In this episode, I talk with R.J. Talyor, of Pattern89. This startup is an artificial intelligence, AI, platform for marketers, that acts as a to-do list Instagram, Facebook, and Google ads to the next level. It runs algorithms across the 29,000 dimensions of the client’s data on a daily basis and provides them with a to-do list to help them drive their performance.
Pattern89 uses a combination of action items within the daily to-do list, broken down into 2 categories. One of which is a list of things the customer can actually do, such as create a video for social media, including a bird and a bike. The other type of task is called an approval task, and once the customer gives Pattern89 the approval, the platform with do these items on their behalf, tasks such as reallocating a budget, change audiences or change placements.
Topics in the episode
Efficacy of the platform
Building their co-op in order to create the data through which they would build the platform
Digital marketing agencies both as a competitor and as a partner
Direct sales strategy
Marketing dinners as a way to gain customers
Why it is important to not rely solely on AI as a business
Mike Kelly: Welcome to the Startup Competitors podcast. Today we have R.J. Talyor who's the founder and CEO of Pattern89. RJ, welcome.
R. J. Talyor: Hey, thanks for having me. Appreciate it.
Mike Kelly: Why don't we start with a quick pitch for Pattern89?
R. J. Talyor: Sure. Well Pattern89 is an AI platform for marketers and we act like a to do list for marketers to take their Instagram, Facebook and Google ads to the next level. And we run all of our algorithms across their data on a daily basis and then provide them with typically an eight minute to do list, to help them drive their performance. And we're looking across 2,900 different dimensions of those campaigns, from what's in the image to how many characters are being used, to the placements, to budget and timeframe and help figure out what to do and really reduce that down to on average eight minutes and give customers on average at 21% lift.
Mike Kelly: So because I'm not seeing the product. So if I'm a user, I log in and it, is it literally a to do list I just start interacting with?
R. J. Talyor: Yeah, yeah. Every day you'll get an email that says, "Hey Mike, these are the things that you need to do to improve your paid social and Google ads results." It'll say exactly how to do that. And the to do list is a combination of actions that you should take or approvals that we'll take on your behalf. So between the combination of the, we call it the do it for me button, which is just an approval to reallocate budget or change audiences or change placements. But then somethings might say like, "Hey Mike, you need a six second video with a dog and a bicycle in it to drive performance." So that's an action that you'd have to go and do that the machine can't do for you.
Mike Kelly: And it's that specific?
R. J. Talyor: Yes.
Mike Kelly: Wow.
R. J. Talyor: Yeah.
Mike Kelly: Okay. That's legit.
R. J. Talyor: Yeah.
Mike Kelly: All right, so who's a typical customer?
R. J. Talyor: Yeah, we work primarily with e-commerce retailers who are spending a lot of dollars on Facebook, Instagram, and Google to acquire new customers or to retain and grow those customers. So we work in CPG, healthcare, et Cetera, but our primary customers are e-commerce retailers, and the agencies that serve those brands.
Mike Kelly: Then current status of the company, any vanity metrics you can share around number of users, transactions, revenue, fundraising? And you don't have to go into all those things, but anything you're comfortable sharing to paint a picture for somebody who's listening?
R. J. Talyor: Sure, sure. So we launched the product last year around August timeframe, and now we have 30 paying customers, and we've raised a seed round and our big claim to fame is our, we call it the constellation data co-op. And what it is, is it's more than 650 brands, 500 of those have been added in the last, let's say nine months or so. And what that means is that we have a hundred billion impressions worth of data and five billion in revenue for our algorithms to scour on a daily basis, to figure out what is driving the performance. So it also serves as a big pipeline for us to work those customers through. But you know, we're building an AI platform. The data within it is really core to it. So the fact that we've got that amount of data is really what we're building the company on.
Mike Kelly: Can I ask how you got 500 brands in nine months? I mean, is that just like brute force or did you get a partnership with somebody and that gave you 300 brands?
R. J. Talyor: Brute force is the way I would describe it.
Mike Kelly: Wow.
R. J. Talyor: I mean the first 50 or so was literally like door to door, and I'd be like, "Hey Mike, can I connect to your account and I'll give you a report." And I did that literally like door to door. Then we built something we called the Constellation Scorecard, which basically automated that manual process I just described. So you could connect your account and then we would spit back an 11 page report that would benchmark you against everybody else in the co-op. And there's such a need for benchmarks as well as insights and what we should do. There's such an appetite for that, that we got a lot of action there. And then we've been doing a combination of typical promotion things, outbound as well as some placements and conversations like this where people say, "Hey, I'm interested. I want to see my data." So now it's kind of created a machine that feeds itself, and we grew the data about 10 and a half percent last month. So it's got a really, really nice clip to it. And that means that everybody wins.
Mike Kelly: That's amazing. Do you have a sense for efficacy of the platform? So if somebody signs up with you, three months later, six months later, 12 months later, I don't know what the proper time is for that to kick in and really make a difference. But what do the results look like?
R. J. Talyor: Yeah, so on average, customers see a 21% lift in the first 15 to 30 days of using our platform.
Mike Kelly: Wow.
R. J. Talyor: It's pretty awesome. And then on the backside, when a customer stops-
Mike Kelly: Real quick, 21% lift, is that in engagements? That's in sales? That's in what, what is that?
R. J. Talyor: Every campaign starts with an objective. And that might be, "I just want video views, or I want email signups, or I want ..." most of our customers are interested in conversions as measured by purchases. Sometimes it's, I just want more add to carts. So whatever objective you've selected, our AI predicts what's going to work for that objective. So it's 21% lift in whatever that objective you've selected.
Mike Kelly: That's cool.
R. J. Talyor: And then on the backside, when a customer decides to not be a customer anymore, or we do pilots and so customers stop using the platform, they see an 11% dip in that metric in the first seven days of leaving the platform. So we know that there's a big spike when they use a platform and a dip when they lose it. So it's really effective.
Mike Kelly: So in your customer retention strategy, you wait seven days before you pick up the phone and call them.
R. J. Talyor: Exactly, yeah. And then show them their data again, right? Yeah, exactly.
Mike Kelly: That's amazing.
R. J. Talyor: Yeah.
Mike Kelly: Okay. So when you think of competitors in the space, who comes to mind?
R. J. Talyor: Yeah, there are lots of competitors in our space. In marketing tech, ad tech land, it's like every month there's that new lumascape that like makes you want to cry because there's so many logos, you can't even see who they are. But we think of kind of three main categories of competitors. One is folks who have been in the social space for a long time, like Marin or Kenshoo. There are some newer platforms out there like Ad Stage and Ad Hoc, that we look at. The second are the marketing clouds that are trying to be kind of a little bit of everything all at the same time they've got some really smart AI and data science engines behind it that can be applied to us. And then the third are actually agencies. And digital marketing agencies are running all sorts of spreadsheets and trying to figure out how to find the insights that our platform does for them. So it's an interesting thing. Our primary go to market outside of direct is through agencies. So agencies are both a competitor as well as a really good friend of ours. So we have found either a huge amount of resistance from agencies or actually a huge uptake, because we make them more efficient and make them look smarter and they've been great partners for us too.
Mike Kelly: Great. So I seriously, I wrote down while you were talking, wouldn't marketing clouds and/or agencies be collaborators or channel partners?
R. J. Talyor: Oh yeah. Yeah.
Mike Kelly: I mean that's amazing.
R. J. Talyor: We're in this weird space where we're both, and because the platform looks so much at creative and like looks at an image like listeners can't see what I'm looking at. But you know, Mike has a beard, he has blue eyes, he's got a white shirt on, he's wearing a Fitbit I think, there's a microphone, we're inside, there's a gray background. These are all things that the computer can pick up and with computer vision and tag this image, there's a table and a computer and we're inside and you're sort of smiling. All those types of things are what the machine can pick up. And that's a really complimentary component to any optimization platform that's already out there or agency, that's trying to come up with the insights for our customers. So it is very, it's like the biggest mistake you hear in startup land is never say you don't have any competitors because you're an idiot or something. It's kind of like, well we kind of don't have competitors who do exactly what we do, but we certainly have a lot of competition for the dollar that we're pursuing. So we have a ton of competition, but we're finding ways in as a complimentary solution to really all three of the types of competitors I've already described.
Mike Kelly: When I think of a marketing cloud, or a bigger company that's out there, I could easily see them building, doing a partnership with you where you're just basically baked into the solution as part of the offering from an upsell perspective. Are you doing that with anybody yet?
R. J. Talyor: Not yet. We've got a number of conversations going with that in mind, and where either we're white labeled or just integrated completely into the solution that they're already providing to the customer. And that's kind of the fun of being a founder. You get to play with what is the best way to integrate our technology. And especially in marketing. I think the average marketer has like 20 different solutions in their quote marketing stack. I mean that's a lot of different things to log into. So if we can provide value through something that they're already logging into, then that's a great go to market for us. And we've got a lot of interest there, and a lot of interest means it hasn't happened yet, but I'm definitely pursuing those types of conversations in addition to selling direct.
Mike Kelly: So I feel like I heard part of the direct sales strategy is get the brand on the platform through those insights, the Constellation, what did you call it, constellation-
R. J. Talyor: Scorecard.
Mike Kelly: Scorecard? which is great. And then that, not only is that getting you data to feed the machine, but that's also I would assume putting some in the sales funnel.
R. J. Talyor: Yeah. Oh yeah.
Mike Kelly: Are there other ways that you're, when you think of sales and/or marketing for a product like this, what are some of the other ways that you're trying to get customers?
R. J. Talyor: We basically put all people towards a free pilot, and a free pilot gets them their data in a view that they can then see the power of the platform. And we've made it super easy. It's literally two clicks to get up and running. AI has this bad reputation as being something that takes a long time. It needs to learn your data. We're not going to see results for a long time. It's mysterious. Those types of things. So we've tried to really pull it back to say it's easy. Two clicks and you can see your data up and running, see all of the 2,900 different algorithms running and see what the results of that. So then you can make a decision on it pretty quickly.
R. J. Talyor: So the question is really how do we get more people to connect their accounts in a pilot with us and it's been through a few different things. One is through an outbound calling strategy, we've got awesome content because of the data co-op, we can learn all sorts of things and trends and ideas and predictions that aren't out there in the world, that are attractive and interesting to help marketers do their jobs. So we use that content to get people on the phone and interested in the first place. And so our outbound strategy has been really working for us.
R. J. Talyor: The other way that I've found is very successful is by hosting dinner, and I'll go to a city, get between 15 and 20 marketing folks, a typical person is about a mid level marketer, to come to a cool dinner. I'm kind of a foodie and I like to go to a good restaurant and it's a dinner with no programming, and we just literally have dinner. I think people are tired of being sold to, they're tired of the, you know that whole timeshare presentation thing. And so it's a no pitch dinner. We have a branded menu and I have about an 80 to 90% conversion rate from those dinners to pilots. So they're expensive, they take time, those types of things. But so does-
Mike Kelly: For an 80% conversion rate, it can be expensive.
R. J. Talyor: Yeah. Yeah, yeah. I mean they work. And so that's been a really successful way to cut through the clutter.
Mike Kelly: I need to unpack that a little bit more.
R. J. Talyor: Sure.
Mike Kelly: Because that's an amazing little gem. So what does that outreach look like to invite them? Is this somebody who's already been in the sales process, and so they're already a little bit familiar? Or is this literally like, "Hey, I'm reaching out to them on Linkedin, I'm going to be in Chicago, I'm doing this dinner." Just got to think of it as a little bit like a peer round table, but it's not structured.
R. J. Talyor: Yeah. Oh yeah. It's kind of ... Some people are in the sales process, but other times I find like one person, we all have these communities of people, like Mike, you know a ton of folks and I just need to find one to say, "Hey, I'm going to be in the city marketing dinner. Do you want to come?" And then typically I'll develop relationship or something with that person and say, "Hey, do you have a friend or two? We're going to this awesome restaurant. Do you want to come? No pitch, let's go to dinner and let's talk." And everybody's hungry for community. Everyone's hungry for someone who's going to just genuinely share ideas. So we kind of get credit for being the foster or the fosterer of have those conversations. And it's been kind of wild. We've done these dinners in a number of different cities and people from one city, like San Francisco, will be like, "Hey, I've got a friend in New York who might be good to join you."
R. J. Talyor: So again, we have a great dinner, we have the chef come talk to us, we their fun wine pairings. I typically bring some sort of little something from Indiana, like Just Pop In popcorn or take your coffee or something small as a little-
Mike Kelly: Or Kelly Farms honey.
R. J. Talyor: Kelly Farms honey. Hey, actually we should talk.
Mike Kelly: Right on.
R. J. Talyor: But you know, something like that just to sell our culture and sell what we're about and you know, it's about, it really is about the community, and then follow up and say, "Hey, you know, thanks for coming to dinner. We'd love to tell you what we're up to. We want to see you.".
Mike Kelly: That's awesome. I need to find a way to start playing around with that. That's cool.
R. J. Talyor: Yeah.
Mike Kelly: Okay. So some people in the ... So cold outreach marketing dinners. Any other amazingly weird strategies like that that I've never heard of that are awesome?
R. J. Talyor: No, I think ... I mean probably the rest of them are kind of standard.
Mike Kelly: Okay.
R. J. Talyor: The ways that we are kind of mining our data to figure out like what are some interesting insights, are we just publish a lookbook, which is kind of a fun trend. We're in fashion and E-commerce, they have all these lookbooks, we've published a lookbook, which has coordinating metrics to what is driving performance among retailers this summer. So kind of aligning our marketing strategies to what they already see. So book content marketing.
Mike Kelly: Do you have enough data yet to predict the best customer for you? So like I'm sure you can plug anybody in and they're going to get results, right? But I would imagine there's got to be some correlation, of like these types of companies we really crush.
R. J. Talyor: Yeah.
Mike Kelly: And for these companies, we do okay.
R. J. Talyor: Yes. Yeah.
Mike Kelly: Do you have a sense for who those are?
R. J. Talyor: So we have a model that predicts it, and so yes is the answer. and actually, our data scientist was like, "hey I built this model" . The thing is that that model takes out the human altogether. And like the human sales job, you know?
Mike Kelly: Right.
R. J. Talyor: And in the same way that I don't believe that the humans should be removed from marketing because of the humanism that we bring to it, like, if you just left it to the machines, they would get you great results for a while and then it would run out or turn into porn or something. Because that's what the machines, they'll optimize towards the lowest common ... You know what I mean?
Mike Kelly: Right.
R. J. Talyor: So it's like the human's not factored into the machines.
Mike Kelly: So then all of your ads look like Fox News.
R. J. Talyor: That's right. Yeah. Well I mean seriously there's some truth to that, because you just like optimize to what people click on. So yes, we have a model. I don't know that I trust it. And the reason why is because there's a lot of education along the way with a marketer who wants to take the leap into AI or artificial intelligence, and there's a lot of false assumptions to get over. There's a lot of control if the machine's going to be making some of these decisions and what do I do? And I think that that education piece is not something that we've figured out a model behind. Some people are better from a sales perspective at educating and bringing people along that journey, and others are not. And if you do it wrong, it comes out as the machines going to take your job. And if you do it right, it's like well no, the machine's going to help you do your job a lot better. So that's a fine line and I think we're battling against some of the conditioning that's out there and some of the flashy headlines about autonomous everything.
Mike Kelly: Right. If you can talk about this, what's on the product roadmap? Where do you think you go next ,or what are maybe some of the new technologies that you guys are excited about that you think will really change the efficacy of the platform?
R. J. Talyor: Yeah, there's two ways I think about the product roadmap. One is deepening what we do today and then going wider across other channels. On the deepening what we do today, we have only really started to figure out what is it that's driving performance. We have 2,900 different dimensions that we look at, is the shirt white, red, blue, green, whatever. Is the headline 62 characters, 63, how many verbs, how many nouns? This is the word Save, exclamation point, you know, like all these different things. But there's lots of different ways that we can deepen the analysis with, you know, I don't even know how many different features so, and it doesn't make sense to do them all, but we're continuing to add to the depth of the way that the platform predicts today.
R. J. Talyor: In addition, customers have said, "We love what you're doing for Facebook and Instagram and Google display. Can you do the same thing for YouTube and help advise us on what video stories we should be creating?" Or, "Man, I'd love to see this live for email, to predict what headlines or subject lines rather as well as body copy and you know, what should be above the fold in email." And I came from an email background at Exact Target and then at Salesforce for 10 years. So it's like, "Well I guess we're going back to that," because marketers want to see the same types of things. So for organic social, for other channels. So it's kind of going deeper on what our predictions can do today. And then going wider to other digital marketing channels.
Mike Kelly: Where does the 89 come from?
R. J. Talyor: Pattern89 was named because there are 88 constellations in the sky, that we're helping marketers look at their constellation of data to find the 89th.
Mike Kelly: I like it.
R. J. Talyor: Yeah. And also that was a name that we could trademark and get the URL.
Mike Kelly: And get the URL. Yes. No, that's beautiful.
R. J. Talyor: Yeah. Yeah. It's a good story. Yeah. That's good. Yeah.
Mike Kelly: How did you decide that this is ... Give me the founding story. Like why this problem?
R. J. Talyor: Yeah. Well, so I've been in tech for now about 17 years and in the marketing world for that amount of time, and at Exact Target and at Salesforce and in my previous startup, the whole problem that I continue to encounter is that pace of marketing is increasing and that marketers more and more just don't know what to do. And even the smartest marketers, they're like, "Well, we're going to AB test it, or we're going to ABN test it, we're going to multivariate." Whatever the case is. And we all want to test everything, but we actually want to figure out what the result was from the test, and the pace of things changes so quickly, especially in paid social that we might test something for a week and then say, "All right, let's put a bunch of money behind it." And then the next week you're like, "Wait, it didn't work. Was our test wrong? Was our testing methodology incorrect?"
R. J. Talyor: So the overall challenge is, how do we keep up or keep ahead of what's going on in marketing, is kind of the core problem and the the artificial intelligence and data science approaches that are out there now can't help really predict what's gonna work or use some techniques that mimic AB testing in a way that would reduce the amount of AB testing that a customer would need to do in order to find the same type of answer. That was kind of like the core problem. And I said, "What if we wanted marketing to actually be this fast, or the pace of marketing could actually increase?" And that was actually what we wanted, and we could create a solution to help marketers stay on pace with it, and the technology is now available to do that. And so I've worked always in kind of the new stuff, in Exact Target I launched our mobile product and I launched our landing page product and then our internet of things products. So all of the new stuff, I like the new new thing and, well what if we had a platform that helps you get smarter about all that new stuff?
R. J. Talyor: So started playing around with some AB testing, like AB testing on steroids and then figured out that actually, customers don't want to do more AB testing. They just want the answer on that. And that's where Pattern89 said, "All right, well we can actually predict what the answer is going to be."
Mike Kelly: Excellent.
R. J. Talyor: Yeah.
Mike Kelly: When you reflect back on the last year in particular, from when you first launched Product to kind of where you are today, what's the biggest unexpected thing you've learned personally?
R. J. Talyor: The biggest thing I've learned is how to deal with myself. And maybe that sounds really cliche, but it's actually true. And you know, I have four kids, I love to work hard. Like I really enjoy work, but there are a few times where I came home from work and I was like, go, go, go, go, go on a conference call. And I'd walk in the front door and my wife literally was handing me a baby that was screaming. Like no joke. Like that whole cliche thing. And-
Mike Kelly: Here, take this.
R. J. Talyor: Yeah, really. And I wasn't in the place to like handle that. Or then I would like be at work mode at home, you know? And my wife would be like, "You need to leave this house and go walk around the block and then come back in again." So it's kind of dealing with myself, meaning like, I mean not to get too personal, but like, you know, I gained a bunch of weight and not managing stress appropriately and that type of stuff. So the thing I think I've learned about myself is, in order for me to be effective as a leader or a founder, you got to like take care of yourself. So in the last year or so I've put, I've got my spreadsheet, I have a spreadsheet in which it's here are the things I need to do every week in order to make sure that I'm kind of staying on track with stress management and life management and that type of stuff.
R. J. Talyor: And I swam growing up and I swam in college and I still swim now. So on my spreadsheet is swimming three times a week. So did I do it? Yes, no? I got into a bad habit of buying coffee everyday, like for whatever. And then I'd buy a coffee and then I buy a pastry or something. So on my list is make coffee every day. It's kind of slows down your morning, make coffee and saves money too. But it's just like more about what are the rituals that I need to do? And I started taking the bus to work, which is not common or I guess in Indianapolis as much. I started taking the bus and then reading. I would love to read, but I haven't been reading. So really making sure that I'm honoring that part of kind of what I need. So then also taking the bus home and reading on the bus home. You can't work on the bus, there's no Wifi, which is kind of a blessing right now. And actually I'm really excited about the new bus to come in the red line, they said it's going to have Wifi, which-
Mike Kelly: Bittersweet, man.
R. J. Talyor: I know. I don't want it. I mean I want the red line because I live right by there. So I'm excited to do that, but I want to kind of decompress from the day and so be the husband and father that I want to be, which sounds kind of heavy, but that's actually what I've learned. Like that's ...
Mike Kelly: Yeah. It's amazing. I have two quick thoughts on that. One is I have a farm and part of the magic, I mean a lot of people hear that I drive an hour in to work each day and an hour home, and they think you're crazy, like, "Why would you give up two hours of your day every day?" And it's one of these hidden little gems that people don't think of, which is, I have an hour to think at the start of my day, where I can think through, "Okay, what are my priorities? What do I want to get done?" Like there's always more than you can do. So just really taking the time to think about where I want to focus. And on the way home, it's totally just decompression, right? That walk around the block. I'm doing that on the way home. Even if I take one or two conference calls on the way home, I still have plenty of time to just let it all go. Right? And so when I get on our property and get out of the truck and I have a kid running up to me, like, I'm ready for that.
R. J. Talyor: Yep, yep. Yeah.
Mike Kelly: So that totally resonates with me. And then yesterday, couldn't be more timely. Yesterday I was at Cafe Patachou the center of the startup universe, and in there were two former guests from the podcast and they were ... And of course I walk up to them, shake their hands and they're like, "You know, we were just talking about journaling and mental health, and how you as a founder have to figure out how to ride this roller coaster, balance life and the work commitment, stuff like that." So it's like, I mean, it's a super relevant topic, right? I don't think it's cliche at all.
R. J. Talyor: Yeah. Yeah. It feels like it is becoming more and more people, like startup founders, talking about it and why it feels a little bit, I don't know, weird to talk about it is like, I don't have some crazy story. You know what I mean? Like it's not crazy. It's just like day to day stuff, you know? It's nothing like, I didn't try to ... Like there's no extreme to my story where like, "Oh my gosh, he almost jumped off a bridge and then came back." No, it's just like normal stuff, you know? And it's funny, it's like I know that there are a lot of startup founders that are actually even more extreme, or who are going through other stuff that I've never experienced, but just in my life it's important to keep things in balance.
Mike Kelly: What are you excited about personally, in terms of continuing to get better at or grow or what's the next thing you're trying to figure out as a leader or any of the above?
R. J. Talyor: Well, there's a lot of stuff. I mean I've got all sorts of like personal things, personal goals and with myself, but on the kind of professional level, or it is professional, but I'm also really personally excited about it, is that there's a gap between what people think of artificial intelligence and AI, and what it is and how it can change our business and lives and stuff. And I think that a lot of times the headlines in the news are like these disaster stories, where the robots like take over the world and kill us. Like that's the headline that everybody's reading. I believe that this technology can make us more creative and allow us to think more and create more and be more human. And I think that that's a cool, interesting challenge, is like how do we create more stories and user interfaces, and the interaction between humans and computers and how do we ... Like even in our product, what buttons do you click, how do you interface with it, is a big challenge.
R. J. Talyor: And it's pretty exciting on most days, because no one's done it before and we're trying to find out what the answer is. It's supremely frustrating on other days, you know, but most times it's like this is an exciting challenge to try figure out and it brings forth, I have an English degree and I have a Master's in English, so it's all about, for me it's like how do we tell the story? How do we create something around this technology? So that's really exciting for me. In the meanwhile the technology is getting even better. So I don't know, like that's a cool, cool, interesting, hard challenge. So I'm really excited about that.
R. J. Talyor: And then all sorts of stuff on the personal front and doing a two mile swim in a week across Eagle Creek, which will be fun.
Mike Kelly: Nice.
R. J. Talyor: Yeah. And you know, raising my family and all those sorts of things too. So yeah.
Mike Kelly: If people would like to get in touch with you or learn more about Pattern89, where can they do that?
R. J. Talyor: Sure. We're just at pattern89.com I'm firstname.lastname@example.org, so we'd love to chat about whatever.
Mike Kelly: Thank you so much for making the time.
R. J. Talyor: Well, thank you.