Jamarlin talks to Keenan Beasley, co-founder and managing partner of New York digital analytics company BLKBOX. The Westpoint grad and former P&G brand manager talks about his early mistakes, how NY and Silicon Valley investors differ, and the advantages of getting experience in an industry before trying to disrupt it. He also discusses M&A activity involving Richelieu Dennis, Byron Allen and Robert Smith.
This is a full transcript of the conversation which has been lightly edited for clarity.
Jamarlin Martin: You're listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let's GHOGH! We're here with Keenan Beasley, the founder of BLKBOX. Welcome to the show.
Keenan Beasley: Thank you for having me.
Jamarlin Martin: So let's dive right in here and talk about your story. What was your path to becoming a founder and starting BLKBOX?
Keenan Beasley: Yeah. So I think, you know, for me, I'm one of those founders that spent extensive time actually in the industry before trying to disrupt it. So my career really started at Procter & Gamble where I was an ABM, so an assistant brand manager on Tide, so I spent two years on that, became a brand manager, then went over to lead Gillette globally. Then finally I was at Lysol before going over into the beauty space at Guardian where I was VP of marketing. The interesting thing there is that I was a 29-year-old VP. So at that point I am about 15 years younger than most of my colleagues, and that allows you to look at the space in the industry in a very, very different way. So this is 2012, 2000, 1314. The landscape had changed the marketing completely, so digital was a lot bigger and more impactful and important than it had been in the past. And so for me that was native, right where a lot of the other CMOs or the other VPs that were maybe 10, 15 years older than me, this was a foreign and new thing, right? They didn't understand what Facebook really was or some of these newer platforms like Instagram, they didn't understand the impact that it was having on the nature and the way consumers are influenced. So that allowed me to look at the space in a very different way from them. And I knew I had the ability now to really create change, and change the way the advertising industry was operating and the way marketing was conducted to better reach that group.
Jamarlin Martin: You mentioned you were a brand manager for Tide. How much exposure did you have on P&G, in terms of black budgets?
Keenan Beasley: When I was an ABM on Tide, you manage the African American budget as well as well as the US Hispanic, so P&G at the time was spending about anywhere from 12 to 15 percent of their budget on African Americans.
Jamarlin Martin: That sounds like a lot as a percentage basis, their entire budget?
Keenan Beasley: Their entire budget. The issue that I always had with this, and fortunately for me Bob Mcdonald was the CEO at the time, who was my mentor, and this was a concern that I brought up to him. It was only done as it pertained to the media spend. They weren't looking at the actual talent, right? The actual agency budget. So that wasn't a fair split when you looked at the market research vendors, it wasn't a fair split. So it was only within the media-buying space that you looked at that. And I thought there was an opportunity to really try to be a bit more fair across the entire marketing spend of the business. So it wasn't 15 percent of marketing spend, those 15 percent of the media.
Jamarlin Martin: Yeah. P&G has pulled back a lot on the other African American spend specifically. Can you talk a little bit about that?
Keenan Beasley: Yeah, I think the trends started to look like where the general market as they call it, and the African American kind of curve, if you look at that reach curve was starting to have significant overlap where both sets of consumers were looking at the same shows and I think it was just a poor job by a lot of the African American-owned outlets of promoting the quality of their networks, the quality of their audience and the influence that they had on the rest of the population. I think on the flip side, the general market population was saying, here's all the insights behind what we're doing across this demographic. Right? And you don't need to go anywhere else. We got you here, we've got millennials, we've got African Americans, we have gen pop, we have everyone, so market on this one platform and we can cover everything and that's where you start to see those budgets start to slide lower and lower across the African American-owned outlets.
Jamarlin Martin: Is it fair to say relatively speaking for fortune 100 companies that P&G has been more supportive to African American media then a lot of the rest of the brands?
Keenan Beasley: Absolutely.
Jamarlin Martin: Tell us about BLKBOX and meeting your co-founder? How did the company come together?
Keenan Beasley: Yeah, so when I was really looking at the space, I saw that there were two significant changes. One was the changing landscape with the consumers, there was this newer group, that was coming into spending power called millennials. I always hate saying that name because technically I am a millennial and I would never put myself in that kind of box, and I think those demographic titles are kind of nonsense right now. I think it's much more at a psychographic level that we operate. But regardless, that was a point of confusion for brands. The other thing that was changing was the amount of data and what was available, right? If you look at the stats now, there was more data created last year then than the previous years of humanity in that explosion causes the thing that we call analysis paralysis. You can get lost in the data, lost in the numbers and you actually prevent yourself from making a decision. So given that, I said we have a real chance to have a deep understanding first and foremost of the consumer base and the audience. And then secondly, be able to break those insights down into real actions to deliver great results and accelerate growth for brands. You know, when I wanted to do this, the first person I thought about was my business partner Dionna (Dionna McPhatter, co-founder and managing partner). And she is what I'd like to think is, is probably one of the top market researchers in the industry. As fast as my career accelerated, hers did right at the same rate. So we came out of West Point, we worked at CPG (consumer packaged goods) together, we worked at Reckitt Benckiser together. She was a 29-year-old VP just like I was, but in that field of market research and insight, and that combination of us bringing brand strategy together and deep rich insights and putting it in one platform, we knew that we could then sit right alongside the brands and develop data-driven strategies around audiences and then bring the creative to them. Right?
Jamarlin Martin: So you and Dionna, you're both at West Point. Can you talk a little bit about how you acquired a certain amount of discipline at West Point. It's different than the conventional college experience. Can you take us back there?
Keenan Beasley: West Point is way different than the college experience. Sometimes I wish I went to a regular college, but West Point is fantastic at teaching you, yes, discipline, but more importantly, attention to detail and the ability to change gears. Switch gears from military to academics or to football or basketball. My business partner played basketball there and I played football, so in the course of a day you have to wear three different hats. That's very similar to being an entrepreneur, right? There are days where I'm strictly in the finance mode and I'm working on investment pitches or, or in that. Then there's modes where I'm in a really creative space and I'm working with the creative team on a campaign, and then there's some times it's really just the discipline of being just purely in a leadership role in trying to motivate an organization. Right? Or come up with the right process. So you wear a lot of different hats as an entrepreneur and I think that's a skill that we really started to perfect at West Point. It's a grueling curriculum, but I think the best part about the curriculum is everyone has an engineering background and the process of engineering and the ability to reverse engineer things, I think is really strong when you're trying to lead a business because there's a process and a formula that you're trying to create which enables scale, right? That's what everyone's looking for.
Jamarlin Martin: So you and Dionna are trained engineers from West Point. So when you walk in a room with investors, how much does that help you? That we come from West Point?
Keenan Beasley: It hasn't helped too much yet. I wish it helped a little bit more. You know, I think every investor, they look for certain pedigrees, right? And I think West Point is unfortunately hasn't been known for a lot of entrepreneurs even though there are some. Yeah, you know, Vinny Viola is an amazing billionaire entrepreneur and the founder of AOL was a West Point grad, so I think that's just not as well known. So people look at us more in the sense of organizational leadership but not from the creative or disruption piece, which is what people expect of entrepreneur. So part of Dionna and my mission is really to change that narrative and show that there are a lot of different skill sets that come out of the military.
Jamarlin Martin: What does BLKBOX do and how are you guys different from some of the other platforms that are out there?
Keenan Beasley: Yeah. So the big thing for us is that we're end to end. So when you look at running an organization, people are very siloed in the marketing industry. Some people only do digital creative, they only do social creative, they only do insights and analytics and maybe only a certain portion of it. We're full fully stacked. So we go from everywhere from brand development to demand creation to fulfillment all the way to measurement. And that's a really competitive advantage in the industry because we're not focused on the silos, we're focused on one end goal, which is accelerating growth for our clients, and we're able to put skin in the game. We're happy to match the marketing investment of some of our partners and that's something that an agency, for example, would never do. They're not able to even function that way and their business model because they don't have the skillset to impact a change on a business.
Jamarlin Martin: Explain BLKBOX to my grandma back in Watts, California.
Keenan Beasley: Yeah. So I always talk about BLKBOX. Simply put, there are people on one side of the table and there's brands on one side of the table and they're always trying to get to each other. The space in between is the BLKBOX, and it's what's confusing, right? How do we reach and find each other? Our mission is to really add a level of clarity to that space. So we're trying to give both people the tools and insights in order to reach each other.
Jamarlin Martin: Okay, got It. The platforms that most of your clients are marketing on, where you can add value, what are the five top platforms that they're marketing on?
Keenan Beasley: From the social channels, Facebook, obviously is still a dominant force. Google obviously is a dominant force, I think you're seeing Instagram really double down and brands are starting to understand that platform and understand how to market and sell on that platform. And the insights that are garnered from that and that they're releasing had been really, really strong. So I'd say for sure those are the top three. I think Youtube comes right in there, if you know, kind of consider that under the Google umbrella. Those are the ones that are really dominating from right now. Everything else is pretty ad hoc. I think what's exciting to see in the landscape is that brands are really focused on the experience that their consumers are having. And I love this shift because as you look at the process of goods, most products are at parody with one another, right? I talk about Tide and I love Tide more than anything just about right. It's my favorite brand, the first brand I worked on, but the cleaning level of Tide is so good that you need a microscope to be able to see it. Right? The average consumer doesn't even understand that. So at a certain point you can't talk about how well you clean. It's the experience that you're giving the people that you're selling to. And the more that brands figured that out, the better off they are. So I'm seeing a lot more experiential events that they're doing a lot of pop up shops, really participating in festivals and different things where consumers can interact with the brand in a one to one personal level, to really separate themselves from the pack.
Jamarlin Martin: You mention Facebook as one of the popular platforms your clients use and that you help them manage and optimize. If Facebook's business was to materially decline over time, would that impact your business?
Keenan Beasley: It wouldn't impact my business per se, but I think it would cause a significant pivot in the marketplace, and I've really been coaching my, my clients to prepare themselves for that pivot because that's a real threat to their business.
Jamarlin Martin: Got It. If someone gave you a million dollars and said, 'hey, you got to go long or short Facebook, you got to pick one', you know, five years from now in terms of that time horizon, are you betting against Facebook or would you go along thinking that their company's a value's going to increase?
Keenan Beasley: Tough question. Right now, I would say I would short it. Just given where they are. And that's without having great insight into their future acquisition models. Right. They're active in this space. So I think Facebook will be a drastically different company in five years than what we know today.
Jamarlin Martin: Yeah. Full disclosure for the audience: I'm short [on Facebook stock] it's down three percent today, but on this show we don't give a fuck about Facebook. Okay. So, recently there's been a lot of controversy over Cambridge Analytica downloading 50 million user profiles. From Facebook's perspective: 'Hey, they breached our rules. That's the only way they were able to get this information, we're sorry, we were deceived'. What is Facebook doing wrong? If you could sit down with Mark Zuckerberg and Sheryl Sandberg and maybe consult them on, 'Hey, what are the big things you guys are doing wrong?'
Keenan Beasley: I think the pressure that Facebook is under is that they originally started as a platform for the people. Right? And I think money changes that. And now they have been heavily slanted towards their customers which are, which are brands which are people that are looking to advertise on their platform and it's fundamentally decreased the experience for the everyday consumer. And so that's the biggest threat to their business. So for me, I would tell them to get back to basics and get back to what your platform was known for, which was having just about everybody in the world on it and enjoying it.
Jamarlin Martin: But if a Mark or a Sheryl or the board, I'm speaking on the board, hey, if we kind of balanced this thing out and bring it closer to the people and what's good for society, I have to cut off. I have to cut my revenue in half. How do you respond to that?
Keenan Beasley: I don't think you would cut your revenue and half. I think right now they have fundamentally changed the way that we see value. Right? And they're in a spot where they can control the prices right off of the market. And that's what's fascinating about their business. So I don't think that that would actually happen. I think they would reframe and put value back on the amount of time that people are spending on their platform and that's the shift that they're doing now. Right. That's, that's the big change in their algorithm when they say, 'hey, we're going to reduce the amount of content that you see for media publishers and get it back to friends and family.' Because what trying to do is, is the hope that people are going to spend more time back on the platform. If you look at all the stats and metrics that they put on their earning reports, the one thing that went poorly was that consumers spent less time on the platform. That's their Achilles heel. They lose that their business has done.
Jamarlin Martin: If you like what you're hearing, you can check us out at Moguldom.com. We have the latest information on tech, crypto, the business of Hollywood and economic empowerment. You can also check me out on Twitter @Jamarlin Martin. Let's get back to the podcast. If you had to guess, how much revenue you think Facebook generates on black users in the United States a year? Users during their engagement, running ads against that, their data. How much revenue you think Facebook, including Instagram of course, generates from U.S. black users?
Keenan Beasley: I would suspect that it is probably around 15 or so percent of their total. I don't think it's going to be too crazy on that in terms of how people are specifying the buy. I think the reality of it is, the percentage of their total users that are black. I don't know the numbers off the top of my head, but again, if I just go a population standpoint right here and the 13-ish range.
Jamarlin Martin: I'm thinking a lot of black users actually generate more engagement. I'm within a range of about $600 million to a billion across the platforms. Do you think Facebook as a public company, if they're generating so much money from black consumers specifically in the United States, do you think they should be doing anything extra if they're pulling all of that out of the community?
Keenan Beasley: Absolutely. For me, this is where I think there's a responsibility of some of the larger companies to start to invest and not just look to acquire but try to lift up some of their quote unquote competitors, right? People that are doing things for a consumer base that they're not specifically doing. Right. We were talking about this just yesterday with, you know, like sort of some larger companies potentially acquiring, but sometimes investing in smaller startups. I'd really love to see Facebook do this because I think what they actually need as a business is competition, but I think the way that they could give back to the community, it starts to promote an uplift the idea of entrepreneurship within the communities that they're starting to take revenue from.
Jamarlin Martin: And have you seen them kind of talking to black executives, talking to them?
Keenan Beasley: I mean they just put Kenneth Chenault on their board. Right?
Jamarlin Martin: But doesn't that feel forced?
Keenan Beasley: It feels a bit forced, but I think he's a great leader and I think he's a master, great career, he was retiring and I think the timing worked out, and I think he brings a lot to that board. I think what I would really love to see them do is put some black entrepreneurs on their board, right, to bring a different perspective.
Jamarlin Martin: So Sheryl Sandberg, representing Facebook, she engaged with the Congressional Black Caucus, related to the Russia stuff. Facebook is working inside Donald Trump's campaign. They're working with Cambridge Analytica, they're doing a lot of racial ads on the platform essentially against immigrants, against black people, they're trying to scare people. But Facebook is, 'hey they're writing me a big check'. So Sheryl Sandberg goes to the Congressional Black Caucus and you know, I read a report that she says we're going to hire an African American after that meeting, we're going to hire an African American. How do you interpret that?
Keenan Beasley: I think Facebook's play has been very hands off, right? And, and that's what I think they're coming into dangerous territory because they're position has always been that the internet is an open source and they're not there to regulate it, right? They're providing a platform for people to express themselves and talk amongst each other. And so it was, it was truly supposed to be unbiased. Then a couple of things happen, right? They tweaking the algorithm and the algorithm then a goes right at your bias and exacerbates that and then certain people start writing bigger checks and guess what, you give them more access. And so essentially you start feeding into the bias and, and you start to be a very slanted a platform and that's what they're walking into. So then just by saying, Hey, I'm going to hire a black executive on the team. No, that's not the answer, right? No, it doesn't get to the root of the problem. I think they fundamentally have to get back into what's actually behind their tech. What's in the algorithms that they're creating, right. That's what they should be looking at. Do you have some level of moral compass from and who you take advertising dollars from him.
Jamarlin Martin: And what about the big tech companies saying, Hey, look, we don't have a lot of black engineers like yourself at Facebook, at Google because there's a pipeline problem. There's not enough good black engineers out there. Let's give them the benefit of the doubt. But why is the Facebook board all white then? Because there can't be a pipeline problem there right for board candidates.
Keenan Beasley: No. Really no excuse for the lack of board diversity across most of these companies. So I'm not going to make any excuses for them. I think it's something that as a public we should absolutely challenge, but the pipeline issue for me is, well then invest in it. We're seeing companies that want to go into Africa, for example, in certain countries within the region and they then invest in building up the talent. So if that is a real problem, then invest in it. You have tons of cash that's sitting there. I'd love to see them focus on STEM programs that are sitting within black communities. They're hiring engineers all the time without college degrees. They can be teaching kids right now that are seventh and eighth grade, and then in a few short years get them right into their facilities.
Jamarlin Martin: And you're saying, Hey, I've worked in marketing, I've worked in media, I'm now in tech and analytics. You don't really see Facebook out there kind of trying to connect with a lot of black entrepreneurs, CEOs. You haven't really seen them out there.
Keenan Beasley: No.
Jamarlin Martin: Byron Allen, he just acquired Weather Channel for $300 million. Richelieu Dennis just acquired Essence. Do you think these are kind of outliers or do you think this is a trend where you're going to start to see black moguls doing more big deals are out there?
Keenan Beasley: I think it's definitely gonna continue and I'm excited to see what's going on right now. Um, I think it was even more exciting is that a lot of the black moguls are just being more vocal. I think before they were virtually hidden, right? Robert Smith has been a billionaire for years and no one knew about him, and now he's much more vocal, he's had most successful private equity company and been the biggest buyer of enterprise software for a decade, hit after hit and no one knew, right? He's been a leader in that space of what we consider is this kind of Silicon Valley world. And it's been two brothers doing it. Yeah. Um, so I think the fact that they're, they're out there more is people can see them and they can aspire to that. And I think that seeing moguls like Byron Allen and these guys being more active, and Richelieu Dennis is a fantastic guy with a family-run business that did it extremely well, younger folks like me seeing that, it's something that we strive to. So now you're, you're starting to uplift the younger generation, and so that's just going to create more and more of this, right? This, this wave is going to continue, which is exciting.
Jamarlin Martin: So you've been through the startup grind. For the young founders out there who don't have a lot of experience. Can you talk to, 'Hey, I had to step into this seat to really understand how hard this hustle is or how much dedication you needed to have to get your company off the ground'. Can you talk to that?
Keenan Beasley: Yeah. For me the big thing about entrepreneurship is you have to come in with a point of view, right? You have to have some, a deep level of understanding of what you're trying to disrupt. And I think some people naturally have that, and they're born with that just through the connections that they had. And some of us, like Byron Allen, like myself had to work for some of these bigger companies to learn the ropes. Right? So when you know, Byron went off and started his production company, he had already been within production companies and learned and understood what that game was and then figured out a way to disrupt it. And you're seeing now he's probably the most successful producer on the planet right now, which is amazing. For me, I spent 10 years working in P&G and marketing for these big brands before I started my company. So I think the lack of experience, you can gain that on somebody else's dime, right? You know, Byron gained experience while being paid. I gained experience while taking a salary, before we disrupted. And then once you go off and start the startup piece, there is no preparation for that.
Jamarlin Martin: You generally believe you should go in the corporate world first, get some experience before you step into that seat.
Keenan Beasley: Not for everybody. I think most people, I think a lot of people need that. A lot of people need that because what that becomes, it gives you a sense of confidence when you go out there and the biggest thing for an entrepreneur is to be confident because you're going to run up against a lot of walls and you know that as well as I do, right? It is not a smooth journey or path and your grit, your confidence, your determination, your will is what allows you to keep going and you need something to fall back on if you've never seen what right looks like, very hard to know what you're going towards. And I think kind of working in some of these really well established, well run companies and being able to dominate that space gives you a lot of confidence. Right? I think I'm a very confident person because of that.
Jamarlin Martin: How much capital have you guys raised to date?
Keenan Beasley: About a half a million dollars.
Jamarlin Martin: About a half a million dollars. I'm assuming you guys have clients, you have revenue coming in.
Keenan Beasley: We've been profitable since day one, so that's why we didn't raise capital.
Jamarlin Martin: You're profitable right now. Can you talk about some of your clients?
Keenan Beasley: Sure. Some of our biggest clients are Samsung, Reckitt Benckiser, Johnson & Johnson. P&G is a big client. We have a company called The St. James, which is down in the DC area, which is kind of a new Chelsea Piers, a new sports complex, run by two black guys, actually really cool product that they have. So those are our big ones. We still work with like Marc Jacobs for example, we've worked with Smirnoff in the past. We've worked with Western Union. So we've worked with a lot of blue-chip clients and that's just because I came from that industry. So a lot of those folks running those companies were my peers at some point.
Jamarlin Martin: Do you have any black-owned clients?
Keenan Beasley: Yeah. So the St. James is black.
Jamarlin Martin: Okay. Got It. From an investor's standpoint or client perspective, you feel like there's been a lot of black love and support for the platform you're building?
Keenan Beasley: I wouldn't say that. I don't think we were positioned that way. So we haven't gone out that way. We have now approached some of these black investors to seek funding in this next phase because, one, building enterprise software is expensive and we built that ourselves off of our own profitability at this point. Now we're looking for the acceleration, right? And that, that takes capital. It takes a boost. That's the, that's the formula. So that's who we're going after now for the investment and explain to them really the power of the platform and what it can be. I think our challenge is that there's not a lot of black tech investors right now.
Jamarlin Martin: That's true on a relative basis, but you're starting to see folks step up. A lot of celebrity folks, Jay-Z...
Keenan Beasley: And it is changing. I think predominantly though we've been investors in very physical things, right? Or in creative spaces. We invest in movies, we invest in restaurants, we invest in real estate. We haven't invested a lot in tech, but we're starting to see that change and that's exciting. It's exciting for my business, and especially as people now realize the multiples that exists in that space, right? There's not too many industries that see double-digit, you know, on revenue multipliers.
Jamarlin Martin: So your business scales up to $100 million dollars of revenue. What could the margins look like once you get there?
Keenan Beasley: You're still going to be at a 60-plus margin, right? And it really depends on the mix of services and pure tech plays, but you're going to be anywhere from 60 to 80 percent.
Jamarlin Martin: Do you feel like your business is at a disadvantage being based in New York?
Keenan Beasley: I don't think so, and the reason, I don't think so is because our businesses is based off of being close to both culture and clients. So there's not a lot of CPG companies that are sitting in Silicon Valley, so that's definitely not the place for me to be.
Jamarlin Martin: In terms of your experience, a leading black box, what have been your biggest mistakes or regrets?
Keenan Beasley: I think biggest mistake I made was not taking capital sooner. That was from a lack of commitment to the technology from the onset. I think as a young black entrepreneur I was hell bent on ensuring that we made money, that we were profitable instead of being dead set on the idea and the concept of it in scaling just that.
Jamarlin Martin: You're profitable now, you were possibly growing faster with the money, but do you think there's a good chance you may have not been around where the VC wants you to go and kind of do all these crazy things so you could be a unicorn too fast?
Keenan Beasley: Always the risk, always the risk.
Jamarlin Martin: But you feel like, net net, you should've taken capital early on?
Keenan Beasley: I think so, yeah.
Jamarlin Martin: Is that because some folks kind were able to take some segments of our market? We couldn't move fast enough and big enough and they took the chunks of that market?
Keenan Beasley: They did. I think what's interesting about us is I think we were a bit ahead of the market to be honest, when we started, so four years ago talking about an end to end solution, the technology wasn't quite there yet. Python coding wasn't as popular as it is now. So the level of machine learning and AI that's needed to run a business like mine was either expensive or very hard to find the right individuals that could even run it. And I think it just took us some time to get to that point where now it is a lot easier and we do see it as the future, and now we're able to truly live our mission. Like I said, I think being early though is good if you can simplify the story in a way that investors understand it and I think that's just the art of storytelling and that's something that I needed to improve on back then.
Jamarlin Martin: Did you see any difference between pitching to a New York investor and a Silicon Valley investor?
Keenan Beasley: Definitely, I think the Silicon Valley investors are much more open to concepts around technology where a New York investor is really looking for traction first and foremost, and so they just want to see, there's a saying, are the dogs eating the dog food, they're looking for that. It's very almost transactional in a way where in Silicon Valley they get the idea of disruption and how long it can take and they're looking to stimulate it. So it's a slightly different mindset and, yeah, you have to pitch it in different ways. For sure.
Jamarlin Martin: I want to thank Keenan Beasley for coming on GHOGH.
Keenan Beasley: Appreciate it. Thank you guys for having me.
Jamarlin Martin: Thanks everybody for listening to GHOGH. You can check me out at Jamarlin Martin on Twitter and also come check us out at Moguldom.com. Be sure to subscribe to our daily newsletter. You can get the latest information on crypto, tech, economic empowerment and politics. Let's GHOGH!
This interview has been edited for clarity.