INCRMNTAL Revenue & Funding (2024)

[00:00] Hey, folks. My guest today is Maor Sadra. He's got twenty years experience in digital advertising and can summarize his entire life in an Excel spreadsheet. Today, he's the CEO and co founder of incrmntal founded during 2020 in lockdown mode, which helps with incrementality measurement using causal models. Maor, are you ready to take us to the top? [00:17] >> Yeah, happy to. [00:18] Thanks for reaching You bet. [00:20] Okay. So tell us what the company is doing and can you name one or two customers and how they're using the technology? [00:25] >> Yeah, sure. So basically, incrmntal was founded during Corona. What the company is doing is incrementality measurement, which is basically all about measuring the value from marketing spend. We're working with advertisers who could be either app developers or websites across e commerce, fintech, gaming, so on. Some companies that I can name is Trainline, The UK train ticket seller, Fastic, which is intermittent fasting. And we're also working with eToro, fairly large FinTech company out of Israel. [00:57] So how does eToro use you? [01:00] >> So basically what they're doing is they're streaming their media spend and conversions data or marketing results. And basically the system allows them with a hit of the button to measure the value of their marketing spend. Means when they increase spend on a channel, did it actually create incremental value or is it just taking value from somewhere else, which is a common unfortunate side effect of marketing measurement. Interesting. [01:26] Yeah, this is obviously a hard problem. Everyone's always fighting over attribution. It sounds like you're trying to solve that. Exactly. Very cool. Okay. And so what are customers paying on average per month to use this technology you've built? [01:36] >> Yeah. So we are pure SaaS monthly subscription. We really wanted to keep it flat. So basically our pricing is lying anywhere between $1,000 a month to 5 ks a month, depending on the size and features the customers want. It was really important for us to not have a variable component pricing because we didn't want to have a bias. We didn't want the platform to prove itself to customers and hence build them based on how much you're [02:01] >> using spending and so on. So four packages starting from free to enterprise package. [02:07] Okay. But sweet spot, you'd say is what? $2,000 a month? Something like that? [02:11] >> Roughly. Yeah. I would say actually the majority of customers right now is enterprise, so bigger. [02:15] Okay. So maybe closer to 5 k instead of 2 k. Got it. Very cool. Tell me about your first customer. So you launched in 2020. How did you go to market? How'd you get that first person signed up? [02:25] >> Yeah. So actually we were fortunate. So me and my co founder were both, I would say not first timers. So we've been around for a while. And when we started, we reached out to design customers. So instead of going directly and developing a product and then offering to market, we reached out to people in the industry, hey, we are developing this. If you believe in the vision, be a design partner. And so we were fortunate again, [02:49] >> I would say thanks to Corona and Zoom and doing everything remote, we had design customers from three different continents. We had 10 design customers actually, big and small, gaming companies from Finland and then health tech companies from Germany and then of course Israeli ones as well. [03:06] What does that mean, those design customers? Like what's the title of the people you were reaching out to and were you using LinkedIn or how were you reaching out to them? [03:12] >> So most of them I would say came through our past network because previously I was CEO for an ad network called AppLift. It was two fifty people, 100,000,000 revenues, 15 offices around the world. So I had the network to actually reach out to people. People used to be, well, are typically anywhere from CEO to CMO, but now we see that the persona we're dealing with typically is either marketing persona or data science persona. [03:38] Interesting. So got it. So you reached out to people who are using AppLift to say, Hey, I'm working on this new thing. You wanna test it out? [03:45] >> No. I actually just reached out to people from my network. Again, twenty years in the industry. It's a lot of network. [03:50] What did you learn at AppLift? [03:52] >> I mean, when you say [03:52] a $100,000,000 in revenue, was that GMV through the platform or your cut that you were taking? [03:56] >> No, no, I would say, so AppLift was a media company. So, $100,000,000 was gross revenue running through the system. Cut was roughly 30 percent. That's the media world. [04:07] Yeah, yeah, yeah. And I guess finish that story out for us. So I think you raised what, $10,000,000 to $20,000,000 bucks there. You did you sell that or what happened? [04:14] >> Yeah. We sold it in 2019, actually. So I became CEO end of two thousand eighteen. And I would say Oh, you [04:20] weren't a Founder? [04:21] >> No, no. Joined it as a VP Strategic Development, got promoted to CRO five months later and ended up taking the CEO role where my only job was sell this company as fast as possible. That was some hard times. That's a different and a longer story. [04:37] Yep. Yep. Okay. Got it. Did investors at least get their $20,000,000 back? [04:42] >> Most of them. [04:43] Okay. Interesting. So, so it was more like sort of a flash sale, get it done, move on to the next thing sort of deal? [04:48] >> Very much. Very much. [04:50] >> Okay. [04:51] Alright. So so back back to current business incrmntal. So you bring your first customers on from your past network. You have a co founder, it sounds like. How many customers are you now working with today? [05:00] >> I'd rather not name it because we're not to the point to actually name the any figures. [05:05] Do you have paying customers today? [05:07] >> Yes. Yes. We do have paying customers. [05:09] Okay. Are we talking, though, like mean, give me a range that you're comfortable sharing. We're talking, like, five or 500 or 5,000? [05:15] >> No. So, again, we just launched Open Beta a couple of months ago. I would say we are a few dozens live on the platform. [05:21] I see. Got it. And live on the platform, that's paying customers. And if not, how do you move people that are okay. [05:26] >> Those are paying. [05:27] Got it. So a few dozen paying. So call maybe 24, 36. When people use it for free, cause because you mentioned a free plan, what do you know they have to do on the free plan to activate, to increase the likelihood they convert to paid? [05:37] >> Yeah. So actually right now we are not offering the free. So right now in beta, what we did is we offered customers that they can join for business or enterprise package. Luckily for us, so last year when we founded the company, something happened. Apple made an announcement that was incredible for us. Apple basically deprecated what is called a device identifier that many companies use for marketing tracking. This killed the ability to actually do attribution properly, and [06:05] >> our solution became de facto this solution companies have been waiting for. So again, even though we've been out in open paying beta only for a couple of months, now we're onboarding three, four customers a week. Mhmm. [06:17] Mhmm. Okay. Got it. That makes good sense. So beta launched recently. You're now adding customers. Now did you guys decide to bootstrap this or did you raise? [06:25] >> No. We raised. We did a basically a seed round on a safe. [06:29] One [06:30] >> of one was last summer. One was kinda like beginning of this year to kind of allow additional investors to come in. And, yeah, now the question is when or if do we do another fundraising? [06:41] Mhmm. How much was the SAFE this year? [06:44] >> 2.2 total. 2.2 total to date. [06:47] Yeah, but how much just this year and then how much last year? [06:50] >> Yeah, we did a million and then 1.2. [06:52] I see, interesting. And did you just, you know, it's very common now to sort of let these things roll. Did you basically just sort of let one roll, Same paper? [06:58] >> No. No. So, did a SAFE one and SAFE two, and SAFE two had a higher valuation. [07:03] Okay. Got it. But still, one has come in and put an equity value on the business, actually priced the business. They both have caps. [07:10] >> Exactly. Exactly. We use valuation caps. [07:13] Tell me more about how think about funding moving forward. You mentioned maybe raising now. [07:17] >> So again, I think now is interesting time. So like when we started the company, we did speak with VCs to think that maybe we can fundraise on a deck before we have a product or traction or anything. That was obviously a big fail. So we ended up raising from angels. Now it's interesting, but a lot of these VCs have been, you know, in contact with us continuously kind of asking how we are and what we are. [07:41] >> And many of them like the story and they for sure liked us because we are experienced. Yeah. So now it's a question. Do we fundraise? From who do we fundraise? Where do we want to fundraise? Do we want to be in The States? Do we want to be in Europe? Do we want to be in Israel? Yeah. So it's like the questions that occupy our minds. Me and my co founder is something we're discussing with our [08:01] >> board, and we'll probably make a decision somewhere in the next couple of weeks. [08:05] Do you think you have to wait to break a million dollars in revenue or at least a run rate before you go out and do that raise to avoid like crazy dilution, or are you thinking you can get a good valuation today? [08:13] >> I think given what we have in terms of all the fundamentals of the company means its technological story. It's a crazy inbound pipeline that we have. It's diversity of customers. It's breadth and depth. It's a high subscription cost, very high margins. No, I don't really think it's about necessarily that golden 1,000,000 ARR. I think it's trajectory that people care about. [08:39] I we can sort of back in if you have 36 customers at a $2,000 average ARPU. I mean, that would put you at, like, $70,000 ish a month right now in revenue. Is that accurate? [08:46] >> Yep. [08:47] So you think you can break mean, what? Got sixty days left in the year. Can you guys break a million dollar run rate by December 25? [08:53] >> I don't know if that's a big question. I don't know. December is a hard month and we try to be conservative with any valuation If or [09:00] you did go out and raise, how much would you try and target? [09:03] >> That's a good question. Let's see what the market what the market brings. [09:08] Well, you should never let the market tell you how much you wanna raise to grow your business. How much do you think you need to grow faster? And what would you invest? [09:13] >> How much do we want to raise or how much valuation we want? [09:17] No, no. You, you rate capital. How much do you wanna raise? [09:19] >> I think we'll probably wanna raise one Sorry. Something like 12. [09:23] Something like 12,000,000? Yeah. Interesting. Why is why 12,000,000? Where would you spend that? [09:30] >> 12,000,000 will allow us to grow the tech team, establish a sales team, a SaaS sales team, specifically in The States where the market pretty much is. Yeah, that's pretty much the gist of it. We wanna take the product to completely self-service, means customers should be able to onboard themselves, integrate themselves, pay, subscribe, upgrade, and so on. There's a couple of other things within the product pipeline and that has to do with features that could be premium [09:57] >> features to actually expand what we are charging to customers who are getting value from the product. Yeah, and at the end I would say for enterprise clients, even though again, we have an insane pipeline inbound, which is nice. For we are not doing sales right now, but for sure there are clients where we are better off if we are approaching them proactively and not waiting for them to reach to reach us. [10:19] Of course. And so what is the team today? It sounds like no salespeople, but what's the total team today? [10:24] >> 12 people. Everybody's an engineer other than me. [10:27] Okay. Okay. That's a nice place to be. Got it. So any any feature request, just stick it in Slack. They put it in Jira. It goes live the next day. Right? [10:34] >> Well, I have a cofounder, and we're equal partners, so everything is a decision between us. It's it's a very much customer oriented solution or a company I would say means that the design customers at the end dictated what the product is. The vision has never changed which is really really cool but what the product is and what the product is capable of I would say grew beyond necessarily what we originally expected and planned for. [11:00] >> We never needed to pivot which is cool. We were like the luckiest people because of that announcement by Apple last year. I would say Corona for us and the whole lockdown was of course strange. I haven't seen my co founder in a year and a half, but it was incredible for us. [11:15] And Maor, when you talk about growth rate because of these announcements, because of COVID, because of Apple, if you're doing $70,000 a month today, where were you exactly a year ago? Do you remember? [11:23] >> Zero. What are you talking about? [11:25] >> Zero. [11:26] Okay. So, you were revenue in November last year. [11:27] >> Yeah. Yeah. I was pre revenue in June this year. [11:32] Got it. So, you've signed up, you know, call it 24, 36 customers at 2 to $3,000 ARPUs all really in the last, call it, five, six months? Yeah. Can you you mentioned wanting to make that no touch. Can you make a $2,000 a month sale truly no touch? Won't someone always wanna talk to someone if they're spending that amount on a website? [11:52] >> Maybe. Maybe. But again, the way we are planning it is similar to HubSpot. If you know HubSpot's flow, it's it's amazing. It's an incredible platform. [12:01] Yeah. But HubSpot's number one thing we just signed up last week. I mean, I'm signing up for a $20 month plan and their sales persons were asking to get on a call with me. I mean, there's there's a lot of touch that HubSpot puts on their expansion. [12:12] >> Interesting. I didn't experience this, and I grew to a two ks a month customer of HubSpot without any touch points. I did reach a touch point when I needed a touch point, but it wasn't sales. Actually, it was never sales. [12:24] Yep. Okay. Got it. So, got it. You feel like you can have that motion, be successful without a ton of salespeople and no touch fashion. We'll see if that works out. What about churn? Has anyone like paid you something and then, you know, either canceled it completely or downgraded? [12:39] >> Not yet. Not yet. [12:40] Interesting. If people do downgrade, what would the reason be? [12:44] >> I would need to retrospect it when someone does. [12:48] Okay. So, you don't have any clues in terms of like what is like, what churn indicators might be today, leading indicators might be today? [12:55] >> Churn indicators could be, again, if someone is not understanding the insights the platform gives them. But to be fair, like, the results screen the platform provides literally is iterated every two weeks based on the feedbacks we get from customers. So customers are giving us a lot of feedbacks. That's, I would say, part of the beta right now. It's like you get on a beta, we will help you with the onboarding, but we want your feedbacks. We [13:20] >> want to know what do you like, what do not like. Share with us results that you understand, share with us results that you do not understand. And this basically constantly helps improve our platform. And yeah, so that's kind of that at the moment. Are at the point where we yeah, sorry. [13:38] You're the point what? [13:39] >> Yeah, we're at the point where we actually like, when people ask, hey, do you want me to introduce you to this client? We actually say no because we don't want to be convincing people right now. Like, there's enough customers reaching to us because they're convinced. [13:56] That's a good problem to have. [13:58] >> Yeah. [13:59] Alright. Let's wrap up with the famous five. Number one, what's your favorite book? [14:05] >> Flowers for Algernon. [14:07] Flowers what? [14:08] >> Flowers for Algernon. [14:11] >> For Algernon. [14:12] Okay. Number two, is there a CEO you're following or studying? [14:16] >> Peter Hamilton. He used to be the CEO of Tune and Oven forgot his last name, CEO of AppsFlyer. [14:22] Number three, what is your favorite online tool for building incrmntal? [14:29] >> HubSpot. I love it. Absolutely love it. But again, I not the engineer. [14:34] >> Yeah, I got it. [14:35] Number four, how many hours of sleep do get every night? [14:39] >> Five or four? [14:40] Okay. In situation, married, single, kids? [14:43] >> Married kids. [14:44] How many kids? [14:46] >> Two. Two. [14:47] Okay. And how old are you? [14:49] >> 40. 40. [14:50] >> That's question. The [14:52] Something you wish you knew when you were 20. [14:55] >> Buy Google shares, a lot of them, or buy Bitcoin. [15:01] Guys, there you have it, incrmntal.com, helping advertisers understand attribution in a way more effective, a way, using a way more effective process. They just launched a paywall call in June, now have called a couple dozen customers at a $2,000 ARPU, $70,000 a month in revenue, again, from nothing about a year ago, 2,200,000 raised on two notes. They're gonna keep driving growth here and see if they go out and start a Q1 and target a 12,000,000 [15:23] series A round. We'll see if that happens. Team of 12 today, all engineers except Maor. Maor, thanks for coming on and taking us to the top. [15:29] >> Thank you, Nathan. Cheers. [15:32] One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM [15:57] Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a [16:19] big fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. [16:41] Sign up for that at nathanlatka.com slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. And if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter [17:00] those people. We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.