On Thursday, November 29th, 2012, OLC attended the NY Enterprise Technology Meetup to see four promising startups pitch their product: Namely, Dwolla, Vaultive and Badgeville all presented their platforms.
Alex Taub and Michael Schonfeld presented Dwolla. "We are going after a huge industry, the ACH, to be exact," Schonfeld said. The ACH, or the Automated Clearing House is a "$33 trillion industry. It's the biggest thin in America and our vision is to create an ideal payment network, a Mastercard for the 21st Century," he said.
Dwolla's driving force is this maxim: "Fundamentally, it makes no sense that money loses value when it exchanges hands." The developers at Dwolla believe that the payment procedure and the payments are broken. "There are a couple of reasons why we believe payments are broken," Schonfeld said. "First, it's hard to implement. Next, you need Legacy Support. Third, there is a big chance of fraud. It's easy to get defrauded using credit cards. Next, it requires massive infrastructure and bureaucracy. Finally, there are just fees after fees after fees that business and consumers have to deal with," he said. Schonfeld explained that there is a lot of cost involved because credit cards have interchange fees, which are a big deal in the overall scheme of things.
Fraud is a big obstacle in banking, especially regarding credit cards. "Credit cards," Schonfeld said, "the 16 digit card numbers go through so many stops to be processed. It's ridiculous. There's also sheer incompetency at some of these check stops. The credit card companies' solution is to create new features and in turn increase fees. This is wrong." In creating Dwolla, the development team considered these questions: on implementing certain features, would the users be able to have access to history — for example, would a Visa user be able to view all of their transactions on their multiple Visa credit cards in a Visa.com account? Would developers be able to access their accounts? Would users be able to block access to certain merchants? Schoenfeld did, however, say that Dwolla is subject to all of the rules and regulations that affect and rule over banks.
Dwolla's big pitch was to banish the interchange fees. "It's 3% of transactions, or .30 cents. That's over $48 billion a year," Schonfeld said. "The winners in this aren't the merchants or the consumers, it's Visa, Mastercard, American Express..." Alex Taub added that Dwolla is like PayPal except there is no "credit card in their system." Dwolla is essentially "a payment network without interchange fees because money should not lose value when it changes hands. We build Dwolla from the ground up and with strategic investors, we were able to ditch credit cards." Dwolla does charge for transactions over $10, but compared to banking services, it is extremely minute.
"We're trying to create a payment network," Taub said. "We're trying to build a financial institution. To do this, we built FISYNC from scratch. With FISYNC, banks can settle money in real time. This is an ACH alternative." Taub and Schonfeld revealed their investors: Veridian Credit Union, The Member's Group, Union Square Ventures, Thrine Capital, Village Ventures and Ashton Kutcher.
Namely, a cloud-based management platform that enables organizations to build teams and retain top performers pulls data from existing data from within the company was showcased by Matt Straz, the Namely CEO and Founder. Formerly involved in a media agency, Straz started Namely to solve problems specific to companies involved in service industries — media, tech, and so on. "Namely gives a solution," Straz said, "for businesses that are overwhelmed with different H/R solutions. It's difficult for them and we can help with UI or UX for these customers. We give them a clean interface to mange their companies."
Namely is organized into projects. It is also divided into teams. It can create teams that would otherwise be created in Excel and rather than the usual top-down charts, it arranges itself in a new way to engage with the user. Namely creates a visualization of the team using a web. It pulls in data dynamically through the company's system to get the information on the employees. Namely is data centric. It allows teams to be created very easily.
It allows the manager to see visually the cost and the performance of the team. Real-time calculations of wages and expenses of the team can be viewed on the screen. "For media and advertising firms that need to manage finance," Straz said, "Namely allows them to analyze easily how well the team is doing." Namely collects data to create a database of people within the company. It also identifies all of the employees' special skills. "It can track all of the teams the person has ever been on," Straz said. "It can look at performance and allocations. Namely can identify unutilized time and resources. It can track hires and departures." Ultimately aggregating data for all future hires.
Elad Yoran presented Vaultive, a provider of cloud data encryptions systems. "What Vaultive is about," Yoran said, "is ownership and control of data in cloud." Founded in 2009, Vaultive has its HQ in New York City, but has their R&D team based in Tel Aviv, Israel.
Yoran explained the idea behind ownership and control of data in cloud. He detailed the cloud service provider as having two functions: hosting and processing. "This is a pretty simple concept," he said. "All they need to do is patch, remove redundancy, and the like." As for end-user acquisition, Yoran said this is where it gets complicated. "There is ownership and control in end-user acquisition, but it breaks down even further. There's data security, disclosure, compliance, and data residency."
The risk of loss of control is real. "You put data in cloud, it's in someone's hand," Yoran said. "You don't know what's going to happen to it." He said that there are "end-user best practices" to avoid such loss. "Encrypt data before it gets to cloud," he said. "Use encryption at all times — at rest, in transit and in use. Your encryption keys should be retained by end-user organization. Don't ever give it out."
Vaultive's encryption uses Unicode text and not a real translation. It uses a mixture of Chinese and Korean and to the hacker, it looks like complete gibberish. "Vaultive's encryption is applied before data and it's transmitted over WAN and protects across the data's lifecycle," Yoran said. "The encryption maintains content characteristics allowing server-side retention."
Badgeville was presented by Omar Divina and Jim Coleman. Badgeville, "the behavior platform" powers engagement layers. "It is a lightweight enabling tech," Divina said. "The lack of engagement within a company and outside, hurts," he said. "Customers aren't loyal because there's a lot of competition and employees are underperforming. What you're getting from this is about 54 percent of your customers inactive in a loyalty program and about 88 percent of employees not interacting or using the company's social software."
Badgeville uses key elements for its behavior platform. It uses game mechanics to drive measure with "gamification," reputation mechanics to elevate user status and social mechanics to socialize and inform users about contextually rich behaviors. "Badgeville isn't really an app," Divina said, "it's really a platform." It uses flexible mechanics driven from key behaviors: Users become players and teams and their behaviors are rewarded through points or contents or missions or tracks. This is all accompanied by visualizations which consist of widgets and gear, leaderboards, activity feeds, notifications and analytics.
"Education has been a very good outlet for Badgeville," Coleman said. "It's helped drop failure rates at schools in the double digits." Badgeville is trying to change social behavior over time. It can deliver highly personalized programs to users and is entirely decision driven. It features in-depth control over setting up rewards and levels and can define rules to allow users to receive rewards.