SaaS Interviews with CEOs, Startups, Founders 818: AdTech: Spongecell Passes $13m+ ARR, Lets Old Customers Go, $26m Raised
Oct 20, 2017
21:21
Ben Kartzman. He's the CEO and founder of Spongecell, one of the fastest growing companies in the United States. Earlier, Ben worked at venture-backed Guidester (now Searchandise.net) in product and business development. He graduated with honors from Carnegie Mellon with a dual BS in Human Computer Interaction and Information & Decision Systems.
Famous Five:
- Favorite Book? – Five Dysfunctions of a Team
- What CEO do you follow? – Jeff Bezos
- Favorite online tool? — Mint
- How many hours of sleep do you get?— 6
- If you could let your 20-year old self, know one thing, what would it be? – Don't stress about your first job—just find things that are interesting for you, follow your passion and do those things
Time Stamped Show Notes:
- 01:55 – Nathan introduces Ben to the show
- 02:25 – Spongecell is one of the fastest growing companies because they are revenue driven
- 02:36 – It was in 2009 when Spongecell first measured their revenue
- 03:15 – 2017 revenue goal
- 03:30 – $26M has been invested in the company and their largest investors is Safeguard
- 04:27 – Nathan shares about his first investor report
- 04:50 – Spongecell is a dynamic and creative company in the adtech space
- 04:55 – Spongecell works directly with marketers
- 05:21 – Spongecell's technology manages different creative variations
- 05:49 – The variations can grow very quickly
- 06:04 – Spongecell sells licenses to a platform and beyond that, it is based on usage
- 06:25 – The licenses are billed monthly and their biggest client is spending $3M a year
- 06:47 – Spongecell is working with hundreds of customers
- 07:20 – Spongecell is moving to target more enterprise customers
- 07:39 – To fire clients, Spongecell raises the minimum
- 08:47 – People are leaving because of the changes in the service
- 09:30 – Usage-based charges per impression
- 10:00 – For every 50 cents CPM, a company would spend $50K with Spongecell
- 10:15 – Spongecell doesn't get involved with the media side
- 10:49 – Most clients have an allocated budget to be spent on Spongecell
- 11:50 – Spongecell has a base amount and the average usage is based on how people are using it
- 12:06 – Spongecell was launched in 2006 and they raised their first round in the same year
- 12:41 – In 2009, they saw the need for programmatic media, which is the buying and selling of ads through technology
- 13:22 – Spongecell has 95 people on the team
- 13:53 – Average ARR
- 14:35 – Spongecell's intuition with their platform is one of the reason why companies choose them
- 15:40 – Spongecell has promised to set up an Amazon database so clients can look up the data
- 16:50 – Fully weighted CAC is changing as they're slowly transitioning, but it is more than $5K
- 17:43 – Ideal cohort of customers for Spongecell
- 19:20 – The Famous Five
3 Key Points:
- It's not easy to let go of customers—however, there are times where it's the best decision to make for your company.
- The transition to focus on enterprise clients isn't as quick or as easy as it seems.
- Find your passion and GO with it.
Resources Mentioned:
- Simplero – The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
- The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
- GetLatka - Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
- Klipfolio – Track your business performance across all departments for FREE
- Hotjar – Nathan uses Hotjar to track what you're doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
- Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
- Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
- Audible– Nathan uses Audible when he's driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
- Show Notes provided by Mallard Creatives