David Steinberg on Zeta Global and Entrepreneurial Growth

Foreign.

I'm very, very, very excited to have one of my dearest friend know him for 25 years now, David Steinberg, a serial entrepreneur who took two pub companies public. Now the public's now the founder and CEO of Zeta Global which is almost $4 billion market cap and also exceeded other companies. Really an exceptional entrepreneur. So really, really happy to have you David.

Thank you, thank you to be had Imran and you know you are one of my favorite people. So when you asked me to do this I was super excited. I have founded seven companies, sold four taken to public and I'm chairman of another. But it's been a good run, it's.

Been a good run, it's been a great run. So start at the beginning, you know why people, you know obviously these days every college student wants to be an entrepreneur.

I was born in 1969, you know, long, long time ago. If you really want to go back that far. I'm not sure we have that type of time.

Yeah, you know, I have plenty of time but, but you know, 70s going starting company, you know, anywhere from New York, it's not the most common thing. What made you wanted to be an entrepreneur after you graduated from college?

Two really interesting statistics. I had started a company prior to going to college. It sort of had been something that, that I had done is when you look at most entrepreneurs they are one concentric circle away from another entrepreneur. I was one concentric concircle away from multiple. My stepfather was a very successful entrepreneur. My grandfather had been a doctor and then an entrepreneur and it was something that was normalized in my life. And then two, you know, like most entrepreneurs I became one originally because I had no choice. I came out of School in 1990. It was the sort of great, it was the great recession of that week and you know, I thought I was going to end up at Goldman Sachs or in investment banking and they didn't think I should be there. So I ended up going to work on the Hill, the Judiciary Committee focusing on a number of issues which is really interesting. And then I fell into the insurance business by accident. I ended up selling insurance for a short period of time and figured out I was good at selling stuff. It was a very funny story. My dad who was an Ivy League educated CPA for most of his career, when I told him instead of going to law school I was going to go sell accidental disability insurance to self employed people, he told me I was nuts. When I told my stepfather who barely finished high school, he had finished high school. He hates when I make that joke but. Or hated. He's not around anymore. But he didn't go to college, went into the military. Ended up starting a very successful at the time direct mail business. And he said this would be the greatest thing to ever happen to you. You need to learn how to deal with people telling you no. And I was in that for a short period of time and then through a whole bunch of happened circumstances I ended up going into the wireless business in 1991. Started a company called Sterling Cellular which ended up doing pretty well. But literally I couldn't get a job that I really wanted. I ended up hey, here I am.

So you really, you really never worked for any company. Your first Sterling Wireless we started 1991.

Sterling Wireless was actually second. I had Sterling Cellular, Sterling Wireless, Sterling Communications, then in Phonic, then Kivis, then Zeta, then Pharmacy on demand. But the. I obviously had very little naming capabilities for the first 15 years I was doing this. I think it was just sort of. We rolled from name to name. But yeah, I've never, I mean listen, I work for my board of directors and I work for my shareholders but I've never been hired at a corporation into a job in my entire life. Good for you.

So let's start. The first like second was Sterling Wireless. What was the premise of that business, how that evolved. And I want to get to your first public company in Fonny. How did you get to Infonix? So walk us through that journey.

When I started Sterling Cellular which was the first one I had started, I had just seen that wireless phones I thought were going to be an incredible business tool and everybody else was sort of trying to sell them in a retail environment at the time. So we felt like if we could take the concept of insurance sales which was an outside sales force going business to business and put it into the wireless space and then sell wireless phones which in 1991 were just getting to the point where the hardware was no cost. If you would sign a long term contract. It wasn't like still $1,000 a device but the hardware was still a few dollars but the real cost was in the time. And we went out. I built a meaningful sales force that really focused on selling wireless phones is a business tool. And we partnered with Southwestern Bell Mobile Systems, you know, DBA Cellular One at the time and built, built a pretty sizable business for you know, for a 21 year old kid. You know we, we ended up getting, getting actually pretty big before we sold that one. But it really worked because we would go to the Business and say, listen, if we could give you two hours a day of productivity at a de minimis cost, would that be worth it to you and everybody? Like, oh my God, yes. How do you do that? Like, there are these brand new things, they're called phones. And you can take them with you and when you're in your car, you can call clients or you can tell your wife you're running late. And people are like, oh my God, this is amazing. I thought they were $1,000. We're like, no, no, no, just sign up three year contract, that'll only cost you $10,000 for free. And we killed. It was, it was, you know, I, I sort of joke. It was a fast enough growing ecosystem that even somebody knew as little as me at that time could win.

So you exited that business. What triggered exiting that business?

So we, we ended up selling it back to Southwestern Bell Mobile Systems. We, we were making a pretty sizable residual on what we were doing and it got to be such a big number that they, you know, they wanted to own it. And then I moved into Sterling Wireless because what I started to see, and I have a premise now that's mature today that wasn't mature then. But almost every technological product goes through three distinct phases in its life cycle. The first is the development stage. The next is the monetization stage, where you can really make money on the product. And the third is the commoditization stage. And pretty much every product I've ever seen in tech has sort of gone through that. The most money, in my opinion that can be made in that type of a world is as products are halfway through monetization and halfway into commoditization. Because when they're interested, yeah, when they're fully in monetization, it's very hard to sell them. Need a complex sales force, very expensive. And when stuff's fully commoditized, it's hard to create margin. So it needs to be just complicated enough, you know, that it's in that development stage, I'm sorry, in that monetization stage, where you can make money, but the commoditization of it allows you to do it virtually. So when I sold that first company, the second company, which we lovingly called Sterling Communications, became a telemarketing platform. So we had, at one point we worked with thousands of telemarketers where we were calling people, most likely annoying you or your parents at night. Would you like a free wireless phone? And we came up with this concept. I had been sort of looking at what Microsoft had been doing around putting software in a box. And you'd go into. Back then, you'd go into Best Buy. I know Best Buy, you could still go into Best Buy. But the way you would buy software back then was not. You would download it on your machine, you would go into Best Buy and you'd buy a box and that box would have disks in it and you'd put those disks. I mean Emron, you're old enough to remember this too. And the reality is that on the outside of that box, which was shrink wrapped, closed, was a contract that said if you break the seal of this saran, you're buying this product and you're agreeing to the contract. I said, why can't you do that in wireless? Because up until that point you need a signed contract. So we created, I believe you don't ever really know, but we create the first I'd ever known of, you know, break the seal contract in the wireless space. And we literally did it to move from a retail and direct sales environment into a telemarketing environment. That business ended up doing really well. We then sold that company. It was very funny because we had built this big fulfillment capability because now all of a sudden you got to ship a lot of phones. We were sold a lot of phones at the time. And we sold that business to what is today AT&T. It was actually we sold it to AT&T before it became AT&T. Again. It was pre Southwester Bell Mobile Systems buying it. They were sort of moving back into the wireless space and they wanted our business to give them a hand. Plus we were selling a lot of long distance because we were like, would you like long distance with that? I sort of joked, would you like fries with that? And at the time they were bundling know long distance home service and wireless and we were sort of doing it as one. And at the closing table when we sold the the business, I said to them, what are you going to do with my fulfillment facilities, the pick pack and ship, all of the capabilities we had built out? And the guy was like, wow, we're going to shut it down. I said, great, why don't you let me keep it? And he was like, well, what are you going to do with it? I said, I think this new thing, the Internet is really going to work. And I would in fact take a discount on the sale of the business to you if you would give me just a long term exclusive contract to sell AT&T phones over the Internet. And the guy was like, sure. They were like this Guy's an idiot. And that turned into Infonic, which of course was a well over a billion dollar exit. I think, I think the initial exit was 1.7 billion. But the reality was it was the germination of virtual distribution, which started in telemarketing and then moved onto the Internet. We were the first by far to do that.

So at this point you learned, started three or four companies. So what are the big takeaway? And then how did from Infonic ultimately you got it to idea of Zeta Global.

So first of all, you know, there's a lot of different ways to start a business, to get into it, to focus on it. What I always joke is, you know, I, we, we at Zeta have this incredible intern program where we get, you know, thousands of applications now for very few spots. And usually we take a few interns that go into our corporate development M and A. And then one gets the bad luck of working with me all summer. But the reality is that I take them to lunch at the end of every summer. And usually these are, these are people who are at, you know, Harvard, Yale, Wharton, this, this year, all the school that I didn't get, the schools I could never have gotten into. Exactly. And they're always like, wow, we want to be entrepreneurs. Like, tell us the secret. I'm like, well, the truth is you guys will probably most likely not be entrepreneurs. And it ruffles the feathers a little bit. They're like, what are you talking about? I'm like, well, listen, when I came out of school, I was working for the government and I think I was making $17,500 a year. You're going to come out of Harvard, Yale, Wharton, and you're going to make 150,000 a year. What we call that, in my basic terminology is a very high opportunity cost. I had no opportunity cost zero. Because I literally looked at it and said, well, if this doesn't work, then I'll go get a job at some point. And I had some savings from the insurance business and was able to put that in. Very funny story about my stepfather helping me at one point after we had, we had already been in business for quite some time because I, I didn't understand what working capital was. So we had all this accounts receivable and we had paid all our accounts payable timely, which now I know better than that. But you know, we, we, we don't do that at, at, at Zeta. That was a joke. But the reality is that we didn't manage working capital. I had to make payroll and I Had to call him and be like, irv, these people owe me a lot of money. And I got to make this $250,000 payroll. He's like, and that's what we call working capital, kid. And he bailed me out and I paid him back. But the reality is that low opportunity costs. So people say, why do young people start businesses? Because the opportunity cost is low, right? You don't have a big, high paying job. You generally don't have two kids going to private school. You're not paying two car payments with a wife at home or husband at home, whatever it is. The other big point I see a lot of entrepreneurs coming out is when their youngest kid goes to college. It's like a very interesting time for people because they're rethinking their lives. They've covered that first sort of 18 years of getting their kids to where they have to get to. And often they're in a position to take a shot or take a risk. And then of course, there's always the great entrepreneurs who come out of other businesses. You know, PayPal being a great example, right, where everybody made good money, nobody made the money that you need, that you would never have to work again. And they use that money to go start businesses. And you know, people ask me, why is San Francisco, Seattle, New York, why are these the big entrepreneurial hubs? I'm like, well, because these people go in, they make money. They were at Microsoft, Amazon earlier, it was McCall Communications and different firms, they make real money, they leave and then they go out and start something. Same thing in Austin. It was Dell, right? I can't even tell you how many millionaires Dell made. And then San Francisco, of course, it's just started with hp and the flywheel has never stopped. New York is starting to get there, right? Because you have so many people who are making so much money even in just Google and Meta, those other businesses, and they go out and start, start their own businesses. So, you know, those are different points for entrepreneurism. When, when people ask me how do I target being an entrepreneur, I say the only way to build a really great company is solve a problem nobody else has solved. And, and it's really just that simple. At the time I started my first company, the problem I saw was they weren't selling wireless phones properly. In my opinion, they were trying to sell them to consumers as a fun tool. And I saw it as a business tool, you know, and when I started Zeta, the real vision was how do we help marketers consolidate 17 different vendors into one platform with one user interface and one reporting infrastructure which allowed two major step functions in the marketing ecosystem. One, it makes marketing more efficient. You don't have to cover the SG&A for 17 different vendors. And two, the reporting and the attribution is pure. Everything is in one place. So you can see every single touch point on a consumer prior to that purchase. And it really changes the game as it relates to how you can better and more cost efficiently manage your marketing. Really the catalyst for that was when I left my last company, which got caught up in the debt crisis of 2008, sold to a private equity firm. That private equity firm ended up selling it and doing very, very well with it. It was a great company with the wrong balance sheet at the wrong time. So big lesson learned, don't over lever yourself right. And once again I learned some very valuable lessons at my last companies that have led me to what we're doing today. And you learn from it and you just keep sort of taking the information that you learn at different organizations and you try to fine tune it and get better. But we had 17 different vendors who helped us manage our marketing at Zeta. And it was just very inefficient and very expensive. So by consolidating everything at Zeta into one user interface with one reporting infrastructure, it just creates a much better solution for large enterprises to more cost efficiently create, maintain and monetize customers.

So you started Zeta right at the beginning of financial Crisis, right in 2007, 2008, early 2008.

Yep.

How that vision of consolidating 17 vendors under one platform has changed over the years. And what made you change those?

First of all, we've pivoted the business ratably on two or three occasions over the years. We've always sort of had the vision of first party opted in. Data that is permission based and regulatory controlled would be the right vision for the data ecosystem. And then two, we, we actually looked at the landscape and felt like the way you would communicate with customers would change over the years. So we built our platform so it was agnostic as to how you would activate to the consumer. Because when we started you would have never considered that Metta could be one of the most important platforms in the world. You would never consider that artificial intelligence would be mission critical to decision. You would have never even thought of TikTok. Right. But that base function where we said how do we put a user interface that allows an enterprise to take their data, massively enrich it with our data and substantially better target around CRM and customer acquisition. And then it sort of grew from there. Now in 2017 we really made the decision to go all in on artificial intelligence. So I sort of joke most of our competitors have been working in AI for seven or eight months. We've now been doing it for seven or eight years. The catalyst was really starting to look at the number of marketing signals we were ingesting even at that point. And now it's trillions. But back then no human could could manage it. And we were trying to run reports to get to these super hyper targeted, you know, audience capabilities, sort of very people based. And the reports would take hours to run. And you've got in some cases milliseconds to decide if this consumer should receive.

An ad and what kind of report this they're running.

So we were looking at how do we take the best customers of the largest credit card company in the country and how do we take their best customers and then find other people who are doing the exact same things in the 30, 60, 90 days prior to signing up for their credit card? But the attributes would go out. In some cases 5 to 7,000 different data elements were coming into play, multiplied by millions of users. Some of the data is demographic, some of the data is psychographic. But a lot of the data was really based on what they were doing in the moment. So that type of data just took a long time to process. Pre AI.

And how did you guys get this data? Right, because a lot of the advertising companies, a lot of the companies struggle to get the data and then ultimately put the data in one place and then to put process the data to do this. How did you guys think about building these things and how did you go about it?

I mean if you think about our data cloud, it goes back to 2017, the first purchase that really was the catalyst for the beginning of the data cloud was a company called Disqus D I S Q U S which is the world's largest commenting platform. And we made some major strategic moves with Disqus. They were charging a SaaS based licensing fee to a lot of customers for publishers to use it. And they were selling the data to third parties. We were one of the purchasers of the data. So we were like, this is some of the best data we'd ever seen. We made the decision to buy it. I mean Imran, if you want to hear about a very funny board meeting, I went into my board which had a bunch of private equity guys on it and said we're going to make the largest acquisition in our company's history and we're going to turn off their two revenue sources.

We literally. How did that go?

Yeah, it was not a popular meeting. We got through it. You know, we have, we have a legendary guy, Bob Niehaus, who's, who's on our board and he's my lead outside board member. And I just, I convinced Bob that this was the right decision long term. And he was like, you know what, let's try like it was. We had the money to take the risk. You know what I mean? And when you think about it, we went in, we bought it, we gave the platform away free to the world. Every publisher could have it, 5.2 million publishers use it today. And we stopped selling data to any third parties. We had three things that you needed to do. One, you needed to host our first party tracking Pixel. We don't use a third party cookie to build attribution or target. Two, you have to host our JavaScript on every page you publish, meaning our platform is able to see every component of what the consumer is doing. Where they come from, where they go to, where they stop, on the page, where they're looking at, so on and so forth. And number three, after a consumer interacts with the platform more than a few times, they get directed back to Discuss.com to re opt in to our terms and conditions. And this is sort of the way we started our Flywheel and Data. And then we bought, I don't know, 19, 20 different companies, the biggest of which now is live and 10, which is the largest ad serving platform for Tier A newsletters for Tier A publishers in the world. So it's funny if you think about it, Discuss really had the long tail of 5.2 million publishers. And then Live Intent works with I think 70 or 80% of the comp score, 1000 most important websites in the world. And by putting those two platforms together, it really supercharged the data cloud. It's been really exciting to see that evolution. But no one platform at this point makes up any meaningful percentage of the data generated or the data that's fed into the data cloud. The other very interesting thing about our data cloud that I think a lot of people do not understand is we never sell that data to any third party. The data lives inside of the data cloud and it's used as electricity to supercharge our software sales.

So all this data that you acquired, those are acquired to acquire to different companies. Ultimately they sit into under your data cloud. And now you have this data. So I think one of the Things that a lot of times, you know, I hear from people saying that how do you keep this data refreshed?

It's interesting. We never ever have bought a company that had a large database. We bought companies that create massive first party data every moment of every day. So remember when we were buying this in 2017, nobody even thought this type of data was valuable other than maybe us, Meta and Google, like that was really it at the time. Most companies looked at their data, excuse me, as an exhaust or a byproduct of the creation of the engine of their business. We saw it as the fuel that fed the engine of our business. And by the way, much like Meta, much like Alphabet and Google and how they operate, but at the end of the day, we refresh our entire data Cloud, which is 240 million-plus Americans, it's refreshed every 90 to 120 days. If, if somebody's not interacting with us, utilizing the platform, re opting in every 90 to 120 days they get moved to an archived status. So it's very, very relevant. It's very. Today, as I said, Over 5.2 billion publishers are hosting our JavaScript and our first party tracking pixel on over a trillion pages of content on any given day.

So that's great. So that data gives you a competitive moat that companies like meta or TikTok or Google might have. Couple of questions. How do you protect that data? And then after you get protect this data, how do you build a business on top of it?

The key to building a business, to answer your second question first is you have to make data actionable. And I'll get into how we do that in a minute. The protection and the data, you know when people would say to me, remember we've been around for 17 years now, we're not, we're not sort of an overnight success sensation.

Most companies are not.

No, I understand some are, we're, we're sort of more of a methodical, steady growth company. We've as you know, grown the company by, I think it's now 30% on a compounded growth basis for three years in a row and 20% plus for many years on a compounded growth rate. But the, you know, in the first quarter of 2025 we grew top line, 36% EBITDA, we grew 53% free cash flow, we grew 89%. So not, not terrible numbers. But at the end of the day, if you think about how we've raised capital over the years, whether I put up the first capital to found the business, which is why I'm still a pretty meaningful shareholder. And then we raised capital from Green Hill Capital Partners and from GPI and other great firms. People would say, what keeps you up at night? I have five kids, so I'd always lead with my children. But the truth of the matter is, when you build a business like ours, your single biggest risk is your data. So we started investing many, many years ago in having the world's greatest data security platform. By way of example, Dr. Jeff Nimiroff, who has his PhD from the University of Pennsylvania, is our CIO and he is a data security expert. Like this is what he focuses on. We silo our data into 28 different silos. Each one requires a separate encrypted primer to merge the data cells together. It's a very, very comprehensive platform. And as you would imagine, we get a lot of attempted incursions on a daily basis. And we employ a global network operating center that operates on four continents at this point. And knock on wood, we've been okay thus far. But it's something you really invest in and it's something you really spend time in. So data security, data protection, data privacy, and data authentication are four of the single most important things in our entire business as it relates to how do we make it actionable. The way our business works is really differentiated, and I think it's taking Wall Street a long time to understand it because it's complex and it's not like what everybody else does. But we build what's called the consumer data platform, which is a very comprehensive software architecture that allows you to target down to a consumer in the data ecosystem instead of a pool. It's really the big difference. We take all of their data. And in many cases, when you're working with a Fortune 5000 company, put in perspective, 44% of the Fortune 100 use the Zeta marketing platform today. So we're really integrated into very large enterprises. You might have five or ten different silos of data you're extracting from inside of the enterprise. So you might be pulling from their point of sale system, their data warehouse, from a IVR system, from their call center. You know, all of this data comes into this consumer data platform. We then merge it with our first party data and we enrich it with over 5,000 incremental data points per person. Now we do something very differentiated. Once we merge that, instead of leaving the consumer's personally identifiable information in there, we remove it. We put a Zeta ID number on top to protect the consumer. So even the Enterprise no longer knows that this is Joe Smith. They just think it's Zeta ID number 13578. Now our artificial intelligence algorithm, which is in this case lives inside of the CDP, has no data exhaust to any other LLMs or any other enterprises. So the enterprise feels very safe. With the way we build this, it starts to look at what were the things that the 10% of most valuable customers who either are a credit card customer or an insurance customer, bought a car from them, whatever it is, what did they do in the 30, 60, 90 days prior to buying? So now what we do is really interesting. First of all, let's take a large wireless customer, okay? The first thing we do is we go into the 240 million Americans and we remove their 40 million customers. How many times, Imran, do you get an ad for a product you already own? Hundreds of times a day. By removing their existing customers prior to spending a penny, you've actually removed a massive amount of expense. Because their existing customers, if you don't know they're existing, look like they would be great new customers. Then we might find, let's say these 3 million other people are actively in market for their exact mobile product. We look at them and say, but this million people won't be credit approved by your criteria. So now you take that cost out. So now you've gone from 242 million Americans down to 2 million people who are actively in market for your product, have a propensity for your brand and will meet your credit criteria. We then have another series of artificial intelligence algorithms that target those people in the best places to target them, whether it's through Programmatic, connected television, mobile, social and Clarity. We can then build authentication and attribution based on every touch point to the consumer. So if we run an ad in the meta and that consumer clicks on that ad and doesn't buy, we then show them a connected TV ad. That night they might watch the connected TV ad and not buy. We then show them an ad inside of Programmatic. The next day they click on it and they buy. Most platforms would say that's the greatest ad unit in history, 100%.

So how do you get paid? So do you get paid for software that your customers are buying to identify it or do you take a margin on ad inventory as well?

So we charge a software fee. Our software fee comes in the form of either a long term subscription contract which gives you access to the data cloud, the Zeta marketing platform, so on and so forth, and then a utilization fee. The more you utilize the platform. The reason that pricing schema has been so powerful for us is it scales so quickly. We have customers, we have a number of customers now who have started on 50 to $100,000 pilots who are spending close to or over $100 million a year now.

It does not involve any media cost, just paying for your usage cost.

Some of it is media through the, the, the integrated platform stuff, which is about 30% of our revenue. 70% of our revenue is on platform and does not include any, any media cost. But that's primarily social, right? Because we don't own Meta, right. We don't own Google. So when we run through them and, and people say, are Meta and Google going to kill you? Well, I think they like us. We pay them a fortune on behalf of our clients. We, we made the decision never to compete with those guys. We want to partner with them. And if we think a individual is better targeted through Meta or through Google's platform, we do it because for us it's about being agnostic and driving the best return on investment to our enterprise clients. But the truth of the matter is that the business is growing at a substantially more rapid pace than we expected because it works. It's one of those things that, you know, last year we had a net retention rate of 114%. You know, our clients are growing at an incredibly rapid pace. And, and we launched our first AI agent studio 18 months ago now. So where a lot of our competitors are trying to catch up, we're on version three of our AI Agent Studio by way of.

And what does AI Agent Studio does?

So let me give you an example. So we're the first company I know of that has strung three agents together in one solution. One agent is doing what I just talked about. It's literally figuring out who are the best people to target. But instead of doing it 2 or 3 million people and whittling it down and then go, it's doing it in real time. The next agent in real time is targeting the best place to target this exact individual. And here's where it gets the most interesting. The third is a real time attribution agent that informs the first two what's working. So in fact, what we're seeing, Eron, is when you straighten two agents together, it's not one plus one equals two. It's one plus one equals an order of magnitude more efficient. One plus one plus one equals two orders of magnitude more efficient. So 100 times. So let me give you a great statistic. In calendar 2024, the I think it was 128 approximately enterprises of our large enterprise clients adopted our AI agent studio. Those customers who adopted the AI agent studio grew at greater than 44% on the platform. So now obviously you've got a range and we're trying to move more of the customers into the AI agent studio and the uptake's been really exciting.

Where does the business go from here? Right, so you talked about few pivoted. Right, few pivots. You started as you know, consolidating 17 different vendors. Then you really build this data cloud which seems like based on what you're telling me, only Google and Meta and few other companies have that kind of data. Now you're taking leverage those data and monetizing data differently than social platform will do. You're creating the software business. So from now, you know, how do you grow the business? You sign up all these enterprise customers, how do you add more enterprise customers or how do you add new product? Like what, what is the Zeta looks like next five to 10 years?

Yeah, I mean listen, we're trying to build the next Salesforce, we're trying to build the next Adobe. We're, we're not trying to build the next boutique marketing and technology platform. Right. So in order to do that you have to have a big opportunity. So we launched the agent business where we're working with the agency hold codes and you know, in the first few years of starting that business, we now work with five of the eight largest in the world. Our goal obviously is to get to 8 of 8. And in some you're just getting started and ramping very, very quickly. You know, one is a little more mature where we're doing a lot of business. Another is drinking out of the fire hose and growing faster than we could have even imagined. It's, it's, and a lot of it is we want to empower the agencies to do a better job with their clients. And we really see that as a very interesting opportunity for us. And you know, quite frankly that went from 0 to 20% of our revenue while the company was growing. You know, as I said, greater than 30% a year on a compounded growth rate. So the enterprise business is growing too. And you know, I think that's going to be a meaningful opportunity. And listen, for a lot of our scaled customers, we might be doing a mill. If somebody's doing a million a year, we're calling them a super scaled customer. That same enterprise might spend 2 billion a year on marketing. So my goal is to get from a million to 100 million. I would tell you three years ago, not 10 years ago. Three years ago, our plan was how do we get 10 customers to 10 million a year. Our plan is now how do we get 25 customers at 100 million a year? And you know, at the end of the first quarter, we had 548 global scaled enterprise customers, so.

So 540, the million dollar revenue, correct?

That's right. I mean, we broke. I mean, it's crazy. It took us 16 years to get to a billion a year in revenue. And by the way, you know, solid ebitda, really solid free cash flow. It's something we really focus on as a company. And our 2028 plan has us more than doubling that business in the next three and a half years. So literally 16 years to get to a billion. Your next billion comes within three and a half years. My goal is to get this to a $10 billion business with a 30% operating margin, with a very large conversion of operating margin to free cash flow.

And what needs to happen to get to that? So if you have a, if you have to hit $10 billion revenue in your mind, what are the one, two or three things you need to achieve?

I think we need to get 25 of our customers to 100 million a year to build an anchor base that obviously would be, you know, 2.5 billion plus. And I think we're going to start looking at customers in the 250 range. We already have customers well over 100. And you're going to continue to grow your existing customer base. I mean, listen, we put out our cfo Chris Greiner, and our president and coo Steve Gerber are the best in the business. And we put out a 2028 plan which lays out specifically the number of new customers we need, the number of new sales reps. We're going to add the average ARPU growth per enterprise client per year. Everything's laid out and we have been in or above the range for each one of the metrics we laid out. I'll remind you, in 2020, we rolled out our 2025 plan. I think we made it public to the street in 2022. It was internal for a couple of years. And we hit our 2025 plan in 2024 for the most part, and we hit the revenue number. We blew through the other numbers by mid-2025. But the reality is that we've laid all the metrics out. And what people haven't figured out yet, which still surprises me, is if you're Projecting. And by the way, we projected a 20% growth rate to get from the 2024 numbers to the 2028. 2.2 billion in revenue at a 25% operating margin. And I think greater than 50 or 60% of that converts to free cash flow. Don't quote me on that, obviously it's a podcast, but this is all available online. What I would tell you is that if we're growing the business, which we did last quarter at 35%, the numbers in the out years get substantially smaller to have to hit those numbers. I'm not saying we won't hit the 20, I'm simply saying you, you know, you would, you would exceed it if, if you continue because the earlier you grow faster, the more it compounds as a business. So, you know, when we think about how do we get there? Here's my favorite statistic about our business and our opportunity. Okay. A lot of companies talk about their tam, right? Their total addressable market, which is the universe of business they could go get. Let me tell you how I think of our business. Our existing 548 global enterprise customers spend over $100 billion a year on marketing today. And last year I had one point of that. How do I get to 5% of that, 10% of that? And of course, we're adding additional global enterprise clients all the time. I mean, the other big long term opportunity is international. You know, our platform, our data, it really could easily be exported to lots of countries. We operate all over the world now, but mostly on behalf of existing US Customers who pull us there. The big question long term is when we want to get from 10 billion to 20 billion. I think that's when international really gets interesting.

Do you have the data advantage that you have in the US in the international market?

Yeah. So it's Great. We have 550 million global people opted into our data cloud today, 242 million of them are in the US so it was funny, I was being interviewed, I won't say the network one day, but it was a live interview on one of the major, major networks. And she, she was like. At the time, I used to just quote the, the, the global number. I think at the time the global number was like 420 million. And she was like, she's like, well, that must be all of America. I was like, well, you know, there are only 250 million. I mean now there's 320, but, but that's, that's other countries too.

Funny. Okay, so this is great. What are the product gaps so we understand the enterprise opportunity. Is there an interesting product gap that you're seeing that or coming into the AI and you have been very good at identifying wireless to Internet. Now AI, what are the opportunities you were seeing that could be product additive to Zeta?

We're working on something that I think is going to change the game from a product gap perspective. But I think when most people who are decision makers in companies are thinking about their days, weeks, months, years, I think there's a lot of holes in how their lives are managed. Whether it's their calendar, their contacts, their schedule and the ability to put all of that in one place utilizing a platform that could enrich it with real time information off the Internet and back into business intelligence and long term marketing, thought, strategy and plan. I think that's a real gap, I don't think. You know, you've got companies like Palantir that do a great job on business intelligence and then you have companies like Zeta and of course, you know, Google Meta and others who do a great job on marketing. I've always thought of us as a business intelligence company that focuses on marketing because the tab is so big. But the real question is, could we bring those things together into another platform that would have a user interface and a reporting infrastructure that would take that to a more seamless place long term? And I see that as a very big idea and a very long term opportunity. It's not something that's going to happen overnight, but I think that's sort of the next big leap for us will be something in that genre.

Do you see any opportunities taking this data do something beyond marketing like we talked about, obviously your other opportunities.

Yeah, that's why I say business intelligence. Yes, I absolutely. And, and by the way, the crazy thing is we provide business intelligence solutions to our customers all the time. We just don't talk about it. And by the way, it's a de minimis percentage of our revenue and it's not something I'm sort of playing up today, but it's something that I think really as I look at our long term outlook, it's something that we want to be our client's first call when they have a problem. That's what we want and we get calls from clients all the time. Could you take your data. Take our data and put together a solution. Plan to figure out where we open our next 500 hotels is a real world solution we put together for a very large client. And by the way, it backed into a huge marketing campaign which was great. But there's lots of things we can do in the future with that data.

So we talked a lot about Zeta. But David, I know you for a long time. You're actually very thoughtful person. So let's talk about some of your learnings. So, start of seven companies, CEO of two public companies. What are the three, four, five things you learned in life that anybody who's listening this call should know about and should follow?

That's, as usual from you, a very big question. You know, listen, there's, there's life lessons, there's business lessons. They, they sort of.

Business lessons. Let's go with the business lessons.

Yeah, no, I understand, but I was going to say in many ways they converge. But you know, listen, this, some of this will be just free flowing. You know, one of the things I really learned in my evolution was when you're an entrepreneur and you start out, you are absolutely sure you can do anything better than anybody in your business and you micromanage and you're all over everybody. The effect of that is it becomes very difficult to get really good people to work with you long term because people don't want to be micromanaged even if you can do certain things better. Like I joke, I. I started my first company when I was 16, my first real company when I was 21, 22, and you know, I was the youngest person in the room for the first 20 years I ran companies and now I was in telecom and Now I'm in AI and data for the last 20 years. I'm the oldest person in the room in any room I walk into. And you know, it's really interesting because I would tell you, as a young entrepreneur, I was a massive micromanager. I would tell you today my single most important job at Zeta is making sure we recruit, hire and train the world's greatest people and let them do their jobs. My job. And we get into our executive leadership team meeting every Monday. It's based on Andy Grove's intel meeting, which he did every Monday. And he called it his standup meeting. The reason he called it his standup meeting is he didn't let anybody sit down. And the theory was if people couldn't sit, they would speak faster and you'd get out of there faster. We don't do that now post Covid. We do it via Zoom. And everybody's sort of all over the world now. But reality is we keep the 14 of us each go through the biggest challenges we're having in the business. And my job is how do I help you? And that's it. It's not to report to me. Now, listen, if somebody closes something big, we give them a victory lap. You got to give people the adulation. But the purpose of the meeting is not to sit there and talk about how great you are. Your division is. It's, where are you against budget? How do we help you get above budget? What problems are you having that I can personally help you on? And that's really how I think about it. The other big thing is this concept I think of as relationship management. A lot of people think of it as sales. I don't think of it as sales. You've seen me now for over 25 years, and I sometimes get the he's a salesman knock. I actually don't think of myself that way.

I think you were not a salesman. I actually never thought about it that way because you never tried to. Most of the times I saw you're never selling anything.

People get mad at me on my team because I will sit with another CEO and just ask them about their business and their life for an hour, and I never even get in.

Talk about yourself.

Yeah. And I'm like, and. And. And I literally, we. I'll be at meetings, and I'll be like, oh, yeah, by the way, we want to work with you, too. But. But what I have found is when people like you, they want to work with you. One of my great mentors is Michael Milken, and I've been involved with Mike and the institute for almost 30 years now. And he's my mentor and one of my closest friends. And he said to me a long time ago, if people like you and really think you're smart, they will figure out how to do something wrong with you. If they think you're selling them, they don't want to. They're going to be, like, turned off by it. Now, I might have gone too far the other direction, but the truth of the matter is that, you know, to me, my network and my relationships and my. I don't even think of it as a network. It's like my friends and, you know, I host these dinners usually, you know, it ranges from one a month to eight a month, depending on the month. And you've been at many of them where I try to bring some of the world's most interesting people together. I had a friend, we did a big dinner at the Milken conference at Lavo. He's in a particular business. I sat him across from another person who was in a similar business, and he closed a $250 million deal out of that dinner and he came back to me and said, what can I give you? I was like, nothing. Mazel. I was super happy about it. And he came back to me literally two or three weeks after that. He was like, my friend runs this massive business consumer platform. They're having problems with their marketing. Would you like to talk to him? I was like, yeah, that'd be great. But it's just, it's about making sure you're putting yourself with the right people, right place, right time. Another lesson. You are the product of the five people you spend the most time with. And I literally tell my kids this all the time. I have three older kids in their twenties and I have an eight year old, a three year old with, with my wife. And I tell my three older kids I don't spend a lot of time on the, the, the eight year old, the three year old on this type of a yet. We'll get to that. But with the older kids it's like, listen, if the five people you spend the most time with are drinking during the day, not going to school and not athletic, you can be sure you will be the fifth person in that category. If the five people you spend the most time with are athletic, a students who, you know, have fun occasionally but not stupidly, you're going to be in that exact same category. And all three of my older kids are massively excelling in their careers at this moment and doing. Two of them have very serious boyfriends. It's two girls and my son is looking. But I'm very, very proud of them and they've really surrounded themselves with amazing people and I love getting to take them to dinner with their friends and they're all in New York right now. So that's, that's really fun for me. The last lesson I will give you might be the most important. If you're going to start a business, don't start a business because you see somebody else doing something and copying it. Now listen, if you're starting a dry cleaner or you're starting a gas station or you're starting a retail store, sure. But if you really want to start a tech business, I'm big something that can be a really large company. You have to solve a problem. If you're not solving a problem, you're not building a meaningful business in my opinion. And once again, there's lots of guys who are doing lots of things who do really well. The other big thing is pick an opportunity that has a very large total addressable market that's growing because it allows you to make mistakes and get through them. If you pick a very hyper targeted space, you're going to have to be perfect at it. And the, you know the age old joke, the last company selling buggy whips in the late 1910s, early 1920s, they probably made the greatest buggy stick in history. But it didn't matter because there's nobody buying horses. Everybody wanted Henry Ford's cars, so it's just, it's just important to do all those things. I know that was a little bit of a stream of consciousness, but this.

Is great, this is, this is super helpful. And with that, we're actually at the 59 minutes mark. So thank you so much for taking the time. It was an incredible conversation. I learned a lot. Despite knowing you for 25 years, I.

Still learned a lot.

So thank you and I hope everybody enjoys it.

Thank you, Emran. I think you learned a lot because for once we weren't drinking red wine and you were able to really retain it.

Thank you again for tuning in and I really hope you enjoyed that conversation.

As much as I did.

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