How Simpli CEO Frost Prioleau grew Simpli to $100M revenue and 400 customers in 2020.

hello everyone my guest today is frost or pre low he's the co-founder and CEO of a company called simplified he's an experienced online advertising executive specializing in targeting optimization and technology primo focuses on corporate strategy driving simplifies growth and ensuring customer satisfaction frost are you ready to take us to the top sure I am ready let's go all right tell us about simplify what do you guys do and how do you make money so simplified is brings programmatic advertising to local advertisers so if you know about programmatic advertising it's taking over just about every form of digital advertising mostly investment in today has been focused on large national brands that are good buy through some of the big six agencies we said we're gonna go the other way we're gonna be the guys who bring programmatic to local and so and that means we have to be very good at powering high volumes of smaller localized campaigns so for the last year the last months right we did a hundred thousand campaigns about half of which spent less than $100 a day there sorry hundred dollars a month and the other half spending all the ways up to like $1,000 a minute interesting and is your business model a pure place SAS model or is it a percent of ad spend model we're a percent of ad spend model but we measure ourselves as a SAS business and we have because some SAS investors we've had and to actually have metrics that are favorable to many SAS businesses what does that mean that means like our net recurring revenue so if we didn't sell a new customer all year we'd still grow 30% in a year because our existing customers come back he's not another way of saying retreat and the revenue retention annually is 130 percent that's correct that's great where's most the expansion revenue coming from typically from new products that were rolling out so programmatic started in display desktop display advertising and moves to mobile we have a very strong mobile solution and now a lot of the growth continues in mobile but also in over-the-top and connected TV video advertising interesting okay you mentioned investors how much have you raised well over we sold about a year ago to GPCR which is a private equity firm up in Chicago prior to that we had raised about ten million dollars okay good so not a ton and we're you one of the initial guys who are the initial founder that's correct myself and our CTO Paul Harrison were both founders and both still active in business well so you frost you know what they say right about acquisitions how do you know once you make a guy rich how do you motivate him why are you so why are you still there well they were very clever Jiki CR wanted both B and told to remain on and so actually although they they really acquired the company both of us like the business want to keep working here and we actually reinvested almost half of our proceeds back in the business same year they made you buy it made you buy back equity huh well I wouldn't say made we were honored to do so actually actually it was that was a favorable part of the terms that actually we could buy back equity on there on the same terms they bought because hey otherwise what would I do I cash it out I'd pay a lot of taxes and I'd put it in D built somewhere so I'm happier having it simplify stock yep interesting okay and how many customers are on the platform today so we have about 400 customers that are billing customers we have about 30,000 advertisers but many of our customers are media companies who have thousands of advertisers working through them yep and and I want to put this on a timeline before I get too deep into so when did you launch the company what year 2010 2010 okay good and do you remember how long it took you to hit a million bucks in revenue that would have been in 2011 okay and how much until you had 10 million ah gosh that would have been I don't remember those I would have guessed three years or so three okay so maybe like 2013 something don't worry that would be my guess okay and then are you comfortable sharing before you sold the GTC our what was your trailing 12 months revenue so we don't share that but I'll say we're about 250 people now we're growing at 40-plus percent still and we've been profitable for last three years okay forty percent in terms of your head count or your revenue year-over-year revenue forty percent year-over-year revenue growth and so headcount a little less than that thankfully yeah I was gonna say when I hear headcount I just hear expenses tell me about revenue growth right 40 percent that's pretty good and he said your cash flow positive yes we have been for the last three years one of the reasons GKC are actually looked in this space for many years for a company to buy and one of the things they liked about us was both our profitability our growth and then our network our SAS like metrics yep yep I was about to say you know private equity firms you know they have a tough time looking at top-line revenue for if they want to see a bit de margins so if you were cashflow positive it makes sense why that works they absolutely re bedell buyers yep now when the acquisition happened I believe my research team said they just bought a stake not the whole thing is that accurate yeah actually what are the headlines came out saying they had a majority investment but accurately they actually did buy the whole thing and not Paul Paul Harrison and myself bought back in yeah correct yeah that's it's nice a clean way too easy way to manage that cap table interesting okay so so I'm curious a lot of the add to companies that have on they are moving from a port rent you know a percentage of transaction model to trying to you know sell the add text software solution right a self-serve SAS platform and some are doing really well some are not doing really well do you have any true kind of SAS revenue or is it truly just a percentage of revenue and that revenue spend scales over time so it looks like SAS revenue so today we are truly percent we do not have any pure SAS revenue we have been completely transparent from day one so all our customers know when they spend a dollar exactly how much goes to our platform fee if they ask for services how much because that and how much goes to media and data so we're totally transparent on that side but we and we are we're working on if you can bait out some analytics products that could be SAS trap pure SAS revenue but today most of you know really that's because the way the buyers want to buy they don't want to see you don't want to pay us platform fee plus media they want to buy you know one one all in price and that's the way as you know much of the industry is evolved that's right for us break down the economic storm real quick let's pull that dollar example for and I pay you a dollar what do you keep and what gets spent typic on average no it probably ranges wildly but on average yeah so typically so platform fees depending on depending on depending on the size of the customer typically go from high single digits to to the mid-teens as far as the platform fee we offer well we have lots of customers using our platform on a self-service basis we also offer a managed service and so for those who want to use our managed service we charge another 10% of spend which is actually considered these customers have thousands of campaign spending one hundred dollars a month is actually I think fairly inexpensive and then the balance and you call that sorry to fund some management fee managed services fee and you're really helping with creative they're mostly we're helping them traffic campaign so they're having they want us to set up you know a hundred campaigns for different locations I see franchises set up geofences pull retargeting things like all that correct and so those are the two buckets and then the balance goes to media and data that's great after they're rated so let me just let me break the down I want to make sure I got it captured correctly on a dollar spend I put through you on average call it nine cents maybe up to mid-teens 16 or 17 cents would go towards your platform fee if I want your help and say frost help me with my four hundred you know car dealerships all spread out give me give me ads for all of them you might say okay there's another ten cents on the dollar going towards the managed services so worst case is you got about 26 cents on that dollar going towards the platform and managed services the rest is going towards the actual ad spend correct both data and media so on that side got it interesting okay great healthy growth launched 2010 while teams I say is 250 people as everyone based in Texas or they spread out we got about 200 in Texas and there we got about 50 people as spread around the country mostly sales and all the normal places that you'd guess but as some of some developers and other service people as well and generally speaking over the past 12 months how much just pure ad volume was put in processed through your platform so that's our spin we don't so we don't disclose that either but we continue to see that that grow especially as I mentioned on the mobile and the OTT and CTV side can you give me a really big range that allows you to be you know you know vague enough where it's not hurting you competitively uh yeah I mean you know well north of in the hundreds of millions hundreds of let me ask you a different question when do you break a billion it will be this year next year what do you think we would grow a lot if it was next...