Kevin Ryan

DoubleClick: 10 to 2,000 people in 4 years, then a brutal 70% client wipeout

Kevin Ryan recounts DoubleClick's arc: scaling from 10 to 2,000 people across 25 countries in four years, then cutting back to 1,000 as the internet collapsed and 70% of clients went bankrupt, before Google bought it for ~$3 billion in 2007.

“So Google bought it for about $3 billion in 2007. Uh, the company started in 1996. I was there for 9 years. It was public for 7 years. First 4 years went from 10 people when I joined to 2,000, which is so crazy, in 25 countries. So that's what I spent my early 30s doing. Then we spent 3 years bringing it back to 1,000 people as the internet collapsed and 70% of our clients went bankrupt. So don't do that.”

People overstate the risk of doing, understate the risk of not doing

Ryan argues any good idea will be independently discovered by three other people within months, so speed matters more than people think. Most entrepreneurs understand the risk of acting but ignore the risk of inaction.

“any good idea I've come up with eventually, even if it's 6 months later, 3 other people are going to come up with the same idea. So you need to move quickly. People tend to, they, most people understand the risk of doing something. They understate the risk of not doing something.”

DoubleClick swept the ad market by going to 25 countries before profitability

Ryan expanded DoubleClick into 25 countries before its first country was profitable, so global advertisers like P&G and IBM picked them over a competitor with only 6 countries. The land-grab cost money but cemented a market share Google still benefits from 25 years later.

“We expanded to 25 countries before our first country was profitable. So if we were a big company, Everyone would've said, look, let's wait and see and make sure our model works. But the result was if you were Procter Gamble or Caterpillar or IBM, who did you work with? You worked with us because we had operations in 25 countries and you have offices in those countries. You didn't work with our competitor who had offices in 6 countries. As a result, we swept the market.”

Business Insider's edge: update all day, have a point of view, A/B test headlines

Ryan built Business Insider on tactics that were obvious but rare in 2007: continuously updating stories (the WSJ and Businessweek didn't update their sites during the day), publishing rumors to draw out sources, taking a strong point of view, and A/B testing headlines for SEO. It hit 300M uniques without spending a dollar on advertising.

“But when we, we would A/B test 3 headlines very quickly on a story. And realize what was working. And so, you know, what I'm proudest of is that Business Insider is at 300 million uniques today and never spent $1 in advertising.”

Steal thisA/B test multiple headlines on every story and publish rumors with a point of view to pull sources toward you.

Why BuzzFeed died: traffic without a brand people loved

Ryan's read on BuzzFeed (now a 36-cent stock, ~$50M cap): even when it was theoretically worth $2 billion, he rarely met anyone who said they loved reading it daily. It got traffic from search but never built a true brand, unlike Business Insider's religious daily readers.

“I rarely ran into someone who said, I love reading BuzzFeed every day. I don't believe they built up a true brand. They showed up in search results, they got traffic, but there were many, many people that religiously read Business Insider every single day. So it just had a brand that I think was much stronger and more defined.”

The studio is dead simple: a good idea and a good team, nothing else

Asked the secret to AlleyCorp's billion-dollar hits, Ryan says there's no special trick: the business comes down to a good idea plus a good team. They de-risk the idea with a deep dive (someone spends 2.5 months interviewing 50 people and writes a 50-page deck) before committing.

“At the end of the day, this is a simple business, but hard to do. In other words, you need a good idea and you need a good team. So that's just, there's nothing else. So, you know, we've had some good ideas. We do a lot of research, you know, at any one time we're doing deep dives. So someone will spend 2.5 months interviewing 50 people, doing the same thing that I would do if I were an entrepreneur about to start a company.”

Steal thisBefore starting anything, have someone spend 2.5 months interviewing 50 people in the space and write a 50-page deck.

Transcend: a $1.5M deep dive into psychedelics became a $50M position

Ryan describes spinning up Transcend from a 2.5-year psychedelics deep dive: started with $1.5M, raised $40M at $80M pre about a year later, secured a patent on methylone (you can't patent MDMA or mushrooms), and now holds a ~$50M position on $5M invested with a compound in Phase 2 FDA trials.

“we started off with a million and a half dollars, but we raised $40 million about a year to a year and a half later in 2 tranches at $80 million pre. So big, big, big, big step up, big valuation. And we have a compound that you haven't heard of going through the FDA process. It's in phase 2 trials right now.”

You're the coach, not the player

Ryan's mental model for running a studio across wildly different sectors: you don't need to understand the code five levels down, you need to grasp the high-level market trend and then assemble the team. Think of yourself as the coach recruiting LeBron and Garnett, not the player on the court.

“You gotta think of yourself as you are the coach. You are not the player. And if you're a coach and if you manage to persuade, you know, LeBron James and Kevin Garnett and a bunch of people on your team, your team's going to do well. That's actually the job.”

Steal thisStop trying to be the expert player; your job as founder is to coach and recruit the best players to the team.

Bet only on 10-year trends; if it happens next year, it's too late

Ryan's North Star for idea selection is where the world will be in 10 years. He deliberately avoids near-term plays because by the time a trend arrives it's already too late to bet on it; MongoDB, psychedelics, and robotics were all 10-year bets.

“what I am thinking about all the time, and everyone here does, is where is the world going to be in 10 years? That's the North Star for what we're doing. If something's going to happen next year, it's too late. I need to bet on a 10-year trend.”

Steal thisPick ideas by asking where the world will be in 10 years, not next year; if it's already arriving, you're too late.

Robotic massages: 17,000 unfilled massage-therapist jobs

Ryan frames automation as a one-chart bet: as labor costs rise and tech costs fall, automation wins. He's invested in a robotic-massage company because there are 17,000 open massage-therapist positions and hotels literally can't offer massages for lack of staff.

“You know, we're an investor in a company that gives robotic massages. There's 17,000 open positions for massage therapists in this country. Wow. And so, you know, there's hotels that just can't offer massages because they don't have the people.”

Steal thisFind labor shortages with thousands of unfilled roles and build the automation that backfills them.

Remote-driven rental cars: legal where driverless isn't

Ryan pitches remote-piloted cars as an automation play that sidesteps driverless-car laws: a rental car is delivered to your NYC apartment, driven by an operator in the Philippines or Arizona via installed software and hardware. Airports are already interested in remote-driving their 2am rental shuttle vans to avoid double-time pay.

“so driverless cars is, as you know, not legal in most countries, most states, but having a remote driver is. So would you, if you're in New York City, would you pay money to have a car, a rental car brought to your apartment as opposed to you having to take your 7 suitcases and 2 kids and go to the rental car. Of course you would. And yet we can have someone in the Philippines or in Arizona drive the car because we put software and hardware in the car.”

Steal thisLook for the legal arbitrage adjacent to a blocked technology; remote operation is often allowed where full autonomy isn't.

Want a studio? First build one company you exit as chairman, not CEO

Ryan's advice to aspiring studio founders: don't start a studio. First start one successful company and engineer yourself out of the CEO seat into chairman within six months. Only once that company has raised its external round and has a full management team should you start a second.

“Start by trying to start a successful company and end up not being the CEO. That's already not that easy. You know, if you have that and 6 months later the company has raised its external round of financing, has a full management team in place, and you are the chairman, you can then decide to do another one. You know, you can't truly be CEO of multiple companies, but you can be chairman of multiple companies, but you gotta start with one.”

Steal thisProve you can hand off one company to a CEO and sit as chairman before you try running a studio of many.

Business Insider sold at 11x revenue on $40M, an insane media multiple

Ryan negotiated the Business Insider sale (to Axel Springer) himself because CEO Henry Blodgett was too emotionally close. The company was doing $40M in revenue and sold for 11x revenues, an unusually high multiple for a media property.

“He was very nervous because I was pushing to get a higher price. And, but which we did, you know, we were doing $40 million at the time. We sold it for 11 times revenues, which is a big, big number for a media property.”

90% of net worth in his own private companies, plus a building

Ryan's portfolio is the opposite of the index-fund default: roughly 90% of his net worth is in his own firm and private companies, with some LP positions in VC/PE, a commercial building in SoHo as diversification, and a lot of cash kept liquid because his income is lumpy.

“All in on private companies. So probably 90% of my net worth is just in my own firm in investing in various companies and things. I have some in some VC and private equity firms. Now as an LP, you know, and I do have some real estate. I bought a building, a commercial real estate building between on Mott and Broome in between SoHo and Bowery.”

Kevin Ryan's pencil-and-paper studio: $300K and 6 months

Sam admires Kevin Ryan (early DoubleClick employee, ~$20M from the Google sale), who with partner Dwight writes out the math on paper, then funds a company with $300K and 6 months to show traction. Hits include MongoDB (~$21B), Business Insider, Zola, and Gilt.

“Then using that, him and this guy named Dwight would invest $300,000 and give a company 6 months to show traction. The outcome of their companies, there's a couple losers and a couple winners, probably a lot more losers than winners. But the first one is MongoDB. Which is currently publicly traded at a $21 billion valuation.”

How Gilt Groupe started: a long line outside a Paris flash-sale store

Sam tells the origin of serial founder Kevin Ryan (20th DoubleClick employee, made $20M personally), who created Gilt Groupe after seeing a long line outside a Paris women's store running daily noon-only deals and deciding to bring the model to America.

“He told me that he was walking down the street in Paris and saw a long line outside of a women's store. He asked a woman, "What is this thing?" They go, "Well, they do these deals every day only for an hour at noon. They're starting to do them online, but they still do them in person." He goes, "Oh, cool. I'm going to do that in America." And that's how Gilt started.”