How Hyprbrands CEO Gil Eyal grew Hyprbrands to $8M revenue and 200 customers in 2017.

hello everybody my guest today is gil ayal he is the ceo and founder of hyper the world's largest influencer search and discovery directory he founded it in 2013 and the brand and the the company now offers brands and marketers in-depth audience analytics for over 10 million influencers across major social channels he's really revolutionized the way that many of the world's biggest agencies and brands are running influencer marketing by focus on the same data analytics and audience demographic information relevant to any other form of marketing the company boasts a client base of over a hundred of the fortune 500 brands as well as the biggest advertising and pr agencies in the world gil are you ready to take us to the top hey good to meet you nathan you're excited you're giggly either because you've had a lot of coffee or you're just excited to see me which one is it it's a little bit of both uh it's 4 p.m over here so i've had probably six or seven cups of coffee already all right so we i think people are very when they hear influencer marketing there is definitely preconceived notions right so how do people know you're the real deal kind of not like those people that are you know social media consulting companies yeah i think the biggest um misunderstanding is between fame and influence and i think most of the people in the industry don't even understand it there's a really big difference between being famous and being influential i'll give you the example alicia keys the face of blackberry she's famous a lot of people heard about it but they don't necessarily respect her opinion about which smartphone should they be using you take a channel like unbox therapy the guy talks about phones talks about digital all the time he's the face or he's not space but he talks about samson uh whatever next phone they have people respect his opinion he's influential he might not be as big as she is but he's really influential and people look at him to make a decision you should think about it the same way as you you look at decisions in your life if you want to choose which movie to go to you're going to ask a friend that's influential that in your opinion about what movies are good you're not going to ask a famous actor which movie to do it so influencer marketing there's a very very fine difference between those two it's easy to overlook because it's tempting to go after people who have really really big audiences and just hope that they perform yep okay so how do you get rich what's the business model how do i get richer out of the influence how's it how's it well actually give me both but what's the business model first so the business model for hyper is that we have a subscription fee we have a a database of about 10 million influential people we track about a billion social accounts on a weekly basis to see what they're talking about who they're following and what topics are the ones that um they engage with in order to understand in real time who online are the micro people not the really big not the kim kardashians of the world but who are the small people are influential in every niche so um if you have uh if you're trying to sell a product in the beauty space you want to make sure that you're talking to an audience that is interested in beauty you're not going to want to hire a bikini model on instagram yeah she has a big audience yeah she's female she has a pretty face but probably most of her audience is men and our system allows you to find the ones that actually have the right audience the second component is the real time if you want to sell to women who want to get pregnant if you missed by six months meaning if they were talking about getting pregnant six months ago they're not interested in your products anymore they're not buying uh strollers or pacifiers or whatever it is that you're trying to sell so it's all about understanding who's really influential at that point yeah who's paying you is it the influencer or the brand so we have no connection to influencers at all we made a decision to only work with brands and agencies so that we can always be um on one side we'll never ever be a suspect of oh you recommended this influencer because they pay you influencers cannot log into our platforms they cannot access their own data you don't have any marketplace issues you didn't have to build both sides yeah and as a former product manager i know what compromises that requires as a product manager if you have two clients they're never always going to need the same product right so one of them is going to want to see certain things in other words exactly the opposite and brands want to pay the least and influencers want to make the most it doesn't really work together we decided we only work with the brand how are those brands paying is it per campaign is it a sas model what is it completely a sas model they pay us uh an annual uh 95 of our clients have an annual or longer contract what is the size of that on average would you say first year first year contract usually so there's a big variety they vary between twenty thousand dollars a year up to uh about half a million dollars okay wow okay that's a huge variety and what drive what drives that variety is it literally how many impressions they want from this influencers you bring to them or what so we don't bring the influencers it's a discovery tool that allows them to reach out to as many influencers as they want but it's limited based on different uh characteristics that they want for their particular uh product if they're an agency and they want to co-brand it or white label it there's an additional fee if they use an api there's some additional fee based on how many searches and how many results they want if they want to reach out to a thousand influencers opposed to 10 um obviously it's a different package so you have a few different levers that allow you to drive expansion revenue one is just the pure feature set what do you want to turn on and off the second is number of kind of people in our database will expose you to that you can make then a choice on and i mean you have a seat model as well or no yeah yeah yeah so if you have an office if you have a firm that has uh multiple offices typically buy one subscription and then additional seats for each office uh which comes out for less than buying separate subscriptions to each one okay give us more of the back story here now we get the business and the customers when did you launch this thing so i launched this about four and a half years ago before that i was working at a company called mobley was a photo and video sharing platform um before instagram and the strategy that i had was let me get a lot of celebrities on this thing and they'll um create content and then their audience is gonna come which sounds like it makes a lot of sense but it didn't work the way that i wanted it to work even though i was able to get um instagram what did they see that you didn't well here's what happened so we got inv so celebrity investors like um leonardo dicaprio toby mcguire serena williams how much sorry how much did they put in a lot of money and millions millions of dollars and um we had in addition to them we also had about 200 deals with their own celebrities but they weren't driving the kind of traffic that we wanted as a marketer at heart i realized i wasn't reaching the right demographic for this product i was trying to sell the 14 15 year old teenagers with um celebrities that appealed to a very very very wide variety of an audience and i realized i would never advertise in a magazine without asking who reads this magazine i would never advertise on a tv show without knowing who watches it why would i work with a big celebrity without knowing who their audience is so i decided to build this tool that can can break down the audiences based on demographics psychographic data and what i realized was that i was paying a lot to get 200 celebrities on my platform and most 90 of their audience was never the audience i was trying to reach and that's a big issue that's what led to the birth of piper because i realized everybody's going to be wanting to activate these younger these smaller influencers these social media stars and if they don't know who the audience is and what they're interested in a lot of money is going to go away so how much have you raised to date we've raised about 8 million so far and why'd you decide to go that route when you're when you're when in your first company you raised from celebrities it didn't pan out so well um i i think the issue with raising with celebrities uh was that it created a lot of attention to the company at a stage where it wasn't ready for it we were driving uh we built an app where a bunch of people built an app and didn't expect to get 20 million downloads over you know a three or four month period and we couldn't handle it uh the app was crashing it wasn't good enough instagram had popped up there were better alternatives so the the publicity that comes with these big celebrities is great but it was the wrong audience that wasn't staying on the app and it was too much for us to handle as a company we decided to go traditional venture capital road with hyper because we didn't think it would benefit from a relationship to celebrities we didn't want to be associated with the influence so we wanted to be associated with a professional brand uh an agency side and what do you have today in terms of total customers using you we have about 200...