For today's interview, we thought we'd catch up with Hamet Watt, who was most recently founder of NextMedium, and is now an EIR at True Ventures (www.trueventures.com). Hamet is now helping True Ventures look at investments in Southern California, and we thought it would be worthwhile to talk to him about the firm's new interest here, his role, plus his insights into where the advertising industry is now.
Tell us what you're doing for True Ventures?
Hamet Watt: I'm looking at opportunities that might be emerging from the Southern California area, and also playing around with some themes of my own, which might make sense to explore entrepreneurially. At True, I'm working with Jon Callaghan, who was also one of my earliest investors in my last company, NextMedium.
Speaking of NextMedium, can you tell us how that worked out, and how you ended up in venture capital?
Hamet Watt: NextMedium was acquired by the Steelbergs, the founders of several successful ad platforms. Most recently, that was dMarc, which they sold to Google. I'm still working closely with NextMedium and the Steelbergs as they explore new ways to grow the platform. When I was thinking about what was next, I reached out to some friends and colleagues that I had worked with in the past and trust. I also had some people reach out to me, Jon Callaghan was an early investor in NextMedium before he formed True Ventures along with Phil Black. Jon and I remained close and stayed in contact, even after he was off the NextMedium board. True is really unique, in that it is extremely focused on people and teams, and specifically on entrepreneurs and founders. If you look at their portfolio, they have exceptionally strong relationships with their founders and CEOs.
Was there any specific interest in Southern California?
Hamet Watt: I think my exploration with them was more sparked out of mutual interest in finding ways to work together, though I think there is also a healthy interest in what is happening in Southern California. They are in lots of geographies--with offices in the Washington metro area, and office in downtown San Francisco, as well as offices in Palo Alto, but I think that there are lots of opportunities which might come from here. Their strategy is very much early stage, focusing on entrepreneurs that they know, and like, and who they believe in.
Is there a specific type of industry of interest?
Hamet Watt: Not really. It's across the board. They've invested in several web-related businesses, some hardware businesses, with all of them primarily technology driven businesses. It's more the stage and entrepreneur.
You mentioned early stage. What does early stage mean to True?
Hamet Watt: It's true early stage, even seed financing, where they have been maybe some friends and family. We stay away from Series B investments, it's all Series A and earlier.
How has being involved on the venture side been for you?
Hamet Watt: I really enjoy having one foot in the VC camp, and one in the entrepreneurial camp. I like it because most entrepreneurs like helping other entrepreneurs, and I can relate to that. There's a natural fraternity. I think to some extent, you get to meet more entrepreneurs being associated with a VC. The True team is uniquely positioned to be a breath of fresh air in the venture market. They really are super mart people, very trustworthy, and are partners with entrepreneurs.
Back to NextMedium, how did that acquisition come about?
Hamet Watt: I met Ryan and Chad Steelberg because they have had a great deal of success in and around ad automation systems and platforms. I was introduced to them by someone in the agency world. We stayed in touch, and we were looking at joint ventures with what we were doing and what they were doing, and ultimately it just made sense to explore an option to acquire us.
Was there anything you learned from NextMedium, or would do differently?
Hamet Watt: I think the modern approach to company building is different. It might be a sign of the times, but I think one is being as capital efficient as possible. I don't think we were spendthrifts at NextMedium, but I mean being very lean as you grow businesses and prove them out. I also think making serious investments in building relationships with big partners helped us. On the other hand, I think we made a lot of investments in technology--we had a majority of our engineers, a dedicated office in Northern California, and a CTO and team--where, although we put a substantial investment in technology, are probably more advanced than we needed then or now.
What's your view on how advertising and the Internet is changing?
Hamet Watt: It's changing things dramatically. There are now tremendous amounts of advertising options. There are so many different platforms and ways for advertisers to reach the consumer, your value proposition has to be distilled and clear, to differentiate from all the noise. Plus, ROI metrics are entering into the picture--even for awareness building and top-of-the-funnel building. You need formal metrics and ROI components, and ROI insights are becoming critical. I think the future involved a much more, seamless integration of ROI analytics into advertising in general, with a lot more cost-per-action ad models or incentive-based marketing ad models. I think, in this environment, with the sheer amount of advertising options out there, being a product company or service company--an advertiser--might be better than someone enabling advertising.
So given the interest in ROI, is branding dead?
Hamet Watt: I still believe branding is an important part of the marketing mix. It's not dead, but it's now intertwined in a lot of your marketing channels and your product. Branding, in the traditional sense, is changing, although perhaps it becomes more important as a differentiator in a market. But, the sophistication around investments in branding will increase.