Jay Singh co-founded ViralGains which is on Deloitte’s Fast 500 list of North America’s fastest growing tech companies. Still working on the marketing technology space, he has founded Clear Coin, a company hoping to apply distributed ledger technology to making digital advertising more accountable. He chose a token sale as a way of acquiring the resources needed to build his new company and seems to be off to a great start.
Jay Singh’s is the first Founder Focus interview on Angel Invest Boston. This new format is a response to the growing demand from founders to be on the podcast. The interviews are shorter and done via VOIP, allowing for more immediacy while still maintaining good sound quality. These Founder Focus episodes will launch concurrent with our regular podcast to offer listeners a broader choice. I hope you enjoy them.
Transcript of Jay Singh of ClearCoin
SAL DAHER: Hi, this is Sal Daher from the Angel Invest Boston Podcast and I'm really happy to welcome you to Founder Focus. It's a podcast where we speak with founders who are working on it right now. To set off our inaugural episode. I'm very happy to have with me today, I'm very honored, Jay Singh, co-founder of that rocket ship company, ViralGains. Welcome to Founder Focus, Jay.
JAY SINGH: Thank you, Sal, thank you for having me on Founder Focus today, it's good to be here. It's always been good to work with you and very excited to talk to you today and hear more.
SAL DAHER: Tremendous. Jay, how long has it been that we've known each other? It's been at least about four years, right?
JAY SINGH: It has been about four years and you were a very early investor in ViralGains alongside the Walnut Ventures folks who were very helpful. You know, Michael, Mark in there and Ralph Wagner and a number of people at Be Love. I think Walnut was a great investor in Viral and you guys all got in really early and we did that seed round which was a few million bucks. Like you said, that company is a rocket ship and it's growing and many more millions of dollars going into that company. Also, many Fortune 500 customers so definitely it's an enterprise company that did really well and, yeah, I think it was about four years ago when I first ran into you, actually maybe five years, honestly, I might have ran into you ...
SAL DAHER: Yeah, five. I think it was five.
JAY SINGH: Yeah. I might have ran into you in 2013 and I think it was during the Walnut Group and we met a lot of those guys, maybe Michael Mark and Joe Caruso.
SAL DAHER: Yeah, it was mid-2013, that time mid to late. Yeah, just a few years before, you and your co-founder had been in a dorm room at U Mass having Brand send you big checks for getting them to go viral, their videos to go viral on the web, which was a pretty amazing story.
JAY SINGH: That's very true, we had that dorm room start and that was Dan Levin and I. We both went to U Mass. I was at U Mass Amherst, he was at U Mass of Boston.
SAL DAHER: That's University of Massachusetts for those who don't know. It's the public University of Massachusetts.
JAY SINGH: Oh yeah, sure, sure. Absolutely, absolutely. We went to high school together, we met in Physics class and we worked on a project about Albert Einstein together. Yeah, yeah, it was about this thing called simultaneity, which is something about particles moving in tandem, something like that. I guess we were meant to ...
SAL DAHER: There's stuff happening in quantum physics right now, which is very exciting about that. Anyway, so now you're up in California and doing something entirely. Jay, please tell us about ClearCoin and what you're accomplishing with it.
JAY SINGH: Sure yeah. I've been in California a few years now and our new company Clear Coin is, it's off to a running start. We've raised about two million dollars and that is in progress. Well, we've already closed up the two million but that number could jump up, it could go to 10 million. We're in a very hot space, we're applying distributed ledger technology.
Just to clarify what that means, distributed ledgers are how digital currencies are tracking the accounting of where the currencies are moving. It creates a public ledger where people can see, okay, these transactions are going this way and it solved this thing called the double-spending problem.
We are applying distributed ledger technology to the media and advertising industry where it's estimated that 25% of budgets are susceptible to bots and fraud. Creating the analytics and doing quality checks for advertising and tracking it on a ledger is going to help large advertisers see where's the quality ad inventory coming from and where's the risky ad inventory coming from.
Since it's tamper-proof because all these ledgers, Bitcoin, Ethereum, they're all tamper-proof ledgers because they're running on different nodes. We're going to have nodes running alongside major advertising companies and the nodes are being updated to track the inventory and the quality of inventory. We've already started to get a lot of that big interest like I had with Viral, a lot of Fortune 500 type of interest already and people are latching on. They really like it and they want to see the continued growth and success of the project. It's a good time, it's a very good time for the company.
SAL DAHER: I can imagine, a very exciting time. Basically, the thought here is you are coming from your background in digital advertising and using social media, other aspects of modern media to basically promote the image of a company. You're updating that, applying a technology in a distributed ledger, which is a way basically to crowd source accountability because everybody has a copy of that. They can download the software and run it on their own, have their own node and everybody is what's going on so it's pretty open and accountable.
Technically speaking, how is it that you're going to make sure that there's not double counting on ad spends and that sort of thing?
JAY SINGH: When the ledger is public people are able to see which transaction happened and the quality of the transaction, in terms of the ad quality. One of the things that we do is we're working with a number of security companies that track for bot activity. What they do is they can track a number of different ways on, say, how the mouse is moving or the fingerprint of the device or how the browser is loading certain things. There's a certain number of factors that we can use, actually there's dozens and hundreds of factors that can track bot traffic and it can be marked off as low quality, inventory or high risk.
Sometimes it's not even the fault of the publisher, sometimes it's the fact that some rogue group has set up a bot farm. Sometimes there's low accountability because somebody can set up a bot farm and suck millions of dollars out of the industry. There was a case where I think some group of people had sucked out billions of dollars from the industry and then Proctor and Gamble recently said, "You know, we need to cut back our digital budgets a bit because we don't know how to track for what's going on."
The improvement of analytics and more reliable quality checks is an ongoing issue in the industry. They say it's a 20 billion dollar problem out of eighty billion dollars that being spent on digital ads so it's a pretty significant size problem to solve in a pretty significant industry. Marketing has always been with us from the beginning of time and it's a way to spread ideas around.
I believe that we've had great fund raising success off the bat is because people can see it's a real problem and there is an application for that distributed ledger to help solve the supply chain inefficiencies that are there.
SAL DAHER: Now, what is the vehicle that you're using for raising funds for this venture?
JAY SINGH: Clear Coin, the token, Clear Coin powers the distributed ledger. Take Ethereum. Ethereum has the ether token and the ether powers, they are distributed ledger. Every time you transact on that ledger you pay a little bit of ether, you'll pay two to $4 of ether and they call it the gas price because that's what's helping power that distributed ledger.
The Clear Coin token is designed to power the advertising distributed ledger and that is the means for fund raising right now. So far in this crowd sale we're up about 2.1 million dollars, which is a good start. We're expecting most of the funds to be coming in February and March so you'll get those updates as that moves on. The mechanism by which we're raising, it's a global crowd sale. As you've probably heard and many of your listeners have heard, there's been six billion dollars of ... In just one year there was six billion dollars of fund raising via what's known as token sales or sometimes known as ICOs but we use the phrase token sale but ICO is a phrase that's still in debate by people.
We use token sale because we're selling the token. We're not selling ownership in the company, we're actually selling ownership of the network but not the company.
SAL DAHER: A little bit like pre-paid services ...
JAY SINGH: Yes, yeah, that sounds pretty good.
SAL DAHER: ... Of a company. If you want to buy ads, if you want to have the ads be accountable, but if you put your supply of ads on the network and be accountable you can pay for the services of the network with the tokens that are being purchased. You're using the Ethereum chain?
JAY SINGH: Oh yes. We do use the Ethereum block chain to track the token. We've already had about four or 5,000 transactions on there. The good thing is it's publicly available so anybody can log in on Ether scan or Ether chain, they can see the transactions for the token. Now, for the ad ledger ... They work together but for the ad ledger we are working with Hyper Ledger which is a Linux Foundation project. Hyper Ledger Fabric allows us to have our own distributed ledger that is powered by nodes running at different places so it's a tamper-proof ledger.
That is going to be powered by the token so we're actually using two block chain technologies there to make this whole thing work. Technologies evolve so as the year goes on we continue to update people in the blog and let them know what the technological developments are, how we're developing it, and what the latest is.
SAL DAHER: What if someone was a bad player who was supplying ads to your network and they run an ad on your network which is encrypted onto your block chain. Then they also run the same ad elsewhere because all the ad supply is going to be on your block chain. How do you confront that problem?
JAY SINGH: Oh. If they're running things off of our network it would be up to them to have some sort of quality check in place. Now, we'd ideally want to become an industry standard, that's the ideal vision of the next years is becoming industry standard. There was a great ad analytics exit called Moat, it was almost a billion dollar exit to Oracle. They became a standard for viewability accreditation and viewability analytics and viewability is one part of the equation.
Now it's more than just viewability because viewability means did they see it or not. Now it's about, "Okay, was it a bot? Was it from a bot farm, was it non-human, was it real, was it not real, was it viewable?" That still matters too but there's a number of factors. Things are always evolving and Moat was great but now there's going to be new accreditation coming where you need to have a standard in place for the industry where they can say, "Okay, well there's this one ledger where we can see everything."
That's kind of where the market is, is for us to become the standard or at least one of the standards because there might end up being three or four standards, sometimes that's ...
SAL DAHER: Becoming one of the predominant standards in the industry and that sort of helps. Also, obviously you're screening the people who are providing the supply of ads into your system to make sure that it's not a shady player. Now, you said that you're using the scanner from Ethereum so does that make it accessible to someone who has the right software on their computer, could just see the transactions happening?
JAY SINGH: Sure. I mean, actually yeah. You know what? It can also be done via web browser so anybody, if they go to, say, Ether chain or Ether scan, and these are just websites so you just ... Ether scan, Ether chain, [inaudible 00:11:15]. There's a couple websites where people can see these ledgers being tracked publicly and then there's so many nodes confirming the transactions to show, they'll show 30 block confirmations and that's evidence enough to say that will have 30 different times it was confirmed, it's probably the real thing unless somebody spoofed it 30 times.
SAL DAHER: True.
JAY SINGH: These things are becoming very trusted and there's ways in place that it can't be spoofed and you can't get away with tampering with these ledgers. That's the beauty of it is we have this technology now that has made digital currency work. Block chain for supply chains is an ongoing market conversation with people. Is any supply chain, there's been a couple of ICOs. There is one ICO, it's a 200 million dollar ICO which handles the supply chain for certain agriculture, right?
SAL DAHER: Yes, yes.
JAY SINGH: The supply chain is one area where block chain is going to create new efficiencies and then there's the idea of smart contracts which can help cut out some middlemen. Again, it's not about cutting out jobs but it's about efficiency, right?
SAL DAHER: Also making it accountable to everybody so if you have the right code to read the transactions which pertain to you they're perfectly transparent. You can sit there and see them happening so there's no argument as to whether or not they happened. By the way, do you want to take the opportunity just to mention your website where people can learn more about what you're doing?
JAY SINGH: Yeah sure. If anybody wants to learn more, the website is clearcoin.co. We are getting the dot com but we're just closing our deal soon so, but we have the dot co so for now clearcoin.co. I always tell people to read up and make their own decision, I never ... I'll tell you what, I have not pitched one person on this yet, it's been all inbound. People have come and they have made their own decision that they're interested.
SAL DAHER: Well, it is always to be recommended to make your decision and to make due inquiry about things. We don't do investment recommendations in this podcast, this is a podcast about learning how people are building companies and also for me to learn how companies are built. It's not a podcast about how to get rich tomorrow, that's not what we do. I just wanted to say that, just to give a little color here, even in the podcasting world these bots can be quite surprising.
One particular episode of a podcast was expected to be a nice episode and do very well. All of a sudden there was just an enormous number of downloads happening very fast. They happened for just exactly four hours and it was a round number that they stopped. When they stopped it went back to the normal pace that I would expect. It's just like a step function, you could see it choom and then ...
JAY SINGH: That's strange.
SAL DAHER: Unbelievable. I contacted Libsyn which is the hosting company. Said, "No, everything looks normal." They were not able to detect this but if you look at the graph it's almost like a step function. Podcast downloads don't happen that way, it's very spiky. I'm pretty sure it was a bot. I don't know why someone would want to have a bot downloading this particular episode but these things are all over the place. I think there's a strong rationale for having protection against them.
Jay, on a lighter side, so compare and contrast life in California and life in good old Bean Town.
JAY SINGH: Boston's awesome. I was born and raised in Boston, I spent 25 years, we built a great company there. California is ... I'm also sort of a warm weather person so part of it was just a weather based decision, I'll just be honest. I spent time in Silicon Valley before but right now we're in Southern California, we're close to Los Angeles, we're here in Burbank which is often known as the media capital of the world so a lot of companies around us here such as Universal, Comcast, NBC, Nickelodeon, Disney. A lot of companies like that are in town.
Then of course you have Silicon Valley where you have some juggernauts. You got Apple and Facebook and Google and it's a very beautiful state but Boston is a very nice, beautiful, historic city. I continue to remain a Patriot's fan and I think they're both great. I just, I feel like I like where ... I have a tee shirt on today, it's 70. I do like that where I can focus on working and not de-icing the car and not where's my gloves and not, "Hey, I stepped in a puddle, now my sock is wet."
I just think that was sort of the motivation for me but every city has its advantages. I even heard that maybe Amazon was going to pick Boston for HQ too but I don't know if that ever resolved itself. I hope so. Well, we're in the top 20, I would expect that. I would expect us to be in the top four or whatever. There's no other place if I were Amazon. This is the place if you want to have really all the tech innovation.
Boston is an enormous exporter of innovation. Silicon Valley is a place where a lot of this stuff gets implemented but this is where this stuff comes from. Two-thirds of Boston startups get venture funding from outside of Boston, which to me means that it's, we're exporting huge amounts of ideas. If you're already on the West Coast the place to be on the East Coast is undoubtedly Boston. Anyway, Jay, you're a busy founder doing something really amazingly exciting. I don't want to keep you any longer than necessary.
Are there any parting thoughts you want to leave us with?
SAL DAHER: Yeah, I agree with you, the technical talent in Boston is incredible and I raised some money from Boston folks. Our co-founder or COO is in Boston so Tammy Kahn is in Boston. I know you know her too.
JAY SINGH: I've met Tammy. I watched her pitch at Walnut years ago and I hope to sit down with Tammy and interview her as well.
SAL DAHER: I think she wants to. She's going to come on in a couple months and she'll have an update about how Clear Coin did and she'll have the total fund raising amount, it'll probably be greater than it is now. We'll be building more and more announcements so we'll be in touch with you more.
JAY SINGH: It's going to be a busy first year for you because I guess after you raise the funds, you got to do the build out, you're going to be all out in that.
SAL DAHER: Yeah, it's going to be very busy. I mean, it's just going to be a busy, busy month, I mean, a busy, busy year.
JAY SINGH: Well, this is your second rodeo so you've seen it all before.
SAL DAHER: Yeah, this is the second rodeo, this is ... Yeah, I've definitely seen it before.
JAY SINGH: The growth that we've seen here has been a lot faster than I'm used ... And I've seen fast growth, Deloitte Fast 500. I mean, I've spent six years there. Starting in 2008 we had a company, Viral Media. I think that the growth here is very fast and we've brought on a number of team members really quickly and we kind of continue to do that. I like doing that, I'm a fast growth type of person.
JAY SINGH: Tremendous. Well, Jay, I'm very grateful you made time for your crazy, busy schedule to chat with us here and cold, chilly, but at least today's sunny Boston so thanks a lot.
SAL DAHER: Oh yeah, thanks so much. It's been good to be on and we'll be in touch with you more and stay aligned, all right.
JAY SINGH: Tremendous. This is Angel Invest Boston, Founder Focus. I'm glad that you joined us today, I'm Sal Daher.