TIKI Investor Brief — Feb. ‘21
Users are signing up far faster than anticipated. In response to the demand, here’s our game plan and why to move even faster.
At TIKI, we believe in transparency. Instead of pitch decks, we’ve elected to publicize in detail our entire game plan. Give it a shot; it’s a quick read and certainly something different.
It won’t come as a shock to anyone. Data, particularly user data, is broken. With trust at an all-time low and privacy non-existent, our data is used to manipulate and exploit… us.
The world is changing. More people than ever are becoming are aware and upset with the seemingly careless and often predatory behavior companies take with their data.
This rising tension is causing companies and governments to react. You might’ve heard terms like GDPR, CCPA, or Privacy Shield; that’s just the start of more and more regulation. Apple has already come out with a strong stance against the unfortunately widespread practice of secretly tracking personal data, going so far as to effectively kill IDFAs. For those unfamiliar, IDFA stands for Identifier for Advertisers. It’s one of the main ways marketers track you across apps and websites, filling up your feed with ads for products you already bought. Google will have to follow suit, To marketers, it feels like the end of digital mobile advertising. To Facebook (and many others), it could mean significant losses in revenue and stock price. To users, this signifies change, a push back.
Massive markets, like the $80B/yr. mobile digital advertising market, have been up-ended. The business models that have propelled companies like Google, Facebook, and Amazon to trillions, are in question. In all this change, chaos, and yes, the worst word of them all disruption. There is a massive opportunity to create something special by putting users first, giving them control of their data.
The number 1 question we get is, how is it even possible? People in tech always ask, how are you going to get Facebook or Google to participate? People not in tech tend to lean towards, what can I even do? They already have all my data. The questions make sense too. It’s a long, arduous road full of failure and compromise to get the industry to adopt some new privacy process, software, blockchain, etc. And yes, “they” already have your data, or at least the big tech companies do.
We’re creating a data market where users sell their data direct to companies.
As the old saying goes, “we reserve the right to refuse service.” When the user is the seller, they a) get paid fairly and b) get to decide who can buy their data. If you’re a company, it’s getting harder and more expensive to acquire critical data. You’re also at the mercy of big tech companies, and for those who don’t know, they keep the good stuff for themselves. Instead, buy it straight from users for ethical, clean, and way more affordable data. Even buy data that was previously thought inaccessible, like a competitor’s.
Don’t worry if you’re feeling a little 🧐 . The idea of a data market is pretty abstract and kinda out there. Obviously, there’s no way users are going to open up their own little storefronts, being like, “Hey, come buy my data!” There are 3 parts to our solution. The first and most important:
1. USER EXPERIENCE
We as users want 1 simple app to easily (quickly) make decisions about our data. 1 place to see what data is being collected on you. 1 place to control your privacy, no digging thru the 80 apps with dozens of settings. 1 place to monetize your data, to get your fair share. An agnostic tool that turns the mess of data into a place where you can make an informed decision in seconds.
The amount of data collected on you (and sold) is astounding. In 2014 (basically, forever ago), Acxiom bragged about collecting, for sale, 5,000 data attributes per person for 700 million people. What do you think it’s at now? We create 2.5 quintillion bytes (18 zeros) a day, expected to grow a conservative 150x in the next five years. Legally, a lot of that data belongs to you, and even more, of it is about you.
While it may not feel like it, as users, we have rights to our data. It’s just buried in complicated laws, terms of service, and settings. It doesn’t have to be that way. We want to make it easy for you to decide how your data is used. The less time you spend in the app, the better. Set it one time, and TIKI will take care of the mess. Want to go completely anonymous and turn off all data sharing? We can help with that. Don’t like that apps are using your photos for training facial recognition AI or your location for ads? No problem, your data, your choices. It can be easy.
Think it’s wildly unrealistic to turn off all data sharing and anonymize the internet? You won’t get push back from us. The sharing of data is fundamental to the internet’s success. We just believe users deserve the ability to decide how their data is used.
Ads are not suddenly going to go away. A relevant ad is much better than the alternative. What’s unfair is that your data is used without your knowledge or consent. With TIKI, you can monetize your data by selling it directly to the companies you choose. No middlemen and big tech companies making decisions about your data for their profit. You get paid what you deserve. You decide who can use your data. A transparent market cleans up the mess. It holds companies accountable; else, they get cut off. It enables truly secure sharing of data, 100% anonymized.
2. SECURE PIPELINE
Every user has a ton of data in dozens of different applications, and the data itself is full of sensitive information. The pipeline connects and combines data from various sources to provide secure real-time insights to the data market. A key differentiator is that we do not store user data. There are 3 reasons for this, 1) privacy, security, and ultimately trust. It can’t leak if you don’t have it. 2) TIKI is not collecting and reselling user data. Instead, we enable users to sell their data to companies. 3) Cost. Not only is it risky, but it’s also very expensive to host, process, and store all of that data. Instead, we use edge computing (the TIKI app on your phone) to:
- Collect data from various APIs, like Facebook or Google
- Anonymize and filter down the collected data, for example, that I binged every episode of the Office last week.
- Delete all of our records of the original sensitive data. Don’t worry. This is only our copy. This process never affects the data in the originating app. Your IG photos won’t get deleted by us.
- Encrypt and transfer the new anonymous insights to the data market with the permissions of who can or can’t buy it attached.
3. DATA MARKET
A successful data market enables companies to purchase the data they need in the format best suited for their business. To us, this means 3 basic formats: subscribe, query, and report.
Subscribing to a data feed means a company will connect data thru TIKI, as it’s made available into their own application, possibly an ML training model, a CRM, or even their own data warehouse.
Querying data means a company can configure its own metrics, KPIs, and insights using simple searches, queries, filters, and chart building tools.
Data reporting consists of pre-built dashboards full of insights for common use cases, similar to how you may interact with your website or social media analytics. We anticipate that with strong use-cases, reporting will be the primary entry-point for companies into the TIKI ecosystem.
Our revenue is generated from facilitating the sale of user data to companies, and if you’ve made it this far, that part’s pretty obvious and conceptually straightforward. Instead, we will focus on the more unique aspects of the model, user data value, and some use cases that are getting companies very excited.
Unlike the typical data broker, we’re not collecting user’s data and reselling it. Instead, we facilitate the sale of users’ data to companies safely and securely per their preferences. For providing this service, we charge a 10% transaction fee to the company purchasing the data. Akin to how a payment processor (Stripe) or a credit card company (Visa) works. We believe this model affords us the following hyper-scalable benefits.
- Maximum payments, minimum costs. Users get paid the maximum amount of money for their data (100% of the sale), while companies minimize their costs by going straight to the source.
- Legal and Compliance. TIKI does not own the user data, store user data, and does not buy user data. TIKI simply makes it easy for users to sell their data to companies of their choice.
- Cost and margin. Because we are not aggregating raw user data, there aren’t any typical major infrastructure costs. The result is a scalable, high margin revenue stream. For example, if it costs $1 to facilitate a $10 transaction, it costs $10 to facilitate a $100 transaction.
We’ve already started seeing early benefits from this model. Instead of the traditional go-to-market strategy of launching in the United States or Europe and expanding, we’re going global from day 1. As you read this, users are signing up all over the world for TIKI.
When you ask, how much is user data really worth? You tend to get 1 of 2 answers… “it depends,” or “a lot.” Yes, both are true, but what matters more is how many companies buy the data. Social media companies, in particular, know this. They take each person’s data and use it to create targeted ad spots for millions of businesses. It’s a business of 1 to many where a single ad click can cost as little as $0.01. In 2020 Facebook’s ARPU (average revenue per user) alone topped $30 and digital ad spend as a whole exceeded $330B. Another $30B+ was spent on financial market data, $12B on audience data, and those are just a few of the data-driven markets. With 30M businesses in the US, Salesforce alone has 150,000 customers. The point of all this… there is nearly an endless number of companies reliant on user data.
Let’s walk thru a simple example:
Say all of your data in 2020 was worth $1 (obviously, very low).
Are there 1,000 business out of 30M that would pay $1 + a $0.10 transaction fee (10%) to purchase your data? Almost certainly.
$1 x 1,000 companies = $1,000 of revenue for you the user.
$1,000 * $0.10 transaction fee = $100 of revenue for TIKI.
1,000 companies buying data might sound like a lot until you start to look at a few of the use cases.
Over 5M companies use Google Analytics to collect demographic data on website visitors. It relies on cookies, a rapidly disappearing technology thanks to annoying popups, lawsuits, and more regulation. With user data, it does not require cookies, and you stay legally compliant, but it’s also a far richer set of insights.
Take content creators and influencers next. Over 500,000 influencers make money on Instagram, all reliant on the extremely minimal analytics provided by Facebook. It’s such a burgeoning market that there are hundreds of services using highly limited public data crawlers. With user data, they could actually understand their audience. This use of data is not a new concept either. We’ve all heard of the “Nielsen Ratings.” Nielsen is a publicly-traded company that did $6.5B in revenue last year by collecting data on what people watch and buy, then selling those results.
What about the millions of businesses reliant on distribution channels and big-box retailers? They don’t know who their customers are. Most rely on expensive product registration and warranty cards, of which 68% of consumers said they never filled out. Often the best data they get is some basic sell-thru numbers by geographic location.
Those are just a few existing use cases impacting millions of companies. I’ll leave you with just one new, unique use case made possible by TIKI. Buying competitor data. The example I often use is, Disney would pay a significant amount of money for users’ Netflix watch history, but Netflix would never sell it to them. However, as a Netflix user, I have no problem selling my data to Disney.
Do not read this as we’re taking on everything and anything, just that before long, there will be thousands of companies buying data thru TIKI. Right now, we need to stay focused on acquiring as many users as fast as possible and simple wide-breadth use cases. Remember $1/yr. from 1,000 companies = $1,000/yr. for a user.
We’re doing this differently. The way to fix this mess is to do it with the users. When I say with, I mean community, a revolution, together we can take back control of our data. We stand by 3 intertwined values, user-centric, trust, and transparency.
It may be an old cliche, “by the people, for the people,” but it comes across in everything we do. At TIKI, the user always comes first. I know it sounds disingenuous for a company to say the users come before profits, but that’s short-term thinking. A user-centric approach creates sustainable long-term growth. Next is trust. For this to work, it requires trust, a lot of it by both users and companies. Trust isn’t something you win; it’s earned or lost every day. Back when we were still roughing-out the idea of TIKI, I was talking to some Silicon Valley types. When asked what would be our “moat” (jargon for a competitive barrier to entry)? I said trust. They laughed or rather snickered. They may not believe trust is a barrier, but that’s because they destroyed everyone’s. This brings us to transparency, another word unfortunately bastardized by the business community. Maybe a better way to say it is radical transparency because we are doing it on a whole other level.
How do you build trust when there is none? Put everything out in the open. All code is open-sourced. Our roadmap, analytics, business model (scroll up), public, public, and public. This investor brief you’re reading, public. The norm is 10 slide pitch decks behind closed doors. No one puts their entire gameplan down on paper and then just posts it on the internet. People tell us we’re crazy, and we get it. It’s a radical approach, but we can’t hide anything if we want to be user-centric above all else. They’re our partners in this endeavor. If you want to build trust in a world without any, do what you say, and prove it.
So we’re different and rebellious, but what if the big guys decide they want in? They will want in. But like we’ve seen in the streaming wars, there’s room in the market for major players (Netflix, Disney, Apple, HBO, etc.) to come together in one unified user-centric experience (Roku).
The key to success is straightforward, get as many users as fast as possible and stay committed to user-centricity, trust, and transparency.
TIKI works if lots of people participate. Your data plus my data is mostly worthless, add in 9,998 others, and now it’s powerful. Clarity is important for rapid growth, a single KPI (key performance indicator). For us, it’s the number of users signed up. Those same Silicon Valley types from earlier, joking said, “let me know when you’ve got thousands of users,” knowing exactly how hard this part is, particularly without any money to spend.
You might’ve heard the term “Growth Hacking” before, it sounds obnoxious, but the concept is simple. Instead of spending all your time and money on one perfect ad campaign. Quickly try lots of different messages, mediums, channels, and strategies. Double down on the ones that worked stop the others, rinse and repeat.
Starting in Jan ’21, this resulted in 4,000 signups and we’re projecting to cross 10,000 by end of Feb ‘21.
Organic Content: Subreddits, blogs, Twitter, TikTok, Facebook, Instagram, direct email, LinkedIn, Discord, Telegram, Signal, and SEO.
Paid Ads: LinkedIn, TikTok, Twitter, Facebook, Instagram, Reddit, Quora, Google, Microsoft, Discord
Influencer Marketing: Instagram, TikTok, Twitter, Facebook
Organic Content: Twitter, TikTok, Instagram
Paid Ads: Facebook, Quora
Influencer Marketing: TikTok
We gained a few key insights from this data. First, the 2 large spikes are from our first TikTok influencer video. For February, we’ve made it a focused effort to do a lot more of this. Second, we found that Quora and Facebook paid ads resulted in the highest conversion rates, so we’ve focused our ad spend on those two channels.
In marketing, you’ll hear the term CAC which means customer acquisition cost, but this does not mean we “bought your signup 😝.” It’s a way to measure the effectiveness of marketing and sales programs. It’s simply calculated by taking the amount of money a company spends on a program and dividing it by how many new users/customers they get from it. This metric is crucial to us, given we’re personally funding TIKI and have a max budget of $4k/month. The lower our CAC is, the more users we can sign up for that same budget.
Our current CAC is $0.60. It’s extremely low and a testament to how excited users are all over the world. We’re acquiring users faster than we could have imagined.
We’re pre-revenue and focused on signing up users, not LTV (lifetime value) yet. For those interested, check out the section on our business model. We’re projecting to start at $10/user/month and ramping up to over $100/user/month. For TIKI, that’s $10, ramping up to $100 of ARR (annual recurring revenue).
While our focus must stay on acquiring users, users do expect to get paid for their data. For that to happen, we have to sign up companies to purchase their data. We’re very early in this process, starting at the end of January, once the first 10k users were within sight. Currently, we’re testing out value propositions and refining messaging.
You might be thinking, 10k users, don’t you need millions? Not exactly, depending on the use case. You might’ve heard the term “statistically significant” before. There’s a pretty simple formula to calculate the number of people needed to answer a question to predict a large group’s results accurately. It’s shockingly small.
With just 1,066 responses, you can accurately predict 1M people (95% confidence, 3% error).
Given this, we’re refining the use-case for real-time (near real-time) user sentiment. In short, this means companies being able to see across channels, what their customers liked, didn’t like, bought, didn’t buy, searched for, struggled with, and just about anything else. As a business, you could finally see the key drivers for acquiring new customers and retaining your existing ones. Early indicators show a ton of excitement and demand from companies, having pre-registered our first few. More to come as we start to dial in the process.
The plan is 100 companies pre-registered by the end of March ‘21.
A simple plan with key milestones immediately in front of us is up on our website. It’s a clear, aggressive path to success, and we expect our users to hold us to it.
While that’s great and shows operationally that we know what to do next to be successful, you’re probably thinking, how big does this thing get? You’re expecting to see some 3 or 5-year revenue projections, with investments, employees, the whole nine. We’re not there yet as a business, nor should we be. There is no crystal ball, and instead of a fancy excel sheet with tons of assumptions all but guaranteed to be wrong, here are the facts and how we think about our already exciting growth and long-term potential. You can make your own projections.
The market opportunity is simply trillions. You’ve got billions of people, and their user data is worth, on average, thousands of dollars per year.
At that size, TAM, SAM, SOM (total addressable market, serviceable addressable market, serviceable obtainable market) kinda lose their purpose. Instead, the question becomes how many users can you really get?
That depends entirely on our burn rate and CAC. With a CAC of $0.60 and a self-funded budget of $4k/month, we’re adding 6k new users per month.
You’ll notice two differences, 1) we’re staying focused on this year’s growth. We’re moving fast, at a rate of weeks and months, not years. The larger this year’s growth, the larger next year’s will be. 2) We’re electing not to tie revenue to user growth, yet. One day it will, but right now, growth comes before revenue.
If you did want to calculate an approximate MRR and breakeven, take the number of users and multiply it by $1 per month — 50k users ≈ $50k MRR. Assuming our team of 5, that puts us cash flow positive at around the same 50k inflection point.
Given all that, you might be wondering, why did I just read the longest investor brief for a pre-revenue company I’ve ever seen when they don’t need my money? And particularly, if you know us well, you know we’ve been hesitant to allow investors into TIKI. Even under the best intentions, money has a funny way of nudging things in certain directions, especially when you’re trying to figure out what works. You’ll never hear us say we’ve figured it all out, but we have figured out how to acquire tens of thousands of users.
We should accelerate. At our current burn rate of $4k/month we’ll hit 50k users in September. With $30k we could get there in March, with $600k we could get to 1 million users by the end of the year.
Thank you for making it all the way down here. We have a unique opportunity to build something really special. It’s what they call a moonshot, but you got to go in knowing the risks are very high, even for a tech startup. Pull it off, and you move the world.
Bio’s with fancy credentials are cool (mytiki.com/meet), but if TIKI really excites you, meet us (discord, telegram, signal). The team’s amazing, and I’m so proud of what we’ve been able to achieve in such a short period of time.
Together, we can take back control of our data.
Founder @ TIKI