Russ: Hi I’m Russ Capper and this is BusinessMakers USA brought to you by Insperity, inspiring business performance. We’re in Ft. Lauderdale today and I’m pleased to have as my guest David Finkelstein, Co-Founder and CEO of BDEX. David welcome to the show.
David: Thank you Russ, great to be here.
Russ: You bet. Tell us about BDEX.
David: BDEX is essentially the single largest data exchange platform in the U.S. today. We hold about 600 billion data points about consumers; everything from their interests, their hobbies to basic demographics and what they like to do and what their interests are.
Russ: My goodness. Do you think my name is there somewhere?
David: I guarantee you it is.
Russ: Wow. So you said biggest in the United States; are there perhaps some like you bigger outside of the United States?
David: None that I know of.
Russ: Okay. So how old is the company?
David: We’re 3½ years old.
Russ: Wow, so still very young.
Russ: Did you have a background though in buying and selling data before BDEX?
David: My background is in internet in general. Since 1994 I’ve owned several internet companies. My previous company before this one was an internet advertising business and in running that business we tracked a lot of data about people. Websites that they went to and what their interests were based on those things and that’s really what led us to realize the real value that we had was the data and led us to start this business.
Russ: Okay and so is it kind of unique that you are actually a data exchange? You don’t own this massive data – you probably own some – but you’re between buyers and sellers of data right?
David: Yeah, that’s what makes us very unique; we’re a platform, sits in the middle between the buyers and sellers. Enables them to execute transactions and we layer on top of that some value added features that enable it to be more powerful.
Russ: Okay. But if you have a seller of data over here and you have a buyer over here and this buyer does a transaction, comes through you, do you get to keep also a copy of the data that he just bought?
David: Interestingly enough we’re holding all of the data in our database, so all of the sellers’ data exists in our platform.
David: Yeah, it all exists there already; doesn’t mean that we own it, we’re just holding it for the seller. And the purpose of holding it for the seller is so that we can make it instantly and readily available for the buyer in a very unique way, so enabling them – the buyer to not only buy that sellers data but five or ten other sellers’ data all in one query.
Russ: And so you’ve already said some big numbers but how many data records do you think you have today of one record; like my name, my address, my phone number, what I like to buy.
David: Sure, as far as records themselves it’s in the hundreds of millions. We track data based on at the consumer level but also at the device level; so whether you have data tied to an email address or a mobile device or a computer as well as to their postal records, so it depends on how you look at a record.
Russ: Okay. So we all talk these days and we know how much data Facebook has from our behavior there and how much data Google has accumulated over the years from Gmail and stuff; do companies like that use BDEX?
David: Not yet. A lot of those companies that you names like Facebook and Google they’re sort of walled gardens; they hold their data close. They don’t buy a lot of data externally. They control a lot of data where they track a lot about people but they don’t yet buy and sell their data. I use the word yet because I do believe that it will happen. Instead we work with a lot of large data companies that you may know like Acxiom and Neustar and Infogroup, but a lot of smaller niche companies that you might not know that are tracking what you’re doing on apps and websites and things like that; POS systems, everything.
Russ: Okay, so companies like these big data people like Acxiom before you came along they still did a lot of business, they sold a lot of data to buyers, they still do to this day but they also use BDEX?
David: We’ve become essentially a sales channel for companies like that. So while companies like Acxiom and Neustar and Infogroup they sell a lot of data right now; sometimes directly to companies if they’re large enough but mostly through online services, though advertising. Most of our data is not used to serve advertising, it’s more used for consumer marketing and lead generation and sales, so we’re really just another channel for them to generate revenue off of their data.
Russ: So my mind is just swimming with questions and opportunities and potential pitfalls. In the pitfalls where do you fall on the whole cyber security world? I mean it would not be good if you were hacked would it?
David: I’ll say the same thing everybody else says about their company, we take a lot of security measures. We use third parties actually to even try to hack into us to help find faults and things like that but even a company like Equifax can get hacked. The one thing I will say is that we’re also talking to some Blockchain companies about implementing a Blockchain technology to help secure data because we believe that the real future is enabling a technology like that to lock down consumer data so that one password can’t get you access to everything.
Russ: I would also assume since it’s so digital, so dynamic – you can be having a bad month and all of a sudden one day boom, completely turn around by some huge order that transacts. Is that accurate?
David: That’s 100% accurate. We get inquiries from very large companies and every once in a while we’ll have a large company come and say they need something huge and something huge happens. We’ve landed some very large contracts that way as well. Especially today with it being a growing interest of everyone trying to figure out how they can use data more intelligently, that’s really how we market ourselves is the ability to use data more intelligently. So it lends itself to large companies saying hey, do you have this and what can we do with it?
Russ: So being an exchange I guess you’re kind of always sort of looking for this balance between buyers and sellers. Maybe not; maybe you always have plenty of inventory so you want buyers, but how does that work?
David: Inventory honestly has always been the easy part, even before we were fully established we had companies coming to us saying that they liked our concept and they wanted to give us their inventory, even some of the biggest. Right now we are – essentially we went from 2 ½ years of a technology company building technology to very much now a sales company; because now the technology exists, the data exists and it’s about making sure that everyone knows who we are and how they can use the data.
Russ: So if you had a seller what happens is you don’t necessarily go buy their data to resell it, you just say yeah, I’ll have it here and you can send me buyers, I might find buyers too and the transaction occurs then.
David: Yeah and most of our sellers basically use our APIs to make their data continuously loading into our platform because the value of it is having access to new, current, fresh real-time data. Pretty much all of our sellers in our platform are constantly feeding us the latest data that they have to make sure that our buyers can get the most value out of it.
Russ: Okay, I know this is probably an unfair question but let’s say that I just identified the specific target data that I wanted and I needed a million records that were name, address, phone number, earnings capability, how many children they had and wanted a million records, what would I have to pay ballpark.
David: That’s a good question. So the data basically is priced, believe it or not, by the sellers right? We’re an exchange, I don’t set the prices. So what happens is it all depends on the data that you’re purchasing and the number of data points. Data typically, just to give you sort of an idea, is priced on a cost per thousand; so it’s like a cost per thousand pieces of data; data points or cpm. And it ranges, any data point can range through our system typically anywhere from a dollar to as much as $50 cpm. So it can add up. If you’re looking at 5, 6, 7, 10 different data points times $3 cpm you’re looking at $3 per thousand.
Russ: In the old days of direct mail when you bought data it was like based on onetime usage. Does is still work that way or is it since it’s all digital it doesn’t.
David: Nope. Again since it’s all digital, once you’ve bought it you own it.
Russ: And you can do whatever you want to.
David: And you can do whatever you want with it, but again the real value of our data is essentially that it is current and fresh. So what happens is you buy it, and are you going to use it again 6 months later? I don’t know; is it still current? Is it still fresh or do you need to refresh it? And typically that’s what happens. We sell most of our data on what we call a data as a service. And what that basically means is you’re subscribing to the data. You’re saying look, I want to know all of the people within a 20 mile radius of my car dealership that are in market to buy a new car and send me that data every day/week/month; I just want it continuously flowing right? Because you want to continuously want to sell cars right? So they pay a flat monthly fee and that data continues to flow in.
Russ: Do you have transactions where somebody buys data through your company and then they essentially enhance it because what they use it for gives them more information so they add fields to the database and then sell it back through BDEX again?
David: We actually have strict rules not to do that. You cannot essentially buy data through the platform and resell it back in to the platform. If you have data that is of value then sell that data, but essentially buying someone else’s and tacking yours onto it is not really the same.
Russ: Wow. It’s so a happening right now business, but where do you see yourself 5 years from now?
David: Ultimately BDEX intends to be the single source where all data is exchanged; all consumer data, just like you would think of stock market exchanges exchanging stocks.
Russ: Wow, fascinating. All right, well I really appreciate you sharing your story with us. I want to stay in touch with you too, it’s an interesting business.
David: My pleasure, absolutely.
Russ: Thank you.
David: Thank you very much.
Russ: You bet. And that wraps up my discussion with David Finkelstein, Co-Founder and CEO of BDEX. What’s the website?
David: It’s www.bdex.com. B – D – E – X.
Russ: All right, and this is BusinessMakers USA.
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