Northeastern student Saad Abdullah founded Echelon so coffee shops can provide loyalty rewards to customers and grow their business.
Opening a small business like a coffee shop is always a gamble.
Up to 30% of these types of enterprises fail within the first year of opening as they try to compete against larger, more established chains, according to data from the National Restaurant Association.
But when Saad Abdullah came to Boston from Dubai to study business administration at Northeastern University, he noticed how crucial small coffee shops were to his experience as a student.
“A large part of a college kid’s life is going to a coffee shop to study,” says Abdullah, a sophomore with a concentration in finance and accounting. “That’s a prime place that people pick to work. (But) you have multiple independent local coffee shops that are struggling to compete with Starbucks and Dunkin’ Donuts that have the money to actually invest in branding and expand globally.”
Abdullah preferred going to these small shops and recognized that many of them needed a little boost to compete with bigger chains. His solution? An app that would help coffee shop owners learn more about their customers and would also help customers gain loyalty points in turn.
“That’s where the idea for Echelon really stemmed from,” said Abdullah. “I figured how can I fill this gap in the market to a level that’s actually going to help (these small coffee shops) compete?”
Echelon offers a web app for coffee shop managers and owners in which they can track customer data through Echelon’s AI algorithm, Espresso.
Espresso, which was fully built by Northeastern students, analyzes customers’ behaviors, such as what products they’re buying and when they’re purchasing them. It then groups customers based on their spending habits and makes suggestions for how the shop can retain them. The owners can look at data based on customer frequency to see habits among new and returning customers.
Most of the algorithm’s suggestions come in the form of personalized rewards; if the algorithm notices customers are coming in four times a week and ordering a certain drink, it might suggest owners offer a discount on that particular menu item to incentivize customers to come in more often. The algorithm can also project the revenue this will bring in.
“That’s the goal with retention … to encourage them to come back,” Abdullah said. “(Espresso) not only does that, but then figures out the best way for a coffee shop to start reaching customers. … The AI algorithm basically projects all that for the owner. Personalized rewards are the bread and butter of what Espresso does.”
On the customer side, the app allows users to earn and spend rewards, replacing the role of the traditional “punch card” many coffee shops use for loyalty programs.
Abdullah originally pictured Echelon as being like a dating app except customers could swipe on different independent coffee shops to find one to try. He started to build this app himself, but the concept kept growing.
“I just kept getting these ideas,” he said. “What if we built an AI algorithm that did this? What if you could have people join these loyalty programs and you could build status? I went to sleep that night and I remember I was in bed and I just kept getting ideas and it went from this small thing to something bigger. I woke up the next morning and thought ‘OK, I’m going to write a business plan and see where this goes.’”
Abdullah officially launched Echelon in March 2024. He worked with fellow Northeastern students on coding the project as well as IDEA, which helped ready the product for launch. IDEA is a student-led venture accelerator for entrepreneurs in the Northeastern community.
“Their mentors have been very helpful in helping me shape Echelon’s go-to-market strategies and the best way we can target our clients,” Abdullah said. “They’ve given me a lot of great ideas on validating our product and going into fundraising. Aside from that, the biggest thing that Northeastern has helped me with is the people I’ve met building Echelon. I needed a team, (so) I went to the Snell Library on a Friday night because I was like ‘whoever’s working on a Friday night clearly are hard workers.’ I started approaching people … and that’s how I met a lot of my team.”
This year, Echelon took on its first client, Central Perk. The partnership is still new, but Abdullah said the goal is to help them increase retention by 30%.
While the app is focused on coffee shops for now, Abdullah said he hopes to see it become a resource for other small businesses in the future.
“I want to build a platform where small business owners can press a few buttons and get things done,” he said.