How We Built a 50-Year-Old Startup
As today’s disruptive companies seek to advance toward tomorrow, how will they keep up with an ever-evolving landscape? We think we have some good advice to offer on the topic.
Fifty years ago, Michael Donovan, founded a company that would bring data-driven efficiency to Mad Men-era advertising. In 2015, we sold that company to private equity firm Vista at a $720 million valuation. And we continue to adapt and grow. In short, we’ve thrived as a fifty-year-old startup.
How did we do it? It comes down to five main lessons, described below. Whether you’re starting a company today or leading one at a turning point, we think you’ll find our own experience valuable to your business.
Do What Others Can’t—or Don’t Want to Do.
Michael Donovan founded Donovan Data Systems (DDS), following a stint with IBM in the early 1960s. At that time, Big Blue was looking to help ad agencies replace back-of-the-napkin record keeping with cutting-edge computer accounting. But IBM soon decided there wasn’t a significant market, and pulled out of the space.
Where IBM gave up, Michael sensed opportunity. He dove in to the vacuum that IBM had left, and proceeded to bootstrap his way to creating the critical data infrastructure for the ad business across North America and Europe.
In 2008, MediaBank was founded as an alternative to DDS. Many warned us that Michael was a tough competitor, and previous companies had failed where we hoped to succeed. But we were undeterred at MediaBank. By 2010, MediaBank captured 40% of DDS’s North American market share. By 2012, the two companies merged to become Mediaocean.
All of this happened against the backdrop of Mediaocean’s business itself: the back-office software that’s provided the decidedly unsexy infrastructure behind the Madison Avenue glamour.
The story of Mediaocean is one of businesses that others didn’t want to start, in a corner of advertising that’s long been overlooked. If that sounds like a negative, it’s not. Entering an arena few others wanted to has helped us get an early lead, and maintain it, in a way that would have been far more difficult in a crowded market. And it’s helped us emerge as an industry leader when, in the last few years, the data business has become sexy at last.
Disrupt Everything—Especially Yourself
DDS and MediaBank began as fierce rivals. Some of our board members laughed out loud when I first recommended a merger: the idea was so crazy, they assumed we were joking. But as surprising as our merger was, we knew it was the right move. Digital giants like Google and Facebook were quietly encroaching on our—and our clients’—territory, and it would take our shared efforts to stand our ground and push back. That’s how MediaBank and DDS merged, and the company Michael Donovan began evolved into Mediaocean. Today, we’re a company that’s leading the charge in stewarding agencies and advertisers into the digital future.
Both Donovan Data Systems and MediaBank would have done just fine – for a time, at least – continuing down their paths as rivals in a legacy business. But innovation requires boldness and creative thinking. Mediaocean is what it is today because we were honest about where we stood, where opportunity lied, and what pitfalls laid ahead—and we were prepared to pivot radically to embrace the future. It’s a formula that’s kept us nimble for all these years.
Culture Drives Growth
Mediaocean was built on a few individuals—Michael Donovan; Brad Keywell and Eric Lefkosfky, our executive teams—who ran against the grain and tapped new opportunities. But a business is more than just a few leaders. How do you scale that disruptive spirit across an organization?
This is where culture comes in.
When Donovan Data Systems and MediaBank first merged, our board was shocked by how much time, energy and funds we spent on everything from off-sites to company breakfasts to team building initiatives. What we told the board then was simple: the company will live or die on whether our employees can bond and work well together. Culture was a make or break, not a nice-to-have.
Today, Mediaocean offices globally are all built on an open plan with an outsized dining and recreation area. Meanwhile, our hiring focuses on scientific aptitude tests over fancy pedigrees. The net effect of these and other culture initiatives is that employees understand that we’re all in this together, no employee is more important than any other, and everyone has an ownership role to play. That spirit has paid off in droves in terms of psychological safety—creating an environment in which employees are empowered to think and act independently, take initiative, and take calculated risks.
It’s not enough to foster a culture of change. Employees need to know what direction to take that disruption—which requires a culture of learning. The more teams know about the state and direction of the industry, the better-positioned the company will be to make moves—large and small—that stay ahead of the times. That’s why we hold regular on-campus events featuring industry luminaries and internal thought leaders—like a hosted discussion on the history and future of automation-assisted advertising. It’s also why we expect all employees to be fully up-to-date on the trade press.
As much as we look ahead, we also learn from where we’ve been. Here’s one example. As the ad world has struggled with the explosion of media outlets coupled with cord cutting, Mediaocean has been able to tap institutional knowledge to help our clients navigate the change. For instance, we’ve found useful parallels between current digital challenges and the problems we solved for clients at the start of cable TV, back in the early 1980s. That awareness has helped us craft solutions and bring them to market faster than many others in the business. An eye to the future is a critical advantage; but so is an understanding of the past. In this regard, older startups have a leg up over younger ones.
Even with history as our guide, it’s impossible to know exactly what’s in store as our company moves ahead. After all: our industry is changing, our clients’ needs are transforming, and the tech world is accelerating at a faster pace than ever. But there are two things we can say with absolute conviction. First, the last fifty years has been an amazing ride for our startup. And second—and perhaps more important: we can’t wait to see what the next five decades will bring.