Having a computer-science background, an appetite for risk, and an eye for solvable problems put you in a decent position be an Internet entrepreneur in Silicon Valley. But there’s also a downside to these traits. You wind up seeing all the flaws and inefficiencies in everyday things and wondering how you could use Web tools to fix them.
That’s what happened to Jeff Hunter and his college friends Jason Marr and Josh Staiger, all members of the Case Western Reserve University class of 2004. For the last three years, the trio of software engineers from the university in Cleveland, OH, have been renting a house together in Sunnyvale, CA. Hunter and Marr worked at Apple, while Staiger worked at Google—up until last summer, anyway. That’s when they decided to quit their jobs to go on a quest to fix, of all things, the venerable supermarket circular.
“We all like to cook, and we would go to the grocery store fairly frequently,” recounts Hunter. “We’re also all frugal Midwestern boys. My mom grew up clipping coupons and she never buys anything that’s not on sale. She’s given me that frugality gene, and Jason and Josh are the same way.”
But these transplanted Midwesterners have a geometry problem: their house in Sunnyvale is exactly midway between a Safeway supermarket and a Lucky store. “It’s not faster to go to one or the other,” says Hunter. “So we pick the store based on the sales, and the sales are all in the weekly circulars. We’d have them sitting in our dining room table, and we’d flip through them to get ideas for what we should make that week.”
The more time Hunter and his pals spent doing that, though, the more frustrated they got. “Many of the deals are not relevant to you,” he says. “I don’t have a kid, so I don’t care about diapers. And sometimes the deals aren’t that great. You might not know that this $5-a-pound beef isn’t such a great deal, because it was on sale for $2 a pound two weeks ago. As technical guys, we were thinking, ‘This is a very interesting data set—there’s a lot of potentially useful information—but it’s not being presented in a way that makes it useful for us.’ We thought that if we could collect this data, organize it, curate it, and think about all the different products we could make with that, there would have to be some inherent value in that.”
That’s the business concept Hunter, Marr, and Staiger pitched to Y Combinator in early 2010, and it apparently clicked with the venture incubator’s penchant for helping entrepreneurs solve what founder Paul Graham calls “hair on fire” problems. The trio were accepted to the summer 2010 Y Combinator class, and they launched Anyleaf in January. The service lets you sign up for a personalized weekly e-mail newsletter listing the best deals advertised in circulars for stores near your geographic location. If the point of circulars is to get bargain hunters into stores and help them save money, the Anyleaf team reasons, then anything that makes deals easier to discover is good for both stores and customers.
Last week, Anyleaf released its first mobile app, for the Apple iPhone, so now deal hunters can search and browse for the deepest discounts and add their favorite ones to shopping lists on the go. Right now, while the Anyleaf guys study how people are using the app and working out the early kinks, the startup is offering discount data only for stores in the San Francisco Bay Area. But their plan is to go national eventually, and to make money by selling sponsorship opportunities in its newsletters and apps and partnering with stores to offer coupons.
So why do grocery stores use circulars, anyway? Lacking the patience to be a bargain hunter myself, I tend to throw them directly into the recycle bin. But Hunter says they plan an important role in the grocery business.
“Stores use one of two models,” he explains. “It’s the ‘everyday low price’ model versus the ‘high-low’ model.” Wal-Mart is an example of an everyday-low-price chain, offering the same prices all the time. Safeway, by contrast, is a high-low chain, offering
