Yipit Cuts Through the Noise Of Daily Deals with Kayak-Like Filtering
This is another story of a New York City duo that left the finance industry to start a tech company, but didn’t quite know where to begin. (For our first take on this theme, read my profile on StellaService yesterday.)
“The only problem was we didn’t know what we were doing, and realized very early on we were in big trouble,” says Vinicius Vacanti, co-founder of New York-based Web startup Yipit. “We made the decision that the outsourcing wasn’t working for coding.”
So the duo started developing source code on their own for about six months, and by summer 2009 had created a New York-focused Web service that e-mailed users to notify them of things like happy hour deals and sample sales in the city. After six or so months, the company had attracted only 2,000 or so users, adding only about 10 people per day. “It was not really taking off,” says Vacanti
“That’s when we sort of got really lucky,” he says. The source? The explosion of the group-buying and daily deals market, with Groupon leading the way. “All of a sudden there were all these deals.”
So Yipit revamped its model in February 2010 to one entirely focused on filtering out the daily deal sites, with the bet that the then-dozen or so daily deals sites would soar to the hundreds, Vacanti says. (When Vacanti and I spoke last week, Yipit was monitoring about 420 daily deals sites and was adding about three new each day.)
The company aims to prevent consumer inboxes from filling up with an e-mail from each one of the services every day, and refine the e-mails so that users only see the types of deals they want. So, boys, you won’t be receiving any offers for spa pedicures or laser hair removal. (Unless you want to.)
Yipit sends users one e-mail per day, with offers in the categories that users have decided they’d like to see (say, restaurants, clothing, and fitness). Users purchase the deal from the sites they originate from, in the same way that Kayak.com filters airline searches but directs shoppers to complete their purchase on the actual airlines’ websites, Vacanti says.
The daily deals makeover worked for Yipit, which has seven people and works out of the General Assembly startup incubator space in New York’s Flatiron district. Ten days after its February 2010 makeover, the site had doubled its user base. It hit 25,000 users last summer, and nabbed $1.3 million in funding from RRE Ventures, IA Ventures, DFJ Gotham, and Ron Conway’s and David Lee’s angel venture fund SV Angel, as well as other tech investors.
“It was very painful for a long time and then we became a real tech team,” Vacanti says. “Then we started making real progress … Next Page »