Managing Licensing Programs with CRM Software | Nate Cavanaugh, Brainbase

Joining us on The Brand Licensing Podcast is co-founder and CEO of Brainbase, Nate Cavanaugh. On this episode, we take a closer look at CRM software and how technology can strengthen your licensing relationships.

Nate Cavanaugh is the co-founder and CEO of Brainbase, a platform that helps brands manage and monetize their intellectual property. Launched in 2017, Brainbase works with globally-recognized brands that generate billions of dollars in sales from their intellectual property. Brainbase is based in Los Angeles and has raised more than $12M from leading venture capital firms in San Francisco, LA, New York and Europe.

Prior to Brainbase, Nate was the founder and CEO of Guuf, an esports tournament platform, which was acquired in June 2016.

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Episode Transcription

Emily Randles: Hi, Nate! How’s it going? 

Nate Cavanaugh:Hey, how are you? 

ER: Good. We’re excited to have you as one of our first guests on The Brand Licensing Podcast. Thank you so much for your time today. Nate is here to talk to us about the role of a CRM software in licensing, but before we get started, Nate, could you just give a little rundown on your resume? 

NC: Yeah, sure. I’m originally from Pittsburgh. I grew up in an entrepreneurial family. I’ve been around startups for what feels like my whole life. I’m 24, newly turned 24, and I’ve watched startup companies grow from pretty small to quite a large scale. I’ve been interested in tech from a very early age. I started a website design company when I was 15 years old in high school and thought I didn’t even want to go to college, but then ended up reluctantly going for one year at Indiana University of Bloomington following after Mark Cuban. I studied business management and economics there on the side studying venture capital startups and product design. I ended up starting an e-sports tournament platform in December of 2014 when I was 18. I was building that company in my college dorm room while I was taking classes at IU and then a year and a half later, I actually sold the company to a firm in New York city when I was 19 and then ended up taking that money, dropping out of college, and moving to LA to start what is now Brainbase. It’s a crazy, condensed story, but essentially, now I’m the co-founder and CEO of Brainbase. We’re a technology platform that helps brands manage and monetize their IP. The first product you mentioned helps brands to do licensing and manage their existing programs. So, we work with the teams at Kathy Ireland Worldwide, Sanrio which owns Hello Kitty, Buzzfeed, and a handful of others. Now the company is based in LA, and we also have a second office in Europe. 

ER: Awesome, that’s very exciting. So, I heard about Brainbase through an email that I received from your team, and it had like a screenshot of this beautiful reporting dashboard. With my experience in client services, I’ve been looking for something that could really solve the problem of royalty reporting and project management and product approvals. I was so intrigued when I got this email from your team and to date, we had really pieced together our product development and nothing really worked exceptionally well and the platforms didn’t work well together. The other thing I found was working with a bunch of different licensees and licensors is that if the platform or technology wasn’t simple, they either didn’t use it or they didn’t use it correctly. And it just made things more complicated. So, like I said, when I got the email about Brainbase, it was the technology solution I’d been looking for from a client services perspective. As a very data-driven company, we work with very data-driven companies, and I felt like this was what’s lacking in the marketplace. You know, we’d get these like Excel files from licensees that had sales data, but it wasn’t in a usable format. So that’s kind of my background around Brainbase and why I was so intrigued to connect with your team and connect with you. What made you want to create Brainbase? What brought you from e-sports into the technology of licensing? 

NC: Yeah, I get asked that question all the time. I always feel like I hear people that work in a licensing industry say that they never expected to work in the licensing industry. It’s sort of this odd thing. I’ve never been able to figure it out still four years into the company. Yeah, e-sports is very different than IP and licensing. As a founder, and I consider myself an entrepreneur at this point, but I’m more of a generalist. So, generally speaking, I just have a general passion for technology and startups, no particular market focus. But I just like working on problems in industries that affect large numbers of people. And initially the idea for Brainbase was to build an online marketplace where brands could buy and sell their intellectual property online. So we were trying to solve patent trolling. So we wanted companies to be able to sell patents online so that they would go into the hands of startups and increase liquidity for patents. And then we realized that licensing was another type of an IP transaction companies buy, sell, or license their IP. And then we realized licensing was actually a really interesting place to start. But throughout that learning process, we realized that managing a licensing deal is actually a lot more complex than even negotiating one. And so we started looking around the space and try to understand, okay, how are brands actually managing this work today? And like you found that there weren’t very many solutions that were either a well-designed or work well together. And we thought that that would be an interesting entry point into the broader market. And so the vision for the company was to start in licensing and licensing management and then expand it into all of these other market segments. And that’s why we describe our company as a sort of a management plus monetization platform for IP in general. 

ER: So what really is the difference between Brainbase as a technology or management platform and other more general platforms? Why should like a licensing company consider switching to Brainbase that’s specific for licensing? 

NC: Yeah, I could talk about this question for a long, long time. Obviously, I have a bias, full disclosure. But look, I think very basically if you look at the usual suspects for brands that are looking to manage a licensing program and you compare those products and how they’re designed and how they function and how the features work together, and you compare them to other apps that you use in your everyday life, call it WhatsApp, Slack, Zoom, Google Hangouts, YouTube, et cetera, they don’t look like any of your favorite apps. So to me, that means there’s a user experience and design problem and they’re just not well-executed software products. And so on a related note, how much have they actually evolved and changed in the last five years? Five years in a software context is like an eternity. Who has actually built those companies? are they, are they people and founders that are obsessed with product design or are they people with sales backgrounds who’ve been in licensing for, for a really long time and wanted to try and build software. And if you look at the best designed and best performing software companies, they’re generally built by people who are obsessed about tech. They’re obsessed about design, product, user experience. And that’s, that’s us to a T where we weren’t originally from licensing and from IT, we learned it ourselves, but felt like my cofounders and I were uniquely qualified to just build good software products. And so one specific example would be, you know, at Brainbase, we care a lot about the details. Like we fight over things like the color palettes and the font sizes that our customers see when they log into the product and make sure that the user experience is perfect. We debate over details like how thick are the lines on our line charts and bar charts on our analytics graphs. Other products don’t even have analytics. So I think just to, in a very stark comparison, the way that Brainbase works together, our Assist platform, which is our licensing CRM covers everything from managing your existing deal flow pipeline, your contracts, we provide awesome analytics across what products, partners, countries, et cetera, are performing, how they’re performing over any period of time. And then also all of the product and creative approvals in the sales reporting. So we’re also working on some really awesome new features that we just announced recently, like a payments feature, which is essentially going to work like Venmo or square cash, but for licensing royalties. So a brand owner’s going to be able to collect their money instantly from their licensees, rather than, than having to wait the net 30 or net 60 payment terms. So on all sorts of levels we feel like it’s not even close, but I would, I would encourage listeners to check out a demo and see for themselves. 

ER: Yes. And, and that was my experience as well. Like it, I mean, the lines are just, I’m a very visual person. And to your point, like the analytics was, was a big piece that was missing and, and our licensees needed that information just as much as the licensors. And I just think, you know, beautiful design it to your point, like what you’re using on your phone every day. And that’s, that’s the expectation today and that’s the expectation of my clients when we’re reporting to them. So I think it makes a big difference that you guys are passionate about, you know, user design and using not only the data, but, you know, putting it together in, in the format that it just makes much more sense in my opinion. 

NC: Yeah. I mean, I think it’s never perfect, right? Like getting, getting a software product perfect takes actually does take time in fairness to, you know, companies that are trying to build apps and products, that version one is never perfect, perfect of anything, businesses, software, physical products themselves, they have to go through multiple iterations. But I think what a good indicator of successes is how quickly companies iterate on their initial version. And I think that’s something we’ve been really aggressive about is making sure that we’re iterating based on feedback that we get from our customers about what they like, what they don’t like and so on. So I definitely agree with you. 

ER: So, because you’re kind of new, not new now, but you know, jumped into the licensing field, what’s been the most challenging thing, or maybe the most surprising thing about the licensing industry that you hadn’t previously experienced with your other ventures. 

NC: Yeah. Well, the first thing I would say it’s a, it’s a really small industry, I think for better, for worse. I I’m, I’m a believer that I think the larger the industry becomes it’s, it’s mutually beneficial for everybody. But it’s a very small space in the sense that everyone feels like one or two degrees of separation away at some level. I would say that the complexity of how each brand owner and company structures, their programs is actually quite different and building that into translating that into software into something that’s actually scalable was quite challenging initially. So how does brand A structure, things like their guarantees and payments and royalty rates versus another brand and how do you sort of reconcile those? And then the third thing I would say is I felt like initially I am starting to see a little bit of a turn in people’s perception about technology and the licensing industry, but I think pre Brainbase, I think there was still a lot of general resistance from executives in the industry about essentially just being comfortable with the status quo. And I think people are increasingly seeing, like that’s not actually going to be OK. And, and that’s fine, but I think it’s a combination of those two things just like in general resistance to technology, very small space and hard to make it scale. And I think that’s the exact reason why we’re trying to build this company is to solve a lot of those issues. 

ER: Yeah. That makes a lot of sense. I know we have like, like brands or clients that just like, “Oh, I just emailed you the approval.” And, and I’m like, looks good does not mean approved in my world. It’s like, if I need to get back, I need, I need you to officially say this is approved and, you know, tracking it in email is just a nightmare. So, yeah. But I get that resistance and it’s been a little bit hard to transition some clients into these, you know, platforms and management. 

NC: But it’s back to your previous point, ultimately for anything, whether it’s licensing, people don’t like change in general. And I think the re the people are much more receptive to change. I think if the experience of the product is really strong and to your previous point, when we started, if the design is easy to use elegant, et cetera, not even again, not just for software, but for anything, it makes the change a lot easier. So that’s one thing we’ve obviously tried to put a huge premium on. 

ER: Yeah. That makes a lot of sense. So we’ve talked about kind of what challenges are in the industry, but what trends are you seeing right now? 

NC: I think there’s a trend of people feeling uneasy about the future of retail. I don’t think it’s contrarian or a bold opinion anymore to say that the future of retail is going to be at least more experiential. I would say it’s, it’s really tough to bet against Amazon and eCommerce in general, obviously I have a bias sort of pro eCommerce and pro Amazon as a, as a founder of a tech company. But just the general uneasiness and the uncertainty around what the future of retail is going to look even pre COVID-19. I think there was a lot of questions around, you know, what’s retail going to look like in five years. But I think that’s even heightened now. That’s a little bit more of a cynical trend. But I think there, there are a lot of implications around that, right? Like I think even this week with licensing week virtual, and to think that UBM now, they were acquired by Informa, but whose businesses entirely in person events is transitioning to an online model this year is really something, you know, interesting to study. I did a short interview with licensed global a few weeks ago, and I, and I predicted that something like licensing week virtual will actually be more popular than licensing expo in the next five years. For the exact reasons I mentioned, I think there’s just a general transition, or at least diversification to, to, you know, e-commerce marketplace models, in general, most a really bullish on digital content licensing. I think what Epic games did with Fortnite and Travis Scott, I thought that was a brilliant collaboration. So just brand collaborations in general. But digital content licensing, I think is really, really interesting. There’s a lot of implications for this in eSports with like digital skins, digital stickers on messaging platforms. So in the gaming context, I think that’s, that’s really, really cool. And then just deals beyond traditional licensing, but beyond just the traditional brand manufacturer relationships. So just doing a, I think collabs are really the best manifestation of that, but so like, those are the few, few things I would say. I’m sure I’m sure there are many others that I’ve missed, but those are the ones that really feel top of mind for me right now. 

ER: Those resonate with me as well. I think I was reading the other day where, you know, they were talking about retail is shrinking in 2023 and the current COVID has just sped that up to 2020. It was shifting, but now I think it, you know, shifting even more and then just how brands are using their direct to consumer, you know, relationship and sales and then, and also how Amazon’s impacting that. So I think it’s, you know, really top of mind for everyone in the industry. 

NC: Yeah. I was going to say, I imagine that that’s something that a lot of your clients are thinking about as well. And I think B to C is a big part of that, that too. But as I said, I think it’s really challenging to bet against Amazon and just the general distribution that they have and all of their internal, I think their excellence around logistics is, is pretty tough to compete with, but I think I am very, I feel very strongly that retail is not going to go away. I just think it’s going to look very different and specifically it’s going to be a lot more experiential. And I think for specifically for higher end brands, I think they’re going to even have a potentially even a better opportunity than, than, than previously because there will be fewer potentially fewer retailers, but the ones that still exist are really high end. So we’ll see. It’s gonna be really interesting to watch. 

ER: I remember last year at the licensing show they, one of the guests or keynote speakers was from Macy’s in their popup shops that they were doing this, the store within a store and just the experience that they were building with those. And I think that that’s kind of more of what people are looking for, right? It’s not just going to buy a shirt at retail, but it’s going to meet their favorite influencer at the retail, or have more of this experience while they’re shopping. That really resonates with me, you know, as a consumer as well. So I think that’s spot on. I also think it’ll be interesting from a business perspective. So, you know, we, we actually are a remote team and just travel a lot to visit with clients and with potential licensees. And so kind of how that’s going to evolve, you know, that the zoom and the, the conference calls are working, but like there’s a, there’s a pull still for this face to face meeting. And when can we get back to that? So I think it’ll be interesting to see how trade shows, you know, evolve with tradshows and meetings just in general, right? That, that the face to face is still important. But how does that evolve after this kind of period? 

NC: Totally interesting subject around just office office space in general versus working, working remotely. I mean, I’m sure you’ve seen Facebook announced that some significant percentage of their workforce is going to be remote over the next short number of years. And a lot of other companies are transitioning away from that. I, I definitely agree with you that in person office spaces are really important. I think people are realizing how much they actually enjoy sitting next to somebody at a desk every day. I think there, again, those are also going to look different, but yeah, I think for certain companies may even double down on, on having an in person space, we are also remote by nature. We have a team in,uin LA and then also in Europe. And,uthe transition for us was fairly easy, but I think for both teams, we have office spaces in two cities. And I think that the team,ufor us is just like really itching to get back into the space, just to see people cause you miss a lot of like the, the facial expressions, the context and the in person meetings and stuff that you just don’t get from back-to-back-to-back zoom calls every day. 

ER: So what’s one piece of advice you would give somebody who is either, you know, either considering a technology platform or building their licensing program? 

NC: Look, what I would say is a couple of things first is I’m not we’re as a company, not blind to the fact that licensing software is not what people that run licensing programs wake up and go to sleep thinking about everyday people or have a million other priorities that are on top of, you know choosing a software for the licensing program that said, if you’re starting a new program from scratch, or you’re trying to rebuild yours, or just modernize your existing licensing infrastructure, getting the foundation in place really does help. And I think providing a great experience on the software side for your licensees so that you can then get better at data analytics so that you can then make better decisions and therefore drive more revenue. I think everyone would agree that is really important. Technology is not everyone needs to be a technology expert, but I think what I would encourage people is to at least know enough to be dangerous. So if you’re evaluating 10 different systems that all on the surface look the same, you know, enough to actually be able to tell the difference between, you know, which one is the right one versus not. And I always come back to the previous point of look at the products that look most like the apps that you use every day and that are following just modern product principles. You don’t have to be a, you know, a software engineer to understand that, you know, certain products look more modern than others, and it’s not just a surface level problem. Of course, like there is something to be said for having great functionality. But I would say just know enough to be dangerous. If there’s somebody on your team work closely with your VP of IT applications or someone on your team that knows it better than you potentially, if you’re not a technology expert by trade. And then I think the other real trend is putting a large premium on business analytics and being able to actually understand which products and partners you should double down on versus cut based on performance and which brands are selling better than others. So you can make better decisions. Ultimately licensing is around brand extension and building, you know, a better rapport with your customers, but it’s also about generating ancillary revenue. And I think analytics are a large part of both of those. And I think that’s something that Brainbase does a nice job of, but yeah, I would say those two things, or I guess three would be my biggest pieces of advice. 

ER: That’s awesome, and I couldn’t agree more with the analytics and kind of figuring out which horse to bet on and which programs to let go of. I think that that’s really important when your resources are constricted and you are trying to maximize your program. With that said, one thing that kind of comes to mind is having data that you can compare, like, how is your program doing in comparison to other like programs does Brainbase offer any solutions in terms of industry data? 

NC: Yeah. So one of the products that you may know that we’re working on later this year, we’re launching a lot of new stuff this year, but one of the features is called our Marketplace Platform, which is designed to help brands and agencies find new licensing partners, brand partnerships, and sponsorships entirely online. 

ER: One question just to wrap things up is what’s the strangest licensed product you’ve seen or something that’s kind of makes you go, “Hmm, I wouldn’t have thought of putting that together.” 

NC: I found a licensing deal that Mattel did with a company called Patriot Computer Corporation. This is so fitting. Obviously, I’m giving a computer answer. But in 1999, they made a Hot Wheels and Barbie computer, Mattel and this Patriot computer company. Supposedly, the computers had so many defects that Patriot Computer actually went out of business a year later as a result of producing the product because it just did not go well. I love Mattel. I think they’re a remarkable company. One of their former Chairman and CEO is actually one of our advisors, but yeah, certain things just should not be licensed. And I think Barbie computers might be one of those. So I was looking at it and chuckling, but I think that’s one among many others I’m sure. But that was the one that felt like a good answer. 

ER: That’s awesome. This is something that I’m excited to gather people’s answers on all the strangest and interesting products extensions that they’ve seen. So, thanks. That’s an awesome example. If people want to find you online or connect, what’s the best way to do that? 

NC: I love Twitter. I wish more people in licensing use Twitter. I think there’s some awesome stuff there. My Twitter handle is @CavanaughNate. My email address for people that are in the licensing space that want to learn more about Brainbase is nate@brainbase.com. Those two places are the best for me. 

ER: Perfect. Thanks for your time today. Like I said, your insights have been great. I’ve really enjoyed talking with you and we’re excited to hear more about the launches of Brainbase and use more functionality of your platform. Overall, I appreciate your time. 

NC: Really excited to listen to this when it goes live. Thanks for having me on the podcast, Emily.