Sentient revenue, CEO Jonathan Epstein, team size, customer count, churn, and more in 2022.

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per talk 5 and6 million he held on global domination we just broke our 100,000 unit soul Mark and I'm your host Nathan lka when I do webinar interviews or I give big speeches to thousands of people all over the world I usually will talk about data and sometimes show my dashboards like my SAS dashboard as I'm growing my SAS company the top inbox or my website dashboard which shows how I take Impressions to convert them into email leads and convert them into customers for Nathan la.com the funny thing is guys I build these dashboards with myself no developer and it's basically free and I use one tool to do it you can see the tool at Nathan la.com analytics I'll tell you more later in the show this is episode 66 6 and coming up tomorrow morning the pay you CEO comes on Lauren Deo and I get him to reveal how much revenue they've done hint it's above $150 million now the way they've done that is with a new risk assessment product to Grow Financial their financial services arm he was the ex PayPal CEO of Europe you don't want to miss it good morning everybody my guest this morning is John Epstein he is currently he just moved in a new role as the senior vice president for uh for inter interational at a company called sentient Technologies at sentient doai the maker of sentient Ascend the first conversionary optimization solution powered by evolutionary artificial intelligence EP Epstein has followed has been in many companies at the Forefront of technology and media including Gamespot which he was the founding CEO of OMC which was sold to Intel and GameSpy which was sold to IGN GN John are you ready to take us to the top absolutely let's go so you're like a nice breed you're not you're not the CEO currently of sentient but you've had a lot of success with your own companies prior to sentient at gam spot and gam spy correct yeah games spot games spy om IGN had a good exit as well good exay on the Forefront say that again when you say a good exit what's a good exit mean to you uh well uh it ranged anywhere from uh in the tens of millions into the hundreds of millions uh of dollars some were better than others and you know some of the startups didn't fair so well such as the nature of startups was uh was games by your baby were you founding a founding CEO Game Spot yes gam spy was the president actually it was more of a turnaround uh Game Spot had been sold to ZDNet and then CNET and uh had invested in GameSpy and uh when uh 2001 came and sort of the you know the website Market was uh Contracting I jumped over to help uh this CEO of Game Spy turned it around and achieved a pretty successful sale to IGN and what was the so I want to kind of dig more into your history these companies I mean are these gaming companies like the names would suggest um yeah you know yes and no so I I I have worked at an actual gaming company most of my life has been you know except for the last eight years was focused on U media and uh other elements related to gaming so um I started out at idg as a magazine publisher originally on the the technical side and then into in the multimedia space that's what brought me into gaming because uh games were the applications that really have always stretched um the mo stretched our PCS and our phones the most in terms of you know requirements for new features which back then was sound in cdrom um so Gamespot was the first really professional online reviews site for games um gam spy had a editorial element and also published content about games but it also had middleware and a software client um that was used for matching up players in server to server gameplay these days online gaming is you know part for the course but back then um you know it was uh people were playing quake and doom and it was kind of hard to find players uh if they weren't on your land and that so GameSpy had a really great piece of software that we then ended up licensing into games from folks like Electronic Arts um and uh two 2K Games and many other and John with it was so GameStop was your first kind of venture into entrepreneurship is that accurate yeah that's right and what how old were you when you did when you launched that what year was that um so Gamespot was launched in uh in in 1995 it wasn't my first startup um I had launched uh the magazine digital news and then I launched the magazine multimedia world but that was sort of Entrepreneurship for idg which is a great company that you know values and so just be clear you were working for that company and you launched those magazines under their brand that's right in terms of my own start up it was 95 I was 31 years old oh that's okay got it and walk me through you know a lot of the feedback I've got from the show and I like to keep close kind of tabs what my audience is wanting they say Nathan you can't just talk about billion dooll companies every day and I get a lot of those guests on CEOs of big companies they like to hear the beginning stories too what I mean what gave you the confidence in 1995 to leave your gig which it sounds like you had a lot of freedom on you were launching whole magazine Brands what gave you the confidence to leave and start Gamespot yeah so I guess it was a so for first of all I had great Partners I I think it it really starts with that people are what matter and there were two guys Vince bro who now runs this moment and and Pete demer who's one of the top um agile consultants in in the world I believe and uh these guys work for me and they were just a really great team and were those founding Partners though John were was it three co-founders so they it was the three of us that started gam spot right and the the original idea came from the two of them they wanted to call it G-spot though and I said I like it sign me up I'm the one out there selling media to largely female media buyers so I don't think so so so that was part of it I think the second one it was clear it was clear at the time hey this you know we had started putting we had put PC World online and multimedia World Magazine online it was clear this internet thing was happening and that if anything The Gamers were ahead of the curve in terms of their use of online and and then there was this problem and the problem was you know if you look at the IND idual video game or PC game their shelf life in the store it's pretty short but magazines had this really long lead time of two months like so by the time a magazine came out either the review had been written before the game was done or the game might have even been off the shelf so there was this this information Gap and we realized that online with the real-time nature of online publishing would allow us to you really serve the gamer Community better and not just give them you know John hold on I don't mean to cut you this is all still in a gam spot or have you transitioned into Game Spot this this was gam spot right okay well hold on wrap out wrap out the game Wrap out the gam spot story first so 1995 you launched it your 31 what happened did you sell it it went under what no yeah so we um so we took in uh uh we took in some external investment we ended up selling it in parts to Z Davis to their ZDNet subsidiary okay um in retrospect maybe a little early but it you know it was you know for for some younger guys and and I was the oldest of the three um it was a decent exit what you what did you sell it to him for or the assets um we sold uh we sold it for stock in cdet So at the peak it was worth about 45 million as an exit and by the time we were able to sell the ZD Net stock we're worth a little bit less than that so I think you know we view it as like we all got a pretty nice house out of the deal Y and and some track record and then you you take that Capital you snowball into a game spy which help bridge the information gap between kind of games on that by moving a lot of this content online not not quite I said I spent a couple years after having sold it to ZDNet first of all we ran it inside of ZDNet for a while and I stepped into an international role I really wanted to get experience in doing business in different countries and ZDNet had you know joint ventures it had wholly owned subsidiaries it had lenses in something like 30 countries around the world so I ran that for a while and then as you know 2001 happened and you know the Internet advertising Market dried up it was clear it was time to you know maybe go on again we had invested from zet into Game Spy I was on the board there and they made a very concerted effort to recruit me so I joined Mark surface interesting there and uh and then did it again it wasn't my my former partners at Gamespot were not super happy with this move since essentially was going to a competitor but uh such as the well well tell us how that worked you're you're a rational guy they must have incentivized the hell out of you have they what they give you what cars do they give you uh Game Spy yeah um a nice salary in about 8% of the company so you know was a good package for uh for for a CEO um games SP was pretty unique in that the founder Mark surface had not taken an external money and he owned more than half of it so um and then in you know two and a half years we were able to Triple the revenues and what years this by the way John let's keep the thing going this was 2001 and it was so I I joined there in September 2001 the company was sold March 2004 to IGN and and the two biders were IGN in Gamespot so okay so you sell it it sells in 2004 so your kind of first big kind of financial moment was when you you sold Gamespot you were in your kind of mid-30s got your nice new house you then took that into a big salary and 8% of games spy which you helped grow uh that sold for you said 10 to hundreds of millions you gave a big range which is fine but that was I guess that one was around $61 million exit if I recall and so I I made more money on Game Spy than I did on on on was that was that all cash or was it an earnout John it was all cash got it okay so you didn't take that you didn't take that money 2004 then what I I stayed at IGN for a while and then I you know after about six months um you know I made some money there as well because they sold the following year to Fox I had some shares there I went and joined a venture back startup called double Fusion double Fusion was um a competitor to massive for those of you that remember the in-game advertising market so double Fusion combined technology that could place ads inside of video games and then um a media sales effort to then monetize that inventory and then fast forward now to to senent so what does sentinent do and what's the revenue model yeah so sentient is uh has been around for nine years it's one of the best funded companies in the ey business you know just to give you a little you know I'd taken a few years off from operations I was an executive recruiter it was a f fascinating way to meet you know super talented top level people build out my network and senia was one of my clients uh the guy with whom I did the original AOL cover Mount deal one back in PC World was was there and I fell in love with this company because um the you know to the extent one's goal is to be on the Leading Edge there's nothing more Leading Edge these days than artificial intelligence so a sentient has built a very powerful AI platform it's a it it focuses on AI at scale it's able to run you know AI problems across millions of CPUs and thousands of gpus using proprietary distributed computing middleware layer and the company has John hold on make that dumb that down for me like give me a real life example of all that technology stuff in in a real life example all right so so we do multiple types of AI people are usually familiar with learning or neural networks that's what's used for handwriting recognition or voice recognition or image image analysis we do that too um but there's another field which which S A send is based on and and another one of our products it's called evolutionary computation and an evolutionary computation um it's an AI that that mimics natural selection so the way it arrives at and searches for if you would the Optimal Solutions or designs to a problem is through a stage of you know a set of Evolutions like essentially breeding different designs together you know and then mutations so um we run a hedge fund using this one of senan's products through a a subsidiary called senian investment management is a is a hedge fund that is we think the first fully AI traded hedge fund the AI doesn't say what's the fund size John I'm curious that that I can that I can't disclose oh it's private okay it's it's growing rapidly um what's rapidly if you don't give a number but like is it 10% month over month or 50 or 100 or what so the the goal of a hedge fund is not to deliver outsid returns it's to deliver consistent returns around in the you know the 10% range no one objects to higher of course but the real reason you know big investors invest in hedge funds is to achieve stable good returns and ideally returns that are not correlated with other Investments they have and so one of the unique things about sing in investment management is that our fund is highly uncorrelated with with other uh funds whether they're traded by you know machines or by you said it's growing fast though do you mean the funds it's managing assets under management right so the things that make funds you know make money for the fund Runners there's two things one is the return and the other's the amount of money um that that's out there so um so how F John my question is how fast is the assets under manager how fast are those growing order of magnitude or higher growth in assets under management that's as much as you get out of out out of me here and that's not my particular so I need to be a little circum latory about that that's fine well so tell me tell me John because we're running out of time here okay so I want to dial in on this real quick how does senate the thing you focus on it cenate how does it make money what's the revenue model all right so it's a SAS product and it's disrupting the world of AB testing and website optimization it uses the same evolutionary approach to allow comp you know all companies that are doing business on the web or through mobile you know rely on some conversion event they maybe they're selling something maybe they're signing up a lead or something like that selling that lead or just using it for their own sales and AB testing is a you know it's what Smart Companies have been doing so far to improve the performance of their websites but it's slow and it's manual and using this evolutionary AI approach rather than test one Ide at a time or maybe a couple our clients are testing anywhere between 10 and 50 different changes to their website funnels all at once and not just the individual changes the AI is solving what's the best combination of those changes to achieve the goal that you set for it higher sales for example higher conversions and so our clients are looking you know they're they're testing anywhere between a few hundred and millions of different designs and within a couple months achieving you know 10 to 50 to sometimes you know 200% gains in their their core kpis and John walk walk me through so it's a SAS business so my audience is very familiar with that help us understand kind of the size of the context here because everything you're saying sounds great but but but kind of understanding more in terms of market share is more helpful so like how many customers are paying you guys currently uh we have we launched in September we have about 25 paying customers about the same number in trial okay so are these and are these Enterprise I mean give me a sense like the average contract size on these bad boys um so they range anywhere from 3,000 a month to 30,000 a month and so you know the average is sort of probably in the the the eight to 10 that's you know the Enterprises take longer the big guys take you know five or six months to to get through their sales cycle and the smaller guys you know can say yes right there so any churn yet has anyone started paying and then stopped no one has churned yet that's great that's great what about in terms of customer acquisition cost is this just you and a team inside sales people going out are you doing any paid Media stuff what's it costing you to acquire one of these 25 customers um so we're still working on that the most effective vehicle's actually been conversion specific trade shows um we also have built a partner Channel there's a lot of agencies and consultancies that specialize in conversion optimization that have the ideas the strategies that are the raw fuel that powers our Ai and so they've also been a very effective and and free if you would source of of leads and referrals a lot of our trials are coming in from that that channel we do do some paid advertising mainly in the search advertising but but uh if there's a good conversion conference uh you know we uh we go to it we have three in the next 30 days what do you spend on average to sponsor those like 10 20 grand or what uh yeah right now it's more in the 5 to 10 range I would say you know in terms of the booth and the sponsorship it depends sometimes we spend more um you know and our investment is going up over time a lot depends on the size of usually these are these aren't huge trade shows I think to go to uh we went to eail West that was for both Ascend and our other products sending a wear that's a more you know that that's in the sort of 20 to 30 range um but as you know as we continue to grow we're expanding our footprint at these shows so next year I'm sure we'll spend uh we'll spend more for show and what um you guys have raised Capital how much total so far to date it's been $143 million and that's across kind of all the product lines correct that's right and and the building of the platform itself got it and what's your current team What's the total team size actually total employees so senan has about 110 employees okay um and I think we've got about 15 or 20 positions open right now um about a quarter of those are focused on Ascend a quarter on a wear a quarter on the maybe maybe a fifth on the hedge fund business and then the remainder are focused on our core platform and then just general GNA got it makes good sense and you said your founder you said you joined him about seven years ago so 2010 was founding year no no I so I'm not a founder of sen and I I was their head hunter and then I joined a CMO and then now in this International world so the company was found in 200 and S and and uh the founders were Antoine BL Blondo who's our co-chairman babako who is our CEO and then the third founder was Adam chayer who went on to be the head of Siri and you're uh your guys's Siri C looks like you closed for about 100 million on November 24th 2014 so that was almost three years ago at this point so you're either in the middle of raising more capital or you're about to be bought for like a billion dollars which one is it well one of those come on John which one is it give it to me know what we think it's too early to sell so oh come on it's no hey AI what you're seeing today we haven't seen anything yet the world will not be recognizable from a technology standpoint 10 years from now and some would even say five things are changing so quickly um and I think uh I forgot who it was that said this recently it was Mark cubin trillionaire the words first trillionaires will come out of AI you know I'm not the founder of senan so that won't be me but maybe some of the you you have some Equity though right I mean I imagine you do absolutely gets me in the trillion range when I was recently in New York meeting dozens and dozens of you that listen to the show I showed many of you guys my SAS analytics dashboard I also showed you my website kind of conversion dashboard from impression to free trial of pending customer along with many other dashboards I use in my business like my social media Command Center and a few others now all of these are built with one tool I just dragged and dropped them together you can see how I did that at Nathan la.com analytics that's sak.com analytics now these dashboards guys are critical to my business you know I refresh them on my mobile phone right when I wake up in the morning I roll over and boom refresh I'll refresh them right before I'm about to take off on a flight cuz I'm just addicted to data and numbers they drive my business so I think they probably drive your business too you can see my dashboards how I use them at Nathan la.com analytics now if you go to the regular website that's the tool is called clipfolio you only get 14 days free you go through my link you get 90 days free so I got a great deal for you guys it does expire so you got to go there now there you go John all right let's wrap up my man with the famous five number one what's your favorite Business book uh so my favorite Business book is hire with your head it's a you know a guide to better uh recruiting a top talent which is the key to any business number two is there a CEO you're following or studying um I find Elon Musk to be the most fascinating CEO followed by Jeff bezus is a close second number three besides your own as their favorite online tool you have like host skater um I uh well we use Salesforce a lot I can't say it's my my favorite I think um honestly built with and similar web are tools that uh we use a lot to uh to better understand our clients number four how many hours of sleep do you get every night usually about six five to six okay and what's your situation married single you have kids second marriage two kids 18 and 21 one a junior in college and the another one uh getting getting word from colleges right now that's great and how old are you John I'm 53 all right last question take us home here take us back 33 years what do you wish your 20-year-old self knew um I wish I had stepped well I wish i' had stepped into an entrepreneurship early I think look I was a bit of a Tyro in those days uh you know arrogant um you know smart hard harder to work with I think you know what I've learned over the the years is it's not always what you say that it's how you say it that can really make the difference and how effective you are and I've been working very hard at that over the last 10 years well guys there you have it from John he's had a ton of success now sitting on his latest bet but it all began back in 1995 when he was 31 started Game Spot and sold a portion of that for a lot of stock to Z Davis and ZDNet where at its peak that was worth about 45 million bucks altto together once they were able to sell their stock it got him a nice new house he then had another nice financial event cuz he drove a lot of growth at a company called GameSpy where they gave him a great Sal 8% of the company that sold for 61 million in 2004 he then stayed around there a little bit but then jumped into the sentient crowd after doing some work and meeting the founders they're now serving using artificial intelligent many different markets but he's specifically focused on rapid AB testing using artificial intelligence currently serving 25 customers with the average contract value of 10 grand per month nobody's churned yet and they're spending money between conferences and some paid ads but don't have a good idea of CAC yet 143 million bucks raised team of 110 people John thank you for taking us to the top thank you if you enjoyed Jonathan today go back and listen to yesterday's episode and you tell me what you feel about the CEO was he blessed or gutsy when he turned down a $400,000 salary to launch his own business it would mean the world to me if you guys got any value from this episode if you would go leave a review on iTunes right now and then subscribe you know I hustle like heck to get these episodes out every freaking day for you guys and trust me I love it I would do it with no listeners but boy oh boy it makes my day and it makes my teens's day when we see great reviews and get your feedback so thanks so much okay top tribe I love giving away free money I feel like o we're giving away cars and I have something special for you today how many of you have heard our super sharp guests talk about success they've had with Facebook and Google ads well all of you listening right now yes if you're listening you get $100 in free AdWords here's how you get it okay again thanks for listening get the free $100 from Google right when you sign up with 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