SaaS Interviews with CEOs, Startups, Founders
1009 The Argument for Shutting Down and Launching With 100% Control
29 Apr 2018
Chapter 1: What is the main topic discussed in this episode?
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode.
Chapter 2: How does Markerly approach influencer marketing?
Hello, everyone. My guest today is Justin Klein. He is the co-founder and CEO of Markerly, an influence marketing company focused on influencer identification and tracking for some of the world's largest and most rapidly growing consumer brands. Justin, are you ready to take us to the top? I'm ready. All right, good. So tell us about Markerly. How are you approaching influencer marketing?
What's your business model? How do you make money?
Chapter 3: What is the business model behind Markerly's success?
Yeah. So, I mean, if you think about it, as far as, you know, what influencer marketing is, it's, you know, you're basically finding popular people on social media. I mean, technically influencing can happen anywhere, but we focus on social. And, uh, we are both, you know, kind of an agency and technology company. So, uh, we run campaigns on a full service level.
If you need everything done soup to nuts, uh, you know, from strategy, identification, outreach, pretty much everything that involves, uh, an influencer campaign all the way to, uh, you know, creating content and reporting. And then basically on the other side of the business, we have a technology platform that we license out to brands and agencies to streamline All those processes.
We basically are using the same technology internally when we're running campaigns for our clients. So is this, I mean, are you a SaaS platform or is it pay-as-you-go? It's, you know, it is a SaaS model. The platform is. And then on the agency side, those are a little bit more bespoke. We're putting together very customized programs. Which one makes it more of your revenue? I would say...
I would say it's probably 60, 40 more on the campaign side. Okay. And is that the high touch kind of more professional services or is that SaaS? Okay.
Chapter 4: When did Markerly pivot to influencer marketing?
Got it. So 40% SaaS, 60% more agency model custom stuff. Yep. Okay. And on the SaaS platform, if people want to get started to kind of use you, what would you say kind of the average customer is paying you per month? So we can get a sense of, you know, your perfect fit. Yeah. I mean, as far as the SaaS model goes, I mean, it can, it's the minimum is a thousand dollars a month.
These are annual contracts goes up from there. Okay. That's the minimum. What's the average paying you? Is it a grand per month on average? You know, it's, I would say on average, maybe a couple, a couple thousand dollars. Okay. And give me, kind of give us more of the backstory here. When'd you launch the company? Back in 2012, actually. And where were you at?
I mean, why get into influencer marketing of all things?
Chapter 5: What are the revenue streams for Markerly?
So the funny thing is, is that it wasn't originally influencer marketing that we were in. Uh, you know, it was back in 2012, we were in Washington, DC, and it started out as a highlighter for the web. It's completely different concepts. What the hell does that mean? Uh, so it was basically, uh, a tool to help you, uh, collect quotes on the internet. Interesting.
Kind of like a Pinterest for quotes. Got it. And that got us into 500 startups, which is a, uh, a startup incubator in, uh, in California. And from there we, we pivoted the business into influencer marketing. We had our technology already embedded on a lot of blogger sites. So it felt like a natural transition, uh, to move into, uh, you know, a way to monetize what we've already built.
And what are you at today in terms of kind of total customers using you? Uh, you know, I would say, honestly, I don't know off the top of my head. It's, um, I would say, yeah, I don't know. We'll have to come back to it. Justin, how do you not, as a CEO of a company, how do you not know how many customers you have?
My audience is going to, they're going to go, what the hell is this guy Justin doing?
Chapter 6: How does Markerly manage customer relationships?
All right, fine. I just, I don't know if I want to disclose that. That's all. What's a range? I mean, are we talking like one customer, 10, 1,000, 10,000? It's under 100 over 30. Okay, got it. So between 30 and 100, that's helpful to understand. And do you require anyone that works with you on the kind of agency side of the business also pays for the SaaS model or do you not require that?
Can you repeat that? Yeah, so the 30 customers that you have, if they work with you on the agency model, the high touch custom campaign kind of stuff, do you require that they pay the $2,000 or $3,000 a month software fee as well or no? No, we don't. So the reason brands like to use our software is because it's basically a white-labeled version of what we use to manage our network.
It was really designed so that you can build out your own influencer network. So brands that already have communities, some will come to us and they'll say, hey, we've been managing over 50,000 influencers with MailChimp and Google Spreadsheets. And it's getting kind of hairy. We need a better way. And that's really where our platform shines. Okay.
Now, have you bootstrapped this or raised capital?
Chapter 7: What challenges does Markerly face in the influencer marketing space?
We raised a small amount of capital several years ago and kind of been bootstrapping from there. Okay. This was like what the 500 round kind of 150 ish. It was, yeah, it was under a million dollars. Okay. Well, I mean, what was raised? I mean, I'm sure I can look this up on crunch space, but would you raise a little over 700? Okay. 700.
And that was all kind of a price or a convertible note, or did you do any price equity round? It was both, basically. It started out as Convertible Notes, and then when we got our lead investor, it basically became Equity. Yep, it did convert. Good. And then where are you at today in terms of team size? So we're about 12 people right now. Based where? In Austin, Texas. Oh, good.
I'm in Austin, too.
Chapter 8: What are Justin's future plans for Markerly?
That's great. Third Ambrosos. Love it, yeah. All of you guys are down here? We should have just gotten together in person. Shit. That's okay. But you guys are all based in Austin? Yeah. Yeah. Okay. And what do you guys I mean, look, this is one thing I always ask about when there's kind of a dual business model going on is how you manage your time, right?
There are people that are attacking the same space purely on the agency high touch model. And there are people attacking this purely on a no touch SAS model, you're trying to do both. Are you going to try and go one way? Or you want to keep kind of playing the middle there? Well, you know, we don't view it as kind of playing both.
The technology we're basically already utilizing internally to run these campaigns. So we're kind of eating our own dog food. And we're constantly making that platform better and better and better. Yeah, but Justin, let me say this differently.
If you have one engineer that's focused on doing something custom for a high-paying agency client, that's one less engineer you can have making the SaaS platform better. There are companies that direct all their resources to SaaS and all their resources to agencies. So how do you not get beat by each of those companies on each side of your model? Well, so...
we're not really allocate, we're not building custom technology on the agency side, right? So engineering is always completely focused on the platform. Okay. Well, same question, same question for you. I mean, anyone, not just an engineer, anybody at your company, a salesperson, a marketing person, a design person, anybody. Yeah.
Well, if you think about it, it's really just about solving customers' problems. And, you know, a customer, a lot of people, they don't know whether they need SaaS or full service. The industry is still very much in its infancy. So to really just focus and put all your eggs in one basket and assume that every customer is going to fit that model, I prefer to solve customers' problems.
If they need help with management, we're here for them. If they then decide they want to internalize their influencer marketing efforts, we're still their partner. and we can move with them to that new model and help them in-source influencer marketing. So it's more about relationships. Yeah, and you've got 30 of them you mentioned.
I mean, can I take the 30 customer number times the average monthly payment you said earlier of around two-ish K and assume you guys are doing what, north of 60 grand a month right now? You can assume that. I'm not really at liberty to disclose those numbers right now. Well, Justin, just to be clear, I'm just multiplying your numbers. I mean, I'm not making anything up.
I'm just multiplying your numbers. Yeah. Please, you know, speculate all you want. Justin, just to be clear, I'm not speculating. You told me 30 customers and you said an average was in the thousands per month. I'm just multiplying your numbers. So are your numbers, are they different? Let's move on to the next question. Well, no, because I want to understand this.
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