Interview with Dave Morgan, CEO and founder of Simulmedia
In a town where the deer outnumbered the humans came a guy who got a law degree, joined a prestigious law firm, then left it, without a plan, created a start-up and eventually sold it and a few others for HUNDREDS of millions of dollars. Meet Dave Morgan, Founder and CEO of Simulmedia. #hoshimo #csuite
Transcript:
Julie: Welcome back to another episode of the conversational. Today I'm here with a friend of mine, Dave Morgan. Dave's got a really impressive ... actually, it's an impressive one and it's one of those that we all sit and envy because he was at the early stages of sort of figuring out what the digital media world was going to look like, and he was at the front part of it. It wasn't easy, as you'll hear from Dave, but today he's the CEO and founder of Simulmedia, which is the leading TV ad platform that enables predictable, scalable [00:00:30] performance. He previously founded and ran both TACODA, Inc, which was an online advertising company that pioneered behavioral online marketing and was acquired by AOL in 2007 for, wait for it, 275 million dollars, and Real Media, Inc, one of the world's first ad serving and online ad network companies and a predecessor to 24/7 Real Media, which was later sold to WPP, the big ad agency conglomerate, for those don't know who WPP is, for 649 [00:01:00] million dollars. After the sale of TACODA, Dave served as executive vice president of global advertising strategy at AOL, a Time Warner company.
Julie: Fun fact, he is a lawyer by training. He served as the general counsel and director of New Media Ventures at the Pennsylvania Newspaper Association back in the early 90s, and he's a political science grad of Pennsylvania State University and holds a J.D. from Dickinson School of Law. He has a wife, two daughters. They all live in Manhattan. So [00:01:30] it's a fun story. I think people are going to love to hear how a lawyer becomes a big old digital media mogul. But before we get to that fun part, because there's a great story there, but go back. Tell me a little bit more about your early, early history. Where were you born? Where are from? What did your parents do?
Dave: I'm from a little cold town in Western Pennsylvania, and by that I mean literally to the West of Pennsylvania. When I tell people that in New York, they're like, "Oh yeah, I know people in Lancaster or Allentown." I'm like, "No, no, [00:02:00] no." I mean, cross the George Washington Bridge, drive for five and a half hours and then stop in the mountains. And so tiny little town, a lot more deer than there were people. To get to a town of any kind of size bigger ... we were about 6,000 and most things around were about two or 300, you drove for more than an hour to get to Altoona.
Julie: Wow.
Dave: So when you're an hour from Altoona when the weather's good, you're a long ways away. But my mother was a nurse and [00:02:30] then ran a nursing school, and my father was a lawyer, and so we were in the middle of a little cold town but had professional parents. And a lot of people don't want to leave towns like that, so there was a bit of a different kind of-
Julie: Youth.
Dave: Youth. Amazing. I mean, it was unbelievable experience. It was like the little town with the picket fences, and you went to school with people whose ... I had probably some of the few parents that had graduate degrees, even those that [00:03:00] had college degrees were rarely other than probably school teachers.
Julie: Where did your parents get their graduate degrees? Were they born and raised in that town?
Dave: They're not. My father had been born nearby, but he went to Penn State, then went to Penn, and went to law school there. They met at Penn. My mother grew up in Eastern Pennsylvania and she had gone to Penn for nursing. And so they met there and they eventually went back. And it's funny because I grew up drinking pop, soda's something different. Soda is something you put ice cream. And [00:03:30] my mother ... we'd always talked about this, and so it's funny now living in Manhattan for almost 25 years, I drink soda, my mother drinks pop now.
Julie: Yeah. This is a funny. So going back, I've lived in 12 states, but I was born in Wisconsin. Both sides of my family, born and raised, five generations, same town in Wisconsin, and everything was pop, same thing. And so I think this must be more of like a rural thing, and then the water ... what did you call the thing that you pushed the button and reach over and drink water from? What did you call [00:04:00] it?
Dave: Faucet.
Julie: Okay. Well, we called it the bubbler.
Dave: Oh, okay.
Julie: So like in Wisconsin, it was the bubbler.
Dave: Interesting.
Julie: I know. So these are these fun little [crosstalk 00:04:08] things.
Dave: Definitely for us, it's like the Allegheny Mountains, Northern Appalachians, everything West is pop in Midwest. So when I tell people like Pennsylvania is two states. It's very different East than West. And if you're on the other side of the mountains, we're much more like Kentucky than we are like Scranton, Pennsylvania.
Julie: Right, or Philadelphia.
Dave: That's a whole different.
Julie: It's another country.
Dave: I tell [00:04:30] people like Pittsburgh, it's in affinity, but we would only get to Pittsburgh every two years maybe.
Julie: Yeah, that's amazing.
Dave: Like you get to go down to a baseball game or you go to the museum and you're going to stay overnight.
Julie: That's amazing. So you stayed there through high school, I understand?
Dave: I stayed there through high school. I went to college at Penn State, which was a bit to the East. And as much as there's a draw, places like that, you don't leave. Most people sort of go back, but the economy was a wreck. And then I went to law school. I started as an engineer in college, but my father was [00:05:00] a lawyer, I grew up around law so I knew I had an affinity to it, I liked it. But only when I got to law school and I went near Harrisburg, Carlisle, Pennsylvania, it was the very first time I saw a help wanted sign, because no one had a job that didn't have a person that you had to advertise for. I literally had never seen a help wanted sign. It was startling.
Dave: I mean, I graduated and went to college in '81 and so I'm in law school in '85, so steel industry collapsed. Everybody [00:05:30] was leaving. No one's parents had jobs when I was growing up. That's way overstated, but it was, unemployment was a huge issue. The mid 70s when Whip Inflation Now devastated Western Pennsylvania. The steel mills had collapsed. Our area that was coal for coking coal for the steel mills, clay for the fire bricks, we refracted fire bricks for the steel mills. When they go, sort of everything went. So it was different. You hear about the late 80s, mid [00:06:00] 80s, late 80s there's optimism and people are hiring.
Julie: Yeah. So you switched from engineering to law and then you finished your-
Dave: I did that and I worked for a Philadelphia law firm after law school. I was going to go back home, but they were paying me more than my father was making after 30 some years. My father had won a case in the US Supreme court.
Julie: Really.
Dave: He was an independent lawyer in a little town, a solo, and a law firm was going to pay me more straight out of school, which is nuts, and so I took it.
Julie: Yeah. So was [00:06:30] it a fun case that your dad won in the Supreme Court? That's kind of interesting.
Dave: I mean, it was unusual and that it was a case that ... Actually, very few cases ever get accepted to be considered. Very few even get an argument, and then of those that get argued, very few get decided, I mean, they will get decided, but those that get decided rarely have opinions. We really write something out that the court makes law.
Julie: Right. Where they read the opinions, right?
Dave: Well, where they write opinion and publish and say ... they'll just say, "This one [00:07:00] won or this one lost," most times, because when the Supreme Court writes opinions then it's essentially making law in common law, and rarely you have dissents where you have multiple justices disagree. And he had one like that. It was a murder case that had happened in the 60s where a school teacher apparently had raped and murdered a student and it was at the same time when Miranda happened, which you have to tell somebody that they have a right to a lawyer. And then a year or two later, it was a case I think called Gonzales, which was, [00:07:30] you have to let people know that if they don't have money for a lawyer that you'll provide one.
Dave: And in small towns, police officers aren't as well trained for this. I mean, they're watching Dragnet or something and they've heard this. So there were real questions about whether this person was fairly given his notice, and he admitted and confessed that he had raped and killed the student. He was a very smart man. He ended up ... because it was so high profile, they couldn't seat a jury. [00:08:00] And he was tried three different times because the law kept changing and they would have to do it again.
Dave: And so eventually, to get a jury, the judge sent sheriffs out into the street of the town and just said, go get people off the street and tell them I'm paneling them in a jury because they needed jurors. And when they asked the juror, "Can you be impartial? Do you have an opinion?" Because everyone was aware of this person, in a small town, small County. And one of the people he empaneled and ultimately accepted as a juror [00:08:30] said, "Yeah, I'm very aware of it. I've been reading about it. I believe he's guilty, but I can be convinced otherwise and I'll be impartial." Which is a bit against you are innocent until proven guilty.
Julie: Right.
Dave: My father ultimately as the district attorney in the town argues that that is fair, and ultimately the Supreme court held that up. And so it was a bit of a controversial decision. It was written by ... [inaudible 00:08:55] wrote the majority opinion and Brennan minority and so it was-
Julie: Wow. So, that case, did [00:09:00] that have an effect on you?
Dave: Yeah, that and lots of cases. I mean, I was lucky in that I felt like I was a mini lawyer. When I was 10, 12 I was working in the office.
Julie: Really?
Dave: It was near the school, so when I'd walk through town to get to my parents' home after school, I could sort of go in the back way by the judges chambers and sit in the courtroom, and so I listened to cases like all my life, be like an hour before swim practice or something like that.
Julie: It sounds so exciting. I mean, I think my parents thought, because I argued with them so much, I would be a natural lawyer, [00:09:30] but you see this and a lot of it's glamorized, and I know so much law is the writing in the books and the "glamorous" the stuff in front of the big stage like that.
Dave: Yeah. What's interesting, what I found was one of the reasons why the big law firm didn't work out for me was it was an industrial version of what I grew up in. When I grew up, my father would do a criminal case, and then maybe an adoption case, maybe a real estate case, three people back to back, and he might have two or three trials in a week. And [00:10:00] you work in a law firm, you might be on the same case for three years. So I liked that part of it. It was sort of like the movies, quite frankly. I was cross-examined at the dinner table every day of my life, which has affected me a lot as a CEO now.
Julie: Really?
Dave: I'm used to not being intimidated that you don't know an answer. You're not expert. We just keep asking questions. People that I ask them of don't always like that, and I always have to say, "I'm sorry. [00:10:30] I was cross-examined as a child all my life."
Julie: Yeah. So you're very comfortable with that?
Dave: Yes.
Julie: That's funny. So, okay. All that makes sense, and I get the sort of the skill set that applies as a CEO, but what happened after law school?
Dave: Well, what happened after law school was I would say now, and this is a bit reflective, I might not have said this as a 24 year old, I had a lot of fun being a lawyer. I mean, I was being paid a lot of money, more than I was worth, working on these fun cases [00:11:00] and with a limited amount of oversight, and I wasn't really into it. But I was bright, and I didn't like having to bill hours every six minute increments and having to write that down on paper. I was lucky that the senior partner in the firm called me in about two years in and he's like, "Look, Dave. We like you, you're nice, you're smart, but this isn't for you." And he's like, "We're not firing you but you better move on."
Julie: [00:11:30] How did that make you feel?
Dave: I was devastated.
Julie: Like what was your thought? Were you thinking like, yourself, "Oh, my God. My dad's going to think ..." I could imagine.
Dave: Yeah. It's like my whole being was wrapped up and you don't know in this professional image that I'm a corporate lawyer and wearing my suit and my tie and everything and yeah, it was devastating. And all my classmates around, everyone sort of knew [inaudible 00:11:51] where I was in the big firm, and so it felt pretty good to be in the big firm.
Julie: Most likely to succeed kind of, right?
Dave: Yeah. It was, without question, the best thing that ever happened. I mean, [00:12:00] he knew I wasn't really engaged and they could tell I wasn't going to be on a path to making them lots of money.
Julie: Right. But it was hard for you to do. So talk about Holy shit moments. That was a big one, right?
Dave: Yeah.
Julie: Being told that this thing that you've-
Dave: And then like knowing, "Okay, he's being nice to me. I probably got a couple of months. I don't know how much time." I'm like thinking like, "Who do I ask? Like does this mean I got to run away in a month? Do I take two months? Do I figure something out?"
Julie: And?
Dave: And so I waited until the end of the year and I didn't know what they wanted to do, but they'd been overpaying me. I had a fair amount of student [00:12:30] loans, so I'm trying to pay these things.
Julie: Right. Oh, gosh.
Dave: And then I was just like, "Heck with it. I'm just going to go travel." And then my father was running in a political campaign, actually running statewide. A little town guy to run statewide. And I'm like, "Well, maybe if I don't have a job by halfway through the year, I'll go work on the campaign." For him, it was a passion he wanted to do. There's no money in the campaign. And so I just left and I said, "I don't know where I'm going to go." And I used that time to read a bunch of books, [00:13:00] traveled. All my college buddies and others, I just go hang out with them, go skiing, go LA, go surfing. I lifeguarded. I needed some money, so I lifeguarded at the beach in South Jersey for the summer, which was funny because people would be like, "Well, no, you're not one of them. What are you doing here?"
Julie: Although you are on the beach. Yeah.
Dave: And I worked on the campaign, which was just amazing and interesting. And I used to run into James Carville most days-
Julie: Really?
Dave: ... because at that point [00:13:30] we'd lost our us Senator John Heinz in a plane accident, and Dick Thornburg was going to run and then Harris Wofford was running against him. James Carville, who had lost all of these races, came back to Pennsylvania because he'd won a gubernatorial race there once for Bob Casey, and so he was like a pariah in the party that he had not. This was a huge win and I got to watch him most days, like I was traveling the state. So I had an unusual track.
Julie: You did. So, what was the impetus that made you [00:14:00] say like, "Okay, I've seen enough, done enough. I'm going to go back and-"
Dave: I needed money. I had no money.
Julie: Starvation was your driver. Got it.
Dave: I still had student loans. I mean, if I'd do it again, I would have taken the too much money I was getting paid and paid off the student loans and things, but I didn't.
Julie: Yeah, well, we all [crosstalk 00:14:13].
Dave: So I needed money. There was a job for a newspaper association, a trade association of newspapers. It wasn't paying well, but it was really interesting to me. I thought I might want to be a writer. I figured if they publish newspapers, maybe they publish books, so I could be a writer.
Julie: [00:14:30] Was this is back in Philly or is this in New York now?
Dave: This was in Harrisburg, Pennsylvania.
Julie: Oh, Harrisburg. Okay.
Dave: Yeah. So I'm bouncing between Philly and Harrisburg. My New York trips were when I played water polo in college and that was sort of it.
Julie: Okay.
Dave: So I'm thinking this is interesting. They're not going to pay great, and if I want to go into politics, which I had been running campaigns, then I'll know all these editors and I can help in politics. And the best part of it was I got to do something I understood well, and I loved doing the [00:15:00] law for newspapers and media law, advertising law. I learned that ...
Dave: ... law for newspapers and media law, advertising law. Learned that and focused on that. But this was the time in the beginning of the information super highway. So we're at '90, '91. And information super highway is going to pipe into the back of the TV set and we're going to order a pizza from the couch. That was what was being talked about in '91, '92. And they needed a lawyer to come in and help do deals between newspaper companies and TV companies and telephone companies and early online services. [00:15:30] And that was me. I'd written a computer program in '79, 1980. So I sort of knew how tech worked. I started as an engineer, so I had a sense. And so I started getting involved in those things.
Dave: And then I then started working in what we were calling new media. So I was helping these companies guide their way. And literally elevator pitched an idea in an elevator in late '94 in Dallas, Texas, 14th floor to the ground floor at the Hyatt to a guy named Brad Burnham who had a tag [00:16:00] on that said he was from AT&T Ventures. He didn't really like the idea, but he liked the idea enough that he let me follow him into the cocktail party and we kept talking about it at this conference where I was. Now, Brad sort of famously known, he and Fred Wilson founded Union Square Ventures, director of Twitter, Tumblr, Zynga [crosstalk 00:00:16:21]-
Julie: Yep. I've met Fred. Yeah. Amazing.
Dave: It's funny, I was going out for a run, so I had to follow him into the party with my running clothes on.
Julie: Okay.
Dave: And this is [00:16:30] the suites space.
Julie: I'm sure. Right. Yeah.
Dave: In Texas. And basically he was intrigued enough by the idea, he told me to come to New York and talk to him. I came to New York to talk to him. He shamed me in that you can't do a startup and also have a day job. So if you really believe in this, he's like, "You're single. Quit and really jump in." He said, "That's the way you get someone like me impressed."
Julie: You're convicted. Right?
Dave: So I did.
Julie: What was your elevator pitch? Do you know enough [00:17:00] assuming it's a 30 second kind of ...
Dave: Yeah. Yeah. It was that the web, the browsers out now, the web is going to let us do direct marketing within media. You're going to have media content, like a newspaper website that will have high degree of content that will appeal to a lot of people and you can change the ads to different people. And that you're going to need tech to do that, to manage the individual one-to-one ads. And you're going to need a unique sales organization to do it. So you start a company to serve ads and to sell ads. Maybe [00:17:30] only one of them works. That's fine. You kill the one that doesn't work. And that was real media.
Julie: That was the pitch. Right. Okay. And that was the pitch.
Dave: He didn't back it.
Julie: He didn't?
Dave: No. No.
Julie: So you quit your job. He's like, "Show me. Quit your job and do this." Then he's like, "Good job. I'm out."
Dave: He was behind it. I had to go to the West coast to Silicon Valley and pitch his partners and they didn't like it. They backed City Search instead. Charles Kahn, great business. I liked it. They had a $10 million idea. Mine was only a million dollar idea. To me from a kid, from a kid from a small [crosstalk 00:17:59] a million dollar idea is [00:18:00] more many than I can imagine.
Julie: Oh my god. Right.
Dave: But Brad became a good friend. I had breakfast with him this morning. I mean he and I have ... He's invested with me. Union square Ventures was created out of my second company. So while he didn't back it, he became an important mentor and friend.
Julie: So who did back it?
Dave: I had to bootstrap it. So I was giving legal counsel on the side. Literally, my tech office outside of Philadelphia, a place called Fort Washington, was only there because a newspaper publisher who had a libel suit. Gave me free office [00:18:30] if I gave him free legal advice.
Julie: Worth it.
Dave: Which I did. And then I got a contractor too. And then eventually I met a guy at a dinner who was Swiss, who was at a company called Publicitas, Publigroupe, invented the ad network in the 1860s in print. And he liked the idea and he said, "Come to Switzerland. Maybe we'll do it." I didn't have a passport. I never ...
Julie: Right.
Dave: I'm 33 years old. I've not had a passport.
Julie: You didn't need one to get from your town to Philly in [00:19:00] those days.
Dave: No. And you could go in those days, well, at least you go to Mexico and Canada on a driver's license.
Julie: Right. That's true. That's right. Yep.
Dave: And my father didn't get a passport until he came to my wedding, interestingly enough, later in Mexico. Yeah, so I actually went that morning down in Philadelphia and got a same day passport and flew over to Switzerland and negotiated an investment deal. And they became an investor. And then soon after that, the Newhouse family invested and they're just amazing people and investors. So I was very lucky to have some early investors [00:19:30] that were strategic, not classic venture.
Julie: But it was not easy sailing as I recall. Right?
Dave: Oh, no. It was terrible.
Julie: Because I think you've told me about one Christmas, right?
Dave: Yeah. So things were up and down and up and down in those days. And we had at one point ... I thought it would be a business of six or eight people and at one point I have 600 people and 14 countries around the world. And then in late 2001, dot com bubble, everything was going down in the wrong direction. And I was [00:20:00] basically told that the only way that we could keep the door open was I had to give up basically control of the company and that we were going to lay off probably two thirds of the people. I sort of had a choice. They're like, "You leave." And I'm like, "I don't think I can leave because they're my people." They're like, "We're taking you out of the control." And I said, "Look, let me do the laying off. Because you're going to have to pick at the right people and someone's going to have to be there and someone's going to have to do it and someone's going to have to manage this." [00:20:30] which I did, which was the hardest thing I've done.
Julie: Ever. Yeah.
Dave: And I like to say-
Julie: This was like '97?
Dave: No. No, no. [inaudible 00:20:41] different points, but this ... Oh, that's right. We had talked a little bit about in another moment. I've had several different, two different Christmas moments.
Julie: A lot of different Christmas holy shit moments. Christmas is a tough time.
Dave: It's late in the fourth quarter. Oh yeah, I'm sorry. So I was giving the dotcom bubble blowing. No, in '97, we [00:21:00] had a Christmas party. We only then were about 20 some people. We did not have enough money to pay the bills. We had three of us had been funding. We hadn't taken any money. We'd been personally funding payroll and no one else wanted to fund. We didn't have enough money. So we were having this holiday party where at the end of it we were going to tell people that the company was being shut down.
Dave: But we had a deal we were hoping to get closed with Netscape. And Netscape was going to license our software and use it inside their publishing for their ad serving. And [00:21:30] they had told us that they were going to sign the contract and wire the money. We made it explicit that this $50,000 had to be wired this night. And so Chase, which was our bank at the time, had already put the money in the employees for the payroll, it was a Friday, in their bank accounts. But we knew that if the 50,000 in show up by 5:00-
Julie: This is your Christmas party too or something, wasn't it?
Dave: Yeah. It's a Christmas party. The money would come [00:22:00] out of the employees and they would lose all ... It would be gone. It'd be over.
Julie: Yeah.
Dave: And so we are going back and forth and one of my colleagues was on the phone with Netscape like, "Are you going to wire? Are you going to wire?" And they said, "Well, look, we promised 5:00, but 5:00 Pacific time, not East coast time."
Dave: So we actually got the manager of the local Chase to keep the door open, just herself. She stayed there for missing probably her own family's Christmas party and stayed open until 8:00. She stayed in there [00:22:30] without withdrawing the money. And sure enough, the money literally showed up a couple of minutes before 8:00. And payroll got funded and no one ever knew except me and the two others who were leading it.
Julie: Right. Who were aged significantly in those three hours. Right? The difference. Okay. So that kept the doors open. And then were you fast forwarding into this other Christmas?
Dave: Yeah, then I fast forward to from 20 people four years later to 600 people.
Julie: 2001. Right. Okay. Right.
Dave: And it's always at the end of the fourth quarter into the holiday season. And we had to lay off literally 275 [00:23:00] or 300 people.
Julie: It was almost half of your-
Dave: Yeah. And then we did another round in two months. And the New York Times ... You typically want press. You want to get the front of the business section. You don't want to get the front of the business section with a teaser on the front page of the paper on Christmas Eve day saying, "Dotcom start up has a nasty Christmas gift for employees."
Julie: Oh God.
Dave: But the good part was we did it early enough that the company [00:23:30] survived and we were able to make it a profitable business. It was able to merge with 24/7. Hundreds of people had jobs because of that. And we did it early enough in the cycle that a lot of them ended up working in places like Google, who was hiring into that cycle. And they did okay.
Julie: Yeah, they did all right, those people. Yeah. Okay. So somewhere along the way, you met your wife, right?
Dave: Yes. So I met her not long before having to do that.
Julie: The first Christmas or the second Christmas?
Dave: It was [00:24:00] the second one.
Julie: The second one. In '01. Okay.
Dave: And we were growing our business a lot around the world. We needed help in Latin America. I was having to deal with the media companies myself because they're family owned, [inaudible 00:24:14]. So if you're going to meet with the head of the newspaper company of Brazil, the Marinho family, Globo, it needs to be me, the CEO. So I needed a lawyer who also had a personality and could sort of work in that world. And a friend of mine who did international [00:24:30] trade law, who I went to law school with, said, "I'm working with somebody and she's back in Mexico. She's now working for Telvista." I know she's a journalist and a lawyer. Telvista is the TV company in Mexico. And he said, "Maybe you could talk to her." And once I had met her and he said, "Well, yeah, even if she doesn't want to work together," he said, "It's probably someone you should meet."
Julie: Right. Yeah.
Dave: I found a lot of excuses to do a lot of business in Mexico for that six months and then convinced her to move to New York.
Julie: You did?
Dave: Yes.
Julie: But she convinced you to go [00:25:00] to Mexico to get married?
Dave: Well, you have to. I mean, yes.
Julie: Yes. Yes.
Dave: We had a small wedding. A small to medium size, which is about 600 people in Monterey in the North. So by Mexican standards, that's not a big wedding. [crosstalk 00:25:14] Yeah. You're going to get married where her family is.
Julie: Right. Her family and the whole ... You have the whole Hispanic culture and big family. It's surprising because usually a Hispanic family means generations and sixth and seventh cousins [00:25:30] all the way around. Right? It's a very tight knit group. Was it lots-
Dave: Oh, it is. Oh, it is. Yeah. It's huge. I mean, and they're all there and you have to try to see if you can remember them. And I think her father was one of seven or eight. Her mother was actually one of three. But yeah. And it's great because for our daughters, we're in Mexico a lot, so I thought it was important no matter what, that they might be as much American Mexican as Mexican American.
Julie: Yeah. Appreciate both cultures. Right. Yeah.
Dave: And not [00:26:00] have an accent that is a [Spanish 00:26:02] accent. Spanish is the language of the apartment of the home.
Julie: Really?
Dave: Yeah.
Julie: That's amazing.
Dave: Not for me, but for them.
Julie: This is when they want to talk about you?
Dave: Yes.
Julie: Okay. Okay, fast forward. What year was it that you finally sold? You sold-
Dave: That business ended up being sold in '01.
Julie: Okay.
Dave: I was exiting because they were like, "Look. Okay, you managed the transition. It was smooth."
Julie: Good. Yeah.
Dave: And here we're going to buy a longterm [00:26:30] non-compete from me. And I said, "No, because I don't know what I'm going to do next. I'm going to get married. I'm going to need full flexibility."
Julie: Yeah.
Dave: So Brad Burnham and I, who I'd met in the elevator years before, he and I started TACODA together and our timing ... And Fred Wilson joined as an investor and some others. And that business had the right kind of timing and turned into a rocket ship and then sold that.
Julie: Yeah. What year was that?
Dave: '07.
Julie: '07. Okay. So you're six years into that. But that's a lot. I mean, you were still in startup. I mean, I know it was [00:27:00] better established, but that's hours and hours of ...
Dave: And we were lucky there because we signed contracts on September 3rd and September 8th of 2001. Only two contracts at that point. If we had not signed those contracts, that business would've never made it because after September 11th, my birthday, by the way, there was no business. There was certainly no business in ad tech digital [00:27:30] for a year.
Julie: Yeah. So it was good that you'd gotten it off the ground because you could keep it ...
Dave: Yeah. So I think if anything as an entrepreneur, I'm pretty aware of the fact that lots of things happen that are out of your control and you don't either A, take credit for things that were out of your control that are nice to you when they happen or things that sometimes are bad and then you just have to sort of control your own destiny as much as you can.
Julie: To keep pushing. So when you finally sold that in '07, [00:28:00] look, you've done ... Your career arc is so ... You've got this wife and ... Did you have children in [crosstalk 00:28:07] the TACODA years?
Dave: Our children were born in '03 and '04.
Julie: Okay. So in the middle of the TACODA years. Okay. So they were there. So then now you've got sort of this juxtaposition-
Dave: We bought an apartment in New York in '06.
Julie: Oh. Congratulations. The peak. Yeah.
Dave: So yeah, it was one of those things, I'd better find a way to get some money to [crosstalk 00:28:26].
Julie: Because you're not going to be selling it anytime soon.
Dave: Economic structure. Yeah.
Julie: Well, [00:28:30] at least for profit. Right. So, yeah. So then ... Okay. So then you sold and you were thinking what?
Dave: It was great and I went into Time Warner, AOL with the opportunity to stay or not. I chose to take a job with a big title. It was a crazy time at AOL. I mean ...
Julie: How was that? That must have been very different though. I mean, you were doing these startups and now you're in this big behemoth.
Dave: It was a couple things. One, amazing people. [00:29:00] Super smart. To find a collection of so many people so accomplished, so credentialed accomplish too, tons of them. But it totally demystified the big company to me. The kinds of things they needed to justify were as much what they needed to justify to each other. So it was a little ... I would say people saw startup people as a bit irrational and risk-taking. I saw them the same. I saw them making decisions for what [00:29:30] it looked like in a big conference room with a bunch of EVPs and presidents there or a stock price or what analysts think rather than what was the smart thing.
Julie: Right.
Dave: Not for want of talent, but because you have to sort of ... You start managing inside, not outside. In a startup, you're managing to the market. You're managing to your customers, you're managing to your suppliers, you're managing to your employees. In a big company, you're managing to peers, colleagues, bosses. When I hire people that come out of big companies, we always [00:30:00] have open space, open planned spaces-
Dave: ... lots of open space, open plan spaces. And I put them in a middle space, always, because I need to see if they can take it. Because if they can't watch people and see who's watching them, and people from big companies, all they do is watch other people. They try to see who are the alpha is, who people move to, [00:30:30] where decisions are made, because that's what you need to do to be successful in a big company, in a large institution. I'm interested in your perspective you've been in-
Julie: Well, what I find and what you're saying, where I'm going, I think in my head, things that are flowing through, is in a startup or in that smaller situation, you know everything. I mean you're so ... Because you have to be, you have to know your customers, you have ... to your point, you're following the market, what do they need, who's coming in. You know your numbers, you know your profit, you know your sales, you know everything. And when you get into the big companies, you only know some of that. I mean, and you find that the higher up you go, sadly, [00:31:00] I don't want to say the less you know, I don't want to ... But you only know pieces of it really well.
Dave: It is, and it even got to the point, at one point, someone had said to me, he was very senior in the industry, and they knew that I was in an unusual spot and they said ... whether I was getting to know people in the company and how it was and I thought my star was in a good place in the Time Warner organization, because it was a significant transaction that a lot of people had to make decisions on. And they were talking [00:31:30] about different people, whether I had met them and then they said, "You know the Prince." I was like, "Who is that? Who's got that nickname?" I'm like, "I don't know who they call that. Who is that?" And she's like, "The book," and I'm like, "Machiavelli?"
Julie: Right. Yeah.
Dave: She's like, "You have read it?" And I'm like, "Well, in high school." And she was like, "Read it." And just like "What do you mean?" She said, "Well, [00:32:00] you are the hereditary prince of the capture Principe. And you have to either ... you can be moved into any level in the company as long as you're ascending and you're part of the new regime. And if you're not, then your head has to be taken off and dragged up and down the street to show what happens if you're not. So you actually have a lot of flexibility, where everybody else that's come in the company has to take their time moving up." [00:32:30] And literally, I was on an airplane the next morning, I stopped in the airport, I picked up the book. It's really a fast read for anyone who hasn't read it in a while.
Julie: Yeah.
Dave: I was like, "Oh my God, she's right. That's where I'm in the middle of." Because I had made some comment to her about ... It was at a cocktail party, it only could happen in New York. I said, "Yeah, well I don't know if I'm going to stay or not." And she said, "Don't ever let anyone hear you say that, because that means then you end up with your head on the thing because they know you're disposable, and someone needs to use you to win."
Julie: As an example, right. Yeah.
Dave: [00:33:00] And it's totally right. And I totally then made some decisions that led to my leaving the company.
Julie: Before they could drag your head up and down the aisles? Yes.
Dave: Yeah. My chopped off head up and down ...
Julie: Yes. Right, your chopped off head up and down the aisles. Okay, so you made the decision to leave, which was probably ... Actually, I always try to make these connections. It's not too dissimilar to your I-was-a-lawyer-in-a-firm story and somebody's like, "Hey kid, you're a nice kid. But this ain't for you."
Dave: Yeah.
Julie: And [00:33:30] you kind of already knew it instinctively, just like you knew it there, right?
Dave: It was. Probably this was a little bit different because, yeah, it is very much like that. I felt like I was a generation or so more mature that I could solve for this one. And then the question was, did I want to solve for it?
Julie: Right. Now that you've got the skills, does it make it any better? Still, it doesn't change how you feel, you're just smart enough to know how to manage through it.
Dave: Yeah, and then I think, because a lot of my career has been working to enable big companies to navigate through the [00:34:00] digital world, it really taught me a lot more about how decision making happens in those companies. I also learned about the loneliness of the people at the tops of those organizations and as you say, the amount of information they have is limited. I had the flexibility that I could get in and out to see them all of the time, so I could share a lot of information that I saw in the market. I found a lot of times, some people might've seen them as detached, and I have to say those senior leaders, some of them may not have fared as well [00:34:30] in the way people think of them, really strong, really smart. I then learned a lot that, boy, what a lousy job this can be.
Julie: Yeah, yeah.
Dave: It's out of your control.
Julie: Yeah. But there is a super lesson in there, because I know I have been in those situations and my head has been actually cut off, bloodied and drug and splattered some more. But instinctively, I knew I wasn't a good fit, I wasn't happy. But you're like, "I'm starting to [00:35:00] get through." And I think it can turn out a million different ways, but it's an important instinct, and I talked to people, it's an important instinct to listen to.
Dave: And then you realize sometimes that this defining moment, which everyone uses for why they want to drag your head, had nothing to do with why your head is being dragged. It has to do with what they want to accomplish and you're not fitting in your ...
Julie: And you're being used as an example, exactly right. No, exactly right. The smart thing is to get out before that happens like you did. But it's an important lesson for people I think listening, is [00:35:30] if you don't feel happy, if you're not motivated and excited, you need to listen to that.
Dave: And then I think once you're back outside again, then you realize there isn't this ... we've created in many ways a business culture, which so glamorizes people, depending on what level they ascended, what size of the organization. And then you start realizing there's a couple things going on. One, [00:36:00] it isn't that glamorous in the higher up. But number two, there's no way I would say they're all more capable in a lot of things. They tend to be more capable for internal institutional management many times, or your job is to manage your board and your stock price, not lead a company, and I now understand that. And so when I said demystify, it's really changed how I think of things. The television industry's a very closed business, in the industry where I am now, and there's [00:36:30] people I would have otherwise just been intimidated by sitting down in a room.
Dave: And I'm like, "No, I get it." They got to worry about a board and the stock price and I'm doing this and actually, in many ways-
Julie: That's the stuff your dad taught you, right?
Dave: And they're ending up more scared of what I could do to them than I am of the fact that it took me three months to get this appointment, where I've been given 18 minutes to get in and get out and I had to fly someplace to go do it.
Julie: Yeah.
Dave: I had to meet one of the heads of the top movie studios, literally in Tucson at 9:35 in a bar, [00:37:00] at a place where I was going to be allotted 20 minutes for a drink.
Julie: Oh my gosh.
Dave: I showed up.
Julie: Yeah.
Dave: It was great.
Julie: Oh, yeah?
Dave: I actually got an hour out of him.
Julie: Oh.
Dave: And he ... It ended up not being ... I was trying to do an ad deal.
Julie: Yeah.
Dave: He basically gave me two minutes to say that. Basically said, "Yes, I'm going to put you in touch with this person. We can do it." And then he used it for half an hour to try to learn information from me, which was wonderful. And we were talking about structural issues.
Julie: [00:37:30] That's fascinating. Yeah.
Dave: And so then I realized, yeah, he needed the meeting as much as I needed the meeting or thought I needed the meeting.
Julie: Probably more, right?
Dave: I probably didn't have to fly all the way to Tucson for this.
Julie: Yeah. But you're right, it's what you learn and what you know. So you've had all these learnings and now you're head of this ... Simulmedia, this big company. How does it feel different? You're still ... it's a big company, right? So you've still got that dichotomy, but you-
Dave: Well, we're not big in a Time Warner big.
Julie: [00:38:00] Right, no. Right, no.
Dave: And I tried to actually in some ways be efficient and very software driven-
Julie: But how many employees?
Dave: Well, only a hundred. So we're not-
Julie: Oh, there's only a hundred. Yeah, it seems bigger I guess when I think about it.
Dave: But we're probably five times bigger than we ... we're more than five ... We're 10 times bigger than we were at Real Media when we had 600 people.
Julie: Right.
Dave: So we're functioning like thousands. But I'm focusing more on impact, how I manage people, and probably a lot more focused [00:38:30] I realized, I think. In some ways, both of the early businesses had smaller original expectations that grew into bigger things. This had bigger expectations. It's very hard to change a $72 billion a year TV and TV ad industry that's run by 14 people.
Julie: Yeah. I've tried.
Dave: Yeah, I know. Yes, I remember.
Julie: Yeah.
Dave: So that's hard. But now I know it's you hang near the hoop, you keep doing the right things, [00:39:00] you figure out how you can work structure to your advantage. I'm much more patient than I used to be when I need to be. I probably attack it more like a marathon runner than a sprinter, but I know when I need to sprint.
Julie: Do you love it?
Dave: Yeah. I mean-
Julie: I mean, what are you going to say, "Oh, your CEO doesn't love his job."
Dave: I love what we can do, I love making a difference, I love doing it with the people. I think this is the thing I feel like I guess at this stage, if anyone had asked me when I started the first company, "Are you [00:39:30] going to be a 25 year, almost 30 year ad tech exec?" I'd have cried if someone had said that about me. I thought I was going to make a real difference in the world.
Julie: Yeah. You're probably are more than you know, right.
Dave: You know who had a little classified ad server selling in a newspaper companies at the same time that we had our display ad server?
Julie: Who?
Dave: Elon and Kimbal Musk.
Julie: Oh my Gosh. Really?
Dave: It was called Zip2. Used to run into them [00:40:00] at conferences all the time. My daughters think that's sort of funny and cool to say that. Anyway, he took his money and took these really crazy, smart risks and I'm really happy for what both of them ... and Kimbal has built really obscene businesses himself too.
Julie: Well, you did your risks before ... Those were big risks. I mean you were-
Dave: I feel ... I'm not ... I feel very comfortable with the risks I've taken. And so part of me now is very mission driven, because fortunately the [00:40:30] economics have worked out really well for me in the past.
Julie: Yeah.
Dave: I'm very focused on the hundred people in those a hundred families and what happens to them when we do well.
Julie: Yeah, it's a nice theme of yours, because you've always been very focused in your ... When you tell the story of the bootstrapping and these people, it's not just that your company's going to go down, you're worried about these people on Christmas Eve about to have their Christmas ripped from them and their jobs, and you've always had a great sentimentality for your employees, which is wonderful.
Dave: Yeah, and I think understanding it matters [00:41:00] and then designing for it matters. We've always gone for really strong health benefits. Why? Well, quite frankly, the most important person when you're hiring someone is the significant other who's not in the interview. Well, what do they want to know? I know what the questions are, because they always call in the next day after the offer to the head of HR to understand the health plan.
Julie: Mm-hmm (affirmative), right.
Dave: So if you win them, you don't have to win the other one. And if they ever have a problem and they're getting calls from other companies, [00:41:30] the Time Warner health plan was not as good as the Dakota health plan. That's my job, is to make sure a big company doesn't have a better health plan. It's harder to take my people away. "Well, you're going to get paid more money, but the health plan's not as good. We have change doctors." Sell that one at home.
Julie: Right. That's a great ... Oh, see that's a great ... Yeah, you put the people first and you can beat the big guys.
Dave: And it's cost effective. I mean, I'm not saying it's an accounting issue. To take away copays, to add optical insurance [00:42:00] and your extra dental insurance and some other kinds of insurance, you're going to make it so they don't have to worry as much at home. So there's less pressure if they're a little bit late getting home, if you have to send them to do something, if they get another offer. That's worth many thousands of dollars in salary-
Julie: And training and turnover. Right, and hiring. That's good. Dave, this has been wonderful. Thank you-
Dave: Oh, it was awesome, yeah.
Julie: ... for coming to spend time. I love doing these. I learn so much from people that I've known forever, so thank you for coming.
Dave: You're welcome. Thank you.
Julie: Appreciate it.