How Sourcepoint CEO Ben Barokas grew to $20.5M revenue and 500 customers in 2024.

Source Point launched in 2015 after a 400 million dollar exit that was admill to Google uh now working on a sort of three-tiered pricing plan what folks can pay him on a on a volume of API call a plan a pure SAS plan which is traditional C and unlocking features and then lastly what percent of spend is Source Point helping you protect they take under one percent call it take rate on that they're growing nicely they raised recently A series C in 2020 for 17 million bucks they've got a team of 60 evenly distributed call it and uh nice a go to market plan leaning on a lot of his ex-teammates from Advent as they look to scale to 50 million this year will be a stretch goal but definitely in 2024 serving 500 customers today hey folks my guest today is Ben brocus he's the co-founder and CEO at Source Point now leading the Strategic Direction it's a data privacy companies for digital marketing he's got a proven track record of growing companies that transform the digital content industry founding and leading the preeminent supply side platform admill to its acquisition by Google for reported 400 million in 2011. he then served as general manager of global Marketplace development team prior to that he drove business and operations for jump TV and AOL Ben you ready to take us to the top sure let's do it buddy all right your bio said 400 million reported okay that was in 2011. I mean can you create Clarity there was that is that confirmed is that close enough I mean it's all about how do you do your fancy accounting there's uh there are bonuses on top of the cat price that was paid that were given to employees and so it was significantly above that in terms of uh price but it's also you know what what gets recorded in the purchase price is the complexity of the uh of the exact price but yeah that was uh that was startup number three and we did we did quite well and I'm I'm uh you have co-founders here or so founder no co-founders co-founder uh different Brian I have a co-founder currently named Brian Kane who was also my chief operating officer at admel but I co-founded that business with the gentleman named Brian Adams uh also an incredible operator engineer and product person uh yeah we founded that company in 2007 exited in 2011 this one after three years at Google founded in 2015 have been rocking and rolling almost eight years uh and it's been a great journey that's great now at admill did you were you guys pretty Capital fishing or do you raised a bunch of money to grow that company we raised a bunch of money and we have had a history of working with the best and most incredible venture capitalist how much had you raised at admode 40. okay four well that's not terrible so if he's 40 and you sell for four how many you read companies all the time today that you know they raise 100 million they sell for 100 million no one makes any money that doesn't work out really well it doesn't work out well so when you say a bunch of money just to be clear again that's I would call that pretty darn Capital session it was a good one for everybody yeah where I come from 40 million dollars is still a bunch of money it's not 400 million it's one point eight billion but 40 million in most people's minds is a bunch of money yeah well it's all it's all relative is how we like to look at it here on the show let's talk about Source points so was this a problem that you had at admode you said I need to leave and actually just build this for everyone else or how did you identify this problem oh no I I mean I think data privacy is one of those things that has been building for the past three four five decades I mean data is the lifeblood and is the oil of what runs the digital Enterprise today uh and and the understanding that from a user perspective uh most users don't um understand what the value exchange by giving their data away uh and more and more that data can be stolen or utilized in ways that um that the individual user doesn't want digital advertising digital marketing made a lot of this data available and there are a number of Brokers uh that don't act responsibly like good digital citizens don't act ethically and don't keep that data secure and so while I was at Google after we almost created the problem while there we developed a protocol called real-time bidding and the rtb protocol enables marketers to bid on individual users based on their data profile and that made data available on just about everyone uh understanding that you're in thousands if not hundreds of thousands of data graphs around the world might make you feel uncomfortable at any rate we knew that the that the digital media ecosystem needed to clean up its Act and we wanted to provide a solution and that's what we did and we created the best solution in the world for large-scale digital Enterprises to evaluate what their data privacy risk is and provide a series of tools in order to mitigate that risk and act in an ethical and good citizenship so Ben we'll go back and get the back story here on the first customer second customer Etc but help us understand today as the company stands if you know you just described a product well for a customer that wants to pay for and use the product today what sort of Market are you serving what's the average ACV would you say 100 bucks a million bucks something in between yep something between call it a hundred thousand dollars a year in annual contract value um and and our clients are the biggest media companies in the world oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret valuation is there's many different ways to value a SAS business so the reason you're going to see three or four different evaluations inside of your founder path dashboard this is all free by the way is because depending on who's doing the buying of your SAS company you're going to get a different valuation a VC is going to pay a different valuation private Equity Firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when I hover over here here right so the teal is what a VC would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on YouTube all these datas are built from real-time valuation data points Founders share with us on the show so traction 1.2 million seed round 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of SAS valuation than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the YouTube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform I hope to see you there all right let's jump back into the interview what do you price against in terms of your utility-based pricings and number of seats number of data you know number profiles protected what do you price against it's more about implementation and volume so we serve the digital Enterprise and so in terms of how we integrate it's on every website call every initiation of an app with an SDK and so however many times you're pinging us to launch our platform is how you pay for one of our products I think another product is a pure SAS play and a third is about how much of the spends that we are helping you uh protect if that makes sense so um product one and two of three are very SAS based models based on volume and evaluated data and one is really on the percentage of uh overlap that we protect and and that third one that you're talking about percent of spend that you're protecting are you taking like I said it's a traditional take rate model there percent of spend or no yeah um but it's basis points so with companies that spend you know hundreds of millions of dollars of marketing in buying advertising or buying data to inform addressability we we depending on how much your spend is we take basis points in order to protect that spend and make sure that you mitigate risk as it relates to placing messages on places that it shouldn't or uh purchasing data that hasn't been evaluated in the program when you say basis points though you're talking like under one percent right that's exactly right okay got it okay that's super helpful then again the first one is pricing on volume of API cause it sounds like and then another the second product is based on like a pure SAS fee unlock XYZ features in this many seats sort of deal that's exactly it very cool okay now that we have that part of the story take us back to the early days what year did you write the first line of code for the platform um yeah it was the end of 2015. uh we wrote the first code I think it got us uh till beginning of 17 where we had our first clients uh and then scaled up I think we've we've averaged about 40 growth year over year some years were better some years were less good but that's kind of how we've averaged out uh we've been certainly incredibly successful among uh the digital marketing ecosystem we are now expanding beyond that to a more generalized uh Enterprise solution we've realized that being the best at what we do has translated very well to other verticals and so we're spending a lot of time making sure that we're the easy button for data privacy programs and for those teams you know everyone within the fortune 1000 uh needs to have a series of tools and a platform by which to execute their privacy program and um we've we've we've penetrated very deep into the media and marketing space and now we're we're really expanding to uh the rest of the ecosystems can you put all that in a bundle for me so across all those markets you just described how many customers are you serving today we're solving uh problems for about 500 customers today uh and and you know we're hoping to again grow by 40 to 50 this year that's great now talk me the original funding here I think you did a series a 10 million series a back in 2015 and then a 16 million series B in 2017 where both those rounds totally pre-revenue or was a series B raised after your first customer came in I think our series big was after our first customer came in we had limited customers then but um but those customers were very very large Enterprise customers and so there was a proof point there I see I guess the the question I have is a lot of second time third time Founders will listen to this show and I always wonder you know someone has a 400 million dollar exit if you you know if you want to you know swing for the fences go build a massive company you want to try and own as much as you can well you know why use 10 million dollars of other people's money there for your series a in 2015 instead of just you know saying you know what I want to own 100 keep as much as I possibly can and then scale this thing oh because it just makes every difference to have Smart Partners on the VC side of the equation I think it's a great accelerator uh for for anything that you want to do if you want to change the world then you're best bet at changing the world is doing so in conjunction with people who have seen and have invested in changing the world and you know I've had the incredible luck of working with some of the most accomplished VCS in the industry you can see you know on our cap table North Zone spark gray Croft Excel Foundry these are all uh incredible companies with Incredible partners that have been uh very very helpful along my entrepreneurial path and so you know again I wouldn't raise Venture if you're just starting a lifestyle business or you're starting something that has been done before but in all of the cases where I've founded companies we we were doing something that has never been done before and we set out to like you said swing for the fences and do that with partners and I think no man is an island uh and you want to increase your success rate by working closely with partners I mean Ben one of the things obvious about raising capital is using our Island now actually the waves are crashing harder right whether it's gray Croft and Spark coming in your series a or North Zone in your series B they have a growth expectation which can limit your optionality into the future uh you've got to accelerate speed these guys are expecting 100 especially in the early days maybe 200 300 year over year growth you manage an average of 40 year-over-year growth the expectations there are not aligned how do you create alignment you know again by having a long-term View and having an understanding of our particular investors for particular stages of uh and they will help you when they can help you and when they can't they will say that they can't and so you find other investors uh that are are more aligned with the particular stage of a company uh that you have and there are times by which the market doesn't move as fast as you would like it to move and in our case data privacy legislation in the United States move much more slowly than we thought that it would uh and still to this day we don't have National Data privacy legislation that has been passed and we're probably a couple years away uh that would account for 60 to 70 percent of our Revenue coming from Europe we do see that that's today 60 today comes from Europe because of the laws over there correct yeah correct uh and now where we've had already four uh States passed comprehensive data privacy legislation now a fifth the Tailwinds are starting to blow very very hard and uh we're seeing an exciting opportunity to um to grow much more quickly in the North American market and then I guess Ben take me back at series a most folks now I got 2015 was when we were just launching the show so I don't have a ton of data points from back then but most folks Series in the past couple years you know you're selling you know 10 to 15 to the company did you sort of do something standard you were sort of in that same range yeah exactly okay and same with sir you know series B you know you're selling five to ten percent sort of in that same range same thing okay how do you think about arrowroot coming in with 17 million in 2020 it's not labeled any that as any kind of round and crunch base so how do you think about them is that a series C sure I mean again you can label them however you want they were the right capital for the right time well was it the same paper the series B said on or do they repay for the deal at a higher valuation oh certainly they repayed it there there are a number of different negotiations and buttons and levers that you do with different funders at different times it was a part of that arrowroot deal secondary was it all for operating capital all for operating character as you said like you know both my co-founder and I have been lucky enough to have significant exits in the past and so uh well you know we wouldn't we wouldn't turn it down if it was at the right terms it wasn't something that we were interested in at that time sorry just to be clear if you and if you incentivize your early employees in 2015 with option grants they've been waiting now for five years it might be nice to create secondary for some of them so necessary wasn't for you but have you created a liquidity opportunity for any of your early early employees who are incentivized with option grants certainly not interesting how did you how do you think about that moving forward if you want to buy yourself more time but folks are getting anxious having you know these options for five six seven eight nine ten years do you try and alleviate that that pressure at all I don't I mean I'm not hiring people with the incentive of being able to cash out their options if the company does well and if a strategic comes along and purchases the firm for a very high price then fantastic and then we'll all share in those spoils but if not I don't see funding for secondary um for employees to be something that's going to primary driver of a funding event tell me more about the team today how many folks are full-time and how do you think about your engineering your product your sales teams um we're about 60 people uh worldwide we also have some contractors around the world we're pretty evenly distributed across engineering product sales and marketing um we have offices in New York in London and in Berlin um and yeah I mean tell us about your first sales hire a lot of folks it's our number one question we get is Nathan I'm at 10 million in ARR we want to make our first like Enterprise sales rep what should quota be what should owe to EB how did you put that together for you and your or your ACV oh it was just spectacular to be able to work with people that had worked for me in the past uh my VP of sales became my cro for this company we had again it's a it's a wonderful wonderful uh way to found and start a company to be able to bring someone on early that you trust that will help you get to that 10 million ARR well Ben teach my crew though are you talking about is it a million dollar quota and a 250k OT or sort of what ratio did you start with well we were doing Enterprise we're doing Enterprise deals yeah I think it was it was more like a million dollars a quarter um for for him and the two sales reps that he hired right away all together we were able to scale pretty correct we were able to scale pretty quickly and it was uh initial quarters uh and then you know there were there were some bumps in the road and we had to reevaluate the technology that we're building and the different use cases we did exactly that um and course corrected and evolved and then uh got back to growth so again none of these none of these uh opportunities are all kind of straight line they everyone takes their own zigging and zagging in order to find the right level of product Market fit as well as the appropriate tools internally to utilize in order to drive the appropriate go to market strategy and Ben before we wrap up you mentioned earlier you know ACV 100 000 bucks and customer accounts about 500 can we multiply those to get a revenue range you can do whatever you'd like well I I don't want to say anything misrepresented you said earlier 500 customers and you said a city we don't display yeah we're not disclosing the details but you certainly can do the math will you disclose 500 customers and disclosed 100 000 bucks ACV If I multiply those it puts you at 50 million in ARR is that accurate that's not accurate okay so is it because no we have a number of different products and so while that may be the ACV for um our Standalone products all of our customers are not on all of our products I see I see so you're working on getting as many of the 500 at that hundred thousand expand them net dollar retention to the hundred thousand dollar per year level with your three different pricing plans exactly can you break 50 million this year you think or is that going to be a 2024 goal everything goes to plan certainly but it certainly it will happen in 2024 whether it'll happen in 2023 it's a bit of a stretch all right fair enough and that's helpful thanks let's wrap up here with the famous five number one your favorite book my favorite book uh the hard thing about hard things number two is there a CEO you're following or studying many I mean today I was uh yeah there's an interesting thing that's going on in the finance sector and I think we all need to be aware of what folks like Jamie dimon are doing and uh how they navigate the current pressure on the finance sector number three what's your favorite online tool for building Source Point oh my favorite online tool I would say that what's used most today is the Google Suite of work products how about that that's a good one number four how many hours of sleep do you get every night at least six and a half okay that's good in situation married single kids married happily for almost 21 years oh congratulations any kiddos nope no kiddos all right and how it already been I am almost 50. almost 50 great we'll call it 48 49 last question what's something you wish you knew when you were 20. um it's all gonna be all right guys already have a Source Point launched in 2015 after a 400 million dollar exit I was add mail to Google uh now working on a sort of three-tiered pricing plan what folks can pay him on a on a volume of API call a plan a pure SAS plan which is traditional C and unlocking features and then lastly what percent of spend is Source Point helping you protect they take under one percent call it take rate on that they're growing nicely they raised uh recently A series C in 2020 for 17 million bucks they've got a team of 60 evenly distributed call it and uh nice a go to market plan leaning on a lot of his ex teammates from Advent as they look to scale to 50 million this year will be a stretch goal but definitely in 2024 serving 500 customers today Ben thanks for taking us to the top thanks for doing it one more thing 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