How Numerator CEO Eric Belcher grew Numerator to $130M revenue and 2K customers in 2018.

hello everyone my guest today is Dennis Moore he is a husband a father studied statistics at Michigan play sports like golf and paddle tennis and loves to use data to analyze things professionally that means using data to help CPG companies make better decisions and personally that means a love for poker and wagering the company's called numerator calm Dennis are you ready to take us to the top sure I'm sure I'm over the pack over the past 12 months how much money have you made playing poker oh geez probably negative something okay so should we listen to this interview or not not if it's about poker advice no all right what's numerator due and what's your revenue model how do you make money yeah we we collect information that big companies CPG companies like Procter Koch Kraft companies like that need to understand how advertising promotion and pricing are trending in their in their industries okay so a couple questions on this obviously your data is only go to the inputs you feed it and then how you use that data so we're what are your inputs so our probably our most important input is a panel of consumers we've about 300,000 people in the United States who send us all of their receipts so when they shop in a store they snap a picture of the receipt when they shop online they've given us opt-in permission to collect their email receipts either in front of their email box or other Amazon Sandee that's direct or you've partnered with an app that is like a receipt imaging app and you don't have our own app so there's two apps one is called shop aruond once called receipt hog on the App Store and it's very direct actually an important point our relationship is very direct with the consumers they know they are signing up to send us their receipts do you pay them for it we pay them for it I'm one of the apps is charitable based if you ever cut out the box tops off your cereal boxes when you're a kid for your school so one of our apps donates money to schools every time you upload a receipt that we gave $750,000 to schools last year collected receipts that way the other one is game of Phibes there's another app that you know if you're not charitably motivated we'll give you some tokens and you can play a game that sort of thing oh interesting that people know what they're doing it's not like we're sneaking the data away from them its own oh by the way I think that's the future right I think if Facebook kind of business model where they paid users some amount of cents 10 cents 10 or whatever a month for all their data we wouldn't have all these issues we're having now about your collecting unwanted data right so I love it okay good I understand the data input now and give me a sense of kind of the velocity of that pipeline how many receipts per month are you ding oh my gosh we collect about 1 out of every 500 receipts in the grocery stores across the country so it's it's hundreds of thousands of receipts a day okay hundred thousands a day but you don't know the number like for the you don't know like last one how many you got total don't know I know I know we've caught we crossed over 500 million in our lifetime and I like in the four years we've been in business but I'd have to be that helpful okay he says is across 400,000 users correct okay that's great okay now let's go the next step so how do you then make how do you add utility value to the data to get CPG brands to pay you yes so the the main thing is insert of measurements of market share so if you think about loyalty data so think about a retailer for instance a retailer knows a lot about who shops in their store right the loyalty card gives a lot but they don't know what those people buy when they're in another store they're not actually they pretty important there's my poker analogy it's like you you don't know what the other guys holding that's the important that's the important fact similarly with the manufacturers what's going on is cuz the retail landscape has changed so much in the last few years I used to be if you knew what you sold in grocery stores you knew most of your sales but now people buy online they buy and so ulties and Sephora's and Dollar Shave Club they just like the way that CPG products get sold is so vast that you need sort of a wide range of consumer data to kind of track all the sales and so that's the primary value we have is really measuring the full omni-channel from physical store to online store and is this a SAS product for CPG brands or papered line of data or what it's a little of both I mean so there's a SAS based model but there's also a services component so people would sign up for a subscription and they can access their own data and do a lot of their own reporting but there's also times when the this the business use case is a little bit more involved and the client wants in addition to the subscription they want some professional services help and we provide both over the past twelve months if your whole revenue pie is a hundred percent what percentage was professional services versus SAS probably I think I'm probably about it's about probably that a third of the panel business the panel business itself about house it's probably someone that order of twenty percent of our revenues probably services okay not crazy especially the attention on the SAS product yeah this we generally speaking we try and provide like one person's worth of service for every million dollars of stuff you buy from us yeah that's pretty good and then okay so let's just focus on the SAS company today so so I'm sure you have a bunch of rent cohorts but I'm gonna force you into an average here just cuz we're short on time so what's the average customer pay you per month or per year would you say per year is probably high five figures right like seventy five and guessing a little bit brand average but yes it's probably it's probably a high five figure annual subscription okay got it so so call it 75 grand a year or maybe around sixty you know sixty two hundred bucks per month something like that and put this on a timeline for us to us before we get too deep here what did you launch the company what here well the company is really a concatenation of about 12 different acquisitions so I'm not the founder you know that I'm sort of the PE CEO of the accumulated companies but the the panel business that we've been talking most about that business started in 2014 it has grown from you know just it's a panel business so it'd take the first year you don't make any money because you that is numerator calm though right yeah yeah yeah yeah the numerator calm yeah the most of the business we've been talking about is like is a subset of numerator correct yeah yeah okay so hold on so I don't understand kind of you were you at the private equity firm that then went and bought market track and info scout or you were at one of those companies and basically moved up the chain after the roll up happened yeah I kind of joined in the middle so I joined when we had a previous private equity owner and we owned several of the businesses that make up the current numerator I joined we then sold to our current owners Vista Equity Partners and shortly after Vista acquired us we made a very big acquisition in this panel based company so yeah that's interesting the acquisitions and then and with both the one owner back and the current owner yeah so one thing I have to ask you because I think private equity firms a lot of people don't really dive into strategy here but there are so many synergies a company like Vista can do that other people just don't even think about for example they also are owners in return path but return prep has a ton of data I imagine your receipt data is also very interesting to return paths inside of a big private equity giant when when when you know Robert puts you right and return about in the same room and says figure out kind of work together I mean how do you and he's kind of saying like definitely figure out way to work together how do you make that work yeah you know well thank I think we actually do quite a bit of that and I can't speak for other private I think this is actually probably ahead of the curve in terms of doing more of that because most of the companies Vista choirs have sort of that tech enablement or SAS synergy so there's more in common so we actually return pass actually no longer part of the portfolio Vista but we would have done something with them but there are two other Vista companies that we talk a bit the partner with quite a bit one is called media ocean yeah that's a little bit the advertised great guy yeah it was yeah bills in fact on our board so that's one other was just on the show a couple weeks ago he had a baby earlier this week so yeah and then integral ad science so I don't know them know by IAS they compete against mote and double verify but all of they collect both meaty ocean and is have a lot of information around how advertising its consumers merged it up with our data we can start to draw the connection between consumers being exposed to ads and do we or do we not see a change in the in the lift of their own volume interesting okay so uh okay so when what year did you join the company like at all any other parts I joined the company in the summer of 2016 okay so two years and then we sold the company to Vista in the spring of 70 okay was it...