NeoReach wants to help bloggers earn more from ‘influencer’ endorsements
A Q&A with NeoReach co-founder and COO P.J. Leimgruber. The Stanford, California-based influencer marketing startup completed a $1.5 million Seed funding round over the summer. It was co-founded last year by P.J., his brother Jesse Leimgruber and fellow Stanford undergrad Misha Talavera. The funding was led by Founder.org, which funds student-led ventures. The team is a past participant in The Alchemist Accelerator, and raised $300,000 in initial funding back in January.
SUB: Please describe NeoReach and your primary innovation.
Leimgruber: We reward users for finding and sharing products they love. Bloggers and influencers represent brands all the time, but the brands and agencies hold all the power. Right now, influencers are either handcuffed to working only with the brands that contact them or forced to give the majority of their earnings to their agency.
We see a different future. We want to give our users the freedom to choose what they promote, and let them keep the majority of their earnings.
SUB: Who are your target markets and users?
Leimgruber: Our primary users are bloggers and social media influencers, but we welcome everyone to use our platform. An everyday average person might make $10-to-$25 for a tweet, while a top blogger could earn over $5,000.
About 10,000 influencers use our platform, including tech bloggers Chris Pirillo and Techno Buffalo, pro surfer and fashion model Anastasia Ashley, ex-American Idol contestant Kayden Stephenson, and Vine stars Weekly Chris, JoeySalads, and Claudia Romani.
SUB: Who do you consider to be your competition, and what differentiates NeoReach from the competition?
Leimgruber: A lot of agencies use our platform and earn revenue from us, but some still compete with us. These traditional agencies and networks let brands connect with influencers, but they handcuff influencers to working only with brands that hand pick them. They’re also difficult for the advertisers, who waste time choosing their influencers and negotiating prices with them.
In contrast, NeoReach uses technology to make the process easier, and more lucrative, for both advertisers and influencers.
NeoReach enables companies to buy traffic from influencers in the same way that they are used to—pay-per-click. Companies only need to set their cost-per-click bid, target demographic, and promotional message—including the target URL, and our technology handles all the rest. We match the campaigns to the relevant influencers and track the campaigns’ performance. As for our influencers, we give them full control over what brands they choose to work with. We don’t want anyone to feel like they’re being disingenuous.
SUB: You just announced that you’ve raised $1.5 million in Seed funding. Why was this a particularly good time to raise funding?
Leimgruber: We raised to scale quickly. We’re currently growing month-over-month, but we needed these funds to boost our marketing and operations and take a ‘quantum leap.’ Our goal is to fundamentally transform the digital marketing landscape.
SUB: How do you plan to use the funds, and do you have plans to seek additional outside funding in the near future?
Leimgruber: The additional funding will allow us to payout 100 percent of earnings to the influencers while we scale up our user base. This means that users earn the full cost-per-click that brands pay. Of course, we will eventually charge the advertisers an operational fee, but we want to ensure that both users and brands have an excellent NeoReach experience before we do.
There are 15 people on our team, so this raise also funds payroll and office expenses. We’ll likely need to raise more down the road as we scale up, but this provides us with enough runway to get to our next milestone.
SUB: What was the inspiration behind the idea for NeoReach? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Leimgruber: Before NeoReach, Jesse and I built the digital marketing agency Rank Executives. Influencer marketing was one of our most popular offerings, but it was time consuming and not scalable. As we worked on automating this process, NeoReach grew into a fully fleshed-out idea.
Before we started building, we picked up the phone and talked to a ton of customers. We wanted to be sure that we were solving a problem that other marketers faced too. Once we fine-tuned the details, we starting working on the actual product.
SUB: What were the first steps you took in establishing the company?
Leimgruber: We moved our developers from Rank Executives to working on NeoReach full-time. For the first couple months, we bootstrapped the company until we built the first version of the platform and closed our first deals. We then joined The Alchemist Accelerator in October, 2013, and raised a small Angel round in January, 2014. We completed the founding team in October as well. It includes my brother Jesse, myself, Misha Talavera from Stanford, Brian Sorel, our best executive from Rank Executives, and Milos Bejda, our lead engineer.
SUB: How did you come up with the name? What is the story or meaning behind it?
Leimgruber: Currently, all of the ways to reach people are either tedious to implement—SEO and PR—or outdated and stagnant—SEM and display ads. Our main goal was to create a marketing platform that was unlike anything before—both easy to run and incredibly effective. The name came pretty naturally, since we’re building the new way to reach people, we call ourselves ‘NeoReach.’
SUB: What have the most significant challenges been so far to building the company?
Leimgruber: Customers always want new features, and you can never please everybody. As a startup, our time and resources are limited. Of course, we want to grow revenue, but it’s hard to validate whether a new feature is just a spur-of-the-moment idea, or something that will take us to the next level.
SUB: How do you generate revenue?
Leimgruber: We charge advertisers for each click driven by our influencers’ posts. After taking this funding, we are now paying out 100 percent of our advertisers’ budgets to influencers. Eventually, we’ll charge the companies a commission fee.
SUB: What are your goals for NeoReach over the next year or so?
Leimgruber: Our primary goal is to empower bloggers and influencers to choose which brands they support. Influencers spend their lives creating amazing content, but many are not yet able to make a full-time living off of their passion.
We also want to shift the direction of digital marketing away from annoying, outbound advertisements, and towards genuine endorsements. We want to focus on increasing the transparency of influencer marketing: Users should have enough options that they can always find a product they love, and brands should know exactly which influencers are converting new customers for them.