How AdGreetz CEO Eric Frankel grew to $9.2M revenue and 20 customers in 2024.

hey folks my guest today is eric frankly is the former president of warner bros tv distribution the ceo today of ad greets the industry's leading video personalization and ad tech martech platform that is disrupting a 768 billion advertising marketplace eric you're ready to take us to the top ready to take it to the top with you nathan good to be i'm pumped for the inside i'm pumped so we were talking before the show so let's say someone's listening right now with call between like 5 million and 10 million in revenue they see these ads on tv they go that's that's for big companies i can't afford that and they're bad ads anyway they're not even custom how can someone with 510 million bucks and revenue use ad greets to launch custom tv ads well we deployed to 26 channels which are facebook and google and email and app and everything that people have been doing for a while but the latest twist is in the u.s we're now doing this on a hundred streaming channels so for not a great deal of money you can test for a hundred thousand dollars and rather than seeing that generic ad we're now doing very specific ads so we can tell you where the local store is we're calling out cities we're telling you uh what what movie theater can you see elvis in and at what time and what's the address so rather than this and what's happening is we're doubling revenue for these brands just by american software company like let's say click up wants to use you to do marketing 100k test across 22 streaming channels what might their ad look like on these channels right so they're so their ad can look like believe it or not just by calling out a city town or village at the beginning of the ad people are so much more engaged so so for example it would say santa monica austin philadelphia have you ever text on the screen or it's a talking face like me and my lips are augmented it could no well it can be anything anyone wants and it wouldn't be lips being augmented typically um because that technology is still a little fuzzy so it can be voice over it could be talent on air so if they were shooting their next commercial they might say here are our 60 important cities and we're actually going to have our spokesperson nathan record 60 cities oh i see and then we push them all out and then we can make traditional television commercials now interactive by adding a qr code so rather than and everyone learned how to use qr codes during covid when we had to you know download menus when we would go out to eat so so now all of a sudden in the corner it says scan and you do that and you go right to their info page or whatever that brand wants so whether you're buying movie tickets or whether you're getting somebody from that click company to reach out and talk to you and i imagine click i imagine sorry during covet you probably saw a lot of expansion people needing this i imagine last time we spoke back in 2018 you had about 17 employees how many folks today full-time we got about 35 and we're you know in new york l.a philadelphia london paris uh kuwait city sydney australia we're so remote people are remote yeah i mean no we just have offices around the world and before that many offices with 35 people that's got to be expensive um not not really i mean well what happened to you know some people want to work out of offices and some people are working from home in those cities so yes it's a combination of remote and we workish type placements other than la where we have you know significant you know real office space did you raise eric did you choose to raise a bunch more money last time we chat i think you only had a 10 well not only but you raised 1.5 million in an angel round in 2011 right yeah so i think we're up to 12 million but nowhere we're breaking even and making money now so uh amen brother congratulations so so that's good but we're we're expecting there's a lot of interest in what we do now as the world has woken up and realized that this is a better mousetrap so whether it's you know giant brands whether it's giant agencies or whether it's these ad platforms that hire us so when they sit there and see oh these ads make us different than the 100 other channels in town oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations and what you can get now inside of founderpath and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview but how are you it's like if i'm a big brand procter gamble selling shampoo and i want to go into 80 different geos in the us the hard work for me isn't it is it isn't the hard work to go record 80 videos with the voiceover artist saying georgia wyoming texas i mean i thought that's what you helped with but it sounds like that's not what you do it is so the answer is yes and we've primarily automated the entire process the only thing we haven't done because the quality hasn't been great enough yet but we continue to test it and meet all those vendors is yes so we can build uh we did uh 25 000 versions of an ad for procter and gamble so how did you do that are you hiring the voiceover talent to read the hundreds of different ads so so we had 200 so the voice talent called out 224 different cities that we pushed the ad out to there were three retailers so we would be telling you to either go to target cvs or walgreens and there were seven days of the week and besides that everything else is graphic but but there was one ad featured a 20 year old woman the next a 30 year old woman the next a 40 year old woman the next of 50 and 60 year old woman and the same thing with men male voice over female voice over and all of those different versions added up to 25 000 and what we've done over eight years is take that incredibly robust process and figured out how to get it done you know in a day or a day and a half for something as bespoke as that that's wild okay and so how do you make is it just so you mentioned a hundred thousand dollar test are you just charging a take grade on whatever someone wants to put through you um well we're getting depending on the we either get paid a flat monthly fee in scenarios where we work for a brand or we're getting paid a percentage of ad spend or an additional cpm added on top of the ad spend depending on who our partner is and what the relationship i see i see so you're actively then measuring sort of gmv through ad grades yes yes so we're out there typically and or with our partners trying to show how we doubled their e-commerce revenue or how we drove eight percent increase at retail or or or a hundred 100 um increase at a retail will you share how much gmv is going through you today um you mean are you talking about ad spend are you talking about how much cash that we're we're bringing in no no not your not your revenue just ad spent through you um yeah we're probably now you have to remember in certain cases because we didn't want to disrupt the apple cart most of our clients already have their media buying agency so what we really do is we're the personalization strategist demo maker once it's signed off on creating those 100 versions or 25 000 versions then we work with the media agency and deploy it and then we automatically optimize and report on it so i would say that today we're probably at about 50 million dollars worth of media um but monthly or annually just annually just annually okay yep yep okay interesting and is that the key driver means that is that when you guys said annual goals is that what you want to grow is that the key thing well the the key thing now we well we have more and more clients more and more clients staying longer so more recurring revenue and then we have these partnerships so there's a broadcaster called nine in australia they're the nbc call it of australia so they now have 600 people out selling our product and they're bringing in their first clients because this is a three-month-old or two-month-old relationship we expect that they will deliver tens and tens of millions of dollars they do two billion in revenue and and we get a very significant or a good good portion of that of that revenue we have someone in the us with 62 sales people and they're out selling so they're again facing the same things that we've faced which is hey macy's hey any company usa let us explain why a personalized version is better but years later they're having a great deal of success but they're still only two or three months and then we're doing the same thing with people like amc and fox and all of these different entities so as the world embraces it more there are hundreds and hundreds of sales people around the world selling our product through our partnership and how many that 50 million in gmv that you'll do this year that you did last year how many customers was that through um probably 18 to 20 customers okay so you're boutique you're like a boutique ad agency with a productized ad service right you don't have bad margins yeah i mean where we yes and the you know rather than shooting a new commercial we're taking their existing commercial and coming up with a strategy to produce and deploy 100 or 20 000 versions or a million if it's email and uh and go out of things that look like letters and things that look like print dance and make them into things that are compelling that people engage with and that are activated by and eric when we spoke back in 2018 you shouted you know you had you know 10 11 customers you told me you did about 2 million revenue then are you still around that range are you much bigger we're going to do we'll do we'll do uh close to 10 million with with 20 plus uh clients this year yeah that's great because we hit the 10 million mark now people start um you know start coming in and saying you know you've passed this hurdle and we'd like to talk to you about investment opportunities and we're buying you would you sell the company sure but i don't think we'll probably sell until we you know probably quadruple the revenue but again you're not looking for a standard buyer you're looking for a strategic buyer you know so as we start to do this for fox you know rupert murdoch can wake up one day and says this differentiates my entire business i want to own this thing and and and and pay more than just your your your typical multiple against is that the plan because strategically well him and 100 other people that were work you know that were in various um phases of working with yeah that's very impressive 10 million revenue with 35 employees is 285 000 revenue per employee which is double most vc-backed companies so you're running a very efficient operation and by the way and a lot of them are consultant types not a lot but a half a dozen are the former president of warner europe the former president of warner aipac the former president of warner you know latin america um who were huge money earners and now go out and sell to their previous clients um and they get paid on a percentage of revenue for a long term so if they bring in channel four in the uk they're getting compensated for quite a long period of time because you can't afford to hire sales people like that because guys if you if you want to do you want to try these custom ads yourself check it out ad greets.com a really compelling way to get ads here and a channel that won't be as competitive as those ppc clicks at the top of google searches where there's perfect competition eric in the meantime let's wrap up here with the famous five number one last business book that you read last business book that i read didn't didn't number two is there didn't you you don't read business books right no because i do this from 6 a.m i finished last night with disney hot star in india at 10 45 so i crashed and got on the phone with my team in paris this morning yeah okay number two is there a ceo you're following or studying well i rather than reading you know the books you're talking about i'm a voracious reader and i read everything i'm primarily addicted to the apple news feed and all day long to the four people who help me prospect i'm sending them articles and stories and so on so the answer is you know i i look at everyone but it's not like oh elon musk i'm in love with him or something like that i'm looking for anything that's interesting and then what we do is write them letters and a huge percentage say i'd like to know more and then we meet with them with the goals smart strategy number three eric besides ad greets what's your favorite online tool for building the business um the simplest least expensive thing i've ever wandered upon rebump have you heard of it i i have this is in your e this is a very niche tool very few people know about this but it's an email follow-up tool and we used to have a human being when i wrote a letter to you because you were the cmo of macy's nathan we would have this human being who a week later would send email number two a week later if we hadn't heard back three and four all different emails and occasionally he would miss and we paid him a lot of money and we found a tool i'm making it up but i think it's 15 a month and it does the best job and and the percentage of yes i'd like to meet with you um through this tool is just you know is just off the charts yeah guys those of you looking to go buy a sas coming by the way rebump is like the perfect target small but very passionate customers like eric and it just gets the job done uh eric number four how many hours of sleep to get every night uh about six and a half okay and situation married single kids um married with to my same wife um and uh grown boys uh grown grown boys who live how many kids two boys so i have a 24 20 28 year old and my 28 year old's first movie is out at the festival circuit now and garnering great reviews so we're hoping oh fantastic you'll get some action on it very cool and how old are you eric um i am 64 years old last question something you wish you knew when you were 20 um i don't think i understood that every day whether you're 20 or whether you're 64 you get smarter and better at what you do and you know you don't know it all and you'll never actually know it all and even the bill gates's or the elon musks you know don't know it all and you just keep on learning and and becoming a better leader and uh and that's pretty much it is just guys enjoy there you have it enjoy every moment every day is a new one at greets.com will break 10 million in revenue this year with 35 employees really impressive unit economics they're profitable that's up from 5 million in revenue just two years ago so healthy growth right here they help you launch hundreds or thousands of customized ads across 22 different streaming channels for as little as 100 000 right but multiple variations you can name a date a time a a city a location a specific store or action you want people to take he's having a lot of success doing this right now with about 20 enterprise clients looking to scale eric thanks for taking us to the top good to see you nathan good luck to you 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 1pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m 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 notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya

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 notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathanlacka.com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya