Why we invest 60% of revenue into R&D

Zsuzsa Kecsmar, Co-founder and Chief Strategy Officer of Antavo, explains why research and development is the #1 destination for revenue
Zsuzsa Kecsmar
Zsuzsa Kecsmar

We make software for loyalty programmes. It's a huge industry. Successful companies are thinking outside the box to ensure loyalty resonates with their audience - like KFC introducing gamification or Ripcurl rewarding shoppers for the time they spend surfing. Traditional loyalty schemes are no longer fit for purpose and we support brands to design and deliver loyalty programs that engage customers and adapt to evolving consumer behaviour.

This ever changing landscape requires constant R&D to ensure we’re keeping a finger on the pulse of what shoppers really want. Of course, this can be capital-intensive but it’s an important lesson in ‘speculate to accumulate’ and can lead to breakthroughs that can increase both profits and operational efficiencies - which is exactly why Antavo invests 60% of its revenue into R&D.

But where does that 60% investment go? To start with, our development team makes up more than half of our overall workforce. Developers form four standalone teams with their own managers, timeline and priorities so Antavo can pursue multiple projects at once.

We also organise regular hackathon days where team members meet and work together for a week. This results in enhanced work output and there is a seasoned quality and assurance group separate from the main development team. Working this efficiently means we always have new features and developments in the making and we’ve achieved quarterly product releases since 2018.

As a pure-play loyalty technology provider, we only specialise in the technology, while many of our competitors also offer additional services such as consultancy or marketing automation. This allows us to focus all of our attention and development resources on our platform - but it also means our technology needs to be a cut above the rest.

Overall, the market is highly competitive and there is a sea of sameness - so, if a company wants to stand out, it’s not enough to have a great concept, an innovative strategy is also needed to turn it into a reality. To succeed, we must remain a trailblazer in the industry, which is why it’s so important for us to invest so much money, time and effort into our product.

One of Antavo’s most unique features - and the product of many years of R&D - is the no-code Workflows editor. It has a clear, easy-to-understand visual editor so for clients, creating, running, and modifying loyalty campaigns requires neither coding nor help from the IT department, it's self-serve. This allows users to customise the operation of every aspect of their loyalty program and, along with our gamification modules, has been instrumental in helping us secure big name clients, such as KFC and BMW.

Our commitment to R&D has a direct impact on clients, as it also allows them to be creative in their offering to their own customers too. Ripcurl, for example, is using our technology as the main driver to achieve its objective of building the largest and most engaged surfing community in the world. The brand not only rewards customers in the traditional sense by offering points when they spend in store but also uses a Rip Curl Search GPS watch and app to reward them for every wave they surf - the first loyalty program of its type in the world.

The risks of not investing in R&D

No business owner can deny that R&D is a strategic cornerstone of companies wishing to compete and scale. However, this tends to be more true when business is going well and less so during times of crisis.

When economic uncertainty unfolds and organisations look to cut costs, R&D almost always makes the list of activities to pause. Leaders commonly struggle to balance the need to reduce spending with the risk of missing out on technological advantages - advantages that could in fact protect companies during times of crisis and lay the foundations for strong future growth.

Keeping up R&D activities, both through the rough and the smooth, signals to both customers and investors that they can rely on the firm to continue to improve their product and service. This approach has been successful for Antavo and in 2021, we tripled our year-on-year growth before closing a €10M Series A fundraiser in 2022.

Being an established expert in our marketplace - both in terms of technology prowess and thought leadership - allows Antavo to spend its resources where it matters, without losing relevance. R&D is the key to unlocking this freedom and I’d recommend every start-up makes it a priority in 2023.

Written by
Zsuzsa Kecsmar
Written by
April 12, 2023