Bootstrapping, Pivoting, Gaining Liquidity, Scaling to Over $100 Million: MediaAlpha CEO Steve Yi (Part 2)

Sramana Mitra: Do you want to quickly summarize what you attempted in the last two startups?

Steve Yi: My first startup, which was in 2004, was a customizable search toolbar platform that any publisher or website can customize and distribute to their users. The second company was a travel advertising site. It was essentially just an affiliate marketing website focused on the travel space.

Sramana Mitra: The first one didn’t work because there was no monetization model?

Steve Yi: Actually, there was a monetization model. You can monetize it through a deal with Yahoo! or with Google. It didn’t work because we were squarely within the crosshairs of Google who wanted the toolbar market. It was a very important market for them. In terms of getting distribution of their toolbars, Google was able to get a far wider distribution. Google was able to pay several times more to the partners that we had, who I customized the toolbars for and were distributing it to their users.

The other problem with that startup was that we just didn’t have a good set of co-founders. It was essentially four business people who had a decent idea and wanted  to run with it. We thought we could run with it because it was not capital-intensive. Ultimately, having four chefs didn’t work out. The co-founding team wasn’t just complementary enough.

Sramana Mitra: What were the dates of this attempt?

Steve Yi: That was 2004 to 2007.

Sramana Mitra: What happens after that?

Steve Yi: I went to work for a larger Internet company here in Los Angeles called oversee.net. That was an Internet company that, primarily, did domain monetization. They owned millions and millions of domains. They resold them and also monetized all of the traffic coming to those domains through a partnership with Google and other search providers. I focused on building their marketing services group, which primarily focused on lead generation for multiple verticals. That was when I got introduced to lead generation performance marketing and search marketing.

Sramana Mitra: What did that translate to?

Steve Yi: That translated to the next two companies I founded including the one I have today. After working there for two years, I was essentially able to regain my footing. The compensation was far better than what I was making at my own startup where I wasn’t paying myself very much. For a two-year period, we gained our footing and were able to reset. It was also comforting to know that I could fail and it wasn’t the end of the world. Many financial and professional holes that you may dig for yourself through a failed venture can be dug out of.

Sramana Mitra: This is why there is no stigma against failed entrepreneurs, mainly because you develop a tremendous amount of skills. Those skills are transferable to a larger company.

Steve Yi: They are. That’s one of the reasons I was successful at that larger company. You just learn to make do and do everything yourself. There’s no backstop. Knowing that you’re the one to fill every single gap, it really instills in you a self-sufficiency and a greater sense of self-reliance.

Sramana Mitra: There’s so much redundancy in a bigger company.

Steve Yi: When you get that perspective of what you’re able to accomplish, when you truly feel passionate about something, then you start to realize what you can do without. That’s when you start to see all the redundancies, all the inefficiencies not only in larger companies but even with small to medium sized companies.

Sramana Mitra: How long did you stay at the larger company?

Steve Yi: A little over two years.

Sramana Mitra: That’s 2009?

Steve Yi: Yes.

This segment is part 2 in the series : Bootstrapping, Pivoting, Gaining Liquidity, Scaling to Over $100 Million: MediaAlpha CEO Steve Yi
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