How Brandfolder CEO Steven Baker grew Brandfolder to $24M revenue and 4K customers in 2020.

good morning everybody my guest this morning is Luke Beatty he serves as the chairman and CEO of brand folder a digital asset management platform located in Denver prior to that he served as the president of media brands at Verizon /ay AOL he co-founded or sorry I found that associate content in 2004 and served as it as its president and CEO and sold that company to Yahoo in 2010 before that he served on the executive management team at wand Inc his expertise is in contextual advertising models online media collection and distribution strategies in his free time Lucas Lee youth lacrosse coach and fly fishes around the world Luke are you ready to take us to the top yeah let's do it all right so tell us what brand fold or dozen what's your revenue model how do you make money yeah so it's a it's a very traditional SAS model and it's a it's a platform that allows brands to manage their digital assets and track the behavior and analyze the use of their digital assets across the web and are you what kind of space are you playing an enterprise small businessman market enterprise and we do some mid market but most of our customers we have about 4,000 customers and I would say more than half of them are brands that you know okay he's on a daily basis and can you give us a general sense of size and are these people paying a hundred bucks a month ten grand a month a million a month yeah yeah the average our our range for the downmarket product for the sort of medium sized enterprise you looking at brands that pay five five thousand dollars a year and then we have a lot of brands that pay up to $150,000 a year for a very tricked-out okay enterprise level product but you're you would say averages maybe in the 5 to 10k range annually a little bit north okay okay fair enough and give us more the back story here so you sold your was it your first company in 2014 to Yahoo or was that not your first yeah yeah that was that was my first company that I started yeah and and we started that in 2004 kind of did a traditional kind of Silicon Valley Sand Hill Road kind of angel round with Ron Conway kind of standard deal and then raised also standard anymore I bet terms were a little different back then huh yeah terms were different and so it's due diligence did notes exist back then uh there were no but they definitely weren't thrown around the way they are today although I think that's that's also starting to the Sun setting on a little bit of those sort of open note raises even raised couple rounds of financing from from South Bank and then we sold that company Yahoo in 2010 and and I stayed there for a while and we actually started brand folder while I was working at a Yahoo and and really spending a lot of time at the company that acquired my company and really along with a couple other folks came up with the need for brand folders so I sort of started brand folder from i from an idea perspective and came up with the product plan and when what year was that Luke found people to build it mm let's see we started brand folders been around for about five and a half years I think from like and incorporated level only twelve yeah and and so we started that company by just putting the money together and finding some engineers in town to start building it I know it wasn't necessarily hey let's have a startup and let's do that I needed the product Yahoo my friend Chris glowed a needed that product at his company as did a lot of other people so we do carve out the IP so that there weren't any conflicts with Yahoo when you did obviously go all-in yeah you know I you know when you when you join a big company like Yahoo you have to sort of very clearly detail what you're working on and and where what boards are on and when or where your investments are and you know I think brand brand management and SAS sort of platforms III I don't think you know I've really raised a flag at Yahoo at that time obviously there their model was really with content and ads so I mean what did that actually happen I mean so you're working you and your friend need it you scrape together some stuff you build it at what point you go wow this thing has escape velocity I should quit Yahoo and go all-in well it took a while I mean we sort of played around with it I I didn't quit you know I actually had another job between which is running the media brands for AOL and Verizon which is very similar to my job of Yahoo so and and I and and so I I didn't start as working as a CEO and joining Steve and the brand folder team until about seven months ago and until before that I had been really just the board chair and really sitting on the board and and and and and participating and from a from a from an investor in board perspective so I think that the the the indication of velocity was more around just you know I'd never seen a company that had built such a clean and and clean and clear and concise product that fit a very perfect niche with such an incredible customer base I think you know it was also a company that was you know after you know tooling around for three or four years and really trying to find its product market fit had gotten to cashflow positive and really was a great thing and I felt like hey you know I can I can come in raise a quick round of financing and we can we can grow this thing into a well many total has been raised our early stage kind of techstars angel stuff I think amounted to about 1.5 and then I just raised around a little bit north five million dollars okay so call six point five in all together and now yeah I think we're probably close to seven okay did you participate in that first five one point five million all around back in the day I put the first money into the company yeah me and other people not by myself yeah good and you kind of you used it as a customer which is a great place to start you kind of stayed a tune over the years as you're you know getting collecting more information probably different brands you're at now you say you go all-in full-time yeah and I spent my you know I spent my weekends and stuff working with these guys on it and yeah it's been a real a real pet project for me I think you know it's funny my my background has been almost exclusively in media and in ads and in content on the big side running you know brands like TechCrunch to Yahoo brands like Yahoo autos and you know big consumer facing media brands and so the the we know which is which is which is a very very difficult business so the prospect of working on a SAS business that I felt like had perfect abilities on predictor predictable revenue or just what I like to call revenue or revenue at all yeah that's that's been how that's that's work so you've been good what's your team size today we have 25 people mostly hosting Colorado except for like outside sales folks in in region okay and where what do you spent I mean 4,000 customers you know that's nothing to shake a stick out there how are you acquiring these guys what are you paying you know all and acquire customer you know it really depends on the product I think you know for a big big enterprise customer like a JetBlue or a you know one of the sort of bigger funder are more kind of some of our bigger huge accounts that we have you know we will pay you know like most SAS companies we can we can we try to have a 12-month payback someone you know we're willing to invest 12 months all right now across all your cohorts about a 12-month payback try to be yeah it kind of really depends on the product we also have a lighter product that this is necessarily for smaller businesses in fact a lot of our biggest businesses like you know like a slack or something they they don't have our biggest our biggest offering so it's really not about that it's more about use case as opposed to a company size so those guys you know a lot of those guys come organically and then their payback is is very very short I think some of our directly sold enterprise stuff where you know we get guys into market we do a lot of demos we show them we do some sales we do a lot of training and you know it's a heavy onboarding some of these brands you know are uploading digital asset libraries of you know tens of thousands of images especially e-commerce people who yeah you know most companies have logos gifts colors fonts and a really important set of brand assets that are kind of common whether you were a landscaping company or or Facebook and and then there's other companies that work in e-commerce and stuff where you imagine you know the company or the product photos product assets so raised before we get too far away from payback I mean you mentioned earlier your average contract by there is about grande so it's faired and you're getting paid back in twelve months so it's fair to say you're spending less than ten grand to acquire these guys at least your core cohort and probably not the coke or horde but our top cohort our most expensive enterprise cohort yeah I mean the averages get crazy over over a period of time where you have to really do it by by what what kind of brand polar brand folder people are buying what are you looking when you look at either turn or attention annually where are you guys at today we try to be north of 90 percent okay in terms of...