Minneapolis startup Gravy brings game show shopping to your phone

It's "The Price is Right" meets HQ Trivia meets home shopping.

Mark McGuire, a Minneapolis-based entrepreneur, has again teamed up with his frequent business partners Brian Wiegand and Craig Andler. Their latest product is an app called Gravy that brings a game show-like experience to shopping on your mobile device. The startup, which has a team of about 15 people in both Minneapolis and Madison, Wis., launched the app in late May.

"It's essentially social commerce, but it's designed for a millennial audience that wants to have these high-energy gamified experiences," said McGuire, who helped lead the expansion of Wisconsin-based startup accelerator Gener8tor to Minneapolis a couple of years ago. "That's what they respond to. They don't want to be sold to."

Here's how it works: Every night, Gravy livestreams a 15-minute show through the app at 7:30 p.m. The host rotates between a roster of comedians, including Twin Cities-based Mary Mack.

Each show features one product, but it's always kept secret until the show starts to help heighten the suspense.

The host reveals the product and talks about it throughout the livestream. The price of the product drops throughout the show and could theoretically go down to nothing. But it usually sells out before then. The catch is that Gravy doesn't tell users how many of the products are available or how many have been sold during the game, so shoppers have to make a risk-reward decision on how long they wait before buying the product.

Right now, quantities typically range from a handful to about 30.

So they decided to include a guessing game in it, too. After the product of the night is introduced, players can guess at which point that item will sell out. The top 10 guessers split a cash prize of $200 every night. In addition, users can participate in a live chat throughout the game.

"So this way, I'm not passively sitting back and consumer-content," said McGuire. "I'm leaning in and actually playing and participating and competing in some way."

Gravy has been drawing about a thousand live viewers a night, growing about 20 percent a week.

The startup asks brands to donate the products. At the moment, companies don't have to pay anything to have their product featured, but eventually Gravy hopes to make money by charging them a fee for being featured.

"We're essentially giving brands the ability to have a live stage," he said. "You get 7 to 10 minutes of focused attention from a millennial audience on your product. But it's done in a fun, authentic way."

"This is more about the early introduction of products, so it's first run — a new product, a new feature — something where companies are trying to generate awareness of something early on in the product cycle rather than getting rid of inventory at the end of a life cycle," he said.

The product usually sells out at anywhere between 20 to 80 percent of the original price. On a recent night, 32 people got a 20-ounce Yeti tumbler that retails for $29.99 for anywhere from $19.44 to $27.32. Another night, it sold four Toshiba 50-inch 4K Fire TVs, regularly priced at $399.99, for between $243.79 and $280.27.

And in another nod to socially minded millennials, 20 to 100 percent of the amount spent to purchase the products goes to a handful of charities from which the players can choose.

In addition to tapping into the "electricity" of livestreaming, McGuire thinks Gravy could have more success attracting millennials' fickle attention compared with home-shopping networks like QVC and Eden Prairie-based Evine Live, whose viewers tend to be older. Some of the key ingredients, he added, are being mobile-based, short format and high energy, plus gamification and participation.

"You have to give millennials a tremendous amount of value to get them to pay attention to you," he said.

Gravy has raised $2.1 million in seed funding. This is McGuire's fifth startup and his fourth with Wiegand and Andler. One of their most well-known ventures, Jellyfish, a social shopping network, was bought by Microsoft in 2007 and incorporated into Bing Shopping.

Kavita Kumar • 612-673-4113