How Bindle Systems Reached 200 Paying Clients and About 100,000 Wallet Installs with COVID Credential NFTs (Interview with Co-Founder Carlos Korten)

Introduction and What Bindle Does

Nathan Latka

00:00Hey, folks. My guest today is Carlos Korten. He's building a tool called joinbindle.com. It's COVID credentials as nonfungible tokens. Carlos, you ready to take us to the top?

Carlos Korten

00:09>> Let's go.

Nathan Latka

00:10Alright. So explain this to someone that has no idea what a what fungible means or a token means or what an NFT is.

Explaining NFTs and Health Credentials

Carlos Korten

00:15>> Yeah. So so this is derivative technology from from cryptocurrency. Right? So you can buy Bitcoin. You can buy Ethereum, but it doesn't have to be money. It could be other things. It could be documents. And in the case of what Bindle is doing, we've decided to take health credentials like vaccine records and test results, turn them into tokens that you can carry around on your phone that are cryptographic assets that are encoded that are yours that

How the Rules Engine and Zero Knowledge Proof Work

Carlos Korten

00:43>> you can carry as as permanent assets. And then we've got a rules engine that sits on top of that. And let's say you wanna go to a movie theater, you wanna go to a show, the venue's gonna have some sort of rule by which they're gonna allow people to come in. And what our rules engine will do or it does today is it scans through your wallet to find tokens that meet their criteria. So if they

01:07>> say, hey. You need to have been vaccinated or you need to have been tested in the last two days and come back negative, It's gonna look for the tokens that meet and then create what we call a zero knowledge proof, which is a cryptographic entry pass that says this person's good.

Nathan Latka

01:21Mhmm.

Carlos Korten

01:22>> And what's great is the venue can then look at that without actually taking any medical data and know that this person's safe to answer. Mhmm.

Token Issuance and Trust Hierarchy

Nathan Latka

01:29Who's who's issuing that token? Why couldn't Joe Schmo in his basement in Kentucky just act like a health care provider and give a sell a bunch of these tokens, like vaccinated tokens to a bunch of people online?

Carlos Korten

01:39>> Totally. So so the answer is Joe Schmo can create his own tokens, but it's up to, like, the venue whether they wanna accept those tokens. Right? So, typically and the best tokens you can get are gonna be issued by the state of California, issued by the state of New York. And there are verified credentials that are out there that you can ingest into Bindle, and that stuff becomes part of your your Bindle wallet. And then those

02:04>> things can be presented as proof. If you live in a jurisdiction where that's not available, CVS Health is actually also creating verified credentials in Walmart and a bunch of other administrators. But if you don't have access to that, you can do a self attestation, and it might get you into your your yoga studio, but it might not get you into the Kennedy Center, for example. So so we handle each of those scenarios, and then it's really

02:29>> up to the venue themselves to decide, hey. Which of these things is, you know, meets the, you know, the criteria of of what we think is is appropriate? Challenge that

Go-to-Market Challenge: Competing with Paper Cards

Nathan Latka

02:41I have thinking through a business model like this like, your biggest competition in my opinion is, like, I was just up in New York last week. And every venue, it was it was show me your your vaccine card and your thing. And I it was just a system. I just carried my passport with me. I had the vaccine card taped inside right above my ID, and I would just open my passport. Boom. It took two seconds

02:57to get in. It's not a ton of pain. So, like, I how

Carlos Korten

03:01>> do you commit That's fair.

Nathan Latka

03:02How do you commit someone like me to, like, go learn what a token is and a wallet is and, like, get all my health care providers to use it and then get all my Walmarts and the local and the star local Starbucks to use it so I can get in and out? How do you do all that?

Rapid Ingress and Large Venue Use Cases

Carlos Korten

03:13>> Yeah. I think it's tricky because I do think that it's really convenient just to show your paper card, your CDC card. Right? Hey. I've been vaccinated, and that's easy, and it's universally accepted. I think where it gets tricky is where where you're trying to seat 10,000 people into a stadium, and you've got people that need to be kinda going through this stuff with volume. And you've got people that were vaccinated in Europe. You got people that

03:37>> were vaccinated that had different kinds of credentials. If you don't have some sort of mechanism to get the line moving and get people in and out, it's gonna bog down. And so we're spending a lot of time talking about rapid ingress types of solutions, universal scanning, where it's a single scan and it can read credentials from around the world. And then also, you know, you know, the I think the nature of what we've learned about the

04:05>> pandemic over the last year is it keeps changing, and the rules of it keep changing. Like, in what the epidemiologists say is critical and not critical, like, how long is a vaccine good for? Like, the science is constantly changing. The opinion is changing. So, you know, now we've got a booster. How do you accommodate that operationally into, you know, safe safe business practice? And the answer is it's a lot easier if you've got a if you

04:32>> got a system that's running on pivot.

Nathan Latka

04:33Ross, I don't disagree with any of that statement that you just made. I the tech to me makes perfect sense. Where I think something like this, like, dies or doesn't work is go to market. Right? So, like, how do you convince FedEx Field in Landover, Maryland where the Washington football team plays to announce ahead of the game that you must bring your Bindle wallet on your phone and show it at the entry. They're never gonna do

04:53that because it's gonna kill ticket sales.

Carlos Korten

04:55>> So and, you know, I think that the society is still normalizing on what is right and what's appropriate and what's what's what's suitable and what's safe. And and it keeps changing. And so we don't really know. And in terms of, like, you know, are are the you know, is is we've been talking to specific NFL teams and to NBA teams and and and major league baseball, and they're and they say things like, hey. If if the

Whether Fans Will Adopt It

Carlos Korten

05:22>> pandemic gets worse, we're just gonna stop. Right? And and we think that there's a middle space, right, where you can be responsible and and and deliberate. And if someone's not willing to download an app and do this in terms of digital registry, then, you know, they may just be watching a game from home. And and, you know, that's I think I think that's just very that's fair and reasonable. I will say that this is

Nathan Latka

05:50I mean, my dad, by the way, is is 80, 81 years old. He goes to football games at Landover, Maryland to watch watching football team. He doesn't even have an iPhone. He doesn't know how to text. So, like, this wouldn't even be, like this is what I'm saying. Like, this is It's tough.

Carlos Korten

06:03>> It's a tough one for him.

Nathan Latka

06:04Totally. But, like, this is the risk that FedEx Field has if they ever made an announcement that said you need your Bindle wallet to enter. Right? They're just it's gonna just gonna kill someone. They'll have five people sitting in the stadium. How do you how do you deal with the marketplace issue?

Coexistence with Paper and the Clear Comparison

Carlos Korten

06:18>> We we think that we think that the Bindle solution needs to coexist with paper, like, for as long as we can imagine. Right? I don't I don't think that this solution will displace paper. I think it's gonna be a little bit like, hey. There's gonna be a fast lane for Bindle, and then you got your slow lane for paper. And I think that more sense.

Nathan Latka

06:35That makes more sense to me. It's more like it's more like what's the airport one? It's, like, clear, I think.

Carlos Korten

06:40>> Yep. Yeah. Yeah. For the airport security type stuff, which is like, hey. If you wanna get through faster, you're prechecked. You can go right in and, you know, just flash your your Bindle, your identity, and and and and your man.

Who Pays: The Verifier Revenue Model

Nathan Latka

06:54So who's paying you then? Is it JCM Analytics or Daybreak, or is it more like the envoys or the employers, courts, Pretty Bird, etcetera?

Carlos Korten

07:01>> It's different in every case, but it is on balance. The verifiers are the ones that are paying for this service.

Nathan Latka

07:06The verifier. So who is that? Courts, the employer who won't let employees in the office unless they have

Carlos Korten

07:10>> It's the employer themselves or it's the venue that's, you know, that's hosting the show. So, yeah, those are the ones that are that are paying for the service.

Pricing: The 10 Cents Per Scan Benchmark

Nathan Latka

07:21And then

Carlos Korten

07:21>> are What do they pay you

Nathan Latka

07:22then on average per month to use the technology?

Carlos Korten

07:26>> It's different in different verticals, but as a benchmark, we shoot for something on the order of 10¢ per scan. So 10¢ per scan. Okay. Yeah. And, you know, I think, you know, like, industry benchmarks are, like, dollars per, you know, dollars per seat. Right? Like, dollars per seat. And so we just feel like it we the price point should be much lower. So

Nathan Latka

07:49>> yeah.

07:49Well, so you when you look at your customers today and you count, like, on average, how many scans are doing per month, how many scans are they

07:54doing per month on average?

Carlos Korten

07:56>> Right now, I think we're doing a couple thousand a month, and I don't have the fresh data. But That's total.

Wallet Installs and States

Carlos Korten

08:06>> Okay. We have, I think, not short of a 100,000 wallets installed, and and we're operating in 30 states in The US and then, I think, two or three Canadian provinces.

Nathan Latka

08:17Okay. So, I mean, 10¢ a scan. And let's say you're doing 4,000 scans a month, right, times 10¢. So you're you're early. You're doing, like, 4 or $500 a month in revenue right now.

Carlos Korten

08:24>> Early. Yeah. And I think that we're still discovering the revenue model. I think the pricing model continues to reveal itself to us. Like, we're still like, we're learning right now in terms of what utilization rates are gonna be at large events, public events, closed events, you know, you know, at weddings, at, you know, at celebrations. These are one time private events where people are looking for for some sort of reassurance that it's it's gonna be safe

08:52>> for my my elderly aunt to attend, and they want to have some sort of assurance that that there's some protocols in place.

How Many Paying Customers

Nathan Latka

09:00And, Carlos, how many customers do you have that did at least one scan in October?

Carlos Korten

09:06>> Jeez. I should've I should've I should've looked at more closely at our volumetrics. In October,

09:14>> We set our new high in October.

Nathan Latka

09:17I'm just trying to get into how many customers you're working with who are actually paying something.

Carlos Korten

09:21>> Oh, like, we've got, like, we've got 200 active clients right now.

Nathan Latka

09:26How do you define active, though?

Carlos Korten

09:28>> So paying, like, invoice clients in the month of October.

Nathan Latka

09:31So there were 200 in October that did at least one scan and paid you at least a 10¢ invoice.

Carlos Korten

09:36>> At least 10¢. Yeah.

Company Founding and First Release

Nathan Latka

09:37Yeah. Fair. Fair. This is great. Okay. So you have some momentum here. When did you first, like, write the first line of code for this? What year?

Carlos Korten

09:44>> So, you know, a lot of this technology has its origins in, you know, pre pandemic stuff. We were talking about digital identity and cryptography and stuff back in 2018. So we were playing with the technology. And then when the pandemic hit in 2020 and started becoming meaningful, the company was founded in June 2020. And and we had our first release in August 2020. So Okay. Yeah.

Fundraising: Angels and Pre-Seed Round

Nathan Latka

10:12And bootstrapped the date, or did you raise capital?

Carlos Korten

10:15>> No. We raised capital. Our CEO comes out of Samsung Global Ventures and has a, you know, has really strong VC background. And right now, we've been raising through angel investors, private private investors. We haven't raised a series a. I think we're working to that now.

Nathan Latka

10:35So you already closed your your seed or pre seed or no? It's still open?

Carlos Korten

10:38>> It's still open. Yeah. We still have our we still yeah. We're still working in a seed context. It's all it's all pre series And

Nathan Latka

10:47Got it. And when you say angels, you're talking like 100,000, 200,000 sort of deal?

Carlos Korten

10:51>> Yeah. $50,000 checks, $100,000 checks that we're looking at. Yep.

Nathan Latka

10:55Yep. Yep. That makes sense. And and why do you need capital to scale this? Why can't you fund from customers? Like, what's the engineering heavy lifting that has to happen here?

Carlos Korten

11:02>> Yeah. I mean, there's a lot of blockchain stuff, right, in the data management, and there's new feature function that we're constantly looking at. Like, we we know that we need a solution to handle minors. So, you know, like children, and the children's vaccine records is distinct from their parents' records. That's infrastructure that we know we need to build. We wanna build out our institutional infrastructure as well for return to work and those types of use cases

11:29>> to have, you know, better reporting and and and better throughput. And a lot of this investment is into digital identity networks, which are more generalized than pandemic or health records. This is stuff that we could we could be doing, digital ticketing. We could be doing academic records. We could be doing voter registration on on a lot of the same rails that we're using health credentials for. So I think that becomes really interesting in terms of future

11:58>> proofing a lot of our investment. We actually think that, like, tokenizing data in these decentralized types of networks has got a lot of legs that'll that'll, you know, that'll be the next decade worth of growth. Yeah.

Nathan Latka

12:11Yep. So so moving forward, tell me more about the team. You're so you're are you one of the founding members? Do you have equity?

Team Size, Six Co-Founders, and Equity Split

Carlos Korten

12:15>> Yep. Yeah. I'm one of the founding members. There were six cofounders.

Nathan Latka

12:19Six cofounders. You get nothing done with six cofounders.

Carlos Korten

12:23>> I disagree. I think it's worked out really well.

Nathan Latka

12:25Who the hell makes the decisions?

Carlos Korten

12:27>> We yell at each other a lot, but I think it's a very constructive yelling. What's what makes it work is that the six of us have perpendicular skills, very perpendicular skills. So

Nathan Latka

12:36Did you split equity evenly amongst all six?

Carlos Korten

12:39>> Yep. Makes it easy. Makes the math easy. Yeah.

Nathan Latka

12:42Wow. Okay. So everyone owns basically, like, 15, 15.3%, something like that.

Carlos Korten

12:47>> Roughly. And, of course, it's been diluted since then. Right? So

Nathan Latka

12:50Yeah. Yeah. Interesting. So how many are you total today then? Obviously, six plus any full timers?

Carlos Korten

12:55>> Yeah. I think we're on the order of 15 full time, I think, right now. And then, of course, we've got we've got an engineering team. We've got a design team. And

Burn and Being Pre-Revenue

Nathan Latka

13:06I I mean, Carlos, this is a lot of expense. This is a this is a lot of employees for basically a pre revenue company. How do you think about burn? I mean, you guys are operating right on the right on the edge.

Carlos Korten

13:15>> Yeah. The burn is the burn is very high for the the the the maturity of the company, but we're punching way above our weight class and and competing with really highly capitalized Who?

13:27>> Companies.

Competitive Landscape: Clear and IBM

Nathan Latka

13:28Your biggest competitor?

Carlos Korten

13:29>> We talk about you mentioned Clear, the airport security company. They're doing a lot of health credentials type business and and competing for the NFL teams that we're talking to as well. Right? So and they just had their IPO last summer, and we're competing with IBM, which is the service provider for the state of New York. And they've got, you know, they've got a solution in the market, and, you know, that's that's our competitive base.

Famous Five Rapid Fire

Nathan Latka

13:55Got it. Very cool. Well, listen, we're obviously rooting for you. Hope the pre seed round closes out nicely, and you scale to 400 locations by the next time we chat. But in the meantime, Carlos, let's wrap up with the famous five. Number one, favorite business book?

Carlos Korten

14:08>> Lean Startup.

Nathan Latka

14:09Number two, is there a CEO you're following or studying?

Carlos Korten

14:14>> Elon Musk.

14:15>> Yep.

Nathan Latka

14:16Number three, favorite online tool?

Carlos Korten

14:19>> Miro. I love Miro.

Nathan Latka

14:21Spell it.

Carlos Korten

14:23>> M I r o.

Nathan Latka

14:24M I oh, Miro. Yeah. Number four, how many hours of sleep do get every night?

Carlos Korten

14:28>> Oh, I sleep really well. Nine. Ten.

14:31>> Nine. That's great.

Nathan Latka

14:32And what's your situation? Married, single, kids?

Carlos Korten

14:35>> Single.

Nathan Latka

14:36Any no kiddos?

Carlos Korten

14:37>> No kids.

Nathan Latka

14:38Alright. And how old are you?

Carlos Korten

14:41>> 52.

Nathan Latka

14:4252. Take us home. Last question here. What are you wishing you when you were 20?

Carlos Korten

14:46>> What say again?

Nathan Latka

14:47Something you wish you knew when you were 20.

Carlos Korten

14:50>> Something I was wishing when I was 20?

Nathan Latka

14:52No. Something you wish you knew when you were 20.

Carlos Korten

14:54>> Oh, when I was 20.

14:58>> Jeez.

15:04>> I think I I was just I was uncertain of myself. I should've just been more confident. I ended up doing the right things, but it took me too long.

Nathan Latka

15:15So Guys, joinbindle.com launched in 2020. They want you to use their wallet to prove your vaccination status or other health records at venue entries, airports, etcetera. We'll see if they can scale. They're currently serving, call it, 200 brands. They charged 10¢ per scan, did 4,000 scans last month, installed across 100,000 wallets. They've got 15 folks on the team, six co founders, 200,000 plus in sort of pre seed capital they're using to try and compete with the

15:38likes of Clear, you know, the state of New York, etcetera. We'll see if they can do it. Carlos, thanks for taking us to the top. Same.

15:45One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

16:10Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big

16:32fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up

16:54for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We

17:13got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys' support. All right. I'll be in the comments. See you.