Omnystudio Revenue, Valuation & Funding (2018)

hello everyone my guest today is Sharron Taylor she's the CEO of omnis to do an advanced audio on-demand platform though for enterprise audio publishers with over a decade of leadership experience in the technology industry at omni studio she drives awareness of podcasting around the globe working with radio networks and podcasters to navigate an excel in this space Sharon are you ready to take it to the top I am graphical very good okay tell us about the company so what do you guys do and how do you make money so today we are in its simplest terms and audio hosts for podcasters or broadcasters that want to move in the on-demand space so I always use that line from Zoolander where he jokes about Hansel being so hot right now like podcasting right it's so hot right now and everyone kind of wants to move into it and so we help broadcasters news publishers kind of any players in edges and industries get into on demand or Gary that's great and what's the revenue model so is it a pure place to ask company or what yeah a few places so all platform and usage costs platform and usage costs okay and and walk through like the average customer what are they paying per month that's a very interesting question is it like any podcast company out there we've got still a long tail of podcasters that of you know paying the simple hey it's 20 or 50 bucks a month and they get a quantity of bandwidth and they kind of go from there and then we go all the way that are there into town where we do like your intercoms and your salem radios and obviously they pay a per program show and that's in the you know up to the tens of thousands a month so it's quite a wide split that we've got okay would you say though like 20 bucks or 30 bucks a month is a fair average now I think at the moment an average will probably be around 400 500 bucks alone okay guys so you are kind of more in the mid market enterprise space yes ya know can people think of this like a Lipson well you could in that anyone could be a podcast host we kind of try more for their enterprise end of town so a toolset once you've aged in more with your podcast or more with your audio that's when you'd start looking at your omni studios but yeah but for simplest terms you'd go lives in probably more like are 19 or megaphone to be honest yep all great companies voice is obviously a very hot space that's always excited to talk to you tell me what about when you launched the company what year so there were three guys that launched it 2011 they started with text-to-speech and they realized very early on in the piece that text-to-speech back in 2011 probably not the best quality of automation of it and then yet the journey has been through voice since then so there was a product called Omni radio which was personalized radio for listeners and then Omni studio the platform was three and a half years ago now mm-hmm now you're you're talking about this as if you just joined recently and you weren't with them at the beginning were you a co-founder you came in later no I was late I'd say yes I've been there about two and a half years now okay so you joined him call it 2016 was that with a round of funding have you guys raised uh we have paused on funding I am a unique startup person that doesn't like the earn and burn mentality and so we moved pretty quickly to being just a kind of profitable self-sustaining company so we came in I came in just after the bridge funding and we might do another raise this year if I can be convinced by the board but how much tolls in the company today about 2.3 okay so you know not a crazy amount but definitely you know raised yeah yes okay very good and so 2011 was start date you joined in two years ago 2016 and what have you scaled to now in terms of total customers we all bring around the 750 to 800 customers at the moment okay I mean look that's pretty healthy now can I take 750 times the 450 you mentioned earlier the average price to assume you're doing call it 300 350 a month oh yeah that's pretty good that's good close that's yeah okay good and and where's growth that so a year ago today what were you doing per month way way way so we've grown about 300% in sales from last year this year oh my gosh so you were doing like 80 or 90 grand a month a year ago yep what's driven was that growth I think partly interesting the space partly a change in business model and adding in kind of new revenue streams so helping people monetize is probably the biggest thing now for us okay that's great and when you talk about monetization does that allow you to drive expansion revenue or you just upsell that as a kind of product feature good both mostly expecting revenue okay so you're I'm sorry what I meant by that is are you actually taking a cut of what you help them monetize in most instances yes yeah we are a bit of a unique player in the industry in that we get weird about touching people's advertising revenue like there's a lot of podcast hosts out there that do like a free platform whether they take a web share whereas we all kind of believe that if you're working hard to make money on your shows you should keep as much of it if not all of it as possible so that's a mindset that we're slowly changing as we realize that the revenue on the table is important but for the most part some enterprise customers that are monetizing can get away on I'm going to do without paying us anything for it yep nope that makes sense you're talking about churn it screwed up on a company like this what's your turn today we're negative so we have two buckets of customers both broadcast and then we count them in the podcast space and I think at the moment broadcasters are like negative one point something percent and podcast is a negative seven point something percent we're bringing on more than we're losing and then obviously we're upselling to the customers like while they're on the platform which is helpful for toon and Sharon just to be clear so you're at net negative churn annually that's obviously sorry I assume that's annually not monthly correct correct yes I got it so net negative revenue churn annually that's great that means expansion is outpacing and each earned revenue when you are signing up new customers where are you getting them from at the moment about 60% of our new business comes from the US and Canada it's just the biggest market and so it's kind of where everyone goes our biggest growth at the moment is coming from the UK and the EU so it seems like you know your France Germany Netherlands etc they've got kind of a new mentality in terms of podcasting a lot of the broadcaster's that we work with over there always used to build their own tech and now I think the mentality is shifting to hey we could just outsource this to a team that lives and breathes it every day yes that's kind of our most exciting industry but US and Canada is the biggest what channel are you using to reach though the US podcasters they're specific website or conference or whether is assuming channels you're using so we have a reseller in the United States which has been really really useful for us and they have Hold'em a lot of high value relationships and kind of independent publishers and then otherwise you'll just see me in the States five or six times a year just conferencing making connections and hustling ya know that makes a lot of sense what are you spending on tactic why are these guys so we've you've caught me at the worst possible time to ask this question I've literally just really literally just gone let's just throw a ton of cash at this and see kind of what sticks online what's the time how much so we're probably looking more around the three to four hundred per customer and that's more than we've ever spent at the moment yeah I just told you that head of my board meeting this month that's funny gonna be published yeah I know you'll be good but if you're paying 300 bucks even right and they're paying you 40 bucks a month on average your payback period still less than a month yes right yes we're very lucky yeah it's hot partly because of how hot the industry is right now and then just partly I think it's taken us what two years to get a solid name over there in the states and it's like a snowball in momentum right like once you get it it kind of just keeps going on its own volition yep tell me more about the team what's the team size today so we're five including me okay great that's a mate so your revenue per employees through the roof I love that yes it's crazy yeah yeah I lost my stock so we got a high up you're gonna hire yes are you all based are you all based over there and uh sorry I think you said you were where'd you say you were in Melbourne yeah Melbourne Australia yeah based in Melbourne that's great and hiring whatever we're gonna scale so we'll do engineering like we're looking for engineers at the moment and then we're more than likely the tying of the idea of having like a single employee in satellite offices in the US or the UK and depending on what day the week you catch me on the I think it's the best idea or the worst idea in the world and so we'll go engineering first because we that's where we're kind of lagging and the guys were amazing but there's only so many hours in the day right so yeah you seem like a very smart lady you've had a lot of success they must have had to do a lot to incentivize you to come in on this business why come into this business oh just starting your own oh that's a great question I am in my mind and other people will disagree with this but I am a fixer like as opposed to hey I've got this amazing idea and I'm going to go from zero to 100 with it myself and so I think they found me at a time that Omni really needed me and then audio and the business just got its hooks in me and yeah it's it's amazing kind of like what grows in you when you find something that you really truly love so yeah they they just got made at an important time for the company and it is what I love doing so I mean did you get hopefully a big chunk of equity called ten twenty percent as an incentive structure no I'm on the lower end of the equity side so you always like I came into the company too I'll call it a volatile time in looser terms we call it five years of on me every setup has its two and five year extinction events and I'm probably less on the bullish side then I should be as a person that's being rearranged this year though I'm doing happy about that because you own a minority you would obviously need board approve one investor cool for this next question but if someone came and offered you 2x a are to buy the company so call it what is that six seven million bucks just to sell would you sell probably not okay and what one goes through your minor you said that very quickly yeah we well it's interesting so we we've been talking about at the moment as some things have read their heads for us I think if we hadn't had kind of like that 300% growth from last year to this year it'll be a different equation but it's hard to make a decision to get off a train if it's just starting to really accelerate and then you know you can drive yourself crazy right like thinking about when the right time is to take the off-ramp for your company I think on a daily basis were all still having fun and wasting the company grow quite astronomically still and until that kind of we get the feeling that it's starting to slow we probably will keep going and have fun on a daily basis I love that all right Sharon let's wrap up here with the famous five number one what's your favorite business book oh I don't have one what do I like I liked Sheryl Sandberg's first for cleaning Lina number two is their CEO you're currently following or studying no no one that you would know there's a couple of amazing CEOs reason I no reason I asked is what I learned so yeah I took care of there's a couple of really amazing CEOs in Australia like Cathy O'Connor who's the CEO of Novell I think is the best business woman that I've ever met in my life so yeah she's pretty face CEO of nova ya know the entertainment big radio and entertainment company okay number three what's your favorite online tool for building the business intercom is something that we live and breathe like it's it's it's pretty important to us number four how many hours of sleep to get every night sometimes five which is really good yeah well otherwise my friends will yell at me that I'm not sleeping as much as those shows let's say looks like let's round up and call it a healthy six okay yeah well you seem healthy and energetic so I guess it's working for you and tell me more about you yeah yeah like we're normally up at 3 a.m. to catch the east coast of America yeah tell me more about kind of current situation married single you have kids no I can't even keep a plant alive so I've got no hope of like having a human relationship here I even bought a fake pot plant and didn't realize it was fake and watered it and then mold worried so [Laughter] I said I promise I'm really good at human directors here but no no single and have a healthy relationship with my Inbox okay and how old are you doing the asking no of course 33 33 last question what he was your 20 year old self Neil to not be such a dick don't be so mean marry guys she joined Omni about two years ago when it was doing I'll call 8090 oh sorry less than 90 grand a month in revenue now they're scaling very nicely there up serving about 700 800 clients each paying about 450 bucks a month for 300 350 grand in monthly that's a from 80 grand a month just a year ago a healthy growth net negative churn about negative one and negative seven percent depending on the cohort team of five and I'll show you again helping with enterprise podcasting solutions everything from ending monetization analytics radio broadcasting you know the hosting even the publishing and sharing they're covering it all Sharon thank you so much for taking us to the top my pleasure thank you it's been really fun