Onespot Archives - SiliconHills

BY LESLIE ANNE JONES
Reporter with Silicon Hills News

Matt Cohen, president and founder of OneSpot

Matt Cohen is an old-school content guy.

Two decades ago Cohen built the Houston Chronicle’s first website and developed the paper’s digital strategy. At the paper, Cohen noted that whenever they did reader surveys, subscribers always ranked the paper-edition advertisements among the top three things they most appreciated. Those ads were useful. They let people know when sales were happening.

But somehow the utility and appeal of print ads doesn’t translate easily into the digital space. And what works on a highway billboard can seem annoying and irrelevant when directly translated to a website masthead.

“There’s no reason at all I shouldn’t be seeing things that are interesting to me,” Cohen said of web ads. “I buy things all the time.”

With the rise of social media, companies are placing more emphasis on delivering substantive value in their digital communication. This is happening alongside a long-term trend toward greater authenticity and ‘real’ interaction between brand and customer. The result of these two trends is that businesses are creating more articles, blogs and videos that are entertaining and/or informational, often entirely sans sales pitch.

“It’s not, ‘Buy, buy, buy right now.’ It’s about creating a relationship with the brand.” Cohen said.

But there’s a pipeline problem. Once that corporate content is created – how to get it to people beyond those visiting the company’s website? That’s where Matt Cohen’s idea for OneSpot comes into play: Put ads for corporate content into traditional web ad spaces, but make the placement decision based on an advanced understanding of the intended individual.

OneSpot’s proprietary technology helps companies build their brand’s audience by using advanced, multi-level audience targeting to improve media placement decisions.

OneSpot’s system has access to about 94 percent of the American Internet audience, chief marketing officer Adam Weinroth explained. The company analyzes a wide range of user behavior and leverages that data using its technology, which is based on machine learning and predictive modeling, to determine when a certain person should see a certain ad. So someone who is perusing recipe sites might see a link to a cooking article produced by Whole Foods (one of OneSpot’s clients) in the recipe site’s ad space.

“A lot of money goes into content creation,” Cohen said. “What we have is a value proposition: take a fraction of that budget to drive a multiple of the results companies are already seeing.” It’s a way to make the whole online publishing ecosystem work better, he says: Consumers get content that’s relevant to them, advertisers reach the right people, and publishers get money for ads that are more than just a necessary annoyance.

Programmatic advertising and real-time bidding on digital ad space has built up over the last five years. Once that infrastructure was cemented, Cohen’s idea coalesced and he founded OneSpot in early 2012. Previously, he’d been a partner at Austin venture capital firm G-51 Capital.

Steve Sachs, CEO of OneSpot

The first year was mainly spent building the software and enrolling a few beta customers. It was clear to Cohen he needed to bring on someone with marketing experience and connections to the advertising world. In February 2013, Steve Sachs came on as CEO.

Formerly an executive vice president at Time Inc., Sachs used to oversee the Real Simple, Cooking Light and Southern Living brands. Since he became CEO, OneSpot has worked to expand its offerings and clients. Many of its current clients come from the food, health and beauty sectors. Since all of these categories routinely roll out new products, they also tend to produce a lot of brand-related content for their markets. Companies that produce a lot of branded content have the most to potentially gain from using OneSpot.

In November 2013, OneSpot held a series A and raised $5 million led by Mohr Davidow Ventures, a leading Silicon Valley VC firm investing in the digital marketing space.

Adtech is a nascent addition to the Texas startup scene. “We’re bringing a piece of New York to Austin,” Sachs said. Cohen and Sachs are excited to be leading local development of the sector.

The company has a sales presence in Chicago and New York. Engineering and customer care is based in Austin. Over the next year, Sachs and Cohen plan to continue building their client roster and improving the capabilities of their software. In late August, OneSpot unveiled its new Facebook sequencing capabilities. The company can now use Facebook’s real-time ad exchange to place its clients’ content into Facebook users’ news feeds.

BY L.A. LOREK
Founder of Silicon Hills News

Justin Jensen with Cinetics, Matt Cohen with Onespot, Barry Evans with Calxeda and Claire England, executive director of RISE Austin

Barry Evans, co-founder and CEO of Calxeda, bootstrapped and eventually landed Venture Capital funding after seeking investment from California and Boston for his microchip company.
Justin Jensen, founder and CEO of Cinetics launched two successful Kickstarter campaigns to fund products for his company.
And Matt Cohen, a former partner with G-51 Capital, an early stage investment company in Austin, received angel money to launch OneSpot, an online advertising company.
They all detailed how they got money to back their ventures during a “Funded in Austin” panel in the Greater Austin Chamber of Commerce’s Office at South by Southwest on Sunday afternoon.
“We really wanted to explore the entrepreneur’s perspective on fundraising in Austin,” said Claire England, executive director of RISE Global, an entrepreneurial conference in Austin. She moderated the panel.
People packed the room to hear the stories about how to get investors to back an early-stage startup. About a third of them were entrepreneurs, some investors and others interested in the subject, according to an informal survey England took of the room.
At first, England quizzed the panelists about their experiences and then the audience members asked the founders questions about their ventures.
Calxeda, founded in 2008, spent a year bootstrapped, got some strategic investment, Texas Emerging Technology Fund money and angel money and in 2010 closed on a $48 million Venture Capital round, Evans said. Calxeda makes ultra-low power server microchips that use ARM-based processors, which are the same ones used in iPhones and iPads.
Austin in 2008 through 2010 would not invest in early-stage hardware companies, Evans said.
He said he “burned a lot of time double checking that fact” and then went to Silicon Valley, Boston and even the Middle East for investors. The company’s first round of funding came from ARM Holdings, Abu Dhabi-based Advanced Technology Investment Co., Texas Instruments, Battery Ventures, Flybridge Capital Partners and Highland Capital Partners.
Eventually, Austin investors did back the company, Evans said. Last year, the company closed on a $55 million round adding Austin Ventures and Vulcan Capital as investors.
“The breakthrough for us was the help of the ATI (Austin Technology Incubator) we were able to figure out the VCs in the Bay that had investments in Austin,” he said.
Evans made sure to get on their schedule when they were visiting Austin. He also learned Battery Ventures was an early investor in Bazaarvoice, Solarwinds and others in town.
In the beginning, Evans spent 50 percent of his time looking for funding and now it’s about 10 percent to 15 percent, he said.
“You never stop fundraising as a CEO,” he said.
It’s Evans first startup and he learned a lot from the early days of fundraising. He said he developed a tactic early on where he would reach out to a potential investor to meet for coffee to just talk about his big idea. If they said yes, then he would pitch them. If they weren’t a fit, it was OK, because it really wasn’t a formal pitch, he said.
His biggest mistake was trying to raise too little money.
“I was asking for $5 million and ended up getting $48 million,” he said.
It was easier and faster to raise a larger amount and spread out the risk among several VC firms.
“It spoke to the risk that everyone was feeling about this crazy idea,” he said.
Onespot, an advertising company that created a platform to turn online content into ads, raised $1.5 million in angel funding last year.
“Angels invest for slightly different reasons than VCs,” said Cohen, the company’s president and founder. “Typically the main reason why angel investors are investing is that they really want to help out companies.”
Onespot sought out investors that could help the company make connections and give it advice, Cohen said.
“Angel investors have a lot more availability and time to give us than VCs,” Cohen said. “We will almost certainly raise a venture capital round later on.”
He advised the entrepreneurs in the room to continue to develop their minimal viable product and gain traction in their marketplace while seeking funding.
“If you’re not making a lot of progress fundraising, make progress on the product or service and then the actual fundraising processes will go a lot easier,” Cohen said.
It’s also important to find the right investors, he said. The most important thing is to do research on which angel investor is the best fit for your company, he said.
“Angel investors are investing in an individual,” he said. “They are putting their bet on you.”
Angel investing is about cultivating relationships, building a network and getting warm introductions anywhere you can, Cohen said.
At G-51 Capital, Cohen often took recommendations from lawyers that work with startups. Many of the lawyers will defer fees until a company gets funded.
Angel investors have their own vetting processes but they like referrals from lawyers and other trusted sources, he said.
“Angel investment is one of the areas where Austin really shines,” Cohen said.
Most angel investors write checks between $25,000 and $200,000, Cohen said. To be successful angel investors, they need to make between a dozen and three-dozen investments, he said.
“I wound up getting a number of angel investors in Austin and also in New York and California,” he said.
Cohen said he’s looking forward to seeing successful entrepreneurs in Austin giving back.
“The thing that brings capital and resources to a town is success,” he said.
In October of 2011, Cinetics completed a successful fundraising campaign on Kickstarter. The Austin-based startup originally sought to raise $20,000 and ended up with $486,518 from 2,019 backers.
“We were bootstrapped,” said Jensen. “We went to Kickstarter for presales.”
Cinetics created CineSkates “a portable tripod slider system that enables fluid, rolling video without the hassle of bulky camera gear.”
It’s a camera dolly that fits into a backpack for independent filmmakers and hobbyists so they “can get shots without breaking their bank or their back,” Jensen said.
“It was really a product that didn’t require a lot of prototyping and funding,” he said. “We built the first product for under $10,000. We really didn’t need any significant capital.”
Jensen advised entrepreneurs to put as much information as possible on the Kickstarter campaign so that potential funders don’t have to ask a lot of questions.
In January, Cinetics launched a second successful Kickstarter campaign for “CineMoco, a compact motor controlled dolly and slider for video and time-lapse photography.”
The CineMoco campaign more than doubled its goal of raising $50,000. The company ended up raising $113,913 from 283 backers.
When Cinetics started crowdfunding, it was one of the first Austin hardware companies to do so, Jensen said. But now many resources exist for companies seeking crowdfunding. He recommended the Austin Hardware Startup Meetup Group to learn about projects and funding.

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