Monetising personal digital data sparks interest in the Den 🐉 Dragons’ Den - BBC

Summary

Sam Jones, founder of Generate, pitches his innovative platform on a TV show, seeking £60,000 for 10% equity. Generate offers users two options: privacy mode to block online tracking or earning mode to share their data for rewards. The business model returns 80% of advertising revenue to users while retaining 20%. Competing with US companies that use cryptocurrency rewards, Generate has seen rapid growth. The pitch impresses multiple investors, leading to offers and a final deal of £60,000 for 10% equity, split between two investors, along with free office space. The successful pitch sets Generate up for future growth and market penetration.

Takeaways

• 😀 Sam Jones is the founder of Generate, seeking £60,000 for 10% equity.
• 🔍 Generate addresses the issue of data exploitation in the advertising industry by giving users control over their data.
• 🛡️ Users can choose 'Privacy Mode' to prevent companies from tracking them online.
• 💸 Alternatively, users can select 'Earning Mode' to share their data and earn points redeemable for rewards, vouchers, or charity donations.
• 📈 The average user earns between £5 and £25 per month in rewards and value.
• 💼 Generate's business model involves receiving revenue from advertisers and giving 80% back to users, retaining a 20% cut.
• 🍪 The platform does not use cookies but instead focuses on user consent for data sharing.
• 🚀 Generate has grown from 10,000 to 30,000 users within a year and aims to reach 1 million users in two years.
• 💼 There is a competitor in the US with a different approach, rewarding users with cryptocurrency, and a significantly larger user base.
• 💼 Investors are interested in Generate's potential for market penetration and its innovative business model, leading to multiple offers of full funding.
• 🏢 The pitch concludes with an agreement to share the deal at 5% each for two investors, including office space for the company.

Q & A

What is the name of the company founded by Sam Jones?

The company founded by Sam Jones is called 'Generate'.

How much equity is Sam Jones offering in return for the investment?

Sam Jones is offering 10% equity in return for the investment.

What is the main issue in the advertising industry that Sam Jones addresses?

Sam Jones addresses the issue of the advertising industry exploiting user data without their consent.

What are the two choices that Generate offers to its users?

Generate offers two choices to its users: 'Privacy Mode' to stop companies from tracking them online, and 'Earning Mode' where users can earn points by sharing their data.

How does a user earn points with Generate's Earning Mode?

Users earn points by sharing their interests with Generate, which then uses this information to tailor relevant advertisements for them.

What is the average reward a user can redeem per month according to the script?

The average user is redeeming between 5 and 25 pounds in rewards and value per month.

What percentage of the revenue does Generate give back to the user?

Generate gives 80% of the revenue back to the user and takes a 20% cut.

How does Generate differentiate itself from a similar company in the US?

Generate differentiates itself by not using cryptocurrency to reward users, unlike its US-based competitor.

What is the current market penetration of Generate's closest competitor?

The closest competitor to Generate has about six million users and is valued at approximately 135 million dollars.

What is Sam Jones's strategy for raising more money for Generate?

Sam Jones plans to discuss with existing shareholders the possibility of raising additional funds to increase market penetration and valuation.

How does Sam Jones respond to the potential threat of a large company like Google entering the market?

Sam Jones acknowledges the potential threat but points out that large companies like Google have not always capitalized on similar opportunities in the past, and he views them as a potential acquirer in the future.

Outlines

00:00

💡 Introduction to Generate: Empowering Data Ownership

Sam Jones, founder of Generate, introduces his company with a request for £60,000 in exchange for 10% equity. He addresses the secret of the advertising industry's exploitation of user data, tracking online behaviors, and selling this information. Generate offers two modes: 'Privacy Mode' to block companies from tracking users, and 'Earning Mode' where users can share their data to earn points redeemable for products, vouchers, or charity donations. The average user earns between £5 and £25 per month. The business model involves giving 80% of the revenue back to users, with Generate taking a 20% cut. Sam clarifies that their technology does not use cookies but instead allows users to control their data. The platform has been in development for a year and a half, with 10,000 weekly active users at the end of the soft launch year, growing to 30,000 users within the next year.

05:01

🐉 Investor Interest and Potential Partnerships

The investors express interest in Generate's business model, which they find clever and timely, as it aligns with growing consumer concerns about data privacy. They liken the model to individuals becoming their own affiliates, earning a commission from the data they share. The pitch's quality and the size of the market opportunity lead to multiple offers from investors. One investor offers the full £60,000 for 10% equity and additional office space for a year. Another investor is impressed by the potential for Generate to become a household name and offers the same terms. A third investor, acknowledging the company's potential but feeling unqualified to partner, declines to make an offer. The founder, Sam, is excited about the prospect of having influential investors on board, which could help scale the business and make it a well-known entity in the near future.

Keywords

💡Advertising Industry

The advertising industry encompasses all the companies and individuals who are involved in creating, planning, and managing advertising campaigns. In the video, the founder of Generate criticizes the industry for exploiting user data without consent, highlighting a common practice where online behaviors are tracked and analyzed to deliver targeted ads.

💡Data Exploitation

Data exploitation refers to the unethical or unauthorized use of personal data, often without the knowledge or consent of the individuals involved. The video discusses how the advertising industry tracks user behavior online and uses this information to serve personalized ads, which is a form of data exploitation that Generate aims to combat.

💡Privacy Mode

Privacy mode is a feature offered by Generate that prevents companies from tracking users online. It's a way for users to protect their data and maintain their privacy. In the context of the video, privacy mode is one of the two choices offered by Generate, allowing users to opt-out of data tracking.

💡Earning Mode

Earning mode is another feature of Generate that allows users to share their data in exchange for points that can be redeemed for products, vouchers, or donations to charity. This concept is central to the video's message, as it empowers users to monetize their own data rather than having it exploited by advertisers.

💡User Data

User data refers to any information that can be collected about individuals as they interact with online platforms and services. In the video, the founder argues for the right of users to control their data, either by preventing its collection through privacy mode or by earning from it in earning mode.

💡Cookies

Cookies are small data files stored on a user's computer by websites to track their activity and preferences. In the video, the founder explains how cookies are a common method for tracking users online and how Generate's software can prevent these trackers from being added.

💡Revenue Model

The revenue model refers to the way a company generates income. In the video, the founder of Generate explains that their revenue model involves giving 80% of the advertising revenue back to the users, with the company taking a 20% cut. This model is designed to incentivize users to share their data with Generate.

💡Market Penetration

Market penetration is the degree to which a product or service is known and used by its potential customers. The video discusses the potential for Generate to achieve significant market penetration, with the founder expressing optimism about reaching hundreds of thousands of users in the coming years.

💡Competitor

A competitor in this context refers to another company offering similar services or products. The video mentions a US-based company as a close competitor to Generate, with a key difference being the method of rewarding users (cryptocurrency vs. points for products or charity).

💡Investment

Investment in the video refers to the financial backing provided by the 'dragons' to the founder in exchange for equity in the company. The dragons express interest in investing in Generate, recognizing the potential of the business model and the market opportunity.

💡Data Monetization

Data monetization is the process of turning data into a revenue stream. The video's central theme revolves around data monetization, with Generate offering a platform that allows users to earn from their data, instead of having it exploited by advertisers.

Highlights

Sam Jones, founder of Generate, seeks £60,000 for 10% equity.

Generate aims to stop data exploitation in the advertising industry.

Users can choose between privacy mode or earning mode to share their data.

In earning mode, users earn points for sharing data, redeemable for products or charity donations.

Average user redeems £5-£25 in rewards per month.

Generate tailors online ads based on user interests when they choose to earn from their data.

80% of ad revenue is given back to users, with Generate taking a 20% cut.

Generate's platform prevents tracking cookies from being added.

The platform took a year and a half to build before soft launch.

Generate has 30,000 users, doubling from the previous year.

A US-based competitor rewards users with cryptocurrency.

Generate plans to reach 311,000 users by next year and 1 million the following year.

Sam is open to raising more capital to accelerate market capture.

Google could be a potential competitor or acquirer.

Investors praise the business model and offer all requested funds for 10% equity.

One investor offers additional office space for a year.

Sam successfully negotiates a shared deal with two investors at 5% each, including office space.

Sam expresses excitement about the potential for Generate to become a household name.

Transcripts

hello dragons my name's sam jones i'm

the founder of generate

and i'm here today to ask for 60 000

pounds in return

for 10 equity the open

secret within the advertising industry

is that it's built on exploiting our

data like when you mention something to

a friend

and the next thing you know you're being

bombarded with adverts for it

everything that we do online is being

tracked

to follow our movements and understand

our behavior

then they collect this information and

sell it

but i believe that people should have a

choice

to stop this from happening or even

better

to earn from it themselves

generate gives people two choices

privacy mode

this is where we stop all companies from

tracking them online

or number two earning mode in return

for sharing their data with us people

earn points

and they can redeem these points for

products vouchers or donations to

charity

and right now the average user is

redeeming between 5

and 25 pounds in rewards and value

per month when a person chooses to earn

from their data

they tell us what they're interested in

we then

use this information in order to tailor

all of the adverts that they see

anywhere online so that they are based

on their interests

generate has started a movement that

empowers people

and i hope that you'll come on the

journey with us very smooth pitch

i just like to understand in terms of

the business what is your revenue model

so everything that we do is about

empowering people to have control

and to be able to earn from their data

so we tell them that companies and

advertisers want to pay to show them

what they're interested in so if you

share your interests with us we'll be

able to target relevant advertising

we're very confident that we will be

able to drive

at least between 5 and 10 pounds per

user per month

our business model is that we give 80 of

the revenue back to the user and we take

a 20

cut and i assume

it's using cookies is that right when

you go on websites and then they track

you from that

no so that's what happens right now so a

cookie is one of

the best tricks in marketing cookie

means tracker so when you go to a

website and you see that annoying pop-up

where it says allow us to drop a cookie

on you if it really said allow us to

drop a tracker you'd say no

but actually what you should do next

time is click on the c vendor list

and you will see all of the companies

that you are allowing to track you

and on many of your favorite websites

the list

is literally hundreds and hundreds of

different companies

right now if you use the world's largest

search engine

and you want to stop them from tracking

you

it will take you 17 clicks to do so

if you know what you're doing if you

know what you're doing yes with your

software installed yeah does it prevent

it from adding a tracker or cookie onto

you

yes

how long has it taken you to build the

platform and how close to

finished is it so we spent

a full year and a half before we even

soft launched it last year

by the end of last year we had about 10

000 weekly active users

at this point this year we've got about

30 000 so we added 20 000 more

is there a competitor out there there's

a company in the us

who would be the closest to us the key

point of differentiation is that they

reward users with cryptocurrency

so what kind of market penetration have

they got

um they're valued at about 135 million

dollars

they have about six million users so

there's a hell of an opportunity there

will be a billion dollar business built

in this space

and it may be that the first one who

gets there wins it

sam i've been in the den for six years

this is one of the best pitches that

i've ever heard thank you

now tell me about your plans to raise

more money

because what i don't want is to invest

now

and find out in two weeks time i'm

diluted

so where we are right now with no more

um raising of capital

i believe we can end next year with 311

000 users and the following year with a

million however i think there could be a

good discussion to have with existing

shareholders

to say guys if we can add another zero

on the valuation

should we raise a couple of million quid

and go out and capture the market

what about someone like google coming

into this because

it's pretty much their technology they

could quite easily develop

a system whereby they monetize people by

allowing data to be shared

could that happen any startup that said

they weren't

slightly worried about google would

probably be lying they're a ten ton

gorilla that's for sure

but the refuge that i take is there was

a browser extension last year that was

acquired for four billion dollars from

paypal and what they did was they added

discount codes at checkout google could

have built that but they never did

similarly we see that there is an

enormous opportunity for us here

and i wouldn't rule out google as a

potential acquirer in the future

sam i think the business model is really

clever and

it kind of feels like individuals become

ultimately their own affiliate

and receive the line share of a

commission

that your business is ultimately going

to pay them so

i think it's really really interesting

and the timing of this is now

i actually think that generate could be

a movement

which is really saying something in the

market because that's when you get real

penetration

so i don't think you're going to be

surprised that the quality of your pitch

the size of the opportunity and the

excitement

has generated my interest

so much so that i'm going to offer you

all of the money all sixty thousand

pounds

for exactly what you've asked for for 10

of the business

thank you very much peter look i think

what you've created

is truly the one solution for the issue

that we have

you know i think i could help you with

raising money for this

with access to a huge number of tech

investors

so i'm going to make you the same offer

all of the money for 10

wow thank you very much

so sam this is about getting a message

out

this is about being trusted and i think

your timings

absolutely bang on in terms of

plugging into that concern that's

beginning to register in the back of

people's minds

and you add on top of that actually even

better than that i can earn some money

out of my data

so i i absolutely love it

and i'm going to offer you all of the

money the 10 of the business

thank you very much

[Music]

outstanding is the word i would use to

describe everything about

this pitch we've just seen and i knew

that you would be walking out of here

with an offer

i don't sit in this chair and pretend to

be the techie expert

and i'm sure i am not the best dragon to

partner with you on this venture

and it is only for that reason that i'm

not going to make you an offer

and i'm out sam

have you got offices

uh rental offices

how about pre-offices for you for a year

in my office

i'm gonna give you all the money sixty

thousand for ten percent

and offer you free accommodation up to

six

eight people per year okay

thank you very much

before um i think i'll definitely take a

moment if that's okay please take your

time

to the wall thank you very much

um thank you all so much this is

absolutely amazing to be in this

position

tsuka i love the enthusiasm and the

energy

that you clearly have for generate

and peter i know that you have

incredible expertise

in this space particularly when it comes

to scaling

would the two of you be willing to share

the deal at five percent each

with the offices included

i i would yeah yeah i think so

[Music]

it's a deal thank you very much

brilliant well done

really looking forward to working with

you an exquisite pit

brilliant business thank you

wow this is such a game changer to have

two

massive dragons on board just helps to

make sure that my business is a

household name in the near future

i've always been brought up by my

parents and i even teach my kids you've

got to have humility

not gloat but it's so difficult not to

gloat after that decision

who says free office space doesn't work

absolutely