San Juan Internet Company with Philanthropic Roots Flourishes

When Chason Kane was beginning kindergarten, his dad, San Juan Capistrano resident Benson Kane, realized the 5-year-old had dyslexia. 

Kane soon found “there is really no funding left in the schools to help those kids out." He thought launching a nonprofit was the way to help children with learning disabilities, but he couldn't figure out a way to make the funding sustainable.

“I had been thinking about schools for several years, and finally the platform was in front of us,” Kane said. It appeared in the form of popular websites offering deals from local merchants. So in February of last year, he started Screamin Daily Deals, an Internet company based in San Juan Capistrano. 

The company offers deals, such as half off a trip to Catalina from a Newport Beach sport fishing company, delivered to subscribers’ e-mail inboxes. The company then takes a percentage of the purchase price when a consumer buys that deal. 

In addition to offering local residents great deals, it allows them to choose to give 10 percent of the purchase price to a local school, public or private, or to a local nonprofit. About half of the subscribers choose this option, Kane said. Of those, the majority—about 85 percent—opt to give to schools. 

“We’re more like a fundraising company that uses a deal of the day to raise money for schools,” Kane, 42, said.

It's a good deal for local merchants, who don’t pay anything up front to offer a deal, he said. “I would say that 90 percent of them had an absolutely positive experience with it,” he said.

The business model has paid off. Since launching, the company has been able to give about $100,000 to local schools. Since launching in February 2010, it has grown to a total of 300,000 subscribers, with 130,000 of those in Orange County. 

The company’s on an upward trajectory. The company now has 15 employees, “and we’ll probably be hiring a person a day for the next 90 days,” Kane said. Most of those hires will be on the sales and marketing side, he said.

It's a familiar story in the Internet-deal business.

According to Bloomberg, at the end of 2010, LivingSocial—second to Groupon—said it would triple its employee base to 1,800 in 2011 and double the number of markets it serves to 300. Groupon has more than 5,900 employees selling deals in more than 500 markets. In January, Groupon was valued at $4.75 billion.

Screamin Daily Deals' sales growth has been steady. The company hit $1 million in sales in September and $2 million in December, Kane said. It did not see the typical dip in January sales, he said, with numbers matching December’s. For March, the company is on track to do $850,000 in sales, he said.

Kane started with about $400,000 of seed money between him and his two co-founders, Dan Griffith and Peter Whyte. It came from their personal savings, along with some money invested from friends. To date, Screamin Daily Deals has raised about $1 million to continue operations. 

The company offers deals primarily in Southern California. Besides Orange County, the company offers deals in the San Fernando Valley, the west side of Los Angeles, Riverside, Temecula, San Diego and Ventura County. Its first market was the Santa Clarita Valley. Utah, Chicago and the East Bay are the markets outside of the area.

Kane figures that ultimately "we might just end up being the dominant player on the West Coast," Kane said. Notably there's Groupon, based in Chicago, and LivingSocial, based in Washington.

As Tech Journal South reported March 17, although LivingSocial and Groupon are raking in huge profits, they are mostly facing competition from "smaller players, often operating in just a handful of markets."

Because Screamin Daily Deals’ ideal customer is a married mother between the ages of 30 and 54, and because it gives money to schools, the company is careful about which merchants it selects. "We really try to stick to things that are going to be safe, and we want to do things that the families can do.”

Kane doesn’t feel the need to build the company to sell, as so many Internet businesses do. “The goal is to keep it in place to help local businesses get more relevant customers and continue to help raise much-needed money.”