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Interview with Jonathan Zweig, AppOnboard

Story by Benjamin F. Kuo

 

Our interview this morning is with Jonathan Zweig, the CEO of Los Angeles-based AppOnboard (www.apponboard.com), which has created software which allows mobile app developers--and in particular, mobile game developers--to create demos of those games which can be played without having to download and install those apps. Jonathan, who was Founding CEO and President of AdColony (which sold to Opera for $350 Million in June of 2014), also told us why he got back in the startup game, even though he could be just sitting on a beach in Bali after his prior success.

What is AppOnboard?

Jonathan Zweig: The main goal of AppOnboard, is to put the discovery mechanisms for the App Store on their head. Traditionally, the way that app developers get downloads for their apps is through banners, interstitials, and even videos--something we pioneered at AdColony many years ago. The only problem with that, is the type of user that ends up downloading the app tens to be a very poor quality user. Usually, it's someone with just curiosity about the app, and the advertisers will pay several dollars for that download, only to have the user just delete the app, without having ever played it or even gotten through a tutorial. What we have done, is we take a part of the game out of the app, and put that on the other side of the fence of the App Store, so the first experience they get with the app is essentially a demo. They can play it, try it, see if they like it, and then the advertiser ends up paying only for very, very highly qualified users. We have already proven out that they are a high lifetime value user, someone who will actually stay in their game, so that they have higher retention, and the user ends up spending more money over time. The basic premise, is try before you buy. No one has ever been able to execute on that from a technology standpoint before. We are a technology company, not an ad agency, and we are really just a bunch of nerds who believe we can turn this thing upside down, and let people try those apps out before downloading. It's been a resounding success.

You've been quite an active angel after your successful exit at AdColony. Why launch into a new startup now?

Jonathan Zweig: I was the largest shareholder in our exit to Opera, when AdColony sold in 2014. At the time, I really had no intention of ever working again. I traveled the world, enjoyed time with my family, and I really never though about working again. However, I was reading this book by Phil Knight, called Shoe Dog, and he talks about his story and how life is basically a sport, and that very few people are on the field of life. Most of the people are in the stands. The real fulfillment in life is on the field, and that's what I realized I loved about the AdColony days. It was being on the field, controlling your own destiny. I yearned to get back to that state in my life, rather than just sitting on a beach in Bali, which is what I was doing. This bigger calling came back to me, and I say—hey, what are you doing with your life Jon? You can't sit on a beach for the rest of your life! So, I came back into the ecosystem, started attending the game and developer conferences, and really started asking the hard questions to executives in the industry, and figuring out where the underserved areas were in the industry. It all came back to this idea of on-boarding. App developers are spending a lot of money with the ad networks just to get users to download an app and go through your tutorial. I said, wouldn't it be great if they could get that experience before they download an app, rather than after? It inspired me to basically find the brightest people I knew inn the industry, and have them create technology to do exactly that.

Some entrepreneurs might be surprised you didn't want to sit on a beach in Bali for the rest of your life—talk more about that?

Jonathan Zweig: Life is not about retiring at 36, I will tell you that. I didn't ever envision all of that happening so quickly. I have to say, I am from Boston, and I'm a huge fan of the Patrios. I really love listening to Bill Belichick. He talks a lot about this. After lots of success himself, he basically says that most of the success you have in your life has to do with the people you come across in your life, who help you out. I got super, super fortunate that early in my career, I was living with an entrepreneur, Randy Saaf, who was running a company called MediaDefender. He sold it to ArtistDirect for $42.5M in cash. I was renting a spare bedroom from him throughout that whole process for him. I had a programming job at UCLA at the time, working at UCLA Radiology. Every single day, I would look forward to rushing home just to listen to his stories about the experiences at his startup. I was a sponge. Without having had the super fortunate experience of having to have been living with Randy, and seeing first hand what a startup really goes through, I don't think AdColony ever would have happened. He was just a friend from church, and we actually connected at church through bible study. It ended up being probably the most pivotal and influential experience of my life, living with Randy Saaf. You can google him, and you can see he's now CEO of Lucid Sight, another Southern California company, which is in VR and AR. I really had the privilege of coming home every night, and picking at his brain, asking him how did things go, how did that happen, what did he do in that situation. Eventually, after five years of living in his spare bedroom, th eiPhone came out, and I started to dabble in making a game. This was before the App Store existed, and he was just unbelievably supportive of all my ideas. He was the first investor in what eventually would become AdColony. I essentially build the company out of the bedroom I was renting from him in Brentwood, on Goshen. So, if I could point to one experience that really made the difference to me, it was moving in with randy, and getting a front row seat to what building a startup is all about. Without that, as Bill Belichick says, it really was about the people you meet in life, and being in the right place at the right time to get that experience. Bill talks about growing up at the Naval Academy with his father, who was an assistant football coach there, and saying that was the most impactful experience on his coaching career. My experience with Randy was much like that.

So, back to AppOnboard, how is it you've had such rapid adoption by such big players?

Jonathan Zweig: One, was the AdColony experience, where I developed a lot of great relationships there. It's all about who you know. Number two, I really believe we have the smartest people in the ecosystem building our technology. What we do, is we build a full-fidelity demo for a customer. We will take that to a customer, and show them what we have. It essentially costs us $100,000 to build that unit, and we'll bring it to the customer, and show them what we have created, and ask them—how do you like this? To a man, they tell us it's the best advertising unit they've ever seen in their life. We're able to walk away with about $1M in insertion orders without much negotiation on the quality of those demos. That's number two. Number three is our investors. Our main two investors are Troy Capital Partners, based here in LA as our lead, and London Venture Partners, out of London. Between those two groups, they have deep, deep roots in the gaming industry. They're very connected with CXOs with a number of the top clients in the App Store. They've been able to make introductions to fast-track the work we're doing. You might hear some talk about how there is a difference between money from one person or another, and there really is. We've experience that with Troy Capital and London Venture Partners. It's not just about their money, but it's about their introductions, which provided a real value. That says a lot about what's happening in LA, in terms of the investment scene. That has not always been the case. When we raised money for AdColony, our main investeor was out of New York, Insight Venture Partners. They did a phenomenal job. LA's ecosystem was not like it was today, and it now has a rich history, lots of smart people who have exited, and who now run funds and get the ecosystem. That's something I am very passionate about, supporting the So Cal ecosystem, which is why we hire heavily from USC, UCLA, Caltech, Occidental, and the other local schools.

What's the biggest challenge for you?

Jonathan Zweig: If you have a software development kit like we do, the challenge is getting past engineering hurdles to get our technology into another developer's app. On the demand side of our business, we have open ended insertion orders, and we're up to our ears in people who want to buy our unit. The challenge, is always getting the supply to deliver to those units. That's really the intent of this round, to really ramp up our publisher outreach team, to empower them to get our technology inside more apps. We have to be in apps in order for our technology to run, and that's a much longer process than simple insertion orders for ad purchases.

Finally, as a serial entrepreneur, what's the biggest advice you'd give to other entrepreneurs?

Jonathan Zweig: I would say, swallow your pride, and let other people help you. Always make sure everyone else in a room is smarter than you. There are a lot of young entrepreneurs who think they have the next big thing, and get a big head, and don't accept help from other people. All of the success I've had is due to other people helping me, and I've been pretty good at getting other people to help me. I think that, no matter how smart an entrepreneur, they are not going to have success unless they let other people help them. I think that's my biggest earning, and I try to continue to learn from people every day.

Thanks, and good luck!