Tod Sacerdoti, CEO of BrightRoll, speaks with GrowthCap CEO, RJ Lumba. He discusses his vision, early beginnings with the company, and his plans for the future.
RJ: You’ve seen tremendous growth and success since inception. Some of our readers may not be as familiar with your company, could you give us a brief overview on BrightRoll?
Tod: Sure, so I founded the company in 2006 and the original vision, which is still the vision today, was to build software that improves and automates online video advertising globally. I think today, without question, we’re the leading programmatic video ad platform unified across buyers and sellers, which means we work with both people buying video ad inventory and people selling video ad inventory.
In terms of how we talk about the business, for people who want to get a layer deeper, we have a media business where we sell media primarily to ad agencies and sometimes clients through what, I would consider to be a traditional media buying process. We have a second business where we built a video advertising buying platform that people use to run their video advertising businesses, and that product is used by clients directly, agencies, trading desks, and ad networks (often display ad networks that don’t have their own video ad technology). And then we have a marketplace business where we sell to all the large programmatic buyers of video that aren’t using our platform to run their business, and we aggregate supply for all of our demand side customers. That’s really how we go to market today, and we’re aggressively growing in all those areas.
RJ: Excellent, can you share with us your background prior to BrightRoll and what led you to conceive of the company?
Tod: I started my career at Robertson Stephens covering internet marketing. That’s really where I caught the bug for monetization and advertising in general. After I went to business school, I worked for a couple startups, most recently a company called Plaxo, which was founded by Sean Parker – before he went to Facebook. We were sort of a sister company of YouTube when they launched, and we shared Sequoia Capital as an investor. And that was where I really first saw the catalyst of consumption change that was happening in digital video. And I mapped my prior understanding of monetization where it was crystal clear that consumers were changing the way they consumed videos, but the ecosystem wasn’t really prepared from a product standpoint to deal with the ensuing tidal wave of consumption that was happening.
RJ: Advertising technology is a crowded space, what is your view on how the space evolves or consolidates over the coming years? How do you see players in the ecosystem evolving over time?
Tod: Sure, I would say the advertising business is a crowded space. It’s probably the most crowded business of all the businesses we touch. The platform business where people are using our software to run their businesses, is somewhat crowded but has much higher barriers to entry, and less crowded than anyone selling media.
The marketplace business is the least crowded of all three. My overall view is it’s early days; it’s very easy to set up a website and sell media. It’s challenging, but not impossible to build a platform and start trying to sell software, but I think over time, the rush to efficiency, sophistication, and capability will weed out the weaker players. Technology, business revenue, media expense, and scale all matter here. There’s a huge network effect of these marketplace businesses that take time to showcase themselves. So we’ve seen in multiple ad categories where companies looked big in the beginning, but weren’t big in the end. And I think part of it is the maturity of the categories. I think we will continue to see consolidation, but it’s still early days in terms of total available market in digital video today.
RJ: Great, and what do you hope to accomplish with BrightRoll in the next 3 to 5 years?
Tod: Internally, we’ve always said we wanted to be the number one video advertising platform, that’s really our number one focus. And it remains our focus today. And I would say there’s a huge advantage in being focused specifically on video because there are a lot of companies that have approached the video category as a bolt-on to other businesses, whether it be search, display, or mobile. But the reality is that for the top 200 brands in the world, the ad unit they care the most about is by far, video – it’s by far the majority of their ad spend. We think being best of breed in that category – everything digital video related – is where we will be focused, and there’s still a lot of work to continue to fulfill that vision. I would say what we want to accomplish is to continue to escape the set of companies that provide video offerings and get deeper and deeper embedded in our largest customers, which are the largest brands in the world. I think if we do that, we’ll clearly be the winner in the video advertising platform business.
RJ: With a company that is doubling revenue every year and continuously hiring, how do you ensure the company’s culture stays consistent with your vision?
Tod: You know, it’s hard and something that takes a lot of time and energy. As you become bigger, you have to be more focused on it because it’s easier to lose that direct connection to the single net new employee and what their experience is. We spend a lot of time thinking about that and making sure we have fit, as people enter the company, and make sure we have consistency among our values and culture for people who have been here for some time. And we continue to test for it in surveys and behaviors, but it’s kind of a never-ending effort in the company today.
RJ: Could you give us some insight on when you decided to bring in a financial partner and what impact it has had on your business?
Tod: We decided to take capital when we needed money to fund the business because we were not a profitable business. And we decided to stop taking outside capital when we were a profitable business and didn’t need capital. It was linear for us. And obviously the impact it had on our business was that it enabled us to hire the people and build the products that we needed to be successful. Our success is directly tied to our ability to raise capital during those years.
RJ: To close out, what advice would you give to CEOs seeking to grow their companies as fast as BrightRoll has?
Tod: Two things really jump out for me. The first is, the bigger we get and the more successful we are, the more clear it is that people make these companies, BrightRoll and other companies included. I think everyone from the outside always thinks product-market fit, and timing, and seeing an opportunity early, etc., but these companies are made up of people and people have really driven our success. And I think you can never over index towards holding out to find the right people rather than hiring people to fill a plan.
And then second, it’s hard to remember, but in 2010 there were companies in our category that had raised 5 times more money than us and were 3 times larger than us on a revenue basis. From the beginning of the company, we stayed very narrowly focused on what we saw as the biggest opportunity long term, which is digital video advertising that looks a lot like television. And over time, that sort of narrow focus became the whole business, and really enabled us to differentiate and win. That comes from the top, and now it’s more important than ever to maintain that focus, as it’s easy to get distracted with a lot of people. My number one advice is I’d rather be the monopoly of something narrow that I can expand later, than a broad platform with no sort of holistic traction. So I advise entrepreneurs to focus on what they think they can win at.
RJ: I think many of our readers will find this insightful. Thanks for spending time with us Tod.
A periodic newsletter from GrowthCap about the topics and people shaping the growth economy.