SaaS Interviews with CEOs, Startups, Founders
984 New King of Influencer Marketing Grows Revenue 6x YoY to $8m
04 Apr 2018
Chapter 1: What is the main topic discussed in this episode?
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 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 Gil Eyal.
He is the CEO and founder of Hyper, the world's largest influencer search and discovery directory. He founded it in 2013, and the company now offers brands and marketers in-depth audience analytics for over 10 million influencers across major social channels.
He's really revolutionized the way that many of the world's biggest agencies and brands are running influencer marketing by focus on the same data analytics and audience demographic information relevant to any other form of marketing. The company boasts a client base of over 100 of the Fortune 500 brands, as well as the biggest advertising and PR agencies in the world.
Gil, are you ready to take us to the top?
Hey, good to meet you, Nathan. You're excited.
You're giggly either because you've had a lot of coffee or you're just excited to see me. Which one is it?
It's a little bit of both. It's 4 p.m. over here, so I've had probably six or seven cups of coffee already.
All right, so I think people are very... When they hear influencer marketing, there is definitely preconceived notions, right? So how do people know you're the real deal, kind of not like those people that are, you know, social media consulting companies?
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Chapter 2: What is influencer marketing and how has it evolved?
So if you have an office, if you have a firm that has multiple offices, typically buy one subscription and then additional seats for each office, which comes out to less than buying separate subscriptions to each one.
Okay, give us more of the backstory here now that we get the business and the customers. When did you launch this thing?
So I launched this about four and a half years ago. Before that, I was working at a company called Mobli. It was a photo and video sharing platform before Instagram.
And the strategy that I had was let me get a lot of celebrities on this thing and they'll create content and then their audience is going to come, which sounds like it makes a lot of sense, but it didn't work the way that I wanted it to work, even though I was able to get- So why went to Instagram?
What did they see that you didn't?
Well, here's what happened. So we got celebrity investors like
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Chapter 3: How does HYPR differentiate between fame and influence?
Leonardo DiCaprio, Tobey Maguire, Serena Williams. How much did they put in? Sorry, what? How much did they put in? A lot of money. Like millions? Millions of dollars. And we had, in addition to them, we also had about 200 deals with different celebrities, but they weren't driving the kind of traffic that we wanted.
As a marketer at heart, I realized I wasn't reaching the right demographic for this product. I was trying to sell the 14, 15-year-old teenagers with... celebrities that appeal to a very, very, very wide variety of an audience. And I realized I would never advertise in a magazine without asking who reads this magazine. I would never advertise on a TV show without knowing who watches it.
Why would I work with a big celebrity without knowing who their audience is? So I decided to build this tool that can break down the audiences based on demographics, psychographic data. And what I realized was that I was paying a lot to get 200 celebrities on my platform. And most, 90% of their audience was never the audience I was trying to reach. And that's a big issue.
That's what led to the birth of Piper because I realized everybody's gonna be wanting to activate these younger, these smaller influencers, these social media stars. And if they don't know who the audience is and what they're interested in, a lot of money's going to go to waste.
So how much have you raised to date?
We've raised about $8 million so far.
And why'd you decide to go that route when in your first company you raised from celebrities that didn't pan out so well?
I think the issue with Raising With Celebrities was that it created a lot of attention for the company at a stage where it wasn't ready for it. We were driving. We built an app. We were a bunch of people who built an app and didn't expect to get 20 million downloads over a three or four month period. And we couldn't handle it. The app was crashing. It wasn't good enough. Instagram had popped up.
There were better alternatives. So the publicity that comes with these big celebrities is great, but it was the wrong audience that wasn't staying on the app. And it was too much for us to handle as a company. We decided to go traditional venture capital route with Hyper because we didn't think it would benefit from a relationship to celebrities.
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Chapter 4: What business model does HYPR use to generate revenue?
That's helpful to understand. Help me to understand how you're landing these customers. These are high, I imagine high touch, you know, high kind of contract value kind of customers.
Yeah. So we all come from, everybody in my company comes from a background of growth hacking. And the first thing we did is we built this crawler that looks on all social media platforms and sees who's running influencer marketing campaigns. Then we evaluate the campaign and we send them a free report. And the report will say not, oh, you suck. It'll be, listen, great campaign.
Here are some things that we could have helped you do better. And that has a tremendously effective conversion rate. Because you're giving them value.
You're giving them value immediately.
Yeah. And look, even if they're not the right client for us, at least they become a champion because they say, okay, I know what I can do next time to do it better. So it's been a very effective channel for us. We have a small sales team of five people that will follow up once somebody's received a report and expressed interest in exploring working with us.
So take those five, plus all your other tech dedicated to getting the sale, plus any direct paid spend you get, what do you assume kind of fully weighted CAC is?
So cost of acquisition for a customer, I know exactly what it is. It's around $20,000.
And why do you say that with such confidence? Is that something you look at every day?
Yeah, we look at it every day. We're a venture capital funded company. We have to do reports. We're very, very organized.
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