Detroit start-up begins pay-as-you-go smartphone service
Summary
Detroit startup is aiming to revolutionize the cheaper end of the smartphone market with a pay-as-you-go data serviceA Detroit-based start-up company is aiming to revolutionize the cheaper end of the smartphone market with a pay-as-you-go data service that charges as little as 25 cents a day for Internet use.The smartphone service by Lunar Labs, which rolled out Monday on a limited basis, also offers free nationwide phone calls and texting.The service charges 25 cents a day for unlimited use of an Internet application, meaning that a customer who uses Facebook, e-mail and a web browser would be billed 75 cents for those three applications for that day. "Were trying to solve a major problem in the city, save a lot of people money and give a lot of people opportunity that they never had," said Lunar Labs cofounder Hunter Rosenblume, 21, a New York native who left college at the Georgia Institute of Technology to work on the start-up.Fellow Lunar Labs cofounder Rohith Varanasi left his New Jersey high school without graduating to devote himself full time to the project in Detroit. It grew out of the Techstars Mobility start-up accelerator in Detroit and has attracted $1 million in start-up investments.The company is attempting to create a more affordable and flexible smartphone service for value shoppers and consumers at the lower end of the market who dont want large monthly charges especially if they use just a handful of functions on their phone.Many of Lunars users during an earlier trial period had experience with the federal governments Lifeline Assistance Program, sometimes called the Obama phone program, which provides free cell phones to low-income individuals. "The goal is to hit certain milestones, get to the next round of funding, then focus on becoming profitable," he said.The young cofounders conducted market research for their smartphone service throughout Detroit last summer by visiting Cricket Wireless stores and speaking with people at bus stops and a homeless shelter about their phone and Internet use. Customers can pay for their usage online and prepaid debit cards are accepted.Lunar Labs has a total of seven employees and interns (including the cofounders) and has raised $1 million over two rounds of start-up funding.