How Adspert CEO Harald Bartel grew Adspert to $10.3M revenue and 250 customers in 2024.

hello everyone my guest today is marcel pierlich he started in finance in 98 then switched to internet and mobile in 2000 and launched bid management in 2010 by using ai-based trading software for stocks to automate and optimize media buying on google ads they're now active on all relevant e-commerce marketing platforms like amazon google ads bing ads yandex as well as greater than 50 programmatic platforms their usp is to outperform everyone to maximize profits for their customers marcel are you ready to take us to the top yes all right looking forward thank you first question i have for you that you know people hate the ad tax in this space so let me ask you if i put a dollar through your platform what percent actually gets spent versus what you keep um we charge a fixed license fee so uh we have more like a sas model typically um and um so we typically keep like three percent of the ad spent okay so if i put a dollar through you're keeping three cents yes okay not not horrible okay not great but not horrible right that's probably is that better than your competitors i hope so i mean the price transparency in this industry isn't isn't that great and we try to kind of say change that by making it very um very first of all low cost and of course like with a very clear percentage easy to understand yeah so what's the average kind of customer pay you per month you said you have kind of sas based pricing yes that's a tricky question because we have a it's a very wide range we have customers especially if you look at google where we manage customers accounts ranging from something about like two thousand dollars a month up to uh five million a month um so you can see a very wide span there already and just to be clear that's the ad spend they put through your platform not the sas pricing you charge i'm asking about the sas pricing you charge on average what do people pay for that per month exactly so the minimum fee is 400 euros okay um so that's that's kind of for the for the smaller ones in town and then the average one is maybe two and a half thousand a month okay that's i mean that's pretty healthy so you're kind of in the mid market space you'd say then yes okay so two and a half so we'll call it 2 500 uh us bucks per month and what does that get them that allows them to spend up like to a certain amount of money through the platform before they have to go up to the next level no not really actually they could they can spend whatever they like and since we have a percentage of course our um revenue goes up with uh whatever they spend um they will only spend more if we are profitable so if we manage what uh their ad spend in a profitable way so it's kind of an incentive already that we have for ourselves to um let's say get most of the customer uh customers profits um for for them okay but just be clear that 2500 bucks per month on average that's a flat fee and then there's another three percent on top of that no that's not a flat fee that's the result of the percentage fee that we start uh that we charge on okay so this is not a sas business and it's a transaction percent business depends on how you look at it well one is a percent of transaction and one is a flat sas based fee we have at the lower end we charge a 399 fee so let's say for customers spending less than 15 000 roundabouts ad spend it's it's a flat fee but uh the rest is then percentage-based okay yeah so if the average is the customer is paying you 2500 bucks per month and that's three percent we can multiply that times 33 and say that customer's putting through what about 82 000 bucks through you per month yes something like that that would be the average customer exactly okay that's because we have a very right range um of money that we manage and of course i mean if we manage larger budgets that means for more stress for the platform and therefore we have a percentage-based pricing yeah that makes sense to me um put us on a timeline for me when you launch the company in 2010 2016 three days three days before new year's eve 2010 2011. oh very good and walk me through some of the other elements here so bootstrapper have you raised capital um we started bootstrapped um and then when we got in first customers and thought that we have a viable business model we went for some venture capital which was a long journey because we didn't have any network and back in germany um like eight years ago it was very very tricky to get in touch with vcs especially the german vc culture is not even close to what it is in the in the us so how much have you raised today we have waste uh raised uh 1.5 million so far okay and you mentioned you started looking at this kind of after you after you got your kind of first customers on how many customers are you at today we are at 250 customers at the moment 250 yes okay that's healthy i cut you off are you raising additional funding um not at the moment um we're at the moment we started with amazon optimizing amazon which is kind of the new ads ad space that everybody is rushing to and our platform is optimizing customers for amazon as well um so that's the new thing and we're considering um once we let's say get to a decent amount of customers for amazon uh thinking about uh expanding this with additional funding too and marshall just be clear i mean if you've got 250 customers at the would you say 2500 per month kind of price point on average to you i mean that puts you at 625 grand a month about that in revenue is that accurate no okay and so which of those two numbers that i'm multiplying is wrong it's it's um let's say it comes from the wide range of customers that we have if you look at our smallest customers which spend like maybe two thousand dollars three thousand dollars a month uh in ad spend up to two million of this i think our biggest customers even spending five million a month depending on the month we have a lot of seasonality in our business so for example during christmas time people are spending a lot more during summer time that goes down and it's not averaging out during the year so we really have lots of seasonalities and some customers even only spend money uh let's say during their particular season um so that really is very volatile um like i said the tricky point is also that let's say when i give you this this kind of average fee it also depends on which customer segment you're looking at yeah so also help help help make this clear then so like last month how much was processed through your system and obviously we can multiply by three percent to understand how much you kept last month should be around 10 million okay about 10 million so that would mean what you guys did 300 000 roundabout exactly yeah that's great okay good so so if i take that 300 000 and obviously divide that by 20 250 customers the average is is 1200 per month per customer versus 2500. if if you do the math exactly like this yes but like i said it it doesn't reflect our customers well because it's very seasonal yeah yeah this is it by the way i don't think this is a sas platform like i'm just going to say what it is because it's not like predictable and recurring and stacking like you even said it's lumpy it's seasonal these are all the reasons sas is sass is because it's predictable and stacking right this is opposite of that yeah let's say a certain degree of it is predictable uh and i agree it's not a let's say pure sales size business business model wise um but since we have this kind of let's say um a minimum fee which is let's say this is called the downside protection that we have it is predictable to that extent well let me ask you differently right you cannot predict the upside of sure let me ask you a different question what are you growing at year over year revenue uh around about 20 okay so if you're doing call 300 grand today maybe you're doing what like uh 250 something like that about a year ago this month yes okay and and if you because you have lumpiness in each month but maybe it's more steady year to year in 2017 what was total volume through your platform total volume maybe um 80 million okay and what do you think that'll be this year um i hope it will be around 120 million okay about 120 million yeah okay so that would put your revenue at three percent of that so call it three to three point two million something like that exactly and i mean maybe to make this point really clear um if we have larger customers which like add to the to the to the amount that streams throw up that form um with the larger customers you typically have let's say um smaller deals in terms of you charge them a lower percentage because they're putting a lot more through your platform whereas if you have smaller customers who maybe spend a hundred thousand dollars per per year through your platform you charge them a higher percentage so if you put 120 million through your platform then totally if you put 120 million bucks to your platform this year what what do you forecast revenue will be i guess it will be around 2.5 million okay got it so it will be way larger way smaller than the three three percent but you're absolutely right that that makes it pretty unpredictable in certain terms uh especially regarding the upside um the only thing that we can predict is let's say that we will not go under a...