Sramana Mitra: How does the business model split? How much of it is affiliate?
Issa Asad: I started converting all my energies to just doing this. All of it is strictly direct to consumer marketing. I’m a Facebook and Google customer where a lot of companies went out and they were trying to buy marketing from Facebook and Google. I have queries for Google and Facebook in my office every two weeks.
Sramana Mitra: Describe your current business in two sentences.
Issa Asad: We are the third largest lifeline provider on behalf of the US government and the United States with over two million customers. We provide low-income people with access to cellphone and Internet data.
Sramana Mitra: I see. Is this something that you’re white-labeling for someone else?
Issa Asad: I am Sprint’s largest customer in the United States. We use their minutes and their platform but with our brand.
Sramana Mitra: You’re white-labeling on top of Sprint. What is the business model? People are buying subscription to the service?
Issa Asad: The customers apply online on our website. We are connected to the US government. We’re able to determine if that customer is eligible for service. If they’re eligible and the government accepts their application, we’re able to approve that customer and basically offer services on behalf of the government.
Sramana Mitra: Got it. Do you make money off of the sale of the cellphone or do you also make money off the data?
Issa Asad: We make money on the data and advertising. I was able to make my own app and advertise direct to consumers. I took my experience from affiliate marketing. As a consumer receives these handsets, we’re able to interject offers and marketing through a cellphone and started to get paid by advertisers to do so. We’ll have Coca Cola say, “We’ll pay you $10 per thousand views.” We run those ads on the cellphone.
Sramana Mitra: Is there an ad network that you’re also using to run these advertising campaigns?
Issa Asad: We use about 30 ad networks.
Sramana Mitra: You’re basically using Sprint carrier platform and you’re using a bunch of ad networks to monetize the consumer base that you have created.
Issa Asad: Exactly.
Sramana Mitra: What is the size of the customer base?
Issa Asad: We have two million.
Sramana Mitra: Excellent. I have a few questions that are intriguing questions. What class of advertisers are particularly interested in your segment?
Issa Asad: You’ll be very surprised. When I first looked at it, I was said, “What people would be interested in my consumer base?” I started looking at it. You have credit card companies. There’s a lot of gaming. Consumers take to those apps. One of our biggest conversion is education.
Sramana Mitra: Interesting. What are the sub-segments in your two million? Are there demographic sub-segments that are dominant in your population?
Issa Asad: When you look at low-income people in the United States, everybody automatically started making assumptions. I’ll tell you that the assumptions they make are wrong. People say African-American, Hispanic, and international communities. The reverse is true. 57% of all our customers are middle American housewives.
Sramana Mitra: Is there a geographical bias?
Issa Asad: We cater to the whole United States.
Sramana Mitra: What is the distribution? If I were an advertiser wanting to buy your inventory, what is the geographical bias of that reach?
Issa Asad: 27% of the population in the United States qualifies as low income. 57 million people get Medicaid and 48 million get food stamps. At the end of the day, there is no specific demographic to say what kind of customers you cater to. Our ability to market through Facebook has been a tremendous experience because where Facebook was just 5% of our sales three years ago. Today, it’s about 60% of our reach. There is no market segment that you cater to directly.
Sramana Mitra: My question is what is your number one geography?
Issa Asad: My number one geography is Texas. Ohio is second. Michigan is number three.
Sramana Mitra: Interesting. The midwestern is a big poverty zone and you’re saying that you’re seeing traction there.
Issa Asad: Correct.
Sramana Mitra: Is that because these are people who are formerly factory workers and they have some technical savvy? Is the entire 57 million population in the US online today?
Issa Asad: No. We find that almost 67% of the US population that’s under the poverty level is online. We find that these people that are in that poverty level also have access to community centers, work centers, and workforce which help them get online. We also find that 85% of our market segment doesn’t come from them only accessing online. Almost every job today has access to some computer in some form or fashion.