hello everyone marco montemagno here the
tech alchemist and today with me from
sweden a car of fridge of some chow a
car how are you I am good how are you
doing Marco we were talking before I
said I have such an orrible surname that
no one can say montemagno and i created
on the soundcloud and how to pronounce
my sister day oh ok I should I should
probably take you up on that yeah in
islam buddy alright so for you take
alchemist guys um Carla I think will be
a very very interesting gas because um
its co-founder and CEO of rap which is
going very very very good and we’ll talk
about that and i think is a very
interesting company to follow because is
mixing you know mobile online offline to
retailing war the gift cards were so so
many things around that and i think we
can have a lot of tips and advices from
from car today so call thank you so much
for being here and before to begin I
want to tell you how I discover a rap
because that was really incredible for
me I was telling you before I was a
table tennis player ok professional
table says well no not an amateur I was
playing over the world and Sweden has
got the most amazing table tennis player
in the history of human beings yah Nova
Varner how do you say yeah Nova partner
yeah you’re furious yeah it is you know
the Mozart of table tennis so all the
people from around or just went to
Sweden to know and to meet this guy and
what I started to think in this period
was that Sweden was an amazing country
because so many times let’s say Black
Swan the the Black Swan theory a Black
Swan saw something incredible came out
from Sweden which is a small country I
mean it’s not USA I mean so but some
someone
or something or a company came out and
surprisingly just they they were
worldwide and they were amazing so and
when I saw rap I thought gosh I think
this will be another you know Black Swan
thing because surprisingly starts to
grow and and then everyone is talking
about so I was really curious about this
my crazy theories about this correlation
between sport and business I’ve know
better fax me I that actually I saw some
statistic I wish I remember the exact
the exact numbers here but I saw some
statistics way back about the diss
Porsche disproportionate performance of
Sweden you know when you put in
comparison the the size of the country
and and then in the number of Olympic
medals that we’ve received throughout
the years and and we were pretty pretty
good in that but I think it’s very much
I wish I could say it’s all because of
table tennis but I think it’s a lot
because of the the Winter Olympic
statistics was also part of that and we
get a lot of snow so I think that’s one
reason why we’re performing relatively
low I I don’t want to talk with you
about sports for 20 minutes but just I
it’s interesting because beyond Borg I
mean he was you know from from nowhere
and then he was an amazing player lower
but in company in business I don’t want
to say but i think ikea is a
swedish company maybe it is it it is a
massive success everywhere so it’s
amazing how sweden can come out with
this phenomenon really so it will be
something i think if you if you go into
kind of the tech and internet-based I
think that we’ve done relatively well in
in Sweden as well when you think of
companies like skype and more recent one
is of course spotify and as well as the
payment provider corner which are a
couple of really really big companies
that have spun out of Sweden and I think
you mentioned me earlier about the the
SoundCloud and using using it soundcloud
to get people to pronounce your name
correctly some trial happens to be
another company which is founded by
sweets but they founded the company in
Germany so I think I think both
Swedish trying to take credit for that
company at the moment that’s very bad
buddy is because you think is an
ecosystem now that is developing after I
mean skype success or something like
that or yeah I I definitely think so and
and we may talk more about this during
the interview but we happen to be very
proud to have Niklas sense to him as an
investor in part of our board the
founder of skype and i think that he
once again using the sports metaphor
here i think that he has prayed played a
similar role to what we are involved did
for swedish tennis he because he became
that explicit role model everybody got a
face about on this internet entrepreneur
success and you could kind of relate
that to this specific individual and
what happens in Swedish 10 is in the 70s
grandborough became very successful and
then we had a couple of generations
afterwards with with the continuous
success on kind of world tennis Gail and
I think that’s that’s really what has
happened in the swedish internet and
start up space and very much thanks to
tunica sellstrom sky but as well i think
you know in the very in the late 90s I
think broadband penetration was very
very rapidly adopted in Sweden in
relative to other countries I think that
helped us a lot as well so I think
they’re numerous factors that plays into
it but I definitely think that we have a
very nice and good ecosystem in Sweden
at the moment and in the whole Nordic
sweet nordic region i would say not only
sweden excellent my missing link of my
crazy theory is that if nikka nikka
Stenstrom is a good table tennis player
then it main senior this is the ha the
answer to all the i will check with him
so later all right I would know that
yeah I know it’s good sex I know it’s a
good sailor he sails a lot but maybe it
does table tennis what let’s say he does
the sake of this interview I think
that’s good all right car I’ll stop
talking about sport but my fault okay
let’s talk about serious stuff um first
I would like to understand better the
this gift cards business in general
because I think many people and many
companies are under estimating the size
of the market and when I sue the size of
the market that you are going to
I thought gosh this is a huge market you
know I thought it was not so big in so
many countries so can you elaborate a
little bit about these gift cards
business what are you going for we’d
wrap what were we talking about yeah no
definitely and just like you mentioned
here I was very surprised the first time
I started doing research on statistics
about the market as well it that is such
a massive market and the number that we
usually use is is a number which says
that the gift card market is more than a
hundred billion dollar in the US alone
per year and each time you say like a
billion it sounds like so much and it is
so much but but I put that in comparison
i think because you know spotify once
again a swedish startup example that has
done tremendously well for itself it’s
attacking a market the music market
which is roughly 17 billion annually and
that’s on a global scale and gift card
is a hundred billion in the US alone so
it it’s truly truly a massive market and
and it’s much bigger than we ever
thought it was and if of course that’s
positive for us and there’s a lot of
statistics well I think us is really the
gift card the whole market of gift card
and to various reasons and that of
course the size of the market tells you
a lot but also the fact that gift card
is is the number one requested gift like
five years in a row five years straight
in a row in the u.s. I mean it’s the
most desired gift to receive as well so
it’s not only the market big in terms of
financial but it’s actually something
which people really love to receive it’s
it’s something which is so appreciated
as a gift and once again in the US it’s
extremely big and very mature to get car
market but it exists more or less all of
all over the world in various shapes and
forms and we’ve tried to do done some
estimates about the global gift card
market you know how big is it if we
aggregate everything but we haven’t been
able to really dig up a good number but
it’s it’s it’s still huge I mean we’re
talking at this 150 maybe even up to 200
billion globally
Maxim ever everyone doing it yes around
the world yeah no definitely and and I
think as well we knew and this is
obviously the one of the reasons why
we’re doing this with rap is you know
what groupon did with coupons one thing
is the online to offline that whole
marketing marketing value proposition
that they use which we’re also trying to
leverage but secondly you know
digitalizing of what traditionally have
been physical a coupon then they made
that digital that it you know a gift
card share so many similarities to a
coupon in in the way that it’s packaged
and then you know how it’s used in terms
of the redemption processes and all the
backend systems and the biggest
innovation of the gift card market has
seen is probably going from from paper
to plastic you know with a magnetic
stripe that’s the biggest innovation
that that the gates called market has
seen in the past ten years or so and it
made so much sense when we started
looking into the gift card space that of
course this this is an industry that is
going digital just like so many others
and if we can you know be on top of that
digitalization and also you know be able
to take a slice of that pretty pretty
large pie I think rap could become a
pretty successful company so to recap to
people totally out of the gift cards
business and the gift card mechanism is
just that if I want to give a present to
make a present to someone I just give
him a card or a company is giving him a
card and you go with this card with this
physical card in the traditional
business in a shop and you get a
discount or whatever is it was working
like that more or less ya know so i
would tell you it does to a lot of
extent but i think what a gift card
really is is that it’s it’s a it’s a
proof of purchase that is attached to a
specific denominational value so it’s
100 euro to be used at a specific store
let’s say the gap right so and and it’s
tote it totally unconditional a gift
cordis should always be unconditional
meaning that it’s not tied 20 specific
purchases I don’t have to buy itunes abz
and it’s not attached to any minimum
spend like a coupon would be you know I
have to spend the minimum of a hundred
then I can use this whatever it is so a
gift card is totally unconditional it
could be used its equivalent to cash but
it’s restricted to this specific store
or Shane of stores so that’s really what
a gift card is and what what they used
to be you know 20 years ago or something
when you went into a store to purchase a
gift card they would actually write a
piece of paper with pretty nice
handwriting and they would say this is
worth 100 euros and then you would give
that to the consumer and then he’d have
to save that and if he lost it somewhere
you know then then that hundred euro was
gone and what happened was with by
leveraging the whole credit card and
magnetic stripe ecosystem gift card went
into plastic so now instead of writing a
piece of paper which of course has a lot
of fraud risks attached to it and people
would copy this and whatever what
company started to do is is to use
magnetic stripes and plastic cards
similar to a gift card so you would load
that that card with a specific value and
then you’d have that in your wallet or
whatever and then you go into the store
and swipe that just like a regular
credit card and now we’re doing that
digital how can you elaborate about how
rap is is working I mean what would
really change what’s the big change with
we’d wrap in this gift cards business
yeah so I think if we continue on kind
of the pure gift card product which
we’re digitalizing and you know what we
are doing is that we are of course
putting it into this thing where where
we have a mobile application so you
store all your digital gift cards in the
mobile device so what a lot of people
would would if you’ve been familiar with
this car before but you would recognize
is this that you get a gift card and
then you put it in a drawer somewhere
where you put it in in your purse or
whatever and then you forget about it
and then you find it X number of years
later when your movie houses and you’re
emptying that Rory’s like oh this old
gift card you know and they usually
attached to it to a declaration
term so often gift cards will expire for
you depending on the market and some
regulations like but we we put the
digital gift cards in your mobile device
device you have the with you at all time
right so whenever you walk in the
streets and you you walk by that store
where you know that you have a gift card
you will you will remember the a I have
a gift card and by the way i also have
it with me because I never leave home
without my smartphone so that’s one one
of the benefits digitalizing gift cards
the other thing is that when you make it
digital you can also make it interactive
so we are of course to adding the social
layer on top of the gift card product so
we have integrated our platform into
Facebook so you when you give somebody a
gift card you can of course leverage the
social graph and your friends there and
the same time the communication that
Facebook can enable that whole
communication can now be surrounded in
this in the rap product and for this
little gift card so if I’d give you a
gift card Marco I’d be very interested
to understand what do you think about
this gift gift card you know I shows the
store for you I shows the store the gap
you know and I gave this to you what did
you like the gap was that was that
something you wanted so of course
there’s there’s an instant feedback loop
that I’m looking for or you have before
this gift and then eventually when you
go in and redeem this gift card I’m of
course very curious to understand him
what did you actually buy more maybe I
told you that here’s a gift card at the
gap I know you want this new shirt I
know they have it in your size or
whatever whatever and then you go in and
redeem it I’m of course curious to
understand did you actually purchase
that specific item or not so we can
facilitate that whole interactivity in
that discussion within our application
how do you collect all these information
straight to the app because you record
everything that is redeemed and or if I
you I’m rating my purchases and you try
to get out of that out of it now at the
moment we are we are leveraging
basically interactivity between the
sender and the giver so whatever the
sender or sorry the giver wants to
communicate back to the sender that’s
that’s what the platform currently
facilitates so let’s say you wanted to
the gap you bought something that you
didn’t want me to know that you bought
whatever reason it could be then of
course that information
push back so it’s more about creating a
dialogue between the sender and the
giver and that what the application does
when you go into the gap to redeem your
gift card I will instantly get pinned on
my cell phone saying hey Marco just
redeem your gift card at the gap or you
curious what he what he purchased why
don’t you ask him and then I could
continue that dialogue within that or
application I could ask you hey what did
you get and you could say I about this
and I could like that etc etc so so we
are you know from up from the
traditional gift card industry we are
making it digital and interactive and
social i think that’s that’s the one of
the big innovations that we’re doing but
i think another one which is important
to highlight is that we have also
changed how retailers use gift cards and
retailers historically have been using
gift cards do because it’s had been it
has been an attractive product to sell
and the reason why it’s attractive if
because i sell it to you today so you
pay me today but i don’t need to take up
any cost for this this purchase until
you actually go in and redeem this which
is sometime in the future so it’s a
positive cash flow effect from gift
cards I’m basically collecting cash and
then I’m waiting whatever it is one day
up to a year up to five years depending
on the market when you go in and redeem
this gift card and that’s when I need to
take on a cost-free but when we realized
when we when we integrate in a built our
platform on top of the Facebook and the
graph there we realized that one of the
foot of the real strengths in social
media and one of the core reasons why
people communicate in facebook or across
Facebook and other social media is
reasons they celebrate so usually the
communication is triggered by an event
somebody maybe change the relationship
status to be married somebody upload
some picture of their newborn baby or on
Facebook you know on the top right hand
side corner you would see this person
has his birthday today right that’s one
of the main triggers where people then
start talking hey Marco happy birthday
you know I haven’t spoken to you in a
couple of months but now I’m a more
subtle reminded that I should speak to
you and the reminder the trigger of that
is a reason to celebrate so we
understood that one of the one of the
huge triggers and the reasons for people
to interact on social media is recent
that they want to celebrate so we want
to create wrath and make this a platform
that you could celebrate any occasion so
our slogan is kind of celebrate your
friends every day and that’s what the
rap is really able all about we have
made part of the gifting experience free
so you can actually give a gift card for
at very prominent and well attractive
retailers for free to your friends so
this could be anything from you know
maybe 5 euro up to 25 30 is depending on
depending on the job retailer in the
category the real and the reason why I’m
able to give you more for a gift card at
the gap for let’s say fifteen dollars
for free the reason for that is because
gap uses rap as a marketing platform as
well as a distribution channel for gift
card and the way that the marketing
platform works is that a retailer they
specify a campaign with rap and decide
the type of demographics so the type of
desired consumers that they want to
track and bring into their stores and
they would they would target this based
on you know age gender Geographics etc
etc the traditional demographical
targeting and then the way the them
retailer sets a specific denomination
and a value how much am i willing to
give this type of consumer if I can get
him to come into our store and shop and
they would say you know Marco either he
fits into this type of demographic or
pattern so let’s say we’re willing to
give this type of demographic 15 euros
to come into our store because we know
but if this type of demographics come in
store store they don’t only shop for 50
euro they spend you know a thousand euro
8100 you imagine right so we they they
they have a perception that some cell
specific type of demographics are more
profitable than others so they can then
set incentives and triggers to get those
type of consumers into the store and the
clever thing yes and the clever thing
with wrath is is that the distribution
of these incentives to get into the
store is done through friends so that’s
what came back to the we call this
friend to friend marketing
so me you know let’s say Marco that
you’re of a certain age and engendered
and most importantly you live in Italy
right me being Swedish the same gender
different age and definitely different
Geographics if I would go in and end and
say that I want to celebrate Marco using
rap but I click on you wrap them
determines the demographical patterns of
you and it presents unique offers that
are targeted to you it’s not targeted to
me it’s not based on who I am it’s only
based on who you are and then it’s up to
the friends me or any of your other
friends to basically decide which of
these brands should I celebrate mark
will be today and what is the reason for
that so it’s always it’s always the the
decision is always made by your friends
so the a brand using rap would never be
able to get to you and target you unless
you have a friend that basically vouch
for this brand and say this is a brand i
want to give marco because i know the
market like let me focus on this car
because i think is very very interesting
so number one a brand is not pushy so
also the perception of a brand is not
imbecile but is a friend is your friend
sending you if gift so for a brainless
perfect because it’s let’s say word of
mouth so as a friend of them marketing
so is great and also unthinking that it
is that very useful because I never know
which kind of gift or present to do and
if I have an app that helps me to choose
not based on my taste there is always I
would only give table tennis things so
but it’s very good to have an app that
helps you based on the demographic of
your friends so I think this is very
excellent so I see a lot of advantages
but my question is okay now is probably
much much easier for you guys to go
there to retailers and say hey look well
why don’t we do a partnership why don’t
you
want to do a deal with weed rap because
we have great investors we have these
tones of users we have the stones of
previous deals and so on so now i think
is much much easier but when you started
when you when you just begun and when to
i don’t know gap and say a hello we wrap
why don’t you run a campaign we da sir i
don’t think it was so easy just to
explain how it worked so how did you
close the first deals with first
retailer so what was the key to go
further yes i mean this is the
traditional chicken and an egg situation
right if we don’t have the users may be
the retails aren’t interested in without
the retailer’s we wouldn’t be able to
get the users so i think luckily for us
the timing for rap is is right now so
when we meet with a retailer and explain
the value proposition of rap and one
thing is that we sell their gift cards
we’re you know we’re doing that in a
digital channel and that that’s like
okay nice fine you know maybe some
incremental sales that you can generate
for us but the cool thing is really the
marketing platform and the aspect of of
using rap as a non-intrusive channel to
reach your potential desired consumers
and what we do is that we leverage
social graph and social media as well as
smartphones based so basically we are we
are we’re a very explicit social media
and mobile marketing channel that that
that creates real value and and drives
real performances for them so it’s it’s
a you know it’s all about bus words here
but i think the retail is an industry
that is struggling for various reasons
you know recession is one the whole kind
of e-commerce versus offline
brick-and-mortar space who’s winning and
out how should we treat that the whole
cost structures of the traditional
retail industries is being challenged so
they are of course looking for
innovative solutions and reasons to
continue succeeding in this space and i
think that we have provided a very very
explicit tool that uses you know two of
the biggest trends that
that the world has seen in the past
years which is social media innovation
as well as as the smartphone ecosystem
so it just it just fits kind of the
timing right now I I think that’s one of
the benefits the second thing is that
our model or business model behind rap
is one hundred percent performance-based
so our incentives are on represent
aligned with our retailers that are
partner with us so they only pay for our
services if we’re actually able to
deliver a consumer into their store that
opens up their wallets and purchase is
something only if if a successful
redemption of these these promotional
gift cards is being is happening that’s
when we charge the retailer so we have
very very a align incentives which means
that it’s an honest way to do business
with them there’s very little risk
involved for the retailer and then of
course you know from a technical
perspective but try to make it as simple
as possible minimum integrations what
not without right so I think what we
have really tried to to package this in
according to the needs of what the
industry is looking for and then we have
lowered the thresholds in all different
components possible to make sure that
it’s easy for them to try it out and see
if it works and and luckily for us is
that we’ve been able to attract quite a
few retailers you trying to find only
let’s say your big retailers that they
have shops everywhere so it’s easy to to
handle the purchases because that Indian
person has to go with the with the gate
to do to redeem it somewhere so by the
way this is another amazing advantage
that I think rap is bringing to to
retailers that you bring people in the
shop and this has really no value in
this moment I think so um the only
closing deals with huge retailers or you
try to find also the small/medium
retailers you try to also include done
yeah so at the moment are our vision of
what rap is and its really kind of the
traditional mall metaphor
the shopping mall right so when you go
into a shopping mall there are it’s
dominated by big brands big change that
you would see in each of them all and
then there are some sometimes there’s
some cooler smaller type of brands that
are available in the shopping mall as
well which may gives it a bit of flavor
and style to it that’s really what we’re
trying to do here at the moment as well
and and for us the primary reason for
this is is due to resource allocation so
if we can sign a deal with the gap that
has whatever it is thousand stores
across the u.s. and we can roll this out
with one sales process rather than you
know signing up this small local clay
here in Boston and then this other small
local one in San Luis etc etc I mean
obviously that that the implementation
aspects of rap is equivalent for us if
we’re rolling out gap with thousand
stores as if we’re rolling out you know
Joe’s mom and pop store with only one
location so it from a reasoning source
application just make sense for us to go
after the big brands and then I think
thirdly is if you know from our user
perspective as well we are a new service
relatively new service right and it’s
about building trust with our users and
getting them to understand what rap is
really about and showing the value of it
and I think that it that is easily done
we can more easily communicate our value
proposition if we partner with big
brands that that you know they are
familiar with before today they have
some kind of film familiar familiarity
with our application when they come into
it and how about the users Carl I mean
in beginning it was the same chicken egg
problem because you said you come say a
user’s come to me use rap if I don’t
have retailers so you first focused on
finding good retailers good brands good
offer and then you started to to
marketing your your app or how did you
solve this problem in beginning yeah so
I think we were lucky we launched in
Sweden first this was in we launched a
kind of nationwide in Sweden in November
last year and I think one of the
benefits that we received in Sweden was
that we were able to make
somewhat of a big bang in in this little
small local market so we raised money
from liquid sandstorm obviously we got a
lot of press coverage for that and and
me my fellow co-founders you know
especially our CEO llamar he has
somewhat of a brand from before and in
it is somewhat well known serial
entrepreneur so he could also stir some
attention around this new venture that
he was involved so I think that we we
came over that initial threshold quite
quickly in Sweden because that that kind
of critical critical mass of users we
reach that quite quickly because we were
able to get some some attention and and
then of course you know when we launched
in Sweden we launched with the some of
the biggest nationwide retail chains we
had really really strong brands from day
one and and you know free gift cards
from really big retailers that that is
attractive to a lot of users so so you
know once once you get that critical
mass and everything about rap is really
viral right I’ve give you a gift in
order for you to receive that gift the
gift is stored within the ratification
so you sign up to our applications and
then you will then be reminded and
prompted to stand give to your friends
so it really spreads layer of layer over
layer right so that that’s really how
our growth looks like so once we reached
at that critical mass I think it was
easier to continue our growth I don’t
remember the name the title of the book
I read book fears to go viral loop
inside and I if I think about rap is
accepting like that is is viral by
default to it to work it has to be viral
so it was right right so you don’t
really have in this moment like a
America marketing campaign running you
just go viral or you also support your
your growth with I am traditional
vertising or whatever now we actually we
do very little traditional advertisement
we we focus quite a lot of PR I mean we
try to be active in PR and be heard that
way but other than that we are really
leveraging our user base and growing
with them as well as as using our
retailers that we partner with so what
rap is for for retailers it’s also kind
of a tool to make their brand ambassador
Oh to give their brand ambassador
something explicit to share with their
friends so let’s say that I am a huge
fan of HTM the Swedish fashion shame if
I’m a huge fan of hmm and you know I
will probably be more likely to give you
a gift card for H&M because I’m trying
to kind of convert you and convince you
that it is such an amazing story I love
this store you should come with me to
the store that’s why I’m giving you this
gift so we’re also using our retailers
to kind of reach their brand ambassadors
and through that being able to leverage
you know whatever followers there have
and get new users that way okay ah few
minutes more and then I let you go car
okay gift cards business checked
everything clear huge business and great
feeling by you guys congrats to
intercept that this trend is a huge
business rep how it works okay I would
like you to help with some tips and
advices about a few topics the first one
is mobile app I mean rap is basically a
mobile app okay it works only also on a
website but basically are they it has
been designed to work as a mobile app
right so what’s your top tip or what are
your top three tips to to create a
mobile app that works in a moment where
you have on App Store cat zillions of
mobile apps so it’s very difficult to be
you know on the screen of the other
users or your top advices on this topic
yeah and I mean you’re touching upon
kind of one of the core core concepts
that we have discussed with rap and it’s
just like you mentioned being on the
home screen on the mobile app that’s
that’s prime real estate location
if you if you are on that home Scream
screen there’s a scarce resource it’s
only a number of apps that can be there
and there’s so many that are forgotten
right I think what we have been been
bouncing back and forth is is two things
one is frequency the other thing is
virality those are the two core concept
of art that we have tried to design or
whole product around so what what could
be the reasons why people would share
these applications to any any other of
their friends you know the virality
aspects and the the second is frequency
how often could I usually use this is
this a one-off versus a continuous bacon
tinuous basis is it monthly is weak base
it daily and how can we increase that
frequency what can we create and decide
within our product to make this this
reminder reminder users to use this more
frequently and create a good value
proposition or reason to do that so I
think you know creating a mobile app
today is is difficult it’s difficult
because if there is there’s so much
competition now there’s so many apps out
there and it’s also difficult because of
the fact that it’s it’s costly if you
want to be cross-platform right you have
to have you cannot only design for iOS
do you have to design for Android as
well these are expecting it and soon
they may be expecting it for windows
mobile as well and if you then want a
web application on top of that you know
obviously you need to create that is
also there is there’s so many there’s so
many starters out there that are talking
about the lean startup mentality which
I’m very much a fan of but in wraps
instant we have actually you know we
raise 10 and a half million u.s. dollars
in our series a which was quite a big
round of money in relation to how far we
were with our company at that point of
time and we have invested quite quite
significantly and aggressively into our
development development team because we
see that there there’s so much that we
want to do there’s so many things that
that need to be done because we’re
working on these three platforms web
Android and iOS in parallel it’s complex
so I think going back to the core if you
want to if you want to create a mobile
app that
you if you want to try to create a
successful mobile app you really need to
think through you know how often will
you should use this and why would a you
should want to use this more often the
ones and then what what what aspects of
this application could could be recent
for me to share this with other people
it is really virality I mean that’s
that’s the key growth driver to your
application you could own you if you’re
in the business of all marketing spend
there will always be one competitor that
try to outbid you on on Google Adwords
or whatever it is if it’s American Idol
TV ads or something something so you
want to be you don’t want to become
addicted by marketing it’s not the shop
nothing wrong should use marketing but
you should make sure that that the core
of your product is something that can
grow virally i think that is that’s
that’s Kiki frequency and virality are
we write it somewhere you know like your
quote frequency virality I like it a lot
okay bye Michael favorite rapper I’d be
very happy if they saw that in writing i
just i’m just curious you’ve been
mentioning nicholas dentist Rome and a
great round a of in investment is also
great look and power nurse so read off
mum also and greed look so you get
funded by great investors what was the
key to get such important investors
funding your company right yeah I mean
as always with with fundraising it’s you
know you have to understand it takes a
lot of time it’s you usually see the
press press release this fundraising is
now completed hooray for this company
right but it’s a lot of work behind
dashed and and it takes a lot of time
both read and Nicholas was actually
involved in rap from a very very early
early stage and in the sense that they
were they were providing us with
feedback and we were balancing our ideas
with them and I think for rap you know
one of the one of the benefits for us I
think was the fact that the co-founding
team a trap had a network and access to
some of the
prominent investors so we could get that
first meeting right which of course is
is which is course it’s crucial right
but then really I think that we are
tackling a huge market that we already
discussed so the total size of your
market needs to be tremendously big in
order for you to have a shot at creating
a company that’s valuable enough so I
mean let’s say in our instance you know
we we raised 10 and a half million us
and our investors I don’t know what
multiple they’re expecting whatever it
is if it’s 5 10 20 50 100 times that
money but of course the valuation
increase of rap is is expected to be
significantly higher and in order for a
company to actually be able to reach
those type of absolute numbers in
valuations it needs to be in a market
which is big enough it means to be
attacking a problem that is that is big
enough to feel that that don’t
exponential count top two or 3i I asked
this to all the tech alchemist guests
your top two or top three tools or
website or app that absolutely suggest
to use if someone is in the digital
business you say okay you can’t live
without this this tools it can be
whatever you want to someone say okay
analytics or whatever from positioning
promoting or or partnership point of
view but your tour or three tools that
the one the apps that you have when
you’re on your screen or the one that
you can you can’t live without I like
the question is good one is the boring
answer is google apps but I don’t want
to say that so I’ll take that back but
and yeah you can say any table tennis
apps because I already said that so I
know that oh god I got it no I have one
awesome app which is on my smartphone
which is called I’m just going to make
sure that I have the name right because
I think they changed the name party is
we sign easy so it’s basically an
application to sign documents on your on
your app on your smartphone when you
want to go so you sign on the on on the
on the screen here so I mean it printing
is a hassle right and then you need to
scan it and then your email in fact I
and the more you can avoid printing the
better the world is from all aspects of
it environmentally am you know
management wise and that kind of stuff
security-wise you’re storing in the
cloud is much better than having it in a
some kind of folder here so side AC I
think it’s a great recommendation the
other tool that we use quite frequently
here at rap is it’s a tool called asana
which is a project management project
management tool is actually founded by
one of the the early guys Facebook can’t
remember which one it is anyway they
raised quite a significant Brown and
it’s in it’s a really good project
management tool when you’re working in
in teams and you have a lot of tasks
then you need to be completed and they
are you know interlinked with each other
and that complexity that that could
happen you know with rap we’re working
across multiple markets we have people
spread out over the world so there’s a
lot of stuff that needs to happen that
are linked to each other so college is a
great kind of base camp but more evolved
yes exactly it’s it’s definitely a
couple of couple notches more advanced
than base camp I love base camp as well
but the you know the simple and the
consumerization of software sometimes
only only gets you that that far at some
point of time you need a little more
sophisticated tool and a cyanide I think
it’s a perfect once you’re done with
basecamp you go to a sauna and that’s a
good extension of it yeah alright last
question car what’s next I mean if you
try to open your crystal ball and think
okay what wiII happen in the next two
years in my market it will happen this
so you bet under percent on the
digitalization of the gift cards market
and the only rap will exist in the world
what wiii happen what’s your vision
that’d be nice yeah
yeah it would be a movie now I think for
us in the very near term is Christmas
everything is about Christmas that the
holiday season the holiday season is is
you know one of the biggest gifting
occasions globally right and we of
course want to be want to be one of the
one of the default ways to to celebrate
your friends during the holiday season
you can’t be there with everyone right
you can only give a physical presence to
show many people because you because you
can only be a one location at a time so
I think wrap to facilitate a lot of that
that gifting needs that you could use
but then I think if you look a little
little further ahead i think one aspect
like you mentioned is the digitalization
of gift card that that is happening
we’re not the only people focusing on
that there’s a lot of people trying to
try to be part of that innovation but i
think what really touches upon the gift
card space and digitalization of that
it’s also the home digital wallet more
if you may say what will happen in with
the digital wallets and you know with
the rap application we have a digital
wallet as well where you store your your
digital gift cards so we’re not trying
to become a digital wallet in the
general purpose we’re only doing gift
cards but I think that whole ecosystem
around you know Apple released its past
book and what will happen of what is the
extension of that and there are so many
other players out there in the market as
well that is trying to to to
revolutionize the wallet space and I
think we are we are scratching that
surface from our little gift card angle
to a certain extent and it’s going to be
very interesting to see that whole that
whole ecosystem evolve and to see what
will happen there it’s I’m not sure who
will be the winner and what will happen
but it’s definitely going to be
interesting and I think that we will we
could actually be impacted by that to a
certain extent you’ve been talking a lot
about celebration and that which is good
you know it’s a very positive value so
I’m waiting for a worldwide celebration
day from wrap if you haven’t organized
yet where you celebrate everyone
a bright you do it right for me the one
yeah no I definitely not that’s that’s
something lovely and then also I mean I
think it’s important to highlight that
you know a rap is all about gifting and
celebrating your friends but actually
you know we’re also working with
nonprofit organizations you can actually
donate to charity on behalf of your
friend so everything is really the core
of rap is really about about that that
whole gifting in the nature of gifting
giving to someone else rather than
yourself so yeah thank you so much a
car-free ozone a co-founder of wrap a
car oh really you were very very gentle
to to share all these tips and keep it
touch for everything good luck thank you
more cool it was lovely thank you well good luck with it able to buy
tech alchemist and today with me from
sweden a car of fridge of some chow a
car how are you I am good how are you
doing Marco we were talking before I
said I have such an orrible surname that
no one can say montemagno and i created
on the soundcloud and how to pronounce
my sister day oh ok I should I should
probably take you up on that yeah in
islam buddy alright so for you take
alchemist guys um Carla I think will be
a very very interesting gas because um
its co-founder and CEO of rap which is
going very very very good and we’ll talk
about that and i think is a very
interesting company to follow because is
mixing you know mobile online offline to
retailing war the gift cards were so so
many things around that and i think we
can have a lot of tips and advices from
from car today so call thank you so much
for being here and before to begin I
want to tell you how I discover a rap
because that was really incredible for
me I was telling you before I was a
table tennis player ok professional
table says well no not an amateur I was
playing over the world and Sweden has
got the most amazing table tennis player
in the history of human beings yah Nova
Varner how do you say yeah Nova partner
yeah you’re furious yeah it is you know
the Mozart of table tennis so all the
people from around or just went to
Sweden to know and to meet this guy and
what I started to think in this period
was that Sweden was an amazing country
because so many times let’s say Black
Swan the the Black Swan theory a Black
Swan saw something incredible came out
from Sweden which is a small country I
mean it’s not USA I mean so but some
someone
or something or a company came out and
surprisingly just they they were
worldwide and they were amazing so and
when I saw rap I thought gosh I think
this will be another you know Black Swan
thing because surprisingly starts to
grow and and then everyone is talking
about so I was really curious about this
my crazy theories about this correlation
between sport and business I’ve know
better fax me I that actually I saw some
statistic I wish I remember the exact
the exact numbers here but I saw some
statistics way back about the diss
Porsche disproportionate performance of
Sweden you know when you put in
comparison the the size of the country
and and then in the number of Olympic
medals that we’ve received throughout
the years and and we were pretty pretty
good in that but I think it’s very much
I wish I could say it’s all because of
table tennis but I think it’s a lot
because of the the Winter Olympic
statistics was also part of that and we
get a lot of snow so I think that’s one
reason why we’re performing relatively
low I I don’t want to talk with you
about sports for 20 minutes but just I
it’s interesting because beyond Borg I
mean he was you know from from nowhere
and then he was an amazing player lower
but in company in business I don’t want
to say but i think ikea is a
swedish company maybe it is it it is a
massive success everywhere so it’s
amazing how sweden can come out with
this phenomenon really so it will be
something i think if you if you go into
kind of the tech and internet-based I
think that we’ve done relatively well in
in Sweden as well when you think of
companies like skype and more recent one
is of course spotify and as well as the
payment provider corner which are a
couple of really really big companies
that have spun out of Sweden and I think
you mentioned me earlier about the the
SoundCloud and using using it soundcloud
to get people to pronounce your name
correctly some trial happens to be
another company which is founded by
sweets but they founded the company in
Germany so I think I think both
Swedish trying to take credit for that
company at the moment that’s very bad
buddy is because you think is an
ecosystem now that is developing after I
mean skype success or something like
that or yeah I I definitely think so and
and we may talk more about this during
the interview but we happen to be very
proud to have Niklas sense to him as an
investor in part of our board the
founder of skype and i think that he
once again using the sports metaphor
here i think that he has prayed played a
similar role to what we are involved did
for swedish tennis he because he became
that explicit role model everybody got a
face about on this internet entrepreneur
success and you could kind of relate
that to this specific individual and
what happens in Swedish 10 is in the 70s
grandborough became very successful and
then we had a couple of generations
afterwards with with the continuous
success on kind of world tennis Gail and
I think that’s that’s really what has
happened in the swedish internet and
start up space and very much thanks to
tunica sellstrom sky but as well i think
you know in the very in the late 90s I
think broadband penetration was very
very rapidly adopted in Sweden in
relative to other countries I think that
helped us a lot as well so I think
they’re numerous factors that plays into
it but I definitely think that we have a
very nice and good ecosystem in Sweden
at the moment and in the whole Nordic
sweet nordic region i would say not only
sweden excellent my missing link of my
crazy theory is that if nikka nikka
Stenstrom is a good table tennis player
then it main senior this is the ha the
answer to all the i will check with him
so later all right I would know that
yeah I know it’s good sex I know it’s a
good sailor he sails a lot but maybe it
does table tennis what let’s say he does
the sake of this interview I think
that’s good all right car I’ll stop
talking about sport but my fault okay
let’s talk about serious stuff um first
I would like to understand better the
this gift cards business in general
because I think many people and many
companies are under estimating the size
of the market and when I sue the size of
the market that you are going to
I thought gosh this is a huge market you
know I thought it was not so big in so
many countries so can you elaborate a
little bit about these gift cards
business what are you going for we’d
wrap what were we talking about yeah no
definitely and just like you mentioned
here I was very surprised the first time
I started doing research on statistics
about the market as well it that is such
a massive market and the number that we
usually use is is a number which says
that the gift card market is more than a
hundred billion dollar in the US alone
per year and each time you say like a
billion it sounds like so much and it is
so much but but I put that in comparison
i think because you know spotify once
again a swedish startup example that has
done tremendously well for itself it’s
attacking a market the music market
which is roughly 17 billion annually and
that’s on a global scale and gift card
is a hundred billion in the US alone so
it it’s truly truly a massive market and
and it’s much bigger than we ever
thought it was and if of course that’s
positive for us and there’s a lot of
statistics well I think us is really the
gift card the whole market of gift card
and to various reasons and that of
course the size of the market tells you
a lot but also the fact that gift card
is is the number one requested gift like
five years in a row five years straight
in a row in the u.s. I mean it’s the
most desired gift to receive as well so
it’s not only the market big in terms of
financial but it’s actually something
which people really love to receive it’s
it’s something which is so appreciated
as a gift and once again in the US it’s
extremely big and very mature to get car
market but it exists more or less all of
all over the world in various shapes and
forms and we’ve tried to do done some
estimates about the global gift card
market you know how big is it if we
aggregate everything but we haven’t been
able to really dig up a good number but
it’s it’s it’s still huge I mean we’re
talking at this 150 maybe even up to 200
billion globally
Maxim ever everyone doing it yes around
the world yeah no definitely and and I
think as well we knew and this is
obviously the one of the reasons why
we’re doing this with rap is you know
what groupon did with coupons one thing
is the online to offline that whole
marketing marketing value proposition
that they use which we’re also trying to
leverage but secondly you know
digitalizing of what traditionally have
been physical a coupon then they made
that digital that it you know a gift
card share so many similarities to a
coupon in in the way that it’s packaged
and then you know how it’s used in terms
of the redemption processes and all the
backend systems and the biggest
innovation of the gift card market has
seen is probably going from from paper
to plastic you know with a magnetic
stripe that’s the biggest innovation
that that the gates called market has
seen in the past ten years or so and it
made so much sense when we started
looking into the gift card space that of
course this this is an industry that is
going digital just like so many others
and if we can you know be on top of that
digitalization and also you know be able
to take a slice of that pretty pretty
large pie I think rap could become a
pretty successful company so to recap to
people totally out of the gift cards
business and the gift card mechanism is
just that if I want to give a present to
make a present to someone I just give
him a card or a company is giving him a
card and you go with this card with this
physical card in the traditional
business in a shop and you get a
discount or whatever is it was working
like that more or less ya know so i
would tell you it does to a lot of
extent but i think what a gift card
really is is that it’s it’s a it’s a
proof of purchase that is attached to a
specific denominational value so it’s
100 euro to be used at a specific store
let’s say the gap right so and and it’s
tote it totally unconditional a gift
cordis should always be unconditional
meaning that it’s not tied 20 specific
purchases I don’t have to buy itunes abz
and it’s not attached to any minimum
spend like a coupon would be you know I
have to spend the minimum of a hundred
then I can use this whatever it is so a
gift card is totally unconditional it
could be used its equivalent to cash but
it’s restricted to this specific store
or Shane of stores so that’s really what
a gift card is and what what they used
to be you know 20 years ago or something
when you went into a store to purchase a
gift card they would actually write a
piece of paper with pretty nice
handwriting and they would say this is
worth 100 euros and then you would give
that to the consumer and then he’d have
to save that and if he lost it somewhere
you know then then that hundred euro was
gone and what happened was with by
leveraging the whole credit card and
magnetic stripe ecosystem gift card went
into plastic so now instead of writing a
piece of paper which of course has a lot
of fraud risks attached to it and people
would copy this and whatever what
company started to do is is to use
magnetic stripes and plastic cards
similar to a gift card so you would load
that that card with a specific value and
then you’d have that in your wallet or
whatever and then you go into the store
and swipe that just like a regular
credit card and now we’re doing that
digital how can you elaborate about how
rap is is working I mean what would
really change what’s the big change with
we’d wrap in this gift cards business
yeah so I think if we continue on kind
of the pure gift card product which
we’re digitalizing and you know what we
are doing is that we are of course
putting it into this thing where where
we have a mobile application so you
store all your digital gift cards in the
mobile device so what a lot of people
would would if you’ve been familiar with
this car before but you would recognize
is this that you get a gift card and
then you put it in a drawer somewhere
where you put it in in your purse or
whatever and then you forget about it
and then you find it X number of years
later when your movie houses and you’re
emptying that Rory’s like oh this old
gift card you know and they usually
attached to it to a declaration
term so often gift cards will expire for
you depending on the market and some
regulations like but we we put the
digital gift cards in your mobile device
device you have the with you at all time
right so whenever you walk in the
streets and you you walk by that store
where you know that you have a gift card
you will you will remember the a I have
a gift card and by the way i also have
it with me because I never leave home
without my smartphone so that’s one one
of the benefits digitalizing gift cards
the other thing is that when you make it
digital you can also make it interactive
so we are of course to adding the social
layer on top of the gift card product so
we have integrated our platform into
Facebook so you when you give somebody a
gift card you can of course leverage the
social graph and your friends there and
the same time the communication that
Facebook can enable that whole
communication can now be surrounded in
this in the rap product and for this
little gift card so if I’d give you a
gift card Marco I’d be very interested
to understand what do you think about
this gift gift card you know I shows the
store for you I shows the store the gap
you know and I gave this to you what did
you like the gap was that was that
something you wanted so of course
there’s there’s an instant feedback loop
that I’m looking for or you have before
this gift and then eventually when you
go in and redeem this gift card I’m of
course very curious to understand him
what did you actually buy more maybe I
told you that here’s a gift card at the
gap I know you want this new shirt I
know they have it in your size or
whatever whatever and then you go in and
redeem it I’m of course curious to
understand did you actually purchase
that specific item or not so we can
facilitate that whole interactivity in
that discussion within our application
how do you collect all these information
straight to the app because you record
everything that is redeemed and or if I
you I’m rating my purchases and you try
to get out of that out of it now at the
moment we are we are leveraging
basically interactivity between the
sender and the giver so whatever the
sender or sorry the giver wants to
communicate back to the sender that’s
that’s what the platform currently
facilitates so let’s say you wanted to
the gap you bought something that you
didn’t want me to know that you bought
whatever reason it could be then of
course that information
push back so it’s more about creating a
dialogue between the sender and the
giver and that what the application does
when you go into the gap to redeem your
gift card I will instantly get pinned on
my cell phone saying hey Marco just
redeem your gift card at the gap or you
curious what he what he purchased why
don’t you ask him and then I could
continue that dialogue within that or
application I could ask you hey what did
you get and you could say I about this
and I could like that etc etc so so we
are you know from up from the
traditional gift card industry we are
making it digital and interactive and
social i think that’s that’s the one of
the big innovations that we’re doing but
i think another one which is important
to highlight is that we have also
changed how retailers use gift cards and
retailers historically have been using
gift cards do because it’s had been it
has been an attractive product to sell
and the reason why it’s attractive if
because i sell it to you today so you
pay me today but i don’t need to take up
any cost for this this purchase until
you actually go in and redeem this which
is sometime in the future so it’s a
positive cash flow effect from gift
cards I’m basically collecting cash and
then I’m waiting whatever it is one day
up to a year up to five years depending
on the market when you go in and redeem
this gift card and that’s when I need to
take on a cost-free but when we realized
when we when we integrate in a built our
platform on top of the Facebook and the
graph there we realized that one of the
foot of the real strengths in social
media and one of the core reasons why
people communicate in facebook or across
Facebook and other social media is
reasons they celebrate so usually the
communication is triggered by an event
somebody maybe change the relationship
status to be married somebody upload
some picture of their newborn baby or on
Facebook you know on the top right hand
side corner you would see this person
has his birthday today right that’s one
of the main triggers where people then
start talking hey Marco happy birthday
you know I haven’t spoken to you in a
couple of months but now I’m a more
subtle reminded that I should speak to
you and the reminder the trigger of that
is a reason to celebrate so we
understood that one of the one of the
huge triggers and the reasons for people
to interact on social media is recent
that they want to celebrate so we want
to create wrath and make this a platform
that you could celebrate any occasion so
our slogan is kind of celebrate your
friends every day and that’s what the
rap is really able all about we have
made part of the gifting experience free
so you can actually give a gift card for
at very prominent and well attractive
retailers for free to your friends so
this could be anything from you know
maybe 5 euro up to 25 30 is depending on
depending on the job retailer in the
category the real and the reason why I’m
able to give you more for a gift card at
the gap for let’s say fifteen dollars
for free the reason for that is because
gap uses rap as a marketing platform as
well as a distribution channel for gift
card and the way that the marketing
platform works is that a retailer they
specify a campaign with rap and decide
the type of demographics so the type of
desired consumers that they want to
track and bring into their stores and
they would they would target this based
on you know age gender Geographics etc
etc the traditional demographical
targeting and then the way the them
retailer sets a specific denomination
and a value how much am i willing to
give this type of consumer if I can get
him to come into our store and shop and
they would say you know Marco either he
fits into this type of demographic or
pattern so let’s say we’re willing to
give this type of demographic 15 euros
to come into our store because we know
but if this type of demographics come in
store store they don’t only shop for 50
euro they spend you know a thousand euro
8100 you imagine right so we they they
they have a perception that some cell
specific type of demographics are more
profitable than others so they can then
set incentives and triggers to get those
type of consumers into the store and the
clever thing yes and the clever thing
with wrath is is that the distribution
of these incentives to get into the
store is done through friends so that’s
what came back to the we call this
friend to friend marketing
so me you know let’s say Marco that
you’re of a certain age and engendered
and most importantly you live in Italy
right me being Swedish the same gender
different age and definitely different
Geographics if I would go in and end and
say that I want to celebrate Marco using
rap but I click on you wrap them
determines the demographical patterns of
you and it presents unique offers that
are targeted to you it’s not targeted to
me it’s not based on who I am it’s only
based on who you are and then it’s up to
the friends me or any of your other
friends to basically decide which of
these brands should I celebrate mark
will be today and what is the reason for
that so it’s always it’s always the the
decision is always made by your friends
so the a brand using rap would never be
able to get to you and target you unless
you have a friend that basically vouch
for this brand and say this is a brand i
want to give marco because i know the
market like let me focus on this car
because i think is very very interesting
so number one a brand is not pushy so
also the perception of a brand is not
imbecile but is a friend is your friend
sending you if gift so for a brainless
perfect because it’s let’s say word of
mouth so as a friend of them marketing
so is great and also unthinking that it
is that very useful because I never know
which kind of gift or present to do and
if I have an app that helps me to choose
not based on my taste there is always I
would only give table tennis things so
but it’s very good to have an app that
helps you based on the demographic of
your friends so I think this is very
excellent so I see a lot of advantages
but my question is okay now is probably
much much easier for you guys to go
there to retailers and say hey look well
why don’t we do a partnership why don’t
you
want to do a deal with weed rap because
we have great investors we have these
tones of users we have the stones of
previous deals and so on so now i think
is much much easier but when you started
when you when you just begun and when to
i don’t know gap and say a hello we wrap
why don’t you run a campaign we da sir i
don’t think it was so easy just to
explain how it worked so how did you
close the first deals with first
retailer so what was the key to go
further yes i mean this is the
traditional chicken and an egg situation
right if we don’t have the users may be
the retails aren’t interested in without
the retailer’s we wouldn’t be able to
get the users so i think luckily for us
the timing for rap is is right now so
when we meet with a retailer and explain
the value proposition of rap and one
thing is that we sell their gift cards
we’re you know we’re doing that in a
digital channel and that that’s like
okay nice fine you know maybe some
incremental sales that you can generate
for us but the cool thing is really the
marketing platform and the aspect of of
using rap as a non-intrusive channel to
reach your potential desired consumers
and what we do is that we leverage
social graph and social media as well as
smartphones based so basically we are we
are we’re a very explicit social media
and mobile marketing channel that that
that creates real value and and drives
real performances for them so it’s it’s
a you know it’s all about bus words here
but i think the retail is an industry
that is struggling for various reasons
you know recession is one the whole kind
of e-commerce versus offline
brick-and-mortar space who’s winning and
out how should we treat that the whole
cost structures of the traditional
retail industries is being challenged so
they are of course looking for
innovative solutions and reasons to
continue succeeding in this space and i
think that we have provided a very very
explicit tool that uses you know two of
the biggest trends that
that the world has seen in the past
years which is social media innovation
as well as as the smartphone ecosystem
so it just it just fits kind of the
timing right now I I think that’s one of
the benefits the second thing is that
our model or business model behind rap
is one hundred percent performance-based
so our incentives are on represent
aligned with our retailers that are
partner with us so they only pay for our
services if we’re actually able to
deliver a consumer into their store that
opens up their wallets and purchase is
something only if if a successful
redemption of these these promotional
gift cards is being is happening that’s
when we charge the retailer so we have
very very a align incentives which means
that it’s an honest way to do business
with them there’s very little risk
involved for the retailer and then of
course you know from a technical
perspective but try to make it as simple
as possible minimum integrations what
not without right so I think what we
have really tried to to package this in
according to the needs of what the
industry is looking for and then we have
lowered the thresholds in all different
components possible to make sure that
it’s easy for them to try it out and see
if it works and and luckily for us is
that we’ve been able to attract quite a
few retailers you trying to find only
let’s say your big retailers that they
have shops everywhere so it’s easy to to
handle the purchases because that Indian
person has to go with the with the gate
to do to redeem it somewhere so by the
way this is another amazing advantage
that I think rap is bringing to to
retailers that you bring people in the
shop and this has really no value in
this moment I think so um the only
closing deals with huge retailers or you
try to find also the small/medium
retailers you try to also include done
yeah so at the moment are our vision of
what rap is and its really kind of the
traditional mall metaphor
the shopping mall right so when you go
into a shopping mall there are it’s
dominated by big brands big change that
you would see in each of them all and
then there are some sometimes there’s
some cooler smaller type of brands that
are available in the shopping mall as
well which may gives it a bit of flavor
and style to it that’s really what we’re
trying to do here at the moment as well
and and for us the primary reason for
this is is due to resource allocation so
if we can sign a deal with the gap that
has whatever it is thousand stores
across the u.s. and we can roll this out
with one sales process rather than you
know signing up this small local clay
here in Boston and then this other small
local one in San Luis etc etc I mean
obviously that that the implementation
aspects of rap is equivalent for us if
we’re rolling out gap with thousand
stores as if we’re rolling out you know
Joe’s mom and pop store with only one
location so it from a reasoning source
application just make sense for us to go
after the big brands and then I think
thirdly is if you know from our user
perspective as well we are a new service
relatively new service right and it’s
about building trust with our users and
getting them to understand what rap is
really about and showing the value of it
and I think that it that is easily done
we can more easily communicate our value
proposition if we partner with big
brands that that you know they are
familiar with before today they have
some kind of film familiar familiarity
with our application when they come into
it and how about the users Carl I mean
in beginning it was the same chicken egg
problem because you said you come say a
user’s come to me use rap if I don’t
have retailers so you first focused on
finding good retailers good brands good
offer and then you started to to
marketing your your app or how did you
solve this problem in beginning yeah so
I think we were lucky we launched in
Sweden first this was in we launched a
kind of nationwide in Sweden in November
last year and I think one of the
benefits that we received in Sweden was
that we were able to make
somewhat of a big bang in in this little
small local market so we raised money
from liquid sandstorm obviously we got a
lot of press coverage for that and and
me my fellow co-founders you know
especially our CEO llamar he has
somewhat of a brand from before and in
it is somewhat well known serial
entrepreneur so he could also stir some
attention around this new venture that
he was involved so I think that we we
came over that initial threshold quite
quickly in Sweden because that that kind
of critical critical mass of users we
reach that quite quickly because we were
able to get some some attention and and
then of course you know when we launched
in Sweden we launched with the some of
the biggest nationwide retail chains we
had really really strong brands from day
one and and you know free gift cards
from really big retailers that that is
attractive to a lot of users so so you
know once once you get that critical
mass and everything about rap is really
viral right I’ve give you a gift in
order for you to receive that gift the
gift is stored within the ratification
so you sign up to our applications and
then you will then be reminded and
prompted to stand give to your friends
so it really spreads layer of layer over
layer right so that that’s really how
our growth looks like so once we reached
at that critical mass I think it was
easier to continue our growth I don’t
remember the name the title of the book
I read book fears to go viral loop
inside and I if I think about rap is
accepting like that is is viral by
default to it to work it has to be viral
so it was right right so you don’t
really have in this moment like a
America marketing campaign running you
just go viral or you also support your
your growth with I am traditional
vertising or whatever now we actually we
do very little traditional advertisement
we we focus quite a lot of PR I mean we
try to be active in PR and be heard that
way but other than that we are really
leveraging our user base and growing
with them as well as as using our
retailers that we partner with so what
rap is for for retailers it’s also kind
of a tool to make their brand ambassador
Oh to give their brand ambassador
something explicit to share with their
friends so let’s say that I am a huge
fan of HTM the Swedish fashion shame if
I’m a huge fan of hmm and you know I
will probably be more likely to give you
a gift card for H&M because I’m trying
to kind of convert you and convince you
that it is such an amazing story I love
this store you should come with me to
the store that’s why I’m giving you this
gift so we’re also using our retailers
to kind of reach their brand ambassadors
and through that being able to leverage
you know whatever followers there have
and get new users that way okay ah few
minutes more and then I let you go car
okay gift cards business checked
everything clear huge business and great
feeling by you guys congrats to
intercept that this trend is a huge
business rep how it works okay I would
like you to help with some tips and
advices about a few topics the first one
is mobile app I mean rap is basically a
mobile app okay it works only also on a
website but basically are they it has
been designed to work as a mobile app
right so what’s your top tip or what are
your top three tips to to create a
mobile app that works in a moment where
you have on App Store cat zillions of
mobile apps so it’s very difficult to be
you know on the screen of the other
users or your top advices on this topic
yeah and I mean you’re touching upon
kind of one of the core core concepts
that we have discussed with rap and it’s
just like you mentioned being on the
home screen on the mobile app that’s
that’s prime real estate location
if you if you are on that home Scream
screen there’s a scarce resource it’s
only a number of apps that can be there
and there’s so many that are forgotten
right I think what we have been been
bouncing back and forth is is two things
one is frequency the other thing is
virality those are the two core concept
of art that we have tried to design or
whole product around so what what could
be the reasons why people would share
these applications to any any other of
their friends you know the virality
aspects and the the second is frequency
how often could I usually use this is
this a one-off versus a continuous bacon
tinuous basis is it monthly is weak base
it daily and how can we increase that
frequency what can we create and decide
within our product to make this this
reminder reminder users to use this more
frequently and create a good value
proposition or reason to do that so I
think you know creating a mobile app
today is is difficult it’s difficult
because if there is there’s so much
competition now there’s so many apps out
there and it’s also difficult because of
the fact that it’s it’s costly if you
want to be cross-platform right you have
to have you cannot only design for iOS
do you have to design for Android as
well these are expecting it and soon
they may be expecting it for windows
mobile as well and if you then want a
web application on top of that you know
obviously you need to create that is
also there is there’s so many there’s so
many starters out there that are talking
about the lean startup mentality which
I’m very much a fan of but in wraps
instant we have actually you know we
raise 10 and a half million u.s. dollars
in our series a which was quite a big
round of money in relation to how far we
were with our company at that point of
time and we have invested quite quite
significantly and aggressively into our
development development team because we
see that there there’s so much that we
want to do there’s so many things that
that need to be done because we’re
working on these three platforms web
Android and iOS in parallel it’s complex
so I think going back to the core if you
want to if you want to create a mobile
app that
you if you want to try to create a
successful mobile app you really need to
think through you know how often will
you should use this and why would a you
should want to use this more often the
ones and then what what what aspects of
this application could could be recent
for me to share this with other people
it is really virality I mean that’s
that’s the key growth driver to your
application you could own you if you’re
in the business of all marketing spend
there will always be one competitor that
try to outbid you on on Google Adwords
or whatever it is if it’s American Idol
TV ads or something something so you
want to be you don’t want to become
addicted by marketing it’s not the shop
nothing wrong should use marketing but
you should make sure that that the core
of your product is something that can
grow virally i think that is that’s
that’s Kiki frequency and virality are
we write it somewhere you know like your
quote frequency virality I like it a lot
okay bye Michael favorite rapper I’d be
very happy if they saw that in writing i
just i’m just curious you’ve been
mentioning nicholas dentist Rome and a
great round a of in investment is also
great look and power nurse so read off
mum also and greed look so you get
funded by great investors what was the
key to get such important investors
funding your company right yeah I mean
as always with with fundraising it’s you
know you have to understand it takes a
lot of time it’s you usually see the
press press release this fundraising is
now completed hooray for this company
right but it’s a lot of work behind
dashed and and it takes a lot of time
both read and Nicholas was actually
involved in rap from a very very early
early stage and in the sense that they
were they were providing us with
feedback and we were balancing our ideas
with them and I think for rap you know
one of the one of the benefits for us I
think was the fact that the co-founding
team a trap had a network and access to
some of the
prominent investors so we could get that
first meeting right which of course is
is which is course it’s crucial right
but then really I think that we are
tackling a huge market that we already
discussed so the total size of your
market needs to be tremendously big in
order for you to have a shot at creating
a company that’s valuable enough so I
mean let’s say in our instance you know
we we raised 10 and a half million us
and our investors I don’t know what
multiple they’re expecting whatever it
is if it’s 5 10 20 50 100 times that
money but of course the valuation
increase of rap is is expected to be
significantly higher and in order for a
company to actually be able to reach
those type of absolute numbers in
valuations it needs to be in a market
which is big enough it means to be
attacking a problem that is that is big
enough to feel that that don’t
exponential count top two or 3i I asked
this to all the tech alchemist guests
your top two or top three tools or
website or app that absolutely suggest
to use if someone is in the digital
business you say okay you can’t live
without this this tools it can be
whatever you want to someone say okay
analytics or whatever from positioning
promoting or or partnership point of
view but your tour or three tools that
the one the apps that you have when
you’re on your screen or the one that
you can you can’t live without I like
the question is good one is the boring
answer is google apps but I don’t want
to say that so I’ll take that back but
and yeah you can say any table tennis
apps because I already said that so I
know that oh god I got it no I have one
awesome app which is on my smartphone
which is called I’m just going to make
sure that I have the name right because
I think they changed the name party is
we sign easy so it’s basically an
application to sign documents on your on
your app on your smartphone when you
want to go so you sign on the on on the
on the screen here so I mean it printing
is a hassle right and then you need to
scan it and then your email in fact I
and the more you can avoid printing the
better the world is from all aspects of
it environmentally am you know
management wise and that kind of stuff
security-wise you’re storing in the
cloud is much better than having it in a
some kind of folder here so side AC I
think it’s a great recommendation the
other tool that we use quite frequently
here at rap is it’s a tool called asana
which is a project management project
management tool is actually founded by
one of the the early guys Facebook can’t
remember which one it is anyway they
raised quite a significant Brown and
it’s in it’s a really good project
management tool when you’re working in
in teams and you have a lot of tasks
then you need to be completed and they
are you know interlinked with each other
and that complexity that that could
happen you know with rap we’re working
across multiple markets we have people
spread out over the world so there’s a
lot of stuff that needs to happen that
are linked to each other so college is a
great kind of base camp but more evolved
yes exactly it’s it’s definitely a
couple of couple notches more advanced
than base camp I love base camp as well
but the you know the simple and the
consumerization of software sometimes
only only gets you that that far at some
point of time you need a little more
sophisticated tool and a cyanide I think
it’s a perfect once you’re done with
basecamp you go to a sauna and that’s a
good extension of it yeah alright last
question car what’s next I mean if you
try to open your crystal ball and think
okay what wiII happen in the next two
years in my market it will happen this
so you bet under percent on the
digitalization of the gift cards market
and the only rap will exist in the world
what wiii happen what’s your vision
that’d be nice yeah
yeah it would be a movie now I think for
us in the very near term is Christmas
everything is about Christmas that the
holiday season the holiday season is is
you know one of the biggest gifting
occasions globally right and we of
course want to be want to be one of the
one of the default ways to to celebrate
your friends during the holiday season
you can’t be there with everyone right
you can only give a physical presence to
show many people because you because you
can only be a one location at a time so
I think wrap to facilitate a lot of that
that gifting needs that you could use
but then I think if you look a little
little further ahead i think one aspect
like you mentioned is the digitalization
of gift card that that is happening
we’re not the only people focusing on
that there’s a lot of people trying to
try to be part of that innovation but i
think what really touches upon the gift
card space and digitalization of that
it’s also the home digital wallet more
if you may say what will happen in with
the digital wallets and you know with
the rap application we have a digital
wallet as well where you store your your
digital gift cards so we’re not trying
to become a digital wallet in the
general purpose we’re only doing gift
cards but I think that whole ecosystem
around you know Apple released its past
book and what will happen of what is the
extension of that and there are so many
other players out there in the market as
well that is trying to to to
revolutionize the wallet space and I
think we are we are scratching that
surface from our little gift card angle
to a certain extent and it’s going to be
very interesting to see that whole that
whole ecosystem evolve and to see what
will happen there it’s I’m not sure who
will be the winner and what will happen
but it’s definitely going to be
interesting and I think that we will we
could actually be impacted by that to a
certain extent you’ve been talking a lot
about celebration and that which is good
you know it’s a very positive value so
I’m waiting for a worldwide celebration
day from wrap if you haven’t organized
yet where you celebrate everyone
a bright you do it right for me the one
yeah no I definitely not that’s that’s
something lovely and then also I mean I
think it’s important to highlight that
you know a rap is all about gifting and
celebrating your friends but actually
you know we’re also working with
nonprofit organizations you can actually
donate to charity on behalf of your
friend so everything is really the core
of rap is really about about that that
whole gifting in the nature of gifting
giving to someone else rather than
yourself so yeah thank you so much a
car-free ozone a co-founder of wrap a
car oh really you were very very gentle
to to share all these tips and keep it
touch for everything good luck thank you
more cool it was lovely thank you well good luck with it able to buy
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