I spent 5 years working for a B2B firm selling online marketing products. In 2013, around the time when I felt it was time to move on, I was invited by a friend to join a brand new company to bring reloadable cards to Manila to pay for meals and other purchases. Filipinos love vouchers and coupons so we wanted to offer the community a way to get rewards for every purchase they make. At the same time, we wanted to provide store owners with a more long-term, viable way of doing business than giving off 50-70% of their margins as they were doing with Groupon. So we created ZAP, which is a rebate-based type of rewards where our partner merchants give back about 5-20% of each purchase to customers in the form of points. These discounts are smaller so merchants can offer them anytime. In exchange we make it easy for them to get in touch with their patrons and get to know who their customers are. In 2 years, we partnered with 650 stores and reached about 200,000 customers.
We encountered two main challenges with our original business model. One is that we needed a lot of staff to onboard and train new merchants to make sure that their sales staff could operate the system and sell it properly to their customers. It was hard to scale fast this way and at some point we hit a plateau. Also, the original model was based on a shared pool of points system for merchants. For example, if a store gave a customer a rebate of 10 points, those points could be redeemed at any other partner merchant. Because of this, stores with large customer bases were apprehensive to join our network and didn’t want to give points that could be used somewhere else. So we had to rethink our model and developed an enterprise product, which provides stores with their own loyalty system and points cannot be used somewhere else. This way stores feel that it’s their own product and they are much more willing to sell it to their customers. Also, we used to be paid per transaction but now we moved to a subscription-based model. Our priority was to bring as many merchants on board as possible and with the old model we couldn’t do that so we had to prioritize and choose.
We started ZAP with our own savings and money borrowed from family and close friends. Then we raised funds from Kickstart, a local venture capital firm set up by Globe Telecom, and a year later we got funding from 2 more venture capital firms. It’s not easy to raise funds in the Philippines. There are not many venture capital funds here so you need to look elsewhere, go to VC conventions in Singapore and pitch your business idea. That’s what we did and even if we didn’t win, we made connections and were able to raise funding. Next year we’ll be looking to raise additional capital to fund our expansion in and outside the Philippines. Manila is a good breeding ground for new ideas but now we feel we are ready to expand.
If I were to start off the sales team again, I would hire more experienced people rather than fresh grads. They are worth the extra expense. Also, if I had to go back I would fire faster. We were way too lenient at the beginning and rather than laying people off, we thought we could fix the issues with extra training. Now if staff doesn’t perform well within a month, they should go.
Clichés exist for a reason. You really have to find your passion and then not matter what struggles come up, you’ll make things happen. There are no right or wrong decisions, you make a decision and then follow through. It’s really helpful to have mentors. We are lucky because as part of the Kickstart network we get to meet and talk to a lot of industry experts. For me a good mentor is someone that is very realistic and can offer concrete solutions, for example advice on hiring talent or how to engage millennials. In general, I find women more attuned to the “soft aspects” of business, like dealing with people and interpersonal skills. Personally, I like having a balance of both female and male mentors.
When I talk to students, I always tell them that they should dream big but not for selfish reasons. You don’t start you own business because you want to want to be a rockstar and have books written about you. It’s about how you affect other people and how you inspire change. You have to dream big, bigger than your self so that you can also include other people in your dream and give back. If you build something, build it for a bigger community so you can change things for the better.
No of Employees: 26