Can John Roas Caden solve the privacy problem of Internet advertising?

Internet advertising was born out of the idea that a variety of services and information would be available free of charge in exchange for being able to collect data from consumers in order to offer them better ads or search results. Yet that ideal consumer contract has, in many cases, turned into a Faustian bargain at the expense of personal privacy.

Data, often provided by consumers without their informed consent, is at the heart of the staggering rise in internet advertising. Worldwide digital ad spending was $521.02 billion in 2021 and is projected to reach $876 billion by 2026, according to Statista, with marketers spending more on digital platforms than any other media format.

Privacy legislation such as the European General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) have attempted to level the playing field to provide consumers with more control over their personal information. Both have yet to significantly change the dynamics of the market where billions of market caps are at stake in companies like Amazon, Netflix, Alphabet, Meta and The Trade Desk.

One startup hoping to change that dynamic is Caden. Founded in 2021 by John Roa, the New York-based company provides an open data platform that allows users to control and monetize their personal data. Caden allows users to securely access data from various brands and add it to their own Secure Vault that they own and control. Users who agree to share their data for advertising purposes can earn a portion of the revenue generated by the app.

The idea isn’t entirely new, but Caden’s concept is championed by internet luminaries including Jerry Yang of Yahoo! fame founder and Wenda Harris Millard of MediaLink, along with business leaders such as Barry Sternlicht of Starwood Capital. Its founder is serial entrepreneur John Roa who broke his vow never to go through the pain and stress of a startup again, but did so to build Caden. This founders journey is based on my interview with Roa.

I had actually written a very rough business plan for Caden back then in 2015 [When Roa was at]. And so I thought about the idea for a long time. And so in 2021, I was talking to a friend who comes from the martech world, ad tech, and I showed him this business plan. He was the first to tell me that this is a really good idea and that I should go ahead with it and figure out if it’s worth doing. And my first reaction was, No way, don’t do it again. I’m not starting over, says Roa.

Roas’ reticence was based on exhaustion and depression caused by the stress of building and selling his Chicago-based digital agency AKTA to Salesforce in 2015. While the sales made him a wealthy man, they also left him spiritually empty and subject to the ‘alcohol. and substance abuse with thoughts of suicide. A friend encouraged him to write about his experience, which then became a memoir that was turned into a book A practical way to get rich and die trying released by Penguin in Roas’ effort to promote honesty and transparency instead of the toxic superhero complex we exist in as entrepreneurs, says Roa.

But Caden’s idea began to take on a life of its own when Roas’ plans to spend time in New York promoting his book were shelved due to the Covid-19 pandemic. So his adtech friend brought together a number of influentials like Bill Gray, former Ogilvy CEO Jerry Yang, Wenda Millard and Barry Sternlicht to discuss the business plan. And all of a sudden, there’s a big group of people in front of me and somehow against my will, I was like, I don’t want to do this, I don’t want to talk about this. I figured they would just tell me why it could never work and that’s not a good idea. And it was quite the opposite. And people like Jerry Yang, who helped create the industry, said there’s been a problem with Internet advertising privacy for 30 years, and now he wants to be part of the solution. And I kind of said, damn it, really? And all of these very influential people said, “Not only should you do it, but if you do, we’re going to support it and we’re going to invest in it, and we’re going to weigh in on the success of that,” Roa says.

From that point until now, Roa and his team of about 25 employees immediately got to work launching their app. A beta version is now available. With the Caden app, users can choose to automatically collect their personal data from online services like Amazon, Netflix or Uber Eats into their Caden account, where they can selectively choose to share it and earn money. According to Roa, users can expect to earn between $5 and $50 a month by sharing their data.

So now all that really valuable first-party data, I can now take, which is my legal right, and move it into a secure Caden vault, basically, digital wallets that we provide to you. And that wallet is encrypted and owned by the user. We’re just giving them a chance to put it all together. Once it’s there, we turn it into a knowledge graph, which is by far the most technically challenging thing we do, Roa says.

With $9.4 million in funding to date, Caden is just starting his journey. Its most recent Seed round for $6 million was led by Streamlined Ventures in early January 2023.

Roa grew up in Grosse Pointe, a suburb of Detroit, Michigan. His father came to Michigan to go to school in the United States from Venezuela before Roa was born. I grew up in a low-income immigrant family on the Detroit border. And it’s funny because I think people hearing my story should assume my parents were computer scientists, and I was exposed to computers by them at an early age, Roa says. His father only brought home a computer when he was 11 because it was given to him as a leftover that they would throw away from the Chrysler assembly plant where his father worked.

I just fell in love with the thing. The funny thing is, my parents thought I was crazy. They thought I had a problem. I was just obsessed. But there was no technology in my family before. There was no entrepreneurship. There was none of that. So whatever the reason I went down this path, it’s a bit unknown, says Roa.

His obsession would lead him down a path of building tech businesses and creating wealth. He describes himself as your typical outcast tech nerd, who builds school websites and hacks school systems for fun. He started his first business at the age of 14. At 18 he started a video game business, moved to Los Angeles and then sold the business to William Morris. That exit was followed by Roa creating SocialCrunch, a psychographic analysis company, which was then acquired by Tastebud. He then moved to Chicago and started a digital agency called AKTA which he sold to Salesforce in 2015 before founding Caden in 2021. I’ve had three very classic failures and three exits, Roa says of his remarkable entrepreneurial journey.

As for the future? Whether or not Caden will succeed in returning the balance of data ownership to consumers remains to be seen. We’re building something that’s extremely complicated, very challenging, has all the hallmarks of the hard way to build a tech company, but if it works, it’s going to fundamentally change the future of the internet. And this is an exciting proposition, concludes Roa.

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