Whether we are aware of it or not, companies are collecting our data — produced from daily activities on our phones or browsing the internet — and selling it for profit.
German-born Serafin Lion Engel, the founder and CEO of DataWallet, discovered the idea for his startup after he dropped out of college to follow his entrepreneurial pursuits. He then caught the attention of billionaire Tim Draper and attended Draper University, a renowned school by entrepreneurs for entrepreneurs, on scholarship.
The curriculum differed from that of a traditional learning institution. At Draper, students are taught how to be comfortable outside of their comfort zones and told to go big or go home. In college, students are expected to get everything right, but at Draper, students are rewarded points for failing dramatically:
“So, at Draper University, you are really encouraged to try outrageous things, and it’s quite a life lesson. Once you adapt to this thing to go as big as possible, it definitely changes your thinking and changes your mind.”
While on his way to pursuing a degree in business administration at the Rotterdam College of Management in the Netherlands, he opted to take a leave of absence to pursue his entrepreneurial ambitions. On whether dropping out of school was a good decision, Engel told Nextshark:
“To be honest, I think a lot of people are seriously over-estimating the benefit of dropping out of college. I think you need to have a very, very clear case why you should; dropping out of college is no predetermined way to success. You need to have a very real contingent and super realistic opportunity. Unless you do, I would highly recommend not doing it.”
While Engel instinctively knew the entrepreneurial route was for him, he didn’t have the kind of knowledge or supportive environment that most entrepreneurs are exposed to early on.
“I honestly did not know the term ‘entrepreneur’ until I was 20. It came to me intuitively. It started with small things. When I was 4, I started selling strawberries from the back of our yard on the street. I would get super upset when nobody would buy them, only to come figure out that no one could read the sign. I could not even write properly yet.
“From very early on, I tried to do different things. As a child, I was trying to sell things and make my own money. At 13, I started working at a restaurant even though legally I wasn’t allowed to do it until I was 18. At 17, in high school, I started my first baby steps; I started my first website, ‘Homework Helper.’ You could submit your homework and have an A+ student in their respective field do all the research for you and suggest to you how to write it within 24 hours.
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“Those were things in Germany where in general you don’t really have that entrepreneurial culture and it was seriously not until I went to college that I heard the term ‘entrepreneur.’ ”
The DataWallet founder and CEO said he conceived the idea of DataWallet five days before he started the program at Draper.
“My girlfriend at the time was studying fashion and she and her friends were the epitome of trendsetters. They would always try to figure out what was trending amongst kids: what are they doing, what are they buying, what are they talking about. At the same time, those kids are constantly broke. I thought to myself, how could you potentially fix this? It was obvious to me that all this consumption is in their data — whatever they talk about on Twitter, Facebook, Instagram, Amazon, etc. If brands could look at the data and see what they are talking about and what they are consuming and those kids could get paid for that type of insight.”
Engel pitched his marketplace idea to a panel of 40 venture capitalists and won first place in the Pitch Day competition.
When asked what it’s been like having Tim Draper as an investor, Engel said:
“He’s been a very close mentor. I’m in constant contact with him — be it with words of advice or introductions to key people. Tim is one those guys who is really able to look ahead of the curve. I’m constantly surprised by how much he is able to say about the product; I’m trying to break it down for him and not go too far into the vision and he actually takes it further; he is truly incredible.
“I think one of the reasons he ended up believing in me was because I failed with a startup before. I still remained at it and constantly tried to push and not give up. I think that this is definitely one of the qualities that Tim saw. He knew that I was able to go through the struggle. This is where I think most entrepreneurs start flaking when they see things falling apart. I literally put all of my savings from the last 20 years into my company and paid every employee out of my pocket. It’s been an incredibly rough time and I think that Tim saw that and also knew that that would help me from a more mature point of view.”
DataWallet is a platform that allows you to be your own data broker by giving you control of the data you create online and allowing you to anonymously solicit it to companies. Data is a huge market as individuals create roughly 5GB of data everyday from sites and apps like Facebook, Twitter, Amazon, Uber and Spotify.
In 2012, the Senate Committee on Commerce and Transportation estimated the global revenue of the data market to exceed $150 billion per year. Engel and his team estimate that number to be around $340 billion per year in 2015. He explains that companies are already taking advantage of our data and selling it without us knowing who is sourcing the data, what they sell, who they sell it to and for what purpose. On top of that, we’re not getting paid for the data we generate.
Users of Engel’s app take 100% of the payouts, as DataWallet does not take any cut. The platform makes the process transparent and gives users control over monetizing an asset they already own. The data will also help companies create, build and tailor products around the needs of the people.
Competitors that DataWallet are up against are established multi-billion-dollar data companies that include Axiom, Epsilon and Equifax. DataWallet’s edge is its primary emphasis on users’ experience while other companies focus on business to business cross-sharing data. With DataWallet, users are in control:
“We are taking a completely different approach. We are saying it’s not about the companies, it’s about the user. The user is the one that holds all the key data.”
The benefit of using DataWallet is the income that users will be able to generate from an asset they already own. Kicking off his launch, Engel says the company will do something every three to five months for the most active users on DataWallet:
“We will send them on a trip to really experience the DataWallet lifestyle — going to Miami and riding water jetpacks, going on a safari or going on a helicopter tour over Miami. We will have a really awesome trip planned so they will really know what the DataWallet experience is all about.”
Even with such incredible resources and support for DataWallet, including Tim Draper, Draper University’s billionaire founder, Engel did not realize his success without experiencing failures and defeats. On the importance of perceiving failure as a learning experience, he said:
“It definitely takes a lot of strength to see the learning aspect of it all — especially when you are deep into it and it hits you time after time. Trying to maintain a positive attitude about it is very hard. It’s helpful to look at it from the point of view that there is no failure but learning. At the same time, without a doubt, you need to be a little bit delusional. All entrepreneurs are a bit delusional; it is the premise for founding a company when all the odds are stacked against you big time.”