Ms. Yeoh (linkedin.com)

When the daily deals trend collapses, the third-party client apps that streamline daily deals will be the first to go. We're getting a whiff of that today with the announcement that CityPockets, a New York-based e-coupon organizer that aggregates all of your deals, is shutting down.

In an email sent out to users today, CEO Cheryl Yeoh wrote:

I deeply regret to announce that CityPockets will completely shut down on June 30, 2012, since we are no longer able to maintain the product for a variety of reasons....We'd like to direct you to our friends at DealsGoRound and Yipit, both offering deal management services and we hope that they will fulfill your needs.

Ouch. Directing your users to former competitors? That's gotta sting.

"We've always been friends with DealsGoRound and Yipit, and wanted our loyal fans to have an alternative to store / manage their vouchers," Ms. Yeoh told Betabeat via email. "It's only fitting for us to show some love to our fellow daily deal friends."

Fortunately for CityPockets fans, Ms. Yeoh also took the opportunity to announce a new venture: It's called Reclip.It, and it's a "social catalog" for the sharing of deals, coupons and discounted products. The social component means that you can follow "deal bloggers, friends, or brands and get notified whenever they clip a good deal into their folder." It looks pretty much exactly like a Pinterest for coupons.

Even though CityPockets will be completely shutting down on June 30th, ReClip.It's similarities--both in industry and concept--make it seem more like a pivot than anything else.

"People have been clipping coupons for decades and the industry that has been primarily driven by ad-ridden, cluttered and outdated coupon sites is ripe for disruption," said Ms. Yeoh.

"We're initially focusing on serving the mommy bloggers who curate coupons and deals on their website to the 32M moms who subscribe to them," she added.

(Source: Warby Parker)

PERFECT TEN. Last Wednesday Time Inc. brought together editors from many of their news properties to bestow upon us the "10 NYC Startups to Watch." Only in the startup picking game since lat year's Internet Week, Time Inc. has already picked winners like GroupMe, which was purchased by Skype for a supposed $85 milion.

The startups that made the cut for 2012 are Adaptly, a social advertising platform; Art.sy, the Pandora of art; Codeacademy, an interactive self-paced tool to learn to code; Enterproid, a mobile platform to segregate work from personal information on a single mobile device; Fab—you already know what Fab does; Fancy Hands, a provider of virtual personal assistants; Loosecubes, a matchmaker for workers and workspaces SideTour; a community marketplace for booking and hosting adventures, Stamped; a five-star-only mobile rating app and Truth Art Beauty; an online platform where users can custom-create skincare blends.

FOUNDER POWER. This Friday Women 2.0 is hosting their New York Founder Friday at 16 East 34th Street. Featured founders Cheryl Yeoh of CityPockets and Eloise Bune of GraciousEloise will begin speaking at 7 p.m. but the event will kick off at 6 p.m. with an introduction by Matt Wolfrom of Makovsky and Company, the event's sponsor. Founder Friday is free, and open to people of all genders, unlike the LOL-inducing "Jews against the Internet" rally, which is $10 and closed to women. Unfortunately, Founder Friday is already at capacity. Add your name to the wait list and cross your fingers.

RALLY IN THE ALLEY. The Association for a Better New York Foundation and Mayor Bloomberg honored the city's technology leaders in Union Square last Thursday including Foursquare cofounder Dennis Crowley, Greycroft's Alan Patricof, ideeli CEO Paul Hurley and NYTM cofounder Dawn Barber. The Lew Rudin Founder's Award went to New York City deputy mayor for economic development Robert Steel.

MEDIUM MAYHEM. Shelby.tv sat squarely at the intersection of social media and video and last week they began making strides to kick to competition down the block. At The Next Web 2012, cofounder Reece Pacheco unveiled Shelby GT, currently operating in private beta. "Rolls," a tool for organization, curation and the sharing of videos by way of tweets, Facebook posts and other social platforms, make up the centerpiece of this latest social video iteration. Request a private beta invitation to the virtual viewing party here.

DESIGNBOX. Last week LayerVault, an online, unlimited storage space for design files, underwent a redesign adding color extraction and an ability to measure mockups. The "Github for designers" has also introduced "Wormhole," a way to search art files visually by highlighting different design components. That recent shell-out for CS5 might feel a little worse now.

CLOTHES BUY YOU. New York fashion ecommerce company Ruby Ribbon got a $3 million go ahead from Trinity Ventures to launch, sell and market a fashion line "exclusively through social commerce." The company plans to connect to customers on a highly personal level through a national network of stylists who will introduce customers to Ruby Ribbon products at private social functions and in their homes. Ruby Ribbon has been operating stealthily, without so much as a landing page, until today.

PURCHASEST. Ever come across something on Pinterest that you wanted to buy? Well now you can! Sort of. The Fancy wants to treat your eyeballs like a lady while and your wallet like... well pretty much how everyone else treats your wallet. "Everything you see on the site is for sale, or can be for sale, in a function that operates like Groupon in reverse," a press release said. "If someone posts something that develops a huge following -- merchants can come online to sell that item and meet the demand." Fancy just hit half a million users and has big name backers like Square's Jack Dorsey and Facebook's Chris Hughes.

WARBY DARKER. Online prescription eyewear retailer Warby Parker just launched a new line of snazzy prescription sunglasses. At $120 they're a little pricier than their non-polarized counterparts.

COMMUTE. Spotify is on the hunt for a senior product manager with at least five years of experience to drive user revenue. App management platform Appboy wants to add a developer to its small team to provide the server backend for mobile client SDKs and the developer dashboard.

Betabeat caught up with Ms. Yeoh to ask about plans for DealBurner. 

So CityPockets acquired Dealburner. Does that mean Jason Fertel is a CityPockets employee now?

Yes, he'll be our Director of Engineering--our 5th employee.

When did you start thinking Dealburner might make a good feature for CityPockets?

CityPockets has always had Dealburner in our product roadmap. In fact, the week he launched it, was the week we were supposed to build it! Naveen from Foursquare actually saw my demo for SXSW back in March and when we chatted, he actually hinted at this idea and encouraged us to build on top of their API... so we've had this in mind for a long time now. But we didn't manage to get to it with all the fundraising, relaunching of website, hiring, etc. until now.

Anyway so I thought, hey, why reinvent the wheel and compete against another start-up? I decided to meet up with Jason to see if our visions aligned and if he could potentially be a good fit as an employee at CityPockets... and not just an employee but someone who can help us drive the company forward. After meeting with him, I decided it's worth a shot given that it's so competitive these days to find a talented and good engineer. The fact that Jason had previously built an app and a company was a good enough indication that he has the startuppy spirit that we're looking for.

What's the timeline for integration?

We're working on something major right now but I promise you'll see it soon and we'll let Betabeat know!

Is Jason hoping to bring on his former employees from his original start-up?

Not yet but possibly in the near future. We always need great iPhone developers and mobile is going to be a core strategy for us going forward.

CityPockets and Dealburner both started working out of WeWork Labs. Is this a sign of an emerging WeWork mafia?

Yes, out of the five CityPockets employees now, four were previously WWL tenants (including Jin Kim who sat next to me and was my UI/UX consultant to redesign CityPockets before I hired her to be full time). Jin is now my Director of Product & Design and plays an instrumental role in driving CityPockets' product roadmap. She brings years of experience at PayPal & Ebay and is insanely talented.

An early CityPockets design.

CityPockets announced its $750,000 round of funding today, a triumph for the struggling quinoa-eating bootstrappers behind the site--thanks to persistence, careful budgeting and two local angels who fronted more than $500,000. 

The round took just over two months to raise, CEO Cheryl Yeoh told Betabeat, but it seemed like much longer. She and her co-founder basically tried to raise money for CityPockets twice: first as an instant deals platform, a pivot advised by investors.

After wasting two months trying to be heard in the crowded daily deal space, Ms. Yeoh reverted to her original idea--the current incarnation, a site for organizing and reselling daily deal coupons--and found things much easier.

"At the end of February, I started really asking myself what is my passion, why am I building a company based on what other people tell me the opportunity is?" she said. She met "a ton of people" at South By Southwest in mid-March, and came home to New York to try again. "Raising was still hard, but in early April we got our lead investors," she said.

For a while, the investors remained stealthy. But we now know the leader of the lead investors was Ben Lin of Great Oaks Venture Capital, a two-angel early-stage fund with investments in Invite Media (acquired by Google), Trulia.com, 33Across, OKCupid and Warby Parker, among others in a portfolio Mr. Lin estimates is worth $50 million.

"We have a handful of investments in the daily deal sites," Mr. Lin said. "We see a huge problem with the daily deal space where it's getting really crowded, with 500, 600 players trying to chase after the same piece of pie. We see a real need for what CityPockets is doing."

There are two opportunities for CityPockets to take advantage of users who feel overwhelmed by too many deals, Mr. Lin said, and the CityPockets marketplace, where deals can be resold, is key. "Number one, people are more likely to buy [deals] knowing that they'll be able to get rid of them. Number two is, people might be more willing to buy them for the sake of selling them. Almost like ticket scalping."

The second example is close to the model of another Great Oaks investment, Stubhub.

Great Oaks also recruited MI Ventures and several other NYC-based angels and international investors.

CityPockets is now comfortably ensconced in Great Oaks's Chelsea office, where Ms. Yeoh still interviews two or three users a week by phone or instant message to find out "who are these people." She just spoke to a superuser, a mom who tracks 200 coupons through CityPockets at any one time. Another fan is the Groupon Pawn, who tried to use the site to organize hundreds of Groupons--he's trying to survive off the site for a year. Things apparently went a little sour with Groupon, though, when the Pawn's usage of CityPockets became public without an okay from the big discounter. Which reminds us of a problem raised in this post by Xconomy, which asserts, "Companies like Groupon have not given their permission for CityPockets to collect and help resell their vouchers. And the legality of the model hasn’t yet been tested."

The dangers of this were greatly exaggerated, Ms. Yeoh says. "The ending about concerns about Groupon shutting us down, I do not agree. I'm not worried about that at all."

In her user interviews, she said, people have told her they were ready to give up on daily deals until they found CityPockets. "Since they discovered us they're starting to use [daily deal sites] again because they have confidence knowing they can keep track of everything," she said. CityPockets has a working relationship with LivingSocial, BuyWithMe, Tippr and others. Ms. Yeoh says they're going to talk to Groupon "soon."

Maybe it'll go really well, we said. Maybe Groupon will want to buy CityPockets.

"I don't know if we can be bought by any particular site because we want to work with all the deal sites, with their needs and their users' needs," she said.

What about other daily deal aggregators?

"Yipit doesn't have enough money to buy us," she said. "But Google, Facebook are kind of testing the waters by aggregating... Or Amazon, eBay. There's potential with bigger overarching companies."

Protein-conscious Cheryl Yeoh

Here's a slice of schadenfreude for struggling boot-strappers. Glowing tech press doesn't necessarily mean the startup life is as glamorous behind-the-scenes. Take fledgling New York coupon aggregator CityPockets. Back in March, Forbes crowed, "Not to sound too cliché or fluffy, but CityPockets is the solution," to the deluge of daily deals sites. A few paragraphs later, they piled it on with:

"To quote Andrew Mason from an email exchange we had in 2009, “[Groupon's] goal is to make Groupon feel 'too good to be true' from beginning to end,” and frankly CityPockets succeeds in bringing an entire industry under that mantra."

With that kind of review 28-year-old CEO Cheryl Yeoh must have been living the Silicon Alley high-life, right? Yeah, not so much.

According to Xconomy, this is what day-to-day life actually looked like back then:

But around the time when these articles were coming out, both Cheryl Yeoh, the 28-year-old CEO of the fledgling tech startup, and co-founder Jhony Fung, 27, were nearly broke. They had burned through most of the savings they brought to the venture, after leaving high-end consulting jobs. Yeoh was down to budgeting $35 per week for food, eating mostly kale and quinoa. (“It’s the grain with the most protein, and the vegetable with the most protein,” she explained.) Yeoh had for months been sleeping on the Stuyvesant Town couch of her newest hire, David Guthu, with only a small curtain, Velcro-ed to the ceiling, for privacy.

Hey, at least it's more nutritious than coffee, ramen, and whatever you can find in the vending machine.

Josh Stevens, Groupawn

The biggest user on CityPockets, which organizes and maps online coupons, had 85 vouchers in the system three weeks ago. Now the biggest user is the man trying to live off Groupons for a year (he's 310 days in). "The Groupawn guy broke our site because he tried to import thousands of vouchers into our system," City Pockets founder Cheryl Yeoh said. "At first, we suspected that it was a scam, until we Googled the guy's name." The average user has about nine vouchers on CityPockets.