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Jun 20, 2019 · 17m · top-founders

1426 Adtech DSP Passes $30m in Revenue With Addition of New Data Product

Michael Beebe · 8m spoken Nathan Latka · 6m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top Entrepreneurs, Nathan Latka interviews Dstillery CEO Michael Beebe to discuss how the ad tech firm scaled past $30 million in net revenue by unbundling its behavioral audience data and transitioning toward high-margin data products and SaaS solutions.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 43.5% of the talking time here. How this is scored →

Nathan as informed peer 4.4 Guest teaching 2.0 Guest disagreement 1.4 Nathan pushing back 2.4
05100:0010:000:01–2:34 · Nathan as informed peer 0/10 Nathan Latka Promotes New Bestselling Book Solo host intro and book promotion with standard podcast housekeeping. There is no guest interaction during this monologue.2:35–7:00 · Nathan as informed peer 5/10 Michael Beebe and Dstillery Core Business Model Nathan references industry context from previous guests regarding ad tech companies pivoting to data. Michael explains Dstillery's applied data science methodology and behavioral audience modeling.7:00–11:06 · Nathan as informed peer 6/10 Decoupled Data Pricing and 20% Take Rate Debate Nathan repeatedly challenges Dstillery's 20% take rate on third-party DSPs as an expensive middleman tax. Michael pushes back, asserting that 20% is standard and justified by superior audience performance.11:06–13:52 · Nathan as informed peer 6/10 Dstillery Funding History and Debt Strategy Nathan demonstrates familiarity with non-dilutive and venture debt financing sources like SVB, Hercules, and TIMIA. Michael outlines their capital strategy and the roadmap from consulting to a pure SaaS insights product.13:53–16:42 · Nathan as informed peer 5/10 Organizational Headcount and Core DSP Revenue Scale Nathan quickly computes gross platform spend from net revenue figures and conducts the standard Famous Five interview segment collaboratively.0:01–2:34 · Guest teaching 0/10 Nathan Latka Promotes New Bestselling Book Solo host intro and book promotion with standard podcast housekeeping. There is no guest interaction during this monologue.2:35–7:00 · Guest teaching 3/10 Michael Beebe and Dstillery Core Business Model Nathan references industry context from previous guests regarding ad tech companies pivoting to data. Michael explains Dstillery's applied data science methodology and behavioral audience modeling.7:00–11:06 · Guest teaching 4/10 Decoupled Data Pricing and 20% Take Rate Debate Nathan repeatedly challenges Dstillery's 20% take rate on third-party DSPs as an expensive middleman tax. Michael pushes back, asserting that 20% is standard and justified by superior audience performance.11:06–13:52 · Guest teaching 2/10 Dstillery Funding History and Debt Strategy Nathan demonstrates familiarity with non-dilutive and venture debt financing sources like SVB, Hercules, and TIMIA. Michael outlines their capital strategy and the roadmap from consulting to a pure SaaS insights product.13:53–16:42 · Guest teaching 1/10 Organizational Headcount and Core DSP Revenue Scale Nathan quickly computes gross platform spend from net revenue figures and conducts the standard Famous Five interview segment collaboratively.0:01–2:34 · Guest disagreement 0/10 Nathan Latka Promotes New Bestselling Book Solo host intro and book promotion with standard podcast housekeeping. There is no guest interaction during this monologue.2:35–7:00 · Guest disagreement 1/10 Michael Beebe and Dstillery Core Business Model Nathan references industry context from previous guests regarding ad tech companies pivoting to data. Michael explains Dstillery's applied data science methodology and behavioral audience modeling.7:00–11:06 · Guest disagreement 4/10 Decoupled Data Pricing and 20% Take Rate Debate Nathan repeatedly challenges Dstillery's 20% take rate on third-party DSPs as an expensive middleman tax. Michael pushes back, asserting that 20% is standard and justified by superior audience performance.11:06–13:52 · Guest disagreement 1/10 Dstillery Funding History and Debt Strategy Nathan demonstrates familiarity with non-dilutive and venture debt financing sources like SVB, Hercules, and TIMIA. Michael outlines their capital strategy and the roadmap from consulting to a pure SaaS insights product.13:53–16:42 · Guest disagreement 1/10 Organizational Headcount and Core DSP Revenue Scale Nathan quickly computes gross platform spend from net revenue figures and conducts the standard Famous Five interview segment collaboratively.0:01–2:34 · Nathan pushing back 0/10 Nathan Latka Promotes New Bestselling Book Solo host intro and book promotion with standard podcast housekeeping. There is no guest interaction during this monologue.2:35–7:00 · Nathan pushing back 2/10 Michael Beebe and Dstillery Core Business Model Nathan references industry context from previous guests regarding ad tech companies pivoting to data. Michael explains Dstillery's applied data science methodology and behavioral audience modeling.7:00–11:06 · Nathan pushing back 7/10 Decoupled Data Pricing and 20% Take Rate Debate Nathan repeatedly challenges Dstillery's 20% take rate on third-party DSPs as an expensive middleman tax. Michael pushes back, asserting that 20% is standard and justified by superior audience performance.11:06–13:52 · Nathan pushing back 2/10 Dstillery Funding History and Debt Strategy Nathan demonstrates familiarity with non-dilutive and venture debt financing sources like SVB, Hercules, and TIMIA. Michael outlines their capital strategy and the roadmap from consulting to a pure SaaS insights product.13:53–16:42 · Nathan pushing back 1/10 Organizational Headcount and Core DSP Revenue Scale Nathan quickly computes gross platform spend from net revenue figures and conducts the standard Famous Five interview segment collaboratively.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 90.8% · guest 9.2%0:00 · Nathan 90.8% · guest 9.2%3:00 · Nathan 16.2% · guest 83.8%3:00 · Nathan 16.2% · guest 83.8%6:00 · Nathan 25% · guest 75%6:00 · Nathan 25% · guest 75%9:00 · Nathan 38.1% · guest 61.9%9:00 · Nathan 38.1% · guest 61.9%12:00 · Nathan 39.6% · guest 60.4%12:00 · Nathan 39.6% · guest 60.4%15:00 · Nathan 53.5% · guest 46.5%15:00 · Nathan 53.5% · guest 46.5%
Sharpest disagreement ▶ 8:26 Michael rejects host's framing of high pricing

Michael firmly dismisses Nathan's assertion that 20% is expensive as hell, countering that their data performs and the rate is completely standard.

 Hardest push from Nathan ▶ 9:29 Nathan challenges the 20% take rate middleman tax

Nathan presses Michael on how Dstillery survives competitors trying to cut out expensive intermediary take rates from media spend.

 Biggest teaching moment ▶ 7:08 Michael clarifies decoupled data product vs SaaS

Michael corrects Nathan's assumption that Dstillery launched a standard subscription SaaS product, explaining their decoupled CPM/rev-share data model.

 Nathan holds their own ▶ 10:15 Nathan calculates gross throughput from data revenue

Nathan immediately works backward from the 20% take rate on $5M revenue to calculate $25M in total media spend processed against their dataset.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Nathan Latka Promotes New Bestselling Book 0000 Solo host intro and book promotion with standard podcast housekeeping. There is no guest interaction during this monologue.
Michael Beebe and Dstillery Core Business Model 5312 Nathan references industry context from previous guests regarding ad tech companies pivoting to data. Michael explains Dstillery's applied data science methodology and behavioral audience modeling.
Decoupled Data Pricing and 20% Take Rate Debate 6447 Nathan repeatedly challenges Dstillery's 20% take rate on third-party DSPs as an expensive middleman tax. Michael pushes back, asserting that 20% is standard and justified by superior audience performance.
Dstillery Funding History and Debt Strategy 6212 Nathan demonstrates familiarity with non-dilutive and venture debt financing sources like SVB, Hercules, and TIMIA. Michael outlines their capital strategy and the roadmap from consulting to a pure SaaS insights product.
Organizational Headcount and Core DSP Revenue Scale 5111 Nathan quickly computes gross platform spend from net revenue figures and conducts the standard Famous Five interview segment collaboratively.

Statements from this episode (7)

Disclosure
Dstillery builds profiles from ad-supported, behavioral, and location data
“We ingest not only the bid stream, which is ad-supported behavioral data, but non-ad-supported behavioral data, which we trade or purchase for so we can see what people are doing outside of the ad-supported internet. And we also incorporate mobile data, locati…”
Michael Beebe Jun 20, 2019 ▶ 6:13
Disclosure
Dstillery takes a 20% revenue share on third-party DSP media spend
“So the way that we price, for instance selling on, on the trade desk is we price off a CPM so, or a revenue share. So we did, we take 20% of the media dollar spent against our audiences is a, is an example of one way that we would price our data.”
Michael Beebe Jun 20, 2019 ▶ 7:52
Assertion Supported
A 20% cut of media spend is standard for third-party data
“And that's a pretty standard rate for third-party data providers across, you know, across different activation platforms.”
Michael Beebe Jun 20, 2019 ▶ 9:23
Assertion Not checkable as stated
Dstillery's standalone data product hit $5M in revenue by mid-2019
“In terms of data revenue, so the 20% that we take it's been approximately five million dollars.”
Michael Beebe Jun 20, 2019 ▶ 10:16
Disclosure
Dstillery has raised $60M in venture capital
“Sixty million dollars.”
Michael Beebe Jun 20, 2019 ▶ 11:23
Assertion Not checkable as stated
Dstillery operates at an approximate 50% net revenue margin
“Our net margin, including our audiences, so our net revenue margin is approximately 50%.”
Michael Beebe Jun 20, 2019 ▶ 14:23
Assertion Not checkable as stated
Dstillery's core DSP product generated $27M in net revenue
“On the core DSP product. On a net revenue basis, it's approximately twenty seven million dollars.”
Michael Beebe Jun 20, 2019 ▶ 15:02
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