SaaS Interviews with CEOs, Startups, Founders
873 How ShareThis Is Pivoting To A B2B SaaS Data Play
14 Dec 2017
Chapter 1: What is the background of Kurt Abrahamson and his role at ShareThis?
Good morning, everybody. I wanted to just quickly remind you, if you love B2B SaaS and you're loving all these CEOs I have on, remember, you can get all of their data in a big, beautiful spreadsheet at getlatka.com. That's G-E-T-L-A-T-K-A dot com. So I hope you're enjoying the month. I love December. I love the holidays. And here is our program for today.
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 this morning is Kurt Abrahamson.
He is, well, really prior to joining ShareThis, he served as a CEO at socialmedia.com or Living Social. Now, currently, obviously, he's a CEO at ShareThis. Before that, he also served as a director at Google, managing the direct sales channel for publishers and global launch of AdSense, the COO of Jupiter Communication and president at Jupiter Media Metrics.
Kurt, are you ready to take us to the top? I am, absolutely. All right, so you go from Google... to, I'm going to oversimplify here and offend you, a sharing widget. What's going through your head?
So the thing that was most exciting about ShareThis and is still the most exciting is the global reach. that the sharing tools have. So we sit on over 3 million domains globally. We see a huge amount of data. We help publishers with simple solutions that make their business easier. So it was and is a top 10 property if you just look at the distribution of the tools.
And so that was what was exciting.
A lot of people are going to go, Nathan, you have a guy, this is the sharing widget. You have this guy Kurt on, like what's going on here? Well, guys, you guys, part of what's happened in the space that Kurt is in, there are loads of copycats. So it's tricky to tell sometimes just from a UI perspective, what is share this and what is not.
Kurt, I'm talking about maybe WordPress plugins, other little widgets that someone built in their basement. How do you differentiate? What's your mode? What's unique about what you guys do?
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Chapter 2: How does ShareThis differentiate itself from competitors in the sharing tool market?
So LiveRamp, you know, we put our data into the LiveRamp marketplace and other users can access it. It's generally available in DMPs and DSPs for users to, for companies to buy. And so we have, you know, 30 or 40 million people who share content in the entertainment vertical that are interested in entertainment content, a lot of celebrity and blog kind of sites.
And so we're able to accumulate, again, anonymously, privacy compliant content. And that's what's attractive to our model.
So how does like a live ramp, for example, you know, obviously don't get into the contract specifics, but what is the pricing model? Is it per line of data, per API call, per what?
Well, we have two models generally. In some cases, it's an all-you-can-eat model. You get access to the full stream of data and you pay us a fixed fee, generally on a monthly basis, on an annual contract. And then we also sell the data just like a lot of other companies on sort of a CPM basis. You can buy an audience of this size and of this interest for $1, $2, $3, whatever the price may be.
And if you had to pick one of those and label it your most important revenue stream, which one would it be, the fixed fee or the CPM basis?
It's a great question. The fixed fee ultimately is ā the SaaS business model that we've been working hard to get on. The variable, though, has global distribution, and we get it out there in a lot of different ways, a lot of different endpoints. As our head of product says, you know, one of the goals of the company is share this data everywhere.
So no matter what your use case is or where you're located, you know, you can find use of our data. Now, the other thing that's really our moat, so to speak, is that 70% of the publishers and the data is non-US, which is surprising to a lot of people, right?
I mean, it's surprising to me because ShareThis, you know, we don't have anyone in India or Australia or Brazil, and yet there's thousands of publishers each month that go to, in those countries, that go to ShareThis.com or WordPress and download our tools. So it's quite an interesting global distribution play.
Just focused on your flat fee model, what's the average customer paying you per month? I assume there's many cohorts, but what's the average, would you say?
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Chapter 3: What is the business model of ShareThis and how do they generate revenue?
They have this magical way of just doing it. And it's a beautiful thing. So every morning when I wake up, I just go, okay, what leads are prosper works telling me to reach out to because they're most likely to close and it works so well. And you guys know, I love money and I love only focusing on the leads that are going to close. So I encourage you to try prosper works or sponsoring the show.
Check them out at prosperworks.com forward slash love your CRM folks. That's again, prosperworks.com forward slash love your CRM. I want to get in your head and understand from a product perspective why, I mean, you talked a little bit about margin kind of deterioration in your other model. And that's why you're moving maybe towards this flat fee model.
But it sounds like over the past 18 months, if you've got 30 people signed up at a minimum of 10 grand a month, you went from nothing to a $300,000 a month revenue stream or 3 million in ARR pretty quickly. I mean, that's good growth. What was the base that you were moving away from? Was it that CPM kind of selling your audience in an anonymous way?
So we were moving away from the media model of selling the data and the media together to just focusing on making the data available to clients. And then they use, you know, more or less their own media. And so it wasn't just high margin. It really was where we found the sweet spot in terms of the quality of the data. We call it sharing intelligence.
For 10 years, we've been collecting all of this data around consumers' interests and the content they share. Um, and all around global from global sites. And so it was really a strategic move to recognize the real value that we had was the data and the media was a value add, but it's really all about the data.
So, I mean, is it feasible to say four, three, maybe even as soon as two years from now, 80% of your revenue ideally in your mind is going to be coming from this kind of new data play that you've opened up? Absolutely. Yeah. Yeah. Like the live ramp model.
Yeah, absolutely. And, you know, we work with all the, you know, the large data companies out there. So we work with Newstar and Nielsen and Axiom besides LiveRamp and, you know, a bunch of companies overseas as well. So starting to get in with the agencies. So it's actually and it's very scalable model because.
you know, there's really not a lot of incremental costs to adding a new customer onto the data.
So Kurt, before you had kind of this predictable revenue, what you're building the data platform now, was your, are your old legacy revenue streams, were they predictable? Were they easy to plan, you know, headcount expansion around and things like that? Or was it very unpredictable?
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Chapter 4: How does ShareThis handle data licensing and partnerships?
Got it. Got it. Okay. Fair enough. Good. When you're trying to project things like lifetime value of these new customers that are paying for data to the tune of, call it 120 to 200-ish grand per year, do you forecast potential future product launches and add that expansion ARPU into those accounts when you plan for LTV, or do you just look at what you currently have?
So we continue to innovate on the product side, but the core products are generally the same. You either access the data... sort of on a fixed fee, all you can eat basis, or you pay sort of on a variable rev share volume based kind of parameters. And so we're working to essentially
improve the quality of the data, the size of the audiences we can offer, the fields that are available to access and look at. But in general, it's enhancing the value and delivery of the data. There's not a lot of new things per se that we have to do in order to keep our clients interested in the products we're offering.
Got it. Any churn so far in this new business?
Uh, it's, it's relatively a new business, but no, right now it's a 90% plus.
Yep. Now, now 90% annual retention. Yeah. Now on the flip side of that revenue expansion, I imagine it's only been around 18 months. That's not really something that you probably have a good, you know, sample size for yet either. Right.
Uh, exactly. But you know, when we look out at this business, um, we can see clear paths to $25, $50, $100 million in revenue. And a lot of that is just continuing to penetrate large accounts, as well as continue penetrating around the world and into different markets. The US data market is hardly saturated, but there's a lot of players. There's a lot of companies in that.
In Europe, in Latin America, Asia Pacific, there's not a lot of companies in the market at all. And there's not a lot of companies that can offer a global player the ability to get into all four of those markets at the same time. So that's another big advantage of what we do is you don't have to find someone at APAC to work with or find someone at EMEA to work with.
You can work with us so we can target globally for you.
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Chapter 5: What challenges does ShareThis face in the competitive landscape?
Thank you. Take care. Have a good day.