How Adthena CEO Phillip Thune grew to $26M revenue and 200 customers in 2024.

hello everyone my guest today is Ian O'Rourke he's been involved in technology and businesses and startups over 22 years and has built businesses in Australia Taiwan Silicon Valley and the UK today he's working on ad fina and he's been doing that since 2012 building it to its current position as the premier global provider of competitive intelligence well at the in itself has won many major industry awards Ian's entrepreneur determination has also been recognized with the developing Entrepreneur Award at the WCIT Enterprise Awards commonly regarded as the Oscars for technology entrepreneurs Ian are you ready to take us to the top thanks for having me you bet all right for those folks that have not heard about Athena tell us what you guys do and how you make money what's your revenue model okay so we're a classic sized business in essence what we do is we use insights about your competition in search marketing to drive customer acquisition for yourself tends to work with fairly serious large enterprise search advertisers are doing a lot of b2c customer acquisition so the likes of hotels.com Toyota BMW progressive various big b2c organizations across the world mm-hmm so you're very much in that kind of a high-touch enterprise space versus low touch high-volume yes we can be inside sales predominantly and we will sell fairly fairly short sales cycles to marketing teams what's what's short so 60 days Wow okay and what are you selling what's the average Ruster are paying per month would you say so average is roughly $50,000 per annum okay 50,000 bucks a year yeah and that goes up and down shares some very large customers and some slightly smaller than that but we're really used by organizations where search is an important acquisition Channel yep now when was the company created when was it launched so we legally founded the business at the end of 2012 and commercially launched it at the start of 2013 okay and what was happening in between there just building out the dev hiring the team things like that yeah just getting started for a few months there's really only a couple of months but I like to think of us as being out in market doing commercial things started 2013 and did you bootstrap the company or your race capital right away yeah so we had no institutional funding so we I tooked in a little my own money and business partners and and then we have taken on a couple of angels here and there and we have a quite famous investor Series A in the guy who was the original chairman and investor and candy crush I called Mel Morris came in and did our series a personally and a six-time successful entrepreneur and so he's been sitting on the board and helping us greatly but in essence we you know we're not BC backed yeah so so total kind of capital in the company today what if you guys raised in total around about five million dollars okay five million USD and where would you say most of that has gone in an engineering team or user acquisition are both really engineering in sales sales and marketing okay right breakdown this kind of machine it sounds like you mentioned inside sales a few times what's the team size today and how many of them are focused on the inside sales good question so the team o'drool we have offices in Austin Texas London is the headquarters in Sydney in Australia and we're probably 80 plus people who's inside says I think there's probably 15 to 20 people ok pretty healthy and they call it 25 30 percent of the company dedicated inside sales it's great when did you hire your first inside sales rep and how did you work out the initial economics of what the ramp should look like what core should be things like that that's a good question I found it very useful to have benchmarks so there's a thinking inside bench as does a periodic table of inside of sales and field and inside and so you can look at the benchmark ratios on that and then places like sastra I have a whole lot of blog posts about what you know how to structure coke plant I have a sales background I used to be a director of sales running a whole Asian operation of San Francisco so I had a reasonable idea of it but then I had to translate my old you know old-time on-premise sale perpetual license selling to sound like you're selling as a SaaS and maintenance contracts right exactly sound like a big bubble up next one yeah but you know success is a better arrangement demanding and yeah there's a lot of thinking and a lot of testing that has to go on into how you design those complaints and then we've had to revise them as well each year we look at they they the purpose are they doing the right motivations and so forth so we're getting better and better every year so when a salesperson one of your sales field today is fully wrapped what's their target in terms of new AR they add and call it a given quarter or given here to translate Masood the dollars they're probably doing bit most of a million dollars okay that's their that's their target and yeah it's over a year you want them kind of closing a million bucks in new air AR yeah yeah we more work for different segments of the market and so forth so we're we're we're working more on multiples of on target earnings tell us what I mean so if you come in and you say look I want to earn a hundred grand so you're gonna say we need you to deliver five or six times that at least yep set their own you they'll come in and say I want to make a corner fifty grand a year you're gonna say okay if here's your 50% base if you agree that they're worth it and then you're gonna say in order to get the other 50% here's what you need to close a new air are all that if the on target is 100 then the minimum we need in in quota is five hundred I see so I've come they look I'm the best world a bit more senior body else I've got a big book of business or rolodex whatever and I want to be paid seventy five seven five then we're gonna say alright well you know knock yourself out here's we five six times that in quota yeah not a five six times the the the 150 not the 75 yes yeah yeah interesting okay good so launched in 2012 obviously six months later today what have you scaled to in terms of total customers on the platform now enterprises on the on the platform most of those UK Australia I think we have a handful of really really good clients in the u.s. we've been going in Austin for about six months now and seen some really good pickup so and they're big brands like progressive and hotels.com and HomeAway and all of these sort of sort of brands so we're really impressed with both the caliber of the people we've got in Austin and the progress that they're making we've scaled we'll hit a little bit north of 10 million u.s. dollars in ARR this year we're growing grew 84 percent last year we've grown at a hundred and fifteen percent this year on target at the moment we're we're on target and then we should organically do that again next year you said one one five growth target this year one five zero no one one five okay and your goal is to break ten minute hour what do you I would you last month what's your current or right we're running close to closing out this month would probably get close today all depends on the pound US dollar exchange rate we stay conservative say seven point five ARR run rate today that means about six hundred twenty-five grand per month across that base and where are you driving you know as you go towards the ten million dollar mark where are you driving most that growth from is it expansion revenue across the two hundred customers or the adding brand-new customers it's adding bring new customers traditionally we haven't done a lot of land in Spain pricing in a product instruction that said last year we we did quite well on land and expensive people want to add additional to we had some additional mobile products we've now got a what we call a a secret sauce is a hallmark abuse and we can tell any advertiser everything that's relevant to them at any point in time so that they know their whole competitive landscape whether or not they knew about it or not we do a lot of gap analysis and exploit that we've now brought to us you so you can look state-by-state across the u.s. if I'm only really interested or maybe money licensed to do business in New York State for an insurance product for example then we can we can drill down on that now or maybe I'm running you know big retailer running swimwear campaigns they want to look at Texas California Florida and New York then we can break down that view of the whole market in each one of those states in turn is critical in this kind of business what's your turn today so we retain bit north of ninety percent and that's and that's that's revenue retention annually yes okay sorry that's gross not net retention so net retention can be as much as a hundred percent or more likely if we added in upsells and things like that so look at those two figures gross dollar gross dollar retention in the 90s and then net dollar varies quarter the quarter depending on upsells quite sensitive to upsell so are you generally all above 100% though I mean that would be meaning your expansion more than makes up any lost well 18 months of doing much upsells it's still bumpy yeah we don't have a fleet we'll do in the up so we might do a really great quarter of upsell so that quarter will be well over 100 and they've been like a really slack quarter of upsells and that'll be you know that'll be under 100 walk me through fully kind of fully diluted CAC what are you spending to acquire a con your customer fully diluted clad last dollars probably I think it's a roughly 30 grand okay good so so wait Leila so you're paid out curry there's about eight or nine months if the ACB is 50 grand yeah yeah I think we're so was around for a ratio of LGBT pack okay but but payback so for nav LTV kak that's great so called 128 you're assuming about a hundred twenty hundred forty grand an LTV something like that yeah yeah what what how do you use that number so if you know a lifetime value is 140 grand do you use that at all in business decisions or just a number you have to have because everyone asked about it it's it's a bit of both right it's a bit of both I like to look at it and see the improving health of the business right we just want to make sure we type all traditional SAS metrics that people recommend in there and we want to make sure that we're within the boundaries of sensible there that we're not overspending on marketing and sales or we're not under investing in it that we've got you know growth rates that are going to get us the right multiples of patient when we by the end of this year will will have been reasonably successful adding several million dollars in US market so we've proven that our proposition works really well it's marketing in the same way sold in the same way it's delivered in the same way across the u.s. which is obviously the largest market for us going forward and then we can really step on the gas and accelerate that market yep now if you're growing at 115 percent year-over-year that's your target here in 2018 today you're doing call it 650 grand a month in revenue is it accurate to say about a year ago you were doing call it July or August 2017 doing about 350 grand a month in revenue yeah somewhere around there yes and are you an ru ru casul positive are you still burning to drive growth we're yet so we do a lot where we test lot of creativity for this year so we're on the road we just breathe we continue because we get paid up from about ninety percent of our new businesses are payments so we use that to accelerate investment in the product okay so that we can develop faster so did I hear you're actively on it from a cash flow perspective your cash flow positive each month we will be cool oh you will be in q4 okay and what do you out today I mean are you negative 20% you but how much are you burning today it's not a huge amount we kind of fall within the rule of 40 right yeah yeah that's that's why I'm asking kind of taking your growth percentage subtracting any you know and you know negative nettie but that to get dere rule of 50 rule of 40 yeah even that said I mean present business 40 for a long time the Pacific Crest Road or the Key Bank that is a big survey and even some of the stellar businesses that you saw bill outside of that rule for a while yeah and and then they start to improve different aspects of the business so if I look at an interesting observation for us at the moment we spend 25 percent of our data collection costs in the US market but we only have six percent of our revenues so I'm kind of making that big bucket had full coverage a big number of customers to climatized that across just yet but if I normalize that back it would show me a much ha ha Jin which would bust changed my lifetime value and my LGBTIQ at ratios so we little things like that that you can really improve the universe anomalies Ian we're out of time let's wrap up very quickly with the famous five number one what's your favorite business book the hard thing about things number two there's yep number two is there a CEO you're following or studying right now watch everything Ben Horowitz is written from David conchs age to reduce his 90-day as well number three what's your favorite online tool for building your business yeah I was thinking about that I've got lots of them demand I'm going to be seven geeks because as CEO about okay I'm about Lyman about tracking progress so from what I said you know that's my that's my go-to tool for making sure that happens number four how many hours of sleep do every night please father so I'll call five and a half and what's the situation married single kids alright your kids and how are you Oh use of 3747 okay great last question what do you wish your 20 year old self knew and into plank you haha yeah how to take a little bit moment you a view of things and looking so hot guys there you have it wouldn't he would have you know had a little more patience not got as a hot-headed as maybe did back in a day but look it seems like everything is working now 2012 launched ad Tina again really competitive intelligence results-driven enables people like call it clothing manufacturers to understand what's going on and maybe certain states if they want to drill down but again unique unique competitive intelligence for search specifically the company is now over to our customers paying you know three four five grand per month doing about six hundred seven hundred grand per month right now in revenue seven point five million run rate hoping to break ten million in terms of a are by the end of the year they're growing about one hundred fifteen percent that's one one five percent year-over-year in revenue from twenty seventeen to twenty eighteen ninety percent revenue retention annually that's on a gross basis net revenue retention flirts with a hundred percent when averaged Alps willing to spend up to thirty thousand bucks on CAC which is about a nine month payback period cocked out to be about 4.5 so hundred forty thousand bucks in lifetime value or about thirty six month is what he assumes his team of eighty people based in Austin London and Sydney iam thank you for taking us to the top thanks very much