How Pubvantage CEO Declan Carney grew to $1.4M revenue and 30 customers in 2018.

hello everyone my guest today is decline carney he's a 25-year advertiser sales and online media veteran starting in b2b in 1992 in new york city and then in 1998 launched lawyers.com for lexus nexus he was recruited by info usa to be president and with sales offices in new york and london he was then promoted by the parent company to become the svp of sale ops for info usa with 125 sales reps and close to a billion dollars in gross revenue he continued on and on today he's focused on his current uh his current venture called pubvantage.com which we'll jump into today declon are you ready to take us to the top absolutely all right what is pubvantage and what's the business model how do you make money so pervantage was really begun as a way to pick up a piece of business that dfp now known as ad manager wasn't doing very efficiently dfp is very good at direct campaigns and programmatic campaigns what they weren't good at is helping publishers monetize their remnant space using ad tags it's a problematic space that deals with a lot of tags that are called passback tags it's very inefficient what we created was a universal passback tag that allowed publishers to handle 5 10 20 different demand partners very easily and monetize that remnant space in a much more competitive manner and that's really that the space we went into we also work with large ad networks who also use ad tags as their main source of revenue and we are far more efficient in handling those type of tags than a dfp or any other ad server that's out there now decline i'm going to like you way more if this is a pure software play versus you sitting in the middle and taking some kind of ad tax so what's the what's the business model which one are you we're a sas model where we go so we don't want to be involved in taking picking money out of anybody's pocket we want to help them earn as much as possible and make it as efficient as possible so we want to help um publishers more efficiently use their ad teams so that they're spending time talking to humans rather than working with technology so our system is very much plug and play yep so give us a sense here a publisher that might work with you i know you probably have many different cohorts and types of customers but on average what would they pay for a year for this so you'd be looking at so it's a volume based place so we charge on a cpm cost per thousand uh it's generally about a penny per thousand on the amount of requests they run through our system so depending on the size of the publisher that could be spending ten thousand dollars a month or as little as a few thousand dollars a month uh to operate it so it's purely how much they use the system and it's a very it's a uh self service we help them set campaigns up but after that they're able to run the whole system by themselves but decline tell me kind of what your target is is it kind of in that four or five grand per month kind of range that's a good kind of customer for you that's the main our mainstay of customers is folks who are paying for 4 000 i guess would be the average amount for a client a month okay and then we can divide would you say 0.1 or 0.01 into that to kind of get what that equates to in terms of cpm or or impressions going through the system 8.1 but the volume yeah yeah the volume so you know around somewhere around 100 million requests a month is the average yeah now looking at your bio you should be on a yacht somewhere going up and down you know the british aisles enjoying life not throwing your hat back into it and competing again why do this why is it exciting um well it's it's the thrill of building something from nothing so you start off with an idea and and it's an idea that my partner uh greg freeman is very much part of bringing to realization so he's the tech genius uh we have a canadian office he works out of there he and his team we also have a development team in hanoi so he and the team um you know we come up with the ideas and then they bring it home for us uh is what we do what we're doing we're actually in the process of splitting the company in two and we're selling the ad server portion of the business off and we're going to be focusing in on uh what we're calling a new company we're spinning off called all one which is unified reporting and reporting is one of the biggest issues in the ad space and outside of the ad space because you're dealing with multiple vendors and they're all sending you reports all in different formats all with different headings um and somebody on on an ad team is trying to pull all that data together and make sense of it figure out how much money you made yesterday where did it come from where are you losing money where are you losing money on your marketing dollars and all of that requires really in-depth reporting right now it's a very manual process where people are pulling data from multiple sources and what we do is we automate the the collection of all of that data through either emails through api connections through uh automated logins and downloaded the data and then our system provides the tools to format all that data into one single database where they can run multiple automated reports so data taken hours and hours to get can be instantly brought from a raw data to an actual actionable uh piece of information yeah go ahead i would say i want to dive more into this in a second but put this on a put this on a timeline first what year did you launch the company so we launched the beginning of 2015 and we've grown the uh company steadily on the ad serving side of the business since then um and now we're really sort of splitting off all one always at a beginning uh it's really unified reporting just now and it's at the beginning so we only have five clients on that at the moment but we see that decline is that the four thousand dollar per month thing or is that the ad guys are paying an average uh right now uh of two thousand dollars a month because we're using uh some of our smaller clients to test and make sure everything is working which now we are 100 confident we think the average for that will be somewhere in the six thousand dollars a month um and again it's a pure sas play we help you set it up and then it's all yeah or even your team are running it just because it hasn't split yet let's still focus on the combined entity um you know you launched sorry i think you just said you launched into 2015 and then you've scaled it today how many folks do you have using the platform on a paid basis uh we have right now we have 30 clients using it on a paid basis okay and what's your team look like uh and where are they based uh four folks here in hoboken we have four in canada and then we have a development team of 15 in uh in vietnam so what is it like 23 total something like that correct that's great now obviously that price point you can you can kind of do the inside sales model and i mean can i take those 30 customers times that average monthly price of four grand and assume you guys are what do about 120 grand a month something like that right and what's the growth look like on that a year ago where were you at so um we're about with 30 year-over-year growth from last year this year okay that's not bad so maybe september 2017 which was a year ago you were doing about 90 grand a month something like that right and was most that growth coming from expanding customers already paying you or adding new customers over the past 12 months and really we don't have a decline sorry we spoke over each other which one is it coming from so it's adding new customers is because once people are up and running unless their business is growing um and most publishers are running a fairly steady amount of traffic so we need to grow we need to add additional customers yep and you've bootstrapped or raised uh bootstrap 100 that's great okay so let's move forward to the split so you're splitting the company so you're essentially selling off this 120 000 a month revenue stream you're launching a new one which you have five customers on paying two grand a month um how did you go about kind of selling the you know this old part of the company the ad server side um so we've engaged a brokerage company uh who are uh out there well we're actually deep into discussions with a couple of potential buyers at the moment so um the process has been fairly recent it's been about two month process at the moment and what are you hoping i mean what would be you know a dream for you in order you know to sell this at what valuation uh unfortunately i can't talk about that uh right now because we're deep into it well uh you know don't talk sorry don't talk about your don't talk about decline don't talk about your deal talk about the space the space is uh you're looking at where the sas technology depending on how innovative your technology is you're looking at anywhere from below 3x to a to a high of a very high of 10x but you'd really have to have very cutting new technology which we believe uh unified reporting will be because of what it's bringing to the table that's the new one you're building that you're not selling so the the ad serving technology would be on the the lower end of that although what we have is very unique and is not duplicated by anybody else in the industry yeah no that makes sense look if you're doing 120 grand a month that's obviously about 1.4 million bucks per year on the low end at a 3x that's you know 4 million but obviously you know if you do it right and you get a bidding war or you have some unique technology and get much you know a little bit higher than that so that's great now that money when you sell that um will you kind of plow that into the new company are you guys exactly yeah we're taking that money to uh to give us additional working capital to expand the sales and marketing team and also to add some additional technology but really most of it will go into sales and marketing we have a pretty solid technology team right now we will add more people to it we have some additional products that we want to add that we see uh potential to automate even more of the process um ad management right now and all right across the board from ad agencies to publishers to ad network this is still a very manual process and a lot of even though you you hear a lot about programmatic buying there's still people in there moving things around and we really see that as a waste of human capital we think we we can really automate ninety percent of what folks are doing today which is this road work they do every day uh to maintain profitability we think we can do it 24 7 uh with smart machine learning yeah no i i totally understand the product we've had a lot of ad tech folks on like bill wise and media ocean they all talk about the same problem so to totally see the value there talk to me about about growth again on the current product obviously i haven't sold it yet but you grew to about 30 folks well how are you acquiring customers and fully weighted what were you paying to acquire them um well it's a lot of our is word of mouth putting out and contacts within the industry um and we have one sales our business development person who's out there beating the bushes for it um but generally it's going to conferences talking to our early networks we don't have a big marketing team around the product because it's it's a hard product to explain to people you really need to come into contact with them which is very different for unified reporting because most people when they think of an ad server they think of displacement sales nobody's giving up ad manager formerly dfp uh but we're not asking to do that what we're doing is supplementing their dfp and turning a part of their business that's inefficient inside the dfp into a very efficient uh revenue generated yeah no again i understand the product i'm just curious for you know you have a sales team so that obviously goes into your fully weighted cac you have i'm sure other onboarding expenses what is your fully weighted cap for a new four thousand dollar a month customer um we probably takes us about a year to make uh six months to make profit on them uh based upon you know our expenditure on trade shows and our staff and so i'd say six months to actually begin turning them into a profitable customer that's great so six month payback period at a four thousand a month price point means you're totally willing to spend about 24 grand to acquire one of those new customers yeah that's great that's healthy and you mentioned the team you guys are you guys are pretty it sounds like in three remote different remote locations how did you get the setup i mean how why that setup why that structure uh well part of it was was just inherited by the nature of where the business was founded greg has been in canada he's an australian guy who's lived in canada for eight years we met in one of my previous companies he's a incredible technology is and i just saw an opportunity to create a company with him i wasn't willing to move to canada and he wasn't willing to move to here so consequently we started the business um with him there me here so and then building the uh he had had experience working with folks in vietnam the culture is really good there um and it's very entrepreneurial uh so people think out of the box inside of the vietnamese culture so it's a good place to build it he had a team that he knew there and we built her own office and rented the space and hired the folks out there greg actually lived in canada for eight months so i lived in vietnam brother months very cool build the team over there well look we are we are out of time but i want to get one last question in here when people look at buying this you know company they're going to go is it truly a sas company or is it too dependent on volume right basically the cpm model you mentioned so talk about your your revenue churn what is your revenue churn look like today so it is truly a sas model in that it's it's purely it's all our own proprietary ip uh revenue churn and you know we we're losing about 10 of clients who go back to dfp uh that we bring on so uh you know it's not for everybody no product that's sorry to climb that's annually annually so it's ten percent revenue return per year okay that's i mean that's not too bad very good all right let's uh let's wrap up here with the famous five number one what's your favorite business book um off the top of my head i can't think of one i wish i know you were going to throw me with all those books behind you you don't have one on the top of your head no i don't all right number two is there a ceo you're following or studying okay um well uh yeah i'm not uh you probably in a blank at the moment i i'm really not well okay by the way one honest answer is i don't that's why i don't send these out beforehand because then people pick what's hot or what's new or what they think people want to hear so if you don't follow anyone you don't follow anyone number number three what's your favorite online tool for building your business uh well where you i mean for us um skype has been unbelievable because of its ability to have video conferences our customers are from all over the world and to you cannot have a personal touch over the phone with being able to do skype video conferencing has been huge because it creates that ability for have a face to face with somebody who's in israel or somebody who's in england number four how many hours you'll sleep to get every night um i usually get six okay that's good and what's your situation married single kiddos married three kids uh and uh very happy that's great decline how old are you um i'm 60. 60. very good last question what do you wish your 20 year old self knew um not to sweat the small things guys don't sweat the small stuff coming from decline again founded this company back in 2015 uh really an ad kind of server model they've now scaled this to 120 grand per month looking at selling it so they can spin off and doing this unified platform approach where they already have five kind of beta testers on that paying about two grand per month uh they've got a team of 23 and basically three remote locations adding customers spending about 24 grand to acquire them six month payback period 10 percent revenue churn per year we'll see if we can get this old kind of the old version the company sold scale it up into the new one and declined come on later and uh and give us an update congrats and thanks for taking us to the top thanks a million nathan much appreciate your time