Krystena Petrakas: Tell me more about the Raffle.it concept...
Pascal Wheeler: Initially the plan was for it to be a marketplace similar to eBay, but because it spread the cost of the item among many people, the winner would get the item for less money, andthe seller would still get the full amount they wanted, making both parties happy.
KP: From where did you find your financiers?
PW: I went in with a business partner who I was working with at the time. For Raffle.it to be a goer we had to raise investment so we could work on the project full-time.
We began by approaching our family and friends, who believed in the idea and made an investment which helped us to employ a small team of people.
The first round of investment was relatively easy to find, so I didn’t appreciate how hard it could be. When we tried to raise additional capital I realised I had left it too late, which is definitely something you don’t want to happen. You should always be looking for money - even if you don’t need it.
KP: How did you overcome this?
PW: One of our last investors decided he would set up an investment hub and in exchange for half the shares in Raffle.it his company iBundle is covering the costs of a redevelopment, so we can focus on channelling new markets such as charities and schools.
Our online raffles are more engaging compared to normal raffles, when people buy a ticket from Raffle.it they tend to come back again
With the help of our investor, Julian Ranger, we’ve now put in infrastructure and gained valuable business expertise, so it’s been a good move.
KP: How does it feel raising money to help charities?
PW: It’s the perfect mix. I think going via the charity route was the right choice for our business.
We provide each individual charity with their own version of Raffle.it, where the prizes are linked across all the networks so they’re in control of what they want to put up.
Plus they get to sell tickets in raffles that we host across all the networks. There’s a sense of community that we’re slowly building and simultaneously trying to engage and grow our population of users too.
KP: How important is that sense of community to your business?
PW: Increasingly now, because its focus is mainly fundraising for good causes. We’ve encountered a number of issues with non-profit companies.
A lot of fundraising entities don’t always support them as early start-ups; they’ve got to have charity status to qualify.
We felt we should try and help them as well so we’ve opened up our platform to include non-profits that don’t have a specific charity status. We help them raise enough money so they can become a charity in their own right.
KP: How did you market the business?
PW: In fairly orthodox ways online using email marketing, Twitter and Facebook. We’ve also done some offline marketing and gone to a few events with an offline version of our raffle.
KP: So, how does an online raffle differ to a traditional raffle?
PW: It’s more engaging compared to normal raffles, when people buy a ticket from Raffle.it they tend to come back again. In the early days we did research to see which games get people to come back regularly.
The gameplay for Raffle.it is based on reverse auctions, where the lowest unique number wins. So there’s no random draw - it’s a game of skill and there’s only ever going to be one lowest unique number. There’s a finite number of tickets in any raffle and if all those tickets sell then the raffle automatically ends, plus there’s a safety catch of an end date.
We try to encourage users to come back, buy another ticket and hopefully stand a better chance of winning.
KP: Raffles and schools have always been synonymous, right?
PW: Well, raffles tend to live in schools don’t they? Parents are always selling raffle tickets and whenever you go to a school fair there’s always the raffle, so it was a natural niche for us to go into. We used the same process as with charities. PTAs are always trying to fundraise for the schools and this is just another avenue for them.
The PTA can get their own Raffle.it brand, include the school details and all the tickets sold via that domain will go to help their school. It’s still early days for us as we’ve only just started approaching schools directly.
KP: Has anything surprised you about being an entrepreneur?
PW: How important constant funding is and how you underestimate how much money you need at your peril. It’s fashionable to say you don’t need a lot of money to start a business, but in reality you must make sure the finances all stack up.
KP: What’s the most important lesson have you learnt?
PW: If you have an idea, don’t sit on it, execute it. If it’s a good idea it will soon become apparent, so don’t be shy about telling people. I was scared to talk about my idea because I was convinced people would steal it, but the reality is everyone’s got their own dreams and they’re busy pursuing them.
Social networking is crucial, especially for online businesses. It’s only when you converse with other people who are in a similar position that you can bounce ideas off each other. They may have a different viewpoint and change your opinion on some aspects for the better. I ultimately think in the business world being sociable opens more doors.
KP: What are your future plans?
PW: To become an exciting and reliable fundraising platform for charities and schools. It’s difficult to predict what’s going to happen online and what platforms we’re going to be using in a few years time.
Right now the real focus is to become a useful fundraising tool that internet users know about and companies want to use. I’m really happy with how the business is progressing.