SaaS Interviews with CEOs, Startups, Founders
808: AdTech: AdForm Beats $40m Revenue Monetizing These 3 Days
10 Oct 2017
Chapter 1: What inspired Gustav Mellentin to start Adform?
ad form. He now has a business model that's diversified across three main sectors, his trading model, which makes up 50% of his revenue. His fastest growing model is his data model, which makes up 10% of his revenue, about a hundred customers that pay between five grand and 50 grand a month.
And then his last model, which is his ad serving model, which is more as transaction and as you go makes up 40% of his revenue. Uh, In 2010, they passed the million dollar mark in revenue. In 2017, they're now up to 750 employees, 18 different offices.
Chapter 2: How does Adform's revenue model work?
They would love to hit $50 to $100 million in revenue here in 2017. This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per talk. Five and six million.
He is hell-bent on global domination.
Chapter 3: What percentage of revenue comes from Adform's trading model?
We just broke our 100,000-unit soul mark. And I'm your host, Nathan Latka. with year-over-year growth rates, customer accounts, margins, and many, many other data metrics and data points, you can go to G-E-T-L-A-T-K-A.com. Here's the thing, though. This database, I keep it to myself. It's so freaking valuable.
And to preserve the quality of the data and make sure that the people that have access to it have a true advantage, I'm only letting 10 companies on each month.
Chapter 4: What is the growth strategy for Adform's data management platform?
So we're full this month, but you can go to getlatka.com to get on the waiting list for next month. And look, there's big people on the waiting list. I mean, the biggest VCs you've ever heard of. You've probably heard of them. They're big, private equity, billions and billions under management. So it's an impressive waiting list. Go get on now at getlatka.com.
Chapter 5: How did Gustav Mellentin scale Adform's team and operations?
Hello, everybody. My guest today is Gustav Melentin. He is the current or currently he is the founder and CEO of a company called Adform in the ad tech space. Before that, he was an engineer. He was in the investment banking world, got an MBA. He was at Bain doing management consulting. He's been all over the place.
Chapter 6: What challenges did Gustav face during Adform's expansion?
Most recently, he just got back from a European holiday. Gustav, are you ready to take us to the top? Thank you very much. Thank you for putting me on the show. We were joking. I was saying your profile picture, your hair is short and you're clean shaven and you go on a little European holiday and this happens.
Well, I was in the middle of the Swedish forest for a European holiday, size of a holiday, and a lot of stuff can happen.
Chapter 7: What lessons can entrepreneurs learn from Gustav's journey?
That's awesome. Was that just pure leisure or was it business related, like a company retreat or something? So no, it was, it was leisure. I was, there was one week of going to Tokyo in the middle of it where I did have to, to trim my hair a little bit and then do a little bit of combing it. But now I'm back and yeah. That's great. All right.
Chapter 8: What advice does Gustav have for balancing business and personal life?
Tell us about ad form. What's it doing? How do you make money? So we are a tech company. We develop an ad tech platform with a number of different applications on top of it. So it's around ad trading, it's around data profiles of users, and it's about the actual serving and creation of the ad. And what's your revenue model?
Is it a SaaS play or you're taking a percentage of spend or what's the model? Yeah, so it's a mix. So we typically do a percentage of spend on the trading model. On the data model, it's more of a monthly fee. And on the ad serving, it's more of a kind of a more transactional kind of per usage model.
But it's all kind of application software that's installed on our servers and run centrally from our servers, right? But business model varies a little bit. between the different businesses. In the data model sector, what's the average kind of monthly fee folks are paying you? Average fee, so I think anything from around $5,000 a month up to something much higher than that as well. Like what?
10K, 100K, about a million? 10K, 50K. Okay. I mean, 50K is a good contract. Okay. Would you say that like an average would be somewhere, I mean, call it 20 grand per month is a good average? So again, just to give you a little bit of an overall picture of how the business is kind of constituted. So most of the business today is actually in the trading space.
So most of the revenue is coming from there. What percentage of the revenue comes from there? Yeah, and that's mainly on the percentage model. No, no. What percentage of your revenue comes from the trading model? Around 50%. Okay. And then what about the data model? And the data model is the fastest growing part of the business. So it's a product we launched just a couple of years ago.
So it's definitely the fastest growing, but it's probably down to around 10% of the actual business. But a lot of the growth is coming from there. It's a very strategic product to us. I'd say in most conversations with new clients and onboarding new clients, what we lead the story we lead with is around data because that's really what's on the CMO's mind.
And it's the best way to initiate the client journey, right? Yeah. Yep. So just to break that down, 50% of your revenue is coming from your trading model, which you make money from a percentage of spend. 10% of your revenue is coming from your data model, which is your fastest growing people paying between five and 50 grand per month for that.
And then about 40% of your revenue is coming from your ad serving model, which is transaction more per usage based. Yeah, so that's the actual, you know, the creative suite, the ability to whip up, you know, a creative within a toolkit and then activate it on a site, on a mobile or whatever with the actual serving of the app, right? So it's kind of more the infrastructure kind of model.
It's not so transactional, but it's more like the whole workflow and ability to manage your creatives. Mm-hmm.
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