A Startup Is Born

To Bootstrap a Customer Loyalty Startup, a Founder of Mirth Performs ‘Airbnb Arbitrage’

And fields biz questions from noted entrepreneur MC Hammer!
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Mirth makers Phil Reichenberger (left) and Jeremy Philip Galen. (Photo courtesy of Mirth)

Did your Groupons for Brazilian jiu-jitsu classes in Murray Hill, Brazilian food in Bay Ridge, and a Brazilian wax in Soho expire unused again? Wouldn’t it be nice if you could be rewarded for patronizing restaurants and businesses you actually go to?

This is the premise of Mirth, a self-described “principled objection to the frenzy of deals.” The new customer loyalty app was presented and launched at TechCrunch’s Disrupt NYC last week by co-founders Jeremy Philip Galen and Phil Reichenberger.

In a nutshell, customers enter their credit card information into Mirth’s site and use that card at participating merchants. After they make two visits in 30 days to the same merchant, they become a “regular” and get a small discount on their purchases. (Watch a video introduction here.)

Though Mr. Galen had been thinking about regulars and merchants for about a year, the two founders met and built Mirth a mere seventeen days prior to the launch. Last Tuesday when they spoke to Betabeat, they were relieved and smiling, and smoked cigarettes outside of White Rabbit, a bar on East Houston that is a participating Mirth merchant, while their launch party raged inside.

There are other loyalty apps similar to Mirth—Mogl and Tagtile, which was recently bought by Facebook, for example—but Mr. Galen maintains they’ll be able to differentiate themselves, both in the convenience of implementation for both customers and businesses (businesses don’t need any software or hardware, and customers need only enter their credit card information once—no coupons or QR codes required), and in the kind of merchants they’ll attract.

“We’re focused on businesses with character that have a voice, identity, or personality, or a proprietor who has decided to do something meaningful. Peter Hoffman [owner of the restaurants Back Forty and Back Forty West, both Mirth merchants] is a locavore, and he bikes from the green market every day, bringing the fresh produce to his restaurants. This man doesn’t need a dealseeker to come in and insult his prices. He has loyal customers that respect him,” Mr. Galen said.

Other current Mirth merchants include SEW Bespoke Clothing, a Manhattan tailor, and Simple Cafe in Williamsburg. Merchants being rolled out soon include Tartinery, Piazza Seventeen, and the First Prize Pies food truck.

What was it like being grilled by MC Hammer, a guest judge in the Q&A session of their TechCrunch presentation?

“He asked two clarification questions that were actually very helpful! It was a great way to close the pitch,” Mr. Galen enthused.

A fair amount of financial sacrifice is required for any tech start-up, but Mr. Galen has innovated the art of living cheaply, and performs what he calls “Airbnb arbitrage.”

“That’s my patented term for Airbnb-ing my apartment nightly. I live elsewhere for much less, then have no cost of living. I pay the rent, and then I pay my living expenses where I’m staying [rooms also found on Airbnb], and I can net enough money each day that I can live,” he explained gamely.