BUSINESS BLOGS
BUSINESS BLOGS
category: business
20 Feb 2008

Most of the web projects out there are ad-supported, or intend to be ad-supported.

While a lot of companies are bootstrapped, most are financed by angel investors or venture capitalists.

Yet, many angel investors or VCs lack operational media experience in general and advertising sales experience in particular. I’ve always noticed that most VCs come from technology backgrounds. Increasingly, many have worked in media companies. But very few have ad sales experience. Sales people get respect, reluctantly. At my old job, as VP of Ad Sales, I was hated by my erstwhile colleagues. When I left, they showed their disdain by lying and manipulating the new parent company into trying to take me and WatchMojo.com out. I defended myself and won, and today I actually have a healthy working relationship with my former partners’ parent company. It’s wild. I feel vindicated.

Anyway, I don’t care to rehash those memories, it’s what I call the Dark Ages of my career, frankly. The point is: during those years, I learned a lot about ad sales, working on the front line and in the trenches. My client list and ad agency relationships were second to none.  If it wasn’t for that, I’d hate myself for ever working with those people.

This isn’t me tooting my own horn, I am trying to make the point that if I was successful, it’s because I went in with no experience and made no assumptions. I asked questions, read a lot, and acted on my gut. Yes, I feel like I am a natural salesperson but I had never closed a box, let alone a deal, before taking the job.

Over the course of 5 years, I went from lone advertising account executive to a manager, I then integrated our sales team into the company that bought us… and over time I became - via this blog - someone that others turn to to get a sense of where the ad market is headed.

In this capacity, I’ve also become an adviser to many startups, and occasionally, an investor that wants to test a hypothesis or conduct due diligence on a company they are vetting.

I must say: I am baffled with how much many VCs are neither realistic nor knowledgeable with the bulk of their advertising assumptions. Not only are the assumptions off, but they seem to fail to realize the psychology and dynamics that go into play with how ad sales work. The competitive nature and subjective method to the madness is generally unaccounted for. Or, alternatively, the challenges and complexities of building sales streams are wildly underestimated.

The bigger problem is many VCs or angels think they know it all.  They should at least realize that they are not well-versed in ad sales, ask questions, then - being smart and accomplished in their own right - come to their own conclusions.  I think it’s because salespeople get respect reluctantly.  Hence my initial reference to my old job and the dynamics with my partners.

I really do not mean to be judgmental or holier than thou, and I realize I did ad sales for years etc. in the trenches / on the front lines… but it’s a bit scary that so much money goes into ad-supported (intended) companies based on false assumptions.

At the risk of tooting my own horn, what I also am starting to see is the advantage I have over other entrepreneurs in being realistic about our ad sales expectations and what it takes to be successful. I guess that is why I am conservative and we’ve been able to build the company over the past years. We don’t take anything for granted, we don’t simplify the challenges and we surely don’t count the chicken before they hatch.

I guess as I write this and think out loud, I realize, maybe what many VCs should do is spend some time on the front lines, ie. not only talking to the founders of companies but also the guys expected to lead the sales charge. Then, maybe VCs should spend some time with advertisers and marketers to understand what they think.

And speaking of company founders, I think while technology and marketing are incredible talents to possess, it might be a better investment to do some sales before venturing on your own.

I’ve actually sent in a couple of emails to VCs for their thoughts and will either update accordingly or publish a follow up.