The Marijuana Marketing Company That is About to Change Everything: An Interview with BDS Analytics Founder, Roy Bingham
By Claire Kaufmann | Rebrandingcannabis.com
An interview with BDSA Founder Roy Bingham
In summary, Roy Bingham is the real deal, and our industry should consider itself lucky to have him around. A Harvard MBA with McKinsey Fortune 500 experience, Roy Bingham is a serial entrepreneur who has created, built, operated and harvested businesses at all stages of development including six start-ups. Roy has hands on experience raising capital with leading investment banks and private equity firms and over eleven years experience in corporate treasury, banking and mergers and acquisitions. He also has nearly a decade of experience selling online. So, yeah. Like I said, the real deal.
About BDS Analytics
Roy founded BDS Analytics earlier this year as part of Canopy Boulder. BDS Analytics is a big deal, not only because of the team they have assembled, but because the marijuana industry overall has so desperately been awaiting their arrival. Until now, while many companies have claimed to have different slices of consumer data, no one has been synthesizing true point of sale data across the industry (you know the kind collected by Nielson, IRI, or SPINS.)
Building the infrastructure to collect this data is quite an undertaking but once completed, BDS Analytics will fundamentally shift how the cannabis industry functions. Retailers will sell more and stop wasting shelf space, growers and producers will be better able to create products consumers actually want (which makes retailers want to partner with them even more,) investors will invest more because the market data mitigates risk. In the end the ultimate benefactor is the consumer, who will now get better products that better serve his or her true (not assumed) needs.
Q: Hi Roy, how are you? I am so glad we could make time to do this interview. Thank you! I wanted to start off asking some basic questions. What business problem is BDS Analytics trying to solve?
A: Essentially, we are eliminating the need to guess as to what products to put into your dispensary and which products to develop for a brand. At the moment, most dispensaries that I have spoken to, say that they are using trial and error. They put a product on the shelves for a month and examine churn volume. If it sells enough, they keep it. That is a very inefficient way of getting to understand the needs of the customer. For example, if a customer goes into a dispensary and looks for a specific brand and you don’t have it, you could have just lost a huge lifetime value customer to one of your competitors. So, it is very important for dispensaries to carry the products their customers are actually looking for.
At the same time, if you are a company that is developing products, especially branded products, you want to develop those products based on what consumers are actually purchasing, not based on what you think they might be purchasing or based on what the were purchasing a year ago.
Lastly, we help you make the most of your marketing efforts. If you are running a marketing campaign, campaigns that involve a shift in pricing or a shift in product placement in the store, you’d be able to know in real time what impact those campaigns are having. The only way to do that is with off the shelf sales data, like the kind that BDS Analytics provides.
Q: What makes BDS Analytics uniquely qualified to fill this niche? A lot of people out there saying they are collecting data. What makes you uniquely positioned to succeed?
A: Yes, it is true, there are other companies out there gathering data but it is not primary point of sale data. There are lots of people scraping data from internet sites but it isn’t actually transactional data. What is unique about what we are doing is that we can tell you what was actually sold in your market yesterday. Second, we standardize SKUs. Our system makes sure we are comparing apples to apples, and that is a huge challenge. But, my team has been doing it successfully for over 17 years in different fields. We use algorithms and manual techniques to reconcile existing inconsistencies in data.
Q: How will this data change the everyday lives of marijuana growers, producers and retailers? What kinds of tangible outcomes can they expect, by having access to this data?
A: For retailers, when you match your product offerings to precise consumer demand your revenue goes up. You will likely have an immediate increase in revenue after starting to use our data. There will be low hanging fruit. You will see which brands are selling well at other stores that you don’t have that your competitors do. Your revenue per consumer walking in the door will increase because they will find what they were looking for. The data will also have a physical effect on how you lay out your store. You will be able to see which products are not selling and help best utilize shelf space efficiently. When one of our prior companies worked with Whole Foods, they used our consumer data to redesign their stores and saw a 20% increase in revenue over a six month period after implementation.
For growers and producers, our data will help them know how they stand as compared to their competitors, in terms of market share. It will help them understand the properties that are important to consumers (i.e. organic or outdoor grown, or potency levels.) Also we help producers and growers get more shelf space. If you can safely say “we are number one in our category,” or say, “we are the fastest growing super concentrate in the market,” that makes it easier for you to sell into a new retailer. There is nothing better than being able to use hard data to show how you will be a better partner for them.
Ultimately what matters is not only the cost of joining our network, but the cost of not joining. If your competitor has access to data and you don’t, they are likely to be able to out maneuver you in the market – its a distinct competitive advantage.
Q: If a retailer wanted to sign up as a retailer, what is the process?
A: Every dispensary uses a point of sale system, we’ve come across over 20 that are being used now. Their POS system tracks every transaction, the price, the volume and so on. We extract this data daily, clean it up, anonymize it and then use both our API and manual techniques to make it usable.
Q: I recently read that you raised $1.5 million in your seed round, a full 67% over-subscribed from your original ask of $900,000. Can you tell me more about your reception so far? Are you allowed to mention who your investors are?
A: Yes. We started presenting to Canopy Boulder investors earlier in the summer. We received a very strong response from that group. Later, we did an online and on stage presentation to ArcView, as well as the Rocky Venture Club. Of the people that have invested, over 2/3rds had not invested in cannabis before… about 1/3 never had any intention of investing in the cannabis sector, but I knew me from prior ventures. Many of the investors are smaller venture capital firms. They see us as a lower risk investment, because we provide a service for the industry overall, and because we have done this successfully before in two other industries.
Q: What are your plans for expansion?
A: Our focus is Colorado at the moment. Then we expect to expand to the NW, to Washington and Oregon. In Colorado we have a 100% adoption rate, meaning that all of the retailers we have met have signed up to be part of the program. For a limited time as part of our BDS Preferred beta panel, it is free for retailers, so why not get insight into your sales? We help retailers understand that the risk of not getting involved is equally great. If your competitor uses data and you don’t, that is a marked disadvantage.