SaaS Interviews with CEOs, Startups, Founders
950k QR Codes Installed and $1m in Venue Revenue, Digital Seat Closing $5m Series A Now
24 Jun 2022
Chapter 1: What is Digital Seat Media and how does it engage fans?
And if you're sort of around that $83,000, $85,000, $90,000 a month range today with a clear path leading to $110,000, $120,000 by the end of the year, where were you exactly one year ago, just so we can calculate growth? One year ago, we weren't barely anywhere. You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom.
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Hey folks, my guest today is Cameron Fowler. He's the co-founder and CEO of Digital Seat Media, a real-time fan engagement technology platform connecting fans to brands, sports teams, and artists through QR codes and NFL technology. You can follow along at digitalseat.com. Cameron, you ready to take us to the top?
Absolutely.
All right. So who are you selling to? I assume you're selling to not the sports fan, but rather the sports team. Right, yeah. So we sell into the sports team or the venue itself so that we can install our digital seat tags and fans can engage with them. Interesting. So, I mean, can you maybe name one or two? Are these like NFL stadiums or soccer stadiums? We run the gamut.
So a lot of collegiate stadiums. So we have a partnership with Learfield IMG. We do Oklahoma, Oklahoma State, Baylor, Washington, the Rose Bowl. But then we have some professional partners on the side like the Oklahoma City Thunder, Utah Jazz that are both in the NBA. And we're having discussions.
We haven't announced it yet, but we've got a major league baseball partner that we're getting ready to install. So we kind of cover all sports. And walk me through that sales process to the baseball stadium. What's that sound like? What are they getting?
Yeah, so at baseball, football, basketball, whenever we go in, we are giving them the opportunity and saying, look, you can work with nine different vendors that do things. You can work with a vendor that allows real-time trivia. You can work with a vendor that does food delivery. You can work with a vendor that provides enter to win and lead collection.
But with Digital Seat, you can work with one company that does all of that, and we'll take that load off you. So we go in there and we say, let us install our Digital Seat tags on your armrests. then you can pick and choose what modules you want to use to provide to fans for them to engage. So we have 31 different modules to choose from.
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Chapter 2: Who are the primary customers for Digital Seat Media's technology?
Because if you do number of events, well, if there's only one event, that's hard to price against. If you do number of seats, well, that's interesting. But what if they're not all full? If you do number of attendees live at the event, but then what's the frequency of the event? So what's the one God Lego block you build around? It's an art more than a science, really. It is looking at the numbers.
Because obviously... Even if you can't go to a stadium that says, OK, we see 80,000, we go, well, you only have 40,000 people here. So we're only going to do 40,000 seats because maybe your team gets better. Maybe they get worse. So we have to base it on the number of seats. And then we normally start with a flat number of events and say, OK, we know you're going to activate for 10.
If you want to increase it to 20, 30, 50 as you grow, then you can do that. But let's start here. So just give me, just for example, to make it really real for my audience, I'm a 50,000 seat NFL stadium with 10 home games a year. That's probably going to run me what? 50,000 a year? Right about. Probably it's somewhere between 50 to 70,000, depending on what modules you're using. Okay.
Very interesting. Okay, cool. Put this on a timeline for me. When did you guys launch the business? So we met, Sullivan, my co-founder and I, we worked together about 13 years. We came up with the idea back in 2013, 2014. because we were working on facial recognition software and consumer behavior analytics. I grew up in Texas, big sports fan.
And so I said, Matt, it's crazy that we can trigger content based on a person's face and age and gender and all this stuff. But when I go to sports, it's the same advertising that it's been for the last 40 years. That was in 2013. I said, we can probably program something down to the armrest so you can scan it and get exclusive content.
So the problem was back then is that originally it was let's put NFC chips in the tags and people can tap it. And let's put QR codes on top as a stopgap. But way back then, QR code scanning wasn't native on iOS devices. You still had to download an app in order to do it. And so if we were going to ask them to do that, you might as well ask them to download the team app.
And so we waited until 2018 when QR code scanning became natively unlocked on iOS devices and on Android. And that's when we said, hey, OK, we need to go and see what we can do in this market. So you weren't building the tool then you weren't doing anything 2014 to 2018.
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Chapter 3: What is the sales process for installing Digital Seat tags in venues?
You had a full time job doing something else. We were working together doing technology consulting, but we were testing tags. So what we were doing was getting different printing materials, learning about adhesives, working with chemists and saying, okay, how do these tags work outside for three and four years at a time? How do we get people from ripping them off?
So we were doing that work, but yes, we had a full-time job. That was just in the side that we were working on this. I see. Was your full-time gig working with these sports complexes? So you were at least getting close to your customers? Not really. Matt and I have been very fortunate where we have gotten to work on projects that interest us.
So we've done things like work with Intel on facial recognition software, building out the event metric system for Mary Kay Cosmetics. We're working with Boeing on some projects. So things that came to us, we worked with Samsung on gesture recognition for televisions.
Things that were interesting to us when clients would come to us and say, hey, we're trying to solve problem A, B, and C. Then we'd evaluate it and say, hey, that looks like something that could be intriguing. We'd enjoy doing. So we were really kind of all over the map, which really helped too, because we learned a lot. Of course. Now, fast forward, that's 2018. Fast forward to today.
How many individual venues are you working with today? So we are about to install our 43rd, 44th-ish, I believe. So we've got quite a few. And now we're starting to do live events too. So we'll be putting on the music festivals. Do you count how many individual QR codes you've installed? Yes, absolutely. I think we're approaching right at a million. I think we've got 900,000 and some change.
So yeah, it's a lot. That's a lot. I mean, you're not out there with like a glue gun doing everyone yourself. Hopefully you have a machine or something. No, you do them by hand. But we've learned, I mean, that's one of the things people are like, why didn't anybody else do this?
I'm like, cause no one else is insane to go to Oklahoma when it's literally 106 degrees and put on 86,000 tags in the middle of July. Like you just don't, it keeps you in shape, but it is just, it's insane. But that's what we do. We've gotten very, very good at it. Like we did the whole Rose Bowl, all 198,000 seats in, I think like 10 hours. So we've got-
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Chapter 4: How do QR codes enhance the fan experience at events?
We really do the rev share on the collegiate side of the business. And if you're sort of around that $83,000, $85,000, $90,000 a month range today with a clear path leading to $110,000, $120,000 by the end of the year, where were you exactly one year ago, just so we can calculate growth? One year ago, we weren't barely anywhere.
Last year was really... And we are very candid when we talk to investment funds and our investors. Was it zero though, Cameron, before you tell the story? No, it wasn't zero. We were a couple hundred thousand dollars last year. Yeah, because that was my question. I'm like, COVID, no one's going to events. So what the hell? So it was... We really subscribe to, you're right, nobody went to events.
And last year we did a lot of, hey, Starbucks, we promise this is going to work and you're going to love it. Let us give it to you or let us give it to you at a discount and let's get the data. And then next year you're going to come in and use it. And it worked really well. So we worked with a lot of brands. We obviously collected revenue from a lot of them too.
But now that we have that data showing that we've increased sales lift for Cheez-It products in Stillwater, Oklahoma by 20%, Now it's a lot easier to have those conversations and go, hey, now it's time to pay for it. So it's worked well. Really interesting. Talk to me more about the team today. How many people are full-time?
So we're running right now about 35 that are here working core product full-time. We're shifting a lot of people. That's including the people that we're shifting that were part-time four months ago that are now, we've expanded enough to where they're coming on full-time. How many engineers? Engineers. How many engineers? We've got nine full-time engineers right now. Okay. Okay.
So heavy engineering, but not super, super heavy. So Matt is a genius whenever it comes to engineering.
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Chapter 5: What are the pricing models for venues using Digital Seat's technology?
I used to work at Dell as a senior level engineer there. Our vision has never been, let's have an engineering team of 50 or 100 people sitting around and building this stuff. We have senior level engineers that we hire and they work very smart. And so... That's really our goal. We don't want to have a massive team. And tell me more about funding history.
Did you guys decide to bootstrap or use customer revenue or did you raise? So Matt and I self-funded for the first, I don't know, eight months probably. Raised a friends and family round. Then we went out and expanded that net a little bit wider to where this last round, we've got some outside capital from some family offices that
Um, we're finalizing around right now and that'll put us at about 11 million total raised. How much was the last round that you closed? Uh, the last round before this one was 3.3.5. Okay. And that was in 20, 2021. Uh, yes. Okay. Now we're closing out of five. Closing out of five. Okay, cool. And then so, so five, six, seven, eight. So what you raised 2 million in 2020, something like that. Yeah.
Roughly between. Yeah. Right. Right around 2 million. Interesting. Well, between 2018 to 2020. Okay, fair enough, fair enough. And then the $5 million you're closing right now, where's that money going to go? We're going to invest it. Expansion, sales is a big part of it. So we're going to bring on a couple more engineers.
The sales team is, we're looking to expand that now and go and attack these other verticals, such as live events and brands and agencies. That's really where we're focusing in marketing. We just haven't, we've never done marketing for the company. It's always been word of mouth. And so now we're going to put some dollars behind that.
And most folks in the series are selling call, you know, 10, 15% of the business. Are you guys going to sort of be in that same range? Um, yeah. So our model, like the way that we, we did a lot of ours on a convertible note to begin with. Um, but for, for this round, it's yeah, it's right. Actually right in that range. Yeah. Yeah.
So you're talking like 25 million pre-money north of that by a little bit. Okay. Okay. Fair enough. Fair enough. Yeah. And then obviously the other 5.5 you already raised will be converting on this round as well. So it's a little, probably a little more dilution. Yeah. Yeah. Okay. Anything you would have changed about your funding history based off sort of looking back?
Uh, yeah, I hopefully wouldn't have, there wouldn't have been a pandemic that came blowing through because that kind of messed things up. Um, whenever way back when, when we had to do these notes, um, had, would I have changed anything? Um, I think I might have started some conversation with some of the funds that we're talking with now a little bit earlier.
But having said that, it's hard to do in the middle of a pandemic when you run a live sports company. I mean, it makes it hard to go, hey, we promise this is a worthwhile investment when people are going, well, we don't know when this is going to end and we don't know when it's going to. So I would have liked to made some of those connections a little bit earlier. Yeah, fair enough.
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