Btw, I do think that you are correct in asserting that location based systems require coupon type discounts to be compelling long term. I'm just suggesting that might be cheaper than you think.
thus, you either need to a) already have lots of users (FB,GOOG,AAPL,TWTR) to motivate businesses to participate, or b) you need to have enough cash to pay them to do so.
ergo, shitload of capital rqd, and/or get bought by bigger player who has users, cash, or both.
takes time to build a comprehensive, online local search presence... particular one with good social coverage and activity.
It's possible that the best way to engage with small offline businesses is to hire a small (okay,maybe medium or large) army of salespeople, and pitch to each business individually. If that it the case, you are absolutely correct. It will take a long time and an incredible amount of money.
However, I think it's possible that someone may come up with a better, cheaper way to do it. I don't know what that better cheaper way is, but I'm not convinced that an army of salespeople is the only solution to that problem.