Can you give some insight into your background and how this led to Cognitive Match? Having studied psychology at university, a factor that combines what I’ve done is a fascination with how people behave and if we are able to change that behavior. This is really what the whole of marketing is about. My first company was an internet web design agency, designing sites for brands like Shell and Lastminute.com in the early days of the internet (1995-2000). The key thing that came out of that was how much data the channel (i.e. websites) generates, particularly about how people behave, even back then. At the time there was no Google Analytics nor Omniture. Targeting means very simply, showing somebody something that is relevant, but doing it in such a way, that you are influencing their behavior. Cognitive Match is 100% focused on that one possibility of changing the behavior through targeting. And we do that both on advertiser’s and retailer’s own websites, so as soon as the tracker arrives, what we show, is that the customer has responded to something on the home page (or landing page), or the next page, and we try and take them through the sales pipe.
Could you briefly take us through the underlying technology? The underlying science is complex. The challenge is, we have hundreds of different pieces of data about you and your environment. So from there how do we proceed? One piece of information might be telling me that you buy expensive products, but actually the geographical information and the fact that it is a Friday afternoon suggests that you might respond to the cheap products. The science behind it is about balancing the information and showing the right thing. The beauty is that you can apply that decision to anything e.g. an interactive billboard on a street, mobile phone app.
You have described your targeting technology as being built to be agnostic to application, data inputs, and decision type. Can you give an example of custom applications? Trying to make every solution fit one size, is just not the best answer for our customers. We have publishing customers, we have retailers; they all have very different needs. And if we went to a market and just said if you can’t fit in one of our products, then forget it. That’s a really bad strategy for a start-up, because as start-up you have to do what your customers are willing to pay for. And then you discover what people are willing to pay for and you do more of it. Secondly, the market is so immature that to get the best results, you have to be flexible. Almost every time that we have done that, we realized we developed something for this customer, but we could use it for another five.
In regard to the increasing prominence of mobile, it is seen as the next big thing. Is it part of your business strategy? Yes, it has to be in this space, when you see the stats of mobile internet consumption. When you are looking at the advertising, it is actually not that successful a channel yet. It is rather small in terms of overall spend.
Can you describe the journey and the challenges you have faced in going from a technology into a fully fledged business? It’s something I have been involved before, so I know a lot of the pitfalls. We were very focused on the bigger market opportunity. There are bunch of tech companies who are short-term and opportunistic, they scale very quickly and then unfortunately they either fall over or they are bought. We are very much focused on the bigger goal, managing marketing decisions from the first time you touch the consumer with an ad or a search result, all the way through to buying. It’s a big opportunity. We also have investors that put pressure on you to scale revenues. I am not saying we will always get it right, but that balance is getting better. You know one of the frustrations of running a venture capital backed startup is that you spend a lot of time raising money, which means I am not building business. But it’s healthy in a sense that you have a really clear understanding of what investors want to invest in, and ultimately the VCs are here to help build something that sells.
So you mentioned, you have had two previous companies before. Do you think that was essential experience in building Cognitive Match? Yes, even though there are two schools on that. However from my perspective, it has been very important in the way we have built Cognitive Match. I think we have avoided some mistakes because of that. We have also made some new ones. But just in terms of how you build a team, take some decision, it was really important. My first business I built without funding, the second business was built with a lot of funding, so I definitely saw those two different scenarios. The first one I had to get profitable from day one and keep profitable. The second one was venture capital funded, so you are funded to expand faster than your revenues.
How do you see Cognitive Match progressing in the near future and long term? We have this really big market opportunity in mind. We think that the acquisition and conversion markets are going to combine. We are definitely ahead of the market with that thinking. The geographical focus is changing from Europe to Europe and the US. We have done some work in Asia and are conscious it is a very different market. As a startup taking on the whole world at once might not make sense, but we want to get there. Certainly the focus for now is the US and Europe. In terms of how we view the space, we are probably the most partner friendly provider. Our competition wants to kick out the partner, they want the entire share of the relationship, they want the advertiser to pay them everything and sort of have an exclusive relationship with them. We don’t think that is a very sensible way to scale. Our model is more agency friendly and we think by having that model we will scale faster. If we sign a few key partnerships with very large agencies that do resell our services, then growth should be fast, and that has started to work really well.
As Venture Capital advisors, we are curious to hear your experience of funding, from bootstrapping to being VC funded. I am pleased to say it has worked out fantastically so far. We have been quite careful about the VCs we have chosen, we are trying to work with VCs that bring more value than just money. It does take a lot of time, I sometimes wonder if VCs are aware of that. Especially when you are raising a round and you are talking to two or three at the late stages. They start to do due diligence and this wall of work hits you. And yet you are an early stage company and what the VC should want, is to know is that the guy who is supposed to be running it, is running it. It is an ongoing frustration, which you just have to learn how to deal with.
Do you have any pearls of wisdom to offer entrepreneurs and start-ups? The obvious one is, just do it! Seriously, don’t spend too much time thinking about it. Choose your investor wisely, if you are raising an investment. There are a bunch of successful businesses that never raise investment. Just be really focused on the benefit(s) you are bringing to whoever will buy your services or products. Believe in what you are doing, but never get caught out in mindset of the stuff I am doing is cool. If the customers are not enjoying some benefit out of it, you won’t be running for long.