Serdar Nurmammedov, Founder and CEO, Beam

Coin Rivet: Tell us about yourself and how you got to the point of announcing an ICO to “rebuild retail so that products and services know the customer they’re destined for before they are even produced”.

SN: We started Beam in 2012 and, from the very beginning, our difference was that we successfully combined the functions of payment and marketing. Our users simply link their credit or debit cards to our app and they can immediately earn or burn rewards every time they pay using Beam. There is no separate step to produce a loyalty card or voucher at the point of payment.

Retailers also get valuable insights, ranging from store visits to satisfaction surveys and calculation of Net Promoter Score after every transaction. These can then be sliced and diced into various attributes such as geography and demographics. Finding the right formula and refining the value proposition for retailers and our users took us four years and $25 million. We cracked the business model that worked for all parties in 2016, after moving through four very different models.

Retailers represent one end of the value chain and they are willing to contribute value if they can measure their ROI down to the cent. On average, retailers outside grocery and fuel contribute 16% into a common rewards pool. We then use this amount to help them acquire customers and keep them engaged. And Beam doesn’t cost a cent unless it brings results and up to 70% of what they contribute goes back to their customers, which eventually comes back to the retail economy, creating a multiplier effect.

Coin Rivet: And what about other parties involved in this space?

We also discovered that all other stakeholders are willing to contribute value to engage with their customers. This led us to study the value chain closely and establish that it’s quite inefficient and there are many problems to solve beyond demand generation. These include planning, pricing, marketing, discounting and excess management.

We also know that users will adopt new technologies if they get good monetary and convenience value out of them. So, we decided to take Beam from being a product to a platform that not only helps retailers but also the entire value chain. This is where the use of blockchain technology is most effective. It allows building money as well as incentives at the protocol level in a distributed manner. The retail value chain is naturally quite distributed, but it has been run in a centralised manner at a stakeholder level because there was no other way. This is about to change.

Coin Rivet: How are you looking to bring about change?

We are now opening the Beam platform up to the world where customers own their data and get paid to share it with the rest of the value chain. This creates the right incentives for customers to share their data as much as they can and at the same time gives the right level of protection of their privacy. In turn, stakeholders in the value chain can now see the full picture of customer behaviour that drives demand and supply. We have developed a token economy that incorporates all our learning to date. As part of this we are tokenising Beam’s revenue model to incentivise developers from all around the world to help overturn the status quo.

Coin Rivet: The token sale will last until Q3 2018 with the aim of raising $40 million. What made you go down the ICO route, what has been the initial reaction and what will you do with the money raised?

SN: The initial reaction has been quite positive and those with experience of the retail value chain seem to agree with the problems we have identified. Most parties we have talked to also agree that a distributed solution is required. We have a proven revenue model and we want to accelerate its scale globally. To do this, we are distributing the benefits of our revenue model globally with a token model specifically built for the retail value chain.

Currently, Beam fulfils the functions of an issuer, acquirer as well as a clearing house and technology provider. Our app acquires users and processes transactions on the customer’s behalf. Our integrations with PoS systems process transactions on behalf of retailers; and Beam operations in a given city are also responsible for growing the acceptance network and providing customer support.

Going forward, we are opening up the Beam platform with a level playing field, so anyone can become a service provider and fulfil the role of an issuer, acquirer as well as a local partner. All of the revenue generated on the platform will now be distributed between these actors globally. Increasing participants will not only accelerate its global scale but also reduce the cost of customer and retailer acquisition. Issuer, acquirers and all other service providers will be incentivised to bring their users and stores to the Beam network. 40% of all tokens generated will be given to retailers and service providers that join the platform. The sooner they join the more tokens they will earn.

Most of the money will be used to create global awareness around the issues that surround the retail value chain. We also want to educate stakeholders as to why they should care about adopting the token economy we have designed and why it is better than what they have. We already have a number of local partners who wish to launch Beam in more than five global cities. We want to increase this to 20. In addition to retailer education, we want as many developers from around the world to become service providers on the Beam platform so they can provide tangible services to retail stakeholders.

Coin Rivet: Many attempts have been made to improve the retail value chain. How will you succeed where others have failed?

SN: We had the courage to make calculated leap of faith assumptions to rebuild our rewards model four times. Today, we have a proven revenue model that keeps all those parties adopting our technology happy. Our current integrations with various PoS systems bring global technical acceptance that exceeds 400,000 stores. In addition, we have processed over four million transactions and $250 million on the network. We also possess an in-depth understanding of the retail value chain as well as the domain expertise to scale the Beam platform successfully.

Coin Rivet: Would you say that, after a lot of hype but no real action, blockchain is finally living up to the hype in the retail sector?

SN: Blockchain by itself will not solve any problems. It needs to be correctly applied where it makes sense and in most cases it’s not the right technology to use. In terms of performance and efficiency it cannot compete against centralised databases. However, there is one thing that it can do that centralised databases will never be able to do and that’s the most important feature of blockchain. With blockchain, you can program money into the protocol and remove the need for a centralised authority or series of intermediaries.

The cost of these intermediaries in some industries outweighs the benefits of centralised databases and the retail value chain is one of them; where each party has fragments of our data in their centralised databases and yet none of them have the full picture of the customer behaviour that drives demand and supply. The cost of this is $4.5 trillion each year. It’s $18 on every $100 we spend. Therefore, we are convinced that the use of blockchain in order to let the customer own their data and create the token economy that incentivises all parties involved, is the right call.

Coin Rivet: What can we next expect from Beam and where would you like the company to by the end of 2018?

SN: We will complete our ICO by the end of September and focus on building our global local partner and retail network for the rest of 2018. We would like to also be live in three more cities. We are currently finalising our launch plans for The Hague in the Netherlands, Lisbon in Portugal and Stockholm in Sweden.