Five Insights for Startups: The Verto Analytics Story
Since founding Verto Analytics four years ago, I’ve often been asked for startup advice. Going after market leaders and incumbents is never easy. But one of the key things to remember is that, as a new company with no legacy, you should not burden yourself with aspirations of immediately being better.
You can never, at least not instantly, be better than another company that has dominated the industry for the past few decades – or even the past few years. Instead, just remember to be different. In fact, the best thing you can do is be radically different.
The Lack of Audience Measurement for Mobile: A New Market Need
The concept of Verto Analytics was born in 2012, while I was meeting with executives from one of the biggest Internet giants in Silicon Valley. We took a look at the company’s user numbers: it seemed like the amount of time that users spent on its properties on mobile devices would soon exceed the time spent on their properties on traditional computers – and the executives confirmed they strongly felt the same. Given that finding, I asked what the team’s biggest challenges were.
They replied that their company was really struggling with their increasingly mobile-centric audience, as it wasn’t something they were able to monetize. It wasn’t that advertisers were disinterested in their mobile users. There was simply no third-party measurement companies (think of what Nielsen does for the TV industry) or data to back the storyline behind mobile – nobody to help them sell advertising on mobile and to quantify its positive impact. Further, the company wanted to see its new mobile products, like apps, benchmarked not only against PC usage but also against traditional TV. They felt that placing all metrics within a single, comparable scale would be an asset for their advertising sales pitches.
On the red-eye back to New York, I recalled how, in the past, my big television network customers had objected to any measurement of digital services (such as Netflix) on a comparable scale with their linear TV channels. They feared these new entrants. I decided to do a bit more homework.
I contacted one of the most notable chief research officers of the TV industry, known already for his work during past few decades in driving the right dialogue in the market, the next day in New York City and, to my surprise, he confirmed that indeed even traditional TV companies now wanted to see digital and traditional media measured through a single service. I asked how such a sea change could have possibly happened since just two years prior, their position had been totally different.
He explained that, based on his company’s internal data, these incumbents would actually now see themselves performing well if digital was measured within the same service, accounting for net reach of traditional and new media channels, using a solid methodology. He then mourned the fact that no such service existed at that time.
These two experiences really got me thinking about how modern media consumption and advertising should be measured if one could build everything on a blank slate. The next day, we started building the team.
Five Insights for New Startups
Today, it’s great to see how our vision from those early days is reflected in our single-source media measurement services, which is now being used across leading markets and in several industries. Getting there wasn’t easy, but, along the way, I’ve gathered some valuable insights that I hope will help aspiring and current startup entrepreneurs.
- Focus on the team: it’s as strong as its weakest link. It’s also your most significant and longest-lasting competitive advantage. Get the best people behind your idea.
- The culture around the company is key. In my view, an organization that is too laissez-faire rarely gets it right with production-level customer deliverables, but a startup with an overly rigid hierarchy never manages to get the speed and cycles right. You need to create an atmosphere in which people feel they can influence and drive things, but with a clear mission and goals. Through shared milestones and vision, you can move your startup to the next phase and ensure that your core team shares the same underlying culture.
- Remember to hire people that you feel good about. Don’t be tempted to make compromises: a highly skilled person who does not fit your culture will not help you in the long run.
- Focus on the minimum viable product and instant market feedback. Companies that do not talk to the customers early enough, or instead focus on fine-tuning the details, rarely get into the right cycle with the product. Iterate quickly with real customer feedback.
- Take on funding at the right pace – and do not raise too much, or too little. Figure out exactly what you want to do over the first 12 months, and the define goals that need to be achieved. Then work like hell to get there. Your existing, or new investors, will benchmark you against the annual goals. Progress is key – not necessarily where you are today or tomorrow, but your ability to go the right direction (and getting there quicker is always better). Be aware that you can’t attract venture capital simply to try to develop a better product for a domain that already has something in place. You need to invent a radically new product, rethink the user experience, integrate several solutions together in a unique way, or refresh the underlying business model. Solve a new or existing problem, but in a new way. That will also help you overcome the mental challenge of going against the big players. With your vision and product/marketing tactics, think about building something bigger than the incumbents and gain motivation by knowing that you have a new, clean foundation on top of which to execute.