BrandYourself Before Shark Tank
In 2008, a student named Pete Kistler couldn’t get a job as a computer programmer. Was he under-qualified? Was it the job market? He couldn’t figure it out. Before long, he figured out that when hiring managers would search his name online, they’d find a drug dealer instead. This cost him real job opportunities. Pete and two classmates from Syracuse University, Patrick Ambron and Evan McGowan-Watson decided to do something about it.
In March of 2012, Pete, Patrick, and Evan founded BrandYourself. As an “online reputation management” tool, or ORM, BrandYourself helps businesses and individuals push down unwanted search results by using positive content. The idea wasn’t a new one, but it did take the online reputation market to a new customer. The non-tech-savvy individual who couldn’t afford a professional agency suddenly had a solution.
In the last several years, BrandYourself has made remarkable progress. As of May 2012, it had twenty-five thousand free users and one thousand paid subscribers. By the date of filming in mid-2014, these numbers had grown to three hundred thousand free users, five thousand paid subscribers, and five hundred users with custom concierge contracts. All signs pointed to success for BrandYourself, but it needed help to fully break into a new market. With investment from a shark, it could begin competing directly with full-time professional firms by hiring enough employees to accomplish everything in-house.
BrandYourself During Shark Tank
Patrick Ambron, one of BrandYourself’s three founders, made the pitch. For two million dollars, Patrick offered thirteen-and-a-half percent stake in the company, a valuation of roughly fifteen million dollars. Everyone commits the occasional minor indiscretion. This isn’t necessarily who they are, but on the Internet, things can appear that way. Patrick explained the problem with “Bob”, an Ivy League valedictorian who couldn’t get a job because of some embarrassing vacation photos. BrandYourself walks a user like Bob through the process of evaluating their online presence, diagnosing any problems, and suggesting custom solutions. These may include include proper tagging, publishing original content, and mentions on high-ranking third-party sites.
The sharks all raised their eyebrows at Patrick’s valuation. Kevin got down to brass tacks. “How do you make money?” Patrick answered that BrandYourself was a primarily free experience in order to bring in users. For greater functionality, someone could upgrade to premium for ten dollars per month. In 2013, BrandYourself launched a concierge service, a solution meant for larger businesses and executives, in which someone could create a custom contract to suit their needs.
Patrick went over some key user metrics with Robert, emphasizing the company’s growth in recent years, as well as future projections. After just over two years in business, BrandYourself had two million two hundred thousand dollars in revenue, with another five hundred thousand in booked contracts. In 2014 alone, Patrick expected the business to have over two million dollars in sales.
Mark was concerned about social media. Not all social media posts make it into search results, but they are still easy to locate through individual profiles. Patrick answered that his team was researching the issue but had not yet launched a solution, which concerned Mark and Robert. Kevin was worried about differentiation. He had used similar services for his own businesses. Was BrandYourself’s niche as a low-cost provider? Patrick replied earnestly that they were bound to be an industry leader because of the quality of their service. They were offering a better product. This didn’t sit well with Robert or Kevin. “Leaner and meaner” isn’t different. Unable to invest at the current valuation, Kevin backed out.
Daymond was the next to go. For him, there was no problem with the business, but he didn’t know the space well enough. He wasn’t willing to risk two million dollars on something he didn’t understand. With Daymond gone, Patrick brought up the elephant in the room. Their total revenue to date didn’t begin to approach the total valuation. Fifteen million dollars was seven times their projected revenue in 2014. Patrick admitted that he was setting the value at this amount because of a partially finished series of funding. BrandYourself had raised three million dollars at this rate already, so he came to the sharks with the same value out of fairness to the other investors.
Lori admired Patrick for his ability to hustle, but it wasn’t working for her. She had seen the advertisements from BrandYourself’s competitor (which was probably a reference to Reputation.com.) She knew the scope of their advertising budget and feared what it would take for a competitor to match them. She bowed out. Only Mark and Robert were left. “The two tech guys,” said Daymond.
Mark spoke up first. He agreed that the size of our digital footprint is a real modern concern. However, he felt that BrandYourself would struggle to adapt to shifting technology. As the dependency on social media in hiring grew, relative to raw search results, they would need to find a solution quickly. Mark felt that Patrick was valuing the business as if he already had this solution. Because of this disconnect, he went out.
Only Robert remained. To the surprise of several sharks, given his concerns over the valuation and the lack of social media functionality, he had positive things to say. “I like it…I think that there’s a very large business for consumers that may not be computer-savvy.” Because of BrandYourself’s growth, Robert wanted in, but not at Patrick’s value, which he called “nuts”. Robert made an offer he was comfortable with, two million dollars for twenty-five percent. Patrick was nervous. He mentioned again that he was not very flexible because of the other investors. Robert pressed the issue. While he admired Patrick for sticking to his guns, he cautioned that it was a risky move.
Kevin couldn’t believe that Patrick hadn’t accepted immediately. In his eyes, even an eight million dollar valuation was generous. Robert gave some insight into his offer. He knew that he wouldn’t make his money back in a year or two, but he thought BrandYourself had the potential to grow to a fifty or one hundred million dollar company. For now, he was dangling the carrot, but he could pull it away at any moment. Kevin urged him to retract the offer on the grounds that, with his experience in security, he could build the same business himself. When Patrick asked to make a call, likely to another co-founder or investor, Robert proved he was serious. He wouldn’t accept further negotiations, and twenty-five percent was his final offer.
Sweat was visible on Patrick’s face, as he struggled to find an answer. Finally, he stood his ground. “I can’t accept it. But that two million dollars would go a very long way…” “Don’t worry, it’ll go a long way for somebody else who’s gonna get it right after you leave,” Kevin chimed in. “So, turn around please,” he said dismissively. Patrick slumped out of the room, disappointed. Before leaving the room, he turned around, as if he expected Robert to beckon him back into the room after a change of heart. But sadly, the deal was done. Or not done, rather.
In retrospect, BrandYourself was not a bad business, but Patrick brought it to Shark Tank at the wrong time. There is a difference between the average high risk venture capitalist and the investors on Shark Tank. Their valuation tends to focus more on sales validation than market trend analysis. While other investors are comfortable investing on hype alone, it wasn’t right for this program. Of course, both approaches are valid. Everyone wants to get in on the ground floor of the next Facebook, but these businesses often go the way of Twitter. They blow through capital, constantly rotate in new management, and never once make a profit. The uncertainty of BrandYourself’s social media strategy, combined with its hype-driven value, was a hard sell.
BrandYourself Now in 2018 – After Shark Tank Aired
It’s unusual (although not unheard of) for businesses that didn’t get a deal to get an official Shark Tank update. However, TJ Hale, the host of the Shark Tank Podcast, helps to fill in the gaps instead. The podcast focuses on behind-the-scenes information that doesn’t make it into the ten minute segments cut for TV. TJ also takes advantage of his guests’ experiences to give his entrepreneurial listeners some advice. In a recent episode (posted on February 26, 2016), Patrick Ambron and TJ discuss BrandYourself.
They start with Patrick’s experience. Since he was a teenager, Patrick was interested in “search engine optimization” (SEO). He ran a consulting firm out of his college dorm called “Day 7”, which was later changed to “D7”. TJ asks if he got started “like Zuckerberg, because of girls,” but Patrick laments the lack of women in SEO. From a young age, he saw Internet identity as the future, when advertising courses were still pushing presence in newspapers and the Yellow Pages. At this point in time, around 2006, search engines and SEO were in a “Wild West” stage, where it was far easier to stake out major key words. However, this hobby became a humanitarian mission when Patrick realized how many people out there were having their reputations destroyed online. He wanted to help Pete, and he wanted to help the world.
He also gives insight into his time on the show. While the format necessitated cut out about 90% of the conversation, Shark Tank did a good job of preserving the “spirit” of the negotiations. However, he is disappointed how the more nuanced conversations about BrandYourself’s weaknesses were omitted. For instance, Robert and Kevin were concerned about differentiation. Patrick’s response turned out to be more than just “BrandYourself is leaner and meaner.” His point was that a lower cost than professional firms captures a completely untapped market. Initially, he wasn’t even competing for the same customers as businesses like Reputation.com.
However, earning this new customer was still beneficial. It gave BrandYourself the user base to become a major player in the ORM market. From there, they gradually expanded to higher value clients, once there was enough name recognition to compete with higher-cost players. This also answered Lori’s concern about the difficulty of competing in advertising. The business model of these competitors was to cast a wide net initially, then prioritize the higher value clients. Most of their revenue came from accounts worth thousands of dollars. By allowing free users and cheap premium options for ten dollars per month, BrandYourself could naturally attract customers, then leverage this customer base to expand into a different market. Ironically, ads from competitors indirectly helped BrandYourself. People would hear them, do a Google search, and find out that BrandYourself was a solid alternative.
TJ inquires into the current relationship with Robert, and Patrick replies that they’re on good speaking terms. While Robert wouldn’t invest at Patrick’s valuation, they have each other’s respect and still keep in touch. The negotiation with Robert was also simplified for the show. While Patrick couldn’t give over more equity, he was willing to offer Robert stock in exchange for an advising role with the company. Patrick said he was tempted to just give in and accept Robert’s offer, but he now feels that he made the right decision. There’s a sense that Shark Tank was an overall positive experience. Patrick heard many different perspectives, and sharks have even recommended BrandYourself to their friends and colleagues.
TJ asks the question that some may have in mind: Is Patrick a gold digger? Requesting such a high valuation could have been a tactic to get some free publicity without getting an investment. Patrick denies this: he simply had to be fair to the initial investors. However, Shark Tank did lead to a huge increase in metrics. The first three weeks of March 2015 were BrandYourself’s best to date. His episode aired on the 20th. In the first thirty seconds of the segment, simultaneous users spiked from two hundred to eleven thousand. In the following single week, revenues tripled totals from the previous three weeks combined. BrandYourself saw nearly half a million in revenue during this week.
But ultimately, BrandYourself is about its mission as much as the bottom line. Most of its customers are victims: of libel, defamation, revenge porn, and so on. These people are in a desperate position. Patrick’s friend and co-founder, Pete, was quoted thirty thousand dollars to smooth things over. This was unacceptable. In regard to people who are victims of their own mistakes, Patrick worries about how information is presented on search engines. It’s robbed of all context and often presents private correspondence. He thinks people should have knowledge of their presence online and how to have a say in it. “Most people haven’t defined themselves online,” he says. BrandYourself isn’t about white-washing bad people. It’s about publicizing the positive attributes of its users.
Despite Patrick’s success giving him the luxury to turn down a two million dollar investment, he’s stayed grounded. Alluding to The Lean Start-Up by Eric Ries, he talks about how missing out on the investment has been a blessing in disguise. So many businesses fall into a cycle of investment and excess. No entrepreneur thinks that a round of investment is the last they will get, but that’s often the case. Running on a smaller budget has forced BrandYourself to substitute quality for money. He has a word for other entrepreneurs out there: Running a business can be a slog, but keeping laser focus on a single problem is the greatest key to success.
BrandYourself Summary – 2018 Earnings
Season 6 Episode 23, Shark Tank Podcast
Initial valuation and offer:
About $15,000,000; 13.5% for $2,000,000
Offers from sharks:
Robert: $2,000,000 for 25%
Counter-offer from Patrick (off air): 13.5%+additional stock role for $2,000,000+advisory role
(BrandYourself did not get a deal.)
May 2012: 25,000 free users; 1,000 premium
Mid-2014: 300,000 free users; 5,000 premium
2014 (projected): over $2,000,000
March 20th-27th 2015: almost $500,000