Alice
Greg Siegel spent years in e-commerce and sent and received tens of thousands of dollars in corporate gifts at his previous company. The gifts he got were the problem. Partners he had known for years, including supply chain, logistics, and payment providers, kept sending him giant tins of cookies and brownies. As Greg put it, he had been in business with them for a long time and they could at least take two seconds to personalize a gift. That frustration became the idea for Alice, an AI-powered corporate gifting platform that tells you what to send someone and when to send it.
Greg moved fast. He came up with the idea around Halloween and aimed to launch in time for the holiday season. He did most of the coding himself with one of his developers in Russia, and the platform launched in about six weeks on December 14th. The first users were about 20 of his old friends and companies, who gifted through the holiday season. Beta ran until about July, when the company opened to the public, though still by invitation at first.
Alice's growth came from its gifting mechanic. When someone sends a gift, the recipient learns about the platform, and Greg reported that between one in four and one in five recipients signed up and used Alice. The business model is built on the merchants. Merchants list products for free and pay Alice a cut of 20 to 35% of every transaction. Gifters pay only the MSRP of the product, and recipients pay nothing. Alice also sells credit packages and subscriptions, which give companies cash up front. Greg said margins are the same across models, but subscriptions are the bigger part of revenue. The catalog grew from about 3,000 products at launch to about 15,000, and the company now works with about 460 merchants.
What worked was a curated catalog of experiences and products people want but would not buy for themselves, plus a model where a single gift brings in a new user. Greg also said that merchants had started asking to pay more margin to get more placement, which points to demand from the supply side. Alice had raised $300K on a $700K convertible note with a 6% interest rate and a 20% discount, and it was still open to strategic investors. Greg expected the company to be profitable in its first year, with a gross margin of about 25% and a net margin of 8 to 12%, though he noted that these numbers depend on how COGS is defined.
At the time of the interview, Alice had about 300 gifts expected for the year. In the last 20 days, the company had put through about $150K in revenue. Greg projected about $4.7 million in revenue for the following year based on signed contracts, and he was considering raising between $2 million and $5 million in an A round.
- •The gifting mechanic turns every customer into a distribution channel, since a recipient who signs up at a 1-in-4 to 1-in-5 rate brings in new users without paid acquisition.
- •Taking a 20-35% cut from merchants while charging gifters only the product's MSRP makes Alice a marketplace that earns margin on demand it creates, rather than charging the buyer a fee.
- •Greg's e-commerce background gave him 460 merchant relationships and a direct route into corporate gifting budgets that merchants could not reach themselves.
- •Launching first to about 20 personal contacts let the team test the viral loop with a small, trusted group before opening to the public.
- 1.Start with a small group of people you already know who have a real need for the product, and use them to test whether the core action (sending a gift) brings in new users.
- 2.Design the product so the recipient of each transaction experiences it and is invited to sign up, and measure the conversion rate from recipients to users.
- 3.Recruit suppliers as partners by offering them access to a budget category they cannot reach alone, and take a revenue share instead of charging them listing fees.
- 4.Offer prepaid credits or subscriptions to buyers so you get cash up front, and track how much of revenue comes from each model.
- 5.Curate the catalog to products people want but would not buy for themselves, and expand it only as demand and merchant interest grow.
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