By Chris Kenji Beer
Northwest Asian Weekly
When Arry Yu entered a hackathon contest at a Seattle Startup Weekend meet up, she may not have expected to create a growing dotcom business out of it. Yu saw winning the contest as the validation she needed to quit her job and try her hand at running Giftstarter.com full-time. Since then, Yu has raised nearly $600,000 in seed funding for her business. She successfully raised early money from 9Mile Labs, 500 startups, and Seattle area angel investors Jonathan Sposato, Rudy Gadre, Heather Redman, and Rao Remala. It takes a special kind of motivated leader to orchestrate participation by such a diverse investor group.
Yu’s company, Giftstarter, is an online shared e-wallet retailer, enabling collective purchasing of a gift by multiple buyers, such as friends, workmates, or family members. “Now friends can all pitch in and each contribute together toward a gift for a friend or family member,” said Yu. “Even kids can get together and buy their teacher a gift.”
In many cases, an e-commerce portal’s top goal is to bring in as many active users in the shortest amount of time. It can be a rat race. This is only partly the case for Giftstarter. Certainly customer numbers do matter. However, Giftstarter enjoys a uniquely high average purchase price, substantially higher at $600 per order compared to just $300 across the country. That’s largely due to the nature of their shared e-wallet solution. It makes sense that if more buyers participate in buying a gift, there is a greater possibility the group will spend more money. At the same time, the nature of group purchasing also drives up the user numbers per purchase more efficiently than one-off consumer e-commerce portals.
This “social buying” helped Giftstarter generate steady growth in 2015, its first year of operation. The company saw a 50 percent month over month growth rate the entire first year. Yu leverages social purchasing of lottery tickets using Facebook to build her user base. Though she wasn’t quite ready to share her current revenue numbers, Yu did say Giftstarter is close to breaking even. To give you an idea into Giftstarter’s market potential, a single social buying of lottery tickets in the Seattle area alone has generated over $30,000 in contributions. The numbers become substantial as Yu expands this group lottery ticket buying program across the country.
Yu is not relying solely on the direct consumer business for the growth of her company. Her team recently completed development of an application programming interface (API) for a private label business-to-business (b2b) service. The API enables other online portals to generate shared purchasing on their websites as well. This is one of the oldest tricks in the book, where a dotcom leverages the customers of partners to reach increasingly larger numbers and generate more revenue. “Businesses just kept coming to us asking for our API to use for their own businesses,” said Yu.
To keep costs down, her team of seven works from home and live in all parts of the country, and even overseas. Team members work from Spain, Ukraine, Florida, Indiana, Oregon, and Texas. Yu resides in Seattle while her partner, Christie Gettler, lives and works out of Rhode Island. Yu used the Myers-Briggs test to assemble her very diverse team.
As for the path that led her to be founder of Giftstarter, Yu started out with musical interests as a child. Her greatest inspiration is her mother, she said. “Mom said, ‘Whatever you want to do, go for it.’” Ever since, Yu took that to heart. As a child, she was so committed to learning music and playing the violin, “I would lock myself inside my closet until mom would agree to get me violin lessons.” Now that’s a CEO in the making. Though her mother said, “I have no money,” somehow, they figured out a way to get violin lessons for the young aspiring musician. Even for college, Yu opted for the second choice Cornell over her first choice Juilliard because Cornell offered her a full scholarship. When you come from a working class immigrant family, you take nothing for granted.
Her persistence paid off again when she moved to Seattle and became an IT (information technology) consultant, providing big data IT solutions for the internet’s captains of industry, such as Google, Microsoft, and Expedia.
In the work world as an Asian businesswoman, Yu said, “I had to learn when to be Asian versus an entrepreneur. As an Asian woman, I was taught to be humble, don’t rock the boat. Smile, be pleasant. As an entrepreneur, sometimes you need to be hard core.”
Today, in addition to her busy schedule, Yu gives her time to a mentoring program at the University of Washington and is passing on her mother’s “do what you really want to do, and go for it” mantra. “Our most valuable asset is our time while we are here on earth.” She advised her pupils, “Put your time into what is most important to you. Don’t let (your time) go to waste.” Yu advised anyone who wants to start a business to “show up with your head and your heart.” “You need both working to succeed” at what you’re doing.
While it remains to be seen whether a pre-revenue dotcom turns a long term profit, Yu has what it takes to successfully run a business. Yu has the combination of life skills and drive, fortified by an Ivy League liberal arts education, a range of professional experience, and out-of-the-box thinking that maximizes her chances of success. You can bank on it.
Chris can be reached at firstname.lastname@example.org.