Matthew: We know founders face unique challenges when they decide to launch and build a company. What was the hardest part about getting VigLink off the ground and how did you overcome this obstacle?
Oliver: I’m sort of tempted to say raising money. And I did the thing, that again, I would not recommend doing, which is I raised money first. I think in retrospect, you know best practices, build something that you think can work. Show some traction and then go and raise money. It will be a lot easier. I didn’t do that partially because of naivete and partially I didn’t have a lot of runway to sort of work on my own without a salary. Initially, I would say that would be my answer. But to be honest, that process was actually quite fun. At the end of the day, you’re just talking to smart people about your cool idea, and you sort of think, if this doesn’t work out, this conversation was still worthwhile.
I would say the hardest part is probably getting the initial seed of the team, the right people on board who are really top caliber to really believe in you. I think counter intuitively that’s actually harder after you get funded than before. I think before, this is such a founder level equity, they feel like a founder. I think after its employee level equity, and getting those really amazing first people is really tough. We did it, but I would say there was definitely some luck involved and it took longer than I wish it had.
Matthew: Since you’ve been in operation, what have you learned about your business or your users that you didn’t realize?
Oliver: Well, I’d say probably, I mean, this was a really counter intuitive lesson. Well, two things I guess. One is when I was sort of first thinking about and pitching the idea, we don’t approach the merchants directly. We work through companies called affiliate networks. Certainly, the business was actually entered in the business school competition, business plan competition. And the number one objection I got was the affiliate networks will instantly try to figure out that you’re trying to disintermediate them and just crush you instantly. The truth is, we have a great relationship with them. They fly us down to Santa Barbara and buy us steak dinner. We would frankly never think about running around them. A company our size trying to deal with 18,000 merchants directly is out of the question. So we were worried these guys were going to be our enemies, and they’re actually our friends. So I think that was one thing.
Another one was the wrong customer can kill your company. The first big deal I closed, I’m not supposed to name the publisher, but it was a very large publisher, less large now than it was then, and sort of a great energy and effort I got this publisher on board. They made something like $5,000 a month. So my investors were like, “Wow. So if you sign up the whole Internet, you’ll make a million dollars. Let’s shut this business down immediately.” Thankfully we sort of hung on long enough to find some other customers and realized that the rate at which they monetize varies, five or six orders of magnitude by customer. The wrong first customer, I’d say, was sort of a near death experience for the company.
Matthew: Lots of people admire entrepreneurs because they appear to make building companies look easy. We know it can be really challenging. My question for you is what talents or skills come easily or intuitively for you? What has been difficult, and how have you managed that?
Oliver: I think in my mind the core function of the startup CEO is the pitch. You start by pitching co-founders and friends. You pitch customers. You pitch investors. More customers, more employees. The press. So I’m told one day inquirers. So you better be good at telling that story and being enthused and meaning it. I think that was pretty easy for me. I think I really am very excited by the idea, and it really sort of goes a lot further. Ultimately, we’re talking about driving the monetization of content in lots of interesting ways. So, being enthused about what you feel like is a really good business is easy.
The harder part I’d say, for me personally, is there are a lot of threads running in parallel, and it’s very easy to turn, to sort of swap so much that you don’t actually make traction on any of them. If you have a deal in the works, to pursue it all the way to the customer has installed and is live and then you call them the next week. How’s it going and you stay in touch. That kind of ongoing follow-up with hundreds of threads in parallel, I find quite challenging. As the team has grown, I have managed to offload some of that. But that’s quite challenging.
Matthew: What’s the most important lesson you’ve learned building VigLink?
Oliver: That’s a good question. I think it really is all about the people. You hear people say that, and you think, okay whatever. But it really is the difference between someone who is really productive and someone who is tenfold or a hundredfold. I think selecting the right people and convincing them to join you, empowering them, making them excited, keeping them excited, keeping them on board, getting even more people and growing, that I think is the core challenge. You are building an organization. The product flows out of that. The customers flow out of that. The culture flows out of that. It’s really about getting the right people on board and keeping them on. It’s tough.
Matthew: Can you share with the audience an experience when you dealt with failure?
Oliver: Absolutely. Well, as I mentioned, I attempted fundraising 96 times. It didn’t really feel like failure to be honest. There was a moment where the company was near death. We had raised a seed round. We had built a cool product, but we had insufficient customer traction. It was just not enough money coming in to justify further investment. I think probably another good lesson learned is the bar. It feels so hard to get over that seed bar, like, “Oh, can I convince someone to give me seed money?” But that really is the lowest bar. When you go and raise A money, you realize how easy seed was. Then when you go to raise B money, you realize how easy A was. I’m sure if I raise more, the bar only gets higher. There was a moment where we sort of wondered if we were going to make it. We were low on cash. We had insufficient customer traction. Then I ended up in a fairly lucky thing getting in touch with the CEO of one of our competitors who had a lot of customers and not so great engineering. We realized that there was a great match there. We ended up buying this company.
It’s funny to say I was running out of money, so I went and bought his company, but that is in fact what happened, in the sense that I could raise money to buy his company in a way that it was hard to raise just on our own. So the combined entity, suddenly had critical mass and all the ingredients we needed, and we really took off from there. When we raised money later, the ball was in our court.
Matthew: What advice would you like to share with our audience about launching a startup? If you have to distill it, what are the key elements?
Oliver: Well, I’d say it’s definitely not wait for the right idea. I think I hear so many people who say they are aspiring founders saying I would do that if I had the right idea, or I don’t have the right idea. I know quite a few founders now, and I don’t think I’ve met anyone where that’s how it happens. Inevitably they want to start something. They are looking for an idea, and they pivot ten times before they figure it out. So I would say the key ingredients are just the thirst to go for it. The moment I knew I was serious about VigLink was in February 2009. I had a job offer and I called the company to say I’m not taking your job because I’m going to go do this startup. This startup at the time was one sheet of paper. That is what’s required, that thirst. I think if you can get two of you in a room that have complimentary skills and between you, you can both build something and sell it, that’s the key ingredient.
Matthew: Before we close, we’d love for you to give our audience your vision for VigLink and how you hope it will change the world.
Oliver: It’s not weird to you that if you reload a web page the display ads are different every time. Your friend sees different display ads than you. You know that under the covers somewhere something complicated is going on to show you the right display ad. We think the links you see in content and where they point should be decided dynamically using a similar sort of algorithm. That is a very big business and that’s the business we’re excited to build.
Matthew: Oliver, it’s been an honor having you as a guest on FounderLY. We’re rooting for your continued success. For those in our audience who would like to learn more, you can visit their website at www.VigLink.com. This is Matthew Wise at FounderLY. Thanks so much, Oliver.
Oliver: Great. Thank you so much. Pleasure to be here.