For anyone who follows the tech sector, it isn’t news that black entrepreneurs struggle to attract investors to their ventures. In 2010 a CB Insights study found that less than 1 percent of venture-capital-backed business founders were black, and access to capital for black tech entrepreneurs hasn’t improved much in recent years.
That struggle is one of many that Ali Abdullah, CEO of Claim It! Inc., has faced during his young life. Before launching an iPhone app that allows users to win freebies after watching a 15-second video ad, the 29-year-old former Google senior product manager weathered difficult teen years in New York City, as well as a brief period of homelessness back in 2008—never mind an environment that makes it especially tough for a black person to get startup funding for a tech venture.
His approach to getting over those hurdles? “Smile, and get s—t done,” Abdullah said recently (with a smile, of course), in an interview with The Root. It’s the unofficial motto of his company, Claim It! Inc., which he runs with co-founders Khalid Mills, who is chief technical officer, and Kaza Razat, who is head of product.
The motto also perfectly captures the combination of dogged perseverance and disarming social skills that gave Abdullah the chutzpah to pitch a former president for a job upon meeting him and to attract high-profile investors to his venture.
The Business of Free Stuff
Since its Jan. 1 launch, 107,000 users have downloaded the app and subscribed to Claim It!, says Abdullah. Nearly 20,000 people have won $360,000 worth of free products and gift cards from brands such as Apple, Starbucks, Garmin, Nike, Chipotle, Forever 21, Starbucks, Zico and Harlem Shake.
The marketing potential in the app’s business model has drawn media coverage by Money, MSNBC, Alley Watch, Inc. and the New York Post. It also attracted $1.1 million in seed money from deep pockets that hail from the worlds of sports, finance and technology, including Blackstone senior managing director David Blitzer, a partial owner of the Philadelphia 76ers; Thaddeus Young, a basketball player for the Brooklyn Nets; Al Harrington, a retired NBA player; Steve Sadove, a former Saks CEO; Dan Petrozzo, a former Goldman Sachs managing director; and Jim Stillittano, managing partner at Razor Technology.
Learning to Play the Game
That the investors’ roll call leans so heavily toward the sports world makes sense.
Basketball helped Abdullah build confidence and connections as a shy, awkward teenager in Manhattan. “I was really good at math. However, I couldn’t read well and I wasn’t confident in myself,” Abdullah explains. Embarrassment about his appearance added to his insecurities—he had eczema so severe that he would scratch his skin until it bled—causing him to disengage from his studies. Two things drew him out of his shell: therapy and meeting a kindred spirit in his best friend, Alphonso Howlett.
“When he and I met in the seventh grade, he couldn’t read well. He had no confidence, he wore glasses. He was a nerdy guy. … People picked on him. So that’s why we hit it off,” Abdullah says.
However, Abdullah points out, “The social component Alphonso had was basketball.” Abdullah picked out his passion for the sport, along with the dynamics of competition and the camaraderie that came with it.
Howlett went on to a career as a college and high school basketball coach. Abdullah, who still plays basketball recreationally, instead pursued a career in tech, landing product-engineering and marketing positions with the New York City Department of Education, the Clinton Foundation and Google. Meanwhile, his love of basketball inspired business ventures and helped him connect with the mentors and investors who would support his dreams. “I'm a really passionate sports person, and so I felt that I could build a product and tie it into … sports lovers or fanatics,” explains Abdullah.
Al Harrington is among Abdullah’s mentors and Claim It! Inc.’s investors. The former NBA player met Abdullah through his sister, Tiffany Harrington, who brought Abdullah along to a family dinner at the midtown-Manhattan steakhouse Ruth’s Chris one evening over six years ago.
“Obviously he was very bright, he had all these ideas,” Al Harrington recalls. One was 5th Avenue Sports, a digital sports marketing company of which Abdullah was a co-founder; Al Harrington became one of his clients. Another was a search engine platform linking athletes and fans called Players 2 Fans, for which Abdullah was the chief marketing officer.
However, with time, Abdullah’s focus shifted away from sports platforms. “The business that I was building at the time just wasn’t sort of the home run,” he explains. Sometimes marketers sent him free products to give away at events, and that gave him an idea. He capitalized on his core competency—building products—along with the relationships he had built with athletes and brands.
Introducing a Game Changer
Al Harrington went along with the shift. “The one thing I love about Ali is that he has vision … so I told him, whatever he wanted to do, I was always going to be there to support him,” he tells The Root. When presented with an early iteration of the Claim It! app, Harrington says he was “the first person in line to support him and help him.”
Another person with that kind of faith in Abdullah is Nets forward Thaddeus Young. The two connected after a 76ers game a few years ago, when Abdullah introduced himself and joined a conversation Young was having about the app Uber. “I was like, ‘Just keep me in the loop about things that are going on in the app market,’” Young says.
Eventually, explains Young, Abdullah told him he had an opportunity “that was kind of huge.”
“I had lunch with him … and he wouldn’t tell me the concept until I signed a nondisclosure agreement,” Young continues. “Once I finally signed it, he sent me the deck on Claim It! and I thought it was a great idea,” says Young. “People are attracted to anything free,” he says with a laugh.
Nods of approval from his business manager and other angel-investor friends convinced Young to come aboard as an investor earlier this year. (He declined to say how much he has put into the company.)
Art of the Comeback
The kind of confidence Abdullah displayed with Young got him into—and then got him out of—one of the low points of his life. “There was a period of time for almost a year when I had no income,” Abdullah explains.
Two years out of college and a couple of years into an engineering position at the New York City Department of Education, he decided to leave the job to pursue bigger and better things. He left with only $1,200 in the bank, confident that he could quickly land an opportunity he’d heard about at the Clinton Foundation. Only 22, he had quit not realizing that you can’t collect unemployment insurance if you resign. And that dream job: “It took longer than expected,” Abdullah admits.
Eventually he was evicted from his apartment, barred from returning until he repaid five months in back rent. His partner, Fatima Williams, who was pregnant at the time with their daughter, Amirah, had left him. He relied on friends for a place to lay his head at night during that period. They were none the wiser about his situation, he admits: “I smile a lot, and I get up every morning and head to Starbucks or the coffee shop and build something.”
Resolving to make things right, he wangled an invitation via hedge fund manager Marc Lasry to a Clinton Foundation charity poker tournament attended by the former president. “I'm the brokest guy there,” Abdullah quips. However, he says, “I showed up with my computer.
“At the time I had nothing,” he continues. “I'm stressed out, depressed and thinking about suicide.” All he had, in fact, was “a bunch of code. So I’m at the bar, and I said, ‘President Clinton, I want to show you what I can actually build for you.’ I start writing software in front of him and I told him, ‘Just imagine … how much money you can raise if you can find a way for donors to contribute money through mobile or Web.’” Clinton told him whom he needed to speak with, says Abdullah. Finally, he had a contract position as a Web-applications engineer with the Clinton Foundation, a reunited family and an end to his period of homelessness.
Will that kind of nerve and determination enable Abdullah and the team at Claim It! to close a $4 million round of funding by the end of the year? “We’re making real progress,” he says. The money will be used to help scale up the business into different cities; as well as to expand redemption beyond the pink truck, bringing it into retailers’ locations.
Moving to a Bigger Arena
Not that Claim It! doesn’t face challenges. The aim of 2015’s activities has been about proving that the concept of the product-giveaway app works. (A recent video interview with NBCBLK shows what happens when the Claim It! team does a daily redemption run in the pink truck.) Actual revenues from advertising have been only $50,000 thus far, though Abdullah is predicting that 10 times that amount will come in over the next 12 months.
A crucial test is going to be what happens when the Android version of Claim It! launches on Google Play later this quarter. “It's going to boost their ability to reach out and gravitate to a lot of different consumers,” says Young. That release will debut version 1.3, which will include enhanced notifications and redemption functionality, Abdullah says.
Attracting the kinds of brands that consumers want and then being able to provide good, real-time data about those consumers’ behavior within the app to the brands will also help Claim It! succeed, said CNBC host Marcus Lemonis in a September video interview published by Inc. “A hundred percent of the success of you attracting new brands is the validity of your data, and the quality of it, and the reliability of it,” he advised Abdullah.
Assuming that all goes as expected, “I'd say competition is going to be the biggest challenge,” says Al Harrington. “You have Groupon, you have different companies out there that at some point are going to try to get out our type of platform.”
Abdullah says that he is undaunted by the prospect of other companies trying to eat his lunch. “I don’t focus on competition, I focus on product,” he says. “To me, competition is good.”
Sheryl Huggins Salomon is senior editor-at-large of The Root and a Brooklyn, N.Y.-based editorial consultant. Follow her on Twitter.