Savy is a company started by a twenty year-old entrepreneur from Columbus, OH, that is trying to help consumers find the best deals on products that they want through a new price monitoring tool.
Through the Savy website, consumers can find the products they want and bookmark them. Additionally, they can set a price that they would be willing to pay. Companies partner with Savy to allow them to track their prices and, when a product meets the customers price or a company is willing to discount to that price, the customers receives a notification that it is now available to buy at the price they were looking for.
Savy as a platform has 1,000 stores partnered and has attracted 2,000 customers through social media in the one year of Savy's existence. So far, nothing has yet to be sold through the website.
The entrepreneur has verbal commitments from four large retailers but those have not yet materialized.
Even though the company is still pre-revenue, the entrepreneur predicts that by the end of the next year the company will earn $1,000,000 in revenue.
Because the platform is still early and no sales have yet been made, in addition to the fact that the commitments are still only verbal, the sharks pass on Savy and the entrepreneur leaves the tank without a deal.
This deal aired on Episode 9.18.
Companies like Savy are truly interesting and represent a lot of potential even though the entrepreneur has to do a lot of heavy lifting to realize that potential. In essence, the company is a "market maker" and must attract parties from both sides of the transaction, with the business struggling until a critical mass is realized. Additionally, the company must bring something that is attractive to both parties until the critical mass becomes self-driving.
In Savy's case, the entrepreneur must entice customers to the platform through the promise of deals to be found on products they like and have just enough deals available for customers to stick around. On the other side, the businesses that the entrepreneur wants to sell through the platform must see enough customers to make them willing to sell both on the platform and at a discount that makes the trouble worth it. On Stats For Sharks, we call this the "Two Market Problem."
The Stats Shark doesn't blame the sharks for being worried about the current size of Savy given these challenges. While few companies do achieve the critical mass necessary to find success those that do become massive. Think eBay, Craigslist, and the like. So while it makes sense to be wary of a company like this, it might also make sense to take small positions in them in case they do manage to make the economics work.