Dave Jones is the CEO and Co-Founder of TOTUS
Let’s start with a brief intro about you:
I’ve worked in the payments, fintech and gift card industries for over 25 years. I started my career as a website programmer with Billing Concepts. I was fortunate enough to have my father, a technology executive at USAA, introduce me to the CIO of Billing Concepts, Michael Long, who took a chance on me as a young, unexperienced, and not formally trained, ambitious young man. I was, however, creative, hardworking, and entrepreneurial. Within six months of starting at Billing Concepts, I donated $65 to a United Way fundraiser we were hosting at the company for a “lunch with Butch Holmes,” the CEO at the time. While Butch assumed I wanted some facetime and a ride in his Ferrari, I had different plans…I had come up with an idea to thrust Billing Concepts into the digital age by providing electronic bill presentment and payment services to the large base of telecom clients the company enjoyed. After making my presentation over lunch, the open-minded CEO recognized the spark in my eye and merit in my idea; one week later I presented the plan to the board of Billing Concepts and another week later, I was taking off in the company’s private plane to visit Princeton eComm, a small but leading innovator in the industry to hold meetings and conduct due diligence, which led to a multi-million-dollar investment. When we returned, I was granted some stock options, a pat on the back and sent back to my programming role, but…now I had the bug, and my life would change forever.
A few months later, I joined forces with both Michael Long, who was now working for Anderson Consulting and Louis Hoch, who had been the director of my technology group, but had also moved to Anderson Consulting, and together we devised a plan to start Billserv, literally on the back of a napkin… This was the late 1990s and venture capital was pouring into anything with a “dot com” in the name and a new perspective on traditional ways of conducting business. We raised capital quickly and within two years, had signed 60% of the providers who sent utility, telecom, insurance, and loans bills to consumers. Shortly after, as the newly established leader in our niche, we went public on NASDQ under the symbol “BLLS” and achieved a $750M market cap. So now I didn’t just have the bug, I was a full-fledged “dot com entrepreneur” with over $70M in “paper wealth” at the age of 26. The experience was a great lesson for me, both resulting from success and failures. I learned a great deal about getting a startup off the ground and operating a public company but also about the depressing realities of the margin calls I used to finance my lavish lifestyle.
As the dotcom bubble burst in 2000, I exited Billserv with a goal of starting a new VoIP peer-to-peer phone system, which due to the market crash, was never funded. I then took shelter with Bank One, responsible for emerging payment products and stayed through the merger with JPMorgan Chase. I soon recognized that while I was good at navigating large corporate environments, building high growth companies was my passion. I reached out to Scott Walker, the founder and CEO of BillMatrix, a hyper-growth bill payment provider and was thrilled to join the executive team leading business development and product management. Approximately a year later, the company was acquired by Fiserv in a landmark deal. With quite a sum of wealth walking the hallways of BillMatrix, I raised $4.5M in angel capital to start PAYjr, a payment system I had devised for kids and teenagers. While leading PAYjr, I enjoyed a first-hand lesson of the importance of pivoting when a business doesn’t meet the expectations of a business plan. So, our team leveraged the technology and relationships that we had established and created CardLab, the first design-your-own Visa gift card online retailer. CardLab was a rollercoaster ride through the economic downturn of 2008 and as Scott Walker, the largest investor in CardLab, would say, I gained the experience as an entrepreneur by “walking through the valley of death”. We considered closing the doors on CardLab multiple times, but our loyal team, including Brian Winfield, our CTO and current CTO of TOTUS, persisted and we turned the company into a great success, selling to Blackhawk Network, the largest gift card company, in 2014.
Blackhawk Network was a new adventure, and I had the opportunity to learn from some of the best in the industry, Bill Tauscher and Talbot Roche, the Chairman and CEO respectively. My responsibilities within Blackhawk escalated quickly, first leading ecommerce globally, then the digital division and finally the incentive division of Blackhawk, a $4.5B business. Two of the greatest experiences and skillsets I picked up at Blackhawk were M&A, with over seven acquisitions within my business, and a deep understanding of the gift card ecosystem and opportunities for disruption. My Blackhawk experience culminated in the sale to Silverlake Partners, which within itself was a tremendous opportunity to participate first-hand in the methodology and transformational actions of a top tier private equity firm. It was one of the toughest decisions I made to leave Blackhawk, but I also realized taking time off was essential, which ultimately led to laying the groundwork of what would become TOTUS.
My professional career has been a fulfilling, yet sometimes tumultuous, experience but I would have never achieved or persisted if I didn’t have the support of my family. My amazing and supportive wife of 25 years along with my two, also entrepreneurial and recent college graduate, sons provided me the opportunity to take risks, inspired me to persevere, and placed their own interests aside, for which I will be forever grateful and indebted. Today, we enjoy traveling adventures, fitness, spending time together and socializing with our wonderful friends.
How did you end up founding TOTUS?
One of the key challenges I recognized throughout my gift card industry experience was the that so many brands, even large well-established brands, struggled to develop and operate a successful gift card program. The more experience I gathered, the more I realized the burden that brands face with so many dimensions of expertise required to run a gift card program. While not a core business of brands, gift card programs require focus…focus with legal, regulatory, operations, marketing, finance, distribution, merchandizing, fraud, ecommerce, and customer service. Without a true outside provider supplying all these disciplines in a single solution and acting as an extension to the brands, the opportunity was clear. I looked for similar scenarios and found the private-label credit card industry was developed for these exact reasons; I studied the private-label credit industry and was convinced, there needed to be a solution for the gift card industry as well!
What makes TOTUS different?
We are already unique in the industry supplying the comprehensive solution that we do, but I would add that we have taken a different approach from most of the providers in the industry by focusing on the brand’s challenges. Many in the ecosystem serve retailers, corporate buyers, and marketplaces, but we made a critical decision to “be the brand”. Our singular mission is to protect, grow and do everything in our power to act as an extension of the brand. This clarity of focus guides us in every decision we make with every relationship we establish. If the brand is not successful, we will not be successful.
Tell us about the TOTUS culture:
I am confident when I say that our team is second to none. When you reach this point in our careers, one of the most influential aspects of enjoying your work is the people around you. We are so fortunate to have brought together like-minded, experienced, and genuine people to form our team. While our industry is significant in size, there are few people in the industry that understand gift card issuance and program management at this level… This, has provided us with confidence in everything we do and an ability to trust and empower each other like nothing I have ever seen before in all my years of business. Most high-growth companies face challenges with team building, understanding personalities, learning strengths and weaknesses, etc. We have the luxury of focusing on execution day in and day out with people whom we truly enjoy spending time with. As the author Peter Drucker said, “culture eats strategy for breakfast” I agree 100%.
What is your long-term vision for TOTUS?
We will disrupt the gift card industry to benefit brands and as a result, consumers as well. We are not trying to build another business in an existing industry, instead we are creating a new industry of branded currency. “Content is king” and for some reason, that has been lost on the gift card industry. Our vision is to give the power back to the brands by creating a world where the brand’s currency drives sales growth, loyalty, and efficiency while also protecting customers, in turn making them happy.
What challenges do you foresee for TOTUS?
Good question, I think we would be naïve to think we will not face challenges. I believe the different stages in our growth will present us with different issues. Today, our challenge is balancing growth with capital. I agree that our economy is likely facing a downturn in the coming years, and while it would be difficult to halt TOTUS based on the opportunity we are already witnessing, we must remain disciplined and be sensible with our capital.
One challenge though, is that we must never lose sight of the fact that our clients are trusting us with their customers, cardholder funds, and reputation. Fraud is a huge issue in the gift card industry. But we will always invest in the best technology and tools to ensure that our clients and their cardholder’s funds are protected first and foremost. To successfully stay one step ahead of bad actors, we will never stagnate and always treat cardholder’s funds as our own.
For a brand contemplating the outsourcing of their gift card program against running the program in-house, what would you say?
First, I understand the hesitancy- keeping functions in- house and under the control of the brand is the easy path, but I would urge the brand to consider the focus required to run a successful gift card program and whether spreading focus away from their core business is worth the risk. I say this out of experience, not arrogance; I believe it is impossible for a brand to employ and provide the level of expertise that TOTUS will bring to their program. This is equivalent to the same type of decisions companies make to outsource their datacenter to AWS or similar service, or purchase Salesforce for their CRM as opposed to building software in-house. The scale, focus and expertise TOTUS leverages to develop and grow a gift card program is enormously beneficial and hard or impossible to match.
For brands currently lacking a gift card program, what are the benefits of adding a program?
The primary benefits are incremental sales and new customer acquisition. Generally, we expect 5-10% of a brand’s sales to come from gift cards and on average, 40-50% of gift card use is from new customers. When compared to other marketing initiatives or acquisition expenses, gift cards are a clear leader. In addition, while widely unknown, the market has shifted to a large volume of “self-use” among existing customers, which makes gift cards critical for loyalty. Consumers have started using gift cards as a budgeting tool and in edge cases, they are using gift card purchases to mask purchases. This isn’t nefarious, a spouse may want to purchase a gift for their spouse’s birthday or other holiday without them knowing. Gift cards have become a commonly used method of concealing purchases so if a brand does not have a gift card program today, then they are missing out on sales.
Any final comments or points you would like to share to brands?
From my interview, I’m sure you can tell I never shy away from an opportunity to talk. Yes, but quickly, if you are a brand contemplating a new gift card program or outsourcing your program, reach out to us and let’s have a conversation, with absolutely no pressure. We are not a group of high-pressure salespeople; we are a collaborative team of industry experts interested in helping brands and driving the industry forward. We would be more than happy to provide advice and suggestions regarding your program, we are focused on long-term relationships and building TOTUS and your brand to their fullest potential.