How Concentricmarket CEO Greg Silverman grew Concentricmarket to $6.9M revenue and 135 customers in 2023.

hello everyone my guest today is Greg Silverman he's the CEO of a company called concentric a software company that licenses concentric market a simulator that improves your planning processes and forecasting abilities previously he was global managing director of analytics and valuation for Interbrand he's author of turning complexity into strategic advantage and the Interbrand top 100 brands report Greg are ready to take it to the top how's it going I'm doing good man you said you knew me well right before we went live but that means you listen to the show huh I do what do you think you like it I like it are you nervous not at all don't be nervous I'm a big teddy bear and soft soft all right tell us about concentric what do you guys do how do you make money yeah so we license product called concentric market and basically it's designed to bring people's data together put it in a system and allow them to forecast how well their business plans or marketing strategies are gonna work and what's the business model is it like per API call per record you know SAS yeah cela it's a seat license and you you you pay per user okay pay per user now and you listen any other things you want to add on before I start asking questions no it's a I think it's a breakthrough right it's it's a really great tool in the sense of how accurate we are and how how fast we help people change the decision-making yeah and I want to dive more to the product in a bit in terms of kind of artificial intelligence machine learning how you're doing that is amidst forecasting stuff but give me a sense first seat on average I mean are we talking 10 bucks a month 100 bucks a month a thousand we're talking at least 12,000 a month a per seat per seat okay got it and is that is that a fairly representative average or is that just your enterprise accounts that's that's average our enterprise accounts are bigger okay got it so average is 12 grand a seat tell me more about how this thing actually works so you see the gray you know Greg the risk in this interview is we lose people when they hear a kind of predictive analytics cuz it's such a frothy word talk hard science to me turn me on here what do you do yeah so first off we're not predictive analytics we're forecasting capability and what we've done is bring five Sciences together that came from social science into one planning platform we actually create mathematical representations of consumers how they make decisions how they talk to each other how they consume media and then forecast what's likely to happen for political campaigns marketing campaigns social policies anything where there's an alternative where people are choosing between one thing or another okay give me a real story here let's type in politics is easy everyone knows how it works give me a give me a story of how you did this in an accurate format and it helps someone you know early on change behavior yeah so we work with a large automotive company and they were going to launch a new version of a car and we started working with them four years in advance of the launch so we started to recreate the market train the system to understand how their market work and two years before the launch with a new powertrain new features new pricing we were able to estimate how well the car would sell two years in advance and when it launched we were 94% accurate on the actual vehicle sales for the first year of the car so that allowed them to drop features that they might not have needed it helped them tailor their advertising and they saved 160 million dollars in deferred capital and got to market six months earlier well Gregg let me ask you a question though so when someone starts using you before they start using your recommendations today for product lease in two years they want to see how accurate you are first at predicting that's the only way then the next report you do do they'll actually act on your behavior so that's right that's a long quote sales cycle route how do you manage that how do you get people to take action on your first you know report or diagnostic before you give them yeah we've been there we've been in business eight years and so it was a long sales cycle for probably the first five or six years but now the cases the body of work we've done with others people want to get into it very quickly and I think that's the biggest difference in our system and other types of forecasting tools is you to be up and running in four weeks and you can start forecasting every month and getting some accuracy adjustments like how well we data is assumptions and they're often running you know inside of six months they can start making you know simple decisions and is they get more confidence that the decisions work and they get feedback they expand across the the organization so for this Clark company you might give them a report and say I'm gonna make this up sales are gonna be 1 billion at the current feature set however if you remove the second door sales will go up to 1.2 billion what you're saying is when they took your recommendations you are right on to about 94% accuracy that's correct interesting really interesting really interesting do you typically focus on automotive are there specific sectors you go deep in we we do great in automotive that's our longest legacy we're very big in films movie gaming television content development we do really well in telecommunications hardware I tell me a film one I would give me a Hollywood connections a movie producer comes to you and says here's the storyline is it gonna sell in theaters that's right can you talk about a real example of this from like maybe a couple years ago yeah we can go pretty far back to do something say like battleship okay tell us everyone knows battleship yeah battleship so we were working with a with with the film and they we saw the marketing that was in it who the actors were and also taking a look at game recreation right because they think behind battleship is there's a hundred million battleship games in closets and they're trying to tap into that storyline and when you started to look at the script it probably wasn't deep enough into that b4c three you know the game we've all played and we could give them some feedback that said you may not make your your box office the way you're intending so what do you predict box office sales would be before your changes what changes did they make and how accurate were you and it actually came out we were very accurate when it came out we predicted around 75 million for North America and that's what it was okay I can't was it before changes like if they hadn't major changes what would it have been I can't disclose that okay okay interesting so so look there's private equity firms that listen to the show I mean I say have the most sophisticated audience they're listening this going if if he's really this accurate I want his data to make investment decisions yeah I'm surprised that they don't do more simulation think about it if you you have a five hundred million dollar fund and you're picking ten winners you should be estimating one how good the market is going to be or how good they'll be in that market and also do you off tap Howie how you optimize the investments you make in him yeah well Gregg this is what I'm saying this is a red flag for me you should be a billionaire by now if what you're saying is actually true in terms of your accuracy you should be floating in money well you know it took a while to get the system to work and make it production ready so we we were kind of a technology inspired consultancy and then three years ago we pivoted to software now we're experiencing that kind of triple digit growth that you would expect and you know sometimes science just takes a while would you grow at year over a year past 12 months 100 percent hundred okay that's great and and bootstrapped of you raise capital we we've bootstrapped and then we did around with a group called Launchpad ventures which was a series a okay and how much how much is that for they're pretty don't they have a pretty standard package they do they're they're pretty largely they're up here in the Northeast and do about 10 million a year and so we've done a couple million with them okay so combined that's your only capital in the company we you bootstrap then we did a seed round through an angel and then they came in and have driven us to the you know productize and gotten our marketing running but caught like three million ition to date so far everyone yeah good more okay a little bit more than three million that's great and what have you scaled to today in terms of total customers we've got what we'd call 15 primary customers some of them are partners and so they might have another ten each so you can think about us just over 50 different brands using the product globally okay so 50 brands and how many seats across all those brands gosh that must be closing in about 135 ok 135 seats interesting and whoo-hoo inside of these companies is typically owning that seat is it the CMO the chief revenue officer who is it yeah so we're usually bundled up against the chief marketing technology right and they're partnering with the CFO because what they want to give the marketing team the product planning teams the sales team are better forecasting tool and so that allows them they drive it so there's a core team usually about six through the heavy modeling analytics workflow people and then we have a second seat where people can just run experiments the what-if analysis so you can think of our models like six plus twenty five dot exhale yeah you were gonna add on that six plus twenty-five yeah that was...