Dynamique Entrepreneuriale interview — November 2016
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Meeting with Olivier Reynaud, co-founder of Teads, following a failure with his first start-up he was able to pivot with a second adventure which has had international success.
What is your educational background?
My studies were not connected to what I do today. If we trace back to the beginning when I was 5, my parents realised that I had a gift for drawing. So I did a fine arts school until the age of 12, which allowed me to create, draw, paint and open my horizons. I loved drawing comic strips and the years went by. When I was 14, Internet arrived. I taught myself to create animated films on Amiga, PC and finally my first Internet sites. After high school graduation I pursued a scientific studies and got my masters in science and technology. I especially learnt what I didn’t want to do! Afterwards I entered a business school in Montpellier.
How did you get started?
During the first month of school, I took part in a contest for starting your own start-up called: “Le Prix D’Initiative” organized by the bank Credit Agricole. After winning the contest, I decided to create my own start-up. That was the defining moment, I was 21. This first experience was to set a free and legal digital music store for the user who had to watch a video advertising. The advertisement provided funds for the musicians and their copyrights. At that time, in 2004, it was a true innovation. I completed my studies as I was setting up that entreprise called “Airtist”.
Thanks to this, I learnt the tools of the trade. I decided from the start to bring in a team more experienced than me in the creation of the start-up because I didn’t have all the knowhow in this but I had vision. I knew what problem to solve. Therefore I created the team. In just a few months, in 2005, we got started in the creation of an Internet site for users with problems such as “Do we work with inside or outside developpers?”. We spoke with artists and independants records company and copyrights professionals (Sacem). My first company and first experience lasted 7 years with all the moments, highs and low, like an “EKJ” which an entrepreneur experienced.
Hard times, personal and professional, when you want the throw out the towel. Others moments when emotion and excitement are very high, where everything is great and you are the kind of the world.
What was the tipping point?
In 2009 the initial promise was made and the service perfectly operational despite the financial crisis of the previous year which had forced to drastically reduce the staff. At that time it was possible to download legally and for free mp3 songs of Daft Punk, Pink Floyd, Coldplay and independant artists, after having viewed an ad for several seconds. It worked! The only thing to do was to expand the business. There was a lot to be done, such as convince the market of the major companies and the advertising agencies, impose yet a new business model, create an online community and especially get funds to accelerate.
Can you give us a quick timeline?
In 2004, Myspace had just arrived in France. There was no legal music offer apart from Napster and Kazaa but both were illegal. Also there weren’t the tools of today which allow you to make Internet site. In other words, a blank track with no example or model to follow. A total adventure into the unknown. So the first 3 years were dedicated to creating a “beta” public version, an enrollment of the artists and the launching of paid downloading as a first step (the price given by the artist). Then, we benefited from a wide TV coverage in January 2007. That period was the climax and then everything collapsed with the financial crisis end of 2008. It was necessary to adapt the company to a new economic and strategic level. It was a very difficult period humanly speaking but very enriching for an entrepreneur. We didn’t give up and we were convinced that we had to get through the next 2 year. We were still convinced that the start-up survivors of this crisis would become tomorrow’s leaders. I took a big risk at that time in giving and selling all my positions to move to Paris and to try to give it to my all. I had to find funding and an national advertising agency. So I went on my own to Paris with empty pockets and crazy willpower. As for advertising I won my bet. However as for investors it didn’t work because the company was in too much difficulty to raise enough cash. A decisive and complicated period which gave me years’ worth of experience and information, but with a company in great difficulties.
What was the turning point?
As I was at cross roads concerning my first company, I wondered “What made the company work for while and then face difficulties?”. I had to solve the equation of my business model and make adjustments. Our website had a community of Internet users who used our site to download music but we had to find a way to enlarge the client base and keep them. Keep in mind music is very costly and that the artists must be paid as well as their copyrights. Advertising must be sold at a certain price in order for the business model to remain viable. Even we realised an increase in traffic, we didn’t generate a high enough turnover because our base wasn’t big enough. Therefore, to solve my equation and get around this problem, the B to B seems the best way. What if creating a micro-payment solution via advertising for websites with an established considerable traffic could be the solution? It seemed obvious to me and I was determined to pursue even though it meant starting from scratch.
Why did you want to start a new company after a failure?
I had always believed in a free business model but rather for the B to B, not only for B to C with music download. This change was THE pivot regarding my first company. I was a very big risk. Everybody advice me to find a job with a salary so that I could pay off my debts. I was not an on employment but I believe in the product and in the revolutionary idea which gave me the strength to carry on. Watching and broadcasting video was mainstream and proposing a payment video solution via video advertising, was appearing as an expectation for the advertising agencies and websites. Time to demand and time to market finally united!
Finally, the last motivation factor: the team.
I worked with two people in my first company, whom I trusted and knew I could work with again, namely Loïc Soubeyrand and Loïc Jaurès. I told them about my idea because the three of us could make it work, as we all had the skills to build a business from scratch : a CTO (Loïc J), a CEO (Loïc S) and a CMO (myself). I was convinced that it was the right moment and that we couldn’t let the opportunity slip by.
I gave myself a deadline of 6 months to succeed, otherwise I would stop and get a job.
At the end of 2010, we created a prototype that we were able to test. The idea was to monetize digital content other than music, which websites were not able to sell. Our first client was Soonnight who had thousands of pictures of social events but worked only with the traditional advertising banner. With our new concept, we were able to download photos after watching an advertisement. It worked instantly ! So then it became a matter of adapting this to other content, such as gaming, software, documents and press articles. This was very encouraging as it proved to me that I had made the right choice. I therefore had to dissolve my first company, and, even though I was in debt, jump into my second adventure : Teads (Teaads, as it was known at the beginning).
What is TEADS ?
Even if the main business model is still video advertising, the solution slightly evolved. We started. We started a system of paywall with video ads, and today our core business is native video advertising powered by a high technology platform. We are the number one worldwide video ad marketplace. Although we are known by the general public, nearly everybody used and sees our solutions (1.2 billion readers in the world, 40 million of which are in France). We created a video ad format called “inRead” which is integrated within the press articles. In other words, you read an article on your smartphone, and in between 2 paragraphs you see an video ad, perfectly integrated in the user experience. The format isn’t intrusive and respect the user user because the ad that we purpose does not block access to the content, contrarily of pop-ups and pre-rolls and the sound of the video is not activated by default. The brand is billed for completed views of the video ad (CPV). Today this sales model is known as “Cost Per View”. Teads employs 500 people, 100 of which are innovators working solely on R&D overt 27 offices in 20 countries.
Why raise funds?
The first time, was with Business Angels for up to 200 000€ at the end of the first year. We had to get financial aid for our first technological investments. The second wave of funding was our serie-A, in 2013 for 4 million € from Partech Ventures (ndlr: funders of Dailymotion) and Elaia Partners (ndlr: funders of Criteo). According to Marie Ekeland (former Elaia Partners, today Daphni) we were “the Criteo of the video!”, so in the end that wave of funding made sense. This first important source of financing allow us to focus on technology and innovation: a video marketplace and getting started internationally. Then in 2014, Ebuzzing approached us and we merged. Ebuzzing was a major French competitor and on the same market. The key to success for this union was the human aspect, by associating with entrepreneurs with whom we share the same vision such as Pierre Chappaz (co-founder Kelkoo, today executive Chairman at Teads), Bertrand Quesada (co-founder Ebuzzing, CEO Teads), Laurent Binard (co-founder Ebuzzing, CPO Teads) et Gilles Moncaubeig (co-founder Overblog, SVP Product Teads).
The objective was to give us the technical and commercial edge to become a global leader. A few months later, Teads group raised 24 million euros in January 2015 with our long-time investors and the Bpifrance. In the end, the most important thing when choosing an investor is the human aspect because we are not only looking for money but an advisory panel, mentoring and experience. More recently in September 2016 we subscribed for financing for 43 million dollars in order to continue our development in Asia and make acquisitions. A first acquisition has been recently announced with the company “Brainient”, the leader in Dynamic creative optimization (DCO). This first acquisition allowed us to fulfill our promise to our users for optimizing their experience and to personalise their video creativity for brands.
How did you find your first clients?
We have two kind of clients at Teads: online press publishers who use our technology and brands to broadcast their commercial films via our solutions. Our strategy to get our first clients was to give them the most premium and customized product. Having the finest Teads’ brand means to give as much of an eye for detail as possible of our presentations, products, website… including business cards; in other words, to go beyond the standard level of design. The result was to create a partnership premium medias such as Le Monde, Washington Post, Nikkei and to work directly with luxury brands: Cartier, LVMH, Breitling and more. It wasn’t easy to convince them and we were lucky that Pierre De Grandmaison join us in the adventure, he is not only a collaborator but also a real partner. Together, we were able to move ahead in this strategy of acquiring premium clients. This commercial approach and the strong Teads brand proved to be successful and is today the foundation on which we became international. Today, over 30’000 publishers use our solutions, of which over one thousand of the most international medias such as Time, Forbes, USA Today, The Guardian. Moreover 85% of the top 100 global brands put their face in us, in other words more than 2500 brands and hundred of media agencies in the world.
What were the greatest challenges you faced?
Concerning my first startup, the main problem were about timing and product. Being the first is not always a good thing and in my case it was more difficult that I can imagined. The problem was to make this innovation known by the brands and those of the music industry. Also having to create a community of hundreds of thousands of users was a real struggle. So, having to face several challenges at the same time make you lose sight of the big picture. Thus, the idea of a pivot with a more simple product by focusing to solve my business model equation. With Teads, the difficulties were also making our “outstream” advertising format known. We had separated advertising video from editorial content video (old market model was the “instream” or “pre-roll”), and broadcasting advertising video within the editorial. Premium brand strategy was one of the solutions to this problem.
How do you balance your personal and professional life?
For a long time, I made sacrifices because I gave priority to my professional life. I was lucky to have the undying support of Amélie, my wife, who accompanied and give advices during good times and bad as there is the life of a start-up. I always have my moments of escape with sports, as in running. Having other challenges to face while creating is necessary for me. Also, to share my experience with students and coaching students motivated by adventure also drives me. Taking time to share my experiences and know-how is important to me. Finally, family and friends have always been a strong support throughout my career, and without them I would not have been able to stay balanced and move forward. Throughout years and experience, I prioritise better my projects, I manage to focus better to carry them out in the best way possible. Working 90 hours a week is no longer worth it… even now it’s still necessary when I delve into new challenge.
What are some common misconceptions about entrepreneurship?
Often, we think that to launch a start-up, the big idea is enough. The idea is a true advantage but the most important things are: first the team, second the timing and finally the execution. A start-up is multiple-year adventure and in most cases the original idea is completely different in the end. However, the founding team remains intact, determined to adapt and pivot the project accordingly. Having the “idea” is not a quest in itself. A common believe is that the simple fact to speak about one’s idea for a startup generates copycat. If you have the idea and if you have the vision you will always be one step ahead. It is useful to bounce your idea off of others, talk with others around you, and that will help it to evolve.
If you have the idea and vision, so will be always one step ahead. However you must pitch your idea, talk about it around you and that will make it grow. Naturally, there is always the risk that somebody will take your idea but the vision and will are yours. Nobody can soak up your soul and your energy. And finally, another misconception is that raising funds is a goal within itself. Of course, clinching a deal is a milestone in the start-up adventure, but it only the beginning of bigger challenges.
Have you handled your risks?
When we throw ourselves into the unknown, we don’t know what the result will be. For me, the key is to know how to set limits in order to adapt, change, pivot or stop in time. Between my first and second companies, I managed my risks by setting a limit of 6 months to have a minimum viable product; if it pays off, I’ll continue. If you spend your time analysing, you can not grow quickly. At Teads, during the first years, each of us focused on our duties in order to have the most optimal execution. Risk taking means doing things at 200%, not having detailed plan for everything but also not knowing everything about everything. There’s no going half way. it is important to believe in yourself, believe in your team and have supports of your entourage. If you stay focused on your problem, enthusiastic about what you are creating and you form a solid team, then it is sure that the world will be yours.