SaaS Interviews with CEOs, Startups, Founders
1300 AdTech Makes $70m in $700m in AdSpend, how?
14 Feb 2019
Chapter 1: What is the main topic discussed in this episode?
had success in his first company since then the other three has all been kind of going into something that's already launched optimizing growing it he's done that here at flash talking 2001 the company was launched he joined call it two and a half three years ago the company has since uh broke 70 million dollars in revenue on call it 700 800 million bucks in total ad spend processed uh bootstrap which i love 320 folks based in uh all around the world but london is home there with the holding company headquarters ta owns a little bit more than half of it but john's enjoying building something that's part of a bigger infrastructure
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, everyone. My guest today is John Nardone.
He's the CEO of a company called Flash Talking. A first-generation ad tech pioneer, Nardone served as founding board member of the Internet Advertising Bureau.
And throughout his career, he's earned recognition within the advertising community for his groundbreaking work at Pepsi, Modern Media, and Marketing Management Analytics, culminating in his receiving the Ad Tech Industry Achievement Award in 2012. John, are you ready to take us to the top? Sure. All right. Your space is changing rapidly. It must be fun. Tell us about Flash Talking.
What do you do and how do you make money? So FlashTalking is a technology platform that delivers personalized ads on behalf of major advertisers so that the ad that you see is different than the ad that I see based on a whole raft of potential data signals. Medium specific or across many medium? It's all digital, but that's digital video, native ads, desktop, mobile, digital.
OTT, but all forms of digital ads. Many people in this space, the old model is percentage of spend. Then people didn't like the ad tax in the middle. So they're going, maybe we can do like a SaaS play on the back end. Where's your revenue model? So it's a CPM model. So it's based on the number of impressions delivered and the complexity of the data and the personalization that's being deployed.
Tell me what that can give me a real example there. What's that mean? So a simple personalization would be based on the weather. So people are going to see one ad when it's raining versus a different ad when it's sunny and over 80 degrees. But that could also be a very, very complex set of rules that would say that
Um, if you've been to the website, show the last three items in order that the person saw, saw, if you haven't been to the website, show the items that are most popular for people in your geography, unless it's raining, then only show items from the outdoor catalog, except if, and you go on and on.
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Chapter 2: What is Flash Talking and how does it generate revenue?
90% of that is going to go to the media and maybe 10% or less is going to go to the ad serving. So which is you, right? Which is us. So if we do 70 million in revenue, that probably means it's 700 million in total spend that's flowing through the platform. Yep. Got it. So how do you like, do you compete with the bill wise at media ocean and that kind of space or no different, different spaces?
No different spaces. In fact, we partner a Prisma, which is part of media ocean is an important partner. So if an agency is using Prisma as part of their sort of media planning infrastructure, they'll push those placements into Flash Talking's infrastructure so that the ads can be served. And where's the company today in terms of team size?
And I'm curious kind of how much, you know, the breakdown between engineering versus, you know, inside sales, things like that. So we don't have an inside sales function. They're all external sales or account management who are serving the clients that are in the house. About 70 in engineering and product development globally, probably 35 or 40 in sales and direct client support.
And then we have a large technical support organization that is neither engineering nor direct clients. They're doing technical troubleshooting and supporting the actual products in market. And how many there? Ah, maybe 25. Okay. So about 130, 135 people total. No, 320 people total. 320. Okay. The numbers you just gave me, I added up to that.
So there's, there's more, there's more people here that I'm not, where are they? Yeah. Well, well, so, so you've, you've got, uh, of course your, your, uh, uh, administrative infrastructure for accounting and there's management in there. We have a strategy consulting team as well. That's a separate team. So there are a number of other functions in there. And where's headquarters?
Where are most people based? So technically speaking, headquarters is in London. It's a UK based company and that's where the holding company is based. Um, I work out of New York and Connecticut as does the CTO and the CFO. Um, and so I guess you would call New York the informal headquarters. John, how the hell do you get excited?
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Chapter 3: What is the company's revenue model and how does it relate to ad spend?
I got to start his own company. How the hell do you keep your excitement level up when you're working for basically the man? I mean, you're, you're, you're part of a holding company. I just, I'm curious how you manage your emotions there. Well, it's our holding company. Okay. So not one of the holding companies. I thought you said TA. I thought you said it was TA. Yeah. Yes, TA is our investor.
Chapter 4: How does Flash Talking personalize ads for different audiences?
And then FlashTalking's corporate structure has a holding company that owns the various country entities. So there's a FlashTalking Australia, FlashTalking Germany, FlashTalking UK. FlashTalking is then incorporated as a bunch of entities. And we have a holding company based in the UK called Simplicity Marketing that houses all of the operating companies. I see. I see.
The numbers you just gave me on revenue figures, is that just yours or is that across all the companies? No, that's across all. Okay, got it. So, well, TA though, I mean, do they own more than 50% of the company? Was the secondary larger than that? Yeah, they have a controlling interest. Yeah, yeah. So, I mean, that's, I guess, my question, right?
I'm always curious why entrepreneurs like you that start something from scratch sell it, then for whatever reason, maybe get more risk averse and say, oh, just I'm going to go do something a little safer, but it's bigger scale and have fun doing that. Well, I don't necessarily look at that way. I'm not the guy who starts companies from scratch. I've done one of those.
Um, in my career, this is my fourth ad tech company. Only one of them that I start from the beginning. Um, the others were, uh, ones where other people had started and I came in as sort of the guy to take it to the next level. Um, and that's really been the case with flash talking. Um, the company, um, since in the three years we've doubled in revenue since I've gotten here.
Um, and that's the space that I like it, particularly at this point in my career at 54 years old. I, you know, I'm, I'm better suited to take something that has a foundation and then figure out how to take that to the next level. Then going back to the days of being the chief cook and bottle washer and it manager all wrapped up in one. We all know John misses the Red Bull and ramen late nights.
He just doesn't want to admit it. All right. All right, John, let's, let's wrap up here with the famous five. Number one, what's your favorite business book? Getting Naked by Patrick Lencioni. Number two, is there a CEO you're following or studying right now? I love the work that my friend Scott Canole has done over at Integral Ad Science. Integral Ad Science? Yes.
Number three, what's your favorite online tool for building your business? I'm in LinkedIn all the time. Number four, how many hours of sleep are you getting every night? Um, I I'm pretty consistent. I go to bed at 10 o'clock. I wake up at five. Seven's pretty good. Seven's the number. You said you're 54. What's your situation? Married, single. Do you have kiddos? I'm married. I have four boys.
My oldest is in the business. He's 23 and works for Deloitte. And then I have twins who are in college and, uh, my youngest is 16 and still at home. That's great, John. Last question here. What do you wish your 20 year old self knew? Um, my 20 year old self had no idea that I would ever do anything relating to math and analytics.
I, if you would have told me at 20 years old that my career would be based on optimization and data, I would have said you were absolutely crazy. Um, so that, that's what I wish I had known sooner that this is where I was going to end up. I mean, look into data earlier. Notice you have a love for that. Yes. Guys, there we have it from John. Again, had success in his first company.
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