The holidays are coming up, which means you’ll likely receive a gift card from a business you never patronize. And while some people probably dash out to Red Robin to drop that $25 from grandma as soon as they can, most of us have an unused gift card or two floating around in our wallets.
Vancouver B.C.-based Giftbit sees that as an opportunity. The startup, currently incubating in the Techstars Seattle accelerator, lets its clients hold on to cash from unredeemed gift cards and only charges them when the cards are used.
“Gift card buyers only pay for the cards actually claimed by recipients — not the full face value of the cards delivered — and can set specific redemption time limits on all offers sent, allowing them to match their marketing investments to specific campaigns,” explained Giftbit CEO Leif Baradoy. “Just as important for modern performance marketers, Giftbit customers are able to track, audit, and manage their gift card offers and campaigns down to the recipient level.”
Giftbit hopes to bring more transparency to the century-old rewards-based marketing strategy, so subscribers can use data to measure their ROI.
We caught up with Baradoy for this Startup Spotlight, a regular GeekWire feature.
Explain what you do so our parents can understand it: “People don’t always use the gift cards you give them. Giftbit lets you get money back for unused gift cards.”
Inspiration hit us when: “I was helping my brother move and unpacked a drawer full of unused gift cards. My background is in marketing and user engagement, so I already had a deep understanding of how incentives and rewards were being used online, mostly through digital gift cards. My understanding of the problem of lack of data and inefficiencies in the existing market, plus this insight, made the idea for this business become obvious — hard, but obvious.”
VC, Angel or Bootstrap: “VC because that’s the right next step for our company that will help us aggressively pursue the opportunity that’s in front of us now. We are very grateful for the support of angel investors that we have had to date.”
Our ‘secret sauce’ is: “Transparency in an industry that has traditionally been opaque. Gift cards are based on a century old, pre-digital model where the assumptions for tracking, accountability, insights were simply not possible. Although digital cards exist, a lot of those same assumptions still underpin digital products today. The fastest-growing segment of purchasers of digital gift cards are companies, especially performance marketers. These people expect data so they can measure their performance, improve, and gain new insights.”
The smartest move we’ve made so far: “Creating a culture where people can be intellectually honest. Intellectual honesty fosters a culture where people aren’t defensive about being right or wrong, where we can all acknowledge the strengths and weaknesses of our own arguments and where the top priorities and best ideas are agreed upon and executed.”
The biggest mistake we’ve made so far: “Raising capital at inopportune times. At these times, the fundraising process takes more time and distracts from growing the business. Extending the time spent fundraising unnecessarily comes with a real cost of not focusing on business growth.”
Would you rather have Gates, Zuckerberg or Bezos in your corner: “Bezos, because Giftbit also believes ‘your margin is my opportunity.'”
Our favorite team-building activity is: “Hiking in the mountains near our headquarters in Victoria with a beer at the summit.”
The biggest thing we look for when hiring is: “Intellectual honesty and the ability to learn quickly.”
What’s the one piece of advice you’d give to other entrepreneurs just starting out: “You are wrong. A lot. Most advisors and well-meaning people you talk to are only data-points for you, not sources of truth. There are no easy answers, short-cuts, or silver bullets. If you’re starting out and you’re taking money from an investor, mentally commit to doing the business for at least five years. The best source of information for you is to talk to prospective users and customers. Get revenue. Work with believers. Exercise and eat right.”
Editor’s note: GeekWire is featuring each of the 11 startups participating in the Techstars Seattle incubator in the lead up to the Demo Day pitch event on Oct. 27. Techstars applications for its next class are now open.