After eight years establishing successful digital lifestyle brands for leading NZ media companies, Michael Fuyala handed in his notice and concentrated his energies on two start-ups.
Rewardhub – co founded with Mike Rishworth – is one of those “it’s so simple why didn’t I think of that” ideas that lets online shoppers earn cash back for charities, at no cost to themselves. Turns out they weren’t the first, as Michael points out below, but it soon gained traction with both shoppers and businesses and the initiative was awarded Digital Startup of the Year at the IABNZ awards in 2020.
His other venture – also co-founded with Mike Rishworth – and which works hand-in-glove with Rewardhub – is the affiliate marketing network Linkshop.
It works with top local brands to bring new NZ affiliate marketing programs to publishers large and small. Oh, and if that wasn’t enough he still oversees his family’s Mt Eden based Christmas Tree business while being a stay-at-home Dad with a young family.
I talked to Michael to find out more.
You had prominent marketing jobs at both Bauer and NZME – did you have to think hard before taking the leap with Rewardhub?
It was a tough call. To go from earning a salary to earning no money and investing your own money in building something new and unproven was risky to say the least. I’m okay with risk but when you have a family it makes it a little more tricky, as it’s not just you. Nevertheless, I could see the challenges on the horizon for traditional media and had a few ideas.
The first idea was a global publishing brand for discovering sustainable products and talking about sustainability. This idea came to me during a work trip to San Francisco while sitting in an Uber there was an ad on the radio with a wholesome jingle telling families that mealtime is not meal time without Coca-Cola. I thought shit, the world has hit rock bottom. We can do better.
In the end I abandoned that idea though as it started to become clear that before long all products will be sustainable and the topic won’t exist in a niche but something that pervades all media and all walks of life. I hope this assumption turns out to be correct on many levels.
Anyhow, the next idea was ecommerce tracking. Working in online publishing with lifestyle brands it seemed that New Zealand publishers were not that well serviced if they wanted to create “commerce content” which recommended or compared products. It was a marketing channel that seemed really logical, and was taking off in bigger markets but not New Zealand.
To this end we (Mike Rishworth and I) started Linkshop, an affiliate marketing network. It’s a tracking platform that makes it easy for online platforms and publishers of all shapes and sizes to promote local online stores on a commission only basis. It’s attractive to brands as they’re in control of the cost so as the channel grows it gives them a cost-effective alternative to Facebook and Google ads.
The technology and connections that Linkshop provides are what made Rewardhub possible.
Shopping and doing good at the same time – it seems a win-win – why hadn’t others thought of this?
We have a family Christmas Tree business (Misa Christmas Trees) and we moved our Christmas fundraisers online, so schools could book directly on our website using a code and earn a percentage of tree sales.
It worked really well, then when I was working on Linkshop a school emailed me about running a fundraiser. At that moment the idea for Rewardhub was born and I stayed on the couch until the small hours of the morning building a (bad) prototype.
After organically developing the idea into what Rewardhub is today I discovered we weren’t the first to come up with the concept. Many years ago, we learned that a man spent hundreds of thousands of dollars building something called Fundraise Mall. It was probably too early, so it did not catch on and sadly he subsequently passed away.
We also learned that the exact same model is popular in other markets including the UK where over 50 million pounds has been raised for charities to date. So that was encouraging.
The CEO of a prominent New Zealand charity (StarJam) once described Rewardhub as being win-win-win as it offers value for the stores, causes and shoppers in equal measure. We generally get really positive feedback from shoppers about the experience and how easy it is to raise money without having to spend more. For brands it can be a loyalty play but also for smaller brands it can help them get discovered.
What’s it like running a new start-up company in a pandemic?
I think the pandemic has been harder on existing businesses in certain sectors than it has on new businesses like mine. I’ve been lucky in that the business is very much focused on online shopping, so lockdowns have actually coincided with strong growth for both Linkshop and Rewardhub. Even more so this latest lockdown which has dragged on and I think people have just switched to online shopping as their go-to.
On a personal level, I’m a stay at home Dad and have been working from home for the last two years so juggling the kids and working late into the night is not new to me as my wife works full time. The biggest challenge for me during the latest (seemingly infinite) lockdown has been homeschooling young kids while the business is growing.
The inverse relationship between the quality of your parenting and the amount of work you get done is exacerbated by lockdowns and balls get dropped. When your work gets done, the kids run riot. When the kids get attention, your work falls behind. I can’t complain though, they’re good problems to have and I enjoy spending time with the kids. My daughter in particular is a big fan of Rewardhub and likes to help with ideas, so it’s fun to get them involved.
How do you ensure the causes you feature are robust and genuine?
We ask for the registered charity number, an email address from the cause and run online checks using things like LinkedIn, and the Charities register. We’ve not had cases of fraud to date.
There’re many more shopping online in the last few months – has that translated to more people using Rewardhub?
Yes, last month was record for online shopping via both Rewardhub and Linkshop, and after a slow couple of years it’s been steadily increasing this year as more high profile platforms like Flybuys, Airpoints, Kiwiwallet and Stuff promote affiliate offers. We’ve also had support from ambitious brands that have taken a punt on us and started to get good results.
Is Rewardhub profitable at this stage?
Not yet. It’s not far off though as Rewardhub is run very lean. When it turns a profit that money will just be invested in growing it anyhow. My philosophy with Rewardhub has always been that it should be a low-cost operator so more commission gets paid to causes. Another platform doing something similar to us launched recently spending big on teams, managers, sales, etc. With Rewardhub it’s just me and everything is done in spare time – so it’s maximum impact.
Rewardhub has a role to play in a healthy affiliate marketing ecosystem and that benefits Linkshop directly and indirectly. It’s also a feel good project that I enjoy working on so we’re definitely committed to growing it.
The NZ tech space is exciting right now, what do you put that down to?
I think there are a few reasons New Zealand punches above its weight. Bigger markets and bigger companies can breed inefficiency and stifle experimentation. New Zealand is small and that can make things easy. Easy to get set up, easy to try different things and fail fast. It means that you can prove business models efficiently without the overhead. That is a good thing if you’re building a business for a global market.
I think if you’re building a business for a local market, size can be a disadvantage too though. Lots of business models, Linkshop and Rewardhub included, thrive on scale. It can be hard to get that scale in New Zealand.
Do local businesses/publishers understand the power of affiliate marketing?
It depends on the segment. If you’d asked me two years ago the answer would have been a resounding no across the board. In the last twelve months there has been lots of progress with bigger players and more focused smaller players seeing the benefits of affiliate partnerships.
Platforms that have a good loyalty element are starting to see results, and online stores have started to give us feedback that they have really noticed the lift in sales since getting their brand on bigger platforms. Review websites are also doing really well and add heaps of value in connecting shoppers with purchase intent to online stores.
Segments that have not really taken off yet include social media and influencer marketing. There was a technical hurdle there but our platform now handles clickless tracking so we expect to see some fruitful partnerships emerge where people can get custom promo codes and earn commission when they’re used even if there is no associated click. This has also opened the door to offline to online affiliate tracking which we’re kicking off next month.
The most encouraging thing that we are seeing is connections which are true partnerships. We connect publishers, charities and brands directly and they explore ways they can work together. That’s where the good stuff happens, we just do the tracking and admin, and try to make it easy.
What’s the biggest misconception re digital marketing/advertising?
Marketers are unsure where they should be. Some think they need to be everywhere, others are dismissive of certain channels as they’re biased from their own experience and perspective with that channel so they stick with Facebook and Google. People don’t know if it’s worth pursuing Tiktok, Pinterest, affiliates, etc. In reality there are a hell of a lot of people using all of those platforms and you need to understand them at the very least. Then you need a clear measurement model before determining what’s worth pursuing, who are you trying to reach?
Did you have a lot of work to do convincing businesses to get involved in Rewardhub?
People instantly understand Rewardhub, especially smaller online stores. We no longer do any outreach or sales for Rewardhub, our business is mostly inbound, people asking to get involved. In the early days I tried to pitch merchants to Linkshop and they got confused, so then I revised the pitch to only explain Rewardhub only. Once they understand Rewardhub they understand affiliate marketing, the general concept of it at least. So Linkshop becomes an easier pitch.
How does NZ keep successful start-ups from simply being acquired by deep-pocketed overseas firms? Is this necessarily a bad thing in your view?
I don’t know that we need to keep them from being acquired once they’re big, as most founders who get a payday want to invest that in other local start ups. What is disappointing though is the lack of early-stage investment in New Zealand by New Zealand investors. I know it exists but New Zealand investors are still very conservative despite the billions of dollars swirling around in KiwiSaver and property. I am a big fan of what Snowball Effect is doing, providing a platform for direct investment in progressive start ups.
What ambitions do you have re Rewardhub and Linkshop?
I have a very long-term view with Rewardhub and Linkshop. I’d love to be talking to you again in 2030 with hundreds of thousands of active users. They were very difficult platforms to get off the ground as they both require a “network effect”. We’re just starting to see that network effect kick in now.
We explored some directions in the first two years, which is hard because experiments mean sinking time and money into things that turn out to be nothing more than distractions. You lose time that could have been spent strengthening your core offer and value proposition.
The core value proposition and the economic model for both platforms have become more clear now so the focus is building on that and scaling them both up. Right now the biggest challenge is juggling businesses with the kids… and Christmas Tree season is fast approaching too.
What sort of coding/tech skills, if any, do you have?
My coding skills peaked in 1987 when I was twelve years old and coded a game on my Commodore 64, it was an archery game with some basic graphics and a multi choice story. My technical skills are not great nowadays but I know enough to get by. I enjoy jumping in the templates, and there are things I can do and heaps of resources available but it’s more efficient to outsource the technical heavy lifting to people that actually know what they’re doing.
Finally Michael – what other NZ start-up has really impressed you…
In technology brands I like CoGo and their purpose and story. I also think it’s a genius application of open banking. I don’t know anything about their business model but they’re mission is making it seamless to monitor and lower your carbon footprint and anything that addresses climate change is doing the most important work in the world.
My favourite new brand is actually very boring though. It’s called Boring Oat Milk. They make really good oat milk in New Zealand and it’s finally let me give up dairy with my daily coffees. You have not tried alternative milk until you’ve tried it. I heard about the Business is Boring podcast and really liked the founder’s purpose and story. The product itself is a game changer.