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Givvy taps Facebook's social scene for gift-giving app

A tiny San Francisco-based startup has a big holiday wish: Revenue and funding for the new year.

Givvy lets Facebook folks create public or private gift lists. The startup hopes to get revenue and funding for Christmas.

Good things come in small packages, and that just might be the case with Givvy; a two-man, self-funded startup. Today they are launching a Facebook-based gift-giving network that lets people on the social network discover and list gifts based on their friends' recommendations.

CTO Larry Rubin handles development and UI design while CEO Claudio Miranda handles everything else: graphic design, marketing, accounting, merchandising, legal, and PR. Miranda was the co-founder and CMO of Organic Bouquet, an online retailer of eco-friendly flowers & gifts. Rubin recently built with Friendster founder Jonathan Abrams.

Rubin and Miranda hope to tap into the social shopping behavior on Facebook and connect people around a common shopping theme.

"Friends just blurt out questions in the hopes that someone qualified in their network will respond with advice," says Miranda. "Givvy solves this problem for gifts. We've created a sub-community within Facebook comprised of influential friends that can help inform and validate purchasing decisions."

Givvy relies on the gift ideas submitted by "savvy shoppers" or "curators." These gift ideas come from any Web site. Givvy converts the URLs into a product page. Anyone can then create public or private gift lists based on the gift ideas they see on Givvy. The more lists and gift ideas you submit, the higher you rank on the Givvy leaderboard.

The foundation of Givvy is social commerce, which happens when online social networks mix with e-commerce transactions. The most popular examples of social commerce are shopping communities like Etsy, group buying models like Groupon, and retail storefronts on Facebook, known as F-Commerce.

"Facebook seems to be at the forefront of the movement because it allows startups like Givvy to leverage the social graph to create deeply integrated social shopping experiences," says Miranda. "This allows consumers to engage with friends at every point in the purchase cycle. Infusing friends into the purchase cycle helps consumers make more satisfying purchase decisions."

The plan for Givvy is to build user traction over the holidays and then raise a seed round in the beginning of 2012. Givvy is pulling revenue from two sources. First, cost-per-click (CPC) revenue from their partnership with Second, cost-per-acquisition (CPA) revenue, a pricing model based on customers who actually make a purchase rather than those who just click around the site. CPA is hard to accomplish and is a challenging revenue source but Miranda says he hopes CPA revenue will account for the majority of Givvy's revenue.

Givvy is just one of hundreds of apps trying to tap into the power of Facebook. With all that interest, I wonder if Facebook is working to help that growing community.

"Facebook is more or less neutral," says Miranda. "Developers are given a set of self-serve documents for how to setup an app and from there we're pretty much on our own. Aside from developer-driven forums, Facebook doesn't offer any tech/partner support until apps reach a high level of active monthly users. This can be very challenging when the developer documents are unclear or whenever Facebook makes sudden changes to the developer platform. But aside from that it's pretty straightforward."

For now Givvy's biggest challenge will be letting Facebook users know they exist. Miranda says Facebook is helping by increasing app visibility on the News Feed, Ticker and Timeline. He point's to Facebook's recent integration with Spotify as an example of how Facebook is capable of getting the word out.

"The age of social commerce has arrived," says Miranda. "Givvy plays its part in this revolution by leveraging Facebook to redefine how people discover and share gifts online."

It will take more than passion and brains for Givvy to survive. But who knows. It just might receive a Christmas miracle.