"During our first few months at Harvard, we looked at different markets and started seeing what we could take advantage of, and we stumbled on the market of grocery coupons," said Jason Gurwin, who co-founded Pushpins with his Harvard classmate, Peter Michailidis. "Grocery coupons have practically been done the same way they were done 100 years ago, so we wondered, 'What happens if you get rid of the paper and do the process completely digitally from your smart phone?'"
The business partners entered their Pushpins idea into an executive summary competition held at the Massachusetts Institute of Technology in February 2010 and won the $5,000 first-place prize — which was enough for them to start building it into a basic mobile app.
Two months later, venture capital firm Lightspeed Venture Partners approached the pair with an invitation to its annual fellowship program, which flew the Pushpins team out to Silicon Valley with a $50,000 grant to develop a market-ready version of the app over the course of 10 weeks. At the end of the program, the company was delivering coupons to shoppers in 250 area stores, and in September 2010, it received an investment of more than $1 million from Lightspeed and Archimedes Capital to further expand that footprint.
Today, the iPhone and iPad app features digital coupons that can be redeemed at more than 6,000 grocery stores, which accept the coupons through their existing point-of-sale systems.
"It's amazing that, from the stores' business perspective, this doesn't really change the game for coupons," Gurwin said. "Now, they're simply sending coupons to manufacturers with the digital infrastructure they already had in place, instead of doing paper drops."
While Gurwin and Michailidis were expanding their one-click coupon clip platform by persuading consumer brands — many of which are located in New Jersey — to include their products on Pushpin's database and pay per clip, San Francisco, Calif.-based Performance Marketing Brands, which operates online shopping programs Ebates.com and FatWallet.com, approached the business partners with an acquisition offer that was sweeter than any potential rounds of growth capital.
"We went into this business wanting to build something big, and we knew the best way to do that was either to raise more capital or to partner up with a company we admire," Gurwin said. "When PMB reached out to us, we saw what their strategy in mobile retail was and we were shocked at how close it was to what we saw the future of shopping being."
Though PMB now owns 100 percent of the company, Gurwin said he views the acquisition as an opportunity for him to further grow Pushpin's sales and technology platforms, as his original team currently leverages Ebates.com's large sales force and extensive technical experience.
"A lot of people say an acquisition is the end for an entrepreneur, but I think this is part of the beginning, as we can now bring what we've done to tens to millions of shoppers," Gurwin said. "The goal is to make grocery shopping easy for everyone, including the stores, and with PMB, we have an even better chance of making that happen."