Fireside Chat  

Featuring Jeff Green, Founder, Chairman & CEO of The Trade Desk  

September 17th 2020 1pm EDT  

EXECUTIVE SUMMARY

Introduction 

Madison Alley Global Ventures hosted an exclusive Fireside Chat featuring Jeff Green, Founder & CEO, The Trade Desk co – moderated by Michael Seidler, Founder + CEO, Madison Alley and Doug Knopper, Co-founder & former Co-CEO, FreeWheel 

Overview of The Trade Desk   

• The fastest growing demand–side advertising technology platform. 
• The Trade Desk works industry-wide to build an efficient model for advertising. These initiatives reflect ongoing effort to empower advertisers and benefit consumers, leading to better experiences across the board. 
• Exclusively focused on the buy-side efforts to: 

• Build brands with a best-in-class technology 
• Manage display for social, mobile, and video advertising campaigns and all other digital channels 

• Ad provider that serves as an alternative to Google (GOOGL) and Facebook (FB) to buy ads on the Internet with data–driven choices that are aligned with advertisers. 

Key Company Highlights   

• Founded in 2009, Led by Founder, Chairman & CEO Jeff Green 

• 23 Offices across 4 Continents, HQ: Ventura, CA 
• $21B Market Capitalization 
• ~1,500 FTEs 
• $680M LTM Net Revenue as of 6/30/20 
• 72% 5 –Year Net Revenue CAGR (2014-2019) 

• $120M LTM Net Income as of 6/30/20 
• 17.6% LTM Net Income Margin as of 6/30/20 
• $3.1B FY 2019 Gross Spend through The Trade Desk 

Startup to IPO and Through Today  

• The Trade Desk took a non-traditional path to its IPO.   

• The company raced to profitability rather than raising capital.   
• According to Jeff Green: “If it were Spotify’s (SPOT) business or Uber’s (UBER) business they would raise as much capital as possible; that’s the only way to win, but in The Trade Desk’s case they needed to get to profitability then reinvest every single dollar of our competitors” 
• The Trade Desk understood the financial mechanics:  Once a business achieves a degree of operating leverage then everything falls to the bottom line and it’s a healthy business.  Not all businesses are measured the same way, and different business models require other elements. 
• In regards to investors for the IPO, The Trade Desk was looking for the right investors According to Jeff Green: “People kept knocking on the door for M&A and so when people knocked on the door for M&A a lot of entrepreneurs just want a reasonable exit so that they can make a few million dollars or 10 million dollars or whatever their number is but that isn’t what motivated us, we really wanted to change it and so every time someone knocked on the door we said ‘convince me you’re not going to screw up my company’. That was the first question, to convince me” 
• In regards to the IPO –According to Jeff Green: “The IPO becomes an important thing to consider: people think of an IPO as an exit. It is for your investors but it is not for the people running the business, and so that once again required just a lot of soul–searching which is; do we really believe that we’re right and that we can compete with GOOGLE and Facebook and if we don’t believe this is over a hundred billion dollar business then we shouldn’t do this we should sell to one of them sell to one of the other companies that’s already big and take the risk that comes with them” 

Leadership in Crisis 

• 2020 has been a challenging year in leadership, and one of the strengths in leadership for The Trade Desk has been in creating a close culture within the company. 
• In February 2020,the company was scheduled to fly their employees to Asia, specifically Singapore because of the trillion dollar pie it represents, two-thirds of it is outside the United States and advertising typically follows GDP growth, as Jeff Green states: “the majority of GDP growth in the world is coming out of Asia so I wanted them to see the future of our company and to paint a picture for where we’re going so I was so excited it took us two years to plan” The trip ultimately was canceled due to the COVID–19 pandemic. 
• Innovation is still the paramount of the company even after their rapid growth.  Jeff Green as CEO feels the company employees still want to contribute and work at a fast pace, although he cautions everyone to slow down a bit to be more deliberate.  As a leader, it is great to witness the drive and momentum in its employees, as they do not need much motivation; but also, a leader to help them navigate towards the right direction for the company. 

The Opportunity of Programmatic Advertising  

• During the current COVID–19 pandemic opportunities for programmatic advertising were perceived to have slowed and The Trade Desk felt inappropriately affected but it, but “programmatic and data driven parts of advertising are agile, and you can pause it” says Green.  COVID–19 may have paused things, but The Trade Desk feels they are part of the recovery as advertising is still imperative for their customers.  
• According to Jeff Green: “Programmatic Advertising will continue to be fragmented not too long tail like websites are but with at least, in the English-speaking world, hundreds of players creating content and hundreds of outlets; and that creates the right amount of competition and that competition makes it so there has to be an open market and especially because it’s the most effective form especially of top of the funnel activity”. 

Summary & Q&A 

• General question from Founder and CEO Diaz Nesamoney of Jivox asks: “Do you see The Trade Desk evolving into a full marketing tech stack creative data owned media social etc. or remaining a DSP?”  Response from Jeff Green: “Great question and it’s great to hear from Diaz who’s a partner, we have to integrate it all but you always have to figure out, what the right level of partnership (is), whether to use the analogy of operating systems so windows, just said ‘oh it’s open market’ and I would argue that they didn’t do enough quality control and I know this because I worked at Microsoft (MS) and felt like all my neighbors thought I was tech support for Microsoft”  
• Question from Michael Seidler: “To what extent do you see strategic M&A opportunities for The Trade Desk?” Green: “historically The Trade Desk has not participated in many acquisitions, they have done one acquisition and fortunately it was a phenomenal success worth an est. $100M which they bought in the single digit-millions, therefore a gain of about 10x” 
• In summary, The Trade Desk believes that a focus on quality and partnering with the right brands to produce a quality product always works.  Deciphering the right balance is key.  The Trade Desk’s main focus has been preserving their culture over anything else.