The below is a full (unedited), machine-generated transcript of a Youtube session / podcasting episode I recorded with Jawad Stouli of Didomi in August of 2021. You can view the video/listen to the podcast on Youtube, Apple Podcast, Stitcher or wherever you get your podcasts.
Erasmus Elsner 0:06
All right. Welcome, everybody, and welcome to another episode of Sand Hill Road. And we all know that the internet today is a horrible place, thanks to the many content cookies. And today I have the person to thank for this. I’m just kidding. He’s actually one guy who respects your privacy who keeps your data clean and safe, Javed stoolie, who’s the CTO and co founder of the domain, which is actually a pretty nice story, a French breakout SAS company, which has just recently announced its 40 million series be a really nice story of a bootstrap, second time co founder team, I’m really happy to have you here and dig into your founding journey. IRS was thanks for having me. And maybe to kick things off the very early days of de Domi. It was started four years ago, obviously coinciding with a major event, the European GDPR regulations coming into force and you guys really being quite early to spot it. I think it was thanks to your prior startup, talk a little bit about these early days. And when you when you knew that you had to, to paddle hard to catch this wave, right. So
Jawad Stouli 1:06
I co founded the domain with the homeland go to with my co founder there. We’re both working together at MediaMath had acquired their previous company, and there was focused principally on targeting questions, optimization questions in the context of the advertising industry. So it was working on things like fingerprinting and cross device tracking questions like that. So kind of the opposite of what privacy is, to some extent. And working in the advertising industry. I think at the time it was 2016 2017 is when we realised there was this big wave of privacy regulations and privacy demands from from people coming up. And that that would completely transform the whole industry, advertising, obviously, but a lot of other industries as well. So we ended up leaving MediaMath, early 2017, we decided to launch a new company in the privacy space, which obviously not very clear to us what we wanted to do at the time, the first six to nine months, maybe until the end of 2017 was discover and research really. So we knew we wanted to build a product in the privacy space, because of those regulations. GDPR would enter into effect in 2018. And we knew people’s expectations were changing. But it wasn’t clear to us what that meant from product perspective. And there are multiple angles to approach a space like this. So at the end of 2017, after a lot of iterations, we ended up deciding to focus on content and content management and UNbuilding technical solutions for developers to get in compliance with those consent requirements, which is usually a subset of GDPR, CCPA, and all the big price or regulations. So the general idea at the time was to build stripe for content management, basically, there was division. And so it really started to pick up in early 2018. We saw things accelerating and coalescing in Europe basically around GDPR. That’s where I think the market really picked up at the time. And the advertising industry was one of the big driver behind those changes as well with the IB TCF and initiatives like that. So we decided to ride that wave and see what would come out of it. So we became the first or one of the first content management platform, which is now more for build software category. But that wasn’t obviously clear at the time. And we went from about zero to 30k in monthly recurring revenue of the time in just a few months in April and May 2018. Basically right before and after GDPR gotta get enforced.
Erasmus Elsner 3:24
That’s that’s quite impressive to have this traction. And I, I remember you were bootstrap for the first part of your journey, which is obviously nothing that everybody can pull off talking about big challenges. You got sued by a US patent troll. It reminded me a little bit of this Silicon Valley episode with a patent troll.
Unknown Speaker 3:44
But sadly, all the good music copyrights are gone. That is so sad. That’s why I moved into tech. And now I sue people like you. So he’s a patent troll.
Unknown Speaker 4:00
Yep. As like him buy a tonne of super broad IP from failed startups at auction and then threatened litigation against accused infringers. IE,
Erasmus Elsner 4:11
it was a pretty dire situation for a while there and you thought things were going to end but I think what you handled brilliantly and where you came out alive, you didn’t budge you took it day by day.
Jawad Stouli 4:23
I felt it pretty hard. I think so it happened very early in the in the adventure, I think late 2018 is more or less the first time we got would that serve? I don’t remember if it was a court or just the lawyers initially that basically said, you know, we have this truck, we have this patent that applies to exactly what you’re doing, which was cookie notices at the time, and you have to pay us I don’t remember how much it was but at the time for us. It was like a huge amount. And you know, as as an entrepreneur, the lows are very low and the highs are very high. So that’s why we do it. But the lows are so low and so at the time, you know, you get served and you feel like it’s the end of the world and there’s nothing you can do against it and you’re not sure how to even move forward from there. There is also an element of of justice with respect to patent trolls, which is you’re the small European company with no US presence or very limited US presence. And you get served with thought by it by a patent troll, that it will take, you know, hundreds of 1000s of dollars to defend against even though you’re surely you have done absolutely nothing wrong. So there’s an element of justice where no matter what you do is going to cost you a lot of money. And when you’re this small, and it’s this early, and you felt like it has just, you’ve just started and you just started to see some revenue, it feels very unfair to be in that situation. So that was that was the initial reaction is, you know, what, why is this even happening? Why should we care? And I don’t want to have to deal with it. So you deal with that for a month or two? And that’s just your personal feelings. And then then you start thinking about what you would realistically do there weren’t completely sure at the time, but you know, it was just too much money to pay. Anyway, the settlement that they offered was too low, I think we offered we countered with something lower, and they just said no, so we decided that the court was the only option at the time, we just went for it, you know, that was a little bit annoying for maybe six months, because we had to get everything started. And then courts are not known to be particularly fast. Also, I think it definitely didn’t necessarily help with fundraising at the time. But after maybe six to nine months, we got things into order, we started to have, you know, our lawyer in place to counter the attack there. And what happened with helped us tremendously was that very fast, I think maybe less than a year after the first time we heard about it, we had a first court decision in New York that basically said that the whole lawsuit was to be dismissed, because there was just no grounds here. And so we didn’t even have to go into a real trial or anything like that we got to dismiss you know, before that even happens, and that was great. Because first it was obviously great news for us really reduced the total amount of expenses, we had to budget for that. And you just felt much better when that happens, then that that kept going for another two or three years through, you know, appeals and things like that, but the initial decision was just upheld the whole time. And we were you know, growing fast and just getting to be a bigger company. So after, I would say, after a Series A, it wasn’t really a problem anymore in our minds, because we knew we had first a very shallow liberal argument that the whole thing was just empty. And second, at that point, we had money to deal with it. And it was a lot less personal and a lot easier to deal with. So definitely the first you know, a few weeks after that, at a size we were at the time it’s a it’s a very bad news. It’s it’s kind of like a different, you know, you’re used to dealing with problems every day. That’s That’s our job. But it’s a different sort of problem. You know, it’s one that doesn’t get you closer to your objective of growing and becoming a bigger company. It’s one that’s just a roadblock that has no value, and where somebody’s just trying to get free money from you. You know, it’s a sort of Racket that obviously you feel bad about as an entrepreneur. But I would say after 12 to 18 months, in our case, things ended up working out for the best for us. So now, you know, after two, three years after the initial problem, we it’s a pretty good story to tell at the time. Obviously it wasn’t, it wasn’t a great thing to happen.
Erasmus Elsner 7:54
No, I I’ve been through a similar battle myself. So I know the dynamics that David against Goliath dynamics, pretty much the worst side of patent trolls comes in the form of suing highly promising startups. So you’re definitely a victim there. But I’m happy that you managed to survive it. And you obviously as the CTO, you were in charge of building the first version of the product, the MVP, I think the first version was actually a constant cookie, you went out into the market, you got the first feedback, you started to see that you needed the constant Analytics, which you build on top of it. But talk a little bit about this really scrappy first product you had Rob is
Jawad Stouli 8:31
a good way to describe it. So yeah, that was you know, early 2018, with GDPR, calming. And after reading on a few products that we ended up keeping over the years, we saw that cookie banners really is the way people see them today, Cookie banners, which really the big the big topic in the space at the moment cookie being one form of content. It’s a subset of the content question. And so I think it was maybe January, February, when we started building a cookie banner, because we started seeing demand in that space. And GDPR would get into effect two, three months later. So it was a pretty short timeframe to get a real product in place, especially because what’s always hard with this type of SDK is is you run into your run on environments they don’t control. And contrary to being you’re building your own applications and mobile web where you control everything, here, you’re deployed and your clients websites or mobile apps, so you have no control over what’s around you. So it’s always a little bit hard to get that into into place, especially in such a short timeframe. So those those few months were definitely a lot of hard work. I think what was interesting, or what I like to remember as the positive side of the experience was I think, April and May 2018. Were like her two big months where we had a lot of times coming in and we’re billing features as fast as we could to answer to their demands. Because GDPR was right around the corner because they were a little bit late. And so I think for a month or two had like obviously very short nights, especially because I was in New York, most of our clients were in Europe at the time. So a lot of problems would happen during my night so I tended to shorten it a little bit. And so after I think a month or two like this very, very active lifestyle. I hadn’t synced up with a woman On my co founder for a while, and then we found a little bit of time to sync up, basically told him about how much I had to work and how painful it was to have to build so much in such a short amount of time. And his answer, which was really fun was basically saying, you know, it’s exactly something to sell sides, I’m selling way faster, and I can actually send the contract and the contracts out, as the first time I discovered, you know, our revenue at the time was like, 30k a month, when two months prior, it was mostly zero. So from my perspective, that’s the two months when everything happened, we’ve got that first product out, it was crappy, I was ashamed. Like, also, I think every sort of co founder should be in the beginning, it was buggy. It was very technical. But we got a lot of the big publishers in Europe just with that, because there was almost no one else at the time focusing on the media industry. So it was actually very successful. And I think that’s when you kind of know that, you know, when you’re putting your your customers through so much pain for adoption, because of bugs because of poor documentation, because it’s so early in the product, but they’re still they’re paying and giving you time to fix issues, because they have no other option. I think that’s when you know, you’ve got something you don’t know where it’s going. But you know, there’s something there that needs to be investigated a little bit more. And so we decided to focus on this question of content management that that time is. And so you know, over a few months, we got constant notices or cookie banners on a lot of big European websites. And what became obvious after that, the first questions were clients would ask us would be, okay, I have my banner now. So I’m happy because I’m compliant. But how is it working with our users? Say yes or no? What’s the impact on my revenue and my advertising revenue from that? So now ticks became this next natural question, just because we deployed the product. And now people wanted to understand what it was doing for them on top of the component, the purely compliance question. So we started building metrics around that. And I think overall, after the years, which were realised that the key metrics, what was the same, you know, because we work a lot, obviously, with media, but also in the E commerce space, and so on, what’s the impact on revenue? That’s the final question everyone wants to know. And what you’re realised is that if you do your job correctly, you know, the impact can actually be positive. So by giving the choice for some people to say no, and by having the people who say yes, be more valuable to you, as users, you can actually get more overall revenue for doing your job correctly. So that was the first big insight we started to build. I
Erasmus Elsner 12:13
think what differentiated you early on was that you have really this developer centric platform with this open SDK, maybe talk a little bit about how to set you apart early on already.
Jawad Stouli 12:23
I think at the time, you know, we had there were already some companies building software in that space. And we were realised that it’s on one trust for instances, I’m sure a competitor will talk about a lot today, but one trust was already there. You have to trust our gut a few companies out there at the time, what we noticed was that they were very focused on the legal approach to GDPR. And price regulation is generally they had workflow management tools, compliance audit, tools, and things like that, which I think is a real part of the markets. But we realise those are more aimed towards privacy officers, lawyers and this type of population. What was an entirely new space at the time was aiming those solutions at developers and building and giving developers an easier solution to get in compliance with regulation question, what was clear as well at the time was that a lot of those regulations actually transformed the way your products have to be built. As you know, in any industry you work on, you have to deal with your data differently. You have to store it differently stored in different ways, stop putting in here, data, things like that. And so at the end of the day, even though those are legal questions, they put a lot of pressure on the product and engineering teams of any company out there. And what was clear at the time was that there was this big gap between what was offered, and the very legal approach to those questions, and what the actual product and engineering teams actually mean, which is specific answers to their problems, and as much as possible technical solutions to that. So their approach was really to build a platform that will help engineers answer those questions on their own, giving them a technical understanding of those legal requirements, and giving them easy ways to put that into practice. So we ended up having basically like a SaaS platform with a lot of API’s to collect content, store it, synchronise it with third parties, along with SDKs around that, that give everyone an easy way of collecting content wherever their users are. So big part of what we build is making sure that wherever our clients need to be where they’re so we have as the case for web, mobile, connected TVs, and then all the declinations of that. So flutter React Native things like that. We’re also discussing with, for instance, car manufacturers on collecting content and cars and things like that. So wherever, you know, content needs to be collected, their job is to be there. And part of the platform is having all those SDKs to be freely available to everyone wherever they build their own products, basically. super interesting.
Erasmus Elsner 14:44
And you mentioned before you went really hard into the media vertical in the beginning because you had some experience in this industry before tea dome is a very sales centric organisation that I think there’s double the headcount in quota carrying And salespeople today then on the technical side, once these early customers came in, how much hand holding was there? In terms of deployment? Was it pretty much a self service solution?
Jawad Stouli 15:11
Yeah, I think at the time, you know, when we started, it was not self service, I would definitely not describe it as self service, it was technically self service in the sense that people could deploy everything by themselves. I don’t think the first few months, I don’t think anyone really did without our help. And it was a conjunction of us having to build a product so fast that there were a lot of good self service features that were missing. And also the problems and being so new and the industry being not so ready, that we needed to work through a lot of those questions with our clients directly. A lot of what we do is an integration job. So you know, we get on the website, and then we collect consent, but a lot of footwork actually happens after that when the user says yes or no, our job is to take that yes or no. And make sure anyone on the website gets access to that that kind of respects the user choice. So we go to Google’s API’s. And we tell them that the user said no, for instance, but three years ago, there was no Google API, there wasn’t a thing. And we had to find ways to communicate that correctly. So there were a lot of fender interactions and integrations that weren’t needed to be sorted out. So I think at the time, we needed to be very, you know, service driven, I would say there was a there was a SaaS product, but it wasn’t fully self service. And it’s the deployment mode. And it’s traded at the time. Also, we were very cell centric, I think that’s still very true that we’re building a strong sales organisation. And we see ourselves as serving big enterprise companies, which requires a strong sales organisation behind it. I think, today, as we’re maturing, though, we are trying to shift away a little bit from the purely self centric, and we are investing a lot of for our money into self service, basically. And that’s something we’re seeing these days where the people we hire will tend to be a little bit more of the product and tech side, and we’re slowly shifting the balance a little bit. And the key reason for us is an industrial one, like three years ago, small websites smoke, they had no reason to pay for GDPR. And so you had a very bimodal market where, you know, most of the market wouldn’t pay a cent for privacy, maybe $5 a month, but nothing more than that. And then the only people who would really pay for that were your top publishers initially, and then slowly, but surely the top retailers and expanded from there. And so I think three or four years ago, the self service side of the business wouldn’t have been that interesting from a sales or business perspective. And I think that has shifted a little bit over time, because the industry has matured, because the rules are more and more clear. So now, every company is slowly getting into the game. And because the rules are expanding in Europe, but also in the rest of the world, you see more enforcement, and you see more regulations. And so the transformation of the company has to follow that. So being self driven is great when you have big publishers or big retailers, big companies paying top dollars, when you’re opening up new markets. And when you want to look at different types of companies, you’ll need to be a little bit more sales service there. So we’re definitely a sales driven organisation. I don’t think that that’s changing anytime soon. But we want to make sure that that’s in line with what the market requires. And the good news is we see the market opening up, which wasn’t the case three or four years
Erasmus Elsner 18:05
ago. Yeah, I think that’s super interesting how the market has matured. And this category, as you mentioned, at the top of the show, didn’t really exist. And maybe if I can double click a little bit on the product itself, and you mentioned, you alluded to it a little bit, you’re not actually storing the user data on your servers, what you’re storing is the content. And then you’re feeding it into all these API’s into the Google API, but also on the client side, making sure that the way that they manage the data is compliant with GDPR. Talk a little bit about this thing that’s going on in the back end that very few people are really aware of.
Jawad Stouli 18:44
I think at a high level content management is pretty simple. So consent really is user choices. It’s the fact that legally in Europe with GDPR, users can say yes or no to their personal data being collected, for certain use cases, certain data processing. And a very concrete example is cookies. A cookie is considered personal data. So setting a cookie on your computer in Europe, you have to say yes or no to that before it happens. But it can be all the types of personal data, your geolocation, your IP, your unique user ID, things like that. And in Europe, we call it consent, because it’s, it’s more of an opt in base where we have to ask you whether you agree or not before doing the data processing. But in the US with CCPA. And even before CCPA, you had opt out, which is really the same thing. Except I can assume you said yes. until you tell me you say no. So at a high level content management is really just collecting those user choices. So it’s having different tools and different UIs for asking users those questions. Cookie banners are one type of consent one type of questions we asked but we have a lot of other products that deal with other types of consent. So for instance, subscription to newsletters or to any form of commercial communication is also consent. And so we’ll have different types of UIs. Behind that the first step in our job is collecting consent and making sure that it’s clear and compliance how we do so And summarise are very regulated. So what’s illegal to correctly form a cookie banner is actually pretty, pretty standardised and pretty regulated. So the exact text you put in there, the colour of the buttons, the shape, things like that are actually pretty regulated. So the first step of our job is collecting content. Once that content is collected, the second step obviously is making sure that it’s respected, because it’s completely useless and non compliant if we’re just asking the user, but doing nothing with their choice. So once content is collected, our job is to make sure that it is synchronised with all the potential third parties or even the client itself, so that they respect the user choice. And what happens, there is indeed a lot of integration. So we’ll take the user choice and start pushing it out to the vendors that could potentially be used for the better pricing that we collected content for. So if we take a very simple example, advertising, today’s before showing an ad on a computer, a vendor might be tempted to use a lot of user data. So in this case, our job is take the concept let the vendor know whether they can display advertising with personal data on and that comes that’s done through a lot of direct integrations. But it’s also more of a spectrum. It’s not a binary thing. So the one end at one end of the spectrum is if the user says no do nothing, so the user says no, show no ads on the website. That’s what happened three years ago, when there was no maturity in the market, the only thing we could do was block third party vendors from doing anything. The user said, No, we will just not display ads. And then over time, what everyone realised is, you know, for users that say, No, we can still do things, we just cannot use personal data. So we’ll do non targeted advertising, we’ll do contextual advertising, things like that. So in this case, our job is to pass that know to those vendors so that they can do contextual advertising, for instance. And the way that synchronisation happens, also changes very often or very fast. In the advertising industry, you have what’s called the TCF transparency and consent framework, which is the de facto standard for CMPs, content management platforms to share the user status, these are choices with those advertising vendors. And so it’s a technical specification that says, how we, as a company, encode the user choice and how the vendors from the ad tech industry read that content and interpret it. So the advertising industry actually did a great job there, the standard is very good. And most vendors, you know, enforce it and respect that the right way. And that didn’t happen in the other industry. So slowly, but surely, you see the big players catching up. So Google and Altix, for instance, or GTN, they added now API’s to be able to receive that contact information. So our job is to keep adding those integrations to be able to push that out to those vendors. And very often, at least for the big players, it is custom integrations with every vendor that’s full chain from the first time as a user, you’re being asked whether you agree to cookies, or whether you agree to receiving emails, the Content Collection side of the business, then it has to be fed into all those vendors, all those SAS layers, usually that our clients work with. And that’s a lot of integrations to build. So at an abstract level, it’s pretty simple. Where it gets complicated is that there is no generalised standard for doing that it with every single vendor out there. And so you have to build a lot of smaller integrations, either industry based or just very specific to a given vendor together. And because it’s a compliance question from a for our clients, they need to have all the integration for every single one of the vendor, you can’t say I’m covering 80%, that’s good enough, good enough is not compliant, basically. So you have to cover everything. And as small, I think, interesting, non technical point is that that’s also a key driver to less diversity in the markets on the vendor side. So that’s the topic maybe we can cover later. But because of that, because of CMPs having to build those integrations, you know, some pliers that are not correctly integrated, will be driven out of the market eventually.
Erasmus Elsner 23:45
And it’s super interesting, given the all these integrations, you alluded to this giving you defensibility within the market, that very few customers actually switching CMPs over time, basically meaning that you have really strong cohorts, very little churn. And this, I think, in part has also allowed you to bootstrap the company for the first few years put off raising the first institutional round for quite a while bootstrapping it, and scaling it really on the customers money, which is pretty impressive thing to do. Maybe talk about, you know, the bootstrapping journey until the first round of financing. So we definitely have
Jawad Stouli 24:23
a very low churn, I would say compared to a lot of our peers, not necessarily in the content space, but more generally, in the SAS, b2b SaaS business. I like to think it’s because our product is great, but I can’t deny it. It’s also because the there is an industrial effect to our business, which is once were deployed, and once your clients go through so much work leaving is definitely hard endeavour for them. It also means you know, it’s hard for us to acquire clients from our competitors, eventually that that leads you to a more oligopolistic market where the strong players in the space have have have a lot of power. And so I think that’s what that’s what has been driving our fundraisers sort of Far, when we bootstrapped, I think it wasn’t clear to us at the time, you know, up until 2019. When you’re in a business with such a low churn and with your competitors also having low churn, it does mean that you know, you are in that b2b SaaS race were the ones who raised the most and appointing the market. And so when we’re bootstrapping, I think we were at our for size, it was a great experience, it was a great achievement, what became clear to us pretty soon was that it would at some point, it would be very hard to bootstrap a fully grown business on the market like this. Because of those strong tendency to a low Trump, that’s, that’s when we realised that we need to start raising money, otherwise, our competitors are going to do it. And we’re going to end up being the losers there just because of that industrial market effect, not because we’re doing a bad job or anything like that. I think Europe is picking up a little bit. And France in particular, the last couple of years in terms of building big companies. What was clear to us though, at the time is that, you know, the odds are against you, when you are a French player in a global market. Usually, French French companies don’t win in markets like this, or at least in the in the tech space, to be clear. And so that will also play the role in that we were able to bootstrap naturally need to raise at the time, but we thought that, you know, that was the only way out of the Europe, European space for us was to also become a bigger player and to raise more more money from VCs at that point. We also like to think that big pricey wave started in Europe with GDPR, there is something to be said about the European player becoming one of the big players of the markets. Because we, if we can’t do it there, then really work in Europe do it in the in the tech space. So that was also part of the the reflection there of us having a little bit of a specific position in terms of tech hear that privacy’s a little bit more European than the rest. That also made us there. So you know, we bootstrapped the first couple of years, and I think that worked great for us, we got to roughly $1 million in ARR, without raising money from from institutional investors. I think that worked well. And we just, we just got to the point where we felt like we needed to get to the next level, and we needed to compete at a more international level. And so we started raising our Series A also more as a French round with French investors. And continuing that logic, and the second round in our series B, we felt like we needed a more US centric investor. And we will work with elephants at that point so that we could become bigger in the US as well as starting investing more in this country.
Erasmus Elsner 27:31
And how aggressive did you go out in the market for the first fundraising? Because I mean, 1 million ARR sauce company, I think it was close the first round in 2020, which was obviously a huge year for any Sass company, I assume you would have had a couple of term sheets on the table. How broad of a fundraising was it? Or were you trying to keep it a lean and quick fundraising and wanted to really focus on growing the business mostly,
Jawad Stouli 27:57
the theory is a was actually pretty hard to raise, I would love to say that it was like they were raised millions and a few days and like an oversubscribed rounds. That’s not really what happened. It was more like written for severance for a month. And the whole night, my co founder did a great job there. At the time, I think what was a little bit against this, the revenue was great. And so as a as an opener to a VC in your first email or your first contact with them, they’ll definitely take the call. So we had a really easy time talking to VCs, we had a really hard time getting them to commit and invest. I think there were two factors there. The first one was we were still pretty deep into publisher and media niche at the time. And so that put us more in the tech space for a lot of venture capitalists and 2019 wasn’t a good year for ad tech, maybe today will be much easier. We see stronger performance from like trade desk, and pretty when things like that, at the time at Tech was losing bets. So that that bias I think was against us. And also I don’t think it was clear at the time that it was a real market, or we had a hard time convincing our investors that it was real markets, it was right after GDPR. So they saw our metrics. As you know, having gone through a huge wave that was great. I don’t think everyone was absolutely certain at the time that the growth was there to stay in that we were looking at the creation of a real category and not just like a very small niche space. What we’ve done since then, you know, is basically extending the market. So opening up to smaller companies opening you up to other questions, and just cookies and things like that. So to us, it was clear that that would happen. And that we’ll start it as this nice player because we needed to start somewhere. But the vision was clear to us. I don’t think we were able to convince as many investors as we would have liked at the time, but we ended up convincing Bri gal who was our first investor on that round. So you know, they took the risk with us eventually. I think we’re forever grateful for that. And I think they’re pretty happy with their investment as well. But yeah, it wasn’t as smooth as I think we would have expected either given a revenue at the time. My feeling is that for the most part, you know, it’s always a bet and some times it’s not clear where their niche is going. That was the hard part of the round at that time.
Erasmus Elsner 30:04
Yeah, it makes a lot of sense. And to what extent do you think that many of these investors from the investor side from the venture side, they perceived also the problem that you’re solving is a very European centric one? Obviously, you diving deep into GDPR. But you mentioned already there’s, there’s similar legislations in the US not quite the same. But how important was it that this is a broader category, that this is not just French logos that you can bring on talk a little bit about how this narrative was important. Also, for the second round for this series, B, the scale of brown that you just recently closed on?
Jawad Stouli 30:44
That’s a good point. So this series B was in comparison, much easier, and much more fairytale from a from an investment perspective. So you know, we spent a couple of months preparing everything. And we already had, at that point, a lot of connections with investors, you know, we reach out regularly and we would talk to regularly at that point, we started a roadshow. And I think in about two, three weeks, we got to a few term sheets, and we ended up picking the best fit there. So I would say there was a lot less pushback, the question of whether it’s a European question or not, I think got kind of sold in between those two rounds, not not necessarily by ourselves. But by the market itself, there was a push for, from regulation. So CCPA, Virginia has as low as well. So even in the US, we can see that starting to pick up a little bit. But there was a big global push for more regulation. So Canada, Brazil, Russia, China is coming up with regulation this year as well. So the question of whether it’s a European or global question, I think, was answered by the market and by regulators pretty, pretty fast. And that definitely helped us not having to face too much of those questions anymore. Too many of those questions anymore. So the Europe versus global in my mind is pretty much settled. It’s a global question now. So we see from regulators, we see it from users, we see from big companies like Apple, for instance, that pushes GDPR, like requirements globally, we’ve also seen from our clients, a lot of our clients, even when they are non European companies, and so they’re not forced to apply GDPR. Globally, they very often decide to apply the most strict set of rules just because it’s easier for them. And so a lot of our clients will decide to just go with GDPR everywhere. And that gives us you know, CCPA, for free and all the other regulation for free. So I think we actually went from it’s a European question to having a European approach to it is a good answer to a global problem. So we actually kind of like turned that around in a nice way. And that definitely made the series be much easier, on top of, you know, just a growth of indeed, the revenue and the logos. Because what we’re also seeing in our clients base is that in Europe, you know, all countries are fully invested in that. So we have a lot of clients in more than 15 countries in Europe, but we also see a lot of traction outside of Europe. So the US also pretty big market for us, but also get, you know, inbound from countries that we have no presence in whatsoever, like South Korea, for instance. And so you see, both in your actual times, and in the demand, you’re getting that it comes from everywhere, and that there doesn’t seem to be any geographical limit to where privacy starts to matter, and where content management starts to be important for companies basically.
Erasmus Elsner 33:19
Absolutely agree. I mean, privacy is becoming such a such a huge topic. And obviously, me saying this as a European, and you’ve now just cleared the 40 million Series B, you mentioned that you’re in the process of sort of scaling up increasing the technical side, you’re obviously now taking more of a managerial position where you have to manage a large tech team, probably your your typical day starts and ends on GitHub or GitLab, where you do source control where you look at, you know what different products are built out, talk about, you know, your personal day to day life now in the scale up mode.
Jawad Stouli 33:55
So I would say less than GitLab or GitHub, but definitely spend more time in meetings than than I used to. So I’m definitely transitioning from a role where, you know, three years ago, I was building most of the platform myself and then grow the team up to about 20 engineers today. So I’ve started to code less than less than to be less than less involved in the technical execution about a year ago, I think. And so I’m just continuing on that path of slowly moving towards a full management position. And so now the questions that I’m faced with are more about how do you grow team? So how do you go from five a year ago to 20 today to 50 at the end of the year, in a way that is sustainable from a cultural perspective, so that people who’ve been here longer and people who just join all feel good and feel comfortable working with the company, how do you grow with from a tools and structure perspective and organisational perspective? So I spend a lot of time with engineering managers and this type of questions. You know, how do we hire what’s the hiring process? How do we train how do we onboard? And then how do we execute what’s our usual process? How do we how do we build everything how to automate everything this type of question, so I’m, you know, I think At the end of that first transition to a full management role, which I’m comfortable with at this point, because indeed, that’s something I’ve done before at MediaMath. We’re always managing a team of about 15 people at a time. And so I’m kind of like, you know, learning wholesale as I go to get to it to a bigger team there. And then, you know, the day to day basis, I would say, you know, the conclusion of that is that I indeed spend most of my time in meetings, whether it’s internal ones, I also spend some time with partners or clients, which is also something I do pretty often. And so my life has transitioned to be a lot less exciting on a day to day basis. But I get a lot more support from the gym today. So definitely lower stress than three years ago. And I started to get a little bit more time to focus on long term questions. And where the company should be going is something that I spend a lot lot more of my time on than I could do, you know, three years ago, when I was the one building features day in and day out.
Erasmus Elsner 35:51
Yeah, talking about long term questions. And when I talk with founders, they typically tell me, what keeps them up at night is oftentimes competition worrying about one competitor going into hyperscale mode, raising $100 million round, you know, basically doing whatever it takes to get new logos, how is it for you? Is it a couple of peers that you’re thinking about
Jawad Stouli 36:14
what happened three or four years ago, was there was this big wave that bill were part of, of, you know, new companies investing the privacy space, a lot of them were obviously not working with content, but a lot of them also went to the the content life and questions. And so at the time, we had a lot more competitors, I would say, as an absolute member, but they’re all pretty small. And what happened, I think is pretty standard in SAS industries nowadays is you have a first wave of consolidation that I personally think we’re going through at the moment that it could last another year or two, where you see, out of all those companies that started three years ago, you’ll have a few left that are strongly on a VC funded path. And a lot of the others will just fall either, you know, stop their product, or just get acquired. So we’re seeing a few small acquisition like cookiebot, for instance. And we’re also starting to get a little bit more clarity on who are two strong VC funded SAS players in this industry. One trust is obviously the big one bigger, by far, I would say much bigger than we are today, they’ve raised I think, upward of a billion dollars at this point. And they’re still growing very fast. So very strong competitor, they also do you know, they’re also are focused on other verticals, not just content. So we see them pretty often. And that has been a strong driver for motivation and growth, including in racing, you know, when you have competitors like that, you know that the only answer you can really give them into long term needs, you need money to get there, you need, you need cash to get there. And so when you’re in the market like this, where the top 123 players are very strongly funded, you kind of have to do it to like, you can’t allow them to just get so much ahead that there’s no way you’re catching up. And I think that’s very normalised today in SAS, that this is how a lot of those markets evolve. So why trust is a big one. In Europe, I would say the one we’ll also look at from time to time would be user centric, because they have their the European competition has raised the most for us. So we’re also kind of like keeping an eye on them. Now there is, you know, I would say at least dozens of other potential competitors we’re looking at discussing with and so you know, that’s what driving us in the sense that we understandably, can’t let ourselves fall behind. That’s the positive aspect of competition, I think that’s what stands on long term might have daily, sometimes a little bit disappointed when they are able to achieve something you haven’t been able to. But I would say in the long run, it’s more a positive force than anything else. And the second thing we’ll look at, I think, is more how the market structure is evolving due to external factors. And that’s something that even one trust as big as they are, they can control more than we can. And so a lot of us catching up and eventually getting to be stronger than they are comes from us reacting better to those external pressures. And on this industry, because it’s changing very fast for a lot of those external pressures. There’s regulation, obviously, that’s changing pretty often, even in Europe. GDPR, you know, wasn’t forced or starting to be enforced three years ago. But do you see a lot of country specific changes, so France in April of this year, starting enforcing stronger roles, Italy will do so at the end of the year, Germany as well. So, you know, even existing markets that have existing regulations keep changing very fast, like every year, you’ll have new rules. So you need to keep adapting to that. You’ll have big non price related players, but that are driving the market structure. And we all know them. So that’s Google apple. In our in our industry, that’s, that’s the main two. So when Apple shows up and says, you know, here’s how you collect consent from users for tracking, for instance, which they did with iOS 14, and what they call ATP. That puts pressure on you, what’s the value of a cmp? When Apple has standardised ways of collecting constantly, if Apple keeps investing in that direction? Will our CMP on iOS that’s you know, I don’t know how much that is in revenue. But let’s say that’s 10% of your revenue, will that still be there in a year to a five year so changes in the market would be cookies, you know if cool? These are gonna go over third party cookies are going away, what’s the value for CMP dedicated to cookies, friends, so you have negative pressures, you also have positive pressure, you know, regulations are generally positive pressure. To be honest, from our perspective, they’re negative to our clients, but are positive to us because they bring a lot of revenue and demand. So we’re looking at both markets and competition as the two big trends and our jobs, please do make sure that we’re constantly adapting to that the main conclusion we take and the main way we look at the market, and that it hasn’t changed that much since the beginning is that the long term vision is around concepts. And that remains true. What we should be careful about is limiting concept to a specific industrial question. So cookies is just one form of content, marketing, communications and other forms of content. There’s a lot of content question in the healthcare industry, for instance, things like that. So our job is to keep expanding, we started as a niche French media focused company in terms of content, then we expanded in terms of industry, we’re now we’re focused on a lot more than just media, so banking, retailers, insurance, things like that. And then you want to keep expanding geographically, the type of contents you manage, and your product offering that goes with it. And our feeling is that, you know, today Apple might be a risk, but give it five years, if we do our job correctly, it’s a small share of the overall question and the whole business eventually. And that’s much stronger than you know, us losing a deal against a one trust once in a while, or things like that, I think,
Erasmus Elsner 41:19
absolutely, you highlight a couple of aspects that very few people think about when they click these cookie concepts. So maybe as we’re running against the clock here, Java to shout out to some of the great initiatives, you’re running at the company. First of all, obviously, you’re hiring, or you host events, and webinars, maybe talk a little bit about all these great things that the company is up to. So we’re
Jawad Stouli 41:39
having a lot of old functions, right, where I think we’re one of the companies that’s hiring the fastest in their space. I think we’re also structured in a way where if they’re remote, we haven’t been remote since the beginning. So we hire people everywhere. You know, we just we just focus on getting good people to work with us, wherever they’re, they work with them. And then indeed, I think, as we’re growing, and as we’re maturing, we’re focusing on a few things. So the first one is being a little more vocal about what we think is the right way to deal with privacy as a business. So you mentioned that that comes through events, we’re doing the yes, we trust summit in October, you know, getting a lot of those thought leaders with us and discussing, what does being privacy compliant mean for the tech side of the business, the product side, the marketing side? And and how do you put all that together into making it not just a race, but also like an asset. So investing in privacy, from our perspective, if you do it right, usually can have positive impact on your revenue. So we do events, we do a lot of you know, blog, posting webinars with our clients, with our partners and things like that. And the key the key aspects of that for us is we we think we know where the market is going. Like, we’re strongly convinced that our vision of the market is right one we’ve been right so far. And the more we can explain that to everyone outside, the more we can go there, you know, altogether, most of what we’ve built so far is built with partners who work with Google very closely work with, you know, a lot of fathers like that. And so we need to get everyone together, we need to get everyone in the same direction, basically building more privacy focused features for our clients. And so the way we look at it, it’s not it’s not a fight between companies and users, you know, there are a lot of local tensions where users want things that companies don’t want to give them initially. But the long term trend for us is pretty clear. companies out there need to adapt basically to it. And the winners of tomorrow will be the ones that have strongly invested in privacy space. So we’re building basically the platform to power all of that. And that’s what we’re hiring because we’ve been growing very fast. And we need to you know, keep keep building your platform to support all those questions.
Erasmus Elsner 43:41
So yeah, Java, thanks so much. I couldn’t couldn’t agree more with you and your your great mission. Thanks so much for taking the time and walking us through the journey here. And every time I hit the consent form now, I will think of you and I’ll be following your journey going forward.
Jawad Stouli 43:55
Thanks a lot for having me.