The Gifts Project is a social ecommerce platform enabling group gifting. Its CEO, Ron Gura, was a mentor at Seedcamp Tel Aviv 2011, an early-stage micro seed investment and mentoring programme. Startup Intelligence recently interviewed him for VC Cafe.
Anyone who has tried to get a group of people to buy a gift, say, for a friend’s birthday, knows what a mess the whole process can be. Members of the group buying the gift initially all promise to contribute equal amounts of money. But then time passes, some members contribute and some don’t; then more time passes, over the course of which awkward reminders are emailed round prompting partial contributions, apology notes, and IOUs to slowly begin trickling in. All too often, as a result of this commotion, the gift doesn’t get bought at all.
Ron Gura, co-founder and CEO of The Gifts Project, believes his B2B platform solves this problem. The company has created a plug-in which displays a Group Gifting widget on e-retailers’ product pages. Now, when your friend’s birthday comes round, one person can identify a gift, click on the product page’s Group Gifting widget, and invite a group of friends via social networks to contribute to paying for the gift online. When the cost of the gift is fully covered then the organizer can complete the purchase.
This solution is obviously more efficient than traditional offline methods of group gifting. What makes the Gifts Project such an exciting start-up is that not only is it great for customers, but it’s great for e- retailers too. As Ron explained, the main value proposition to e-retailers is that his offering “makes the purchase completion rate as high as possible”. He has taken the whole process of group gifting online and made it as easy and convenient as possible. Group members therefore have little excuse not to cough up their share.
The Gifts Project can point to analytics which show that it helps e-retailers generate higher revenues, to the tune of 5x higher and more, by increasing the total amount of money users end up spending overall. The company takes a commission on every purchase.
“This is the future of social commerce”, Ron believes. Others agree. For example, Dr Yossi Vardi, Israel’s most famous angel investor, provided the original seed funding in 2009. In January of this year it closed a $1million+ funding round led by Gemini Israel Funds which also included Index Ventures. And the company’s client base includes such heavyweight clients as eBay.
With such strong backing it would appear that the only threat to the company’s ongoing success is competition from other collective buying platforms such as Groupon or Facebook which has recently announced a social buying offering. Ron, however, cites fundamental differences between collective buying and social gift buying (e.g. discounts are somewhat antithetical to the notion of gifting) as a reason not to get unduly worried.
Ron also points out that his team’s chemistry is something that cannot be replicated. He was a 1st Lieutenant in Israel’s air force and has entrepreneurship almost literally running through his veins: his father is a well known entrepreneur in Israel, and his brother (also an investor in The Gifts Project) is a successful serial-entrepreneur is his own right too. Company CTO, Erez Dickman, was in the elite intelligence unit and as well as bringing technical expertise he also brought fellow highly technical soldiers with him.
As for Facebook, The Gifts Project already has a good working relationship with the company.
Ron’s goal is to have his Group Gift button on every product page on the internet. Very ambitious, admittedly, but given how far the Gifts Project has come in 18 months you’d have to be brave to bet against him.
Contributed by Startup Intelligence. Startup Intelligence provides free content to tech entrepreneurs and writes about them
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