different items at a discount every week as loss leaders while raising prices on the other items the store knows you’ll buy if you visit. For high-low stores, circulars are the main way of spreading the word about the discounts. “Safeway spends a lot of money every year sending off those weekly circulars, and it clearly drives people into the stores and improves sales, or they wouldn’t do it,” says Hunter.
All of that said, Hunter and his co-founders are convinced that “the traditional circular is on the way out.” They realized that if they built scraper software to visit the stores’ websites and gather all of the weekly discount data in one place, they’d be in position to apply search and filtering algorithms to help people compare the deals at nearby stores, or see just the deals for the grocery items they buy regularly. (Vegetarians, for example, can opt to screen out deals on meat items.) With all the data in one place, Anyleaf would also be able to give some context for each deal—showing how this week’s circular price for steak, say, compares to the average price, the historical low, and the historical high. “Only the most hard-core bargain hunter is willing to do that kind of exhaustive research,” Hunter says.
But the first version of Anyleaf was more like Google than Groupon. “We were thinking of it as Google Finance for groceries,” Hunter says. “You could see price fluctuations in chicken breasts over the last three months. It was kinda cool from a geeky, data-analysis point of view, but what we realized early on was that that just doesn’t match how people shop. The one thing that’s not broken about circulars is that they just come to you. So we decided to focus more heavily on e-mail and having the deals pushed to you every week.” Two-thirds of the way through their Y Combinator session last summer, Hunter and his co-founders scrapped their first prototype and started building a new one focused on reassembling the scraped deals data into location-specific newsletters. “Think of it as your personalized weekly circular,” Hunter says.
The Anyleaf iPhone app introduces a new spin. “If you didn’t have time to plan before you went to the store, you can just use that to see the top deals” once you get there, Hunter says. “Right now we’re thinking of it as an ancillary thing. But for all we know, people will focus on the app, and maybe that will become our complete product.”
Even if the app and the e-mail newsletters find a big following in the Bay Area, however, growing beyond NoCal will be a challenge for the startup. That’s partly because the grocery business is so fragmented. The top 10 grocery chains in the U.S. account for only 30 percent of sales. To offer fairly complete coverage, Anyleaf would need to scrape weekly deals data for more than 200 chains—which would not only be a computing challenge but bring its own problems in areas like quality assurance and “data cleanliness.”
“All the stores post [their deals] in different formats,” says Hunter. “We have to parse the product name, the quantity, and the price, and then we have to logically identify different products—we have to say this Lucky chicken breast is the same as that Safeway chicken breast, and they should show up on the same page when you’re comparing.”
Hunter says the startup is considering seeking freelance help screening all this data from deals bloggers and mommy bloggers. “But we don’t want to spend a bunch of time and money expanding until we know for sure that we have the right product and the right business model in place,” Hunter says.
So far, Anyleaf is largely a bootstrapped operation, aside from Y Combinator’s investment last summer (the incubator usually puts $15,000 to $20,000 into its startups). “If we hit on a sustainable business model and we want to expand nationally, we will definitely have to do some fundraising then,” says Hunter. “For right now, we are not in desperate need of funding.” Which isn’t too surprising for a group of frugal Midwestern boys.
