The Exchanges

Q Why, um, why did you need to raise capital for this? Obviously capital comes with dilution. Why couldn't you kind of get creative and bootstrap it?

A I've done that three other companies and sold them. It's definitely a way to go. It, uh, you retain most of the ownership and you get to, uh, get the upside. But I think on this one, being that we have, uh, hired about 15 engineers, I, I didn't know how to, I didn't know how to pay for those 15 engineers without raising some money first. So it's, uh, SAS is unique. I think, uh, it takes, it takes hyper growth and it's kind of, it's, I don't know many SAS that don't go for venture just because of the speed that you need to grow at and, uh, And kind of the delayed, uh, income and, you know, recurring revenues. And so when we did agency work with Disney, that, that company was all bootstrapped and, uh, you know, our, our customers were essentially our seed fund. We'd sell ourselves into profitability. Uh, this one, I, I didn't have the luxury. I wish I could. It's the best way to do it.

AI assessment note: “I didn't know how to pay for those 15 engineers without raising some money”

Q Okay. And so I guess walk me through that model. So maybe let's use, let's stick to skull candy or purple mattress since I'm familiar with both. So skull candy a year from now, um, what's the transaction model look like for a company like them? And let's say I'm an influencer.

A Let's say you're not an influencer. Let's, that's what we're going after. Let's say you're everybody, everybody else in the world. And, uh, and you, you are at a family reunion or drinks with your friends. You're going to recommend products and you love your new Skullcandy wireless headphones. Uh, you believe that people to track that, that transaction that, that Skullcandy shouldn't be paying, you know, Amazon and Google and retargeting on Facebook for customer acquisition that lets your customer actually, uh, be able to kind of be the point of sell and the sales rep in the field or purple. Every customer of Purple should be, the showroom should be the customer, and so that customer will be able to buy, if you recommend to your friend or family Purple Mattress, they will be able to buy from you cheaper than they can get it on Amazon or Purple.com because a brand wants to, they want that taxonomy of like, where is, they want to see where the word of mouth marketing is happening. Tesla did this perfectly with their app. They had the best referral program ever where you wouldn't go buy a Tesla without Uh, using a recommendation, a referral code, because it would give you free supercharging for life. And, uh, they did actually expand that a little while ago. I think it was too good of a plan, but that's, that's what we're doing is we're actually laying like the digital rails acros…

AI assessment note: “they will be able to buy from you cheaper than they can get it”

Q But what do you think it'll be like? You think it'll be like 10% of the 80 dollar sale will go to you as the facilitator?

A I think, I think potentially five to 10%, um, maybe three at the worst case scenario. And some products won't have anything. We won't be integrated with them. But we have a reason that you will actually have the app on your phone Um, and there's other benefits that I'm not going to disclose here that, I mean, this is our secret sauce, so there's a lot of things that would keep you, want you to have this wooly wallet, this phone app on your, on your, there's a lot of reasons you have it for how you communicate with the brand, a lot of things that you're going to, that's kind of our, We needed our, our IP for the next year that we're not going to share everything, but, uh, yeah, it's not gonna be perfect. I mean, it's a two-sided marketplace. Nothing's gonna, the chances of success are 10%. I've done this long, long, long enough to know, but if we hit 10%.

AI assessment note: “I think potentially five to 10%, um, maybe three at the worst case scenario.”

Q Okay. And now, how do you measure, obviously, you're, you're changing the business model, especially over the next 12 months, but when you look at churn, right, revenue churn in your base, how do you measure that, and what was it over the past 12 months?

A Luckily, we've only had one, uh, customer churn, uh, that was a, you know, I would say a significant customer, and they just, it was sold incorrectly, and it was, uh, not a fit for, they were wanting this performance marketing, and it just wasn't working, um, so we're, we're, we're not really Worried about churn as much right now because we're having so much new product come out that we're able to expand most of our contracts and then, uh, And once, once someone gets into our CRM, it's pretty sticky. It's hard to, it's hard to delete a CRM. It's what we are at the, at the, at the base of it. We have a social CRM. You don't really want to go delete all these contacts and these people that you've been communicating with, um, who are your ambassador and best customers, and then go back to spreadsheets. So we don't see a lot of churn, but we do see a Yes. What they're going to try to sell them maybe more, more effective campaign products or something like that. So, uh, we're, we're luckily we don't have real turn, but we do have, uh, we have more issue on new customer acquisition at this moment than we do turn just finding the right customers.

AI assessment note: “Luckily, we've only had one, uh, customer churn”