How Quanticmind CEO Brian Bird grew Quanticmind to $15.6M revenue and 65 customers in 2019.

hello everyone my guest today is brian birdies the co-founder and ceo of quantic mind the platform for smarter advertising his company is the pioneer of predictive advertising management software for paid search and social channels brian you ready to take us to the top yeah absolutely excited to be here nathan thanks man okay so that's a mouthful help me understand what the company does and what's your revenue model is it based off percent of spend or is it pure play sas yeah so so great question so quantic mind enables performance marketers to achieve superior results and we do that through a combination of uh platform as well as service offerings that that are layered in on top of that ultimately depending on the sophistication of the in-house digital marketing team that a particular brand has so our typical customer is a google 5000 enterprise marketer and in some cases those those companies use an agency in which case they'll the brand will have the agency work with quantic mind and in other cases the uh the brand has an in-house team and that in-house team will will leverage the aquatic mind platform interesting now if you look at your revenue over the past 12 months what percent would you say is pure sas versus services sure so uh it's in the mid 90s in terms of the the sas there is a a percent of spend component that goes into how the sas fees are charged but we're we're a sas or a sas company that is is simply looking to use the the services offering to be able to help ensure that we can deliver the technology because that's the that's the start of the show yeah it drives up it drives churn down right when people when you help people set up on professional services absolutely that's great okay what give me an example of a customer actually using you so a lot of the hits you know i've had a lot of kind of um like bill wise media ocean these kind of companies on and they always get hit because of the ad tax that they take right so so how should people think of ad tax relative to how you price and what they get yeah so ultimately we don't buy or sell any media so we're simply a technology that helps enable the media acquisition that a brand does to be done more efficiently and to deliver better business results so i'll give some examples of some of our customers so um can you actually use would you would you mind using that just because i had just had the wp engine team on can you tell me wp engine uses you sure so wp engine does um or spends uh their digital marketing budget um among other places on google ads as well as bing ads and so they use quantic mind to be able to manage and optimize how those investments are made across the google and bing advertising ecosystems okay and then help me understand i'm sure you have a lot of cohorts but on average what do these kinds of companies pay you per year to use your technology sure so typically um in the low to mid six figures on an annualized basis okay um so our our model is really focused on enterprise programs that typically are spending anywhere from a few million dollars a year on up to some that are in the mid to high nine figures a year on with additional advertising spend yes what how much toilet spend goes through your profit or or is this optimized through your platform annually would you say um it's uh in the low one billions yeah that's very that's kind of a fun number to say right it's uh well we have even more data points that the system is processing on a on a day-to-day basis i think uh i think the last check uh last week was a little bit north of 17 billion data points per day that's great all right um put this on a timeline for me when you launch the company um so the company launched in uh 2011 and ultimately that it takes a while to build a platform of of this scale so first uh first two to three years were spent tinkering getting alpha and beta customers on board and ultimately uh we launched the first version of our enterprise platform in 2014. was that your year we had the first dollar revenue first our revenue was a little bit less than three months in uh oh okay uh we we're revenue hawks we're going to chase every every opportunity we're going to bake borrow and steal to be able to help deliver value to customers i guess the reason the reason i'm asking i'm always curious um there's a lot of founders that'll spend like a million two million over two years building a product totally in the dark like and then they go get customers versus there's others that are like you know what i'm not writing one line of code unless i can pre-sell the idea in a powerpoint there's two very different worlds right so i'm curious what did you spend on your mvp before you had your first dollar of revenue do you remember um i mean we'd probably spend about 15 or 20 thousand dollars in total including like incorporation fees and everything before we earned our first dollar revenue that's great i mean this is not a simple so i mean you you were you can't build this platform with just 20k so you were selling very much an idea on that first dollar revenue yeah well and and the business model um ultimately we didn't have the platform to provide three months in but we had an ability to deliver value that eventually the platform would be able to automate and so what what we had was was ultimately some of the data science based models they would be able to drive the calculations those were ready and we just had to layer in some um some analyst horsepower behind that to ultimately be able to execute the algorithms do things like push bids and ultimately um use that as a vehicle to deliver value keep ingesting data use that to refine the models and then at the same time have our our back-end team continue building the platform yeah that makes good sense now um 2011 was launch date three months later first revenue 2014 enterprise uh platform kind of goes out how many customers are you now serving today uh it's about 65 okay and do you remember how you got your first five that were true sas um so you know there there was an old saying that um we would uh we would use that if opportunity doesn't knock then build a door um no one knew who we were in the early days but we're we're data geeks and we're going to use data to try to solve problems so what we wanted to do was be able to model our uh target market understand who those five top five thousand google customers could be and unfortunately google doesn't publish that that list um despite our asking so we had to come up with some creative ways to be able to to back our way into the who those companies are um and then use things like linkedin sales navigator uh to be able to understand who the right contacts are and then just do targeted customized outbound messaging to be able to say hey we really respect what you've done as a brand to be able to to build your business we we believe that we might be able to add some value and love to have an introductory conversation yeah so a discussion like that happened in uh mid-2013 with the uh homeadvisor cmo uh and ultimately they came on as our first real enterprise sas deal in uh the beginning of 2014 huge milestone for the company but that that discussion um happened over the course of about six months in 2013. and now is it mostly outbound or inbound or what's the process today yeah so so for um from 2014 through 2018 call it we were primarily outbound based but ultimately that one of the big transformations that we've made as a business over the last 12 months was just acknowledging that we weren't participating enough in the conversation and so uh we made the shift to be able to leverage our in-house experts to be able to do a high volume of content of both high quality um content generation across written formats so ebooks white papers but also in events so we'll be at the etail east summit next uh next month in boston yeah we also do a lot of uh things like webinars we have a data science meets sem webinar series that is incredibly popular both with in-house data science teams at some of the biggest uh digital marketing uh or got it so you're getting some inbound now right as a and then also mixing in these other events as well absolutely what's the team size today how many people uh about 75. okay 75 folks and did you guys decide to bootstrap this or raise capital and take delusion um so we we have raised capital so um raised a series a and a series b um and what is that what does that add up to in terms of total capital so total is in the kind of uh mid uh or actually about 37 million okay and did it was it all equity or did you use debt um those were all equity okay why not use debt um so fair fair question and it's it's one of the options that i mean we do have and uh or we we do have lines that are obviously made available to the company by our banking partners uh but but ultimately just based on the the quality of uh investors that we've been able to bring on board feed we chose that yeah you feel like it's worth taking the dilution versus the six percent interest rate on the line because the strategic value of the investors yep so for example in uh in our series b foundation capital uh led that and ashu garg who um had been a part of uh two mogul and and part of adobe um he's been publishing um a series on the decade of the cmo and being able to bring...