I was able to have a longer conversation with Andrew Chapin, CEO of Benjacoin about his current ICO and future plans.
First I want to say congratulations on getting the new contract (with the NFL).
Thank you! We are very excited, we have all 28 of our vendors onboard to use a token based system. We thought that it would take some time to pitch them and get the commitments, but it was nice to get them early.
How will these companies purchase your token? Through Orderbook.io?
Yes, ultimately we think all the orders will go through Orderbook. We think that most of the orders will go through this month, but some will wait until they are actually able to use the token, but everyone is committed to be willing to use the token. So the actual amount they will be purchasing will vary by the vendor… and it’s also seasonal. The majority of our merchandise is activewear and sports gear, so for example, the NFL is trying to sell the majority of their stuff in the summer because their trying to offload a lot of last year’s inventory, as well as trying to get people to purchase new gear for the next season. But you also have some skiing and snowboarding brands which heavily display in winter. We think we will be able to track $12 million in revenue in 2018.
Outside of active wear, how do you see the platform growing?
That’s TBD. We have this sweet spot with active wear, we know the audience really well, we know where to find them. It’s also a great price point for us. A lot of the merchandise we sell retails for around $100 and we are able to sell it for 20-40% off. This is a really good price point for making a quick decision. Right now we are about to buy a bunch of inventory from Pinterest, which has a heavily female audience and an audience that is very interested in home décor items, so we are really interested to see how it goes.
Right now the Benja system is tied into your display ads, do you have a plan to expand to other forms of advertising?
The display unit is its own unique thing because of its interactive format and so the constraint there is that we have to negotiate each placement spot by spot, which is a constraint to growth. Though, there are a lot of other opportunities, we’ve talked to different mobile apps for integration, a puzzle game, where when you solve the ad’s puzzle you get access to a special deal, we’re talking to a Shopify app company called FOMO which does little pop in ads when you are on an ecommerce site. We’re really just getting creative. We’re not above doing traditional banner advertising, we would just need to find the right channel and the right way to present it.
What is further down the road for Benjacoin in the next 4-5 years?
We currently negotiate each of our advertising placements one by one, brick by brick, which is a big constraint. We’d like to make that as self-service as possible, and we’ll also look at ways to extend the network by helping a mobile app, like a game app, monetize those eyeballs. I think we have a way to maximize those impressions.
The API can be opened to other companies who want to use your system as well..
Yes, we didn’t specifically talk about that in the whitepaper, but its what we intended to do in the end of 2018 and 2019. We just have a lot on our development roadmap before we can get to there.
How did the company come about and how did the team come together?
I met my co-founder Tommy when we worked at an event tech company called Feathr. They used to make event and conference apps for large events and conferences. They would do they agendas, floor plans, and that sort of thing, but our secret sauce was that we did professional networking so we could tell you, ‘while you are at this conference, these are 5-10 influential people you should meet.’ I joined the company and about a year later the company had a great opportunity to pivot and execute a merger of sorts. A bit of a complicated deal that was great news for everybody and meant that Tommy and I were about to become free agents. When that happened, we had the opportunity to see what would come next or move on, and we decided to move on.
Some of the things we were working on at Feathr were personalization, data, and how we could use this to apply it to products we use every day to improve them. One of the ones we look at closely was Groupon. We were both regular users of Groupon and despite the fact that we had a 5 year purchase history, they were still trying to sell us photography lessons and things like that. So we saw an opportunity to work in the deal space to do personalization. One thing led to another and we started talking with big vendors like Nike about why they didn’t use Groupon. The issue was that there was a business model problem. Groupon takes a big commission, so we found a way around that.
We launched the Benjamin mobile app that offers personalized deals and 60 seconds to decide or pass. We tapped into some hot user experiences, bringing swipe right to buy, swipe left to pass to shopping, which people enjoy. This eventually led us to the advertising world, because we were looking for ways to acquire paid users and we kept on coming back to the idea that if we could just give people the mobile app experience, they would understand it. When I hand someone my phone with the app, it takes someone about two or three swipes to be like “oh okay, I get it.” There was no easy way to hand people the mobile app inside of an ad unit, so we went and built that. This ad turned out to be the real scalable business opportunity. In the past two years we have taken that ad unit and grew it into its own business.
Now we are this multi-platform merchandise ad network. We have two primary channels: one is the mobile app, the other is an online display ad, and we are working with top-tier brands like Patagonia and Nike to help them sell their stuff.
Great I hope the rest of your token sale goes ok and I will be looking forward to your development.
Great, thank you!