Catherine Bennett, executive editor of Utah Business, sat down with Steve Sonnenberg, co-founder and CEO of Awardco, to discuss the company’s recent valuation of over $1 billion, making it the first unicorn in the Utah market in the last few years.
What was your first multimillion-dollar company? What did you learn from it?
It was a business that was all around e-commerce. It was called Wholesale Match, and I matched wholesalers and dropshippers together. … In 2011, I had a failure, … and when you fail, what does any entrepreneur do? They pivot to their next idea. I was at the lowest point of my career, but I’d also been studying under my father, who’s been in the employee recognition industry.
I saw, through him, … that the younger generation is not going to care about rings, lapel pins, plaques, trinkets, … service anniversaries and other outdated solutions. When things failed, I had a decision: Am I going to do what my dad does, or am I going to completely reinvent it? I told my dad, “I’m going to completely reinvent it. … The younger generation wants choice, they want options.” … It didn’t exist, so I set out to blaze a new trail to create that modern experience for rewards and recognition in the workforce.
Whenever I do anything, I go all in. When you go all in, you fail a lot. But I have the mindset where I don’t just stop after the first failure. I’ve had three or four or five failures along the way before I finally figured it out. If you put me to a test, I’m going to figure it out; it might not be right at the beginning, but I’m really good at taking that first step, and I’m really good at pivoting very fast.
In the early days, how did you handle financing? You didn’t do any investing or pitching at the beginning, correct?
I don’t know anything about that world. I just know how to create products from nothing, and I know how to provide value to customers. A lot of times, when I’m still building, I’m just giving it away for free to learn from the experience of users using it. Then I quickly realized, this is how I’ll pivot, this is how I’ll adjust. … It’s an evolution. Entrepreneurship is a journey — there’s never one “aha” moment.
I have a simple motto: “Don’t sacrifice my family.” Because I had to put food on the table, even during this building period of Awardco, I got a job at Qualtrics. It was purposeful because I wanted to learn how to sell to enterprise organizations, and Qualitrics has a world-class sales force. … That 14-month chapter of my life … was instrumental in giving me the confidence to sell to large organizations. It was nice to put food on the table through Qualtrics while I was innovating at night.
I’ve also been partnering with my wife, communicating all throughout, saying, “Hey, this is what I’m doing; this is the vision. What do you think?” I treat her almost like a co-founder, even if she had her other job — we had small kids at the time, and she was taking care of them and helping them. But I really kept her along the process so she didn’t feel like I was just doing it on my own.
There was a point where you approached Amazon. What was their initial response? How did the relationship progress?
The idea was simple: I wanted to take all of Amazon’s hundreds of millions of products and put them inside Awardco through an API. But when I reached out to Amazon to say, “I’m going to push a lot of money your way,” [they didn’t like it.] … From 2011 to 2015, I really had to show Amazon that they were wrong.
I took all their products and put them inside Awardco. … This is the first time it’s ever happened where people can actually reward people with points [which they could use to buy items] on Amazon. I would capture that experience on Awardco, and then my wife would go buy the items for people on Amazon. We had to do that for many years; then the revenues started being quite large.
In 2015, Amazon [agreed to collaborate], and they created additional APIs that automated the ordering process so my wife didn’t have to do all that ordering. When an order came through, I was able to send it to Amazon in real-time. Then I did that all over the world. We integrated with every Amazon warehouse in the world. We solved something that was so needed in the world. … Well, I didn’t reinvent the wheel; I just built great technology that partnered with companies like Amazon to really catapult the new buying experience for rewards and recognition.
At what point did you begin fundraising?
The fundraising began in 2020 when I did a seed round with Ryan Smith [through connections made at Qualtrics]. Someone told me early on that it’s not about the money — it’s about the partner. So even though I didn’t need the money because we were running an efficient business, it was more because … I wanted [Ryan Smith] on my team to help and guide me through the process of investing.
Series A happened a couple of months before COVID-19, and then COVID happened and put a spotlight on the workplace. What’s the one way to connect people? Recognition. I actually experienced that: While we were all working at home and I felt disconnected from the world, it wasn’t until I started recognizing people that I started feeling connected to my peers again. That’s what recognition is: It’s a bridge, a connection.
People started using rewards and recognition as a strategy to bring their workforce together, whether they’re at home or in the office. In 2021, … [that’s when] we got a large valuation [at] 900 million. … Then we had to put our heads down because the world turned, and it was really tough. We were fortunate to have a very solid product and great customers that fueled our growth.
You’re a global company now with an office in London. Is this your first international office?
We started our London office a year ago, and it’s growing faster than we thought. It’s going really well out there. Since we have so many global customers, we needed to be out there to start servicing them and plan to continue to grow globally because recognition is a universal love language. I mean, everyone needs recognition. I don’t care who you are or what country [you come from.] Everyone wants to feel validated. I think we were born with that.
How do you stay competitive?
We have the world’s largest configurable marketplace that drives the behavior of people. We talked about Amazon, but we also integrate with gift card vendors all over the world. … We have over 6 million users on our platform from all over the world, and so we’re solving very complex things when it comes to rewards and recognition.
We stay competitive by not being competitor focused. We’re customer obsessed. … We’re listening to our customers. We’ve actually formed a customer advisory board — we call it a CAB — where some of our best customers from some of the biggest organizations around the world meet. We learn about the problems they are facing and how to solve them, and we truly come in as a partner. In order to stay ahead, you have to be so close to the customer. I’ve taken a lot of cues from Jeff Bezos and how customer-obsessed Amazon is. That’s why I say we’re so customer obsessed versus competitor obsessed. It’s flattering to have other companies try to chase us. If you’re doing something good, of course that’s going to happen.
What have you seen that company culture desperately needs right now? Is there something that’s unique to today that didn’t exist 10 years ago?
What’s needed is to understand the data. We understand that people leave organizations because they don’t feel a sense of appreciation or belonging. And yet, I ask HR professionals, “Are any of you guys measuring that sentiment? Do [you] measure when people are getting recognized?” If that’s the number one reason why people leave a job, not because of salaries but because they don’t feel a sense of belonging, then why aren’t you measuring it?
Awardco did a really good job integrating with the communication tools that already exist — Slack, Teams, Outlook — and because we’re in the everyday flow of the employee, we capture all that good that’s already happening. We’re now able to provide powerful analytics to leaders so they can know who in their organization is recognizing and appreciating.
What I’ve seen is that people need recognition. Because we’re so flexible — some people are home, some are at the office — you need a way to measure that, and I think that Awardco is one of those things that people need to track engagement.
How do you, and the company as a whole, feel about achieving unicorn status?
To me, it is great to reach that [unicorn] status, but it’s not necessarily for me; it’s for my employees. There’s such pride in them saying, “I belong to this company.” Not only are we doing a lot of good in the world, but also we’re growing. … They get excited about [being valued at over one billion], and I get excited because they’re getting excited.
I believe we’re doing much more than just selling software. We’re actually doing a lot of good in the world; it is affecting everyone to look at the world with a little bit more positivity because the world is extremely negative. I think it’s a great thing, and I feel so fortunate that we build software that does that and helps people. We want to continue to recognize the good in people. We want to develop those behaviors because we believe that people, when they do that, they’re happier, they’re healthier and they’re making a major impact in the world. … We’re excited about the future. I think this is just the beginning. The Awardco runway is massive.
And the roadmap ahead is even more ambitious. Later this year, Awardco will debut new listening and engagement tools that convert every pulse of employee sentiment into action, while advancing incentives, performance and daily team connection — with recognition as the culture engine behind it all.
