When Facebook launched its API in 2007, allowing developers to build games and applications for the social medium, Kristaps Ronka and Hussein Fazal "just started building things for fun." For instance, they built a treasure hunter app and an app to share documents with friends.
At the time, Fazal was a software developer for Bell Canada and Ronka was an intern. "We started talking about how to make money off the applications," says Fazal. "And that's when we realized there weren't any good Facebook Ad networks. Ronka came up with the idea of building an ad network for applications—not just for Facebook, but for MySpace and a few other sites as well. So, says Ronka, "we just started coding in our free time."
After months of that, Fazal decided to create a legitimate business. He quit his job and started AdParlor. And when Ronka finished his internship, he told his mother that he was going to leave school while he worked on the business. "His mother didn't like me for a while," jokes Fazal. Ronka dropped one course after another and never finished school. "We were working out of our respective basements," says Fazal.
The Canadian government has a program, CIX Candadian Technology Accelerator, which pays for technology start-ups to work out of the Plug and Play Tech Center in Sunnyvale, California, as a way of making contacts and building businesses. Fazal was able to take advantage of the program and spent eight months living in Palo Alto, California, networking and building the AdParlor.
Fazal and Ronka knew all about coding and nothing about advertising. After they built the network they were faced with a conundrum: they didn't have any major advertising for the apps in the network; and advertisers who wanted to use the network were not finding enough apps in the network. "To get initial clients we would scroll through the Facebook app directory and message app publishers that we were a new ad network and did they want to join," says Fazal. They did a lot of cold emailing and cold calling. And they used the apps they had initially built for fun to test the ad network. Essentially they were their own clients.
Today, AdParlor is one of less than 100 companies that has access to the Facebook Ads API. It is the exclusive manager of Groupon's entire Facebook Ad spend as well as managing the Facebook Ad spends for Ubisoft, SEGA, Playfirst, Casual Collective, Cie Games, and many others. Because of the competitive nature of their business they were unwilling to disclose revenue figures but it is in the "tens of millions," says Fazal.