Case Study: 3 Day Startup Partners with RetailMeNot for a New Kind of Innovation
RetailMeNot, Inc. is the world’s leading marketplace for online coupons and deals. The company’s websites enable consumers seeking to save money to find hundreds of thousands of offers from retailers across the globe. RetailMeNot partnered with 3 Day Startup (3DS) to host student entrepreneurs at the company’s headquarters in Austin to foster disruptive innovation in digital couponing and commerce.
- Insights into new types of offers, new distribution and redemption channels, and better services for RetailMeNot’s merchant partners
- Six innovative, early-stage student startup teams focused in and around the digital couponing and commerce industry
- One student team generated enough interest to warrant direct seed investment from RetailMeNot
- One team launched during the weekend and received acceptance into a seed-stage accelerator
Duration: Multiple pre-program sessions culminating in an intense three days
Objective: Generate and validate new ideas in digital couponing and commerce by collaborating with student entrepreneurs
Key Insights to Success
- 35 vetted students with diverse backgrounds were chosen to participate through a selective application process
- Pre-program preparation included an in-depth market education session, where top-level executives from RetailMeNot provided students with insider market data
- RetailMeNot employees participated as true stakeholders in the process — many played significant roles in mentoring students over the course of the weekend
- Students were pushed to validate their ideas by taking the streets and talking to customers
Prior to the program weekend, 3DS selected 35 highly-motivated student entrepreneurs from diverse backgrounds through a selective application process. A few weeks before the program, 3DS hosted a market education boot camp with top-level executives from RetailMeNot to expose select students to potential opportunities in the space. During this market education boot camp, RetailMeNot employees helped students establish context and gain an understanding of current trends in the industry.
Brainstorming and Team Formation
On day one, 35 student entrepreneurs moved into RetailMeNot headquarters in Austin. Participants were split into six brainstorming groups where they discussed ideas they would pursue over the weekend and beyond.
A total of 10 ideas were pitched to the entire group and based on feedback from other students and mentors, each student entrepreneur voted on the ideas they wanted to pursue. Ultimately, six ideas were chosen which ranged from a financial tool for low income families to a mobile solution for improving customer shopping experiences at brick and mortar stores. Teams formed around these six ideas and students spent the next two days talking to customers, coding, building business models, and developing a business pitch and working prototype.
During the weekend, many RetailMeNot employees were indistinguishable from participants. This type of interaction with this depth of engagement promotes an atmosphere ripe for new ideas, new insights, and new perspectives. This atmosphere combined with the dedication and focus of the student teams resulted in the outcomes highlighted earlier.
“The students were very well organized. They had a plan, they knew their solution, they broke up into teams, and acted like it. It was really impressive to see them take action and go forward.” – Mike Cravey, Engineering Manager at RetailMeNot
Six Innovative Ideas
Quorum Buy is an online group buying platform that aggregates product purchases. This passes discounts onto customers and helps merchants plan their inventory to better maximize warehouse space and merchandising efforts.
ReQwip is a mobile marketplace for buying, selling, and renting new and used sports gear. ReQwip pushes users to meet at their nearest local bike store for safe exchanges, creating a prime opportunity to push targeted coupons and deals to drive users in-store.
ShopVIP seeks to help brick and mortar retailers improve the customer shopping experience through a mobile solution that syncs to an individual’s social profile. When customers use this mobile app in-store, retailers have visibility to which customers need help and can further engage them with recommended items based on their user profile.
Aggrelink is a google analytics-style service optimized for affiliate marketers targeting small and medium enterprises. The service places particular emphasis on improving cart abandonment metrics.
RaceDay works with event organizers to connect marathon runners with critical race day information via a mobile application. The application also pushes digital coupons to this group of targeted runners, saving event organizers time and money by cutting the need to stuff physical bags with paper coupons and efforts in after-event clean up when these bags are trashed.
Abuelita is a financial tool for the underserved powered by SMS. Upon finding that low income families are four times less likely to use coupons than more affluent families, this team set out to find a solution to help low income households increase their buying power. In the future, Abuelita will push geo-targeted and lifestyle relevant offers to this segment.
Customer Discovery and Market Validation
On day two, teams eagerly hit the streets to talk to customers and validate their ideas. RaceDay headed out to two marathons to seek customer and user input for their mobile solution, and other teams visited local retailers and grocery stores in the area to observe consumer shopping behaviors.
On day three, the six teams presented a working prototype and a pitch in the same conference room where RetailMeNot has inked some of their biggest deals and acquisitions. The crowded conference room offered intimacy and facilitated great interaction between the startup teams and the well-respected panel of RetailMeNot executives. The panel included: Cotter Cunningham, CEO and Founder; Paul Rogers, CTO; Jag Bath, Senior Vice President of Product; as well as Thomas Ball, General Partner at Austin Ventures.
“RetailMeNot is an innovative company and we are trying to find ways to disrupt the digital coupon space as well as shopping in general. It has been really cool to seed a bunch of people in this space and see the crazy ideas they’ve come up with. More companies should do things like this.” – Matt Howitt, Senior Vice President of Engineering at RetailMeNot
Startup Team Outcomes
Abuelita rebranded to GuavaText and RetailMeNot funded their first seed round. The team was also offered The University of Texas McCombs Entrepreneur Fellowship giving them access to resources to help them launch their venture from the university’s MBA Program Office, DLA Piper, and the Austin Technology Incubator.
Aggrelink rebranded to DeckPresenter and was accepted to Gener8tor, a seed-stage accelerator based in Milwaukee, Wisconsin. DeckPresenter was one of the five companies from a pool of 200 applicants that were accepted into this year’s 12 week program.