“Half the money I spend on advertising is wasted; the trouble is I don’t know which half”.
This a famous quote from marketing pioneer John Wanamaker and even 100+ years later, it still holds true as it’s difficult to accurately quantify the response to marketing, especially in an era of omnichannel commerce. Recast, a data-focused marketing analytics and forecasting platform, is on a mission to change that. By leveraging AI, the company is able to replicate the work of hundreds of manual data science hours to provide marketing teams with the tools to establish real-time marketing mix modeling (MMM), forecasting and planning, and marketing optimization without building out in-house teams. As the economy is expected to contract, Recast allows brands to develop the confidence to know their marketing dollars are driving the bottom line as macroeconomic concerns have shifted the focus away from a “spray and pray” approach to effectively understanding drivers of revenue from a data-driven and holistic perspective. The platform is already in use at growing consumer brands like Away, Harry’s, Masterclass, Rocket Money, and Calibrate.
AlleyWatch caught up with Recast Co-CEO and Cofounder Michael Kaminsky to learn more about the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $4.5M, and much, much more…
Who were your investors and how much did you raise?
Recast raised $3.4M in a Seed funding round led by Lerer Hippeau. Participating were Good Friends (led by founders of Warby Parker, Allbirds, and Harry’s) as well as Data Tech Fund, Vibe Capital, and industry experts Jonah Goodhart (co-founder of brand advertising platform Moat) and Adam Grenier (ex-Uber, ex-Masterclass).
Tell us about the product or service that Recast offers.
Recast puts state-of-the-art marketing science tools into the hands of practitioners. Tools for marketing mix modeling (MMM), forecasting and planning, and robust marketing optimization can be used directly by marketing teams without having to wait on data scientists or outside consulting firms. Recast uses cutting-edge artificial intelligence and Bayesian statistics to automate processes that used to take hundreds of data-science hours to do by hand.
What inspired the start of Recast?
When I was running the data science team at Harry’s I evaluated a number of options for doing marketing mix modeling and simply wasn’t happy with the products that were available on the market. Tom’s (cofounder) experience running a market research firm (Gradient Metrics) had shown him the same gap in the market. When I left Harry’s, we decided to team up and tackle this incredibly challenging statistical problem head-on.
How is Recast different?
Recast is the first marketing mix modeling platform built for modern brands, providing a product that addresses the shortcomings of other measurement approaches. Recast is adaptive and “learns” over time to refine and improve models. Recast is able to evaluate the effectiveness of a marketing program holistically: it works equally well for online and offline channels, and works across trackable and untrackable distribution channels (online and in-store).
What market does Recast target and how big is it?
Recasts TAM is large (and growing!). With a mission to eliminate wasted marketing spend, Recast estimates a potential savings of $100B within companies spending upwards of $500B on marketing.
What’s your business model?
Recast is a SaaS platform with a subscription-based model.
How are you preparing for a potential economic slowdown?
We believe that one of the best ways companies can prepare for economic slowdown is to analyze and optimize their marketing spend. When capital was cheap you could throw VC dollars at a Superbowl commercial, but those days are over. The Recast platform can tell CMOs where to cut and can help the finance team plan for how marketing budget changes will impact top-and-bottom-line performance.
We believe that one of the best ways companies can prepare for economic slowdown is to analyze and optimize their marketing spend. When capital was cheap you could throw VC dollars at a Superbowl commercial, but those days are over. The Recast platform can tell CMOs where to cut and can help the finance team plan for how marketing budget changes will impact top-and-bottom-line performance.
What was the funding process like?
Despite a really difficult funding environment, we were very fortunate to have lots of investors excited to work with us. We believe that this is because as a business we have always focused on capital efficiency and we were able to show investors that there was a strong demand and willingness to pay for our product. We have real paying customers so we weren’t trying to raise money on a slide deck and dream. We feel lucky to have an incredible partner in Lerer Hippeau a top-tier fund based out of NYC.
What are the biggest challenges that you faced while raising capital?
The biggest challenge for us came when trying to decide between competing term sheets from very different funds. It’s a really emotionally draining process and you have to make a choice that’s going to impact the long-term future of the company based on what you know about people from a few hours of total interaction time. We feel great about the decision we made but those were a very stressful few days!
What factors about your business led your investors to write the check?
Our investors recognize the innovation and grit that Recast’s founders bring to the table. Caitlin Strandberg, Partner at Lerer Hippeau said “Tom and Michael both have incredibly impressive technical expertise combined with a deep knowledge of marketing and the problems modern marketers face when measuring performance.” Our investors also hear what our customers are saying – that they see Recast as an indispensable tool to manage their marketing program, providing value rapidly and effectively. Our investors recognized that Recast has successfully built a team of top-notch experts with backgrounds in data science, econometrics, and statistics.
What are the milestones you plan to achieve in the next six months?
Recast is planning to scale both the software engineering and data science teams to continue to expand the platform and increase our reach as the best automated marketing science platform in the world.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
There will always be capital available for solid businesses. At times that capital might be more expensive than you’d like, but a solid business that’s profitable on a per-unit basis will always be able to find willing investors. Focusing on the core product and business fundamentals is what every leader should be doing, no matter how much capital they have in the bank (or how hard or easy the venture funding environment is).
There will always be capital available for solid businesses. At times that capital might be more expensive than you’d like, but a solid business that’s profitable on a per-unit basis will always be able to find willing investors. Focusing on the core product and business fundamentals is what every leader should be doing, no matter how much capital they have in the bank (or how hard or easy the venture funding environment is).
Where do you see the company going now over the near term?
Nothing changes for us – we have the same roadmap we did before, now with a bit more resources to bring new product features to our customers even faster.
What’s your favorite restaurant in the city?
Birds of a Feather in Williamsburg. We can’t get enough of the peppercorn sweats.
