The Revenue Engine

Using Capital-As-A-Service for Revenue Growth with Hanna Kassis, CEO and Founder of OAREX.

October 16, 2021

The Revenue Engine

Each week, Revenue Operations expert Rosalyn Santa Elena shines the spotlight on founders, CEOs, and Revenue Leaders from hyper-growth companies and dives deep into the strategies they implement to drive growth and share their learnings. Rosalyn brings you inspirational stories from revenue generators, innovators and disruptors, as well as Revenue Leaders in sales, marketing, and operations.

What does a law degree, a Masters in Financial Economics, and a CPA have to do with being a founder and CEO?

Well, in this episode of The Revenue Engine Podcast, Rosalyn speaks with Hanna Kassis, the CEO and Founder of OAREX, about his journey that led him from law school to starting the Online Ad Revenue Exchange (OAREX). OAREX is a capital-as-a-service platform for digital media and advertising businesses, enabling them to obtain funding - and drive revenue growth - faster.

Hanna shares his insights and expertise about starting a new business, being an entrepreneur, the explosion of the digital ad economy, and so much more!

Connect with Hanna

Check out OAREX

Connect with Rosalyn

Rosalyn Santa Elena
Host @ Revenue Engine Podcast + Chief RevOps Officer @ Carabiner Group
Hanna Kassis
Founder & CEO, OAREX Capital Markets, Inc.

[00:00:00] Rosalyn Santa-Elena: Welcome to the Revenue Engine podcast. I'm your host, Rosalyn Santa- Elena, and I am thrilled to bring you the most inspirational stories from revenue, generators, innovators, and disruptors revenue leaders in sales, in marketing. And of course, in operations together, we will unpack everything that optimizes and powers the revenue engine.

Are you ready? Let's get to it.

What does a law degree, a master's in financial economics and the CPA have to do with being a founder and CEO? Well, in this episode of the Revenue Engine podcast, we learned from Hanna Kassis about his journey that led him from law school to starting OAREX the online ad revenue exchange. OAREX is a capital as a service platform for digital media and advertising businesses, enabling them to obtain funding and drive revenue growth faster. So please take a listen and learn more about starting a new business, being an entrepreneur, the explosion of the digital ad economy and so much more.

So super excited to be here today with Hanna Kassis the CEO and founder of OAREX. For those of you who aren't familiar OAREX is the online ad revenue exchange. It's a capital as a service platform for digital media and advertising businesses to obtain funding faster. So welcome Hanna, and thank you so much for joining me. So excited to unpack your story and really learn about how your company is providing on- demand liquidity and changing the digital ad economy.

[00:01:54] Hanna Kassis: Sure. Sounds good. Thanks for having me. Yeah.

[00:01:57] Rosalyn Santa-Elena: Great to have you here. So let's talk a little bit about your journey before starting OAREX you have a lot degree, a master's in finance. And you're a CPA. So wondering how that combination ends up being a founder and a CEO of a company really involved in digital media. So can you share maybe some of your background and sort of the story of your journey that led you to founding your own company? You know, as I recall in our first conversation, I think Khloé Kardashian may have played a very small role.

[00:02:27] Hanna Kassis: Yeah, that's right. Yeah. So thanks again for having me. So yeah, so I was in law school. This is 2012 in Chicago. I'm originally from Youngstown, Ohio went to YSU. And my, my goal was to just be a corporate auditor, you know? And so I'm in college and I decided I want to go into accounting and you need a fifth year to do it. So I end up getting a master's degree in financial economics, right when the, the mortgage collapse happened in 2008. And I'm working in public accounting after college end up having an opportunity with Congressman Tim Ryan. He ran for president a few years ago and he was actually running for Senate in Ohio, ran his campaign. Basically I got out of public accounting and started working for Congressman Ryan.

So I was in grad school studying financial economics. So I had enough credits to take the CPA. Working part-time with the Congressman and, the markets fall out, the market collapses. So I was really attracted to just finance and markets and trading. And, but before, like before trading was cool, like on TikTok and YouTube, but it was like, like I did, my, my background in grad school was on technical trading. So I've always been into finance.

So I go to law school with the hopes of just being an attorney tax attorney. And I'm reading one day about how, you know, Twitter was really big at the time. I was reading somewhere that Khloé Kardashian's Twitter account was worth $22 million. So I started researching it and I find that there's multiple valuation services that are out there. And then there was a company called sponsored tweets and they actually had like a network of advertisers and celebrity Twitter accounts. And they would, you know, be the intermediary on the, on the advertising exchange. And if you recall Twitter, like at the end, I was, so I was the eight thousandth account on Twitter. So I was like a very first mover on that technology. So, hyphen SP was when there would be a sponsored Twitter ad. And so I did the research. I found out Khloé Kardashian gets maybe $10,000 or $13,000 per tweet. Her accounts worth $22 million bucks. So she has to be alive for a very, very, very long time to collect $22 million.

And so I set up a business called SONEX which was social networking exchange to, basically allow Twitter celebrities to sell shares in their Twitter account. And then, you know, whatever percentage that the fans, celebrity fans would own would go to that percentage of the advertising dollars would go to them as like a return on their investment because they own shares in the account and the balance would go to, you know, the Kardashians.

And so I started exploring it and I took securities regulations course in law school. I took a lender licensing, like course in law school. Basically trying to figure out how do I go about doing this? So that's not a security. So that's a huge legal bill upfront, half a million dollars, were the quotes that I received at the time and. And how do I, how do I do this so that it's not usurious, it's not in violation of lender laws? And I stumbled upon this, what's basically known as the merchant cash advance. It's a huge market. They fund unsecured loans of business owners and what they do is basically the Kevin O'Leary deal on shark tank. Kevin O'Leary says, you know, someone will get up there and say, well, you know, I want a hundred thousand dollars for 10% of my company, Kevin O'Leary's like, I have a better deal. I'll give you a hundred thousand now in exchange for 10% of your revenues, until we collect , I collect the 130, and then we'll part ways you get to keep ownership of your company. And I make a really good yield on my money. And that's basically what clear bank is doing the huge e-commerce funding company and on deck a huge lending company.

So I stumbled upon a product, very similar to that, where I would go to a web publisher and say, you generate a thousand dollars a month in Google AdSense, I'm going to give you $2,300 for the next three months. And I would optimize on page all the SEO and I would capture the lift from that, that increase in ad revenue.

And so the first deal was actually with Nintendo enthusiast, which is public on NASDAQ. They just hit a $1 billion valuation and our fingerprints are on their, their early growth that enabled them to like raise from seed and continue to grow. And what I realized was that there was a huge opportunity for factoring. Just to go out and buy receivables from media companies that are generating these ad dollars that have like a huge, what do you call it? Like, capital outlay necessary in order to scale. So think about like a publisher or an app that makes money from downloads in the app store. They need a ton of money to do a cross advertising campaign.

And so we realized, as I realized, as I was in law school, I was talking to these attorneys. Yeah, it's cool for social media celebrities to be able to do this, but there's a real need for websites, apps, digitally based businesses, ad exchanges, ad networks. So I pivoted the business to really broaden the media reach, renamed it to OAREX, which is online ad revenue exchange. And it's just basically a way for media owners to exchange their future revenues upfront. It started with future revenues before it was earned, like a very, like we'll buy your future revenues off of you. Now we just buy the receivables, which is I'm happy to break that down for the audience if, because it's a very technical term from the upper left hand part of the balance sheet. So I'm happy. And that'll answer your question. How you're providing liquidity on demand.

[00:08:15] Rosalyn Santa-Elena: Yeah. And you might have to break that down for us, not accountant-type people.

[00:08:21] Hanna Kassis: Right, right, right. So a receivable is basically money owed. It's a future it's future cashflow. So you do a job now, your customer says, thank you, that was great, I'm going to pay you in 60 days. That's a receivable and it's booked as accounts receivable invoices. So what, there's a lot of companies that will lend against it. And what we do is we actually buy it. And that's how we provide on demand liquidities that you basically have this pile of receivables, on the upper left-hand corner of your balance sheet, and you might be a publisher app that's monetized with Google, app nexus, Vander, magnate, index exchange, or any of the big agencies. Dentsu.

And so you're, you're doing these campaigns, these jobs throughout the media ecosystem. You accrue balances like your customers owe you money, but you just have to wait to get paid. So what we do, the on demand liquidity we provide is we basically sync up with all those, those receivables. We verify them and then our customers pick and choose whatever they want whenever they want. They basically it's think of it like we buy a couch in their lobby and their office. We come to them, we say, all right, here's 80 bucks. Give me your couch. You pick it up. You walk out of the office with it. That's what we're doing with receivables.

We say here's 90% upfront. We take the receivable. We walk out of the office with it and then we wait to collect. We actually collect the money and then we, we, we remit the balance back to our customers minus a fee. So it's super flexible. And it's just a huge need. We followed the, we followed the lead of fast pay.

And the one thing we learned along the way is that we always tell people this for any CROs, RevOps, AdOps, anyone out there, our number one competitor is that you negotiate better terms with your customers. And so I always tell our customers, potential customers start there, right? Because you won't even need me, but typically the problem is that these major companies dictate the terms. So it's just created this huge payment delay in the, in the industry.

[00:10:27] Rosalyn Santa-Elena: Yeah. That makes a lot of sense. Thanks for explaining all of that. I think that's super helpful. I think for the audience. So let's switch gears a little bit, cause it's been about eight and a half years, I think since you started the company, right? In your LinkedIn profile, you share how you understand the struggle, right, of being an entrepreneur. And I know you did a pretty wide range of jobs to kind of keep afloat. I think you were helping to build websites. You were at nightclub bouncer, and you were trying to kind of help people get out of IRS trouble and a lot more. Right. So what advice, I guess, would you give to another founder who might be in a similar situation and really just trying to stay afloat. Like, were there any lessons learned that you think could have really made a difference?

[00:11:08] Hanna Kassis: Yeah, I think, you know, they say you should never have regrets in life. You know, I think for every entrepreneur and founder, first things first is to really, if you're in business for yourself, no matter what you're doing, I would say you can't put a price on headspace.

So, if you want to go out, you're a new business owner, make sure it's not eating your headspace, when you're, when you're not working, make sure you're able to go home and be with your family and not occupy your headspace. Right? If that is where you're at, when you're starting your business, then don't start your business.

For me, I say in my LinkedIn profile profile, I know the struggles of an entrepreneur because there was a time in 2015, just started out OAREX really didn't, wasn't able to pay me. And I was studying for the bar. I postponed the bar exam for one year and there was an I, I had no, basically no income. And I was studying for the bar. Trying to work full-time OAREX and a brokering loans, just as a means of income. I had just started that business and I'm eating Kansas sardines for dinner, and I have $5,000 in credit card debt. But I knew, I knew in my heart of hearts, like I want to be here. Right. But a lot of people don't want to be there.

And so my advice is that if you're an entrepreneur, you're struggling, like I know the feeling of being able to like you smoke cigarettes in the middle of the night and not know if you're going to pay your rent. Right. People, I think everyone on their entrepreneurial journey has been there. I was just there when I was young, single, I knew that this was just the beginning, I didn't really care. Right. But there's people that are there, you know, in their careers that want to either make the shift from corporate America or, you know, want to start up another entrepreneurial journey later in their career. And that is where it can be scary. And I relate with anyone who's who's ever been in that situation.

And I say that on my profile because a lot of venture capital people that we've spoken to don't, right. So there's this huge disconnect between, I just saw posts yesterday from a company micro acquire, you look up the CEO of micro acquire. Can't recall his name off hand, look at his posts and see what he says about the disconnect between VCs and real entrepreneurs who built businesses from white blank sheets of paper.

Right? There's there's a big disconnect because a lot of the Silicon valley was high finance in New York. Right. And the entrepreneur who really went months without income to know that struggle is lost on too many of them.

[00:13:54] Rosalyn Santa-Elena: Got it. That makes a lot of sense. Yeah. It's it's definitely, you know, I think that's super helpful and good perspective too, right? Because it's, it's not the, you know, we always see all those success stories of companies, you know, becoming a unicorn, going IPO, but you don't really hear about those true struggles when they really, really starting, you know, we hear kind of, oh, they started in their garage or you have three people in a, in a room, but you don't really hear that kind of personal struggle of being an entrepreneur.

[00:14:20] Hanna Kassis: Yeah. That's exactly right. People see the successes and it's like, there were probably 10 failures before that unicorn. Right. You know? So, yeah, so that's, I think I bring a pretty good background for my customers and clients, you know, having a holistic background. So one thing that I always, and I, another piece of advice would advise to any business owner is that put yourself in your customer's shoes.

You have to know your customer in and out. In the finance world there's, what's known as KYC and it's you see it more now with the crypto popping up, It's just know your customer, like who is your customer? Right. And without deliberately targeting any demographics, because obviously in certain housing credit there's limits and rules as to what you can and cannot say in your marketing, but who is your core customer?

Right. You have to look at your data. And figure that out. And I think e-commerce brands should have a KYC, right? You should know people of this age and this demographic of this sex or gender you name it. This is who my, who my customer is. And then you, from there, you know, their needs and desires and when you know their needs and desires, you can reverse engineer your ad, your advertising and sales How you're communicating and what you're saying,

[00:15:47] Rosalyn Santa-Elena: Love that, love that. So with the shift, I guess, to more and more individuals, right, obviously working remotely, everything's moving online and digital that I imagined the digital ad space has just kind of blown up. What have you seen in terms of changes in the market, in this area and where do you see it headed?

[00:16:06] Hanna Kassis: First? Thing's first is the iOS 14 update really, really hurt a lot of businesses that acquire sales through Facebook or, or traffic through Facebook that eventually converts. And so I think as that kind of, that incident kind of dictates where I see it going in the future. And I think in some way, shape or form, there's a major decentralization of advertising technology and media and and I eventually think that in media, in particular, there becomes more opportunities like the basic attention token, which is a, it's an Asyrium token, so widest adopted most widespread adopted Asyrium token in the world. It has 1 million active users on its platform founded by the founder of Mozilla Firefox and inventor of JavaScript. And so he may, he may have just been on the founding team of Firefox. That might be a wrong fact. He was associated with it.

And you know, I was at Digiday last week in Miami and no one knew what the basic attention token was. And so if you want to know what it is, we have an article on our blog. You can check it out, but I think the future is a future that's starting. I think what the brave ad network is doing with the basic attention token and Washington post is on board. YPO is on board. Millions of millions of customers are on board. I think the future looks something like that. Maybe in three to five years. And the next 18 months, 24 months, you're looking at a way to add scale and with efficiency in data analytics server to server communications. Because of the issue with pixels and iOS 14, there's now servers, which are in a sense nodes have to be talking to one another and there has to be something uniform at that sub level that makes web 2.0, as we know it, which was founded in the early two thousands exist. But I think the future ultimately is what web 3.0 is doing with decentralization servers, which are called nodes, but they're basically decentralized. And the incentives with these different crypto's about around digital advertising and the brave ad network has some kind of startling traction that not many people are aware of.

[00:18:37] Rosalyn Santa-Elena: So let's talk more about OAREX. So how can organizations, you know, best leverage your services, right, to help them drive revenue growth. And what are you seeing them do right? And what are they doing wrong?

[00:18:54] Hanna Kassis: Sure. So two organizations can best leverage us to drive revenue growth if they are actively spending on new acquisition. So if you're, if you have an organic following or base, really not a huge need for a solution like ours, because you've probably already figured it out. Right. But for a company that has to actively like, a publisher, or if you're like a media buyer on the, let's just say you're an agency vendor. And you have an opportunity to go out and do an audience reach campaign for a major brand.

You know, you need to come up with a ton of money to take that on. And you, you, a lot of those companies only have two or three customers because there's just such a huge capital commitment to take on these IOs it's almost like the big agencies say, yeah, we'll give you, we'll give you the money, but you got to spend $250,000 upfront or else we're going to find someone else, someone else to do it, right.

And so those companies can best use us for revenue growth because we unlock, we actually do IO financing is one of our products and IO financing is basically just that immediate buyer gets a huge opportunity from a big company, but they need the money to act on it. And so we that's part of our suite of products, it's almost like it's basically alone, and then once it, once they deliver on the media campaign and we buy the receivables that are generated from it. So it's like a very good one, two punch for companies that are, that need to spend to grow. So if you don't need to spend in order to grow your revenues, then feel free to reach out, I mean, that's, but it's usually the people who have an active needs for scaling acquisition and they they're, their number one bellwether is return on ad spend or their whatever install campaign they're doing or how low they can get their CPMs on the buy-side.

[00:20:51] Rosalyn Santa-Elena: Got it. So, I guess along the same lines, when it comes to driving your own revenue growth, right, as well as retention of customers, what are some of the things that you think you've done right. And are there any maybe advice or tips for others there?

[00:21:07] Hanna Kassis: Yeah. So that's a good question. And I'll preface it with it depends on if your business is B2B or B 2C.

I'll start with B2B because that's where I'm at. I consider what we're offering. I call any B2B. That's a big decision. I just call it a big ticket B2B or high ticket B2B. Not necessarily because it's expensive, just because it's a big decision, right? Big decisions come with costs. If they're, if they're bad decisions. And so on the B2B side, I would say know your customer. Again, it's not just the profile of your customer, but like actually go look at their LinkedIn and find a commonality because at first, if you're going to do business with people, you got to like who you're doing business with. Right. So if you, if you could find a commonality, now you have some, you have, you have at least one thing in common that you could at least open up a conversation about it. And if you never have a conversation with them again, they're going to remember this guy actually cared about me. Like how many times do you get a canned email on, or a canned message on LinkedIn? Right? It's each, like, at least, like I got a, an email from, from, from, like a, like a business loans company, business loans, broker, and they said, Hey, You know, we offer lines of credit of up to a hundred thousand dollars for, you know, small business owners, right. We're technically a small business owner, but we have, we have access to a hundred million dollar line of credit joint line of credit.

And so I, I almost want to respond that you should at least just at least know something about me before you messaged me, like hold like, right. So that's on the B2B side, it's getting the data, harvesting the data. Anyone can do that. Right. It's how well do you know your customers? How much you care about your customers that matter.

On the B2C side? I I'd actually say it's advertising. You want to unlock growth with advertising in your advertising. This is business advice, number three, I think, or maybe four, for business to business owners, is the advertising should be the written words of your best sales guy or sales, sales gal, whatever. It should be the best written words of the salesperson. Right. And so, go to that, go to that top salesperson and ask them, you know, what are the emails you've been sending out? W what are the text followups you do? Like, I, I met a sales guy not too long ago, and he, you know, he said to me, he's like, I call. And if they don't answer, I send them a text with their first name, question, mark. Right. And then I call him right back. 90% answer rate. So there are tactics you could use. It depends on how aggressive you want to get. Right. But on the B2C, on the B2C side, I would say, just look at all the copy, look at whatever texts they send the clients, look at how their followups are.

And, and it also matters if your sales are in local or not. Like if you're an agency and you have a lot of local corporate clients, go sit down with them, go meet them. If everyone's vaccinated, wear your mask, go have a cup of coffee with them. Right. So it kind of all depends. But, the short answer is B2B, know your customers really on a personal level. It's something about them at a personal level and on the B2C side it should be the best written words with it, the written words of the best salesperson.

[00:24:22] Rosalyn Santa-Elena: That's great advice. That's really great. So, you know, as I think about, when I think about the podcast and the revenue engine, I'm always hoping, you know, others can learn how to accelerate revenue growth, right. And really power that revenue engine. I think you've given a lot of really great tips, especially from an entrepreneur perspective, from a business owner perspective and, you know, really just kind of understand your customer. You've talked about knowing your customer a couple of times. Are there things that you wish you maybe knew earlier or maybe that you might do differently if you could do it all over again? You touched on kind of like not having regrets, but is there anything that maybe you might do differently?

[00:24:57] Hanna Kassis: You know, I probably would have found a technical co-founder. Because we've we have a lot of interesting technology, right, but I'm not a technologist by trade. And I think for any business in the digital age, it would be to have a technical co-founder right. Our, our chairman and CFO he's technical in the sense that he's a mechanical engineer, former Carnegie Mellon, ex wall street. And so from a technical founder on the finance side, we have a very, very, very technical co-founder on the financial side. And, but, but I would say tech is number one, no matter what business don't think you don't need tech. A lot of people go into business that need tech, or they could use tech it's not maybe necessary, but it's sufficient to scale. And then the second piece would be that I wish I got it, I'm very fascinated by advertising psychology and I wish that, I wish I got into it sooner. And it's funny because I've been financing a lot of the savviest, we finance the savviest media buyers and marketers in the world. Like absolutely the savviest people, way ahead of the curve in terms of what works, what doesn't on, what channels, who to target, what word to say, what gets the clicks, what gets the conversions?

And so I realized that I'm marketing to the best marketers. So I need, I need to, I need to understand, I need to think like them. So I, in 2017, 2018, I dove into, I read like the Halbert copywriting method books. I read Cashvertising, I read how to write, copy that sells. I w I took a landing page psychology video, and that really, for me, was like, Oh, wow. Okay. This, this, I see the results of this. It's like, it's like the subtle underlying result of just more deals, right. More growth from, from just the nuance. You'd be surprised. And so another piece of advice is, business owners, your copy and your sales marketing, everything should be written at a eighth grade level. So go to Hemingway to type in, if you're going to send a sales email, go to Hemingway, make sure it's not written like a PhD level, right. Or, and so I think being able to clearly and simply communicate to an eighth grader is very, very, very, very, very important, no matter what business you're in.

[00:27:25] Rosalyn Santa-Elena: Yeah. Yep. I love that. Thank you. That's super helpful. I completely agree. So thank you so much for joining me. But as we wrap up and before I let you go, I always love to ask two things. So one, you know, what is the thing about Hanna that others would be surprised to learn and two what is maybe one thing that you, you want everyone to know about you?

[00:27:48] Hanna Kassis: Um, that's a good one. People, people always. Maybe after this interview, it won't be a surprise, but people always want to tell them that I love etymology, they either ask what's that or they know what it is and they're surprised. Yeah. So, etymology is just the, or the study of the origin of words. I just love knowing where words come from. And, so that's pretty cool.

And then w what I want people, what I want people to know, is that, my, my family comes, my family comes from the west bank of Palestine. And we're a Christian family, which is a minority in the holy land. And when I walked around Palestine and I walked around Israel, people, I fit right in both places, people don't really know that the difference. And my, our church calendar is tied to the I'm not too religious, but it's just historical. My calendar is tied to the Hebrew calendar, which is tied to the moon. And I grew up with a bunch of Muslim people. And so what I want people to know about me is that we're all human and my number one desire and world is just peace. Peace on earth. I love everybody.

[00:29:04] Rosalyn Santa-Elena: I love that. I love that. Thank you. That's incredible. I love that. So thank you so much for joining me. I always a pleasure, right, to chat with you and I'm so incredibly, just grateful and thankful for your time and sharing your story. I think this has been super helpful for all of the listeners.

Thank you. Thank you so much for the opportunity. Nice talking to you.

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