Ibotta’s CEO Bryan Leach Opens Up About His Startup, Personal Pivot
Bryan Leach was in the middle of a glittering legal career. By the time he was in his early 30s, he’d graduated from Yale Law School, clerked for Supreme Court Justice David Souter, and become a partner at Bartlit Beck, a boutique law firm renowned for its commercial litigation practice.
But inside the lawyer was an entrepreneur burning to get out.
Leach had an idea. He had the connections, including the backing of one of Silicon Valley’s most influential leaders. And he had the hunger.
“I had the idea I probably would regret not doing this more than I feared collapse and utter failure,” he said. “I thought if I can’t take this risk, than who can take this risk?”
So about three years ago, Leach, now 36, leapt from law to the uncertain world of startups. His big idea: connecting retailers and advertisers to consumers with an app that gives users cash rebates and gift cards after they make purchases at retail, grocery store, restaurant, and movie theater chains. “The ad unit is changing, the way you pay for it is changing, and we’re right in the middle of that. I think it’s a $50 billion idea, I don’t think it’s a $1 billion idea,” Leach said.
Industry experts agree about the size of the opportunity, with some venture capitalists predicting mobile enabled commerce will yield the next $100 billion startup.
Right now, Leach’s Denver-based startup, Ibotta, is still a long way from $50 billion, or even $1 billion, in annual revenues. But the 55-employee company’s apps now have 3.5 million users, with 5 million expected by year-end. Ibotta works with more than 80 partners, including outlets such as Walmart, Costco, Target, Safeway, and Home Depot. The company has raised more than $33 million from investors, and year-to-year revenues have tripled.
Many startups are racing to build apps that capitalize on the disruptions the rise of mobile commerce is creating in the retail and advertising industries. While some are mobile payment systems or mobile retail apps, Ibotta is focusing on helping brands engage customers at home, work, or anywhere else through their smartphones or tablets and persuade them to make purchases, either in a brick-and-mortar store or online.
There are a few big names that are trying to do that by using digital coupons, like RetailMeNot. SwagBucks offers users gift cards for playing games and watching videos. But Ibotta is focused on persuading consumer to buy things by offering them rebates after they complete an activity that teaches them about a product. Brands like that because rebates only reward customers after they make purchases, and they can use the app to find customers and build awareness.
Users earn the rebates, typically between 25 cents and $1, by using the Ibotta app to play games or complete tasks like watching a video or taking a survey about a product. That unlocks rebates shoppers can redeem by using their phone or tablet to take a picture of their receipts after they make a purchase. The rebate is sent to the consumer’s bank account through PayPal or Venmo.
When I interviewed Leach earlier this month, he said Ibotta users have earned more than $10 million in rebates.
Creating something consumers use to seek out and be engaged with advertising “is a revolutionary idea about the give-and-take of commercial relationships,” Leach said. But while the idea sounded good, it went against decades of evidence that consumers try hard to avoid advertising.
“The question is will people spend the time and effort [to use the app,] and the answer is … Next Page »