"I’m sick of deals – the whole idea is to put an end to the madness of deals," Jeremy Galen tells me, Marlboro 27 in hand. He says he used Groupon once to get a deal on a pair of jeans. When he got there he realized the store only sold women’s clothing, which was not exactly befitting of his debonair style. He alraedy bought the voucher, so he went ahead and bought some jeans for his sister. Groupon punked him.
Now he holds forth at length about the gimmicky and tacky feel of group deal sites; their harassment of vendors and consumers, their needless ‘friction’ and homework it might take to avoid future punkings.
Mirth, the startup that Galen recently launched at a party at a bar called White Rabbit on the Lower East Side, sounds much smoother. After enrolling at Mirth’s site with a name and a credit card number, you immediately and invisibly began earning credit at local establishments. The second time in thirty days that you use your card at a Mirth Merchant, you become a "Regular." That title earns you an automatic discount off the bill — no coupons to clip. Merchants in turn get emails and analytics, which they use, says Mirth, “to encourage loyalty through meaningful announcements, special offers, or surveys.”
It might seem like a recipe for spam, but Galen rejects that idea (“You only receive Mirth messages from the businesses you frequent,” he says, adding that filters and options are in place to limit the number of messages any single customer can receive.) Still, the creepy privacy questions aren’t far from his mind. “Mirth users will never feel as though their data is working against them. That’s a promise. So no ads with complex targeting tools. But wouldn’t it be cool to have a better experience of the world based on where you were a regular?” The idea isn’t to give you deals you don’t really need but reward you for being a faithful customer at the tailors and food trucks and cafes you already frequent. (Mirth is focusing on integrating with merchants that have a “personality”; a handful are signed up in New York.) “We want data to be useful, plain and simple,” says Galen.
Mirth tries to have a reasonably minimal approach, hoping to attract vendors to a platform that is less confusing than current offerings. With this frictionless and anti-hassle attitude, such a startup might have a good kill shot on the bigger deal sites. For a customer who needn’t print out coupons, memorize Mirth merchant locations or bring a companion for 2-for-1 deals, Galen says, a three percent discount applied to the check will make her a return visitor. They like to call these discounts, which are set by each vendor, “a little bit of love back.”
Meanwhile, part of the Groupon malaise has been given a number: the company is currently settling for $8.5 million in a class action suit for customers who purchased a voucher between Nov 1, 2008 and Dec 31, 2011 and could have experienced an issue with hidden expiration dates and other restrictions by merchants (claim your small portion at www.grouponvouchersettlement.com).
At the same time, Groupon is trying to add a merchant payment system in an attempt to compete with PayPal and Square by offering a cutrate on credit card processing and keep small businesses online. (One study claimed that 70 percent of small businesses hated Groupon.)
As promising as Mirth sounds as an alternative, it’s yet to be seen if daily deals-wary vendors give them a little love in return.
For now, Galen is still reeling from the attention Mirth received at the TechCrunch Disrupt conference, where he and and his co-founder Phil Reichenberger launched the idea, just weeks after first meeting and starting the company. Among the judges Galen pitched to on stage was none other than MC Hammer. “It was the most legit thrill of my life,” Galen said, as the launch party swelled around him.