Jul 10, 2018 · 24m · top-founders
1081 With $2m in ARR and $16m Valuation for 7+ Years, Do You Feel Stuck?
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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 Podcast, host Nathan Latka interviews Eric Frankel, founder and CEO of AdGreetz, examining the company's data-driven video personalization platform, its $2 million revenue run rate, and the lessons learned transitioning from media executive to tech founder.
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 32.9% of the talking time here. How this is scored →
Nathan as informed peer 5.6 Guest teaching 3.9 Guest disagreement 3.4 Nathan pushing back 5.4
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 16:25 Eric rejects the treadmill framing and compares himself to Johnny Appleseed
Eric firmly rejects Nathan's critique that the company is stuck on an agency hamster wheel, countering with the Johnny Appleseed metaphor to defend his missionary market-building approach.
Hardest push from Nathan ▶ 14:13 Nathan calls out AdGreetz as an agency rather than a SaaS businessNathan bluntly refuses Eric's SaaS positioning after learning they only have 10 active clients out of 80 total, challenging him directly on agency-level customer retention.
Biggest teaching moment ▶ 15:20 Eric cites his 28 years at Warner Brothers and VOD historyEric schools Nathan on enterprise sales cycles by pointing to his multi-decade track record inventing video on demand and explaining how radical tech adoption always lags early expectations.
Nathan holds their own ▶ 19:07 Nathan breaks down investor math and the 8x ARR multiple neededNathan uses exact financial logic to show that AdGreetz needs an extraordinary 8x ARR multiple just to return investor capital on a 16M valuation given its historical churn rate.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Introducing Eric Frankel and AdGreetz Video Personalization | 5 | 4 | 2 | 4 | Nathan presses on the exact technical mechanics of video personalization, asking how dynamic lipsyncing or variable video generation works. Eric clarifies that AdGreetz compiles multi-variable creatives and data rather than deepfake talking heads. | |
| AdGreetz Revenue Growth and Customer Expansion | 6 | 3 | 3 | 6 | Nathan calculates revenue run rate based on customer count and ARPU, quickly discovering inconsistencies and forcing Eric to give precise historical figures. He then drills into cap table dilution and valuation math from their funding round. | |
| Combating Churn and Proving Year-Round Value for Brands | 6 | 4 | 4 | 6 | Nathan challenges the stickiness of the model, arguing that infrequent purchasing cycles like car buying inevitably lead to churn. Eric defends the concept by highlighting multi-stage lifecycle marketing and higher click-through conversion rates. | |
| Mid-Roll Sponsor Segment: Casper Mattresses | 5 | 3 | 2 | 5 | Following the mid-roll ad read, Nathan investigates AdGreetz's customer acquisition strategy and pivot history, challenging Eric when discovering the 80 historical customers only translates to roughly 10 active accounts today. | |
| The Debate Between Agency Model and SaaS Enterprise Adoption | 7 | 5 | 6 | 8 | Nathan directly challenges Eric by asserting that AdGreetz operates like an agency on a treadmill rather than a recurring SaaS business. Eric pushes back vigorously, drawing on his decades of experience pioneering video on demand to argue that market education simply takes time. | |
| Analyzing Valuation Multiples and Enterprise Inbound Velocity | 7 | 4 | 5 | 7 | Nathan confronts Eric with the reality of an eight-year-old company requiring a high ARR multiple to clear its prior liquidation preferences and valuation. Eric rejects the idea that he is stuck, citing massive inbound lead growth. | |
| The Famous Five Rapid-Fire Questions | 4 | 3 | 3 | 4 | During the rapid-fire round, Eric balks slightly at the business book question before sharing personal habits, fitness routines, and executive leadership reflections. | |
| Reflecting on Steve Jobs, Pixar Opportunities, and Career Wisdom | 5 | 5 | 2 | 3 | Nathan digs into Eric's relationship with Steve Jobs, and Eric explains why he turned down an opportunity to run distribution for Pixar, correcting common narratives around Jobs' management style. |
Statements from this episode (14)
Brands pay AdGreetz low tens of thousands monthly for personalized video
“Brands pay us tens of thousands of dollars a month in the low tens of thousands of dollars a month to take their advertising from what we call one size fits all that doesn't really fit anyone to hundreds of thousands or millions of unique versions”
AdGreetz built a campaign for Nissan with six billion possible versions
“We just did one last week for Nissan. They have a mailing list of hundreds of thousands of customers, which of the 13 model Nissan's over which of the 10 years they own. So we're talking to you about your 2013 Rogue or Altima. We know you're in Toronto. We kno…”
AdGreetz has served approximately 80 Fortune 500 brands
“We've done this for about 80, you know, fortune 500 brands all around the world, all different languages.”
AdGreetz generated $2M in 2017 revenue, doubling annually since 2015
“No, we're talking about literally a couple, two, two million in 2017, half of that in 2016, half of that in 2015”
Eric Frankel personally invested $2M and raised $8M for AdGreetz
“So, you know, I put in about two million bucks and we raised another eight million from some terrific, smart well-known executives from around the US.”
AdGreetz raised $10M pre-revenue at a $16M valuation in 2012
“Well, that was pre-revenue, and off the top of my head, because it's already about six years ago, we raised ten million at, I don't know, sixteen million dollar valuation.”
Eric Frankel retains slightly less than a 33% stake in AdGreetz
“We sold, yes, I own about, I own a little less than a third of the company.”
AdGreetz downsized its team from 38 to 17 employees
“So the team size today is about 17 people.
We started with 38”
AdGreetz serves roughly 10 active customers monthly, including six annual contracts
“So we do about 10 in any month and about six full-time you know year-long contracts with more coming on regularly.”
Frankel: Personalized video ads will mirror video-on-demand adoption curve
“Nathan, I helped invent video on demand, and I spent 10 years knocking on the doors of all of the cable and satellite executives, and for nine years, they would say, what are you talking about? Nathan's happy to watch NCIS tonight at nine o'clock, and we said,…”
Frankel: New products evolve much slower than entrepreneurs expect
“I have a history of seeing how new products evolve, and the answer is they evolve a lot less quickly than the entrepreneur behind them Would like in most cases.”
Frankel turned down Steve Jobs's Pixar job offer over limited scope
“Well, I was under contract at Warner Brothers at the time, and I said, I can't have this conversation with you, or if they found out, they could let me go, and I'd be out of a job, but it was actually going to work at Pixar, and at Warner Brothers, I had 7000 …”