If entrepreneurs present to a market an idea too new or too grand, the market often rejects it. The innovators then tweak the product or service until the market accepts it, and sometimes a change resonates so deeply with a consumer base that the original idea moves to the backburner. Luke Heath, co-founder of Austin-based Seedling, experienced that firsthand.
Heath's son Elliot was born in 2013. One of his first thoughts as a father was to set up a trust fund, but when he couldn't find an easy, online option, he created one himself.
Each fund — called a seedling — would last 10 to 20 years, with people able to contribute until the fund closed. Additionally, Heath thought people might like to include video messages in the seedling, and that he was definitely right about.
As Heath and co-founder Deke Foxhoven showcased the trust fund-based service last year, they realized that encouraging people to trust large sums of their money with a brand new startup was a big ask. At the same time, users were frequently asking Heath and Foxhoven about other uses for the web-based platform. People wanted to use Seedling to wish loved ones happy birthdays, congratulate graduates, and show teachers appreciation.
Heath and Foxhoven listened to their customers. Soon they saw Seedling’s potential to be not only a player in the online gifting space, but a true game-changer.
“It’s a way to celebrate special people in your life at special times in their life,” Heath said of the second iteration of Seedling, which launched in private beta last March.
Growing a Seedling
Planters create seedlings — a collection of digital messages destined to be sent to the planters’ person of choice on a certain day. The planters invite others — called growers — to add their video and image messages before the send date, which is referred to as harvest day. Seedling’s technology automatically assembles slideshows of the messages and delivers them to the recipients on harvest day.
Planters decide whether or not recipients know of the seedlings or are surprised. Essentially, Heath and Foxhoven want to put emotion into online gifting.
“We’ve all received the Amazon gift card that gets lost in your inbox, or the Facebook post that gets lost in your feed, or the PayPal that gets lost in your balance. The sentiment is there — someone wants to express their care and love for you on a special day — but the sentiment is really lost by technology,” Heath said. “It’s not being properly delivered. So that is one of the big things that we want to do — make this more of an emotional, connected experience for our users.”
To ensure Seedling is achieving that goal, Heath and Foxhoven — the only two employees — are monitoring how often a seedling tugs on one’s heartstrings. According to Heath, about 50 percent of users cry when using the platform. The second iteration of Seedling gained 100 users in the first week. Heath and Foxhoven capped the number of users at 200, as Heath said that would allow them to properly collect feedback during the private beta.
Monetizing the platform
Although Heath said the bootstrapped startup is in the “do-things-that-don’t-allow-us-to-scale” stage, he and Foxhoven are actively working on monetizing Seedling. That requires building out the automation aspect of Seedling’s technology, as well as developing API platforms that will transcribe text from video messages and create meta tags.
Once Seedling reaches that fully automated stage — the founders hope in about six months — Heath anticipates the trust fund aspect coming back into play. Seedling will take two percent of each funded seedling to cover the costs of the platform. Additionally, growers will be able to add product recommendations to the seedling. When recipients adhere to those recommendations — say by purchasing an item on Amazon — Seedling will make an affiliate commission on each purchase.
“The immediate goal for us as a company is to reach that automation and scalability point where we’re going to be able to take a step back and really start to ramp up the uses,” Heath said. “Before we do that, we’re big advocates of agile methodology and validated learning, where we’re really understanding what our users are going to want before we build it. We’re okay with it taking a little bit longer to reach that point to make sure that what we build is what the users are actually wanting.”
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