Neil Patel

I hope you enjoy reading this blog post.

If you want help with your fundraising or acquisition, just book a call click here.

Jonah Goodhart is the CEO and co-founder of Moat, a New York–based analytics company focused on driving success for brand marketers and premium publishers. Moat raised $70 million from investors like First Round Capital, Founders Fund, Lerer Hippeau, Insight Partners, or Founder Collective to name a few. Moat was ultimately acquired by Oracle for a reported $850 million. Jonah Goodhart was the founding investor and board member of Right Media (acquired by Yahoo for a reported $680 million), founding partner of WGI Group and co-founder of Jonah Goodhart was also a member of Mayor Bloomberg’s Council on Technology and Innovation.

In this episode you will learn:

  • Building a company with a family member
  • Being hungry as a trait to succeed
  • Investing in other entrepreneurs
  • Patterns of what works and what doesn‘t
  • Selling companies for hundreds of millions
  • How to build meaningful relationships
  • How to take care of yourself in such a stressful environment


For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

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The Ultimate Guide To Pitch Decks

Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).

Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.

About Jona Goodhart:

Jonah Goodhart is the co-founder and CEO of Moat, Inc. — a New York-based software-as-a-service analytics company focused on bringing intelligent insight and analytics to brand advertisers, agencies and premium publishers.

Jonah Goodhart has spent the past 17 years, and counting, building businesses in digital advertising. Jonah Goodhart was one of the founding investors and board members of Right Media, the leading online advertising exchange, which was acquired by Yahoo! in 2007.

More recently, Jonah Goodhart co-founded WGI Group, an early-stage investment fund, and, a not-for-profit platform helping non-profits leverage the Internet to spread their messages.

Connect with Jona Goodhart:


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Alejandro: Alrighty. Hello, everyone, and welcome to the DealMakers show. I think that the guest that we have today, we’re going to learn so much because he has done it multiple, multiple times, and the last one was a pretty significant experience. So, without further ado, let’s welcome the guest, Jonah Goodhart. Welcome to the show today. How’s everything?

Jonah Goodhart: Thanks for having me, Alejandro. I’m really excited to be here.

Alejandro: Cool. Let’s do a little bit of walkthrough memory lane here. You studied in Cornell. Is that right?

Jonah Goodhart: I did. I went to Cornell University, and I am one of three brothers, and both of my older brothers also went to Cornell. So, it was sort of a family tradition by the time that I got there.

Alejandro: Really cool, and all of you guys studied political science?

Jonah Goodhart: I studied political science. My middle brother studied political science, and my oldest brother studied psychology. I probably would have done a business major, undergrad, or something along those lines, but at the time, Cornell didn’t have really a business major of sorts that I could do. So, I thought political science was interesting and gave you an interesting perspective on the world. But my view was I wanted to at some point get into business and hopefully try to create businesses.

Alejandro: Did you already know before college that you wanted to go into creating businesses? Where did that entrepreneurial bug come from?

Jonah Goodhart: Yeah, it’s interesting. For me, I did have this interest in it, but it was mainly driven from my oldest brother. So, my oldest brother had started a company when he was in college that was a newspaper. He had figured out a couple of interesting innovations in that space. Then he went on from there to start a magazine. He’d done a couple of things that I looked at, and went “Wow. That’s super interesting.” It’s not a traditional job. He can sort of create his own destiny to some degree. It just looked really exciting and really fun. That was really my first exposure in my family and in my world to being an entrepreneur, and I loved it. So, when the time came, and an opportunity presented itself, myself and my middle brother decided to form a partnership together, and jump in, and see what we could create. We ended up creating a company in my junior year of college when we were just trying to figure out what was happening in the world, and in the world of myself personally, and the world of the internet, and a lot of things were new. So, we jumped in with both feet though.

Alejandro: And this is with Noah. So, what was the age difference between Noah, and then also your older brother?

Jonah Goodhart: Noah is two years older. Josh, my oldest brother, is five years older.

Alejandro: Got it.

Jonah Goodhart: I remember visiting Josh when I was in high school when he was in college, and I remember just being sort of amazed at what he was doing, and in the business that he was creating there. Noah had graduated or was just graduating when I was becoming a junior, and he went on to start a Ph.D. program, actually in political science at another university and came back to campus during a Spring Break. We really just got into talking about an opportunity that we started to see and decided to jump in and create a business. I can’t say that we planned it out and that we had a business plan or any of that, we just felt like it seems like there’s an opportunity here. Let’s give it a try.

Alejandro: And this was the late ’90s.

Jonah Goodhart: This was the late ’90s. Yeah. This is the time when internet companies were going public, and market values were going crazy, and venture capital was frothy, and all of these things were happening, and there hadn’t been any downside yet. So, from a third-party’s perspective who wasn’t involved in that, I was looking at it going, “Wow! This is pretty exciting.” First of all, the internet. This is pretty amazing. The idea that you can communicate, and transact, and interact in a way that I had never seen before in my life. #1 and #2 the fact that there was an incredible amount of value being created. That companies were going public. That they were creating billions of dollars of value it seemed, was just exciting. So, I think I wanted to be a part of it. My brother wanted to be a part of it. But we didn’t know what to do, and we didn’t know what to create. So, that ended up becoming a really interesting journey for us in creating our first company which is a company called Colonize that we started when we were at Cornell, or when I was still an undergrad at Cornell.

Alejandro: So, this was in New York City?

Jonah Goodhart: No, Cornell’s in Ithaca, New York. They actually now have a campus in New York City, the tech campus for Cornell, but the main campus for Cornell is in Ithaca, New York. So, we were in upstate Ithaca, New York looking over the gorges, freezing ourselves nine months out of the year in trying to figure out what to do. Actually, I was working at a computer center. I didn’t own a computer at the time. We didn’t talk about this, but we were raised in Michigan. Grew up in the middle class in the Midwest. Got to school. Couldn’t afford to buy a computer, was on full financial aid, had a scholarship, had basically everything the government and Cornell combined would offer me in order to pay for school, but I was enamored with the internet and with technology. So, my brother had gotten a job when he was at Cornell at the computer center, my middle brother, and I loved that idea. So, I got a job making $4 an hour or $5 an hour, something like that at the time, but I got access to computers, and I got access to the internet. So, that really gave me a chance to start exploring. I think once that started, and Noah and I started talking about different ideas and what we were seeing happening in terms of the world of e-commerce and what companies were doing to acquire customers, we started to experiment. From there we ended up creating a company.

Alejandro: Let’s talk about This was your first business.

Jonah Goodhart: Yeah.

Alejandro: And you were doing this with Noah, with your brother. So, how did the idea come about? Was it his idea, and he enrolled you in it, or what was the incubation process?

Jonah Goodhart: It was pretty iterative. What happened was e-commerce companies were launching. So,,, We remember the big names. Some of them still exist today, although most of them don’t. Part of their launch strategy at the time was to give away free products in order to induce new customers. So, they would say, “Come signup at our site and get your first purchase for free.” As a student who didn’t have very much money, I thought that was pretty cool, not as a business, but as a person who could get free stuff. So, I would go online, and I would sign up for these different sites, and I would get stuff shipped to me. Over the previous summer going into my junior year, I became sort of obsessed with this idea of getting free stuff on the internet and being able to sign up on all these different e-commerce sites to the point that I had boxes, and boxes, and boxes showing up at my college dorm room over the summer in New York City doing an internship there every day, at which point, my roommate at the time said to me, “You know, this is a little bit odd that you have, with no offense, that you have all this stuff showing up. How is it that you’re able to do that? You don’t really have that much money you can spend on this sort of thing.” I said, “Well, it’s the internet. Everything’s free on the internet.” And he said, “Huh. That’s pretty cool. Can you send me an email with how you do that?” It was actually this interesting moment in time where he was someone that had come from a different background than I had. He was an investment banker. His family had run successful businesses, and I thought why would someone that has a little bit more means than I did have an interest in getting a $10 or $20 thing for free? And it was one of my first business lessons which was that everybody wants a bargain. So, I sent him an email, explained to him, “Here’s how you sign up for this free stuff.” He said, “That’s pretty cool. My boss, the MD of the whole bank wants to learn how to get this stuff as well. Can you add him to your list? If you send out an email, can you send out to me and him?” I had a bunch of friends start to do this, and I started talking with Noah about this of “This is interesting. People are asking to find these offers.” It wasn’t a business yet. It wasn’t making any money. It was literally just finding cool stuff, free stuff on the internet and sending it out by email to my friends. What started as a handful of folks soon was 20, 50, 100, 200 people. Not massive, but there’s a little population of people that were getting emails from me to the point that we thought there was something interesting to having an email list. There were companies at the time; one called NetCreations. I think it was called Postmaster Direct and they eventually changed his name. Another called Free Shop, which for public companies trading at something like $100 per email address. I remember talking with Noah, and Noah saying to me, “That’s really interesting that the value of someone’s email is $100 or at least it seems to be in the public market. We should build a big email list.” Here we had a couple of hundred people that we were emailing about what we called bargains or free deals on the internet. It seemed interesting to sort of create that email list and see what would happen. Again, no idea of a business. No idea of what would happen next. So, what do we do? Well, when we got back to Cornell, we literally posted flyers around campus with the little tear-offs, if you can remember those where you’d tear off a little part of the paper, and it would say, “Go sign up to get free stuff on the internet. Go signup for a free CD.” There was a company called CDNow that was giving away free CDs, and we said, “If you signup, we’ll send you a link so you can get free stuff.” In order to just facilitate people wanting to be on this email list, we put up a basic web page, and we just said, “Submit your email, and we’ll send you these amazing bargains that we find online. Again, no money being transacted until one day, I got a phone call, and the phone call was from someone who worked at Barnes & Noble. I answered the phone, and the person on the other side of the line said, “Are you the person who’s sending out emails telling people how to get free stuff from” I sort of paused for a second, and said, “Maybe, yes, possibly. How can I help you?” The person said, “No, it’s great. In fact, we have an affiliate program, and if we send you a link, it has a specific code in it. If you use that link to send out to your emails, we’ll know that it’s you, and we can pay you for every customer that’s generated from your links.” For the first time, Noah and I both thought, “Huh! That’s super interesting. So, they want to pay us, in essence, to promote their products, but at the time, it felt like pay us to give away their products because the offer they were giving to consumers was so great, we of course, instantly thought, “I wonder if the other companies that are giving away their products will also pay us to promote them to give away their products. So, we called up each company. Got in touch with them. Noticed that actually most of them had an affiliate program of sorts that we could signup for, and the next email that we sent out to this list of now maybe 500 or 600 people, instead of it just being generic links, had codes in them. Those codes linked back to us, and when people clicked on them and became new customers, we got paid. That was the first time that we realized that there might be some sort of business here. At that point, we got really excited. Again, I still don’t own a computer. I’m working at the Cornell campus, one of the computer labs which gave me 24/7 access to computers, and all the sudden, we sent out one email, people click on it, and they become customers, and we’re making money. So, we thought, “This is pretty cool. How do we scale this? How do we get not 500 people; how do we get 5,000, 50,000, 500,000?”

Alejandro: How much time passed from the moment you thought about the idea to when you had this Ah-hah moment?

Jonah Goodhart: The moment that we transacted on our first emails when we actually made money, it took us very little time to figure out that there’s a business here. We didn’t even know if it would be a good business, a real business, something that scaled, etc., but we became obsessed with trying to grow our email list. So, we went out and bought email advertising was the first thing that we did until one day I actually got a cold call from someone who was selling what was called banner advertising at the time. Now, they call it display advertising, but the ads that are on every website. He literally said, “I sell banner advertising. It’s on every website in the world. I saw that you guys are advertising your newsletter. Have you ever thought about buying banner advertising?” One of the things that we had found in doing some email ads is that they were great, but there weren’t very many of them. They didn’t scale that well. It was hard to find space in email newsletters, and the idea of banner advertising was intriguing because it was on every website in the world. I remember we said to him, “Yeah, we’ll give it a try. If you can take a credit card, we’d love to run a test over the weekend.” Later, he would tell the story on how nobody had told him that they would spend a couple thousand dollars the next day with him on a credit card, particularly some guys out of Ithaca that he didn’t know, but nonetheless, we went forward. We spent a few thousand dollars, a campaign went up and running, and it made money instantaneously. What became exciting for us was then figuring out “How do we scale this into a business?” So, I think in our first full 12 months as a business we generated 15 million dollars or so of revenue and some 10 million dollars or so of profit. It seemed great. We were on top of the world. I’ll cut to the chase, though. Little did we know that 2000 and 2001 were around the corner. Little did we know that we were about to face one of the biggest learnings of our career which was that we hadn’t built a sticky business. We hadn’t built a sustainable business. We hadn’t built something that had value beyond the moment. When the world changed, our business changed dramatically, and we ended up not being able to sustain the business for very much longer after that.

Alejandro: So, then what ended up happening with the business?

Jonah Goodhart: Well, what ended up happening was that the guy who had cold-called me and sold me banner ads, after 2001 happened, he was working at a company called DoubleClick, and DoubleClick decided to split media and technology at the time. This is pre-Google buying them. DoubleClick said, “We’re going to be in the technology business. We’re not going to be in the media business. So, he was working on the media side. He was selling media, and he said, “Well, now, I’m going to be part of this other acquisition. I’m getting spun-off in this other company. I think I want to go start my own company.” Of all the things that have happened over the last couple of years, what we’ve done together, and you buying media from me,”—we were his biggest client at this point at DoubleClick—”has really shown me that there’s an opportunity to trade digital ad inventory maybe in a different way than has been done before. So, he called me. I went out to dinner with him and my brother. We talked about this idea of trading digital ad inventory and creating maybe a better way to do that, a more efficient way to do that. So, we ended up deciding now as our one business is declining very rapidly—nobody knew that of course—but as our one business, Colonize, is declining rapidly, we decided to write a check for this other guy to start a new company that he wanted to start. That new company became the first at-scale digital advertising trading platform, or marketplace, or exchange. It was a company called Right Media, and it would eventually go on to be bought by Yahoo. But, it was this super interesting serendipity and set of events that I think one, we felt very fortunate and lucky, but at the same time, had we not been sort of in the situation that we were in, maybe we wouldn’t have been as focused on finding what was next, or betting on somebody else, or what have you, but seeing the decline of our first business, we thought, “All right. This is not sustainable. Something’s changed. I don’t know if it’s our fault. I guess it’s our fault, but it’s not working anymore. So, let’s figure out something else.” We happened to get a phone call from this fellow, and we made a bet.

Alejandro: Really cool. Colonize, actually, you built that into one of the most trafficked websites in the U.S. Is that right?

Jonah Goodhart: It was at the time. Yeah. It really taught us the power of media, and the power of the internet, which was that if we could make an ad that was successful, it could run across a tremendous number of websites, and we could generate traffic from those ads. I remember when banner advertising first came out people thought, “Well, this is really like magazines. This is about building a brand, and this is about telling a story. This is not about selling anything through the lens of direct response. This is not classified ads. This is about building brands.” What we learned through Colonize was you can actually build a pretty big direct response business by leveraging banner ads. I think we were probably one of, not the first, but certainly one of the first companies that had some scale at driving traffic using banner ads, using display ads at the time. Since then, of course, what was interesting is Right Media, of course created the platform for trading ad inventory, and then fast-forward a little bit to 2007, Right Media gets acquired by Yahoo. Certainly, we have this interesting moment where we pause and go, “What’s just happened here?” So, the world of the internet has continued to grow. User growth continues up and to the right. Every country that comes online, up and to the right. Transactions, up and to the right. Advertising, up and to the right; however, it seems like most of the money being spent on digital advertising in 2007 was direct response advertisers, where folks that could measure to a T that I transacted. I get somebody to submit their email address to join a newsletter. Did I get someone to take some specific action? We had this initial beginnings of an idea that would take us a little bit of time to turn into a new company, but it was this initial idea of brands are going to have to figure out how to make digital work. They’re going to have to figure out how to story tell in digital. So, what we had seen through Colonize and Right Media was that digital’s great for direct response. It’s great for getting someone to signup for something, to enter a sweepstake, to take some specific action, but how do you story tell? How do you build a brand that’s memorable in the ways that a lot of the great brands that we know and love have built their brands frankly in television and in other mediums? So, that became this inkling of an idea of “How are brands and our brands going to figure out how to story tell in digital?” It would eventually become really the crux of our vision or our north star for creating Moat, which we started in 2010.

Alejandro: We’ll talk about that in just a second. On Right Media, when you invested, what kind of involvement did you guys have? Were you actively involved, or was it just more like “Hey, here’s the investment, and we’ll just track it and help whenever we can?”

Jonah Goodhart: We were actively involved. We were on the board. We were the first customer. We started doing our media buying that we used to do through DoubleClick, now through Right Media. We were active in early customer conversations and trying to get other people involved in the platform. It wasn’t our company. We were still running this other thing, trying to make it work. We were, I would say active investors, but we weren’t running it day-to-day. It was Mike Walrath. It was his company and the team that he hired. But we were close to it, and we were looking at what was happening, how it was affecting our business. One of the things that we saw on the Colonize side is that as Right Media took off and started to do well, it became even harder, not that we needed more challenges to figure out at Colonize, but it became even harder to make Colonize work because it was easier to buy media as a result of Right Media. It was easier to bid on inventory. It was easier to centralize your creative and run it across thousands of websites. So, all the sudden, it made it easier for other people to compete with us. So, what was already a challenging business to try to maintain, became really hard when Right Media started to scale. Luckily, we had some upside in Right Media, so it worked out, but it was really interesting to see how that unfolded.

Alejandro: I believe the terms of the transaction of Right Media, it was 680 million, the price that was paid by Yahoo, I believe?

Jonah Goodhart: Yes, that’s right. So, Yahoo had owned 20% of the company already. They had actually bought 20% of the company invested in the company previously. So, Right Media was acquired at a value of 850 million, but the net of that, because they weren’t paying themselves because they already owned 20% of it, was the 680, I think the number was. So, that’s exactly right.

Alejandro: So, this is probably, Jonah, one of the best angel investments in history.

Jonah Goodhart: Yeah. I don’t know about that, man. Nowadays, it seems like there’s lots of bazillion-dollar companies all over the place.

Alejandro: Right.

Jonah Goodhart: And a lot of great companies out there, but for two kids coming out of Michigan, and going through Cornell, and experiencing what we had just experienced, we were honestly amazed and didn’t feel like we earned it. We did this because we saw it and we knew it wasn’t anything like that. It was us trying to ride the wave and to make a bet when we saw someone that we believed in, and honestly, didn’t know much more beyond that.

Alejandro: You also continued on the investment side before you started Moat. It’s great because I guess the experience with Right Media for you and for your brother, Noah, it really brought you close to Mike who was the driving force behind Right Media. He eventually became like your third brother from a business perspective. Right?

Jonah Goodhart: Yeah. He became our honorary fourth brother, I guess. But he became really close, and we decided to form an investment fund together. So, we formed WGI, which is with zero creativity, stands for Walrath, Goodhart (my last name) Investments. The idea was, we’re going to invest in internet entrepreneurs. We’re going to invest in interesting startups. So, starting right around the time when Right Media sold, we started ramping up our activities in that world. So, we went out and met tons of interesting companies that have made over 100 investments over the last 10 or so years. Some of which have ended up becoming amazing companies like Yext, which is a great public company. Others that have been acquired by folks like Apple, and Twitter, and plenty of companies that didn’t work, and went to zero, and have learned a lot in that process, but it’s been really amazing just to meet entrepreneurs and to get to know different businesses. I think one of the things that that process did of being an angel investor for me is it helped inform who I was in the sense that I realized I’m not a venture capitalist. I realize that my identity is an entrepreneur. That where I’m most excited is when I’m in there with my hands in a product figuring something out, talking to a customer, trying to create something. I think having Colonize be sort of successful, and then sort of not successful, it was this interesting experience for me where I had felt like, “Okay. We created something that kind of worked, but then it didn’t ultimately work. It kind of just died to some degree in the end. Right Media was really successful, but it wasn’t my business. I invested in it and did great, but it wasn’t my sort of baby if you will. We invested in a lot of other folks, and that has been awesome to watch them grow, but they weren’t my companies. So, I and I think my brother really got this feeling of “We need to create our own thing. We need to go out and put our stamp on the internet world as much as we can. So, that became part of the desire behind founding Moat was we wanted to create our own company and really get back into operating.

Alejandro: I’m sure that right before you got into Moat, there were certain traits that you were able to identify or patterns from those founders that eventually became successful, and perhaps that you shared with Noah like, “Hey, if we go at it again, this is something to keep in mind.” Or, “This story could be mine.” So, what were those traits that really made or gave founders that potential success that you were able to identify?

Jonah Goodhart: I guess the way that I think of it is when I see someone else who’s an entrepreneur, and I meet them for coffee, or I meet them across the table, it is just obvious to me whether they are in their heart of hearts an entrepreneur. The reason it’s obvious is because there’s hunger. There’s this desire that you can’t contain that if you email them at 3:00 in the morning, they respond at 3:01. That if there’s an opportunity to get a new customer, and you have to fly for 12 hours or 15 hours to do it, they do it instantaneously, and they’re on the next flight. There’s this thing that I think it’s hard to wrap your arms around, but there’s this feeling of I guess hunger’s the closest thing that I can think of that entrepreneurs that I meet where I just get really excited by, you can just tell. It sort of is all over the place. You can tell that they’re driven, and passionate, and exciting, and will do whatever it takes, and it’s the number one thing that matters in their life. Honestly, that’s one of the things that I’ve struggled with as an entrepreneur is as, for example, building Moat. I gained a lot of weight at the time that I was building the company. I didn’t see my family as much as I would like to, as I think happens with a lot of people, but I was on a plane constantly. Every week, every other week, I was doing—I think we counted up at one point in the course of my first year or two, something like 1,000 meetings on some ridiculous number of 10 meetings a day, 12 meetings a day to the point you don’t remember anything because it was just this desire to make it work and to find success. I think one of the things that is easy to recognize is when somebody has this appetite when they’re like, “I will literally do whatever it takes to be successful.” I think one of the challenges is trying to figure out is there a place of balance for that? Because I know for me, in some ways, it got the best of me in my eating habits and things of that nature. So, trying to figure out how do you balance that, how do you not stay up 24/7 and still make this work. It’s something that I think Arianna Huffington and others are talking about now in trying to get to this balanced lifestyle. I don’t know how to do it, frankly, as an entrepreneur. For me, you’re either in 24/7, or you’re not. I haven’t figured out another way, although I’m sure others have. But that’s the set of things that I look for. To me, it’s obvious when you see it.

Alejandro: Absolutely. Why don’t we talk now about Moat? Here you are coming from this experience of success, failure, building Colonize. Also, identifying patterns, being successful on the investing side. Let’s talk about how Moat really comes together with Noah, and also with Mike.

Jonah Goodhart: Yeah. Take you back 2007. Right Media sells. Big success. Everybody that we’re talking to says, “This is a huge deal. A huge home run.” I have this feeling of happiness, but also a little bit of emptiness. The emptiness was I felt like this is awesome, but it’s not my thing. It’s not the thing that I’ve created. So, I think that started this feeling of like I need to get back in and operate again. We spent the next couple of years investing in other startups which I think helped really cement that identity in myself, at least, that I’m an entrepreneur first and an investor second. Then what happened was, we started talking about, Noah and I, about what is broken? What are the things that we think don’t work in the ecosystem? We were focused on digital and focused on advertising. This is where we had spent a lot of our time to this point. One of the things that we concluded was Right Media was about programmatic advertising. It was about exchange, traded advertising. It was about making everything as efficient as possible, and in a lot of ways, it was about direct response advertising because it was mostly direct response advertisers that had adopted those types of platforms at that time. So, we had this idea that “Where is Pepsi? Where is Coke? Where is Nike?” Where are all the guys that we think of when we think of brands that have an impact on our lives? How are those folks advertising in digital and how are those folks going to figure out digital, and do they have to figure out digital? I remember having conversations with Noah and with Mike as well about it feels like brands are going to have to figure out how to story tell in digital. This idea that digital’s going to be just the search medium, just the classified’s medium, just the direct response medium didn’t sit well. It felt like brands are going to have to figure out how do you story tell? It seemed clear to us that at the time, they hadn’t. That at the time, what was the most memorable banner ad that you could remember? Not much. What about television ads? Well, you can remember lots of things. You can remember hope and happiness with CocaCola and the Panda bear. You can remember any number of things that jump to your head, and you think of memorable brand advertising and TV, but we didn’t have an equivalent in digital. So, we started thinking, “Huh. This idea of making brand advertising effective in a world that’s increasingly digital seems to be something interesting.” Now, that eventually would become our north star for Moat, but what business we would start was not the business that we ended in. The business that we first started was a creative-focused marketplace. Our thought was, “Well, alright. So, brands are going to have to figure out digital. The reason that they’re not doing a lot of storytelling on digital is because the ads are not very good. The ads are bad. So, brands are going to make better ads. How can we help brands make better ads? We’re going to build a creative marketplace. That was the idea behind Moat when we started in 2010. Our thought was, innovation can come from anywhere. Ideas can come from anywhere. We’ll leverage that and enable new ideas to surface for brands to story tell. We were completely wrong about what to build. But we learned that lesson by going out and talking to brands, by saying, “Hey, we want to show you this idea that we have.” They would listen politely, and then they would tell us that they wouldn’t pay for it. They would tell us that the creative agency already does it. They would tell us that they had no way to judge success of the ads that we were creating in our marketplace. At that point, we thought, “That’s interesting. How are we going to help them judge success? Well, let me ask that back to you, Mr. or Mrs. Brand. How do you judge success today? How do you know if an ad was successful today?” And by and large, they said, “Well, I guess it’s whether somebody clicks on the ad.” I remember having this conversation internally with Noah that it’s weird. We don’t really click on banner ads. It doesn’t seem like that many people click on banner ads. In fact, the clickthrough rate at the time was less than 1%. So, 99 out of 100 people aren’t clicking on the ad, how could that be successful? How could that be the metric that a brand was using to judge success? So, we became interested in this idea of there’s got to be a way to judge success per brand. That makes sense. There’s got to be a way for us to show, still at the time, that our creative marketplace was creating quality ads, but it’s got to be something beyond clicks. So, we ended up engineering with a great early engineering team some analytics, and we built the analytics into the ads that were made in our marketplace initially. They analytics measured things like whether the ad was on the page. How long it was there? Whether the person moused over the ad. We created these cool heat maps around how people moused over ads. And we went out to brands and said, “Alright. Here you go. We have a crowdsourced created marketplace, and we have a way to judge success. We have metrics and analytics to judge whether it worked or not.” The response from brands was, “Well, we’re still not interested in the creative marketplace,” nicely, “but the analytics, the engagement metrics,” what we would eventually call attention metrics, “are very, very interesting. We agree with you that we think consumers by and large don’t respond to an ad by clicking on it. They see it. They maybe pay attention to it, but they don’t necessarily act by clicking on it.” So, figuring out how to judge success is very, very interesting. I remember my brother, Noah, saying to me at the time, “I wonder if we could build a business just based on analytics? Just based on helping companies and brands understand whether somebody paid attention to their ad?” That really became our mission. So, still under the same north star of making storytelling work for brands and increasingly the digital world, but now we had something that was more specific which was how do we get brands the metrics that they can use to judge success? And very quickly after that, we stopped doing the creative marketplace and spent all of our time building an analytics platform. In the background to give you some context, this concept of what’s now called viewability had been created. People started talking about, “How do you know? If a webpage can be scrolled down much further than what you can see on the screen in front of you, how do you know that the ad that you bought actually ever appeared on the screen? That became a super interesting problem, and we ended up with our existing analytics platform thought, “Huh. I wonder if we can add that into what we’re measuring, in addition to measuring engagement, and hover rates, and things of that nature, I wonder if just the ad being on the screen is something that we can measure as well. So, we started coding. I remember, we went out and met with Forbes. said, “Hey, it would be super interesting to get these metrics that you guys are creating on our ads on Forbes. Have you read about this viewability thing? Are you able to measure that as well?” And we said, “Of course.” And then we went back to the office and said, “Okay, guys. We’ve got to create a way to measure viewability and all these other things that we just agreed to give Forbes.” Low and behold, we had some awesome talent, and we created from scratch some new metrics. We created metrics around was the person scrolling on the page? How fast were they scrolling? Something that would eventually be called scroll velocity. We created the metrics around viewability, etc. We went back to Forbes, and they loved it, and they became our first client. It really opened up for us the opportunity of building an analytics, and eventually, measurement company that we would go on to build.

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Alejandro: Really cool. At what point did you decide to raise money because one thing that I saw here is you got really good investors, but here, you guys are coming from already a really nice successful outcome where you had some financial muscle, so why did you decided to raise money from outsiders?

Jonah Goodhart: You know, I think there were a couple of reasons. 1) We did self-fund the company to start. We put about 3 million dollars into the company. From 2010 to 2012 we didn’t make any revenue. So, we spent two years on our own nickel or our own dime hiring developers, and hiring staff, and getting office space, and iterating, and trying things to figure out if we had a potential business. Towards the end of 2011 was when we started to get focused on this idea of analytics and when we started to feel like, “Alright. Maybe we have something here. It’s not clear what the business is going to be. We still don’t have any revenue, but maybe there’s something interesting here. We had also created a search engine for ads, which sounds like a funny thing, but when we would think about the creative marketplace, and we would say, “So, you know how the ads that are created online generally are not very memorable, and people would say, “Sure. I understand what you’re saying, but there was no way to show that to them. We thought we really need a search engine for ads so we can pull up an example ad for fill-in-the-blank brand and show them. So, in addition to creating analytics, we created this simple search engine where you could type in any brand and see what the ads look like if that brand was running online. So, with those two things, a basic analytics platform and a basic search-for-ads platform, we decided we’d go out and raise some money. Our view was let’s raise it from friends and family, from angels, folks that are betting on us, not folks that are betting on the business model because we hadn’t figured out our business model yet, but we were really fortunate. Ron Conway was one of the first people that said, “I’m in. I want to write a check right away.” The folks at Lerer Hippeau said they’re in right away. Founders Fund, Josh Kopelman from First Round. A number of just awesome funds right away.

Alejandro: Yeah. Let me read it Jonah to the people that are listening. So, we have SV Angel, First Round, Mayfield, Founders Fund, Lerer, Founder Collective, Insight Venture Partners, SoftBank, Bowery Capital. This is like the Oscars. How did you get these people in?

Jonah Goodhart: We were super fortunate to get all of our investors. So, just to put some timelines on it, Insight Venture Partners was our last investor. They led our Series C. Mayfield led our Series B, and SoftBank came into that round as well. Prior to that was our angel round. That was the SV Angel Round, Conway, Lerer Hippo, Founders Fund, and a bunch of CEOs and that sort of thing. Honestly, I think it was people that were making the same bet on us that we tried to make on other people. It was saying, “Look. I don’t know what this business is going to turn into, but you guys are super passionate. You’re clearly spending all of your time on this. You’re focused on it more than anything else right now, and we want to bet on you. So, we were humbled that some of those folks decided to write us a check. We raised our first round what we called our Friends and Family Round of about a million-five around August 2011. But at this point, we had raised 3 million or had put 3 million into the company of our own. Now, had raised a million-five. So in total, we had four-and-a-half million into the company, and decided for our next round instead of raising a Series A, which would have been the logical thing to do, we raised a Series B for some reason, and made a good learning that I try to pass along to entrepreneurs now that you want to be really careful at what price you raise money at because you can raise money at too high of a price, number one. And the lettering of your round, as silly as that sounds, actually doesn’t matter. The reason is because when you raise a Series B as an example, the next round you raise is a Series C. There are expectations for what does a Series C look like? What’s the size of the check? What’s the growth of the company? What’s the revenue, etc. When we raised our Series B from Mayfield, which probably should have been a Series A. We didn’t have any revenue. So, we had a lot of lessons to be very quickly learned from the day after we signed the paperwork when they said, “That’s awesome. We’re thrilled to be an investor. Now, you’ve got to go generate a bunch of revenue and get significant traction before you can raise the Series C.” I went “Uh oh. I don’t know if I should have just raised a B.” Maybe that was a mistake.

Alejandro: No pressure. Right?

Jonah Goodhart: None the less. Yes. Mayfield invested in 2012, and we were off and running. One of the things that Mayfield did for us which was really critical to Moat’s success, I think was they helped us figure out SaaS pricing. They helped us figure out how do you price the products that we were selling? How do you do a demand curve exercise? What does a business look like that’s based on SaaS metrics? What are the metrics you use to judge success? So, things that I didn’t understand at the time: cap ratios, magic numbers, MR, ACB, AR, all these things that became critical parts of how I ran the company were really things that Mayfield introduced me to at the time. I became after that, obsessed with those metrics because I think that SaaS businesses are wonderful businesses. They’re predictable, and you can see into the future a bit. That was something that Mayfield showed me. So, that was in 2012, and then we ended up raising our Series C from a great firm here in New York, Insight Venture Partners, a partner named Jeff Lieberman and team decided to make a bet on us. This was at the end of, I believe the end of 2016 that we raised—was it the end of 2016? I think that’s right. The end of 2016 we raised our round from Insight Venture.

Alejandro: What was the total amount that you guys raised for Moat before the acquisition?

Jonah Goodhart: We raised a little bit under 70 million total. So, it was three from us, a million-five friends and family. So, four and a half, another 13 or so led by Mayfield, and a handful of others. Then Insight put about 50 in. This was the end of 2015. Sorry, that Insight put their money in.

Alejandro: So, you guys were definitely experiencing some really interesting growth, so at what point do you start to think about whether it makes sense or not the M&A?

Jonah Goodhart: I guess the way that we thought about it was things are going seemingly pretty well, but it’s not going to always go that well the next day. So, we first of all need to be focused on running the business and not get distracted. So, I think our primary view was we have competitors. We’re in a big market. We’re not the best thing since sliced bread, so don’t read too much into anything that seems like it’s going well for us. We need to be humble. We need to work incredibly hard, and we need to deliver on behalf of our clients, and if we do that, I think over time good things will happen. So, I think we tried to be really just focused on delivering on behalf of our clients and felt that the magic of doing that and being focused on product innovation and being focused on what good we can do, good things will result. You know, we ended up building relationships with Oracle and with a number of other companies. Over our times as a company, we had partnered with Oracle, actually a couple of years prior to them acquiring the company. That was great. It was something that we got to know the company a little bit. We got to integrate with some of the products early on. It’s something that I tell entrepreneurs when you eventually think that your company maybe is going to go public, or maybe is going to get acquired, or you think that an M&A is possibly the path that makes sense, build partnerships. Build bridges with as many big companies as possible because usually when a big company goes to buy a company, it’s much easier when they work with you already. It’s much easier when the internal champion can point to some success that they’ve had. It’s much easier when they can say, “Here’s the business case. Here’s what we’re going to do with them because we’re already doing it.” I think that was an important lesson. We didn’t do that with every company, but Oracle was one of them that we had had a great relationship with. So, when they approached us about acquiring Moat, it made sense, and we certainly had other conversations, and were thinking about staying private, were thinking about maybe going public at some point, but we also decided it was the right fit for our employees, for our partners, for our investors, and we decided to do the deal.

Alejandro: That’s amazing. Obviously, I know that you guys are with all types of confidentiality stuff, but it was reported that the deal was for more than 850 million. So, that’s a really, really fantastic outcome all around. So, I want to ask you a question here, Jonah, that I typically ask the guests that I have on the show, and that is you’ve been around the block quite a few times. So, if you had to the opportunity to talk with your younger self, and I know that that’s quite impossible, and give yourself one piece of advice before launching a business, what would that be and why?

Jonah Goodhart: I guess on the B2B side, I think we get an advantage. The advantage that I didn’t understand 20 years ago is that you actually get to go out and talk to your customers. You get to talk to the people who are going to give you money for some product that you’re trying to create on their behalf. So, the advice I would give myself is before you even create the finished product, go talk to as many prospects, as many customers as possible because they’ll tell you quite overtly their pain points. They’ll tell you, “Here’s the issue we’re having.” They’ll tell you, “Here’s what we would literally pay for.” So, they almost give you the roadmap, and they give you the opportunity to see a little bit of a vision into the future of what sort of company you might create. That was something I didn’t know in the beginning years. If I could pick two things, I would say it would be that and really spending all of my time focusing on just building a great product. Because I think if you build a great product, and you’re delivering something that the market is asking for, almost nothing else matters. Yes, you can make lots of mistakes doing other things, pricing, and hires, and all of that. But if you can build a great product, and it’s what the market is asking for, then you’re going to be in a pretty good spot.

Alejandro: Really, really cool. What is the best way for folks that are listening to reach out and say hi, Jonah?

Jonah Goodhart: For sure, feel free to email me at [email protected]. I love to meet entrepreneurs. Love to still do active angel investing. Still advise folks with the best advice that I can give, and frankly, I’m still learning from other entrepreneurs, so I love meeting people, hearing their perspective, hearing the problems they’re trying to solve. So, feel free to reach out and would love to hear from you.

Alejandro: Amazing. Well, thank you so much for being on the DealMakers show, Jonah.

Jonah Goodhart: Thank you for having me, Alejandro. Take care.


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