An Interview with Buyapowa’s Founder, Gideon Lask

I’m a London boy, born and bred. I spent two very exciting years living in Canada while growing up. But other than that, it’s very dull and boring London. It’s where I was born, where I was educated, and now where I have built our business—although we’ve reached that exciting part where the majority of the team aren’t in London or even in the UK; they’re outside of the UK, which is nice.

We have, and our approach, Shane, has been to focus on very large clients—the likes of Vodafone, T-Mobile, Centrica—rather than small companies. We deal with very large entities, and we work with them internationally across all their various sub-brands. That’s our strength. If you are large and complex, we love you. If you’re working in a regulated industry like telecoms, gambling, or healthcare, we love you—which is nuts, right? What am I doing? Why have I gone after this segment of customers who are lovely but quite hard to work with? That’s become our thing. So yes, 100 large, complex, demanding clients around the world.

Family of four, with two psychiatrist parents trying to shrink it. Not really knowing what I wanted to do, I did a bit of selling before going off to university. Then I found myself in a management consultancy called Ernst & Young, being exposed to digital very early on in the mid-90s, helping banks primarily get online for the first time. I fell deeply in love with digital as a channel—the immediacy and ability to understand what changes impact the customer. I hated being a consultant, the idea of jumping in and out of various projects, so I quickly moved to join a company called Letsbuyit.com, which was Europe’s largest e-commerce player. It was huge in 18 countries, growing at something like 300% every year. I joined to run business development for them.

To start with, it was a bit of a rocky patch. They had a massive boom and then a massive bust—to the point that the business pretty much went into Chapter 11, or the European equivalent. But that gave me a chance to buy the business. With my management consultant glasses on, I saw what was right and what was wrong in that business. We were great at branding and marketing, but terrible at logistics and warehousing. So I flipped the business into a marketplace rather than a traditional online retailer, restructured it—reducing from 18 countries to four and from hundreds of staff down to about 50. I ran that for a few years and then sold it at a relatively young age. I learned a huge amount. Between you, me, Jane, and your listeners, you kind of make it up as you go along, but that’s how you learn. It was a fabulous five years. I loved it.

For my next gig, I took a bit of time out because I didn’t want to worry about keeping the business alive and managing cash flow. Then I was offered the most amazing opportunity. I don’t think it was in America, but the largest entertainment retailer in Europe—and indeed Japan—was called HMV (His Master’s Voice). It was the store I’d go to growing up to buy records and CDs, and it had a big cultural impact on my life. Everyone I knew grew up with HMV; you’ll probably recognize the logo—a dog with a gramophone. I joined in the early 2000s, when they didn’t have a website. They had an amazing business, all store-based with no website. I came in and did the basics, and just by doing the basics, the business grew and grew. We introduced digital into the mix, and it was a mega success story. It was wonderful to work with a team of talented retailers who taught me so much, and to be able to do my little bit of e-commerce and transform the organization to the point that about one in five sales were done online. This was a long time ago, when Amazon was just coming into Europe. Those were five of the happiest years of my life, selling music, film, and games.

But when you’ve taken that kind of mega growth journey, you don’t want to create a business within a business. You start handing bits back to the core business, and that’s when, as an entrepreneur, I started to lose interest. Then a guy at Universal Music, Lucy Grange—who now runs it—had a brilliant vision around direct-to-consumer. He wanted all of his artists to start selling music, merchandise, tickets, and experiences directly to the fan, cutting out middlemen like HMV, which I thought was so cool and disruptive. As a retailer, the dream is to work on your own product, not resell someone else’s. When Lucy and the guy in the UK, David Joseph, came to me with that idea, I jumped at it.

It was fabulous—very supportive guys, and we learned a lot about how to sell a product directly to consumers in that space. This was 2009, the early social days, and I took the opportunity to leverage everything about social. The big opportunity was working on behalf of the likes of the Rolling Stones, Justin Bieber, and Lady Gaga. You would create, or at least promise, something special to the super fan. For example, for a Lady Gaga super fan, you’d say, “I’ll create this amazing box of merchandise with music, record this special edit for you, or give you a behind-the-scenes concert experience. But we need you to bring your mates in, because unless enough of you want it, we can’t manufacture it.” It was kind of like Kickstarter—the super fan would go out and find other people to buy the product, and word-of-mouth marketing was happening digitally. This might sound obvious now, but until social came about, word-of-mouth didn’t really happen. You might email your mates, but you certainly couldn’t track the impact. Suddenly, with social and virality, you saw word-of-mouth marketing working in real time, and we were selling and selling these products.

Absolutely. The internet before that had been a one-to-one conversation between brand and customer. Then suddenly, customers were having conversations with each other, and brands could participate. It was really exciting. As much as I loved what I was doing at Universal and was proud of the team we built and our achievements, I saw a wave of change coming. I felt compelled to become an entrepreneur again and build my own business.

Back in 2011, I decided to do something called co-buying, which later became Buyapowa—hence the name, which will make sense in a minute. I believed the power balance should shift so that retailers were not in charge; instead, the buyer—the consumer—should be. Co-buying is about leveraging economies of scale and offering them to a diverse audience of people who may not know each other. For example, I might offer you a bottle of Chanel perfume that would normally cost $100 in a store. But if I grouped everyone in my office together, we could probably reduce the price to around $80. And if everyone listening to this joined in, we could probably lower it to $50.

We were doing that collective, group buying in real time. Dynamic price shifting got more people committed to the product, and it went gangbusters. We were selling thousands of units within minutes. The customers loved it. However, the manufacturers and brand owners did not, because it led to price point erosion. Typically, such price discounts are behind the scenes, but I was bringing them to the forefront. The brand manufacturers and retailers we sourced our product from would say, “Love what you’re doing—it’s disruptive—but how about this: Gideon, why don’t you give us your technology so we can integrate it into our apps or websites and run this co-buying campaign?”

That was our pivot into B2B SaaS—moving away from trying to be a marketplace and actually becoming a B2B SaaS provider. That approach was successful for three years, but scaling was challenging because brands and retailers were using the technology for one-off campaigns rather than evergreen ones, which did not lend itself to a recurring revenue stream. It was also quite complex to sell, as the CEO had to sell the vision of group buying and co-buying repeatedly.

One of my close friends, Tim Simmons—who has been with us since day one and now runs the business—came to me in 2014 or 2015 and said, “Gideon, have you seen companies like Uber, Dropbox, and Airbnb? They’re all launching in Europe using refer-a-friend for their acquisition.” At the time, I was still pushing co-buying, which wasn’t having the greatest success. He said, “Let’s be realists: if we want to scale this business, we should recognize that co-buying is not dissimilar to refer-a-friend and we should double down on that.” He was absolutely right.

Since 2015, we have focused entirely on refer-a-friend. We’re nerdy about it. We scaled in the UK, then across Europe, and finally into North America—not by becoming all things to all men, but by excelling in the sectors where we chose to operate. This focus has allowed us to be defensible against our competition. We now work with the 20 largest telecom businesses in the world. Why go to anyone else if you’re a telco looking to run a refer-a-friend campaign?

That’s been my journey and some key points about the evolution of the business, which is now in a great place and growing. I’m delighted to be here doing podcasts like yours, Shane, with the rest of the team working their magic.

So word of mouth: if you’re a good brand with good products and services, word of mouth will happen anyway. But if you layer good software and a solid promotion on top of that natural behavior, you can amplify its impact 100x. Some of our clients acquire over 50% of their new customers via refer-a-friend. It’s that powerful a channel.

What you also find is that customers who refer a friend are far more profitable than those who come in via Facebook or Google, perhaps just hunting for a deal. The very fact that they’ve come on the back of a recommendation means they have a far higher conversion rate and are more profitable.

Also, Shane, and I didn’t predict this: if you look at the lifetime value of a customer before they refer and after they refer, they become about three times more valuable for the brand. After referring, they have a lower propensity to churn and a higher propensity to take multiple or higher-value products from our clients.

So while refer-a-friend is primarily an acquisition channel, it also offers significant loyalty benefits.

We’re fortunate because we chose to work with hundreds of clients, not thousands. We like to think all of our clients are crushing it because we offer not just technology but also the service, consulting, and client success that supports it all.

What I’m getting passionate about right now is some of the streamers we work with—like the Zone massive sports streaming network and Formula One Television—and how you can drive referral not just for the brand but for the content itself. It would be very easy to have a Zone Program that says, “Hey, Shane, have you heard of the Zone? Sign up and get three months free, and I’ll get $50 in reward.” That would probably work.

But it’s way better if you’re targeting me while I’m watching what I’m watching. Let’s say I’ve just binge-watched the UEFA Champions League highlights from the last 10 years and spent six hours of my Sunday on it. This user is engaged and hooked in. You deliver a message to his phone with a great picture of the screen he’s been watching, a URL, and a code that he can post on his Instagram stories. Then I post that to my Instagram stories, saying, “I’ve just watched six hours of UEFA Champions League highlights. You should too, and you’ll get rewarded.” It includes the URL and code.

This approach dives into people’s specific passion points and behaviors, driving referral far more effectively than just a big banner on the Zone site that says, “Hey, refer your mates.” I’m quite passionate about that now.