The Up Group

Can you tell us about Happy Elements? What do you do and how was the business founded?

We are a social gaming company focused on bringing our games to both Social Networks, such as Facebook, as well mobile gaming platforms.

Happy Elements was founded in 2009 and first game was launched in fall of that year in traditional Chinese on Facebook Taiwan. Launch coincided with that platforms  explosive growth and our game “My Fishbowl” soon became extremely hot on the market. With its 1.3 million Daily Active Users it still remains the platform’s most popular game.

What markets are Happy Elements currently in and what are your plans for expansion?

Based on that initial success in Taiwan with “My Fishbowl” we have launched successive games on that platform as well as an additional 18 platforms around the world in a total of 15 languages, both Asian and Western. We are widely considered to be the social gaming company with strongest overall presence across Asia’s four strongest social gaming markets; Taiwan, China, Japan and Korea. We are now using that presence to serve as a “publisher” for other gaming companies i.e. customize and promote other companies’ games using our resources.

You launched the business with “My Fishbowl”, a Facebook game. How important is Facebook to your future strategy and success?

With the launch of our first game “My Fishbowl” on Taiwan, Facebook, has served as the base of our success, however across other key Asian markets Facebook (Japan, China and Korea) is way behind local social network platforms. Our strategy is to work, when we can, with the market leaders in each country.

Facebook and the web in general are awash with casual gaming companies, so who are you targeting and how do you seek to differentiate yourselves from others on offer?

The social gaming landscape is entering a mature phase where the dominant companies now have the user base across which they can cross promote their games. This means that for smaller companies with a small game portfolio having a good game is often not quite good enough. Monetization often isn’t higher than the cost of acquiring new users.

We believe that “We are running a service, not a product”, so that our games must constantly be kept fresh and new with updates to improve quality of content and gameplay. With so much competition the users are becoming more and more demanding. And that pushes all of us in industry to make better and better games.

How important is it that you have a multiplatform product, and to what extent are you focussing on mobile and tablet?

Creating a new social game can easily involve 6 months work for a team of 15-20 people. That is a lot of fixed costs to recoup, therefore it is important to try to get the new game on as many platforms as possible. Because of this we have created GIP (Global Integration Platform) as a type of middleware to connect our proprietary games, as well as the games we publish for third parties, with the 18 platforms we serve.

Mobile and tablet games are the new hot field and we are putting a large part of resources into game development. Some large players that from the SNS gaming space such as Zynga & Electronic Arts are naturally reallocating resources and growing quickly into this space, but there is still much space for new entries and Happy Elements as well as many are rushing to establish a strong market presence.

What is it like to work at Happy Elements? What type of company culture are you keen to foster?

Ours is a very young relaxed, fun team-oriented company culture. We are trying to foster a merit-based culture that rewards innovation and self-motivation. Since demand for top talent in this sector can be so fierce it is especially important for us to create not only a friendly place to work, but also a place where employees feel challenged to grow professionally.

Outside of your own market, what do you think is the hottest emerging trend or technology right now?

I see smart phone technologies getting smarter and smarter and this combined with location-based technologies will make the mobile in our pocket and even more of a powerful, multi-use tool in our lives.  Things that we probably can’t even imagine now, but will definitely also include innovations to make gaming ever more exciting and engaging for the users.

Read our exclusive with Per Besson, Business Development at casual gaming start-up, Happy Elements

Tell us about Wrapp? Who is behind the business?

Wrapp is a new social gifting service that lets you use your smartphone to send free and paid digital gift cards offered by top brands to all of your Facebook friends. The digital gift cards are then stored in the Wrapp Wallet on the recipient’s phone, so they’re always in your friend’s pocket, ready to use.

Wrapp was started earlier this year by some of the best and brightest young entrepreneurs in Sweden, including Andreas Ehn, Spotify’s founding chief technology officer; Hjalmar Winbladh, founding CEO of Rebtel, and Sendit; Carl Fritjofsson, former strategy advisor to Groupon.se; Aage Reerslev, founder of mobile browser Squace; and Fabian Mansson, former CEO of H&M and Eddie Bauer.

How did you and your co-founders come up with the idea?

Early this year we started looking at what was going on in the world and the mega-trends impacting our daily lives. Smartphone penetration was exploding. Everybody was on Facebook – some 700 million of us worldwide. And the global economy was a mess, making life miserable for retailers.  Then we found that one of the most popular items in the retail industry was a gift card. In the U.S. alone it’s worth more than $100 billion a year.  But not much has happened with it during the past 50 years. Paper cards have turned into plastic cards, and that’s about it – and there is still a lot of friction in buying and giving them.  So, it was clear there was room for real innovation.  We put all those ingredients together, turned it up-side down and in-side out, and out came Wrapp – a business that disrupts the gift card market in a positive way – actually makes it larger – by making it social, digital and mobile.

Wrapp combines two very hot trends, mobile and social media. What do you think will make Wrapp successful? Is there something similar in the market?

There’s no shortage of companies in the social gifting category but what makes Wrapp unique is a few things:

Wrapp is first to make it just as easy and fun to send gifts of real value to your friends and family, as it is to say Hi or Happy Birthday on their Facebook wall.

So, by making gift cards mobile, social and digital, gift giving can now be an everyday event. Thank-you, Monday, a new job – whatever – everyone loves to be recognized and celebrated.

And for retailers, Wrapp is the first low-risk, low cost customer acquisition platform for improving in-store sales using precision targeting that drives only desired on-line consumers into stores.  And, it’s pay for performance; retailers don’t pay until the gift cards are redeemed in-store.

Just the free gifts business creates a strong company; the contributions mutual friends add to gifts will make Wrapp great.

You took the business to launch in a very short time. What do you think made that possible?

We have a great tech and design team led by Spotify’s former CTO, Andreas Ehn.

But equally important, is that top retailers have quickly recognized our unique offer and the benefits of becoming a Wrapp partner.  Many merchants have found that daily deals and deal-hunters dilute their brand’s value and is bad business because it drives the wrong traffic to the store and doesn’t generally foster repeat business.  In contrast, Wrapp has found a way to make friend-to-friend marketing real and accessible to many retailers for the first time ever.

How did you market the idea to retailers? What have been the challenges in getting traditional retailers on board? Is it easier if they already have a mobile strategy?

Retailers are no fools.  They know they must have mobile and social strategies if they are going to survive today.  The problem is that until now it’s been a crapshoot for many when it comes to adopting cost effective and measureable programs. With Wrapp the get both.

Wrapp is a pay-for-performance platform – the retailers only pay when a gift card is redeemed.  Wrapp allows them to target specific demographics – they’re able to offer free cards only to exactly whom they want in their stores. Wrapp generates real-time performance and customer demographic data – valuable information that’s measureable and can be used to tune their campaigns. And last, and possibly most important of all, with Wrapp friends are marketing the brand to friends.  In my opinion it doesn’t get better than that.

Your proposition is B2B and B2C, what are the difficulties in developing products that must appeal and work for both groups?

First and foremost we have to delight consumers.  They have to love what we’re offering and use the service often, if not every day.  So the benefit to the consumer has to be instantly understandable.

Just as important, the app has to be super simple and intuitive to use.  If we’re not making people’s lives easier, better and more enjoyable, what’s the point?

For the retailers, it’s all about delivering on the promise – actually delivering the shoppers into their stores that they know, based on demographics, are the most profitable.

So far, so good on all fronts – at least in Sweden, and soon in the UK and US.

You have recently secured some significant VC-funding from Atomico. What will this enable you to do?

Just having the advice, counsel and attention of Niklas Zennström is epic for us.  He brings amazing insight, experience, knowledge and relationships that will be crucial to our ability to expand and scale quickly around the world.  But the funds are also important because they allow us to hire a few more people and increase our marketing efforts that are required to successfully enter new markets – first and foremost the UK and US.

What are Wrapp’s aspirations for the future?

We believe Wrapp can disrupt the gift card industry for the better – actually make it bigger than it already is worldwide – by making it mobile, social and digital, and in so doing, become the de-facto standard for Internet gift giving among friends.

Where are your offices right now and how many people work in the business? What type of person fits into the Wrapp culture?

We currently have three offices: Stockholm, London, and Silicon Valley. There are just 15 of us right now, going on 17 going on 20.

We’re looking for a few fellow entrepreneurs, who are creative, relentless, and know the retail industry.

What is your personal background prior to co-founding Wrapp?

I’ve had a bit of a scrappy past (pun intended).  I started my career as business development manager atStena Metall AB, which recycles and processes metals, paper, electronics, hazardous waste and chemicals in five geographical markets.  But just before Wrapp I was global sales director of the Online Division atMetro International, the world’s largest urban newspaper and business intelligence firm.  And before that, I was with TradeDoubler, the international performance-based digital marketing company, where I was the agency service director.

Outside of your own market, what do you think is the hottest emerging trend or technology right now?

We’re focused on retail and gift giving but the hottest emerging trends are the same within and outside of our market: mobile, social and global.

Read our exclusive with Aurore Belfrage

Here in Europe we all know Gilt as a successful designer fashion eCommerce business but in the US you have been translating this model across other verticals, and in 2010 launched a travel equivalent called “Jetsetter”. Can you explain why you have done this and how Jetsetter works?

In 2010, Gilt had already grown rapidly and had developed a large member base of passionate shoppers. We started to ask ourselves (and those shoppers) what else they might be interested in buying from Gilt. Travel was consistently the top reply we heard.

Jetsetter began in much the same way as Gilt, selling luxury products, in this case hotel rooms, at a significant discount, in a range of daily, members-only, limited time ‘flash sales’.

As a proposition to our vendors (hotels), Jetsetter has some key differences to Gilt. There are some incredible properties in the world, but many struggle to reach the right audience, relying on traditional methods like a visiting journalist, or attracting influential guests. By working with Jetsetter, great hotels find themselves promoted on our site, and in our communications with members, which in turn drives bookings and awareness of their product.

Both the online travel and daily deals spaces are very busy. How do you differentiate Jetsetter UK from the competition in both areas?

There are many, many ways Jetsetter UK is differentiated, but I would particularly highlight three. Jetsetter UK curates the very best hotels around the world, which means that the deals that customers find on our site are at hotels that we feel strongly are the very best-in-class. In the same way, we invest heavily in our editorial process, commissioning many of the world’s best travel writers to visit and review the properties you will see on the site – we never feature a hotel we have not personally verified.

Finally, and more mechanically, many of the new wave of daily deal sites are really selling coupons for travel; customers need to contact the hotel after making their purchase to (hopefully) book dates. At Jetsetter, we are selling actual hotel stays – customers book the dates they want right there on the site, just like they would with a regular online travel agency.

What markets is Jetsetter currently in and what are your plans for expansion?

Travel is an inherently global product, and Jetsetter trips can be booked from anywhere in the world. Even before we launched the Jetsetter UK site, 20% of bookings made on Jetsetter where made by customers outside the US. We launched our UK site in September, and we already have a sales team based in Asia managing our hotel relationships there.

Our major focus for the next couple of quarters is growing the UK operation, but we are always considering other geographies – both emerging, and established.

The daily deals business model has come in for some criticism recently. How does the Jetsetter model add value to both the individual consumer and the business customer long term?

For our consumers, what you see is what you get. We feel passionately about the hotels we curate, and we know that our members will be blown-away by the travel experiences we provide. Our hotel partners know how great our members are too, and will often go out of their way to do something a bit extra for customers that book through Jetsetter, all of which adds up to a better experience for our customers to enjoy.

From a hotel perspective, as I mentioned before, we help hotels reach a high quality audience with a passion for travel. And we generate significant bookings for them too, which of course is a big plus for our partners.

Can you tell us more about Gilt’s future strategy and how Jetsetter fits in to the portfolio?

Gilt continues to grow aggressively in the US, and like Jetsetter, is actively looking at further international expansion. We recently launched international shipping, meaning that customers from over 90 countries around the world can now access the amazing deals on Gilt. Gilt is looking very closely at Europe at the moment, and the continued success of Jetsetter here in the UK is only going to support those aspirations.

Businesses like Gilt and Groupon are achieving staggering valuations and the market is awash with speculation on whether you will IPO in 2012. What is your take on this and what do you see as the pros and cons of floating?

That speculation seems to grow every day, and we have been open about the fact that an IPO is certainly an option Gilt will consider in 2012. The key is getting the timing right, and we will make sure not to jump before the business is genuinely ready.

The pros and cons of floating for Gilt are much the same as they are for other online businesses – a capital injection and increased public awareness are great upsides, but increased scrutiny is something that needs to be carefully considered. The fluctuations in Groupon’s share price since their floatation are testament to that.

You have been spearheading a lot of Gilt’s international expansion plans. What are the major challenges of launching a business like Gilt in Europe? In particular how do you go about building your team?

This is not a new business for Europe, and there are many players who are doing a great job in specific countries – Privalia in Spain and Vente Privee in France – are good examples. But we feel our positioning is differentiated, and we are yet to see any truly successful businesses operating at the luxury end of the spectrum in the same way that Gilt does. Clearly that creates an opportunity for us to expand.

Building the team in Europe has been a fantastic process, and I am lucky to have put together an extremely high calibre team at Jetsetter in the UK. In the technology and travel industries, the Jetsetter brand has genuine cache, and I think my team are just plain excited to be attempting to replicate the success that Jetsetter has seen in the US with a new audience here in the UK and Europe.

 What is it like to work at Jetsetter and at Gilt? What type of company culture are you keen to foster?

It’s a fascinating business to be a part of – even given the rapid growth, Kevin, Susan and the management team have done a remarkable job of maintaining a passionate and committed culture and a team with a desire to keep pushing the boundaries.

Last week Gilt ran a sale with Virgin America to let one customer charter an entire plane to fly any route, anywhere within the US. Thrown into the deal was the chance to permanently name the plane with a moniker of your choosing, painted right there on the fuselage, for time eternal. All for the princely sum of $60,000. That deal sold in under an hour, which is pretty extraordinary if you think about it what it takes to fill the 146 seats. Being a part of a business that can pull off deals like that makes Gilt an incredibly exciting place to work.

Outside of your own market, what do you think is the hottest emerging trend or technology right now?

My tip for the next big thing is social shopping. The early pioneers in this space are rapidly discovering that retailers can dramatically increase the chances of a customer making a purchase if they can engage that customer’s friends, and voices they trust, in the selling process. Businesses like Svpply and Pinterest in the US are at the absolute forefront of the space, and are generating purchase conversion rates that would make even the most successful online retailer cry with jealousy.

I think we will see successful standalone businesses in this space, but more importantly, I believe we will see this new approach to selling have a dramatic impact on the way that every online retailer sells products.

Read our exclusive with Rob Deeming.