Our content supported SaaS business hit $20m in SaaS ARR in 4 years

please help me in welcoming to the stage Craig Fuller from Freight waves

good afternoon everybody it's always great to be back in Austin it's one of the greatest I think one of the greatest cities in the country and it always reminds me of the college football season that is starting up again so uh excited that we're back in Fall it's my favorite time of the year uh I I think this bringing together Founders to talk about what's happening around the SAS business and how to build businesses whether it's bootstrapping using interesting marketing techniques to acquire customers that's what this form is all about and what I'm going to share

with you today is the story of freight waves now a lot of people think of us as a media company we provide supply chain news data and context for the global supply chain industry and we have journalists that write original content and so if you ask someone who is familiar with the brand they would suggest that we are a media company are investors on the other hand think of us as a SAS and data company and in the

four years since we've launched our SAS business we've achieved 20 million in ARR and we burn about a million dollars a quarter but we add about two million dollars of net ARR per quarter we have some of the most compelling unit economics of any Enterprise SAS company and we're still growing exceptionally quick and this is really a tribute to

our model of combining media with SAS we have coined the term content supported SAS which I will walk through how we built this and how we got this today so a little bit about freightways we're based in Chattanooga Tennessee we have about 200 employees and we focus on the global supply chain so if it's a product that moves through the economy if it's physically Goods part of the economy that is our focus and that's what we are

entirely centered on is understanding what's happened around the global economy I'll walk through how we provide data and intelligence but the important thing that I think is really sort of uh different about our business is we go to market thinking about what the community needs to understand what's happening in the global supply chain the community being the community that we've built and using both content and data to get there

this is just a story of our growth trajectory you'll notice and I'll get into this in a few minutes is that we started out as a media company that's how we monetized and over time data and recurring Revenue have increasingly become part of our business and we'll talk about what that looks like as we move forward I often start presentations for folks that don't know who freightways is and say the way to think

of us as if ESPN and Bloomberg had a baby in the back of a semi and what I mean by that is if you think of the way Bloomberg has built their business model they have a really substantial media brand they're the largest media organization news organization in terms of editorial and journalists in the world but they really make money on their data and their subscription products people pay companies Traders pay 25 000 a year for this uh recurrent for this data platform that brings in

the world's economic and financial data and we are building that at freightways except we're focused on the physical Goods part of the economy but we also live in an industry and work in an industry that's very blue-collar and you've got truck drivers Warehouse operators they need to be spoken in terms of the tone and how you talk to them in their own language and I think ESPN has done a remarkable job of really becoming fit you know the folks at ESPN

are often Fanatics they're former football players their former coaches that's what we do when we recruit our editorial team we recruit people who are actually on the field to write editorial content so that it's written from a point of authority and it's written from a point of credibility and not written from somebody who's never actually dispatched a truck driven a truck or loaded an airplane so a little bit behind the scenes 200

employees we have 50 uh right at 50 analysts and I'm sorry 50 journalists uh analysts and data science we get about 85 000 people a day that tune into our streaming content live uh and then we get about three million visitors across all channels across our entire world uh 65 of supply chain content is originally sourced from freightwave so if you're reading times you're reading on Washington Post perhaps you're reading

in Bloomberg a lot of that data material actually gets originally sourced through our data and through our content and it's as you anyone has known four years ago people had can you really build a media business on supply chain that sounds kind of boring if you've lived through the last two years you know that's actually not true uh straightways as I discussed has a Content supported business model and what that means to us is we go to market with really two primary products one is our sonar data

product which is on average about twenty five thousand dollars per year is what customers pay us for the data and our media offering which is advertising supported media so companies that want to reach the same audience the very same decision makers that we want to reach are paying to advertise to us if ever watched Bloomberg television or red Bloomberg articles you will see services and products that are being pitched to

other traders that also happen to be Bloomberg customers it's the same business model it's just that we focus on the physical Goods part of the economy um our data product because this is really a SAS conference so I'll talk a little bit about what we focus on is high frequency data so we're tracking the global economy and really at what's moving around the world within 24 hours so when the virus hit uh Wuhan China in

January of 2020 we were monitoring what was taking place and preparing supply chain Professionals for what was about to come into the United States when the economy was starting to Roar back in mid April of 2020 it was not apparent to anybody else but Supply chains you actually see the economy eight to 12 weeks before everybody else does in March 31st 2022 I wrote an op-dead

that said the the we believe a recession is imminent and the Global Transport sold off and it's because the high frequency data that we track is showing what's happening globally way Upstream think about it if you're building a product if you're manufacturing a product if you're ordering a product or a retailer those products have to move 12 16 18 weeks

before you see it consume it as a consumer so we see that data and through that data we publish it and our editorial team brings content to it so that this data all comes alive our media business I talked a little bit about I think really the focus of today is this can apply in any industry I'm a True Believer that content supported X models and what I mean by that it can work in real estate it can work in SAS it can work in anything it's basically going at it in a editorial first

mentality of developing content that will drive your audience to buy and consume your products let's think about this for a second everybody in this room is here because of the content that's being produced on the platform you have come across and become aware of it not because you're buying something but because you're intellectually curious about the topic of SAS you came here today for the very same reasons that our com our customers buy our data products they become aware

of what's Happening they become aware of these Trends oftentimes these trends that we see because it is supply chain and is Upstream happens weeks or months before or maybe they're just curious about why is a ship stock in the Suez Canal going to impact my life or why can't I get baby formula for my babies those things people get curious about and they're really concerned about and having that information and being

the market leader in providing that context has enabled us to build not only a very successful media business but also a very successful SAS business so when we talk about our media business our investors often don't really spend a lot of time thinking about media it's a 50 margin business our data business is about an 83 margin business it operates under traditional SAS metrics the reason that they love the media business is it actually generates a lot

of cash flow and that cash flow enables us to reinvest back into our r d for our data but it also creates something that we've coined negative CAC so if you think of a traditional SAS metric of customer acquisition cost we actually have a term called negative CAC so when I pitching investors and talking to SAS investors they want to see the metrics of your SAS business and we provide metrics of SAS business the way everybody else does

but we have something that very few companies does that do which is as we go out and develop content and are developing customers and creating top of funnel the advertising contribution margins the profits we make in our media business actually enabled us to have perpetual and almost unlimited growth without having to acquire pay to acquire customers that's not to suggest that we don't pay Facebook and Google and Linkedin an enormous amount of money to

advertise like every other company does but 70 of our deals that come into our uh into our Enterprise SAS business are closed because those companies read about the data on our own media business um I want to talk a little bit about data businesses because this is I think rarely talked about we think about SAS businesses workflow but I think data businesses are incredibly powerful and it's really what we're focused on we're

not in workflow we don't match Freight we don't actually provide software that helps companies essentially operate Freight movement or track Freight we provide Market level data and intelligence that powers some of the largest and most most robust Supply chains in the same way that a lot of Market data businesses do one of the thing about data businesses if you can actually get scale and you can actually have Market success is these businesses

can live on forever this is a great sort of example of that done in Bradstreet actually has four U.S presidents that work for it imagine businesses that have been around so long that they can say that that Abraham Lincoln Grant worked in their business there's very few and these are data businesses they don't die they're like cockroaches they will live on forever and ever because if you become the source of information an intelligent in your Market no one can kill you now as we talk about the economics of data models it's all

about the data you have to have something unique and proprietary because if you don't then you become a commodity they have very slow beginnings and I'm going to show you how long it took us to get scale in our Data Business it was a very slow go versus the size of our media business and how fast it went it accelerates over time and as I've mentioned they are super sticky but they're also incredibly rare if you think of data businesses in markets all over the world we look at

companies like CoStar which provides construction and real estate intelligence IHS Market which is now part of s p Bloomberg dtn which is all about oil Morningstar you probably know it if you've ever bought a mutual fund s p plats all of these companies are of all involved in global Commodities and markets all over the world but remarkably even though 40 of the global economy is tied to supply chain

to physical Goods movement there has not been a central platform for intelligence across all modes and that's what we've set out to build so this is our son our platform and what it does is it tracks high frequency supply chain data we take the world software platforms across it so we see transactions from Amazon PNG Pro Nissan Nestle we see the world's Freight transactions when they order those uh trucks and they order their

planes we see it in real time containers being loaded in China we see it in real time we then provide fundamental data and Analysis out to the market and that enables companies to make and interpret information this information then gets put into context and intelligence and we editorialize it through a media business and that has enabled us to grow our entire platform so this is our Revenue growth one of the things I want to point out because I

think this is really important if you look at our SAS trajectory it's very slow our our investors were incredibly patient a long time relative to the media business to build up enough momentum and we look at subscription data subscriptions as a percent of our Revenue back in 2018 it was five percent and to this year is the first year that our subscription data Revenue will have

surpassed our media business they're both growing 90 year over year but the really important part is that now we can truly say that we are a SAS business first a little bit of how we do it is we provide the insights and we do it through a lot of methodology so we post about 50 original articles a day we're not syndicating content from Bloomberg or the journal we're actually writing this stuff original content we pay competitive salaries from Bloomberg in

the journal so you're paying a reporter 100 120 000 maybe 150 000 picking them off from very large media businesses but they become your primary source of content lead generation we provide research through white papers that enable us to capture the leads and then we provide about three hours of streaming live television that goes out to the decision makers that have to get involved in these supply chain issues so when a president of the United States threats to shut on

the border of Mexico because he wants a wall built and wants the Mexicans to pay for it if you're an auto supplier and you've got to deal with the threat that next week your your border is going to get shut down what do you do you've got to answer questions to all of the executive management team what are we doing well we're right now getting a warehouse in Laredo because we don't have a choice but there's no warehouses there where do we go this is the type of stuff that we get to cover every single day um how do we put our data how do we make

it present we make it ubiquitous this is just a few examples we put it into our articles with embedded uh into our articles right editorial content we put it on a scrolling ticker we put it into a daily animated video we put it in data charts and we put it on our streaming TV we are trying to make it such that people that are in our community are aware of everything that we're seeing and we provide it completely for free so if you never wanted to pay us a dime you could easily figure out what's happening

around the macro economic situation in the economy in fact all of you guys are welcome to do it's completely free but if you run a 70 billion dollar Logistics operation and you're head of Amazon a 10 error cost you seven billion dollars and that's the reason that the decision makers come and try to understand what's happened around the global economy and that's why they tune in when we post our data product we embed if you have data intelligence in

your product a lot of SAS companies do this as a derivative we actually have a watermark and we want these charts shared on social media we want them in the wild because guess what when you see those charts I see them on my LinkedIn I see them on Twitter I know exactly and so does everybody else where they came from because that Watermark is there it's ubiquitous people know the source so they can easily share it and now everyone knows where it came from in terms of product engagement we really got into streaming television

because we had a very large virtual events business in 2019 half of my 11 million dollars in Revenue came from physical events 5.5 million all of a sudden it was zero in 2020 and yet we grew 70 percent the reason is we pivot really quickly into streaming television and now sixty percent of the content that we produce is actually consumed through live video or on-demand video that we're embedding our charts

into that content we also have a SiriusXM radio show that came they came to us and said hey truck drivers are listening to this in their their cabs can we provide real-time intelligence so every day Monday through Friday for two hours we're talking about what's happened to market now truck driver interested in the spot rate necessarily but they are interested in market conditions regulatory issues they want to talk about and complain about shippers and their Dispatchers in the law those are the things that we do

again it's being a part of the community and doing a lot of things you're not getting paid for because it's all about branding Community equity uh streaming television we talked about we have a really robust Studio we have 20 full-time folks involved in either our our television content producing content or in our videographer team and basically if you came to our studio it looks like a cable television Production Studio in fact the person that runs our

studio used to run ESPN Internationals uh production and we built a cable network level in terms of infrastructure that enables us to put this information out every single morning at 9 00 A.M we provide three three hours of content in something called freightways now it's basically a Morning Show I know you're probably not that interested in Freight but if your job and you're one of the eight million people whose job depends on moving the economy you are interested

in what's happening and we provide a Morning Show to prepare them every single morning we have guests we have charts we have weather we have all the things you would expect on The Today Show or CNBC or whatever your preferred network is to wake up to talking about the economy the physical Goods economy and it's all through data again it's all free we are not charging for this but again it's top of funnel because guess where those charts live people ask me how can I get the data that you share on Twitter how can I get the data that's in

on your website well you can come pay us the subscription we're happy to sell it to you and it creates an enormous amount of social credibility and Market credibility for it so these are just examples one of the podcasts we do gets about a hundred thousand downloads a month called what the truck because we take the video we strip the audio and put it on a podcast because we live in a market where there are truck drivers driving across the road they're not tuning in TV they want to know what's happening and then last but not least we

bring the industry together much like you guys have done by bringing the industry together by having events so we we do two big events per year we did one in Northwest Arkansas we did about 3.6 million in that made about 1.3 million in profit but it's bringing all of the industry together the sea level suite the people they're going to spend on average more than 10 million dollars a year in Kappa X in logistics together to come to our event to talk about the

future of supply chain and what's happening in all the market conditions and it's a two-day commercial data thank you I appreciate the time [Music]