How Pulse.io CEO Joe Kaul grew Pulse.io to $2.7M revenue and 50 customers in 2024.

hey folks my guest today is joe call he's a 25 year old marketing expert owning a marketing agency and an emerging technology in the machine learning ai space called pulse pulse predicts the outcome of creative content before it's published maximizing return on ad spend for brands and marketing agencies alike joe you ready to taste the top for sure all right so i have 10 ad creatives who are you publishing them to before i actually launch them on facebook to see if they're going to give me a good return so what we're doing is we're taking creatives uploading them through our ml platform identifying um a number of different key factors through the machine learning in terms of hue saturation luminance object identification and a number of other key factors in terms of the natural language that's used in the written context of text formatting to identify based on petabytes of historical data how people have reacted previously cross-correlate that against how they're likely to react to that piece of content in the future um the machine learning is now complete we're in 97 accuracy on the prediction model 97 accuracy on what what are you trying to predict on predicting the outcome of emotional responses to creative content so when someone is publishing a piece of content are they going to feel angry about it are they going to feel sad about it confused unhappy how many people are going to engage with it um what type of engagement is that likely to be we can predict that with 97 accuracy now how do you know i mean i scroll a lot of facebook ads you know in the course of a day that i never interact with and maybe one makes me angry but i give no signal to facebook that i'm angry i just keep scrolling how are you able to capture that yeah sure so that's based on a number of other engagement statistics in terms of watch time um in terms of uh frequency of watch in terms of uh frequency of communication around the piece um but fundamentally we leverage um available public data to identify trends um of how people have reacted to similar pieces of content so while you might not react other people will react in a similar way and possibly more forthcoming with that information that subsequently gives us the data set to identify how people are likely to react similar process and uh you know i identify identification process to natural language processing but it's kind of nlp on steroids and and so i understand why brands or agencies want to pay you for this but give me a sense of what you like how you price what are they paying on average per month to use this tech yeah it varies so it depends on how many campaigns they're running simultaneously but it varies from 500 pounds a month um in in british pounds um all the way up to however much they want to be paying but the range for staff subscriptions is 500 to 5.5 a month what's like your sweet spot though i know it's sort of weird to fortunate average but was 600 700 bucks a month a good average around about five and a half thousand is probably going to be the average the majority of significant sized agencies if they're smaller size agencies they're going to be going for the 500 pound a month package well i know but the real question i'm asking is what kind of agencies are using you right so i'm asking what the mix is effectively by asking what the average is sure at the moment we're pretty rev um but as soon as we hit rare new generation we know that we have a hundred and so agencies that are going to be taking the platform on from day one um and of those they're sort of roughly falling into the 2 000 two and a half thousand bracket and so how are you learning that are you sending a pdf with like made up prices to see how people respond and you've had a good response to a five thousand dollar price point for large agencies so it's based on a number of things we've not priced it based on what they would want we priced it based on what we know we can achieve and based on what we know our direct competitors are using um and we're building uh you know a technology that's subsequently substantially better than our direct competitors um so we know quite confidently that the agencies that are going to be deploying this sort of solution um are going to be quite satisfied on the price point side of things majority of entry point for similar products like talkwalker for example people are paying six grand a year um for a similar product when did you launch the business what year middle of last year june of 2020 um we've been burning through cash quite fast since then how much are you burning uh we've done 1.48 million uh pounds so far okay and what why is it so expensive to build this lots of machine learning lots of computer vision um predominantly the bulk of the spenders have gone into that um the tech stack that we have behind this has meant that we've had to deploy um some quantum computation elements as well and a variety of other facets to the product in the back end to handle these vast quantities of data um that we have where did you get 1.7 million 1.8 million bucks to burn through so 150 000 has come from private investors the rest has come from me um and the money that i've accrued over the past however long uh by running my marketing agency oh very cool okay so you've had significant success then in the marketing agency to be able to put a million two million of your own money into the business been okay been okay yeah no this is great okay cool i love a story like this so so how do you decide do you have partners in the agency no okay got it so it's your own leadership i see i see and how do you make money at the agency is it people pay to spend 100 grand a month for them and you take 10 uh basically that yeah um it depends on what model we're working on so you've got uh the payday model um but then it's a full service agency so we do video production um animation photography uh creative design branding the whole the whole suite in one place and why let other people take equity and put 150k why not just put in another 100k yourself and keep 100 control i'm strategic um so i'm not going to say who the investors are but there are a couple of private investors that we've uh taken on board who are fundamentally going to help us long-term with our long-term vision and plan for what the product can do but fair to say you still own more than 95 percent of the business yes that person close close oh okay you see that present are you raising now are you about to announce around uh we may be announcing around at the start of next year um you know additional capital is always useful particularly when you're deploying a product like this it's very complex complex requires a lot of funding behind it um yes we may be launching another round but over and above that we have you know option pools and a variety of other facets that are going to decrease my my equity holding um don't doesn't your ability to avoid dilution drastically decrease the second you go from zero dollars in revenue to one and if so wouldn't you want to do that before going out and raising another round yeah absolutely so that's that's absolutely the case so um by the time this podcast goes live i'm assuming it's gonna be january 22 anyway um so you know from the point at which we launch the product early next year um you know we're definitely going to have a few months of uh of live phase before we actually implement a new round i see i see what's the team look like today how many people 15 um a range of full-time perm um and uh contractors basically perm as well okay so 15 and how many engineers uh seven seven engineers seven engineers and are you all in like if you lose this million bucks you personally put into the business are you screwed like do you feel the pressure i definitely feel the pressure it's a lot of money to chuck into one project for sure um you know i'm in a fortunate enough position where um the agency's doing well um we have a number of really exciting things happening on that front as well um which will help pulse subsequently next year am i screwed hopefully not um would i uh would i prefer it to work absolutely talk to me about the agency how young were you when you launched that so i've been in the space since i was 16 um i set up my first agency with a business partner at that point ran that for three years wasn't happy with the direction it was going shut it down so from the age of 19 through to today we've been running our uncle interesting okay so the agency's called encore yep very cool and and how many folks are full-time there uh 25 at the moment but scaling very very very rapidly next year interesting okay so 25 full time full time there and best year in terms of revenue at the agency was about how much uh i am not going to disclose that at this moment because there's something quite significant happening over there um but i i will gladly share with you a later date more can you share a range more or less than a million revenue no yeah i was gonna say uh i i think it'll be very fairly easily more than a million um would you sell the agent i mean would people i would imagine people would require you to um be less connected to the agency if you're about to raise a big round in the sas company and one way to solve that problem might be to just sell the agency um i i'd i'd argue the complete opposite to be honest with you by virtue of me being quite well connected in the marketing space and in the agency space it's actually very beneficial for pulse so the more involved i am with the agency the more involved i am with the space in general the better um and you know um the the network that i have over there substantially um helps to grow the pulse all right so i'm gonna roll play with i'm a very strategic person that you want to bring into your company and i'm looking at leading your next round hey joe you know what that rationale makes perfect sense to me you're exactly right so i need you to bundle the agency with pulse and if i'm writing you a check i want to have a equity stake in both of them again something significant happening over at the agency side which uh will ultimately adjust uh the way in which i can i can discuss that um i can't say any more than that the reason i bring this up this is a trend that i mean i interview thousands of founders but i see this happening so frequently where people are they're brilliant they build distribution first which is what i would argue an agency is right it's distribution or community first and then you build a sas tool and then you have to decide you shut the community down and go on on the sas or do you let them work together because you would argue that any customer that your agency touches that also uses pulse has a higher ndr on pulse because the agency helped them get set up on polls uh and managing the story with investors is very tricky because like you want to keep your media agency separate because that can be king maker for the rest of your life you built it at 19 right who knows what'll happen with pulse but then everyone else is going to want you to build it in together or assign a master licensing agreement or master referral agreement or something like that yeah for sure i mean um again there are opportunities for um for that to make more logical sense again i can't say much right this very second there's something very significant happening in january um that's preventing me from saying any more about strategically why i'm doing what i'm doing and how i'm doing it but there is a very good method behind it and there is method to the madness yeah okay interesting um talk to me a little bit about uh so you have 15 people seven full time how many folks like how many customers do you have using false but not paying yet but they're ready to start paying um none um again they have had access to the platform we have been testing the platform um internally though how many have happened uh we have 50 that have access oh wow okay yeah that's great so you can watch how they use it learn a little bit guide your engineering team etc yeah exactly very cool all right anything i was going to talk about before we wrap up the famous five uh i'm good uh you tell me if you need anything else no i just wanna make sure i don't wanna i don't wanna miss anything all right so let's do that number one what's your favorite business book favorite business book uh influence psychology of persuasion not technically a business book but very applicable to what we do influence psychology of persuasion yeah cool number two is our ceo your following or studying there is a bit of baroque one it's a guy called joe binder um he's the ceo of a personal branding agency in the uk doing an amazing job um supports some of the biggest names in uh the ceo space in the uk really cool guy number three what's your favorite online tool for building pulse oh uh so the question i've got is favorite tool for uh growing the business um i put people um so technically not an online still um but over and above that i think we use live plan which is great for financial planning um excellent tool from an online perspective for us live plan yeah okay number four how many hours of sleep you get every night [Music] uh four to six during the week four to ten during the weekends depending on what's going on and situation married single kids uh in a relationship not married not single no kids but two dogs and joe how old are you 25 25 last question something you wish you knew five years ago when you were 20. uh relaxing is not the end of the world um it's probably the most important thing that you can do for yourself and for your mental position to actually progress forward guys he launched a media agency at 19 did over a million dollars in revenue last year over 25 people scaling quickly and use the learnings at that agency to go you know what we need to build something and systematize something here launched pulse tech he's put over a million bucks of his own capital into this sas platform they've got over 50 people using it today about to launch pricing called in january at a round caught you know anywhere from 500 to 5 000 a month sorts of contracts the whole idea of pulse tech is for you to be able to test and predict which ad creatives and combinations will perform before wasting money putting those things live so return on ad spend should go up if you use pulse we will see what happens joe thanks for taking us the top thanks very much nathan speak to you soon one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 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