Friday, February 8, 2008
Interview with Ken Hayes and Gary Mittman, Nami Media
We recently caught up with Ken Hayes and Gary Mittman of Nami Media (www.namimedia.com), a local Internet advertising firm that has been funded by the Pasadena Angels and recently selected as Finalist for the PriceWaterhouseCoopers Entretech Award. We thought we'd hear a bit about what Nami does, and also get some insight into the firm’s experience with angel investors. Ken Hayes is President of the firm and a member of the Pasadena Angels; Gary Mittman is CEO and co-founder.
Where in the internet advertising space you fit?
Ken Hayes: Nami Media is really an internet technology company focused on the search, affiliate and optimization space. We create technology to make advertising effective, and we manage networks of advertisers and publishers. The company has been around 2001, when we developed tracking software and later an affiliate management solution to help marketers and merchants pay affiliates on a commission basis. Our white-label platform enables them to manage this process with a high degree of control, and that system is sold as software as a service. In 2006, Nami further developed into the search market. We basically took our core technology and refined it to allow search marketers--people buying cost per click ads such as Google Adwords-- to manage their search activity at very high volumes. We further developed the system to enable search publishers to link to advertising sources that aggregate and syndicate large inventories of ads. That system helps websites display relevant ads depending on the website’s quality and source of traffic.
What's the main part of your business, it seems there are several parts?
Ken Hayes: We refocused in late 2006 on the search business. The main advantage of the Nami platform is our proprietary click fraud filtering system. That's enabled us to attract a body of publishers, hook them up to advertising sources, and protect advertisers from click fraud. Protecting advertisers, while sending them high quality users, is a key element of our pitch.
Ken, you're a member of the Pasadena Angels, which has backed Nami Media--can you tell us how you got involved with the company?
Ken Hayes: The two original co-founders of the company are Gary Mittman and Ethan Joffe, and they're the linchpins of the company. They started in 2001, at the toughest time in our industry, and they received modest angel investment from the Pasadena Angels in 2002 and again in 2004. They went through the process of developing the technology, proving it with real customers, but hadn't hit yet on a great source of revenue. I was introduced to Gary about a year ago through a fellow Pasadena Angel, and I had worked at Oversee.net in the same space. We really got along. Gary is very strong in product development and new business. Ethan, our CTO, is a technical genius from MIT. My strength is in building organizations. With the three of us together, we're a lot stronger. I joined the company in July 2007, in conjunction with another angel round with Pasadena and other angels. It was good timing -- Nami did more revenue in 2007 than in all previous years combined, and we are now on a strong growth trajectory.
Gary, how have you found the angel involvement in your firm?
Gary Mittman: One interesting thing that has been very valuable is our Advisory Board members, including the founding members of the angel group. They have a key hand in guiding our path, and we meet every month with them. One really positive aspect working with the angels is, it's in full cooperation with the management.
Ken, we often hear about how angels end up pulled in to help run companies; did you imagine as an angel investor you'd be taking such an active role?
Ken Hayes: It's not unusual in the angel experience, especially among organized angel groups. The Pasadena Angels are active in dozens of companies. What occasionally happens after making an investment, is that even though there might be ongoing progress, a company does not necessarily take off as expected. So, there's an opportunity for angels to re-invigorate those companies and add the missing pieces which might be critical to grow. It's a real opportunity for angels to get involved in a positive way with those companies.
It sounds like angels can sometimes be more helpful than other investors?
Ken Hayes: Definitely, that's certainly the intention of many angel groups. It's more humane or humanistic than venture capital, perhaps. That's due to the fact that at the angel level, companies are so dependent on the entrepreneur, that angels prefer to get involved only if it's cooperative.
So it sounds like the experience has been positive?
Gary Mittman: Extremely positive. We've been involved with friendly and supportive angels. I don't know if this is true of all groups, but the Pasadena Angels have been extremely supportive, and are really there as a guide.
Ken Hayes: Many entrepreneurs underestimate the importance of trust between the entrepreneur and their investors. Building trust really pays off for a company, if it goes through a dry spell or unexpected developments. Instead of panic, you work in a supportive environment and focus on driving the company forward.
Finally, where's the company headed over the next year or so?
Ken Hayes: Our goal is to grow aggressively. Nami Media is a survivor, has a proven profitable model, and now the challenge is to grow and scale it. We will continue to improve our unique click fraud filter systems, the tracking and management platform, and our optimization tools in that platform. Our mission now is to organize and aggregate the second and third tiers of search. We believe the major search companies like Google and Yahoo have essentially locked up the top tier of search with the highest quality advertisers and sites, but there's a huge opportunity--not just domestically, but also internationally--to really bring advertisers to the great mass of websites which are hard to organize and find, yet still provide millions of legitimate, quality users.