Fireside Chat

Featuring

Jonah Goodhart, Co-founder and former CEO, Moat

March 4, 2021 @ 1pm ET

EXECUTIVE HIGHLIGHTS

Introduction  

MadisonAlley.tv virtually hosted an exclusive Fireside Chat featuring Jonah Goodhart, Co-founder and former CEO of Moat.

Moat was acquired in April 2017 by Oracle for a reported $850 million.

Overview of Jonah Goodhart

• Founder and former CEO of Moat, a leading digital measurement company acquired by Oracle in 2017 for a reported $850 million
• Founding investor and Board Member of Right Media, a platform for targeting audiences and monetizing digital media, that was acquired by Yahoo! in 2007 at a valuation of $850 million
• Co-founder of WGI Group, a leading investment group primarily in the technology space

 Snapshot of Moat

• Co-founded in 2010 by Jonah and Noah Goodhart, with Michael Walrath as Chairman
• Headquartered in New York City
• Three funding rounds totaling ~$65 million
• Series AA, B and C led by SVAngel, Mayfield, & Insight Venture Partners, respectively,
• Acquired by Oracle in 2017 for a reported $850 million

– Interview –

Pre-Founding & Founding

Doug Knopper: Can you give us the background prior to Moat? How’d you get there and how’d you start off?

Jonah Goodhart: The pre-story to Moat was a fun one – I started the business in college with my older brother Noah in 1998. eCommerce companies were starting to take off.  The likes of PlanetRx and Drugstore.com were giving away products to encourage people to use a credit card online, which seemed like a weird idea at the time. As a consumer, I used to take advantage of these deals, and started a business with my brother finding these deals and making an email list. We built newsletters and a business communicating to people with content.

At the time, Michael Walrath was working in Sales for DoubleClick, and suggested that Jonah and Noah buy banner ads for their email list. This began their relationship, in which eventually, Michael left DoubleClick and invited Jonah and Noah to join him at his company, Right Media.

Jonah, Noah and Michael Walrath, Chairman of Right Media, had been speaking for a couple of years about the inefficiencies of digital media advertising, and Michael thought there could be a better way. Jonah and Noah joined as investors and Board members of Right Media.

Following the sale of Right Media to Yahoo!, Jonah and Noah felt they had been successful in their ventures but hadn’t built something of their own. In 2008/2009, they decided to start their own company, Moat.

Strategic Positioning

Goodhart: “We were sure that we didn’t want to buy or sell ads – the opportunity here was to be a platform, a marketplace, and a participant in this ecosystem. We didn’t want to be looked at as a buyer or seller, and therefore a competitor.”

Jonah described their original goal of serving all participants in the space, with two main questions at the crux of their business model: What ads are brands running? and how do we know how their ads are being impacted by those we replace them with? The first question, after finding scarce resources at the time for such an endeavor, led to Moat Search. The second question, after tackling the idea of the right metrics to be tracking, as well as building out heat maps for interaction and viewability, led to Moat Analytics.

Proprietary Technology

Goodhart: “My brother and I decided on day one to have an engineering DNA. We endeavored to hire really smart people, who were able to not only build things but also talk about them. They built search technology for advertising that hadn’t existed at the time – being able to see when an ad campaign launches, when it came onto the screen, for how long, etc. One challenging aspect was triangulating what we thought of attention – we knew clicks weren’t the right metric.”

Goodhart explained the intricacies of tracking a metric as fickle as attention – with his team of developers, they ventured to see if there was a way to accurately judge consumer attention to an ad.

Moat worked with industry leaders such as AOL, where they were placed on the home page and tasked with measuring ad efficacy. “The type of technology we were using was not something as simple as a background pixel to mark the fact that people were ‘there’– we were essentially keeping a heartbeat.”

Capital Raising

Goodhart: In terms of raising money, part of it is how much money you have left in the bank, how much you’re burning… so part of it is less theoretical. We knew, being a SaaS company, we planned to be venture-funded, as charging on a subscription basis was our first business model and therefore, we’d need a lot of money to do it.

“We certainly went around and met with a lot of people, shared decks, told our story… but we really focused on chemistry with the VCs. I would pre-pass on any venture capitalists who I didn’t have good chemistry with. It makes you feel like you’re in the driver’s seat. It was also important for us to partner with companies that understood B2B software. In the 10-year run, we wanted somebody who had felt that pain and knew that process.”

Pre M&A Planning

Knopper: So, the company feels like it’s hitting escape velocity. You don’t know it yet but you’re a year away from being acquired – what’s going through your head and where are you going at this point in 2016 / 2017?

Goodhart: We really made a focused effort to be a thought leader, and I think it showed in the press that we did, in the events we did… We tried to be someone that was taking a step back and not focusing on selling our specific company or our specific products.

Jonah goes onto describe the shift in energy: “I think that was critical to our path in raising money in 2015 and the press (received) in 2016, we started to notice the pace picked up. Instead of us going out and pitching advertisers and publishers, we were getting a tremendous amount of inbound, where people were calling us saying ‘we’ve heard about you, how can we work with you’… there were a couple moments where we internally went, ‘something has shifted here’”.

M&A Exit

Seidler: “How long prior to the transaction did you begin planning for that, what triggered it, and what kind of either organized or unorganized effort was run to get there?”

Goodhart: We always ventured to know the right people at these large companies, to understand what they were trying to do. In our minds, that meant at the very least there’s a partnership, a way to work together, and perhaps something else comes out of it.

With Eric Rosa and Oracle, it was about two years of knowing him and then working together. We had been through the process a little and had some interest, but we always made it our main focus to build a profitable business that scales. When Eric came to us and said that it may be in our best interest to do this pretty soon – once there was that urgency, it felt like something could be happening here.

Post M&A Experience

Goodhart: I spent two and a half years at Oracle, and it was a great learning experience. I had never worked at a large company before… so for me, going from a 300-ish person startup to a company with 140,000 employees was just a very different world. I got to spend time with the top executives and founders at Oracle and that was really special for me.

“My brother and I are now working on some startups, some new ideas that we have. We put together a company we call Montauk Labs, essentially our startup laboratory. We’ve focused on building mission-driven companies: leveraging what we know in spaces, but also pushing ourselves on spaces we don’t and trying to have fun and do it with people we like and respect and want to be around. We’re trying to build what we call forever companies.”

– Q&A –

Jeremy Hlavacek, CRO at IBM Watson Advertising: Where is the next opportunity in digital advertising?

Goodhart: At a high level, my personal opinion is that everything that can be digitized, will. Whether that’s transportation or healthcare, or of course entertainment… The obvious trend of recent has been connected tv, which adds all sorts of capabilities in the advertising world and is generally a pretty exciting medium. Another industry is gaming, at least those of us with small children I’ve been watching this company Roblox, and I’m sure my daughter will be on TikTok as much as can when I let her. Things like this remind me that every five years or so there’s a new platform or company that didn’t exist prior, so in terms of what happens I think it will be something that doesn’t exist today that will launch and get us all excited.

Madison Alley client: If you were to start a new venture today, where do you think is a good place to start and do you think it would matter less with a distributed workforce?

Goodhart: I’m certainly of the belief that you can work from anywhere – in the technology space, we’ve long allowed for the idea that people could be (distributed), in our companies we had team members in Singapore, Australia, and many different parts of the US. You can absolutely build a successful company with remote workers. Right Media got started in New York and one of the reasons it was initially pushed back on venture funding was that the VC said they did not want to fund since it was in NY. I think it comes down to what kind of company you’re building, and what kind of interaction people need with each other.

Victor Kong, CEO of Cisneros Interactive: From the perspective of Moat as a company, did the acquisition by Oracle slow or accelerate growth?

Goodhart: One of the things we loved about joining a bigger company was being part of a suite of services. Somebody very smart said to me that over time you can have a phenomenal product, but the suite will ultimately win out. There is a lot to be gained by being part of a larger group of products, so it was the right decision for us.

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