Tinseltown is better known for producing movie stars, but there may be another star in the making in Hollywood, California-based startup Friendgiftr.com.
Friendgiftr.com recently debuted e-commerce applications that turns sites such as Facebook, MySpace, iGoogle, Ning and Bebo, into social media-based storefronts that sells actual gift cards from retailers and other businesses to social media users. Through a Friendgiftr application, consumers can buy gift cards from more than 130 brands such as Gap, Dominos Pizza, Starbucks, Barnes & Noble, and Banana Republic, among others, for friends and connections in their social netoworks.
“Introducing our network of gift card storefronts across numerous social networking sites is a game-changing step forward in the commercialization of social media,” says Friendgiftr CEO Rob Carpenter. “It’s also a cornerstone of our unique business model. We partner with the companies whose gift cards we sell, which keeps our operating costs minimal, and unlike most web-based start-ups we have multiple viable revenue streams, including commissions from cards we sell through a growing number of storefronts, slotting fees, advertisements and affiliate marketing programs.”
Understanding The Gift Card Economy
Another unique aspect of Friendgiftr is that card recipients can exchange the card given to them for a card they prefer from any of the merchants Friendgiftr offers, at no charge, and without the buyer knowing. Not happy with your Banana Republic gift card? No problem – just exchange it for another. Recipients can even split the gift card amount across multiple merchants, to make sure they get the gifts they really want.
“It became clear that, as we were conducting our market research, we had to do more than just sell gift cards. We had to solve some sort of pressing consumer problem. So we decided on the idea that we were going to allow anyone who received a gift card from one of our storefronts the ability to exchange the gift card for any gift card they want or split it across multiple merchants,” says Carpenter. “After all, everyone has received a gift card at one point or another they just didn’t want and ended up not using it. We thought this was a total waste and needed to be fixed, which is why we allow the end-user or recipient to pick the gift card they really want after it’s been purchased for them.”
“We thought this would be a pretty neat solution for a lot of people.”
Commercializing The Social Media Explosion
Carpenter, who previously worked at the White House and as a business writer, admits that the inspiration behind Friendgiftr is popular social networking site Facebook. Carpenter was intrigued by Facebook‘s virtual economy – virtual goods like smiley faces and cupcakes that users bought on the site – but felt much more could be done. “We thought if users were comfortable buying fake gifts on social networking sites, maybe they’d be comfortable buying real ones, too,” Carpenter says. The idea for Friendgiftr was thus born.
Friendgiftr was originally designed to sell gift cards – America’s most popular gift – on a single platform, Facebook. “Over time, it became clearer that we had a tremendous opportunity to both expand our gift card offerings… and our gift card platforms, by adding other social networking sites like MySpace and Bebo, mobile phones like Blackberry and Android, and an array of innovative new shopping platforms,” says Carpenter.
Growing The Brand
So far, accolades have been streaming in for Friendgiftr, including awards such as the Henry Kravis Prize in Venture Capital and the Venturebeat.com Technology trends competition. Reaching this point, Carpenter reveals, has been a big challenge. “Getting funding in the worst economy since the Great Depression; persuading big merchants to partner with a tiny, unknown startup; and in building customized apps for each platform that we’re on,” says Carpenter, listing some of the numerous external obstacles they faced.
“Fortunately we have overcome these challenges and are moving forward pretty aggressively on a lot of new fronts.”
In contrast to the experiences of many startups, Friendgiftr was lucky enough to land venture funding from Tech Coast Angels on its first attempt to raise capital. “We went to an event called Fast Pitch and gave a 90-second speed presentation, which then led to a 30-day negotiation before we got our first infusion of funds.” He declined to reveal the amount, except to say it has given them ‘a comfortable cushion’ so that it can focus on its mission.
Carpenter says growing the Friendgiftr brand and virtual shopping network will be key to its short and long-term success, but he’s not about to give away its “secret sauce” by saying which platforms they’re moving onto next or its specific marketing approaches. But he does offers this hint. “Needless to say, strategically we rise or fall based on our online reach. It’s crucial for us to multiply in as many creative ways as possible. And it’s especially crucial that we multiply boldly in this economy, as we want to continue to be on the offensive by giving our customers more shopping choices than they ever thought possible,” he adds.
The reason Carpenter believes why they’ll be successful, is because he feels he’s built an incredible team around Friendgiftr. “The team here at Friendgiftr is extremely passionate, hard working, creative and experimental, and willing to try bold new ideas,” he says. “We generally and genuinely love people, culture, and food – especially here in Hollywood – and definitely enjoy having fun in the very fast-paced startup world.” In particular, he gives a shoutout to teammates search engine optimization (SEO) expert Jonny Chan and creative marketing director Jennifer Reece (who Carpenter reveals is working on a stealth marketing concept that will be revealed soon).
Views on Entrepreneurship
Having been both an entrepreneur and social entrepreneur, Carpenter believes he understands the differences and similarities between the two. He encourages as many people as possible – especially the youth – to try both paths out as they can be rewarding. “It’s not just the fact that you are your own boss, but it’s the notion that you have a profound opportunity to create new jobs, new industries, and re-make society,” says Carpenter. “There’s nothing better than to introduce innovations that allow people to live better, more convenient lives – whether you’re offering them a product or service or trying to save the world.”
The biggest lesson he’s learnt as an entrepreneur is to be patient and persistent. “If you want to be an entrepreneur, run a company or nonprofit, make bold changes, and do all of the other incredibly difficult and challenging things that entrepreneurs do on a daily basis, you have to have the tenacity to hold on to your hope until one day your time arrives,” he shares. “If you believe strongly enough in yourself, other people will start to believe in you, too.”
“It’s that simple. Dream big, work hard, learn everyday, be true to yourself, and never give in. If you follow some variation of these themes, you will one day get to where you want to be and achieve your wildest dreams.”