Scaling to a $700M Exit: Zain Jaffer, CEO of Vungle (Part 4)

Sramana Mitra: What happened with Gokul?

Zain Jaffer: Gokul became a very pivotal figure. When we got into Angel Pad, a lot of people didn’t believe in our idea. It was very disheartening. There must have been at least 10 different advisors who came in and said, “This is never going to work.”

Gokul was the only one who sat down with us and encouraged us to keep on going. Gokul said, “If you’re passionate about this, you can do it.” That meant a lot because Gokul was the industry expert in advertising. His opinion meant more to us.

He said, “Rather than convince investors, why don’t you do what all startups do? Go talk to customers and validate.” We went to customers. We said, “We build video ads right now. We want to help you promote your ad.” Gokul challenged us to really ask why they are buying our video ads. What do they want when they buy our video ad?

We were very disheartened to realize that our customers just posted on YouTube and it just sits there gathering dust. Sometimes they send a video to a journalist, but that’s about it.

After asking why, we realized they want people to download their application. That’s where the idea started to move. We realized that if we take this video ad, put it on another smartphone, then and there the user can see the ad and in one click download the app that’s being advertised. It’s become an app promotion advertising network.

We didn’t have any engineers. It was just me and my co-founder. We were the joke of the class to be honest. At that time, we went to some customers. They said, “We absolutely want this. We need to promote our app.”

Rather than charge them $500 for a video, we said, “What if we do the video for free but you pay us per download?” I said to one customer, “If I got you 5,000 downloads, would you pay me $2?” They said sure. With the next customer, “If I get you 10,000 installs, would you pay $3 a piece?”

We did that until we had $200,000 in pre-orders. We went to investors and said, “Whether you doubt if we’re capable or not, customers want this product. We’re going to build this no matter what.” On demo day, we were only raising $200,000. Within three weeks, the round spiraled into a $2 million seed round. 

Sramana Mitra: You were based out of San Francisco?

Zain Jaffer: At that point, I was going back and forth between London and San Francisco. I wanted to raise as much money as I could so that I can have a lawyer to get me a good visa. Investors also wanted us to be based in San Francisco.

This segment is part 4 in the series : Scaling to a $700M Exit: Zain Jaffer, CEO of Vungle
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