AppSamurai started in 2016 as a self-service mobile advertising platform and raised a series of funding rounds while also growing to more than 50 people located in Berlin, San Francisco, London and Barcelona offices. The company has run more than 30,000 advertising campaigns in 2018 alone and its 3-year history is full of pivots and sharp decisions that re-routed the company’s direction.
The founder of the company, Emre, was my guest in the 10th episode of Glocal Podcast. We discussed AppSamurai’s pivots and changes in direction over the past couple of years. I firmly believe that SaaS companies should experiment and iterate with different business models, products and market segments in order to continue expanding with high gross margins. AppSamurai’s story is a good testament to that.
Culture eats strategy for breakfast
Before moving on to AppSamurai’s story, I want to share Emre’s vision of the organizational structure and company culture behind AppSamurai. Every founder should continuously think about what the right structure for the company should look like and re-design accordingly.
AppSamurai’s organizational structure consists of two main branches and is almost reminiscent of companies that deal with hardware and software simultaneously. The hardware-like structure is made up of small teams that can switch between responsibilities and meta teams that examine the challenges on the user journey. This is an adaptation of the famous tribes and squads methodology that is implemented by a lot of companies for a while.
The other branch, that resembles software teams is an adaptation of the objectives and key results framework that pushes the whole team to focus on the same target within a framework of different responsibilities. This structure has been working well for AppSamurai so far as it gives freedom to people while also pushing them to go out of their comfort zone and seize new challenges. Emre feels like this structure will continue to work well until the company reaches 100 people and he will re-design the structure then.
After AppSamurai reached 40 people, Emre onboard a Chief Happiness Officer who solely focuses on company culture building and has backgrounds in tech and HR. This well-structured system has been the core of the company’s success since its implementation back in mid-2018 as the team’s execution speed and motivation reached new highs.
“We are trying to create a company culture that people will crave to work for. I have worked for corporate companies and we should never build such corporate structures. We continuously share all plans, resources, and knowledge with the whole team. This is a company where the sun never sets. When it is midnight in Turkey, we continue to give good service to our customers in Japan or Costa Rica.” - Emre
Mission to democratize smart marketing tools
Spending years in corporate life and later as a service provider to large enterprises, the AppSamurai team had a good expertise on the different marketing technology tools that enterprises develop in-house to optimize marketing return on investment. AppSamurai initially dreamt to enable small advertisers, who are not able to develop such solutions internally, to run high-return campaigns through the AppSamurai platform. Building integrations with various advertising platforms and attribution tools, the team launched the first platform that provided smart suggestions and budget optimization. During these initial phases, the minimum budget was set to be $100 to let very small marketers use the platform freely.
Through this strategy, AppSamurai reached 50k publishers and 1.2 billion users while also raising $1M. During this timeframe, the company’s revenue grew 7x year-over-year with 75% of the revenue generated from international customers.
Importance of creating an ad network
AppSamurai also provided integrations to old ad networks with legacy infrastructure. The polluted data from these sources, their fraudulent nature, and high commissions led the company to develop its ad network. Already managing large corporate ad budgets, signed agreements with a couple large publishers and rolled its ad network.
Able to drive higher quality traffic for cheaper through the AppSamurai ad network, its revenue grew rapidly. Controlling the end to end data flow, AppSamurai further developed its budget optimization platform and reached 15 thousand advertisers from more than 100 countries.
Decision to focus on much larger advertisers
The glass ceiling in the ad network business and fraud became obstacles for AppSamurai. In addition to the self-service ad optimization platform and ad network, AppSamurai also launched various adjacent products like the affiliate link testing tool, GoTrace. Setting the minimum ad budget cap at $100 to attract long-tail advertisers, AppSamurai soon realized that these budgets weren’t increasing as expected and repeat frequency wasn’t where the team expected it to be. These resulted in the decision to only servicing larger advertisers.
Apart from minor product tweaks, AppSamurai also raised its minimum ad budget to $1k and re-designed its sales strategy to attract large brands and ad agencies. Onboarding large enterprises like Nike and Migros, AppSamurai doubled down on this strategy and opened sales offices in various countries.
“Even small teams of two people can be seen as our competitor. From that perspective, we have more than 5k competitors around the globe. We differentiate our technology by attaching artificial intelligence and fraud detection to its core” - Emre
Alternative solutions to the same problem
Since its inception, AppSamurai’s value proposition has been increasing advertising ROI. The company constantly dealt with various types of fraud, since $1 out of every $3 of ads goes to fraud. Leaving out Google, Facebook and branding, a $100B per year market loses one-third of its value to fraud. Experiencing the problem first-handed, Emre decided to pour more resources.
Developing advanced fraud detection systems for internal use, AppSamurai decided to spin it out as a SaaS product to service external customers. Intercept detects fraud and hence has the potential to vastly increase advertising ROI. Although the problem is still the same, the solution and business model has shifted greatly.
“Uber, P&G, Unliever… They all sued their ad agency for fraud. In 2025, the fraud market will exceed $50B annually.” - Emre
Continuous trials and errors
Time will show whether Interceptd will resonate better with brands that own the budgets or ad agencies that readily control them. AppSamurai’s rapid experimentation mindset full of pivots on the product, target segment, and business model is a direct result of the robust company culture Emre developed from scratch.
SaaS companies need to ride on a few trends, while always re-inventing the business, to become unicorns. The recipe for that is continuous tests and search for new product-market-fits to sustain high gross margin sales. AppSamurai’s story thus far is a good example of that...