Maximus Revenue, Valuation & Funding (2018)

hello everyone my guest today is josh keller he's got over 16 years of experience in digital marketing he's the co-founder of union square media group and maximus live an expert native advertising his revenue has exceeded a third of a billion in the past nine years he's served as a number uh he's has served as a member of board of directors for spark networks and sup atx all right josh you're ready to take us to the top i sure am all right appreciate it of course so tell us about the company what are you doing how do you make money uh well there's a couple different companies within that uh global agora is a holding company that owns uh two of the companies that i actually run one is union square media the other is maximus union square media is a typical agency we bring in fortune 5000 clients and work on a performance basis where we're driving traffic through social native advertising is actually our wheelhouse and email marketing maximus is a sas product that we then sell to other media buyers to automate their media buys and unit square media is actually the biggest client of maximus right now and walk me through how this kind of child parent relationship works so do you own maximus 100 you know 100 percent or does global agora own a percentage of it and it's a holding company essentially yeah global gore actually owns the majority of both companies and i'm a partner in global agora okay and i was going to say you look like a young guy why would you work for the man why not go out and start your own thing where you're 100 but you're part of the you're part of the top tier there too that's right okay very good so let's double down on this interview i want to focus on uh my audience is mainly our mainly sas entrepreneurs we'll focus on maximus so walk me through if someone pays for maximus what are they getting they are paying basically 9.99 a month up until a certain amount of spend which is 150 000 a month and then it kicks over to a percentage of spend to explain maximus it's better for me to explain actually how i got to the point of having maximus so within union squared media we have a team of 10 media buyers that all use maximus uh the reason why i built it in the first place because i was actually buying the media specifically on native advertising and it's very fragmented there's very manual processes and it's not time efficient and it's not easy to transfer the knowledge and that person leaves and you basically have to start all over with maximus if somebody left i'd be able to take over those campaigns with another buyer very easily because maximus is doing 90 of the light work you're talking about like headline image combinations targeting keyword things like that um so you're you're shoving in your your headline your image is your landing page and then maximus is self-optimizing based on the learning of the pixel placement i see i see to the site level so if you're going to a native network like outbreak or jabula you could be having a thousand sites so for you to change each bid on each one of those site placements based on performance you'd be sitting there all day with one campaign if it was running a lot of volume yeah now walk me put this on a timeline for me when did you launch this company um late uh 2017. so it's brand new basically it was in uniskirmia and it was the single best tool i had to launch and and keep and stabilize the team became too good where i felt like i needed to share with others because anyone's doing it the old way you know it's it's it's like sewing sewing versus an automated sewing machine you know you just not move as fast so you said okay makes sense to spin this out it works so good for us there's a sas model here with higher margins than a media business let's scale it yeah because uh in order for me to capitalize on all the traffic and all the verticals out there i would need a team of you know 500 buyers you know and that takes a certain level of time whereas for a company to directly be using it like an aarp or a harry's who's actually buying the media themselves they don't want to give the business to an agency they want to run and control everything themselves it was built for that so they didn't need an agency or if you were an agency that was already buying media you can build out your team a lot faster now have you bootstrapped the company today or did you guys raise uh no we've bootstrapped out both companies actually been funded out of the revenue it created i started in uh 2008 in my apartment with just myself and built it up and now between the two companies there's about 80 90 people that's great and uh just again on on the on maximus product how many customers have you scaled to over the past couple months so there's basically um about 25 customers that are paying and about 10 that have just signed up so we have a 15 day free trial uh-huh we're we're constantly you know bringing them on and scaling them up but uh uh the higher the level of spend the more involved we get in the campaigns you have a client success manager that helps you a day-to-day to scale your buyers yeah i mean but josh that's pretty good late 2017 you spin the thing out you already have 25 paying folks and your minimum is a grand per month so i mean you're already north of 25 grand a month on the new product yeah well actually over 150 000 it kicks over to seven and a half percent and we have a couple of people hitting those tiers so that's when the real money comes in and those are obviously the clients that were doubling down with the resources because we want them to grow and be partners yeah so how far north of 25k then per month right now are you it's ranges obviously the spend ranges so it's anywhere between 75 and 125 000 depending on the spend oh that's great so you're up at 75 grand a month or 125 grand depends on the on the month already per month in revenue right so if one client spent 400 000 last month but then only spent 300 000 there's obviously less revenue that's still pretty healthy though because i mean that means that means more than 70 of the sas revenue is tied directly to usage in terms of dollars through the platform yeah yeah that's great um now most of these 25 folks where'd you find them are they coming from the agency no they're all just basically word of mouth because uh union square media were known as the native media buyers so if you're trying to get a lot of traffic very fast a lot of people come into our agency and we have affiliates as well so anyone who's doing it the old way as soon as i show them the new way it's it's game over i mean you just got to pass that learning curve of obviously any new system that you're learning has a learning curve but once you're past that there's no going back now when people kind of occur when you say affiliate so you know we'll we'll kind of you know tie this into your cac your fully weighted cac i imagine you're paying them some kind of reward for that what is your full weighted attack to acquire customers so when i'm saying affiliates i mean affiliates of union square media so we uh have our own media buying team but then let's say if we're not good as good as it on google and we give it that same deal out to an affiliate they're running it so um it's an affiliate of the agency not of affiliate of bringing on maximus new clients i see okay so is is it too early then to look at like a cac metric yeah i mean we haven't even began the referral program because people are just naturally recommending it because they understand the power of the tool it's like once they cross over they're becoming our evangelist yep uh any churn i know you're only a couple months in yeah uh so there's definitely a little bit of churn i would say about 30 and it's mostly due to um i don't know how familiar everyone is with how facebook's working right now but but it's very up and down especially if you're in e-commerce and a lot of other categories one day you're doing really well the next day you're not so there's a lot of people looking for other solutions besides facebook and google and they naturally come over to native but it's still number nine on their things of do list and if you're not paying attention to anything you're not going to be good at it right okay that's 30 that's logo churn per month no so like of the total amount of customers we've ever signed up we've lost so far 30 of them but you've been in operation for less than 12 months so we can assume it's at least 30 annual logo churn yeah okay i think that's what we're basing everything on but we're we're our our focus right now is is the onboarding and the client success to make sure that those people don't get lost who don't necessarily know what to do but want to learn this new thing there's a lot of education when it comes to native because everyone's always heard of it but most people don't do it and what's the team size focused exclusively on maximus it's about 20. 20. okay that's very good and then so what that means you have 80 90 80 or 70 on the agency yep and what's where's everybody based new york miami la couple people in austin and we have a little team in ukraine and a team in india for uh like localized tech good to spread out any any uh you know any plans to raise capital for this business or no for maximus we thought of it i mean there's a lot of different avenues we could go we could become a network ourselves instead of actually selling into the other networks we could bring in facebook and google as a part of the dashboard there's a couple other things we want to do but for right now we're almost breaking even on the amount of tech we even have so our main focus is get to break even uh refine the customer onboarding process and then look to see what our next move what month do you think you'll get to break even um i would say well before the end of the first quarter of 2019 yeah but we're also adding more tech right so every person we add you mean more dev more engineers yeah so we can go faster like we're about to launch a fully automated app so you don't even have to use it once you set it up in the desktop you can basically control all your buys from the app that's great all right josh let's wrap up with the famous five number one what's your favorite business book you're breaking up a little that's okay let's wrap up here with a famous five favorite business book losing my virginity richard branson number two is there a ceo you're following or studying right now not currently number three what's your favorite online tool for building your business i have to say the thing we use the most is probably slack for communicating because everyone's all over the place number four how many hours of sleep do you get every night seven to eight hours clean that's good and what's your situation married single kiddos married with a two and a half year old and a baby boy on the way into summer oh busy man how old are you i'm 42 42 all right last question what do you wish your 20 year old self knew um that's a great question uh do not focus always on the revenue side of a business but to focus more on the business itself and building a create a stable environment to make it actually be a business instead of just a revenue stream guys there you have it focus always you know more on the business versus just the short-term revenue launched maximus in 2017 basically spun it out of his agency which is hugely successful part of a you know part of a basically a conglomerate which is called agora up at the top but in 2017 launches 20 people working on maximus again about 25 customers today spending you call it 75 grand per month in terms of total revenue 30 annual logo turn to date as they look to kind of fine tune who the perfect customer is that team at 20 based out between new york city miami la austin ukraine and india bootstrapped so far josh thank you for taking us to the top thank you so much appreciate it have a great day