Zaarly’s Wild Ride: Winning a Weekend, Quitting a Job, and the $100 Midnight Cheeseburger

3/24/11Follow @curtwoodward

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were brokered. The Zaarly team drove some of this, even paying someone to lug them a keg of beer. But it was also spreading. “Amazingly, after 12 hours, there was literally a market created where both sides, buyer and seller, were being created by people without a connection to us,” Koester says.

That may not be terribly surprising. After all, the SXSW Interactive crowd is essentially several thousand really early adopters—that’s why you debut the product there. “But the amazing part is the Austin community—people who were not at South by Southwest got wind of this, and they were part of the people fulfilling the offers,” Koester says.

Austin remains the experimental site for Zaarly, although the last time I checked there was only one offer: $5 for some cucumbers. Are those rare in Texas? In any event, Koester and the other principals are now hiring people and looking for ways to build robust networks of users in different cities. The plan is to be strongly tied to locations—sites will be similar to seattle.zaarly.com—and work with businesses to get them on board as order fulfillers.

Zaarly also wants to incorporate existing payment processors in its next launch, Koester says, citing examples like Square, PayPal and others. They don’t plan to ask for fees on cash transactions, focusing instead on being a platform for deals and taking a piece of electronic payments. Zaarly also might have a decent revenue opportunity in marketing or advertising deals with merchants and other businesses who want to be in the new marketplace.

Even in the sometimes overheated world of tech startups, this is a pretty quick growth curve. And there’s a big difference between fun deals at a tech conference and building a citywide network that’s big enough to sustain itself. Craigslist, an obvious model of comparison, didn’t stick around because of the novelty. It killed off old-school newspaper classifieds because it solved their problem in a much better way. So the question will be: Is your inability to get concert tickets right now, or my late-night lust for a cheeseburger, or someone else’s willingness to deliver a keg of beer really a sustainable market?

The answer will determine whether Zaarly is the next big thing in social commerce, or a fun idea from the new bubble that became the tech equivalent of an abandoned shopping mall. It will be fun to see what that answer is.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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