Bootstrapping an Ad Tech Company from Paris: Daniel Nathan, CEO of BidMotion (Part 7)

Sramana Mitra: The $9 million in 2015 was your revenue or was it the gross spend of how your advertisers are spending with you?

Daniel Nathan: It’s the gross spend but the average margin was pretty high.

Sramana Mitra: From an accounting point of view, how do you calculate revenue? Growth spend is not revenue in your business, right?

Daniel Nathan: It is, because we are doing an arbitrage business model.

Sramana Mitra: If you’re gross spend is revenue, what is the gross margin then?

Daniel Nathan: We cannot disclose exactly the gross margin but it’s much higher than industry standard. The industry standard is about 30%.

Sramana Mitra: Are you doing this bootstrapped or have you raised money?

Daniel Nathan: No, it’s all bootstrapped.

Sramana Mitra: Is that what you want to do? What is your game plan? Do you want to continue to bootstrap?

Daniel Nathan: Yes. This year, we’ll see probably $40 million to $50 million in revenue. We are a small team. We have 15 people now.

Sramana Mitra: Based in Paris?

Daniel Nathan: Yes, but we have a lot of different nationalities. We don’t want to be a French company in terms of people. We have Chinese, Spanish, Indian, French, and American employees.

Sramana Mitra: You’re going to manage $40 million to $50 million gross spend this year, and you’re a 15-people company based in Paris. What else is interesting in the story?

Daniel Nathan: Our strategy to show the world that a great company can emerge from our technology has actually worked out. We are extremely excited about this. Basically, we will be able to plug out technology to a lot of different agencies. I see huge opportunity right there. We completely changed the structure of our business because when you’re selling SaaS, you have to give 24/7 support. You have to get a good product that is inline with our clients. This is a completely different way of working.

Sramana Mitra: In the long run, you want to be a SaaS company and not a media company?

Daniel Nathan: In the long run, we want to be a data company to be honest with you. We’re going to build multiple business streams to be able to aggregate data in different ways.

Sramana Mitra: Why are you making this detour into SaaS?

Daniel Nathan: It’s not a detour actually. It’s a step. When you want to monetize data and when you want to put data in perspective, you really need to aggregate tons of data, and be a massive player. You can’t just say, “I’m going to build a data company.” Have you heard about Onavo?

Sramana Mitra: No, I haven’t.

Daniel Nathan: Onavo was a company based out of Israel. It was an app. At that time when they started, all the carriers had a limit on data. You were able to use one gigabyte per month. What they did is say, “You can use a VPN that is built by Onavo. You install the app, and you put the VPN of Onavo. All the data is going to be compressed in the service of Onavo. Instead of having just one gigabyte a month, we’ll have 10 gigabytes.” It’s great for the user. They were getting more data than Facebook and the carriers because they knew everything about the user. Then by building anonymised reports, they were able to send very interesting reports. At the end of the day, they were actually acquired by Facebook. I really think the business model is super interesting when you’re providing a great service almost for free that is helping a lot of people. Then you are going to a critical mass which you’ll be able to produce by anonymising the data. This is a game changer.

Sramana Mitra: Very interesting. From the media point of view, you’re going to be managing $40 million to $50 million in ad budgets to go spend. How many clients does that represent?

Daniel Nathan: We have about 60 clients.

Sramana Mitra: Are all of these going to go on the SaaS business model?

Daniel Nathan: We hope so.

Sramana Mitra: It’s fascinating what you’re doing. I’m thrilled to see that you’re doing this from Paris and you’re not immediately moving to Silicon Valley. It’s really distressing to see what’s happening in Europe. Entrepreneurs like you are really the future of Europe. If you all leave, then Europe will have nothing left. Thank you for your time.

This segment is part 7 in the series : Bootstrapping an Ad Tech Company from Paris: Daniel Nathan, CEO of BidMotion
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