VV Show #45 - Kevin Ryan of Panther Express, ShopWiki and Music Nation
Not many entrepreneurs have a motor like Kevin Ryan's. Kevin is best known for his work as CEO at the on-line advertising firm DoubleClick, which he grew from a 20 person start-up to the largest Internet company in New York at the height of the dot-com boom. After escaping the ensuing bust in an arguably improved strategic position, the company has since changed hands twice. In June 2005, the company was sold to the private equity firm of Hellman and Friedman for $1.1 billion and has made headlines yet again with its recent acquisition by Google for an astonishing $3.1 billion. Yet, this success has not slowed Kevin one bit. Since departing DoubleClick, he has already launched three start-ups, with plans for a fourth this summer. Listen in, as Kevin describes his DoubleClick experiences in both boom and bust, outlines his new start-ups, and explains why now is as good a time as ever to start a company, especially in the Big Apple.
2:00 Early career
- INSEAD by way of Wall St.
- EuroDisney: “an incredibly unpleasant experience.”
- United Media: launched Dilbert.com, which he describes as a “fantastic experience.”
3:55 The Internet according to Dilbert
- “[P]eople were passionate about the Internet and no one who started using the Internet stopped using it.”
- “[The Internet] is most fundamental business shift that is going to occur in my lifetime and it’s going to reverberate through almost everything.”
4:43 Focus on advertising
- “Advertising was going to be a key part of the Internet infrastructure… and the infrastructure didn’t really exist at that point to do it effectively.”
- Joined a small startup called DoubleClick because of their “valuable position.”
6:10 What differentiated DoubleClick?
- “People and technology at DoubleClick were really going to make it the long-term leader.”
- “They were thinking very big. The plan was that this was going to be a billion dollar company some day.”
- “Technology was going to play a huge role. That you could dynamically target these ads… that would make it ultimately much more effective than other medium.”
8:10 The DoubleClick alumni club
- “There are so many companies run by double click alumni.”
- “I will feel great in ten years if there are 10 people in this room who are CEOs. And it’s turning out to be the case.”
8:42 Lessons learned as CEO
- “The key was managing the growth … Force everyone to continue delegating”
- “[Y]ou’ve got to be able to make changes and make them relatively quickly.”
10:42 Dealing with mistakes
- “As long as you self correct … you can recover just fine”
12:38 Money management
- “We definitely spent too much money… It felt like capital was free.”
- “Today, that I’m launching companies and I see other people launching companies, everyone is more careful and more thoughtful and more cautious.”
13:09 The IPO
- “At that time the IPO process went incredibly well and it was easy because investors didn’t know what they were investing in.”
- “We were the largest [Internet] company in New York City. So it was just a great time.”
14:03 The boom goes bust
- “I can remember one week in the beginning of 2000 when the stock price, the value of our company went up by a billion dollars and I thought ‘this has got to be the beginning of the end here.’”
- “We had 70% of our clients who went under. You were prepared for 10%. You were prepared for 20%. I don’t think anyone prepares you for 70%.”
15:30 Lay-offs began and continued
- “People had lost faith in management.”
- “That’s the hardest thing to do. Senior management has to always feel positive and be positive about the future and it’s hard to do in a terrible recession.”
- “I never came close to quitting. I always knew the fundamentals of the Internet were going to win out.”
17:57 A changing business model
- “[We] always made more money in the technology business than the media business.”
- “Over time, [it] started to feel like we were having some conflicts. Some of the larger players didn’t want to deal with us on the technology side because they thought we were selling ads and competing against them.”
- “Getting out of the media business was the right decision.”
19:10 Exit strategies
- Hellman & Friedman buys DoubleClick for $1.1 billion in July 2005.
- Google buys DoubleClick two years later for $3.1 billion.
- “Three years from now, Google will look back and think that it was a good purchase."
20:00 New ventures
- “Really wanted to get back and felt there were opportunities in smaller companies.”
- “I felt like it was a fantastic time in the Internet…Unlimited capital available… The fundamentals of advertising, commerce and subscriptions, which are the three elements of the ecosystem, are all doing great.”
25:05 Start-up #1: Panther Express
- Content delivery network.
- “[A] sector that’s going to cross over $1 billion in revenue.”
- CDN’s are not a commodity; there is segmentation in the market.
- “We felt there was an opportunity for a very low cost infrastructure.”
- “Business is going to grow about 10 times from January to December.”
28:48 Keeping it lean: the benefits of a small office
32:30 Start-up #2: ShopWiki
- “We felt, as consumers, that there was a real need for an independent, consumer oriented shopping engine, a search engine for shopping.”
- Traditional shopping sites are not searching the whole Internet; “they’re just taking ads.”
- Most shopping sites search 6,000-7,000 websites; ShopWiki searches 180,000.
35:15 Time: the most limited resource
- “Prioritizing time is an inexact science but it’s very, very important.”
- “At the beginning of the week, I always list the three most important things and make sure that I spent enough time on those three things.”
36:40 Start-up #3: Music Nation
- YouTube meets American Idol.
- “Blown away by the traffic.”
- “Goal is not to have as many videos as YouTube. It’s to have fewer videos of higher quality.”
39:55 Best entrepreneurial locations
- Community is bigger in the Valley, but New York is closer to your customer base.
- “New York is the clear second to Silicon Valley”
42:17 Current health of the start-up market
- “I’m incredibly bullish.”
- “I think we’ve got another good five years of very significant growth.”
46:04 Start-up #4!
- “I’m going to launch another one this year in the e-commerce space.”
- “It’s in the women’s fashion space, in clothing, but you’ll see it’s a different twist on the business model.”
46:35 Advice to entrepreneurs
- “Don’t be afraid to take risks. Especially in the US economy, you’re not penalized.”
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Among the many meaningful comments from Kevin, his thoughts on NYC as an entrepreneurial center are right-on. There is already a great deal of discussion on the topic, just check out NYTimes link at the bottom.
From my understanding there are a few really powerful environmental factors that collectively keep Silicon Valley humming: proximity to capital, extensive university support, quality of infrastructure, and a culture of experimentation. New York is undoubtedly the center of global banking and home to the largest concentration of wealth anywhere. Though there are less VC’s than the Valley, this is slowly changing as angels invest locally in the metro-area. NYU and Columbia, as well as the large number of CUNY schools are a much deeper talent pool than many businesses realize. The infrastructure piece is admittedly a little less welcoming as modest rents and accommodating law firms are far fewer in Manhattan. Though what it lacks in basic services, NYC makes up for it with a diverse culture built on experimentation. Many industries have historically relied on the innovative and progressive nature of New Yorkers to drive growth. In the next few years, don’t be surprised if there are more DoubleClick-like ventures coming out of the Big Apple.
Posted by: JoeW at April 30, 2007 3:50 PM
This was a great interview. Thanks very much for doing it Greg.
Posted by: Dhrumil at May 2, 2007 7:13 PM
Great interview, Greg!
Even with its higher engineer salaries (and smaller supply) and higher rent, NYC can be a great place to build a startup.
Kevin talks about how the media and advertising companies are all here and that's really important for getting a media-related business going.
I founded Socialight, a mobile social media platform, in NYC and we haven't looked back yet. As a consumer service that thrives with urban use, NYC also gives us easy access to a customer base and environment which doesn't exist in the Valley. As more and more of the world's population concentrates in megacities like NYC, Seoul, Delhi, and Mexico City being in and understanding those markets can also be an advantage. Yes, the world's also getting smaller, but it's still good for a startup to be right there where the action is.
Posted by: Dan Melinger at June 9, 2007 4:35 PM
It's fun to hear the story from someone that's been very successful and is still driven to create more successes.
Posted by: drew at July 6, 2007 11:22 AM
I worked at DoubleClick under Mr. Ryan - he was a prolific ping pong player.
Posted by: KC at April 8, 2008 1:44 AM
Kevin Ryan is a tool. He worried more about the special bolt that was ordered for the crane that would help build his baby -- the basketball court -- for the headquarters of Doubleclick than he did about his employees' welfare and the products that would power the company forward.
On a separate occasion when we met with Kevin to propose an idea to help advance the company, he walked over to his desktop multiple times during the meeting to check how many dollars the stock was rising at the time.
Ryan was the one who was solely responsible for the demise of DCLK. I never understood why the real leader of DCLK (Kevin O' Connor) ever handed it over to Ryan. I respected O' Connor until he handed over the reigns. Actually, I still respect him, but that was a HUGE mistake for DCLK.
Posted by: Bradd of www.sexyavidols.com (NSFW) at June 19, 2008 1:46 PM