20 VC 012 Angel Investing, Accelerators and AdTech with Clark Landry

Harry Stebbings hosts Clark Landry on the 12th episode of "20 minutes VC," delving into Landry's journey from the technology industry to angel investing, with notable investments in AngelList and Lettuce. Landry recounts his beginnings at iwin, learning media buying on the job, and spotting arbitrage opportunities that led to co-founding Traffic Marketplace. Despite the dot-com bubble's impact, his ventures, including a social networking site sold to Viacom, experienced successful exits. Landry emphasizes the importance of team over the product in startup success, his preference for co-founders over solo founders, and the value of previous startup experience, even without major successes. He also reflects on the empathy gained from being both an entrepreneur and an investor, understanding the struggles and the need to support beyond funding. While he's heavily invested in ad tech, he's also excited about ventures like Distilled, The Trade Desk, The Black Tux, and Bloom Nation, which are innovating in their respective fields.

• Clark Landry is the founder and chairman of Shift Platform, a leading social advertising network.
• He is also the executive chairman of Graph Effect, a social media marketing firm.
• Clark has made investments in companies like AngelList and Lettuce.
• He has achieved ten exits in his short time investing in startups.

"And on today's show we have Clark Landry. Clark is founder and chairman at Shift Platform, the leading social advertising network for brands."

This quote introduces Clark Landry as a significant figure in the technology and investment sectors, highlighting his current positions and achievements.

• Clark joined iwin in December 1999 as a manager of business development.
• Despite having no experience in media buying, he was appointed as a media buyer due to a substantial budget needing to be spent.
• Clark was expected to become an expert in media buying within a few months.
• This role provided him with a hands-on experience in online media buying, selling, and ad tech.

"I joined iwin, I want to say in December of 1999 as a manager of business development... You're now our media buyer... It was an absolutely fantastic opportunity and experience just being able to go out there, really learn about how online media buying and selling worked, how ad tech worked at the time."

This quote describes Clark's initial role at iwin and his unexpected transition into media buying, which led to a valuable learning experience in the early days of online advertising technology.

• Clark observed arbitrage opportunities in the early internet advertising space.
• He could profit from simple online arbitrage using platforms like Commission Junction and CPM ads on Washington Post.
• Clark proposed starting a new company to leverage these opportunities, leading to the creation of Traffic Marketplace.
• Evan Rifkin, CEO of Traffic Marketplace, later sold his company Burstly to Apple.

"So while I was there, was seeing all these really interesting arbitrage opportunities... why don't we start something, another company that takes advantages of some of these opportunities... The company was called Traffic Marketplace."

This quote explains how Clark identified early arbitrage opportunities in internet advertising and initiated the founding of Traffic Marketplace to capitalize on these opportunities.

• Clark was not in charge at iwin during the dot-com bubble but was affected by the changing environment.
• Discussions of IPOs and valuations were impacted by the bubble bursting.
• Despite the challenges, the exit for iwin and Traffic Marketplace's founders and investors was successful.

"I wasn't running the show at iwin... there were discussions of ipos for iwin and a variety of other things... the exit for the founders and investors for both iowan and traffic marketplace were very good, so couldn't complain."

This quote reflects on Clark's experience during the dot-com bubble, noting the impact on the company's strategy and the successful outcomes despite the market downturn.

• Traffic Marketplace was Clark's first angel investment, which yielded a good return and sparked his interest in angel investing.
• After the acquisition of Traffic Marketplace, Clark co-founded Tagworld, a social networking site competing with Myspace.
• Tagworld was eventually sold to Viacom.

"So there's actually a lot more in between... traffic marketplace was really my first angel investment... After working at traffic marketplace for a little while after the acquisition, was involved with a company called Tagworld."

This quote outlines Clark's progression from his first angel investment in Traffic Marketplace to co-founding and eventually selling Tagworld, highlighting his entrepreneurial journey and continued interest in angel investing.

• The transcript cuts off before Clark can articulate his feelings regarding the emotional impact of exiting a company.

"To be perfectl"

This incomplete quote indicates that Clark was beginning to address the emotional aspect of selling a company, which can vary among entrepreneurs, but the transcript does not include his full response.

• Clark Landry discusses his passion for startups and investing, emphasizing the goal of building valuable and exciting ventures.
• Exits are often seen as a relief by entrepreneurs due to the challenging nature of the due diligence process.
• The anticipation of celebration is contrasted with the reality of a long and drawn-out exit process, leading to relief and excitement for the next venture.
• There is an acknowledgment of the bittersweet feeling of moving on from a significant project.

"I love doing startups. I love investing in them and being involved as an entrepreneur. But ultimately, I would say it's more the former, because I view it as kind of a means to an end."

This quote highlights Clark Landry's passion for being an entrepreneur and investor, viewing startups as a pathway to achieving his goals.

"I think a lot of other entrepreneurs would probably say the same thing. Just because you get to a point, especially going through a due diligence process, which is challenging, right?"

Clark Landry identifies with other entrepreneurs, acknowledging the due diligence process as a challenging stage that often leads to a feeling of relief upon completion.

"And so I think that there's always that aspect of missing what you've played, hopefully a significant part in building. But at the same time, it's exciting to move on to the next chapter."

This quote reflects on the mixed emotions of leaving behind a project one has contributed to significantly while also feeling the excitement of starting a new endeavor.

• Clark Landry's experience as both an entrepreneur and investor has led to an increased empathy for all parties in the startup ecosystem.
• Entrepreneurs may view venture capitalists (VCs) as difficult, but as investors, they have their own pressures and concerns.
• The importance of transparency and updates from entrepreneurs to investors is highlighted.
• As an investor with entrepreneurial experience, there is a greater understanding of the challenges startups face, leading to a more supportive approach.

"I'd say the main thing is that you just end up having a lot more empathy for everyone in the whole ecosystem."

Clark Landry explains that his dual experience as an entrepreneur and investor has fostered a deeper empathy for the different roles within the startup ecosystem.

"So by doing investing on your own, you start to realize that you have a lot of concerns."

This quote underlines the realization that investors have their own set of concerns and challenges, mirroring those of entrepreneurs.

"You're still not happy when targets are not met."

Clark Landry acknowledges that as an investor, there is still dissatisfaction when startups fail to meet targets, but there's also a deeper understanding of the difficulties they face.

• Understanding the hard work behind startups leads to a more patient and supportive approach from investors.
• When startups underperform, the focus shifts to problem-solving and adding value beyond financial investment.
• Helping startups involves actions such as facilitating additional funding, making introductions, and providing advice.
• Clark Landry has experienced a significant number of exits, prompting discussion on his approach to selecting startups to invest in.

"You just might understand it a little bit more."

Clark Landry explains that while disappointment with unmet targets is universal, having been an entrepreneur allows for greater comprehension of the reasons behind underperformance.

"And I think also you want to put yourself more in a place of trying to help out as much as possible, as opposed to sitting there and giving people a hard time."

This quote emphasizes the investor's role in providing constructive support to startups, rather than simply criticizing them for their shortcomings.

"It's clearly paying off, though, because according to my research, you've had ten exits so far."

The host acknowledges Clark Landry's successful track record, implying that his supportive approach as an investor has contributed to his achievements.

• Clark Landry acknowledges that his views on selecting startups to back are not groundbreaking and may even be clichéd.
• The conversation suggests that there are particular aspects or a holistic view that Clark Landry considers when choosing a startup to invest in, though specific criteria are not detailed in the provided transcript.

"It's one of those things where I think, with me, none of these comments are groundbreaking and are kind of cliches, I would say."

This quote indicates that Clark Landry's approach to selecting startups for investment may align with common industry practices or beliefs, though the specifics are not elaborated upon in the transcript.

• The founding team's capability is a primary factor in business success.
• The ability of the team to solve problems is valued over the business model's robustness.
• The speaker emphasizes the importance of having co-founders for support and motivation.

"it really starts with team, right? That's the most important thing for me."

This quote highlights the speaker's belief that the team is the foundational element for any business.

"so much of it is, again, at least for me, less about trying to poke holes in the business model or talk about kind of what are you going to do if x, y or z happens? Because ultimately the people running these businesses know more about them than I do."

The speaker trusts that the founders have a deep understanding of their business and prioritizes their problem-solving abilities.

• The speaker prefers to back teams with multiple founders due to the benefits of shared experiences and emotional support.
• Experience in entrepreneurship, even without significant success, is seen as valuable.
• The speaker backs both first-time and experienced founders, recognizing the lessons learned from past ventures.

"I much prefer deals where there are multiple founders."

This quote reflects the speaker's preference for backing businesses with a team of founders, emphasizing the support system they provide each other.

"I backed first time founders, a lot of them. I tend to like people that have done it before, even if the outcome wasn't fantastic."

The speaker is open to backing first-time founders but acknowledges a preference for those with some entrepreneurial experience.

• The speaker believes that failure is not a necessary component for entrepreneurial success.
• Learning from challenges encountered during the startup journey is considered sufficient for growth.
• The speaker is skeptical of the glorification of failure by successful individuals and acknowledges the hardships of failing entrepreneurs.

"Probably on the it's not necessary side."

This quote indicates the speaker's stance that failure is not a prerequisite for success in entrepreneurship.

"There are a lot of people out there that have failed in their startups and it's not a fun thing."

The speaker recognizes the difficult reality for many entrepreneurs who do not succeed and challenges the romanticized narrative of failure.

• The speaker's investment portfolio is heavily weighted towards ad tech due to personal expertise and network.
• Ad tech is acknowledged as a challenging and constantly evolving field.
• The speaker has transitioned from hands-on involvement to a strategic role, acknowledging the depth of learning from earlier hands-on experiences.

"I'd say my portfolio skews pretty heavily towards ad tech just because that's the world that I come from."

This quote explains the speaker's investment focus on ad tech, which is influenced by their background and expertise in the field.

"ad tech is a challenging space to be absolutely constantly changing."

The speaker highlights the dynamic nature of the ad tech industry, implying the need for adaptability and continuous learning.

• Clark Landry expresses his enjoyment of Cormac McCarthy's "Blood Meridian" and describes it as a classic and enjoyable, though not the easiest read.
• Another book he likes is "The Dark Fields," a novel that was adapted into the movie "Limitless," which he finds very entertaining.

I really like "Blood Meridian" by Cormac McCarthy. I don't know. Very enjoyable book.

That comes to mind. I think it's a classic. Not necessarily the easiest read in the world, but it's enjoyable.

Another one. I'm sitting here in my office at home and I just spotted another one that I like a lot called "The Dark Fields." It's a novel. They turned it into a movie called "Limitless." It's a page turner.

The quotes indicate that Clark Landry enjoys both "Blood Meridian" for its classic status and challenging nature, and "The Dark Fields" for its entertainment value and page-turning quality.

• Clark Landry believes the value of tech accelerators depends on the specific accelerator.
• He recognizes the value provided by certain accelerators in Los Angeles, such as Launchpad, Amplify, and Mucker.
• He acknowledges the importance of Y Combinator and Techstars, although they are not based in LA.

Oh, tech accelerators. I'd say it depends on the accelerator.

I've done a lot of investments in Launchpad companies. They recently have changed their model a bit, and I'm not sure that they're doing kind of annual or biannual classes anymore. But Launchpad is great. Like Amplify a lot. Mucker is great.

Clark Landry's responses suggest that he sees potential in tech accelerators, but their utility is contingent on their individual models and the value they provide. He singles out Launchpad, Amplify, and Mucker as notable examples in Los Angeles.

• Clark Landry's most recent investment is in a company called Distilled, a denim brand selling high-quality jeans online at low prices.
• He also highlights other investments he is excited about: Trade Desk in ad tech, Black Tux for tuxedo rentals, and Bloom Nation, a platform disrupting the flower delivery business akin to an Etsy for flowers.

Most recent investment was in a company called Distilled. It's Dstld. And they basically, I would almost describe them as like a Warby Parker for jeans.

Trade desk is one. They're doing exceptionally well. Of course, they're in the ad tech space.

The black tux is an interesting. It's almost like Netflix for tux rentals.

Invested another company called Bloom Nation, and they're disrupting the flower delivery business.

These quotes provide insight into Clark Landry's recent investment choices, highlighting Distilled's business model, Trade Desk's performance in ad tech, Black Tux's innovative rental service, and Bloom Nation's unique approach to flower delivery. Each investment reflects a disruption of traditional business models in their respective industries.

• Harry Stebings thanks Clark Landry for his participation and invites him to return to the show in the future.
• Harry directs listeners to the show's website for resources and encourages them to submit questions for future VC guests.

Clark, thank you so much for coming on the show. I've hugely enjoyed chatting with you and I'd love to have you on the show again sometime.

Now, for all the resources mentioned in today's show, head on over to www. Dot the twentyminutevc.com.

The quotes conclude the podcast, with Harry Stebings expressing gratitude to Clark Landry for the discussion and providing listeners with guidance on where to find more information and how to engage with upcoming shows.