I created FounderBlog in 2006 as a way to "pay it forward" by sharing the entrepreneurial, leadership and company culture lessons I've learned through the years.
As an engineer turned entrepreneur, I've launched six companies resulting in 1 IPO, 2 acquisitions and a combined market value of more than $1 billion.
Now I'm building my latest enterprise - the Rubicon Project - one of the fastest growing, most disruptive advertising technology companies in history.
I look forward to sharing, please do the same...
I did a presentation yesterday at the Digital Publishing Summit in Deer Valley, Utah. Instead of doing a pitch about the Rubicon Project, I chose to take the opportunity to lead a discussion for the industry about focusing on the right competitor. I think it came as a bit of a shock to the room; but I felt like we really needed to elevate the conversation.
Competing often pushes teams to develop better solutions for a market. However, sometimes competing can become a massive distraction from the big picture. In the display advertising market, there are over 1,000 companies competing with each other. Publishers competing with each other, ad networks competing with other ad networks, ad networks competing with publishers, publishers competing with Google, DSPs and real-time-bidders competing with ad networks… The list goes on and on. On one level, there is room for everyone, it’s a $30BN global market. On another level, it’s very short-sighted — everyone is so focused on the $30BN that’s in the market today, that they have lost sight of the fact that there are more than $200BN that haven’t made their way online yet. There are a number of reasons why, including: massive fragmentation, inefficiencies, confusion, buying friction, antiquated methods of measurement, lack of standards, privacy concerns, etc. The industry focuses so much energy competing with each other that it leaves little energy left to work together to co-develop solutions that will benefit everyone and potentially quintuple the size of the market.
Anyway, in the spirit of this blog being entrepreneurial focused lessons, the lesson here is to focus on the right competitor. The airline industry is a great example, American Airlines and United Airlines focused so much time and energy competing with each other that they ignored the fact that their business models are inherently flawed. They kept perpetuating the flaws and creating an even more destructive environment. The result is that they are constantly needing to be bailed out by the government. While they were so busy competing with each other, JetBlue and Southwest came along with better models — they are highly profitable and growing rapidly. American and United were focused on the wrong competitor.
The lesson for the digital advertising industry: the real competitor is broadcast and print media. Solve for industry-wide solutions and we’ll find that at least $200BN new dollars will flood the market (away from broadcast/print to online)… We at the Rubicon Project feel so strongly about this that we even invited all our competitors to join us in this project!
The lesson for entrepreneurs, do good for your market and focus on the right competitors — especially if they aren’t even in your industry.
Something’s wrong: consumers are valued at 10X the rates when reading the same article in the NY Times print newspaper vs. shifting their attention 90 degrees to their computer reading the exact same article online at the exact same point in time
Digital experiences are getting richer: started with AOL walled garden of content, World-Wide-Web came along and brought a flurry of content from premium websites, social networking connected everyone and inspired user generated content, video brings emotion and dimension and now with tablets we can hold the Internet in our hands (just like a newspaper)
But, we’re not capturing the increased value (rates/value are still the same as they were 10 yrs. ago)
Publishers are over-reacting: they aren’t able to capture value so they’re throwing up pay-walls – blocking consumers from content and shifting burden to them to monetize it (opposite of the Internet promise of content access), they fire ad networks because of concern about pricing, they strip their valuable brands out of the market when selling through channels (concerns over channel conflict) and block data because of privacy concerns
Advertisers are reacting too: they’re holding back billions of $$ from the market because they want the exact opposite – transparency, leverage data, harness the innovation from over $1BN that was invested in ad technology in 2010 alone, and they need efficiency (it costs 3X as much to buy online vs. offline) – doesn’t make any sense in a tech driven environment!
Lastly, sorry to say it – but the way we sell media is bullshit! We’re using tactics from the 1950′s – the “mad men” martini lunch days. The best dinner wins, not always the best value or the best technology
If this continues: lower revenues will lead to lower quality content which will attract lower quality audiences which will eventually be commoditized (and yes, traded like pork bellies) which will only lead to lower revenues and so on and so forth…
The quality content business could go out of business.
Lots of talk in the industry (committees, forums, working groups, etc.) — but no action!
Instead: energy focused on competing with each other, like rats eating at the last piece of pie (like it’s the last dollar in the market)
But, there’s a much bigger pie available (5X as much $$ – $200BN)
We at the Rubicon Project propose a new way forward: work together instead of against each other
We take the term “project” in our name very seriously. We’ve been working from day one to help the industry and the ecosystem realize the true value of digital experiences. We’ve been committed to efficiency, transparency, an open market and harnessing and organizing the collective innovation and value that’s been created in this market — this from day one.
Now, we’d like to invite everyone to join the project…
By everyone, we really mean everyone: our 450 customers, 600+ ad networks/exchanges/DSPs who participate in the REVV Marketplace, our smaller competitors (AdMeld, Pubmatic) – we’d be foolish to think we can solve every problem in this market alone - and the big giants in the space (Google, Microsoft, Yahoo!, etc.) Yes, the big guys have billions of $$ being spent with them and you probably think you can go at it alone… But, if we can all come together to solve this problem, there are billions more waiting for us.
What if we took all of the energy we spend working against each other and instead worked together? What if we:
create an open market
make it easy for advertisers to buy (easier than broadcast and print)
deliver value to the consumer (through advertising)
unlock the benefits of data; safely
embrace privacy and put it in the hands of the consumer (where it belongs!)
provide a risk-free environment where publishers are safe to leverage the billions of dollars that they’v collectively invested into their brands
Let’s get connected! Work together to solve these problems. Because… if we can, there are over $200BN more dollars waiting for us!