788: Ad Tech Agency Does $17m Gross Profit 2016, $30m VC Raised

SaaS Interviews with CEOs, Startups, Founders

Nathan Latka

Ceo, Entrepreneurs, Founders, Software, Business, Entrepreneurship, Saas, Startups

4.6 • 683 Ratings

🗓️ 20 September 2017

⏱️ 18 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Patrik Fagerlund. He’s been working with mobile internet since the 90s. He’s an engineer by training and now, he’s the CEO and founder of Widespace, a mobile adtech company. Outside of work, he loves spending time with his family with his four kids and his wife along with many activities and sports.

Famous Five:

Favorite Book? – Business Insider
What CEO do you follow? – Elon Musk
Favorite online tool? — Slack and Flatly
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? – “Be what you want to be”

Time Stamped Show Notes:

02:00 – Nathan introduces Patrik to the show
02:36 – Widespace is a mobile advertising campaign
- 02:40 – It was spun out in 2007 from what Patrik thought was a great media channel
03:04 – Patrik sold media fueled by their technology
- 03:10 – Selling media per CPM which is $10 per impression
- 03:31 – This was the business model in 2009
04:00 – $2M was the total ad spend for the previous model and 40% went to the company
- 04:26 – Team size was 9
04:38 – Widespace's current business model spent $30M for ads
04:40 – Team size is 130
04:41 – “We’re moving into selling technology at a rapid space”
04:49 – Widespace extends their tools and technology for both the supply and demand
05:09 – Widespace focuses more on selling their technology
05:28 – The model is close to SaaS, but the pricing depends on the volume and usage
06:11 – Of the top 50 global advertisers, Widespace serves 70% of them
- 06:24 – Widespace works with most of the umbrella agency companies in the world
06:51 – The tech of Widespace is a full-stack offering
- 07:01 – The algorithm is based on interests
- 07:18 – If Widespace goes against other legacy technologies in adtech, Widespace will outperform them
07:46 – A customer pays 50% of their ad spend to make use of Widespace’s technology
- 07:54 – It’s a volume game, the more a customer pays, the less Widespace charges
08:04 – If a customer puts $20M into Widespace’s system, it will go down to below $10M
08:53 – Average ARR is around $4M
09:06 – Since Widespace is a full-stack, they service both demand and supply
09:11 – There’s a cap on the demand side and a supply cap to serve the supply
- 09:26 – The suppliers are the top publishers in the world
09:45 – Widespace takes a cut from the demand and supply side
09:56 – Widespace charges on the extended version of the algorithm as well
10:11 – Last year’s processed ad spend is shy of $40M
10:49 – 2016 total revenue is around $17M
11:04 – Widespace was initially bootstrapped
11:16 – Widespace has raised close to $30M
- 11:33 – Over the years, Widespace had propositions from strategics but they turned them down
12:08 –Widespace is currently working with 500 suppliers/publications
- 12:17 – Widespace keeps control of their supply and has deeper integration
13:07 – A few years ago, Widespace was the only one who was servicing the publishers
13:40 – Widespace doesn’t have any exclusivity
15:02 – The Famous Five

3 Key Points:

Adjust your technology depending on the needs of your target market.
Find the right partners with whom you can grow your business.
Be what you want to be!

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

Transcript

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0:00.0	launched his agency many many years ago in 2009 he was playing with kind of a different model
0:05.5	kind of based solely on a cut now today they're doing uh they work with about a thousand agency
0:10.8	or sorry a thousand companies that are putting ad spend through his system called wide space
0:15.5	those are the proctor and gambols of the world he's working with over 500 publications and the way
0:20.0	they make money is they take
0:21.0	a percentage kind of of this cut, both on the supply side and the demand side. So they did about
0:25.4	$36 million processed in 2016, of which $17 million was gross profit. 130 people looking to
0:32.3	continue to grow. They raised $30 million in VC. This is the top, where I interview entrepreneurs who are number one or number two in their
0:40.9	industry in terms of revenue or customer base.
0:44.5	You'll learn how much revenue they're making, what their marketing funnel looks like, and
0:48.4	how many customers they have.
0:51.1	I'm now at $20,000 per talk.
0:53.4	Five and six million. He is hell bent on global domination. We just at $20,000 per talk. Five and six million.
0:54.3	He is hell bent on global domination.
0:56.2	We just broke our $100,000 unit sole mark.
0:58.9	And I'm your host, Nathan Latka.
1:02.3	Many of you listening right now don't have time to listen to every B2B SaaS CEO that I've interviewed.
1:07.1	If you want to get access to the database I've created with year-over-year growth rates,
1:11.0	customer accounts, margins, and many, many other data metrics and data points, you can go
1:15.5	to g-et-l-a-tk-a.com.
1:18.7	Here's the thing, though, this database, I keep it to myself.
1:21.9	It's so freaking valuable.
	...

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