Bootstrapping to $80 Million from Canada: Rob Purdy, CEO of Power2Motivate (Part 6)

Rob Purdy: It is. It has worked very well. It has been a good ride for all the shareholders who came in at that time because they’ve been receiving dividends for the last three and a half years. The valuation of the business has grown significantly in six years.

Sramana Mitra: These are people that you knew. You basically used personal relationships.

Rob Purdy: Yes. This was a combination of employees as well as business partners that we had built up over the years. Ben, out of Australia, bought 10% of the company. We had another partner do the same thing. Then we had some external people who I had as consultants over the years. We worked together on the business. They put up loan guarantees as well. There’s no friends and family. It was people who, in one way, shape, or form, had a relationship with the business.

Sramana Mitra: Excellent.

Rob Purdy: Some of the people that bought in from the employee level were there right at the ground floor of the development of the product back in 2006.

Sramana Mitra: Super. This happened in 2011? What is the next major strategic move?

Rob Purdy: It’s actually the previous year. In 2010, we had completed a number of the other build outs that were core to Power2Motivate. One major build out was build a global reward platform. When we launch a program with a customer, it’s a point-based incentive program. People would build up points and points can then be exchanged for rewards within a catalog.

Because we were global, what we had to build was a global reward delivery system for every country in the world. From the outset, one of the defining components of our product was that it had to be global. We’re approaching 20 languages today. It had to have the ability to manage any currency. We manage 66 currencies now. It also had to have the ability to deliver a reward to any member of a program anywhere in the world. Those were the guiding principles of the design. We didn’t start that build out until 2010.

Late in 2010, we started to build the technology to manage reward and reward delivery. We started to build out the supply chain network at that time as well. If you look at the competitive landscape in 2010, there was nobody that could deliver a SaaS global product. Nobody in the world had even begun to develop that. That was a major turning point for the company because if we could deliver that, we had a major point of difference. Not only was the front-end platform unique and powerful, but we could now facilitate reward delivery.

Sramana Mitra: When did that product become available?

Rob Purdy: In 2012, we released the first prong of that product. We went in and started to provide reward services to the Power2Motivate licensees. Prior to that, the licensees did all the rewards management themselves using an existing piece of technology that we built inside the system. It was suitable, but it wasn’t great. It was suitable for a domestic program. We didn’t make any money on that.

If you look at our business, we split the revenue opportunity into two. We have the service fees. The second revenue is in the reward component. If you were to break it down, the market is roughly a $400 billion market. 10% of that goes into fees. 90% goes into rewards. The rewards business is significant. If you could deliver a global platform in a SaaS mode, it was a huge unique advantage. We started that process in 2010 and released that in 2012. By late 2013, we released the product outside of Power2Motivate, for example to Salesforce and different providers.

This segment is part 6 in the series : Bootstrapping to $80 Million from Canada: Rob Purdy, CEO of Power2Motivate
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