Mister Beacon Episode #123
Turning Products into Platforms using NFCJanuary 19, 2021
The next time you a buy product, a purse or a pair of shoes, imagine the capabilities that could be unlocked if it were really a platform.
The purse could digitally verify its own authenticity, your shoes could seamlessly share the story of their design and origins. ‘Product to Platform’ is the transformation Blue Bite has been enabling: A new way of engaging customers throughout the entire product lifecycle to protect the brand, tell its story, and enable new product commerce opportunities.
Blue Bite plays in many industries and has worked with many notable brands like L’Oréal, Bulgari, Adidas, Moët Hennessy, and Samsung. They have helped these brands digitize their products with connecting technologies like QR codes and NFC, which are managed by their ‘Experience Studio’ platform. Tune in this week as we chat with Mikhail Damiani, CEO of Blue Bite, to hear about which applications are driving each of these technologies and the new experiences that Blue Bite is bringing to market.
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The Mr. Beacon Podcast is sponsored by Wiliot, scaling IoT with battery-free Bluetooth.
Steve Statler 00:16
Welcome to the Mr. Beacon Podcast. Very excited this week. I've got Mikhail Damiani, who's the CEO and Co-Founder of Blue Bite with me. Mikhail, thanks very much for joining us.
Mikhail Damiani 00:30
Thank you for having us, Steve. I appreciate it.
Steve Statler 00:34
I think you're, you know, this show, we've interviewed lots of different CEOs of startups, but you are kind of the head of an iconic Bluetooth beacon startup that is still around 14 years later, because you pivoted and adapted. So I would love to talk about, you know, why you did that what you pivoted to where you see this ecosystem that we're both in evolving. Maybe the best way to start this off, though, is just a level set. And have you introduce people to what Blue Bite is who you are now, and then we can talk a bit more about how you got there and where you're going?
Mikhail Damiani 01:20
Yeah, absolutely. And thanks, again, for having me. And, yeah, I mean, it's, it's been a long journey. A fun one, definitely an interesting one. So excited to dive into that. But Blue Bite, at its core is focused on connecting people with information through the physical world. And the reason why we do that is to basically deliver value to the end consumer, right, we want to improve life in some way, shape, or form, whether that's instilling trust, providing convenience, allowing people to make an impact, right. So what are those ultimate end values and benefits that a consumer can feel by engaging through a variety of different technologies, whether it's near field communication, or just scanning a QR code on a product. And so Blue Bite is a software platform that enables brands to manage that experience, if you will, and to create these personalized experiences that will tailor themselves over time based on the consumer journey. It allows them to measure that in real time. And again, ultimately, for the main benefit of delivering that value to the end consumer. And by doing so certainly, the brands realize a lot of value on their end, right in the form of increased loyalty, lower churn, more sales, you know, better authentication, things like that.
Steve Statler 02:41
So if there's like a couple of use cases that really are driving your business, what are the key applications that you're seeing taking off? And maybe I should start off with, you know, how is business? What do you what have you seen that trajectory, like over the 14 years of your company's history?
Mikhail Damiani 03:03
it's been a kind of slow and steady improvement, right in the business. And again, if you think about the way our businesses, there's a lot of different factors that play into that. Things ranging from handset compatibility with technologies, which is almost entirely outside of our control, right, and the only thing we can control there is education. And slowly over those 14 years, that has improved to a point where now in the past few years, and especially now is the first time in 14 years where you have some kind of standardization, right? People can scan QR codes with no apps, they can tap an NFC tag natively. Every phone has Bluetooth on it, right. So all of these things that over the years, you know, we've kind of seen hype cycles, and different technologies that have appeared disappeared, been on some Android devices, not others on iPhone, not on iPhone, that creates a big challenge when you're trying to now convince a brand or a company to say, hey, deploy this, but by the way, only 10% of your customers can use it the other 20 they have to do something else, the other 30 have to do something else, and then the remaining 60 do something completely else, 50 whatever the math adds up to date. And so that's been a huge challenge. And we're certainly at the best point we've ever been on that now and, you know, for the past year or so. So it's on one side, you know, on the sales side and kind of the business call it your your traditional metrics, we're, you know, doing better than ever, you know, it's crazy, because it's certainly not the best year and the year started off really challenging. You know, q1, q2, even part of q3, extremely challenging. A lot of the brands we work with within the fashion space and luxury space, you know, kind of closed budgets and said, Okay, well, we got to figure out where we stand before we invest into any new technology. And now we're seeing them at least the ones that are successful and we'll be okay. Starting to invest in kind of, you know, the next evolution of what that communication looks like between them and consumers and any digital means of doing so. And so we've seen a pretty significant increase in that over the past few months. So, you know, on the business side of the verticals, the lighting up then which, so this year, we've seen a lot of good traction in the CPG space. So that's food, beverage, beauty, wine and spirits, right? People need to need something to keep them sane after months of lockdown. You know, that vertical is done well, now, but even then, fashion apparel, like I said, they took a little bit of a break or a breather in the middle of the year, but now they're, they're coming back. Same with luxury. It's coming back. So you know, I think 2020 was a somewhat of a challenging year for a lot of businesses. And in those verticals, but 2021 looks like, like it should be, you know, a lot of returned customers and a lot of returns interest into especially doing what we're done.
Steve Statler 06:04
And what is it that you're doing? What are the use cases that are really fueling the most popular use cases that your platform is being used for?
Mikhail Damiani 06:12
Yeah, and that's changed, right, the kind of the mix of the use cases, or at least the you know, really, within each brand, I would say it's rarely one use case, it's usually a combination of kind of a primary driver, you have your secondary, tertiary. And it goes back to those value points that I mentioned before, right? As far as what does that that what is that? What is it that we want to deliver to the consumers. And so you have things like brand protection, right, which is authentication. And to the extent the brand has pretty high issues with counterfeit goods, we can help enable that security on their on their products through a combination of NFC and secure authentication in the cloud. In certain cases, blockchain if it makes sense for them. And that's, again, helps the brand, save money, you know, generate more revenue helps consumers to make sure that they're not getting ripped off and buying a counterfeit item. But typically, like that's a use case, that's a, you know, an entry point, once you've validated or authenticated an item, you really don't have to do that again in the future when you own it, right. But if you're going to go through the effort as a brand to invest into that technology, invest in the process and the platform, you might as well get your money's worth over time. And so the second big and this is kind of the broadest use cases, this idea of personalized storytelling. And so being able to deliver the appropriate information for a product in store, right, if I walk into a store, I scan a product, maybe I want to see transparency information, I want to see where the where the materials are sourced from, I want to see how it was made, maybe get a story about if it's an artist and product of how that product was made the person behind it, you know, and their story. And then after I take that product home, the experience will shift over time, maybe it's delivering me some kind of content or promotions or ideas or, you know, as you get to the end of life of the product. What do I do with the product? Right? Can I recycle it? Can I resell it? Can I upsell it. And so being able to be able to add that logic into the experience where it will change over time on its own to deliver that content to the user. So this is kind of the, you know, the broadest area in which in which Blue Bite lives and that idea of storytelling is very specific to each brand, right? They have different ideas about what that means. Commerce has been has been one that we started about two years ago, but I would say probably the fastest growing for 2020. And I think that's a natural kind of given based on the lack of physical sales, read channels, or at least the decline in physical sales channels for a lot of these brands and then looking elsewhere. So okay, well, how else can we connect with consumers? How else can we transact we have income, you know, social media, other types of venues or channels. So, you know, what we're saying is, okay, well, how about the product itself, right, you have this tangible, intimate connection between your consumer and yourself, the product is sitting in their homes, they're wearing it, they're touching it, yet, it's not currently being used to do anything other than deliver that functionality that the product was designed to do. Whereas we can layer now this whole digital layer on top of it, and you can use it as as you would any other channel. So Commerce has been a big one. And what does that look like? What does that really mean? Can you give me an example of commerce? Yeah, so an example of commerce would be if you have a pair of let's say Adidas shoes, and you scan you know, you scan that pair of shoes and say Oh, hey Steve, by the way, you know these Adidas you know, ultra boost running shoes that you have, they're great. You should buy this pair of joggers, right because it's goes perfectly with you know, your where you live with the climate outside. You know, these joggers are what we recommend to you. And by the way, because we know you own this pair of Adidas Ultra Boost will give you a, you know, 10% offer towards that purchase. So that's, that's kind of an upsell. Commerce can also look like peer to peer. So these days maybe a little bit less relevant because we're, you know, socially distancing, but in the days prior to social distancing, and post social distancing, you know, to the extent that come over your house and say, oh, Steve, wow, that's an awesome pair of ultraboost, you have, where'd you get them, so don't worry, just tap them, I could tap your shoe will, will recognize on our end that it's not you who's tapping, and my experience will be different. So hey, you like Steve shoes, click here to buy yourself a pair and ship them overnight or two days. And I would do that. And by doing so you would get some kind of credit for that for being an advocate of the brand.
Steve Statler 10:47
And so this implies going from putting these NFC, because you're talking about using NFC,
Mikhail Damiani 10:54
NFC, it could be a QR code, you know, we don't really care what the underlying technology ultimately is. It really depends on on the ultimate use case.
Steve Statler 11:04
But the use case, you know, whether it's NFC or a QR code, we're used to a lot of these technologies being on a disposable label that's used in store, but I think a lot of what you're describing implies that it's actually integrated into the product into the care label, or what's the story of how that's progressed? And where people putting these auto ID tags in the products?
Mikhail Damiani 11:30
Yeah, yeah. And to your point, again, obviously, if you if you put into something that's that's disposed of, then you're going to lack that continuous journey. And so it could be anything I mean, Adidas is making shoes with a QR code on the shoe tongue, they've been embedded NFC into the shoe, Tom. So it's stays with the shoe for the entire life of the product. We've seen brands put, you know, put them anywhere, I mean, we work with outerwear brands, I put them inside the sleeve, you can put a you know, like you said inside of the care label you can put inside there, ultimately, you want it to be extremely easy to interact with and easily accessible, where you don't have to take off the item to tap and where it's naturally located. But it's it's a progression, right, four or five years ago, brands weren't willing to go through the process of changing their factory process, changing their production process in order to add this in. And so the first hidden phases of testing were, in fact, either a hang tag or some kind of supplemental collateral that they would give just to test whether people were willing to interact with us, and people were willing to go through this effort. And now that's evolved to where they see yes, people are willing to do it, they're doing it at a higher rate than they are through other digital channels. And that justifies the investment, both from a capital standpoint and a human resource standpoint to alter the process or amend the process and to to add this functionality in there. So yeah, I mean, we're seeing a lot of seeing a lot of printed QR codes within CPG. And wine and spirits. We're seeing a lot of NFC in the lifestyle footwear and luxury space, right, because those items higher end, they stay with you for a while. And you know, typically the packaging, whether it's disposed of or not, is not something you have access to on a daily basis, right, you've taken it out, you've put it somewhere. And so in order to get that engagement, you really need to have the whatever technology built into the physical product
Steve Statler 13:24
People using washable NFC tags? I guess if you've got NFC and the tongue of the shoe, then you probably don't wash your shoes very often. But if it's in a NBA jersey or something, that thing's probably going to be pummeled 2550 times in its life.
Mikhail Damiani 13:42
Yeah, yeah. And they have all of that. So even in the shoe tongue, it's, it goes through wash testing and dryer commercial dryers, and were testing and, you know, gets tested by all sorts of robots that beat up the issues to make sure that it can withstand it. So, you know, luckily, I think there's been a lot of advancement made by the companies that produce these tags, whether it's NFC tags or print QR codes to make sure they don't you don't lose their their scannability over time, right, and then kind of retain that. So yeah, I mean, you have the washable wearable, you have on metal tags, right. So to the extent you're talking about something that is applied to a metal surface, then, you know, we have like appliances and things like that they have tags now that can be applied directly to metal, whereas a few years ago, that was a challenge because the metal would inhibit the NFC signal and basically would render the NFC tags useless. So I think there's been a good amount of progress made on the actual form factor side of things.
Steve Statler 14:41
What I find is, as an entrepreneur, you who's passionate, you tend to talk about a really broad set of use cases of all the things that are possible. But the thing that I think a lot of people want to know is okay, I understand the vision and I believe in the vision but where is it happening now, what is the thing that's really driving the volume? So and there's many dimensions that we could slice this by, so let's kind of go through them this QR code versus NFC. There's, you know, product type, you know, are we talking about tapping your coffeemaker versus your shoes versus think you've been involved in putting NFC tags and soccer balls and all sorts of things. So then there's the use cases. So let's start off with QR code versus NFC in terms of your business, how much of it is being driven by one versus the other? Would you say?
Mikhail Damiani 15:43
Yeah, that's a good question. I mean, we don't look at it that way. In terms of, you know, look at the market, it's not like we're going out and say we have, okay, we have a QR sales strategy or an NFC sales strategy, right for us. That same thing, to to URL, it's exactly, it's just that's part of the consideration set. Once you get to this, the second part of what is the use case? What is the product? Right? The ultimately the initial conversation is the same, it's okay, what is that value we want to deliver to the end user? And if the product is, you know, very inexpensive and you don't have the cogs budget to integrate NFC, okay, you probably will use QR, if there is no component of exclusivity or brand protection or authentication, okay, then you may not need NFC either, right? Or if it's a high value product, and you don't need authentication, but the aesthetics of the product, don't allow for any visual changes or amendments to the product, and you need it to be seamless and embedded and magic behind the logo. Okay, then, obviously, qR is not your go to. So I think it's, it's really a function of looking within a specific brand that we're working with to see that I mean, some brands do both NFC and qR, how do you train people to find the NFC tag? I mean, I remember back before I joined really, at Qualcomm, we had real challenges getting people to use their phones to tap something, and they didn't know where the radio was in the phone, and they tap the heel or the front bit. And then just, and I think in America, it was actually worse than Europe, because in Europe, then people were used to tapping for payments, it seems like the payments thing is educated people, but how do you solve the worldwide tap problem. So luckily, you know, Apple did a good job on that part, at least on iOS devices and standardized at the top. And so that makes it easier for Android, you know, you still lack standardization, it's typically in the back, but it could be towards the bottom of the phone, the top of the phone. So we've created a kind of a clever, you know, a clever way to showcase that basically where you go and, and we tell users, if it's an iPhone, you know, you tap at the top of the phone, like Apple Pay, if it's an Android, we asked users to slide their device on the back. Because that's the only, that's the only way we can, you know, we've been able to do it. But it's gotten better. I mean, the number of NFC interactions are triple digits, quarter over quarter continuously. The brands are doing a lot of this education for us, obviously, it's not up to Blue Bite to do it. So if a brand was coming out with it, they'll have it on their hangtags, they'll put it on in store signage, they'll put it inside E-com. And you know, and start educating people as to do that. And in terms of the tag itself, you know, again, now, because we've done this for so long, we have a lot of best practices that we give to brands from the beginning and say, Okay, here's what works, here's what doesn't work, your recommendations. And so then the brands aren't scratching their heads, you know, to kind of your earlier point of like, we can do anything, right. And that's, that's a terrible pitch when you walk into a brand, so you can do anything, the platform is amazing. You can do whatever you want. And go ahead and good luck. So I think we've learned the hard way that we need to be a lot more specific across each of those things, whether it's education and collateral, whether it's the use case and content, the KPIs and measurement and all of those, for each of those points. We have extensive best case, you know, best practices, extensive guidelines and experience that we leverage. And then we kind of just bring that into the conversation and give the brands more of more so of a menu or recommended list. And if they want something outside of that, or something different. Certainly we can do that. But at least I have a very good starting point.
Steve Statler 19:31
Yeah, I mean, politicians are really good at selling choice, but I think consumers actually don't like choice. It's like, you know, the thought of having 500 TV channels is just like, sickening to me. I want a few really good ones. And the Paradox of Choice is a real problem. And I think you're absolutely right from a solution selling point of view, then, you know, at least you give people something to react to, don't you if you have that prescription of what works well, and you can focus your marketing and so forth. So, okay, that makes sense. And then you say you said it doesn't really matter. But I'm gonna ask you again, because I grew up in England, and engineers tend to ask questions over and over again. What are you seeing in terms of the split between QR codes and NFC in the business?
Mikhail Damiani 20:33
So if I look at just consumer interactions, because I actually looked at that report earlier, we're probably about two thirds NFC will one third qR. Wow, that's completely the opposite of what I was expecting. And it was a year ago or two years ago. And again, that may change. And it changes, it can change pretty drastically depending on the rollouts that we do with which brands right, because we have conversation now that with brands where they want to put a QR code on, you know, 10 million beverage packages, right. And that's going to skew skew towards the QR side. And certainly we'll change that calculation a bit. So, you know, for us again, because we don't have a specific call it sales target, let's call it or sales strategy around, hey, let's go after businesses that only want NFC or businesses that want QR codes. It's it's a, it's shifts pretty often depending if you know, we have a big customer roll out with one technology or another.
Steve Statler 21:36
So what are the trends in terms of objects that are getting tagged? Would you say is there is there a pattern there?
Mikhail Damiani 21:43
Yes and no. So as far as industries, I would say we've seen this year specifically, as I mentioned before, CPG and wine and spirits, more so than any other of our verticals, at least right there's probably 25 verticals out there that are relevant, we focus only on four because that's all we can do with the resources that we currently have as far as a sales team and marketing team. But we are seeing a big comeback in demand from from the retail lifestyle, fashion and luxury space in q4 and moving into q1 of next year. But a lot of this year has been around CPG food beverage beauty and you know Wine and Spirits as well. And that's been a combination of qR NFC even within the same brand right there tagging some things with just qR some things with NFC may be a function of looking at your high value goods and tagging those with NFC and everything else is QR code is enough. And so that's why again it's it's a little bit hard to to break that down based on qR and NFC just because it's it's it's so widely variable.
Steve Statler 22:43
So in your wine and spirits business what what does that what are the use cases look like there because I remember going to AIPIA, can't remember that what the acronym stands for but basically advanced packaging, and seeing someone from Bacardi talking about tapping the phone on your bottle of rum and thinking, I just don't see people doing that. What's actually panning out? What What will people do with a phone and a bottle of booze? So they will tap it depending on what it is right? I think ultimately it's it's to your point with what are they going to get after they tap?
Mikhail Damiani 23:27
You know, is it a commercial from Bacardi and some kind of 32nd ad or 32nd? video? Okay, yeah, probably not. If it's something where authenticating inexpensive bottle, potentially, you know, we've done things around the holidays where you can gift it, right? So I tap it, I record a get a message, the next person who gets it that I gift it to I tap it, and I get a digital message. Right. So that's kind of gamifying a little bit rather than some kind of stagnant experience. What else have we seen, you know, we've seen stuff, we did a launch with a wine company in Europe where they did music, so you get playlists based on the wine from wine, so you know, kind of trigger different playlists. So that's a little bit of a different use case and interesting one we're working with. And I would say the Asia Pacific region, there's a lot of brand protection with wine and spirits, specifically as it relates to, you know, to some of the goods going to China, but I think wine in general is one of the most counterfeited items globally. The last stat I read was something around 17% or 18% of global wine is counterfeit. So it's just a huge, huge issue.
Steve Statler 24:40
That is fascinating. So just quickly, tell us a bit more about your platform. How, what, you don't spend a lot of time evangelizing the platform. I get it because marketing people don't really care how you do it. But how do you do it?
Mikhail Damiani 24:56
Yeah, I mean, it's true, and it's also something that we learned over time. coming in and telling people about our platform, and as you said, they don't really care as long as it works. And it does what, what they want it to do. But ultimately, it's it's a web based platform that brand owners can or brand managers can log into, they can drag and drop components to create these experiences, and really the ultimate, the ultimate value of the ultimate called secret sauce, you know, and what we're providing is the ability for those experiences to change dynamically on their own rather than a stagnant landing page. So if I was to say, okay, you know, every brand for every product, you basically have a landing page, right? You have a product page on E comm that you can go on and gives you the product information, some other stuff, potentially, you know, ideas of pairing that product with another one, and all of those pages look exactly the same, right, just switch out to a couple of the key assets in the CMS. But what if I was to say, Okay, well, now, I want you to create a unique experience for each of those, not just for each skew, or for each product, but for every single individual item produced as part of that skew. And not only that, I also want you to create a unique page for every single individual person who buys that product. Right, that would be good, not feasible, challenging, yeah, because he would need a million or 10 million or 100 million unique landing pages that are, you can't build in a traditional CMS. So the way our platform works is you actually create the components in there with logic, right. And so you define the logic to say, if this product is this color, this size, this season, and somebody taps it in New York versus, you know, la versus Miami. And they happen to have tapped the product before in the past week. And this is the third time they're typing this product, and they've signed up for our CRM, show them this piece of content. And you can keep adding these kind of Nestle this logic in there, where as the product is actually given to different people at different times in different locations. And they do different things within that product experience, the experience itself will change itself. And so what you wind up having is then this, basically unlimited number of possibilities, you know, or, you know, renders of that experience, given those different kinds of conditions. And so again, all of that's just driven by underlying logic and the software doing the work for you, rather than somebody trying to sit there and create a million unique landing pages, which would be, as I said, a very difficult task, let alone a boring one, it would.
Steve Statler 27:39
Well, unfortunately, we got to wrap it up. But I've got lots of questions I'd like to ask you. So maybe, let's let's check in again in a little bit. And we'll see how the industry's gone. And I want to talk more about how you navigated from beacons to what we've been talking about, which is a bit but it's been really interesting. Congratulations. Good luck. Thanks very much.
Mikhail Damiani 28:01
Thanks, Steve. I appreciate it. Yeah, I'd love to come back for round two.
Steve Statler 28:11
So you run Blue Bite? How did what's the founding story of the company? How it was like 13 years ago, right?
Mikhail Damiani 28:19
Yeah, it was officially, almost 14 years ago. So February of 2007. Which Yeah, I don't know how that happened. I was just thinking about it yesterday. But the the initial idea was actually started back in 2002. So you're talking about almost 20 years ago. And it's just really just a notion or a seed that was planted by one of our professors at NYU, who walked into a classroom, first semester of school and just mentioned, by the way, you know, this new phone that I have, it was a contact, you have Bluetooth on and I said, one, one day, you'll walk past a gap store, and you'll get a coupon on your phone, and you'll walk and redeem it. And at the time, it was kind of Yeah, cool, interesting. You know, we're busy thinking about what we're, you know, what we're doing that day, or what we're going to eat for lunch that day, first semester, college kids, but that kind of stuck in our heads. And so, after we graduated, I worked in finance for about a year and a half my friend Tom, who, you know, I've known since we were 12. He worked in finance, very briefly quit and then we started thinking of wacky ideas of things we can do together. And this was one of the things that popped back in our head and, you know, kind of asked ourselves is this possible? Seems like a good idea, right? proximity and kind of relevance and, and so growing up and going to school at NYU in New York. We kind of came into contact with a lot of the media that exists in New York. So every single street corner bus, shelter phone kiosk has available, you know, some kind of visual Either signage and outs, a lot of it is digital has been converted to digital video back in 2006 2007. You know, it's kind of a clear opportunity for us to say, Okay, how do we turn this physical stagnant signage into something that's interactive, measurable. And that's where Blue Bite was born plan words on Bluetooth technology, we used to install these big, kind of PlayStation sized Bluetooth units, as we call them transmitters. They need a power, they needed internet connectivity. And then you would, basically through the cloud preloaded with some kind of content. And as people walk past it, exactly as the professor mentioned, we can deliver them content. So at that time, it was couponing. It was wallpapers, ringtones, back when people used to pay 99 cents for those things. But we would do that on the basis of proximity to the Bluetooth transmitter. So it was kind of version 1.0, of location based marketing. And your co founder was a fellow student at NYU. Yes, he was a fellow student in high school and middle school. So I've known Tom since since we were 12 years old, 13 years old.
Steve Statler 31:12
Amazing. is some still part of the business.
Mikhail Damiani 31:15
Yeah, he's he's still involved, not on an active basis. So he's still involved. But he's, he moved on to other opportunities earlier this year. So still still involved, but not on a day to day basis.
Steve Statler 31:29
Right? And how did you figure out who was going to do what, in the early days,
Mikhail Damiani 31:37
we didn't really outline it so well, to be honest with you, we kind of just started doing, and things just fell into place by by doing right. So kind of started doing started some of the same stuff we were doing at the same time, because we needed to, and then just over time, it kind of worked out. And again, I think in our case, the benefit was that we had worked together at that point already for 10 years, right through high school and working on projects and classes together NYU, same thing. And so as I guess, an easier fit, because we knew our strengths and weaknesses. And so we just kind of continued doing what we were doing before just in a little bit of a different capacity.
Steve Statler 32:17
So that's pretty remarkable. So you basically got the idea in college, you did about three years of kind of normal jobs, and then suddenly creating your own company. And that's, and in the main part of the interview we're going to talk about, about that transition that you made. So what so what would you say is the secret to longevity? Because you definitely beat the the odds in terms of how long the company's been going?
Mikhail Damiani 32:52
Yeah. I don't mean craziness. Yeah. A little bit of that. Yeah, just kind of, I guess, belief that this underlying belief that what we're doing what we're working on is, is important. And it's not going anywhere, right, this whole idea of changing the way people interact with the physical world around them. That concept, that idea, I think we latched on to that pretty early on, and we've never let go. And things have changed, obviously, how we do that, whether it's Bluetooth, or NFC or QR, whatever that technology is, has changed. The types of things we enable from media, now we work a lot in the connected product space, that's changed, but the underlying concept of there's a better way to connect people to information and to in some way, shape or form, improve their lives, whether it's on a small scale or large scale, as part of that new way of consumption is really, I think, something that, you know, we've never let go of, you know, and no, just we just kept at it, right. I mean, there were certainly times when, for the first couple of years, you know, there's there's really very little demand for what we were doing. And in fact, it was the opposite. we'd walk and talk to a brand and then said, you guys are crazy. Why would we do this? And that was the case for the first couple of years. And I'd say the past four or five have gotten better. But honestly, it hasn't been up until maybe the past 12 months, where we've really seen some significant pickup and adoption of what we're doing. And so, you know, here we are, and what So what was your approach to funding? Was it bootstrap start off with or did you get an angel investor? Yeah, so we started in 2007. We bootstrapped it for about a year and a half. Actually longer than that, so we closed our first round in 2009. So if you remember, obviously, 2008 not the best time to be raising money after the market collapsed. That's exactly when we were out there trying to raise money. And so we raised our first round. Yeah, see But million bucks in 2009. And that lasted us for five years. So we bootstrapped it just to two of us, you know, we hired a third person hired a few more scaled back. And we've kind of bounced around for five years trying to figure out what really the play was. And then we started seeing a lot of pickup in 2012 2013, we started seeing the business pick up and we started seeing opportunities on the NFC side on the QR side, and then this whole idea and kind of world of connected product. And then we started raising more significant capital and in 2014, expanded the team from three to 24, which is where we're at now. And now we're, you know, seeing the opportunity that's big enough in the market has developed in a way where we can go out and raise a significant amount of capital to further kind of scale that growth and to support the growth that we're that we've been seeing. So I would say we've raised, you know, a decent amount of money, but certainly not what you see, as far as companies raising money these days, just because we kind of had to wait for the market to mature in a sense, in order to get, you know, to get the ROI on that investment. Because if we if we had invested 10 million bucks into sales and marketing five years ago, it would have done nothing for us, because the market wasn't ready to buy, consumers weren't ready to engage. And so most of the investment has went into product and engineering over the past few years up until now.
Steve Statler 36:25
And when you were thinking about founding the company, did you always want to set up a company? Was that part of it? Or was it just kind of a means to an end?
Mikhail Damiani 36:38
Yeah, I mean, I think, you know, kind of entrepreneurial spirit runs within, you know, within my family. You know, I don't think I left college with the idea of like, okay, one day, we're definitely going to start a company, right, and we talked about it. But that wasn't a clear path. And I liked my job in finance, I did investment banking on the west coast, I liked what I did, I was good at it. I think what convinced me to leave that come back to New York to start, this was just the size of the opportunity, I'm just, you know, the the scale and the possibility of what we can do here. And that idea of, Hey, we can create something out of nothing. And we can change something was appealing to me and how we did it in this case, you know, the means to an analyst who said was we're starting our own business, but it wasn't, you know, we didn't start the business, because we want to start a business, we started a business because we saw the opportunity, and now's the way we can take advantage of that opportunity to actually make these changes in the way people, you know, interact and consume information. And you mentioned kind of entrepreneurship in the family. Where did you inherit that from? What was the so I guess a couple of things. So I came here when I was in third grade from Russia. So you know, I immigrated with my, my family, my parents and my, my grandparents. My dad started his own company in in Chicago, my parents were divorced, my stepdad, he had his own businesses, you know, some in Russia some here and just kind of growing up. You know, I helped them a lot and like legal stuff, translating stuff from Russian to English. And so I got exposure to running a business interacting with people, legal stuff contracts pretty early on. And so I think a lot of that actually prepared me for the work that I then had to do.
Steve Statler 38:29
Right. Fascinating. So onto the music. What if you had to pick three songs to take on a very long trip, say to Mars, then what would? What would your choices be?
Mikhail Damiani 38:44
Yeah, I have a pretty eclectic mix on my on my phone. Yeah, we can spend a whole hour probably more than that on on just that alone. So let's start with I would say the first one would be and you probably never heard of this guy, but it's iron Sky is the name of the of the song. And it's by Paolo Nutini
Steve Statler 39:05
Okay, you're right.
Mikhail Damiani 39:09
Italian opera singer, but he's actually Scottish. So, yeah, so it's a it's a good song.You know, and I don't know how deep you want to get into, into let's get into
Steve Statler 39:26
Yeah, I wonder why.
Mikhail Damiani 39:28
Yeah, so you should I mean, I'm sure you'll listen to it after after we speak but you know, that one kind of speaks to me. Pretty powerful song. It makes you feel you know, kind of makes the hairs on your, on your arm stand up when you listen to it. But that one to me is all about kind of how much we rely on others to to affect change. I think you know, that's honest, I guess somewhat political, in nature, but in general, You know, whether it's you know, politicians, government, whatever, to me, it's more, you know, how much? How much do I rely on others to implement change or to impact change or to do other stuff? versus how much of that power is within ourselves to make sure that happen, right, for lack of a better term? So that's why I love that song.
Steve Statler 40:20
That's, that's an interesting topic, isn't it? Yeah, as an entrepreneur, you have to accept responsibility for everything, you know, you start blaming other people, then it's not gonna get you anywhere. It disempowers you, doesn't it. But the flip side is, you know, as human beings, hopefully we accept that, whether it's the genes we got, or the education we got, or the freedoms we enjoy, then that's, you know, that that has a factor in our ability to be successful you. I think immigrants feel that, particularly, you because you kind of have a sense of this place that you left in my case, I grew up in England and England in the 70s was not, you know, it was not the England today, and you basically stuck in your space, you didn't kind of upward progression was not encouraged. It was, and I look, you know, you look at the states, and it may be corny, but this ability to, to achieve that. And, and applause for success. It's, it's a factor in our success. So it certainly makes it
Mikhail Damiani 41:29
Yeah, I agree. The the underlying rationale for my family moving out of the Soviet Union in the early 90s. Yeah, same, same, same principle, same idea. And, yeah, I think, again, it was, especially when you have that backdrop of coming from a country like that, you have less confidence in government and kind of higher power to help. Right, it's, it's more up to you. But not to say, you know, to your point, obviously, there are other factors in that you can't do it alone. But it's To what extent do you expect, right and rely on that? And what's that balance?
Steve Statler 42:11
So number two, what's the second thing?
Mikhail Damiani 42:13
Number two out of here familiar with, Hotel California, by the Eagles?
Steve Statler 42:19
Is that to do with practice going to California as an athlete?
Mikhail Damiani 42:26
No, no, no, has nothing to do that I'm sure you know, that song has beenthought about and, you know, kind of analyzed in so many different ways of what it could possibly mean. And I think it means different things to different people. You know, for me, it kind of just reminds me of, you know, as we go through life, there are different things that pull us in, you know, and kind of that we get sucked into, and some of those good, some of those bad, you know, anything from I mean, a business idea, right? It's something you're kind of addicted to, you know, could be other addictions and vices or like I said, Good and good things as well. So that's what that reminds me of is just, you know how life is and you get pulled in and out of certain things. And some things suck even more than others.
Steve Statler 43:11
Yeah, it's funny how these it's a powerful motivator. It's, I think, entrepreneurs, they see a problem. They feel like this is the way it should be. This is the solution. And it's really, if I think that's why they get so passionate and maybe a little difficult to deal with sometimes, because they have this very firm view of the way it should be. And that's what propels them through rejection and all those other things.
Mikhail Damiani 43:38
Yeah, yeah. For sure.
Steve Statler 43:40
Let's so number three, what's the number three?
Mikhail Damiani 43:44
Running. It's a it's a posthumous album from Tupac and Allen is actually featuring Biggie. I don't know if you've heard about one, but it's a it's a good one.
Steve Statler 43:57
Yeah, I listened to it. I started listening to his music, mainly because I was wearing a kuji sweater in Portland, Oregon, once. We used to live there, we went back there for a weekend I went through a phase of collecting these sweaters. And no one has ever commented on the sweater other than maybe someone I'm kind of socializing with, but I'd be walking down the road and people would like high five I was like getting adulation. I'm like, I have no idea. I've never had this experience of wearing a sweater. And it turns out that it's a rapper thing. And Biggie was the guy that popularized it. And so now I can't wait to go back to Portland to wear my kouji because that's where you get the adulation. So you're, that's that's an interesting collection of music you got there. Thanks. Thanks very much for sharing it with us.