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Lunch With: BioWare co-founder shares e-commerce experience with gift certificate website

Lisa Hryniw and Andrea Spevak hear from Ray Muzyka

Lunch with … is a column for Alberta Venture. Every month, we ask a young executive to pick a person with whom he or she would like to talk business. The senior executive, if willing to act as mentor for an hour or so, gets to pick the place to eat. If you would like to participate, email Michael

Jul 5, 2013

by Michael Ganley

THE DINERS

YOUNG EXECS: Lisa Hryniw and Andrea Spevak
COMPANY HISTORY: Together with Andrea’s husband, Jeremy Payne, Hryniw and Spevak launched Sendioso in February 2012.
It’s an e-commerce site that links people wanting to buy gift certificates with independent retailers
NUMBER OF EMPLOYEES: Aside from the three founders, the company has a web developer and three part-time salespeople
LUNCH: Hryniw: Salmon salad plate with mixed greens, fresh fruit and multigrain bread. Water • Spevak: Same

SENIOR EXEC: Ray Muzyka
COMPANY HISTORY: Muzyka is best known as a co-founder of video game developer BioWare, from which he retired in 2012. He is now the CEO of venture capital firm Threshold Impact
LUNCH: The same salad as Hryniw and Spevak. Iced tea

006_lunchwith_story
Andrea Spevak, Ray Muzyka and Lisa Hryniw
Photograph Jason Everit

Ray Muzyka arrives for lunch at Edmonton’s Upper Crust Café prepared. He scrolls through pages of notes on his iPad as he asks Lisa Hryniw and Andrea Spevak about their website, Sendioso, which allows shoppers to purchase gift certificates for local, independent stores.

“I usually approach the first conversation with entrepreneurs by asking a lot of questions,” Muzyka says. “Tell me about the company’s history and how it’s organized.”

Andrea’s husband, Jeremy Payne, first had the idea about six years ago. “We kept expecting someone would go with the idea, but nobody had, certainly not in Alberta,” Hryniw says. So she, Spevak and Payne started getting serious two years ago and incorporated last February. Spevak does the day-to-day administration, maintains relationships with merchants and oversees the sales team. Hryniw focuses on getting the buyers and setting up the corporate relationships. They’ve hired two part-timers in Vancouver and one in Calgary to help them expand their offerings. “You should be able to buy a gift certificate for a store where your family is,” Spevak says.

“And what’s the company vision?”

“It’s to make it easier for people to connect to independent shops,” Spevak says. “We want to be national but we don’t do chain stores. Most importantly, we want to make it special, and not just, ‘I was in Safeway last night at 10 o’clock and know you live near a Boston Pizza, so here’s a BP gift card and happy birthday.’”

“Who developed your website,” Muzyka asks, “your payment engine, your security, your analytics?”

“We had a company develop it but we should have asked more questions before dealing with them because it doesn’t function as we want,” Hryniw says. Payne is a developer, so he’s doing maintenance and making changes with the help of a freelancer.

“One thing that was lacking was that the developer didn’t include a way to put in new cities,” Hryniw says. “We just got over that.”

“Have you done A/B testing of the website?”

“We haven’t,” Hryniw says. “We want to, but we want to get the one we have up to a standard of doing the things we want it to do.”

“But often you do that with A/B testing,” Muzyka says. “I know it’s expensive and takes a lot of time, but it can have a huge impact on sales conversions. Moving a button around, measuring the number of clicks to closure and measuring the analytics can have a huge effect on your conversion rate.”

“Is it worth it to try it on a really basic level, to do something simple, or should we do something proper when we’re ready?” Spevak asks.

“That depends on how stable your development environment is,” Muzyka says. “Can you actually move a button around without bringing the thing down?” Spevak and Hryniw admit they’re not sure of the answer to that one.

The server comes for the lunch order. Hryniw, who worked at Upper Crust in her university days, recommends the Maria salad. It’s not called that anymore, but it’s still on the menu: a bed of lettuce, grilled chicken, candied nuts and fresh fruit. All three order it.

“How many users come to your site, and can you segregate them into two cohorts so you can do the testing?” Muzyka continues. Again, Spevak and Hryniw aren’t sure.

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“We break down the consumers into three segments,” Hryniw explains. “The general population looking to buy a gift, the professional buyers like a realtor or mortgage broker who wants to give client gifts and the employer looking to reward employees.”

“How did you come to the conclusion that you had three segments? Have you done market research?”

“It’s more intuitive,” Hryniw says. “We think our primary segment is women like us: They’re busy and they’re the primary buyer of gifts for teachers and family and so on. We talked to them about how they would use it.”

“It’s a bit insular if you’re asking your consumers who are coming to the site where they want to go,” Muzyka says. “Are you really expanding your audience to new stores that might be more lucrative?”

Spevak explains that Sendioso has 30 stores in the Edmonton area on its roster now and just signed up its first in Vancouver.

“Have you done an analysis of the profit per customer?”

“We haven’t,” Hryniw says, “because we haven’t had a lot of sales yet.”

“Have you heard of the 80-20 rule? Eighty per cent of your customers aren’t your best customers,” Muzyka says. “You want to focus on the 20 per cent. Maybe you should be figuring out which customers you don’t want.”

Muzyka then jumps into questions on analytics, a key factor in the e-commerce sector. “What metrics do you track?”

“We’re just using Google analytics right now, and I’m looking at those things,” Hryniw says. “We’re looking at how many people visit the site, unique users versus total. We’ve been averaging 1,500 visitors per month, or 50 per day, which we’re pretty happy with.”

“Are those conversions?”

“No, those are visitors,” Hryniw says. “We’re struggling with conversions. Ninety per cent are uniques.” She says the average time spent on the site is three minutes, and six or seven page visits.

“I looked at the site a few times, and three minutes doesn’t seem very long,” Muzyka says. “I had some difficulty getting to the stores. I had to select the region first, then the category and then all the stores aren’t listed on one page. It may be too many click-throughs.”

He says some of the keys to success for online stores are to give a meaningful but not overwhelming number of options, to provide an easy way for consumers to become customers without having to go through a painful process of registering and to reduce the time to purchase.

“You want to measure the exit points,” he says. “You want to know the conversion rate from one step to the next and you want to make changes and measure the impact of the changes on the conversion rate.”

The discussion continues for another half hour along the same lines: Muzyka probing with questions about value propositions and PR strategies; Hryniw and Spevak answering and reflecting on the state of their business. The lunch plates long since cleared away, the three rise to say their goodbyes. Muzyka shuts down his iPad and tells them to stay in touch. “I’d love to find out how you do,” he says.

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