SaaS Interviews with CEOs, Startups, Founders
903 $700m Goes Through BizX As SMB's Barter and Trade Services and Goods
13 Jan 2018
Chapter 1: What is the main concept behind BizX and its services?
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode.
Chapter 2: How does BizX facilitate transactions among small businesses?
Hello, everyone. My guest today is Bob Baga. If you have not met him or heard of him before, he is the founder and CEO of a company called BizX. It's a membership-based association where members can buy and sell products and services using BizX dollars. The company has facilitated $700 million in small business transactions for a total of $300 million in cash savings.
Bob, are you ready to take us to the top?
Yeah.
All right. Break those numbers down for us. What exactly does that mean?
Chapter 3: What are the financial benefits of using BizX dollars?
$700 million in transactions and $300 million in cash savings?
So we have a community of businesses that are all are able to buy and sell amongst each other. And rather than using us dollars, they use biz X currency biz X dollars. Why would they do that? The reason why they do that is that they're saving cash. And so, uh, you might have a restaurant tour. He needs $10,000 of the plumbing. He has a choice.
He can write a check or he can pay for it with $10,000 worth of new food sales. And so for him, it's only costing him his incremental cost, which is about 30 cents on the dollar.
Chapter 4: How does BizX differentiate from traditional bartering?
And so based on an average incremental cost of about 50%, that's $700 million in transactions represents about $300 million in actual cash saved to our members.
Interesting. Because, yeah, yeah, got it. So this is really like bartering on steroids, right?
Well, bartering is interesting. Bartering is you and me. There's two people one to one. And the problem with bartering is that you both have to have what each other want at the same time. How do you keep track of it all? How do you invoice it, take care of taxes?
Chapter 5: What challenges does BizX face in matching services and goods?
And what happens if one guy... you know, screws you on the other end or flakes out. With this, it's actually what we've done is taken all the benefits, the economic benefits of barter and created a liquid currency. And the biggest thing is that you don't have to have what each other want.
So how do you handle that? If I am a restaurant and I had a roof leak or I'm in Houston and I now need a plumber from all the flooding, but no plumber wants 10,000 of my free food. Exactly. How do you handle that?
Yeah. So that's exactly where BizX comes in.
Chapter 6: How does BizX generate revenue from transactions?
So, uh, you need plumbing, you go to, uh, you would go to the app or you'd go to our web or to our marketplace and you would find a BizX plumber. There's probably, I think 40 of them in our system. And so now rather than writing a check, they would pay with their BizX card.
But if that person doesn't want the $10,000 in free meals, what am I paying with on the BizX card?
You're paying with BizX dollars, which then that plumber can then go and use with whatever they want within the system. Oh, I see. I see. Yeah. You see what I'm saying?
So you have like I'm making this up.
Chapter 7: What are BizX's future growth plans and market expansions?
You have digital inventory where when there's not a match between the meals, but I need the plumber, you're incentivizing the plumber and then going, OK, who can I go give these ten thousand dollar meals?
It's actually beyond that. We don't carry any inventory. We literally have a community of over five thousand businesses that are participating that agree to accept BizX currency. And that's everybody from the plumber to the electrician to large major sports franchises like the Oakland Raiders, San Francisco Giants.
But if you can't efficiently match the actual goods that transact and then convert to BizX dollars, you have to perfectly match all of those for the system to work. OK, that's what I'm asking. When you can't perfectly match them.
We never have to perfectly match them because everybody just buys and sells using BizX currency. So Inc.
Chapter 8: What insights does the founder share about starting and scaling a business?
Magazine, one of our one of our. If I want to buy ads, if a BizX member wants to buy ads in Inc. Magazine, they would go through BizX. And as long as they're a new advertiser and they're cleared by Inc. Magazine, they can pay Inc. and BizX dollars. Inc. then takes those BizX dollars.
So let's go break it down. How many BizX dollars for an ad in Inc. Magazine?
Whatever their rate panel is. $5,000, $10,000, whatever their rate is.
So it's $10,000.
Yeah.
So I want that ad in Inc. I am a marketing technology company who I think Inc. 's readers, they will love me. So how do I get $10,000 on my BizX card to pay Inc.?
So you would have either made a sale to begin with and earned BizX dollars already by selling your product or service to another member, or you would... get, uh, BizX or you would, uh, you can get a BizX line of credit so you can actually spend BizX dollars before you earn it.
Okay. That was the key, right? That is what I was trying to get at. So if my services don't exactly exchange on your platform, I can go get credit from you.
Yes. We issue lines of credits in advance, uh, to, to, to new members.
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