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July 18, 2014
Foundation Capital
Every now and then, there comes a moment when you feel really good about a risk you took, about something you believed in and took a chance on. That’s how I’m feeling this morning about backing TubeMogul, which went public on the NASDAQ earlier today.
I remember being fascinated by the company when a close friend told me about it. That was back in early 2009 when we were in the process of investing in FreeWheel. I vividly remember the moment – my wife was due to deliver a baby any day, and we were moving houses the next day. I was supposed to be packing stuff for the move, and yet I was on the phone with my friend, Ajay Chopra, exchanging notes on how the video ecosystem would evolve, and the role that both companies could play in it. TubeMogul and FreeWheel seemed to be very complementary, and I remember asking Ajay to promise me that he would introduce me to Brett Wilson at TubeMogul well in advance of any future financing.
A year later, I got a chance to meet Brett, John, Jason, Adam, and the rest of the team. It was love at first sight! Brett and John had incubated TubeMogul at UC Berkeley, and they exemplified — and still do — everything I love about Berkeley: the exuberance, the determination, and the earnestness. Brett had pulled together a really smart and scrappy team, had launched their publisher analytics product, and had a handful of passionate customers. Most importantly, he had a grand vision to transform video advertising.
There were a few minor questions – they had yet to build the advertising platform, the team was learning about the advertising market as they went along; and the analytics product, which was most of the business at the time, had no future.
Given investments in Netflix, Freewheel and Conviva, we had a ringside seat in the online video ecosystem. We were seeing the explosive growth of Netflix’s streaming business at close quarters, and I was increasingly convinced that linear TV would eventually die, and all premium video content would be viewed on-demand over the internet. If I was right, TubeMogul had the opportunity to dominate in what could be a $ 200 B+ market over time. Very quickly, it was clear that Brett and I shared a common vision around the opportunity to transform advertising by moving brand-centric ad dollars online, and enabling media buyers to buy brand advertising through automated exchanges instead of over cocktails. I still remember sitting in Vogue (one of our Foundation Capital conference rooms) and saying, “If this works, it could be the Google of Brand Advertising!”
And so began my journey with TubeMogul. At the time, the whole company could fit into a conference room, and all they had was their Berkeley spirit, boundless enthusiasm and some naiveté. Right from the beginning, regardless of what they did or didn’t know about the ad industry, they were clear they wanted to build a self-service platform and not become just another ad network. And four years later, despite many obstacles, they have succeeded. Brett has built an exceptional culture focused on “follow through” and a high “do-to-say ratio”. I remember that when they once had a serious bug in the software, Brett rented out a handful of hotel rooms and the entire company worked around the clock for two days until the issue was resolved. Today, the company is 20 times larger, but I have confidence that they would do the same thing if such an issue arose again.
The IPO process has been a roller coaster ride, and it had its scary moments. I am proud of how everyone stepped up to the challenge, and put the company ahead of everything else. I am thrilled that we are a public company, but this is just another small step towards transforming an industry.
My conviction that linear TV will die and that all brand advertising will be bought and sold via exchanges has only gotten stronger, given the events of the last four years. It will take time, but it will happen. My belief in TubeMogul has been — and continues to be – unwavering. We are putting our money where our mouth is, and buying more stock in the IPO. This company is going to revolutionize video advertising, and we are still in the early innings of that game.
Tubemogulers – Congratulations! Let’s celebrate this today and get back to the hard work of building a great company on Monday.