In Episode 257 we meet Arry Yu, the CEO & Founder of Giftstarter. Previously, Arry was at Logic 20/20 and left her job in June 2014 to go full-time on Giftstarter.
Founded in March 2014 and incorporated in July 2014, Giftstarter “came out of a hackathon,” Arry explains continuing, “I just joined the hackathon to try out an idea that had been brewing in my mind for quite sometime. And we won first place! And I thought if I can convince other people to quit their jobs and join this with me, then we got something going!”
What is Giftstarter?
“Giftstarter is a destination for consumers. We allow people to take anything that’s sold online and make it into affordable chunks. So a $1k sofa, that’s really hard for 1 person to afford. Well why not break it into $20 affordable pieces or $50 affordable pieces and then your friends and family can come in and buy 1 piece for $20 or 5 pieces for $100. Once it’s funded, we ship you the actual sofa,” Arry explains.
Arry goes on to explain that Giftstarter is a “full end to end automated process, everything from sourcing the products that are sold online to fulfilling it. So it’s basically crowd-funding or friend-funding for ecommerce.”
How does Giftstarter make money?
“We make money in a couple of ways; one is a transaction fee to the consumer of 8%,” Arry says continuing that, “think of a $100 item, that’s $8 (transaction fee) and $8 broken into a bunch of pieces, maybe it’s 40 pieces, and no 1 person is paying the fee. Secondly, we also make commission on the products sold because we are actually fulfilling products. We don’t carry any inventory, we drop-ship everything.”
How much total revenue did Giftstarter make in 2015?
“Total revenue was $12k,” Arry says adding in 2016 “we are hoping to get more towards $50k.”
So you must have raised some capital?
“We raised some angel capital of about $525k,” continuing that the capital is, “convertible.”
You must have pitched them one thing and had to pivot, what’s the story there?
Arry explains that initially we thought we were going to be an “e-commerce plug-in” and we found out that we “didn’t have the right product for what we were trying to do,” she says candidly.
“So that’s why we pivoted and it took us a few months to pivot. So we re-launched the product as a consumer product in the middle of 2015. So in 2015, we were acting more like an e-commerce destination for consumers,” Arry explains continuing that towards the end of last year that, “that’s when we found out the customers were loving our payment experience and that’s where we are today!”
Here are the links to get more information:
- For more on Giftstarter, go to www.giftstarter.com
- To email Arry, please use firstname.lastname@example.org
- To find Arry’s blog, go to www.arryinseattle.com
- To find Arry on Twitter, go to @arryinseattle