DigitalTown, Inc. (OTC PINK:DGTW)

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October 23, 2017 Issue



Q&A with Rob Monster, CEO and President of DigitalTown, Inc. providing a Cloud-based Smart City Platform enabling Cities and Municipalities across the Globe and their Citizens to Search and Connect to Local Retailers, Restaurants, Business and City Services


Rob Monster

Chief Executive Officer & President


DigitalTown, Inc. (OTC PINK:DGTW)


Interview conducted by:

Lynn Fosse, Senior Editor, CEOCFO Magazine, Published October 23, 2017


CEOCFO: Mr. Monster, would you tell us the concept behind DigitalTown?

Mr. Monster: DigitalTown is a global, smart city platform which enables any city to become a smart city utilizing a cloud base that allows citizens to be able to search local, connect local, share local and buy local while equipping municipalities and other local institutional stakeholders to be able to work together to co-create a better quality of life for all. Imagine at each city that is able to be not only its own Google, but also its own Amazon, Expedia, Air B&B and PayPal, all in one.


CEOCFO: What does that mean day-to-day, when you are engaging with a city?

Mr. Monster: Typically as citizens we have become more and more aligned in terms of our preferences and affinities for certain types of websites that we use or certain mobile apps that we use, such as Expedia to search for travel or Amazon to buy an item for PayPal to make a payment. The problem over time is the fees that are associated with using these various tools are going higher and higher and more and more revenue is leaving the communities. In the early days when the size of the eCommerce economy was small, the consequences in terms of the well-being of a municipality and the well-being of the stakeholders that are living there, was not significant but as the online economy has rapidly outgrown the offline economy, the consequence in terms of the well-being of merchants on Main Street, is becoming more severe. In response to that, municipalities are having to look at their digital strategy but they lack tools, which is how DigitalTown began.


CEOCFO: Is this a platform that is adapted to each city?

Mr. Monster: We operate more than 22 thousand city portals accessible to web and mobile. We work with local stakeholders. The standard approach is to work with local municipalities, the Chambers of Commerce, destination marketing organizations and trade associations that are operating in those communities and to provide them with the technological tools to have a cohesive additional strategy for allowing members of the community to search local, buy local and buy direct. In some cases where there is no municipality or Chamber of Commerce or institution that wishes to license the platform, we then use blockchain as a distributed ledger to be able to allow private citizens who are legal residents of the community, to become the owners of the platform, ultimately equipping those private citizens to also, be able to buy and sell those ownership units through blockchain.

CEOCFO: How much of your business is global and is that a major focus?

Mr. Monster: We were a global company from the start and are based in Seattle, with the primary technical center in Vancouver, Canada. We are by design global. We are a global company with operations and personnel on the ground in Europe, India, Latin America, and of course the USA. We are in the process of adding Africa as part of our on-the-ground staffing. However, we already operate many sites in Africa.


CEOCFO: When might someone turn to DigitalTown?

Mr. Monster: Whether someone is a resident of Miami or Gainesville, we provide solutions that allow the person to surf the web. The intent is that the city portal serves as a search engine for buying local, searching local, featuring local businesses where you could make a direct purchase. This notion for creating a vehicle for which citizens can act upon the rhetoric of buying local by practically being able to buy online 24/7, is a big step forward for municipalities and the cities they serve in terms stemming the tide against the winner-take-all economy that is rapidly unfolding before our eyes?


CEOCFO: What does research show regarding people that want to buy local if it is made easy for them?

Mr. Monster: There are different segments, some of the Gen-Y and millennial segments, having affinity toward the locality, and Gen-X and Boomers have a greater affinity for the locality. They are more settled in their community, they have appointments and relationships with merchants that they have bought from for many years, and when those merchants struggle or go out of business because they cannot compete in the digital economy, it affects them more directly. We think we will see a greater movement across age groups for appreciating the importance of stemming the tide of winner takes all. For example, most consumers are not aware that Expedia charges a commission of up to 40% to book a hotel room. If you are a small hotelier selling a room, not only do you get paid $0.60 on the dollar, you get paid net $0.60 after staying. Contrast that with a large hotel like a Marriott who will pay 14% commission and get paid on or around the time of booking or definitely by the time of the stay. The relative economics for an independent hotelier relative to a larger chain, is completely unfair. The consumer is only familiar with the convenience of being able to use the consistent user experience of Expedia, or whatever their chosen product is, but they do not realize is that now 93% of the US online travel agency market for online hotel booking is now dominated by two companies, Priceline, the parent company of, and Expedia. Therefore, we have de facto monopolies already in operation, and with that comes the ever increasing pressure on local merchants and DigitalTown is partnering with the communities that are depending upon the well-being of local businesses to reverse that trend.


CEOCFO: How do you get consumers to care?

Mr. Monster: That is a great question and the approaches are twofold. Number one, partnering with the municipalities that control a great deal of the messaging and signage that is visible within the community, and the second method is blockchain, which is the ability to make citizens of the community actual owners whereby they share in the businesss ability to keep money in the local economy. Rather than having that commission money go outside of the community to an Amazon or other market-making platforms that have become a defacto standard in the industry, the search experience becomes the starting point of being able to search local and buy local. Creating those various points of use not only for staying informed and engaged but also buying local, are all designed to create a habit-forming user experience which starts on a city page of accessing the city app for being informed locally and locally engaged.


CEOCFO: Have we hit a turning-point with blockchain so that people understand enough for it to be a viable factor?

Mr. Monster: I think it is still early days for blockchain. There are obviously early adopters that started with persons who were trafficking mainly in contraband, who were likely using the likes of Bitcoin, but Bitcoin has become more of a mainstream asset class for a growing number of people that like the idea of frictionless instant payment that bypasses the traditional banking fee. Now more recently mainstream press, especially Business Press and Tech Press have provided ample coverage around various technologies that are built around blockchain and distributed ledger. Governments are developing it for the purpose of developing solutions that are self auditing and can be cost effectively deployed. Platforms like this are about bringing these Best of Breed technologies into the mainstream and down to the local level. Consider for example Uber, which is only in a small amount of cities worldwide, it has become a Behemoth of an enterprise. Consider for example India with all its vast population of almost 1.5 billion, declaring initiatives to bring smart city capabilities to 100 cities, well they announced it two years ago and it is still not done but what about the thousands of cities that are not included in the first 100 cities. Cities all around the world benefit from applying this technology and there is no reason why democratize it as a universal good, connected through a single sign-on that you can go from one city to the next with one login and be able to transact direct and local with those merchants. It is a great enabling ability and because it is self-financing for transactions, everybody can afford it.


CEOCFO: What is different if I were to go to a Gainesville DigitalTown site?

Mr. Monster: The main benefit is the prospect of being able to book local and book directly. The restaurant industry is having a difficult go of it, with the combination of the move to delivery so the Grubhubs of the world that take 30% of the gross ticket combined with rising operating costs of restaurant operators have made it difficult for many restaurants to maintain profitability. The restaurants are having year-after-year some of the toughest sequential growth patterns that they have seen in decades. The idea that the local communities are able to book local and book direct is an interesting aspect both in terms of allowing restaurants that are not digital to become digital, but also inviting a dining industry innovation which is the notion of the so-called ghost restaurant. Ghost restaurants are restaurants that have menus and they deliver to you but they do not have an actual restaurant. These types of innovations are uniquely possible in a world where we are digitally connected.


CEOCFO: How do you focus your outreach in marketing?

Mr. Monster: Our emphasis from a roll-out standpoint is around market education. We have built these platforms and many of them are operating thousands of city sites. As a public company we have a unique position of being able to allow both city stakeholders and non-city stakeholders to become beneficiaries and stakeholders in the success of DigitalTown as a movement. DigitalTown at the fundamental level is a movement, and it is a movement in trying to stem the tide of winner take all and return and restore local economic safety while co-creating quality of life in a public/private partnership between the citizens and the municipalities or other local entities responsible for the well-being of the citizens they are intended to serve. The technology which has been developed in many different locales, has not been democratized so DigitalTown provides that tool. There will be cities that will be early adopters and later adopters and in some cases non-adopters. What we are seeing remarkably is a great deal of interest from unexpected places like Latin America, Africa and Eastern Europe who have seen this happen to the Main Street economy in the United States, and do not want that. In places like Istanbul where eEcommerce penetration is just 2%. They see what Ali Baba in China has done to local merchants and they do not want that. Family-owned businesses desire to maintain some semblance of a sustainable position in the local markets. Using technology like this in municipalities can help them achieve that outcome.


CEOCFO: Are you seeking funding, investments or partnerships?

Mr. Monster: The company is publicly traded, fully SEC compliant and audited with plans to make a move to NASDAQ in the foreseeable future. Generally, we have relied mainly on private investors instead of raising funds from large institutions and the logic there being we are a movement and we want to optimize for creating value form from many stakeholders and not just a few. We have not actively courted large institutions. Though we have had engagements from large institutions and, though we may have  had engagements  and we are open to taking funding from mission-aligned investors who see the importance of this movement to create a sustainable platform for driving local economies.


DigitalTown allows citizens to be able to search local, connect local, share local and buy local while equipping municipalities and other local institutional stakeholders to be able to work together to co-create a better quality of life for all.- Rob Monster


DigitalTown, Inc. (OTC PINK:DGTW)



Rob Monster







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