Vesdia CEO mixes tech, financial services

Jim Douglass writes on a white board like a techie, but don’t be fooled.

He’s a money guy whose background in the financial services industry landed him about a year ago at the helm of Vesdia Corp., a company that evolved from a tech startup of the dot-com days.

Enlarge this image

Johnny Crawford/AJC

‘We are a technology-enabled marketing services company,’ Jim Douglass says of Vesdia Corp.

THE JIM DOUGLASS FILE
• Age: 43
• Hometown: Huntsville, Ala.
• Residence: Buckhead
• Family: Wife, Kay; son, Jack, 9; dog, Hank
• Hobbies: Golf, exercise, son's sports
• What you're reading now: "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street" by William D. Cohan
• Favorite travel destination: Tuscany
• Favorite movie: "The Untouchables"

BUSINESS
Latest Headlines:
[an error occurred while processing this directive] • More business news
• Business photo galleries

Ask Douglass whether his firm — which started with an online-only business model — is a tech company, and this is his carefully considered response:

“We are a technology-enabled marketing services company.”

On the white board in his office, the business model takes shape in circles, lines and numbers as he gives the company’s history.

Vesdia Corp. began as BabyMint, offering consumers a way to save for college funds while shopping online.

“That was a direct-to-consumer play,” Douglass explains, “so we were having to market to consumers to acquire consumers. Obviously, that is an expensive proposition.”

Eventually, Vesdia revamped its business model. Today it is a technology-based matchmaker between banks that want to enhance their credit and debit cards with loyalty programs, and retailers that want to pull in new shoppers and encourage occasional shoppers to come to their stores or Web sites more often.

Vesdia’s loyalty programs are linked to more than 50 million debit and credit cards, Douglass says, and the company is growing, despite the tough economy.

“Last year, we grew about 50 percent. This year, we will grow, worst case, 25 to 30 percent,” he says. “My view on it, if you can grow 25 to 30 percent in this market, that’s a great place to be.”

Q: When did you decide working with banks, rather than going after consumers directly, was the best model?

A: It really started because Citibank came to us about four years ago. They were really the first bank to step forward. At that point, we launched one of their programs with 1 million cards. Today, that’s grown 20-fold.

Q: How important was it that you got such a gargantuan first deal with a bank?

A: Hugely important. … Trying to build a small business on the backs of a bunch of little customers is very, very difficult.

Q: What’s your annual revenue?

A: We don’t release that.

Q: Are you profitable?

A: We returned to profitability in 2009, after investing in the company in 2008.

Q: How does your revenue stream work?

A: We get monthly fees from banks. We take a percentage of the rebates [loyalty rewards] from merchants, and we pass a majority of them to the consumer.

Q: What’s your potential market?

A: We are chasing 1 billion debit and credit cards that have some reward program on them today, and we are trying to enhance those programs. Most of them are inside 100 banks and airlines.

Q: And how about the merchant side of your business?

A: Our objective is to add as many retailers to that card as we can, so that you, as the consumer, say, ‘Wow, that’s the card that pays me the most.’ … We already have most of the online merchants. In-store is where all the growth is. We run about $200 million in total sales through our network right now, and about two-thirds of that is offline.

Q: Is your biggest challenge attracting merchants and keeping them satisfied?

A: That clearly is the biggest challenge.

Q: How many employees do you have?

A: We’ve got about 60.

Q: Have you had any layoffs?

A: Yes, we’ve definitely had to cut back to some areas. We’re probably down 12 to 15 percent, contractors and employees.

Q: How was the first quarter of this year compared with the first quarter of last year?

A: On the merchant side, it was up. Merchants are looking at us going, “I need to try something different.” … It was slow on the [bank] side because banks are having to watch their pennies. Signing new banks, it’ll be a slow year.

Q: Is there an upside?

A: I will say that what you see in these down times is you see people [consumers] looking to these loyalty programs more. People are asking, “What can I buy with that?” … Also, one thing that’s a luxury of the time we’re going through now: You learn other markets, and you learn how to do more with less. We’re learning a lot.

Q: You’re leaving this interview to go to your son’s baseball practice. How do you balance the responsibilities of work and parenting?

A: At one time, I couldn’t. Now, I just make it happen.

Q: How did you figure out how to do that?

A: Just realizing priorities, and realizing I can get everything else done. I think it’s just maturity more than anything. … The people I do business with are the same. The excuse for being at your child’s game is a universally accepted excuse.

Q: Has that become truer with the slowdown in the economy?

A: I don’t think so. I think it’s always been there. … You can do both.