Frank Addante is CEO and founder of Rubicon Project, which provides online ad optimization technology to publishers. Frank is a successful, serial entrepreneur, and tells about his experience growing Rubicon from a small startup to a much larger team. He originally posted a version of this on his personal blog.
I run a very different company today than I did a year ago. Running a global company with multiple product lines, a much larger team (spread out in offices around the globe) and hundreds of millions of dollars flowing through our platform has completely changed the dynamics of the business and my role has needed to change in it, accordingly. Personally, this has been a big shift for me, and one that came quite rapidly. I could have never planned for Rubicon’s rapid success and the last thing on my mind was how to plan for the evolution of my role within it. In short, I’ve had to go from playing “running back”, to “quarterback” to now “coach.” There is a big difference from “doing things” and “being responsible for things getting done” and it’s a difficult switch for scrappy entrepreneurs (who are used to doing everything themselves in the beginning) to make. Two years ago, I was building desks along with my co-founder Craig to keep our engineers building, our sales people selling and our support team servicing. It was the right thing to do at the time. Today, the company footprint is very different, its goals are more complex, the risks in the business are intensified, the opportunities are greater and more plentiful and I have a lot more people to answer to as the overall equity value of the company has dramatically increased (investors, employees, shareholders, etc.)
I’ll write a series of posts on CEO/Founder evolution, but the one that I want to focus on right now is probably the biggest lesson I have learned: Get the hell out of the office! My company is no longer confined to the walls of our headquarters in L.A. We now exist in San Francisco, New York, London, The Netherlands, Germany, Australia, Hong Kong and soon to be in more cities, countries and continents. We have customers, partners, employees, press and investors in all of those places and prospective ones as well. We’re operating in different economies, with different laws, cultures and markets. Sitting in our headquarters in L.A. would give me a limited and skewed version of what’s really going on in the company and in the markets we operate in around the world. The only way for me to get a true picture of our evolved, global business is for me to experience it directly, and sitting at my desk only hindered my ability to gain a broader, more global perspective.
I learned a great lesson from Peter Sealey (former CMO of Coca-Cola, President at Columbia Pictures and now professor at Stanford and Berkeley.) Peter told me a story about how when he was at Coca-Cola, they tried many times to break into the market in China. After millions upon millions of dollars and a few people getting fired, multiple attempts to break into the market had failed. Confused by the repeated failure, Peter decided to take matters into his own hands and fly to China. The first thing that he did when he landed was go to a café. He ordered a Coke and they delivered it to him warm. He took a sip. Peter asked me if I have ever had a warm Coke. I said no. He said, “if you have ever had a warm Coke, you would never drink a Coke again. It’s awful.” Peter immediately changed all of their marketing to “Drink Coke Cold.” (from their usual “dancing bears and balloons” feel-good type campaigns) and the rest was a great success. The moral of the story is clearly that you sometimes need to experience things yourself to understand them, develop a feel for them and be able to soak up information to make those critical gut-feeling calls that entrepreneurs and business leaders need to make everyday.
So, I’m doing just that. I vowed to get out of the office. The first step was to change my role internally. I was spending a lot of time doing things like editing press releases, product roadmap reviews, putting together presentations, etc. It was too “in the weeds” and it was preventing me from taking an external perspective on the business looking in. I was also slowing things down. I would get involved in a project, then I’d have to leave on a press or customer tour for weeks. In the meantime, the project would stall. I became a bottleneck. That was the first thing that needed to change.
Fortunately, I already had a strong leader within the company, my co-founder and our COO, Craig Roah. I shifted all internal responsibility and day-to-day management to him. Everyone in the company now reports to Craig directly. Not to over-simplify business operations, but it’s like baseball. Throw the ball, hit the ball, catch the ball – that’s baseball. Business is: build great product, sell great product, support great product – that’s business. There is no one better in this market to build and support great product than Craig. Together, Craig and I decided that we needed to put someone in charge of selling. Fortunately, we also had a great leader there, JT Batson (recently referred to as G.O.D. in the January 18th, 2010 issue of Forbes.) We rolled up all revenue responsibilities under J.T. In short, I simplified my internal responsibilities and lines of communication so that I would not be a bottleneck to the organization.
This was a difficult transition. It required great discipline to “get out of the way.” and to “teach people to fish” rather than bringing them the fish. Some employees questioned my commitment to the business, wondered where I was because I wasn’t jumping in with them to solve every problem, I wasn’t sitting at my desk next to them like I used to and I also became much more selective with the meetings that I decided to accept. It was absolutely the right thing to do and the business is much stronger as a result, but it was a somewhat painful transition personally. I’m not a parent, but I imagine there are similarities to a parent sitting back and letting their kids make mistakes, knowing that it will only help them grow smarter and stronger.
So, my first goal was to make myself unnecessary to running the business internally. I was successful in accomplishing this. My next goal was to figure out what my role should be as “coach” instead of “quarterback.” Here is what I came up with as a start:
1. Right Team:
a. Make sure I have the right team managing the business
b. Ensure they work well together
c. Mentor the team
2. Right Goals:
a. Set the vision for the company
b. Bring them perspectives from the market (financial and industry)
c. Ensure that the team is setting the right goals based on the above
a. Internally (managers and staff)
b. Externally (customers, press, analysts, financial community)
4. Investor Relations & Board Communication:
a. Ensure the company has the capital accessible to achieve its goals
b. Keep all shareholders in sync so we have everyone marching toward the same goal in full force
In order to do this, it’s important that I have all of the information. I can’t absorb this information by sitting in our corporate headquarters. I need to go to every country that we either operate in or intend to operate in. I need to absorb the cultures of those countries and explore the markets and economies. I need to see how advertising works in each of those countries and compare/contrast them to the U.S. markets that we’re familiar with. In some countries, I need to understand the government or legal impacts on the business, either operationally (e.g. employment laws, patent law or taxes) or advertising market-specific. For example, in certain countries, people are bound to employment contracts (mainly for their protection) so they are required to give many months notice if they are going to quit to go to a new company. Conversely, companies are also required to give them similar notice in the event of a layoff. This can play a pretty significant impact when you’re planning on entering these markets (i.e. you can’t enter them as quickly as the U.S., for example) or the risks involved (i.e. you can’t unwind a mistake as quickly either.)
Let’s compare communication, which is one of our cultural values. There are cultural nuances that exist within regions or countries. Just as New Yorkers (i.e. very direct) communicate differently than Angelinos from L.A. (i.e. more laid back), the same exists from country to country. Right now, I am in Australia and I’ve noticed that people are pretty direct and often don’t use pronouns in their writing or communication. Personally, the lack of a use of pronouns in emails (e.g. “Hi Frank. Wanted to reach out to you to schedule a meeting.” – omitting the “I” before “wanted”) is a pet peeve of mine. I view it as a sign of laziness. However, in Australia, that seems to be common communication. This is a small example. There are larger ones, such as how the Japanese will politely say “That’s very difficult” and what that really means is “there is absolutely no way we are going to do that!”
Market nuances are extremely important. In the U.S., there is a big ad quality and content quality challenge for publishers and advertisers. Publishers don’t want “belly fat ads” on their site and premium brands don’t want to show up next to them. In Germany, their standards are extremely high. They consider an ad quality problem to be when a BMW ad shows up on the same page as a Honda ad (i.e. thinking that the Honda brand is of lower quality.)
Direct interaction with economies can also tell you a lot. Since it was my first time in Australia, I did some site-seeing in between business meetings. I learned that it seems that Australians are concerned about the economy and have pulled back spending on things like eating out and entertainment, however, they still spend on travel. Travel is important to them. This is very different than the U.S. This could be good information when deciding where to invest or focus in certain markets or regions.
Talking directly to employees in offices outside of headquarters is crucial. You learn a lot about how they view communication with their sister offices, what they’re seeing in the market and you can absorb their ideas. All of this information is important when trying to fill the logical part of your head with information that you need to develop that “gut feel.”
I have seen the company evolve quite a bit over the past six months. As a result of the changes I’ve put in place, I believe the company is much more scalable and sustainable. I am not a bottleneck and the team has become far stronger. It is parallel processing and doing so in multiple time zones on multiple continents and has melded well with multiple cultures. This is important to me for both geographical expansion as well as inorganic expansion through acquisitions. We completed our first acquisition mid-2009 (of OthersOnline) and the culture mesh has been fantastic – they are some of our best people. We anticipate doing more acquisitions, and proving that we can absorb one successfully was a good test for us. I hope that by traveling and spending more time out of the office that I’ll be able to:
a) Gain the direct information, exposure and knowledge that I need to make the right “gut calls” for the business going forward, globally
b) Expose the team to new ideas, experiences and challenges
c) Figure out what the next big thing is for Rubicon while the team is cranking away on our current big thing
I can go on and on… I think you get the point. Get out of the office!
Frank Addante is the founder and CEO of the Rubicon Project, an online advertising technology company. Frank is a serial entrepreneur with one IPO and two acquisitions before the age of 30. He previously served as CTO and technology Founder of L90, Inc., a publicly-held Internet advertising company that was acquired by DoubleClick after a successful $112 million IPO. Frank’s fifth company was StrongMail, the leading email delivery infrastructure provider for thousands of companies worldwide, including Fox Sports/MSN, Ticketmaster, Williams Sonoma, FTD, Netflix and MySpace.com. He serves on various boards of innovative technology and marketing companies and received his education in electrical and computer engineering at the Illinois Institute of Technology. Read Frank’s blog at www.FounderBlog.com.