Contrarian Investments (Sometimes) Win
Anyone who knows the Jump Capital team appreciates that there is no way I could walk into an investment committee conversation leading with “this company plays in a crowded and established field that has over 250+ competitors.” I doubt that I would have been thrown out of the room, but certainly ridicule would have continued for at least a week.
And that is the backdrop of 4C Insights (“4C”). Today, we announced the completion of the sale of the company to MediaOcean/Vista. It’s easy to throw in an analogy around the journey, the chapters in the book or other generic blurbs to celebrate the occasion, but there is so much more to this story and this partnership.
In celebrating the success of this investment, it’s nearly impossible to not be reminded of the fact that it was very much a contrarian bet. At the time, 4C was a little over $1M in revenue, 12+ employees and one of over 250 Facebook Marketing Partners. At that point in 2013, I probably met with over 30 social media activation or monitoring companies, Facebook had already IPO’d, Twitter was on this path…this was an established and cluttered market. The number of venture investors willing to invest into AdTech/MarTech was a small fraction of the venture ecosystem, and the industry was saturated with companies (see this Lumascape as a reminder). From our view, most of these companies and their benefits sounded the same.
As many know, Jump Capital is thesis-led…nearly 70% of our recent investments are derived from our developed perspective on microsegments within Fintech, Media, IT/Data Infrastructure, Retail or similar verticals and then hunting for that company (some examples of recent ones here and here). We do this primarily so that we don’t do dumb deals. Let me rephrase, so we don’t know substantially less than the entrepreneur and can truly partner, advocate, make intros, and debate. This is where nuance matters.
In 4C, we saw a unique self-service platform when everyone was managed service. It was built off of incredible data science from decades of research at Northwestern, and focused explicitly on buying outside of the normal real-time-bidding ecosystem, or typically referred to as “walled gardens.” No one else was doing that combination.
But, what really made it work was the brilliant computer science professor from Northwestern, Alok Choudary, and the consummate student of the advertising technology industry, Lance Neuhauser. Their approach was completely different. In the early years there was little brand-focused marketing…the industry was almost completely built off of networking events like going to an awesome yacht party, someone sponsoring a concert or other fanfare. It’s easy to spend money building brand while also getting lost in the crowd at CES, DMEXCO, or Cannes…and you’d likely see the 4C team attending these events but staying under the radar.
By understanding the nuances of the industry, they navigated chaos within the agency world, they shifted their focus to video within the walled gardens and eventually, they expanded to an omnichannel solution with TV/OTT being the cornerstone. There is nothing sexy about executing well, but they did it by building great products, listening to customers and navigating swiftly to where the customers wanted them to go.
Even with a great team and the right thesis, there is much work to see a win – I know my entrepreneur and venture friends will agree, easy to take a contrarian perspective, hard to see it succeed. We were pleased to have the opportunity to be meaningful partners to Alok and Lance – many people on the Jump Capital team were engaged at different times and levels to support. Special thanks to Brent Dobsch on Jump Capital’s Operating team who spent 3+ years working with 4C through growth, fundraising and an acquisition. And to Jason Felger, who leads Jump Capital’s Corporate Development, for working closely with the 4C team through this exit path; he is truly our sherpa while navigating an exit process during COVID when much of the industry is tremendously impacted.
The marriage with MediaOcean is an obvious fit to most in the industry. Putting the planning, activation and measurement data science of 4C with the industries’ system of record should make their customers highly efficient and successful.
My partnership and friendship with Lance, Alok and the 4C management team will continue. It really was an awesome journey and I expect that our regular catch-up over bourbons will not end with this transaction. I look forward to watching them flourish.
If you have a contrarian view or approach on the industries we spend most of our time within, please connect and share!