Robert Loughan is the founder and chief executive officer of Ferret, a Calabasas company and platform that allows users to evaluate the reputations of their social and professional networks using an AI-powered mobile app.
His goal with Ferret: Democratize swaths of data typically accessed only by large corporations.
“Big companies or big financial companies and governments have these very powerful tools that they use to make decisions about our future,” Loughan said. “I wanted to try to find a way to democratize the data and the tools they use so that we all have access.”
Ferret has negotiated exclusive access to records and data compiled by solutions company NominoData. That data was once only available to financial institutions as a means of handling identity, compliance and risk management issues. Since acquiring access and making the data freely available, Ferret has expanded its data system, recently garnered $4 million in seed capital and is currently seeking further data acquisition deals to scale its platform.
Loughan’s motivation comes in part from business experiences involving asymmetrical access to information.
“I got burned on this one deal where someone would invest in a company and the next thing they would do is write a promissory note where the IP is the collateral, which is typical. Then they convince you to extend it, then they don’t extend it and then they foreclose the next day and try to take the company. That happened to me,” he said.
By the time Loughan and his associates took the individual to court and navigated mediation, his company had already bled dry and been taken. Loughan later discovered that the individual had pulled the same stunt with three other companies.
“(Ferret) kind of blossomed into making transparency the new norm. So not only looking for bad things, but (good things too),” Loughan said. “You basically have a dossier of all the people that you know, and all the people in your contacts, the companies and people that work for them … that shows the full spectrum of all of the things that have been printed about them from reputable sources, including government records.”
Loughan added that Ferret does not factor in user-generated posts such as blogs.
Loughan is a serial entrepreneur with his fair share of business experience, including his role as co-founder of Octane Software, which sold for $3.2 billion in 2001.
With Ferret, his co-founder is Al MacDonald, chief executive of NominoData, the company that supplies some of Ferret’s data. Ferret has its administrative offices in Calabasas.
As the co-founders built out Ferret, the most pressing matter boiled down to privacy and ethics.
Kristen Walker, director of the masters of business administration programs at California State University – Northridge wrote in an email to the Business Journal that Ferret will have to find footing in a dense data broker and surveillance market and argue how the data it uses is unique when compared to competitors.
“How to do so ethically has to be carefully worked into the business model, not an afterthought or reaction,” Walker wrote. “Companies must also remain aware of increasing regulation efforts as consumers become more knowledgeable about the risks of exchanging information online.”
Initially, Loughan knew little about privacy laws and organizations such as Europe’s General Data Protection Regulation, the Fair Credit Reporting Act or the California Consumer Privacy Act. He emphasized that he has worked diligently with a global law firm to ensure the platform operates within boundaries.
The firm has asked Ferret not to disclose its name.
“I’ve spent a lot of money doing it right, because it’s not just about legal, it’s about ethics,” Loughan said before adding that he hired a company to review the work conducted by the law firm.
Loughan added that his model is to build out the platform as if he were trying to satisfy the laws and regulations for places throughout the U.S. and the world that are strict regarding privacy. “I think you’re going to stay out of trouble (if you do that),” Loughan said. “The last thing that we need is for someone to say, ‘You published data that is not public, that is not legal.’”
Ferret plans to publish a white paper that will explain in detail what the company does and does not do on legal and ethical issues.
Making the legal cut is one thing, but another obstacle Ferret will likely navigate comes down to a question Loughan believes people will ask about the company — is it fair?
“While the intent may not be to do harm, the consequence may in fact do harm,” Walker wrote. “This is problematic in terms of social responsibility and issues of vulnerability (i.e., fairness, trust, equity) even if the goal is to protect the reputation of another entity.”
Loughan has heard concerns from people that it is not fair if someone is pinged on the platform for something they did many years ago. He said that Ferret, which is under a non-disclosure agreement with five dating sites that are reviewing the AI platform for potential use, will strip out as much excess data as it can and is considering leaving out data that is more than 10 years old.
“We’re not dogmatic about anything. I’m waiting to see what the world is going to say and what they don’t want to know,” Loughan explained. “We’re going to listen to our customers and if we hear a lot about ‘We don’t want to hear or see that kind of data, it’s not helpful and maybe more hurtful, even though it’s public,’ we’ll probably make the decision to just turn that piece off.”
The app is expected to roll out an open beta in the first week of November if the recent controlled beta goes off without significant hitches.