How Above CEO Eric Daimler grew Above to $2.5M revenue and 100 customers in 2023.

hello everyone my guest today is gustav von sydow he's the ceo and co-founder of a company called bert where they're building a data they're building data intelligence companies in a previous life he hustled an e-commerce developed award-winning marketing campaigns and spent way too much time at advertising and internet technology conferences presenting at events such as uh keynes lions web 2.0 demo and techcrunch 50. all right gustav are you ready to take us to the top yes i am good all right tell us about bert what are you guys doing how do you make money so uh bert is actually a company that develops well marketing tech companies but on a day-to-day i run our customer engagement platform which is focused on the ad industry so we help our customers automate routine tasks and identify opportunities to be more successful so typical next generation intelligence company i would say okay and what's the revenue model is it a percent of spend or is it a sas model or what so all our companies have a sas model so typically mid market or enterprise customers and what do you mean all your companies are you spinning companies out of this or what yeah so we originated as a out of an agency built a product and built another product and then sort of ran that as a platform but now we decided to sort of chop it up into pieces which has been well significant for our growth curve okay so um i'm trying to figure out i want to focus on one thing right now so maybe let's focus on kind of the one baby you have that's doing the best in terms of maybe revenue or growth which one do you want to focus on yeah so let's talk about the customer engagement platform uh the other sort of companies we have gms for so that's the one that i spend my time on these days so what's the url for that what's it called so that's actually a a url called above so above.ai which is not launched yet so it's going to be launched in the next week or two okay now so have you pre-sold anything or it's pre-revenue pre-product pre-everything so we uh carved it out last year so we ran it as a product line so it's doing about three million dollars right now okay it's growing about 140 150 year-over-year and describe kind of what it does it sounds like it's kind of operating right now but it doesn't have a website yet so what's it do so it's a this is a product line out of our sort of one of our products and it integrates all our customer systems and provide well i guess sort of smart alerts and automated reporting for ad sales so typical users would be someone within ad sales trying to figure out what to do next what are the actions that i can take to sort of grow my business or sort of focus on the opportunities that have a high likelihood of closing and things like that so is this sit on top of like the crm the sales person walks in the morning and you tell them who they should call first or what yeah exactly i mean crm is definitely one of it but it's also like ad serving systems measurement systems so i'd say typically we integrate with about 50 or 60 systems on a reasonable size customer so like the media companies that we work with have a very fragmented sort of sales of marketing and out stock and how many customers are on above.ai today so it's about a hundred or so sort of individual companies but many of them sort of are in within sort of media groups so we have about three of the top 10 media groups in the world that use the platform in some capacity right now okay and you mentioned a 3 million run rate so you know 3 million divided by 12 monthly that's 250 and that means each customer your hundred are paying about what two you know 2500 bucks a month for the tool yeah but like typically our contracts are sort of structured on the enterprise level so uh like it'll be like two three four hundred thousand dollars a year contracts got it okay good and then walk me through uh i wanna understand more kind of why you decide to break all these products out how does bert interface with above yeah so we i mean we wedged it initially between our underlying customer data platform and sort of this engagement system that sat on top because a lot of customers were asking us to sort of uh get systems and get sort of connected systems that were not our platform so we had a data platform and we built sort of tools on top of that and then it turns out that people also wanted to connect it to their crm and then we had customers that said well i already have a data platform so i don't need yours so at that point we sort of figure that if we divide the company up in two it should make it easier to grow either one of them and once we started that then we realized that hey you know this is actually two companies and then we started spitting things out got it which made it easier for the data play yes yes yep okay good so it makes it easier to grow give me more economics on onabov.ai so churn is critical in a sas business what's above ai's churn so we're about 140 net revenue retention okay 104 or 140 140 okay and where is most the expansion revenue coming from what are people upgrading for so it's either you grow it to more companies within the same sort of account so you go from you know 10 markets to 17 markets if you're in a local media company or you expand it in in terms of adding more integrations and more capabilities okay good so so 140 net revenue retention what about overall growth rate so today your 3 million ar take me back to you know june 2017 what were you then so we're doing about half that or a million or so oh that's great okay so healthy growth and um it sounds like a lot of that growth is would you say more of that growth is coming from expansion revenue we're adding new customers all together so i mean we've we we've been focused on building like a a strong core customer base of bluetooth customers that could act as references so it's only recently that we started do like uh prospecting and legion to the extent we're used to okay okay so most most the revenue expansion has been coming from exactly that expansion revenue not not brand new customers yeah also about half half i'd say okay good and um when did you start this product even if it wasn't named above back in the day when did you launch this particular product so we carted out into a separate product line about a year and a half for late 16 uh ish and and we sort of broke it up into a separate team mid last year and that's where we really started to see great growth so what's the team now just dedicated to above how many people so we have a 20 or so person team and it's mostly engineering and then product and to an extent we have like sales development and prospecting roles that we just started adding and now we're building out sort of a geographical footprint with with our office here in new york because of it i think uh 70 or 80 percent of the revenues for this product line is in the us and so i'm curious where you spend most of your time you've got the parent company you've got bert you've got above and a bunch of other babies it sounds like two we haven't even talked about what does your day look like so i mean typical month i'd be a week a week or ten days in new york and i'll be uh equal time split between our two swedish offices but we have great people sort of uh manning the ship there so so i'm not i mean that's to degree i think that's been a been a sort of a silver lining because i'm i'm i like getting into the weeds of stuff but when i'm not physically there you have to delegate right yeah so are you the g like are you are you the kind of a ceo of above yeah so i'm the ceo of above um but we just just hired a new gm for to manage our other uh sort of portfolio companies got it and have you bootstrapped this or raised capital so we did raise capital but it was a very long time ago uh and then we sort of managed to hit a wall there so we we had to go from 35 people to 15 people there for a while when was the nasty year i was 12 13. i was i can't i can't i can hardly recall anything from from those two years you want to erase it from your memory yeah yeah so it takes you way longer than you're willing to admit to sort of get the get the sort of to to stop thinking about that as the worst part of your life so now it's more lesson learned so how much did you end up raising back in the day so we raised a three million dollar seed and then we completely failed that raising uh sort of a decent-sized series a and we ended up doing like a three million bridge and that was about it a debt debt bridge there or was it yeah so it's actually convertible debt uh that we ended up uh well repaying that's great so you just you convertible debt they give you some cap they give you three million there's a six percent interest and you said you know what we're growing now we can just pay it back pay back the interest well it wasn't that it wasn't that uh that straightforward right they we'd raised it on one plan and then we ended up uh we ended up not executing on that so it was a bit of a a couple of board meetings that were not you know uh uh the the smoothest ride but i think we're all friends now oh gustav maybe i misunderstood you did you take the initial 3 million in equity and basically said we're screwed we don't want to do a down round we can't raise can we convert this to a three million dollar basically debt insurance no no wow no no no we we did this three million initially and then we started we added on top of that so we had a convertible debt stack and uh that we ended up sort of repaying or restructuring at least i see why did you have to agree why did you have to restructure that debt though i thought you said you just paid back the interest and the principal yeah it was complicated okay uh uh it was i mean i was really a uh a tough time we the business model that we that we went for a couple of american companies ended up raising a ton of money uh i am very early stage excuse me name a few of those uh moat indoor lab science double verify uh that all did fantastically well i mean it turned out that ad verification which was the product that we had like that that space ended up being uh significant in terms of exits well it's very tough as a european company to to uh to make a dent it was very americanized in terms of the type of partners that you needed and the type of funnel that you needed so uh i mean right after that one once we sort of dismantle that product the first thing we did was to start by trying to to i mean get into the u.s market that took a while but once that started to hit they were i mean it's been a great ride for us the last three years so those early equity investors i imagine they're still on the cap table then right yeah yeah so they're happy now yes yes that's how it works it's a roller coaster they they are they are i mean i mean it's found money to an extent but it's funny how quickly people's ambitions go up right once you i mean right now i mean you you you you used to have an asset that you thought was worthless and now you have yeah you're an investor in multiple companies that are all doing well do you have different kind of founders agreement for each of these companies and different cap tables or they're all kind of the same thing still from a legal so it's yeah it's all rolled up uh roll up to one but uh i mean we we've had a lot of interest both in in terms of of selling off one a couple of the companies or or or taking on new investments which would obviously change that but we'll see i mean it's fairly to be honest it's fairly new for us that that we're doing this well uh we're sort of we've been doing well for the last three years but it didn't feel us we're doing you know reasonably well until you know this year yeah the second year the second you feel you're doing well is when you get your ass kicked so so stay paranoid yeah i mean the apparent the paranoia is still there right for a long time so uh so we're probably on the on the verge of becoming bankrupt now i guess without knowing yeah so so this uh above is doing three million what's the overall number what do all the companies together do so we did about five and some and changed last year okay so above is the number one thing yeah it is now it is now my name is fairly reason that that it sort of broke out though yeah what are some of the other i mean are there i'm curious look i buy software companies so i'm curious are there any of the other assets that are doing the one or two million there that you're considering selling right now and if so what do they do uh we're not considering selling them at all actually i mean there it's it's sort of the sort of customer data management space has been you know incredibly interesting the last year year and a half with all these privacy regulations coming in and a lot of companies understanding that you need to become smarter in terms of how you integrate and utilize your data so i think we're alone and we have a lot of lessons learned in terms of how to build companies in that space uh i think we have a fantastic team that's sort of that's starting to grow these businesses that were sort of that portfolio companies what are you paying to acquire new customers on the above product with your cac uh it's about a hundred or so okay uh probably for the enterprise and for the sort of more mid market it's about 15 or 20. you turn around 100 bucks i had a thousand i was just to say 100 bucks to acquire a 2500 customer yeah sorry about that now so about a hundred thousand or so and about 20 25 perhaps or or slightly less for the mid market i'm always surprised that people don't segment their customer acquisition costs more yeah yeah they generally do i on the show i generally force people into an average but most of them behind the scenes they do a lot of cohort analysis so what what is your if you spend 100 grand to acquire a customer what's your payback period look like on that do you wait 12 months or what immediately i mean it's cash up front it's enterprise software sorry not on a cash basis on an actual deferred revenue basis is it 12 months oh no no no see less i mean i mean i'd say that sweet so customers would be about two to fifty a year okay got it so six cost six months something like that yeah i mean it's i mean the economics definitely hold uh but but i mean i sort of the phase we're in right now is to build out the scalable enterprise sales function it's quite expensive so you said 20 20 people right now right yeah or and change got and how many of those are inside sales or sales in general it's about four people in that that who we're evaluating based on our growth yeah last question here are you considering uh raising any capital just for the above product right now or no you're staying away from that uh i think that we have a couple of more months in it we'll see why yeah i think we we feel like we're growing really well customers are happy and we want to get that sort of out on their separate brand and sort of see how that sticks i i sort of feel like the only reason to raise money in sas if you have significant competitive risk and right now i sort of feel like we're winning the deals that we want and and the customer seems to be sticking around that's great all right gustav good stuff let's wrap up here with the famous five number one what's your favorite business book uh the score takes care of itself the score takes care of itself yep number two is there a ceo you're following or studying right now um pete gassner the viva guy okay good i love you number three what's your favorite online tool for building a business uh google sheets number four how many hours you sleep to get every night eight that's good and what's your situation married single kiddos uh married with a daughter two-year-old oh great so so eight is probably the total but not in a stretch yeah married with one kiddo and how old are you uh 38 38 last question what do you wish your 20 year old self knew uh the working with the internet could be a real job guys working with the internet could be could be a real job you heard here from gustav again had a lot of success building about a 5 million company but many many different product lines recently decided to basically split these out bert is the data play above.ai is the sas play that ties more to sales and marketing people and crm data customer data specifically they've got a hundred customers on that platform doing about three million bucks in ar at this point that's up from a million just a year ago so healthy growth rate uh three million raised for the parent company again this spin-off uh occurred in 2016 now of a team of 20 folks dedicated 140 net revenue retention year on year so healthy stuff gustav thank you for taking us to the top thanks man see ya