How Brandwatch CEO Giles Palmer grew Brandwatch to $120M revenue and 2.4K customers in 2021.

hello everybody my guest today is guiles palmer he's the founder and ceo of a company called brand watch a leading social intelligence company formerly of b sky b giles started brand watching since its launch in august 27 is growing to become one of the world's leading social media analytics and listening companies guys are you ready to take us to the top ready to go ready to go all right good um and and and correct me by the way if i'm wrong your name is it a hard g on the front or is guile's right uh sahaja yogi giles sorry about that i didn't choose it don't apologize for your name i just want to make sure i get it right giles okay good giles palmer so tell us about brandwatch what's the company doing and how do you make money what's the revenue model it's a subscription business it's a sas business uh and it's basically a data business so we uh down we crawl about 80 million websites and have feeds from the social networks uh we aggregate all of that and we allow brands to to kind of check out what the world is saying about them their competition and so on and it goes back you know five years so it's a research tool and a real-time insights kind of engine for brand managers primarily so if you went in there and i plot you know uh mcdonald's against wendy's can you actually see in your trends when wendy's hired that super witty social media marketer that just grills people on twitter can you actually see the lift or the drop possibly we it you can certainly see any changes in the conversation of anybody mentioning wendy's online and what they're talking about so you can even the system will even tell you when unusual activity starts and an unusual activity could be uh when a certain phrase gets mentioned close to a brand for the first time ever um so there's this kind of this big big kind of algorithmic engine behind the scenes watching for unusual activity and then it kind of tells you oh look this is a new thing that's happened today we haven't seen this before interesting like i got i got i i got a sick we call them signals uh we got a sig i got a signal today about one of the companies in our space uh having made an acquisition within uh six or seven minutes if it hit going online because the system was just kind of kind of watching for for that kind of activity who was that uh falcon social guys in copenhagen uh they're quite another local local company uh i can't actually remember the name of it because i hadn't heard of it but i'd say do you know enough about the deal to know if it was a good buy or bad buy for them look it looks like a sensible buy um it's a small buy but uh it looks sensible to me yeah interesting so so give me a general sense of customer size i mean are these folks paying a hundred bucks per month or a grand or 10 grand per month what's general acv uh annual contra value is about thirty thousand dollars okay so 2500 a month on average yeah so it's it's it's enterprise grade it's not cross-enterprise um you know those systems tend to be more and more expensive but it's it's a high-end professional tool like it's not an it's it's it's not hootsuite no it's it's it's like it's like a bmw not not a not a whatever mini metro mini monster whatever when did you launch the company what was your one august uh 2007. so let me ask you a question there was a i would say the last big pop of mna activity in this space was 2012 when you had buddy media going out victory wildfire all these guys you i'm sure yes i'm sure you had offers you chose not to sell why we had a lot we had a lot of approaches we had uh one kind of pseudo offer um we didn't know yeah exactly exactly we we decided um i guess we thought we were in in a kind of uh up and to the right phase and and we didn't think that the the deal that was being offered to us was uh was representing that strongly enough and also we were kind of like you know we we didn't do this to sell we didn't we didn't start it to just sell it we started to build a company and we didn't feel like our job had even been half done at that point i mean and and actually if you look at those acquisitions none of them really have gone on to meet to be meaningful there i mean wildfires shut down who who even knows where buddy media is and that you know i mean in salesforce right who knows vitru who knows where they are involve or where where are they i mean mostly they got shut down yeah so it and that would indicate to me that they were bought prematurely you know they weren't mature businesses they hadn't figured out what why they existed and what they were trying to solve for um and i don't think we totally had at that point either so if we'd sold it would have been a kind of oh look somebody's come along with a big amount of money here is and and actually one of the reasons why we're still around and we're doing pretty well is because there's a bit you know there's an honesty in in in what we're trying to do we're not we're not trying to build and sell we're trying to build a great company and and i don't think that we were ready to to sell it at that point so what have you scaled to today in terms of total customers using you uh just under 1500 1 500. um you know this year we'll do more than 60 million dollars in revenue and there's 420 staff in the business so and it's profitable so we've got it to get a good spot are you so where's growth that so you said you're gonna you're you will over the past 12 months you did 60 million are that's what you will do uh last year's record recognized revenue was around 50. so this year it will be above you know well above 60. okay and take take me just so we can get a growth rate take me back 13 months ago december 2016. what was your run right then i can't remember but last last year we we we you know we grew it healthily it wasn't 40 50 but it it wasn't like it was like it was like 30 ish right around that yeah yeah yeah yeah so if if you did fit you know if you ended the year at a 50 minute or you're gonna do or you're on a 60 million run rate today right you you were somewhere caught in the in the 48 49 million run rate december 16. something like that i haven't got the data in front of me that's okay you know it gives you a sense of the scale i'm gonna really love you if you tell me you're bootstrapped but i have a feeling you're gonna break my heart yeah i know sorry about that how much have you raised it we've raised 50 million bucks um five zero yeah yeah not all of that's gone into the company but the majority of it has how much of it went to secondary versus operating um i mean four fifths of it went to operating something okay that's healthy yeah i mean the the reason why uh we're not totally bootstrapped is isn't because we've scaled sales and uh and all that kind of stuff and been super aggressive it's because we had to build the back end a way ahead of actually being able to monetize it and that's an expensive exercise that's hardware software and data so you know it's it's a big that we've got something like a thousand servers that sit behind the live application i mean we could put it on the cloud it doesn't you know either way it's gonna it's an expensive machine to run because it's a massive data processing storage um game that we're in well it's a nice moat for you now now that you're at scale it's hard to compete exactly it is that's true enough yeah interesting okay tell me about churn that's obviously critical in this kind of business churn is yeah it's and it's it's the um as the business gets bigger it's it's an absolutely killer thing that you just have to get under control i mean we're not one of those businesses sadly that that that get that signs on for like a dollars worth of revenue and in five years uh that that's two dollars sort of thing on on average taking account of churn and so on i you know i i i'm envious of of companies like netsuite and and i guess salesforce that just end up having this kind of viral effect across once they get it once they get a a customer uh we have to work very hard for retention we have to make our product incredibly sticky we have to onboard our customers in a really smart way such that they're successful we have to keep innovating like crazy to make sure that our product is something that they're going to continue to choose in some ways it makes us fitter as an organization but it's also um you know a huge challenge um to scale a business because you know if you've got one percent per month churn is that what you're at right now yeah not quite but there are there abouts in terms of revenue or logos either way it's very similar um uh the you know that's a lot of revenue to replace now obviously we've got upsell so that's gross churn so upsell and and increasing your footprint with an existing account so that's going to reduce that on a net basis what is your debt um it's varies but if we don't we don't disclose that but are you over are you over 100 in terms of net revenue retention annually they're or they're about so it varies depending on the cycle um but but uh but...