INCRMNTAL Revenue & Funding (2024)

hey folks my guest today is mayor sadra he's got 20 years experience in digital advertising and can summarize his entire life in an excel spreadsheet today he's the ceo and co-founder of incremental founded during 2020 in lockdown mode which helps with incrementality measurement using causal models mayor are you ready to take us to the top yeah happy too thanks for watching you bet okay so tell us what the company's doing and can you name one or two customers and how they're using the technology yeah sure so uh basically incrementality was founded during corona and what the company is doing is incrementality measurement which is basically all about measuring the value from marketing spend uh we're working with advertisers who could be either app developers or websites across e-commerce fintech gaming and so on some companies that i can name is trainline the uk train tickets seller um fastik which is uh intermittent fasting and we're also working with etoro fairly large fintech company out of israel so how does etoro use you 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 um unfortunate side effect of marketing interesting 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 yeah so we are pure sas monthly subscription we really wanted to keep it flat so basically our pricing is lying anywhere between a thousand bucks a month to 5k a month depending on the size and features the customers want it was really important for us to not have a variable component you know 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 using spending and so on so four packages starting from free to enterprise package okay but sweet spot you'd say is what 2000 bucks a month something like that roughly yeah i would say actually the majority of customers right now is enterprise so bigger okay so maybe closer to 5k instead of 2k um got it very cool tell me about your first customer so you launched in 2020 how did you go to market how did you get that first person signed up 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 a partner and so we were fortunate again 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 what does that mean those design customers like what's the title of the people you were reaching out to and were using linkedin or how are you reaching out to them so most of them i would say came through our past network because i previously i was ceo for an ad network called app lift it was 250 people 100 million dollars revenue is 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 interesting so got it so you reached out to people who are using app lift to say hey i'm working on this new thing you want to test it out no actually just reach out to people from my network again 20 years in the industry it's a lot of network what did you learn at app lift i mean when you say 100 million bucks in revenue was that gmv through the platform or your cut that you were taking no no i would say so aptly was a media company so um 100 million dollars was gross revenue running through the system cut was roughly 30 that's the media world yeah yeah and i guess finish that story out for us so i think you raised what 10 20 million bucks there you did you sell that or what happened yeah we sold it in 2019 actually so i became ceo end of 2018 and i would say oh you weren't a founder no no i 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 yep yep okay got it uh did investors at least get their 20 million dollars back most of them 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 very much okay all right so so back back to current business incremental so you bring your first customers on from your past network uh you have a co-founder it sounds like how many customers are now working with today i'd rather not name it because we're not to the point to actually name the any figures do you have paying customers today yes yes we do have paying customers okay are we talking though like i mean give me a range that you're comfortable sharing we're doing like five or 500 or 5 000 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 i see god and live on the platform that's paying customers and and if not how do you move people that are okay those are our paying god so a few dozen paying so call maybe 24 36 um when people use it for free because you mentioned a free plan what do you know they have to do on the free plan to activate to increase likely they convert to paid 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 they 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 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 okay got it that makes good sense so uh beta launched recently um you're now adding customers now did you guys decide to bootstrap this or did you raise no we raised we did a basically a seat round um on a safe one one was last summer one was kind of 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 how much was the safe this year 2.2 total 2.2 total to date yeah yeah but how much how much just this year and then how much last year yeah we did a million and then 1.2 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 no no so we did a safe one and save two and save two had a higher valuation okay got it but but still no no no one has come in and put an equity value on the business actually price the business they both have caps exactly exactly we use valuation caps tell me about how you think about funding moving forward you mentioned maybe raising now uh 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 attraction or anything that was obviously a big fail so and we ended up raising form angels um now it's interesting but a lot of these vc's have been you know um in contact with us continuously kind of asking how we are and what we are 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 um yeah so it's like the questions that occupy our minds i mean my co-founder is something we're discussing with our board and we'll probably make a decision somewhere in the next couple of weeks 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 delusion or you think you can get a good valuation today i think given what we have in terms of all the fundamentals of the company means it's 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 high subscription costs very high margins no i don't really think it's about necessarily that gold and one million are i think it's trajectory that people care about i mean you can sort of back into 36 customers at a 2 000 average rp i mean that would put you at like 70 grand ish a month right now in revenue is that accurate yep so you think you can break them i mean what we have 60 days left in the year can you guys break a million dollar run rate by december 25th 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 or estimations if you did go out and raise how much would you try and target that's a good question let's see what the market what the market brings well you should never let the market tell you how much you want to raise to grow your business how much do you think you need to grow faster and what would you invest how much do we want to raise or how much valuation we want no no you you rate capital how much do you want to raise uh i think we'll probably want to raise one in sorry something like 12 something like 12 million yeah interesting why 12 million where would you spend that 12 million will allow us to grow the tech team start establish a sales team sales team specifically in the states where the market pretty much is um yeah that's pretty much the gist of it we want to 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 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 um 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 of course and so what is the team today it sounds like no sales people but what's the total team today 12 people everybody's an engineer other than me okay okay that's a nice place to be got it so any any feature request you just stick it in slack they put it in jira it goes live the next day right uh i have a co-founder 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 planned for yeah we never needed to pivot which is cool um 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 and mayor when we talked about growth rate because of these announcements because of coba because of apple if you're doing seventy thousand dollars a month today where were you exactly a year ago do you remember zero what are you talking about okay so you were you were pre-revenue in november last year yeah yeah that was free revenue in june this year got it so you've signed up you know caught 24 36 customers at two to three thousand dollar rpoos all really in the last call five six months yeah can you you mentioned wanting to make that no touch can do can you make a 2 000 a month sale truly no touch won't someone always want to talk to someone if they're spending that amount on a website maybe maybe but again the way we are planning it is similar to hubspot if you know hubspot flow it's it's amazing it's an incredible platform yeah but that's what's the number one thing we just signed up last week i mean i'm selling it for a 20 month plan their sales person's asking to get on a call with me i mean there's there's a lot of touch that hubspot puts on their expansion interesting um i didn't experience this and i grew to a 2k a month a customer of hubspot without any touch points i did reach a touch point when i needed a touchpoint but it wasn't sales actually was never sales yep um okay got it so got it you feel like you can you can have that motion be successful without a ton of sales people in no touch fashion we'll see if that works out what about what about churn has anyone like paid you something and then you know either completely or down downgraded not yet not yet interesting if they if people do downgrade what would the reason be i would need to retrospect it when someone does 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 churn indicators could be again if someone is not understanding the insights the platform gives them but to be fair like the result screen the platform provides literally is iterated every two weeks based on the feedbacks we get custom from customers so customers are giving us a lot of feedback 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 want to know what you like what you not like share with us results that you understand share with us results you do not understand um and this basically constantly helps improve our platform and yeah so that's kind of that's the moment we are at the point where we yeah sorry we're at the point what yeah we're 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 that's a good problem to have yeah all right let's wrap up with the famous five number one what's your favorite book flowers for argent flowers what flowers for algernon okay number two is their ceo you're following are studying peter hamilton he used to be the ceo of tune and oven name forgot his last name ceo of appslier number three what is your favorite online tool for building incremental hubspot i love it absolutely love it but again i'm i am not the engineer yeah i got it number four how many hours of sleep to get every night five or four okay and situation married single kids married kids how many kids two two okay and how are you 40 40. last question something you wishing you when you were 20. buy google shares a lot of them or and buy bitcoin yeah guys there you have it incremental.com helping advertisers understand attribution in a way more effective in a way we're using a way more effective process they just launched a paywall called in june now have caught a couple dozen customers at a 2 000 rpoo 70 000 a month in revenue again up from nothing about a year ago 2.2 million raised on two notes uh they're going to keep driving growth here and see if they go out and start a q1 and target a 12 million dollar uh series a round we'll see if that happens team of 12 today all engineers except mayor mayor thanks for coming on and taking us to the top thank you nathan cheers one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 p.m central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to 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