Ridge rejected a small data deal because the risk outweighed the return

Transcript

From the transcript TBPN publishes with the episode.

1. 1:03:00

   after that. So many. It's so annoying. What... But what what actually worries you about potentially selling data? Because right now if I go to any LLM and I ask how much is Ridge doing in revenue, it will probably estimate that on things you've said on podcasts and like open web data. And then if asked to build a financial model that models the margins, it might be able to get close with like first principles thinking like it's a McKinsey associate. But it's not going to have the actual data. But if you sold the data and it wasn't de anonymized, it might actually wind up in the training data. Is that the fear?

2. 1:03:40

   Or is it someone being able to go to an agent and just say like, build me a direct ridge competitor. And it's like, well, you're in luck buddy because I got all the data. Is that it? Or what what what makes it unsettling?

3. 1:03:52

   I think I mean, at a high level, it's like you run a business that does hundreds of millions of dollars of revenue and taking Yeah. Taking $500,000 to risk any... To to to introduce any incremental risk. Right? There's already all this risk to running a business, you know, like Mhmm. You're you're... You sell, you know, technology products now. Who knows where that market goes? You sell fat, you know, fashion apparel style products that again go through cycles and risking, you know, the golden goose for not even one egg. It's crazy.

4. 1:04:28

   Yeah. Dude, we're talking just like maybe an egg white out of that. Right? Yeah. Yeah. So I'm not very worried about... Well, a couple things. Yeah. The first is, to Jordi's point, $40.80 grand is not that much money. Sure. Right? Privileged position to say that. I know a lot of people would love it, but you know, I could probably negotiate up to maybe 1,000,000, maybe 2,000,000 or whatever, but saying King the castle. King in the castle.

5. 1:04:52

   It's just not going to make that much of a difference in a year. Yeah. Right? You know, we'll we're up 50% this year. We're we're already doing You hundreds of millions of got any more? Woah. Woah. So it's like it's just it's not that much money. Yeah. Number two, I think that the LLM platforms are going to get the data anyway.

6. 1:05:13

   Oh, sure. Because you're using them. Yeah. Like Right. You know Codex is an amazing tool I use all the time. Yeah. Right? I, you know... I mean if

7. 1:05:20

   you're in the enterprise plan, they're they're not training on the data but there's still other ways that stuff gets...

8. 1:05:25

   Keep adding features and it's like, if you just give me a little more data. Yeah. A little more data. Yep. You know, Astra is already amazing. Yeah. Like in two more version cycles, it's gonna run my entire business. Sure. Of course, it's gonna have all my data. Yeah. And they're like, hey, we have to train and make it a little bit better. Yeah. Oh, sure. So I think they're gonna get for free anyway.

9. 1:05:41

   Yeah. Yeah. The third thing is... And there are other companies that have the data. Like Shopify has your data. Totally. And like they're and like AWS what might might store the data. And they just have different retention and what they can do with it. The the micro one offer, the data broker offer is like, we're taking the data and we can do whatever we want with it. Right?

10. 1:05:56

    Yeah. And they do claim that it's no customer data. They're like, hey, we're not...

11. 1:06:00

    They'll do d d in anominant... They'll run the de anonymizer. Right? Yeah. And they're like, you know... Anonymizer. There's probably

12. 1:06:08

    some indemnity, so like you're not gonna get sued for selling your data or whatever. Sure. But still it's like, look, if if I'm getting random cold emails nonstop for $480, I think we're probably in the beginning of the AI wave. Maybe it's gonna be $4,800,000 in a couple of So you're holding out. Yeah. I'm holding out. That's... So if you want rich data, go ahead and just email me you know, $30,000,000 offers. Yeah.

13. 1:06:27

    There you go. Okay. That makes sense. That makes sense. Do you know other companies that have taken it?

14. 1:06:31

    Yeah. There's there's a whole list of companies that have taken Okay. I mean, look, it's been hard for consumer the past couple of years. Sure. Know, if you add in tariffs or whatever else was going on like Yeah. You know, all the consumer brands are all like posting up negative growth if they're public. Like, know, they're they're shrinking 3%. A lot of people would take that offer just to have some cash coming in.

15. 1:06:48

    I wonder how valuable it actually is. I always thought that, like, the coding data was... Would be valuable. But the e commerce stuff, I I I I guess they want the Slack as well, like how business processes run, so then the models

16. 1:07:02

    can... Yeah. Sometimes when I hear about a company that sold their data, I'm like, I don't want their data in the models that I'm training the models that I'm training. Right? Because I don't wanna I don't wanna live like you.

17. 1:07:13

    Dude, undoubtedly. Like right now if people are desperate to take that money their business is probably not going great. So they're gonna have a big cohort of customers in the data that are just like, here's how not to run an e commerce brand.

18. 1:07:22

    Yeah. But that could be valuable too, you know. There's a lot of Reddit comments that were down voted and that was like, oh, that one doesn't make any sense or that one doesn't answer the question posed by the Reddit thread. Like, the anti signal is as valuable as the signal sometimes. Yeah. That's a good point.