March 1, 2012
Question: What is the annual value of all unredeemed loyalty points?
You don’t need to be a CFO to realize that’s a lot of money. Credit card companies, banks, and retailers dangle these various loyalty programs in front of us in an attempt to earn our dollar. More often than not, it works; free is an enticing price. The problem is, the excitement from their incentive program is usually short lived and before we know it, we’re off chasing the next carrot.
KULA Causes not only helps you make use of those unused loyalty points, it allows you to do so altruistically. This new Boulder-based startup converts your loyalty points from a wide variety of programs to “Kula” (the site’s currency), which can then be donated a charity or cause of your choice. Being a philanthropist has never been easier and more convenient.
In order to take off, KULA will require strength in both the quantity and quality of partnerships with both loyalty programs and charities. Gerrit McGowan, KULA co-founder and CEO, is up to the task. McGowan’s experience includes working with the UN and various national governments. He founded Syntegrity Consulting Group and, following a merger in 2006, became a partner in EcoPlan International, Inc. I caught up with McGowan to learn more about KULA, the future of social good, and the Boulder startup scene.
Tech Cocktail: What was the inspiration behind KULA?
Gerrit McGowan: KULA was born as a result of my previous career. I spent the past decade working as a consultant in the development sector – advising governments, civil society, the private sector, and UN organizations in the area of Local Economic Development. Bringing representatives of these types of organizations into multi-stakeholder decision making processes, it became clear to me that there was a negative feedback loop at play. Specifically, the private sector and civil society could not easily build mutually beneficial relationships. Charities were always seeking private sector dollars to operate. But private businesses had little incentive (other than altruism and PR) to support the charitable sector. I wanted to find a way to incentivize brands to support charitable causes — by providing tools that could measure and monetize the value of corporate philanthropy and social responsibility.
Tech Cocktail: What effect do you predict the social sharing of one’s conversions and donations playing in the adoption and use of KULA Causes?
McGowan: Social sharing is a key component of KULA. As most brands have learned, it is rare that a consumer will share the brands they frequent in their social media channels. Rather, consumers tend to talk about brands when they have negative experiences. Positive experiences with brands are expected.
But if a brand enables a consumer to support a cause they care about, that consumer will be far more likely to share their experiences across social media.
As an example, I won’t post that I bought a pair of shoes at Brand X on Facebook, but I will definitely post that Brand X enabled me to support my favorite charitable cause. Therefore, KULA has social media connectivity throughout every step of the giving process.
Tech Cocktail: What do you see for the future of the crossroads between technology and social good? What effect will an improving economy play in the growth of this movement?
McGowan: The information that we now have at our fingertips has offered us more knowledge, awareness, and transparency into brand activities and operations. This alone empowers consumers to make more informed decisions and enables us to find brands that have similar values to our own.
Technology has really become the key driver of social good.
The same goes for charitable causes. In the past it was very difficult to find charities that work on issues we care about. Hence the success (and dominance) of the large charities. They simply had greater brand recognition. But now it is much easier to find causes of all sizes that we care about – as well as information about the efficacy of their operations.
Moving forward, I believe that technology will reinvent the way we give – and make philanthropy and social change an activity of the masses. It will become far simpler for us (as consumers) to support our favorite causes simply by making our every day purchases. KULA is taking the lead on this evolution, transforming consumers into philanthropists simply for being loyal customers.
Tech Cocktail: Can you touch upon the startup scene culture of Boulder, CO? What other local startups and resources have stood out to you?
McGowan: As a graduate of the University of Colorado, I have watched the growth and evolution of the Boulder business community for 15 years. Although I left 10 years ago, I came back often and was amazed by the changes each year.
The concept of KULA was actually born while I was living in Vancouver. And as KULA is actively engaged in the loyalty marketing space, I chose to start the business in Europe in 2010. But it didn’t take long to recognize that the US market was perfectly primed for a business like KULA. So when deciding where to move the business in early 2011, it became evident that Boulder would be one of the options.
We ended up choosing Boulder for a number of reasons. Not only is it a beautiful place to live and recreate, but the blossoming tech startup scene is impressive. The density of entrepreneurs in Boulder is extraordinary alone, but the growing number of social entrepreneurs and triple bottom line businesses made Boulder even more attractive to us than the traditional hubs of the Bay Area, NYC, and Boston.
I would recommend Boulder to almost any startup out there. Although we still face some challenges with access to finance and investment, the quality of life and the sense of community among local entrepreneurs is unprecedented.
KULA has recently landed a second investment round – a seven figure deal that closed a few weeks ago and will officially be announced in the near future. KULA Causes is one of the featured startups at the Tech Cocktail’s SXSW #Startuplife Celebration.
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