Last week, New York-based e-coupon organizer CityPockets announced the acquisition of the month-old, one-man start-up Dealburner, a real-time SMS notification for daily deals based on the Foursquare API. DealBurner was created by Jason Fertel after he and his two co-founders decided to abandon their group-texting start-up Freespeech, which seemed doomed despite sending half a million texts a day just because there were so many bigger start-ups doing the same thing. Both CityPockets CEO Cheryl Yeoh and Mr. Fertel worked out of the Soho co-working space WeWork Labs, which has seen companies formed, funded by angel investors and accepted into incubators since it opened in April.
Betabeat caught up with Ms. Yeoh to ask about plans for DealBurner.
Group Buying Mania
With the launch of instantly-available deal alerts from Dealburner and Foursquare’s integration with Groupon Now, it seems real-time deals are the new front in the oversaturated and therefore increasingly creative daily deal space. New York dealster Scoop St. just announced its mobile app, which serves up instantly-available deals in a user’s vicinity. Lamely, it is only on iPhone for now.
A day after local mini-start-up Dealburner.com launched to alert users to flash discounts when they check in to a venue via SMS, it turns out Foursquare is rolling out its own instant deals with Groupon, starting in Chicago.
Foursquare announced it would be syndicating deals from Living Social, Gilt City, AT&T Interactive, BuyWithMe and Zozi, surfacing them to users in the “explore” tab alongside merchant offers about two months ago–a hot source of revenue for the location-based start-up, which is still giving venue owners free advertising by letting them offer deals at no fee. It’s a great deal for Foursquare, which gets a piece of the daily deal pie, and a good deal for advertisers, who are essentially paying for search ads as consumers using the “explore” feature are looking to make a decision about where to go. But Groupon was noticeably missing from the line-up.
Freespeech was serving half a million texts a day. But in a crowded market of group texting apps, some of which have received millions of dollars in funding and hired fancy PR teams, the three-engineer start-up wasn’t getting enough traction. About three weeks ago, former financial services coder-turned start-up entrepreneur Jason Fertel decided to throw in the towel. “It was hard to be seen amongst the 20 other applications that did the same thing,” he said. “On top of that, with Apple and Google and whoever else about to jump in that ring, it just didn’t make sense to continue with it.”
Bummer, Mr. Fertel and his team were shooting around some ideas at the keg at WeWork Labs in Soho when WeWork manager Matt Shampine started complaining about he kept checking in to a certain establishment where Fourquare was offering a free margarita, unaware that Scoutmob was offering a more hefty discount of half-off everything.
“It would be awesome if when I check in I get a text with those Scoutmob deals,” Mr. Fertel thought. He started building it right away, and a few days later dealburner.com took its first steps on the world wide web, serving up deals instantly to users who check in on Foursquare and Facebook Places.