OEN is pleased to showcase Robert Haydock, the Founder and CEO of Scratch-it, and the 2015 winner of the Wyatt Starnes Award. The award honors our region’s most promising early-stage tech entrepreneur and is selected by Wyatt’s family.
“I am very honored to have won the award. It is great for team moral to win awards like this, and provides validation for all the hard work we put in as a team every day,” says Haydock. “I didn’t initially realize the importance of the award and have been pleasantly surprised by the number of people who have reached out to congratulate me…Many of these service providers take huge risks working with early stage startups like ours and it’s great when the companies they work with get validated from the larger community with an award like this one.” The award will be presented to Haydock on October 22nd at the OEN Tom Holce Entrepreneurial Awards.
So what exactly is, Scratch-it? In a world where marketing campaigns overflow our inboxes it’s difficult to get people to open, let alone interact with an e-mail. Enter Scratch-it. Like its paper counterpart, Scratch-it entails unearthing hidden messages through virtual scratching on your digital device. It engages customers, drives traffic, and has revamped e-mailing with its use of reveal-marketing. Robert Haydock gave us an inside look on Scratch-it and his personal experience as an entrepreneur:
What was the spark that inspired the birth of Scratch-it?
The birth of Scratch-it happened while I was watching the 2012 Tech Crunch Disrupt conference in SF and saw a mobile app called Gyft. The app allowed you to collect gift cards and organize them on an iPhone. They had a feature in the app that allowed you to flip the digital version of your gift card over and scratch off the code digitally. If you are familiar with a physical gift card they often have a unique code on the back of the card which is covered and requires the gift card owner to scratch it off and reveal the unique code below. When I saw the scratching interaction on the iPhone, it clicked with me, and reminded me about the physical scratch cards through direct mail I had received over the past decade or two. Specifically it made me remember a Macy’s annual campaign that was a scratch card for their annual sale and how they revealed discounts by scratching. After the conference I immediately began looking for a scratching solution to use on a few marketing campaigns I was working on and couldn’t find any solutions that would work. This was when I decided to build my own.
What problem does Scratch-It solve?
Digital marketers are largely constrained by using text and images in a variety of formats to market to their audience. In some cases they will get the budget and time to produce a video or hire an agency at a very high price to create rich media experiences, but the day to day digital marketing team is always looking for innovative ways to keep people engaged. Scratch-it’s reveal marketing solution provides the marketer with a whole new way to engage an audience and provide desperately needed content variety.
How did you come up with the name?
We came up with the name from the experience. The hard thing about having a name like “Scratch-it” is that it’s very hard for people to see your whole solution beyond the interaction of scratching. The great part is that it’s very easy for new customers to find our company. Long term, Scratch-it will become a product name and we will find a new name that better describes our business’s focus on the greater opportunity of reveal marketing, which will extend far beyond scratching.
How is Scratch-It better/different than your competition?
Because we are creating a new category of “reveal” within digital marketing our direct competition is fairly nascent and we are all taking our own path to success right now. However, we are competing for dollars with other solutions in marketing tech that improve the performance of campaigns. We are differentiated from our competition because to use Scratch-it you don’t need to involve your tech team to integrate anything with us in order to start using our solution. By taking a new approach to solving a long standing problem we have been able to provide marketers with an exponential improvement in performance instead of the incremental improvement most of our competitors provide.
How do you make money?
We charge an annual licensing fee for our SaaS software solution. Our pricing starts at $15k a year and goes up based on the number of email records a company has. We chose to use email records because our initial solution was focused on email marketing, but we are already seeing customers use Scratch-it in other marketing channels and will be introducing additional pricing plans to include support for channels like social, SMS, and others.
What’s the best thing about being an entrepreneur?
The best thing about being an entrepreneur is working with a very passionate group of people all working to figure out how to achieve the same goal. There is something special that happens with small teams where it is really easy to rally around a single business objective like hitting a specific revenue goal and have everyone on the team figuring what the most important thing they can do any given day to help achieve the business objective. This will be harder to maintain as our team grows, but it’s an amazing feeling when it happens.
What has been the biggest surprise in your entrepreneurial experience to date?
The biggest surprise to me in my entrepreneurial experience is the level of interest there is in startups. And it’s amazing how many times you end up getting introduced to the right person at the right time.
Your biggest success?
My biggest success to date is learning from my previous company that the team is everything and you have to make sure you really like the people you work with. With Scratch-it this has been a big focus in our hiring and it’s been amazing. I feel very fortunate to be in this situation and putting a team together like the one we currently have is by far the biggest success of my career.
Do you have a failure story to share? What did you learn from this failure?
I think failure is a constant part of growing and learning. With Scratch-it there have been many decisions where I led us down the wrong path, but every time we have learned from our failures and make better decisions going forward. When we started Scratch-it I thought we were going to be the Groupon of scratch cards — and until we had a website up with no traffic and no sign of any traffic did I realize that this was the wrong approach. The next failure was selling Scratch-it campaign by campaign instead of as an annual license, but we learned and adjusted to both these failures. I think failure is a big part of learning and I’m sure we will continue to fail, but we learn from each failure and they become less impactful over time as we refine our business and get better product market fit.
As an entrepreneur, what keeps you up at night?
Team dynamics is the major thing that will keep me up at night. If the team is working well together then everything is extremely efficient and our business progresses quickly. If we have major conflict brewing within the team then it will keep me up. I think most people don’t realize that conflict is an important part of working in a team and if there is no conflict occurring then it’s usually a sign that a major conflict is brewing and something big and bad will happen soon. By having regular smaller conflicts and catching things before they become a big issue you can keep a healthy relationship between your coworkers and this produces a great team dynamic.
What is the best entrepreneurial advice you have received (and from whom)?
The best overarching entrepreneurial advice has come to me from my experience as a competitive tennis player –it came from one of my coaches and took a long time to implement. In tennis, like the rest of life, there are things you can control like your attitude and the decisions you make, but there are also things you can’t control like the wind, court conditions or your opponent. As humans we tend to obsess over the things we can’t control instead of focusing on the things we can control. Learning this from my tennis coach has been important to my entrepreneurial life, because it has helped me focus on what I can change instead of focusing on the things outside of my control.
What is your #1 piece of advice for a budding entrepreneur?
Entrepreneurship is about the experience of the grind not about the money. When I look back at past companies I started the most memorable moments are the worst times when everything felt hopeless and you had to figure out solutions to what seemed like impossible problems. But these moments are also the ones that you will love to reminisce about with the teammates that were by your side. These moments define both you and your company’s identity.
What is the #1 book you would recommend for a budding entrepreneur?
“The Five Dysfunctions Of A Team”, but it’s definitely a book to read after experiencing a highly dysfunctional team because it won’t resonate the same way if you haven’t experienced true dysfunction.
What song best describes your entrepreneurial journey?
I can’t think of any songs but there is a clip from a movie that I first heard this when my life was focused on tennis and it’s very raw, but provides an accurate depiction of the mentality it takes to make it through the entrepreneurial journey. Al Pachino Speech in “Any Given Sunday” called “Peace by inches”
Imagine your venture becomes wildly successful. What does that look like?
For me wild success will be building a company of people who love coming into the office everyday even though they have the option of working from anywhere. We spend most of our adult lives working and there is nothing like working as part of a high functioning team to make you excited about life and the opportunities that lie ahead.
What’s your favorite local business and why?
My favorite local business is “Palio” a local Portland coffee shop in Ladd’s Addition. It’s my favorite local business because it’s a great place to spend Saturday or Sunday morning and either catch up on news or get a little work done. I really like the local vibe and that it’s in the center of a neighborhood. I live on the west side of Portland and will drive across town to spend time at Palio.
When you were a child, what did you want to be when you grew up?
I didn’t have a clear idea of what I wanted to be when I grew up. I liked tennis, building remote control cars and playing the French horn. I always enjoyed a good debate, which I think may have led me into business.
Do you think Oregon is a good place to start a business? How has it helped you, and what challenges has it posed?
I think Oregon is a great place to start a business and it’s only getting better every year. I started by volunteering at OTBC when I first moved to Portland and also attended numerous OEN PubTalks. I met my co-founder at a Startup Weekend. After starting Scratch-it our company was based out of the TiE Pearl incubator for a year and about 18 months ago we moved into the Portland State Business Accelerator. Our lead investor in our most recent angel round was Portland Seed Fund. I think the ecosystem is extremely well set up to educate “wantrepreneurs” about how to start a company and nurture them before they are ready to jump off the cliff. As you build your idea and are ready to jump there are a different set of resources available to help you grow from concept to early stage. All these different parts are vital and we have used most of them throughout our journey so far.
As far as challenges go, I think the funding environment is constantly evolving in Oregon and can be tough to navigate as an entrepreneur. We went through many failed attempts to raise Oregon capital and were drawn in many different directions. I think it’s clear that funding is still rapidly evolving in Oregon with a recent boom in small funds emerging, but I think it will be a while until we have enough capital in all phases from early stage angel to micro VC and finally large VC’s.
I think it’s vital for those entrepreneurs who have large exits in the state of Oregon to help fill in the gaps and invest in continuing to mature the ecosystem because many of their employees will be founders in the next generation of startups.