MOGL founder has set the table for expansion

The Daily Transcript revisits three of last year's Tech Innovations finalists. Here's how they've fared over the last year.

Jon Carder, the 33-year-old chief executive and co-founder of San Diego-based MOGL, has tweaked the recipe for the traditional restaurant customer loyalty program: leave out the vouchers and membership cards, and mix in a pinch of friendly competition and a dash of charitable giving.

So far, investors are biting. MOGL has raised $12.4 million in financing for expansion, including a $10 million second round announced Jan. 31. Another round of fundraising is inevitable at the end of this year, Carder said.

“This business is going to be capital intensive. $10 million only gets us so far,” Carder said. “Right now we’re all about expansion. The model seems to be appealing to our customers.”

Appealing enough that MOGL could be profitable in the San Diego market this year, he said. “Just in San Diego,” Carder said. “We’ll still be losing money in other cities.”

Jon Carder

MOGL intends to go “really deep” in Southern California this year, with plans for about 700 member restaurants and 100,000 restaurant patron users. MOGL intends to eventually foray into the San Francisco and New York City markets.

MOGL has a full-time staff of about 50 employees, but could hire an additional 70 to 100 employees within the next year, according to Carder.

The slogan for MOGL’s loyalty program is “eat out, cash in.” It works like this: Restaurant patrons register their credit or debit card with MOGL online, then use that card to pay for food at any of MOGL’s participating restaurants. Patrons get 10 percent of their bill credited back to their card each month. In the spirit of competition, a cash jackpot is available each month to the top spenders, who can track their ranking with a smartphone app. And in the spirit of altruism, each $20 spent at a participating restaurant triggers a donation to Feeding America. MOGL estimates it’s donated more than 31,700 meals so far.

The MOGL online database recently showed 165 participating restaurants within 50 miles of San Diego, including Sammy’s Woodfired Pizza, San Diego Desserts, East Village Tavern & Bowl, Hodad’s, House of Blues and Cold Stone Creamery.

Carder said restaurants are attracted to the program because it draws new, loyal customers who are compelled to spend more money with each visit. MOGL also gives those restaurants insights into their customers’ spending habits.

MOGL appeals to “anybody that eats out, from college students to my grandparents,” Carder said. But the so-called “power users” are in their mid-20s to early-40s and dine out frequently for business and pleasure. Executives often use the card for business lunches, when they can frequent the same restaurants to earn more cash back and increase their chances for the monthly jackpot.

“The gaming element is very powerful,” Carder said. “Before this, in the last five years, it wasn’t really used by businesses. But the same techniques that are used in video games can be used to drive people to behave in a certain way.”

Carder said he likes to tell the story of one of his attorneys, who reluctantly signed up for MOGL despite his aversion to mobile applications. After dining at Bellisario’s Pizzeria in Del Mar, the attorney discovered that he was in the running for the monthly jackpot. He then made the unusual decision to take his employees out to lunch, and ultimately won the jackpot.

“He did something nice for his people, and changed his behavior,” Carder explained.

Carder said MOGL will be able to avoid the kind of buyer-fatigue associated with big daily-deal platforms like Groupon (Nadaq: GRPN), because MOGL is more network-driven. As more restaurants and patrons sign up, the better the service is.

“It’s kind of like a snowball,” he said.

Carder is no novice entrepreneurship. MOGL is the Point Loma Nazarene University grad’s fourth startup, from his first e-commerce website eHeaven.com, to online loan comparison site ClientShop, to the Yelp-like MojoPages.com.

“I jumped in head first and hit the bottom of the pool,” he joked. “But at each one, I learned one or two little lessons. I know for a fact that if I hadn’t had all these experiences, I wouldn’t have learned to stay focused on one city, to go deep,” he said.

“If I was launching MOGL five years ago, I would have spread us too thin.”