SaaS Interviews with CEOs, Startups, Founders
Sourcepoint Hits 500 Customers for Data Privacy Product, Will "definitely hit $50m in 2024"
23 Mar 2023
Chapter 1: What is SourcePoint and what problem does it solve?
The easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now 1% call it take rate on that. They're growing nicely. They raised recently a series C in 2020 for 17 million bucks.
They've got a team of 60, evenly distributed call it, and a nice go-to-market plan, leaning on a lot of his ex-teammates from AdMob as they look to scale to 50 million. This year will be a stretch goal, but definitely in 2024, serving 500 customers today. Hey, folks. My guest today is Ben Brokus.
Chapter 2: How did Ben Brokus achieve success with his previous ventures?
He's the co-founder and CEO at SourcePoint, now leading the strategic direction. It's a data privacy company for digital marketing. He's got a proven track record of growing companies that transform the digital content industry, founding and leading the preeminent supply-side platform, AdMob, to its acquisition by Google for a reported $400 million in 2011.
He then served as general manager of global marketplace development team. Prior to that, he drove business and operations for Jump TV and AOL. Ben, you ready to take us to the top? Sure. Let's do it, buddy. All right. Your bio said 400 million reported.
Chapter 3: What is the significance of data privacy in digital marketing?
That was in 2011. I mean, can you create clarity there? Is that confirmed? Is that close enough?
I mean, it's all about how do you do your fancy accounting. There are bonuses on top of the cat price that was paid, that were given to employees. And so it was significantly above that in terms of price. But it's also what gets recorded in the purchase price is the complexity of the exact price. But yeah, that was startup number three. And we did quite well at them.
Chapter 4: How does SourcePoint's pricing model work?
You have co-founders there or sole founder?
No, co-founders. Co-founder, a different Brian. I have a co-founder currently named Brian Kane, who was also my chief operating officer at AdMeld. But I co-founded that business with a gentleman named Brian Adams, also an incredible operator, engineer, and product person. Yeah, we founded that company in 2007, exited in 2011.
This one, after three years at Google, founded in 2015, have been rocking and rolling almost eight years. And it's been a great journey.
That's great. Now at AdMail, were you guys pretty capital efficient or had you raised a bunch of money to grow that company?
Chapter 5: What types of customers does SourcePoint serve?
We raised a bunch of money and we have had a history of working with the best and most incredible venture capitalists in the world.
How much had you raised at AdMail? 40. Okay. Well, that's not terrible. So if it's 40 and you sell for four, I mean, you read companies all the time today that they raise a hundred million, they sell for a hundred million, no one makes any money.
That doesn't work out really well.
out well so when you say a bunch of money just to be clear again that's i would call that pretty darn capital efficient it was a good one for everybody yeah where i come from 40 million dollars is still a bunch of money it's not 400 million it's 1.8 billion but 40 million in most people's minds is a bunch of money yeah well it's all it's all relative is how we like to look at it here on the show let's talk about source points so was this a problem that you had at admelt you said i need to leave and actually just build this for everyone else or how did you identify this problem
Oh, no. I mean, I think data privacy is one of those things that has been building for the past three, four, five decades.
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Chapter 6: What are the challenges of raising venture capital for startups?
I mean, data is the lifeblood and is the oil of what runs the digital enterprise today. And the understanding that from a user perspective, most users don't understand what the value exchange by giving their data away. And more and more that data can be stolen or utilized in ways that the individual user doesn't want. Digital advertising, digital marketing made a lot of this data available.
And there are a number of brokers that don't act responsibly like good digital citizens, don't act ethically, and don't keep that data secure. And so while I was at Google, after we almost created the problem, while there, we developed a protocol
called real-time bidding and the rtb protocol enables marketers to bid on individual users based on their data profile and that made data available on just about everyone understanding that you're in thousands if not hundreds of thousands of data graphs around the world might make you feel uncomfortable
At any rate, we knew that the digital media ecosystem needed to clean up its act, and we wanted to provide a solution. And that's what we did.
Chapter 7: How does SourcePoint plan to grow in the future?
We created the best solution in the world for large-scale digital enterprises to evaluate what their data privacy risk is and provide a series of tools in order to mitigate that risk and act in an ethical and good citizenship-like manner.
So bad. We'll go back and get the backstory here on the first customer, second customer, et cetera, but help us understand today as the company stands. You just described the product well. For a customer that wants to pay for and use the product today, what sort of market are you serving? What's the average ACV, would you say? 100 bucks, a million bucks, something in between?
Yep, something in between. Call it $100,000 a year in annual contract value. And our clients are the biggest media companies in the world.
Chapter 8: What are the key lessons learned from Ben's entrepreneurial journey?
What do you price against in terms of your utility based pricing? Is it number of seats, number of data, number of profiles protected? What do you price against?
It's more about implementation and volume. So we serve the digital enterprise. And so in terms of how we integrate, it's on every website call, every initiation of an app with an SDK. And so however many times you're pinging us to launch our platform is how you pay for one of our products. I think another product is a pure SaaS play. And a third is about
how much of the spend that we are helping you protect, if that makes sense. So product one and two of three are very SaaS-based models based on volume and evaluated data. And one is really on the percentage of overlap that we protect.
And that third one that you're talking about, percent of spend that you're protecting, are you taking, like I said, it's a traditional take rate model there, percent of spend or no?
Yeah, but it's basis points. So with companies that spend hundreds of millions of dollars in marketing, in buying advertising or buying data to inform
So addressability, depending on how much your spend is, we take basis points in order to protect that spend and make sure that you mitigate risk as it relates to placing messages on places that it shouldn't or purchasing data that hasn't been evaluated in the appropriate way.
So Ben, when you say basis points though, you're talking like under 1%, right?
That's exactly right.
Okay, got it. Okay, that's super helpful. Then again, the first one is pricing on volume of API calls, it sounds like. And then another, the second product is based on like a pure SaaS fee, unlock XYZ features in this many seats sort of deal.
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