The Exchanges

Q And then, that's good, right? And then we'll talk a little bit more about the layers, the lawyers, and the process you did on the exit. So all that in the next 14 minutes, but let's talk about the product for a second. This is your homepage. This is what you do.

A Yeah. So Issue is this massive digital publishing platform, primarily catering to marketers to take their marketing content, collateral, sales materials, brochures, um, publications, all the, a whole range of different documents, mostly created in using Figma, Adobe, or Canva, gets uploaded to Issue, Issue hosts it, Um, transforms it into a range of assets. So you create one piece of content and it can get transformed into a video and link enhanced paginated version, an article using AI, social posts, whole range of different assets that can then be shared anywhere, embedded anywhere, and then provide a whole range of data and analytics around that content. We landed on this homepage about two years ago. Um, We had our version of the purple homepage.

AI assessment note: “Issue is this massive digital publishing platform, primarily catering to marketers”

Q So you get this deal done just recently. For those of you that joined late, over a hundred million dollar exit on thirty-two million bucks of revenue, this is a company that is known for doing these kinds of deals. They've bought these other kinds of companies, which Joe mentioned. What should people be prepared for if they're entering an M&A process with a Bending Spoons? Lawyers, banking fees, process?

A Yeah, so, you know, you have, if you typically have a banker, That's a couple million dollars. Um, your lawyer, I think most people think, oh, I'll just get an M&A lawyer at the time I'm doing an M&A. Maybe your law firm does it. The lawyer you use makes a big difference. We worked with Goodwin Proctor, um, Larry Chu. You know, when I talk about folks we work with, I try to be as honest as possible. Like, if they're not good, I'll tell you. If they're great, I'll tell you. Um, Larry Chu is a fantastic lawyer at Goodwin, and he helped make phone calls and talk to people in the midst of this process that enabled us to navigate through both the term sheet and the contract Way more efficiently than otherwise.

AI assessment note: “if you typically have a banker, That's a couple million dollars. Um, your lawyer”

Q Yeah. Okay. Fair. Um, any new product lines coming out we should know about?

A Uh, yeah. So one of the big things that we're focused around is, uh, is integration. So we, we've rolled out, um, early stages of it, but integrations with Hootsuite, MailChimp, um, Dropbox, Google Drive. So we're focusing a lot on providing our customers easy integrations with the other products that they're using in what I like to refer to as the story cloud. So the story cloud are those sets of tools that businesses are using to tell their story, uh, in the, in the digital world. So a huge focus around, um, uh, around those integrations. Um, we just rolled out, uh, early stages again, um, a set of tools around creation. So templates, you can now come to issue if you haven't created somewhere else, you can now come to issue and start creating directly with us. We have templates for, uh, restaurant menus and, and catalogs and, uh, real estate agencies and, uh, a whole range of, Uh, those sorts of capabilities. Um, and that's, uh, we're starting to see some, some really nice traction, uh, on that side of things.

AI assessment note: “we've rolled out, um, early stages of it, but integrations with Hootsuite, MailChimp”

Q Why'd you raise that? That's obviously a big decision.

A Yeah, so, um, we see, we raised it because we see the market, the market is massive, and the opportunity ahead of us is massive. We've seen, um, you know, there are tens and tens and tens of millions of businesses, all of whom are creating marketing collateral brochures, catalogs, need to be able to tell their story, and we're finding, um, you know, we wanted to raise that money to be able to reach them more effectively than we have been. We also raised that money to be able to innovate pretty dramatically, um, Uh, against the product. So we'll be bringing on additional engineers and, um, and developers as well as marketing folks so that there'll be a, you know, whole additional set of tools and services.

AI assessment note: “we raised it because we see the market, the market is massive”

Q No, but what's the go-to-market motion, Joe? I mean, is this a paid advertising, you know, it's freemium, obviously, but.

A Got it, yeah. So it's a, it's a range of things. One is we've been a, we've been an established brand and known as a company that's super valuable in this space for many years. And so there's a lot of word and mouth and organic growth that happens. Uh, we do, we spend a little bit on SEM, um, a few, you know, less than a few 100,000 dollars a month on SEM. Um, we have strong SEO. We have, um, you know, customers, part of our business is that when you leverage us, Often you're making your content public, and so other people in and around your space see that you're getting so much value from issues, so they come to us, right? Increasingly, what we're finding is, you know, we're marketing in particular categories, so, you know, we've seen huge growth in, in restaurants using us, right? All of a sudden now in the last two years, everybody needs to read a restaurant menu online in a digital format. We provide really good tools for that. We're seeing increasingly businesses that used to require In person handing out of pieces of information are now using us for, for digital experiences, conferences, huge growth for us.

AI assessment note: “So it's a range of things. One is... word and mouth and organic growth”

Q And Joe, last question before we kind of wrap up with, with kind of the, the final part of the show. Why, so why are you, what turns you on about this? I mean, you could be doing anything. You have connections to VCs all over. Why go into the publishing industry?

A Oh, because the publishing industry is at a very foundation. It's about, uh, passion and enthusiasm and what moves people, what moves people in their lives. I mean, people are, uh, For, for centuries, uh, you know, they want to be consuming content ideas that, uh, that inspire and, and interest them. And we have more of it than anywhere else. We've got the thirty million publications, um, that cover, uh, topics that inspire and motivate and excite people, uh, every minute of every day. And I can't imagine a better way to spend my time than connecting those people who are passionate Uh, about their content with, um, with human beings who want to read it. You know, uh, I'll just give you a, a great example. It was, um, you know, yesterday was Malala's birthday and, and a lot of folks around the world were celebrating what she's done for human rights and women. And, um, we were able to We created a blog post where we showed a number of really high quality, unique, thoughtful, uh, publications created by women kind of highlighting the impact of the change they want to be having in the world. Um, so the ability to create that connectivity is, is, um, is really exciting and valuable.

AI assessment note: “because the publishing industry is at a very foundation. It's about, uh, passion”

Q Interesting. Is that an important metric for you guys, or is that not, not something you're looking for?

A No, the important metric for us is, there's sort of two key metrics for us, right? Um, one is customer engagement. Are they using our product? Are they getting real value? At the end of the day, the revenue we generate from customers is a proxy for the value we're delivering to them. We want to see those folks building their business. Um, so it's really customer engagement. How are they using us? Are they using the tools we're making available? We, we monitor that carefully. And second, of course, is, um, Is, is paying customers. Absolutely. It's a key metric because it, it's the thing that enables us to understand that we're running a good business. It's also, uh, at the end of the day, the thing that keeps us in business. Um, I'm a huge proponent of what I like to call the pro grow profitable and growing. So, you know, we, we've looked at running issue as a business that's, uh, that's growing nicely. And also, uh, for, for most of our tenure, for most of the last Six years, we've been a profitable business.

AI assessment note: “No, the important metric for us is, there's sort of two key metrics”

Q Okay. This makes total sense. And so what, give me a general sense here. What is the average business sort of paying you to use the issue suite of tools?

A Yeah. So we, we cater primarily to SMBs. Um, in addition, it's, it's groups at large companies. So everybody from folks at shell to Patagonia, um, the Miami dolphins use us, um, in, in all those instances, it's groups within the marketing group or the HR group that's using us. Our largest set of customers. We've got over a million customers. Um, we're a freemium product. Over a million folks are using us. It's everybody from those large companies I mentioned to real estate agents and restaurants and solopreneurs and, um, and, and, and commerce companies that are selling products. Uh, the, the base product that most people are paying us for is, is 500 dollars a year. And with that, they get a whole set of tools and services that enable them to, uh, take the content that they have And turn it into all the right assets they need. The super interesting thing about what we're doing now that's, that's, uh, where we've evolved quite a bit in the business is that the ecosystem has evolved a lot, right? So even five years ago, digital meant you had a piece of content, you put it onto a website, and you got access to the web by buying it through, uh, WordPress or Squarespace or GoDaddy or one of those. Now the web is just one of dozens of channels where you, as a marketer, as a business, need to make your content available. And the bulk of those channels, Pinterest, Instagram, LinkedIn, …

AI assessment note: “the base product that most people are paying us for is, is 500 dollars a year”

Q Yeah, but what's, I know, I know, but what's, based off what you know, like, what, what would you, for a range would you put on it?

A I don't know. You know, we're certainly in the high hundreds of millions of dollars, probably more, depending on, um, on, on, on who's doing the valuation and where things are going. I, I don't focus that much on valuation. I think valuation is a, um, is sort of a red herring in a lot of cases because, because valuation is simply Whoever is doing the valuation has their own context for doing it. Um, what I'm focused on is again, are, are we in a, are we in a massive market? Is there huge scale? Can we deliver great value to these customers? And if we're able to do those three things, we are, we have a choice ahead of us. We can go build and grow this business. We can go acquire companies. You know, we can, uh, we could be acquired, but our focus isn't on any of those things right now that we are looking at potentially acquiring companies. Uh, our focus is, Uh, is real growth and, and, um, and building out the market and the opportunity ahead of us.

AI assessment note: “we're certainly in the high hundreds of millions of dollars, probably more”