Google Inc.’s announcement that it will buy AdMob Inc. for $750 million brought a media spotlight on Accel Partners, an investor in both AdMob and Playfish Inc., which said today it will sell to Electronic Arts Inc. for at least $275 million. Several blogs, including this one, hailed Accel Partners for its impressive and quick investment returns at a time when deals like these are hard to come by.
But AdMob’s founder and CEO, Omar Hamoui, really deserves the attention for building a company that in three years became the largest player of mobile Web ads and ultimately, a coveted jewel for the largest Internet company.
Jim Goetz, a partner at Sequoia Capital and the first investor in AdMob, was quick to praise Hamoui, telling VentureWire that the entrepreneur “has a very keen perception of mobile and a very unconventional approach. All the things you hear today, since the iPhone, about the independent developer – Omar identified that community years ago.
“He kept a maniacal focus on the independent developer,” Goetz continued. “He ignored the carriers, he ignored the ‘walled garden.’ When he started, there was no economy around mobile. It was the inception of this market. He’s a special entrepreneur, and he built an extraordinary business in a short time.” (It’s worth noting that Sequoia has added a picture of Hamoui on its sparsely decorated home page as a tribute to him.)
Hamoui, 32, dropped out of the Wharton School to start up AdMob in January 2006 in an effort to find the best platform for bringing Internet advertising to cellphones. As the story goes, Hamoui originally built a mobile service in 2005 called Fotochatter designed to let people easily share their online photos with friends who can view and comment on them through their mobile phones. But he found it difficult to market the mobile service online, so he set out to start another company to help advertisers do just that.
Hamoui’s first hire was Russell Buckley, now AdMob’s head of European operations, who originally reviewed Fotochatter on his blog MobHappy years ago. That blog is how the pair connected. Earlier this year in May, Buckley reminisced about that chance encounter in a blog post and added: “Over 80 Billion ads and 3 years later, we’ve come [a long] way since then, have over 100 employees and a valuation at least in the hundreds of million dollar range.”
Buckley then posted a short series that shared “some of the lessons [Hamoui] learned” while building AdMob. While we wait to hear back from Hamoui about the Google deal (he commented on his blog here), we found it useful to direct our entrepreneur readers to Buckley’s blog posts which tap into the mind of Hamoui, who offers his thoughts on company launches, deals and negotiations, sales and marketing, competitive threats and communication.
As an example, and in light of the Google acquisition, here are Hamoui’s short pieces of wisdom about deals and negotations, as written by Buckley who adds his comments:
Understand what you really have to lose (which is usually not much)
If you are a person with a laptop and an idea, don’t worry about messing up the 100m dollar business you think you will someday be.
Russell adds: It’s hard to emphasise how important this is. In reality, most people have very little real downside to having a go and even if the idea doesn’t work out (and most don’t let’s remember) you’ll still learn a ton, which will add considerably to your value in business.
I’d also add, on a related note, that far too many entrepreneurs get paranoid about protecting their idea to the point of paralysis. The value of most ideas is in the execution, not in what the concept actually is. To make it reality, you need to share it – actually, with as many people as possible, counter-intuitive though this might seem. And in my view, forget about NDAs and the like. They’re pretty useless all round as far as I’m concerned, but for one man and a laptop, a total waste of time and effort, which at best just create speed breakers for your idea.
Leave something on the table
If your partner feels as good as you walking away from the table, you are much more likely to have a successful relationship.
Russell adds: This is so important. Many self-proclaimed “great deal makers” focus too much on getting the best for themselves and wonder why the relationship falls apart or never achieves its potential.
Wait until the rubber hits the road to evaluate a deal
Don’t get too excited until the results actualize. Most deals are not as good as they look on paper.
Russell adds: Oh yes. If I had a penny….etc
It’s also worth remembering that many of the best deals come from existing relationships with partners or customers. This isn’t as sexy as hunting down the big mammoth stomping around in the jungle, but effective account management is a skill you ignore at your peril and every company could improve this aspect of their operation.
The Google offer no doubt looked good on paper. Hamoui will be staying on with AdMob and Google for now, but you can bet once he’s ready to move on to start another company, venture capitalists will be lining up to invest.
If you want to hear more from Hamoui, below is a one-year-old, half-hour interview by Robert Scoble who around the two-minute mark gets Hamoui to talk about his negotiations with venture investors, including Sequoia Capital, which invested in the company in 2006. Hamoui said he was introduced to Sequoia after he didn’t like a term sheet from another venture firm. On a Thursday night, he flew out to meet Sequoia, even though he had until Friday to decide whether to accept the other firm’s offer. Within 24 hours, Sequoia offered Hamoui a competing term sheet and he signed it two minutes before the other offer’s deadline. Sequoia’s partners deserve credit for seeing something in Hamoui, who was the only employee of the company.
“I had to do the pitch [to Sequoia] like four or five times,” he tells Scoble, “because it has to be a unanimous decision. Every partner has to see it, and every partner has to vote yes otherwise they won’t do it….The overall market opportunity is extremely substantial. And they tend to be market investors, so they’re whole theory is that if the market is spectacular, even a sub-optimal product with a sub-optimal team will do fantastically well. Not that, hopefully, we are either.”
0 comments:
Post a Comment