Former ‘The Apprentice’ contestant James Sun is the CEO of Pirq, a mobile app service recently launched in the Seattle area that offers users the ability to claim daily deal offers from nearby restaurants on their smartphones.
1. What made this past year the ideal time to launch a service targeted exclusively at smartphone users, despite a great deal of cell phone users in the US still yet to adopt internet-enabled devices?
There are a couple factors that are happening. The first one is the proliferation of smartphones coming down in cost, so that the average user can get one. It’s now well over 50% of mobile users that have smartphones. From a smartphone perspective, we believe that it will be ubiquitous, and within in the next three years, we’re projecting that pretty much 70-80% of the people that we’re targeting will have smartphones. The second part is that people want deals on their phone because it’s convenient and also relevant to their location. The old-school way was going onto a daily deals site and finding a restaurant or service deal for later, but it’s now more about people wanting to know right now, this moment, where they can find a deal, because they’re hungry. So it’s a combination of smartphone users increasing, and people wanting to save money in a bad economy.
2. Considering the appeal of paperless transactions, what do you think that spells for the future of all of the other now-traditional daily deal services, as well as the future of the daily deals business in general?
I think the daily deals business is here to stick around. Having talked to local restaurant owners and vendors, I find that they are continuing to look at making deals that will bring traffic to their restaurant. But the daily deals business will change dramatically, because a lot of restaurants don’t want to do the traditional daily deal where they sell a thousand of these, or five hundred of these, where the discounts are being used at times where they’re already busy. The restaurants and vendors are getting smart about when to do deals, and so I think that where the situation is going is that there’s going to be players coming out with smart, intelligent systems that are going to help a local business owner manage their campaign in an automated fashion, similar to Google Adwords. So that’s where the direction is going in; I believe it’s all headed to the smartphone. People getting their daily deals in their e-mail and printing it out is going to go away. I firmly believe it’s going to go to mobile, and it’s going to became more intelligent for the business owner to know when to run these campaigns.
3. There have been many concerns and stories about businesses being hurt by daily deals sites due to lack of strong communication between the vendors and the deal providers. What sorts of steps need to be taken to keep it an open and trustful relationship?
The number one thing is that if there’s not a win-win-win, it’s not going to work. That means that the vendor has to win, they have to make money; the customer has to win by feeling like they got a good deal; we have to win by making money and being in a business that has longevity. We built our whole company and our product based on those win-win-win factors. For the restaurant or local business, they make money on every single deal they do; they don’t lose money at all, ever, even at 50% off, because of the way we structure the cost of that deal, and because we’re bringing in traffic at non-peak hours. The customer feels good, because they have a deal that they don’t have to pay for. It’s not fair for the customer to buy these deals that expire or lead to bad experiences. That’s not a fair process either. With us, they don’t have to buy anything with a credit card; you just grab the deal and it’s yours. As a company, we have to win too, obviously, because we have to make money to be in business. We’re still making money today, because we have a very good model built off everyone winning; that’s our approach.
4. What led to Pirq engaging in philanthropic efforts immediately upon release?
That was actually something that Bill Gates encouraged me to do as we were about to launch. He encouraged putting into our business model the aspect of philanthropy and giving back. We realized that if it’s the customer winning, the vendor winning, and us winning, it makes sense for everyone to feel good about being in business with each other. So when a consumer uses Pirq, they feel good about feeding someone that’s hungry, a food bank or a homeless person. When the vendors signs up and puts out a deal, they feel good about helping the community that they’re making money off. And from a company standpoint, for Pirq, we feel good about being in the technology business that also cares about the community. We feel like by having the community at the core of what we do, it makes everyone in the ecosystem participate more willingly. That was a fire that was sparked by Bill Gates.
5. The tech industry here makes the Seattle area an ideal place to introduce this kind of service, but looking toward the future, how will you go about determining which markets are also strong candidates?
The way we look at it, firstly, is the demographics. We ask, do they have high rate of smartphone penetration? Then we look at the restaurants. Are there a good group of restaurants that are progressive and looking at new ways of promoting their business? Third, we look to see if it’s a large enough market. Those three factors define what we’re looking for, and the next market that we’re actually opening up, coming up in March/April time frame, will be San Francisco and the Bay area.