Jakub Krzych is the co-founder of AdTaily and just recently stepped down from his day-to-day role in the company where he now serves as a Supervisory Board Member and a minority shareholder. I recently caught up with him to find out more about his background before Adtaily, his early days at Adtaily, getting investors onboard, advices towards raising money and his plan for 2012.
AdTaily is a self-service advertising network that enables any online publisher to sell ads directly on its website.
Hi Jakub, How are you doing, great to have you on YHP?
I am fantastic! Thank you for having me here.
Could you quickly give us some background information about yourself?
I graduated from Jagiellonian University in Krakow, Poland with a degree in Computational Physics and Applied Computer Science.
Straight after my studies I started to work as a software developer in a Norwegian design and technology consulting firm where I developed my project management and strategy skills. After 4 years of work I decided to start my own company which within 2 years became the most popular self-service ad network in Central Europe.
Tell me how you got into business? Were you exposed to entrepreneurship as a child?
I was born in 1981 and at that time Poland was still under the influence of non-capitalistic systems. During my childhood I observed the transformations people went through during and after the fall of Communism, and that was an inspiring lesson of entrepreneurship.
So tell me how AdTaily came into the picture?
In late 2007 blogs and community portals were at the height of their popularity and I investigated the possibility of advertising on blogs. I learned that the processes were very complex. First one had to contact the blogger or website administrator and send an inquiry. Then it was a matter of waiting for the contract, paying the invoice and sending the ad to be placed on the website. I thought to myself, there must be an easier way to publish an ad on a website you visit and this is how AdTaily came along.
What is Adtaily and how does it work?
AdTaily is a self-service advertising network that enables any online publisher to sell ads directly on his website. An advertiser just selects a place where he would his ad placed and without actually leaving the website he could upload an image, pay online and have his ad published immediately.
What were you doing before you started the company?
I was a software solutions consultant working on different international projects, with a strong focus on user interfaces as well as on product strategy. I spent a lot of time abroad in places where I could gain a better understanding of what we had available on the domestic market.
Tell me about the early days of AdTaily, especially starting the business in the middle of the recession – what difficulties did you face and how did you get through that period of hardship?
Actually the middle of recession was a huge opportunity for our business. A lot of online publishers were trying to find a way to diversify their ad revenues and were more likely to test new solutions like our system. The biggest challenge was that, just before the crisis, we talked to several investors who paused their relationships when the recession started. Nevertheless we were able to convince some other ones that our product could benefit from investment, and succeed.
What makes AdTaily different from any other advertising platform out there?
Its simplicity and the large network of publishers we have managed to build on our domestic market. We've always been focused on user and customer experience, and have developed many approaches that strongly differentiate us from other ad networks or marketplaces.
What is your business model?
We take commission from advertisers who want to publish ads on publishers websites. We have several tiers. If the ad is bought directly on publisher site the commission is lower than in the case where our sales team find advertiser proactively.
What are the most crucial things you have done to grow your business?
Since we are an ad network the biggest challenge was to solve the chicken and the egg paradox. If you don’t have publishers no advertisers will come; but no advertisers means no publishers. So our strategic decision was to choose an investor that offers us so-called “smart money”. In this case AGORA S.A., the leading Central Europe media group, provided us not only funds but also their whole network of web properties, publishers and advertisers.
We will talk about AGORA S.A in a few mins, but before that, would you say the business has changed from the first initial idea?
Oh yes! It has evolved from the original idea and crystallised over time. New sales channels and products were born. However our core thinking of delivering high-performing ads in the simplest way has stayed with us.
You mentioned the deal with Agora SA in 2009 earlier? How did that all happen and why did you decide to go ahead with it?
Agora was one four investors that send us their term sheets and we had long discussions about which one to choose. We finally decided on Agora since we knew that, apart from cash, we needed ad-market experience as well as access to publishers and advertisers.
I know you guys have also gone on to raise additional money to grow the company – how was the whole fund-raising process and what are some of the key things that you took away from that experience?
First of all, it took longer than we expected – mainly because it always involves a lot of paperwork, even for a young startup. I think the key lesson is to have several term sheets to choose from and always try to raise more than you think you need.
What tips can you give upcoming entrepreneurs looking to raise money to grow their startups?
Almost four years ago when we raised our seed capital the networks of investors, accelerators and incubators hardly existed in Poland. Nowadays it seems much easier to raise funds and we recommend young entrepreneurs, especially from Eastern Europe, to include investors from other countries in their investor relationship process so as to make the valuation process less subjective.
You’ve just recently stepped down your day-to-day role in AdTaily to become a minority shareholder and Supervisory Board Member – how did that decision come about?
I co-founded AdTaily and served for almost four years as the Board Member responsible for Product Development. My mission was to build the best-possible product team and establish processes that will enable further growth. I get the feeling that my mission has been completed. Apart from that, recent innovations in technologies are creating new opportunities and I was always eager to go for high risks!
What can we expect from you in 2012?
My new venture, just started, is a company working on new technology related to the “Internet of things” trend. We hope that by the end of 2012 we will release the first batch of products and will find their product-market-fit.
What has been your most memorable moment so far?
The most exciting moment when you start your product/company is achieving take-off. More and more users register and they send you positive feedback; new reviews and articles are being published about your product and you can start to have intensive conversations with your customers. That’s memorable!
What pieces of advice would you offer entrepreneurs starting out today?
First of all focus on your product. Forget about using advertising as the main tool to gain users. Your customers need to love what you offer them and that’s why they will return and also recommend others.
Another thing is to plan long-term. You should always think twice before accepting a quick-money offer that will change your main focus and only fulfil temporary needs. It’s good to say no and come back for the big money later.