Eldar Sadikov's Jetlore turned down a Groupon acquisition in 2011 to prove their content-analysis engine could work beyond deal sites. They licensed it to eBay, LivingSocial, and One Kings Lane instead, delivering over 2x revenue lifts and validating the broader technology.
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And we had a very big dilemma at the time because we were small. I mean, you know, at the time we were only like 2 years into it. And I think as first-time entrepreneurs, it was very, very exciting to think about it and be like, wow, I could make a quick exit within a 2-year timeframe and make pretty serious money at the time. We got lucky with a few investors. Um, um, and, and one of them connected us to Groupon and, and he said, listen, like, why don't you show it? And we were lucky because at the time Groupon was very entrepreneurial. So at the time it was like, you know, um, it was, um, Groupon just was making a lot of acquisitions. So a lot of the internal folks that were at Groupon were former entrepreneurs of companies that Groupon acquired. So like, you know, when you connected with them, they're like, oh yeah, we, you know, this is sound, this sounds cool. Like if your engine can analyze the content of Groupon deals, we could totally put it to use and we could like do something with it. Because one of the biggest challenges that they had at the time was that, you know, they had this big inventory of deals that they sourced from local businesses, whether it's like, you know, nail salons, massage spas, like you name it, like, you know, um, restaurants and they don't know if this deal is about the same thing. Let's say you have hundreds of businesses in San Mateo or around San Mateo and you don't know, like, is this restaurant deal the same as similar to this other restaurant deal because they both, let's say Italian, and they both talk about Alfredo pasta, let's say. And so we ran our engine on some Groupon deals and showed them that we could mine essentially salient terms from the product data, and this way we could analyze what people were buying in the past and say, because you bought deals from nail salons before, then you're likely to buy nail salons in the future. So if there's a new deal from a new nail salon, in, in the vicinity that's gonna be relevant to you. And so we proposed that as, as kind of like, oh, we could essentially— it became a personalization engine because we didn't envision it that way. We didn't think about it that way because we were like, well, we just, we have this cool technology. We don't know how to, to apply it. But I think that, you know, they said, okay, what you need to do is essentially something that's gonna rank deals for me. And I said, okay, well, we can build that. So we built that, we did some offline evaluation, it looked promising. We were very serious about it, being a 7, 8 people company. Groupon obviously did not look at us very seriously. They were like, well, these guys are like a bunch of scientists. They sound very smart and the tech looks solid, but they don't have a product. We're not going to license this product from some 7, 8 people company. Uh, if, if it works, then let's just buy them because that's, you know, as a company that I think at the time they, they just went public, if I'm not mistaken, 2013. Um, and, and that's kind of what their interest was. And I'm not going to tell you the full story, but essentially they approached us and said, you know, we want to buy you. And, um, we had a, we had a very big dilemma at the time because we were, small. I mean, you know, like at the time we were only like 2 years into it. And I think as first-time entrepreneurs, it was very, very like exciting to think about it and be like, wow, I could make a quick exit, you know, within a 2-year timeframe and, and make, you know, pretty serious money at the time. And, but at the same time, we were young, foolish, and hungry. And one of the big decisions we made was that we said, you know what? Let's just move on. Let's see, maybe this technology can actually be applied across the board. Maybe Groupon is not the only company that could use this technology. And what we've done is that we went and made a very bold move. And we went to LivingSocial and a bunch of other flash sales companies at the time that were either competing were very closely aligned in terms of the space with Groupon and said, well, look, this tech works very well for Groupon. We'd like to— do you want to license this tech from us? And the crazy thing was that we got those customers. And so we got the first pilots, and we ran a pilot with LivingSocial. We ran a pilot with eBay, and eBay is not a deals company, but what eBay had at the time and still has is the program called eBay Deals. It's essentially like a subset of eBay inventory that's high-velocity flash sales offers that they source, and it's constantly changing, like products that are competitively priced. And we're able to apply this technology for eBay And it was successful. Like we got very good results for them. I think that in the program where we launched it, I think it was pretty massive lift, more than 2x revenue uplift in the program that we, where we launched that. And, uh, very quickly, almost in parallel to that, we signed One Kings Lane, which at the time was a pretty big company. Like it was valued at $1 billion. Like, right, you know, eventually One Kings Lane got acquired. By Bed Bath Beyond, but at the time it was riding pretty high and we got all these popular e-commerce companies that everyone talked about, Groupon, eBay, LivingSocial, Watkins Lane, and it was pretty exhilarating and very quickly people started approaching us from the outside saying like, oh, this guy is like, yeah, it's Yeah, it's just like 10 people like from Stanford like doing something, but they must have something important if every, if every big e-commerce like company that's currently hot is looking to use them. And it was very exhilarating. I think this is the moment when, you know, we, we, the struggle, I literally tell you that 2012, 2011 were not easy because we struggled because we, we tried one thing, it didn't work, we pivoted. So it was a, You know, it was pretty stressful to go through that, but then all of a sudden we have the success and, and it was very exhilarating to like actually start invoicing customers. And we realized quickly that we actually have a service that people can, can use and rely on. And, uh, we quickly also build out the service in a way that it would not be simple like API, but you could actually plug it in into certain marketing channels like email, for example, by embedding just like images. And then you could dynamically insert content into those channels without a lot of integration. And I'm showing you some of the pictures from the time, like I think that this picture is probably circa 2013, 2014, some of the first conferences we went to, like our office and things like that.
