NCSU students digitize bargains in Durham-based venture

Coupon books use smartphone

dranii@newsobserver.comMarch 4, 2012 

A startup that originated in an MBA class at N.C. State University is putting a 21st-century twist on the coupon books that community groups sell as fundraisers.

"We are taking that same business model and eliminating the paper from it," said Matthew Davis, chief operating officer of the Durham-based venture, Zeek, which operates in space in the American Tobacco Campus that was donated to NCSU.

Zeek has digitized the coupon books that feature discounts and buy-one-get-one-free offers from local merchants and are sold by school and church groups and nonprofits. Instead, you can call up Zeek coupons on your smartphone and electronically "clip" them as needed. Those who don't have smartphones can print out coupons from, the company's website.

The community groups that Zeek signs up "sell one-year memberships to our mobile and online site," said Davis. "Just like the books, it is loaded with at least $1,500 in savings" from more than 100 merchants per market.

Zeek was conceived for a class project by Jonathan Stephens, 33, an MBA student who is concentrating on high-tech entrepreneurship at NCSU. He teamed up with two of his classmates, Davis and Josh Robertson, and the co-owners of Durham Web development company Smashing Boxes - Brian Fischer and Nick Jordan - to create Zeek.

Stephens, who is CEO, and Davis are pursuing their MBAs but quit their full-time jobs in order to devote more time to making Zeek work.

"I think Zeek is at the forefront of the new world where the smartphone is going to be (a vehicle) for doing lots of things you never thought of," said Al Bender. Bender, who has been CEO of numerous startups, is one of two NCSU mentors working with the Zeek team.

Digitized coupon books have some inherent advantages. Because they're not tied to when they're published, groups can sell them year-round, and merchants can join up at any time. Merchants who are already participating can change or add deals, although Zeek requires that replacement deals must be roughly comparable. And you don't have to worry about forgetting your coupon book - it's on your smartphone.

Moreover, the market is becoming so saturated with paper coupon books that a mobile version is a way for community groups to differentiate themselves, Stephens said.

Testing the concept

Last fall Zeek started signing up merchants in two test markets, Wilmington and Greensboro, and to date they have landed more than 100 in each market.

They're testing the concept this spring with about 16 community groups who recently began selling Zeek memberships; eight others have committed to future sales. The groups get to keep half of the $25 price of a one-year Zeek membership.

Zeek also recently expanded into northern Virginia. The goal is to work out any kinks before the fall, which is the major fundraising season for community groups.

"Parents who use smartphones, use technology, are really into it," said Stephanie Lanier, PTA president at the Child Development Center in Wilmington, which recently started selling Zeek memberships.

Lanier has known Stephens since they were college classmates. Zeek has deliberately avoided entering the Triangle market because Stephens' sister, Holly Armstrong, and her husband own Greater Raleigh Citipass and Chapel Hill/Durham Citipass.

Certainly established coupon-book companies in the markets Zeek is entering could go mobile too, but Zeek is betting it can establish its brand before others invade its digital turf.

"Why did Blockbuster not respond faster to Netflix? Why did Borders bookstores not respond faster to Amazon," said Stephens. "It's an inertia thing."

Ranii: 919-829-4877

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