When we started way back in 2012, the only thing we wanted to build was a company which ll bring paradigm changes in the way ‘gifting’ happens in India. Over the last 4.5 years, we experimented, iterated and kept doing course corrections. What we do today is way different from what we started with. During this week, when we have rebranded ourselves to Xoxoday, I am taking you through our brief journey over these years.
The Journey From Giftxoxo and Frogo To Xoxoday
Group and social gifting as a concept was quite hot in the western world in 2011-12. We felt that we can do this in India. It sounded big and novel. The idea was to convert the offline groups of people gifting to someone, into an online method through social platforms or through emails or mobiles. We also made some nice excel sheet based business model using primary and secondary data and came up with a multi-crore revenue projections :). Since this idea required lot of technology development, we started looking for a good technology partner. We outsourced the web development work to a friend’s company in Noida but it really did not work out. We realized that to build a good technology product, we need to have a good in-house technology team and that should start with a good tech co-founder. We started searching through friends, family and network and met over 100 such potential tech co-founder in next few weeks. Finally we met Abhishek through another good friend in June 2012 and discussed the idea with him over next couple of weeks. Abhishek unlike many other technology guys, was simple, grounded and very business mature. Abhishek agreed to be part of our journey. I and Abhishek had commitments with our existing companies and hence continued to work until July 2012. And from late July 2012, three of us started the entrepreneurial journey.
A good name to the company was paramount and it took us around 1 month to finalize one. The name Giftxoxo was a serendipity over a dinner discussion with family. We got our logo done from a freelancer and launched the website in July 2012. [thankfully those days Apps hardly existed and hence we had to just handle website alone] . We wanted to keep minimal asset spends in beginning. Hence, we took a small room in a friend’s office in exchange of equity. To bring quick transactions, we also enabled one to one gifting option apart from group gifting. We had our first online customer on July 20 (my birthday) and Sumit & Abhishek delivered this “midnight” cake & flower successfully (chased by a dog :)).
We tried to acquire customers on the social group gifting product we built. But we found that though the idea is great on paper but practically there are no takers. Even the funded companies in the US and Europe in this sector slowly got shutdown. So somewhere around September 2012, we started rethinking about this business model of social and group gifting. During the same time, Kushal also joined us as the youngest co-founder in the 4. So we were 4 co-founders by end of 2012 and the best part was that each one of us had complementary skills which together covered almost every aspect a large business would need in long term. We kept doing the individual gifting of cakes, flowers, chocolates etc. We also got occasional bulk orders for these gift items and executed few of them. Our first bulk order was on 10th August 2012. This kept us going in terms of some revenues.
We have always been very open in taking advice from seniors and industry experts. We met Mr John Kuruvila, ex-Air Deccan, whom Sumit knew through a connect. We discussed our business model with him and how we are struggling to get any transaction on group/social gifting. That is when he gave us a great piece of advice which has been helping us till today. And the advice was “Revenue momentum in a business is very important, and if you are able to get that momentum, you can always use these revenues to fine tune your business model in long term. So the show must go on in in short term and keep fueling the long term business”. This advice really helped us get some confidence and we started working on building revenues through bulk orders of gifts from corporate. 2012 Diwali was coming and we planned to leverage the Diwali bulk sales in corporate. We could slowly build a monthly revenue of around 20 lacs selling anything and everything which a corporate would need: Gift cards, Gift Vouchers, Tshirts, mugs, sippers, mobiles, mobile covers, pens, diaries, bags, jackets, etc etc etc. It was really so funny meeting some of the most fancy and Utopian requirements from the corporate to bring the ‘kuch hatke’ in their corporate gifting. In a short time, we learnt so many types of printing, embossing and customization techniques required in corporate gifting. We had built a small and good team by then. And the best part, the team we built in 2012, most of them are with us today when I write this article. And this wonderful team has kept us going through thick and thin. We learnt the tricks of B2B businesses, the psyche of sales in corporate and had built good relations with the corporate in India. In terms of revenues we were growing, but at the same time we knew that this product gifting business is linear and manual. We always knew that corporate product gifting was never our end goal but just a means to go ahead. We kept meeting the veterans in this industry and kept taking relevant business calls to fine tune our model. Corporate gifting is very price sensitive, and does not differentiate between educated and technology driven players like us versus someone who runs a gift shop in the market. Hence we always kept working on some breakthrough innovations using the revenues we built through corporate gifting.
We learnt and researched about a very innovative concept of experiential gifting which was working well in many countries in Europe, US and Australia. We found it very interesting and started working on it in Jan 2013. We always took business decisions with lot of primary and secondary research. This time too, we spoke to the founders of these experience gifting companies in other countries and did good homework before we started. Experience gifting in simple language is gifting someone with experiences instead of tangible products, gifting memories instead of things and gifting moments instead of giving assets. We launched our first mock up of the experience product in March 2013. Behind the scenes it required lot of work in terms of getting the right experience vendor partners, the content, packaging and entire booking process. The right design and packaging itself took around 2 months of iterations. We sold our first experience box in April 2013 for an anniversary gift and slowly started getting orders for experiential gifts.
Someone truly said that ‘Most of the times when you meet or speak to someone, it’s for a purpose already marked in your destiny”. We had spoken to an experience gifting player in Singapore before we started our experience gifting vertical. Those guys connected us with Naveen Kshtriya (our first investor) as Naveen was quite impressed with experience gifting idea in Singapore/HongKong and wanted to do something similar in India. We really did not try to raise funds in initial year as we wanted to focus more on finding the right business model. But thoughts become things, and it happened in the best way it could have happened. We closed our first seed round in May 2013.This was a great stepping stone for us. Naveen has been one of the best mentors we ever had and has been helping us on various fronts.
We slowly started strengthening our experience gifting vertical. We could sense that this could become a good competitive differentiation for us in gifting versus others. Our B2B gifting business kept on growing with experiences, products and gift vouchers. While products and gift vouchers were good entry and revenue drivers into corporate, experience gifts provided us differentiation and competitive advantage. Diwali has always been a time when we used to deliberate on what next, how should we go ahead, are we going in the right directions, should we shut down or continue? So Diwali of 2013, we were deliberating about the future of product gifting business. End of 2013, we started facing the heat which is prevalent in product gifting in terms of some delivery/quality or payment concerns. We found that this business runs deeply on credit lines and hence from a cash flow perspective was tough in terms of scale. It was also taking our time and focus away from experience gifting which was our long term. We took a bold call in early 2014 to discontinue product gifting. This impacted our revenues heavily for a quarter but if I should look in hindsight, it was our best decision till date. Once we stopped doing product gifting, our own focus and the team focus increased towards the experience business. With this focus, we signed up long term contracts with some large companies like Cognizant in 2014.
We kept trying ways to innovate in product, sales and supply. It was same Diwali time in 2014, when we deliberated on how we can move our transaction billings in corporate more towards subscription billing. We discussed, how transaction billings are costly and risky. In late 2014, we started working on ideas to convert our ‘transaction business’ with corporate into long term and repeat business. This is when we launched the Rewards and Recognition SaaS platform ‘Xoxoengage’ which can be used by companies to handle their rewards, recognition and engagement seamlessly. The rewards could be used on our experience catalog or gift vouchers. We started signing up with around one client every month on this platform. This platform is now shaping up very well and is becoming one of our key competitive advantage in the b2b business.
While our b2b experience gifting business was growing and picking up well, we were still figuring out our ways in the b2c market. We always wanted to acquire customers organically and hence tried to work on product ideas rather than spending loads of money in advertisements. In late 2013, we tried our hands in consumer gifting discovery platform to bring organic b2c transactions on our website. With the help of few team members and interns, we experimented with building discovery capabilities in our website so that consumers can find and buy the best gifting option from the plethora of gifting options available on the web (specially when e-commerce was catching up big time in 2013-14). We tried this idea for few months and realized that most of the online gifting market is captured by top e-commerce players. Hence building a discovery layer on the top of this ‘short head’ was neither long term and nor a consumer need.
Another experiment which we did to gain consumer traction in b2c was selling gift vouchers and cards to the b2c consumers. While we always were selling these gift vouchers to corporate, we saw an opportunity to sell it to consumers too through the website and hence we enabled consumer buying of gift vouchers in late 2014. We found the sales picking up in B2C gift vouchers very rapidly. This experiment worked really well in terms of getting consumer traction, revenues and awareness. This helped us gain good momentum in the consumer side of business along with the corporate side. However, instead of consumers buying these gift vouchers for ‘gifting’, almost 95% were buying it for self consumption. Consumers would buy these gift vouchers at a discount from us and then buy a product from these stores (like flipkart/amazon etc) which was already at a discount. We realized that this is a commodity business deeply driven with ‘discount’ as the key driver. 90% of the gift voucher business lies with top 10% of the brands. This made it a risky proposition in terms of margins and supplier side risks. The entry barriers to gift vouchers business are also too low. Again this discussion started over during Diwali of 2015 and we took another big decision to slowly move away from b2c gift voucher business. Hence, in early 2016, we planned to discontinue the b2c side of gift vouchers. But in these 1.5 years of consumer gift voucher business, we had learnt the hooks and levers for driving our consumer experience business.
In all these initial years, we were selling experience gifts through our website Giftxoxo.com and channel partners. We had some success and got a fair idea that consumers are really excited to buy experiences and activities. However, most consumers want to “buy” these experiences for themselves rather than “gift” someone. The trend was more of buying an experience and gifting was just a very small percentage of it. By early 2015, we started realizing that we need to go beyond ‘gifting’ in experiences and activities. It has to be more in terms of self consumption. However, our brand name Giftxoxo had a strong connotation with gifting due to the upfront word ‘Gift’ in the name. We did not really want to kill the brand name Giftxoxo as it had created a good awareness in the corporates in India (b2b business). So we retained Giftxoxo.com for our b2b business and launched a consumer focused brand called Frogo. The idea behind the brand Frogo was that you hop on like a frog and explore places around you through our activities and experiences. We acquired companies like Yipeedo, Actizone, Bookmyinterest and Fundoo.io to strengthen our experiences and activities business in 2015-16.
From mid 2015 we started living with two brand names, Giftxoxo and Frogo. Though both essentially were selling experiences but one to a b2b and other to b2c. While working on two brands simultaneously, we found that confusions and inefficiencies were creeping in from our internal employees, customers and suppliers. Sometimes in situations like an event or Ad or introduction, it was tough to decide whether to put Frogo or Giftxoxo or both. Internally, the teams were feeling little divided in roles for two brands. Externally, people were little confused between the difference in two brands or were aware of one and not the other. Also at the stage of growth we are, it was not very wise for us to handle two brands in terms of marketing, customer care, products etc. It was becoming unnecessary overhead. Other issue we have faced over time is that people generally associate gifts with traditional gifts like cakes, chocolates, flowers, mugs etc. Unless one knew about us or had seen our website, they never knew we gift experiences and not products. Thus, the word gift in our brand name was not giving a clear picture of our business and potential to the external world.
We lived with these two brand names for over 1.5 years. However, we have been always deliberating should we have one brand or two. If one, then what should be the name of that brand. It cant be Giftxoxo as ‘gift’ is limiting and gifting is just a small percentage of our overall business. Frogo.com was unavailable and since we were going global, we felt this can limit us in the long term. Hence we had to think of a new brand name altogether. We have been thinking over it for last few months. Some of our analysis strongly suggested that we should retain the word ‘xoxo’ in our new brand name as xoxo is something people have started associating us with. People recall us with the word ‘xoxo’. We wanted to keep a brand name which is simple, available and connects to our business. During Diwali of 2016, we built a task force to rebrand ourselves into a single brand and started working towards it. Diwali has always been special for us. We have taken good decisions every Diwali and progressed ahead.
And on the auspicious day of Pongal and Makar Sakranti, we simplified things with a single brand name which carries a larger perspective. We call it Xoxoday.
Xoxoday, Live your now with experiences and activities.
The post From Giftxoxo and Frogo To Xoxoday: The Evolution! appeared first on Enterprise Blog for xoxoday.