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Stephen Upstone (CEO, LoopMe) on startup advice, M&A in adtech & the future of advertising
March 24, 2022
Stephen Upstone is the CEO and founder of LoopMe, the leading outcome-based advertising platform. Following recent investment by Mayfair Equity Partners, Stephen sits down with The Drum to discuss starting a business, the changing M&A landscape, and how to retain talent amid The Great Resignation.
What advice would you give to someone who is planning to start a business?
When it comes to starting a business, there are four key points everyone needs to have sorted out: the market, the product, the investors, and the planning.
What do I mean by this? Let’s start with the market: what is the problem that you are trying to solve and do similar solutions already exist. If not, why not? Then the product: can you explain how and why your product is unique and stands out from the crowd? And what is the sustainable advantage or barrier to other companies offering something similar? Being fully informed about how and why your business is needed right now, with clear proof points (ideally from customers) is vital to understanding the next step: approaching investors.
When you speak to investors, you need to be able to demonstrate and convince them that your idea is ready to go, that it is tangible and effective. When pitching, remember to think of investors as people you may be working with for years to come: building mutual trust and respect is paramount for a successful future. Also, make sure you enjoy yourself when you’re pitching: this is your opportunity to highlight what’s best about your idea; let your enthusiasm carry you, and create a positive, open atmosphere where relationships are more likely to take root.
Finally, think about the timeline of your venture: the first one to two years are the most crucial, so focus your efforts to establish a sturdy foundation and a strong start. Most significant businesses take over 10 years to build, so think long term and have a large ambition. It is often as difficult to do something small as it is to create something with a much larger impact and scale. Lastly, keep an eye on the horizon and a finger on the pulse for any emerging trends or opportunities for growth and innovation that could redefine your business in a positive way over the next three to five years, if you start work on them now, never stop innovating.
There’s been a huge M&A growth in adtech recently. Why do you think this is?
This surge is a symptom of a changing landscape. Innovative products that solve specific challenges are not only a recipe for success, but are also in high demand. When it comes to the privacy-first world, adtech businesses are solving targeting issues and helping advertisers create contextually relevant ads while also protecting users’ data. So we are seeing the need for solutions that lead to creative collaborations. At the same time, joining forces facilitates and encourages growth in new markers and geographies, extending resources and reach.
Take LoopMe’s recent $120 million investment from Mayfair Equity Partners as an example. This has allowed us to expand further into the US and Japan, markets where we can continue to develop our product as well as our company, especially in the APAC region where huge innovation and a strong mobile-focused market is bound to inspire progress.
The Great Resignation has been a challenge for many companies recently. How do you retain talent?
As we know, this situation is the result of the pandemic and a shift in priorities for people: they want to feel like they matter, and that their work matters. Employers need to remember that a business’s raison d’être isn’t solely to generate profit for investors, they have a responsibility towards their staff to help develop their careers, too. This means knowing what your employees are passionate about and what they want to be working on.
At the end of the day, if you want to be sustainable as a company, you need to hire people not only based on their experience, but in anticipation of how they can evolve and learn within the company framework. In practice, this could translate into carrying out regular staff surveys, both to gauge how employees are feeling, as well as providing a means for workers to get involved in creating new products, feeling valued, and being integral to the company’s success. What you’re doing is helping employees create the kind of environment they want to work in, which increases their satisfaction.
So for us, our employees are at the forefront of much of our decision-making as a business. We offer them shares in the company, which makes them feel less of a cog in a machine and more of a key part of a whole. Simply put, when it comes to growth, the longer it takes, the better, and nurturing talent is an integral part of the process.
What industry trends can we expect to see in the future?
In general, we are seeing advertisers dip their toes in a range of exciting and developing channels. For example, Gucci advertising in the hit online game Roblox implies that the metaverse, augmented reality (AR), and the opportunities found within virtual spaces are likely to remain a hot topic.
Connected TV (CTV) and in-app advertising are both thriving and showing promising signs of growth, and while CTV still has a little way to go in terms of advancing campaign measurement metrics, in-app already accounts for 70% of US digital media time, and is one of the driving forces behind an estimated global digital advertising spend of $753 billion in the next four years.
Businesses will be wise to take these trends seriously when considering future planning In our case, as well as branching into new markets, we’re also developing new products including the offering in-app advertising, creating new versions of our AI-driven video advertising product suite, PurchaseLoop, and optimizing our core products. To put it simply, in order to thrive and stay relevant you need to be at the frontier of developments at all times, whether you’re B2B, B2C, or even B2G.