How Banjo decides when to turn on revenue and the perils of doing that too soon – with founder Damien Patton (Part 3)

How many social networks do you interact with every day? Facebook? Foursquare? Twitter? Instagram? More? At some point it becomes completely overwhelming to really and truly interact with, react to and create relationships through these networks without hiring an assistant.

Enter Damien Patton and his company, Banjo

This is a typical startup story of being sick of missed opportunities mixed with scrappy entrepreneurial savviness but what isn’t typical is the founder story. You’ll be inspired by Damien’s life experiences – from 2 tours of duty in Desert Storm to NASCAR to startup CEO.

Of course we dive into the reason the product was created, what opportunities Damien sees in this space, where the market is going, how they plan on generating revenue and what differentiates his vision from the competitors.

In the final segment of this episode we talk revenue and vision. How and when does Banjo turn on the revenue stream? What are the perils of turning to revenue too early (or too late) in a startup’s life? How do they decide when is the optimum time to start asking for money? Where is the social/local/mobile world heading? What gets Damien excited about the future of this industry?

Segment 1 of this episode can be found here: From Desert Storm to NASCAR Chief Mechanic to founder and CEO of Banjo – with Damien Patton

Segment 2 of this episode can be found here: Why success for Banjo means you shouldn’t need to take your phone out of your pocket – with founder Damien Patton (Part 2)

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Raw Transcript

Announcer: If you’re like me, you’ve got contacts in every single possible format, email, Facebook, LinkedIn and Twitter. It’s becoming harder and harder to stay on top of them. To help me make sense of this mess, I use Smarter Contacts, the free app that automatically creates rich profiles for all my contacts right on my smartphone. The thing I love most about this app is the rich profiles it creates. I can see photos, job titles, company details and updates from social networks all in one place, all in context. This is a free app and is available on all mobile platforms. Head to www.UNTETHER.tv/smarter to download it today.

Rob: Hello everybody. Welcome to UNTETHER.tv. I’m your host, the founder, Rob Woodbridge. This is that place where we dive into long form conversations around the mobile industry. We sit down with entrepreneurs who are changing the way we do business, the way we buy, shop and share. Today, the way that we actually communicate, exchange, get in touch with, contact people in our social circles. It’s a pretty amazing thing to think about that, two years ago, a lot of this we’re talking about today didn’t exist. The way that we communicated with people was old school like nine or 10 digits on a phone number and that was it. Today there are so many different ways to stay in touch with people. We’ve got one of these companies on the show right now.

To paint a little picture for you, we probably use every social network available to us. You do. I do. I use Twitter, LinkedIn, Facebook, Instagram, I use all of these environments that all tag my location but they’re all so disjointed. The world needs a unified source of social engagement, and that is what we’re talking about today with Banjo. I’ve got the founder and CEO, who’s Damien Patton, with us today. Tough day to get his attention because late last night they launched version 2.0 of Banjo. I’m very appreciative that Damien has actually come on without sleep and still wants to come on and talk to you guys and share some of their stories. Damien, thank you so much for doing this. I really appreciate it.

Damien: Thanks for having me, Rob. I’m glad to be here.

Rob What are you looking at now? We’ve done a little bit of a pre- interview, but what are you looking at now? In front of you, monitors full of what?

Damien: Well, besides looking at you right now, actually behind my computer right now I’m looking at a bank of monitors. On those monitors I’m just looking at our server health, all the traffic coming in from around the world, all the downloads happening, the people, what they’re doing in the app right now, our growth in certain countries, etc. It’s exciting. It’s exciting here every day at Banjo, but today especially. The team has worked incredibly hard over the last six weeks building this new version and today it’s paying off very well for everyone here. I’m real proud of everybody and real proud of what we’ve accomplished.

Rob: The product launched last night, version 2.0 of the software. Originally, you’ve been out since summer of 2011, right?

Damien: Yeah. We came out June 22. About seven months ago, we launched. It’s been a phenomenal ride since. We’re at about 650,000 users when we launched v2.0 late last night or early this morning, and growing really fast. Over 100,000 users a month before we launched. Obviously we’re on pace to beat that handily this month. Things are good.

Rob: Things are very good. We cannot go without mentioning that you’re in the middle of a launch, so thank you for doing this. I really appreciate the fact that you’ve stuck with this episode. I love watching this. We’re going to dive a little bit more into the product in a little while, what Banjo is, what it does, what it will be, what it will do, all those kind of things. What struck me, when I was doing a little research on you, is you have this insane background, which doesn’t really push it into where you are. This wasn’t, probably, a linear curve to get to where you are right now. Talk about this. You were a NASCAR mechanic?

Damien: Yes, I was. Among other things in my life, I spent many years as a chief mechanic for one of the top NASCAR teams and had a great time. It’s a fantastic life. I came out of the military after serving a couple tours of duty in Desert Storm and went into NASCAR.

Rob: Oh, my.

Damien: I do miss it a lot. I miss auto racing a lot. I miss that excitement a lot, but what’s been cool throughout my life, not only from the military and into NASCAR, but I’ve taken that precision and speed that you learn to do when you’re in auto racing. People always say, “Well, if you move fast you do things too quickly, you make mistakes,” but if you want to win, you can’t make mistakes. You do that by practice. In auto racing, we practice, practice, practice. Now, engineering is no different. You can move a lot faster and you can do things and accomplish a lot more if you run things like a top pit crew. Whether it’s a Formula One racing team or NASCAR, the principles all apply the same. I’ve applied those here at Banjo. That’s one reason why were able to move so quickly and that we’ve accomplished so much in a little bit of time with, originally, just me. Now, we’ve grown to a really great team. Anyway, yes, NASCAR.

Rob: Damien, Desert Storm, you did two tours of duty?

Damien: Two tours.

Rob: Two tours.

Damien: Yes.

Rob: Whereabouts were you? Do you talk about this or is it something. . .

Damien: I don’t not talk about it. I was living at home in Hawaii, and it was just about that time I turned 18. It was the right thing to do so I went. While I was there, serving in the military, I actually fell in love with auto racing. I just made it my mission that I was going to be involved. I always wanted to be on the pit crew. I always thought that what they did was so amazing. I just put myself in the position that, not only did I get there but, like I said, I did very well. From that, I put myself through college. Then, after college, I started my own companies. It’s been all uphill since then, but all good stuff.

Rob: Desert Storm, two tours, come back, now you’re chief mechanic in NASCAR.

Damien: Yes.

Rob: How long did you do that for?

Damien: I went into NASCAR in late 1993 and my final year was right at the year 2000, so seven years, I guess.

Rob: You earned enough to put yourself through college.

Damien: Yes. It did very well.

Rob: Did very well. The question is, from that point, you worked so hard. . . I talk to a lot of entrepreneurs who’ve got that same, it’s not meant in a bad way at all but, Jack of all trades. It’s like, “Put me in any situation and I can do what is necessary in order to be able to excel at that.” It’s a high compliment when it comes to being an entrepreneur. I can clean windows the same way that I can code. It’s just something that you do. Most of them don’t get through college because they jump on to an idea and then they’re just gone. You put yourself through college. Did that put an idea in your head? What happened after you finished college?

Damien: First of all, in going to school, I owe it all to the great people in auto racing who were able to provide me with an opportunity to, not only go to school, but I didn’t have the means before that, my family didn’t, to pay for my school. What I was able to earn in auto racing not only put me through school, but it rocketed me into life after that, with my own companies.

I didn’t want to spend four years going college so I studied hard while working full time in auto racing. I did my four years in about two years and seven months and graduated number one. Then, when I graduated, I left auto racing, close to the same amount of time, started my own company. Like I said, it’s been a wild journey ever since.

Somewhere in between there, I decided to do a stint as a crime scene investigator because it felt like something I had to do. You always had that boyhood dream of I wanted to be a cop. When the Chief of Police offered me a gun and a badge, I just couldn’t refuse.

Rob: That’s just incredible.

Damien: I had to leave the tech world for a little bit, pick up a gun and some fingerprinting devices and off I went and I did that. Then, eventually, I think as we all do at some point in our life, I went back home. Home for me is the island of Kauai in Hawaii. I went back home and started another company there, and on and on. Eventually I found myself here, back in Silicon Valley and having a great time.

Rob: Doing Banjo. Do you remember how many companies you’ve started in this period of time?

Damien: Started. . . We don’t call a lemonade stand a company, I don’t think. I don’t know if that qualifies. Real companies, this is my fourth real start up taking it to a real company where I’ve had a lot of employees. I’ve had small companies here and there, but this is my fourth one. My last one that I sold, I ended up moving to Las Vegas afterwards and lived there for a little bit before coming here to Silicon Valley. I also have this great life of being able to travel everywhere.

We were looking at it last week and we counted 77 countries I’ve been to. Of course, with auto racing, you get to go all over the U.S. I follow Formula One still, so I travel the world a lot going to a lot of those races. In fact, we just talked about how much I come to Canada to watch Formula One. Anyway, I think that’s my life in a nutshell pre-Banjo.

Rob: It’s pretty amazing. Now, what was it about the mobile space that was appealing to you? I don’t want to get into what Banjo is, but there’s got to be some kind of draw, like mobile popped its head up one day and you said, “Oh, man, I’ve got to be in that space.” Was it the problem that came first?

Damien: Well, for me it was definitely the problem that came first. There was no doubt from the moment I had that flip Nokia phone that things were going to be going that way. I remember when I started in auto racing, I think it was ’93, ’94, I got an AOL account. I remember that being brand new.

Since that day, I’ve been tinkering around with it. It was coding on computers or something else, but I love the space of technology. Phones were just its natural progression. I can’t say to you, “Oh, I had this great idea for a mobile device.” That’s not how it came about. I saw a problem. I knew that technology could solve it. The mobile phone is one way of solving it, and that’s where we come to Banjo.

As we’ll probably talk about, to me Banjo is a technology company. It’s not a mobile company. We use mobile phones or mobile devices for you to understand the technology, for you to use it to make your life better to enrich human connection, but at the end of the day it’s really about the core technology that we’re building that excites me, not just putting an app on a mobile device.

Rob: It’s funny because part of the questioning is always around, “What are the challenges of running a mobile company?” What it seems to me is that when I ask that question, a lot of entrepreneurs come back to me and say, “It’s tough to get traction, to find customers, the typical line items.” When I read that quote, I think it was today or yesterday, it was probably today, that it said that the core Banjo is a technology. We’re not an app. We use an app as a medium to get the technology out, but what we’re really building is tech that other people rely on in the location and social space. That’s a pretty profound statement.

Just like I’ve only known you for 13.5 minutes, but what I gather from you is grounded, very centered, very focused, I understand what business I’m in, I’m not going to sugar coat it, but you’ve had enough experience around this to say, “Listen, it’s very clear what business you’re in. Mobile is the conduit for the customer for you, but what you’re really working on is the back end stuff, the technology that driving this.” Was it a hard way to come to or is this just inbred, this is how you think?

Damien: It’s definitely how I think in order of seeing a problem and finding a solution. That’s how I started all of my companies and that’s how Banjo began. I was at an airport on the East Coast and a good friend of mine who I had served in Desert Storm with was in the same airport as me. I got home to Las Vegas. I checked my social network and realized that he happened to be in the same terminal as me at the same time. We probably spent two hours there together. It could have been back to back for all I know.

It frustrated me that someone I hadn’t seen in years, because he lives in Texas, I live in Las Vegas, and we were both in Boston. Not only in Boston, but we were really close to one another. That fragmentation of the social networks and mobile both didn’t allow us to be noticed that one another was there.

It was that night, literally, that I started programming what has become Banjo. It didn’t begin life as Banjo, of course. It began life as a set of ideas around technology to build this connection engine, if you will, to connect humans so we could interact better with one another. We didn’t miss out on the important things in life. We’ll talk about it. It’ll go way beyond just you and I being able to meet when we’re near one another. It’s going to go into things that are important to us outside of human connection that we don’t want to miss out on. When we find out that we missed out on an event… For example, we talked about that you’re a Bruce Springsteen fan. I hope I didn’t let anything out of the bag there.

Rob: No, no, people know. Trust me.

Damien: Imagine if you had been in Boston, like I was, and Bruce played with the Dropkick Murphys. Imagine as you were walking by Fenway Park when they were playing at the House of Blues, your phone said to you, “Hey, bro, Bruce is playing over there.” That might have been important information for you to know. If you had gone home, had you gone back to Ottawa, and you read in your paper how he just played that night and you walked right down, it would be a pretty big bummer, right?

Anyway, so this is how Banjo came about. To me, it was really thinking about the idea of this lost human connection and how we’ve become so fragmented. We’re all in one social network or another. Then every time I join a new social network, I have to get all my friends to join, and which friends join, and which one or another. It can be pretty overwhelming.

Rob: It can. If I was walking down the street and Springsteen was playing in House of Blues and it pinged me he was playing there, I would probably first drop down in tears or faint or something like that, the same reaction if I had missed him when I arrived back in Ottawa. I want to clarify that. I’m not proud about it, but I’m honest. I just had to get that out. If you haven’t seen any of the video on YouTube for the Dropkick Murphys and Bruce Springsteen playing together in this show that we’re talking about, just YouTube it. Dropkick Murphys and Springsteen. You’ll see some great footage, shaky footage. That’s my last plug.

It’s really clear that you understand what business you are in. You go after a challenge. You’re going to apply whatever technology. If the web was the best technology for you it, you’d be building everything on the website, right? This had to be the perfect convergence, right? So many social networks, so many things happening around you that mobile was the obvious choice, I’m saying.

Damien: I did begin this. . . Sorry. I’ve got people at the window giving me thumbs up for some reason. I have no idea. Maybe I’m doing a good job or something.

Rob: That’s right. If they’re listening in, that’s fine. I think it might have something to do with the product, right?

Damien: In any event, this actually began on the web. I didn’t begin on mobile when I came up with the idea. When I came home that night, I immediately went in and started programming it on the web because that’s where these social networks live. To me, that’s where there is human interaction. That’s where I discovered that I’d miss a friend, and so that’s where it must be. iOS was still very new. The Android really hadn’t come into its own yet. Obviously, BlackBerry wasn’t really good at connecting people with social networks, right?

As the idea matured, though, I then went on and realized that as iPhone became obviously very popular and widely distributed, the Android as well, other devices, you started having all of these great location-based technology services come out like foursquare, Instagram, and on and on. What that did is it just enriched… Well, it did one thing. It fragmented more because out here there’s another social network I have to get on. It started enriching the amount of information that was out there about my friends and other people that I might want to hang out with and where they’re at. It was a very natural progression to go from this idea about technology and move it into mobile because that’s where we all live. We all are mobile, right? Many people don’t even have a phone at home anymore except your mobile device. Of course, it has to be there, right? We might forget our wallet at home, but we’re not going to forget our mobile device.

Rob: Not on your life.

Damien: Exactly. That’s why we see Banjo’s focus is about showing the technology through mobile because that’s where these moments of you walking by and finding out that Bruce is playing with the Dropkick Murphys, or me finding out that my friend from Desert Storm is in the same airport as me, or me finding out that some other important event while I’m traveling is taking place that I want to take part in. That’s only going to happen right now on a mobile device. That is the future of human connection, and making it more rich, is using these mobile devices and the technology that’s already out there, and bringing them together in a meaningful way.

Rob: I love that statement and I want to come right back to it. I’ve got to ask, did you teach yourself how to program?

Damien: I did, just like in everything else. I’m not going to go into all the other things that we already talked about like NASCAR. In those things, if you really want something badly you just have to go out and do it, right? No one’s going to do it for you. Yes, I taught myself how to code. I taught myself how to build engines. I’ve taught myself how to run construction companies, on and on. It’s no different from professional athletes. They grow up, they practice, and they train for something. It’s no different than designing, programming, and coming up with an idea like Banjo and Execution, right? You practice and you train your whole life. Maybe not in this one genre, but your whole life you’re practicing or training.

We talked about it earlier about how I like to run companies, especially in technology, like we did the racing teams and the pit crews. It’s because you’re so efficient and you have to move so quickly in order to win. You can’t make mistakes. If you make mistakes, you either get hurt or you lose. None of us want to get hurt and we don’t want to lose. It’s all about being precise. It’s about constantly practicing your craft, whatever that craft may be.

Rob: You step away. You come home from that experience. You’re back in Vegas. You start building this site. You build it first on the web and then eventually it moves into mobile. Talk about now, today. Dive right into the product a little bit. We’ve talked a little bit about background. There’s an inference about what it does. How do people use this today? It solves the problem of being in a location where somebody else that you want to connect with. What else does it do? How do people use it?

Damien: I’ll give you several big use cases and all very different. One is obviously the reason I did it was because of the connection engine I was going to build. I didn’t want to miss out anymore on important people that were near me as I traveled through life without having an opportunity to connect. That’s what it does.

As I’m here in Redwood City right now or if I travel to New York, Banjo’s always looking out for all of my friends across all of my social graph, my Twitter friends, my Facebook friends, this big fragmentation. When they’re doing something near me, it’s letting me know, “Hey, you and your friend are near one another.” That’s huge.

We hear about that, I don’t want to say dozens of times every day, but it feels that way. We hear all these great stories about family members that might be cousins or an uncle, these college roommates, or people who play sports together are traveling even abroad and they happen to be in the same place as one another, and who would have known, but Banjo told them and created that opportunity.

Outside of that, a lot of other cool ways Banjo is being used, big sporting events or concerts. We all can’t be at the Super Bowl in Indianapolis this year, but Banjo lets you go to the Super Bowl. It lets you be right there. It lets you not only experience people that are tweeting out something, but the people that are sharing photographs, the people that are checking in, talking on Facebook. It allows you to engage right there in the moment.

Media and the news has been using it to report on events and stories when they can’t be there, whether it’s a weather event or whether it’s. . . I saw something in the paper outside of Philadelphia that reported that there was a bomb scare at the mall and they want to talk to people at the mall about what was happening. They used Banjo, went to the mall, saw all the different people on social networks that were there, used Banjo to connect with all these people, and they were able to break the story before the police even came out with it. Banjo is used in all these different ways.

The core of it, if you get back to it, is about this connection engine. It’s about us not missing out on the things that are important to us. Even though these scenarios are very different, if you will, it all does circle back to that and that’s the core value of what we’re doing.

Rob: It’s pretty much every social network that it connects into. That’s the crux of it. It brings one termination point for all these social networks.

Damien: That’s right. We don’t obviously have every social network. We have a lot of social networks and service. . .

Rob: Because there’s like 180 of them that went out of business in December, right?

Damien: Yeah. The cool thing about Banjo is about the technology that’s been built and how quickly we can add in these social networks. For example, I think today we’ve had something like 15 new social networks that have been suggested to us, just today from lunch that we don’t have in there.

Rob: Just today?

Damien: It says, “Hey, it’d be great if you’d connect this one and this one.” I know three of them went up on the board already as something we’ll have in probably in the next 30 days. With Banjo it made it easy to connect, like spokes on a wheel. All of these different things that are happening out there…

Actually, I explain it like a spider web. If you think about it, if this was one social network and this is another, they cross. Sometimes you see, like on Twitter you’ll see this tweet out of your foursquare check in or on Facebook something you shared from a picture from Instagram, and they cross. Like a spider web, there are all of these gaps. Banjo fills in all those gaps and connects everything. That’s the main idea.

Rob: When you start to think about the ramifications or the things you can start to do with this stuff, it all comes down to, which is what I love, the technology that you’re building, the back end, the piece of technology that sits on the server that feeds that dumb screen, right?

Damien: Yeah.

Rob: You went out. . . I read on, I wish I remember where I read it, BetaKit or it was the Fast Company Article, you hired a Ph.D. who worked on the Netflix algorithm?

Damien: Yeah, that’s right, we did. We have some really amazing people here, not just Yann but some really amazing engineers that we’ve been able to hire since launch because they’ve been captivated by, not only the idea of Banjo, but truly the technology that we’re building here. We were able to get someone like Yann who has a Ph.D. in artificial intelligence to leave a company like Netflix. We have people here from Google. We have people here from the Director of Engineering from Second Life’s social web services that’s here now. A lot of really great engineers and talent.

In fact, that’s what we’re proud of most is that this is a company of people doing engineering, of building technology. Through that, we’ve been able to get these remarkable talents that come together and to all march behind this idea that we’re going to build this connection engine technology that people are going to build on top of. This is going to be what helps people in the location, social, and mobile space build their ideas, their dreams, the things that they want to do. This is what’s going to make it happen.

Rob: You’re a small startup, a young startup, a version 2. Is that what it is? You’re selling the vision right now about what this can be and people are jumping on to this like they have been. You’re extracting people from some of these big companies where you would think that people are clambering to get it into. There’s got to be much more of an appeal to work with something like Banjo.

Damien: It’s a big idea, right? First of all, they come into this knowing that it’s not an app. They come into this knowing that it is a big idea. They come to it knowing what we want to solve. Just like with friend alerts, this isn’t another social network where you have to invite someone and they have to also be a member of Banjo. What makes this so special is that once I join it, I already belong to Facebook, Twitter, Instagram and Foursquare. All of those friends out there that are on those other social networks and fragmented, they don’t all have to come in and be part of Banjo, yet Banjo let’s me know when those things that are important to me are nearby. It’s that type of technology.

You said we’re young. We’re seven months old now, I think. In that seven months, we’ve processed I think 1.1 billion updates already. We have created 50 million-plus connections already. Obviously that’s just growing exponentially now.

Really, if you think about it, it’s not just having people join a social network and then saying, “Oh, you have this device and you have this device, you’re both on the social network, you’ve both done some action and now you get alerted.” That’s a lot of steps. We want to solve it so you don’t have to do any steps. I don’t want you to have to take the device out of your pocket to get value. I want you to feel a buzz, you bring it out and the next thing you know, there’s the value, it’s staring at you and you’ve had to do nothing. Why? That’s what I want. I want my phone to tell me what to do. I’m tired of punching into it, trying to find search for this, search for that. I don’t want to do that anymore. I use that same passion and enthusiasm to make sure that other people in the future don’t have to do those things.

Rob: What do you learn from all that data? All those pieces of social interaction, over a billion different data points, I would say, what do you learn from that stuff?

Damien: You learn who the influencers are. That’s number one. You definitely can tell which person in the group can say something or do some action and rally people behind them to go to a football game or to go to a movie. You learn about what people really like to do. What people love to do is they love to consume. We all love to consume. They like to consume visually.

When people see rich content like photos from Instagram, for example, you learn how much time they like to spend looking at those photos or saving and sharing those with their friends. You learn a lot about human interaction. You learn about what people like to do. You learn patterns of people when they travel and when they travel outside of their normal area, how far they’ll actually go from a city center. There’s actually so much.

The data, if you can imagine, if you think about it, over a billion updates from all these different social networks and each one of them doing different things and people having different interests. There’s so much you can learn about people. At the end of the day, what we’re learning is we’re learning from people how to better give them the results that they want when they want it without them having to do anything to get it. The information already exists out there so why should I have to give you anything else?

Rob: That’s so true. Simplicity. Some of the comments I read about version 2.0 versus version 1.0 is the refinement of the UI and the UX. That’s got to be something… This is very app focused, but my guess is you can do all the work that you want to on the back end, you can create the greatest algorithm, you can tweak it so that it distills the most important information and relevant information to where you’re standing and what you’re interested in, but if you can’t access it effectively, if the UI or the UX is broken, it doesn’t matter how much effort you put into the back end. Talk about that, the balance between back and front- end for you guys, as you built this out.

Damien: Again, it’s all going to be the human interaction, human connection. It does have to be about how we’re going to consume this. In version 1, it was about moving fast. It was about me coming to Silicon Valley with an idea, building it out, seeing if the world even liked this idea. Was it a good idea? Once we realized it was, it was then about bringing in what I called the professionals to do it. You’ve got to hire people that are better than yourself.

In version 1, I did a lot of the design myself. I can assure you in version 2, we were super lucky to get a really good UX designer who had done some great things at companies like Aardvark and Adobe. He’s come in here and just made the world of difference. The users of our app have a debt of gratitude to owe to him.

Also, it’s through the user testing we do. We do a tremendous amount of user testing. It started back in Boston last year, in fact, right around St. Patrick’s Day. I started actually testing a lot of the idea there with people in focus groups. We did focus groups in hotel lobbies where we’d get 30 people together or we’d do it in Irish pubs. We actually did it at a Patriots- Jets Monday Night Football game, I think with 200 and some people. I said, to date, we’ve had over 6,000 people in person that we’ve brought in and tested with different ideas. This is how version 2 came about.

If we’re a technology company, then we’ve got to live and breathe and die by the technology. What that is, is the information we learn from you, the user. When you don’t like something, and we’ve spent 80 hours just sweating over this thing, and the user doesn’t like it, if we can’t improve it, then we get rid if it. We don’t get emotional about it. It’s gone.

Version 1 to version 2, why you saw that happen so quickly is we had gotten so many users already, at over a half a million at that point. We had learned a lot. There was no sense in saying, “Well, let’s wait until we get to a million and then take out this stuff.” No. Users didn’t like the stuff. It’s out of there.

Then users told us, “Hey, we’d like to have more friend alerts. We’d like to get notified in these kinds of cases instead. I’d like to be able to search for my interest when I go anywhere in the world, not just where I’m at now.” Because of that, we built it and we put it out there. Rodrigo, our UX guy did an amazing job. Now you can use it and it’s so simple and so fast. Don’t be mistaken for that simplicity and how lightning fast it is to use, at the technology that’s under the hood that drives that.

Rob: It’s very complicated to get simple. We see that. Apple did it. The simplicity is the key to the success right now. It’s very difficult to get to that point. What about protecting this? Do you wrap patents around this stuff? Are you working at such a pace that you say, “We’re going to get this out as quickly as we can to as many people’s hands and we’ll worry about that later”?

Damien: It’s a little bit of a double-edged sword. Sure. We filed for several patents, and I had filed for some long ago, actually, in the space where I came up with the idea. Of course, that’s important from a high-level technology idea. We are also a company that is very proud of the open source technology that we do use. This past year, 2011, we won the 2011 Ruby Innovator Award, from Mats who invented the Ruby language. Ruby and using Rails, it’s all about open source and building things and sharing them with the community.

Our algorithms though, the things that define the technology, the things that, for example, we’re building to make it so that you get different types of alerts when they’re important to you, of course those are patentable. Those are things that we might not share broadly outside of Banjo. Other things have made our lives easier by figuring out how to do something on the iPhone.

In fact one of our new iOS engineers just built a really cool library and we are going to open source it because it’s going to make everybody who does iOS, who does any kind of social network on it, their life so much easier. It’s just something that we want to share back.

Like I said, it’s a little bit of a double-edged sword. There are obviously some things that give yon a competitive advantage. For me, it’s our team and the early technology that we did in the beginning and how that’s continued to grow. Of course we’re not going to give that away. The other things that have made our livers better in engineering, we want to share that back to the community because it’s in our best interests, to have other social networks and other location-based services, applications come out because that just makes everything richer so that we get more people to come in and share their social location. That information is going to make it so that you get the type of notifications that you want to get, when you get them. If we became a society where we only have one or two social networks and that’s it, it would be pretty tough to do what we’re doing.

Rob: It’s a pretty bad situation at that point anyway. It’s too much power concentrated in one F-logo. That’s a lot of people. Eight hundred million is a lot of people to have in one network. Last question with the product. We could probably spend hours on the product, but I definitely want to talk about a few things around going forward. When it comes to the way the product is today, how close is this to the vision that you had? I know it hasn’t been that long ago, but how close is this, the implementation of version 2, or how far off do you think you have to get to?

Speaker: If I put it in a percentage, we’re 20% of the way there of the original vision. Part of the vision was I came home and I was disappointed because I didn’t have that connection with my friend that was in the same airport. We’ve solved a lot of that with our type of friend alerts, the fact that I don’t have to have my friends belong all to my same social network, and yet I still get this notification. We’re continuing to make it better every day. Although friend alerts are accomplished, we’re not to where we want to be with it yet. Again, Banjo is much bigger about that.

We talked about that it’s not just about the friend alerts. It’s about our devices telling us what’s important around us all the time in our life regardless if you’re sitting in Ottawa or that you fly to New York tomorrow. As you fly, things change in your life. Your interests change, things that you want to do change, and your travel patterns change. Because of that, the smarts, the intelligence around the technology has to change. That’s not something you’re going to build overnight.

Sure, you can make it look pretty in an application and you can give it to people to use, but at the end of the day, it’s about us learning. That’s why we put in several things inside of Banjo for us to really learn from the user. They’re not meant to have been there long term. If the users love them, they might stay in there long term, but they’re really meant to just learn. Oh, we put in more photos. The users like to engage more with photos. Sounds like a no-brainer. You have to prove what they like to do with photos, you know? You have to prove how they like to communicate with other people. You have to prove that when they do get a notification that a friend’s nearby. Do they open it up right away? How much time do they spend in their application?

That was something that was amazing to me, is that when people get a notification from Banjo and they come back in, they spend, on average, more than five minutes each session back inside the Banjo just discovering outside of that notification they got.

It’s things like that that I can’t say that we’re really anywhere near where the vision was day one, which was to solve the problem where my phone tells me everything. Although Siri from Apple has done a pretty good job at starting to talk to me about stuff, it’s certainly not telling me everything I need to know when I need to know it because I still have to ask the question. I don’t want to have to ask the question again.

Rob: Well, that begs the question, what happens when voice… Mary Meeker calls this the year of the ear. Certainly Siri has awakened this slumbering industry. It’s certainly been around for forever, as long as I can remember, back when Microsoft was trying to tackle it, and certainly Nuance has been doing this. What happens with this? What you’re doing is a perfect… Voice is a perfect extension for what you guys are doing, so that it’s an audible response in a car, for example, as opposed to a buzz and a beep and a message, right?

Damien: Absolutely. Again, by talking to something, it’s a lot easier than probably typing something.

Rob: Sure, except for my kids, they don’t respond anyway, right? Sorry.

Speaker: I think it goes beyond that as we look to the future. If this is the year of that or this is the couple of years of us talking to devices and them talking back to us, when are we going to get to the point where we don’t have talk to a device or we don’t have to input into a device? The information, the things that we do, the places we go, the things that we consume, the people I hang out with, the type of food I eat, I put it out there, right? I share that already. Therefore, you need to start telling me when those things are around me that are important or if something else is important.

I agree that things like Siri, of course… I did some things the other day on Siri, I was just asking it random questions. I was pretty amazed at the technology and how good it is. Of course, then I started thinking about, wow, it’d be pretty cool if you could just tell Banjo, “Go to Times Square right now and show me all of my friends that have been there in the last two hours,” and it just did it and I didn’t physically have to go into Banjo, go to Times Square, and then filter by my friends.

Yeah, it does capture your imagination. Again, when I travel to Times Square next time, I want all that filtering of not only friends, but other things that are important to me to happen without me having to say anything, just the fact that I went to New York City should be enough.

Rob: Yeah, it just knows. It just knows. We’ve kind of moved into this a little bit of thinking forward. I do have to ask about revenue. I do have to ask about the potential for revenue for this. This is a true company, right? The way you positioned it, I love the way that you’re thinking about this, it’s not an app. It’s a technology. You’ve hired Ph.D.s to work on algorithms, to mash this data together and output relevant, relevant is the key term here, information based on time of day, location, and everything else contextualized. What about making money?

Damien: In the beginning, for us, it’s really about developing this core technology. When you think about roads to monetization, quickly you start to think, “Well, for customers we could do this, but we have to compromise in this.” I’m not a person that’s compromising when it comes to technology we’re developing. We want to get the user base. We want to bring this community together. We want to learn from you so that we can give you the results.

If we started going and trying to make money right away, certainly that direction, that path, that vision, and the best results for you would probably not happen. We’ve stayed very focused on this point. Of course, as you imagine, all of this information and being able to serve up to you without you asking, things that are important to you, it’s not too difficult to imagine how monetization could come. I will tell you, we’re not going to just start putting ads on Banjo.

Rob: Thank God.

Damien: That will not happen on my watch. It is really just about building the community base right now. While that’s not trying to avoid your question at all, that’s just as simple as I can put it. I was very upfront when I came here and I started building this company that we were going to stay focused and we were going to make sure and make it our mission to develop this technology and to give it back to others without being distracted. There are a lot of distractions, not just from monetization, but distractions from distribution-type deals, people who are very influential that want to come in and help you out.

At the end of the day, you have to make the hard decision. Is that a distraction? Is it just the cool thing to do? Is it really going to help the end user out? Is it really going to help us develop this technology? We want to all develop this technology so that the world and the people that are building on top of tech, mobile apps, web companies, businesses, they don’t have to just imagine it and then, well, it’s not available. Nope, we want to make that a reality, and so this is how we’re doing it.

Rob: Is there a threshold for you guys? You’re at 20% of your vision. I talked about Instagram, 12, 15 million people, certainly with Facebook with a considerable number of people. They can’t figure out how to really elegantly turn what they’re doing into revenue without butchering it with banner ads which is not the… Whoever’s listening or watching, don’t do that. Please, do us a favor.

Damien: Of course you can’t do this for life without making money. That just doesn’t exist. You can be diligent in what you do and your approach you go about it. That’s very different from avoiding the monetization problem or question that’s going to eventually face you. No, I’m very clear in my ideas that are how we can make money. Taking all of this information and bringing value to you, how can you bring other people to you to have value without it being intrusive to your life?

Through those types of ideas, it’ll be a big paradigm shift in the way advertising is done in the future or branding, if you want to call it, because it’ll be bringing value to you as opposed to intrusiveness to you.

Like I said, right now, it’s about, we don’t have that technology. We’re in the midst of building it. We’re 20% done at best. While we can’t go on and on without being able to monetize, we’ll spend the next 2012 getting to hopefully 60% of the vision. That 60% of the vision, or 70% or whatever that may be, you can see past the monetization at that point become a reality because now you’re not distracting from the core idea. You’ve built such a solid foundation, the team’s in place, we’re marching in that direction, the users are there. That monetization actually becomes a much easier path at that point.

Rob: I love that sentiment. I’m a monetization guy, whether you turn it on or not, you always have to have it clear in your mind that it is going to be turned on. You don’t want to wake up one day with a whole bunch of millions of users and be surprised by the fact that you can’t turn it into revenue. You start to see that happening.

Damien: Well, this isn’t a government-funded entity so, no, we don’t have endless cash.

Rob: That’s right. You’ve got to turn it into revenue somehow. The idea of monetizing too soon, which is something that a lot of companies struggle with, is that you pick your direction when you decide to go after revenue. That might not be, as you said, in the best interest of your users or in the best interest of your product. It changes the scope and it changes the box with which you’re working in. Hold steadfast. It worked with Mark Zuckerberg, right? He didn’t want to turn it into revenue. I like that approach.

I do like the fact that obviously you’re thinking about where this is going to go and how you’re going to generate revenue. That obviously is going to shift as you guys get closer and closer to that point where it’s you feel comfortable with revenue, right?

Damien: Exactly. We don’t walk through life with blinders on. When they came in here, just about everybody, asked, “Well, eventually how are we going to make money? How are we going to do it?” They know. We, as as a team, all understand the ideas that are out there, but it’s about walking to that destination first and sometimes sprinting, in some cases, to the destination.

At the same time, like you talked about, some of my good friends in the Valley, in their startups, have been pressured to do monetization too early and it’s ruined them. It’s corrupted the idea. Now they’re something they never wanted to be. Now they’re thinking, “Well, in order to get this dime out of a customer we have to do X or Y.” Guess what they’re not doing? They’re not really thinking of the benefit of the customer. They’re not really thinking of the technology they want or the dream that they had that was going to make everybody’s lives better at the end of the day. I would ask, what’s the point?

Rob: Right. You can build marginal product any day, right? You only get a few opportunities to build something truly revolutionary.

Damien: Well, I told you about the lemonade stand I had at the beginning of this conversation. I’d just go back to selling lemonade.

Rob: My guess is that you sold that up, right? Like Kool-Aid, you sold your lemonade stand to Kool-Aid or something like that.

Damien: That’s right. My Kool-Aid was cool, man. It had a NASCAR sticker on the cup.

Rob: It did? I love it. All right, forward thinking here. We’ve rapidly run out of time but I’d like to know where you see this industry going. What are the things that are getting you very excited about what you’re seeing? Twenty percent done your version, but looking out saying, “Oh, man, look at that, what we’re about to embark on is going to be incredible over the next couple of years.” What gets you excited about it?

Damien: It’s really about the contextual type of technology that’s coming out there today. A friend of mine is a CEO of this really cool mobile technology called Waves that shows you directions in your car. They’ve made it not only a social network but kind of a game that you play as you drive to get better directions. For me, I just use it to get more time out of my life.

It’s things like that. It’s really contextual based. Things like Banjo, things like these other social networks in the location space that get me really excited because people are now sharing more. There was a time when people kept a diary under their bed, but now people are sharing more every day. As they share more every day, although some of it we don’t really want to hear, we do learn from it. There are places I’m sure you’ve eaten at because of someone else’s review. There are movies that you’ve seen because of someone else’s review. There’s an airline that you’ve flown because someone recommended it to you. All of these things have happened through human interaction or through you consuming something, whether it was from a magazine or TV. It’s pretty cool now that we can do it through a little device now that we carry in our pocket and 24/7 anything that we want is literally at our fingertips.

That gets me excited, that we can come up with the technology and an idea that can be with you 24/7. No matter where you are at in the world, we know that you’re probably going to have that device. If you’re going to have that device, then we can make your life and your experience and whatever you’re doing just better.

It’s through all these different technologies and companies that are contributing to the space and enhancing it. We don’t see anybody as competition, we see everybody as contributing. Helping people come into this big social, local, mobile atmosphere so that we can make it better for everyone.

Rob: I love that. The only example I always think about when I talk to somebody like you who is simplifying something… I don’t think that the check-in or the location-based economy is a challenging economy. I think that we inherently get it. You stamp your place, there’s some logistics around that.

What I love about it is I always remember this Google television commercial where it was Google TV and they were selling it. Then they’d show you this converter, the remote control that had 900 buttons. It was like the engineering end, where you just take every termination point and plug it into something and let the consumer figure it out, which is never a good idea.

When you talk about wrapping all of that contextualized [inaudible 50:29], throw it into an app, throw it into a simple screen, and then allow people to use that, you’re enabling so much more. That network, all of a sudden, expands. People start to use it, dive a little bit deeper, and everybody benefits from this who is engaged in these communities.

Damien: The big part you said when you were mentioning the TV, you had to make all these different decisions. What do I do with this? How do I do this? Listen, you didn’t want to do that. You just wanted it to do what it was supposed to do. When you pick up that mobile phone out of your. . . We just want it to do what it’s supposed to do. To me, what it’s supposed to do is make my life better at every step of the way.

That’s what we’re in. We’re in this age where you can get people to come together and build these really cool startups really fast that contribute back. Some make it, some don’t, but what they all do is they contribute to all of us through learning through technology, experience, and social location. It’s not just about the check-ins, for example. It’s about where you’re sharing photos with people, or where you’re having a conversation, or where an event’s taking place. Through all of this, we’re learning a different way of life. We’re learning how to be a community in a very different way. Today it’s centered around our mobile devices and I think it’s going to be for a long while.

Rob: I love it. Damien, this has been unbelievable. I think the classic definition of an entrepreneur is a maker. I sat with Whurley, who is from Chaotic Moon, who’s just an energetic guy, if you don’t know Whurley. He talks about the same way, the same passion about making. I think you’ll believe this. I don’t want to put words in your mouth, but we’ve invented enough stuff right now that we aren’t using that we could be using that can cure disease, that can create companies, create value, deepen a relationship, or reunite people, for example, or stay connected to people. We’re just not using it.

It’s guys like Damien, guys like you, that are coming in here that are the makers, that are building these things that are out there. You’re taking nine different pieces, jamming it together, and putting it in something that we can use. That is incredible. That’s why I love doing this. That’s why I love having guys like you on the show. I really appreciate this.

Damien: No, thanks very much for having me. You just have to be passionate about what you’re doing. If you’re passionate about what you do, things will work out.

Rob: Obviously, great background, great history, love the app. Listen, you guys are out there, I know that you’re engaged in social communities. You’ve probably already downloaded this application. You’re probably engaged with Banjo. If you haven’t, just go to Ban.jo or just look it up on the app store or the app marketplace. Download the application, get engaged, start using this tool in your social networks and creating those relationships, and sit back and watch what happens with this company. It’s pretty cool with the focus on the technology, not on the app. I love it. Anything else that you want to plug here, Damien?

Damien: No, no plugs at all. I just appreciate you having me on. Today’s been an awesome day. This was a great chance to take a small break from the chaos and engineering today, but this was good. This was great actually. Thanks a lot for having me.

Rob: I really appreciate it. I’ve been speaking with Damien Patton, who is the founder and CEO of a company called Banjo. Ban.jo or just look up Banjo in your various app stores. I really appreciate you being here. Thank you so much, Damien.

Damien: Thank you.

Rob: Folks, wherever you are, whatever you are doing, thank you so much for bringing this into your day, for listening to this. I know you found a tremendous amount of value. If you didn’t from Damien, just pack up your business and go somewhere else because lots of lessons here. Great inspirational guy. Neat company. I can’t wait to follow up with these guys in a little while and see how things are going with version 3 of their app. Thank you for watching. Damien, thank you so much for doing this. I really appreciate it.

Damien: Thank you.


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About Damien Patton
Damien Patton BanjoDamien Patton, Banjo Founder and CEO, is a serial entrepreneur and problem solver who developed Banjo in 2011. Not satisfied with the hurdles that hinder people from connecting across social networks on a mobile phone, he felt he had no choice but to tackle the problem himself.

A trailblazer in the mobile industry, Damien speaks frequently at conferences on subjects ranging from social media to location-based technology. Damien thrives on leading teams in innovative projects, and has placed first in various hackfests, including Google Campout. From think tanks and boardrooms to dirt bikes and racecars, Damien is a risk taker who likes his life fast-paced and full of challenge.

Damien holds an MBA, and his diverse past includes working as a NASCAR Chief Mechanic, Desert Storm veteran and crime scene investigator (no joke). He cruises the Bay Area on his Harley, loves Boston and never misses a chance to see The Dropkick Murphys.

This episode is brought to you by:

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About the author

Rob Woodbridge

I'm Rob, the founder of UNTETHER.tv and I've spent 14 years immersed in the mobile and pervasive computing world. During this great time I've helped some of the most innovative companies grow their business through mobile. If you are in need of a mobile business advisor or coach, connect with me here to get things rolling.

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