The Exchanges

Q now they all have SaaS platforms that are scaling much, much more rapidly because brands are moving those transaction volume thing in-house, right? So that revenue stream is declining. Bill Weiss from MediaOcean was the last CEO that told me the exact same thing. Is this a trend that you think is going to change or you think every kind of CEO in your shoes is doing the same thing?

A So I think, first of all, I totally agree with you. Everyone I talked to was, oh, now we're a subscription company. Everyone's moving to SAS. There is a really good reason for specifically marketing companies to move into SAS, because once everything is based on consumption, you have a lot of variance between the quarters and every month. And as a CEO, the bigger companies, it's kind of unnerving. You can't forecast. You don't know how Q four will end like, you don't know how Q one will look like. You don't have, you can't look into the future. Now, as you want to grow and have a bigger company and you want to go public, The one thing that public companies need to do is to be able to forecast the revenues. And if you can't do that, you can never go public. That's why investors don't love marketing technologies. And that's why investors love specifically subscription services. So I think as this became an obvious for people who operate companies, then, um, what most people did, we made the model of subscription much smarter and better to use and efficient for the customer. So it's cheaper for them to subscribe to this data. Versus just buying a consumption basis, so it's a win-win situation. I prefer to make less money, but have forecastability than making more money and variability.

AI assessment note: “I totally agree with you. Everyone I talked to was, oh, now we're a subscription company.”

Q exact same revenue was predictable and you have a fast growing SAS company growing a hundred percent year over year with sub two percent monthly churn, right? And healthy economics payback period. Those companies are valued sometimes at five, six, seven X ARR. So even if you give a discount on folks moving to a SAS model, that ATM is still a better ATM for you to pump money through.

A So I can tell you a story about Stakey from about three years ago. We were operating until then as a media company. So we weren't even selling our data. We were just basically selling media and we would buy the media on the client's behalf and basically take a margin off, uh, whatever, like using our data, we bought the media for Cheap and sell it for higher than that and send it to an arbitrage business. Um, and when you do that, you can make a ton of money. There's a lot of very successful large companies making a ton of money, but then your multiple is two X on the company because they're selling media. Then you drop the media portion, just sell people the data. Let's say you even, if you stay the same size, the company is all of a sudden worth five times more than it was worth before, which is the world of startups. That's how things work. And it's fair. It's fair because I can see why a data company is easier to scale in the media company. I can see why a SaaS business where you have subscriptions is a better public company than a, than a non-recurring business. So, so there is a reason for all these things to happen.

AI assessment note: “I can see why a SaaS business where you have subscriptions is a better public company”

Q So, take us forward now to Teiki. You're sitting in a very Non war zone area now in the States here up in New York. What is take he doing? What's the model? How do you make money?

A Uh, great. So what do we do at Takee? We basically crowdsource the entire internet. We look at social media, articles, comments, videos, everything we can to basically figure out what content is right now hot for any audience. What do moms talk about? What do millennials talk about? What do eighteen-year-olds from Minnesota like sports talk about? And we're able to basically take all this content and understand what's going on to provide our customers of an understanding of their audience. So imagine, uh, your Coca-Cola. Or Pepsi, or Unilever, or Paramount Studios, you want to be able to understand who your audience are, what they care for, so you can build better marketing plans and design better products. You can always have a better movie if the actors will be someone that the audience would love. And that's what we do.

AI assessment note: “provide our customers of an understanding of their audience”

Q What's your best guess on what that new model might be at 12 months from now?

A To be fair, I think what we're seeing all the time is there's, we keep going back to history. So it's kind of a loop. You know, ad tech right now is not hot and not trending. Five years ago, it was the hottest thing ever. Even three years from now, it could be huge again. I think what people will start saying that, ah, they don't want to commit to things, they prefer to pay a bit more, but have the flexibility to switch between services, and we'll see a lot of consolidation. You see it specifically in marketing, where the bigger companies become even bigger, because again, ah, a client doesn't want to work with, like, 300 different vendors. It's, it becomes a pain to do that.

AI assessment note: “they prefer to pay a bit more, but have the flexibility to switch”

Q 32, so, Was there a, was there, how active were the investors in recommending a shift in business model strategy for the purpose of a healthier valuation for future rounds?

A I would say that I don't know how it, because I can only say what's happening in my company. Our investors are amazing, and they're thinking about the health of the company. And when, when the first thing they recommend is if you do any shift, you need to do it slowly to make sure you're not hurting the people who work at the company and your potential to grow. The health of the business is the number one thing. Now, I don't know, our, our investors told us a lot that we should try to figure out what's the best model to go with. But it's, it was obvious. If you look at the industry, everyone's talking about subscriptions and everyone's doing that. By the way, I think in a year we'll have a problem. Everyone will try to sell subscriptions. And then when a client goes in and said, okay, now I need to buy a 150 different subscriptions to things. It's also kind of crazy. So we'll have a different problem going in and then people would have a new model where it's, um, I don't know what it would be, but there's going to be a new model.

AI assessment note: “our investors told us a lot that we should try to figure out”

Q It works, listen, it works. Um, okay, talk to me some, some more about, kind of, economics here. So, as you try, and you have a limited cohort to work with here, because you only have 20 or 40 people on the new kind of SaaS platform, but do you have any insight yet into what churn's gonna be, or what churn is?

A Ah, too early. That's interesting. So, for us, like, as I think of the company, I want to think about, like, um, the focus for us for this year wasn't necessarily increasing, well, you always want to increase revenue and grow, and luckily we're happy to do that, but, um, but the focus this year was trying to convert as many people as we can to the new model and understand, so we'll have enough data points, so we can go and understand how the business looks like, because if you want to scale the SaaS business, the more data you have, that's where the future comes in. And I think when you think of a startup, you shouldn't think of the short term. Here's where the next 10 bucks come from. I want to understand how they take those 10 bucks and make them into 20 or 30 or 40. And that's why the focus this year for us, although growth was great, the focus was how do we convert clients to new models to do that. To do so, by the way, we launched a whole new product to come along with the subscription. Uh, we call it the intelligence product. So it's an insights product. Think of, um, think of, uh, any client can go in and say, Okay. We want to see what are the hottest actors for this? Who are the biggest musician for that? And you could do everything, um, on our website to try it out. It's like a web-based product that we, anyone can sign up for that. You should sign up now, which is tak…

AI assessment note: “Ah, too early.”