DealDash

DealDash was founded in 2009 by William Wolfram, a 16-year-old Finnish entrepreneur, who had lost $20 bidding unsuccessfully for a MacBook on an earlier penny auction site. Wolfram had generated approximately $500,000 in affiliate sales a year earlier buying popular YouTube videos for $50, borrowed from his mother, then collecting revenue from affiliate marketing links he would add. He used the money he had saved to start DealDash.{{cite news |author=Hamish McKenzie |date=March 21, 2013 |title=This 20-year-old's three-year-old startup did $44M in revenue last year |url=https://pando.com/2013/03/21/this-20-year-olds-three-year-old-startup-did-44m-in-revenue-last-year/ |archive-url=https://web.archive.org/web/20131201010859/http://pando.com/2013/03/21/this-20-year-olds-three-year-old-startup-did-44m-in-revenue-last-year/ |url-status=dead |archive-date=December 1, 2013 |work=PandoDaily}}{{cite web | url=http://www.talouselama.fi/kasvuyritykset/huikea-kasvupyrahdys-20-vuotias-yrittaja-takoi-31-miljoonaa-euroa-3356456 | title=Huikea kasvupyrähdys: 20-vuotias yrittäjä takoi 31 miljoonaa euroa | date=January 19, 2013 | publisher=Talouselämä | accessdate=October 14, 2016}}{{cite web | url=http://www.kauppalehti.fi/uutiset/vuoden-kasvaja-kasvu-430-prosenttia-34-miljoonaan/pQTWiP9z | title=Vuoden Kasvaja: kasvu 430 prosenttia 34 miljoonaan | date=May 29, 2013 | publisher=Kauppalehti | accessdate=October 14, 2016}}

The company's business model, as with prior sites, is that customers enter into bidding, where they pay for each bid on an item, regardless of whether they succeed or not. Each bid marginally increases the price of the item until the end of the auction, at which point the item is sold to the final bidder. DealDash differs from predecessors mainly in that losing bidders are given an option to apply money they had spent unsuccessfully bidding on an item towards purchasing the item at a posted retail price.{{cite news|work=ArcticStartup|url=http://arcticstartup.com/article/dealdash-sees-explosion-of-growth/|title=DealDash Sees Explosion Of Growth|date=October 21, 2011}}

DealDash obtained early financing from a youth program of Tekes, a Finnish public funding agency.{{cite news|work=ArcticStartup|title=Different Types of Tekes Financing – With William Wolfram of DealDash|date=March 16, 2012|url=http://arcticstartup.com/article/types-of-tekes-financing/}} It later raised approximately $1.5 to $2 million in venture financing from the Chief Executive Officers of Rovio Entertainment (publisher of Angry Birds) and Carbonite.{{cite web | url=http://www.arcticstartup.com/2012/01/11/dealdash-recruiting-talent-with-strong-growth-and-1m-investment | title=DealDash Recruiting Talent With Strong Growth And $1M Investment | work=ArcticStartup | date=January 11, 2012 | accessdate=August 21, 2012 | author=Vilpponen, Antti | archive-date=November 6, 2012 | archive-url=https://web.archive.org/web/20121106191847/http://www.arcticstartup.com/2012/01/11/dealdash-recruiting-talent-with-strong-growth-and-1m-investment | url-status=dead }} The company grew quickly, quadrupling its revenue yearly for its first three years. As of early 2012 it was earning $1 million profits on $44 million revenue. By 2013 it had 67 employees, yearly revenues approaching $100 million,{{cite news|work=ZDNet|url=https://www.zdnet.com/article/top-tips-for-startups-from-the-companies-that-got-funding-and-the-vcs-ready-to-invest/|title=Top tips for startups from the companies that got funding, and the VCs ready to invest|author=Jo Best|date=November 20, 2013}} and was ranked as Finland's second-most visible startup based on attention from media, bloggers, influencers, and users.{{cite news|work=Wall Street Journal|title=Finland's Top 100 Startups|author=Nick Clayton|date=January 24, 2013|url=https://blogs.wsj.com/tech-europe/2013/01/24/finlands-top-100-startups/}} According to Socialbakers, DealDash was the most talked about brand on Facebook's "People Talking About This" during a period in May 2013,{{cite web | url=http://www.adweek.com/news/technology/obscure-direct-response-brands-dominate-facebook-chatter-149636 | title = Obscure Direct Response Brands Dominate Facebook Chatter | accessdate = May 24, 2013|work = Adweek| date = May 17, 2013 }}{{cite web | url=http://www.kauppalehti.fi/uutiset/suomalaisbrandit-fbssa-nokian-perassa-2-startupia/gBRfRn9D| title=Suomalaisbrändit Fb:ssä: Nokian perässä 2 startupia | date=September 12, 2012 | publisher=Kauppalehti | accessdate=October 14, 2016}} and had the highest engagement rate that September.{{cite news|work=Adweek|url=http://www.adweek.com/socialtimes/socialbakers-august-2013/428197|title=Walmart Still Top U.S. Brand On Facebook For August; DealDash Leads Post Engagement Rate|author=David Cohen|date=September 12, 2013}}

In 2013, when Wolfram was still 20 years old, DealDash moved its headquarters from Helsinki, Finland, to Minneapolis, Minnesota. In August of that year, the company also created the site DealDashReviewed.com to house and aggregate reviews and testimonials from their customers.{{cite web | url=http://www.dealdashreviewed.com | title = DealDash Reviews | publisher = DealDash | accessdate = September 30, 2014| website = DealDash Reviews}}{{cite web | url=http://whois.domaintools.com/dealdashreviewed.com | title = DealDashReviewed.com WhoIs | accessdate = September 30, 2014| website = DomainTools}}

DealDash, like other auction sites, has been described as a gamified approach to e-commerce. To participate, registered bidders first buy "bids" priced at $0.13 each, that they may spend bidding on auctions.{{cite web | url=http://www.talouselama.fi/uutiset/haluatko-ipadin-13-66-dollarilla-talla-tavalla-syntyi-veret-seisauttava-kasvutarina-3449405 | title=Haluatko iPadin 13,66 dollarilla? Tällä tavalla syntyi veret seisauttava kasvutarina | date=December 22, 2013 | publisher=Talouselämä | accessdate=October 14, 2016}}{{cite web|url=https://www.dealdash.com/how-does-it-work|title=DealDash: How Does it Work?|website=DealDash|accessdate=January 30, 2016}} Standard auctions begin with an opening price of $0.00, with every bid placed increasing the price by $0.01 and removing one paid "bid credit" from the user's balance. Bidders may choose to place single bids, by manually clicking the bid button, or through an automatic bidding tool called the "BidBuddy". An auction clock restarts from a maximum of 9 seconds (as of 2024), every time a bid is placed. If no new bids are placed before the clock runs out, the last and highest bidder is declared the winner of the auction.{{cite web | url=http://www.arcticstartup.com/2011/10/24/dealdash-sees-explosion-of-growth | title=DealDash Sees Explosion Of Growth | work=ArcticStartup | date=October 24, 2011 | accessdate=August 21, 2012 | author=Anderson, Greg | archive-date=January 6, 2012 | archive-url=https://web.archive.org/web/20120106215219/http://www.arcticstartup.com/2011/10/24/dealdash-sees-explosion-of-growth | url-status=dead }}{{cite web | url=http://www.dealdash.com/page.php?id=2 | title=Deal Dash - Frequently Asked Questions | publisher=DealDash | accessdate=August 21, 2012}}

DealDash has been criticized for offering poor value to customers and for making disclosures only in fine print.

Penny auction sites, including DealDash specifically, have often been criticized for failing to disclose or include the cost of bids in what customers actually spend in total to win a product. In a conventional auction, bids are based on prices that participants are willing to pay, with the item sold to the final bidder within a set period that bids the highest price. This usually allocates the item to the person who is willing to pay the most. By contrast, penny auctions award items to parties that are persistent or lucky enough to place the final bid, with money raised primarily from the cost of bidding rather than the final price of the item. In most cases, users spend substantial sums of money without winning anything. DealDash and others have been compared to gambling by consumer groups.{{cite news|last1=Giorgianni|first1=Anthony|title=Bidding on penny auction sites is risky|url=http://www.consumerreports.org/cro/news/2014/06/bidding-on-penny-auction-sites-is-risky/index.htm|accessdate=August 31, 2016|work=Consumer Reports|date=June 30, 2014}}{{cite news|last1=Mayer|first1=Caroline|title=Are Penny Auction Sites Seen on TV For Real?|url=http://www.nextavenue.org/are-penny-auction-sites-seen-tv-real/|accessdate=August 31, 2016|work=Next Avenue|date=May 12, 2014}}

According to Consumer Reports, the "buy it now" prices can be significantly higher than the same products on Amazon.com. Unsuccessful bidders not using the option lose the value of the bids placed. A company spokesperson says DealDash generates significant business from bidders who choose to buy items after losing, with hundreds of orders processed daily.{{cite web | url=http://www.arcticstartup.com/2011/05/05/interview-with-william-wolfram-ceo-of-dealdash | title=Interview With William Wolfram, CEO of DealDash | work=ArcticStartup | date=May 5, 2011 | accessdate=August 21, 2012 | author=Vilpponen, Antti | archive-date=April 14, 2012 | archive-url=https://web.archive.org/web/20120414013219/http://www.arcticstartup.com/2011/05/05/interview-with-william-wolfram-ceo-of-dealdash | url-status=dead }}

Consumer Reports also reported that many "luxury" brands touted on DealDash are non-existent beyond the website and their trademarks are registered by the owner of DealDash, through another company that he is associated with, namely Galton Voysey.{{Cite web|url=https://www.consumerreports.org/consumerist/customer-accuses-dealdash-of-selling-cheap-generic-products-disguised-as-independent-luxury-brands/|title = Customer Accuses DealDash of Selling "Cheap, Generic" Products Disguised as Independent Luxury Brands| date=March 8, 2018 }}

Consumer organization Truth in Advertising reported that a DealDash television commercial shows "Roseanna" winning a $349 KitchenAid stand mixer for "less than $25". Small print explains she bid 761 times on that mixer, which cost her over $456, plus the $25 "price" she won it for. This means she paid closer to $481 – well over the stated $349 retail price. Both Truth in Advertising and Consumer Reports noted that DealDash's own terms of service tell users that they are likely to spend more than the retail cost for products and are unlikely to save money using the site{{cite web | url=https://www.truthinadvertising.org/dealdash-com/ | title= DealDash.com | work=Truth In Advertising |date=November 1, 2013| accessdate= August 21, 2016}} (the terms of service were updated in 2016 to no longer include that statement).

DealDash faced a false-advertising class-action lawsuit in 2017, with plaintiffs alleging that consumers were deceived into thinking they could purchase items for less than their retail value but in reality having little chance of winning items or saving money. Plaintiffs also argued the allegedly premium products on offer were generic items manufactured by companies with links to Wolfram.{{Cite web |title=Is DealDash a bargain penny auction site or a "perverse lottery"? |url=https://www.nbcnews.com/business/consumer/dealdash-auction-site-accused-running-perverse-lotteries-n771166 |access-date=2022-11-28 |website=NBC News |date=June 30, 2017 |language=en}}{{Cite web |last=Moak |first=Bill |title=Penny auction sites: The house always wins |url=https://www.clarionledger.com/story/money/personal-finance/consumerwatch/2017/04/23/penny-saved-lesson-learned-bill-moak-column/100742942/ |access-date=2022-11-28 |website=The Clarion-Ledger |language=en-US}}{{Cite web |title=Class Calls Penny Auction Site DealDash a Scam |url=https://www.courthousenews.com/class-calls-penny-auction-site-dealdash-scam/ |access-date=2022-11-28 |website=www.courthousenews.com |language=en-US}} Eight months later, the lawsuit was dismissed.

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Category:American companies established in 2009

Category:Retail companies established in 2009

Category:Internet properties established in 2009

Category:Online auction websites of the United States

Category:2009 establishments in Minnesota