Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of mixergy.com where I interview entrepreneurs about how they built their businesses. And also I read a ton about entrepreneurs, about the startup scene about what’s going on in tech. And I have for a long time, I don’t read about today’s company.
Even though they’ve been growing 30 to 35% annually since launching and often when people say that it’s to hide the fact that they started with $1 in sales and then kind of slowly grew over the last two years. Uh, no they’ve been in business for over 10 years. That has led to actually, I think I should let you say what the revenue is.
What’s the revenue. Can you say for 2018?
Patrick: Yeah, we, we did a hundred million last year. We were on trajectory to do 130 this year. We were at 30% grower out of the gate. That’s a great point. Our first year of revenue was like 3 million and then we did almost 10 the following year. So it’s a, it’s been a fast grow out.
Andrew: That’s Patrick Colmar. He is the founder of lucid. Lucid is the largest marketplace in Rez tech. I don’t, I don’t know what let Rez tech means. I think we can go into it specific examples, but first I should say this interview is sponsored by a company that many people are gonna use to hire employees and to test them, make sure they’re a good fit before they hire them.
It’s called VRBO. You can get them free at vrbo.com/mixergy. And if you need a website hosted, you should go to hostgator.com/mixergy, Patrick. I always heard that survey monkey was incredible. It was good software for serving, but also that they had this incredible collection of people that if I wanted to ask a question, like, what are the top five podcasts that, uh, people that startup entrepreneurs listened to, I can go to survey monkey and they already have those panelists in their network.
They’ll go and ask as many as I need. And they’ll come back and tell me the top five podcasts you blew my mind. You said that they work with you, that they don’t have those people on their list necessarily.
Patrick: Well, you’re absolutely right. Survey monkey is a fantastic survey platform and they do have their own panel. But the reality is, is that any company with a panel that panel is never big enough to satisfy all the different requests. Targets are audiences that customers like you’re looking for. And so in this world of surveys and research, everyone is looking for audiences and lucid is the largest marketplace for those audiences.
And one point you just brought up is that it’s a company you haven’t heard of it, maybe an industry that most people aren’t familiar with. And that’s part of the reason if I think back to that Ryan Smith quote from Qualtrics, what’s the most important company and industry you’ve never heard. Qualtrics.
That’s all about Rez tech. That’s all about research and surveys and we’re the backbone of how respondents are, how users engage with survey companies like a survey monkey or Qualtrics
Andrew: Rez, meaning like that’s short for
Patrick: research mass. Exactly. Right.
Andrew: Got it. All right. So That’s one thing. And by the way, if I have an audience of entrepreneurs of say startup entrepreneurs, is that the kind of thing that I would then come back into you into lucid and then say, I’ve got this audience. If anyone needs to tap them, this is a place to go.
Is that how the marketplace work?
Patrick: So, you know, you think of when I talk to startup founders and entrepreneurs, for the most part, they don’t think engaging with their audience is easy.
It might actually be hard or expensive. And so they usually don’t. But the fact of matter is as a startup founder, you can start engaging whether it’s user product testing. Um, market sizing arrests, even before you’re funded, is that fast and that easy to do these days, whether you’re working directly with lucid or you’re working with one of our partners, like a Qualtrics or a survey monkey to get to the answer.
Andrew: So if I wanted to, if I had a new idea for software, I created a design that I needed somebody to give me some feedback or try it out and tell me whether it works or not. I go to lucid, but what I mean on the other side, since it’s a marketplace, could I have.
panelists to, as,
Patrick: Absolutely.
Andrew: my audience could become panelists for people, and then I could make money by sending them surveys.
Patrick: Every single day, we engage with new publishers or partners where they have an audience. They have a user group that would like to take surveys and monetize that user group through the lucid marketplace. So typically that’s going to be like an app, a mobile app or something where you have a very distinct audience or a very broad audience, a consumer based audience, where you’re looking to provide another earning opportunity for those users to.
Andrew: Got it. So maybe somebody in the audience has got an app. They, um, they’re monetizing it from advertising. And what they’re trying to find is another way to get some revenue. And instead of showing an ad, they might show a survey or instead of charging the user, they might give them A week for free. If they answer survey questions, give feedback, and that would be through the lucid marketplace.
That’s what you
Patrick: A hundred percent. That’s exactly right.
Andrew: All right.
And then you also, you also help companies with audience measurements, understand who’s watching their ads. That’s a different
Patrick: Well, we have millions of users a day trying to take surveys. And so we have this huge data lake as people like to call it these days of first party data. And we have this permission to ask people questions on a global. So, what that allows us to do is for our customers to serve an ad, let’s say, on any, you know, website or a CTV ad, and then us to understand the difference of our users coming into our platform.
Who’s seen that added, who has not, for example, we have a direct integration with Amazon, a server to server integration. So we can tell you every single user in our platform, have they seen a certain Amazon ad or not? And then we can ask them questions or help. The customer note, did the audience actually like the ad, did it actually improve their brand awareness or their brand lift?
So this is a capability. That’s an extension of the, of the marketplace product.
Andrew: That’s a hundred million dollar a year business.
Patrick: Oh yeah. He’s going to grow to a billion dollar a year. So this
Andrew: I’ve got it. I got a clip every time that I say a hundred million dollars to you because I do something. Child that was last year,
grow up. Yes. You give me that same, that same response. I love, I love that. How did you even know that this was a thing? What were you doing before?
Patrick: So I literally finished my MBA from Columbia, moved out to Los Angeles and he had a job and I landed. This is like 2003 post.com bubble post nine 11 moved out of New York to LA and literally dove into the, uh, uh, internet scene there with a company called . And I film is literally the precursor to YouTube.
If you ever wonder why it’s called YouTube it’s because they were a reflection of I film and I film had a sub cinerary, which was called OTX, which was the first online research agency. And they needed someone to run their survey business. And I landed there and started learning about the entire market research space, which I knew nothing about survey, sample, polling, all these words, a lot of people don’t dive into and record.
Andrew: I film. I see it. It’s I, I don’t remember them, but I’m looking at them on Wikipedia. This is a site where people can upload their videos, very similar to YouTube,
Patrick: absolutely.
Andrew: and they had a research component.
Patrick: They did. So they had raised around 35, $30 million after, uh, uh, the bubble burst. And so they actually did this whole process of like buying other or investing in other entrepreneurs in the LA market. And one of those other companies was OTX. So they, they actually own that, that business.
Andrew: Ah. Okay. Got it. And then soon after that, you ended up in new Orleans with your wife because
Patrick: yeah. She’s from new Orleans. She’s the youngest of 12. Um, but also we wanted to return to new Orleans. This is recent. Um, just, I just after Katrina and we felt that we wanted to contribute to the rebirth and the Renaissance of the community. So we wanted to do it directly, you know, spend our time.
Andrew: Maybe it’s because I’m from New York. I never understand when people say I want to go back and give back to my community, we always are like, what else can they get me? What? You run through a storm? Sorry, I’m outta here. You got nothing left for me. I’m living in San Francisco, San. Francisco’s going through a hard time.
It’s my time to go to Austin. So in a few weeks we’re gone, Austin. I like that kind of attitude of this is our place. And meanwhile, you’ve invested in it. Are you still there now?
Patrick: Uh, absolutely. Um, I’m in my, uh, garage in new Orleans right now, but that’s one of the things that hit me about moving to Louisiana and starting a company you’ve been there and talked to a ton of entrepreneurs. They get excited about the company. The team gets excited about the product, a widget, and through your course of podcasts, you’ve heard of hundreds.
I’ve did have ideas and concepts. You never would have thought would be a business, much less a growing. Um, that’s normal. That’s expected when I moved to Louisiana and started this company, there was this other passion, this other driver, which was, we knew that every success we had at lucid was also a success for our community.
It was that next job that for someone to could stay in Louisiana could stay in new Orleans. It was that next son or daughter who got to move home, had to leave because of Katrina. They could come back. And so it’s a growth engine and a community building engine, and it became a dual passion of the company.
And it’s one of our core values today that it’s we say, it’s not just good enough to build one great company. We have to impact our community directly and make sure we’re contributing there. So I was
Andrew: you do
Patrick: by it. How do we do it?
Andrew: Do you have an example of how you did it help, help the community just by being there beyond giving jobs or creating jobs?
Patrick: Well, jobs are our big deal. You’ve got hundreds of millions of dollars of direct economic contribution, but, uh, uh, for example, we spend a lot of time making sure that we’re helping the, uh, the youth in Louisiana get stem education. You get coding education. We work with youth force NOLA. We work with girls who code a lot.
Do you mean the organizations who are trying to bring up the next generation of kind of technology roles and we work directly with them, or we work with other startups. We, we lend a hand in terms of that community connection with the other companies that are trying to do to the same level that we’ve gotten to so far.
Andrew: All right. So your wife is moving back home. You need to get a job there. Weren’t a lot. Is that what it was that sent you off this that’s what it is. You couldn’t get a job.
Patrick: There was no job that fit my description. I’ve been an entrepreneur since the.com bubble. That’s all I know how to do is build and grow businesses. That’s all I’ve ever done. And so landing in new Orleans post-Katrina what am I going to do? Work at the bank. I’ve got a lawyer. So I realize that if I’m going to do what I do, I’m going to have to start it.
And that was the impetus to getting the whole ball rolling. And then the second question comes, well, what would be really cool? And what if worked would be a really big deal? And then that’s how lucid was formed.
Andrew: All right, you are, is this the title that you had samples are That’s a real thing.
Patrick: Samples are a company that I founded, um, after I left IBM before joining OTX it
Andrew: that was your title. It was VP operations at
Patrick: know, that’s the funny thing is that people have often called me, the samples are over the past decade. So it’s a, it’s a name that stuck, even though that company didn’t let the last
Andrew: All right. So you say, I know this I’m going to start a company based on what I know and the vision for it was what was it going to be a marketplace?
Patrick: Absolutely. So we, we haven’t pivoted from the original concept. So when I first got into sample and surveys, which I knew nothing about day one, right. I recognize that there’s a correlation between that industry and advertising. And we saw advertising go through this programmatic digital digitalization, digital transformation, and become ad tech.
And so really that was a crystal ball for the business models and concepts required for a different industry that needed to go through the same digital transformation, which is the entire data collection survey business on a global
Andrew: Because it was what, before we’re talking about before I fill in, before you got into it, it looked like what? before. it was digitized.
Patrick: But same thing that, uh, advertising looked like original with, I would say Yahoo very early on Coca-Cola would call Yahoo directly and say, I want to run an ad and Yahoo would say, great, what size, what creative, where do you want it to go?
There was no programmatic integration. Same thing. You want to talk to, uh, you know, entrepreneurs who listen to podcasts, whether they’re top five, you’d have to find some database of entrepreneurs, call them up and say, Hey, would you let me send an email to your users so I can
Andrew: the way it worked when you were in.
Patrick: that’s that’s the way originally worked.
And so I started this kind of first network, first connections that were more automated, more programmatic, and there were simple idea of lucid as there was no marketplace. We saw. To be Frank, you know, DoubleClick was sold to Google for a couple of billion dollars, right. Media was sold to Yahoo. The first major companies coming out of ad tech were all about marketplaces.
And so we realized that that fundamental concept of marketplace in a new industry that was highly correlated, could be a business model that worked. If I had known how hard it was to do. Yeah.
Andrew: you saying we, but it was, you.
Patrick: there was,
Andrew: It was, you maybe you and your wife, you had friends co-founders would you have who you’re talking to
Patrick: really it was my younger brother. So my brother and I have been starting and building companies, uh, since college and he would fly down and the weekends over the summer and we’d talk about business models and concepts, and we put together what, uh, what you’re looking at now, lucid
Andrew: Okay. And so the, first step to do that was what I imagine. Yeah. What was the first step finding the, the companies that had the panelists.
Patrick: the, I’ll say the first step was convincing myself to start another car. Cause that is a, it’s a hard thing to take on. It’s an emotional roller coaster and it’s fraught with failure for the most part. And so step number one was convincing myself and believing in myself that this would be something I want to do again
Andrew: I gotta pause for that for a second on that, because you work for a company that was kind of infamous for a while. There governor, there was a D right after the.com bubble burst. Someone published this, this documentary on an internet company that was supposed to be one of the highest flyers out there, and then it failed and.com bubble burst.
And this became the movie to explain why it burst. And the movie, the documentary was based on gov works.
Patrick: Absolutely. So I was the chief of staff at gov works. I was there to the rise and also the fall worked directly with the CEO through the entire thing. I remember when I interviewed at gov. There was a camera there, there was an interviewer and a camera. And I asked why was because the CEO’s roommate was an aspiring documentarian and so laid, let them film the entire rise and fall, which is why all that content existed to tell that story for better or worse.
Andrew: This is a company that raised $60 million before the internet was, was. Was a thing really with the idea that eventually it would be, but boy, it took a long time. The original idea from what I remember was the Cove. One of the co-founders got a parking ticket, he discovered it. He realized, wait, I should go online and pay for it.
Even when the thing just exploded. And it didn’t make sense that that issue, that problem made a ton of sense to me, just go online and pay for it. The problem was they raised a bunch of money. They got arrogant. I actually saw a trailer for it. Uh, just in preparation for this interview. There was the founder, got to meet president Clinton.
Bill Clinton was trying to show how like we’re supporting entrepreneurship and tech and all that. He gives them a business card and then later laughed. He goes, I might want to give him a job one day. Like that’s how arrogant they got, you know,
Patrick: Yeah, there was a lack of hubris in that, uh, in that scenario for
Andrew: And then the company fell apart because of infighting and all. Why didn’t that? I know for a lot of people, that was an example of why they shouldn’t get into tech companies, why they shouldn’t get into startups. It wasn’t for you. You don’t see that at all. Why not?
Patrick: Well, it really showed, picking your partner and picking your co-founders and original team really matter. Right? If there’s infighting and you’ve got the wrong culture, you’ve got the wrong sense of integrity. There can be huge problems. Um, but it was also a sense of timing. I mean, you probably heard a lot of entrepreneurs.
Timing really matters. You can be too early. You can be too late with the idea go forks was too early. And a lot of companies in that first.com bubble were right about the business model, but too early for a variety of different reasons. Eventually the gov works idea, which is e-government is going to be a thing you’re going to usually pay all of your bills, the internet.
They were absolutely right. We were absolutely right, but we were way, way too early, even though we created the. Method for you to pay parking tickets online. You can think that how long ago that was, you could not pay anything online. And we created the first path for anyone in New York city to actually buy a, you know, actually pay a parking ticket, which was, you know, mind blowing at the time.
Andrew: Do you know how weird it was to pay online? Jason Calacanis great. Podcasts are a great investor. He keeps talking about how he ran Silicon alley, uh, insider magazine. You couldn’t freaking pay for that on his website. You you’re shaking your head. You knew I was going there. You couldn’t pay for it on his website.
It was just unreal.
Patrick: card companies could not connect directly to government. There was no banking system and allow that to happen. Was it an impossibility? And part of the original value of gov works is creating that connection in the first place, because there was no way for a government to swipe a credit card in their actual offices, much less.
Andrew: Yeah. Okay. So then you’re just saying. You saw the possibility you still believed in it, you weren’t soured on the negative aspects of, of the business. No.
Look at you. You’re, you’re shaking your head because this is not a thing for you. And so for you, when you’re saying, I had to figure out whether I should go back into entrepreneurship and to start up it’s Because of what, what was the thing that made you say this is a rollercoaster.
Patrick: Because you’ve got to put yourself out there. You have to be the face. You have to be selling all the time. People are going to constantly judge, second guests aspire to be challenged you on a day-to-day day in day out basis, you’re going to have to justify your existence constantly, even at $130 million people question what you’re doing and how you’re going to get to the next level.
Right. You’re never out of the
Andrew: I’m scrutinizing every gesture that you make, your eye
Patrick: yeah, I know I’m wiggling my hybrid. I know your costs.
Andrew: You told our producer, you used to be a shy kid.
Patrick: Yes,
Andrew: there’s a shyness that the introversion come out through this and it feels uncomfortable to be watched idolized, anger, rage, anger, and all that. It
Patrick: single day. Of course, of course. That’s. Even though I have a degree in theater actually focused on performance and focus on the stage, I still get that imposter syndrome. I still get anxious about telling the story and putting myself out there.
Andrew: You know what I like seeing that, cause you such a fricking handsome guy, your hair is landing just
Patrick: Yeah, right. You’re right, right on. Right on
Andrew: And so it makes me feel good to know. All right. He’s going through the same thing too. And so maybe next time. Yeah. Seriously.
Patrick: every single day, I’m not making the right decisions. What are people thinking about? You know, people always say, well, don’t worry about what people are thinking about, but how can you not worry about what others are saying and doing? How can you. I’m having an emotional reaction when your leadership is being questioned, whether it’s by a junior person or an external, you know, every single day.
Right. And of course, then you have investors and even though you’ve raised money and you’re doing well, they’re still asking the same questions over and over again. Right. It’s the nature of the beast.
Andrew: Why did you decide, okay, I’m coming into it. I’m going to do it.
Patrick: I decided, honestly, one of the challenge I wanted to be able to declare that I could be a successful founder. And get to the first 10 to $20 million of revenue. I had not been able to do that yet. I’d been a part of founding teams that had gotten their OTX at a tremendous story. I from got to a good exit, but I didn’t see that as a founder and CEO yet.
And I want to prove that I could do it.
Andrew: Okay, then that was the first thing you took in a moment. We’ll talk about the second step first. I’ve got to tell you about the, the first sponsor. It’s a company called VRBO. My guess is you don’t know VRBO.
Patrick: I don’t know VRBO, but I know about, uh, talents.
Andrew: You do. Okay. So let me tell you here’s what VRBO does. You know, an applications, what you want to see is 10 people do the work, even in basic level, can they fill in the spreadsheet? Can they respond to customer service? Can they answer the question in a way where their voice projects, that kind of attitude that we’re looking to do all those things right.
Well, most forms that you use to see if the candidate is the right fit, we’ll send you over to another app to do that. We’ll say this is not what happens in the application form. This happens later. What, if we can embed all those things into the forum, what do you need? Spreadsheet, Excel, spreadsheet, Google sheets, whatever, embed that in.
You need someone who can talk. How about this? You talk into your application, form your respondent. The applicant will hit a button and then record their answer. How they would respond to a customer, all these things embedded in. So you go great, Andrew, this is wonderful. And then what happens? You get all these applications, a hundred applications, a thousand go fricking, Hey, this is mind blowing.
I got to sit and listen to all these people. Three minute videos or even 30 seconds, you go insane. So VRBO takes it a step further. They’ve got artificial intelligence, machine learning, computers, all the words. They’ve got it in there. And no, no, no exaggeration. They will go in and start to scream. Based on some of the criteria that you’re looking for.
And so it’s not as perfect as you screening, but can they do the first pass? Absolutely. Even the second pass. And now what you have is a handful of people that their software has screened, who have done the work. So you can see their responses. You can see the work that they’ve done. All right. We’re ready to proceed with them.
That’s the beauty of VRBO. That’s why they paid me. To uh, to talk about them because people don’t know that this exists and it’s a company that’s been doing phenomenally well, the founder was on talked about how much you raised. I still think that because their name is a little confusing. People are not signing up.
And I’m glad that they’re paying me to tell them VRBO, V E R V O E is the name of the company. And if you want to use them for free right now, I had to spend so much time with them to tell them, please let my people have a free, free account so they could really try it. And as a result, everyone can go and try it right now.
Go to vrbo.com/mixergy, V E R V O e.com/mixergy. Do you notice my, I liked just went out in the middle of this.
Patrick: Yeah, of course I did. Like my ear bud popped out. Right.
Andrew: It’s cause I’m, I’m testing out now, uh, like a more portable situation, because I do want, when I’m moving over to, to Austin to have everything ready. And so I said, let me test out this portable light. So, so, So far so so, all right.
Patrick: far so good.
Andrew: We talked about the first step, Patrick, what’s the second step that you took to get this thing going.
Patrick: I think the second step was really ironing out the business model and the, the vision, like what would make this worth doing? I think sometimes I’ve seen entrepreneurs pick small problems versus big. Or big opportunities. So my brother and I literally said, what could we solve that if we solved, it would be important, but also incredibly valuable, cause that’s worth our time and energy to solve, to actually get right.
Um, and the simple concept of there was no marketplace in the industry to match buyers and sellers. And then on top of that, that data set would create new products like our, our media measurement toolkit. And so we had these ideas out of the gate that was really spent months really honing in on what was the core business model that would create that big value.
Luckily, I had worked in industry for the previous eight years. And so really engaging with the first buyers and sellers. I had the Rolodex to engage with first and because I have a lifelong history in entrepreneurship, I could call my buddies and say, Hey, I need your help building a product. And they, you know, I had people immediately that would jump in.
So I didn’t have to worry about a technical co-founder because I’d worked with so many people in my past. You could fill in that role on an ad hoc basis.
Andrew: What did that first version look like? Did it, was it like a
Patrick: It’s so embarrassing, right. So bad. It was so ugly. I think it was, it was red, white, and blue. I mean, if you look at our site today, it’s got all the things. Got you. You would write interfaces the right color schemes, right. Branding. Our first, um, interface was terribly ugly. It was for internal purposes only, but we launched our, you know, our MVP, our first version of that product within six months of launch.
And so we were racing to get the first version out the door.
Andrew: I’m on the site right.
now. Now the site is L U c.id. I go to internet archive. That site goes back as far as 2015. What were you
Patrick: right. We changed our name in 2015 from a glorious federated sample. You’re welcome branding gods. And then we changed it to lucid. And our, our team was able to get this fun little URL hack and spend all night bidding on this Indonesian three litter TLDR back or whatever it’s called back in the day.
So
Andrew: it costs
Patrick: I guess, like 60 bucks or something.
Andrew: Oh, that’s a great price. But so then was it just like, uh, like when I think of, uh, of a basic marketplace from back when, let me see, when did you guys launch? You launched in 20, uh, 2010.
Patrick: Yeah.
Andrew: It was basically like a bulletin board, but that’s not what you had, right? It wasn’t like somebody can go in and shop and say, I want, I want to buy that.
Hit a link. And then, and then buy, was it, what did it look like?
Patrick: When we first launched in 2010 or the first world customer in 2011, 2012, you could, uh, if you, if you I’ll tell you this, if you already programmed your survey, you already had a survey in survey monkey. You could go into the lucid platform and say, I need those podcasts. I need those entrepreneurs who listen to podcast.
And say, this is the order. This is the type of audience that I want to engage with. And then it originally was literally a paid offer wall. And the suppliers who had different types of audiences could log in and view all the different targets that were required and then send those individuals, email invitations.
That was
Andrew: it was.
Patrick: that was literally step one was an opera wall for surveys
Andrew: All right. And then how do you make money from that then? If it’s a wall.
Patrick: Well, the, the, in our world, the buyers sets the price in a reverse auction, much like, uh, Google ad words. And so buyers say, all right, here’s my price per interview, which is the metric in this industry, a cost per interview, a CPI. And let’s say it’s $10 per interview. And we take a very, w we learned from apple that you could take a 30%.
So we took a 30% cut. So the supplier takes seven. We take three and off to the races.
Andrew: What I mean is in the first version, though, it was an offer wall. People could send a message and just work out a deal directly, right.
Patrick: No, they would, they pay, we, we were the, the, the bank in the middle. So we would, we exposed the, the price that the buyer was willing to
Andrew: but they were paying you and then you were passing that money on.
Patrick: We had to, we had to act as the Anna-Marie bank and we still do
Andrew: Okay. Got it. All right. And you still allow them to communicate with the people who had am I calling them? Right? Respondents.
Patrick: respondents is, is what are the people that take surveys?
Andrew: Okay. All right. So you did that, and then I’m guessing you work through your network and you went back to the people who were buying, went back to the people who are selling.
That’s how you got your first, your first people.
Patrick: absolutely.
Andrew: How far did you get with that? What, uh, what size revenue we’re able to get in the first year or so?
Patrick: So, yeah, in the first year we did about 3 million in annualized revenue and in the second year, close to 10 million in revenue. So we were,
Andrew: Overall revenue means market, not your share, not the 30% that you take.
Patrick: No, no. At that time it was the, what is now called GMV gross merchandise value, the value of goods and services. We switched accounting methods in 2012 to just be the fees and commissions.
Andrew: Got it. So when you say a hundred million dollars, it’s your cut of the transactions on the platform?
Patrick: Yeah. We’re a 70% gross profit business at $130 million.
Andrew: it’s uh, that means it’s not that a hundred thousand, a hundred million dollars last year went through your network. It’s that you, that was your cut of it. Wow. You’re still in a t-shirt you’re still hanging out at home. Have you considered a monocle and top
Patrick: to go?
Andrew: All kidding aside. Have you done anything for yourself with all that? Is there something that you find that you as a kid wanted to buy back when you were like sleeping in the back of a car or whatever it
Patrick: funny. You say that I was, uh, we had some friends over last night. My son who’s 10 was showing off his transformers and he and I both liked transformers and he pulled out the Devastator, which is a com combination. And he pulled up the most recent devastated was like eight is like from the recent movies.
And I was like, go pull up the generation one, the G one devastated, which is a remake. And he pulled it out and we start putting together. I said, I bought this for my son, but also bought it for me. Cause when I was a kid, I couldn’t get, I couldn’t afford the G one. Devastator so I’ve got that for myself.
Andrew: Oh, I see it. I see the, the state are here.
Patrick: Do you want to devastate her man?
Andrew: The, the ratings on it are also phenomenal. Uh, but it’s, it’s pretty hard to get. Wow. Um, that’s it. That’s what you got. Yeah.
Patrick: Oh, man, I’ve got a couple more things, but
Andrew: Okay.
Patrick: the reality is, is that it’s, it’s not about pulling money out and buying stuff for me. It’s it goes back to that inspiration of what are we building and, and what does the F what is the impact to the people around us? Because we did the work, right? What’s the value for me.
And why do I think people will stay enjoying. Lucid is because our purpose is greater than just the company that we put together. And
Andrew: going back to your parents and is this a religious thing? Your parents were priest. Am I right?
Patrick: my parents, I don’t correlate directly to being religious, but yeah, both my parents were priests. I grew up in the Episcopal church in Alabama. Um, I think it’s just, uh, honestly, Um, maybe call it a moral, a moral center, right? I, I want to contribute to the community, right? It’s not just good enough to pull capital out of a company, to be honest, we’ve never pulled any profits out of the business.
We reinvested everything every year,
Andrew: All right. Beyond your network. How did you grow the business in the early days
Patrick: besides sheer force of will.
Andrew: when you apply? You know what let’s go to sheer force of will when you’re applying sheer force of will. What was your thing? Is Patrick, the guy who just works the phone endlessly and says, who needs to buy, how do we work deals or what.
Patrick: Um, well, it was interesting. I had just had, my, my daughter was 16 months old. My, my son was born six months into starting the company. And so sheer force of will was getting up at three or four o’clock in the morning to work on the continent. Right. Sheer force of will was 24 7 trying to balance being a good dad, trying to balance being a good husband and.
Build a startup. I think that my secret sauce, uh, the gate was going home at five 30 every day and relying on the team. And that may not seem like the sheer force of will, but I had to separate myself away from the business. So the business could operate itself versus me having to do everything. I mean, we hired maybe a half dozen people in the first six months or so, and I had to rely on them to make it work.
Andrew: To do what, what was, where did the effort go in the beginning in a marketplace it’s to find both sides or one side of the marketplace that’s most valuable. Is that it?
Patrick: You at the beginning, the most valuable side was the demand side, the buyers, the surveys themselves. And so I went out and attracted a lot of large customers to, uh, put their inventory, their surveys into our platform. Then at the same time, I would go out. Work with the entire supply chain and get them to view our offer well, and eventually integrate via API into that marketplace and create the whole dynamic as that spot.
So it was a lot of sales at the early days. I realized heavily on the team to build kind of the business operations, finance, HR, all those elements I didn’t spend. Um, much time, uh, working with, but also your, you know, we raised $3 million within the first 18 months of launch. And so I had to go out and raise that capital out of the new Orleans market, which isn’t known for having a lot of VC funds,
Andrew: Which today doesn’t matter that much, but back then it mattered a ton. Right.
Patrick: matter a ton? Absolutely.
Andrew: Um, who were the first customers who were the first buyers?
Patrick: So the first buyers are large institutional research firms that you may not be as familiar with. For example, like a Kantar GFK Ipsos. These are firms that are the, the, the go-to market research companies for the largest brands in the world. Like a Nielsen, as an example, as a big market research. Uh, element to it.
And then we went to the largest suppliers at that time. They’re big ones, like my points. Um, for example, is a big just incentive, uh, driver of, uh, traffic,
Andrew: Is my point still around, they were creating like a search engine that competed with Google, but would give you points for doing things on their network. right?
Patrick: Yeah, they’re still around. They were acquired by one of our other partners called, uh, protege a number of years ago. Yeah. So protege now is one of the largest suppliers of respondents out. There are an incredible partner of ours based out of Los Angeles.
Andrew: You know what? Just knowing that this whole industry exists almost puts ideas in your head for what to do. I think about a company that I interviewed the founder of pick Fu pick Fu will let you put multiple options up on a screen, have respondents that fit your, your search criteria. Tell you what they, which of the options they like and why, or what they understand and cetera.
And, um, I wonder if they’re customers of yours too. They’re making great money with this business, um, for bootstrap lifestyle, business, phenomenal money. And it’s probably built if maybe it’s built right on top of lucid.
Patrick: It could already be built on lucid. Typically companies like that start with like a general consumer capability, but their customers end up winning. I want entrepreneurs who listen to podcasts, right? And so that targeting capability, the ability to identify your core customer and actually engage with them.
Is this special sauce?
Andrew: Yeah. You know what, um, it does make sense and that, I wonder if they are your customers. And I wonder then if that’s why, whenever I say to them, well, I’m writing a book, uh, for podcasters and he says, oh, I can help you out. And I say, well, podcasters, you don’t have podcasters. You’re not getting them from mechanical Turk.
He goes, we got them. So maybe that’s the answer.
Patrick: Could very well be the answer. Yeah.
Andrew: All right. When it comes to management, what was your style? How do, how did you do it?
Patrick: Well, my style of management and business building goes back to theater. So the theater degree, I spent years, um, you know, working backstage and onstage and being a director. So it’s really about the thesis of how you create magic and how you create that authenticity on stage. Um, and as a director on stage your job, isn’t to be the source of all wisdom and the creative power of the organization.
Your job is to unleash the capability of the team you have, whether that’s community theater, your friends, or Broadway, where you’re the best in the business, regardless of this, the capability of the team, the job is to get the best out of the team for the performance for today. And that’s, that’s by
Andrew: do you do that?
Patrick: Well, one is to trust that they’re fundamentally trust that they’re capable of delivering an incredible level of execution really trust, and they can Excel. They can exceed what they thought they thought possible for themselves.
Andrew: So I was just talking to Brent Oakley. He is a guy who runs a company called vibe dynamics. He’s like strong football player looking guy.
Patrick: Yeah. Right on.
Andrew: What he does is he plays, he does music for Kroger’s and other places like that. And then he makes money by placing ads in there and shares the revenue with the, with the supermarkets.
I sensed how he was doing it. He says month starts. I give people one day break. And then I say, where the numbers show me the numbers. And he’s got like this athlete approach to show me the numbers. And I imagine he was doing the same thing when he was calling and getting Kroger’s or getting salespeople to get programs.
That’s his approach. When you say I’d bring out the best in people for him, it’s that for you? It’s what, how do you do that? How do you set the stage for them to do that?
Patrick: But I would say it’s about inspiring them to tell me what the. What their aspiration is and their, and their career and their life, what they want to achieve, whether it’s for the job today, for this quarter, this month, and really help them think beyond what they thought was possible. And then set that as the goal, kind of like, uh, it’s now become more known as, okay, ours, right?
Where you, you set a very aspirational goal and then you set metrics against it and try to achieve, um, but it’s, it’s that environment where. Every single employee from top to bottom knows that they can impact and give input to how we’re delivering the success of the business,
Andrew: So wait, you’re asking them about their personal goal or their goals for
Patrick: personal and professional we, we used to actually, uh, it’s interesting. We, uh, for a number of years, we would set a bonus targets for the company goals, but also your personal goals. Like what are you achieving as an individual?
Andrew: Like what, like do I Go to the gym. Do I get my runs in
Patrick: to the gym. Yeah. Yeah. Or I went to take a painting class or whatever it is, right.
There was a focus on your own, your own personal capabilities, not just what the company was doing, because I always tell them, look, the loose it’s going to do great. And it’s going to achieve its results. That’s the question is what are you going to achieve while you’re at it? Cause the company is going to work and we’re going to take the time necessary and you’re going to give the time necessary to be successful.
That’s de facto and we have a high set of standard for hiring and what we execute against. That’s all going to happen now, what are you going to achieve as an individual while you’re here so that when you’re hired by the next company, that you’re the most important player they’ve ever hired ever brought on.
So you can start the company, be a part of the management team, be a part of the next success for the next company that you engage. Uh, because no, one’s going to work at lucid forever. So what are you learning here? What are you going to actually contribute? And what are you going to be able to contribute to the next, uh, project that you get to work on?
Andrew: And so when you want to make sure that they do that, are you writing it down internally? That someone’s goal is to become a better manager or to understand what an income statement is so that they could contribute beyond that. You do, you write it down somewhere and you check in with them as a management team, you do.
Patrick: We use a whole platform based out of new Orleans called align technologies, which sets up all those priorities, all those goals sets in so that we can see from top to bottom, how people are engaging with those goals on a quarterly, quarterly and annual basis.
Andrew: I never heard of a line technology. I’m looking them up right now. This is like a CRM for your people, right?
Patrick: That’s right. How do you set up goals and actually deliver the results that are most meaningful for your business on an annual.
Andrew: Sample con was that one of the ways that you grew the business?
Patrick: Absolutely simple con I love research man. Sample con was at first supposed to be just a user conference for our buyers and sellers. And then we, we did one you to conference and realize that, oh no, we actually need to make this an actual coffee. So that the industry that is forming with us and around us has a place to engage with its competitors and partners, and talk about the future of the industry.
So we started the conference and then gave it over to a board. And now I go to sample con, but I don’t have an official role there anymore.
Andrew: Also that’s why sample con doesn’t have your face on there as far as I
Patrick: No, no. I started it, founded it and made sure it could run independently.
Andrew: Okay. So in the beginning it was, how do we get our customers, our suppliers, everybody together for what? Why do they need to be there together?
Patrick: because we were transforming how the industry was behaving. The go to market was changing, how you’re buying and selling was changing from a, uh, a manual process to an API or UI driven process. All of these behaviors, all these processes, and even the KPIs, the language of the industry was shifting. So when you had a format and a platform to have that discussion with our, with our.
Andrew: Got it. Okay. And then the industry in general, they send spies in to see what you were up to that.
Patrick: We invited everybody, we invite our competitors, right? Um,
Andrew: Did they come?
Patrick: he came early, some came late, depending on where they wanted to give us credence as to how we were, you know, we were highly disruptive to the space, right? You, you drop a marketplace into the middle of a non marketplace driven ecosystem and there are going to be dramatic shifts.
Right. It’s
Andrew: Because what you’re doing is you’re acting as a middleman and somebody who had direct access to their customer now feels threatened. And you’re also adding new technology and you’re adding more competition, which means that other people start to feel threatened either by the tech or by the competition.
That’s what we’re talking about here.
Patrick: Absolutely. I mean, before lucid, before tech and programmatic in this space before sample con it would take weeks to run. And now it can happen in hours because of automation because of programmatic, you know, years ago, a single survey might cost $10. Now it might cost $2. So there’s been price change.
There’s been speed change. Everything’s built on technology. And so companies that missed the window to be a part of that revolution built huge disruption and challenges.
Andrew: All right. I wanna talk about my second sponsor. It’s HostGator. And I want to ask you something, usually HostGator ads, where I talk about hosting websites. I bring in the guests because I want to know how you would think about this. So if somebody is looking at you and saying lucid is interesting, because what they did was they took something that was a one-on-one connection and they turned it into a marketplace where now it’s many to many, how would they find another marketplace?
To do this too. And then hopefully they go to HostGator to host it. But frankly, HostGator is a sponsor is happy. Even if they go somewhere else, as long as they’re doing well. So how would they think about a marketplace like this if someone’s listening to us?
Patrick: So the question is how do I find another marketplace to, or how do I find another industry or opportunity to create a marketplace?
Andrew: How do I lose it in other industry? How do I find another industry to lucid?
Patrick: I would look for typically a high transaction volume industry that doesn’t have an API. It like if you’re a developer and you’re looking for the API, that does the thing and it doesn’t exist yet. Oftentimes there needs to be a marketplace there.
Andrew: That’s such a good, um, there’s gotta be a place online too, where you can find people who are creating these, these a duct tape API for you when an API doesn’t exist.
Patrick: That’s right. That’s, that’s usually a product market fit. And in disguise, I need the API that does the thing. I can’t do it. And it seems really obvious that that API should exist, but just doesn’t
Andrew: okay.
All right. Let’s uh, kind of like if there’s someone who’s doing, if they’re a lot of companies doing the same thing on a spreadsheet, it means software needs to exist. All right. If anyone out there is listening and they need to create a marketplace like this HostGator has got free open source software that you can use to launch a marketplace.
You can go and play with it right now. Before you have your ideas. Possible. And if you do have your idea, you can go and run it right now, either way. It’s inexpensive, it’s reliable and it’ll grow with you. I’ve been using HostGator for years and years. Um, people didn’t even notice when I switched to HostGator, I noticed because my price went down and service still stayed up.
hostgator.com/mixergy. When you use that URL, you get there and lowest possible price. hostgator.com/mix. You know what I was looking for you online to get a sense of what you were doing, what you said. I saw this blog post that you wrote last year, April 20, 20. And you said, believe me, this was a hard decision. And it was about letting people go and cutting back. What were you going through? I would have thought that that you’d have it easy because everything is online. It’s not like people have to come into a store in order to buy from Lucy.
Patrick: well, April 2nd, 2020 was the hardest day of lucid because we had a reduction in force. So I, that’s probably a reason I wrote that and talked about it before. It mattered. It was meaningful. And I wanted it. It was hard to talk about, but it needed to be talked about, um, coming into COVID. Uh, we took a very aggressive approach to how the global economy could fair.
Uh, for example, gov works regardless of what your view is of the management or of the timing, gov works, fell apart mainly due to the bubble burst. In the summer of 2000, the next company, I went to instant gravity, which was a, um, database integrator with our rent sales for all of our customers were the large, the largest bank.
And that went out of business because of nine 11, because every single one of their contractors were fired within three months after that disaster. And then you have 2008 where companies like OTX, um, saw huge changes in, you know, revenue and cash. And you had companies like Goldman Sachs who had to find money for more.
So coming into 2020 with the pandemic, which is still the biggest event that we’ve seen in a generation, um, we assumed that it was going to be very bad for the global economy, therefore revenue, therefore cash. And so we were not going to be in a situation where the company was not going to be successful through a very challenging time.
Andrew: So you hadn’t had revenue impacted yet? No, you hadn’t had a crisis yet. You just saw it before. We’re talking about before San Francisco closed down in San Francisco was one of the first cities in the country to close down. You just saw it and use this is like, ah, got it. So the.com bubble burst did leave a scar on you a little bit.
Yeah.
Patrick: I see, I’ve seen how you can do everything right. As an entrepreneur and fail because of exoticness external events that are bigger than.
Andrew: Yes. Okay. Wow. And so if you weren’t failing, there’s, there’s so little pressure to act, and I know how much you care about your people. You talked about it throughout here, right?
Patrick: Oh,
Andrew: And so was there an, any outside force? What was it that got Patrick over the, over any hesitation that you would have had? Like, let’s wait a little bit.
Let’s give them some time.
Patrick: Uh, no, there was no, not there. Wasn’t a station or second guessing. Because I refuse to let an economic crisis, um, limit the success of the business. And it’s, you know, it’s a scenario where you got to look at the needs of the many versus the needs of the few. Right. And we went on to give very, you know, we went over.
What was necessary in terms of health benefits for, for severance and the rest. But we took the approach that, um, this was going to be quite traumatic. And for a lot of industries, it was devastating. Right? And we were extraordinarily lucky that for technology firms, one remote works and two, we had the opposite effect within one quarter.
We recognize that. Um, programmatic surveys and the ability to ask people questions was going to light up because everyone was asking their consumers a lot of questions because there is dramatic change in consumer behavior, consumer sentiment, and the only way to figure out what was going on was to ask them what they were thinking, what they were doing.
So we, it was, I regret the, the move in the sense that I was impacting people’s lives directly. Um, what I do it differently again. No, I would make the same choice again and again, protect the company.
Andrew: Yeah. All right. Um, yeah, I, and this was before the crisis really hit before I remember I interviewed in April, people were not entrepreneurs. We’re not, we’re not rattled yet. It was late April, March. That things really started to get scary.
Patrick: What, uh, as someone who is a data analyst by trade and understands statistics, you could see by the early numbers, what this really was.
Andrew: How, what were you seeing that your data gave you insight into.
Patrick: Basically the trend lines out of Italy. That’s when I knew that they had blown out of APAC, it being COVID. So I was watching early January, February as the first indications came out of China, some of the early new, um, uh, Asian countries that were saving some COVID cases. And then literally when Italy lit up.
That’s when I knew that, uh, all hell was about to break loose. Cause when Italy jumped, I knew it was everywhere, right. That it was going to spread everywhere and immediately
Andrew: So it wasn’t data that was proprietary to lucid. You’re just looking overall at the data around the world and saying, I see where this is going. I’m
Patrick: I see where this is going. Yeah. There’s a difference between log and linear curves. And it’s not, it’s not hard to figure out what’s
Andrew: um, all right. What do you see as the future for lucid, then let’s close it out with that.
Patrick: Well, one, as I said before, going from a hundred million to a billion dollars in revenue and really being, um, a more visible entity, you started out this conversation saying I’ve never heard of lucid. And that was the challenge that Qualtrics had early on. So one of my biggest challenges. Yeah, the future of lucid is being a more visible company.
It’s not good enough just to have an excellent company that no one hers has seen, even though it’s impactful and meaningful. We spent a lot of time defining the rest tech space because this is a fast growing technology sector that has a lot of corollaries to ad tech. And so we bit time to finding and really introducing this concept of Rez tech and helping investors in third parties, really grappled with how data collection is changing.
But probably the biggest area of growth for us, the most exciting is we just announced a deal with the trade desk, which is the largest independent platform for buying and selling ads. And we’re now the defacto built in measurement. And so we have, um, brands and agencies and advertisers adding, you know, measurement and brand lift to their projects on a global basis now directly in the trade desk platform.
So we’re seeing tremendous scale in our media business as everyone’s grappling with a cookie this future, regardless of what Google says about punting their, their, their cookie window. But also connected TV as linear TV converts and the connected TV. The special sauce for advertisers is really understanding the impact of their spend and how their audiences are changing through, through streaming and through CTV.
So those are big, big growth areas for us to see a lot of opportunities.
Andrew: Do you see yourselves growing beyond people having to respond directly through just watching the actions that they take?
Patrick: uh, that is a, uh, yes, a lot we’re integrating, uh, more and more third party data. So information is already known. So we don’t have to ask the questions again, because one of the most annoying things about taking a survey is asking a question that the company should already know. Like when you’re, when you’re, uh, for example, when you’re asked to what’s your email address, when you’re sent it from the actual brand that you already signed up for, or they ask you, you know, what’s, you know what your name is or what your gender is like, you should know this, or I already gave this to you.
And so a lot of that repetitive answering of stuff just needs to go away.
Andrew: All right. The website is lucid L U c.id costs less than a hundred bucks for that domain. It’s a good domain. All right. I want to thank the two sponsors who made this interview happen. The first you need a website go to hostgator.com/mixergy. The second when you’re hiring people and you want to get a sense of how good they’d be at the job, go to vrbo.com/mixergy.
Thanks to them. And to you, Patrick.
Patrick: I appreciate your time. This has been a joy.
Andrew: All right, man. Bye.