SaaS Interviews with CEOs, Startups, Founders
1131 We do $70m Annually in Buyer Data Space, 50% Gross Margin
29 Aug 2018
Chapter 1: How did Jay Habegger achieve success with OwnerIQ?
He's having a lot of success after selling his first company, BitBite, for $40 million. Then in 2007, launched OwnerIQ. They're now serving about 600 brands that are sharing or borrowing or buying somebody else's data every month on his platform. They've worked with about 1,000 in total. But again, data is hot.
They've raised about $40 million, doing about $70 million top line gross in terms of gross revenue, doing about half that. So healthy, healthy business. 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 of 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. Hello, everybody. My guest today is Jay Habegger. He's the co-founder and CEO of Owner IQ. He's a pioneer in digital media and advertising, having over 20 years of experience in the space.
He's built the queue from its humble beginnings to teaching and leading the industry in second-party data and has the leading programmatic solution for digital advertisers, retailers, and brands. Previously, he was the CEO and president of BitPipe, leading the company through its sale to TechTarget in 2004 in a $40 million transaction. Jay, are you ready to take us to the top? Absolutely. Okay.
They say it's hard to motivate a rich man. How much money did you make on the $40 million transaction? Why do you stay motivated? That is a totally fair question. Let's put it this way. I made enough that I didn't necessarily have to start the queue. That's for sure. Okay.
But, you know, when you're into building companies and trying new things, I mean, that's not something that you give up lightly. When I sold BitPipe, I was still
late 30s early yeah late 30s hadn't turned 40 yet so what was i gonna do i mean i had to i just don't think i really knew how to do at that point was to start internet companies and so that's what i did i didn't think i'd be in this one for 10 years but are you are you married jay i am indeed yeah so what really happened is your wife said jay get the hell out of the house go start another company you're around too much right that's what happened there may be some truth to that as well all right tell us about owner iq what's the company doing how do you make money
So what OwnerIQ is fundamentally about is part of this what we call programmatic revolution and how digital advertising is bought and sold. And one of the big innovations the last few years, or I should say the last five years, is to decouple where the media, where the ad shows up from the data that's used to decide to put the ad there. And so that's created a very large ecosystem.
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Chapter 2: What innovative solutions does OwnerIQ provide for digital advertising?
So our margins from that top line are about a gross, are about 55%, 60%. Okay. Um, when you look at it that way, so not the 80% gross, um, uh, gross margin, but, but pretty high. So it's pretty good. Yeah. So 70 top line, you're taking, you know, into the gross area, call it 50, 60%. So 35, 40 million there that then goes to everything else in the company. What are your above the line costs?
My, just to be clear, above the line costs, you're referring to the cost of goods sold? Yeah. Yeah. What are your costs of goods sold? So we have multiple ways of selling to customers. So one way is that you can just take this data and go use it in software systems to access media that you're bringing to the party.
Another way is that you can access media directly through us, through our software platform. And when you do it through us, we take the principal risk. Some portion of that through us, some portion of that is going to be advertising media that we then have to pay the pay the media owners with that. Yep. That makes sense.
Now, your last valuation, what was just that around and how long ago is that? So, excuse me, our last capital in was it's been a while now. I want to say it was the end of 2016. OK, thanks. Jay, you know what that means, right? No, I actually don't. What does that mean? Right now, you're either selling to somebody or you're raising more capital. Which one is it? Oh.
Um, we are actually raising more capital. So, um, uh, very perceptive of you. Uh, we, we actually don't have a round going today, but yes, I am in market for that. Yeah. And, and so what is the pitch? Like when you're, when you're talking to new potential investors for the company, you know, data is obviously a hot space.
Um, campaign driven is tough from, in terms of predicting revenue, but you have serious scale. What's the pitch sound like? Pitch basically goes like this. All marketing is becoming data driven today. Um, With the algorithms that you're using to power that market, you're only as good as the data that you put in. And today you have limited sources of data to put into that.
You have the data you're generating yourselves. And then aside from what we do, you have really opaque, anonymous data that you can't make heads or tails out of. We're the only transparent data source in the market that allow you to judge relevant data and assess how well it is for the application you're putting it toward. And that 2016 deal, what was that, a $20, $30 million round size deal?
Oh, it was a, it was a very small round. It was an inside round. Oh, an inside round. Okay. But like what percent of your total rate, like your total 40 million in was that? Oh, uh, uh, percentage of my head. I mean, I want to say it was less than 10%. Okay.
Well, the re the reason I'm asking is because like a lot of times, and you alluded to it earlier, uh, CEOs and entrepreneurs, especially will go after the highest valuation possible to minimize dilution makes logical sense because Until you start looking at some of the terms and, you know, thankfully, if you can get away with a one X equalization preference, that's great.
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Chapter 3: How does OwnerIQ's data exchange platform work?
Last last question. What do you wish your 20 year old self knew? You know. Honestly, I wish my 20 year old self knew that I know now something I try to tell my daughters is you don't need to be in a rush. I was in such a such a rush to get out of school, get some business experience and start a company, which I'm gathering is exactly what you did. If I could do it all over again, you know what?
I would have gone and be a ski bum for a year. I would have done that hostile backpacking across Europe that I didn't do and probably won't do that now. It didn't need to be such a rush. There you guys have it from Jay. It does not have to be a rush. He's having a lot of success after selling his first company, BitBite, for $40 million. Then in 2007, launched OwnerIQ.
They're now serving about 600 brands that are sharing or borrowing or buying somebody else's data every month on his platform. They've worked with about 1,000 in total. But again, data is hot. They've raised about $40 million, doing about $70 million top line gross sales. in terms of gross revenue, doing about half that. So healthy, healthy business growing up there in Boston.
Jay, thank you for taking us to the top. Jay, thank you very much.