 from Las Vegas, expecting the signal from the noise. It's theCUBE, covering Interconnect 2016, brought to you by IBM. Now your host, John Furrier and Dave Vellante. Okay, welcome back everyone. We are live here in Las Vegas, so winding down day two, getting ready for our wrap up of three days of wall-to-wall exclusive coverage of IBM Interconnect 2016. This is SiliconANGLES theCUBE, our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, my co-host Dave Vellante. Our next guest is Mark Josephson, CEO of Bitly. Welcome to theCUBE, great to see you. Great to be here. Thanks for having me. Bitly, we've watched it from day one. Shorten URL service that takes long ass URLs and makes them short. Good for tweets, good for sharing. Great for tracking, great for data. Tell us the update. You guys are doing really well. You're profitable. Yup, thanks. Quick update. The update is the business has really expanded from being, we were known for short links on Twitter, but we've actually built an enterprise grade software platform, a link management platform that the biggest and best marketers in the world use to help drive their business. The link is often forgotten and taken for granted, but not by us. So the link lives in every single digital channel, whether you see it or not. Links are in display, in search, in email, in SMS, sure and social, in app. But every time you click, tap or swipe, there's a link and nobody cares about links as much as we do. So we spend every day all day thinking about how to make that more powerful for marketers. It's one of those things where people kind of like forget about it, but when you actually take the totality of link management, it's a lot of richest there because what's happening now with the infrastructure is the mobile mentioned swiping, now you have social, omni channels, everything's all over the place, native software in the cloud, but at the end of the day, people have infrastructure like funnels and coded URLs to CRM systems. Absolutely. So what's your message about where stuff came from? Well, so our mission as stated is to help marketers build the strongest possible connections with their customers across every channel and every step of the journey. But when we sit back and really think about what we're doing, it's such an incredible time to be doing what everybody in this building is doing, which is advancing technology to help their business and to help the world. And so what we really care about is how do we make marketers more successful and by giving them more information, that all of this stuff from IoT to mobile to app to SMS to email to social can be better and they can understand their customers better and that's like really exciting. So it sounds like your monetization today is largely around the tooling, is that right? Because John's right, we saw Bitly earlier on, we said, wow, this is a gold mine, the data, the data, the data, which is still a potential mine, but it's the tooling that if I understand it. I saw Bitly then too and said, oh my God, I need to work at that company, right? I need, because I used it from day one. And so our business is enterprise software. We sell subscription software to marketers, one year, two year deals and it's access to the link management platform. And we've had some success and it's been a lot of fun. It's, I think it's unique, this is my fifth startup and living in this ecosystem to have a core product that A actually works, like it works. Our link management platform, our link shortening, it works and everybody in the world uses it. Everybody in the world uses it. So like to be able to come to a market or a customer and say, how can we help you? We know you're using our product already, let's do more interesting things together. And did you know? Yeah, and did you know? The value that you're missing. That's right. So what is the value that they're missing? Because we had a great conversation with some of the IBM Institute of Business Value, Think Tank, and the mobile first guys were like, you know, it's the classic 10% of the iceberg up here, but the value's hidden. Same here, right? Seems to be a lot of the value that's not being realized by marketers. Can you give some insight into what that is? Sure, absolutely. It starts with understanding your customer across all of your channels. The link lives in every single channel, and because we take all of those links and all the performance on those and correlate back to individual profiles, we can start to show your customer journey. And we can tell you what's happening with your customer and how they got from point A to point B, to C to D to E, and ultimately to transaction. And that's really powerful. And then because we're so ubiquitous and so big, and again, I can say this, one, because I'm the CEO and two, because I didn't build it, I'm just running it, is that 70% of our activity, and we did 15 billion clicks in the last 28 days, and it goes up every single month. And most should, I want to work there. Come on! Come on, I want to go work there. Please. That's a lot of clicks. It's a lot of resolutions. It's a lot of transactions happening. Well, it's a lot of connections that really matter, right? And so, but most of our stuff happens with our free product, because we're free to pay. So we're able, with the Bitly network, to tell our customers more about their users than they know, because we see them everywhere else that they go. Talk about your experience, because you're a veteran in the industry. You're good at five stars, but you're also seeing the whole evolution of the web, now to mobile. What is the problem with these business models these days? Everyone, I mean, I have my own opinion. I want to get yours. I don't want to taint you with my opinion, but there are, people are scratching their heads challenge right now with making money. I mean, it should be very easy. SaaS, it's built for money making. I mean, it should be freemium to paid. How do you make that work? And what's your advice to others out there who are shouldn't be scratching their head. They should be saying, hey, this is really easy. Well, I think that there's, I think the first thing we have to do is lean out a little bit and see that this whole thing is cyclical. So the crunch that we're undoubtedly entering, we're going to come out of in six months or 18 months, somewhere in between there. And if my advice to any company or any CEO or any person starting something is to really understand what your customer is and the value that you can provide and have a plan, right? And don't be afraid to execute that plan, but make sure that you're providing value along the way. And make sure your product works. Make sure your product works. Oh my God, right? Like what a luxury. It's unique sometimes. It actually does what we say it's going to do. Okay, so you have, when did you start selling the subscription model? So we started in earnest, really in earnest in 2013, end of 2013. Okay, so what's been, what you were talking a little bit about the high renewal rates. Can you quantify that a little bit? Yes, we keep doubling and that's really exciting. So we're now, we haven't publicly talked about it, but we will. We're at about a $15 million run rate right now, all recurring revenue. And what's the most exciting thing about the business? And there's, look, there's 50 challenges and things that I wish we could be doing better. But part of what is incredibly rewarding is that our customers renew and they do more with us. The conversations that we get- You get a lot of customers, not like you have a lot of- So we have 10 million people using our, marketers using our platform every month, creating those links. We have about 1,000 paying customers. And every time we have a conversation with them, there's a little bit of discovery, right? If there's a blessing and a curse being our brand because everybody knows us, everybody uses us, but it's that iceberg thing where we get to say, well, did you know that we can solve, our links are now device aware. We have deep link technology. We open up your app and take you in there. We fix your app install, app engagement process. We can monitor face, we can give you one source of truth from Facebook to Twitter to LinkedIn to Pinterest to SMS to email because we're unique. Then we sit down with like, I sat down with a customer the other day and they were challenged on ad blocking. We don't sell ads. We're not in the ad blocking game, but we're first party on phones. We've got three and a half billion first party cookies on iOS and Android. And all of our analytics live in redirects. If you're a mobile marketer today, working with third party pixels on iOS or Android, you're not looking good. You're not feeling so excited about the nose of that plane. It's not going up, right? It's going down because consumers are starting to block third party pixels. But we help that because we're a redirect and we can give them analytics and insights on what's happening on their mobile product in a way that they didn't know. Yeah, and that's amazing. And then that's important because that is a commitment that the user is making. So it's not really, it's hard to gain. Let me certainly gain clicks. People do that. But how do you get around? How do you balance that gamification aspect? Because in Google ad words, figure this out when people were gaining. So we don't time monetization to the clicks. So the incentive might be different. That doesn't mean that developers aren't doing that on our behalf. So we've got over 12,000 active developers every month building off of our APIs. But with the corpus of data that we have in the footprint, it's so big we get to start to do some really interesting science around that and fraud detection. There's a ton of work that happens behind the scenes every day that the world doesn't talk about and I won't either, between the companies that through which most of the traffic on the internet flows. Yeah, there's another belly for sure. We know that. So your unique value proposition is the ability to track that life cycle, right? That's what I just tracked. And more so than the ability to get somebody to use your URL shortener, how dependent are you on that usage? In other words, you see Twitter as it's, you can't use it outside of Twitter, but they've got a URL shortener and Quora's got one and Google's competing with you. So talk about the, I mean, yeah, but talk about the competitive environment and how you've been able to sort of thwart that competition from big companies. Well, I think that we were very lucky because we were started at a time to solve a very simple problem, which was indeed that the links on Twitter were too long, but we got so big and we've been able to like build the tool set, like so advanced. All we do is think about how to like, make links more powerful for marketers. So guess what? Twitter, who has Tico, it's a great thing that's built into their product, but Twitter's marketing team uses Bitly, right? The big- Because it's better. Because it solves problems for them that they don't have. And so I, you know- It's shadow IT for links. It's faster, it's kind of value for them. Well, and if you care about what happens with your links and how you're using them, and if you're a marketer that needs to drive improvement and performance every day, every week, every month, every quarter, every year, which- Every marketer. Every marketer, you're gonna take every chance you can. You're gonna buy every product, use everything that, and you're gonna stick with the ones that work. So, yeah, so we don't think about, like our numbers continue to go up, where we open up end points for every single feature that we build so that developers can build them in. What's the IBM relationship now? So you're here, talk about your IBM relationship, obviously with SoftLayer. There's a blue mix component that's kind of being teased out all throughout the show. Any movement there for you guys? Yeah, so the interesting things with IBM, first of all, like blown away by the size and scale of this show and the conference and what's happening here. First time here? First time here, yeah. So we are, we announced this morning that we're moving our entire platform over to SoftLayer in the hybrid cloud. And that's really exciting for us. So that's 25 billion links that we've created over time. And then all of the activity. And we picked SoftLayer for lots of reasons, but the primary is the geographic footprint and load balancing. So 70% of our activity happens around outside of the US. And in some markets where, like India, things are happening on phones and you have to be a whole lot faster and a whole lot closer to your customer. So that was a big thing. We also announced that we are beginning to integrate into IBM's marketing cloud. So SilverPop, Unica, and the data exchange, UBX, the platforms that IBM is building for market is really impressive. So we're building our link management platform into that. We're- You're an ingredient for the cognitive engine. Yeah, for sure. That's the way they see it in my mind. Well, and then we're having really interesting conversations with Watson, right? And the things that are- Watson group or Watson itself? Well, Watson says how? I'm not sure there's a difference. I think he's behind this wall here. But because what Watson is so good at and I'm so impressed by it is understanding and finding value in the data sets that it gets, but maybe not have the context of the other things that are happening without that data set. So we know how the world uses the internet. We know what content is trending. We know what's interesting at any given time. And hopefully we can provide some value to Watson customers that way. So you've obviously got some experience around monetization. It's kind of one of the reasons you were brought into Bit.ly, big open source. You're seeing it dampen some of the software markets. We're in the open source business. It's always a- You said the number one question you get is, how do you guys make money? So what do you see as the future of monetization? How models are changing? How media is being affected by all this? Give us your thoughts on that. Well, I think that customers will always pay for something that helps them build their business and is tied to their results. I think if you can build a product and a service that helps people achieve their goals and shows them demonstrable ROI and demonstrable benefit, then there's a fair value exchange that happens there. I think frankly one of the biggest problems that startups face is not knowing how to ask for the sale or how to ask for the money. And there is definitely these tropes about building scale and figuring out monetization later. And that can be really great if you've got a ton of capital and can spend that time. I mean, most people forget to say that I was Mark Schuster had a blog post on both sides of the table blog, which is a great VC blog. And he's like, guys, ask for the order. Yes, you have to. Just ask for the business. Don't be afraid. Don't look at your shoes. Just look at it and say, I have a product. It's got value. Yeah, so you guys got to start using the Bitly Link management platform. We should. How do we get involved? We'd like to understand how to apply it to our business exchange in real time. No, you're right. I can actually think of a few ways that we can use it in our business. Absolutely. We should talk about that. What's the biz dev opportunity for you guys? We're interested. What do we do? I need to understand what you're really trying to accomplish. You know what we should do? You've got a lot of customers, right? Do you guys do any events? Or we should bring the cube to your facilities and do an innovation day at Bitly. I love it. I love it. Let's do it. I'm serious. Always be closing. Coffee for Dave. Get some coffee for Dave. We have a huge, we're all about free content. So we spray content all over the world. We have our own URL shortening for CrowdChat. We don't monetize it anyway. It's just a way to get the links shorter. That's our own. We can easily move that. But as content flows around the streams, we have an origination site, Spilkan Angle, Spilkan Angle.tv, YouTube, wikipon.com, what's free content that's being consumed. And your platform could help a lot. Absolutely. This all demonstrate to our customers, our brands, hey, this is what's happening with the content. And show them the value of the distribution that you're generating for them, right? So you guys build a tremendous audience and you do it on behalf of the folks like me and the folks who want to be here. Plus, it allows us to invest in areas that are throwing off greater value. That works in what doesn't, right? So we have some really interesting use cases when our customers are looking not only at the content that they're publishing through us, but at what's happening on the Bitly network. So you probably, I'm sure we know what the world is interested with your content that you don't know. Yeah, and that's something that we need to know. So we'll get involved. We'll certainly sign up for the service. Is there expanded deal? We can actually get deeper in the links because if we want to look for affinity outside of our content, how does that work? So we've got lots of interesting resources and research projects that are happening. So is that a BizDev conversation or is that more a SaaS? It's a sales conversation because our platform surfaces insights and surfaces value through our audience insight. We're now doing benchmarking to show you how you compare against your peers and if you're doing all the right things. I mean, we know how... So we do that on a SaaS basis. That's right. There's no BizDev deal with this. I mean, we can certainly talk about it for special people. But you do BizDev deals with people. No, but you do a BizDev with a lot of customers, right? Well, we do, so we do BizDev deals to drive integration of our platform and of our platform stuff, right? We're selling our product. So we go back to that. We sell our product. We can help you. And I know that if you give us $1,000 a month, I'll give you $2,000 a month in value, right? And there's no doubt about it. Well, we love the company. Big fans, we glad it works. Getting confidence in the product. We understand the value. And so congratulations. Thank you. Thanks for the IBM deal. We are here inside theCUBE. And of course, go to Twitter and search CubeGems to see all the highlights. This interview segment will be up on YouTube on SiliconANGLE.tv. But highlights are instantly available on Twitter. Hashtag CubeGems. This is theCUBE. We'll be right back with our day two wrap up after this short break.