This firm "pays you" $360 per month to view ads in exchange for your data: this is the business of Kubik Data

They haven't been out for 3 months now, no matter what you tick." "That's enough of fooling us." "I've been here since the closed beta and not one ad." "Aren't you embarrassed?" These are just some of the Dozens of comments on the official Instagram account of Kubik Data, a Barcelona-based startup that was born in mid-2019 with an ambitious goal that many other companies, including Telefónica, have pursued until now without success: pay you for your data.

change of perspective

Faced with the 'big tech' of Silicon Valley, who built an empire at the expense of privacy, other firms sought just the opposite, reward their users for their personal data. Kubik Data is the latest attempt and it started strong, with US$1.9 million from the pocket of Òscar Pierre Prats, the father of the creator of Glovo. The money has already melted in just over a year and now many users are fed up.

The case of Kubik Data is apparently similar to that of hundreds of new technology companies that try their luck every year. Being born, making mistakes, swerving halfway, closing or selling for a million is part of everyday life.

But Kubik Data is actually a special case for two reasons: Very few startups have the luxury of starting with more than $1.9 million in funding from one of Spain's most renowned investors.

And even fewer try to sneak into a field in which so many others have already failed: that of the remuneration of personal data. In just a year and a half, Kubik Data went from promising to revolutionize the sector to having to deal with continuous delays (the service will not be 100% ready until the summer), serious technical failures, layoffs, hundreds of users in rebellion, and financing that it is over.

Its creators ensure that everything is under control. But employees and former employees consulted say the opposite.

Carl Tessmar, CEO and ideologue of Kubik Data

Kubik Data's proposal is similar to that of dozens of 'apps' already in operation and, on paper, difficult to reject: go to our website or 'app' (only on Android) and we'll pay you 1 euro for each video that you see. "You can earn up to €300 a month by seeing only the advertising you want to see, when you want to see it." It is the hook with which they have been capturing people since the end of last year.

These users fill in their personal data and interests so that the brands they want can send them advertising. If you are a company that sells sports shoes, for example, you will be able to select thousands of users with the exact profile you are looking for, show them a video with your product, ask them a few questions at the end (such as "would you be interested in receiving offers? email") and generate sales. That is the promise.

The cost to brands? Two euros per video viewed. If they want to show it, for example, to 5,000 users, the campaign would cost them 10,000 euros, of which 50% goes to the users, and 50% to Kubik Data.

Esta firma

With this idea, the 'startup' managed to attract 30,000 people, of which some 16,000 are active (enter at least once a month), according to data provided by the company. The figure assumes an acquisition cost per user of about 100 euros.

However, the first big problem he faced is creating a technology platform that works and delivers on the promise of paying people for their data.

Òscar Pierre Prats, investor and owner of Kubik Data

"This is what happens when you burn money without having clear ideas. A minimum viable product was not created, a lot of money began to be invested in unnecessary things, such as external consultants or building 'apps' when you don't even have the product working. No It is normal that you have polished 1.6 million in just over a year and you have not yet left the beta. Money is being thrown in the trash, "explains a current employee consulted who asks to remain anonymous.

The result is visible to everyone. Registering on the platform is almost an impossible mission. The option to create a new account or access the existing one has been disabled for days (at the close of this information it still does not work). Upon entering, some videos from clothing stores such as Zeeman or the Pensium website appear. You press play, a 20-second video appears and at the end a question. "Are you interested in these products?" And four options: "No; yes; maybe; maybe."

According to the firm, these are real ongoing campaigns that these companies are paying for. "In the last three weeks, 30 campaigns have been published by 22 different brands," they point out. The system has significant technical flaws: since the closed beta was launched in mid-December 2020 (the open beta arrived in early March), the platform allows users to select all variables when filling out their profile. That is, you can select that one is a man and a woman at the same time or that one has all the possible age ranges.

Faced with the hole, dozens of users selected all possible variables in the hope of receiving more ads and being able to charge more, but not even so, as many complain to the company on Instagram. The result is that the data obtained so far by the brands that tested the system is worth absolutely nothing.

"It is a mistake that we have made and that we will solve in the coming weeks after a new update. We have returned the money to the affected brands. In any case, if a user marks all the options, our algorithm detects it and does not shows ads", explains Carl Tessmar, CEO of Kubik Data and ideologue of this model for which he convinced Òscar Pierre to get on board through his company Aggity, now Kubik Data's largest shareholder.

Tessmar put 225,000 euros out of his pocket to start the company, which was joined in January 2020 by some 1.2 million from Pierre. The funds ran out in November and Pierre put on the table a participative loan of 400,000 euros so that the company could continue. Five months later, they need funds again, waiting to increase their turnover.

"The application is still in beta, we are polishing these bugs every day, it is something totally normal in a 'startup'. I know that I can lose money, but that is investing. We could have done it better or worse, now in hindsight it is easy to say that it should have been done this way or that, or that I should have invested less, but in hindsight everything is very simple. We are adding 5 or 6 new ads a week, the pace and evolution is as expected", explains Òscar Pierre, who assures that they are already seeking an additional 1.5 million euros for 12% of the company, which would mean valuing it at more than 10 million euros.

doubts and complaints

Carl Tessmar also minimizes the complaints of users on the Internet and ensures that it is a minority. "At the moment, some 150 users have received an amount less than 10 euros." He assures that the company has already invoiced 300,000 euros and the goal is to reach 1.5 million by the end of the year and 13 million in 2023.

User complaints on Instagram

"For brands the value is obvious. They can go to Facebook or Google, which are cheaper, impact hundreds of thousands of users and generate zero sales, or do it more selectively with our system and gain real customers. Recently , an electric wheelchair company tested our platform. Ranking on Google cost between €180 and €200 per keyword. With us, they spent €100 and had 4 sales. Imagine when instead of 16,000 active users we had 100,000," he added. .

Online marketing specialists consulted are more skeptical. "These models of paying to view advertising have already been shown to not work. You end up with thousands of users who don't care about the product, what they see or what they respond to, they just want to get paid. And when the brand contacts them to sell them something of truth or to obtain more data, neither case", highlighted José Ramón Fernández, specialist in online advertising and founder of The Social Audience.

Furthermore, it is a sector already taken over by similar applications such as AppKarma, Consupermiso or Toluna. Those who tried them thoroughly reached a sad conclusion: "After a month without stopping watching videos, answering surveys and giving away clicks, the income is not even for a couple of coffees: less than 2.5 euros."

"On the internet, micro-segmentation only works when you have a huge volume," recalls Fernández. "Facebook is still king here. For 10,000 euros you can get 10 million hits and 10,000 records of people interested in your product. It's almost impossible to compete against that."

Source: The Confidential

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