One of the big problems with daily deal sites like Groupon and Living Social is that the offers tend to attract customers at peak business times, causing havoc for small merchants. A new Seattle area upstart by the name of Pirq believes it has solved that nagging issue with a mobile application that allows restaurants to tailor deals in real-time for specific parts of the day. For example, a sub shop could promote discounts between 4 p.m. and 6 p.m. on Tuesday afternoon.

In that regard, Pirq CEO James Sun said that the offering is similar to the dynamic pricing provided by hotels and airlines.

“The number one complaint that vendors have when they do a daily deal is that all of the redemptions are happening on their peak hours,” says Sun. “We are bringing a yield management piece. And I’ll tell you, we are literally out there competing against Groupon and Living Social and winning those deals.”

A four-month-old joint venture between GeoPage and Passport Unlimited, Pirq is taking the covers off the service for the first time today. The 28-person Kirkland company has already signed up more than 100 Seattle area restaurants, with the mobile app set to debut next month.

Best known for his appearance on Donald Trump’s reality show “The Apprentice,” Sun says that the daily deal model is fundamentally flawed. He calls what Pirq is doing “deal 2.0.”

Sun stumbled upon the idea after a friend bought a daily deal discount to a local spa. The business was so slammed with other people redeeming offers, that Sun’s friend couldn’t make a reservation and the deal ultimately expired.

That caused Sun to think that there had to be a better way. At Pirq, he said that consumers will be able to redeem deals in real-time. And unlike the major daily deal sites, which offer say $30 worth of services for $15, Pirq plans to give customers discounts on the entire bill.

The company — which has signed minimum six month contracts with restaurants like 13 Coins, Cupcake Royale and Red Mango — plans to make money by taking a $2 to $6 fee on each person who dines at the restaurant.

Pirq’s service works in conjunction with Microsoft Tag to authenticate and track the coupons, with the company planning to eventually integrate into the restaurant’s point-of-sale system. It also allows customers to opt-in so that they get notified of deals as they pass nearby establishments.

Small businesses have grown frustrated with daily deal promotions, with a recent study by Rice University discovering that 42 percent of restaurants lost money on Groupon deals.

With Pirq, Sun is trying to reverse that trend.

“On every single deal, the restaurant is profitable,” he said. “We figured out exactly how much they need to make in order to give us our small cut, and it is so much better than the daily deal stuff which is 50 percent of the deal side. That kills their margin.”

Selling to restaurants is not an easy task, but that’s where Passport Unlimited’s experience in promotional dining offerings helps out. Passport Unlimited CEO Roger Blier serves as chairman of Pirq, while other executives from the company are involved in sales, marketing and operations.

Pirq does face a lot of competition. In fact, former Microsoft general manager Davide Vigano recently unveiled the mobile application Foodcaching that allows consumers to find discounts at local restaurants.

But for those who watched Sun on “The Apprentice,” you already know that he doesn’t mind a little competition.

The 34-year-old entrepreneur previously founded Zoodango, a startup that attempted to serve as a matchmaking service between business professionals at local events. Like Pirq, Zoodango had a location-based element to the business. But the idea never took off.

“Five years ago, Apple didn’t even allow geo-coordinated type apps,” said Sun, adding that they were a “little to early.”

Previously on GeekWire: Following in Groupon’s footsteps: A parade of daily deal sites (List)

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  • Guest

    Congratulations to Dr. Sun for continuing to spur innovation in the dealosphere! I’m glad to see progress around temporally-sensitive price controls, or “4D pricing” as I’m inclined to call it.

    • James Sun

      I like “4D Pricing”!

  • Lisamaloney1981
    • James Sun

      @Lisa, we ran into Groupon Now in the marketplace, and we beat them for several restaurant accounts for three reasons:

      1) Vendors manually have to run campaigns but restaurant owners are very busy. We provide a way to automate intelligent campaigns to fully optimize or Pirq up their business…similar to Hoogle analytics for foot traffic.

      2) GP Now takes a % of the deal…we only charge a transaction fee

      3) GP Now doesn’t provide 3 levels of authentication and verification of deals like we do.

      4) GP Now controls the payment by taking money from te consumer and then holding onto the cash and later, paying the vendor….Pirq allows for a direct relationship between the vendor and consumer, we get out of the way.

      And ultimately, my biggest passion is what’s good for the consumer…GP Now makes you pay upfront through a credit card before using the coupon. Big hassle and just not necessary.

      • James Sun

        Sorry for spelling errors. Meant Google Analytics. I was like what’s Hoogle. Darn Iphone.

      • cay

        James, no one

  • Judgejennipher

    Go James, here is a guy who does nothing short of 100% I hope you make a slam dunk..!!

    • James Sun

      @ Judge J, thx for the kind words and encouragement.  We will definitely work extremely hard to build a great NW tech company!

  • Marcelo Calbucci

    When I read the headline I was read to skip this news (“… another GroupOn wannabe…”), but this is a great idea. Excess inventory is a big deal for restaurants (food spoils). I think this is a great service with a great potential. Obviously, they need to get critical mass of both, restaurants and consumers, to get this flight off the ground.

    • Leonardo Vergani

      Yeah, is has great potential; but Groupon is doing exactly the same thing with Groupon Now. :3

    • Leonardo Vergani

      Yeah, is has great potential; but Groupon is doing exactly the same thing with Groupon Now. :3

  • Cliff Rudolph

    James, Great idea teaming with the folks at Passport Unlimited.  Roger is fanastic to work with and leveraging their existing marketshare and relationships with new technology is a fantastic idea

  • ben maldonado

    congrats James. This is a great idea

  • Austin Bowlin

    “Vendors manually have to run campaigns but restaurant owners are very busy. We provide a way to automate intelligent campaigns to fully optimize or Pirq up their business…similar to H[G]oogle analytics for foot traffic.” How Pirq tackles this challenge will be interesting to see. Manual campaigns can be very difficult when restaurants are busy, but this sort of tools appears to be for the times in which they are not. If a ‘intelligent campaign’ is actually smooth and effortless for the vendor then this is a no-brainer, but perhaps the manual campaign ought to be run at first so as to really understand when the deals are best offerend and which are best received. Then the intelligent campaign can analyze and learn from the results. 
    I always hear food food is only a third of the costs of running a restaurant/eatery. If this is true than there can be a great win-win relationship between Pirq and restaurant owners for putting butts in the chairs during slow times. 

    Also Roger is a smart guy and I am looking forward to seeing what him and Mr. Sun put forward, as well as capitalizing on a few of these deals!!

  • Thiaghu Ganesh

    When I read the headline I was read to skip this news another GroupOn wannabe, but this is a great idea….   Groupon Script

  • Jason Gerard Clauss

    Good riddance to Groupon. The only thing more annoying than their smarmy aesthetic was their contempt for their clientele.

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