Recently we managed to catch up with the co-founder and CEO of Birdback, Nicolai Watzenig, to discuss Birdback and his thoughts on the startup process. Birdback took part in the SpringBoard accelerator program of 2012.
Birdback is turning your credit cards into a loyalty cards. They will be launching in London during the next couple of months, and just this month opened up to beta users. To follow their progress please click here. On their bulletin board they will will be posting updates on design, product development and announcing new initiatives.
How did you come up with the idea for Birdback?
We were based in the US before moving to London. We witnessed first-hand how the payment space all competed on introducing a new frontend – whether that is NFC, QR, Square etc. The traditional loyalty industry has not changed much for the last 30 years. We still rely on club cards, loyalty cards and coupons to get discounts. The Internet has been notoriously poor in solving the local merchant problem and even though Groupon carved out a new group buying industry, they never managed to solve the loyalty aspect of their discounted deals. They were great at bringing in new customers but couldn’t assure or track if they were coming back.
That’s why we are building Birdback in order to solve a lot of the hassle associated with the traditional loyalty programs and the daily deal industry. We thought to ourselves, why are we not using the existing credit or debit card everybody already is carrying around in their pockets? Innovating on top of the existing credit card allows us to match and track purchases (Birdback is being developed using bank grade security practices and we don’t store any data on our platform) and offer cash-back each months to our users. We firmly believe it should be that simple, utterly efficient and completely hassle free! More so most of us are going out having lunch, dinner or drinks several times during the day and week and you spend a lot money and you are still treated like everybody else. We want solve that by offering a real loyalty program which actually reward the loyal customer. The more you spend the higher cash back you get!
On the other hand merchants never had a tool to track their customers and reward the best of them. We are offering a complete overview on who their customers are, how often they are visiting, the amount spent etc. Birdback aims to be a highly intelligent loyalty tool for both users and merchants but once you’ve signed up it all runs smoothly in the background and we are taking care of the rest.
Bridging online and offline
So why use the existing credit card? Isn’t QR codes and NFC the future? We believe the perfect solution is already invented somewhat 40 years ago with the plastic card. We don’t believe payments needs a new front-end. But there hasn’t been a whole lot of innovation based on the plastic card and we believe the existing plastic card can get a lot more intelligent than it already is. In the UK the average credit card per-person is 1.57 and for the first time ever credit and debit card spending has exceeded cash spending. We truly believe the future is the plastic card and it’s not going away any time soon. We are taking on a payment industry which hasn’t changed much and we’re only seeing the beginning on what’s possible. Birdback is focused on bridging the offline world with the online world. 90% of all transactions are still done in “the real world” and we know almost 85% of household income is spent within 6 miles of their home. By providing the offline world with best technology from the online world we believe we can create great value for both the user and merchants on the Birdback platform. Local is hard but huge! It’s early days for Birdback but we’re on the path to create something really important and we’ll dive into more aspects of the business on the blog in future writings.
What were some of the challenges that you faced starting a company?
We spent half a year researching potential data partners and looking into the different European markets in order to get an understanding of the payment/data infrastructure. This is still our main challenge. Being able to support any card and get sufficient data that enables us to match merchant and user with cashback. The UK payment industry is very fragmented and one of the great obstacles is how to aggregate the market data into a unified solution.
Have you had any major pivots from the conception of Birdback to where you are now?
None, we had a strong conceptual understanding early on and we have mostly focused on executing like crazy! This may change but currently we’re on track.
You were part of the SpringBoard accelerator program in London, what difference do you feel being part of an accelerator made to your company?
Speed. Upon arriving in London we had a sparse network in UK. Being introduced to a couple of hundred people ranging from VC’s and angels to industry experts enabled us to run even faster and saved us a lot of time. Now we don’t have to spend 1 year networking to get in front of the right people.
What advice would you give to people looking to start a company and work on developing a business plan?
Just start building and executing. Don’t focus too much on building a business plan. Everything will change anyway so focus more on getting your product out there and get some feedback! These learnings are 1,000x more valuable and helpful to you understanding the value that your product brings to the end users. The mental gap is way bigger than the actual gap but as soon you’re going, you realise it’s much easier and fun than you may have thought it would ever be.
A massive thank you to Nicolai for taking the time out of his busy schedule to put down some awesome answers to our questions. We look forward to catching back up with Birdback next year to see how things have progressed. In the mean time, check out their site, you can also follow them on twitter.