The Gifts Project – Building and Launching an MVP; Company Culture

There were various approaches that Ron could have taken to create group gifting, but reality sunk in quickly. The Gifts Project team was small and had very little capital to fund the business. Not long after doing some market research and defining the product goals, Ron understood that in order to stay lean, they would need to be asset-light. They scratched the idea of owning the whole product lifecycle, or of going anywhere near the manufacturing of retail goods; instead, they focused on a split payment solution as well as on the user experience. The technology they built had the capacity to accept many microtransactions, pull them together, and only process the whole

product transaction once all of the microtransactions had fulfilled the product cost. In order for The Gifts Project to carry all of the microtransaction consoles, there was a large product transaction cost. “To some extent, it was a group payments company that started with a very specific use case of gifting, instead of, say, buying your friend a cup of coffee through Venmo, but in terms of the technology, it was exactly the same,” said Ron. In 2009, payment apps like Venmo were just starting out,49 and PayPal was used mostly by businesses to offer their consumers an alternative form of payment.

However, technology feasibility was only half the battle – they still needed to define the user experience (UX). Though group gifting required buy-in from several users, once Ron had that, their collective user behavior was simple. The complexity came during the product selection process. To better plan out The Gifts Project’s UX, Ron and his team focused on the group organizer: the friend in the group that knows all of the specific details in order to pick out the right gift for the recipient, from the right size, to the taste preferences, to the correct shipping address.

Ron figured that by building a seamless user experience tailored to the group organizer, the contribution from friends would follow. That pinnacle moment when Ron and his team defined their user type and focused their resources on developing a product around it helped make The Gifts Project’s UX tighter, as well as cheaper to produce. 

First came the build, then came the launch strategy. Again, cash was scarce, so Ron needed to find a cheap way to acquire a critical mass of users. In 2009, Facebook’s user traffic was erupting, but it had not defined its monetization strategy. Pre- advertisement model, Facebook had an aggressive approach to marketing games on its platform by sending notifications to users claiming that their friends were actively playing when, in reality, they might not even be on their computers. Ron gives the example of Farmville, a game produced by Zinga50 and played on Facebook’s platform, where Facebook would send on behalf of a user to their friends an invitation to play along with them, whether the user was actually playing or not. This became a very powerful mechanism to get users to play Farmville, which ultimately caused virality. “People would not like this in 2020 but were totally fine with it in 2009... That was actually cool,” said Ron. Looking for a similar viral effect, Ron used Facebook to launch The Gifts Project to his target users. 

It didn't take long for Facebook to notice because it was the first use case where commerce and social media worked together, ever. Ron and his team picked up on the potential, and Facebook responded with loads of press coverage and gave The Gifts Project a few of its private APIs that had not yet been shared with external developers. With momentum and technology on its side, The Gifts Project evolved the user experience and target audience reach. “They gave us an inbox API, which today would sound bananas! We would message Facebook users about chipping in for a gift from within the messaging app. It looked as if the user personally invited someone to join in on the present, while it was basically us sending it,” said Ron. 

The Gifts Project collaboration with Facebook went like this:

User A wants to buy a present for User B, and they’re friends on Facebook. The Gifts Project used the private API Facebook had given them to create a button where User A would click it and an invitation to chip in for the present would automatically be sent to all of their mutual friends. The invite included what the gift would be, and a link with a preview of how many people had already contributed, as well as how much each had paid. All of this would remain a secret to User B, as User A collected the sum needed to finalize the transaction. Once purchased, User B would receive the present along with a note from each user that had contributed.

It was, to put it plainly, a speedy success. The user base and purchase conversion rates were astronomical, and the company reached $1 million dollars in revenue only a few months after their launch. This helped them grow from a team of five to 12 within the first year. The company’s partnership strategy also helped put The Gifts Project on the map. At the time, eBay showed the most aggressive interest, as it sought a competitive edge against Amazon. In 2011, only a few months into their partnership, eBay acquired The Gifts Project for $30 million dollars.51 eBay converted The Gifts Project into the eBay Israel Innovation Center, inviting Ron and his team to lead it.52 

While gifts remained the first use case on which the innovation center focused, Ron went on to grow the team and expand group payments technology to cover a second use case – concert tickets. In 2007, eBay had acquired StubHub, an online ticket marketplace where fans could buy and sell tickets to entertainment events. Ron reasoned that, more often than not, people attended concerts with friends or family, but rarely went alone. With that in mind, Ron and his team built the same product flow they did with The Gifts Project, but this time for StubHub under the eBay umbrella.

That was the first of many projects. “Our core team stayed at eBay for four years. The rest is history,” said Ron.

The Gifts Project was a short but sweet experience for Ron. He admits it was one of the best moments of his career to date, mainly because of his co-workers. Before The Gifts Project was acquired by eBay, they were a team of 12, all young and captivated. While it was a short period with a small team, Ron identified the two main behaviors that defined the productive and exciting culture within The Gifts Project.

For starters, Ron and his co-founders weren’t looking to set the rules for how to work within the company; actually, it was quite the opposite. Ron filled the roles needed with talented self-starters who took ownership over their part of the business. For Ron, this wasn’t so trivial in Israel in 2009, where he saw businesses running their teams with a more strict micromanagement style. He gives an example of a software engineer on his team, who besides programming, also did his own QA, his own deployment, and very often ended up doing some of his own product design as well. In retrospect, Ron observed that such a level of responsibility and ownership for a young engineer created empowerment and excitement, rather than overwhelming him or her. He credits his management tactics to his naivety, ultimately realizing that empowerment removed a lot of redundant work cycles and friction in building and launching The Gifts Project. “For us, the 18 months during which we operated were magical,” said Ron. “We were really lucky to never have had a setback. For us, every month had better numbers than the month before, and we never had enough time to get into a fight.”

Being only 12 people, mostly made up of software engineers and graphic designers reporting to Ron and his co-founders, The Gifts Project wasn’t exactly an example of a company with a complicated organizational chart. The fact that it was a small team made it easier to create an intimate and comfortable working environment. So it made sense when Ron described how organic it had been for everyone to provide clear and transparent feedback to one another. “Everyone just gave people feedback all the time. We embraced it and did it rigorously,” said Ron. “We were so direct with each other from the start, and after a few weeks, it wasn’t even painful anymore for people to tell you that you were wrong.” Ron thinks it worked out this way by accident. Everyone on the team was a first- timer with no previous experience working in a major company, and nobody had a clue as to how, or when, to hold performance reviews – it was all in the moment and without ego. While this level of transparent, almost cunning feedback between colleagues wasn’t a quality that Ron had intentionally instilled in the culture, he does look back and think it was a key to their success.

While The Gifts Project was short-lived, the team experienced 18 months of incredible synergy and collective success. A part of Ron acknowledges that perhaps they were able to maintain such a special culture because it was a short period that ended with an acquisition. “12 kids on the boulevard building stuff. Things were very naive, romantic, and simple. You don't get to stay that naive for so long, but we did because that was the end of the story. If we didn't sell the company, maybe the team would have been bigger, or maybe it would have gone south, who knows,” said Ron. Innocence can’t be bought with money, but there is much that can be learned from it. 

Ron urges entrepreneurs to look for naivety in themselves and within the individuals they hire to form their core team, as he believes it will provide the strength needed to keep working together to validate and improve a concept. “Take the jump and trust the process,” said Ron. “The world needs more naive people who think they can make a change.”