Connecting Mobile Consumers and Local Businesses, With James Sun, Pirq

How do you encourage mobile users to frequent local businesses, via mobile phone? Seattle's Pirq ( is figuring out how to best connect local merchants and mobile consumers, and is just now getting set to take on the nation with its mobile apps. We spoke with James Sun, the company's founder, to hear about where Pirq is and its plans to go national.

Let's start at the top. For our readers who aren't familiar with Pirq, can you talk about what you do?

James Sun: What Pirq does, is it helps local businesses and merchants with yield management, so they are optimizing their traffic during peak hours, and bringing in foot traffic in off-peak hours. It does that by leveraging the frequency of existing customers. For example, we're increasing visits by a customer from once every three weeks, to twice every three weeks. We are also bringing in new customers during off-peak times, when they need some new business. Our goal is to give them ROI on their open hours. On the consumer side, when a consumer downloads our app, they see deals that these businesses will be offering for them to come in during specific hours.

Where is this available, and who is using this?

James Sun: Right now, we're in two metro markets. We're in the Seattle area, covering the Puget Sound, and down in Silicon Valley, in San Francisco. We're soon going to be marketing nationwide, and we're getting ready for the growth curve. The reason why, is we're going nationwide next month, as we've created a new product that we're going to be introducing to merchants outside of restaurants, and which has no geographic boundaries in the U.S.

How has the experience been in San Francisco, and has it been different between that and Seattle?

James Sun: It has been different. The merchants in San Francisco seem to be more open to trying things faster, especially in the realm of technology solutions and mobile. Their adoption rate is faster. Seattle tends to be more economic in terms of weighing the unit economies, before making the decision to try a new technology. We definitely see a different in merchant sentiment.

Do you think the market is ready location-based offers?

James Sun: It's interesting, because I think we've digressed in terms of consumers downloading multiple or even a wide variety of apps. Consumers are actually downsizing on the number of apps they are using, but they have higher usage on the apps they do choose to load. Basically, they're using fewer apps, more often. I think a lot of app companies are finally realizing this, and that it's very hard to get users. They've built apps, and no one came. It's more than typing in a URL and checking a website, there's the act of downloading an app to your phone, which is a very personal device. However, for users who are using apps, they are using mobile and surfing the web more so than on the web. For location-based applications, you really have to differentiate yourself in look and feel, as well as content and utility. It use to be that if you look good, that was fine. Now, consumers are looking at your value from the utility standpoint, look and feel, and the content has to be good.

What are your plans to expand to other markets?

James Sun: We have created a model which is not depending on doing mass, consumer marketing before we launch with vendors. There's kind of a chicken and egg problem. Say, if you want to launch in a new city like Kansas City, you won't have any users in Kansas City, why would a vendor sign up? Vice versa, if you have no vendors in Kansas City, why would a consumer download the app? The reason we're now going nationwide, is we've created a new product that doesn't exist in the market, which will help a merchant or vendor increase the frequency of their existing customers, and not rely on mass marketing to bring in new customers.

How does that work?

James Sun: We have a digital punch card, which works on text messaging as well on the app itself. You don't have to download an app, which is great, because fifty percent of Americans still don't have smart phones. We've created the first solution that addresses 100 percent of the market for local merchants, for everyone who has a cell phone. What happens, is a merchant will load an incentive to increase the frequency of visits. For example, you might go to Starbucks today and buy a coffee in the morning, and they have a treat receipt which encourages you to come back in the afternoon to get a discounted iced latte. In the same way, when someone comes in, and sends a text messages or scans a loyalty punch card, the merchant can offer, in real time, an incentive to come again the same day or next day.

What you've learned most so far with this startup?

James Sun: I think the biggest things I've learned in the mobile merchant market, is that consumers are so ahead of the local merchants in terms of adoption of technology. But, you have to build a company that addresses both. Consumers want the most cutting edge applications, but vendors and local merchants are not ready for that on the back end, and are not ready to manage that. You have to, as a company, arbitrage and help both sides in the middle. There's a multi-billion market being in the middle between the mobile consumer and local merchant.

Thanks, and good luck!