☕️ Return the Fun(d) Presale (NY #TechWeek)

+ Chatting with Miguel from Otis AI

Author

Morgan Barrett
May 28, 2024

👋 Hi, Breakfast Club Members!

NY #TechWeek is so soon

I can’t wait to party with you at Return the Fun(d) - we just launched the presale for tickets. I’d be honored if you went ahead and bought your ticket for the event. The first batch is discounted - so buy now instead of waiting until the day before the event.

So excited to team up with Drinks First and Litquidity for the best party of NY #TechWeek. Come celebrate with us and enjoy the sounds of Chopstix Mami.

Also, thank you to Clerky for sponsoring this edition of the Tech Breakfast Club Newsletter. Clerky is how the best startups get legal paperwork done!

Reply to this newsletter to get the TBC Clerky discount.

Tech Breakfast Club NY Tech Week Events

Return the Fun(d) Tech Week Party Friday June 7th. We’re back with unprecedented amounts of DPI. Join me, Ariana Nathani from Drinks First, Litquidity, and hundreds of other Tech Breakfast Club members for a blowout party.

Wednesday Evening Standup Meeting with Underground Overground Comedy, June 5th. Open Bar! SNL level talent.

Shoutout to Chris Keith from HIREXE for sponsoring. HIREXE connects companies and candidates via a modern, smart-matching system for better hiring.

NYC Tech Breakfast Club Meetup (BIG) Wednesday, June 5th, with Kate Chichi of Founders Club.

Brought to you by Mobilo - Seamlessly exchange contact details and have Mobilo AI do the background research, score and filter new contacts against your personal ICP, and send leads straight to your CRM or marketing database.

NYC Tech Breakfast Club Meetup (small) Thursday, June 6th with Lori Berenberg of Bloomberg Beta

VC Golf Outing (10 out of 20 slots filled) Wednesday, June 5th. We’re playing Bayonne GC! This might be the sickest thing I’ve ever put together. If you want to sponsor a group - we’ve got a little space left.

Tech Breakfast Club Events

SF Tech Breakfast Club June 18th with Jack McClelland

LA Tech Breakfast Club June 20th with Scott Howard from House of Ventures

NYC DTC Tech Breakfast Club July 11th
Cohosting with Zach Cox and celebrating all of our DTC/CPG friends

Clerky 🤝 Tech Breakfast Club

Shoutout to the Tech Breakfast Club Members who have already taken me up on this offer!

I’m beyond excited that Clerky and Tech Breakfast Club are partners. When you’re ready to start your company, email me (or reply to any TBC newsletter), and I’ll invite you to a special Clerky portal - as a Tech Breakfast Club member, you’ll save $100 on Clerky’s already reasonable fees.

Whenever a founder comes to me for legal services and I find out that they’ve incorporated with Clerky, I breathe a sigh of relief. I love Clerky and trust their documents. As a lawyer, it saves me a ton of headaches if you just use Clerky and get formation done right the first time.

Member Spotlight
Otis AI & Miguel Guerrero

I’ve known Miguel for close to a year now and love watching him operate. He’s building Otis AI into a monster and I’m thrilled to feature him in this edition of Tech Breakfast Club Member Spotlight

What is Otis?
Otis is an automated ad solution for small and medium businesses. We leverage AI and first party data to drive targeting, attribution and marketing automation. We replace and outperform traditional performance marketing agencies.

We've been growing about 3x year over year.

Small and medium sized businesses are a huge and growing market – there are 36 million US small businesses.

Business owners know that they need to adopt AI in their operations and full funnel marketing strategy. And they also know that they need to collect and leverage their own data to be successful.

There’s a lot of activity in this space -
The $9.2b Klaviyo IPO recently brought a lot of attention to the importance of leveraging first party data – especially in SMS marketing. But in the paid advertising space, there’s an acute pain point. With these performance marketing agencies, they have a lot of manual processes... they’re quite small and fragmented and have high minimums. The pricing is prohibitive for these long tail, smaller businesses.  

So, your main competition is performance marketing agencies?
We do compete against agencies, but Otis is such a strong solution that we end up partnering with agencies to create value for their customers. We make them even more successful with creative services, full funnel marketing strategy, and more.

What exactly does Otis do, though?
We simplify the marketing flow. We drive efficacy from the campaigns because we increase their ROI in the first six months of starting with Otis. 

We help SMB’s reclaim time at a fraction of the cost of their traditional agency. There's a significant price advantage. The platform facilitates that with a holistic solution. 

One of our customers, Extra Butter, a sneaker store in New York, was using a performance marketing agency. They were paying very high minimums and commissions. Some agencies are charging $3000 to $5000 a month in commissions. And that's not to say that's a bad thing, but when you're a small company, like a startup, and you have a smaller budget, you need to iterate quickly and get to some unit economics that you can use to scale up these channels. Otis really helps with that. It helps with companies that have smaller budgets, initially. We can help them iterate quickly and scale on their programs.

It's a very easy to use platform where a customer can deploy the campaign across multiple channels. Facebook ads, Google Ads, YouTube, TikTok, search display - they can do that within minutes. So, we handle all the paid social and search channels and we connect with their first party data sources. They might have data in their e-commerce platform, their CRM, or their POS system. 

How does that data help?
We use the data to facilitate targeting the right customers and then we measure their results. So, we drive attribution both online and offline. Then we drive the performance optimizations. That's what really pushes the needle in terms of their results. We're focused on performance. 

We do dynamic budget and bid adjustments across channels and audience segments and creatives and other aspects of the campaign focused on increasing their return on investment. We also help them on the creative side too, because if they upload their own content, they might have worked with influencers to create organic video content, static images or animations. They can upload that into Otis. Or we can suggest some content variations for them.

Based on what they upload, we're able to predict how well that content is going to perform when shown to the audience. 

As Otis gets more data from other businesses, does this improve results?
So that's the performance engine. It’s a flywheel - the more customers that onboard to Otis, the more first party data and the more historical marketing data we have and that helps our engine. Our models perform optimizations in a more effective way to drive our customer outcomes. 

So, as we continue to onboard more customers, it's really going to help us drive more success for our customers. 

We have about 280 customers today, so it's a strong portfolio of customers across retail, e commerce, restaurants and services, and also startups which include SaaS and consumer platforms. We're able to increase their ROI by two to three times in the first six months. 

Does Otis use Otis to grow?
We use Otis to market ourselves. We get a lot of our customers through our Otis advertising. I think we're in a really strong position because when we talk with customers that are with performance marketing agencies, 90% of them are thinking about leaving and we have close to 100% win rate in those sales conversations. 

Is Otis the first business you’ve founded?
I actually ran the world’s largest Minecraft server before Otis. I grew it to 5 million users

I love this – how old were you?
I was 14. It was making about $30,000 in net profit per month. 

Why did you go to college? You had a pretty serious business at a very young age –
I was thinking about not going to college but ended up going to NYU and that turned out to be a good decision. I became more well-rounded. I learned a lot about life and other areas of business. Running my first company, I was definitely immature. 

Yeah, you were 14! 

One thing that impressed me about Otis is that you’ve been able to convince several investors to back you who have been historically very skeptical of Marketing Tech startups – why do you think that is?
There's been a generation of marketing tech companies that didn't achieve their potential. Partly because of the dynamics with big advertising players and volatility in the market and partly because of poor positioning. 

There’s a paradigm shift in marketing tech – AI and automation has unlocked the ability to service and acquire these smaller, long tail customers at scale. The unit economics – acquiring and retaining SMB customers has improved drastically. 

It’s only now that investors are starting to become very excited about the potential of ad tech and SMBs. They believe in the size of the market - a $948 billion potential addressable market. If we're able to really help customers measure and effectively increase their ROI so that they can grow and scale these channels, it’s a huge opportunity.

You’ve endured a lot of challenges in your journey – what can other founders learn from you?
I think the biggest lesson is resilience. You never know how low it can go in entrepreneurship. You have to realize that it's just part of it. 90% of entrepreneurship is rejection. So, you have to be comfortable with that. But you can't have success unless you also see rejection. 

While running the Minecraft server, I was scammed out of $50k. I was investing in a data center, and it turned out to be not a real data center. And that was a painful lesson. But you have to keep going.

And secondly, it’s better to just get started than wait for perfection. There’s a lot of uncertainty and there’s always risk – but you don’t know until you try something. 

And lastly, I wanted to ask about your investors – who has been particularly helpful so far?
We're lucky to have a strong group of investors, both institutional and notable angel investors. Some of our VC's include Studio VC and Vibranium VC. We were funded by Google founders fund and Gaingels - each of our investors has different domain expertise and ways that they can help us.

We're very thankful that we have supportive investors and we also have great supportive notable angels like the former head of SMB marketing at Meta and Google and the former head of SMB products at Google.

So, it really depends on what we need or where we have a problem. 

About Morgan
Morgan, besides running Tech Breakfast Club, is a Startup Lawyer at Optimal, an elite lean boutique startup law firm repping clients funded by a16z, Sequoia, Kleiner, Accel, and countless other VCs. He works with clients from formation to exit, in collaboration with Optimal’s partners.