How does an ad man who’s fed up with banner ads launch and sell a viral video company?
Today he’s the CEO of The Huffington Post, one of AOL’s biggest media properties.
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Hey there freedom fighters, My name is Andrew Warner, and I am the founder of Mixergy.com, home of the ambitious upstart. In this interview I want to find out how an ad man who got fed up with banner ads online, launched and sold a viral video company.
In 2006, Jimmy Maymann co-founded GoViral, an online video distribution company. Five years later, he sold it to ALL. Today he is the CEO of the Huffington Post, one of ALL’s biggest media properties and by the way, we are here to talk about how did it. Welcome Jimmy.
Jimmy: Thank you very much. Thank you for having me.
Andrew: I know it wasn’t your first company that you sold GoViral, but do you remember the day that the deal went through?
Jimmy: The day, the deal with ALL went through?
Andrew: Yeah, for GoViral that after all that worked do you, I see a smile what do you remember about that day?
Jimmy: No, it’s funny because I don’t remember that day in any particular way. They say, when you are an entrepreneur and like me had the fortune to found and build a couple of different businesses, I think the first time is actually the most special one and I remember that day very much when I sold my first company.
Andrew: Tell me about that.
Jimmy: I remember what I did, as a 27 year old Dane that got a big check. I remember what I did the day after that accreditation. So I think that was special, I think , the second or third time around when you sell a business, it’s more a validation point because you have already fortunate enough to make money. So now it’s more about kind of, getting a validation from the people around you from all around you that what you have been doing for last five, ten whatever years is actually something that’s meaningful for the people.
Andrew: Was it, did you feel like you needed a validation. Where there times, where you said may be this isn’t right, maybe I am just a one hit wonder?
Jimmy: Yeah, without any doubt you know I think those are the questions as an entrepreneur you always ask yourself because when you kind of burst something out, the saying is it always start at an early age, you have seen some trends, you have tapped into some data or something that you kind of that allows you to believe in something and that’s what we did with GoViral,
We looked at the broadband penetration . We looked at people not clicking on banners at scale, we looked at [?] I wanted to kind of re-engage the audience and we believe that video could be you know a format that could work for advertisers ad-scale and that’s why we founded GoViral. What was fortunate for us, actually we founded it in the middle of [?] but that’s fine reason why that [?] later YouTube launched and obviously being in a big year, having YouTube there, building the big pressures and also building the big story about video was definitely something that worked in our favor.
It meant that we got to win it back instead of interface and also it meant that whet I normally do is, you know when I was young I used to surf a lot. What I normally do is an analogy from surfing. When you start a business you get out there on the waters. The waves are not very big. But, the good thing is if you stay there on your board you actually get used to surfing the smaller waves. So, when the big ones come you’re a skilled surfer and you’re ready to really take in the full opportunity and obviously leverage that.
Andrew: What do you mean? What was the small wave for you, in business that helped you learn and prepare for the bigger ones?
Jimmy: The small waves for me in business were really my first time around when I did my first startup. I think to understand the importance of networking, to understand the importance of the team composition, those are things that you are learning the hard way. In my first venture I founded the business with friends, not with people that had the right kinds of skills.
Andrew: You know, it’s funny you should say that. I saw a video of you, it’s just a 30 second clip, as I was preparing for this interview. You said, the wrong way to start a company is to do what so many other founders do, which is to say, I’m going to go with my drinking buddies and we’ll start a company together, because we get along, because we have this great idea over a drink. So, you did that in the first company?
Jimmy: I did that in the first company, and it probably took me a couple of years to realize that. As we realized that we had to make changes. It’s very difficult to make those changes when…
Andrew: …To push, to tell your friends, hey this is not going to work, and push for a new vision.
Jimmy: Yes, exactly right. And, get rid of some of them.
Andrew: Do you remember getting rid of one of your friends?
Jimmy: Oh, yes. It’s one of the worst experiences in my life. It’s always difficult to fire people, but actually to fire people that are also your friends is…
Andrew: …How did you do it?
Jimmy: You know, I did it the most professional way I could. I treated it as if it had been a normal employee, and then tried to be as professional and rational about it as possible. Even though it is extremely difficult when you have known someone for 20 years, and suddenly you’re telling them that they’re not going to work with you, they’re not going to come to work tomorrow. That’s tough. But, at the same time it helps you drive things forward. You learn something from that experience, hopefully. Otherwise, it’s just a painful experience.
Andrew: We’re talking about, let me see if I’m pronouncing the company name right, it’s Neo Ideo.
Jimmy: Neo Ideo, new idea in Latin.
Andrew: I see, new idea in Latin. You started in 1995. You sold it to Leo Burnett in 2000. So, you said earlier, that was the deal that you remember.
Andrew: What happened, what’s the day that’s most memorable about closing that deal for you?
Jimmy: What you have to keep in mind, I started that company straight out of university. So, I’d never really had a job. Then, to your question about questioning, I think every day of the first two years I questioned that. I promise you, my dad questioned that until we sold the company.
Andrew: When you question yourself, what is it like? For me, it’s like, am I a real entrepreneur like a guy like Jimmy. You look the part of an entrepreneur. You come across competent. So, when I question myself, I often compare myself to someone who’s much more successful than me. And I think, I could never be him. Which of course is true, I can’t ever duplicate you. When you question yourself, go deep. What does it sound like in your head?
Jimmy: In my head it’s like, am I really cut out for this, is this really what I should do. Would it be easier for me to just be an associate in a big corporate business where I can hide somewhere in an office? Or, perhaps not even in an office, because I’m not important enough to have an office. So, sitting now in one of these spaces and keeping my head down, is that really…So, that’s what it sounds like, and…
Andrew: How do you get yourself out of that?
Jimmy: Because that’s also the picture that pisses me off. That’s kind of not how I see myself, so that’s like no, that’s not who you are. You are someone who can create things, do things, and get people behind you. That’s the talk that you have to give yourself, I think…
Andrew: So, Jimmy, let me see if I understand you. There’s a part of your head that goes into, who are you to start your own business here. You don’t have enough experience. You maybe belong in a cubicle somewhere, not even an office but a cubicle somewhere hiding the fact that you don’t know your work. As soon as that comes to you there’s a bigger vision of yourself that says, no. I don’t belong in that. That’s not the life for me. I have this other vision, and I’m willing to risk a lot to get there.
Jimmy: Yeah. That’s exactly right. I think I was also fortunate enough to do it when I was young. I founded my first company when I was 23, 24 years old. I didn’t have a family. I came out of university. So, at that point in time you can basically live on a stone. You don’t have to have a big check, you don’t have to have those things when you are in that point of point of your career, point of your life. So I think that helped me sticking around longer than I probably would have done if I kind of felt what it meant to kind of have a monthly pay check and to do all those things.
So I think that’s also right you know, you see a lot of the great companies that’s been build out of [?]. Its often, the destructive ones are often people that were not you know, that do not have long educations. They have gone through all the right scores but they drop out, they build something that’s solely [?]. They haven’t enforced into these boxes there, they are doing challenging conventions and the thing is, although you get the more difficult I find it, the more difficult you find it to curb challenge conventions because that’s what everyone else’s doing so much people right thing to do and they think, that a younger yak, the more you challenge convention and the more you end in bigger visions you have.
At least, I you know that’s why I kept going, kept going even though was very, very tough in the early stages when we founded that company. You know in 95, 96 in [SP] countries, probably there wasn’t lot of people that wanted to buy internet solutions.
Andrew: What was the big idea for business?
Jimmy: It wasn’t the big idea once the U. S. in ’94, ’95 on a [?] for my master thesis and the internet was happening. In that point of time I didn’t really know what it was, how it worked I would just spend some time familiarizing myself and came back totally inspired and ended up writing my thesis about what are the commercial aspects of these things called the internet and no one knew what it was in the [SP].
Andrew: Wasn’t it till the late ’90s that people started to understand?
Jimmy: Exactly, then you know as ’97, ’98 then you know people started to put money behind it and needed to have digital presence you know on building big brand platform, e-commerce solution all those kind of things that we have talked about, that could be the commercial opportunities of the internet but that is a thing when you get into things early, its pretty to get in early but you have to have staying power because otherwise you also get out before things really start to be interesting.
Andrew: So five years later, you sold the business, I am seeing kind of a pattern here roughly half a decade and it’s time to move on.
Andrew: What did you, when you saw the big check, how did that feel like, what did you do? you said you did something right afterwards.
Jimmy: Yeah, I did something that my dad probably is not proud of but it just goes to prove that I was 27, a big boy you know and what do you do when you get that big check, the first thing I did is at least the day after was I had lived a very decent life but not a, by no means was I living in a poverty at that point of time it was a successful business but it was not kind of like a billion dollar business.
The first thing I did was go out and buy myself a Porsche, so at 27 of course I needed that Porsche and I am still laughing when I think about it because it’s personally a gift to myself for kind of having five years, where we kind of have [?] delivered on in and ended up sowing the business and yeah, that was what I did when I sold my first business that’s what I remember it.
Andrew: It’s not a bad idea it all, you could have gone so may worse places than that, alright. So then you go and you become, I called you an ad-man would you consider yourself an adman from 2000 to 2004 when you were at Leo- Bernard, in fact till 2006 roughly.
Jimmy: Yeah, you can say that in a certain way obviously in digital space but still [SP] out, that’s what you do when you work for companies like Leo- Bernard so definitely my areas of expertise working with some of the great, great fast [?] brands that Leo-Bernard is working for like Procter and Gamble so yeah, that’s definitely what I did in that period of time.
Andrew: And you started to see the frustration with banner-ads, you told [?] in the pre-interview that clicker rates almost were 0.02 percent the engagement was low, earlier today I was on Yahoo’s webpage and right on yahoo’s webpage was this ad that burst out of the box that took over basically the homepage and I am thinking why wasn’t that the direction you went in, why didn’t you say, these ad models were started to pop up around the time. Actually even in the early 2000’s. Why didn’t you say let’s go bigger? Why’d you decide to go viral instead of bigger or more dramatic banner ads?
Jimmy: You’re right and actually the viral notion was more kind of the buzz word. It was actually never the appropriate name for the company. But one of my co-founders really loved that name. And that’s why it ended up being that name. But it’s, the problem with it, is it is to generic.
It’s a small fraction of what we ended up doing. Because what we ended up doing was building a platform, a video platform, that was able to track, distribute and host thousands of populations of campaigns. [??] And some of those campaigns have great content so obviously they went viral and you earned a lot of unpaid meteor. But it was also a platform that we’re able to take traditional video ads and get them to stream across many, many sites or categories or countries.
Andrew: So, I went back and I found an early case study from your company, from 2006. I think it’s for Nissan. And one of the things I noticed is that you were doing, it wasn’t so much that you were doing work on your own as, it’s that you were brought in by PBWA to create a campaign for, I guess this one was for Nissan. But it looks like you were partnering early on. That you didn’t have to go out and knock on doors and get big companies to talk to you. You were partnering. Right?
Jimmy: Remember what I said to you earlier? I said to you, “One of the things I learned in my early stage was building a network and really use that to kind of leverage what you want in your entrepreneur. It’s important. And that’s the approach that we had when I co-founded [sp] Covar. It was that we were very commercially driven. And actually I always joke about this. I think we were so commercially driven that the first 18 months we didn’t have to product we sold. At least, not 100% product we sold.
So selling is kind of our mission and a lot of advertisers like that. But we didn’t really have the technology yet in place so we actually ended up doing a lot of it manually before the platform was actually…
Andrew: What do you mean? What didn’t you have in place that you secretly did manually?
Jimmy: No. So I talked about it before. It ended up being a platform play right where we had a shoot system that could track and distribute. And also, would in life, allow publishers to sign up and work with us. Ultimately being paid. All these things weren’t in place when we were started. Which meant that we had to manually work with publishers. We had to manually make sure that these commercials went out. We had to manually, you know, obviously do the sales whereas kind of at a limited stage it became a reliable place where both advertisers and publishers could meet and I basically took myself out of the equation.
That was at a much, much later stage in the cycle. So, that’s why I’m saying we had an idea for and a mission for what we were going to do with the business. But we didn’t have the product in place. So, a lot of sobs I see today obviously go out and get big funding to build that product. We didn’t do that. We went out and sold our vision and from basically six months in we were cash flow positive. And even though we took and investor in, that was only to create a different ownership structure. We never really needed additional money funded to the expansion of the business into the six, seven countries that we launched in Europe.
Andrew: So a lot of the entrepreneurs who listen to this interview are funded. What would the funded entrepreneur be surprised that you did manually because you didn’t have funding? Because you took a different direction?
Jimmy: I think at the end of the day I think if you have a really, really big product idea and it’s going to take you years to create, of course you need funding. We were in position where we had an idea for a platform but also some formats that we thought that we could sell. [sp] Creed, the big shining machine was ready. What I will say is that, that’s also what I normally joke about, is that because we had this very sales focused approach to kind of starting a business.
I think we also limited our potential. And if you want to have that big billion dollar exit then I think that product focus is exactly the right focus. Because in your early stages I think you focus more on that. Whereas in the early stage we did focus on product, but we focused like 70, 80 percent of our time on getting out there, let’s get some money in so we can build the next situation up, or build something more, or hire some more engineers, or do that. Suddenly, it’s sales driving your product development and not you driving your product development.
Andrew: Do you remember your first sale?
Jimmy: Oh yeah.
Andrew: What did you sell, and who did you sell it to?
Jimmy: I sold actually a campaign to Nissan, a small campaign. Later on Nissan ended up being a huge client doing millions of dollars of investments in campaigns with us across 18 different markets. So, it ended up being a big client, but I remember the first one because that’s what led to the opportunity to…
Andrew: …What did you do for them?
Jimmy: We helped them launch one of their cars at that point in time in a few markets. So, nothing as big as the thing you refer to. It was actually the launch of Nissan Test Drive which was to them a very important product launch that we digitally kind of handled a big part of it. That ended up being…
Andrew: …What did you do for them? Were you running videos for them on other sites?
Jimmy: Yeah, video ads. Basically, it was not only video ads but actually a video story. We created a narrative around with TVWA. They basically created a great narrative, so it was kind of like webisodes that we then made sure got distribution across thousands of sites.
Andrew: So, you went out and you paid for and promoted to thousands of sites who ran the videos on their sites. How did you find the sites that would run this video?
Jimmy: Oh, as I said in early stages, we spent a lot of time kind of here is a car brand, so we analyzed what were the most relevant car sites. Of course, there will always be a couple of premium ones in any market. The problem with that is it’s also very expensive to get into those, and you might find the audience somewhere on the long tail side where it would cost you one tenth of what it would cost you to buy that same person on the premium site. So, that’s pretty much what our model is. We focused on the long tail so we could…
Andrew: …You started just working the phones or working the e-mail system until you got all these different sites to run the webisodes.
Jimmy: That’s how it worked in the early stages. Later on, as I said, it was possible for publishers, and then more and more publishers heard about us and it was interesting for them to get a new revenue stream. Then they came through us and signed up. When we sold the business we had more than 120,000 publishers in our system, long tail publishers. Of course, those are big publishers, but publishers in all different categories that could give us leverage in sports or in auto or in other categories so you could do something for brands at scale.
Andrew: In 2006 you told potential advertisers that you’d help them get promotion on reddit, on StumbleUpon, on Twitter, on Myspace, I think on Technorati blogs…
Andrew: How did you do that?
Jimmy: And Myspace is not even around anymore.
Andrew: Technorati isn’t. There’s one here whose logo I can’t even identify, but you were helping your customers get on there. How did you do that?
Jimmy: Well, it was the early stages, so it was very much about doing blog posts. We paid writers to do that as well. Blogs were also important. If you were a big car brand it’s important to kind of get attention from the people that are known as opinion leaders in that space. So, we paid our way in also to get that kind of attention. We did all kinds of things to kind of get traction. In this sense traditional digital media coverage but also to kind of set it off so it could go wild, so it would amplify by getting out into those different brands.
Andrew: And as the business developed, if I’m understanding you right, you started to build in metrics into the video platform so that your advertisers could see how viral it went.
Jimmy: Yeah, a lot of different things. At the end of the day the video player was really the format, so you would have all kinds of data. You’d have…
Andrew: Did I just lose you?
Jimmy: …play button, but how long did they stay with the content, they drop out…
Andrew: Let’s see.
Jimmy: …that tell you about how many people forwarded it to people. All those kinds of things were later built into it, so it became a very sophisticated tool for advertisers.
Andrew: Why was there a bomb in the first logo of GoViral?
Jimmy: That was the viral bomb. That’s what I told you. One of my co- founders really liked that idea. At that point in time, in 2005 and 2006, everyone talked about viral. No one really knew what it meant or how to do it, but everyone talked about it. Everyone wanted some free media, unpaid media. How do we get unpaid media? We want some free mileage. That was why there was a bomb in the logo.
Andrew: Even in, I think it was 2006, just when you launched, on the bottom of your site it said, in Moscow, London, et cetera. But, you were essentially in London at the time, right?
Jimmy: Yeah, that’s correct, but we then set up teams in key markets very fast. The reason why we’re in London is when you do stuff like this that is media centric there are two places I believe you should be – either in London or in New York. We were in London because we were European based to kind of tap into the big international budgets that are handled out of London. There are always some key markets that are critical for these brands. Sometimes, you need to have people on the ground to be able to handle those campaigns. That’s why we launched and put people in some key markets…
Andrew: …Were there real offices there, or were you at the time still out of people’s homes but they were working for you?
Jimmy: In the beginning it was out of people’s homes…
Andrew: …I see…
Jimmy: …so whatever…
Andrew: …and you still got to show the strength of having people all over Europe.
Jimmy: We had people on the ground which in the early stages was important. Later, it was important to show the advertisers that we actually had offices. But, in the early stages it was more kind of like having someone with a Russian phone number that would pick up the phone in Moscow if there was an issue with any of the sites that we were running campaigns on in Russia.
Andrew: I love to know that even you were doing things like that.
Jimmy: That’s hard starts. That’s being an entrepreneur. You need to crawl before you can walk or run. It goes for everyone.
Andrew: You told April in the pre-interview that you guys decided that the bigger opportunity beyond where you started was being a platform. How do you go from being a company that does the work to being a platform that allows others to just connect with each other?
Jimmy: That’s obviously a product test, but, as I said from the very beginning, that was always the vision. The great thing is if you have a vision that becomes your north star. That’s where you’re trying to deliver on.
Again, coming back to the conversation about being product focused, we believed it was better to kind of get out there early on and do a lot of integration before we got close to what our vision always was. That’s really what helped us push the business forward.
Also, the thing is when you have an idea, when you have a vision, it often happens in isolation. You sit down with the team that you’ve gathered to kick off this new venture and you come up with ideas based on your learning and the things you’ve heard. Obviously, the great thing for us was six months in we already had live clients. We started to get a lot of feedback which actually changed a little bit where we ended up. Because…
Andrew: What’s the most dramatic change that came from having real customers give you feedback?
Jimmy: I think the most dramatic change was we didn’t think from the beginning that we needed to build a publisher back end. We didn’t think that we needed to treat them just as well as we treated our advertisers. Obviously, our advertisers from the bidding had interfaces so they could track everything and see what happened with the campaign.
We thought we’d just sign up some publishers and would pay them for whatever they deliver, and that’s it. Then, we realized that we needed to offer something that was much more sophisticated to them in order for them to stay on and understand and see the flow of what we were doing, and at the end also being able to self-service go into our system and pick the campaigns they thought were appropriate for their side.
Basically, what our publisher manager was doing was when a site signed up then they would assign them to certain categories and say we think this site is great for this, this, and this. Then, that publisher would be able to self-service go in and say, oh there is a new campaign here I think I’ll click on that, and then because we then had APIs to all these publishers, it would immediately run on their site. So it was then a very, very efficient tool, and obviously, as I said in the early stages, this took a hell of a lot of time to get these campaigns up and running. In the end it was very efficient.
Andrew: This time you wanted to pick the right founding team. Who did you pick as a co-founder? What background?
Jimmy: It’s interesting, because the business was actually already going a little bit, but it was going in a different direction when I came on. Then we did the pivot up.
The two guys that I co-founded GoViral with were already doing, but what they did was viral video. They actually went to advertising agencies and said, you know what, we have this great idea for this brand. It will totally go viral. You just need to fund the shooting of it.
I said to them, you know what, that’s not the kind of business I want to be in. I’ve already sold a digital agency. I’m not going to build and sell a new agency, because it’s more sophisticated but it will still be an agency or production house. I don’t want to do that. I want to build something on a platform that can scale and I want to do international from the beginning. Because that was some of the learning that I had from my previous venture…
Andrew: …Because an agency doesn’t scale. It’s still your people’s time and creativity that you’re selling.
Jimmy: Exactly. It’s a people’s business. It’s a people’s business first, and there is no economies of scale really. You can add some more people. Let’s say, it’s at best a million dollar per head. Then, you have a hundred people. You have a revenue of 100 million if you do really well.
It’s not very scalable, and from that perspective also I had done that, so I didn’t want to do the same thing again. I wanted to do something that was more scalable and was more international in nature from the very beginning. That is also why we picked London as the headquarters for this venture, because that way from the beginning we would be perceived as being much more international.
Andrew: Because you’re Danish.
Jimmy: Yes. I’m Danish. The first business I founded was out of Copenhagen.
Andrew: Was Claus one of the co-founders?
Andrew: He was. Okay. And he was the one who ended up being with you at the end…
Andrew: …but the third co-founder wasn’t a good fit because he was in video production.
Jimmy: Yeah. He was in video production. He was creative. He was good at that. But, that’s really what he wanted to do, which is why…As I told about, at a point in time we actually got some external investors in. They didn’t put money really into the business. They put money into kind of changing the ownership structure, buying him out, and creating a new path for us to build towards.
That was needed. At that point in time we really needed to put in place a more serious option program, because we were starting to launch international offices. We needed to have strong country heads, and we needed to give them an interesting packet. So all those things…
Andrew: …Was this 2009?
Jimmy: It was 2009 that we took the money, yes.
Andrew: I think it’s from Kennet. They invested 6.5 million pounds in the business…
Andrew: …so that your co-founder, the third co-founder, could cash out…
Jimmy: …Yeah. The majority of it was he cashed out. Then we bought shares from some of the other shareholders and created a big option program so we could…
Andrew: …Did you get to take some off the table, too, in that…
Jimmy: …Yeah, they actually wanted us to do that. Also, the guy that left wanted us to do that to kind of feel that the price was right. It wasn’t something I wanted to…
Andrew: …I see, that if he’s going to take the money out, to make sure it’s fair you guys better take some of the same money…
Jimmy: …We failed to get out. Because otherwise he didn’t feel that the price was fair. So, we took a little bit off as well which was fine. It helped the process.
Andrew: And here’s what “The Guardian” also said, that the pair, at that point it’s you and Claus… Let me make sure I’m pronouncing Claus’ last name, right? Is it Moseholms?
Jimmy: Moseholms. Close.
Jimmy: Close, yes.
Andrew: So, the two of you, you and Claus, then diluted your share further by giving management access to an undisclosed stake in the business, and took your combined holdings down under 50 percent according to “The Guardian.” That sound right?
Jimmy: About, not quite. We still had more than 50 percent…
Andrew: …Oh, you did?…
Jimmy: …but I wouldn’t have sold if I didn’t have control at that point in time. We still had control of the business. But it’s right, as I said to you before, we did this to make sure that we could actually take the business to the next level with the right kind of senior hires. Obviously, that’s always a challenge in young businesses if you don’t have equity. Because you can pay reasonable salaries, but you can kind of go off the cliff on salaries obviously.
Andrew: [??] They’re a good paper. How did they get that wrong, saying that you guys are under 50%? I wonder if they check in with you and say, “Hey look, Jimmy, can we run this, is this fair?” Or are they checking it somewhere else?
Jimmy: You actually can check it.
Andrew: There’s no public place, but they could send you an email and say, “Are we going to look ridiculous we say that a few years ago…”
Jimmy: I think they probably asked and I said I had no comment for that.
Andrew: So they just went with what they had. I wish they didn’t report it with such certainty, “The pair then diluted their stake.” I wish they would say, “The pair reportedly diluted,” or “apparently”.
Jimmy: That’s a fair point. Who wrote that piece? Was it Mark Sweeney?
Andrew: Mark Sweeney, yes.
Jimmy: You know what, I’m going to say that to him. He’s interviewing me this week.
Andrew: Remind him that he wrote that piece.
Jimmy: I will remind him. That’s actually very funny. I didn’t remember. Andrew: January 31st, 2011. Was he right about this, that he said at the top of his reporting that you sold the company for $96.7 million, that you and Klaus pocketed 20 million pounds plus another 22.6 million paid over two years?
Jimmy: No, that’s not enough.
Andrew: Oh really, what was the actual number?
Jimmy: Again, as I said to you, if you don’t have the breakdown of the shareholding right, then you won’t get the payout right, either. As I always said, yes, it was a sweet deal. We have no complaints. I personally did not want to sell the business at that point in time, but the majority of the rest of the guys wanted to sell. And I have no regrets, that was fine.
Andrew: So you’re saying that because you and Klaus had over 50%, that meant you were the minority but maybe Klaus and the new investors said, “Let’s sell, now’s the time”.
Jimmy: No, we got an offer of about $100 million, and there were a lot of guys we’d given options. There was a lot of interest in capitalizing on that. I would say in hindsight that I’m very happy, there were 25 people that made, in Danish money, on the order of 1 million Krona. I think that’s enough to buy a nice apartment, or at least get started in life.
From the perspective of a lot of young people, we did something great for those people. Video is even harder than when we sold the business, so I’m sure it would also have been great to have kept going. Kobal is doing good under AOL, still performing well, but, no regrets. When you do these kind of things you need to be pragmatic. You took the money, so here’s what it is. I was very pragmatic, I always said that if I want to sell I’m not going to stay around. I’m not going to run a business that’s controlled by an owner.
So I said that I’m going to spend six months integrating it, and then you guys will stick around for two years. That’s what AOL wants. I have to say the core team of Kobal is still there, even though they don’t have to be. That’s obviously a great testament of their ability to do what they want. So, AOL has kept it pretty much as it was, which is great. I left after six months. I retired myself, and eventually they persuaded me to come back and do this job?
Andrew: I’m going to ask you in a moment about why you were persuaded to come back, but let me make sure to hit on this point. How do you keep a company running without you? What was the most important thing you set up before you left so that it could continue after you were gone?
Andrew: One and a half year before we sold, in March ’09, we basically put in place a new management team. I elevated myself. I used to run the business, but then I became a chairman, and someone new came in to be the CEO. For the last year and a half, I wasn’t the CEO of the business. It was natural progression. I wasn’t running the day-to-day. I was still very involved, but I just spent it on strategic clients and strategic projects. I wasn’t locked down in the day-to-day.
Jimmy: Going back to you running the Huffington Post. You told April that you were lying on a beach in Spain. Congratulations. Arianna Huffington calls you and says, “I’d like to have a conversation with you.” A moment ago you said you didn’t want to run a company that was run by someone else. What kind of magic Did Arianna whisper in your ear that made you say, okay I will go and run the company that’s named after you?
Jimmy: It’s a good question, and that’s actually not exactly what happened. Because in the beginning I didn’t come in to run “Huff Post.” In the beginning what both Arianna and Tim Armstrong, the CEO of AOL, wooed me to do was to come back and help them create a plan how to make AOL a more international business and take some of their brands and roll them out internationally.
Obviously, that’s what I’ve been doing most of my career anyway. They wanted an entrepreneur to kind of play that role, to be that international head. So, you can say I saw that was very entrepreneurial, creating a plan, taking some brands, launching them in other markets.
I thought, you know what, I’ve now been doing this for a month, lying on the beach. I’m starting to get a little bit bored. I don’t know what my next venture is, so, okay, I’ll have a look at that. I have no vested interest. I can always walk away. That’s what happened. That’s why they got me back.
Andrew: What about this idea that you’re a creator? You’ve done it now twice. You’ve seen what works. You’ve led people with a vision. Why not go and start another company?
Jimmy: It’s interesting. When I think of myself as an entrepreneur I don’t think of myself as a creator. I don’t think I’m a creator. I need a creator to work with me. I’m very good at the business side of things and understanding how to scale things and internationalize things. That’s really kind of what I add to my entrepreneurial partnership.
In all my businesses I’ve been involved with that’s the role I’ve played. Also, if I were to do something else that’s what I would be looking for in a partner. Not that I’m not creative. I’m probably from a business perspective more creative than most people, but I just see entrepreneurs that are super creative and those are the kind of people, when I join forces with that kind of people, personalities, good things tend to happen. That’s always what I’m looking for when I’m going into new things.
Andrew: So, what’s your super power, if you could call it that, as an entrepreneur? It’s not being the creative guy. What’s your super power, then?
Jimmy: No. I think it’s the laser focus, it’s the staying power, and it’s the ability to understand how to monetize things and be creative about that.
Andrew: Here’s something else. April has been asking potential guests what your favorite books are. You said, I don’t have any books to recommend. What I prefer to do is get perspectives from experienced entrepreneurs, people who built businesses more than once. Who do you talk to to get your feedback like that, to get their perspective?
Jimmy: It’s great. There are a lot of great forums right now at least for entrepreneurs. A great place to kind of go and get inspiration and talk with like minded for me is Founders Forum which is an organization that started in London but are now doing events in New York, London, and other places and are gathering some really, really strong entrepreneurs like Niklas Zennstrom from Skype. It’s everyone from the billion dollar exit guys to the guys that have sold the business for 10 million dollars. It’s hundreds of entrepreneurs. So, I think from that perspective that’s always very, very interesting.
The other thing that inspires me, the way I keep in touch with my entrepreneurial side, is to do angel investments. I actually have a lot of people come in still to this day and pitch me ideas. Right now I’ve invested in eight different things. I don’t think I have the capacity to invest in many more, probably a couple of more, then that’s it. Because I want to invest in things that I believe in where I can add something else than just my money, where I can help them grow the business…
Andrew: …What kind of companies? I saw some of them on your LinkedIn profile.
Jimmy: It’s all in media, tech, and gaming. It’s in those areas where I feel I have an understanding, some learning. Of course, I always invest in people. A great idea is good, but if it’s a lousy team then it’s not going to go anywhere. So, I always try to invest in good people, good teams as well, and then pushed him on dreaming big.
Having big visions, big ideas and trying to help them when they have these international ambitions. Because, obviously, as I said to you earlier in this interview, I do believe that leveraging your network is something that can help fast-track any early stage company.
Andrew: I’m looking down here at my notes and I realized that I asked you why you sold AOL, how that deal happened.
Jimmy: That’s a good question. It happened because we needed an American partner. As I said, we already had a European presence. We had six, seven offices around European countries. We really wanted to bring our model to the U.S. No one was doing what we were doing in the U.S. at that point in time.
We also were a little intimidated by the U. S. Because as I said, network is important. I have a fantastic network outside of the U. S. Now, obviously, I’ve been here for the last couple of years. So, I’m starting to have a good U. S. network as well. But at that point in time, I didn’t have a strong U. S. network, which meant that we were basically starting from scratch. And we’ve seen a lot of other startups, entrepreneurs losing a lot of money going into markets like the U. S.
So we wanted a partner. AOL was one of the companies we talked to. And they were interested in testing out what we were doing. So, we did that for six, nine months period of time. And then, Tim Armstrong, the CEO of AOL said to me “You know what? We need to be serious about (?). It’s not good enough for us just to do partnerships with companies like yours. So, we want to acquire companies in this space. Do you want to have that conversation or are you not willing to have that conversation. And it’s fine if you’re not, but then, we’re just going to move on to other (?) businesses.”
That’s really how that conversation started. And in the end, ended up after we internally then decided “Okay, we should have that conversation that ended up as an acquisition.” But by no means were we actually trying to sell the business at that point in time. But I also do think that that’s the best way of doing an excerpt. You’re not trying to sell something, you’re being bought. You’re being acquired by someone that is coming in and validating what you’re doing and want to pay a premium price for that.
Andrew: Let me do a quick message to the audience and I want to ask you an important question based on where you are now and one thing that I noticed on camera that I want to ask you about. But the important message is, guys, if you’re a member of Mixergy Premium, this is why I’m especially grateful to you. Because I’m looking here at the different walls of research that I’ve got in front me.
Everything from articles about Jimmy to pre-interview with Jimmy, to research, to everything even before we talked to you and had you on. We screen people on, Jimmy, to make sure that they’re right. There’s so many entrepreneurs out there who claimed they founded companies. What we do is we go back in time and we say “Who did the media report as the head of that company, the founder of the company five years ago, ten years ago.”
We call up that person and say, “Do you know this guy who is now blogging about being the founder of your company”? Sometimes they say “No, never heard of him.” We talk to their investors. Is this the founder. “No, this is just the guy who was part of the founding team,” meaning an early hire. And so, we politely reject them. But research before we bring the person on. Research when we decide to have them on. Research to make sure that everything here is correct. And it all happens because I really believe that there’s a lot of junk out there when it comes to teaching entrepreneurs.
Frankly, when I was starting my first business, I believed a lot of it. And then as you build your first company and realize “Wait, that is just not true.” And the only way to get the truth, I think, is to go directly to entrepreneurs and to do some work ahead of time. And so, I’m especially grateful to Mixergy Premium members who pay monthly and as a result, allow us to keep building this product and make it better for them and frankly, for others online. So, thank you for being a part of Mixergy Premium.
So here are the two questions, Jimmy, that I want to ask you. First of all, is that a paddle over your shoulder? We’re doing the video in your office. It is a paddle.
Are you playing cricket? Do you know cricket?
Jimmy: It’s a cricket bat.
Andrew: I thought it was a fraternity paddle. I said “What do they do at AOL to new CEOs”?
Jimmy: It’s actually a cricket bat signed by our Indian team. So, when I used to run AOL International, we have an operation in India. When I went to India, they teach me about cricket and they gave me this cricket bat. Being in the U.S., no one knows what cricket is, so everyone has baseball bats. I thought it was funny to bring it back.
Andrew: So, here’s my final question. I’ve got Huffington Post here on my right, your site. You guys create the best headlines. Even when I don’t have time, I will click on the article because the headline is so good.
Jimmy: Thank you.
Andrew: No, thank you and man, I wish that you can maybe scale it down a little bit sometimes. But if you were to write the headline for this interview, what would you do? How would you create the right Huffington Post headline?
Jimmy: I would say the good, the bad and the ugly about entrepreneurship.
Andrew: All right. Nothing about side boob?
Jimmy: No. Side boob is good as well. But we didn’t come up with that. [inaudible]. You already have an ad because you told me that we had to shift out of the light so that you can get something for your female audience as well.
Andrew: I did want you to look good on camera. You’re a good-looking guy, so I figured we might as well take advantage of that. Usually, people just have to look at this. How about this? “Founder of GoViral bares all, but not any side boob”?
Jimmy: That’s fine, too. I can live with that.
Andrew: [inaudible] Ari to come up with the headline. Thank you so much for being a good sport and for coming on here and doing an interview. I knew you were right in a meeting before, and I appreciate you taking the time out to do this.
Jimmy: My pleasure. I love entrepreneurs and I hope at least some of the rumbling that was going on about the issues for them, that’s the only thing that’s important. That we pay for it as entrepreneurs.
Andrew: Guys, do me a favor. If you’ve watched this interview and you got anything of value from this and you use it. How about maybe in five years, you’re going to find a time to catch Jimmy and send him an e-mail and say “Hey, look, five years ago, I heard you on Mixergy,” even if it wasn’t on Mixergy. “I heard you on some site, you changed me, here’s what I did as a result of it, thank you.”
Try doing that as soon as you can, as soon as appropriate. And I’m going to start by doing it right now. Jimmy, thank you so much for doing this interview.
Jimmy: Thank you.
Andrew: Thank you all for being a part of it. Bye, guys.