The Exchanges

Q Now people that use this cause you have such a huge free user base. They might be going, wait, I don't know. I didn't know they make money. I thought they were just a free tool. How do you guys make money?

A So we make money through a bunch of different ways. And, um, we stumbled across, uh, across probably every different way that a product like discuss can make money. So we learned a ton. Um, we make money primarily through, um, advertising. Because what we do is a publisher network. Um, it makes it such that we have all of this, uh, all these page views and exposure to users, and Disgust inherently is free to use. Our free version is ad supported, and we'll run advertising against that. For the other folks who don't want the advertising, um, they can choose to pay for a, um, uh, premium version. Starts at 10 dollars per month, so pretty affordable. And, uh, so the rest of our business is all around, um, um, just, uh, building out, uh, better features that people can pay for.

AI assessment note: “we make money primarily through, um, advertising”

Q We work with a number of these, um, either SSPs or DMPs where they are looking to, can you, can you spell out those acronyms just for my audience?

A SSP, um, supply, supply side platform, DMPs, data management platforms. Um, these are companies who are trying to help other brands, um, have alternatives outside of Facebook. And there's a duopoly in this world. It's either Facebook or Google who has, uh, Ownership and access to data and really has a big, uh, big dominance over how media works online. So these companies crop up to essentially give these marketers different options and, and allows them to get more bang for their buck. And, you know, companies like discuss, um, you know, we, we end up aggregating a lot of, uh, user, um, attention or publishers as a whole. And we work with these platforms, um, to extend their advertising reach or to extend their audience reach. Right.

AI assessment note: “SSP, um, supply, supply side platform, DMPs, data management platforms.”

Q And how did you know you kind of had lightning in a bottle? What were you looking at metrics wise where you said, okay, we're going to go all in on this one.

A You know, in retrospect, uh, we didn't have any really good metrics besides how we felt about it day to day. And, um, after the first few days, it felt like, Hey, we're every single day, a few more people saying, You know, I love this, or they're saying, I hate this, but can you do this a little bit differently? But ultimately we were making some sort of difference to one person, um, every few hours and the feedback kept rolling in and it just felt good. And, um, after a certain point we started to measure a little bit and it turns out that, uh, a lot of people were using it. Um, that gave us enough, um, confidence to actually start thinking about it as a, uh, you know, product, not just a toy and not just a product, but then a business.

AI assessment note: “we didn't have any really good metrics besides how we felt about it”

Q people on who I use. I'm a big fan of the product already. So I've, and it was funny. We were talking before, right before the show about the name. So it's, it's, it's discussed, not discus for whatever reason. That's what I thought it was, but we see it all the time at the bottom of blogs. How'd you come up with the idea and what year was it?

A This was, God, this is 10 years ago. Um, 10 years ago, the original idea sort of came to, uh, me and my co-founder when we were working on, um, a bunch of different ideas. Um, the idea to do a startup came before anything else. Uh, we knew that, uh, we wanted to build software on the internet. We knew that, um, it was sort of a special time where getting that was going, um, easier and easier every day. And, uh, we started playing around. First to friends and then to other people and seeing, uh, how they reacted to that. And, um, the product for discuss was maybe one of the first five things that we did. Um, initially the idea was around building online communities, um, sort of online forum style. And we realized that, uh, a lot of the communities were coming out of blogs, uh, websites that were very narrowly defined and, um, very much focused on someone's passionate interests, like Cars and horses. And, um, you know, we built a product to embed right into the website and it extensively sort of looked like comments. So that's where we started.

AI assessment note: “This was, God, this is 10 years ago. Um, 10 years ago, the original idea”

Q That's awesome. Now, did they build other things in the deal? Like, like earn out to retain top talent or like, how do you make sure the team stays together?

A Yeah, I think the number one way is to really look at the structure of the deal, and for us, number one was, is it still discussed, right? Are we still responsible for run revenue, operating expenses, um, hiring, all those aspects that an independent company has control and visibility over, and that's been the way with, um, Zeta. They don't run, um, they haven't run this type of business before, but they do things that have Very tight overlap into what we do. So we work with brands, and they work with data partners, um, and discuss feeds into that vision, but ultimately, our world of publishers and commenters and readers, that's not really their forte. So we're, we're very much In full operations of that, and that means that we control the outcome.

AI assessment note: “the number one way is to really look at the structure of the deal”

Q Fair enough. And to the extent you're comfortable doing this, but it's still pretty fresh, Daniel. There's obviously rational regions for an acquisition, you know, a multiple and strategy and is it a good home and all that, but there's always an emotional, there has to be an emotional angle to the art side of the deal for you. What was the emotional aspect? Why decide to sell the company?

A Yeah, I think the biggest thing for us is that we knew that Disgust is a, um, ten-year-old business, and we have hit profitability, um, uh, over the last year, and we've hit cash flow positive, um, Um, over the last, um, year as well. So over the last couple of years, we've kind of been on this mode of really getting to a, um, operationally efficient business, but given the age of the company and given where we are in the market, we knew that for us to kind of make a huge step, we'd either need to raise a ton more capital or figure out, do we work with a partner to accelerate? So, over the last few months, we've explored this, um, pretty actively. We had a bunch of folks who were interested in working with us on that level, either as a full buyout or a strategic investment, and for a long time over the last, I would say, three years now, you know, we've listened to those options, and Consider it, but it was not always the first thing that we wanted to go do. We liked the idea of being a hundred percent independent, but, um, uh, more and more it became clear to me that it would be the way to go if we really were to ramp up our vision and get to where we wanted to be. Um, So it became a real thing, um, in the last six months. And recently we did this deal and that's exactly what, um, that has become, which is, uh, stay independent as an operational business, but really taking the…

AI assessment note: “We liked the idea of being a hundred percent independent, but”