ADOTAS – Last summer, AdGrok cofounder Antonio Garcia-Martinez’s tome about being a cog in Goldman Sachs’ twisted machine during the buildup to the financial crisis — notably titled, “Why Founding a Three-Person Startup With Zero Revenue Is Better Than Working for Goldman Sachs” — made a fair deal of noise across the Internet.
Would-be physicist Garcia-Martinez has long since moved from the quant haunts of Goldman to digital advertising, recently launching AdGrok’s in-browser tool for SEM and Google AdWords management. The innovative solution kind of looks like real-time Google Analytics, but with search campaigns that can be instantly modified via actionable insights.
Garcia-Martinez was able to catch his breath after SMX and answer some questions about AdGrok, including why it’s different than any other SEM tool out there and why it could become the “QuickBooks of online marketing.” He also details working with buzzy funder Y Combinator and dishes some more on his Goldman days,
ADOTAS: So, gotta ask – what’s up with the name? It kinda reminds me of a marketing caveman – “Wheel good!” In other words, what is “grokking”?
GARCIA-MARTINEZ: “Grok” is a reference to Robert Heinlein’s “Stranger in a Strange Land.” In that sci-fi classic, “grok” is a Martian word which means to understand deeply and completely. If you’re an uber-nerd, you’d use grok in casual conversation thusly: “I listened to his lecture on parallel computing, but I didn’t grok the bit about concurrent threads.”
What sets AdGrok apart from other SEM management solutions?
Unlike every other marketing solution in the universe, AdGrok places your data and tools in context, inside your browser, on the pages you’re advertising. It’s a natural part of your browsing experience.
We also provide tools that let smaller advertisers punch above their weight, and build out their campaigns like the pros would. We’ve got a bunch of smart tools that help you do stuff like generate keywords and manage your bids. There’s a lot more on the way when it comes to sophisticated juju like that.
And all of this at a very modest price that’s way below those of any competitor.
Can you imagine buying a Ferrari for the price of a Yugo? That’s what AdGrok is.
What made you decide to launch the tool now? How did the beta period go?
The beta went very well. We grew from from basically one user and $200 annual spend to over 300 AdWords accounts and $10 million in annual spend in about six months.
We launched because you can’t really look in the mirror and call yourself an entrepreneur if you aren’t actually selling something.
Also, we launched so that Paul Graham of Y Combinator would stop asking us, “Have you launched yet?” every time we ran into him.
Who are these cofounders of yours and how did you all hook up? How did AdGrok come to life?
One co-founder, Argyris Zymnis, is a Stanford Ph.D. with a specialization in machine learning, who also occasionally holds down a spot as DJ at the Stanford student radio station.
The other co-founder and CTO is Matthew McEachen, a lifelong startup junkie and engineer with over 20 years of hacking experience.
We met at a company called Adchemy, where Argyris and I were on the research team, and Matt was a senior engineer. We pitched YC some other crazy idea involving local search and an iPhone app. He funded us, and then told us our idea was stupid in our first post-funding meeting. After a couple iterations (stopping along the way at some augmented reality ridiculousness), we settled on what we know how to do: automate and optimize internet marketing. We decided to build for the one segment in the advertising market that’s almost completely ignored: the low and mid-market, people spending at least a few hundred, but not more than $100K/month.
Can you give us the inside scoop on your specialized services Groknoculars, Grok-O-Matic and GrokMe?
As you’ve surely noticed, we specialize in striking product names.
Grok-O-Matic solves one of the biggest pain points for ecommerce sites: scaling out their SEM campaigns to all the products on their site. It’s a cornerstone of SEM best practice to tightly couple ad copy to the landing page. By extension, you should be running ad campaigns that advertise specific product offerings, and drive the traffic right to the product page (where they’re one click away from buying).
But how do you do that when you’ve got a product catalog with thousands of product pages? You either embark on a monumental clickfest, hack some scripts to create a spread sheet you can upload, or pay a chunk of money to an agency to do it for you. Grok-O-Matic dispenses with all that and let’s you do in seconds what would normally take hours.
Once you’ve built out an effective AdWords campaign, you can manage it using Groknoculars. Groknoculars are binoculars for your search campaign. You can set up saved filters that, say, show you all the keywords in your account that cost more than $3 cost-per-click but produced no conversions (i.e. crappy keywords). You can then do anything you want over that set of keywords: pause, delete, change bids by absolute or percentage amounts, etc. The idea is you can store your entire workflow inside Groknoculars, saving your filters on good or bad keywords, or popular/unpopular ad copy, and let you slice and dice easily. Then you just close the tab and get back to your own website.
What has been your experience with buzz-about funder Y Combinator?
Great experience. It’s really a startup bootcamp. I couldn’t recommend it highly enough. We wouldn’t be where we are today without Paul Graham and the startup factory he’s created.
So what’s the main reason busting your ass for your own startup is better than being a Goldman flunkie?
I can wear sandals in the office and take a pull from the keg whenever I like.
Are there any lessons from Goldman Sachs you apply in running AdGrok?
Quoth Mark Twain, “a classic is a book you like to have read, but don’t want to read.”
In a similar vein, Goldman is a good place to be from, but not be at.
Goldman has a phenomenal corporate culture, with values everyone internalizes and practices daily. Those values are basically ones of long-term greed and sacrificing individual interests for the good of the whole. It also, basically, does almost everything right. They invested in a sophisticated risk and pricing infrastructure (all of it homebrewed over years and years) when most banks don’t think beyond the next quarter and, even now, do everything as hacks inside Excel spreadsheets. It was a phenomenal learning experience being there with very smart and motivated people making very complex structures work in a fast-moving and dynamic environment.
It was also one of the most furiously high-stress and exhausting places to work. The only viable exit strategy is making partner, which means being a very small cog in a very large machine for many years. The chances of doing that are probably worse than creating a successful startup, and far less fun.
What drove you from the world of finance to online marketing? What interested you about SEM in particular?
Our lives are more random than we like to think they are.
Right around early 2008 when the credit crisis was building, I read a random New York Times piece about a startup that just closed a funding round. On a whim, I emailed a resume. A couple weeks later I interviewed and they made an offer. That company was Adchemy, whose schtick is applying high science to Internet marketing.
I realized the advertising world was like finance 20 years ago before the rise of the ECNs and the quant revolution, and a quant like me would have a huge edge in the marketing world, particularly since most financial types were clueless about tech. Their mental world doesn’t extend westward past the Hudson River, much less San Francisco.
So I took the job. I quit Goldman, bought a convertible, drove across the United States and started at Adchemy a week later.
Any port in a storm. My storm was the credit crunch, and Silicon Valley the port of rescue.
How has your background in physics come into play building up AdGrok?
Essentially not at all. Other than maybe impressing business types when I mention my background.
Has all the fuss about Google’s slacking search results had any effect on the paid search sector?
Not that we’ve noticed.
Even though you just launched, how are you hoping to expand with AdGrok?
You know how 20 years ago every small business owner had to either hire a bookkeeper or learn double-entry bookkeeping, and then QuickBooks came along and changed everything? We want to be the QuickBooks of online marketing. Marketing these days is as critical a business function as accounting is, and there’s really no Intuit there pushing something SMBs can use.
So, long-term, we want to be more than an AdWords app. The goal is to pack our GrokBar with every tool small business need to market themselves effectively online. So that means channels like Microsoft AdCenter (which is on the way) and Facebook, and sophisticated marketing tricks only the big boys can afford to do now, like display retargeting, or automated ad copy created, smart keyword generation, etc.
Do you still think of yourself as a “failed scientist,” or has AdGrok redeemed you, perhaps turned you into another beast entirely?
I am very much a failed scientist. And I suspect that won’t change any time soon. Failure early in life is good though, just like getting beaten up is.
Tasting your own blood in your mouth after getting smacked (by life, or by the football player two grades higher than you in high school) has a surprisingly salutary effect. It has the dual results of:
- Making you fear it less (failure can be survived, and getting your ass kicked isn’t the end of the world); and
- Making it less likely to happen since you learn what got you smacked in the first place.