4 Lessons From One of the World's Smartest Entrepreneurs
BY Peter Cohan
A serial entrepreneur talks about the four things you should know before starting a company.
What is smartness? There are different kinds for different human endeavors. A smart football quarterback has little in common with a smart genetics researcher.
And you hardly ever come across an individual who is both a smart professor and a super-accomplished entrepreneur. Given my, perhaps twisted, values I am incredibly impressed by an individual who can excel in both of these fields.
That’s just the thing that Finland-born but U.S-raised Micah Adler has accomplished. His latest company’s name is a testament to his smartness. It’s called Fiksu - it means smart in Finnish - and the Boston-based start-up makes “a tech platform for programmatic mobile app advertising.”
Adler has achieved excellence both academically and entrepreneurially.
After all, he holds a BS in mathematics from MIT and a PhD in theoretical computer science from U. Cal. Berkeley. From there he went to the University of Massachusetts where he became a tenured professor.
What’s unique is that he quit during the year of his tenure-ensuing sabbatical and went on to start three companies. And all those companies tap into Adler’s love of algorithms based on theoretical computer science which to him means “proving an algorithm will work or providing evidence that it won’t.”
His first company was CourseAdvisor, an online lead generator serving the education industry, which he co-founded in 2004. By the time, the Wakefield, Mass.-based company was acquired by the Washington Post in October 2007, it was “matching up students with suitable degree or certificate-granting programs across 800 institutions,” according to PaidContent. Adler was “president but my real job was Search Engine Marketing (SEM) algorithm optimization lead.”
He went on to found two other companies. Autotegrity, a data analytics company that, was acquired by ADP in March 2012 and Fiksu -- which he founded in late 2008 -- where Adler is spending most of his time.
And Fiksu’s success suggests four lessons that any start-up CEO should make sure to follow.
1. Target a huge opportunity.
If you are going to start a company, you are not likely to get any more than 10 percent of the market. So if you want to build a decent sized firm that can help you achieve your wealth goals, it makes sense to go after a big opportunity-- especially if you can come up with a better solution.
Adler started Fiksu to figure out how to tap into what he saw as a huge opportunity in mobile. “I did some analysis and reached a conclusion that many people saw as shocking-- there would be $100 billion worth of acquisitions of mobile companies. One thing that helped me reach this conclusion is that Google estimated that mobile ads would reach 30 percent of its traffic. I decided that I needed to get in and build something and we would learn as we go.”
2. Just get started.
If you have identified a big market opportunity and it’s relatively new, you may not know where to start. In many cases I have studied, success does not come from the first product you ship - but it could come from how you respond to its failure.
Fiksu’s initial focus was on building apps -- but a major insight led it to change course. As Adler explained, “We built a news aggregation app like Google News that was optimized for mobile. For a few months in mid-2009, it was more successful than the New York Times or CNET. But we went from tens of thousands of downloads a day to 50 a day within two months. I said, ‘We need to do something beyond PR to get recognition and downloads.”
3. Build off your strengths.
If your first product sputters, you may be tempted to give up. But a good approach can be to fall back on what has made you successful in the past. For Adler, he concluded that success might flow from approaching Fiksu’s problem as he had always done before.
So Adler went back to his first love. “We started to develop algorithms to make digital marketing efficient. We reached out to AdMob (acquired by Google), Quattro (bought by Apple), and Millennial Media Millennial Media -- which went public. It was costing us $3 to generate a download of our app which was too expensive. I brought in some PhDs to figure out how to get more efficient,” he said.
The result was a technology with mind-boggling efficiency. Adler exulted, “Over the next six months, we went from a cost per download of $3 with thousands of downloads per day to $0.26 per download with tens of thousands daily. We realized that we had invented something that was powerful, unique, and with broad commercial appeal. We surged to the number one position in the news category on the app store.”
4. Boost your customer’s profits.
Finally, while it is nice to go back to the skills that have helped you succeed in the past; they will only help your company if they lead to a product that makes your better off. In the case of Adler, he built an app marketing algorithm that gives companies more bang for the buck.
Fiksu offers its 500 customers such as Coke, Disney, Ebay Ebay, and Groupon considerable performance advantages. According to Adler, “Thanks to the depth of our algorithm, we can improve our clients’ mobile advertising effectiveness by a factor of three -- either by increasing the number of app downloads three-fold or by cutting by a third the cost to generate the number of downloads they want.”
Take it from this smart teacher and entrepreneur, these four pieces of advice can help your start-up succeed.
Strategy consultant, start-up investor, teacher, corporate speaker, pundit, and author PETER COHAN has invested in six start-ups, three of which were sold for a total of $2 billion. Before founding Peter S. Cohan & Associates in 1994, he worked with HBS strategy guru Michael Porter.