FEED Tribes Inc.

• Author: Peterson, Eric
• Position: Company overview

INITIAL LIGHT BULB:

Early last year, Rod Stambaugh decided it was time to leverage his 17 years in the payment industry into a startup that turns mobile phones into credit cards.

"The original premise was to enable the mobile phone to make a payment at point-of-sale," he said. "That was the initial genesis of the company."

Stambaugh, now CEO of the nine-employee startup, was looking to bring in a social-networking aspect and connected with Eric Elkins and Nate Warren, the team behind the Denver Newspaper Agency's now-defunct Bias, a youth-oriented weekly. Elkins and Warren currently serve as the company's vice president of marketing and creative director, respectively.

IN A NUTSHELL:

FEED's mantra: Keep it simple. "Make it really simple for the user, the consumer and even simpler for the merchant," Stambaugh said. "We architected a way for that to happen. It's simpler than cash, simpler than a credit card."

Without installing any new hardware or software, merchants can bill consumers quickly, securely, via FEED's mobile-phone-based system. "When the sales clerk rings up the order and totals everything out, they just touch the FEED button," Stambaugh said. "They just put in the four-digit transaction code the consumer gives them and push the 'OK' button. It's that fast."

Besides simplicity and speed, cost is a selling point. FEED charges the vendor just 19 cents per transaction versus the credit industry norm of 30 cents plus 2 percent of the total charge. Stambaugh touted FEED's security of "four levels of authentication" (the consumer's PIN and the cell phone's unique electronic ID as well as the vendor's digital certificate and IP address), as opposed to one for a standard credit card transaction or two for a PIN-based transaction. After verification, FEED wirelessly delivers the consumer's one-time transaction code; the transaction is complete after the consumer gives the clerk the code to enter.

"There's also a whole marketing component built into the payment platform," Stambaugh added. Vendors can send coupons and other offers to FEED users' cell phones via opt-in promotional programs, and websites for each market will feature marketing campaigns as well as community information and user-generated content.

[ILLUSTRATION OMITTED]

"Merchants are really...