How Jebbit Reached Just Under 100 Enterprise Customers on Over $10M Raised with 200% Growth (Interview with Co-Founder and President Jonathan Lacoste)

Introduction and Guest Background

Nathan Latka

00:01Hello, everyone. My guest today is Jonathan Lacoste. He is the co founder and president of Jebbit, an enterprise software company in the digital marketing and consumer data space. His focus is on helping the world's largest brands create a declared data strategy using explicitly consented data and their digital marketing channels. Jonathan, you ready to take us to the top?

Jonathan Lacoste

00:18Sounds good. Good to Yeah. Thanks for having me.

What Is Declared Data?

Nathan Latka

00:19So first off, give us some definitions here. What does declared data mean?

Jonathan Lacoste

00:23Declared data is a type of consumer data where customers are actually declaring or sharing information with brands. So quite simply, it can be answering a question in a piece of content or it could be filling out some information, in a survey or a lead form.

Facebook, Apple, and Consumer Data Privacy

Nathan Latka

00:36So let me ask you a question. Facebook right now, they were just shut down by Apple, a certain app that they had because they were paying consumers to essentially give them access to their data. I actually said, wow, this is great. At least Facebook's paying people for their data. Most people just collect it without even telling the consumer at all. However, the storyline that took off online was very much the opposite, which was, wow, Facebook is...

00:56They're breaking privacy laws. They're capturing all this data when really most companies do it anyway and never pay the consumer. So don't we wanna see more companies, Google, Apple, offering to pay consumers for their data?

Jonathan Lacoste

01:07Yeah. I think it's interesting. We always talk about a value based exchange where companies, if they're going to collect and use consumer data, there needs to be an enhancement to the experience. So a personalized recommendation or some type of value, maybe even monetary. Like, that's totally in the realm. Yeah. I think where Facebook overstepped here in particular is they used a protocol with Apple where it was only supposed to be an internal employee app, and they

01:28kind of kept it secret and used it as an external market research tool, breaking Apple's rules. And then there's always kind of the iffy line of it it monitors everything you did on your mobile device for people all the way as young as 13 and 14 years old. So I think it gets to kind of the ethical question of how much data is too much to share with these companies, and what should consumers be able to

01:49control, and when should they be able to give it?

UBI and Consumer Data Ownership

Nathan Latka

01:51Yeah. This is very interesting. For those people who really like the idea of universal basic income, for these big tech companies that love data so much, actually I could see potentially a way to fund UBI as being these tech companies paying every consumer in The US a grand a month, right, for access to the data, and it's essentially opt in by consumers because they value the data so much.

Jonathan Lacoste

02:07It's really interesting. I think what you're hitting on is we are moving quickly to a world where consumers will own their data and it could be treated as a fundamental human right. And companies have to respect that and treat that data a lot differently. Whether we ever get to the point to to your idea around monetizing it or like a basic income, totally totally open for discussion. But what certainly is true that consumers are gonna have

02:29a lot more control of their data moving forward than in the past.

How Jebbit Works and Who It Sells To

Nathan Latka

02:32Yeah. We'll see what happens. Okay. So how's Jebbit fit in the picture here? What do you guys do? Are you... I mean, it a SaaS company or what?

Jonathan Lacoste

02:37Yeah. It's a SaaS platform, and and enterprises all around the world right now are being faced with the challenge of how do we collect and use this data in a really transparent and simple way that not only drives business value, but is also respectful for everything that we just talked about with the consumer. And so, enterprise companies license our technology. The short answer is they build these immersive mobile experiences. They launch it as a part of

02:58their digital strategy with the whole goal of giving consumers the ability to share what they wanna share with enterprises, the preferences, motivations, so that enterprises can immediately alter the experience and give them a more personalized and relevant, you know, shopping experience or browsing experience as a part of their journey.

Nathan Latka

02:58Mhmm.

03:16Is this the kind of data that an Expedia might use to know it's a Mac user, not a PC user, and charge 10 times the airline prices because they assume the Mac user has more money?

Jonathan Lacoste

03:24That's inferred data. So a lot of the data that they're looking to get from, customers is really just understanding on a conversational level, like, why are you searching? So if Expedia sees you searching for a flight to Hong Kong, they may see your location and what device you're browsing and all of those things. But with Jebbit, they wanna understand the why behind the action. Why are you going? What motivations? You know, is it for, with a

03:47spouse or is it for a honeymoon or just a friend's weekend? When you arrive, what type of hobbies are you interested in? I think in an ideal world, consumer data sometimes is is treated too much as kind of this programmatic transactional exchange between consumer and brand, and we're trying to add a human element to it to make it a little bit more relevant to consumers.

Pricing Model and Contract Structure

Nathan Latka

04:04Interesting. Okay. And then help me understand kind of who you're selling to. The average customer is paying about how much per year for your technology?

Jonathan Lacoste

04:10It's a 6 figure contract. I mean, we're selling to, you know, working with the largest brands in the world. And at the end of the day, we're selling into product and marketing teams, primarily.

Nathan Latka

04:19So fair to say then, again, just before the average kind of ACV even in year one is above a $100,000?

Jonathan Lacoste

04:19Correct.

Nathan Latka

04:19And why would someone pay a $100,000 per year versus a million, right, per year? What what are the pricing axes you pricing against?

Jonathan Lacoste

04:30I think it's all about how much they're using the platform. So, you know, we're based here in Boston, and so we primarily focus on companies in North America. But pretty frequently when our customers in North America find success, they refer us to other divisions within their company or they refer us to their European or Asian counterparts. So I think as the platform continues to expand internally and they upgrade with certain features or the usage increases, that's

04:53when you start to

Nathan Latka

04:54Based off what though? Usage based off what? What's the metric?

Jonathan Lacoste

04:57Well, new teams are licensing it. Launching more experiences. More consumers are going through it and they're collecting more data. So a variety of factors.

Nathan Latka

05:04Okay. So just to be clear, you have an inside sales team that says, hey, you are moving from a team size of a 100 to a thousand, you should pay more or you're, you know, you should add this feature set across all your seats, you should pay more. Or, hey. You just passed a million consumers through your experience in one month. You should move to, like, the next level.

Jonathan Lacoste

05:19Yeah. We see a lot of, enterprises start based on where they're at in their declared data journey. Right? Like, we're we're building a category as a SaaS platform. And so a lot of customers are coming to us, and they don't know necessarily what technology they need to solve these problems. So to your point around pricing and packaging, a lot of the time what we do is we start someone on the basic platform, which gives them a

05:38certain number of experiences, a certain number of interactions. And then as they need more advanced capabilities, unique custom APIs, more integrations into their CRM and DMP, more experiences to launch in more regions, that's when you start moving up those price points.

Nathan Latka

05:51So on average, what do you see contract values increase from percentage wise from year one to year two? Are we talking doubling or 50% growth or 10% or what?

Jonathan Lacoste

05:58It totally depends, but most of our customers are doubling or tripling their spend within the first twelve months, which I think is a really exciting metric that we keep track of because it directly correlates to value.

Nathan Latka

06:08Now, obviously, the doubling can't keep going per account year over year. Otherwise, you'd be a multibillion dollar company at this point. Obviously people kind of flatten out. So when you look after kind of the rapid acceleration up to a certain price point over the first eighteen to twenty four months, I mean, do you see it kind of calm down where expansion year over year is maybe like whatever, 10, 20%?

Jonathan Lacoste

06:26We're not even at that point yet, be honest. Right? I mean, as a SaaS company that's three years into building the category, a lot of what our focus has been is just continuing to add customer value. And these enterprises we're dealing with are at such a scale that we keep finding new global teams to work with, new brands, new divisions. So we're still kind of at that point where we're still accelerating.

Nathan Latka

06:45When did you launch?

Jonathan Lacoste

06:47The company's been around seven years, but we formally announced declared data kind of at our customer conference at the beginning of twenty seventeen. So it's been over two years now of just kind of really focusing on building the category.

Nathan Latka

06:58Okay. But I mean, you have some history here though. It's not like you don't have any cohort data to analyze. So 2012 was launch date. You were always a SaaS company, right? Or were you like an on prem kind of thing and you morphed to a SaaS company?

Jonathan Lacoste

07:08Yeah. We've had a couple of different evolutions. We were a marketplace for a period of time, launched our SaaS offering in 2015

Nathan Latka

07:08Okay.

Jonathan Lacoste

07:08Focused specifically on mobile interactive content to the mid market. And then we shifted to an enterprise software solution focused on this larger declared data challenge at the beginning of twenty seventeen.

Capitalization, Funding, and Team Size

Nathan Latka

07:27And how have you driven this growth in terms of capitalization, bootstrapped or raised?

Jonathan Lacoste

07:31We've raised a couple rounds of VC. And, primarily, a lot of the growth has been from, again, land and expand, type go to market strategy with customers. We have a couple of really key partnerships we're excited about. So Snapchat and Twitter, are are partners of ours where we have a unique relationship where their sales and customer success teams can also sell the Jebbit platform, and so we find a lot of value in those partnerships.

Nathan Latka

07:53So raise to date about how much?

Jonathan Lacoste

07:55Just over 10,000,000.

Nathan Latka

07:56Okay. 10. And all that was priced equity or any debt or venture debt or anything?

Jonathan Lacoste

08:00No. All priced.

Nathan Latka

08:02All priced. Okay. Great. And then round up the team for me today. How many folks?

Jonathan Lacoste

08:0654 full time employees here in Boston, Austin, Texas, and in New York.

Nathan Latka

08:11Austin, very good. That's great. And okay, so 54 folks. And how many of them are focused on kind of onboarding sales marketing?

Jonathan Lacoste

08:18Half the company is sales, marketing, customer success and partnerships and the other half is product engineering.

CAC, Payback Period, and Sales Team

Nathan Latka

08:24Okay, the reason I ask, I'm curious, I mean, how aggressive are you being in terms of CAC? So if year one ACV is a $100,000, are you willing to spend that whole amount for a twelve month payback or how aggressive are you being with acquisition?

Jonathan Lacoste

08:33No. I mean, we've been pretty lean, if anything. I mean, I think because so much of our growth, and this is something that we talk a lot about when we think about SaaS unit economics, so much of our growth is coming organically from customer referrals internally expansion. We have unique partnerships, and so we're able to get lead generations of customers that are interested in what we're doing without putting a ton of paid dollars behind it. So

08:52a very early, and intent... Thoughtful part of our go to market strategy was really around what are the unfair advantages advantages we can have to keep that CAC low, and those were two of the areas we wanted to lean in on.

Nathan Latka

09:03Okay. But just to clear, when you look at fully weighted, it's not just drug paid spend you're looking at. If you have a sales team that's half your company, obviously, there's commission structures built in there, you know, their desk space, all kinds of their software, you pay per employee to use Yesware or whatever you're using. So when you look at fully weighted, I mean, what are you paying fully weighted to get a new dollar of ARR?

Jonathan Lacoste

09:17Still a very small percentage. We have a five person sales team. So again, a lot of this is is genuinely from our our three person partnerships team working with the partners to get an inbound lead or our customer success team working to get an introduction.

Nathan Latka

09:31Okay. So if the CAC number is a harder question to answer, let me ask it differently. Again, what kind of payback period are you happy with? Three months, twelve months, twenty four months?

Jonathan Lacoste

09:40I mean, we're we're happy in the three to six month range. The the SaaS VCs of the world, the the best ones will tell you anything sub 12 in enterprise software.

Nathan Latka

09:47Yeah. Yeah. Yeah. No. No. I don't care about them. I care about... I I wanna be about you. Right? So, like, you've optimized for it sounds like less than essentially a three month payback period.

Jonathan Lacoste

09:55Yeah.

Nathan Latka

09:55Okay. And and so why not be more aggressive, right, knowing that the standards are much higher than that? I mean, by the way, there's nothing wrong with a quick payback. I think it's wonderful. The best payback is like zero. Right? But, why not be more aggressive?

Jonathan Lacoste

10:07Aggressive in what sense? Hiring?

Nathan Latka

10:09Well, I I have no idea. Don't know your business. But have you identified ways to be more aggressive or is that the exact problem? You don't actually know how you'd be more aggressive if you tried?

Jonathan Lacoste

10:16No. I mean, I think we have a pretty clear roadmap. We tripled the business this past year and and we've had a lot of really interesting conversations about what what 2019 will be. We're at 55 employees now. The the road map has us, getting closer to to 80 or 90 by the end of the year. So there's a pretty clear plan for enterprise sales rep going direct to brand and and continuing to build the enterprise pipeline.

10:37One area we do wanna invest more in is partnerships. So I mentioned Snapchat and Twitter. There's about a dozen more that are in the works right now that we haven't announced. And so those are areas that we're definitely gonna lean in on, this year.

Nathan Latka

10:47What's the incentive you pay for those for those partners to come to the table? Is there some kinda kickback or rev share or value add? Why do they do it?

Jonathan Lacoste

10:53No. I mean, if anything, the incentive is that they get to bring a new solution to their customers that they feel a genuine pain point for. So because of regulation, GDPR in Europe, California has a state initiative that is gonna become law 01/01/2020, just eleven months from now. Everyone has to be evaluating how they collect and use consumer data. And in the marketing and the advertising world, the entire infrastructure infrastructure and ecosystem is built on collecting

11:16and using third party, first party inferred data without consent. And so everyone's being forced to think through different solutions that help them, and Jebbit's one of those solutions.

Nathan Latka

11:24Okay. But if this is gonna be so critical, right, to these companies, I mean, why on earth would they would they basically outsource this via you? Wouldn't they wanna be building this internally?

Jonathan Lacoste

11:33Well, there's a there's a there's a couple ways to think about this. So one is everyone's gonna build the infrastructure internally to a certain extent or on their owned properties. Everyone is already leveraging kind of the infrastructure from like a technology standpoint of their their pure marketing tech stack, their CRM, their DMP, etcetera. But this is exactly what we've been focused on solving for the past five years. And there's something to be said about kind of

11:54being really laser focused on one unique niche problem and pain point. And so we built the platform as opposed to in the marketing space, you hear a lot about CDPs, consumer data platforms that are trying to help you collect and combine a lot of the data. So a long way of saying we're pretty uniquely focused on this and no one else in the space is really focused on solving this problem as of today.

Customer Count and Revenue Discussion

Nathan Latka

12:13And how effective have you been? You mentioned you've been doing this for kind of five years. How many customers have you scaled to?

Jonathan Lacoste

12:17Yeah. I mean, publicly, we talk about just under a 100 enterprise customers. Again, we've built a business in the retail and e commerce space, travel and hospitality, media, entertainment, sports, leagues, teams, consumer packaged goods. I mean, are the big categories that we find, have the biggest need for first party declared data.

Nathan Latka

12:36Mhmm. So, Jonathan, mean, just south of a 100, let's just say you mean 90 by that. 90 times a 100,000 price point will put you at about $750,000 a month right now in revenue. And in terms of MRR, is that about right?

Jonathan Lacoste

12:45Yeah. We're not allowed to talk figures, but you can you can extrapolate off that.

Nathan Latka

12:49Well, yeah. And just to be clear, I'm... I don't wanna make anything up. These are numbers you gave me direct. These are direct quotes. You said less than 100 customers and you said $100,000 year one ACV.

Jonathan Lacoste

12:57Yep, both of those are true.

Nathan Latka

12:59Okay. So three x year over year growth, that means about a year ago, you'd be about, again, one third of seven fifty. So call it maybe two fifty, something like that.

Jonathan Lacoste

13:06Yeah, again, really not allowed to comment. We're going through a financing sequence right now. But yeah, those are those are the things we're allowed to talk about publicly.

Nathan Latka

13:14Yeah. Again, Jonathan, I'm not I'm not asking you to share anything you haven't already shared. I'm multiplying things you've already shared. So you said 3x year over year growth, you said less than 100 customers, I said 90. So you said $100,000 ACV, that would put you at $750,000 today, one third of that is $250,000. Is there anything that are any of the inputs you gave me leading me to wrong math?

Jonathan Lacoste

13:32Yeah, I think under 100 customers, I wouldn't pick 90 specifically, but yeah, we're really excited about the tripling of growth and I think we're gonna try and aim to 2.5 or three x the business again this year.

Nathan Latka

13:43Okay. Yeah. And look, the reason I ask this question is because a lot of times people will say, we a 100 x year over year or 10 x year over year, and it deceives my audience because it's easy to go from a dollar to $10 and call it 10x year over year growth. You see what I'm saying? And that's a very different, you learn something different than someone going from a million bucks a month to $2,000,000

14:00a month. So from what I'm hearing you say, and I won't push any harder than this, you're saying less than a 100, maybe not quite 90, but we look forward to getting there pretty soon. And part of the process of how we're gonna do that is raise some capital right now to fuel some growth.

Jonathan Lacoste

14:12Yep. Yeah, we're on the same page.

Burn Rate, Runway, and Financing Strategy

Nathan Latka

14:14Since you're in that those kinds of conversations right now, you struck me as a very intelligent guy. So you wanna make sure you have as much leverage as possible. Did you wait until you got the company back to breakeven from the 10.2 you've already raised before you start go out and raising now, or are you still burning a little bit?

Jonathan Lacoste

14:27No. Our strategy has always been to to to burn. We're not... We haven't taken the the other route.

Nathan Latka

14:34Okay. So you are still burning today. So you have a finite runway. You have to raise x by x amount. Otherwise, you can't do payroll next month.

Jonathan Lacoste

14:40I mean, theoretically, if we kept any SaaS startup that's burning at that rate, that... That's definitely how the economics will work out. But we have a diminishing burn rate, let's just put it that way.

Nathan Latka

14:49Got it. You can decrease it by cutting some variable expenses if you needed to.

Jonathan Lacoste

14:54One of my favorite things about the SaaS model and with high retention rates and with a partnership ecosystem is over time, as you know, as your expense base increases, your growth rate increases at a much faster rate. So we have been very fortunate to surround ourselves with some world class advisors. I mean, Bill Macaitis, the former CRO, CMO of Slack Technologies is one of our board observers. We we work with a lot of folks at Salesforce

15:20and Adobe as well. We've kind of really tried to architect us to be scalable to many many folds beyond what we're talking about today.

Early Customer Acquisition Tactics

Nathan Latka

15:28Yeah. No. That's great. And then last question last question here. First 10 customers you got, what were you doing to hustle to get those first guys or gals?

Jonathan Lacoste

15:35Oh, man. Cold cold outreach on LinkedIn, showing up to networking events and and and introducing yourself, trying to get customer referrals. I think, yeah, all all three of those have have candidly turned out to be some of our largest customers as well.

Nathan Latka

15:49And just quickly, the targeting on LinkedIn, what were the keywords?

Jonathan Lacoste

15:53No. Not even paid advertising. I'm saying going to like a marketing event and and just shaking hands and doing cold outreach, like physically messaging people on LinkedIn.

Niche Events vs. Large Conferences

Nathan Latka

16:00What was one of the first marketing kind of events you went to?

Jonathan Lacoste

16:03In Boston, we have a lot of these, like ad club or like MITX is an organization locally. They'll hold ecommerce summits. And so what we found to do and what I talked to a lot of other SaaS founders about is instead of going to these big shows like South by Southwest and Dreamforce, find an audience of a couple 100 people talking about a really niche problem, either in a specific vertical category or type of buyer,

16:23and go and kinda network in the room and that's always worked really well for us.

Famous Five Rapid-Fire Questions

Nathan Latka

16:26Yep. Very good. Alright. Let's wrap up here quickly. Famous Five one word answers. Number one, favorite business book?

Jonathan Lacoste

16:31Bad Blood.

Nathan Latka

16:32Number two. Have to. Number two, is there a CEO you're following or studying?

Jonathan Lacoste

16:38Benioff.

Nathan Latka

16:38Number three, what's your favorite... Or sorry, what billing tool do you guys use?

Jonathan Lacoste

16:43Billing tool. RYDOO.

Nathan Latka

16:46Spell it.

Jonathan Lacoste

16:47R Y D O O, I think. Expensify competitor.

Nathan Latka

16:51Okay. Yeah. Yeah. Number four, how many hours of sleep do get every night?

Jonathan Lacoste

16:51Six.

Nathan Latka

16:51And what's your situation? Married, single, kids?

Jonathan Lacoste

16:58Girlfriend.

Nathan Latka

16:59Okay. So not married, no kids yet. And how how old

Jonathan Lacoste

16:59Yeah.

Nathan Latka

16:59Are

Jonathan Lacoste

17:0325.

Nathan Latka

17:04Last question. What do wish your 20 year old self knew?

Jonathan Lacoste

17:07Be more patient and be more,

17:12thankful.

Nathan Latka

17:13Guys, be patient, be thankful. Launched in 2012. Again, Jebbit, really trying to help folks understand declared data, remove any ambiguity around who owns what data and really creating safety for brands and knowing that they can do whatever they want with data collected from consumers in this particular way. Less than 100 customers paying, call it, a $100,000 per year in terms of ACV, growing three x year over year. 10,200,000 raised so far. Team of 54 in Boston,

17:34Austin, and New York City. You know, CAC and payback periods, you know, three month payback periods, so healthy economics as they look to scale and potentially raise here shortly. Jonathan, thank you for taking us to the top.

Jonathan Lacoste

17:43Awesome. Thanks, Nathan.