$9.4M? And Aprizi’s First Pivot

When Liz and I first started Aprizi, it was very different in concept from where we eventually ended up. I had become fascinated with Mint and Gist, and people’s willingness to share rich data in exchange for the right value proposition. I started thinking about other places where valuable data existed, but was relatively hard to get to. This led me to email and the realization that access to email receipts could generate an incredible database of product-level shopping information that few folks other than Amazon have.

But while email receipts could be useful to a business, that’s not a value proposition to the consumer. So we thought about possible reasons why someone might let a (trustworthy) company analyze their email. I came up with 7 primary ones: a reward points system (ed. after all my time in virtual worlds, I had virtual currencies on the brain); targeted discounts / coupons; easy access to shipping info; analytics on how you spend money; receipt records and organization; 1-click shopping to buy an item again; and personalized suggestions.

Before we decided to officially start Aprizi, I “got out of the building”, interviewing lots of people and running a survey. One amusing discovery was that men wanted reports on their spending activity, but the women pretty universally said “don’t you dare show that to me!”

In the survey, we asked people to rate interest in those 7 options on a scale of 1-5, from “don’t care” to “need now!”. Here are the results, broken into 3 basic buckets:


You might look at that chart and say, “well clearly you want to focus on deals.” However, I had a discussion with a very savvy retail market researcher who warned me that it could be a red herring. Sometimes, he explained, people feel like they are supposed to answer a certain way, but when you examine their actual behavior, you will see a different pattern.

Indeed, that’s what I found when I did more qualitative research. Now, there are lots of people who obsess over deals, but I was focusing on what you might call “middle-class” customers, since I felt like the low-end of the market was pretty covered on the Internet. I found that deals and discounts were not as strong a driver of people’s actual behavior as one might think.

Note that we didn’t have “sharing what you buy” on that list of value propositions. I didn’t buy it. When Blippy and Swipely emerged and raised a ton of money, I starting asking people about public sharing and got really negative reactions. I think that was confirmed by the lackluster uptake of those companies’ initial products.

We ultimately decided that concrete interest existed in two categories: personalized deals and personalized suggestions.

Liz starting building a prototype that would integrate with gmail and pull in Amazon receipts, and I started paper-testing mockups. We also built a “wizard of oz” prototype which felt like a functioning website but was really me trying out different kinds of recommendations on people. We tested both deals and suggestions, things like sample sales and coupons, commodity products and unique items, different price points, and big brands vs indie ones.

We ran some user tests watching people (at this point, we had already focused pretty strongly on women) use the prototype, or if they were remote, trying to hop on the phone with them just after usage. The highest point of “happiness” was reached when a woman discovered a new store or product that held a designer or brand she had never heard of. The body language was amazing, and we decided to focus on trying to bottle that moment, that experience.

Here’s a slide from one of my early investor decks on our “learnings” from all the customer development work we were doing:


I was also getting a lot of signals that people were increasingly interested in smaller or more socially conscious brands, but that it was really hard to make sense of all the noise in the market. What should be a fun shopping experience online was a serious chore. Our decision to focus on becoming a “Pandora for shopping for independent brands and designers” led to a rethinking of the product and our business model, but that can be the subject of another post.

Ultimately, we generated a decent amount of enthusiasm from thousands of users, but we struggled with the investor community. They respected Liz and my backgrounds, but being mostly men, didn’t personally get what we were trying to do. Aprizi was too complex, the “long tail of design” was too unknown, and we made the fatal mistake of delaying connecting the dots to revenue and instead focused our efforts on iterating the product experience. That might work in Silicon Valley, but is very tough in New York.

I do still think that Aprizi tapped into a big problem and someone, someday, will become very successful by solving it. But I can understand the hesitation of investors as well. We had pivoted our business model three times, and while I thought that we could get it working, I knew that there was risk remaining in our e-commerce strategy. I remain proud of what we accomplished with just 2 full-time people and a mere $35K in capital. Ultimately, having a family, I had a limited runway to make it work. We’ve cut down the servers to a bare minimum, but if interested you can still see the product for a little while longer.

So what was the $9.4M you mentioned in the title, Giff? That’s because I woke up this morning and saw the Techcrunch headline that “Project Slice” had raised $9.4M to — guess what — help you manage your email receipts, the concept we had long left in the dust (including throwing our email integration code in the dustbin).

Now I’ve been in this industry long enough to know that raising a lot of money is NOT an indicator of success, but it inevitably raises the question, did we make a mistake? Did we follow our noses off a cliff instead of into the fruit trees?  Maybe Project Slice will prove our pivot wrong. Offermatic is another West Coast company that has raised a lot of money that could show that we were wrong in our conclusions. Entrepreneur to entrepreneur, I have to wish them the best.

We *are* seeing a trend right now where VCs hand enormous sums of money to entrepreneurs with a “previous win” long before product-market fit is established. Granted, that in itself is nothing new, but the volume is higher than the preceding decade.

Startups are a series of judgement calls, and you make the best ones you can based on the information you have at the time.

I don’t regret the 15 months we spent working on Aprizi, not for a second.

14 Comments $9.4M? And Aprizi’s First Pivot

  1. Kelley Boyd @msksboyd May 27, 2011 at 1:34 am

    Wow – Great data and great learning in here Giff.  Thanks so much for sharing.  

  2. giffc May 27, 2011 at 2:49 am

    Thanks Kelley

  3. Joel Andren May 27, 2011 at 4:40 am

    Great post as usual, Giff. Inspiring and humbling at the same. A lot to chew on as I embark on my first (non-hobby) entrepreneurial venture.

    Best of luck on what’s next.

  4. giffc May 27, 2011 at 4:44 am

    Thanks Joel – hoping your new venture kicks ass!

  5. Greg Gentschev May 27, 2011 at 4:49 am

    Fascinating story. It sounds like investors were turned off by the pivots in your case, which is unfortunate since business model changes typically mean your approach improved. I wonder how much investors are seduced by certainty in the wrong approach.

  6. giffc May 27, 2011 at 5:13 am

    I don’t actually think it was the pivots. While I think most investors care more about results than process, I think the forward-thinking ones appreciated the process. Then again, as an entrepreneur you do hear many examples of how absolute confidence and vision can steal the show. Beyond some factors listed in the article, it did not help that fashion, which we were lumped into, has gotten very noisy and crowded. We also did not have a fancy pedigree in fashion, which has driven many investor decisions in the space for better or worse. We knew startups, tech, and product. Our outsider perspective let us come up with something innovative, but hurt us as well. One startup viewed as similar raised money months before us and took many investors off the table with their syndicate. Many factors adding up and it probably depended on the investor.

    What I was personally most worried about was scaling revenue with “long tail” products.

  7. Brian Wang May 27, 2011 at 5:22 am

    Giff, I’m sorry to hear that things with Aprizi are winding down, but as I’ve come to expect from you, it seems like you’re taking it in stride and focusing on the lessons learned.

    Best of luck in your future endeavors – I’ll definitely be watching for them and rooting you on 🙂

  8. Greg Gentschev May 27, 2011 at 5:29 am

    Yeah, it’s often not just one thing. I’d be interested to hear about your long tail concerns some time. Maybe that’s another blog post. 

  9. giffc May 27, 2011 at 12:20 pm

    It was very painful making the decision, but it has now been several weeks and I am trying to think clearly about our path and what lessons I can learn. And thanks Brian – I’ve decided I want to stay on the product side and I am having fun designing and building stuff for friends and a client while I look for a full-time fit.

  10. Liz Crawford May 27, 2011 at 12:59 pm

    Nice post Giff. Ditto on the no regrets!

  11. Michael Grassotti June 1, 2011 at 3:05 pm

    Great post. Here at weshop we had the same reaction to the project slice announcement. FWIW I think you made some great pivots, others have (or will) burn a lot of capital learning the hard way.

  12. giffc June 2, 2011 at 2:09 pm

    thanks Trevor — hope your efforts are going well

  13. giffc June 2, 2011 at 2:12 pm

    thanks Michael — hope you guys are doing well at WeShop.u00a0 One of these days we should grab coffee since we are both in NYC.

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