Mister Beacon Episode #29
Beacon Orchestration - PulsateFebruary 16, 2017
We talk to Patrick Leddy, the CEO of Pulsate, one of the pioneers in geomarketing about the state of the market, the challenges of app design, the best ways for companies to create their mobile app strategies and the role of an orchestration layer in making sense of beacon signals and delivering a great experience for users.
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Patrick Leddy 00:04
Orchestration there. So yes, we are we are that layer in that marshals all of the in app events, the behaviors, the buttons have to campaign open for job and the amount of messages that a beacon and view events, events, we break it all down and we figure out what to do with it in real time we segment that we make sense of it. And then when there's campaign attachment and automation, we do the job of delivering the right message at the right time. While we're seeing a lot of it's a big world out there, we're seeing strong customer sign on. I mean, it could be it should probably be 10 times what we're getting. And one of the reasons for that, and I think companies still value they're very low on their list of priority, and much to their detriment. You know, we talked about mobile first company, or mobile, a company. These are the ones that are disruptors, the Ubers, the halos, if you're in Europe, for the tenders that have a little ruse, all of these apps, they're disrupting, and they're killing existing business models. And we get the buying route all around this pain point a problem they know they need to solve them on the other son, that the pain is same is so much greater than the pain of change and the cost of their current behavior and killing them. What the potential is up here. I think when they start to understand that they'll act and then they bring in expands millions instead of 1000s on redefining the products and bringing in the right type of product developers and innovation managers actually make us feel.
You're listening to The Hitchhiker's Guide to the Beacosystem with Steve Statler.
Steve Statler 01:40
Welcome to The Hitchhikers guide to the Beacosystem. My name is Steve Statler of Statler Consulting and this is our podcast for solution designers or architects if you want a fancier title, and entrepreneurs who are location aware, and for the third time ever, record breaking, never have someone back three times. Patrick Leddy, CEO of Pulsate welcome back.
Patrick Leddy 02:05
Thank you for having me back again to the Treasury back on the show.
Steve Statler 02:09
Very good. And we've done over 20 shows now. And actually, I think you're the first person to come back period, although we do have Cisco coming back. And in the new year, I've been promised that we're going to get another Google interview. So that should be really looking forward to to both of those because they're doing some interesting stuff. But enough about them. Let's talk about you tell us who are . And we've known each other for for a couple of years now. And it's been fascinating to see you evolve. So I'd love to hear some of your lessons learned if we have time, but just give us the elevator pitch on Pulsate.
Patrick Leddy 02:46
Absolutely. Thank you, Steve for the introduction. So Pulsate is essentially an all in one piece of mobile marketing software, and for apps and their locations. So initially, and we built that some of the things around push notifications and in app messages and tools to be able to talk to and from customers in your app. But originally where we started was we wanted to get very accurate, very contextual location based information on where customers were, we wanted to be able to notify app owners when these customers showed up for you in the physical world, so that you could you could track that they were there, but also the you could take action, you could attract them to your business, you could inspire them once they came indoors, to actually take action to buy that product to increase their basket size and to do things like that. And we did that initially with beacons, which we all know about. And then eventually we expanded the geo fences from a macro location standpoint, to get people in and then using the beacons with CRM data and with other contexts to figure out what is the best message to put in front of customers, what would they like to see from us. So that's pretty much where Pulsate grew from. Before Pulsate, we were actually an app development agency, going all the way back to 2008, the beginning of the app Gold Rush, we founded a company called furious tribe. And essentially, we set about building apps for some of the biggest and most demanding companies in the world. I was in Kuala Lumpur in Malaysia, building the first one of the first ever geofencing solutions. And on iOS, this is back in very late it has an eight. And it didn't work very well, mainly because the API's didn't exist, we have to build all of our own functionality. And also the radio and on that device weren't that accurate. But we were very early to the game. We learned a lot from this. And we build custom projects for companies across the world. And we could see commonality between the things they needed and also the lack of a solution on the market or the gap in the market for us to come in with something and to productize that knowledge and to move forward on the idea for pulsate was born. We're about three years in, we're about 30 people and we raised about 3 million in funding so the the bear is definitely You're in threes. And we're having a lot of fun, we built a great product, a great company. And we've helped companies the world over and implementing our SDK in the RAF to improve engagement to improve conversations and that based on the customer's location, and based on the customer's context, so that was a little bit more of an elevator pitch. But it is a complex product to describe.
Steve Statler 05:23
Great to get this story, the furious tribe, from consulting to product, which seems to be just a great, you know, template for entrepreneurs who can they can kind of cast your net, solve problems for people and then get something that's repeatable and get that more annuity revenue from products and subscriptions. So do people buy your product? Or is it a subscription?
Patrick Leddy 05:45
It's a subscription. It's not necessarily a box piece of software that we shrink wrap, and we put on pilots, and we send it off to people. It is like kind of like enterprise SAS. So we provide a plugin for apps. And then we charge basically, you know, on a monthly basis for people that like rent space on our software, Cloud for both.
Steve Statler 06:06
No one likes to be labeled, but the label that I would use to describe you as an orchestration platform, so to kind of take out this chaos of inputs from sensors and API's and you kind of bring order and establish context and give insight into who the heck is it that is using my app, and then you give tools for marketers to actually drive campaigns and that sort of thing? How is your product evolved? I know, it seems to be a lot more modular. There's a lot of modules on your website. Can you kind of tell us the story of that? What are some of the key modules that people use? And how did you get to breaking it up the way you have?
Patrick Leddy 06:42
Absolutely as getting it first of all, I love that label the orchestration or you actually coined that originally received a patent for that, and we now use it in sales pitches. We talked about a cold safety orchestration there. So yes, we are we are that layer in that marshals all of the in app events, the behaviors, the button taps, the campaign opens, the push opens the united message that beacon the geofence events, we bring it all in and we figure out what to do in real time we segment it, we make sense of it. And then when there's campaign attachments, and automations, we do the job of delivering the right message at the right time. So Pulsate started off as one big product, it was difficult to understand what it was, it was even difficult to buy it. And that's what we've done as we added more functionality to pulsate, and as we've evolved, we decided to split pulsated into its six core product groups. So we have Pulsate engage we have Pulsate Converse Pulsating locate. The first three products are our cloud flagship product, so engages mobile marketing locations, as the name suggests, as beacons, the geo fences. And converse is about being able to talk. It's kind of like live chat for mobile apps, we also have an analytics products, and which is probably a very new Bullseye product. And then we have Kinect, which is about data pipelining. You also have predict these last few products are in beta. We're bringing them commercially in production. Next year, at some stage, I think probably by quarter two, or fully unveiling those. And that's what we do. And we basically using the jobs to be done framework, which I think we talked about a couple episodes ago, what we do is we research not only what the consumers want, but walk to businesses think about it, when they buy mobile marketing automation software, they think in terms of the hire, I want to hire a piece of software. So I can talk to my users there, we call it the universe, I want to hire a piece of software to locate when customers so we actually call it locate every pulse a product is named after an action verb. And critically, people can purchase these products independently, they can be used collectively as a suite, they integrate together beautifully, you know, as your geofence is in lowercase, triggered them engage for communication. Now you could just use locate by itself if he wants, even by the Locate SDK, you can do your geo fences and beacons. And then you might be your push with somebody else you may do an enhance and we want you to be able to do that and deploy these discrete product component components based on the jobs that you need to get done in your own business. So that's the reason for taking both a blocking it out.
Steve Statler 09:16
What are you seeing in terms of the the conversion rate on those different modules? Where is the market at? Where do people what is it that people want to do today?
Patrick Leddy 09:29
So people are engaged product because it is kind of like our foundational products. And it's the most tangible that it does things and interacts with customers after that, that the standard product is of course locate. So that's the thing that people come to us and they really we have very unique capabilities. With location, there's geofencing and then there's really good, accurate, reliable, robust background, geo fencing with incredible accuracy. And there's companies that offer both of these things. So we're able to do He demonstrated a big point of difference between how our competitors approach this and their view of the world and ours. So when we put that out to market and we've developed the course a lot of content around this, and we've been teaching our competitors, I believe, and that's one of the reasons why Pulsate locate is a very strong entry level product for people, I think engage will always be your foundation for then located very close second to engage. People are hiring Pulsate. You know, some people might be looking at another poll, say competitor, let's say for the engagement stuff, but then when they see how powerful and differentiated they're located off, is it going to be the thing that makes it stand out compared to others that are very powerful? Part of the product?
Steve Statler 10:44
Side question, kind of where are you in this cycle of fundraising? You you raised? One, you had basically self funded at the start and then went out and did an initial would you describe it as a seed round? Or an a round? Yeah. What are your plans in the future?
Patrick Leddy 11:03
Yeah, absolutely. So we, we sell the company for the first kind of prototyping phase, we put it into half a million from our previous agent, and it was everything that we had, we really believed in what we were doing. We raised our first raise was, we raised a bit over a million dollars that came in from PayPal, and California. And then dunnhumby, which are one of the leading customer science companies in the world, they were very interested in what we were doing, we continue to work with them with their clients and various projects, to kind of discuss some of that today. But maybe on a future episode, we'll we'll have some case studies to talk about it. And then we did another round, actually, just this summer, we brought our funding to about three $3 million dollars in total. So we're posting a retraction on revenue is quite strong. So for now, I think we're pretty good. We'll probably look at some stage next year, I'm going again. But generally, we don't talk too much about the kind of the next day for a raise or how much we're looking to raise. But we're continuing to, you know, forecast, we're very ambitious growth plans for the company. And we do need to put in a great deal of infrastructure to facilitate the strong demand that we're seeing, we're seeing a lot of signups. And we are a small team. As I mentioned, there's about 30 people in the company, we plan to be probably I'd say about 60 people by June or July of next year. So you can see that growth is quite strong. We could do that organically. We want that. But I just think there's a lot of market opportunity out there. So I see Pulsate going again, and probably again for fundraising in terms of the exact amount. And when your guests might be as good as mine for now. But we continue to explore all interesting options for growing and accelerating the company yet.
Steve Statler 12:47
So what is your assessment of the market? Because this is one of the most interesting questions for me is getting a sense for from CEOs of companies that we interview about where we are on Geoffrey Moore's Crossing the Chasm, are we in the chasm? And you know, Where's, where's the money? And when's it gonna come?
Patrick Leddy 13:07
Yeah, that's a great question. How do I answer that? So yeah, I think we all got very excited when vegans came out. And it was these new sexy devices. And I think were predicting that there was going to be millions, billions of these devices, maybe even around the world. I think we've fallen off one side of the chasm, and we've fallen into the river at the bottom, we're kind of clawing our way over the other side of the cliff to cross and that's actually kind of what's happened. And so we'll be getting value that hasn't been like this breakout, amazing success that everyone has hoped for. People are kind of like the the kind of the honeymoon period I think is wearing off and people are saying, you know, what, what are these things actually useful for and why are we what are we going to do with them and hard questions are being asked around the ROI around their deployment. So when I think of the market, I still think leaving, you know, beacons, which use usually require an app as a prerequisite and leaving beacons and geofencing. On the side, while we're seeing a lot of it's a big world out there. We're seeing strong customer sign on. I mean, it could be it should probably be 10 times what we're getting. And I one of the reasons for that is I think companies still value they're very low on their list of priority as much to their detriment. You know, we talked about mobile first companies, or mobile, a company. These are the ones that are disruptors, the Ubers, the halos, if you're in Europe, with tenders that have a little ruse, all of these apps, they're disrupting, and they're killing existing business models. But then you have like more traditional companies. And they develop like the token app because their CEO wants to get an app. They haven't really dug into this enough. They haven't invested in it. They can't deploy their software fast enough. They don't develop apps that are in line with what customers need, but if they did, if they did, it actually plays a tension in the value of this. I think they could build incredible businesses and bring and contribute to their bottom line. So basically, what I'm saying is a lot of companies out there are still mobile, traditional companies that approach it from, we're mobile Z, they need to be mobile a they need to flip it around.
Steve Statler 15:19
Because developing apps is kind of challenging, it's it's difficult. And maybe the CIO, ticked the box and said, Hey, we've got an app. So the CEO can't keep on saying, When are you going to get an app? Is that what is holding the market back just the challenge of successfully developing apps?
Patrick Leddy 15:39
I think so of how under valuing, I think everyone was under valuing the latent potential is, I just don't think they see it as a thing that could potentially generate them 10s of millions, hundreds of millions of dollars, they just like, as an app, it's just this little fancy thing, we got one built in like a year ago, it didn't do anything for us, we're not investing in that again. You know, that's what we defeatist attitude, I think companies need to get really serious about potential here. But the shift to this technology and platform and the raw potential and become serious about it, they need to rally the troops, they need to get group consensus and engage in what we call collective learning, or random walk. The problem is because usually there's dysfunctionally buying groups and these companies, they have different divergent mental models, they come to try and discuss something, but they're all coming from these different points of view. And they don't really agree on much. Usually, they agree on reducing risk, reducing costs, minimizing disruption to the business, were really the leadership and trying to bring them together and form a group class, a mental model, and a kind of a all rally around a problem that's really worth solving for the company and their customers, by extension, and when we do this, I think mobile might come into focus more. And then by extension, GEOCELL comes into focus more, especially for these traditional businesses, which have some brick and mortar component, right? So it needs to become more focused on when it's really more in focus. And we get the bind group all around this pain point or problem, they know they solve it, or they understand that the pain is same is so much greater than the pain of change, and the cost of their current behavior and how it's killing them. And what the potential is, is up here, I think when they start to understand that they'll act, and then they bring in, they spend millions instead of 1000s, on redefining their products and bringing in the right type of product developers and innovation managers to actually make this stuff happen. And not just about the token app like I did two years ago, but it didn't work for them. So mobile doesn't work.
Steve Statler 17:43
He's doing a good job. So I recognize that malaise that you describe and some of the dysfunctionality, what have you seen in the market that will give us a bit of hope about who's doing it, right?
Patrick Leddy 17:58
Absolutely. I mean, there's some department stores that are coming to mind, some of Selfridges in the UK, Brent Thomas as well, which is another brand they own. They're doing combining location based data with CRM data, real time transactions and weather data is personalized notifications, you're walking by to do product notifications, when you're inside of the store. Good or bad example is Metro and Canada. And they're serving inside your app, the latest deal based on the store that you are in. And that's another good example of a of a shopping app. We're also working with some fuel retailers, but based on certain treats and rewards and random acts of kindness that they give you. They'll remind you to redeem them. When you're in the physical locations, your moat more and more inclined to actually go there to redeem that free carwash or coffee. And then you'll really fuel up while while you're there. But I'd actually I'd love to spend some time and maybe go over, you know, one or two use cases and do like a real deep dive on exactly how some of the, you know, some companies that have developed their mobile Northstar how they banned it and all the things that are that are working for them, and really dig in and maybe we can do you have me back on the show a fourth time.
Steve Statler 19:09
Really distance between you and Cisco and Google. Very good. Okay, Patrick, so, so interesting to talk with you. Thanks very much for your time.
Patrick Leddy 19:19
It's been great to chat. Thanks, Steve. And thanks guys again for tuning in to my third time on the show and talk to you soon.