By Derek Webster
Disruptive Technologist™ D. Bernard Webster, founder of Vanguarde Consulting Group, an entrepreneurial content provider for small business development and innovation, said scaling a company quickly requires properly capitalizing the company at the beginning to ensure long-term sustainability. A 2013 Entrepreneur/Venture-in-Residence at the New York Institute of Technology, Webster shared the story of his first business launch into the then “gold-rush” industry of out-of-home advertising.
Blame it on TiVo–says D. Bernard Webster, referring to the disruptive technology which led to the launch of his first company in 2007. Now widely known as DVR, TiVo’s digital recording capabilities were designed to enhance the in-home viewing experience by allowing fast forward and playback of shows they may have missed. Yet, this technology created a fundamental problem for advertisers as empowered TV-watchers began editing their time in-front the tube—leading to millions of ad dollars lost each time home viewers zipped past their carefully crafted—and expensive–commercials.
To Webster, it made sense that if the highly influential and desirable audiences targeted by these advertisers would not stay still–then he would attempt to reach them in places where they had no other choice but to stay put; in such places like an elevator traveling up 50 floors, or at the gas pump where their attention is fixed. Further aided by the declining price points for digital flat screens and mini PCU’s, Webster started to envision the early specs for an in-store ad display network that would resolve advertisers’ problem.
In 2007 Webster built a small team of marketers who helped him properly frame a unique selling proposition for an industry that was essentially new (Out-Of-Home Advertising) to secure more than $250,000 in seed capital. Much of the initial investment dollars were spent on market and competitive research to determine a clear path for positioning. First movers in the space SIGNSTOREY, CAPTIVATE, and GSTV (Gas Station Television Network) also served as viable models for predicting a possible exit for investors (SIGNSTOREY sold to CBS that year for $71.5million). Product prototypes and legal consultations were ongoing to manage the cost of deployment of for his firm’s projected infrastructure (Flat panels in stores along busy commercial strips).
After about eight months Webster and his team were confident that they’d mastered the industry language, metrics, key performance indicators, and overall understanding of how media buying works in order to build and exploit an actual model, culminating in a high level meeting a Cable TV executive.
“Our presentation was so on point the exec asked us what our acquisition price was right there at the table”, Webster recalls. Yet any illusions that they had “made it” were quickly tempered when the executive mentioned they would need a key shift in the technology delivery if the network were to be a good a fit for their company. What he didn’t know was that Webster and his team had yet to build out a full scale model. Everything they had accomplished to that point was based upon the significant perceived value they were able to create via the market research and branding efforts they had engaged in months before. After getting a letter of interest from the TV Network that they could show to their investment group, Webster and his team sought to collect the remaining $1.5 million in second and third rounds of funding.
But that was near the end of 2007 where some of the first companies began to feel the financial pinch. Webster’s firm was no different, with their investment group running out of money from poor investments made elsewhere, leading to the eventually “bottom out” of the tentative deal they had negotiated with the network, and the eventual closure of that business.
Ultimately, Webster looks back on that experience with fondness as in his words “We Failed Forward.” We were in the right moment, with the right assumptions and data to shape our roadmap to success. What we didn’t have were the dollars to complete the work.
Given these insights and obvious battle wounds, D. Bernard Webster continues to support early stage entrepreneurs on the NYIT’s campus at Columbus Circle, providing guidance and review of their unique go-to-market strategies. His advice for aspiring business owners seeking to scale quickly is: “Raise Money you’ll need everything cent because it will make things easier.”