Selling the Great Outdoors--Online
John Laramie has it going on. He just may be sitting on the last great, untapped online idea in advertising. He seems able to convince investors that he's the one to pull it off. He's a chick magnet for ping-pong groupies (assuming such creatures exist). And he's all of 26 years old.
Laramie this year founded a company called ADstruc, an online auction and listing marketplace for outdoor advertising, which includes billboards; "street furniture" such as bus shelters and benches, and shopping mall displays; transit ads, including moving vehicles and transit stations; and alternative media such as airplanes at beaches, gas pump panels and postcard stands, among others. ADstruc revenue comes from a small software-as-a-service fee for listing inventory, as well as a 15 percent commission from sellers on each transaction.
The Innovators: Outdoor Advertising Platform Founder John Laramie of ADstruc
Remarkably, the $5.8 billion outdoor advertising business represents one of the few media that are still bought and sold exclusively offline without any of the efficiencies the internet provides. ADstruc puts planning and executing an outdoor ad campaign a single click away, or as Laramie puts it, "as easy and as transparent as Google Adwords."
He and ADstruc COO Josh Warrum were selected to participate last summer in a TechStar program, a three-month intensive support and mentorship seed-accelerator program in Boulder, Colo., and other cities. The mentors are often angel investors as well, and before the final "demo day" presentations, Laramie had commitments for $1 million in seed money. ADstruc became the 23rd TechStar participant to be funded since 2007. All but five are still going concerns, and five have already been acquired. He and Warrum also lined up 30 clients.
"Every time John and Josh were able to close new business," says David Cohen, TechStar's founder and CEO, "there was a little celebration. Many shots (of tequila) were taken this summer, which is a good thing."
While he has a good base for a startup, Laramie still hasn't cracked any of the Big 3 outdoor advertising companies--Lamar, Clear Channel and CBS Outdoor--that account for 65 percent of total sales. He has, however, attracted interest from smaller outdoor companies and many companies from overseas, although he wants to concentrate on the U.S. market in this initial phase. He's also managed to gain the support of Scott Daly, chief of media at Dentsu Holdings USA, the American arm of the Japanese ad agency giant.
"Dentsu's 'Good Innovation' corporate philosophy identifies the three elements of innovation as ideas, technology and entrepreneurship," Daly says. "ADstruc epitomizes 'Good Innovation.' There's a lot of hucksterism in the ad industry, but John and company are good guys with a potentially game-changing concept. The nature of our support is more from an evangelist perspective than contractual. I loved the ADstruc concept from the get-go. It's exciting."
The idea came to Laramie in the summer of 2008 while he was working in New York City at Beanstalk, a brand licensing agency with clients such as Procter & Gamble, Ford, Harley-Davidson, Jack Daniels and HGTV. A client wanted an outdoor campaign on billboards near Bed, Bath & Beyond stores in the city. Laramie quickly discovered there was no handy source, online or off, where he could access that information.
"I literally got on my bike and started riding around and noting the signage around the stores," Laramie said. "Then I said, 'This is really silly. I can't believe I have to do this.'"
That night, he started making calls to test his idea. "I don't believe in being stealth with a business idea," Laramie said. "I believe in talking with everyone you can." He talked with an entrepreneur whose family was in the outdoor business. He cold-called billboard companies and media buyers to assess the need. He called venture capitalists to determine how attractive the idea would be to investors. His studio apartment in Manhattan began to be covered in poster boards, each inked with new and improved business models as he refined the idea.
Warrum, an attorney, was his cohort at Beanstalk, handling the legal negotiations on deals Laramie would bring in. By December, Warrum suspected Laramie was planning something. At the Beanstalk holiday party, Warrum said, "I know you're up to something. A kid like you is doing more than just the company job. What is it?" The next day they met. Laramie laid out his idea, and Warrum signed on. ADstruc began to get its first traction. By April 2009, both men left Beanstalk.
Like so many others before him, Laramie came from a long family tradition of entrepreneurship. He started out as a kid with lemonade stands, as well as cutting grass and shoveling driveways--a particularly robust business in his hometown of Bloomfield Hills, Mich. Since he was 12, Laramie says, he has been inventing products and developing ad campaigns for them. His 92-year-old grandfather, Francis Sehn, once owned and operated an auto engineering firm in Detroit. His father, Joe Laramie, owns DGE Inc., an automation and telematics company, also in Detroit.
"I really believe in that Nike slogan, 'Just Do It'," Laramie says. "Think big. Do big. You have to dream big, and you have to have the right people around you. You need to do as much due diligence as you can on where to take the business, what's best for customers and employees. Don't build what you think is great. Build what 100 people tell you is great."
As for the right people to have around you, Laramie has learned that you never know where they will pop up or what background they will have. When he and Warrum arrived at TechStars, they had a place-holder website that he confesses was "plain ugly." A tech intern at TechStar named Sam Herbert saw the site and unabashedly told them how terrible it was. Herbert was self-taught. He had no college education. And he was only 20 years old. "But we connected immediately," says Laramie, who hired Herbert as head of web development and technology.
"I learned more in three months at TechStars than I did in four years at Beanstalk and four years at college," Laramie says. "Part of that is to build a culture that is fun. And we are having so much fun. The night we soft-launched our site to the server, we stayed up all night in the basement of TechStars, and we've never had more fun. We work 20-hour days and we make jokes at 4 a.m. and laugh at 8 a.m. We set our own pace with each other, and we share ideas of passion. It doesn't work without that."
There has to be some release, though, and for Laramie it is ping-pong. He started playing as a child in the basement of his parents' home. Later, he would have a consultancy whose main client was Naked Ping Pong, a social club for table tennis enthusiasts. He got pretty good. His tournament wins include the Microsoft Bing Tournament and another sponsored by Puma, for which he will travel to France to compete in the world tournament.
At TechStars, Laramie won the mentor's ping-pong tournament, defeating TechStars CEO Cohen in the semifinal match. For all he's learned, Laramie still needs to work on the adage, "Don't bite the hand that feeds you."
But lest Cohen fret the loss too much, Laramie thinks about being a ping-pong whiz and says with a laugh, "I am such a nerd."