788: Ad Tech Agency Does $17m Gross Profit 2016, $30m VC Raised
Patrik Fagerlund. He\u2019s been working with mobile internet since the 90s. He\u2019s an engineer by training and now, he\u2019s 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? \u2013 Business Insider
- What CEO do you follow? \u2013 Elon Musk
- Favorite online tool? \u2014 Slack and Flatly
- How many hours of sleep do you get?\u2014 6
- If you could let your 20-year old self, know one thing, what would it be? \u2013 \u201cBe what you want to be\u201d
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Time Stamped Show Notes:
- 02:00 \u2013 Nathan introduces Patrik to the show
- 02:36 \u2013 Widespace is a mobile advertising campaign
- 02:40 \u2013 It was spun out in 2007 from what Patrik thought was a great media channel
- 03:04 \u2013 Patrik sold media fueled by their technology
- 03:10 \u2013 Selling media per CPM which is $10 per impression
- 03:31 \u2013 This was the business model in 2009
- 04:00 \u2013 $2M was the total ad spend for the previous model and 40% went to the company
- 04:26 \u2013 Team size was 9
- 04:38 \u2013 Widespace's current business model spent $30M for ads
- 04:40 \u2013 Team size is 130
- 04:41 \u2013 \u201cWe\u2019re moving into selling technology at a rapid space\u201d
- 04:49 \u2013 Widespace extends their tools and technology for both the supply and demand
- 05:09 \u2013 Widespace focuses more on selling their technology
- 05:28 \u2013 The model is close to SaaS, but the pricing depends on the volume and usage
- 06:11 \u2013 Of the top 50 global advertisers, Widespace serves 70% of them
- 06:24 \u2013 Widespace works with most of the umbrella agency companies in the world
- 06:51 \u2013 The tech of Widespace is a full-stack offering
- 07:01 \u2013 The algorithm is based on interests
- 07:18 \u2013 If Widespace goes against other legacy technologies in adtech, Widespace will outperform them
- 07:46 \u2013 A customer pays 50% of their ad spend to make use of Widespace\u2019s technology
- 07:54 \u2013 It\u2019s a volume game, the more a customer pays, the less Widespace charges
- 08:04 \u2013 If a customer puts $20M into Widespace\u2019s system, it will go down to below $10M
- 08:53 \u2013 Average ARR is around $4M
- 09:06 \u2013 Since Widespace is a full-stack, they service both demand and supply
- 09:11 \u2013 There\u2019s a cap on the demand side and a supply cap to serve the supply
- 09:26 \u2013 The suppliers are the top publishers in the world
- 09:45 \u2013 Widespace takes a cut from the demand and supply side
- 09:56 \u2013 Widespace charges on the extended version of the algorithm as well
- 10:11 \u2013 Last year\u2019s processed ad spend is shy of $40M
- 10:49 \u2013 2016 total revenue is around $17M
- 11:04 \u2013 Widespace was initially bootstrapped
- 11:16 \u2013 Widespace has raised close to $30M
- 11:33 \u2013 Over the years, Widespace had propositions from strategics but they turned them down
- 12:08 \u2013Widespace is currently working with 500 suppliers/publications
- 12:17 \u2013 Widespace keeps control of their supply and has deeper integration
- 13:07 \u2013 A few years ago, Widespace was the only one who was servicing the publishers
- 13:40 \u2013 Widespace doesn\u2019t have any exclusivity
- 15:02 \u2013 The Famous Five
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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!
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Resources Mentioned:
- Simplero \u2013 The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
- The Top Inbox \u2013 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 \u2013 Track your business performance across all departments for FREE
- Hotjar \u2013 Nathan uses Hotjar to track what you\u2019re 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 \u2013 Nathan uses Acuity to schedule his podcast interviews and appointments
- Host Gator\u2013 The site Nathan uses to buy his domain names and hosting for the cheapest price possible
- Audible\u2013 Nathan uses Audible when he\u2019s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
Show Notes provided by Mallard Creatives