How Verblio Reached $6M Revenue in 2020 and 30% Growth with 3,000 Writers on Its Content Marketplace (Interview with Steve Pockross)

Introduction and Background

Nathan Latka

00:00Hello, everyone. My guest today is Steve Pockross. He's building a great company. It's marketplace plus SaaS for content creation. It's called verblio.com. He brings more than twenty five years of experience to start up Fortune 500 and nonprofit to his role years of experience there to his role at Verblio. He previously served as VP of business development strategy for a marketplace plus SaaS pioneer called LiveOps, as well as leadership roles at Tendra Western Union and HSBC. He

00:25received his MBA from Kellogg and has an MA from Wesleyan University. Steve, you ready to take us off?

Steve Pockross

00:30>> Ready.

What Verblio Does

Nathan Latka

00:31Alright. So LiveOps OG SaaS plus marketplace stuff out there in here. What's Verblio working on?

Steve Pockross

00:36>> Verblio is working a lot. We're riding a pretty big content wave as it becomes a more and more powerful tool for marketing, and we're we've got I think we're gonna create 80,000 pieces of unique content this year with 3,000 writers working on our SaaS platform, and, yeah, we keep trying to focus on our mission, which is high quality content at scale for every niche.

Content Volume and Writer Pool

Nathan Latka

00:57That's interesting. Okay. So you think we'll do three k writers on the platform this year. We put together 80 k pieces. What were those same numbers for last year?

Steve Pockross

01:07>> So the same numbers for last year were around 60,000 pieces of content.

Nathan Latka

01:11And how many writers?

Steve Pockross

01:12>> So about the same. We actually it's interesting. We're actually going down in writers. Part of my fine tuning philosophy of how to get more out of your marketplace is to actually use the right size pool. So I we started the company with 10,000. We're down to 3,000, and I hope to be using 1,000 active writers by the end because I think it's the right balance of getting the power of scalability and quality or scalability out of

01:36>> your marketplace without sacrificing quality.

Nathan Latka

01:39Of course. Now do what do you I mean, I imagine a key measure that you measure is on average, what is the writer gonna earn on Verblio? What is that?

Writer Earnings and Marketplace Philosophy

Steve Pockross

01:49>> We do you know, we don't as much as you think, and it's because every writer comes with a very different goal. Some of them are looking for full time work. We actually had our first writer make a $100,000 last year on the Verblio platform, which Oh, nice. Incredibly proud of. And then we have some that are working for side money that are just doing their side hustle, and their goal is probably 5 to 10,000 a year,

02:09>> and that's probably our average writer.

Revenue and Freelancer Payouts in 2020

Nathan Latka

02:11So how much total did you pay out in 2020 to writers?

Steve Pockross

02:14>> So we paid about half of what we we paid out a flat half. So our company brought in 6,000,000 or 6,100,000 last year, and so 3,000,000 went to freelancers.

Nathan Latka

02:23And does that work at scale? Can you keep sort of taking sort of 50% there? If you put 10,000,000 through platform, you'll pay out 5?

Steve Pockross

02:29>> Completely. Scale. It is built to scale.

Nathan Latka

02:33Okay. So it's scaling. But less less writers, so higher quality, more pieces of content means each writer's average income via verblio should sort of increase if you keep up with that trend.

Steve Pockross

02:44>> Exactly. And the amount of pieces that they write for every client, so they get better at better at their work, and that's how we see it. The more they get paid, the more quality our clients get, and it's a beautiful virtuous cycle.

Nathan Latka

02:54And so why a business that's coming in and they're looking for, you know, scaling their content creation, it makes sense why they wanna use a marketplace. They don't have fixed expense writer, full time salary on their balance sheet and p and l, But why why your marketplace over another marketplace? There's a lot of writing marketplaces. Why do they pick you?

Steve Pockross

03:11>> There are. So we put a lot in. So we our goal is to be the the premium marketplace in the business for content creation, and we look at the business in some pretty distinct ways. We have really focused on what I was just talking about on quality as we look at that level of how do you get more quality out of your marketplace at multiple levels. So some of that is just how do you get your

03:30>> writers more excited, more engaged. The more engaged the writer is, the better that they're going to perform. Some of it is the selection process for how they get matched to clients, and some of it is our content creation platform, which we try to make as friendly as possible because as much as the writing quality is really important, content creation is messy. It takes a lot of co creation and back and forth, so have a client doing

03:53>> 1,200 unique pieces of content per month on our platform. They need to give edits on every single one of them, send them to different subscriptions that they have within their profile, and make sure all of that gets out on time. And so I don't wanna downplay the the importance of technology in this whole marketplace system.

Nathan Latka

04:11Had that customer tried to acquire the whole business?

Steve Pockross

04:15>> Not yet, but but maybe I'll ask. Interesting.

Nathan Latka

04:19Okay. And how many businesses, put at least call it, you know, or or actually today. Right? How many customers do you have businesses putting at least one piece of content to your platform per month?

Steve Pockross

04:28>> A 30.

Nathan Latka

04:30One third. Okay. Got it. So about the same number actually as we last spoke about a year ago. You had about a thousand and two.

Steve Pockross

04:36>> That's about right.

Nathan Latka

04:36Okay. Okay. Interesting. And are you know, there are customers who also churn. Right? So the ones that churn, what content strategy were they trying to execute that just didn't work with sort of an outsourced writing team?

Customer Growth and Moving Upmarket

Steve Pockross

04:49>> So, yeah, there's two different buckets. So the reason that we've grown so much, so we grew 30% last year in a down economy. I think we last talked to you in April when things were not looking quite that bright, so I'm glad to to come back to that story with a better tale. And the ones that so we they were all replaced with much larger we've been focusing on moving upmarket and work with much larger clientele.

05:10>> So our average customer now spends $800 a month

05:15>> versus I think last time we talked to you was clearly must have been a third 500, yeah. And so that's been a big difference in our business. The churn on those accounts that are basically we consider enterprise a thousand dollars and above churn at 2% per month. Our largest I don't know how many I think we're somewhere between five to seven clients at 20,000 a month. Those don't churn. They have zero And then the lower marketplace

05:42>> that you brought up the question for, they churn around nine I think eight to 9% now. It's really gone down from, I think, 10 to 12 last time I talked to you. Mhmm. And they're just it's a different business. It's a subscription month to month. There's no long term. Some people have short term needs for so there's a variety of reasons. One is the clients could have short term needs for content. They could see it for

06:03>> a few months. Another is they could have not done it before. A lot of them are agencies that went in for one client and their contract went away, and some of them we might not be a good fit for. And I don't know why, but I think I think they should try again.

Current MRR and Run Rate

Nathan Latka

06:17And so what does that mean in terms of MRR? 1,020 customers to $800 a pop. You're doing, what, $800,000 a month in revenue these days?

Steve Pockross

06:23>> Yeah. We're crossing $750,000, and we should be at $830,000, $840,000 within the next two months.

Nathan Latka

06:29That's great. And then, yeah, during COVID, so at the beginning of COVID, when we chatted, I think you said you're at, like, a 6,000,000 run rate. So you think you finished last year at somewhere around, like, a 8,000,000 run rate. Is that right?

Steve Pockross

06:38>> We we finished with 6,000,000 in revenue and a run rate of around 7 plus, and we're we've had a pretty big growth first four months of the year.

Nathan Latka

06:46Yeah. Interesting. Where's that growth coming from?

Steve Pockross

06:50>> The growth is coming from large customers that are looking at content as at scale. They really have a need to do well, they're thinking of content as competitive advantage. What I mean by that jargon is that a lot of them are building their businesses based on content. So the first wave, when we first talked a couple years ago, it was small businesses trying to keep five blogs afloat. Wave two was digital agencies that went upmarket. We

07:14>> were solving a big pain point for them of how do you manage content, do it by vertical, do it at scale. This next wave is really coming from really large clients that are thinking, how do you build the business if you have a company like Verblio powering you where you can do quality content at scale for any niche? It's kind of

07:33>> fuel of the modern marketing engines, and a lot of people are thinking more creatively about how to use it.

Nathan Latka

07:37Now have you changed your team dynamic at all? Last time I spoke, we were 22 people or 20 or 17 people, I believe. How many people today?

Team Size and Hiring Plans

Steve Pockross

07:44>> Yeah. We're 31 now, and we have seven open recs, and we should end the year at 40. We're on down low.

Nathan Latka

07:49What are they doing? What are you hiring for? Salespeople? What? Engineers?

Bootstrapped Growth and Sales Team

Steve Pockross

07:53>> It is super balanced across the company. So because we're bootstrapped, as you know, which is one of your favorite topics Love it. Love it. Well, is that, you know, you the the dynamic is you invest behind the curve. You you invest six months after you really needed that person, and so we basically are adding incrementally to all parts of the business as we need them. How many engineers today?

Nathan Latka

08:17Again? How many engineers today?

Steve Pockross

08:19>> We have seven engineers today.

Nathan Latka

08:21Oh, wow. Okay. And how many any sales reps that carry quota?

Steve Pockross

08:25>> We have we had our first we have our first three well, we had one sales rep for four years, and now we have three, and our first executive VP of sales.

Nathan Latka

08:33That's a big hire.

Steve Pockross

08:34>> Yeah. So most of our focus is on driving marketing, brands, driving SEO, and living the content dream of if you build it, people will come to you. Mhmm.

SEO and Content Strategy

Nathan Latka

08:44How are you? Mean, it's interesting to ask content guy how he's thinking about SEO. Are you thinking about SEO from a content perspective or like programmatic SEO where you're sort of auto launching pages, comparison pages, things like that?

Steve Pockross

08:56>> It's interesting. So our next big phase will be productizing content. So moving a lot more into the second part that you said. So, so far, we've really been following what the market demand is, knowing that we had something really valuable, and the next phase is how do we take some of these ideas like SEO refreshes? How do you revamp pages at scale and turn those into products.

09:18>> Yeah. There's a lot of them. Video falls into that bucket too that we still have a lot of work to do to build out our video company that we bought a couple years ago.

Automagical Video Acquisition

Nathan Latka

09:25Mhmm. Tell me about that video company.

Steve Pockross

09:27>> So we bought a company called Automagical, which is very similar to to sorry. Been out of it for a while. So similar to other players in the market that are trying to take existing content and turning them into into videos by using AI. The the twist that we put on it is I think that the the main goal of those of that video technology should be to dramatically reduce the cost of creating the video as opposed

09:54>> to fine tuning the quality. So we then put our writers on. Once the video comes, it has a great draft that the AI created, and I think that's about 50% there, and then we have our writers go in and finish the story to have a much higher level product at a lower cost.

Hired by the Founders

Nathan Latka

10:08Interesting. Very cool. Now talking about capital needs, you have to correct me if I'm wrong here. Were you the founder of the company, or did you come in after founding?

Steve Pockross

10:15>> I was hired by the founders about four and a half years ago.

Nathan Latka

10:18Got it. And are the founders still active in the company, or are they left?

Steve Pockross

10:21>> They are both out of the company, and they're both on the board.

Nathan Latka

10:25So how how do you guys think about you don't need to think about this really because you're not you're not raising capital, but if you were to put a valuation on a company, how would you think about it?

Valuation Thinking

Steve Pockross

10:34>> So it unfortunately, there's not as many comps as I would like in the space. I think marketplace and SaaS has really taken off, and I appreciate your support in fostering the terminology to get there. And so I think, you know, you

10:48>> there's a variety like, you have your marketplace options, like you've got your Upwork's that they have their valuations, you have your SaaS companies, and then you have your services companies that are clearly much more towards the one to one revenue and nowhere near as high as the, you know, five to 10 to 15 of the rest of them. So I think it's still yet to be defined of how much value is here, and I think it's

11:08>> up to the industry to prove out what we can do that's different than anybody else and how it's a more powerful platform before we get there. So right now, it's basically comps and conversations, but I I hope it gets a lot more towards the five plus than it does towards the one.

Nathan Latka

11:23If someone offered you guys a $100,000,000 today about 11 x multiple, do you take it?

Steve Pockross

11:27>> Yeah.

Famous Five

Nathan Latka

11:28Yeah. There you go. Direct answer. We like that on the show. Steve, on that note, let's wrap up with the famous five. Number one, what's your favorite business book?

Steve Pockross

11:37>> It's currently Alchemy, the dark art the dark art and curious science of creating magic in brands, business and life by Rory Sutherland.

11:44>> He was ready for that one.

Nathan Latka

11:45Number two, is there a CEO you're following or studying?

Steve Pockross

11:50>> You know, I love David Cancel. He was just on my podcast, and I find him deeply inspiring in the way he thinks about brand and the things about people and all of the intangibles that build a great business.

Nathan Latka

11:59Well, hey, let's give your podcast some love here. Why as a SaaS plus marketplace brand, why did launch a podcast and what's it called?

Steve Pockross

12:05>> The podcast is called Yes and Marketing based on the improv idea that marketing ideas can come great marketing ideas can come from anywhere, and there are no best practices in marketing. So I talked to inspired leaders and inspired marketers with the idea of we're going to learn from from any of them with the idea of, like, the focus of our company is really a lot more on building new marketing capability than it is on, you know,

12:31>> the the basic idea of delivering a service.

Nathan Latka

12:33And people can find that on iTunes, assume?

Steve Pockross

12:35>> Please, everywhere. Okay. Hope you like it.

Nathan Latka

12:37Say it again, the title.

Steve Pockross

12:39>> Yes and Marketing.

Nathan Latka

12:40Yes and Marketing. Very cool. Number three, what's your favorite online tool for building Verblio?

Steve Pockross

12:45>> You know, I know this is boring, but I'm going say Slack, and Slack because, God, it's so fundamental to how we created a great remote culture during this meantime. Everyone's on all times of day on all sorts of channels just creating water cooler talk in a way that would have never been possible before. So I think I think about it much more from cultural than I do from process driven kind of productivity.

13:08>> Yep.

Nathan Latka

13:09And before, how many hours of sleep are you getting every night?

Steve Pockross

13:10>> Oh, man. Last year, so I I aim for six to eight, but coronavirus has not been very helpful. I have the whole corona insomnia thing that I know many of us are suffering through.

13:21>> Yep.

Nathan Latka

13:22Number four, situation, married single kiddos.

Steve Pockross

13:24>> Married, two kids, 10 13 boys, living in Colorado, gives lots of outdoor time and fun things to do.

Nathan Latka

13:30Boulder, Colorado. How old are you, Steve?

Steve Pockross

13:32>> I am 48.

13:35>> 48.

Nathan Latka

13:36Last question. What's something you wish you knew when you were 20?

Steve Pockross

13:39>> Man, every step along, I was thinking about my career, every step along the way that I did something that I thought would be good for my resume versus what I wanted to do was a mistake. So I worked for large companies, three giant banks, All of them went terribly horribly wrong. It's just not a cultural fit, so I wish I would do what I felt like doing, which I did most of my career and just all

Nathan Latka

14:00>> of my career.

14:00Guys, big moments happening at Verblio. Even during COVID last year, they run a marketplace of writers. Their first writer earned more than $100,000, which is great. Over 3,000 writers on the platform will create about 80,000 pieces of content this year. That's coming from 1,020 businesses paying about $800 per month to use verblio.com. They're breaking they just broke the $750,000 a month threshold, which is called an $8,000,000 to $9,000,000 run rate. That's up about 30% year over year. They

14:27pay over 50% of that 9,000,000 revenue to their writers about 4,500,000, 5,000,000 ish. They're doing this all over a team of thirty three thirty one out there in Boulder, Colorado. Steve, thanks for taking us to the top.

Steve Pockross

14:37>> Nathan, great to see you again.

Nathan Latka

14:40One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday one

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16:12See you.