Rahim Noormohamed, co-founder of GIFTforward
Rahim Noormohamed. Copyright 2020.
GIFTforward is a social tech venture helping restaurants and other small businesses through the coronavirus-induced shutdown. GIFTforward began with a group of Toronto-based entrepreneurs looking to support independent businesses and assist struggling owners. Rahim Noormohamed, who is currently pursuing an MBA at Harvard Business School, is one of the founders.
Aswin Pranam: What was the mission and purpose behind GIFTforward?
Rahim Noormohamed: We started GIFTforward to help independent businesses survive the economic impact from the COVID-19 shutdown. Many small businesses and restaurants, in particular, are hit extremely hard right now. Due to the shutdown, many have zero revenue but still have bills to pay and people to employ. Our mission is to help these businesses make it through this crisis by selling gift cards.
Pranam: Describe the team composition. What brought you all together for this cause?
Noormohamed: This started with a dinner that two friends had in Toronto before the shutdown. They noticed the restaurant was emptier than usual and that it was going to be like that for some time. They started brainstorming solutions and came up with the idea of gift cards. It evolved quickly from there, and I got pulled in a couple of days after that initial conversation. Our core team includes a handful of entrepreneurs from Toronto with a background in restaurant management, business, law, and more. Most of us didn’t know each other before this project and have never met in person. Several additional team members are leading our upcoming launches in new cities like Sydney, Los Angeles, Boston, and more. What’s common about all of us is that this is no one’s full-time job, but we’re all passionate about doing whatever we can to help. GIFTforward is a massive team effort, and everyone’s help so far has been invaluable.
Pranam: What types of businesses are you targeting with the solution?
Noormohamed: We started with restaurants because they’re already feeling the pain – in good times, margins are thin (5-10%); in a shutdown, they’re catastrophic. We are focusing on smaller, independent restaurants because they often don’t have the resources or the know-how to sell gift cards online themselves. They are also less likely to have access to a large rainy-day fund and need help urgently. We know there are many other types of small businesses that can’t sell online (e.g., fitness studios, barbershops, nail salons) and are working on how to support them best.
Pranam: Why are gift cards the best method to help struggling businesses?
Noormohamed: The problem facing restaurants and other small businesses is a CASH problem. They need cash today to help pay bills since they’re not selling any food. Buying a gift card puts money in the hands of a small business immediately. Our gift cards are redeemable after the shutdown, meaning the restaurants are essentially receiving a loan – repayable in food. Paying back loans in food is a much better option for a restaurant than trying to pay back loans in cash, given how tight their standard margins are. To learn more on why gift cards are the best method to help businesses, read our post.
Pranam: What geographic areas are you currently serving?
Noormohamed: We are currently operating in Toronto (with more than 40 restaurants/businesses signed up). We have restaurants excited about joining our platform in Sydney, Los Angeles, and Boston, and we expect to launch in these locations soon. We have folks interested in helping out in other geographies as well – and this is a global problem. If anyone is interested in helping us launch in a new city, please reach out!
Pranam: What businesses have you helped so far with GIFTforward?
Noormohamed: We have more than 40+ restaurants and small businesses on our platform already and have sold greater than $10,000+ in gift cards since we launched just over a week ago. Restaurants on our platform include Rasa, Fresh, The Good Son, Montecito, Sara, Il Covo, and many more.
Pranam: What is the business model? Is there a profit incentive?
Noormohamed: We are a social-good venture – we don’t make money. Right now, we don’t charge any fees at all – every dollar spent on a gift card goes directly to a restaurant or small business thanks to a partnership with Stripe, who has waived credit card processing fees. Eventually, we may have to pass the transaction cost to the restaurant. There’s no profit involved in this venture; we’re just trying to help some of the hardest-hit businesses at a difficult time.
Pranam: Do you have plans to continue operating after COVID-19 resolves? If so, what will be the primary focus?
Noormohamed: We don’t have any plans beyond making sure that our customers have the support they need from us to redeem their gift cards. GIFTforward is an initiative to help out in a time of need, so we don’t see a future past this crisis.