The Exchanges

Q Okay. Very good. Okay. So you founded it, you said in 2014, two years ago, what prompted you to found the company? Did you, Leave corporate or something or what?

A Nope. I've always been an entrepreneur since I was 15 actually, and really fast forward to 2012. Um, you know, my background has always been performance marketing and the digital side. Uh, we saw this opportunity with the social ecosystem really being a challenge for brands, agencies, and marketers to, to be able to deliver profitable campaigns, um, for their own initiatives. So, uh, companies that may have been really successful advertising on paid search or Other channels just weren't able to crack the code with Facebook and with other channels to really be able to hit their cost per acquisition goals. So we saw the opportunity, we saw the shift to mobile, um, and we saw Facebook really investing in, um, driving that innovation forward to help advertisers find and secure success from the platform.

AI assessment note: “we saw this opportunity with the social ecosystem really being a challenge”

Q Okay. And I ask on average, cause I'm sure kind of clients vary. When will you take less than that? And when do you take more than that?

A So it's really based on volume, right? Um, when we'll take more than that is when we're, when we're actually arbitraging a campaign. So in certain instances, you know, advertisers actually don't believe that, for example, social can work for their customer acquisition goals and their management team says, there's no way we're investing in this channel. We think it's only for branding. So we've actually taken some intelligent risks where we understand the metrics, we understand the campaign, Uh, we'll actually take a, uh, we'll actually run that campaign on an arbitrage basis. It's very, very few, far and few in between when we'll do that. But when we do that, we have an opportunity to leverage our insights, our technology, uh, and drive a higher margin than that. And when that 20% would actually go down is if, if someone's spending a considerable amount of dollars, uh, monthly with us, that will start to tear down based on volume.

AI assessment note: “when we'll take more than that is when we're, when we're actually arbitraging”

Q Okay, and what is the, so it looks like a growth year over year. Uh, in terms of revenue is obviously impressive. What is it in terms of like, or actually what do you guys measure? What's important to you guys when you're sitting out with your strategic team planning growth year over year? What do you look at?

A I mean, we, we, we look at a couple of things, right? How many new opportunities are we securing and how, and how closely do those opportunities fit our ideal customer profile? Obviously our growth in both top line and net revenue, as well as managing churn and attrition. That's a really big component of being in the services based businesses. If you're not, if you're not carefully monitoring how, how much business you're churning, um, you're just You know, what you're doing, even if, even if you're wonderful at sales or getting new opportunities, you're just filling, you know, a leaky bucket with more water. So, um, that's something that we fixate on a lot. And really, um, there's two things that you can control in, in our type of business. You know, one is flawless execution. And the second is fanatical customer service. Um, there might be outliers where, you know, customers just don't have the right product, right? They're trying to sell something that's just not a good fit for social, uh, or whatever, whatever service it is that you're offering. But if you control those two things and you obsess about those two things, You're gonna, you're just going to organically do a much better job of managing churn.

AI assessment note: “growth in both top line and net revenue, as well as managing churn and attrition.”

Q of these agency models that, you know, I haven't met many agencies that are doing call it 3040, fifty million per year in revenue. They seem to top out unless you really get to into the top tier. Once you guys hit call it 25 or thirty million bucks in revenue, how do you go after additional revenue? Do you launch kind of SaaS businesses or what do you do?

A So we have a slightly different approach because, um, I think the pivot to SaaS in our space is actually really, really hard. It's RGS, RGUS, it's expensive to do, and there's some big key players. Our long-term aspirations are actually to, um, develop and incubate consumer products because Social is, is, is the frontier for demand gen. And when you think about companies like Dollar Shave Club or Honest Company or Harry's Razors, I'm using kind of, you know, companies purposely in the same sector. A lot of these businesses have exploded off of, um, the prevalence of social and, and, and just having a team that from day one really understood that mousetrap. And so what we're thinking about long-term is, um, if we can, if we can think of other verticals that are right for disruption, That are really a good fit for the virality and the reach of what social creates from a demand gen perspective. Um, we would like to be, um, you know, moving sort of more in that direction. Uh, it's our longterm aspirations are not to be like, we don't want to be a services based company for 20 years. And when we think about SAS again, you know, we, we think about the opportunity is not, we, we know SAS multiples and everyone knows SAS multiples are really attractive, but, um, for us fundamentally, we see a bigger play based on our core expertise. And where our passions lie in the consumer product sp…

AI assessment note: “Our long-term aspirations are actually to, um, develop and incubate consumer products”

Q Prior exits. Interesting. What were some of those companies? Just list a few.

A Uh, one company was a lead generation platform. Uh, it was built in 2000 and nine, sorry, 2008. We exited in 2010. The company was called Generate Consumers. Uh, it was, it was purely, you know, helping Helping generate leads for financial services. Um, another business that, uh, I exited in 2000 and end of 2011 was a conference business for internet marketers, uh, based out of Europe. So that, that was acquired by a public company called web summit kind of thing. Um, it's not, not, not quite like web summit. It's more of like, uh, more focused around affiliate marketing, which is, which was, which is my prior background. Um, so that was acquired by a company listed on the London, uh, stock exchange. Um, So, so, you know, those are probably some of the more recent ones.

AI assessment note: “one company was a lead generation platform... The company was called Generate Consumers.”

Q real quick, Warren. So you're an entrepreneur. You started at 15. One of the questions I always like understanding is to go back from the company level, one kind of peel of the onion as an entrepreneur, how do you generate cashflow from yourself, from your business? And then what are you doing with that cashflow to, to grow whatever you want to grow wealth, you know, charity, giving, whatever.

A Yeah. So it's a great question. I think, um, as an entrepreneur, first of all, you have to choose what path do you want to go down, right? Do you, some entrepreneurs are just, uh, they, they, they, they're fixated on raising capital for any idea they have from day one. I'm, I'm, I'm, I'm a little bit different, right? I mean, I, I grew up in the kind of quote unquote, uh, school of hard knocks of business. And, and, and I've always been a bootstrapped entrepreneur first, taking concepts to actually producing revenue, producing real profits, and then thinking about, Um, different fundraising strategies. So for me, um, it's really important that the business can stand on its own and it generates enough cash flow to be able to grow. Uh, and then I think about, you know, my compensation as, uh, as a, as a secondary facet of that, because I would rather have a larger enterprise, take more market share, pay myself less initially, and be able to reinvest and capture those opportunities while they exist, uh, versus, you know, paying myself a large salary. Because I think again, you know, when you're, when you're going into a space that's actually worth it, There will be competitors that will enter and there will be market share that gets tougher and tougher to grab. So, so my philosophy has always been, you know, reach a certain inflection point where you have enough cash to support th…

AI assessment note: “reach a certain inflection point... and then pay yourself, you know, just pay yourself a percentage”