Helping Publishers Monetize Premium Ad Inventory: isocket CEO John Ramey (Part 6)

Sramana: In 2009 you received some angel funding and earned TechCrunch as a first customer. What came next?

John Ramey: Initially I was very nervous about accepting that first deal from TechCrunch. They are a significant first customer. I working in their office for a bit and then it went live. [Michael] Arrington wrote a blog post titled “So Long Federated Media, And Thanks For All The Fish.” In it he explained why he was leaving Federated Media and his intentions to use isocket. At the time I knew it was a big deal, but I did not realize how big of a deal it was. This was in the summer of 2009, and things were somewhat quiet. The article struck a chord and the response was fantastic. Publishers all over the world responded that they needed it.

I then put together what was the largest seed round of 2009, and to my knowledge I was the youngest entrepreneur in the world to raise that level of seed funding in 2009. I was 23 at the time. It was a syndicate of investors led by Tim Draper. The TechCrunch launch and the success the following month is what made the seed round feasible. I raised $1.8 million in that round.

After TechCrunch, I Can Has Cheezburger, the Cheezburger Network, was our next large customer. We were in a private beta period for a while because the customer response was greater than I anticipated and I did not have a product ready for it. TechCrunch knew the status of the product but the rest of the market did not. I did not let a flood of customers in, and for a year we let in fewer than 100 publishers.

Sramana: When did the customers start paying, and what did you settle on for the business model?

John Ramey: Customers started paying in the summer of 2010. I had decided on the business model very early, before I met TechCrunch. I felt that one of the reasons that companies like Glam Media were unable to move into this territory was because of the commission model. A publisher is going to resist using a tool where when the publisher generates the lead and then passes that back to the ad network only to see the network spread that advertisers money across their entire network and then charge all the publishers 40%. I wanted our business model centered on one concept: If you don’t act like a broker, don’t take a commission. If you are a tool, charge like a tool. We are the first company in the industry to avoid a commission and charge a SaaS fee. We don’t do revenue shares. Our fees are tiered and start at $19 a month. We have publishers who put an extra six digits a year in their pockets because of this model.

Sramana: Given that you are empowering the sale of premium inventory, you have to select which publishers can join, correct?

John Ramey: Yes, and each publisher in our system is hand selected. People are surprised to learn that we reject 90% of the publishers that try to get into our system. The aggregated reach of our publishers is 1.5 billion visits and 10 billion page views per month.

Sramana: Beyond the $1.8 million in seed financing, have you raised any further financing?

John Ramey: We raised a Series A a couple of months ago, but the amount has not been disclosed.

This segment is part 6 in the series : Helping Publishers Monetize Premium Ad Inventory: isocket CEO John Ramey
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