Brett Wilson could see the concern from his employees when he and his team at TubeMogul Inc. decided to take the company in a completely different direction in 2011.
“It’s easy to fall into a trap of dissonance where you justify decisions that you’ve already made,” says Wilson, the company’s co-founder, president and CEO. “In our case, it wasn’t a low point that we reached where there was no cash in the bank and we were out of options. The company was doing well. We were hitting our goals and investors were happy.
“But we didn’t really believe it. We believed if we kept down that path, there wasn’t going to be a business. The challenge of having that conversation is being humble and self-aware about what you really believe and not just rationalizing decisions that you made previously.”
So what was the problem that Wilson and his partner, co-founder John Hughes, were seeing that created the need for such a drastic change?
“The software we built had hundreds of thousands of users,” Wilson says. “But when we really got serious about monetizing the offering, the willingness to pay wasn’t there. The problems we solved weren’t painful enough that we could build a big business. That was the crux of it.”
When Wilson and Hughes launched TubeMogul in 2007, the goal was to build software for content creators and publishers.
“We only had $22,500,” Wilson says. “That was the money we won from a business plan competition. Over time, we developed this mantra called the ‘Do:Say ratio.’ It’s really from those early days when we didn’t have much going for us. We learned that if you do nothing else than the things that you say, good things are going to happen.”
Good things had happened, but Wilson and Hughes firmly believed change was needed in order to fulfill true potential of the company, which now has nearly 600 employees.
“We had raised venture capital, invested multiple years of our lives and recruited talent on this mission, but we just didn’t believe it,” Wilson says.
“So we made the decision to stop funding the development of the software. We sold it and took the company in a dramatically different direction. We flipped the concept. We were building software for content creators of video. We thought, ‘Maybe if we do the same thing for advertisers and help advertisers better automate their video ads, maybe we would be onto something.’ That insight was the foundation for the company that we built. We’re now one of the fastest growing companies in our space.”
You need a plan
The biggest challenge Wilson faced was convincing his team that this transformation was necessary and that he had a plan to make it work.
“The key is setting a vision and establishing a plan and giving people reasons to believe why we can win, why we deserve to win and why we’re going to be good at this,” he says. “It needs to be credible, tangible and executable.”
TubeMogul changed its product set from syndication and analytics for publishers to software for advertisers.
“We started selling to different clients or building software for them,” Wilson says. “We had to get smart in a new space that we didn’t come from. We had ideas for how we could do things differently and maybe add value. But we didn’t understand all the nuances and dynamics of this new industry we were getting ourselves into.”
Understanding those dynamics and getting inside the heads of people in the advertising industry was crucial to making the change work.
“We built software for the largest advertisers in the world,” Wilson says. “These are companies that tell stories through their ads and they’ve been doing things a certain way for a long time. The challenge was figuring out how we could both accommodate advertisers and some of the reasons that they do things, but also offer up a better way, a different way of looking at the world.”
When you’ve demonstrated integrity and given your employees good reasons to trust you, you stand a much better chance of successfully implementing big changes.
“There was concern,” Wilson says of his employees. “But there was a lot of confidence in the team and that confidence came from a track record of following through. We were making this decision to change direction not out of desperation, but from a place of strength. We were hitting our plan, we had done what we said and we followed through on our commitment to employees and investors.”
Don’t settle for easy answers
Companies that are successful are able to build a rapport with clients and identify what they need to be successful. But it’s not just asking clients what they want and then doing it for them.
“If all you do is build the things that your customers ask for, it’s just a recipe for incrementality,” he says. “We’ve been very good at taking a step back and thinking about how we could fundamentally do things differently. Quickly rolling out software that has a minimum feature set to get feedback.”
In other words, maybe it’s not a finished product the first time you roll it out. But you put it out there and give potential clients a chance to look it over, now you have a starting point from which to build an even better product. The key is you have to constantly be thinking and brainstorming about how you could take it to an even higher level than your client has imagined.
“How can you improve their business outcomes or save them time or bring them joy?” Wilson says. “Until you can really show them, sometimes you don’t really get the feedback that you want. Therein lies the challenge. Conventional wisdom is to spend time with clients and build the systems that they need. But that can’t be the only way you tackle a problem.”
Wilson has learned over the years that one of his key tasks is to clear the path for his employees to be able to come up with those great ideas for TubeMogul’s customers. They don’t all have to come from him.
“I’ve evolved from someone who was successful because I was a great doer,” Wilson says. “I’ve learned to help us win by setting our principles and by working through others and focusing my time not on accomplishing specific tasks, but setting the conditions under which the company can succeed. That’s a difficult transition for an entrepreneur. The things that got you here end up being the things that will kill you as you scale. You just don’t have time to do everything anymore.”
The ability to look beyond the easy solution and dig deeper to find something that no one had thought of before requires employees that are as committed to your company’s goals as you are.
“We believe that above a certain aptitude threshold, it’s all about intangibles,” Wilson says. “That’s what we focus on in the recruiting and interviewing process. We’re looking for people who really want to be here for the right reasons. We’re looking for people who are going to buy into the culture and can be successful here, people that are hungry.
“Because of that, there’s a temptation to recruit people with a certain pedigree that go to certain schools or came from certain companies. Our approach is the exact opposite. We’re looking to evaluate people for who they are and often we are more attracted to the scrappy underdog then the accomplished executive.”