E@D sat down with Rewardzzz founder, Hunter Friedland, to learn more about his startup.
How did you come up with the idea of Rewardzz?
A year and a half ago a friend of mine introduced me to blockchain technology. It was amazing to see how much value the technology created. I started to realize that this technology was going to be like the internet. It was going to
change the way the world works.
After this introduction, all I could do was think of ways to create something of value to people using the technology. I started brainstorming all sorts of ideas. One day during my hotel operations class, the professor was lecturing on the split between independent hotels and branded hotels. One of the key things that struck me during the lecture was the difficulty independent hotels had with creating a loyalty program that works for them. This is due to multiple reasons: the high cost required to maintain and develop a loyalty program, and/or the limited benefits to a consumer of points collected from a loyalty program owned by an independent operator, given that the program would only be specific to this one location.
After this insight, I came up with the idea of a universal loyalty rewards program for independent hotels. This was the beginning of it. I spoke to my dad about the idea. My dad has been an entrepreneur all his life. I wanted his opinion on the concept. He fully supported me.
Then about a year ago, I started doing a lot of research on loyalty programs and talking to independent hotel operators. Over the summer of 2017, when I worked for a private equity firm, I also started writing the business plan for Rewardzzz, while doing more customer discovery.
By the end of the summer I had spoken to over 300 independent hotel operators and other businesses. During this phase of customer discovery, I asked business owners how they retained customers, how they increased exposure and how they brought more customers to the business. I also wanted to know if they had ever tried using loyalty programs. It turned out that most of them had not. This was because the loyalty programs offered in the market were very expensive to maintain and use. However, the independent hotel operators did see the value of a loyalty program. One thing I also noticed was that as much as these operators used social media to market their businesses, they also took the time to connect their marketing with local businesses.
This discovery was the real insight and was very exciting to me. It meant that Rewardzzz could go beyond a loyalty program for just independent hotels to an ecosystem of points for all independently owned businesses, wherever in the world they may be located. As a hospitality-focused online network, the core would still be hotels and restaurants but would extend to other independent merchants as ways to increase the opportunities to earn and redeem points.
How does Rewardzzz work?
The blockchain tracks and records each customer’s points as they visit stores locally and internationally. A customer would be able to collect points at a local participating coffee shop in, say, Mexico and then use them at an independent hotel participating in Florida. By consolidating all the data and allowing the customers to track their points, we will be preventing the loss of points. I would also like to add, that I see this to be bigger than a point system. Due to the nature of the technology, I know, we will be able to do a lot more things beyond tracking points. However, for now we will be focusing on helping independent hotels, restaurants and other merchants drive more customer traffic through their establishments. Also, we intend to expand our offering to ecommerce merchants as they too can benefit from our program.
Why not focus on the bigger branded players in market, such as Hilton, or the Marriott, or even Starbucks?
They are welcome to join but they don’t need my help. I want to help small businesses and promote entrepreneurship. Rewardzzz is a way for small businesses to immediately attract a new customer base without having a big brand. I also know that there are already other competitors who are eyeing these bigger players, it may not make sense to me going after them. I believe the independent hotel operators and other merchants are arguably a more profitable and underserved market opportunity. It makes sense, from a strategic perspective, therefore, to focus efforts on them.
Do you have a team helping you, and how did you meet them?
Yes, I have a team. As part of my technical development team, I just hired a Chief Technology Officer, Daniel Macadar, and a lead developer, Simon Haucel. Both Daniel and Simon have worked in the tech industry for about 15 years. They work in Miami. I also have a couple of students from Cornell on my team. Spencer Goldsmith who has a real estate background and Lorenzo Masias who is also in the hotel school and has worked in the hospitality industry. Alex Spivak who is a coder and an engineer. Alex is helping us with the technical front and further innovation. I have known Spencer and Lorenzo for a couple of years and both are my good friends. I met Alex through the entrepreneurship club. I recognized his natural talent in the tech field and he has become an essential part of the team as well as a good friend.
What is next?
We are working on a couple of extra features for the platform that will make it easy for people to collect and spend the points. We have also selected Ithaca as our first market because it is a small enough city to cost effectively market to both users and merchants. We hope to have 5,000 users and 200 businesses enrolled by 2019. We are also applying to as many accelerator programs as possible, to help us grow the business faster.
To learn more on Hunter’s venture visit Rewardzzz