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ASHLAND — Peter Jenson hopes to give mom and pop operators the same data advantages heretofore reserved for the Amazons and Walmarts of the world.

Artificial intelligence and machine learning are creating enormous amounts of data. At this point, however, only large corporations possess capacity to harness the technological power. Jenson asserts that’s a threat to small businesses and livelihood of the communities they support.

Even though small businesses account for two thirds of job creation in the U.S., and two-thirds of the gross domestic product, they have lacked the ability to compete, and for the first time, they are dying faster than they’re created.

“It began going that direction in 2008 and is spiraling,” Jenson said.

Jenson and his start-up team at Erndo have developed the tools to reverse the trend.

The solution is turning customers and local communities into influencers and rewarding them for their efforts.

“They simply have to be activated,” Jenson said. “By bringing AI (artificial intelligence) to the local level, automation can be applied to customer engagement and insight.”

Erndo combines AI with blockchain elements to develop customer acquisition, loyalty, insight and engagement.

In essence, Erndo’s app allows small business to interact with consumers in similar fashion to Fortune 500 firms that have relatively unlimited resources.

Jenson earned a bachelor’s in biochemistry and biophysics from Oregon State University and then earned a graduate degree at Oregon Health & Science University in bioinformatics and computational biology.

He likes to think of it as a secret weapon for small business: turning customers into “local heroes.”

During the recently completed beta testing phase in Ashland, about 100 businesses enrolled and 550 users downloaded the app.

“We intended to do 10 businesses and 50 consumers,” said Ben Searcy, marketing director. “But word kept spreading; it was a nice problem to have.

“We compiled a lot of data and know exactly what we need to know.”

Review apps such as Yelp may attract or repel future business, but there’s not much reward for the reviewer, Searcy said.

“People write reviews if they are either happy or upset,” Searcy said.

Once reviews are posted they get buried, for better or worse, and generally are of little consequence. Erndo is designed to give businesses feedback it can use and ripple to points unknown.

“Here we are at Rogue Valley Roasting Co.,” he said. “They may be saying we’re not getting as many people as they want to come through the door; they just don’t know why. Erndo allows people to say why or why not they go there, if they’ve never heard of it, or it’s too far. That kind of insight can help an owner make decisions if they want to market toward them. Or if someone is a Starbucks-only person, it’s great to know .”

Customers earn tokens, building in value as their participation in the system builds. It’s blockchain of a different sorts.

“We’re developing the next generation as people turn their dough into cryptocurrency,” Searcy said. “If you mine Bitcoin you need a node of computers, a lot of technology and an MIT degree to figure out what you’re doing.”

Cryptocurrency mining is something like acquiring stock, but more speculative and volatile. Erndo tokens, however, can be spent where they are earned or anywhere in the network.

Erndo is not a marketplace, Jenson said, but an ecosystem where businesses grow through automated market engagement, while customers see personal returns not merely from their purchases but their voice.

Erndo is a shortened form of Earn Dough.

“We think it gets the point across, the businesses are able to earn dough and to actually scale and grow,” Jenson said. “And customers do the same exact thing. So for both parties it’s simplistic describing what happens.”

With the pilot phase completed, Erndo is now seeking venture capital to hit major markets.

Ashland was chosen as a test market for demographic reasons.

“We wanted to get an idea how this would work,” Jenson said. “The psychographic differences between Medford and Ashland are so large even though only 10 or 15 miles separates them. So we’re able to capture data in an efficient manner. But support for neighbors and friends is a pretty non-controversial thing, transcending religion and politics.”

— Reach reporter Greg Stiles at 541-776-4463 or gstiles@rosebudmedia.com. Follow him on Twitter at www.twitter.com/GregMTBusiness or www.facebook.com/greg.stiles.31.

[Mail Tribune / Jamie Lusch] Peter Jenson, CEO and founder of Erndo, films a promotional video at the company's office in Ashland on Tuesday.