Leif Baradoy | Giftbit & Lightrail | S1 Ep3
It’s All About Grit and Suffering
On 20Mile’s third episode of season 1, we sat down with Leif Baradoy, CEO and Co-founder of Giftbit - A B2B company that facilitates the sale and offering of giftcards to clients.
If there is one word to describe Leif, it is driven. Leif found his entrepreneurial drive at an early age, as he witnessed his relatives run successful businesses started from scratch.
This drive also led him to become a high-level triathlete, competing against the top athletes in the world and ranking in the top 5.
From ideating to entering one of the top startup accelerators in the world, to raising angel and venture capital money for growth, Leif tells the story of how he got Giftbit off the ground.
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Mike: All right. Welcome everyone to another episode of the 20Mile Podcast with your hosts myself, Mike Williams and Gabriel Barcante. I'm really excited to be here to hear another founder's march and we've got a really great guest here today with us Leif Baradoy. Leif is the founder and CEO of Giftbit and Lightrail. I'm really excited to hear about those companies and Leif currently manages a team of 17 here in Victoria, BC where he lives with his wife and two kids, a boy aged four and a girl aged two. And just a little bit about Lief he has a very interesting background. Some of his hobbies include running, triathlons but also a mix of musician ... he's a musician, plays guitar, sings, writes songs and also apparently has done some spoken word in the past which is something I would like to know more about so hopefully we'll get into that a little bit.
And Leif's super power is really the ability to drive with his grit through some real suffering for a good purpose and also to help others in their journey. Either sharing his story or being reflective on some of the things he's learned and engaging with that with others to help them be successful as well. And so now I'm going to pass it off to Gabe and we'll dig in.
Gabe: All right, well welcome Leif.
Leif: Thank you very much.
Gabe: For being here with us today. So can you tell us a bit about what Giftbit and Lightrail do?
Leif: Perfect. So yeah, Giftbit and Lightrail are two separate products within the same company. Giftbit sells digital gift cards, rewards and incentives to large corporate buyers. So we'll sell, you know, millions of dollars a month of Amazon cards, Starbucks cards, Visa incentive cards. That was the first business that we built. Out of building that business we saw a need and opportunity in the market for a new sort of digital gift card infrastructure and that's what Lightrail provides. We took a look at what Starbucks and Amazon have and realize that this is something that every company needs to have as they think about how value enables them to work with customers. So programmable financial value infrastructure. That's what Lightrail is.
Gabe: All right and for your part give us a bit of background regarding your own entrepreneur story and how you got to where you are today.
Leif: So I've always ... my first job was actually finding my own, you know, pulling weeds and doing gardening work for a few people at businesses around my small town in Alberta. So I've always worked for myself from day one and just that sense of, you know, being able to bet on myself, understanding that you know, there's all sorts of ways to make money and you don't necessarily have to get somebody else to be your employer was like just basic from me from day one. So I think I had a lot of that entrepreneurial drive from my family as well. Particularly an aunt and uncle were entrepreneurs. They had a homeschool book selling business that was actually quite successful and then my grandparents ran a sign shop in Calgary that did very well.
So there's, you know, some entrepreneurial history in my family. So some examples of that. Had that myself and then right out of college I worked for a startup. I was employee number one and that really got me because I was accustomed to, you know, early into computers and programming, working for an early stage startup as employee number one right out of college. Just that was the bug that bit me and I always knew that I wanted to form my own company and give it a shot, particularly something that would have a large impact on the world. So the way I think about what a startup is, it's a, you know, temporary organization that is seeking after repeatable and scalable business models.
So it's one of those huge, if true opportunities and I knew I wanted to put my mind and my effort to something that could potentially make a big dent on the world. And that is a very particular perspective that you bring when starting a company or organization. It is not the only way to build the business. It might not even be the smartest way to build a business, but that is something I intentionally chose and I think knowing that I made that intentional choice out of the gate and being able to remind myself of that is very important as I think about the long march to try to build something that is repeatable and scalable.
Mike: How long have you been at this with Giftbit and Lightrail?
Leif: Went full time in summer 2012. So just over six years now.
Mike: And then you've raised money for it as well?
Leif: That's right.
Mike: Can you talk a little bit about about that?
Leif: Yes, so I didn't have any savings, frankly, to fall back on when starting the company. I was working for a outstanding agency here in Victoria and knew I was working on a ... the company used to be called Kind off the side of my desk and realized I wanted to go full time with it. So we did raise capital frankly, far too early in our product life cycle because founders wanted to focus on it full time and so and wanted some sort of basic income as well as to cover costs. Looking back now, I think there's a lot of wisdom in running side projects as long as possible before taking capital in. So, but these are decisions that I made at the time and I'm very grateful to have a outstanding set of early investors, friends, family, local angels who entrusted me with some capital so that we could grow and build what is becoming an outstanding product. Two outstanding products in the digital gifting space.
Gabe: Can you expand on that? I think it's pretty interesting you said perhaps you thought you raised too early and you could have stayed longer with the company and working as a side project before going full time into it. So what makes you think or that, that would have been better perhaps?
Leif: I just think the decision for a business to take capital is a very, you know, very large decision. I have always, as I stated, already had aspirations and plans to build a repeatable and scalable business. So with that in mind, raising capital does make a lot of sense, but you know, you want to show proof and progress to words, your vision and hope to build a repeatable at scale business and a product that actually has some signals or signs that it might be the thing. So it's not just your crazy intention of wanting to do a thing, but there's actually some real traction and data showing that you might be on a path towards, you know? Yeah. Towards growth and something meaningful.
So I think there's a great deal of noise around fundraising, particularly in the early stages and I think it ... that amount of noise makes it difficult for people to think clearly about it, especially for first time founders. So, and I think I, out of ignorance and also need, was not fully aware of the implications of taking funding so early and yeah, looking back I may or may not have made a different decision, but I certainly know I wasn't aware of how significant the decision was at the time. And so that's a good, you know, a good lesson in hindsight that I try to share with earlier stage, you know, early stage founders is, you know, the implications and the responsibilities of stewarding other people's capital and when is the right time to make that decision. So it doesn't have, again, I may have made the same decision anyway knowing everything I know now, but it is, you know, understanding how ignorant I was at the time is something that's ... it's just part of the game.
Mike: You don't know what you don't know.
Mike: And then you found out and you know, it'd be interesting to go back and do it again.
Leif: Yeah, yeah.
Mike: What was it that like, what did you see that was wrong with the gift card world or like what opportunity did you see? Like there's something there. I've got to go and take that.
Leif: Yeah. So the original idea of the business in 2012 was ... came out sort of around the heels of when Groupon was rising and all the other copycats of Groupon doing these, you know, huge discounted daily deal services. So that was part of what was going on at the time. And really what that showed me was that businesses are using value to nurture relationships with ... for acquisition and customers. It's, you know, couponing. This is all part of customer engagement and here's some new and interesting ways to do it. The thing about Groupon is it was completely untargeted and didn't give you a list of anyone who necessarily might be a repeat customer. And that really got me thinking about as a marketer and someone who ultimately, you know, is interested in how businesses form relationships, real relationships and valuable relationships with customers over the long term, that got me thinking about how gift cards and promotions could be better executed to actually engage the right set of people so that businesses could better target loss leaders to the right set of customers.
So it was the gift ... the way I think about value. So gift cards and promotions and loyalty are all actually mixed together in one thing and there ... when people talk about gift cards there and you listen to them, when businesses talk about gift cards, they usually start pulling in other things around promotions, acquisitions, customer growth. So this thing called gift cards is really almost like a symbol of something different and it's talked about in different ways with different people. So I saw an opportunity at the time. We built a product that allowed businesses to send more targeted coupon offers out into the wild and realized very quickly that selling to small businesses would be difficult.
And then we looked at how other businesses are building and nurturing relationships using values. We're like, look, we can just make it easier to buy an Amazon card or Starbucks card at tracking and hence the product gift that was born. Also having more financial efficiency. So why the gift card space? Gift cards on the surface are old and broken. But what's really interesting about them is that they're a pathway to relationship between a customer and a business and that is what is really exciting for me and continues to excite me.
Mike: Interesting. Yeah. So and I always think of gift card as like not as useful cash to have cash but it's for the Gap or Starbucks right?
Mike: So what I interact is Giftbit a B2C play? Like would I go ... would I interact with Giftbit? That's where I don't ...
Leif: Yeah so Giftbit is a B2B service. So some business may send you a gift card for doing a survey, for referring a customer ...
Leif: For earning a bunch of points within their app and send you a reward and or incentive for Amazon or Starbucks. Whereas Lightrail is the digital gift card infrastructure if you are your own company that wants to send out promotions. But both products are, you know, really tools for businesses to engage their consumers and customers. Generally an everyday consumer who experiences Giftbit is fairly ignorant about, you know, they're the right tool. Right so B2B tool and that's our job is we're not trying to get into the middle of that relationship. We're trying to facilitate it.
Leif: Oh that's great.
Gabe: Could you perhaps mention one or two major challenges you found along the way one pre traction and then one that you're facing today.
Leif: So one major challenge was back to what I said earlier, seeking to build a repeatable and scalable business model. We ignored for a very long time, some great business ... basic business opportunities in search of something that would be disruptive and huge if true. And it wasn't until 2016 that we finally said, you know what Giftbit is a great business. It's a great product, but this is not a massively disruptive product in this space. This is a business we can continue to grow, but it is not this, you know, it is not going to be our Unicorn company product. And we failed to grow that product in the way that it could have because we were searching back to, you know, first, you know, what our first intentions for the company to build a repeatable and scalable business. And we knew that optimizing, you know, a good business for growth was not the expectations we set within the team, not the expectations we set with investors.
So I think that was one mistake was saying we've got something very good in front of us but we're trying to make it be something that it's not. And in 2016 we finally said, you know what? This is not our unicorn product. This is a killer business with like really great financial. It's really great growth effective, outstanding cashflow. Let's run it like a normal business.
Mike: What a concept.
Leif: Yeah, I know. I know. And so we certainly could've made that call earlier so, you know, and been even further ahead on revenue than we are today. But ...
Mike: It's really interesting though, cause you mentioned like disruptive and raising capital and these are all the exciting parts of entrepreneurship and what everybody talks about or within the news right? But it sounds like you've built a really great business that's just a really great business.
Mike: And that's something that should be celebrated too, right?
Leif: Yeah. Yeah and I think it absolutely should be celebrated and the challenge is when you have different expectations within your investor base, within your team about what you are and what you set to do, the story you tell on the 20 mile march about, we've built this real business has to, you either have to say, we're giving up on this larger intention or here is how this really great business is going to allow and this is what we do. What we believe is that we've got this really great profitable business in Giftbit and that's allowing us to take endless shots on goal as we build out new products like Lightrail.
Leif: Et Cetera, et cetera.
Mike: It'd be interesting to see if like if that's the fuel for something that's really disruptive which I think is kind of what you're potentially, or maybe ...
Leif: We keep building really great more, more, more and more great businesses. That's ultimately, that's great for the team, great for us and great for investors too. So I think the, yeah, some of the other mistakes I made was as an entrepreneur I'm very comfortable with risk and I always saw the idea of doing a startup as something that I would be temporarily doing in my life and if this doesn't work out, I can start my next entrepreneurial endeavor. And I think the idea of having something that is growing and good but it's not temporary was ... there was some personal stuff where I was like, oh this isn't what I set up to do. Like here's a really great longterm business we can grow over 10 years or potentially sell to an acquirer at a certain point in time. And I think the ... I had some rigid thinking based on my early intentions that held me back from seizing opportunity as quickly as we could have.
And part of my journey is becoming more flexible in my thinking about, and much more common sense. So rather than just fully embracing the risk I have as an entrepreneur saying like, hey, you know what? I don't have to burn the house down and build a new one like this is just fine. It's working. Maybe it's never going to be a rocket ship. We've built a plane or we built a car. But you know what? That's pretty awesome, right? So yeah, I think one of my strengths is an ability to move past what, you know, what isn't working and you know, let go of some costs on things. But that's also one of my blind spots is a readiness to move to something new and different. And so I think there's ... part of my learning has been to not throw the baby out with the proverbial bathwater.
Mike: It sounds like you've got some really great self-awareness there of risk like being open to risk and just knowing that is probably a good thing too. Where do you think that risk being so open to that, where .. does that come from somewhere, or has that just always been there?
Leif: Yeah, I think it's probably partly genetic. Certainly my father who was a park ranger in the country, was in the backcountry, you know, really enjoyed being in more extreme situations. That was something that was fairly normal for me. So I think I've just grew up, maybe it's genetic, maybe it's nurture, but with a higher risk tolerance exemplified to me than most other people. And then also seeing my aunt and uncle who were entrepreneurs who had ... who are almost like my second parents running their business and seeing everything it took for them to build a business from like their living room to, you know, multiple stores and things like that over a course of years. Seeing them take that risk. Those are, yeah, those are things like pretty foundational where it just seems normal.
Leif: So yeah, that might be where I point to.
Mike: Yeah now I I know you're like you have hobbies of running and triathlons and, but you're not, you don't just do those as a hobby. Like you're actually very good at that. Right? There's a lot of people that, you know, like I might say I ran a half marathon, but you know, I came in 775th place. Right. But I survived. But you actually like compete at like a high level and I think I saw recently you were like first in a race and then you finish third or something and ...
Leif: Oh I was, yeah I was ...
Mike: So you're quite a high level athlete.
Leif: Yeah, I think it's an area that I have ... I'm just ... I put in some work in my late twenties to get to a high level and to have the right genetics and also just endless energy, which is also helpful for business. Can burn out others around you. So the, yeah, I'm very fortunate to have a body that can perform well and one of the things I think about is like there's ... I have this gift in my, am I really using it to its full potential, but I was a professional triathlete for a few years. I discovered triathlon actually later in my twenties and excelled at it very quickly within two years of discovering it really and sort of self coaching. I became a carded Canadian athlete representing Canada officially around the world. I placed third in the world in 2010 in my age group for the Olympic distance triathlon and then again competed at sort of one the IT level below one level below sort of the Olympics.
Leif: So yeah, it's one of the superpowers is just ability to suffer and there's a great quote from a Tour de France winner. It's, it never gets easier, you just get faster. So you know, when you're pushing it 100% it always hurts at 100% it just happens to be if you get used to that feeling of pain, you will get faster and get better over time. So again, it's just, it's comfort with discomfort is something that is ... has benefited me. Reminding myself that that is my superpower and it is not everyone's superpower has been helpful in maintaining a team that has had very low voluntary attrition since the beginning of our company.
Gabe: And you know, you touched on ... it sounds like you have always had that unique drive from an early age and then for both sizes professionally as well as in your own personal life. Do you think that helps you sort of balance the two as you have like a young family now and you have two products companies on the go, how do you think that sort of helps you, not burn out, but also, you know, keep going with focusing on both of those things?
Leif: Yeah, I would say that I have noticed that I've always been extreme in what I do. So sort of full on when I choose a path, but I have not always been as intentional about my direction as maybe I should have been. Hence the introduction was like in his twenties he did spoken word and played in a band and I went to grad school and all these other things. So I think the maturity into my thirties and beyond is about focusing and being like where's this all ... where do I want this to end? Where am I, you know, rather than reinventing myself every five years and be like, that was interesting. I got to this point, let's try something new. Having a bit more intentionality around where I'd like to go.
I think the drive portion is as I attempt to balance, you know, being a good father, husband and then leader with my company, particularly when the company has two products, it is a difficult set of trade offs and as well like leading myself and keeping myself healthy. So I think the downside of drive is that when your plate is overloaded, I continue maintaining very high expectations of myself that I am not achieving. And it is not comfortable to feel like I'm not being awesome across the board right? I'm sort of ... now my drive is split across all these different things and it's just a set of trade offs and, but that's reality. It's like if I want to have all these things that is the outcome right? So, you know, I could get divorced, stop seeing my kids and work all the time. Yeah. That's, that's not the scenario I want in my life.
Similarly, I could be a stay at home dad if I wanted. My wife has a great career, but that would not benefit me and probably, yeah, she's making me do something anyway to get me out of the house. So I'd use my drive.
Mike: It has to go somewhere right?
Leif: It has to go somewhere.
Mike: There's only so many triathlons.
Leif: Yes, yeah, yeah.
Gabe: And looking back from where you are today, what would you change if you were to start today?
Leif: If I was to start today, already stated that, you know, raising capital early creates a set of pressures that, and expectations that are not beneficial. So I would ensure that I had a very clear sense of what we were doing, where we are going, more customer discovery work if I was to start today. And also maybe some expectations around, you know, what failure looks like early on. So that say we went out to do these things and if we don't get this, we're here, you know, we're gonna end it or we're gonna figure out something else and you're along for this roller coaster ride. I think similar with investors, it's a difference, you know, they are a different set of stakeholders than a co-founder and you know when you invest and buy one thing, people who think they're buying a product that might pivot versus a team that's going to figure it out. Those who think they bought this product and this opportunity and then you decide that it's no longer sensible. Those people get very confused about what a pivot looks like. So that's something that I would do different.
What else would I do different? I would have more thinking and research early on, faster testing, clearer expectations setting with everybody involved, including myself. So, and those are still like those are things that I do now, right? So the things that I've learned to do, I would, that I'm doing today, if I could start again I would have those tools in place.
Mike: Maybe do them sooner.
Leif: Do them way sooner.
Mike: Yeah. That's pretty interesting what you're talking about. Cause you almost talked ... you talked about like a definition of failure, right?
Leif: Mm-hmm (affirmative).
Mike: And like when you're coding it's like what's the definition of done so that we know we're there. It's like, well, what's the definition of failure? Because ultimately failure is a big part of success and it's nice to know, okay, well we failed. How are we going to succeed and not, you know, go into depths of despair to be like, oh my God, we failed. We're so horrible. It's like, okay, well we recognize that that's a failure. Failure is part of a success with our next step right?
Mike: I think that's a really interesting point.
Leif: Yeah. And to actually say we would think that this would look like, you know, failure where we would stop, I'd be, we don't have this, you know, we're not able to gather this much data or get this much traction from the market or what are those, you know, what are those things that are going to, especially when a product is very early, whether it's a company, if it's a startup or a new product that a company is building it's like what are the points at which you say this, you know, invested enough.
Leif: This isn't working or we've invested enough and if this team of two people can't figure out, you know, how to do it with this awesome product that we've built, that's like fairly feature complete, two business people can't start selling this better. So just really thinking through what, you know, what commitment to a path looks like along the way right?
Leif: So yeah, for your guys' 20 mile march metaphor, it's if you start changing the destination, it's the 20 mile march metaphor. It's like great, you know, we're going to the South Pole, but like if the founders start being like, holy crap, we need to go somewhere else, it's like alright. We all, you know, that's a major point for conversation with everyone involved and I think early in the company's life cycle we made some really big pivots and I didn't appreciate how confusing it was to others when they're like wait a minute were like, oh, we're still on a long march. Don't worry about that.
Mike: We're still going somewhere.
Leif: Yeah we're still ... it's still gonna be hard but we're now changing like the, you know, our trajectory that requires a lot more depth in this than I had early on. I've gotten better at it over time.
Mike: Yeah, it almost would be great to do another thing at some point right?
Mike: With all the lessons you've learned.
Mike: Well I would really like to thank you for being here today and sharing your stories and going deep on a lot of stuff. It was really great to dig in and learn more about yourself and Giftbit and Lightrail. Again, appreciate that. Also, thank the listeners for tuning in. Check out our website at 20mile.co or follow us @20mileco on Facebook, Twitter, Linkedin and Instagram. And until then, just keep marching on.
Leif: Thanks everyone.