CheapFlights Founders Launch Retro Deals Site CheapToday

10/21/08Follow @wroush

At a time of dwindling portfolios, mass layoffs, impending recession, and general financial queasiness, Web entrepreneurs should to go back to basics, focusing on services that help customers save money, say startup gurus like Paul Graham. That’s exactly what CheapToday did last week, launching a website and an e-mail newsletter that highlight the best deals on popular products around the Web, hand-picked by a team of expert bargain hunters.

In fact, CheapToday is so basic that it lacks features that are standard on other shopping sites, such as user reviews, user-contributed deals, and automated product searches: it’s just a list, updated daily, of about 100 discounted products in five categories (clothes, electronics, entertainment, health, and home).

This isn’t Web 2.0: it’s more like Web 0.5, circa 1997. But CheapToday’s founders, veterans of the U.K.-based travel site CheapFlights, are betting that simplicity is exactly what today’s consumers are looking for.

“It’s a very traditional model,” says Hugo Burge, the company’s co-founder and chairman. “Our mission is to help consumers find the best deals, wherever they are. We’re excited about the simplicity of it—nobody else is doing exactly this.”

CheapToday screen shotShopping sites are a venerable and popular category on the Web, and they do go through periodic reinventions. Purely automated comparison shopping portals like Become, PriceGrabber, Shopping.com, Shopzilla, and Froogle (now Google Product Search) are seeing new competition lately from user-driven sites like Bountii and BeatThat (profiled here), where consumers themselves can earn rewards for submitting deals they’ve discovered. These newer sites tap the expertise of Web “prosumers” who spend so much time online that they find product discounts even the search engines haven’t detected.

But at the opposite end of the spectrum, there may be another group of consumers who feel overwhelmed by the Web’s infinite morass of shopping and entertainment possibilities, and just want a few honest recommendations to help them past all the hype. The popularity of micro-publications such as Very Short List, an HTML e-mail newsletter from IAC that recommends exactly one product per day, may point toward this hunger for simplicity.

Whether online shoppers will be attracted to CheapToday’s extremely spartan feature set, however, is an unanswered question. The self-funded company is run by president and CTO Milenko Beslic from an office in Boston, together with a small “editorial shopping team” based in Chicago. The writers spend their days checking RSS feeds, newsletters, and e-retail sites for enticing prices, then write short blurbs for each deal saying why they stand out. (One recent item: “Sarah Palin Eyeglasses.”)

“Computers don’t wear shoes,” says Beslic—meaning that it’s hard for automated search engines to separate products that are fashionable or inspiring from those that are just cheap.

So far, there are no ads on CheapToday, and the site doesn’t even collect affiliate commissions on the traffic that it sends to e-retailers—one of the key revenue streams for most comparison shopping sites. “We want to gain people’s trust that these are the very best deals no matter what,” explains Burge. “We may take advertising placement and affiliate fees in the future, but we won’t do that until we get to a critical mass and we know the product is working and we can make sure that we don’t compromise the editorial quality.”

In time, the company may “layer on things that might be seen as more contemporary,” such as user feedback, Burge says. “But more than anything we are about simplifying purchasing decisions and making sure people get great quality at a great price.”

That formula echoes, in some ways, the strategy at CheapFlights, one of the oldest comparison-shopping engines for travel deals. When it was founded in 1996, it was Britain’s first search engine for comparing airfares, and though it grew into one of the top 20 travel search sites and expanded to the U.S. in 2003 (Burge directed the company’s U.S. operations), it has never handled actual flight bookings, the way giant competitors like Orbitz, Travelocity, and Expedia do—it simply finds the cheapest flights to any given destination, then directs users to sites where they can book travel.

Beyond the name, there’s no affiliation between CheapFlights and CheapToday, though Burge says he’s long wanted to try the CheapFlights model on a broader range of products. “Only 20 percent of Americans have passports, but 100 percent have wallets,” he says.

Burge says bad economic times are the best possible moment to launch a deals-oriented shopping site. He may be right: after all, he brought CheapFlights to the U.S. right in the middle of the airline industry’s post 9/11 dive. During down times, “You get a little more air time,” Burge says. “People are genuinely looking for good deals and bargains, and companies have plenty of inventory they want to get rid of, so there are deals out there.”

Of course, it’s possible that economic conditions will get so gloomy that consumers will simply zip up their wallets. But if that happens, CheapToday won’t be the only company suffering.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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