Two years ago, I wrote a blog post that garnered a lot of (friendly) flack from our investors here at the Rubicon Project. Titled Optimized for Speed = 30% Waste, in the post I talked about how different companies operate in various gears at different stages of their development. I noted that it’s really important to define and set the “gear” for the company and make sure everyone is aware of what it means.
The goal of “Optimized for Speed” is to generate market share quickly and figure out the business model as fast as possible. The 30% waste is generated by making fast decisions – on hiring, advertising, product development, operating infrastructure and strategy. But, when right, optimizing for speed will put you leaps ahead. We’ve been optimized for speed for the first 3 years of our life as a company. We’ve been focused exclusively on driving market share, customer growth and product development. And happily, the results speak for themselves.
Today, we are the #1 Yield Optimization platform in the world and this platform powers the largest open marketplace for display advertising on the Internet. We are doing for display advertising what Google did for search advertising. Our technology processes over 50,000,000,000 ad transactions monthly for over 300 of the web’s largest publishers, and reaches over 550 million Internet users globally.
We hired a large number of people – especially on the demand side of our business – to quickly develop and then manage our relationships and transactions with ad networks and exchanges as we simultaneously developed the technology that would automate that part of our business. Now that we’ve launched REVV for demand, our automated buying platform for demand sources, we don’t need so many people to do this work. That said, we couldn’t have reached this point in the market without those team members who were committed in helping build our organization. Nonetheless, our market development efforts here are complete – we now have all of the relevant ad networks and exchanges plugged into our platform (more than 550 globally.) The addition of Protected RTB, with which we’re meeting great success in private beta, will make that side of the business even more efficient. The commitment of resources to these areas that drive our technology (and with that technology, increased automation & efficiency for us and our customers) have led to less need for as many people to do that work.
In a recent internal company newsletter, I wrote a note to the team that I titled “Free Throws and Defense” (I will post it later.) It basically talked about focusing on fundamentals, because that’s what wins games. I believe very strongly in setting the tempo and pace for the game and making others play your game, especially when you’re in the lead. To do this, it requires extreme discipline. You need to establish your core offering and markets that you want to focus on and you should fight hard to win 100% of the deals in your core, anything outside of that you need to be OK losing (and hopefully pick them back up later) – that’s what discipline is about.
Focus: it’s essential to success, as we all know. Focus doesn’t just mean working hard. It means working smart: prioritizing projects, opportunities and goals. To this end, we’ve decided to focus on three core product areas going forward – we call it our Go Forward List. We’re making some changes to the way we do business to ensure those areas, which will drive us to both reach our profitability goal and service our customers, premium Web publishers, most effectively, will get the most time, attention and resources. Along with this, we have also put together a Not Right Now List, this is equally important for companies to establish. In a sea of opportunity, it is often times easy to drown yourself in chasing too many of them at a time.
It’s important to align your organization around no more than 3 overall goals. We set our goals to establish brand-franchise in these three areas:
This is all in the spirit of maintaining our position as the innovation leader for publishers.
Our decision to optimize for profitability is driven not only by the stage of growth and market share we’ve achieved. It’s also driven by opportunity – the need for a yield optimization platform to drive revenue for publishers across the $71 billion in digital advertising spend has never been greater, nor has the market ever felt more poised for dramatic growth as more and more brands follow consumers online. Sellers and buyers, both large and small, are reporting rising media sales compared to a year ago. Moreover, tremendous innovation in the space promises to accelerate change and growth still further this year. Shifting gears requires extreme discipline, but it’s important to do it at the right time.