Capital Efficient Entrepreneurship to $30 Million from India: Ankit Oberoi, CEO of AdPushup (Part 5)

Sramana Mitra: How did you course correct from there?

Ankit Oberoi: It took much longer than we anticipated. We had to first understand the fundamentals. We spent six months doing that. We didn’t shut down the business. We had started making $50,000 to $60,000 a month.

It took us six months to get clarity in terms of building a good understanding of the market. Before that, we were so focused on technology. As a founder, that was my biggest learning – to understand the customer, markets, and segments. We went to understand where the biggest market is and where the biggest publishers were. 

Sramana Mitra: During these five or six months that it took you to reorient the business to a sustainable business model, were you still doing $50,000 to $60,000 a month even though they were unsubscribing? 

Ankit Oberoi: That’s right. 

Sramana Mitra: Whatever experiments that you were doing, you weren’t losing money. Your burn rate was lower than that, right?

Ankit Oberoi: Our burn rate was probably $10,000 to $20,000. We had half a million in the bank as well. 

Sramana Mitra: You were not only generating revenue; you were generating profit. That was extending your runway on top of what you had raised as seed capital. 

Ankit Oberoi: We weren’t profitable, but our burn was $10,000 to $20,000 a month. We had half a million dollars in the bank, so even if we were burning $10,000 a month, we still had a five-year runway. We were comfortable financially, but as a founder, there is always this fire in your belly. 

Sramana Mitra: Not only that, the angel investors have not given you $500,000 to sit on it for five years. They expect a return. 

Ankit Oberoi: Luckily, none of our angel investors said that. This was very helpful because they were all founders. This was more of a self-enforced pressure. 

Sramana Mitra: I think you are doing it in a healthy fiscally responsible way. That’s the point. 

Ankit Oberoi: It was taking a toll though. If you are not in the best state of mind, it reflects on the team. We got more learning along the way. 

Sramana Mitra: What was the nugget? What did you learn? What was the conclusion of that soul searching and investigation that would become the sustainable answer to this problem? 

Ankit Oberoi: After doing the research for six months and talking to 200 publishers, the only clear thing was that publishers are not good at technology. That’s one thing that we clearly understood. We also saw that the market is very underserved.

Most of the software companies are being built for marketers. They all want to sell to marketers, nobody wants to sell to publishers. This market is severely underserved in terms of technology. Publishers at all these media houses have non-existent technology teams and data teams. Machine learning is a distant world.

The second thing that was clear was that in this industry, the owner of the monopoly was the jury, the judge, and the executioner. You will be surprised that a publisher, who is monetizing through ads, uses the GoogleAds server. Google is also deciding the price for the inventory. It’s their market. It’s their price.

Basically, everything is controlled by Google and publishers have an understanding of what is happening under the hood. We realized that this was a very big problem for publishers.

Everybody knew and spoke about it but they couldn’t do anything about it so we said, “You know what, we will expand our product.” Instead of just making it an A/B testing tool, we will convert this to an ad revenue optimization platform.

How it differentiates with A/B testing is, not only are we defining the ad placement, which they can benefit from immediately, we would also run an auction for the publisher. We would run the auction which runs under the whole roof of the Google system.

The moment we started seeing it, there were so many problems in all auctions. We increased our publishers by two or three percent. Soon enough, they started adding up. 

This segment is part 5 in the series : Capital Efficient Entrepreneurship to $30 Million from India: Ankit Oberoi, CEO of AdPushup
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