New York startup SimpleReach has raised new funding and replaced its CEO, founder and former CEO Edward Kim tells Term Sheet. New funding for the “content data platform” startup totals $9 million, led by Spring Mountain Capital. Hal Muchnick, formerly of DoubleClick, Kontera, AddThis, and LowerMyBills, will become CEO.
This news is notable for two reasons:
- In the last year, investors have viewed any startups related to advertising and marketing as toxic, in part, because the category was over-capitalized and VC portfolios are over-exposed to struggling assets.
But last month’s sale of Moat, an ad verification startup, to Oracle for a reported $850 million has renewed interest in the category. Kim says after the Moat deal, “a ton of folks” that had passed on investing in SimpleReach “emailed [him] right away saying, ‘We want to catch up.’” It was too late — Kim says SimpleReach had raised “more than enough capital” and doesn’t want to take more dilution than needed.
- Kim’s move from the CEO role is notable because it goes against the prevailing narrative among startups that says founders should avoid handing their companies over to a more professional CEO. Those that didn’t willingly step aside risked being forced by their investors.
That was the old way of doing things. Web 2.0, Mark Zuckerberg, Sean Parker, The Social Network, and the rise of founder-friendly venture firms changed that. Recall Digg CEO Jay Adelson’s anti-VC catchphrase, “F*ck the sweater vests,” from Sarah Lacy’s book on Web 2.0. Now, instead of stepping aside when the job outgrows them, founders “hire a Sheryl Sandberg.” As Businessweek noted in 2011:
Today, young founders generally get to stay at the helm of their companies, and there’s a new shorthand for the kind of leader whose willing to serve as a second-in-command, complementing without overshadowing the wunderkind while doing the hard work of turning a promising idea into a real business: a Sheryl Sandberg.
But even with “a Sheryl,” successful founder-CEOs still need to learn how to become professional executives that can manage billion-dollar businesses with thousands of employees. Some of them get antsy and would prefer to get back to the scrappy days of experimenting, pivoting, and inventing.
“A lot of founders feel like it’s this big slight if they don’t hang onto the CEO title, but to me, this stuff is really hard and if you haven’t done it before, there is something to be said for bringing someone in who has scaled company after company,” Kim says. “When I think about how to maximize the value of my own equity, I think having [Muchnick] leading the day-to-day will end up with the company being most successful.” Kim will remain active as executive chairman at SimpleReach, “leading the charge on the product vision.”
Sidenote: It’s not clear why Oracle wouldn’t officially disclose the size of a deal as large as the one for Moat, but it’s worth noting that last time Oracle made a splashy ad-tech buy, a $300 million deal for social media management platform Vitrue in 2012, competitors Salesforce and Google followed up with even splashier deals. Two months later Google bought Wildfire for around the same price and Salesforce bought Buddy Media for more than twice as much.
In the past
2014- SimpleReach Raises $9M To Measure Content Marketing And Native Ads
SimpleReach, a startup that helps marketers and publishers measure the effectiveness of their content and ads, is announcing that it has raised $9 million in Series A funding.
The company says it can not only tell customers how well their content is doing on publisher websites and on social media, but also predict which articles will take off — each article is assigned a score between 0 to 99, indicating how much social media traffic it will drive to the customer’s site. SimpleReach then allows marketers to promote those articles through ads on Facebook, Twitter, LinkedIn, Outbrain, Nativo, StumbleUpon and TripleLift.
The New York Times, Forbes, The Huffington Post and The Atlantic all use SimpleReach to measure their native ad programs, the company says, and brands such as Intel and Xerox use it to analyze and promote their own content marketing.
We covered the company’s $1.6 million seed round two years ago. Co-founder and CEO Edward Kim acknowledged that SimpleReach may have been “a little early to the market,” with investors not necessarily convinced that there was a big opportunity here.
Kim added that in the early stages of content marketing (i.e., promoting a brand indirectly by publishing articles, videos, and other content that has isn’t just an ad), everyone was focused on, well, the actual creation of content: “Before you create, there’s nothing to distribute.” Now, however, he argued that SimpleReach’s measurement and distributions tools are clearly necessary.
“How many companies today, and how many marketers today, have a blog?” Kim asked, suggested that the answer may be in the “hundreds of thousands.” But far fewer have a distribution strategy and are doing anything to show the return on investment.
Those are the kinds of tools that SimpleReach is building, and will continue to build. Kim suggested that his goal is to bring content marketing to the same level of technology as online display advertising.
The new funding should help with that. It was led by MK Capital, with participation from Atlas Venture, Village Ventures, and High Peaks Venture Partners. MK’s Kirk Wolfe is joining the SimpleReach board of directors.
Kim concluded our interview by suggesting that analytics companies are “somewhat uninteresting” — an odd statement from someone running what appears to be an analytics company. However, Kim defined analytics companies as building a “one-to-one relationship” around data. In other words, they take your data and show it to you in a new way.
“If you can position your company to go and build a data marketplace, which is many-to-many … then you become a layer [in the ecosystem], and it’s harder to displace you,” Kim said, offering Nielsen and comScore as examples. “That’s really where our focus is and where we see our opportunity. And that’s part of the reason we were able to raise the round that we did.”
— and in 2012
After Raising $1.6M, SimpleReach Launches To Become The PageRank Of Social
Pivoting is a part of life for startups. But, generally speaking, most entrepreneurs aren’t going to go out of their way to pivot right when their business starts taking off. But that’s what SimpleReach did. The startup’s first product, The Slide, is a simple widget that lets publishers recommend similar content at the bottom of articles. In just a few months, it was adopted by thousands of publishers, like Freakonomics.com, sparknotes.com, disinfo.com, The Washington Times, and SF Gate — to name a few.
Yet, in spite of strong early growth and graduating from AngelPad’s accelerator program, they decided to pivot. They froze all new signups to The Slide and turned their attention to an idea they believed could have a much larger impact. Today, the NYC-based startup is revealing its new solution, a product founder Eddie Kim calls the “PageRank of social.”
Only time will tell if it was stupid or brilliant, but there’s still the matter of “why?” Well, in pitching The Slide to publishers, the SimpleReach founders would be asked to explain how their content recommendation algorithm worked, and, in doing so, they’d talk about how social was a key component to the algorithm’s secret sauce. In nearly every case, Kim tells us, publishers would struggle to get comfortable with that fact. While they were far from underestimating the actual potential of social media, they were clueless as to how to best take advantage of it or where to find their data.
Given how important social media strategies are to publishers — of all sizes — he said that the team was continuously struck by the fact that most lacked any significant understanding of how to optimize social sharing or what tools to use, etc. In many cases, publishers would admit that, to get a better understanding of how their social sharing tools were working, they were manually opening hundreds of articles and typing the results into an Excel doc to perform some old-fashioned number crunching.
In asking publishers how they would compare a network’s performance, say, yesterday versus today, which of their authors do the best on Twitter, or what the value of a tweet is versus a Reddit upvote or a pageview, they would just sit there blinking.
So the founders went back to the drawing board, and after some serious market analysis, came to the conclusion that there really weren’t any products out there offering an end-to-end solution to solve this demand, nor were really any clear market leaders.
The other thing that’s important to understand is that, when creating their social media strategy, the majority of publishers focus on maximizing the value of Facebook and Twitter. That’s understandable, but the landscape is more diverse than the F/T binary. In fact, for a surprising number, Stubleupon is the leading driver of traffic and Pinterest is obviously quickly gaining ground, especially for evergreen content. Reddit is inconsistent, but cracking the nut behind those upvotes often spells big time traffic.
The challenge, though, is to make sense of each network both individually and in aggregate. Existing tools, like social sharing buttons or shortened URLs, only provide a limited snapshot and are far from providing a holistic view. To really be comprehensive, publishers need to be tracking everything, he says.
To solve this problem, the new SimpleReach integrates with every major social network’s API to let brands, marketers, publishers, and consumers track social engagement for any link in realtime. But, the key for SimpleReach’s platform is that not only is it analyzing millions of social actions and pageviews every day to offer up robust social metrics, it also builds statistical models that enable it to predict which pieces of content will be the most social.
Kim called it a “significant technological undertaking,” part of the reason that 9 of SimpleReach’s 10 employees are engineers or data scientists. And also part of the motivation behind the startup’s recent $1.6 million seed raise from High Peaks and Village Ventures. The funding, he said, is primarily being used to hire engineers and scale its product.
But, getting back to publishers: While it’s easy to view twitter sharing stats for individual posts, finding out (right now) which articles are performing best on twitter out of the hundred published on the platform today? Not so easy.
So, by capturing every social action from the instant its published, then running models against that incoming data, SimpleReach believes it has a better shot at being able to predict how well an article will do. It’s one thing to just add a social sharing button for Twitter, but any tool that’s worth its salt, will capture its data in realtime (for every article ever published) and make it easy to extract insight from that big data. Right?
“We’re able to take all the articles on your site, place them on a trending page and rank which are predicted to drive the most social traffic in the near future,” Kim said, “and it’s this kind of data intelligence that gives us a leg up on the competition.” That, and the fact that most solutions offer a pull-based experience, while SimpleReach wants to use its tech to make data intelligence a push-based experience.
And, in that (most basic) sense, Insight has the flexibility to be interval-based, so that every three hours the solution will push info on which social networks are driving the most traffic. Or it can be event-based, so that it will let users know if an article receives more than two thousand tweets today, for example. And depending on the use case, SimpleReach can offer customers a standard stock of insights or the ability to build custom ones.
As to its business model, the startup already has a handful of paying clients (launch partners include Time Inc, Demand Media, Hearst and many more), but Kim said that they’re focused on the free version and finding it the widest adoption possible. Then using the up-sell freemium software technique.
However, most of the biz models the company is pursuing depend on having a big footprint. It could concentrate on charging publishers, but Kim says he doesn’t think that option is sustainable in the long-term. He thinks the real opportunity is the fact that content marketing is still nascent and is beginning to explode.
“There’s still no way to take a hundred assets across various networks and channels and rank their success. The company that can create and own that standard in market will be huge and will, he says, have created the PageRank for social.
Of course, they were the ones who pivoted before the harvest, thinking that the short-term fold leads to long-term gold. So, they would say that.
Find SimpleReach here.