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Bootstrapping an Ad Tech Company from Paris: Daniel Nathan, CEO of BidMotion (Part 4)

Posted on Sunday, Jul 10th 2016

Sramana Mitra: What happens next?

Daniel Nathan: My first company was not going to copy the technology I was building. They were not going to buy on CPM. On the other side, my company was not going to go to direct advertisers. The issue was that advertisers wanted to work with us directly because they had much more control. The incubator came in and said, “It doesn’t make sense to have two companies competing with each other.”

My third company bought us and then I stayed in the company for six months. I plugged the technology and the team. The team today is still the most profitable team in there. What happened is I wanted to do something else. When we built Uplift, we were using a third-party technology to build our business. We were not using our own technology and I always thought that this technology was not efficient. It was managing all the data and it was not applying any type of optimization algorithm or machine learning techniques.

When you’re managing so much data, there’s a lot of things that you can do with the right technologies. I went back to the incubator and said, “Guys, I have another idea. To build Uplift, we had to hire 200 people. It’s too many people to manage such a small client base. The issue is that we can’t hire stupid people because the job that we ask them to do is a bit complex. If we hire two smart people, they will leave us in six months because it’s such a repetitive job.”

I said, “I’m going to build a technology that will make us able to hire monkeys to do the job.” They really believe in the idea. At that time, the incubator was moving to fin tech and they wanted me to lead the fin tech stuff. I said, “I love fin tech. I think it’s a great industry but right now, I still believe that I can do something in marketing technologies.”

Sramana Mitra: Besides, you hate finance anyway?

Daniel Nathan: Yes, but I love technology. Whatever you put on technology, I’ll love it.

Sramana Mitra: So what did you do next?

Daniel Nathan: When I sold the company, I got some cash out. I had around $150,000. I came back to Paris. The reason I came back was two things. First is tax. If you don’t make money and you’re a startup, there are a lot of benefits. If you hire a Ph.D., you don’t need to pay him. The government pays for the Ph.D. The second thing is engineers in France are cheaper.

You have tons of engineering schools in Paris. The issue I had in Berlin is that we had to go to Ukraine, Poland, and Russia to bring engineers to Berlin because there is no real engineering school in Berlin. I think there are 10 in Paris. I came back in December 2014. Then I built the technology to be able to optimize workflow and ad buying processes. The idea was I would be able to hire monkeys to do mobile marketing. At the beginning, I wanted to build a SaaS product. It was very similar to Salesforce.

After a few months, we didn’t have any clients. People were telling us, “You’re great, but you’re too small. We don’t trust you to power our business.” It was the classic issue of the chicken and the egg. We didn’t have clients because we’re too small but we were too small because we didn’t have clients. We started pitching VCs. We had some term sheets on the table but we felt it wasn’t the right moment. People see us as ad tech. We didn’t want to go raise funds because it wasn’t the right moment.

So we were going to create our first client and we were going to show the world that by using our technology, you can build a great company. So we built another company which used our technology. Our SaaS business is basically a white-labeled platform where you have to do everything. The company that was using the technology is like a managed service. Typical clients were agencies and big mobile marketers. While we were selling as a managed service, we could go to any advertiser and say, “We think that with our technology, we can guarantee you two things. We can guarantee you that we can do a lot of volume and we can give you high quality users.” This turned out to be extremely successful.

This segment is part 4 in the series : Bootstrapping an Ad Tech Company from Paris: Daniel Nathan, CEO of BidMotion
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