Rob Pace wants to upend the world of data analytics and help the nation’s cash-strapped nonprofits in the process.
The 58-year-old founder and CEO of Addison-based HundredX Inc. is paying millions of dollars to nonprofits — from youth sports teams to rare-disease charities — for simply getting their supporters to speak their minds about consumer companies and brands.
In return, HundredX is rapidly building a treasure trove of data gathered from anonymous, diverse and geographically spread-out people. Companies that subscribe can delve deep into the data to see how they’re doing on all sorts of fronts.
The former senior partner of Goldman Sachs and a past national chairman of The Salvation Army calls it data for good.
“We have the easiest way to raise money ever, and the product is better,” Pace said.
“Instead of holding bake sales, washing cars or selling concessions at sporting events, a qualified nonprofit can typically earn two bucks for every smartphone survey that its supporters complete.”
It works out to about $100 per volunteer survey-taking hour.
HundredX is paying $500,000 a month to nonprofit organizations of every size and kind. Pace hopes that will grow to $500,000 per day.
That’s not as farfetched as it might sound, says Clark Hunt, CEO of Dallas-based Hunt Sports Group, who is among the early-stage investors and adopters.
“At first I was like, ‘I don’t understand this,’” said the 56-year-old owner of the Kansas City Chiefs and FC Dallas. “But once I got it, I was, ‘Wow! This company gives away millions of dollars to charities and in the process collects data that is 10 times better in its quality than its competitors.’
“I believe HundredX has the makings of a unicorn. I really do.”
HundredX’s name stems from the biblical story that the right seeds planted in the right soil can yield a crop that’s a hundred times greater than those scattered indiscriminately or planted in poor soil.
“The analogy is that listening allows businesses to do that,” Pace said. “The beautiful thing about our data is that it’s unfiltered, benchmarked to other companies, and it comes from normal people.
“I feel like a kid with the answer key.”
Crowd is genius
Big tech companies are under fire on Capitol Hill for pirating customers’ personal data for financial gain.
In contrast, Pace calls his data “ethically sourced” because neither the nonprofit nor HundredX knows who participated in the 30-day campaign or which of the 2,000 companies in 65 industries they commented on.
Participants are demographically grouped but not named, so their personal information can’t be exploited.
“The crowd is genius and often collectively much smarter than the experts,” he said. HundredX surveys, for example, predicted the streaming ascension of HBO Max and the slowing of Netflix months before headlines pointing this out began appearing in the financial media.
Currently, the survey-takers’ appetite for plant-based meats isn’t taking off as fast as some experts predicted.
And they don’t yet see the value of the 5G network that mobile providers all like to tout. They probably won’t until a killer app is developed, Pace said. “5G is No. 16 out of 16 of what customers are talking about. What customers are talking about are coverage area and price.”
Marquee names
In the past two years, HundredX has raised “multiple tens of millions of dollars in capital” from two investment rounds.
In addition to Hunt, big-name investors include discount brokerage pioneer Chuck Schwab and John Hayes, the former chief marketing officer of American Express.
Schwab, who is acting as an individual investor and not as chairman of Charles Schwab Corp., said he was attracted by “the power of listening combined with the HundredX business model that does good.”
Hayes says it’s like having a Bloomberg terminal for consumer feedback at your fingertips.
“You can dial into it and understand your market based on what’s going on today,” said Hayes, who is credited with bringing Small Business Saturday to life while at AmEx. “We have so many social trends in this country going on at once that it’s easy to get distracted. Rob is making it easy to stay focused on how these trends are impacting your business.”
Institutional investors with $350 billion in combined assets under management — including three of the country’s largest hedge funds — have put in money and are using HundredX data to make portfolio decisions, Pace said, adding that confidentiality agreements prevent him from naming them.
Hunt participated in both financing rounds, even though he rarely invests in early-stage companies.
“I’m a small investor [in the group], but it’s a significant investment for me,” Hunt said, declining to reveal how much he added to the war chest.
Hunt initially worried that people wouldn’t participate in a meaningful way.
But two data campaigns for FC Dallas’ youth teams — a small pilot in November 2019 and a much larger data campaign a year ago — showed how eager parents and friends were to help. Nearly everyone who could participate did, raising a total of $350,000 for their teams. They’ve since done two smaller programs and are poised for No. 5 later this month.
“That’s really the genius of the model,” Hunt said. “The groups doing the surveys care greatly about the organizations they’re involved with. They don’t have survey fatigue and are more than eager to take the surveys.”
But the most important reason Hunt got involved is his 35-year professional relationship with Pace, the only boss he’s ever had other than his sports icon father, Lamar Hunt.
Hunt was on the same investment banking team as Pace when he joined Goldman Sachs in New York after getting his MBA at Southern Methodist University in 1986. When Pace moved to Los Angeles to head up the fledgling West Coast region three years later — in what some thought was a career blunder — Hunt followed him there.
“Rob was one of the best investment bankers during my time at Goldman Sachs — and I couldn’t have had a better boss,” Hunt said. “He retired from Goldman to lead The Salvation Army, which shows you where his heart is. He’s always been a person who’s given back. He’s humble but incredibly smart.”
Striking it big early
Pace grew up in the tiny town of Bonneville in one of Oregon’s poorest areas. Half of the adults in the area were unemployed, and no one Pace knew went to college.
He was a remedial reader but had “this math geek thing” and could divide and multiply before he turned 4.
His gift for numbers and ability to spot patterns in them held him in good stead when he joined Goldman Sachs on Wall Street in 1986 after getting his Harvard MBA.
While at Goldman, Pace invented one investment instrument and co-invented another that turned into multibillion-dollar lines of business for the investment giant. “I was fortunate to be one of the partners when it went public in 1999,” said Pace, who was 36 at the time. “I got hit by the lucky stick when I was young.”
He left Goldman in 2007 as head of its multibillion-dollar capital markets and related risk management businesses because Wall Street had become too transactional and he was an old-school relationship guy. “Sadly, that proved to be fairly prophetic when the wheels came off in 2008 because of that,” he said.
HundredX is Pace’s second try at using data analytics in a positive way.
The first — with the unfortunate name of Goodsnitch — was billed as the “anti-Yelp” because it posted only positive reviews while privately sending complaints directly to the businesses.
But his database never achieved critical mass. Pace gave up the ghost and pivoted to his data-for-good plan in 2019.
“We’re starting to get traction in the market for investors and companies that want to know the truth, not just about themselves but about their competitors and their industry,” Pace said. “We have more than 20 corporate clients using this concept of listening. It took a while to put it together in a way that made sense to people.”
First Republic Bank, a San Francisco-based bank and wealth management company; Viasat, a rural internet provider; and the San Diego Padres baseball team are among companies and organizations that pay a subscription fee for data ranging from about $100,000 to more than $1 million per year.
Nearly 50% of the company’s data is mined from people of color, Pace said. “We’re trying to give that group a voice in terms of what their experiences are.”
For example, HundredX keeps consumer data on over 200 prescription drugs. “The experience of Black and Latino consumers is dramatically worse,” he said. “There are more side effects, lifestyle impact, less availability, poor instructions.
“One of the things I’m most excited about is bringing a spotlight to some of these issues. Whatever your political beliefs, who could be against all consumers having effective pharmaceuticals?”
Major league talent
Since March, Pace has been on a hiring spree.
David Allison, who headed Google’s internal analytics group in Irvine, Calif., joined HundredX as its chief products officer in March. Two months later, Michael Wong left his post as principal software engineer at Google to join his longtime buddy and colleague as chief technology officer.
“Michael and I built the analytical tools that over 92% of Googlers use to understand Google’s vast array of products and services,” Allison said. “I know I’m biased, but I think that an extremely compelling aspect of HundredX is bringing together world-class tech and business talent to solve a fundamentally human problem: How can businesses create dramatically better outcomes for their customers?”
Andre Benjamin, who joined HundredX in April as vice president of strategy, spent most of his career at Goldman. “I wanted to find more personal gratification in what I was doing,” he said. “This solves everything I was looking for: doing high-quality business with a talented leadership team to help change the world.”
At any given moment, Molly Smith, HundredX’s chief client officer, is coordinating 20 programs with nonprofits around the country, ranging from large ones like the National Urban League and Morehouse College to tiny ones like Peace Love Leotards Inc., a nonprofit in Winter Haven, Fla., that donates dancewear and provides virtual training videos to underprivileged children.
Its founder, a 17-year-old who studies dance in New York City, raised $5,102 in May, Smith said. “That’s a load of leotards.”
Gabby’s Grief Center in Monroe County, Mich., was in dire straits in October, when its executive director, Kaye Lani Rafko-Wilson, heard about HundredX.
A 5K run and two other fundraisers had been canceled and grant money had been reduced. Yet Gabby’s free grief counseling services were needed more than ever as her small town lost loved ones to the pandemic.
Rafko-Wilson galvanized her supporters, who generated more than $50,000 in donations in November by taking surveys on their phones — enough to cover half of this year’s budget and more than offset the canceled events.
“This was a safe way of giving productive feedback to companies that are searching for it,” said Rafko-Wilson. “And yet, my audience didn’t have to open their pocketbooks or worry about their information being sold to another marketing firm.
“I told my audience to give real feedback so that HundredX would have something valuable to sell.”
Rafko-Wilson has signed up for a second campaign in November.
Re-upping — and almost everyone does — is vital since HundredX must constantly feed the data beast. The “use-by” date for data can be one month for a new product rollout up to a year for macro trends, Pace said. “The most common view is the latest three to six months.”
Pace is trying to find that blend of creating a company with a great product that allows him to give away millions of dollars.
“I don’t take any salary. I’m going to give 90% of my share of this company to good causes. This is my second act. It’s not that I’m such a great guy. But I have enough, and enough is a feast.”
So what keeps Pace up at night?
“Execution,” he said flatly. “I have seen so many good ideas fail because of failure to execute. I know we have a great idea. The thing that used to keep me up at night was putting together a great team. We’ve been able to attract some amazing people.
“Now we’ve just gotta execute. That sounds much easier than it is.”
AT A GLANCE: Rob Pace
Title: Founder and CEO of HundredX Inc.
Age: 58
Grew up: Bonneville, Ore.
Education: Bachelor of science in finance and mathematics, Oregon State University, 1984; MBA, Harvard Business School, 1986
Past experience: Senior partner, Goldman Sachs; national chairman, The Salvation Army
Personal: Married to Jennifer for 32 years. They have two sons and a daughter, all in their 20s.
HundredX Inc.
Founded: 2013 as Goodsnitch in San Diego
Headquarters: Addison
Ownership: Privately held with Rob Pace as the majority owner
Employees: 30, with 50 planned by year end
Market valuation*: $100 million-plus
Annual revenue: Under $10 million
*Estimated price that the company would currently sell for
SOURCE: Rob Pace
How it works
Nonprofits sign up with HundredX and enlist their supporters to participate in a 30-day data drive.
Participants — not their nonprofit — decide which of more than 2,000 organizations and brands in 65 industries that they’d like to share their experiences about.
During the 30-day data campaign, participants can pick up to 75 brands that they’ve had actual experience with within the past six months.
Each survey takes about a minute, and the nonprofit typically receives up to $2 for every completed survey.
Fifty surveys equal $100 and take less than an hour to complete.
Data is compiled into demographic, geographic and industry groups that can be used for all sorts of comparisons.
Companies and organizations pay a subscription fee that ranges from about $100,000 to more than $1 million per year to tap into the HundredX database.
