Sramana: What was your next milestone after 5min?
Adam Singolda: Our next goal was to attract big brand publishers. The problem was that I had no idea how to make money. We could not make it scale to the point of relevancy to big businesses. That is when I decided to leave the tech side of the business in Israel while I moved to New York. If you want to run a media business you have to be in New York, not doing so is the big risk. I moved to New York on May 23rd of 2009. Around the same time, we were very fortunate to have Lior Golan join us as the CTO. He had just sold his previous company and was a very good fit for where we were trying to go. He became my partner in crime. It was a life-changer for me to have a person like him to talk to.
Sramana: How was the company surviving at that point? Where you still living on the $1.5 million that you raised?
Adam Singolda: I raised $40 million dollars in total, and $6 million dollars were raised in the first two years.
Sramana: How did you raise the second $4.5 million dollars in your first two years?
Adam Singolda: There were some larger publishers who wanted to work with us. There was no revenue opportunity at all. Bigger names thought it was worth their time to meet us. The $4.5 million was a follow on with our initial VCs and it was all included in the same round.
Sramana: What was going on in the business after Lior joined the company?
Adam Singolda: We were still at the product market phase. We had an engine that could get people to engage with content and consume more of it. Our original idea was to increase site traffic but that was not good enough to build a business. We had to build technology that would do a good job of predictive analysis and it took us 4 years to develop the business model that we have today. Essentially we generated zero revenue during our first four years of operations. We built a business that has a $100 million run rate over the past two years.
Sramana: How did you navigate this journey of not having a good product market fit and ultimately building a product that the market accepted? How did you keep investors interested and the team engaged?
Adam Singolda: It was very challenging. The most important thing is that we always had traction. We always had the support of the community and publishers. Our challenge was finding a way to generate significant revenue. Initially, publishers thought we should just have a SaaS model since we were providing them a service. That never worked out. We then thought that if we increased traffic to publishers, we should take some of the upside. That proved to be too complicated. We then tried third party advertising, but that did not generate enough revenue, and publishers did not need another advertising product. By that time, we had been around for 4 years. At this point, we realized we had to fail fast enough to be able to move on to the next idea and still survive.