Archive | May, 2008

Greystripe – Developing a Complete Mobile Phone Advertising System from Scratch

7 May

Greystripe LogoAfter attending a presentation yesterday by CEO and Founder, Michael Chang, and VP of Operations, Kurt Hawks, about their startup, Greystripe, I have a newfound appreciation for the challenges that face entrepreneurs innovating in a part of the market where there is so much uncertainty. Greystripe’s primary revenue stream is from the sale of visual ads placed on mobile phones, but the story of how they got there, and the challenges they had to overcome, was both inspiring and daunting. I want to share a condensed version of that story, although I apologize in advance if any of it has been mangled in the retelling.

Where they are today:

Greystripe is an advertising network, content publishing partner, and distribution network for mobile phones that is VC backed by Steamboat Ventures, Incubic, Monitor Ventures. Its most recent capital round, a series B, raised $9 million. Their free, ad-supported games are being downloaded at a rate of 250,000 per day, by users all over the world.

How they got here:

Chang’s presentation focused on how the company has evolved since getting off the ground in 2005, and the multiple iterations the company has gone through in creating its current business model. The company started with a focus on mobile advertising in a single vertical: location based services. Inherent from day one in this business were challenges of developing content for different screen sizes, across different phone manufacturers (e.g. Nokia, Samsung, Motorola) with different operating system software (e.g. Palm, RIM, Microsoft), operating on different telephone networks (e.g. AT&T, T-mobile, Verizon), with different wireless technologies (e.g. GSM, CDMA). The complexity would not stop there.

As it became clear that location based services were evolving much slower than they had hoped, Greystripe’s focus shifted to a different vertical, gaming and applications. Games were sourced from publishers (e.g. Digital Chocolate, Hands-on Mobile), modified with the company’s AdWRAP technology, which inserts additional blank screen pages for advertisements before and after gameplay, and offered for free to users to download on their mobile phones. The next challenge, then, was to find advertisers who would pay for the full-screen advertising real estate within these games. Their search for an advertising network which could effectively source those ads on their behalf turned up empty, and again the fledgling company was back to the drawing boards.

Developing an advertising network, which places ads on behalf of companies and advertising agencies, would require a larger sales force, and a different business model than Greystripe had originally envisioned. A sales team was hired, relationships developed, and the first ads were placed. As the network took shape, and advertisers began to take notice, two new challenges would emerge. First, visual modifications would have to be made to the ads to serve the multiple screen sizes and formats, and second, the games would have to be distributed to users for download. The second would prove to be particularly daunting: it became clear that there were no effective distribution avenues available to ensure that games could actually reach users.

The next iteration of the company therefore took on this challenge: developing a diverse set of distribution channels for publishers. These have evolved to include mobile providers’ own catalogs of games and applications available for download, the sites of the game publishers, and GameJump, a portal developed by Greystripe.

Greystripe today is fully functional end-to-end, and is revenue generating (though not yet profitable). The company is now in its fifth iteration of its business model, and both Chang and Hawks sounded optimistic that even if not the company’s last, that it offered their greatest chance for success to date. Chang acknowledged that future developments could include gathering more detailed profile information about the users of its ad supported games, layering on location sensing technologies, and using it to more precisely target ads to specific users, allowing them to demand a higher premium per screen view from advertisers.

For the potential entrepreneur’s in the audience, Chang offered several tidbits of advice – including the importance of this kind of iteration and evolution in the formation of a business: “Push things far enough to really test the business model, but without pushing them so far that you run the company into the ground.”

Reflecting on the Launch of Hilltop Consultants

5 May

Mini Hilltop Consultants LogoI was recently asked to contribute to a guidebook for new student members of Hilltop Consultants, a student nonprofit consulting organization that I started while I was at Georgetown University. I thought it would be appropriate to also post my thoughts here:

Starting Hilltop Consultants was an exciting part of my university experience at Georgetown. I had heard of other student nonprofit consulting organizations on other campuses, and was surprised to see that none existed in Washington, DC. Given the plethora of nonprofit organizations based in the area, the potential client base was huge. My peers, other undergraduates at the McDonough School of Business, were an ambitious bunch who were eager to find ways to gain real-world experience early on in their university careers. These same ambitions had led many to join The Corp and the Georgetown University Alumni and Student Federal Credit Union, and I saw no reason why their energies couldn’t also be directed toward nonprofit consulting projects.

After returning from a semester abroad, in January 2004 I began working on the plan in earnest. A group of three other students answered my calls for assistance to start a new student business organization. We drafted a mission, vision, and business plan, applied for recognition as an official student organization, and recruited the first leadership board for Hilltop. By April of 2004, Hilltop Consultants was a reality. By the time I graduated in May 2005, we had served four clients over the course of two semesters, and hosted the first ever business strategy case competition at Georgetown University, the Business Strategy Challenge.

As a member of Georgetown’s case competition team, I had experienced first-hand the excitement of student case competitions, and saw a great opportunity to expand Hilltop Consultants’ activities into that area. By choosing a local nonprofit organization as the subject of the case study, we were able to further build upon Hilltop’s mission of both serving the DC nonprofit community and enhancing Georgetown students’ opportunities to learn about business by advising the managers of local organizations as they struggled to tackle real-world business challenges. Our first Business Strategy Challenge, in April 2005, focused on the obstacles facing the United Way as it adapted to a fundraising environment in which donors demanded greater transparency about how their donations were being put to use.

After graduating from Georgetown, I spent three years as a management strategy consultant for the Monitor Group. I was lucky to not only gain experience serving many impressive businesses in the United States and abroad, but also served several nonprofit organization. It was incredibly stimulating to work in a place where I was constantly surrounded by a group of people with such incredible intellectual horsepower.

Consulting is a valuable first-step out of an undergraduate education not only for business students, but students from all academic paths. It provides a strong analytical foundation which is valuable to employers in nearly all reaches of the economy. It also provides opportunities to build presentation skills and enhance a person’s professionalism as he or she is put into meetings with more and more senior clients. Finally, it provides excellent opportunities to explore a variety of industries and practice areas (e.g. marketing, finance, operations) to see where your passion lies.

I hope that Hilltop Consultants not only helps students find a way to contribute to the nonprofit community through a higher impact investment of their time than might otherwise be possible, but that it allows students to “test the waters” of a career in consulting. The long hours, the often grueling travel schedule, and your status as “advisor” rather than “decision maker” mean that consulting certainly isn’t the perfect career for everyone. As a first dive into the professional world, however, I can think of few better options available to a recent Georgetown graduate.

-Mitchell Fox

Founder and President, Hilltop Consultants, 2004 – 2005
Consultant, The Monitor Group, 2005 – 2008