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INTERVIEW: $100 Billion Market, 30% Growth Per Year, Nets Over $10 Million in Sales in Less than Two Years

How many unused gift cards to you have right now?  The next time might be soon­er than you think.   In a mar­ket where play­ers are dis­ap­pear­ing reg­u­lar­ly George Bousis has built a sub­stan­tial defen­si­ble busi­ness in the resale of gift cards.

How do you cre­ate a bar­ri­er to entry in the gift card resale busi­ness?    In this inter­view George tells Roy exact­ly how he has cre­at­ed a tech­nol­o­gy bar­ri­er that is far supe­ri­or to any­thing ever done before in this space.  The busi­ness is grow­ing so fast that he is hir­ing 3 or 4 new peo­ple every week.  Based out of Chica­go, Illi­nois, is a com­pa­ny to watch.

You can lis­ten to or read the inter­view below: 

Roy:    My name is Roy Weiss­man from Today, we’re speak­ing with George Bousis, who’s the founder and CEO of Six­ty-three mil­lion in gift cards go unre­deemed every day. Raise is an online mar­ket­place where users can sell unwant­ed gift cards to each oth­er, turn­ing waste into real value.

Hel­lo George, how are you doing today?

George: Doing well, Roy. Thank you for hav­ing me.

Roy:  George, we appre­ci­ate your spend­ing the time. How did you get into this busi­ness? Why this busi­ness? What is your back­ground? When did you start it? Why don’t you give us the basics?

George: I was in the gro­cery busi­ness before start­ing At the time, I was work­ing for a fam­i­ly busi­ness where I was help­ing devel­op a loy­al­ty and rewards plat­form. Through this plat­form, we’d be able to under­stand exact­ly what our cus­tomers were pur­chas­ing, how often they were com­ing to the store, what did they buy exact­ly dur­ing what sea­son, where did they come from?

A lot of this data, these met­rics kind of fed into a larg­er pic­ture of a real estate port­fo­lio; where we should open up future loca­tions. Kind of through­out my research in the loy­al­ty world, I guess, I came across gift cards space. Doing a lit­tle bit of research on the space, I real­ized there was a huge prob­lem going on with all these unused gift cards. The gift card mar­ket was just grow­ing every year and there wasn’t real­ly a solu­tion for any kind of con­sumers try­ing to turn those gift cards into cash, or buy dis­count gift cards of brands that they nor­mal­ly shop at.

So nat­u­ral­ly, the inner-entre­pre­neur in myself kind of devel­oped a lit­tle bit of a small busi­ness plan, and then tried to put two and two togeth­er of how I could cre­ate some­thing that can real­ly help solve a larg­er prob­lem. I pret­ty much start­ed the com­pa­ny out of my apart­ment about two years ago. Saw mas­sive space, that was $100 bil­lion plus a year, where 20% were going unre­deemed every sin­gle year.

The mar­ket was grow­ing 30% year-over-year, world­wide. I just thought it’d be a large oppor­tu­ni­ty to get involved in this space. I kind of left a day job with the fam­i­ly and start­ed the com­pa­ny. Two years lat­er, we’re grow­ing fair­ly quickly.

Roy:      When you say grow­ing, how big are you today? Can you give us a metric?

George:   Sure, there’s 43 of us here now. We’ve been active­ly hir­ing about two peo­ple a week now. Most of them here local in Chica­go. As far as growth, rev­enue is over eight dig­its. It’s been quite a ride from an apart­ment to a large-scale operation.

Roy:    You guys are doing rev­enues over eight digits?

George:  We are.

Roy:  Now, when you count rev­enues, you’re count­ing, so some­one sells a gift card for $50, how much of that do you get?

George:   Sure, so let’s take it through a sce­nario. Let’s say you have a Tar­get gift card. You received some­thing for your birth­day and it’s a $100 gift card. You’re say­ing that I don’t nor­mal­ly shop at Tar­get. I would rather go shop at Whole Foods. I would rather go use that mon­ey to go pay for some­thing else that I need. You would take that Tar­get gift card. Let’s say you want­ed to list it for $0.95 on the dol­lar. So you list a $95 gift card that’s worth $100. As soon as the gift card sells, we charge a 15% com­mis­sion to the sell­ers. You would col­lect the dif­fer­ence between the $95 trans­ac­tion, less 15%.

Roy:  When you say eight fig­ures, that’s the gross amount for all the gift cards?

George:   That’s correct.

Roy:  Okay, so then you get 15% of that, what­ev­er that num­ber is. But that’s still pret­ty sub­stan­tial. With­in two years, you’re doing an eight fig­ure business.

George:  We are.

Roy:  That’s amaz­ing. Isn’t this space crowd­ed? I mean, you go online. You look up unused gift cards and there’s tons of sites. One site, Plas­tic Jun­gle, claims to be the largest one.

George:  Sure, well actu­al­ly recent­ly, Plas­tic Jun­gle had gone out of busi­ness. This hap­pened a cou­ple weeks ago. We think we’ve real­ly solved the solu­tion in this mar­ket. All the oth­er play­ers in this space are real­ly buy­ing gift cards from their users. If you have $100 gift card, they’ll offer you, say, $0.50 on a dol­lar for your gift card, or $0.60 on a dol­lar. So we’re tak­ing on that lia­bil­i­ty of hav­ing to shift the card, send the card, receive the card, and wor­ry about a ton of cash flow.

The oper­a­tions cost are through the roof. What we’ve done is just cre­at­ed a com­plete C‑to‑C mar­ket, very sim­i­lar to tra­di­tion­al mar­ket­places like eBay, or Stub­Hub, or Etsy, where everything’s done by the users. At that point, we weren’t hold­ing onto any gift card inven­to­ry. We didn’t have to wor­ry about ful­fill­ment. We cre­at­ed tech­nolo­gies to kind of make phys­i­cal gift cards elec­tron­ic. So at the point that the buy­er did pur­chase a gift card, he could access it through his account via mobile device, print the vouch­er, or use it online.

Roy:      But there has to be, I mean, here’s anoth­er one, Gift Card Rescue.

George:  Yep. Gift Card Res­cue, Card Pull, they all pur­chase gift cards from users and they hope to resell them.

Roy:      They buy the gift card? The dif­fer­ence between you and these oth­er guys is you don’t buy the gift card?

George:   No, we just facil­i­tate the trans­ac­tion between buy­ers and sell­ers and col­lect the commission.

Roy:    Is there any­one else out there doing the same thing that you guys are doing?

George:   There isn’t. We’re actu­al­ly the only peo­ple right now world­wide that are doing any­thing like this. I believe the rea­son for that is if you’re not famil­iar with the gift card space, there’s a ton of fraud in this space. Plen­ty of these com­pa­nies have gone out of busi­ness because they didn’t under­stand how to com­bat the fraud. They were tak­ing on all the risk.

Between hold­ing on to the gift card, hav­ing to wor­ry about a ful­fill­ment cen­ter, hav­ing to send to send it out, it’s a cus­tomer ser­vice and ful­fill­ment night­mare to have to deal with all these bal­ances. So what we did is we invest­ed all of our mon­ey in tech­nol­o­gy and secu­ri­ty. We real­ly want­ed to help pio­neer this space and cre­ate the best user expe­ri­ence with the least amount of fraud.

In doing so, our fraud is below, I’d say a quar­ter of 1% on this site. When there is case of fraud, we have 100% mon­ey back guar­an­tee. We do what­ev­er we can to ful­fill any order. We’re actu­al­ly work­ing with the brands direct­ly to com­bat fraud, ver­i­fy bal­ances on gift cards, and do what we can do main­tain a great cus­tomer experience.

Roy:  In oth­er words, if I want to sell my Tar­get gift card, you actu­al­ly ask for the infor­ma­tion and you ver­i­fy the balance?

George:    We do. We work with many of the brands to bal­ance check that gift card to make sure that it wasn’t pur­chased with a stolen cred­it card, there wasn’t any fraud­u­lent activ­i­ty. But this all hap­pens in sec­onds through our tech­nol­o­gy that we’ve cre­at­ed. In doing so, we’re con­stant­ly clean­ing the mar­ket and mak­ing sure that every gift card is legit­i­mate and every gift card has the bal­ance that it was list­ed for.

Roy:   Now, I always won­dered some­thing. When I thought of get­ting gift cards, I said why do I need to go to get a Banana Repub­lic gift card. Why don’t I just get a $100 Visa card and give it away, and then they can use it any place?

George:  Sure, the prob­lem with the Visa cards is that they have set up fees. So as soon as you go to acti­vate the card, plen­ty of times there’s a hid­den $7 or $8 fee, some­times low­er, some­times high­er. After a year of inac­tiv­i­ty, the cred­it card com­pa­nies can actu­al­ly issue a fee month­ly until that gift card is actu­al­ly drained.

Roy:   But don’t the mer­chants, don’t they expire their gift cards too?

George:    Well, in 2009 there was some­thing called the Card Act that was cre­at­ed. I think this is why the sec­ondary mar­ket grew so much. There was reg­u­la­tion in the gift card space, where gift cards could not expire for at least five years. Most of these nation­al retail­ers, to avoid deal­ing with a state-by-state gift card laws, cre­at­ed a non-expi­ra­tion pol­i­cy for their gift cards. How­ev­er, this left a ton of lia­bil­i­ty for a lot of the brands because a gift card is a lia­bil­i­ty on the books until they come back and book that rev­enue in their stores. What’s hap­pened here is we’re actu­al­ly work­ing with a lot of the brands now to lever­age those indi­vid­u­als and bring the moti­vat­ed shop­pers back into their stores.

Roy:  You’re actu­al­ly work­ing with the brands? You envi­sion get­ting rev­enue from the brands for pro­mot­ing their cards?

George:  Yes. There’s a long-term play as far as work­ing with brands, lev­er­ing a lot of data. There’s a lot of rich data that we have for brands that has to do with what oth­er brands is an Apple user inter­est­ed in? What moti­vates an Apple user? How much are they will­ing to spend? What is their demo­graph­ic? So there’s a ton of infor­ma­tion that we have work­ing with the brands to cre­ate a pos­i­tive over­all expe­ri­ence both in store and while a user’s shopping.

Roy:    How are you build­ing your cus­tomers? Just online? Just [to] online marketing?

George:   There’s a kind of dif­fer­ent vari­ety of ways that we’re build­ing our cus­tomer base. Build­ing it through [atril­i­ty] chan­nels, build­ing it through search engine. We start­ed doing a lit­tle bit of paid search, work­ing with offline part­ner­ships as well. I can’t real­ly dis­cuss those right now. But there’s a ton of offline oppor­tu­ni­ties that we have that many peo­ple are going to see com­ing up in the next upcom­ing months.

Roy:  Okay, so do you see your­self as more of a tech­nol­o­gy com­pa­ny or a mar­ket­ing company?

George:  Well, I see us more as a tech­nol­o­gy com­pa­ny with a kind of pro­fi­cien­cy in mar­ket­ing. We work with a ton of data. We have a ton of engi­neers here. Over­all, our most impor­tant kind of way that we oper­ate our busi­ness is from a cus­tomer ser­vice stand­point. Our cus­tomers are very impor­tant to us and we always want every­body to enjoy their shop­ping expe­ri­ence in our stores.

Essen­tial­ly you’re offer­ing peo­ple to have the pow­er of buy­ing mon­ey for less. You’re rais­ing people’s pur­chase pow­er. By doing so, I mean that if you know you’re going to go spend mon­ey at Wal-Mart or you know you’re going to go shop at Whole Foods, why wouldn’t you come on and come pur­chase a dis­count gift card to any of those stores, use them right­ful­ly at the stores, and save mon­ey for shop­ping at a store you’re already going to spend mon­ey at?

Roy:    Now when I buy this dis­count card, these days you just send me a code num­ber or I have to wait for you to mail me the card?

George:  Most of the trans­ac­tions on our site, it’s reach­ing about 90%, are all elec­tron­i­cal­ly. What hap­pens is when you pur­chase a gift card, it’s elec­tron­i­cal­ly avail­able, seam­less­ly on you’re my Account page. You can access that account via mobile device, because our web­site is opti­mized using HTML 5 for smart phones. You can access it on a home com­put­er and print out a vouch­er. Or you can shop direct­ly online by using that code.

Roy: So of your 43 employ­ees, what are the great­est per­cent­age? What dis­ci­plines are they?

George:  I would say mem­ber ser­vices, the risk depart­ment, and sales, fol­lowed by engi­neer­ing, affil­i­ate mar­ket­ing, social, con­tent, and cre­ative user expe­ri­ence and user interface.

Roy:  The new peo­ple that you’re hir­ing, what kind of roles are they?

George:  It’s pret­ty much spread across the orga­ni­za­tion. We’re obvi­ous­ly look­ing for more engi­neers at this time. By engi­neers, I mean pro­gram­mers. We’re look­ing for mem­ber ser­vices. As the busi­ness has been scal­ing and grow­ing, we’ve been grow­ing in the upper two or three dig­its every month. To deal with the call vol­umes and deal with the emails and the live chats and every­thing, the fastest grow­ing depart­ment, I’d have to say, is the mem­ber ser­vices, fol­lowed by our sales team.

Roy:    Many of your cus­tomers don’t just do it online? They call you up?

George:  They do.

Roy: Why do you think that is? They don’t know you? What do you think the rea­son is?

George:    Well, they don’t know. There’s ques­tions. How can I redeem the card? Again, those are all answered on our site. But many peo­ple don’t want to dig around or look for some­thing. Maybe a card goes bad. Hey, there’s no bal­ance on this gift card. Well, what we do is, when you’re pro­cess­ing thou­sands of trans­ac­tions, you’re going to have a prob­lem once in awhile.

What hap­pens is we have to open an inves­ti­ga­tion tick­et, look into the sell­er, see what hap­pened, con­tact the brand, work with them to see what we can do. Over­all, just kind of caters into the whole pos­i­tive expe­ri­ence that we have for our buy­ers. Many times there’s ques­tions on the sell­ers side. How are the fees assessed? When am I pay­ing the fees? Are there any upfront costs? Again, these are all avail­able online. But you’re always going to have cus­tomers that are going to call in and we’re more than hap­py to answer those ques­tions and help our users out to real­ly edu­cate them on what’s going on.

Because again, this is a very new space. There’s not much known about it of, I’d say, all gift card buy­ers, I would say that maybe 1 or 2% only know that you can sell a gift card online and you can get cash back for it. It’s real­ly grow­ing very rapid­ly. As kind of the space grows, you’re doing what you can to edu­cate users and oth­er con­sumers out there on how to sell a gift card or how to buy a dis­count gift card to any brand.

Roy: When I buy a gift card, what, do I print out a cer­tifi­cate that says I have a gift card for X amount or something?

George:  Exact­ly. Let’s say if you come on our site. We have brands like JC Pen­ny have 20% off, or Star­bucks have 20% off. Every day brands that you’re nor­mal­ly going to shop at. When you pur­chase one of these gift cards, the order is processed and you’ll get an email that says that the gift card is now avail­able in your account. You would log into your account and you can either access that using a mobile device. You would show your mobile phone to the cashier at the store. She would type in the pin or scan the phone. You can print out a vouch­er and hand it to the cashier and she would punch it in, or again, scan it. Or if you’re an online shop­per, you can take that gift card ser­i­al num­ber and pin, and go shop online.

Roy: What would you say, obvi­ous­ly it sounds like you’ve built a phe­nom­e­nal busi­ness in a short peri­od of time, but what’s to stop the big guys or some­body in doing this? What do you think your secret sauce is? What’s that bar­ri­er to entry for the oth­er guy?

George:  I just real­ly think we’re very, very far ahead with part­ner­ships, very ahead in tech­nol­o­gy and research and com­bat­ing fraud, and order pro­cess­ing, and in name. I would say we are eas­i­ly a year and a half to two years ahead of any com­pe­ti­tion in join­ing the space. Of course, we wel­come any­body in com­ing into the space. It just fur­ther val­i­dates our busi­ness. But we don’t real­ly see any threats any­time soon or in gen­er­al at all.

Roy:  What do you envi­sion, say five years from today? What do you vision your rev­enue mod­els to be? Where are you going to be gen­er­at­ing rev­enue? Obvi­ous­ly sell­ing, doing the gift cards. Any oth­er chan­nels also?

George:  Sure, I think there’s oth­er kind of plans that we have as far as adver­tis­ing. There’s place­ment oppor­tu­ni­ties for brands. There’s brands sell­ing direct on our mar­ket­place. There’s these offline part­ner­ships. There’s data. We’re in devel­op­ment of large tech­nol­o­gy that we’re going to be releas­ing, I would say in two, four, or lat­ter part of two, three now.

So there’s a ton of things that we’re doing to build on this. In any mar­ket­place, it’s all about crit­i­cal mass and vol­ume. We’re reach­ing that point of crit­i­cal mass and vol­ume pro­cess­ing thou­sands of trans­ac­tions every day. The growth has been phe­nom­e­nal. As more part­ner­ships are estab­lished, as we con­tin­ue to grow on dis­tri­b­u­tion, we know there’s always going to be a buy­er on the oth­er end. Because you’re always get­ting a deal on our site. Regard­less of the brand that you’re shop­ping at, regard­less of the restau­rant that you’re eat­ing at. There’s usu­al­ly always some­thing that’s available.

Roy:  How much do you envi­sion, do you envi­sion using the data to mar­ket oth­er prod­ucts to your customers?

George:  Yes, I think it’s real­ly tai­lor­ing the site to become a social shop­ping expe­ri­ence and work­ing with the brands to moti­vate users to come shop in their stores and real­ly under­stand a bit more about the user. So under­stand­ing that if you’re in the mar­ket for home improve­ment, what can I do to moti­vate that user to con­tin­ue shop­ping, not only using our site, but going to those stores that are fea­tured on our site and spend­ing money.

Roy:     How many cus­tomers have you guys done busi­ness with to date?

George:  There’s been over 100,000 now.

Roy:    You obvi­ous­ly have them all on an email list?

George:   That’s correct.

Roy:   That’s very impres­sive. Why do you think you’ve been so suc­cess­ful with this? What do you think you’ve done, did you raise mon­ey to start this business?

George:  I think it’s the mar­ket. It was ripe for dis­rup­tion. There’s a huge mar­ket oppor­tu­ni­ty when there was reg­u­la­tion of the gift card space, it kind of opened up the sec­ondary mar­ket­ing gift cards. I think tim­ing is a big thing.

I’d say expe­ri­ence. We have a very, very tal­ent­ed team here, from our CTO, from our COO, who’s also my co-founder, from oth­er indi­vid­u­als here in the affil­i­ate space, to mem­ber ser­vices. There’s just a ton of experience.

There’s a very hard work eth­ic. I think com­ing from Chica­go, hav­ing that strong work eth­ic and hav­ing good peo­ple on your side, it’s just been game chang­ing for us. I work sev­en days a week, pret­ty much morn­ings and nights. The thing is you have to do what­ev­er it takes as an entre­pre­neur to make sure that your busi­ness suc­ceeds. You nev­er want to be that indi­vid­ual that says if only I’d worked a lit­tle hard­er, worked a lit­tle longer, worked on these days, things could have gone my way.

From two years, from my apart­ment to now hav­ing, we have an 8,000 square foot space here in Chica­go and are going to be expand­ing on anoth­er 4,000 square feet and grow­ing. I think real­ly the deci­sions that you make ear­ly on and not spend­ing mon­ey out­side your means, and real­ly under­stand­ing your busi­ness. I think the prob­lem is that there are many com­pa­nies that raise mon­ey a lit­tle bit too soon. Rather than build­ing a great prod­uct that peo­ple find tremen­dous val­ue in, they look to try to make as much mon­ey as they can, as fast as pos­si­ble. I think that’s the wrong approach.

I think you need to invest in your prod­uct. You need to pro­vide the best user expe­ri­ence and the best inter­face, the best shop­ping expe­ri­ence online, in the case of an ecom­merce store. You have to give peo­ple a rea­son to come back. That’s real­ly what we’ve done.

Our aver­age cus­tomer comes back mul­ti­ple times per month and shops mul­ti­ple times per month. There’s a ton of reen­gage­ment. We’re very tar­get­ed with the groups that we go after. We don’t just spend mon­ey to spend mon­ey. I think it’s mak­ing smart deci­sions, fac­tu­al deci­sions using data and num­bers to back up every­thing that you’re doing. I think that’s where a ton of the suc­cess comes from.

Roy:   What per­cent­age of your busi­ness is repeat business?

George:  We have an 89% repeat order prob­a­bil­i­ty. Which, in tra­di­tion­al ecom­merce is between 7 and 10%.

Roy: I was going to say, 89% is just, it’s beyond enor­mous. That’s like gigan­to enormous.

George:   Exact­ly.  You’re solv­ing a greater prob­lem, I think, is real­ly the large piece here.

Roy:   Well, when you cal­cu­late, any busi­ness, espe­cial­ly in an ecom­merce busi­ness, the cost of acqui­si­tion is crit­i­cal. What do they say in the cell phone busi­ness, it costs them some­thing like 5 or $600 to get an account. And that’s on top of the cost of the phone and all kinds of stuff. Yet, if you get 89% repeat busi­ness, that means the cost to the per­son to come back is minuscule.

George:    Well actu­al­ly, our cus­tomer acqui­si­tion, we actu­al­ly make mon­ey on the cus­tomer acqui­si­tion cost. It’s a very strange, I’d say, oppor­tu­ni­ty. But again, it’s very prac­ti­cal and very easy to under­stand our busi­ness. You’re buy­ing dis­count gift cards to brands that you’re nor­mal­ly shop­ping at. You’re sell­ing gift cards and get­ting cash for ones in places that you don’t nor­mal­ly shop at or are not going to spend mon­ey at.

Roy:  Now did you guys raise mon­ey to start this business?

George:   Ear­ly on, I kind of used all of my own mon­ey start­ing the busi­ness. Prac­ti­cal­ly went broke and bor­rowed a lit­tle bit of mon­ey from my moth­er, who secret­ly helped us out because I didn’t want to admit to my father that I need­ed a lit­tle bit of help. I think it’s being a lit­tle bit of a bul­ly or being a lit­tle bit tough on myself. I start­ed the busi­ness at 23 years old out of col­lege. There’s not much I could do.

With that lit­tle bit of mon­ey, we built a busi­ness, got it off the ground. Then we raised a lit­tle bit of mon­ey through some friends and fam­i­ly. Since then, we’ve just grown tremen­dous­ly. We’ve had plen­ty of oppor­tu­ni­ties to raise mon­ey with pri­vate equi­ty groups and ven­ture firms.

We’ve, to date, turned every­thing down. I think it is in our plans because we’re reach­ing that point of scale and growth, and we’re also look­ing towards inter­na­tion­al­iza­tion. I think that’s a huge mile­stone and a very large oppor­tu­ni­ty for us to con­tin­ue to grow the busi­ness as we look to expand oth­er markets.

Roy:  Can you give us a sense of how much mon­ey you ini­tial­ly raised in total to get this busi­ness off the ground?

George:  It was a cou­ple mil­lion dollars.

Roy:  Oh, okay. Okay. Then, of course, your part­ner, you said is a developer?

George:   My part­ner actu­al­ly had a very exten­sive back­ground in ecom­merce. He has start­ed anoth­er suc­cess­ful com­pa­ny that was called [Vilio]. They offered prod­uct deals on a dai­ly basis that were heav­i­ly dis­count­ed. Then he was involved in a drop ship­ping busi­ness, which did prod­uct ful­fill­ment for oth­er large ecom­merce websites.

After I’d gone to busi­ness school and came up with a plan, I kind of reached out to him and was like hey, would you like to start this with me? I real­ly think this can be some­thing big. He saw the oppor­tu­ni­ty and jumped on board right away.

Ear­ly on, our web­site was called Our whole idea behind that was con­sol­i­dat­ed sav­ings. It was a place where you can find gift cards and coupons and deals and every­thing all under one domain.

In doing that, we found that there was a lit­tle bit of dis­con­nect as far as gift cards and coupons go. So we decid­ed to split the two prop­er­ties and con­tin­ued on with while also main­tain­ing Coupon Trade as a very suc­cess­ful online coupon site.

We still have that web­site, too, to date. It’s a very suc­cess­ful site. It’s a great way to save mon­ey as far as coupon codes and online offers and what­not goes. You can also stack your sav­ings, so you can buy a dis­count gift card on Raise and if you’re a savvy inter­net shop­per, you can head over to Coupon Trade and use one of these coupon codes and save more mon­ey at checkout.

Roy:    Now the Coupon Trade, is that national?

George:   Coupon Trade is national.

Roy:    Oh, okay.

George:     We work with thou­sands of stores on there, every­thing from Nord­strom, Nike, Tar­get, Macy’s, a ton of these brands where you can come on our site, pur­chase a gift card at 15 or 20 or 30% off. Then you can go on Coupon Trade and find anoth­er coupon and save between 5 and 50% off. Com­bine those sav­ings and save all you can when shop­ping online.

Roy:  In two years, you’ve done a phe­nom­e­nal job build­ing up this busi­ness. Where do you think you’re going to be in three years from a rev­enue standpoint?

George:   From a rev­enue stand­point, we should at least be in a cou­ple hun­dred mil­lion dol­lars in rev­enue in the next cou­ple of years. We already have plans and growth and a whole, I guess, fore­cast of events and mile­stones that we have in mind of work­ing with oth­er affil­i­ates offline, online, oth­er ways to con­tin­ue grow­ing the busi­ness. I think if you look at the rate that the busi­ness is grow­ing at today, it’s very real­is­tic to be at that lev­el in the next 12 months.

Roy:  Who you going to sell the busi­ness to?

George:   Well, I think when you build a com­pa­ny and you look to build a suc­cess­ful busi­ness, you’re not look­ing for the sale right away. I think we’re look­ing to build long-term busi­ness and a busi­ness that will con­tin­ue to suc­ceed and make mon­ey, and can solve a larg­er prob­lem out there for users. I think at any point, if there’s an acqui­si­tion or any­thing that is pre­sent­ed and it’s a right offer, or if we believe that the acquir­er will con­tin­ue our mis­sion to help users and help con­sumers solve this prob­lem, I think it’s very like­ly. In the event that we think that indi­vid­ual or that com­pa­ny doesn’t share the vision that we do, I think we would rather con­tin­ue on and help con­tin­ue build­ing the business.

Roy:  George, you’ve built a phe­nom­e­nal busi­ness here. Eighty-nine per­cent. I’ll nev­er for­get that num­ber. Eighty-nine, I mean that’s like, phe­nom­e­nal. It’s like, if you said that num­ber to any­one, even in the mid­dle of nowhere, they’d be impressed, even if they didn’t even know they’d be impressed. Eighty-nine per­cent repeat business.

George:  We’re con­stant­ly being impressed with what we were doing and so it’s been a dream come true. It’s been an amaz­ing adven­ture. I don’t have any regrets.

Roy:   And then, an acqui­si­tion cost that you make mon­ey on, mar­keters would just be drool­ing at that thought. Today, peo­ple always talk about you got to have an upsell and you have to have ten oth­er things to sell them. So you lose mon­ey on the first sale. You guys, you’re not sup­posed to make mon­ey on the acqui­si­tion cost. You guys have built a phe­nom­e­nal busi­ness in such a short peri­od of time. Is there any­thing I didn’t ask you that you want­ed to men­tion that you think is important?

George:  I think you pret­ty much summed it up. Every­thing was great. I’m more than hap­py to answer any oth­er ques­tions or any­thing else that you may have. Again, I think this whole user acqui­si­tion mod­el for many busi­ness, I think it’s just a bit too much to have to spend mon­ey too ear­ly before real­ly under­stand­ing your busi­ness. Espe­cial­ly for us, mar­ket share was very impor­tant. By build­ing a prod­uct that peo­ple use in their every­day lives, on aver­age when look­ing at our entire user base, time to sec­ond trans­ac­tion, the sec­ond time that they trans­act on a site is less than 15 days.

You’re look­ing at, in a peri­od of about two weeks, you’re hav­ing a user come back and shop twice on our plat­form. Again, I think it’s real­ly pro­vid­ing the users the great expe­ri­ence with a ton of val­ue and some­thing that’s very prac­ti­cal and easy to understand.

Roy:    Two things I didn’t ask you, are your cards right now domes­tic, or are you going to be expand­ing inter­na­tion­al­ly? What are your plans there?

George:  All of our cards are domes­tic cur­rent­ly. Most of them, nation­al retail stores. We are look­ing at local busi­ness­es as well and cre­at­ing a gift card pro­grams, as you may. Inter­na­tion­al expan­sion is huge for us. I think there’s a huge mar­ket oppor­tu­ni­ty in Europe, in South Amer­i­ca as the econ­o­my ris­es there and there’s more and more con­sumers. There’s a huge oppor­tu­ni­ty in Chi­na that we’ve been look­ing at as well in the gift card space.

Now that we’ve already built the plat­form, it’s then doing our dili­gence and work­ing with oth­er stores in those areas. I think that inter­na­tion­al expan­sion is very real­is­tic and going to be com­ing very soon.

Roy:   Where do you think you’d start with international?

George:   Prob­a­bly Cana­da as the clos­est friend and fair­ly sim­i­lar mar­ket to move down into it. After that, I’d prob­a­bly say then the U.K. and Ger­many, France, the entire EU, and then on from there.

Roy:  What per­cent­age of your traf­fic now is mobile?

George:  Mobile traf­fic, I would say is about 15% on our site right now. We’ve seen that steadi­ly increase as our site has been recent­ly [mobile-ly] opti­mized for smart­phones. That will con­tin­ue to go up with time. As this entire mobile expe­ri­ence, more and more peo­ple begin to use it and redeem these in store, it just becomes eas­i­er and eas­i­er. You’re kind of get­ting a bit of that bar­ri­er to entry, if you fig­ure that today most peo­ple have smart phones.

What we’re try­ing to do is train the con­sumer in the thought that you can live life spend­ing less. So if I know in the morn­ing, my rou­tine is get­ting up and going to Star­bucks, I can pur­chase a Star­bucks gift card at 20% off and get a cou­ple free cof­fees over time. If I know my next stop is going to Wal­greens to grab a cou­ple things, I can buy a gift card and use it at check out and save a cou­ple dol­lars there.

I know I’m going to a local gro­cery store. I’m going into a Whole Foods, or I’m going into an Albertson’s or Safe­way, I can pur­chase a dis­count gift card and save more mon­ey there. I think it’s real­ly use­ful and prac­ti­cal life to real­ly save mon­ey on every­day things.

Roy:  George, you’ve done a phe­nom­e­nal job. We’re going to keep an eye peeled on you guys. I mean, if ever there was an up and com­ing com­pa­ny that is real­ly poised to, I mean, you’re doing phe­nom­e­nal, you’re ready. I think it’s going to be inter­est­ing to see. You’ve built a strong infra­struc­ture. It’s going to be inter­est­ing to see in the next year or two how you grow. There’s some very unique oppor­tu­ni­ties to mar­ket your prod­ucts and to build the busi­ness. Your num­bers are already indica­tive of a very strong busi­ness mod­el. How would peo­ple get in touch with you if they want­ed to reach you?

George:  They can email us at There’s also sup­port at Raise. Those emails for any type of press oppor­tu­ni­ties or just any kind of feed­back in gen­er­al. More than hap­py to answer any ques­tions. Many times I hop on the phones and call some of our users and speak to them and ask them about their expe­ri­ence and how we can con­stant­ly improve our site and what we can do to real­ly con­tin­ue to grow and help pro­vide peo­ple with this best expe­ri­ence. Any type of feed­back, any type of inquiries or what­not, more than hap­py to respond to them. Again, hap­py to do so.

Roy:     One last ques­tion. How did you get the domain name

George:  That’s the mil­lion dol­lar ques­tion that I’m asked all the time.

Roy:     I can’t believe I wait­ed this long to ask it.

George:   Sure. That’s been some­thing that a ton of peo­ple have been ask­ing me about. There’s a very long and tough process that we went through. As you know, domains are real­ly com­ing back right now. There’s a huge empha­sis on domains and brand­ing and then cre­at­ing kind of a mean­ing­ful brand behind it.

We’re very for­tu­nate to have one of our investors who’s a brand strate­gist. He’s real­ly helped us through this tran­si­tion. We kind of came up with the name because we want­ed to help raise people’s pur­chase pow­er and real­ly change the con­ver­sa­tion when it comes to loy­al­ty and reward­ing indi­vid­u­als and dri­ving behav­ior in stores.

So we came up with the name. We went out to go buy it and the sell­er of the domain had asked me for a $1 mil­lion. As a start­up, that’s a tough num­ber to kind of com­pete with at the time. We didn’t real­ly think it would be real­is­tic. But I had spo­ken to some of our investors. I had spo­ken to the team. They said you should do what you can and go after it.

I think the inner gro­cery sales per­son in me kind of came out at that point. Going back and forth with that indi­vid­ual that owned the domain, I end­ed up buy­ing the domain for less than $50,000 and got an offer actu­al­ly a week lat­er for $400,000.

Roy:   Wow. Buyer’s remorse, you had none. You were hap­py when some­one made that—maybe it was the guys friend who sold it to you. He had his friend make that offer so that you wouldn’t renege on his deal.

George:    Maybe it was. I think it was a great invest­ment. I think that we real­ly invest­ed in our brand and invest­ed in cre­at­ing some­thing that was pre­mi­um and some­thing that could real­ly con­nect with people.

Roy:    George, you’ve been very gen­er­ous with your time. You shared some great infor­ma­tion with us. I think you guys, we’re def­i­nite­ly going to have to check in with you in a year and see how things are going. It sounds like it’s going to be like, sub­stan­tial­ly larg­er in a year from now. It sounds like you’ve got a phe­nom­e­nal busi­ness going. We wish you the best.

George:    Roy, thank you so much for your time. I real­ly appre­ci­ate every­thing. Thank you for the ques­tions. I’m hap­py to have answered them and hap­py again, to dis­cuss every­thing again lat­er down the road.

Roy:    Thanks so much, George. Have a good day.

George:   Thank you, Roy. You too.

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