AdGreetz Revenue & Funding (2024)

hello everyone my guest today is eric frankl if you missed my first episode with him you'll know or if you've heard it you'll know he's building a company called ad greets based out here on the west coast eric you ready to take us to the top i'm ready all right so for folks that missed that first episode give us the quick download what's ad greets and what do people pay for um we're reinventing how brands converse with past current um or prospective clients um instead of a generic one-size-fits-all often static message we help brands ideate produce deploy optimize and then provide reporting for hundreds of versions thousands of versions tens of thousands or millions and instead of a brand talking to you about dresses we're talking to you about your black t-shirt and my black t-shirt and the store you know a mile from your house where you can purchase it or click and shop now so just be clear if i'm sending out like a mail merge for example to a thousand potential customers i can customize that video even with even my lips moving and saying hey eric hey steve hey joanne whatever ad greets allows us to do that yeah except for that it doesn't necessarily have to be a name or in the middle of doing uh png's first hyper personalized campaign ever they typically make one commercial we've got 300 000 versions so we call out 224 cities towns and villages we uh show people we have demos who look like yourself so there's 20 year old women in the commercial 30 40 50. the same thing with men people who have babies with babies we say it's monday tuesday wednesday thursday never been a better time to switch this product and then we remind you that your nearest store is either a target cvs or walgreens and we give you that address and or ask you to click now and shop and return it specific to someone in beverly hills on this friday now when we last i last had general just back in january actually of 2018 eric it's been a while uh you had acvs that were averaging in sort of the 200 000 range is that still your your acv average today are we referring to what the average what the average brand is is paying us um to to do business since i may not speak your uh your lingo you got it per year um well a typical is approximately 33 000 a month which gets up to 396 000 a year not everyone retains us every month there's a lot of testing going on this is still a business that about two percent of brands are playing in although 84 say it's the future so this is um you know we're in the selling process but then once brands uh you know test it see these huge results they typically come back and become regular customers so let's break down if i'm if i'm paying you 30 grand a month right now what am i getting for that is any of that going to like ad spend directly or is that all software you know expense for you it's all it's all software and some hand-holding in a new business so you don't know how to do this so we have people who help you ideate what's better than one commercial um then there are demos that are made that show and then and then we get into the sas automation version um part of it which is then manufacturing the hundreds thousands tens of thousands or millions of versions and then we get into the automation and integration portion which is from one platform pushing it out to all of the popular digital platforms in the world instead of going facebook doing all of this hard work going on to google doing all of this hard work going on to twitter from one place push it out so so eric it sounds like you are obviously a high touch low volume sort of business how many total customers are you working with today this month uh we're working with 12. 12. okay got it and and and why don't people retain in other words why do they come on just for one project why can't they use you year round all the time well they can um the history of advertising has been kind of simple and unsophisticated in my opinion a brand hires a company to make one commercial a brand hires a company to push that one commercial out and sits back and keeps their fingers crossed that someone comes to their store drives their car sees their movie watches their television show buys an airline line ticket goes to their hotel um it obviously takes more work to figure out what the messaging should be what 300 000 versions of this is like than one so but what's happening is nearly everyone is starting to come back they sometimes just need some breathing room so for example we did a very successful campaign uh with the largest jewelry retailer in indiana can you and they're owned by titan which is the number one um company in all of india reliance is number one titans number two we increased their click-through rate uh 4.6 times which is big we include increased people watching 12.6 times longer and that was a year ago they caught their breath they've come back and given us a 12-month order this is somewhat this is somewhat shocking because the business has been so easy and but a month or two into it you realize it becomes easy but it's like anything else that you were me learning you know how to ski if we hadn't or you know how to do how to climb so eric how many folks in the team do you have supporting these new you know diamond customers for example during covid where a lot of people have been furloughing and uh and having less teams we've increased our teams so today we're only 30 we just opened an office of course there's no real office because of covid we just opened in bank we just opened in paris we're in london new york in la how many of the 30 are engineers um right now 10 of the 30 are engineers and we just stole away and uh the cto from a competitor a company called spirable and uh uh i needed another you know very muscular executive in addition to our cto he had built their entire stack he had built them from the ground up how did you do you give him equity or just like triple his pay or her um um neither so the answer is um he makes a little bit more pay but nothing that would be meaningful to anyone he owns less of our company than he does of the the of their company um we just had a product that was more compelling that he thought stood a chance to be more successful even than their terrific product so he decided to roll the dice and uh and uh and maybe what i was congrats on that he likes he likes your little ounce of crazy right you have to be a little crazy to be an entrepreneur he likes your crazy better than the other kind of crazy all right that's literally it he didn't tell me that but i know people who have met that that's good how how many of your 30 folks do you have actually running point with these new accounts do you have any quota carrying sales reps or no um yeah yeah so we have two other sales reps we have one in the middle east we have one in new york we have myself selling and a typical account has available to them and at some point in time touches um a project manager a tech executive a creative executive um what am i forgetting project manager creative tech and analytics okay and last time you came on i mean you're building all this obviously you've got great customer accounts coming in you can probably fuel mainly off customer cash but you had raised last time you came on you had to raise 10 million bucks back in 2018 have you raised any additional capital are you profitable today we're up to about 12 but for the first time what happened since i last spoke to you is seven months ago a competitor of ours that we think is terrific but you know if i was to pull up a chart i would show you eight or nine things they do versus 42 that we do not that more is always better but we think it is in this particular case they got they had the majority of their company purchased for 223 million dollars that's called a smartly io out of finland yes and they weren't yeah they weren't bought by a strategic which would typically happen but rather they were bought by a private equity firm and the private equity firm only buys them planning to sell them in three to five years for three to five times more so that's created a bit of a marketplace and all of a sudden you know uh when somebody pays something for a company for the first time in our space it creates a valuation so now there are many other companies starting you know to have those conversations with us are you profitable today um no we will be profitable in about 60 days if i was to i had a board meeting coincidentally yesterday and i'm not i'm not selling you because there's no reason to sell you but the reality of our business is i could show you july with five i could show you august with eight i could show you uh september with you know with with with 12. i could show you october with 15. you know and the lists are even longer but many of them won't happen on time because that's the way of the world but the reality is it's a really you know we launched on september 10th with pepsi that only took five years um you know the the the png deal took five years um now though but we've gone from kid getaway for me you bother me into a probably 62 percent of the cold calls that we make um turning into people saying yes i'd like to know more versus five percent we're running that's all obviously great growth and smartly is obviously bringing the whole market up which is a good thing for you we're running out of time here so so quick questions last 12 months how much revenue do you guys do um depending on how you want to look at it if you do it the way smartly does we're doing 10 million bucks but a portion of that is cash in pocket a portion of that is media that goes through us that we get a percentage of a small percentage because that's the media business how much of the 10 million was media spend how much of the 10 million is media spend is about half so it's about five five million in cash and a percentage of the other five got it over the last 12 months you did 10 million in top line revenue gross revenue would be something more like five million plus a percent of the five million spend plus media buying is in the two three four five percent of the other number depending on what the brand is guys you call it like 5.4 million ish something like that over the past 12 months yeah something like that could be very good all right eric let's wrap up here with the famous five number one favorite book favorite book i wish you would have told me this in in in advance holy moly i'm gonna okay what's my favorite book well first of all here's what you need to know i love books but my current day starts at six o'clock in the morning in europe and ends at 11 30 i ended last night at 11 45 with yes bank in mumbai which you and i have never heard of before so i haven't read a book haven't taken a vacation um yeah i mean i do let's see what did i just read i mean i love all of michael lewis's books so i guess i like the one where he talked about how unprepared um trump was when they came in there was no one for obama's team to hand off all of those all of those learnings that they had in eight years i'm forgetting the name of it number two number two is there a ceo you're following or studying um is there a ceo you know i'm a when i'm not a voracious reader of books and novels at this point in time because of my life but i would say i'm an addict of the apple news feed and is there is there is there a ceo eric that you're following everything about every ceo in business all the time and i follow many many many many they're you know what i think are there they're they're good quality can you name one ceo that you respect a particular ceo that i'm that i sit there and say i you know study i am not an elon musk or i am you know not uh you know i am not number three what's your favorite just name a favorite online tool quick answer here we're out of time favorite online tool for building the company favorite tool um probably trello and asana number four how many hours of sleep to get every night six okay and situation married single kids married 20 kids 26 two two boys one of them's out making his first feature as we sit here and talk right now very cool how old are you eric oh i'm very very old i'm 62. last question what's something you wish you knew when you were 20 um probably maybe to kiss a little bit more bud um because then you don't um especially when i did 30 years of corporate life as president of warner brothers um because it's easy to bend people out of shape and it might be better to kiss some butt and continue to be an incredibly overpaid executive at a giant entertainment company guys very happy kiss more but eric from ad greets again launched a couple of years ago today past 12 months is about 10 million top line revenue of that though 5 million was ad spend which they think two to five percent of so total revenue past 12 months on a growth space is call it something like five and a half million bucks team of 30 people as they look to scale 10 engineers three sales reps helping big brands 13 customers right now scale their marketing scale customize manage messages at scale taking one ad and making it 300 000 different variations eric thanks for taking us to the top good to see you thanks nathan have yourself a good one one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2pm central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell 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