Monday, March 6, 2017
Interview with Clark Landry, Maple Media
Los Angeles-based Maple Media (maplemedia.io) recently announced a big, $30M funding from Shamrock Capital, to assemble a collection of mobile applications in the utility, productivity, games and entertainment verticals. We caught up with co-founder Clark Landry to chat about his new startup, which he co-founded with Michael Ritter.
What's the idea behind Maple Media?
Clark Landry: What we are doing here, is acquiring mobile applications that we think we have a lot of potential and apps that we can actually acquired and make changes to them, in a number of areas, to increase monetization, improve their user interface, and things of that nature. What we're trying to positions ourselves as, and it might sound touchy-feely, is a friend to app developers and app owners who have mobile applications. Some might be looking for some liquidity, they might want to sell their app outright, or it could be they want to cut a deal on the publishing side, and get some helping out with advertising and monetization. We're going out with the backing of Shamrock Capital, who has been a phenomenal partner to date in the limited time we've been working with them. We've been looking for individual mobile applications that we feel we can acquire or partner with, and help improve those apps so that we can generate more revenues from those apps. We are making changes to the user interface, to help limits things like attrition and other things we're trying to avoid. My partner in this is Michael Ritter, who was formerly at SGN, which you probably know is now called Jam City. I've known Michael for eight years. We'd get together every two or three months to grab coffee or lunch, and talk about what we're up to. I told him, that we should figure out something to do together. I told him--you are a top 10 guy worldwide, when it comes to understanding mobile applications, how to acquire them, how to improve monetization, and how to improve the user experience on those apps, and I thought our skill sets would be complementary. After I sold my last company, Shift, in May of 2015, I took some time off to look for the next thing to do. We reconnected, talked about this, and I was thrilled at the opportunity to work with Michael on this.
What was appealing to you about the mobile app area?
Clark Landry: For full disclosure, Michael's level of understanding of the mobile app ecosystem is an order of magnitude or two greater than mine. I was really excited to partner with him, because of how talented he is and how deep his understanding is of the space, and all the hard work he's put in over the years. As a function of having worked with Chris DeWolfe, another amazing individual, Michael was really able to work closely with SGN and JamCity in the mobile area. Knowing how much Michael knew about this space, I knew it would be that much easier to come and raise money for the startup. We ended up going out and having some conversations with Shamrock Capital, and the feedback from them was very positive, and we ended up doing a deal with them. We could not be more thrilled to be working with Shamrock and Alan Resnikoff and Steve Royer, who is also on the board. The amount we've learned from them from the last couple of months has been immensely valuable for us, both for the long run, and in terms of operating this business.
What kind of apps have you been looking at?
Clark Landry: It's funny, as they are actually all over the map. We've talked to a lot of mobile game developers, which is a natural fit, given Michael's background with SGN/JamCity, but we've also talked with developers of productivity apps and utility apps. We saw one today which helps you track how much of a certain thing a day you do is healthy for you. It's funny, but there are many simple apps which have user bases that are very passionate about using those apps, have a consistent user base, or a pretty flat to growing revenue. A lot of what we've been looking at are the metrics. How much revenue is the app making, how much are they spending on the app, the current method for monetizing the app, if they're using advertising, and if so, what's the CPM and ad partner they are working with. We look at all of those things, and see if we can paint a picture of what we have, and if we can plug in all thse variables and figure out if it's a good buy. There are some apps which we can look at, and play with, and figure out some things we we do very differently, using a lot of experience fro Michael. I also have an ad-tech background, so I can do some damage here too. We're able to take a look at the apps and if we do this thing, we can fix that, and this will improve monetization, or we could reduce attrition by doing this. It's very exciting to find these apps, and once we make those acquisition and changes, see if our expectations and projections are meeting up with what happens in reality, once we actually own the application.
Why not just go and build your own apps?
Clark Landry: That's a really good question. A lot of this has to do with the fact that nowadays, it's really hard to get an app off the ground. Increasingly, it takes a lot of spending to build out an app, and then getting users for an app, whether that's through paid acquisition or another method. It seem that now, versus a few years ago, it's a lot more competitive to try to get out and acquire a user profitably for an app. We saw that and said--there are lots of apps out there, lots of great app. But people don't even find them, because you could spend all day on the App Store--which I do lots nowadays--and you still wouldn't find these hidden apps. We sat down and did the math, and figured out that it is much more cost effective to buy an app, than to go out and spend money to develop and acquire users from scratch. It's a much better situation to identify apps that already have a user base, and pick those up. Those apps might be from individual developers, who have built an app where it has gotten really big but users have dropped off, or it might just be a developer who wants to concentrate on their next project. In a lot of cases, we're talking to people who have had successful apps, but those apps might be a little long in the tooth, though they don't have to be. In many cases, the developers might be working on building a new app and need some capital to put behind that, and they might be getting monthly checks from the ad network, but they just don't have the time to fully optimize those apps from the monetization perspective. They don't want to spent a whole lot of time changing a user interface, when they are much more passionate about their next project. We can roll in there, and we tell them we're willing to pay a very fair price to you for this app, so that instead of those monthly checks, we can give you a much more substantial check right now, which they can use to build their next app or take a vacation to the Barbados. That's really appealing for a lot of those developers.
On the other hand, we also talk to a lot of people who say--this is my baby. I don't want to get rid of it, and I don't want to sell it. But then it's easy to transition into a conversation about another part of our business, which is the publishing and monetization service for these apps. I have yet to see a situation where, even if we don't own an app, we can't jump in and help them make more money on ads for those developers than they are currently making, without detracting from the user experience. In most cases, we actually improve the user experience as we switch things up.
You're known as quite the angel investor here in companies (ie. Traffic Marketplace, Adconian, TheTradeDesk)--what is it that you look for in investing in a startup?
Clark Landry: My answer five years ago would have been entirely different. I just got off a phone call with a buddy I went to college with, who works in the same general space. We were talking about how, as you get more experienced and as you get older, if you look at the things that worked out and haven't worked out for you, you realize that in many cases, you got really lucky, or your timing was really fortunate. I'm not saying there isn't a skill involved in picking companies, but there are so many variables at work. If you talked to me at 25, I would have told you that I was a really good angel investor, who knew how to pull this s**t off. But looking at it now--I go, wow, there were so many things I didn't know back then that I know now. Any angel investors who is serious about and has done enough deals that have both succeeded and not succeeded, you start to understand that it's very, very hard to look at something and be convinced that it will or will not work out. I love that Bessemer anti-portfolio they have posted in their office, of all the investments they missed. It's hilarious, and I love that they did that. If I look back at all of the deals that I passed on, and I know it's a “humble brag”, you realize if you look at a lot of deals you will make mistakes and you will pass on things that end up being huge. You'll also put money into things that will go bust. And they are all roller coasters, as you know. Some of the deals that worked out best for me as an angel were those companies I was telling my cash guy one year that this will be a complete write off. The next thing you know, you're making money on it.
Anyway, I haven't done a lot of investing in the last two years, and I've really slowed down there to focus on Maple Media. Shamrock was very adamant to me on the importance of doing this full time, and so I'm not spending a lot of time on angel investing. That's fine with me, as this has been really fantastic and better than I imagined. I'm glad I've been able to really focus on this one thing, as opposed to looking at 100's of different deals. It was fun, for a period of time, but it's nice to get into something like this. It's nice to come into something where we have significant capital behind the project, and we don't have to raise money every year. Instead, you can really focus on executing.
Finally, what's next for you?
Clark Landry: I could not be more excited about working with Shamrock, ad their track record speaks for themselves. They're an elite private equity firm, and what's even better is I can literally walk from my house to their office. We're not out aggressively looking to put this money to work. We have a huge acquisition pipeline. We will be doing lots of acquisition, but we have some very, very specific ideas in mind of what the numbers have to look like, in terms of price-to-revenue, price-to-earnings, and price-to-DAU. It will be interesting to see if we can plug in and figure out what will work and what will not. We'll also be hiring aggressively. If you know good mobile product managers or developers, who know what they are doing, send them my way. We're continuing to look for people who fit the bill to scale this thing up. My number one priority, is for each of the deals in the pipeline, the day we close them we need to have people to handle those. We want to put our money to work effectively and prove that we can do this in a really effective way and continue to scale things up, and prove we can do what we say we can do.
Thanks, and good luck!