Why it matters:
- Evite was a pioneer in electronic invitations, but as a small part of a big conglomerate it hadn’t made a profit in 10 years.
- Digital entrepreneurs saw an opportunity to revive the company when the pandemic caused both party hosts and Evite to hit pause.
- Evite replaced an outdated revenue plan with a revamped strategy that included investments in technology; added premium designs for paying members; and replaced banner ads with affiliate marketing that moved the brand out of the red and into the black.
David Yeom made three key bets when he, along with George Ruan, bought the online invitation company Evite in 2020.
The first bet was that (despite conventional wisdom) a pandemic was the perfect time to acquire a brand that depends on parties – lots of in-person parties – to survive.
The second was that he could turn around a company that hadn’t shown a profit in 10 years.
The third bet was that people would return to hosting parties in a big way, even if the pandemic persisted for years.
Now, almost two years later, those bets are paying off for Yeom and Evite. The company was profitable in fiscal 2021 for the first time in a decade, and is about to record its fifth consecutive profitable quarter.
Competition in the online greeting card industry heats up
The online greeting card industry, which includes invitation companies like Evite, generates over $1 billion in revenue according to a March 2021 report from IBISWorld. But the report noted that competition in the electronic invitation space from new startups and social networks, like Facebook, could create challenges.
Traditional retailers also are looking at online invitations as a new way to connect with customers. Party retailer Party City, for example, invested $4 million to acquire a stake in digital invitations company Punchbowl in order to expand its invitations business.
Evite, however, has enviable brand recognition thanks to its 24-year history. It was launched in 1998 and was part of Liberty Media — a huge media and entertainment conglomerate that has ownership stakes in Formula 1, SiriusXM and the Atlanta Braves — until the digital invitation site was purchased by Yeom and Ruan for an undisclosed amount.
Reviving Evite amid a pandemic
When the pandemic hit, Evite saw its daily usage plunge from about 20,000 invitations to below 2,000, creating a buying opportunity for Yeom and Ruan.
Yeom previously was the Co-Founder of Hollar, an online dollar store that was acquired by brick-and-mortar retailer Five Below in early 2020. Ruan co-founded Honey, the online coupon site that was acquired by PayPal.
Yeom, who became CEO of Evite a year ago, after serving as its executive chairman, told CO— that as a father of young children, he knew how popular Evite was with parents.
“I also love the mission of the company, which is about creating face-to-face gatherings to strengthen connections,” he said.
He was impressed too by how loyal Evite users were to the brand, even though Evite had done little to update or improve the business model over the past decade.
“There are not many brands out there that have that affinity. So, we knew there was something really powerful there,” Yeom said.
After acquiring the company, Yeom made a number of bold decisions as part of his turnaround strategy. He outlined them for CO—:
Eliminating intrusive banner ads
Evite’s business model, since its founding, had been to offer digital invitations largely for free, and make money selling banner ads that appeared when someone sent or received an invitation. Yeom eliminated most of those immediately and laid off the sales team that sold ad space on Evite to advertisers. Ads still account for about 20% of Evite’s revenues, but he plans to phase out all of them completely by the end of this year.
Laying off the sales team and giving up a main source of revenue were tough decisions, Yeom said, but he felt strongly that the banner ads detract from the Evite experience and brand.
“Our users put a lot of time and effort into selecting a beautiful design, and putting in the right content,” he said. “The last thing you want your guests to see is an ad. It takes away from the message you are trying to send.”
Attaching ads to free content was very much a Web 1.0, early-days-of-the-internet business model, Yeom said. “If you were creating Evite today in 2022, I don’t think that would be your first choice in terms of how you want to monetize it,” he said.
They were saying ‘Dave, you’re in for a big headache. We don’t know about this COVID thing,’ and, ‘How many turnarounds work? The odds are not in your favor.’ But I’m an entrepreneur. Yes, there [are] a million things that could go wrong. But I think, what if it goes right?
David Yeom, CEO, Evite
Adding affiliate marketing revenue: The strategy accounts now for half of Evite’s sales
Evite began adding affiliate marketing content to the site in the form of shopping lists for hosts organizing parties, or for guests looking to bring a gift to a party. If an Evite user clicks on a product featured in any of the lists, Evite receives an affiliate marketing fee.
Party hosts also can attach links to bridal registries or other gift registries to their Evite invitations, and purchases made from those links create affiliate revenue for Evite.
“One of our goals is to become the gift destination for folks, whatever the occasion,” Yeom said.
The company has also added ways for party guests to send gifts, such as gift cards or even crypto currency, from Evite, creating another potential revenue source.
Affiliate revenue now makes up about half of the company’s revenue.
Treating the pandemic as a time to start fresh
The steep drop in usage at the start of the pandemic gave Evite’s new owners a chance to make dramatic changes and test things while activity on the site was low.
“We looked at it as, ‘What a perfect opportunity,’” Yeom said. “If there was ever a time to do the things we wanted to do, this is it.”
Invest in design, content, and tech: Premium purchases now generate half of Evite’s sales
Yeom and his team dramatically upgraded the premium designs on the site, with the belief that a significant number of party hosts would pay for enhanced design and added features such as animation.
“We felt very confident that if we invested in having amazing design templates for users to select from, collaborating with artists, and adding things that inspire and dazzle our hosts, they will pay for that,” Yeom said.
Now, close to 10% of Evite hosts pay for premium designs, rather than use the free offerings. Premium purchases now account for the other half of Evite’s revenues.
Evite’s new owners also invested in technology to make the user experience easier and more flexible, bringing on Thanh Khuu, a Co-Founder with Yeom at Hollar, who joined Evite in 2021 as Chief Technology Officer.
Hosts can send Evite invitations by text, Slack, or social media link in addition to the original delivery method of email.
“Our fastest growing form of sending invitations is via social,” Yeom said. “People just copy the link and send it.”
Thinking globally: ‘It’s not just Americans that love to party’
For the first 24 years since its launch, Evite only operated in the United States. Now the company is planning to move into Canada and other English-speaking countries this year, and other foreign markets next year.
“Evite will finally become the global brand that it should have been. Because it’s not just Americans that love to party,” Yeom said.
‘The bets are working’
Before investing in Evite, Yeom heard from business friends who warned him against the purchase.
“They were saying ‘Dave, you’re in for a big headache. We don’t know about this COVID thing,’ and, ‘How many turnarounds work? The odds are not in your favor,’” he said.
“But I’m an entrepreneur,” Yeom said, “Yes, there [are] a million things that could go wrong. But I think, what if it goes right?”
“I’m very fortunate that things did go right,” he said. “The world did come back. People are coming together, people are celebrating, and the bets we made on changing the business model are working,” he said.
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Published July 25, 2022