UM Grad Launches One of Nation’s Fastest-Growing Companies
By Cary Shimek
UM News Service
The past five years of Ryan Hansen’s life have been a rocket ride.
The 34-year-old with two University of Montana degrees launched LumenAd, a company that builds software for the advertising industry, out of his Missoula basement in 2014. In just a few scrappy years crammed with problem-solving, innovation, hard work and some fortunate timing, the company now boasts more than 90 employees — 30 of them UM grads — and in 2019 tallied north of $18 million in annual revenue.
The explosive success of LumenAd, headquartered on the fifth floor of the historic Florence Building in downtown Missoula, has earned the company recognition far beyond Montana. LumenAd was ranked № 29 by Inc. Magazine on its 2019 list of the 5,000 fastest-growing private companies, and its three-year revenue growth clocked in at 7,212.5%. The magazine also ranked LumenAd the № 4 fastest-growing software company in North America.
“Receiving that recognition kind of validated what we knew all along, which is that we are growing and growing fast,” Hansen said in his office, surrounded by the bare floors and exposed wires of LumenAd’s latest remodel. “To be part of something this new — managing growth with tons of potential — it’s a fun challenge to navigate.”
The Missoula CEO exudes optimistic energy, and one wouldn’t suspect he’s often sleep-deprived from raising a 6-month-old baby boy and 3-year-old daughter with his wife, Emily. His life is filled to brim at the moment, and things are working out beyond his wildest expectations.
“I just wanted to have my own business and not work for someone else,” he said. “That’s it. If I could have a sustainable business where I could collaborate with extraordinary people, that was success for me. So it’s been an unforgettable experience to watch our team get to this point.”
Hansen’s rocket ride started in his hometown of Rapid City, South Dakota, where he was raised by a family of serial entrepreneurs. His parents owned a small shoe store in the downtown area, and when such stores could no longer compete with big department stores, they switched to restaurants in area malls.
“Entrepreneurship is really the only thing I knew,” Hansen said. “It was all around me. So it was kind of a given that I would go to business school.”
UM was the only university Hansen applied to. His mother was born and raised in nearby Anaconda, and generations of her family had toiled in Montana copper mines. Summer trips with his parents made him fall in love with Big Sky Country, and he toured UM as a high school sophomore.
“I took one lap around campus, and it was like ‘I’m done!’” he said. “I was one of the first people to apply when college came around, and I got this sweet room in Miller Hall. My freshman year was 2004.”
He came to campus with a vague plan to major in finance, like his dad did at the University of South Dakota. But he soon received feedback that accounting is where he should focus, and he switched to that major.
“I never truly wanted to be an accountant, but accounting is the language of business,” Hansen said. “It’s being able to read a balance sheet and manage cash flows. I probably would have been a terrible accountant, but I did OK in the classes, and moderate accounting skills in a startup go a long way. It’s more than what most people have, so it worked out for me.”
Hansen describes himself as “all over the place” as an undergrad. He tried many things and was open to learning and new experiences.
He taught ping-pong classes and worked in the University Center. He became a mini-celebrity, serving as half of the Booze Brothers, a duo based on the Blues Brothers but designed to combat underage drinking on campus as part of a substance abuse prevention program. He made many appearances as a Booze Brother.
However, he said the UM Advocates were the glue that held his entire undergraduate college career together. Hansen was a coordinator for the group, which promotes the University through campus tours, orientation activities, social events and volunteerism. Advocate participation is a proven path to success for many UM students.
“The Advocates provided this central place where a lot of like-minded people got together and hung out,” he said. “We were passionate about the University, did great things for campus but then had a s@#t-ton of fun together.”
Hansen was shocked to discover how meaningful his classes outside the College of Business were to him. He said by far the most important class he took was Richard Drake’s History of Terrorism. He hadn’t heard anyone speak so passionately about history.
“I was this lowly business student who didn’t think outside of debits and credits,” he said. “But it became so cool to learn — to be informed on these certain topics. It was infectious! There was a lot of information out there, and I couldn’t soak it up fast enough. So I totally get the new communication strategy the University is doing about providing a tomorrow-proof education, making people more well-rounded and preparing people for their first, second and fifth jobs. I came to college being totally one-dimensional, and the interdisciplinary education I received was amazing.
“There’s going to be a lot of change in the form of automation in the coming years, but the things they can’t replace are critical thinking and creativity.”
As graduation loomed in 2009, Hansen participated in a business plan competition with Montana Community Development, now called MoFi, which led to an internship and then a full-time position. MoFi is an economic development finance nonprofit that helps entrepreneurs access capital and technical business skills. It gave Hansen a front-row seat to the world of startups and the basics of accounting in a small-business setting. It also provided a first job out of college he was passionate about.
MoFi encouraged Hansen to return to UM for his Master’s in Business Administration, and the nonprofit paid half his tuition. He completed part of his MBA online while helping MoFi start a Bozeman office. He later returned to Missoula with the nonprofit and gradually finished his degree on campus.
“I was busy, and it took me like five years to finish that degree, which has to be the max amount of time you can take,” he said with a laugh. “They almost kicked me out.”
He said his favorite MBA class was John Chandler’s Telling Stories with Big Data. Hansen said it made him realize we are all drowning in data, and that there is a desperate need to connect the data scientist world of mathematics and statistics with the world of business. He said it’s a problem LumenAd tackles every day.
While finishing his graduate degree, Hansen worked two years as director of operations for GCS, a Missoula-based tech company that provides custom geospatial information technology services. GCS was started by Alex Philp, another UM alumnus.
His experiences at both MoFi and GCS helped him stumble across a problem he realized a new business could solve.
“Working with entrepreneurs, I saw how much money people were investing into advertising with zero real understanding or strategy,” Hansen said. “They didn’t know how to customize messages and measure results for a given audience. And from spending time in the data-mapping world with GCS, I started learning more about how people could take (latitude and longitude) coordinates from a cellphone and bring it to the world of advertising to deliver hyper-targeted mobile ads to a specific person with a specific message at a specific time.”
He realized a lot was possible in the digital advertising space. If he could figure out how to bring this technology to the masses, there was an opportunity. Thus LumenAd was born in Hansen’s basement in the summer of 2014.
“I’ve realized that starting with a problem as opposed to starting with a solution is a way easier way to start a business,” Hansen said. “If you focus on the problem and figure it out from there, you’ll have a much easier time than having a questionable solution that is in search of a problem.
“I guess I had always been looking for a problem, and that was it. So we just ran with it.”
The total initial investment was about $10,000, which went toward a simple website and branding that resulted in business cards, brochures and a little PowerPoint. Hansen also reached out to his former professors in the UM College of Business for advice on getting the startup going, and they were incredibly helpful — especially Michael Braun, who teaches strategy, entrepreneurship and international business.
“One of the many rewards as a business professor is seeing former students going on to do great things,” Braun said. “I marvel at what Ryan and his team have built over the past five years. It’s a testament to our University and thriving business ecosystem to be able to attract and retain high-caliber talent like Ryan. I think we are extremely fortunate to have LumenAd in Missoula.”
Hansen said UM actually was one of LumenAd’s first customers. Mario Schulzke, former UM chief marketing officer, was intrigued by the startup and used LumenAd’s services for targeted social media ad buys. But the company wouldn’t graduate from the basement for a year, and work initially was done on old computers and folding tables. Yet with hard work and adding new clients, the company eventually moved into a single office in the downtown Florence Building. The company has since expanded across the entire fifth floor and also has a Bozeman branch. Some employees work remotely.
“We have some very smart people on our team, and we kind of anticipated where things were going,” Hansen said. “But there is this Montana, Missoula, UM thing — there is a get s@#t -done mentality here. There are no egos and no politics. If we don’t have the answers, it’s easy for us to admit and to find the right people to help us figure it out. In those early years, we just flew under the radar, kept our heads down and did what needed to be done to get to the next level.”
These days, few of LumenAd’s clients are from Montana.
“Advertising is one of those sexy industries based in Chicago, LA and New York,” he said. “And we did confront this attitude, like, what is a Montana company doing in advertising? But what we found is that people love the Montana story. Thanks to this thing called the internet, you don’t have to live in Denver or Atlanta to do the same thing you can do here. Flights can be a challenge, and sometimes it takes us longer to get somewhere than somebody else. But in the grand scheme of things, why not be here? There is a Montana mystique, for sure.
“Our customers love it. Instead of taking them to a Dallas Mavericks game or whatever, we take them fly-fishing or whitewater rafting or to a Griz game.”
As an old UM Advocate, Hansen has no regrets about attending college in Missoula. However, in the early days of LumenAd, he admits it can be intimidating to travel and find himself confronted by a room full of Ivy League graduates.
“But at the end of the day — sure they went to cool schools — but it all comes back to IQ is not the predictor of the ability to get things done and be successful. It’s the EQ — the emotional intelligence — that’s needed in today’s modern economy and your ability to think creatively, relate to people, build relationships and just follow through with what you say you are going to do. Those are better indicators of success. And I think I learned those skills in spades at UM.”
So does he have any advice for students interested in following his path to success and starting their own business?
“Don’t overthink it,” he said. “Don’t get into the analysis paralysis and spend all your time trying to perfect a 30-page business plan. Just focus on the fundamentals, start with a problem, find some customers, try to sell them a service they will value and try to retain them. You can do it in a way that doesn’t scale at first, because that’s going to be faster and leaner than spending a year building something and then trying to talk customers into it.”
And with those nuggets, Hansen rises, shakes hands and returns to his company on that fifth floor in downtown Missoula.
The rocket ride resumes.
Feb. 12, 2020
