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Maximizing the Moment: A conversation with Brian Handrigan from Advocado

February 15, 2020


– [Alexander] Three people
meet for lunch and discover they each possess a unique
ingredient for a new company. The result becomes Advocado. A company that connects
traditional advertising with the digital world to
maximize click-through rates and ROI. In this episode of UpTech Report, I speak with Brian Handrigan. Advocado’s cofounder and CEO, who explains the unique
technology they used to find the synergy between
television and the internet, and discusses an
unconventional hiring approach they use to eliminate unconscious bias and diversifying their team. – Thanks so much for joining me, Brian. I’m exciting to learn more about Advocado, how it got started and
also how you are innovating and continuing to grow and
look forward to the future. So first off, Brian, where are you located and what year did you start this company? – Sure, so Advocado is located in the central part of the States. We’re in St. Louis, Missouri
and this is actually a project that my co-founder and
I started working on a couple of years ago. Actually, this is a really fun time for us because it was Thanksgiving of 2017 when we got the phone call
that we had someone willing to let us try out our
minimum viable product, so we have a lot to be
thankful for this week. – Indeed, so two years later, this continuation of the journey, tell me kinda how did it start off and what was the primary focus, the pain point you were looking to solve and how has that evolved as you’ve found more product-market fit? – Gotcha, so one of the
things that’s really important to think about when it comes
to our journey is really my co-founder, Jeff
Linihan, and I aren’t called the normal, say, startup
weekend co-founders. We’ve been business
partners for about 10 years. We used to own a digital
marketing agency together, which was my background. I spent over 20 years in that space. So what’s important about
that is it was the experience that we had through that journey that helped us identify that opportunity. So for example, for those that don’t know, on the digital marketing side of things, what we experienced for years
with our advertisers was that when they were running television, our campaigns did better, right? It was great to be on the
receiving end of that benefit, but the TV folks didn’t
like it so much, right? Because what’s happened
if you’ve been following any of the trends in media, over the last 10 years,
digital’s been growing, traditional advertising has been declining and in 2017, there was an inversion where digital finally surpassed
traditional advertising. So, you know, that part
of things is one big part of the influence. And what kinda happened
was a couple of years ago, about two and a half years ago probably, a mutual friend of Jeff and
I’s asked us to have lunch with a friend of his. And it was one of those kinda
coincidental interactions. And the reason we were asked was because we had digital marketing experience and we also had prior startup experience. So this isn’t our first startup. And so, we were in a phase
where we had left that startup. It was doing great, we
brought it an outside CEO, and we were ready to start building again, and so we go to this lunch and, again, to put it in perspective, we… In digital marketing, you’re
always looking for an edge, and so we had written
algorithms that would talk to the Google ad system to
try to right-price keywords. And so while we were at lunch, we got introduced to Sam, who’s
one of our co-founders now. And his family owned this really interesting intellectual property, and it was this… What was great, right,
if you think about trying to introduce something new, it was already an industry
standard for ad verification. So large advertisers like
Coca-Cola would use it to make sure that when they
bought ads all over the country, that they actually got
what they were paying for. Kind of a crazy idea. And so as we were
sitting down and talking, talking at lunch, Jeff
and I looked at each other and we said, “Wait a minute. “So there is a system
that’s already in place “that advertisers already trust “that tell us exactly when
a specific ad is running “anywhere in the country?” Okay, that’s pretty cool and… Taking you back, right? We already knew and had experience knowing that television could influence digital. But we said, “How much better could it be “if we knew exactly when
that TV ad was running, “what that TV ad was and
we went ahead and we went “and connected, initially
it was, to Google, “and we, essentially, ask
Google to tell us what we needed “to bid to be first
for all of the keywords “our customers cared about.” So, it was a combination of experience and a hell of a lot of luck
to be at that lunch that day and realize we could control
a really interesting set of intellectual property. – A lot of good things
happen over lunch there. Being able to–
– [Brian] Exactly. – And it’s the meeting
of both unique technology as well as your experience. The algorithm and the
opportunity in the market brought together this Advocado. Curious, the name. How’d you guys arrive at one?
– Yeah, yeah so um… It actually came from a time
we were all sitting around, trying to name. But the essence of it is this, right? Advertisers are trying to
connect with viewers or consumers all the time, right? And we are constantly distracted, right? We’re constantly on our mobile phones. And the way we look at it is
there’s a small window of time when a specific consumer is actually ripe and ready to hear what
an advertiser has to say. And if you’re like me and
you like avocado toast, you know that there’s only
a small window of time when an avocado is perfectly ripe. So while we were sitting around, it was actually Sam that said,
“We’re kinda like avocados.” And so it then evolved into Advocado. – Love it. So then, starting in 2007, that first client said,
“Yeah, I’ll try this out.” Advertises from there. You guys then bootstrap
with your own funding? Did you get VC funding? How did that start?
– Sure, so back then, we were bootstrapping, right? When we were doing our
minimum viable product and trying to really
understand it, you know, that was all bootstrap. Actually, what it was, was Jeff and I had some intellectual property
that we were contributing, there was a watermark
they were contributing, and then we kinda
self-funded that first test. After that, we said, “Okay, we actually think
we have something,” right? And this is actually kind of… Let’s call it a really
good note for entrepreneurs out there is when you do your minimum viable product and you’re trying to test
it, what are your benchmarks that you’re trying to get to, right? So for us, we were
looking at trying to prove that we were finding more
interested consumers, and our metric was click-through rate on a Google Ads campaign. And our target was if we could achieve a 30% or greater improvement
on click-through rates for a reasonable average
cost per click increase, then we had something. Our target was 30% improvement at a 10% average cost increase. We blew that away. We ended up almost doubling
the click-through rates with a 98%. So back then, we said, “Okay. “We have it, let’s build it.” The other thing though was
to make sure we didn’t launch too fast. So we did go out, we
went to some investors and raised some initial,
angel, pre-seed capital. And said, “Okay, what we
wanna do is we wanna build “a platform that is reasonably
complete on day one.” We didn’t wanna baby step into it because the ad-tech space can have some bad rap in terms of smoke and mirrors and not really creating value. – If you wanna already
go into the marketplace, setting the right tone… It has to be already
turnkey in a way, got it. – Yeah, we needed a fully baked product and our first version of
the product was pretty much what we did in our minimum viable product. It was using signal data,
as we call it right, from broadcast television ads and I’ll explain how everything
works here in a sec, right? And then we were activating
what are referred to as micro-moments. So literally two minute
moments of time in terms of enhancing Google Search campaigns. And did you manually do this first test or was it all automated?
– We fully automated that test it was a lot of duct tape,
baling wire and bubblegum, but the first one truly
worked the way we wanted and one of the critical
aspects of it was that it had to be automated ’cause we never knew when a TV ad was running. And if we were gonna
use, say the old method of getting a schedule file that told us which 15 minute block
the TV ad was running, we weren’t gonna have any true impact. We were just doing something
everybody else was doing. So we actually fully automated it and so, I’ll lay out kinda here’s
how we work, right? With that watermark, within
the first couple of seconds of the TV ad running, we have computers all over
the country watching TV so we’re not listening
in your home right now, we’re listening in a central
station and that’s important, privacy matters–
– You have a specific computer all over the place, watching for this. – Watching local TV and national
TV all over the country, and what’s different
than content recognition. So there’s a way to do things. If you remember the old Shazam, right? A music app. Shazam could use automatic
content recognition to tell you the song. And that’s really great for a song, right? ‘Cause a song has a finite
start, middle and end. It doesn’t change every time and there’s only audio, there’s no video. So while there is… And we use a version
of content recognition for a different part of our product, for us, we needed to know exactly what that television ad was and which version of it was,
as fast as humanly possible. So what’s great about our watermark is, so the way we’d work is
within the first four seconds, we essentially pick up
this inaudible barcode in the audio stream
that told us everything we needed to know.
– Wow. – And we’d go, “Great, so
we know the exact version.” Let’s say it was for a Blue Cross Blue Shield
health insurance plan, right? Right in here, in St. Louis. So we knew the exact station, we knew it’s running right now. Then we actually know how long that television commercial is. All that other data that
we can store about it. – Which the client has already put inside their content and
submitted for advertisers. – Yep, so it’s all set up in our database. So again, within the first few seconds, we know the exact creative. Our system then turns around and connects to that advertiser’s Google Ads account, so part of onboarding is we have a very simple connection process, and then the customer
decides which campaigns or even individual keywords– – And this is all self-controlled, that they’re, it’s… – Full power on their part to determine what things they wanna amplify, and they can even put limiters on it. They can say, “Even if Google
tells us that the bid is $200 “per click, I don’t
ever wanna go over $54.” So they have all that safety and security. So first couple of seconds,
we know the exact creative. We then turn around and
automatically connect to the Google Ads API and we ask Google to tell us
first position bid by keyword for 500 or 5000 keywords,
it doesn’t matter. Google tells us that, we apply some additional business rules like these bidding caps
or even multipliers, and then we go in and we surgically, algorithmically price
each individual keyword to be right priced at
that exact point in time here in St. Louis, if that’s
where the ad is running. – Tell me a bit, both about your team as well as the client base. Like, what’s the growth
in numbers wise look like? – So, again, so while we did our minimum
viable product two years ago, we actually spent most of
2018 building out a platform that was rock solid. So we launched just over a year ago. It was middle of September
of 2018 when we launched out of beta, and we started gaining
some traction immediately because of our past histories
and being in the agency space, we understood the mechanics of annual health insurance enrollment time. So we got some initial customers, we had revenue almost
immediately, which was nice, but it was seasonal, right? It happens during the fourth quarter. The good news is all of those
customers have come back and expanded. (speaking over each other) But we’ve really kinda
spent most of then, 2019, working out our sales process. So our team has grown. So we had a very heavy
engineering team, right? During 2018. We then added, in terms
of our customer success and onboarding, our data
analytics and digital platforms. Our, probably, most
significant recent hire was our chief revenue officer,
Amy Bobchek, who came to us, she had spent the last 14
years at Comcast Spotlight. So she knew the problem
from the other side and saw the value proposition, and she’s been a super add. So with customer adoption, you know, we had kind of a flat summer of sales. It’s one of the reasons why we found Amy. You can’t do everything
right on the first try. Our revenue grew from 25000
in monthly revenue in August to 45 in September, to 77 in October, to November’s looking… So we’re on a pretty good path right now. – Nice.
– And our goal is to hopefully be around and
over 200000 in monthly revenue in Q1. – What would you say for
other entrepreneurs out there? Over the last two years, what’s a hurdle that you had to overcome that, maybe you can share some insight that… A learning that came from that. – I think one of the
things from a hurdle is I think hiring for startups
is always difficult, right? And there are two parts to it. One is we definitely want the
best team that we can bring and I think we talk a
lot as startup founders about bringing diversity to our teams, but we don’t know how, right? And so, fortunately, Jeff, my co-founder, came
across this survey assessment, called The Culture Index, which the essence of it is
we all became who we are at about age 12-13. Things that drive us, right? Are we more about hard charging ahead or are we about service to others? Do we like social interactions
or do we like data? So there are these four
core traits, right? And so one of the things we learned and… So Jeff found it, he’s like, “Brian, you gotta see this thing.” Somebody I’d never met told me who I was on the first call and it was crazy, and then explained why Jeff and I are such effective business partners. So we started learning more. We got trained in it and we deployed it, and so for us, when we
do a hiring process, we start by identifying the
traits that a person needs to be successful. So if you’re in sales, you
better wanna win, right? You know, and if you’re
a software engineer, it’s about service to others and data. So there are these innate traits– – Aligning their own innate
trait to the specific role that you need them to play. – Exactly, ’cause the idea is
the more that the people are in alignment with the role, you end up with job
satisfaction and happy people. Crazy, right? They’re gonna stay in the job longer. So that is our first test, is are you of a profile
type that is gonna be able to succeed in the job? And by putting that as our
first hurdle versus looking at someone’s resume, we end… Now you get it. All of a sudden, a lot of
unconscious bias is thrown away. – So two years in, moving forward, you see the vision already, potential revenue in Q1. Where do you see the business
in five years from now? – Oh my God, five years is a long way. Well, if you think about our
business not as a television to digital platform, but the way we describe it is
this intent arbitrage engine that uses signal data, right? In the offline world, primarily, to drive actions in the digital. You know, we have things coming out. You know, we have four core
pillars of our product road map that include things like
contextual-based triggers. So are we processing all
the close caption streams and audio streams to find
positive and negative sentiment with keywords. We think political is gonna
be an interesting year for us because with all of the restrictions of, I’ll call it the old
black hat style targeting, we think we can be a white hat approach to more appropriate connections. So as we grow, I see us growing throughout North America, specifically. We’ve got interest from
folks in South America. We’ve got interest over in
the European markets as well. So the goal is we become
the dominant industry leader for this new type of
advertising technology, that is about connecting in
a micro-moment of intent. That’s what I see the
next five years bringing. – So both growth and location,
global opportunities, as well as the different
industries and the timing with the elections and
everything coming up. TV, there’s a lot of
commentary around that itself. If you look isolated, TV on the decline but what you’re doing is not
(mumbles) connecting yourself only to just the
traditional concept of TV. Is that correct?
– You’re absolutely right. So I’m completely there with you, and believe me, we hear that
question all the time, right? Like, what are you guys
doing because TV’s dying but it still is massive, right? And it is a complicated offline to online connection to make. So we have a very strong moat, all right, with our intellectual
property that we control, we’ve got additional patents we file. So we don’t see it dying anytime soon. However, we’re not gonna go the way of the buggy whip, right? Manufacturers. Our business is about
intent, not about television. And so where we can build
and where we can bring more intent based connections, that is what we’re gonna grow on. So that might mean audiences
on connected TV ads, right? Or on streaming services, in a way that other people can’t do. – Moving forward, aside from them, the technology how you apply this vision, what other hurdles do you
see in order to realize where you wanna be in five years from now, that you’re gonna have to overcome? – Well, you know, there’s
definitely on the capital side. So our goal is, you know, in some ways I’d say the
WeWork debacle, right? It’s really helped startups
because the prior view of the world was, “Okay, I’ll go through my
seed stage and then raise. “I’m gonna keep burning capital “and I’ma get to my series A. “Somewhere down the road,
I’m gonna make money.” Our approach has always been we wanna get to cash flow neutral, cash flow positive out of our seed rounds so that we can decide when
to do a series A for growth. And then that growth, if we
ever hit an economic bump, we can always turn profitability on. And so we’ll use that as
gasoline, as rocket fuel, but not as “we’re gonna
build the rocket ship.” – You’re not using it
to build it as you go. You’re gonna use it to
fuel it so it goes faster. – Exactly.
– Are there particular blogs or podcasts or books that
you’re listening to or reading? – Yeah, I listen to all
kinds of different books. I mean, one of the things that I think, as a startup founder in particular that tends sometimes to get lost, is a commitment to being the
best leader you can be, right? So whether it’s Extreme Ownership or Simon Sinek’s Leaders Eat Last, or The Dream Manager. Probably, if you look at my
business book collection, most of them are on just how
to not be a crappy leader, because even though I think
we’re doing some good things, day in and day out, it’s always easy to forget. And so, you know, there’s that. The other side is I do
love kinda understanding how businesses operate. So the current book I’m listening to is Bitcoin Billionaires, with the Winklevoss
brothers doing their redo. And so far, it’s really
interesting and brilliant. – Last question I have for ya is of all the upcoming
technology that’s coming out, what are you personally most
excited about, interested in? – Interesting. I’m probably most interested in the idea of autonomous driving. Like, in terms of pure
technologies coming out, I mean, the complexity
behind making that work and not killing people… ‘Cause I just hate driving. I’m notorious for being the guy that… Get in the rental car, I’m
not getting the driver’s seat. And if there’s somebody else with me and we’re going to a meeting, I’m probably not driving. So I love the idea or the
promise of being able to hop in my car, get to a place
and not have to worry about paying attention to the road. – Well, thank you so much
Brian for joining us. Where can folks go to learn more and what’s a good first
step for them to take? – Sure, so if you wanna
learn more about us, we are at myadvocado.com, and the best first step is
we have a couple of things, I think, on our website. You can download some
white paper to learn more, we have some case studies. And if you’re somebody that
either is doing advertising on TV and in digital, or even if you’re not, one of
the things we’re working on is with our competitive, you
don’t actually have to have your own TV ads. If you wanna activate
against somebody else’s, give us a call, we’ll get
in you the sales funnel and we’ll start a couple of month trial. My guess is it’s gonna work
’cause it hasn’t not worked and then we’ll go from there. – [Alexander] Have you
seen a company using AI, machine learning or other technology to transform the way we
live, work and do business? Go to uptechreport.com and let us know.

1 Comment

  • Reply Aiden Rath February 13, 2020 at 2:02 pm

    Great stuff 🙂 Would you like to be YouTube friends? 🙂

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