BlendCard: finding a home in Iowa

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Paul Kongshaug had panic attacks.

Or so he thought.

Starting while he was a student at Central College, and increasing in frequency over time, he would have episodes where he could not speak. He would quietly excuse himself from the room to ride them out, first in his college classrooms, and then, after moving to Arizona, in a corporate job where he felt like he could hide.

By the early 2000s, he was having several attacks each day and watching his life fall apart. But, it wasn’t until he tore his ACL that he mentioned these episodes to a doctor.

Kongshaug had a brain tumor. The “panic attacks” he had been suffering for the past nine years were actually small seizures, originating from the part of the brain that controls speech.

The next day, he quit his corporate job. The tumor was benign, and after having it removed, he took a job at a technology startup.

“I feel like I’m making up for lost time,” Kongshaug said. “I just have this desire to create something.”

Today, Kongshaug is the founder and CEO of BlendCard, a newly-launched startup in the Iowa City area.

About BlendCard

BlendCard is a combined customer-loyalty card, currently accepted at 21 businesses in the Iowa City area, with 10 more to be added soon. Users get an initial deal when they activate the card – a free froyo at Yotopia Frozen Yogurt, for example – and then additional perks as they keep using it.

“What we are trying to do is create valuable connections between the right businesses and the right consumers,” Kongshaug said.

Since launching in September in a combined event with Yotopia, nearly 2,000 BlendCards have been distributed.

The idea for BlendCard, however, goes back much farther.

In his first startup job in Arizona, Kongshaug was working on a new advertising model for online video, analyzing what makes marketing valuable for both businesses and consumers. It was hard to sell the solution to advertisers, though; advertisers were so accustomed to paying pennies per impression that they didn’t want to spend more, even if the solution was more effective.

Meanwhile, small brick-and-mortar businesses were paying huge dollar amounts to Groupon to try and lure customers in their doors.

The online retailers had an advantage: customer data. They could track what ads a customer had been shown and what websites they had visited prior to making a purchase. The small businesses in the real world had no way to close that sales loop.

Enter BlendCard.

While no personally identifiable customer data is shared, shops using BlendCard can see trends in their customer’s purchasing behaviors, and offer rewards tailored to their customer’s needs.

Although BlendCard only launched this fall, Kongshaug was able to raise a $100,000 seed round in May from local angel investors, because he had already spent years refining the idea and starting to build the product.

Spending years thinking about the idea before taking the plunge to full-time entrepreneurship helped him make smart decisions, Kongshaug said. He learned not to grow too fast from his Arizona startup days – Blendcard consists of Kongshaug and three part-time employees – and he was able to modify his idea over time. Originally, BlendCard was going to be a mobile app, but he eventually grew fond of the low-tech solution of a card with a magnetic strip, something everyone already knows how to use.

Finding a home in Iowa

When he was finally ready to work on his company full-time, Kongshaug was considering locations like San Francisco or Austin, Texas. Although he grew up in Marengo, Eastern Iowa never crossed his mind as a place to build a startup company.

A chance meeting with Mark Nolte, executive director of ICAD Group, changed his mind.

“I just started thinking, ‘maybe Iowa is a place I could come back and launch a tech startup,’” said Kongshaug, who has two young children and a third on the way. He and his wife considered Iowa’s education system and their family connections. “When I realized it is also a viable place to start a tech company, that was the last thing that I needed.”

Iowa City has proven to be a fantastic testing ground for his idea, Kongshaug said. Businesses here are willing to work with a new startup, unlike small businesses in startup hubs, which have seen dozens of high-tech marketing solutions come and go.

Plus, the business owners like that BlendCard is a local company, and that they can help it succeed.

“People are friendly here, they’re introducing me to other business owners down the block that they’re willing to collaborate with, and not view as a competitor,” Kongshaug said.

BlendCard will make its debut in Cedar Falls in coming months, thanks to a strategic partner there. Meanwhile, Kongshaug hopes that BlendCard’s use will grow to include hundreds of businesses in the Iowa City area.

“You have one life to make an impact,” Kongshaug said. “The impact that I want to make goes well beyond starting a tech company.”

(The above video was created and provided by BlendCard.)

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