Sramana Mitra: Who are the customers? Who are the ones who want to run this kind of media buying?
Ari Paparo: There are two kinds of customers that we’ve been selling to. One is media companies. A lot of media companies are selling ads to brands and to advertisers directly, but they’re not always using the ad inventory on their own site. They’re buying that ad inventory on the exchange. One of our customers is Foursquare. They use their location data to find consumers who meet the requirements of their advertisers.
Sramana Mitra: They work directly with advertisers. They somehow juxtapose their location data on top of
some other things using your platform to be able to do better media buying, is that what you’re saying?
Ari Paparo: That’s exactly right. The other type of customers are the brands themselves who want to develop in-house some of these technologies. They are a growing source of business.
Sramana Mitra: When you started, how much of this was fleshed out in your mind?
Ari Paparo: Really all of it. We knew exactly what we were doing. We were working in ad tech for a long time.
Sramana Mitra: To develop it, did you bootstrap the development? Did you seek financing?
Ari Paparo: We raised a million dollars before we even started. That was mostly based on our personal connections and reputation in the industry. That is certainly not common for many entrepreneurs. We had all been in ad tech and we had all worked at Google, so we knew a lot of people. It’s pretty technically complicated, so it took some time.
Sramana Mitra: How long did it take you to get the first version built?
Ari Paparo: We had a beta at about a year. We were starting to trade in September of 2015.
Sramana Mitra: Who was the first customer?
Ari Paparo: The first real customer would be Foursquare.
Sramana Mitra: How do you charge? How did you charge Foursquare when they became a customer?
Ari Paparo: We charge in a pretty unique way. It’s not very unique for platforms or a cloud service, but it was very unique for advertising. We charge a flat monthly fee based on the capacity of the servers that we deploy for our customers. In this programmatic advertising world, the volume of transactions is extremely high. It’s in the millions per second. We charge customers based on the number of opportunities they have to bid per second. Then the pricing is tiered based on volume.
Sramana Mitra: After Foursquare started working with you, what was the next wave of customers? How did you find them?
Ari Paparo: A lot of the customers came in through personal relationships. It was largely inbound and self-selecting. There was definitely a strength in mobile. We’re pretty good at mobile app advertising. We also do desktop. Then we decided in early 2015 to bring on sales. We brought on an enterprise sales exec who had a lot of ad tech experience. He was able to widen the net and started bringing in people who hadn’t necessarily heard about us or who were using other platforms.