If you blinked during the second week of May, you might have missed the fact that a Silicon Alley daily-deals-resale company called CityPockets had disappeared from the New York startup scene, only turn up in Silicon Valley a week later with a new name, Reclip.it, and a new focus, as a sort of Pinterest for coupons.
It’s one of the most sudden and drastic startup reinvention stories I’ve come across lately; if pivoting is like stepping off a cliff into the unknown, then Reclip.it’s founders are doing it in true Wile E. Coyote fashion. I met with co-founder Cheryl Yeoh recently to find out exactly how it went down.
“In April I was out in California and I caught up with Dave McClure,” Yeoh says. McClure, of course, is the prolific angel investor and founder of the Mountain View, CA-based startup accelerator 500 Startups; Yeoh had met him at South by Southwest in 2011. “I told him what we were working on [with the new coupon service]. He has a lot of companies that he has funded that work with moms, so he saw a good fit. He was like, ‘I will invest in you. Can you move here next week?’”
Yeoh’s answer: “I certainly can.”
That was on Sunday, May 6. Yeoh flew back to New York that night and convinced her team to move to California with her. By Wednesday, May 9, they’d signed a term sheet and bought their tickets back to the West Coast. And by the following Sunday, May 13, the team was in Mountain View, in time to join the summer term at 500 Startups.
“It was pretty sudden,” says Yeoh. “I didn’t even have time to tell my friends that I was moving.”
It’s not unusual for a startup to throw out its original product and start over, or to change its name, or to move from one city to another. But Reclip.it did all three at once—which makes it an interesting case study in what you might call “the power of the pivot.”
To rewind the story a bit: Yeoh and her co-founder Jhony Fung, both former management consultants, started CityPockets in 2010 as a kind of online wallet and marketplace for daily-deals vouchers. This was back before the bloom had come off the rose for giant daily-deals sites like Groupon and LivingSocial; Yeoh and Fung had observed that some people were buying so many vouchers that they’d forget about them or fail to use them before they expired. “We offered a place to resell the vouchers they couldn’t use,” says Yeoh.
It was an interesting idea, and one that that a number of other daily deals resale sites, such as CoupFlip, CoupRecoup, DealsGoRound, and LifeSta, also pursued. But it turned out that it wasn’t a big enough idea to live up to the dreams Yeoh and Fung had for the company. So they decided to explore a related area: the world of coupons offered by manufacturers and chain stores.
“We found that there was this whole community of people using coupons, and it was a way bigger market,” says Yeoh. “Daily deals are still an evolving market, whereas couponing has been going on for decades. And with the downturn in the economy, people are looking for a way to stretch their dollars, which makes people who aren’t normally into coupons look at them.
Yeoh credits shows like TLC’s “Extreme Couponing” and even Groupon itself with removing the taboos around coupons and vouchers and making it cool again to save money. Once you start looking for coupons online, you can find them everywhere— thousands of coupon-clippers share their best finds on their personal blogs, for example. The problem, says Yeoh, was that there wasn’t a good place for coupon clippers to track or share these deals. “All the big coupon sites were built in the 90s and are cluttered, text-based, and hard to read,” she says. “Then there are millions of coupon blogs, with moms curating coupons, and they have a huge readership but they are all really old-fashioned. It’s a really bad user experience.”
Yeoh says she and Fung wanted to build a coupon curation site that would be social, fun to use, and appealing to younger consumers. Inspired by the success of Pinterest, the online pinboard service where people share images of everything from to DIY crafts to exotic vacation spots, they built a site that amounts to a pinboard for deals. If you find a great deal on the Web, you can
