SaaS Interviews with CEOs, Startups, Founders
EP 363: Google AdSense for Physical BillBoards Does $250k with Douglas Lusted
22 Jul 2016
Chapter 1: What is the main topic discussed in this episode?
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 top. Five and six million. He is hell-bent on global domination. We just broke our 100,000-unit sold mark.
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Top Tribe, this is episode 363. Coming up tomorrow morning, you'll hear from John Gillen from Roost. He's doing 300 grand per year, but just got a $15 million valuation. What the hell is wrong with this picture? Top of tribe. Good morning. Our guest today is Douglas Lusted. He's the CEO and co-founder of LinkIt. He's named as Forbes 30 under 30 at the age of 19.
He's grown his company from conception to enterprise customers in the out of home advertising industry. Douglas, are you ready to take us to the top? I am ready. Thank you. Okay, very good. So tell us what LinkIt does and how do you make money?
Sure. So link it is an analytics platform for the out of home advertising industry. So if you see a digital screen advertising anything in a mall or an airport, for example, we do all of the metrics and analytics behind that. Uh, we essentially are counting how many people see the ad for how long, how many times, and if they actually converted on what was being advertised.
So your physical version of Google AdSense.
Exactly. Okay, very cool. How do you make money?
So we sell it as an annual subscription to the network owners. So the guys who own the digital screens or sometimes we'll sell it directly to the advertiser who wants to see that data back.
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Chapter 2: What is Linkett and how does it operate in the advertising industry?
So I actually like small teams making a lot of money. That's way better, isn't it?
It is. Especially if you can get into profitable, you can kind of make your own rules, which is sleep at night.
Absolutely. So give us a sense of kind of growth. What was 2015 total revenue?
Well, 2015 total revenue was about $250,000. This year, we're on pace to do just under a million.
All right. And how many paying customers do you have as of May 2016? We have 18. 18. Good. So you're working, again, you're kind of selling. In other words, this isn't like a big low ARPU SaaS play where we're selling to thousands of customers because there's a few people that control these signs. You sell to them and then you're in, right?
That's correct. Yeah. Getting in is the tough part.
Yeah.
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Chapter 3: How does Linkett measure customer engagement and ad effectiveness?
What was, give us a sense of monthly recurring revenue. What was monthly recurring revenue in May 2016?
Uh, we're at about 25,000. Okay.
25,000. And what, um, so what is the average customer paying you per month?
About five grand. So we have like out of the 18 customers, um, all 18 of them, um, were, were kind of started out as pilots, which is kind of an ugly term for us, but, um, we often have to go through fairly long pilots. And then we've had about six of those 18 converts so far.
Okay. Got it. So, so kind of those, that's 18 free customers. Six are paying customers paying about five grand per month. That's how you get the 25 grand in MRR or 30 grand.
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Chapter 4: How does Linkett generate revenue from its services?
Yes. Okay. Got it. Very good. Um, what about churn? Have you seen any churn yet?
uh yeah we had one uh we had one client um stop our service after the pilot said they didn't want it um it's kind of an interesting space where and it's very disruptive i mean is it competitive i mean do you have competitors or what we have guys who use cameras so they put a camera on the screen and track people we actually track people through small wi-fi sensors
So I wouldn't say it's very competitive. It's just the industry is slow to adapt or adopt these types of things. I mean, they've been telling their clients, you know, hey, a million people walk by this display, just trust us. And then when we come back with the data and it says, well, actually, only half a million people walk by this screen. You know, some people don't like that.
How do they charge their clients for that? Let's say I'm renting, I'm in Mountain View, there's a convention center or conference center, and I'm renting a billboard that's like six foot by three foot. It's electronic. What am I paying for that daily?
So it's based on a CPM rate. So cost per thousand people. Let's say the mall... How do you know a million people go through it a year and your billboard is up there for a month? They'll divide a million by 12 and say, OK, you know, it's X amount of dollars per impression. Therefore, you owe us X amount of dollars. But it's not very accurate.
What is typical impression cost?
It really depends. it varies so much. Like if you're in a mall, it depends what mall, it depends the general income of, of the traffic that's going through.
Give me a mountain view somewhere in mountain view. Real example.
In mountain view, you're probably looking at about 80 bucks per screen per month. Or sorry, 80 bucks per screen per week.
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Chapter 5: What was Linkett's first-year revenue and how did it grow?
I don't think it's going to, you know, I don't think the industry is going to fold by any means. It's growing by about 35% per year. Measured by what?
Revenue or measured by what? By revenue. Okay.
So I don't think I don't think it's going to disappear. It's just going to absolutely have to adopt platforms like ours or similar technologies if they want to if they want to keep that growth.
Interesting. If you had if you owned every billboard kind of in the country, what would you do with them?
Um, I would, uh, open an online bidding, um, platform so that people can start buying billboard ads online. Cause right now you can't do that. You have to physically call the billboard owner and try and make a deal. So real-time bidding is what I would, I would do with it.
Oh gosh, that'd be a pain in the butt. If I want to do a national campaign, I have to call every guy and negotiate. No, thank you. Exactly. Yeah. Okay. So you've got six customers. Do you, do you know kind of customer acquisition costs or is it, you're just hustling right now? It's too early.
Too early. We're just hustling right now.
Yeah. Okay, good. A lifetime value is probably too early as well. Um, do you know, well, I don't know, maybe, do you know what a customer is worth to you?
Yeah. So, um, We really are only going after like the top 30 guys in the industry. There's only really 30 in Canada and US that are worth our time. And those 30 would be anywhere from 600,000 to 6 million a year, depending on who it is. Okay. Who's the biggest one? The biggest customer prospect we have now who actually is doing a pilot is OLG, which is the Ontario Lottery Gaming in Canada.
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