Category Archives: Startup & Venture Capital

YCombinator Ad Innovation Conference Keynote Breakdown

Today’s opening keynote was given by Paul Graham, at the YCombinator Ad Innovation Conference in Mountain View.  I attended along with @tdavidson and @barryl530 to see the early stage innovation that’s happening in the ad tech space.  We were certainly impressed not just with the innovation but with the amount of great agencies in attendance such as AKQA, Goodby, Sapient, Omnicom, Cadreon, VivaKi, and Jess3 amongst others.  We were in good company, to say the least.

Paul admitted he wasn’t an advertising guy, but knows technology enough to understand how tech will influence advertising in the next few years.  The data he used to back his claims were based on the thousands of applications YCombinator receives and is able to forecast and see trends in where innovation is happening.

Here is a summation of the 9 trends that’s pushing advertising, per Paul, but I tend to agree as well.

1. Tablets are important and might call for their own unique advertising platforms to take advantage of the user interface.  Apple and Android will dominate the market and Apple will dictate the ad formats.   Tablets are genuinely a big deal and we aint seen nothing yet.  My take:  Yes, he’s spot on.  Tablets penetrate and are both a content consumption device but increasingly, a content creation device, as long as we can innovate and create good input devices.

2.  All data lives in the cloud. All data about a consumer, transaction, records, etc will live in the cloud and ostensibly, be located in one database that can be used.  What will hold this back will not be technology, but will be government and policy.  My take:  Totally.  We’re seeing this today.  I’m all about data.

3.  More stuff happens peer 2 peer.  Paul used an analogy that I don’t know if I agree with, but he claims that hotels exist because consumers couldn’t find any other way of staying in a remote city or town, so hotels were built to meet this demand.  Now with services like airbnb, hotels could cease to exist as we know them.  My take:  I like what he’s trying to say, but don’t know if I buy the entire analogy.  Not everyone wants to stay in someone else’s home.

4.  There are going to be a lot more startups.   I liked where Paul went with this.  He basically said that engineers had 2 choices after college:  go to graduate school or join a big company.  Now, they have 3.  The third oppty is to create a startup.  Paul threw out the 1% number which was how many developers/engineers start companies… and if this increases 10%, then that’s 10x the amount of startups in the ecosystem.  Again, we aint seen nothing yet with the volume of startups out there… there are going to be many.

5.  Facebook is already a big deal.   Paul said that the $1.6bln from Facebook is quick and simple money and they haven’t really began monetizing yet.  They are focused on growth and even have a Facebook Growth Group, which is one of the most powerful groups in Facebook.  He thinks that when they start monetizing, they can seriously move into markets and kill competitors such as PayPal or Wepay.  My take:  I agree with Paul, but they have to be careful in how they approach this as to not alienate developers and users.  I don’t want Facebook to be 100% of the services I use as a consumer.

6.  Software eating the world.  Don’t be an advertising company that does software.  Be a software company that does ads.  Having this mentality is obviously valley-driven, but allows you to scale a business and think more product focused, which theoretically, should have better outcomes.

7. Target Ads Precisely.  Google could target their ads much more precise but they don’t have to yet, as the market isn’t necessarily requiring it or does it make economic sense for Google to do it until they must.  Paul said a great quote:  “Assume you can read someone’s mind, what ad would you give them.”  My take:  This is one of our investment thesis at kbs+p Ventures – application of data to drive advertising decisioning.

8.  More things will be done by numbers.  If an investor had to place a bet on quantitative measurement/analytics of creative, bets should be placed on measurement.  Numbers will/can/do drive decisioning and with ROI driven world, we need to quantify it.  My take:  Spot on, another investment thesis of kbs+p Ventures as well as what we apply at VMM and The Media Kitchen.  Couldn’t agree more.  I even treat my fantasy football teams this way.. and I want 2-1 this past weekend!

9.  Creative.  Creative will begin to become “generated.”  Paul essentially argued that the best creative in the “future” world will have to be generated because of all the varieties that are needed.  My take:  I think he’s onto something if we’re able to deliver the right creative to the right person at the right time.

I loved Paul’s opening.  This wasn’t 100% of everything, but was a lot of it.  My friend Roger of IA Venturesc also talks about similar trends on his blog, in a post titled, changing polarity in advertising, if you want to continue being inspired…

Enhanced by Zemanta

An Ad Tech Roll Up

I’ve been noodling the opportunity around an ad tech dream I had.  Yes, I really do dream about these things.

We all know the positions that Yahoo! and AOL are in.  I won’t go into that here, other than they will need to make some short term decisions rather quickly.

As a proactive entrepreneur, what if you could acquire the assets of Right Media (including client contracts) from Yahoo! and Platform-A (whatever is left of it) from AOL, roll them up, put on top of a 2.0 infrastructure such as AppNexus and scale the business?


  • Client contracts lead to instant revenue
  • RMX has a name for itself in the industry
  • Could probably get it for fire-sale pricing


  • Contacts/clients might not transfer
  • Yahoo! inventory is not guaranteed if moved away from Yahoo!, so that would need to be written into the agreements
  • Implementation of both platforms might be more hassle then they are worth
  • Much of Yahoo! RMX talent has already left, but not all

There is an opportunity here, at least at first glance.  It’s less about the technology and more about the contracts to advertisers.  The hypothesis that the acquisition of these both would lead to a faster time to market and revenue out of the gate.  There are probably quite a few other ad tech companies that you could bundle in here at the same time.  Might be worth investigating?  I’m sure a few people probably are…

Examples of Applied Data Visualizations

This past week, I tweeted the following:  “the data itself isn’t overly interesting.  the application of data is what is fascinating.”

Tweet about data

This wasn’t the first time I tweeted something along these lines and if you’ve heard me speak publicly (or inside the agency) over the past few years, I’ve probably touched upon the topic, if not spoken all about it.

A few people reached out and asked me to write about where I see this playing out – as to illustrate the point about the application of large data sets to make decisions.  I thought I’d use this post to do just that – give 3 sites that you can check out to see what I mean.  In no particular order, they are listed below.

#1:  Numberfire

Numberfire is a fantasy football GM’s mecca.  If you are managing a fantasy team and want to compliment (and/or replace) watching ESPN Fantasy Football Now, reading all the blogs, etc, why not apply large data sets worth of performance data to predict performance of players?  If you can aggregate plenty of data sets, normalize them, and run regressions/etc, then you can figure out which players have a higher probability of performing better each week.  I used Numberfire last year, which was their first year and they continuously outperformed the ESPN and Yahoo! rankings (7/10 times).  What’s nice too is that Nik, the founder, has an eye for design and made his site very usable and IMHO, probably the best site within this space.

Numberfire Chris Johnson visualization

#2: TRUEcar

I read last week that a site named TRUEcar raised $200MM for vehicle-data related purchases.  Anything that has a nine figure capital raise and data related to it immediately got my attention.  What TRUEcar does simply is help people decide what to pay for a used or new car, based on historical information.  Seems simple, right?  Have you ever tried buying a used car and all you had to rely on was the KBB value of the car (kelly blue book)?      See the image below, as it illustrates a search I did for the 2011 Range Rover Sport, a car I fancy.  Their visualization of large amounts of data is what is extremely important and will help separate them from forthcoming competitors.

TRUEcar Range Rover

#3:  NFL Decision Maker

I did not realize that Bloomberg launched Bloomberg Sports and it includes a decision making program for fantasy football rosters.  Essentially, Bloomberg is leveraging it’s data infrastructure and visualization tools to help make informed decisions of whom to sit/start each week for your fantasy or handicapping needs.  This product certainly competes with Numberfire (and vice versa) but it’s not as robust.  However, this is a great start for Bloomberg Sports.

Bloomberg Sports NFL Decision

PaidContent recently re-posted a vision I had regarding the Bloomberg Terminal for Advertising.  This is an area that is ripe and one I’m currently exploring.  Would be really interesting to bring advanced visuals and analytics to the world of real time bidding and media trading.

I believe that just having data or access to data will be table stakes in the next few decades.  The organizational winners will be ones who can apply the data to whatever they might be working on.  These are early days for this now, but I believe this will play out over a long term vision.  Data scientists + Data visualizers = data visioneers = people I’d like to meet.

kbspVC Portfolio Company, Crowdtwist is Hiring

One of kbs+p Ventures portfolio companies, Crowdtwist, is looking to attract and hire sales folks to join their team.  For those who aren’t familiar with Crowdtwist, it’s a social loyalty platform that bridges the paid-owned-earned media ecosystem.  I’m extremely bullish on them because they bridge the evolving media ecosystem and bring social data into our CRM and data-driven programs.

Mashable has a nice article titled, “Why Social Accountability Will Be the New Currency on the Web” and it highlights Crowdtwist amongst others.  You can start to see why their platform is so powerful.  And if that doesn’t convince you, they are on the Top 25 Startups to Watch list by Business Insider.

I was their lead mentor coming out of TechStars NYC and have been involved with them ever since.  So of course I’m biased about them.

The type of candidates we are looking for:

1.  Must have background in selling platforms and solutions, not just IAB compliant banners.  You must be able to demonstrate that you’ve sold platforms and can handle getting to consensus with multiple parties including IT, social media teams, and media teams.

2.  Must have at least 4+ years in sales background, preferably within a venture backed or publicly traded digital media or information technology company.

3.  Entrepreneurial passion and fire a must.  We want to find hustlers who like being out of the office more than in it.  By being out of the office, we mean knocking on doors of Fortune 500 clients and their respective agencies.

If you know of someone who is interested, or you might be, please don’t hesitate to reach out to me.  I have to be strict on filtering out per the above 3 filters, and will only pass along candidates who have demonstrated this.  You can reach out to me here.


The Bloomberg Advertising Terminal

(originally posted on Google Plus and then picked up on PaidContent)

I’ve been spending a lot of time thinking about data recently and it’s become the central investment thesis for kbs+p Ventures, our go to market approaches for The Media Kitchen, and how kbs+p communicates vision. My friend and entrepreneur extraordinaire +Jon Steinberg says it extremely well, advertising is becoming “guided by math, but moved by art.” For many folks in direct mail or other quantitatively driven marketing disciplines, this has been the norm, but I’m loving how this new norm is playing out across all of marketing.

Data isn’t new. Data allowed ancient salt traders to make important investment decisions in Egypt. Data allowed Christopher Columbus to accidently find the Americas. Data allowed Babe Ruth to know which pitches to throw to which batters. It’s been around.

Why it’s become a central thesis to us now is because it’s more actionable than ever because it’s become almost tangible and tools allow it to be ever more moldable. As a focus group of one, I use data to optimize my fantasy football teams thru +Nik Bonaddio‘s Numberfire platform, I use data through our Trading Desk, Varick Media Management, to optimize our biddable media campaigns, and I use data to help me understand where to invest my personal capital to help drive returns that can pay for my kids college tuition and my wife & I’s retirement.

As above, “data” can be used for many different uses.

One area of use that I’d love to see built out (and maybe I’ll pursue it) is legitimately, The Bloomberg Terminal for Advertising Data. If you are in the advertising technology ecosystem, then you’ve probably heard a million pitches with the words, “Bloomberg Terminal” but I think this is a huge opportunity around a very structured product. Let me explain.

Fact: hundreds of millions of dollars (if not billions) are being invested in media impressions thru biddable media sources

Fact: brands and agencies are building RTB advertising technologies to take advantage of market opportunities

Fact: publishers are going through an evolutionary period in which they transact their “wares”

Fact: agencies are in an evolutionary period in which they structure their buying decisions and put data front and center

In my theoretical world that I like to play out in my head every now and again, and run past trusted sources, I play out a scenario in which Advertising Traders have multiple screens on their desk, similar to a Bloomberg Terminal in which software is running showing the market dynamics and pricing. This Bloomberg For Advertising will show specific marketplace pricing (AdX, RMX, Rubicon, etc) indexes, demand volume, specific data asset pricing & demand (3rd party data), and the like.

To create this and carry out the vision, I believe as of now, but could be convinced, that this needs to be executed by a unbiased 3rd party company who isn’t tied to media or data volume. They purely are (profitably) motivated thru licensing of their Bloomberg for Advertiser software.

Why is this important?

1. Data assets as simply described above are going to become increasingly important for investment decisions in the near and mid-term.

2. Publishers need access to this information the exact same as advertisers to help drive their businesses forward.

3. Regulation of markets is a commonplace in the USA and the advertising marketplace is heading in this direction, at least at a preliminary level, especially as we increase our usage of spot and forward markets.

I believe there is a very large opportunity to be this for marketing and advertising. If you are out there building this or have a viewpoint similar or dissimilar, I’d absolutely love to hear from you.

Your Most Important Hire, Your #2

There have been plenty of posts about hiring and building the right teams but I wanted to dive a bit deeper into a certain position:  Your #2.  This position is for everyone:  no matter high up or low down on the corporate totem pole you are, you have a #2 in some capacity.

I will be bold and say it, but I don’t believe you can be consistently solid without a dependable #2.  As many of you know me, I usually introduce my #2 as my “sidekick,” “my right hand,” or “my lifeline.”  That’s how I feel about them – and I used the word “them” as I oversee multiple business units with different #2s.

A #2 is someone who you can rely on to consistently deliver at or above your (and the market’s) expectation level and can fill in for times you might not be available.

Finding the right #2 for you only is doable when you understand yourself.  If you are a right brain person, then a #2 should be a left brain person and vice versa.  If you are theoretical, then find someone practical.  If you are a thinker, then find a doer.  One of the only characteristics is consistent across all #2’s is the word reliable and that comes from trust.   A solid #2 will ultimately become a #1 in due time and that person should be as reliable as they come.

Since early 2011, when we launched kbs+p Ventures, I’ve been spending an increasing amount of time getting pitched by entrepreneurs.  While many venture capitalists are looking for a solid team, I’m looking specifically for a #2 for the CEO.  The #2 is as important as any revenue or product, as the #1 cannot be everywhere at all times and the #2 needs to be able to steer the ship and get everything done that #1 needs.

While some companies in our portfolio may have a great #1 & #2 setup, some don’t.  Our portfolio companies have been asking us to help them find that #2 person.  I think real growth with these companies will happen when #2 arrives.  You can bet that we’re helping them find a #2.

I started off the post by saying that a #2 can be at all levels, though the middle part of this post has all about being the #2 to the #1 person in the company.

A media strategist should have a great #2 in an associate media strategist.  An account executive should have a great #2 in an account coordinator.  A business development director should have a great #2 in a business development manager.  The list goes on and hopefully you understand what I’m getting at.

I can’t stress how important this is.  It’s not easy to find your #2, but when you do, you’ll know.  Maybe someone internally grows into the #2 position.  Maybe you have to go outside your company to hire them.  Hopefully, as a good manager and boss, you’ll groom your #2 into a #1; that’s one of the best feelings in the world.

On Camera: ThisWeekIn Marketing

A couple of weeks back, I went out to Santa Monica to film a segment for This Week in Marketing.  I’m not sure if any of you watch the This Week In Series, but it’s a great collection of 15-60 minute shows on different topics ranging from startups (with @jason) to venture capital to video games.

We wrote about ThisWeekIn in our Menu, which we released earlier this year.

What I personally like about it is that they can efficiently create niche content that only appeals to a very specific audience.  Using traditional studios and distribution platforms, this would not be economical.  Now it is, or at least it’s starting to be.  The democratization of high end video content is just in it’s earliest forms, but we’re seeing some fantastic results.  The industry thinks so as well, as Google acquired my friends over at Next New Networks, which was a similar company.

I wanted to share the segment I filmed with all of you.  I don’t know why I closed my eyes so much on camera but everything else went well.  We covered everything from the agency, technology, venture capital, twitter, video, and content integration.  I hope you enjoy.

Enhanced by Zemanta

The 87.5% Category According to Luma – Lots of Acquisitions

I’ve spent a bunch of time with ad servers in my life.  It all started when I was installing phpAdsNew for my brother‘s website, Exotic Car Network, creating ad zones across in OpenAdStream, a web property that about 7 of us ran in the late 90s, working on the team to create a self-service ad buying platform for eBay, creating a proprietary ad server for the in-game advertising marketplace called Radial, founded MDC‘s trading desk practice using BidManager and TerminalOne, and finally, using DART, Atlas, and MediaMind at the agency that I’m currently at.  Now looking back at it, I’ve centered much of my career around served and tracked media.

So as you can see from above, I spend quite a bit of time with media technologies.

I believe they will play a large role in the future of advertising and I will continue to play in this field over the coming decades.  There’s been an increased amount of coverage in this space which was once reserved for the back floors of the premier industry showcase, AdTech.  Terry Kawaja is bringing some light humor and some fantastic charts, John Ebbert is creating a mini-media empire (well, not an empire), Brian Morrissey is resurging an old newsletter back to the top, and there’s been a handful of acquisitions lately including Admeld (Google) and MediaMind (DG Fast Channel) totaling close to $1 billion.

According to the display Lumascape, the only category with 87.5% of companies acquired, yes, 87.5%,  is the ad server category.  Crazy when you think about it.  Atlas, DART, MediaMind, Pictela, PointRoll, MediaPlex, etc have all been acquired.  There are some independents in the market today such as OpenX and insurgent AdZerk, but the majority have already been acquired.  I predict that the category is still ripe for innovation and will continue to see many new players enter the space.  I was a personal shareholder of MediaMind and it was one of the larger positions I’ve held.

I continue to think that the best 3rd party ad server is exactly that – a 3rd party ad server that is not biased towards any media.  Almost exactly a year ago, I wrote a piece titled, “Insurgent:  How to take down Atlas and DART.”  I continue to dislike Google’s positioning in the marketplace as overnight they theoretically could shut off access to their inventory for non-DART users (could, not should), Microsoft has an ad serving system built in the 1990s and still feels like it, and this left an opening for a major ad serving player to come in with an independent stance, thus MediaMind gained traction.  I love this stance as mentioned above and it needs to continue.

A few days ago, I wrote a post about attribution and the growing advertising operations line-item.  If you haven’t read it, you should.

If I personally was to start a company tomorrow, I’d probably create the next 3rd party ad serving system built for the future of all media (able to serve site-direct placements, social media and RTB) and include the opportunity for biddable, rich media, video, and full reporting & analytics.  I believe no ad serving system delivers superior reporting and analytics so this is an area that I’d specifically make sure I’d nail.

I think this is an area for massive innovation because the vision that the industry hasn’t recognized the full vision for the future… I believe that all media will be served, tracked, and optimized across all channels.  Television, print, radio, and out of home will all in some way or another be served, tracked and optimized.  This obviously cannot happen overnight as there are quite a few barriers and obstacles to go thru, but the opportunity is huge.  There is a reason why 87.5% of the companies in the ad serving segment have been acquired.

Note, I don’t think you need to start from scratch.  If you could raise some money, you can start by acquiring several of the pieces.  There are quite a few DSPs who could use an exit right now.   There are even some large independent ad servers who would be interested.  A roll-up strategy would be interesting and something that could come together nicely.

One of the bigger parts here is that you need to service the advertiser (or marketer).  This needs to be written on all company walls.   Mandated thru corporate handbooks.  This is similar to how SSP’s service the publisher.  You cannot be all things to everyone and when this happens, decisions sometimes become very tough to make as you try to please too many constituents.  Think about all the decisions Google (and Admeld) had to make about where to flow it’s ad dollars – to Google-run sites or it’s 3rd party network of sites.  Stick to one core area of focus and innovate within it.

This area gets continually dinged because there isn’t a ton of money to be made.  $0.04 average CPM and 200 billion monthly impressions net out to about $8MM in monthly ad serving fees (~$100MM/yr).  That’s a nice company but think of how many are larger.  If you create a robust reporting & analytics infrastructure, ad verification, workflow solutions, etc – you can charge a premium.  I believe you can.  Create a premium bundle of services to execute within the Ad Ops space, and sell them as one package.  There are buyers.

The space is only going to heat up further.  Continued innovation, a lot more media technology thinking, and investment will raise the industry forward.  I know I want to be a part of it!

Areas of Interest from kbs+p Ventures Summit

We launched kbs+p Ventures about 6 months ago as an early stage investment arm of our agency, kbs+p.  Last Friday, we hosted a summit where we brought a small group of people with both visionary and tactical backgrounds to help us filter the areas that are of potential investment focus.  While most firms keep this confidential, following Fred’s recent post over at AVC, I’ll open these thoughts up as well.

Why?  I hope that any of you reading this blog might help point me/us in the right direction of entrepreneurs who are innovating in any one of these spaces.  You can easily get in touch with me here or on Twitter or LinkedIn.

In no particular order:

1.  Virtual Currency – what will the impact be of Facebook Credits?

2.  Measurement – how do you measure engagement?  How do you value “social”?

3.  Fan Acquisition – what are the best ways to acquire “fans” and “followers”?

4.  In-Stream – should brands participate in the stream of conversation and if they do, what are the rules to play by?  A company who is participating here is 140Proof

5.  Influence – how do you buy influence?

6.  No two networks or channels are used the same way.  I.e. While Facebook is a social channel, so is Linked In.  Think about the differences in your usage.  Compare this to 20 years ago when ABC and NBC, both television stations, were used similarly.

7.  With millions of web publishers, how do you match creative to each individual publisher?  It’s tough.

8.  We spend a lot of time targeting specific audiences, but an additional filter to overlay is “mindset.”  Are they currently in the “mode” to purchase? How do we differentiate messaging based upon where audiences are in the funnel?

9.  How do we combine SEM + social media monitoring.  If a topic is trending, how do we buy SEM against it?

10.  Predictive Trending – how do we predict what might trend and then purchase advertising around it.  (current company doing this is buzzfeed)

11.  How do we create video at low-cost, and then scale the distribution

12.  There currently isn’t one cohesive “stream” of me.  How can we harness the entire stream?  Where will the meta-stream live?

Leave comments and/or questions.  Would love to elaborate on any or all of these.

We (and they) are hiring!

At my last startup, we used our investors not just for business guidance, but also as talent scouts.  They were constantly meeting interesting people who were looking to join or build the next big idea and they helped us place some great talent within our organization.

Now, as an investor at kbs+p Ventures (and still an entrepreneur), our portfolio companies are asking us for hiring help.  Taylor and I are working on an internal & external talent management tool but I didn’t want to wait to publish these until it’s polished and released as it could be another month or so.

Here are some awesome opportunities from our portfolio (and friends of ours) who have asked us for candidates:

Crowdtwist:  A New York based startup who drives customer engagement through next generation loyalty software. CrowdTwist’s activity engine intelligently tracks consumer interactions with your brand (i.e. consuming, creating, sharing, purchasing, etc.) within your own site and across other destinations online. They are currently looking for:  Director of Engineering, Project Manager.  A New York based startup who has made it extremely easy to buy media and audiences across the social web.  I personally call these guys the first social DSP.  They are currently looking to hire:  Ruby Developers, Data Scientists, Account Managers, and Summer Interns

The Media Kitchen:  New York based communications planning and buying agency (part of kbs+p) is hiring an Associate Director of Media Technology.  This position will be reporting into myself and will be an awesome role for someone who understands the infamous GCA/Luma Partners slide and reads AdExchanger daily.  Job description is located here.

If I missed any opportunities, I’ll post again in a few weeks.  If you are interested in applying for an opportunity, please contact the company directly (follow instructions on the opportunity page).

Enhanced by Zemanta