Bootstrapping to Exit, Then Raise Money and Exit Again: Wendy CEO Lance Neuhauser (Part 6)

Sramana Mitra: How did you address this complex sales cycle issue? Because that could really block velocity.

Lance Neuhauser: We made the call to focus. We slimmed down and said, “Alright, we know media is being managed, and we know the insights can be used for advertising.” So, we decided to put some of the social commerce elements on hold. The answer was focus—making hard choices and simplifying the sales cycle.

However, that meant letting go of some of our ideas about what we thought the future could be. What happened was that we ended up showing the technology we had, which was essentially a giant affinity map between people, interests, and media.

For example, we were approached as a potential technology solution for a challenging brand—a gum that helps people quit smoking. You can probably guess which brand it was. Attracting customers was critical for them because, if successful, people would eventually stop using their product. So, they constantly needed new customers.

They had already explored many of the standard technologies and tactics. But here we were, sitting on this massive data set. What we discovered, to our surprise, was that the number one affinity connection to this company during Q4 was Santa Claus. Initially, we thought the data must be wrong since that seemed completely unrelated.

We were doing this live in a demo, and as we dug deeper, the insight became very clear. People who wanted to quit smoking weren’t just thinking about it constantly; they had lives.

Sramana Mitra: It’s their New Year resolution!

Lance Neuhauser: Their motivation to quit was often their kids. It was Q4, and during that time, they were engaging with their kids on social media—interacting with content like Santa Claus. So, while they were trying to quit smoking at 2 PM at work, by 3-5 PM, they were engaging with Santa online for their children.

This insight was huge. The creative essentially wrote itself: “Get off the naughty list, get on the nice list—quit smoking for your kid.” Engagement with the ad increased by up to 67%, and the cost per acquisition dropped by 72%.

This insight landed us the client, and it also led to an opportunity to pitch for one of the biggest social business accounts at the time—Walmart. We partnered with Publicis to go after that account. During the pitch, we went up against seven top Facebook-certified technology partners. Despite Facebook advising against us because we weren’t certified, Publicis stuck with us, saying, “We know what we’re doing.” As a result, we helped Publicis land Walmart’s social business, which put us on the map.

From there, we grew significantly, landing business with nearly every major holding company. We managed over $2 billion of social ad spend. It was around this time that we formed a relationship with Bill Wise at Mediaocean, the largest and oldest ad tech company. He saw 4C as the next area of expansion for them. Bill brought Vista Equity Partners to the table, and soon after, Vista acquired us for Mediaocean.

Sramana Mitra: So, that’s the story of 4C. What year was that?

Lance Neuhauser: Yes, 4C was sold during the pandemic. We weren’t even looking to exit—we were fundraising to expand beyond social into television. By that point, 4C had become the largest self-service social ad tech platform, and we were key API partners with Facebook, Twitter, LinkedIn, Pinterest, Instagram, and Snap.

We also began working with television data and realized the potential for cross-platform insights. We landed NBCUniversal as a major technology partner to fuel their new data-driven offerings. Right after that, we got the call saying, “Don’t fundraise, sell to us.” That call came in March 2020, and by May, they showed serious interest. The deal closed in July.

Mediaocean had amazing products but needed a growth story, and we provided that. After our acquisition, Mediaocean bought FlashTalking, and eventually, the entire group—Mediaocean, FlashTalking, and 4C—was sold from Vista to CVC Partners. I was part of that transaction as well.

Sramana Mitra: So, 4C effectively took over Mediaocean?

Lance Neuhauser: In a way, yes. The CEO, Bill, and the CFO, Nick, stayed at Mediaocean, but most of the other executive positions—engineering, product, revenue, and marketing—were filled by people from 4C, even though we were just a fraction of Mediaocean’s size.

Sramana Mitra: That’s fascinating. It reminds me of when my husband ran NeXT Computer for Steve Jobs. When Apple acquired NeXT, NeXT essentially took over Apple, which led to its rejuvenation. This kind of thing happens more often than people realize.

Lance Neuhauser: Absolutely. Credit to Bill and Nick for recognizing that the organization needed to change the tempo and operations. I don’t know if the acquisition fully met their financial models, but I believe it brought Mediaocean into a new era, expanding its opportunities. Mediaocean is now on a great path.

This segment is part 6 in the series : Bootstrapping to Exit, Then Raise Money and Exit Again: Wendy CEO Lance Neuhauser
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