ICYMI: MNTN's First Earnings Report

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2:48Yeah, ignore me I've been friends with this guy for years I know, but I just mean sometimes You have to ignore Matt Mark Douglas is with us Founder, Chairman, President and CEO of the ad platform company Mountain here in our Bloomberg Interactive Brokers studio. We should point out, the stock is a downfalling result. Although we were talking about a bunch of analysts have come out and raised the price target on the company. The stock is up more than 70 % from its IPO in late May. Since you actually talked to him once before today on TV, take it away. 82 % when I looked this morning since the IPO, and that was just May 22nd, right?

3:22Yeah. I looked at the... It's down 16 % though, off of earnings. I looked at your ticker. Great buying opportunity for the market. So what is going on there, Mark? Because I counted eight analysts had raised their price targets on your stock since the release. So you do the earnings call yesterday. You have these one-on-one meetings. And these analysts go back to their office, crunch the numbers, and they say, actually, Mountain's worth more than we thought. And now the stock is down. How does that? This is the stock market for you. So the only thing we can do, we have a big TAM, meaning big opportunity.

3:55that's the total addressable total addressable right let's not use acronyms and then we are growing consistently i'm really really happy with the growth and we are doing it with a just the basis we're doing it profitably and so that's what we can do and honestly i think it's a great opportunity for investors and you know whoever wants to take profits today great you're up you know you're up a hundred percent as of yesterday anybody listening is going to say well of course Marcy's going to say it's a great investment. Talk to us about the business a little bit more. Remind everybody who might not be familiar, we often talk to you about, certainly when it comes to the digital ad market, but tell us exactly what you guys are doing.

4:36Right, so what Mountain does is we enable small and mid-sized businesses to advertise on television for the first time and to do it specifically on streaming television across every streaming network and to do it with precision to find. So these are not brands like a T-Mobile where everyone in America can be a customer. These are challenger e-commerce brands, direct-to-consumer ad travel brands who they are growing businesses. And now instead of just being on paid search with Google and paid social with Meta, they now can be on the big screen, on television, on across every streaming network and do it with precision to make money.

5:20And so Mountain enables that with our software platform. And we are partnered with virtually every streaming network in America. We're partnered with all of the TV manufacturers in order to make this possible. And customers have responded. What is a typical digital ad cost? Well, it's more in terms of what are the average budgets, right? So think of it that way. So your business and our minimum spend on our platform is$500 a month. We have companies spending millions a month. And so, and the way they think of this is what's the return on ad spend? What kind of revenue am I getting in comparison to what I'm spending on the media?

6:02And so, and the return on ad spend that most businesses are looking for is in the two to one, the three to one range. Meaning you spend a dollar, you make two, three dollars. You'd play that game all day. And they're used to doing this with, on Instagram, you're basically using Meta app platform and doing it with Google's app platform. So it's Google AdWords. Everyone's probably heard of AdWords, even if you haven't used it. Meta App Platform, now Mountain Performance TV. And that's the opportunity we've enabled. And it's a very big market opportunity. So the company is consistently growing. The other thing they do is...

6:37Wait, wait. Hold on a thought. So what's the return on... Is it two for one or what is it? Well, it depends on the customer. Those are kind of average status, more in the three to one range. But if you have great product market fit, meaning like people say, I have to own this, you're going to have a higher return than a company that just released the product and is still figuring out what their target consumers want to buy. So it varies by customer. Right. But I say that's usually the range. Is there an average three to one? Two to one to three to one is what most companies are looking for. And that's to fit the economics of the business.

7:13The key thing here is 97 % of Mounds customers have never advertised on TV before. So we are literally enlarging the market, bringing new companies into the television advertising market for the first time on streaming. And your take on that is what, a percentage of the return on that? Or what is your piece of that? Right. So a portion of their budget goes to pay for all of the technology we power in order to make that possible. And that's very typical. If you think of a company, we don't compete with Trade Desk. They're in a completely different segment of market. But that's it's the same revenue model as someone like Trade Desk.

7:50So I think the coolest thing. Thank you. Thank you, by the way. No, of course. I just want to finish the thought. One of the coolest things that you guys do is you say that these people have never made ads before. A lot of them when they come to you. For TV. And so when I think of making an ad for TV, I think I got to get, you know, cameraman, director, editor, et cetera, and so forth. But you have, A, AI tools that help them reduce that budget, I imagine, drastically. And you can tell me some numbers around that. And B, you have Ryan Reynolds as your chief creative officer. Right. And you see the ads that he makes.

8:24I know. They're just brilliant. And by the way, they don't have directors. I mean, they get produced in what seems like an impossibly short period of time. That's because your first thought is usually your best. And increasingly, you can use a cell phone, an iPhone to film an ad. So our customers, they're right. 97 % who are new to television now have TV ads when we meet them. They do have a lot of video. You can't be a direct-to-consumer brand and you're not creating video for Instagram, TikTok, YouTube. And so those assets can now be brought to television. You do need an editor to edit them into a 30-second TV commercial.

9:10Also, we have a division of mountains called Quick Frame. It's a network of thousands of young, independent creators, videographers, who can help edit those ads, use stock video. So you don't have to have them on stack. You just tap into them when you need them. Exactly. It's like Uber for creative. We just connect you with a creator. And then, as you mentioned, AI tools are coming on pretty strong now. And so we have essentially, we haven't fully released it yet. It's in beta with some of our customers or Genove AI tools. And you can mix that. You can bring in your video you already have plus Genove video and mix it all together to have kind of the perfect TV commercial.

9:52So when I met, the way I met Mark first was that I knew a few investors. And they were like, we got this guy who's like a genius coder. And he just creates businesses. You were at Oracle for a while first, right? Way back in the day. Then you went to, did you - Literally worked with Mark Benioff. He and I were both individual contributors at Oracle when I met Mark in the Bay Area. And then he became like director of desktop products and I was director of applications. He did okay, Mark Benioff. Yeah, and Larry Ellison was walking the hallways. That was a long time ago. But no, my point is that you went on and did a bunch of other stuff.

10:28So you built essentially the matchmaking machine at eHarmony. Yeah, I was head of engineering at eHarmony. You did other startups. And when I met you, you were doing Steelhouse and then you pivoted to do Mountain. What's next for you, Mark? What's next? The way I think about it, I'll be really clear. This is what I told my team. If you look at any successful public company, 90 % or more of the value is created after the company goes public. So you think of Meta, Google. But you could think of TradeS, AppLove, and any of these companies. They're a successful company, most of the value. So I said, IPO is done.

11:11You just, you know, so we're at the 10 % mark. And now we're going to go for the other 90%. So we're going to bring hopefully millions of investors along with us. And so the next is to continue to go after this market, build even more product, more technology, and really just grow this into what we do. So how important is your company? Because when I talk to like Joe Kaiser at Mercado, right? Yeah. They invest. He's on your board. Yeah. He it's about you. He's like Mark Douglas is the asset here. He's the brain. But I know that you have an extremely happy employee base. You have incredible ratings on Glassdoor.

11:56Nobody has to come into an office. So how important is the company that you built, the team that you build around you? It's incredibly important. I mean, it's not just me. I think I'm not used to like talking about myself. I think the skill I have is I think I'm very good at product market fit, like really identifying these trends are going to equal this opportunity. And that's what we did here. When we first launched our performance TV platform, I told the team the easiest way to win a market is to create that market. So we're going to create the market for performance advertising on television, what we now call performance TV.

12:35But like so I identify the opportunity, the trends. Yeah, I worked with our designers on what the product should look like. But it's at Mountain, there's 500 people working as a very efficient team, almost 40 percent of the team is engineers. And it's I don't want to sound like a cliche, but like there's only so much I can do. I can like point us at the right market opportunity, but execution matters and especially matters now that we're public. Wait, I got to ask you though. The barrier to entry. Ask me the harder question. No, I know. When you say execution, that's my like, but barrier to entry sounds like another company could do this or another advertising company.

13:16Like this doesn't sound so difficult for somebody else, except you do have kind of your own IP of you being the person behind it. Yeah, yeah. And yes, but Apple wasn't the first mover when it came to smartphones. And yet, look what it's done. So other people can come in. So how do you own the market? And got about 40 seconds. Okay, so there's a ton of technology involved. And the first mover advantage does matter there. We have a big cost advantage. We're partnering with every streaming network. And they are increasingly reliant on Mountain being a growth channel. because remember, 97 cents out of every dollar is new revenue that we're bringing into the TV industry.

13:57And then we have our sales cycle averages 19 days to bring a new customer live. So we're finding the customer before anyone else, bring them live faster than anyone else, bringing more technology to bear to drive that return on ad spend. All of that combined is our advantage. How much of your customers come back and stay with you just quickly? Oh, it's the best. Percentage? Yeah, I don't have that. It's the vast majority of our customers are repeat spenders over and over and over again. Interesting space. Interesting individual. Mark Douglas of, of course, Mountain joining us right here on Bloomberg.

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