OMG's Katelman On What Is A Startup?

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startupSteve Katelman, EVP, Omnicom Media Group. took a slightly different tack with our round-up question on "When Is A Startup No Longer A Startup?" From his agency perch, Katelman opted for defining the startup.

The “startup” company became famous in the late nineties during the dot.com boom/bust, and even though those days are long behind us, the “startup” still exists all over world today. They are depicted as romantic dorm-like cultures that are fueled by capital, endless energy drinks, office foosball tournaments and grandiose visions of stock options.

But what, really, is a startup? A startup is new company with a distinct scalable idea that creates concise value in the marketplace.

In the arena of ad-tech, it is rare that I see a true startup. (Did I say that out loud?) I see lots of companies that add a bit of incremental value to a system in need of an overhaul, and then made scalable through the expansive available impressions marketplace.

So what’s the disconnect?

1) Most “startups” are built within the same framework.

A common set of banners, boxes, and inventory constrain most ideas. But a true startup requires disruption and new ideas. Rinsing and repeating the same old “stuff” is not new or interesting. And more so, it simply doesn’t deliver value.

2) Ideas are sacrificed by systems of margin and distribution.

With technology scale models leading the ad tech investment conversation, a large group of companies I see deliver minimal value to customers. They focus more on creating scalable investor value through media.

True startups slow down. They focus on finding a niche that creates scalable value through a product idea that remains meaningful to the customer ecosystem it serves.

So when is a startup really a startup? When they are built on these two concepts:

START
Ideas that disrupt through product.

UP
Value exchange that drive venture and scale.

And for the record, I have mad foosball skills. (I'm from Nebraska)

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6 Responses to “OMG's Katelman On What Is A Startup?”


  1. John Haake says:

    A common set of banners, boxes, and inventory constrain most ideas. But a true startup requires disruption and new ideas. Rinsing and repeating the same old “stuff” is not new or interesting. And more so, it simply doesn’t deliver value.

    AMEN, Brother!

  2. Tim Ogilvie says:

    Totally agree with the sentiment, but I come to a different conclusion: physician, heal thyself! After hundreds of ad-tech startups have followed similar paths, isn't it time we started looking for other culprits?

    The structure of today's agency has created this beast and is holding back the entire industry. Agencies are thinly-capitalized and have under-invested in technology for the last twenty years. So they have no way of adopting this mythical beast: the revolutionary disruptive startup that isn't sold on a media basis. Entrepreneurs with such a solution will wander the halls of agencies for years trying to find someone that wants to use their solution AND has the ability to pay for it out of a tech budget.

    It's much much much easier to buy some yankees tickets, get that media buyer to a game, and you'll get an IO next quarter. Even the mighty Google ultimately found this to be the most fruitful path. Is it any wonder that startups follow this path?

  3. John Donahue says:

    START
    Ideas that disrupt through product.
    UP
    Value exchange that drive venture and scale

    If you dont meet that criteria you are not a startup
    Short & simple

  4. MaximumLLoyd says:

    In online advertising the reality is that there is nothing new. How many DSP’s (or some other 3 letter acronym) can an agency buy inventory through? Numerous times I have seen the same inventory from the same source going through 2, 4, 5 or more “Platforms” at close to the same pricing.

    With the idea of a start-up being a disruptive force just doesn’t happen in the world of Online Advertising anymore. IF you’re truly disruptive, you’ll get no business of value to grow the idea from the agency nor will you get funded.

    Meanwhile back at the ranch in world of clones it goes back to what Tim quoted with it being easier to take someone to a game and get on the RFP list then it is to get budget for testing of new concepts and technology. In our universe it is fair easier and more financially rewarding to copy a model then it is to create a new model.

    Well that’s a problem.

  5. Joy Cavanagh Ross says:

    Katelman, saying it out loud is meaningful and valuable. In true Katelman spirit I wouldn't expect anything less than that from you.

    Value in the ecosystem is something start up's struggle to maintain their course. The key to value in the ecosystem is becoming a profitability entity contributing to marketplace growth and the transformation of digital advertising.

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