A Eulogy for Millennial Media

We lost one of our own last week. In an official release, Millennial Media has been acquired by AOL. And while the company will live on in our hearts (and within the larger AOL framework), what Millennial represented is forever lost to the ether.

This day marks the end - the death - of the mobile ad network. 

Millennial Media was born on the threshold of a new mobile age.

Positioning itself as a mobile ad network, Millennial Media basked happily in rising demand of mobile inventory. We proudly watched Millennial go public in 2012 with a jaw-dropping valuation of $2 billion. It had become a bastion of mobile ad networks. Where others failed, it rose above.

But soon the winds began to shift, and even this great, greying champion of mobile ad tech began to succumb to attrition.

The mobile advertising industry became increasingly fragmented, with new technologies and innovations sprouting by the day. In order to continue its early success, Millennial had to possess cutting-edge programmatic technology – technology the company didn’t have.

We remember Millennial’s efforts to save itself, after already taking a heavy beating from the market. In 2013, Millennial acquired mobile ad company Jumptap in order to build its demand side programmatic business. Then in 2014, Millennial bought Nexage, a sell side technology.

And yet, in retrospect, these acquisitions were nothing more than last gasps. Our dear friend Millennial was dying. Its business model was fatally flawed.

Millennial Media couldn’t scale. Its inability to operate outside its own SDK had stunted its growth. It also never manifested a working mobile tech stack, having to rely on the third-party technologies of others.

No matter how bravely it fought, the result was a company struggling to turn a profit. In 2014, Millennial accrued $149.1 million in losses. And now, in 2015, a company once valued at $2 billion, has been bought for an underwhelming sum of $238 million.

Indeed, the age of the mobile ad network has ended.  

Only those vertically integrated mobile platforms that boast a full mobile tech stack remain.

Ad Tech Consolidation: What Comes after the LUMAscape?

By now, you’ve probably seen the LUMAscapes. They’re the complex, sprawling mappings of the ad tech industry’s many entities as they stand today – fragmented and wholly redundant. 

The mobile LUMAscape is particularly messy.

When the first iPhone hit back in 2007, advertisers weren’t prepared for the mass consumer exodus to mobile that took place. Their desktop-first technologies didn’t work. Ads were breaking. Mobile – for a while – remained a mystery.

But soon, innovation played its hand. Emerging companies began to develop new technologies to combat the myriad of problems the mobile ecosystem faced.

It was a piecemeal solution.

And while that piecemeal solution did address each problem and pain point individually, on the whole, it created another set of issues, plagued by fragmentation, breakages, inefficiencies, and increased costs.

Observe the infamous mobile LUMAscape. There’s currently no better visualization of this piecemeal solution today – a solution still fraught with failure.

Can it last?

The easy answer is no.

Terry Kawaja, the influential architect of the LUMAscapes, has forecasted the eventual downfall of the ecosystem as we know it. Others have recently chimed in. “Consolidation is coming!” the industry now cries.

And how’s the journey to consolidation to take place? In the words of Terry Kawaja himself, “There will be blood.”

It’s a narrative not unfamiliar in American history.

In 1900, there were close to 500 car companies in America. By 1908 there were 253. At the beginning of the Great Depression in 1929 there were 44 – and 80% of the output came from three industry behemoths: Ford, GM and Chrysler.

Those automobile manufacturers who were able to seize control of their nascent and massively profitable industry, did so by consolidating the supply chain. And while the analog of the automobile manufacturers perhaps imperfectly portends the future of the ad tech industry, the moral of the story remains the same:

Those companies that can control all parts of the supply chain will rise – and those that can’t will either fall or be consumed by the majority.

We, The Mobile Majority, have started with the belief that consolidation is inevitable, that mobile is the future, and that ONLY players with an entire mobile stack can compete.

To quote a recent post by Peter Horan:

“With digital advertising there are too many options, too many people touching the deal, too many people arguing about the bills, too many people saying that everyone else is a crook.”

In short, there’s just too much. The supply chain is broken.

In order to execute a campaign well, a media buyer not only needs to work with 5-15 different vendors, but all those vendors need to be integrated. If one of them is not up-to-date, or any of the hundreds of thousands of connections don’t work, the campaign doesn’t work.

It’s for these reasons that we at The Mobile Majority have built a complete and vertically integrated mobile buying stack – not through partnerships but with our own tech developed in-house.

The result of doing so already speaks for itself.

In a recent campaign, our DSP technology went head-to-head with an established, desktop-first platform. We performed 16X better in terms of the final KPI (email address submissions) the brand wanted. Of particular note, this KPI was not easily faked through bots and non-human traffic.

This was only possible due to the fact that we’ve engineered the entire ad stack to deliver significantly higher campaign performance (2X to 20X) while reducing redundant vendor costs by over 60%. Instead of deciding to focus on local optimizations, we focus our tech on optimizing for the final outputs. Somehow the ad tech world got so caught up with little companies building platform features that everyone seems to have forgotten what the customer (the advertiser) wants: results.

So Terry Kawaja may indeed be right. Most ad tech companies will fail long before they can make a case for being listed on his LUMAscape chart.

But those companies that succeed?

They won’t do so vying for placement on a LUMAscape. Their vision has to be much bigger, much grander – just as the visions of Henry Ford, Rockefeller, and Carnegie’s were years ago.

In order to succeed, ad tech companies will have to build the components to make up the entire chart. That’s the only way to improve campaign outcomes while reducing costs.

The Mobile Majority doesn’t fit the LUMAscape model. Instead, we’ve just displaced it. 

"I Woke Up With No Pants": The True Objectives of Entrepreneurship

No pants.

I couldn't believe it.

I had flown to San Francisco to attend a pitch competition hosted by Plug and Play Tech Center, one of the largest startup incubators in the country. But when I arrived, I realized I hadn’t brought suitable clothes for a business presentation (pants in particular).

So I improvised. I ran to the nearest Nordstrom with five minutes to find something. I ended up with jeans so baggy they looked like hand-me-downs. I was still wearing the same wrinkled shirt from the plane, and it was absolutely not presentation attire. I looked like a mess. But at the competition I gave my pitch regardless — a presentation I’d reviewed briefly that morning — then retired to a private area to handle company affairs.

To my relative surprise, we were named one of the winners of the pitch competition. As I came off the stage, everyone from Forbes to the Silicon Valley Business Journal awaited, ready to interview me. Strategic investors from General Motors to State Farm to Yahoo all approached, pitching ideas and asking about investing. And I was still wearing those ridiculous baggy pants.

No One Cares How You Look

I wasn’t particularly proud of my showing that day. I felt rushed, I didn’t look my best and I could have prepared better for my pitch. But in the end it didn’t matter. I wasn’t the focus, the accomplishments of our company were.

Experts across the industry saw the problem our company is tackling and believed in our solution and our results. It was a testament to what our team at The Mobile Majority had built over the past twelve months. We didn’t win the event last year, while today our work speaks for itself.

Along the way, it’s fun to remember that this is what success looks like. It’s not just the final product. It’s the interim work; the relentless hustle; the impromptu meeting requests; the random introductions to people that you don’t think will turn into anything fruitful. All the craziness that happens along the way that adds up, even if you aren’t looking your best.

No one cares what you look like, what that journey looks like or how ideal a narrative it all creates. Identify what you have to do in order to accomplish the goals you’ve set. Outline your steps, create a plan, and if it doesn’t work, trash it. You can blaze a new trail if you’re not afraid to move forward when it gets messy.

Entrepreneurs walk a very thin line between success and failure. As such, ideas and efforts don’t always work or don’t produce the solutions you expected them to. Don’t fight it and don’t try to make what you’re doing look pretty. Instead, focus on what is working and build on that. When you tackle big enough problems with a clear differentiated strategy and you execute day in and day out, there is enough serendipity to make big things happen — even if you aren’t completely put together (as I wasn’t the day of my pitch presentation). At the end of the day, entrepreneurship is about focusing on the objectives, not the obstacles.

A version of this post originally appeared on The Mobile Majority blog here.

The Happy Entrepreneur: Staying Positive In the Face of Persistent Bad News

Chris Dixon recently wrote that the default state of a startup is failure. I agree. In college I studied science and philosophy, so I spent about half of my classes in the hard sciences and worked in a molecular genetics lab. I wasn't a business student, so I've always tended to think of business concepts mostly in scientific terms. As a result, I think about  this same phenomenon that Chris describes in a slightly different way. A startup, in terms of physics, is an organization disrupting market 'inertia' or "the resistance of any physical object to a change in its state of motion or rest, or the tendency of an object to resist any change in its motion."

The point is that it is incredibly difficult to change the status quo. Changing a market means changing hundreds, or thousands, or millions, depending on market size, of people's minds and habits. It doesn't always matter - in fact, almost never matters - if you have a better way of doing something. You have to have a remarkably better way, so much so that you can alter the basic tendency of people and markets to maintain their current state. This, with a few very rare exceptions, takes time, money, and persistent effort.

The natural corollary to the above phenomena is that when you are fighting inertia, most things will fail. Most of your ideas and efforts will not work, or not work fast enough. The ideas and efforts that do work will most likely have little impact on changing the market right away. Even if your company can provide a product or service better, faster, or cheaper - or even all three at once - it still might not catch on, or not catch on before your company has ran out of money. Why? Because it takes most people a long time to change their minds and habits, and people make up markets. Thank God for early adopters, or else there would be no startups.

This is the harsh reality of being an entrepreneur. As a result, an entrepreneur will encounter more failure than success. This doesn't mean that she is a failure, or that her business will fail; it just means that the day-to-day life of an entrepreneur is filled with more bad news than good. As a result, it's really easy to get down on yourself when bad things keep on happening. So what is one to do?

We all know the old saw of the ever-persistent entrepreneur, or inventor, toiling away for years until she finds success. The Lean Startup movement (from Eric Reis, Steve Blank and Patrick Vlaskovits) has taught us all to pivot into a workable business model, but has not addressed a much more fundamental problem of entrepreneurship: how to handle the day-to-day rejections and failures.

I think there are many answers and tools to help, and I usually look to the work of an emerging movement within the scientific psychological community for answers: positive psychology, or to the the Buddhist tradition.  The most effective tool that I have found is one that Martin Seligman discusses in his latest book Flourish, which he calls 'Three Good Things.' It's an exercise that I have incorporated into the daily huddle that we do at PaeDae, and will make a part of any company team I lead for the rest of my life. The exercise is simple:  every day in our morning huddle we go over a variety of things, like priorities, learnings, metrics, etc. We always finish with 'Three Good Things,' which is the short time at the end of our huddle when each of the team members recounts two positive work events, and one positive personal event from the previous day.

The two professional good things have the effect of reminding us that we are making progress, and that good things are happening in the face of rejection or slower results. Some days it's easy after a big win like a new customer, or when a major funder comes on board. Other days it's harder, and we have to dig deeper to find the good things that have happened. It may be as simple as one of our engineers finishing a big task in his sprint, or the sales team finally getting a call with the customer they have been waiting on for two weeks. By taking the time, even for just a few minutes a day, to celebrate and recognize that some things are going well, it keeps our spirits up and encourages us to look at the broader goal of finding - and then growing - a repeatable, scalable business model.  Lastly we go over at least one good thing that happened to us on a personal level. These 'good things' can range from getting engaged, all the way to a great band practice. They are constant reminders that our startup is one part, but not the only part of our lives. More importantly, it's a moment when we all learn something about our fellow co-workers and deepen our relationship with each other. This leads to a more engaging and happier work environment.

What do you do to stay happy at work?


©  Robert Emrich. All Rights Reserved.