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Entrepreneurs set themselves apart from the rest of us by seeing the opportunity rather than just the problem, as Israel-based IDC Herzliya graduate Itay Eral proved when he created Zeek, an online gift voucher marketplace.
Mr Eral admits to causing “quite an issue”, shortly after his wedding in 2013, when he misplaced an unwanted gift voucher he had received as a present. But after explaining his mistake to his wife, Mr Eral guessed that many others could have suffered similarly and wondered whether he could find a solution.
After a bit of research, Mr Eral discovered that his hunch was right. About 30 per cent of vouchers worldwide are never cashed in, and not just because the owners lose them.
“That amounts to about £65bn, which ends up in the bin,” he notes. “I decided to find a solution, and created a marketplace for gift vouchers.”
Mr Eral discussed his idea with Daniel Zelkind, whom he met on the MBA course at IDC Herzliya. They then wrote a business plan for Zeek, where customers can sell unwanted vouchers and buy them at a discount, and pitched it to Uri Levine, an Israeli entrepreneur who had sold his tech start-up Waze to Google for $1.3bn. He agreed to back the venture with some of his own money and became their chairman.
“Zeek was a perfect match for me,” Mr Levine says, adding that it has similarities with businesses he has previously been involved with. “It deals with a big problem [and] it is doing good for consumers. It is part of the innovative sharing economy that I love and it is simply making the world a better place.”
Three months after Mr Levine came on board, following an intensive period of software development, the team had an app and Zeek started trading.
Skills and values
Business schools played a key role in the company’s creation, Mr Eral claims. If he had not studied at IDC Herzliya for his MBA, he would never have met Mr Zelkind, now Zeek’s chief executive.
“If we hadn’t met each other I’m not sure whether Zeek would have been born,” he says, adding that the course also taught them a lot.
“The MBA was a formative experience as we needed to build the right team and it allowed us to tap into like-minded, aspirational people who were willing to volunteer their ideas, support and resources to make Zeek a success.”
Zeek, initially set up in Israel, launched its business in the UK in 2014 where it seeks to tap into a gift card and voucher industry that is worth a potential £5bn. About 47 per cent of adults receive more than one gift card a year and more than half of those are never redeemed.
Retailers benefit from Zeek’s service just as much as those with the vouchers, according to Mr Eral, who claims that people tend to spend about 40 per cent more than the face value of their gift cards when they redeem them in store.
Zeek’s app has more than 80,000 users, a number that has been doubling every month, says Mr Eral. The business aims to increase this as well as the transaction size for each user.
“We have thousands of transactions a month and the average transaction is approximately £30,” Mr Eral explains.
He says that the company is on track to be profitable by the beginning of 2016. “We want to become a big player in the UK market and we plan to open four additional offices over the course of 2015 in European countries which are comparable to the UK and likewise highly digitised.”