00:12:29 · David Senra
[00:12:29] S0: I want to tell you about the presenting sponsor of this podcast, Ramp. I have been reading a lot about SpaceX lately. SpaceX is one of the most valuable businesses in the world, and one of the main themes in the history of SpaceX is constantly attacking and questioning your cost. Ramp helps many of the most innovative businesses in the world do exactly that. The median company running on Ramp cuts their expenses by 5%. And one thing SpaceX has demonstrated is that a religious dedication to controlling costs can help actually increase revenue because you can pursue opportunities you couldn't otherwise. And we see that in the ramp data too. The median company running on ramp also grows their revenue by 16%. So when you're running your business on Ramp and your competitors are not, you have a massive competitive advantage that compounds over time. Ramp is the only platform designed to make your finance team faster and happier. Many of the top founders and CEOs I know run their business on Ramp. I run my business on Ramp, and you should too. Go to ramp.com to learn how they can help your business save time, save money, and grow revenue. That is ramp.com. Deel is how the best founders turn the world into their talent pool. I've been studying how history's greatest founders operate for a decade. And one thing they all have in common is they understand that recruiting and hiring the very best talent is your most important priority. A players recognize other a players, which is why top companies like Ramp, Shopify, ElevenLabs, Uber, and DoorDash all use Deel. Many of the top founders I know have personally invested in Deel after using their product. And what they discovered is that Deel is the best company in the world at building infrastructure for global hiring. Deel will help your business hire, pay, and manage any worker anywhere in the world so you can retain the best talent anywhere and spend the rest of your time focusing on what you do best, delivering value to your customers. The founder of ElevenLabs has a great description of the value Deel can give your company. He said, we built ElevenLabs to break down language and communication barriers. With Deel enabling us to hire and support exceptional talent anywhere, we can accelerate our innovation and bring more voices, stories, and ideas to every corner of the world.
00:14:37 · David Senra, Rafael Vivas
Deel is trusted by over 40,000 companies and growing fast. Learn how they can help your business by going to deal.com/senra. That is deal.comsenra. What is the state of the business at the time you moved into the office? [00:14:49] S1: State of the business is pre revenue. It was like an animal house. Adam had a bunch of engineers just working on different apps, they were just trying to find product market fit. Their next idea was to build AppLovin ad network. And for context on Adam as well is that Adam before had ran a very successful ad platform called Social Hour. That was an ad network on Facebook and then before that, he'd been doing advertising as well. So he was very, very familiar with the space and something that he mentioned in your last episode, he already saw a lot of user activity switching from PC to mobile. So it was kind of like he was the perfect person to tackle the space because he understood the problem. It was a wide open field. And then also me coming on board, I was able to connect us at that time to the right advertisers and publishers and the rest is history.
00:14:49 · Rafael Vivas, David Senra
[00:14:49] S1: State of the business is pre revenue. It was like an animal house. Adam had a bunch of engineers just working on different apps, they were just trying to find product market fit. Their next idea was to build AppLovin ad network. And for context on Adam as well is that Adam before had ran a very successful ad platform called Social Hour. That was an ad network on Facebook and then before that, he'd been doing advertising as well. So he was very, very familiar with the space and something that he mentioned in your last episode, he already saw a lot of user activity switching from PC to mobile. So it was kind of like he was the perfect person to tackle the space because he understood the problem. It was a wide open field. And then also me coming on board, I was able to connect us at that time to the right advertisers and publishers and the rest is history. [00:15:40] S0: He also told the story too where he tried to sell 25% of the company to VCs for a million dollars. Yep. He's like, you know, you can buy 25% of the company. We should back this. You guys got in really early in this trend where you just said this transition from desktop to mobile. Yep. And he was turned down because they thought they're like gaming and ads. Like, are terrible businesses. Yeah. They didn't understand that. And then a few years later, they go and fund a bunch of other competitors to you. And he said you guys made it a company principle to put those... To drive those other competitors out of business.
00:15:40 · David Senra, Rafael Vivas
[00:15:40] S0: He also told the story too where he tried to sell 25% of the company to VCs for a million dollars. Yep. He's like, you know, you can buy 25% of the company. We should back this. You guys got in really early in this trend where you just said this transition from desktop to mobile. Yep. And he was turned down because they thought they're like gaming and ads. Like, are terrible businesses. Yeah. They didn't understand that. And then a few years later, they go and fund a bunch of other competitors to you. And he said you guys made it a company principle to put those... To drive those other competitors out of business. [00:16:10] S1: So take a step back here. So there was actually plenty of other companies in the space that were very well funded. And they were backed by the top tier VCs at the time, so Benchmark, Sequoia, and so on. Some of them were very, very successful already. It felt like the market actually at the time was very mature. It was like, how are these? At the time, it was like this one kid that's doing sales and a few people in Palo Alto gonna succeed against these behemoths that already had a... At that time, it looked like a lot of the market. And also when Adam went to go try and raise his money, we were already profitable. It's funny because he was giving them a deal on a silver platter. Revenue traction, companies growing like crazy month over month, very profitable, you know, world class margins convert to everyone else in the space, and he still got turned down. [00:16:54] S0: Why do you think that is?
00:16:54 · David Senra, Rafael Vivas
[00:16:54] S0: Why do you think that is? [00:16:56] S1: I think what it came down to was that we have a very untraditional story and background. A lot of people that, you know, had raised money before, you know, they were doing these mobile game app, they were game publishers or they were part of these big corporate companies. And so on paper, they worked at Facebook or they worked at Google, they were on the AdMob team, which was one of the biggest ad platforms at the time. They worked for all these businesses. On paper, they looked great Versus us, we were performance marketers who... We always ran arbitrage businesses. We'd never run an ad network that had kind of seen its way to... It's like a very profitable ad set. So I I think that's really what it was. [00:17:35] S0: How do you start? Like, you guys are a smaller team, no funding, you're essentially bootstrap competing against already established players that have more money and have more people. So how do you guys start building company? How do you start winning?
00:17:49 · Rafael Vivas
[00:17:49] S1: What Adam understood better than anybody else in the space was that the tech is the most important part. Everyone else focused on sales. Right? So they had, you know, hundreds of advertisers and they had, you know, these premium publishers, but their algorithms were shit. A lot of these algorithms were people just, like, manually optimizing things in the background. Now we didn't have a state of the art machine learning model that's not what existed back then, but we had rules in place and we did regression learning around deciding what to serve. And that in itself allowed us to outcompete our competitors even though we didn't have as much demand and even though our publishers at that time weren't as high quality as some of the other ad platforms. And so when we would go and we'd actually see our monetization, let's say we'd go head to head with another ad platform, And a lot of times we would monetize at double the clip of somebody else. So the conversation of when I would walk into a room where I'd reach out to a publisher was, I guarantee you more money than you're making elsewhere. It was a no brainer. A lot of people, they believed it was too good to be true actually, so they make us put it in writing. We had no issue doing that. I would really say it was like Adam's vision in going all in on the tech is what allowed us to succeed.