How S6 grew S6 to $4.2M revenue and 20 customers in 2018.

hello everyone my guest today is david de yong he's the founder and partner of screen 6 and has been closely involved in the development of innovation regarding the latest technologies for online marketing and advertising David are you ready to take us to the top yeah and I'm here all right get specific for me what does screen 6 do and how do you make money how do we have money good question and what do we do well let me start at the beginning we focus on identity resolution in digital advertising which essentially means that we are a company that works for other technology companies in our ecosystem and we inform them what devices belong to which users so imagine for example a 20 years ago you know you Nathan you might have had one laptop at home which was shared across your whole family it was pretty easy for an advertiser to track usage there right like cookies and stuff that didn't need it just one cookie to track nowadays everyone has many digital and connects devices mobile desktop tablets in a pet cetera and even smart televisions what screen 6 does is we connect all the different identities to individuals therefore informing our clients what their consumers are doing across devices and across media verticals ok and so how is this different than like a clear bit or a foot you know a full-contact or these kinds of companies I'm assuming actually I don't know these companies I'm assuming these companies today focus more on the marketing or to CRM side yeah I just saw on my research team noted that on your website you talk about your new features CRM onboard and campaign analytics unity connectivity I mean those companies I just mentioned do a lot of like you know hey give us an IP address or give us a domain name and we'll tell you all the information about the people on these kinds of companies but you're not doing that no I guess those are more like census based and they're using the IP to abstract some information about the households potentially what we do is more individually focused so it's more for a display advertising use cases for example where you're showing a banner to someone and you would like to know whether you've already exposed this person yes or no whether they might have already converted with you or whether they have a specific profile that you you might have some historical knowledge on and how do you charge is it pure sass play it's pure sauce play indeed okay so what do people pay you on average per month would you say I would say that's about twenty to twenty-five okay a month okay okay so you're very much in the enterprise range yes yeah I are give us more the back story when did you launch the company we launched the company about four years and a half ago we is my co-founder who sexually also the CTO and myself we've been entrepreneurs also doing our previous business together for about twelve years now when after that one we sold it good good outcome or not well beyond a science it was at that time it was a good outcome yes I think we could have been able to continue for sure as well and might be able to leverage a bit more what we know right now but you know what inside 20/20 etcetera it doesn't help us at all I have no regrets the size of that what was the size of that company in terms of revenue before you sold it air are about 1.6 or 1.8 million okay so we streamer are tomorrow got it so you were doing I mean you were doing what north of 20 million a year we were doing wow this is 2010 known myths midstance okay and when you say that you could have done better I mean are you just saying like the multiple you got on a or are you think you could have you know done it yourself a bit longer and gotten a better deal there or what what do you mean by that yeah I think that that's about right we we were focused not so much on global expansion we were not focused on funding the company we were basically growing our business organically it was nice trapped it was indeed our company most most of let's say we have a bit of seed funding funding in our current company as well how much total funding in the current company six hundred K okay so basically bootstraps now that first company guys work together on where you guys the only two founders you just split it 50/50 or no it was different no it was actually my my co-founders well he had a company before they say creative firm and the business that we run before this was a technology that they developed within this the creative company and they couldn't really spin it off right it did that they were charging hours to their clients but this was a SAS model yes so it didn't really you know didn't interact with their internal [Applause] challenges and and the way they Sony shows that they sell attack and the agency or just attacked not just attack because it was spun off already okay a couple years before okay I mean but that seems like I mean it was a pretty significant financial event for you if I mean if I'm doing the math there's two of you and you have 50/50 ish and you sell it for a call at ten or twenty or thirty million bucks it's still a pretty meaningful event for you let's say it could have been better than what you're saying up all right good tell me about the current company so there's two of you now did you split this one 50/50 or how did you have that tough equity conversation we have did we have this seat investment as well but it's 5050 between the two of us yes okay Bart that we retain yeah this is what it's like for tea it's like 40 40 20 or something like that whatever the seed people told yeah yeah awesome belts but yes okay very good and so you took the seed funding and then where are you today so obviously launched about in 2013 issue where you today in terms of total customers using the platform yeah we are in 20s now in terms of clients okay we started Cindy's a couple of years ago but what is interesting is that the company might it might exist for about four years and a half now but we kind of pivoted halfway so we we started the business focusing on cross-device as well but it's a more service-oriented a campaign oriented business model where we were selling to agencies and brands and we pivoted towards a business model where we are servicing SAS companies and technology companies right I mean it sounds like you've scaled I mean 20 customers paying you know 25 grand per month puts you at about 500 grand in MRRR is that generally accurate the it's it's we are I'm calculating give you a good number it's about two-thirds of that okay got it so you're doing about your GF some policy we have some legacy companies still in some legacy clients from the early days goddess you're doing about 350 K a month right now yeah okay and what is that up from if you go back and look at 12 months ago in December at the end of December 2016 what were you doing then [Music] we were doing about 40% less we did grow pretty pretty good over the year but we also had some struggles during last year where one of our companies filed for bankruptcy which let us basically do that well there was a pretty big disadvantage no did that company make up more or less than 10% of your total revenue yes it is more at that time yeah yeah I know that it's about 10% of them at that time revenue yeah so that's why it was tough for you guys you had to figure out to replace that revenue pretty quickly yeah you know we were expecting of course that revenue during the year and we were already investing on top of that and then you know once of Sun and a day they fade away and they take a big loss in base bills and of course all the future revenue is not coming as well so that's that's a loss in an hour for a story and then also what is happening in our industry that's something that happens all the time in in tech or marketing technology consolidation between companies so we might have two clients today but you know if one buys the other and you're left with one client and they're oblation of gonna paid the sum of that that was the previous amounts paid because of the SAS model what's your annual logo churn logo churn that you mean how many clients are leaving us or it's a term I don't know I don't know so I'm just guessing okay well I don't want you to make something I don't want you to make something up what what do you measure in terms of turn do you measure dollar churn or logo churn what do you measure we measure indeed what you say logo - Insurance office about 10% annually see yeah okay I mean that's pretty that's not bad that's pretty healthy what is the in terms of acquiring these customers I imagine it's pretty high touched what are you paying to acquire them do you know we I I can check this exactly because we have you know the whole let's say it takes us about three months or so to earn back the decline so about 100k more or less yeah so you're spending about 100k to acquire the customer it's taking you three months to essentially earn that back if they're paying 25 or 30 grand per month and that's your current kind of money velocity yeah so there's certain it's basically form own section it takes four months to commit it that's healthy and then what do you assume lifetime value is on these customers you have a good sense of that or no not yet because we are still scaling and no I can say for sure of course we can calculate with the churn and the growth that every client...