Privy Gets Global Experience at 500 Startups Accelerator

10/31/12Follow @gthuang

Plenty of Boston-area tech startups want to learn from West Coast mentors. Few actually go out there and do it. And most that do, don’t come back.

Privy is an exception—for now. The Boston startup, which helps restaurants and local businesses manage online marketing and promotions, is taking part in the 500 Startups Accelerator in Mountain View, CA. The program, which is affiliated with Dave McClure’s seed fund, admits two cohorts a year (spring and fall); the current session started in early October and will finish with three demo-day events in February 2013—one in Silicon Valley, one in San Francisco, and one in New York City. (More on 500 Startups’ investment structure here.)

Ben Jabbawy, Privy’s founder and CEO, says his startup has found some validation and valuable mentorship out in the Valley. “It’s been tremendous for us in terms of growing,” he says. “As a Boston founder heading to Silicon Valley, there’s a question of being on the right path,” from the perspective of things like customer acquisition. (I took this to mean that because Boston’s Web startup ecosystem is much smaller than the Valley’s, local founders can feel isolated and need to focus on building their networks.) Privy’s new mentors have looked at its metrics and helped the company keep its focus on the right things, Jabbawy says, adding that the approach has already paid off in terms of “improvements in revenue, customers, and product.”

“I hope a lot of what we’re learning out there can help other startups here,” says Jabbawy, who was back East this week (nice weather). “I’ll be encouraging a lot of Boston startups to apply to 500 Startups.” He also says he plans to keep Privy in Boston after February, because of the strength of the region in business-to-business companies, talent, and investors.

The company, which started in 2010, has been targeting small restaurant chains as its primary customers. Privy’s software lets businesses set up and run promotions via Facebook, Twitter, Google Ads, e-mail, and their own websites; the technology can help merchants track where their customers came from, and what’s working in terms of ad placements. Of course, this is a Holy Grail of modern advertising—figuring out which customers, reached on which platforms, actually walk in the door.

Privy does this in part by allowing merchants to run promotions that customers redeem with their mobile phones; there’s a digital record of where the promotion came from. Early on, Privy billed itself as an alternative to Groupon, but as the daily-deals sector has imploded, the startup has shifted its focus to more sophisticated advertising tech. “We enable local businesses to track [return on investment] and sales attribution from their advertising dollars,” says Jabbawy.

At 500 Startups, Privy is also getting a bit of a global education. The current batch of 33 startups in the accelerator hails from all around the world (more than half are from outside the U.S.). Jabbawy says he sits next to startup founders from India, Brazil, and Argentina. “You always hear that it’s a global market,” he says. “But we’re sitting next to all these companies that are moving just as fast. You can’t really just think about your competition as U.S.-based businesses anymore.”

The 500 Startups accelerator has a very different application process compared to Y Combinator, TechStars, and other programs. Namely, it doesn’t have one. There’s no official online form; to get accepted, you have to be referred by 500 Startups’ limited partners, investors, or mentors. This year, however, the accelerator did use AngelList’s site to help select the last eight companies in the batch (and it says it plans to keep doing that).

Privy, which previously raised a seed round from angel investors and Genie Bottle Ventures, has seven employees and “enough customers to make it interesting now,” says Jabbawy. Sounds like a man who’s out to show the world—and the Boston startup scene—what he has learned.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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