In 1992, Jonathan Coon started a company out of his Brigham Young University dorm room. He says he was trying, like all entrepreneurs, to solve a problem.
“I was a poor college student and contact lenses were expensive,” he said. “They took a week to get, which didn’t make sense to me. They were already made.”
That idea became 1-800 CONTACTS, a company Coon co-founded that went on to become a hugely successful public company that helped not only popularize contacts by mail, but contributed to creating a 2004 federal law requiring optometrists and other eye-care professionals to releases contact-lens prescriptions to patients.
For more than two decades, Coon stayed with the company as CEO. Then, “all the major problems were solved,” he said.
So he found another problem. In 2012, while doing some shopping with family at a Walmart store, he found a two-pack of candle lighters and decided to showroom the price using Amazon’s mobile app.
“I was really surprised by the results. The package of lighters was $5.97 at Walmart and it was $15.99 at Amazon,” he said. “And I was like, that’s not a subtle difference, that’s not 5 or 10 percent. That’s three times the price. I realized free shipping was being baked into the price on certain products, and we don’t bother to check anymore (on less expensive items).”
That idea became Wikibuy, a comparison-shopping tool that launched in beta at the end of 2014. It was a fast transition from 1-800 CONTACTS, he said.
“I went to my retirement lunch after 22 years on a Friday and that Saturday and Sunday, I was interviewing people to come work at Wikibuy,” Coon said.
WHAT THEY DO: The Austin-based company helps online shoppers compare prices not only at Amazon, but with hundreds of online retailers and eBay verified sellers. Coon says the company is like “Waze applied to shopping.” It combines the company’s own information and machine learning with the crowdsourced experiences of its users. It not only compares prices across sites, but also verifies and applies coupon codes and calculates overall shipping and tax to give customers a final price.
Coon says shoppers have become so used to shopping on Amazon.com that they rarely do comparison shopping for items below a certain threshold, say $100, because it’s too time-consuming. “It’s a repetitive task, something a machine can do,” he said. “We built a machine, and that’s what Wikibuy is.”
Shoppers can search for items on Wikibuy.com or use a browser tool that follows them along on shopping sites and compares prices in real time. As more users shop with Wikibuy, the comparison results become more accurate and useful, Coon said.
WHO THEY ARE: Coon is leading a team of 24 full-time employees out of an office in Southwest Austin. The original idea was to launch several startups, including several in e-commerce, under the banner “Impossible Ventures,” but the team has instead been focused exclusively on Wikibuy, which has grown to 1 million users, the company says.
INVESTMENT: All of the company’s funding has come from prior investors in 1-800 CONTACTS, mostly friends and family, Coon said. “We don’t have any institutional investment,” he said. The company is not disclosing how much it has raised. The company’s business model is to make money from people searching for items on shopping websites, on the use of coupon codes and from alerting shoppers to price drops. “Each of those things monetizes in the same way,” Coon said. “Sellers pay for orders.”
The company charges 5 percent in affiliate fees on average to sellers.
BIGGEST CHALLENGE: In the beginning, Coon said, the company’s biggest challenge was keeping the product from getting too complicated. It was originally envisioned as a do-all cart for shopping the entire web. It turns out, he said, that customers wanted to shop and buy from retail sites, not have Wikibuy as a payment middleman. So the company pivoted and made Wikibuy easier to use. Now, Coon said, the biggest challenge is finding clever ways to acquire customers for less than their long-term value. Some of that involves spreading the word that Amazon is not the only retailer to shop with online.
“It’s not Amazon or, it’s Amazon AND the rest of the Internet,” Coon said. “If you don’t check the rest of the Internet, you could be missing out on a good deal on the same item.”
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