A sharing of experiences, tales and rants of the path leading up to and including my 6th startup company (the Rubicon Project). 6 startups = $1BN+ market value including 1 IPO, 2 acquisitions, 1 failure, millions in venture capital $, hundreds of employees in cities worldwide and the building of my latest venture, the Rubicon Project - one of the fastest growing advertising companies in history.
The formula for a great company is not a business model, or financial projection.
I used to think that company culture happened naturally. After starting and building five companies, I've learned that great culture doesn't just happen—you need to make it happen. In general, a company's most expensive asset is its people. So it surprises me that so many companies fail to develop a culture or "people plan" to invest in and grow that asset.
When I started my most recent venture, the Rubicon Project, an online marketplace for ad buying, the first thing I did was create a blueprint for our culture. I talked with the founding team about the kind of organization we wanted to build and the values that we'd instill to guide our employees.
We didn't start with a business plan, product roadmap, or marketing budget. Why?
(my first article of a weekly column that I'm writing for Inc Magazine)
A five-time entrepreneur makes the case for launching a company in Silicon Beach. He's not the only fan.
Los Angeles is the capital of small business in the United States, according to Los Angeles Mayor Antonio Ramon Villaraigosa, at a reception earlier this month for Ernst & Young Entrepreneur of the Year Finalists. L.A., dubbed "Silicon Beach," has become a breeding ground for successful Internet and advertising companies. I have a theory about why.
I moved to L.A. (from Chicago) 13 years ago, in the midst of the dot-com boom, to build an online advertising company, L90/adMonitor. In addition to warm weather and beautiful beaches, I found a very creative, innovative talent pool of agile thinkers. I think it was behavior bred from Hollywood, an industry that's highly competitive and constantly innovating. We had a great ride with the company. And we didn't raise venture capital money until our IPO.
Make decisions. Wrong or right, making quick, informed decisions is far better than not making a decision at all. Not making decisions is what kills companies. I've learned to pick up on interesting patterns from the five companies I started prior to Rubicon Project. In general, when my companies are feeling stressed or headed in the wrong direction, it's usually because the decision-making pipeline is clogged. When my companies have done their best, it's usually because they're making quick decisions, learning, reacting and adapting quickly.
The first step in making quick decisions is to make sure that you have complete alignment with your team. Everyone needs to clearly understand the objective and be in the right mindset. From there, you'll be able to make quick, informed decisions - get everyone behind that decision and go. If you're right - congratulations, you took a leap ahead. If you're wrong, no worries, you just eliminated one of the incorrect possibilites which means you're more likely to make the right choice with your next decision. Just make them quick and make sure they're informed.
Every day that we hold up progress because of our inability to make a decision is very, very costly…So remember - wrong or right, making quick, informed decisions is going to get you to your goal faster.
So, what's holding you up? Make a decision (or force someone else to). Now.
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-devleop 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!
- the Rubicon Project Acquires Fox Audience Network for Technology and Team
- Closes $18M Growth Financing
- Company Reaches Profitability; Ahead of Plan With $100M Revenue
- John Carnahan Joins Company as Chief Technology Officer
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 Rubicon Project has reached the point in our development where it’s become time to switch gears. It’s still all about optimization, but now it’s about optimizing for profitability, not speed. Why? It’s time to go from the “find out” stage (building) to the “roll out” stage (making it work). Now that we’ve figured out the business model, proven scale, achieved critical mass, successfully executed multiple acquisitions and have deployed globally – now’s the time for us to focus on scaling profitability.
When optimized for speed, you should expect that 30% of all of your efforts will be wasted:
- 30% your decisions will be wrong;
- 30% of your money will be wasted;
- 30% of your time will be wasted.
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.
But the truth is that there was waste. We raised a lot of capital – $42 million, to be exact – and with that kind of capital we were able to make some investments in areas we never expected to do as quickly as we have. For example:
·Our plan had us opening only one international office in 2009-2010. Instead, we have built strong presences in 5 countries: the U.S, U.K., Australia, Germany and France;
·Last year, as we saw the market moving toward buying by audience, we successfully acquired an audience data company called OthersOnline. With the 50 billion ad transactions, 550+ million users, 9 billion page views, 135 million daily search results and 500 billion keywords we process monthly – we were able to turn this data into dollars for our customers with this acquisition.
·Acquiring a malware security company was something we neither anticipated, nor would have been able to do without strong capital and revenue. But as it became clear that malware was a large and growing problem for publishers, we made a strategic move, and in May we acquired SiteScout for their proprietary, advanced security platform and their brilliant team of security experts joined our Rubicon Project family.
·New product launches outside of our original plan: Audience Data Platform, Brand Protection Platform, Permission Controls and Protected RTB (private beta)
Some of the decisions and investments we made in those first three years for the sake of speed don’t make sense any longer.
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.
Now that we’ve got great traction in the marketplace as well as the technology and products in place to automate more of the business both internally and externally, we’ve moved into a strong position to achieve the ultimate test of success for any startup company and its stakeholders: profitability. We are on track to do $100M+ in revenue this year, and with discipline, will reach profitability in Q4 of 2010. All of this in just over two years of launching our product into the market... What does optimizing for profitability mean to us day-to-day as an organization?
Discipline
Focus
Performance
Discipline: there are many examples of maintaining good discipline – around spending, product development and growth as a business. In addition, there must be discipline around ensuring that all the team members who are with us are at the top of their game – and completely focused on the right things. To truly be optimized for profitability, you have to make decisions about people who aren’t hitting their performance targets with greater discipline than you might have during an optimized-for-speed phase.
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:
-#1 Yield Optimization (maintain current position)
-Top 5 Source for Audience
-Top 2 Source for RTB
This is all in the spirit of maintaining our position as the innovation leader for publishers.
Performance: In this case, I’m talking about customers, not employees. We’re more committed than ever to achieving the publisher-centric goals we set out in our manifesto in February: to innovate digital advertising technology for publishers to keep digital media free for consumers and to help content flourish. To do this, we have to be sure that our technology platform, REVV for publishers, is the best possible choice for accelerating ad revenue – essentially that it continues to outperform the alternatives in all the areas we’re focused on. So we’re adding people and other resources in the areas that drive our technology; including 5-8 people on our product and engineering teams to help us achieve the technology vision we laid out in our manifesto.
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.
Ok, I’m going to revive this blog. Thank you to all of you who have sent me emails requesting that I continue writing. My apologies for going MIA! Without trying to come across as though I’m making excuses, it was difficult for me to keep writing after I broke my arm last January. The recovery took about a year – even now, typing for extended periods of time strains my hand. I’m still rebuilding strength from my damaged nerves over a year later. After not writing for a while, it was difficult to jump back in. So, I just decided to just do it (lame Nike reference, I know!)
Aside from the broken arm things at the Rubicon Project have been exploding. We grew 270% on a revenue basis in 2009, went from 35 to 150 employees, set up offices all around the world (London, Australia, Hong Kong, etc.), raised $33MM in venture capital and launched a bunch more products. Needless to say, things have been a little nuts for me. Rather than use that as an excuse, it has inspired the topic of this post.
I run a very different company today than I did a year ago. Running a global company with multiple product lines, a much larger team (spread out in offices around the globe) and hundreds of millions of dollars flowing through our platform has completely changed the dynamics of the business and my role has needed to change in it, accordingly. Personally, this has been a big shift for me, and one that came quite rapidly. I could have never planned for Rubicon’s rapid success and the last thing on my mind was how to plan for the evolution of my role within it. In short, I’ve had to go from playing “running back”, to “quarterback” to now “coach.” There is a big difference from “doing things” and “being responsible for things getting done” and it’s a difficult switch for scrappy entrepreneurs (who are used to doing everything themselves in the beginning) to make. Two years ago, I was building desks along with my co-founder Craig to keep our engineers building, our sales people selling and our support team servicing. It was the right thing to do at the time. Today, the company footprint is very different, its goals are more complex, the risks in the business are intensified, the opportunities are greater and more plentiful and I have a lot more people to answer to as the overall equity value of the company has dramatically increased (investors, employees, shareholders, etc.)
I’ll write a series of posts on CEO/Founder evolution, but the one that I want to focus on right now is probably the biggest lesson I have learned: Get the hell out of the office! My company is no longer confined to the walls of our headquarters in L.A. We now exist in San Francisco, New York, London, The Netherlands, Germany, Australia, Hong Kong and soon to be in more cities, countries and continents. We have customers, partners, employees, press and investors in all of those places and prospective ones as well. We’re operating in different economies, with different laws, cultures and markets. Sitting in our headquarters in L.A. would give me a limited and skewed version of what’s really going on in the company and in the markets we operate in around the world. The only way for me to get a true picture of our evolved, global business is for me to experience it directly, and sitting at my desk only hindered my ability to gain a broader, more global perspective.
So, I’m doing just that. I vowed to get out of the office. The first step was to change my role internally. I was spending a lot of time doing things like editing press releases, product roadmap reviews, putting together presentations, etc. It was too “in the weeds” and it was preventing me from taking an external perspective on the business looking in. I was also slowing things down. I would get involved in a project, then I’d have to leave on a press or customer tour for weeks. In the meantime, the project would stall. I became a bottleneck. That was the first thing that needed to change.
Fortunately, I already had a strong leader within the company, my co-founder and our COO, Craig Roah. I shifted all internal responsibility and day-to-day management to him. Everyone in the company now reports to Craig directly. Not to over-simplify business operations, but it’s like baseball. Throw the ball, hit the ball, catch the ball – that’s baseball. Business is: build great product, sell great product, support great product – that’s business. There is no one better in this market to build and support great product than Craig. Together, Craig and I decided that we needed to put someone in charge of selling. Fortunately, we also had a great leader there, JT Batson (recently referred to as G.O.D. in the January 18th, 2010 issue of Forbes.) We rolled up all revenue responsibilities under J.T. In short, I simplified my internal responsibilities and lines of communication so that I would not be a bottleneck to the organization.
This was a difficult transition. It required great discipline to “get out of the way.” and to “teach people to fish” rather than bringing them the fish. Some employees questioned my commitment to the business, wondered where I was because I wasn’t jumping in with them to solve every problem, I wasn’t sitting at my desk next to them like I used to and I also became much more selective with the meetings that I decided to accept. It was absolutely the right thing to do and the business is much stronger as a result, but it was a somewhat painful transition personally. I’m not a parent, but I imagine there are similarities to a parent sitting back and letting their kids make mistakes, knowing that it will only help them grow smarter and stronger.
So, my first goal was to make myself unnecessary to running the business internally. I was successful in accomplishing this. My next goal was to figure out what my role should be as “coach” instead of “quarterback.” Here is what I came up with as a start:
1. Right Team:
a. Make sure I have the right team managing the business
b. Ensure they work well together
c. Mentor the team
2. Right Goals:
a. Set the vision for the company
b. Bring them perspectives from the market (financial and industry)
c. Ensure that the team is setting the right goals based on the above
3. Thought-leadership:
a. Internally (managers and staff)
b. Externally (customers, press, analysts, financial community)
4. Investor Relations & Board Communication:
a. Ensure the company has the capital accessible to achieve its goals
b. Keep all shareholders in sync so we have everyone marching toward the same goal in full force
In order to do this, it’s important that I have all of the information. I can’t absorb this information by sitting in our corporate headquarters. I need to go to every country that we either operate in or intend to operate in. I need to absorb the cultures of those countries and explore the markets and economies. I need to see how advertising works in each of those countries and compare/contrast them to the U.S. markets that we’re familiar with. In some countries, I need to understand the government or legal impacts on the business, either operationally (e.g. employment laws, patent law or taxes) or advertising market-specific. For example, in certain countries, people are bound to employment contracts (mainly for their protection) so they are required to give many months notice if they are going to quit to go to a new company. Conversely, companies are also required to give them similar notice in the event of a layoff. This can play a pretty significant impact when you’re planning on entering these markets (i.e. you can’t enter them as quickly as the U.S., for example) or the risks involved (i.e. you can’t unwind a mistake as quickly either.)
Let’s compare communication, which is one of our cultural values. There are cultural nuances that exist within regions or countries. Just as New Yorkers (i.e. very direct) communicate differently than Angelinos from L.A. (i.e. more laid back), the same exists from country to country. Right now, I am in Australia and I’ve noticed that people are pretty direct and often don’t use pronouns in their writing or communication. Personally, the lack of a use of pronouns in emails (e.g. “Hi Frank. Wanted to reach out to you to schedule a meeting.” – omitting the “I” before “wanted”) is a pet peeve of mine. I view it as a sign of laziness. However, in Australia, that seems to be common communication. This is a small example. There are larger ones, such as how the Japanese will politely say “That’s very difficult” and what that really means is “there is absolutely no way we are going to do that!”
Market nuances are extremely important. In the U.S., there is a big ad quality and content quality challenge for publishers and advertisers. Publishers don’t want “belly fat ads” on their site and premium brands don’t want to show up next to them. In Germany, their standards are extremely high. They consider an ad quality problem to be when a BMW ad shows up on the same page as a Honda ad (i.e. thinking that the Honda brand is of lower quality.)
Direct interaction with economies can also tell you a lot. Since it was my first time in Australia, I did some site-seeing in between business meetings. I learned that it seems that Australians are concerned about the economy and have pulled back spending on things like eating out and entertainment, however, they still spend on travel. Travel is important to them. This is very different than the U.S. This could be good information when deciding where to invest or focus in certain markets or regions.
Talking directly to employees in offices outside of headquarters is crucial. You learn a lot about how they view communication with their sister offices, what they’re seeing in the market and you can absorb their ideas. All of this information is important when trying to fill the logical part of your head with information that you need to develop that “gut feel.”
I have seen the company evolve quite a bit over the past six months. As a result of the changes I’ve put in place, I believe the company is much more scalable and sustainable. I am not a bottleneck and the team has become far stronger. It is parallel processing and doing so in multiple time zones on multiple continents and has melded well with multiple cultures. This is important to me for both geographical expansion as well as inorganic expansion through acquisitions. We completed our first acquisition mid-2009 (of OthersOnline) and the culture mesh has been fantastic – they are some of our best people. We anticipate doing more acquisitions, and proving that we can absorb one successfully was a good test for us. I hope that by traveling and spending more time out of the office that I’ll be able to:
a) Gain the direct information, exposure and knowledge that I need to make the right “gut calls” for the business going forward, globally
b) Expose the team to new ideas, experiences and challenges
c) Figure out what the next big thing is for Rubicon while the team is cranking away on our current big thing
I can go on and on… I think you get the point. Get out of the office!
P.S. – While traveling, I’ve had to put my Pay It Forward events on hold… I feel really bad about it. I’m working on figuring out how to incorporate the events into my travels and will hopefully be able to turn it into more of a global event. Stay tuned…
I decided to try doing a video blog post. Here is a tour that I did of the Rubicon Project headquarters and all of the thought that we have put into things like culture, communication, efficiency, team development (and a little fun)... We have woven these things into our environment and I thought I'd share our thinking with you.
Some highlights to look out for:
Furnished on a low budget (IKEA furniture, etc.)
"No Office Policy" - everyone sits out on the open
I receive an overwhelming number of meeting requests and would like to accommodate as many requests as I can. So I am organizing a monthly event called “Pay It Forward” that will give 10 students and aspiring entrepreneurs with common interests the chance to sit down with me and discuss the following:
Entrepreneurial Lessons
Team Development
Building Companies
General Brainstorming
Whatever is on your mind!
The setting is informal and will be held at the Rubicon Project’sHeadquarters in LA (fun fact: It is the original set of the TV show “24”). To make sure we can organize the groups accordingly, if anyone is interested, please kindly answer the following questions and respond by end of day this Sunday, April 12th as we are looking to potentially host the first event next Wednesday, April 15th. If we can fit you in the event, then we will.
Please tell us a bit about yourself
What are you looking to get out of the meeting?
One of my favorite quotes is: “The future belongs to those who believe in the beauty of their dreams.” Please describe your life dream.
Please describe how you would take the information you gathered from the event and pay it forward.
The event will be video taped and shared with other entrepreneurs and students on this blog.
We will review all responses carefully and although we can’t promise we will be able to sit down with everyone who responds, we certainly will do our best!
Recently, I was asked to present my philosophy and methodology toward building what I call A++ teams at the Startonomics conference. Below, you'll find the video recording of the presentation and the actual presentation itself.
My apologies for the lack of posting to my blog -- I broke my arm snowboarding six weeks ago which makes it hard to write. :-)
My (now former) assistant, Mallory Portillo, was the very first employee outside of the founding team at the Rubicon Project. We’ve grown quite a bit since she started just over a year ago. With our strong commitment to team development and culture, Mallory is now moving on to a new role. She’s going to be responsible for culture, training and communication (see our Cultural Values.) I did a Twitter post about how we do culture surveys and I got a lot of requests from people asking about the process and the questions that we asked. So, I asked Mallory to write a blog post about it, so here is her contributed post…
Cultivating, maintaining and growing a motivating culture at a fast growing start-up company is not a simple task. When I joined here, we were a small office of six and now we are rapidly approaching 75!
As we got bigger, one of the major things we wanted to focus on was gathering culture development feedback and learn about areas for improvement. We knew our team was relatively happy, but we wanted to know what exactly we could do to make their daily experience better and not feel like “work.” We developed a survey to be administered to our entire team using a great survey generator and delivery service called Survey Monkey (you can access the survey builder and deliver it to your team at www.surveymonkey.com). We kept it completely anonymous because we wanted honest, valuable feedback and not what people think we “wanted to hear.” The survey asked our team to describe their daily experience, including why they get up for work in the morning, what they value about coming here, and what they would do to improve communication and the feeling of appreciation among employees at the company.
From the results of the survey, we learned that our team feels our overall company culture is high but wanted to improve on specific areas like communication between departments and employee appreciation. From this feedback, we improved interdepartmental communication with the adoption of Yammer, a new micro-blogging tool which allows everyone in the company to discuss ideas, post news, or ask questions to the entire company. We even devoted a large plasma screen in our office to the feed, which is constantly broadcast to the entire team and anyone who visits our office. It has become a great way for people to interact between departments, remote offices and traveling team members.
From feedback on employee appreciation, it became apparent that the feeling of appreciation across departments was the lowest. In order to encourage people in different departments to show that they value others outside of their own departments, we developed a program called Rubi Rewards. Each employee gets a $75 Rubicon Visa gift card each quarter to show their appreciation to one or more people in the company who they feel stood out in the organization. Examples of why people have given Rubi Rewards includehelp/assistance on a project, having a really positive attitude or inspiring them in some way. Both of these programs, which came as a direct result of the survey, have been in effect for only a few months but the feedback from our team has been extremely positive.
There were, of course, things that surprised us about the survey. We expected our team to rank our company culture a 7 out of 10 (I even thought it might be a 6!). Our average was an 8.44, which while is not close to the 9 out of 10 that we are someday hoping to achieve, it does mean we are headed in the right direction (we will never rate ourselves a 10 because that means we are no longer trying to improve). It is great to know that the time, effort and resources we are investing into maintaining our culture is valued by our employees. However, just like our technology, we are never going to stop improving and innovating!
These were our takeaways from this experience:
Culture is something you have to cultivate, reflect on, and constantly improve.
You cannot be afraid to ask tough questions and confront things that aren’t working.
The only way to know what would make people happier, more effective, and ultimately keep them around is to ask for their feedback.
Every group is different, as is every individual. Culture is driven by reaching and inspiring individuals to act together as a team. What works for some may not work for others.
A strong company culture is not mandated but rather created by the very people who live and breathe it everyday!
We have included the questions we asked our team for reference, in case you were interested:
Culture section: 1. Please pick four words that describe the term “entrepreneurship” 2. Please pick six words that you feel describe the Rubicon Project. 3. Please pick three things that you like most about working at the Rubicon Project? 4. Please pick three things that you like least about working at the Rubicon Project? 5. What motivates you to come to work each morning? 6. How would you rate our culture, on a scale of 1 to 10? Consider 1 to be the lowest and 10 the highest. 7. How do you describe the culture of our company to your friends and family? 8. How would you like to be able to describe the culture of our company? 9. If you were in charge of improving culture, what changes would you make? 10. Please suggest 3 activities for company bonding events (ex: bowling night or wine and cheese tasting). 11. Do you normally attend company events? 12. What suggestions do you have for improving company events?
Communication section: 13. Overall, do you feel that people in the company are supportive of each other? 14. How often do you feel valued and appreciated as an employee in your department? 15. Do you feel valued by others outside your department? 16. Do you feel comfortable approaching leaders in your department to discuss ideas or problems? 17. Do you feel comfortable approaching leaders of other departments to discuss ideas or problems? 18. Are you motivated by other people in your department? 19. Are you motivated by the other people at this company? 20. Are you motivated by the overall leadership at this company? 21. Do you feel that you always do you best to be positive and motivating to others? 22. How can we improve the process of getting feedback on company culture? (ex: this survey, anonymous suggestion box, etc.)
Given our commitment to transparency (also a key part of our Culture Values), below I have included the results of our survey (it's the exact presentation that we delivered to the team). It is a Culture Roadmap (just like you would have a business roadmap or a product roadmap)
Last week, our office manager, Lindsey Mitten, instituted Green Week. One of our Cultural Values is Community, which includes environmental responsibility. I thought I’d share with you what we did for Green Week(I'm actually re-purposing the email that Lindsey sent to the team.)
Each morning Lindsey sent out an email letting everyone know about the small “green” project for the day. She also posted some friendly reminders around the office.
So, staying with the theme of this blog, what’s the business lesson here? Well… First, going green can save you money (something critically important during today’s economic times.) Second, it brings the team together for a common cause and builds pride, mutual respect and purpose. Third, it’s simply just a good thing to do.
You could feel the energy (no pun intended) in the office change every day when Lindsey announced a new green initiative.
Rubicon Green Week Initiatives:
Monday:
Changed all of our light bulbs to CFLs (Compact Fluorescents)
Did you know? “Compared to general service incandescent lamps giving the same amount of visible light, CFLs use less power and have a longer rated life. In the United States, a CFL can save over US $30 in electricity costs over the lamp's lifetime compared to an incandescent lamp and save 2000 times its own weight in greenhouse gases.”
Tuesday:
All disposable paper products that we usually use were replaced by 100% recycled or alternative paper products.
Wednesday:
Passed out individual recycling cans for every desk next.
Thursday:
Carpooling, biking, or walking to work. Everyone who did it got a prize.
Friday:
Switched all office cleaning products (general cleaner, dishwasher detergent, dish soap, hand soap, glass cleaner) over to eco-friendly products which will eliminate toxins in our company’s waste water. If you are interested in any of these products, please check out www.buygreen.com.
From Here on Out:
All paper in the office will be 100% recycled
All cleaning products will be eco friendly
CFLS will be used in place of regular light bulbs
Better recycling system (cleaners know that recyclables go in the white dumpster and trash in the gray dumpster)
All paper products (towels, napkins, plates etc) will be at least 25% recycled if not 100%
More recycling trash cans will be placed around the office
I will try to use more of the reusable bags for groceries
Looking Towards the Future:
Commercial composting
Setting up carpools
How to Help:
Consider printing out internal documents double sided
Shut down your computer! One computer left on overnight equals the use of an entire 60 watt light bulb.
If you are the last person leaving an office or conference room, remember to turn off the lights!
Try to eliminate “Vampire Energy” by unplugging devices that you aren’t currently using
Use those recycle bins I gave you and the ones placed around the office
Go green on your way to work
It was such a huge success; we will be doing a “Green Week” once a quarter from here on out…
I did this video interview for Dog and Pony (below) about Creating a Culture of Innovation. Many of the viewers asked that I share our list of Cultural Values here at the Rubicon Project. So, here they are...
the Rubicon Project Cultural Values
Innovation: We invest our thinking and resources into change that will propel the industry and this company forward.
Transparency: Knowledge is powerful. Transparency keeps us honest. We believe in the highest level of transparency possible with our team, investors and customers.
Active Communication: Communication makes or breaks relationships. We will devote time and effort to make communication a priority.
Humility: While we enjoy winning, we will not let our success get to our head.
Respect: Team development is top priority for us. We hold in each other in high regard and have zero tolerance for disrespectful behavior.
Community: We consider ourselves to be fortunate and believe in paying it forward to those in need.
Competition: We are driven to win and are highly competitive; externally not internally.
Pride: Personal pride in our work is the number one criteria for our team members.
Speed: We go fast but don’t hurry.
Do More with Less: Constantly find ways to do twice as much with half as much time, money and resources.
Mistakes are OK: If we aren’t making mistakes, we aren’t moving fast enough. Making mistakes is key to innovating and learning.
Fun: We will celebrate our wins together, big and small.
I had to put together a video introduction for The Lobby conference again this year. I can't say much about The Lobby other than it is a get together of industry thought leaders to talk about the future of the Internet. I can't say much about it because it is supposed to be "off the record" and blogging, micro-blogging and reporting about the conference is strictly forbidden.
Anyway, everyone attending the conference is required to put together a video introduction about themselves. So, I wanted to share mine with you here... It's a "behind the scene's" look into the secret to our success here at the Rubicon Project... Enjoy! =)
Click here to see my video from last year (and the thought process behind it), the "L.A. Video" that seems to have made it's way around the Internet with over 10,000 views...
Special thanks to my friends Ryan and Wayland for helping me put these videos together... If anyone is looking to produce a video, let me know and I'll happily introduce you to them - they're amazing! They also did our famous "Golden Eggs" video for us at the Rubicon Project explaining the Ad Network Optimization problem.
Two of the unique values of our culture at the Rubicon Project are transparency and active communication. Communication takes effort, but we make it a priority. Transparency is a big commitment but it's also a discipline that, while difficult at times, is incredibly beneficial.
A lot of people ask me about the things that we do to promote active communication and transparency, so I thought I'd share them with you in this post:
1. Team Meetings:
Board Meeting Update (once a month): I like to hold monthly board meetings. They serve two purposes. First, regular communication with the board. Second, regular communication with the entire team because we share the -exact- same board of directors meeting presentation with the entire team (yes, really - exactly the same.) This is much easier said than done. It forces a certain discipline. For example, I cannot tell the board something that the team is not already aware of (e.g. problem areas in the company or concerns) because I know we’ll be sharing those same exact slides with the entire team. Vice-versa, I can't tell the board something that the entire team wouldn't agree with because they are living this business everyday. If the team saw something in the board slides that they didn't agree with, I wouldn't be able to stand up and present it to them with a straight face. It forces complete alignment with everyone in the company all the way through to the board.
Themed Team Meetings (once a month): We have a “team meeting committee” (led by Lisa Backman from our Yield Management team and Mallory Portillo, my assistant) that is responsible for coming up with a new theme for every team meeting. This keeps the meetings interesting and informative. Every department has to create their updates to reflect or address that particular theme. Additionally, we require that a different person from each team (not the team leader) present the update. Some of the themes have included:
Ask Anything: people were able to use our anonymous suggestion box (see below) to ask ANY question (yes, anything) and we would answer it in front of the entire company (BTW, this was a potentially very scary thing to offer up considering that we had no idea what kind of questions would be asked – really tests the level of transparency commitment)
3 Positives, 3 Negatives
How will your life change after the next product release?
What are you worried about?
United Nations Meetings (weekly): We do not have “management” meetings, we have what we call United Nations meetings where all the group leaders get together and give department updates and discuss key issues.
2. Rubicon University: We also have a Rubicon University education committee (lead by Ryan Dranginis from our Ad Network Development team). There is a class syllabus and every week, during lunch, someone from the company does a presentation to educate the entire company. Classes are typically 30 minutes in length. Topics have included:
3. No Offices: No one in the company has an office, everyone sits out in the open. There are no walls or dividers between desks. There is nothing to prevent communication flow and believe it or not, noise distractions are rarely a problem.
4. Boiler Room: Every morning (without exception) at 9:30am our Publisher, Account Management, Ad Network Development, Yield Management and Product teams get together in our daily Boiler Room meeting and go through all of our customers’ goals. We treat each of our customers like stocks and manage them like a stock portfolio to ensure that they are meeting their performance goals. It is all automated through a performance dashboard that we created specifically for this meeting. Either I or my Co-Founder & COO, Craig Roah, run the meeting every day. It forces us to pay attention to all of our customers and over 30 people are present for the meeting, soaking up valuable customer information. The information flow and accountability that comes out of this meeting is incredible.
5. Anonymous Suggestion Box: We have setup an online anonymous suggestion box where anyone in the company can send anyone else a suggestion/comment anonymously. Comments have ranged from “attitude/behavior” suggestions to “it’s too cold in the office.” We try to encourage open communication, but sometimes people are shy or it’s easier to submit an honest comment anonymously. We want to promote as much communication/information flow as possible, and this has been a very useful tool for us.
The only thing off limits when it comes to transparency is sensitive financial information (e.g. salaries, compensation, confidential investor information, etc.) I encourage everyone in the company to speak their mind and ask any questions they may have. I haven't heard a question yet that I have felt uncomfortable answering. It's quite refreshing, actually.
All in all, the investments of time that we make into active communication and transparency continue to pay off. We have tight-knit team where everyone is aware of the key challenges and opportunities. Given that, in less than a year's time, our team has signed 1200+ customers (such as American Greetings, Washington Post, Gannett, Electronic Arts, etc.) and has optimized over 40 billion ads across 225 of the top ad networks and we now reach over 210 million unique Internet users on a monthly basis (that’s more than MySpace or Facebook) – I can say without a doubt that one of the single biggest contributing factors is the strength of our team’s ability to communicate effectively and proactively with each other.
I sent out a Twitter update saying that I was stumped and needed some new, fresh blog ideas. Ian Douglas, one of our engineers here at the Rubicon Project responded with an idea (thanks Ian!)
Here is what he wrote: "Fear of failure can often paralyze a company, but sometimes so can 'fear of success'. I don't imagine that's ever slowed you down, but I'd be curious to hear your thoughts on it. "
Ian brings up a point that over the last few years I've learned is a very real issue. At 31, I've been incredibly fortunate to have had a lot of wins at a young age. Certain things are easier with past success (e.g. confidence, attracting investors, recruiting, etc.) However, the expectations are also higher resulting in an intense pressure to perform.
In my twenties, I built a site that ranked #7 in terms of Internet popularity, was an officer of a public company, had raised millions of dollars from top tier VC firms, spoke at top industry conferences, and hired hundreds of employees all over the world (most of whom, by the way, were older than me.)
I never thought twice about any of it. I followed my instincts and my gut. That's what drove me. There was very little to no second guessing. I just did what I believed had to be done.
A few years ago, I lost that ability; the ability to just trust my instincts. I applied logic and common sense to every decision. Guess what? It didn't work as well. I made more mistakes by over-thinking things than I did when I was following my gut feeling. Fortunately, I recognized this behavior and worked hard to get back to trusting my instincts. This was hard to do.
The problem is similar to the difference between children and adults. Children run around with little fear. Adults are more cautious. The reason I changed my behavior is because I was a victim of my own success. With success came expectations. Before, when I was the "young kid in the room" I could make mistakes because it was expected, I could say the wrong thing and it was OK and if I did anything great or impressive it was a surprise. All of a sudden, there was this inherent pressure to perform. I was no longer the "young kid" in the room that got lucky a couple of times. I became the "experienced entrepreneur" that people actually expected something from. People expected results. They expected me to say something smart. They expected the right answers. These expectations clouded my ability to simply trust my gut and I felt that I needed to have more logical support for my decisions. It slowed me down.
Before starting the Rubicon Project, I was fully aware of this newfound deficiency (pressure to perform.) So, this time around, I took a different attitude. I shoved all of the success aside and got back to basics. I've relearned to trust my instincts. I've learned it's OK to feel strongly about something without necessarily having a rationale explanation for it. I've learned that if you truly believe in something, you really can't go wrong - it may not be "right" but if it's not you'll learn why and that learning will bring you to the right place faster. I learned that sometimes I will say the wrong thing because it's impossible to be "right" all the time. And, I've learned that in the end, it's really just not worth stressing about anyway. We aren't saving lives, this is just a business. Ultimately, what I have grown to accept and be comfortable with is that it's all OK.
A note to my investors: Don't worry! I take the business seriously, but I don't stress about it. I believe that if you have the right team and they are cohesive and focused on the right goals, they will perform the best that they can. The right team wants to win and will do whatever it takes. The right team does not want to fail. When they make mistakes, you need to encourage them. It is very much like coaching basketball. No one wants to miss a shot. If they miss and you keep harping on their misses, they'll stress out and lose confidence. If they lose confidence, they'll wind up in a slump. People do not perform well under stress. Stress causes tension. Tension causes bad habits. Bad habits cause failure. To continue the basketball analogy, if you are tensed up sitting at the free throw line waiting to shoot, you're likely going to miss because the tension will screw up your shot. Staying loose, feeling confident and focused increases your chance of success. Fear of failure will cause losing behavior. Fear of success raises the bar for the definition of success (and failure as a result.) Especially in environments where the bar for success is high and the chance of failure is also high, you need to keep encouraging your team when there are misses. They'll regain their confidence, get back in their groove and keep scoring.
So, yes Ian, there is such a thing as "fear of success." And yes, I have fallen victim to it in the past (contrary to your confidence in me.) My best advice is to simply not take it so seriously. Just do the best you can, feel good about every decision you make by trusting your instincts and the rest will fall into place as it should. Chill out, relax, it's OK.
Yesterday, our 1,000th customer went live here at the Rubicon Project. I have been blown away by how fast this team moves and how quickly we have ramped. So, I took a step back and asked myself, how did we go from zero to 1,000 customers in 6 months? The answer is that we have specifically focused on optimizing this company for speed. Speed is our mindset. It's easier said than done. It doesn't just "happen." You have to purposely manage a company differently to be optimized for speed - and it requires a special set of expectations, alignment, trust and discipline.
Different companies operate in various gears at different stages of their development. It's really important to define and set the "gear" for the company and make sure everyone is aware of what it means. As an example, a company optimized for cash-flow may not take as many risks or yield as much waste. A company optimized for speed is going to be very risky, make lots of mistakes and there will be a certain amount of waste. If people are not aligned, it could create a lot of confusion. Right now, speed is our strategy. Meaning, our #1 objective is to move the company forward by putting points on the board as fast as possible (e.g. market-share, customer growth, product development, etc.)
The primary reason that we have raised $21M in capital is so that we can afford to operate in this gear. This is because when optimized for speed, you should expect that 30% of all of your efforts will be wasted:
- 30% your decisions will be wrong; - 30% of your money will be wasted; - 30% of your time will be wasted;
This 30% waste is generated by making fast decisions. Fast decisions on hiring, advertising, product development, operating infrastructure and strategy. But, when right, optimizing for speed will put you leaps ahead.
Thomas Edison failed more than 1,000 times when trying to create the light bulb. When asked about it, Edison allegedly said, "I have not failed 1,000 times. I have successfully discovered 1,000 ways to NOT make a light bulb."
Edison was able to afford himself the time to make 1,000 mistakes. He wasted a lot of time. But, his waste yielded great success. So, in order to truly optimize for speed, you have to reconcile with the fact that you will produce waste.
This may sound irresponsible. But, if the objective is speed, you are inevitably going to create waste. If you are in your car and you slam on the gas pedal after every stop light versus slowly easing into it, you are going to waste fuel, but you will likely get to your destination faster. (note: by no means am I encouraging this driving method - it is unsafe and environmentally irresponsible :) )
One of the biggest benefits of raising capital is that it enables a company to move fast. And to move fast, you will make mistakes. Capital enables mistakes without sacrificing the viability of the company. Along side that, you need to encourage mistakes and (managed) waste. It is an extremely difficult discipline to accept.
This is one of the hardest lessons I have learned. When you bootstrap a company, every penny counts. You have to spend wisely and cannot afford waste. Going from bootstrap mode to optimized for speed, requires a different kind of discipline, ultimate trust in your instincts and a whole different mindset. Many entrepreneurs can't make that transition, it took me 5 companies to figure it out.
I can't believe it's been a year. When Craig, Julie and Duc and I got together a year ago we didn't have a business plan, we didn't have goals... actually, none of us were even looking to start a company in the first place. So, today, on our first birthday, I ask myself where did this all come from? I'm just amazed by how fast this company has grown...
Immediately after asking myself that question, I remembered the very first meeting that the four of us had together. We spent a majority of our that meeting talking about the "kind" of company we wanted to build and the "way" we wanted to build it. We didn't talk about product or marketing or sales or finances... We talked about people, culture and vision. We committed that team development and people would be our #1 priority. If we could build the world's best team, they could build a world class company.
We wanted to make sure we enjoyed everyone we worked with and wanted to make work fun. Our vision was to attract a team of winners, entrepreneurs... a team of good people, and a team who had extreme pride in their work. We talked about all the ways we could keep the team motivated and continue to make culture a priority ranging from small perks and benefits to donating a percentage of our profits (and our time) to charity. The second thing we discussed was that we wanted to do something big and game-changing. We generally felt that the online advertising space needed a new wave of innovation. We knew it would take big risk and a big effort. We were committed to creating that wave. That was day 1.
Day 2, we went to work with those fundamentals in mind. And we did exactly what we committed to. Team development has been the #1 priority for us. I can't say this enough... If you build a great team, they build a great business. We have an unbelievable team here. They are all winners. I am so proud of everything that they have accomplished. And, I'm proud of the -way- that they have gone about accomplishing it. I feel privileged and honored to work with every one of them.
I would like to personally thank the entire team for being rock stars... I'd like to thank all of them for believing in me, Craig, Julie and Duc. And thank you to Clearstone Ventures for having the foresight and faith to invest in this crazy dream of ours...
One of my favorite quotes is... "The future belongs to those who believe in the beauty of their dreams." -- Eleanor Roosevelt
Year 2 starts tomorrow... Lucky me! I get to watch this incredible team of believers dream new dreams...
I was in the process of writing this post, and then I got this comment from a reader challenging my last post (particularly, our presence at ad:tech San Francisco.) While John and I likely disagree on management style and approach, we do agree on the right questions to ask (not the way of asking, but the questions themselves). Interestingly enough, we asked ourselves at the Rubicon Project these same questions prior to committing to the event and the launch. So, I have rearranged my post to directly address his remarks.
Here is John’s comment:“A few comments/observations on this disturbing post:1-Sending your entire team is crazy..some of them are very very junior in their experience level. How could they possibly engage with prospects in a meaningful way? Would be better off and save money hiring local booth talent.2-Carpooling in large SUV's with gas over $4.00/gallon? Quite expensive, and what a huge carbon footprint! Please, go hybrid. That is just shameful.3-Visit MarketingSherpa or other similar resources, they all say that trade shows and event marketing will not deliver the biggest bang for your buck. Those marketing dollars can be put to far better use that will deliver much better ROI and build your client base. Gimmicks like this don't.Maybe these things don't matter since you are flush with cash right now or maybe you are stuck in a time warp from one of your former gigs. Two words for you: BURN RATE” - John
Short version: this was by far the most successful event I have been a part of. Net results: 1,800 leads (and reached an estimated 3,000 prospects and 250 ad network partners.) It was a very high ROI event for us.
The only concern that I did have about our presence at ad:tech was that people might have the perception that we spent an excessive amount of money. Despite appearances, we did not. The team did an absolutely amazing job creating a strong presence, a presence that looked a lot more costly than it actually was. However, our budget was not out of the norm for a typical show presence. We spent wisely and were able to squeeze a lot out of the areas that we did invest. We only spent about 10% more on this show than I had with prior companies and we yielded 5X the results. It proved to me that a little extra effort, unique thinking and a passionate team can make a HUGE difference.
Bottom line: The show exceeded our expectations and goals and likely accelerated our business an additional 6 months.
As for John's comments, here are my responses:
“John: A few comments/observations on this disturbing post:1-Sending your entire team is crazy..some of them are very very junior in their experience level. How could they possibly engage with prospects in a meaningful way? Would be better off and save money hiring local booth talent.”
This is a team that pulled all-nighters for 3 weeks trying to get this release out. So, I wanted them to see the direct results of their hard work. It was a motivator on one hand (they had to be there in front of prospects and stand behind the product they built) and it was rewarding on the other hand.
There is not a single person in this company that I would not (proudly) put in front of a customer. And, I'm happy to say they proved me right. Every single person in the company meaningfully engaged with prospects. They were well trained and knowledgeable. The results speak for themselves. Not only did they do a fantastic job engaging and bringing home a wealth of leads (avg. of 50 per person,) they also learned a lot more about our customers' needs. We say that our customers are our #1 priority. And while we do speak to them on the phone every day, it was very valuable and impactful for our team to meet with them face to face. Even the engineers were able to engage with real customers and prospects about the product, and to see them using it first hand. How often do you see engineers in a booth? That touch point was priceless and the end result will be a better product.
Local booth talent? No way. Never. It’s the worst thing you could possibly do. We do not believe in hiring local booth talent, we believe in engaging with our customers directly. In fact, we received many compliments for doing just that at ad:tech SF and ad:tech NY. Myself included… someone stopped me while I was passing out water bottles in NY and asked what company I was with (assuming I was hired to pass out water bottles), I said, “I'm the CEO”... It resulted in a customer (and set a an example for the rest of the company.) Engaging directly with our customers - that kind of ROI cannot be beat.
“John: 2-Carpooling in large SUV's with gas over $4.00/gallon? Quite expensive, and what a huge carbon footprint! Please, go hybrid. That is just shameful.”
The environment and cash management are very important to us. We carefully considered these factors as well. We do our best to be green, though, admittedly, we could do a better job, but we do the best we can. As an example, we did away with water bottles in the office and instead have glasses and a Rubicon Project re-useable water bottle for everyone on the team (saving thousands of hours of energy every month). In this particular example, the carbon footprint of flying everyone on airplanes was greater than actually driving.
As for cost, originally, we were going to bring 20 people (sales, marketing, business development) to engage with customers and partners. Flying 20 would have cost about $350 per person (between flights, taxi's and parking,) approximately $7000. The cost of driving 40 people was $6700 (less than the cost of flying 20.) With more than 9,000 people attending ad:tech most of the ad networks that we partner with were going to be there already and thousands of prospects. As a whole, it is a huge cost savings play for us because we don't have to fly to see them individually in their respective cities - having them all in one place is much more efficient. And, because of the efficiency of meeting many of our customers and partners in one place, we were able to reduce our travel budget (to meet with customers and partners) for the rest of the year by at least $5,000 (estimated ten trips times $500/trip including airfare, hotel, taxi and meals).
Further, having teams of 7 in cars together was highly productive. Not only did they bond (great for productivity) but also it was 12 hours (6 hours each way) that the teams had a chance to talk about important business-related issues. Brainstorming led to great ideas being generated during the trip. We believe very strongly in active communication, in fact, I think it has been the largest contributor to why we have been able to do so much, so fast.
Oh, and by the way, even though the carbon impact was less than flying we did purchase carbon offsets to counteract the impact of those vehicles. (Would you believe the carbon offset cost was less than $200 for the whole trip?! I paid for it personally, not with company funds.)
“John: 3-Visit MarketingSherpa or other similar resources, they all say that trade shows and event marketing will not deliver the biggest bang for your buck. Those marketing dollars can be put to far better use that will deliver much better ROI and build your client base. Gimmicks like this don't.”
Interesting. This is the third company in which trade shows have been the single largest source of leads for us. The key is to execute well at these shows, however, I would agree that most companies do not. The key is to measure and metric the success of these shows like you would any other lead generation activity. We had a goal for this show of 500 leads. We brought back 1,800 and probably touched another 3,000 indirectly.
“John: Maybe these things don't matter since you are flush with cash right now or maybe you are stuck in a time warp from one of your former gigs. Two words for you: BURN RATE”
Given that we spent half as much money as our original plan and accomplished twice as much in half the time... We understand this well. We are a highly metrics and ROI driven organization. When we spend, we spend wisely. We consistently exceed our top line targets and have spent less than our plan. But, thank you for the reminder, it is always important to remember.
To summarize…
Things we did to make a big splash without spending big cash:
1. Designed a slick booth --ourselves-- Marwan, our VP of Brand and Creative, literally designed the booth on the back of a postcard at a restaurant in NYC after ad:tech NY. He did an amazing job! (see pictures below) 2. Do NOT hire local booth talent - it is expensive, ineffective and insulting to your brand (see: Why Booth Babes Are a Mistake) 3. We brought 40 people gave them branded clothes - it was like having 40 walking billboards (avg. cost per person: $200) 4. Shared hotel rooms (cut costs in half), stayed at the Holiday Inn (budget hotel), carpooled instead of flying (less expensive) 5. Threw a party, largely sponsored by StrongMail Systems, Clearstone Ventures and Om Records (big impact, low cost) – thank you to our sponsors! 6. Re-used materials (such as the video from our website) 7. Did very little printing (saves trees and cost.) We kept collateral to one half-sheet which featured a “free music” card (which, by the way, the free music was sponsored, no cost to us - thank you to our partner, Om Records!) 8. Focused on the primary goal: get leads (we brought home 1,800 leads in 2 days, almost half of what we acquired in the past 6 months) 9. Trained the team well (our people, engaging with real customers and prospects) - priceless.
Thanks for teeing up this post, John! I was having a hard time getting it started – sometimes it is hard to get motivated to write and finish a post. I appreciate the thoughts and am glad to hear there are other people out there that are passionate about the environment and the success of other businesses.
Today’s lesson(s):
1. When you spend, spend wisely. 2. Make sure everything has a goal and measure against it. 3. And… do not ever hire anyone that you wouldn’t feel comfortable putting in front of a customer.
