How Blockid CEO Huzefa Olia grew Blockid to $100K revenue and 3 customers in 2023.

hello everyone my guest today is paul hyrent with more than 30 years of experience in technology publishing in healthcare along with business management business development internet business definition he has launched many many companies been in the online community since early 1980s hosting a bbs for midi users from 1983 until 1986 became an active member of the well which is the whole earth electronic link the first virtual community in 1986 and published one of the first consumer cd roms that included online access to updated content now building block id which is identity control for individuals paul you ready to take us to the top sure all right so so what does this mean identity control for individuals so uh we have a problem in this country and in the world frankly the internet somebody thought it would be good to not have people accountable and be able to be anonymous the problem is that's caused a lot of friction and a lot of fraud so we try to solve that by giving individuals control of their identity we started a company called trade harbor which is you can be authenticated by your voice or sign documents with your voice we started that in 1998 and at that time i thought number one it's not a good idea to tie your biometrics to your real world identity and number two somebody was gonna solve digital identity um that hasn't happened so in about four years ago we started a company called cyber deadbolt and the idea was give individuals control of their identity by enabling them to lock down their accounts like their credit report their credit card accounts that kind of stuff maintain control of their financial life um that company got acquired in the fall of 2017 by a company called rivets and rivets does the trusted execution environment and mobile devices but i found out that their primary market and the only market they're focused on is enterprise and my whole need for identity was for individuals uh not having companies so we started block id in uh january 2018 after the close of the sale all right so 20 you sell that company you launched block id in 2018 i mean did you make money on that sale that you plowed into block id or was basically flat um well we are shareholders and one of my co-founders is chairman of rivets so we continue with value in rivets they did a very successful they were one of the few companies who did an ico that was a true security token so if you have a rivets token you can use rivets identity services and authentication services at the time of the ico what was the value of of the ico uh i don't know exactly i think it was somewhere around 50 million dollars how much one um it's not convertible at all it's only usable for their services yeah but i mean they can obviously i mean they're you know there are exchanges obviously where you they many of these folks would convert a portion of fiat to pay engineers and things like that to you know pay for expenses to build the team i'm just curious how much they converted to fiat oh they had already raised lots of money from an equity perspective yes they had raised lots of money prior to that um and the security offering was really to to say enterprises can use our security services and they can pay for it in a unique way did you do an ico uh we did not with block id but but rivets did the ico i see okay all right so you launch block id in 2018 and then i mean help me understand who's paying for this do individual people pay like what 10 20 bucks a month to use the tech or what's your revenue model actually a revenue model for block id is requesters people who want to authenticate verify someone's identity and then authenticate that it's them those requesters pay for the services so it's free for individuals to sign up and get a block id and for us to start modeling their identity interesting okay so i mean uh i'm sure you have a lot of different customer cohorts but we don't have time to talk about all of them what would you say a fair sweet spot is on average what's the company going to pay you to use your technology per month um it's usually about a dollar a transaction so these are high security transactions where they need to really make sure it's that person so what does that equate to in terms of what a company is going to pay you per month to use it um some call centers are doing 30 million calls a year so whatever that turns out to be okay so you have you have companies paying 30 million a year then a dollar per verification every call yeah that's the that's the opportunity okay but when you look at what i'm trying to get is what your sweet spot is right now so when you look at your current customers paying are we talking like a grand a month 10 grand a month or less right so what we decided to do with block id was to fund it through revenue and so we're working on projects with requesters and so far our two biggest projects are government related uh one's dod and one's general government we're also working on an application in the music industry to enable artists to secure their work with blockchain technology so they have an identity they're a piece of wood so you're sas the sas side of your company then is not spun up yet you're essentially doing larger kind of professional services work which is fine to essentially fund the gross of the sas play is that accurate exactly yes and that's sadly comes after we have obviously millions of enrollments and that's what we're working on is gaining partners who and will enroll lots of people so those people uh get their own identity one example is a company that provides fraud protection services for insurance companies for uh um property and casualty insurance we also do a lot in the medicare medicaid and the medical um uh anyway that's great medical space yeah so who so right now how many custom projects are you working on with kind of paying contracts yeah three right now three that are um active three okay and one the music application that that's where the musicians don't pay but they get paid when somebody uses their music yep okay that's wonderful so um so that one the dod any others um the insurance company that provide it's a company that provides fraud protection services for insurance companies we're just now working with them on a model that will enable insurance companies property and casual companies you apply for auto insurance okay so paul sorry i'm going to keep cutting you off but i want to get more your back story so right now about three contracts dod music and insurance right okay three of those and then how many folks are on your team right now working on these projects there's seven in total okay all engineers or is anyone like a quota carrying sales rep no there's most of them are business development how many um uh there's five of those or business development oh wow okay so only two developers 5bd yep oh interesting oh why do you need so many so many bd people i mean there's only three contracts so that means two of them haven't closed anything assuming the other three are evenly distributed yeah these are large projects i don't know if you've worked with insurance companies but it takes um it takes a year or two to close a customer so it's all about relationship building and these are some of the people are in the music and entertainment industry are business development people and so those are ongoing work um and then a couple in the dod and iot smart city space yeah okay interesting i mean are these like fifty thousand dollar year contracts or a million dollar year contracts what's a general range yeah some of them will be millions some of them will be 20 000 a year i mean have you closed in a million dollar your contracts no not yet okay so right now most of them are like 20 30 grand a year or something like that yeah or some of them are 10 a month okay fair that's great so call it 120 grand a year something like that okay good look by the way great way to fund your sas company right i'm hoping you're going to tell me that you're bootstrapping it so you own 100 of it have you taken dilution have you raised capital zero i love that point that's great that means you're going to have a little bit slower though yep well for trade hardware we raised nine million dollars and uh it's cash flow positive so i don't have to raise money for this company uh i've funded the development i use a lot of contract developers and so once we build a piece we don't need it anymore and it's we're building it's basically a blockchain ecosystem so um it it becomes self-governing uh in a lot of ways do you plan to do a token issuance in the future like or when do you plan to raise capital if at all um we're gonna see what's happening with the scale but so far with the projects and with the enrollments um we're really building the value by enrolling people and giving them control of their identity and then the opportunity to cash in on that if you will right through providing services to people to be able to authenticate those customers but paul question is in terms of driving growth right do you plan to do an ico to raise some capital or do you plan to raise traditional equity capital or state bootstraps um we're looking at potentially equity capital as we have enough traction but as you well know everybody they call it seed funding but they want you to bring in the crop before they give you the seed so we're trying to avoid that that non-virtuous circle if you will i hear you that's very dilutive if you don't have something right you're going to see it around so it makes a lot of sense for you to be...