Entrepreneurs often draw inspiration from the success or failure of other risk-takers.
But without a doubt, it’s much easier to stand before more than 250 businesspeople and deconstruct a triumph than recite what went wrong.
On the face of it, Nathaniel Turner, one of four founders of Invite Media Inc. - which was started in April 2007, while he was in college, and sold to Google Inc. in June 2010 - would seem to be something of an overnight success.
After all, in little more than three years, Turner and his crew had built a new type of display-advertising exchange that had Google, with a $190 billion market capitalization, pursuing them.
As Turner told the crowd at the third Founder Factory event at World Cafe Live earlier this month, it was not as simple as it appears. Invite Media is a great example of the “pivot,” a bit of business jargon that means if your first idea isn’t working, shift to a new one.
During his presentation, Turner even joked about being able to describe how Invite Media adapted using such a term. Pivoting sounds a lot more decisive than how Invite Media’s venture capital investors characterized Turner and his fellow twentysomethings: “the shiny-object kids.”
As a teenager, Turner had started and sold other online businesses, including one to swap gift certificates and another to order food from local restaurants. While at the University of Pennsylvania, Turner, Zachary Weinberg, Scott Becker, and Michael Provenzano started Invite Media in 2007 to build a video ad network.
It would prove to be an awful idea, Turner said, and led to a pivot to a new approach to the many marketplaces that handle the buying and selling of online advertising.
It was also clear that a company focused on advertising agencies for its clients would need to spend more time in the center of that universe, New York. Turner and Weinberg put thousands of miles on a car, driving to New York in the wee hours to make 8 a.m. meetings at agencies and then driving back to Philadelphia to get to class or take tests.
A 600-square-foot office in Philadelphia’s Northern Liberties neighborhood was where the four founders lived, worked, coded, and lost a lot of sleep. But looking back, Turner, now 24, said it was the most fun he’s had.
“There is no better time to start a company than when you’re in school,” he said.
After all, college students don’t require a lot of money, their housing often is paid for, and their peers often are willing to hustle at all hours to meet deadlines. “You can’t beat that when you need to have your attention focused on the company,” he wrote in an e-mailed response to a question.
But the energy of youth is at times counterweighted by the lack of experience. “We never acted like we knew everything,” he said.
Turner told the Founder Factory audience that he and Weinberg once wasted a week in Menlo Park, Calif., trying to meet with the storied venture capital firms that line Sand Hill Road.
However, their nonstop networking would pay off in attracting venture investment from two of the Philadelphia area’s brand-name firms: Comcast Corp.’s venture capital arm and First Round Capital L.L.C., the Conshohocken seed-stage investment firm run by Penn grad and Half.com founder Josh Kopelman.
It was Kopelman who not only told Turner & Co. to stay in school and get their degrees, but also to hone their pitch to potential clients using simple language. Turner described long sessions before a whiteboard trying to distill what it is Invite Media’s technology did. Eventually, they came up with the phrase “demand-side platform” for Invite Media’s Bid Manager exchange, where advertisers can bid on display-advertising space.
During his recent presentation, Turner was most colorful in describing entrepreneurs’ interactions with venture capitalists, likening the VCs to high school girls. “If one likes you, they all do,” he said.
There is a herd mentality to venture investing, as firms often try to match what others are doing, chasing the technology du jour. But, as Turner said, if an entrepreneur can get one venture firm to offer a term sheet for a round of investment, it’s easier to attract others.
Once a start-up takes money from a venture capital firm, the relationship changes. “You are signing up for a marriage when you take venture capital money,” Turner said.
It’s very hard to undo a deal and, therefore, entrepreneurs need to take seriously what the commitment means. Venture capitalists expect managements to run their companies, but they can be quick to get involved when things go bad, Turner noted.
That said, of the $4 million in venture capital Invite Media raised, the company still had $2 million in the bank at the time of its acquisition by Google.
Turner, who continues to run Invite Media from Google’s New York offices, would not disclose the purchase price. Google never announced what its DoubleClick business unit paid for Invite Media, but the Wall Street Journal’s All Things Digital website reported the price was $81 million.
Today, Invite Media employs about 60 people, with 15 working from its Center City offices.
Turner’s tale was the hit of a daylong Founder Factory event, organized by Philly Startup Leaders, that celebrated the drive of local entrepreneurs.
Some businesspeople spend a lifetime building a company they one day might sell for a fortune. It took Turner little more than three years. Just think what he might do next.