AdDuplex Post-Mortem. Part 1: Genesis
The last functional parts of AdDuplex just went down marking the end of a big chapter of my life. Now that I think of it, AdDuplex was my longest held job so far and quite possibly ever. It would make total sense to analyze what went right and what went wrong over the years. I don’t know if it’s just me (probably not), but I can’t just sit down with a glass of wine and think intently about something for two hours straight. So, I’m going to think about it by writing it down.
Hopefully, other people find it informative, inspiring (or terrifying), and useful in some practical or even philosophical sense. If not, that’s OK too. After all, I’m working through it for myself.
I’ll go through the history of AdDuplex chronologically and try to synthesize some lessons learned from those periods (or in retrospect). Maybe, I’ll even do a separate “lessons learned” post without the history part at the end. We will see.
With that said, let’s begin…
What was AdDuplex?
Obviously, it makes zero sense for me to assume that everyone reading this knows what AdDuplex was. Actually, this could be my first “lesson learned” here! So here goes a quick overview for the general audience.
AdDuplex (established in 2011) was a cross-promotion and advertising network for Windows (originally Windows Phone) apps. Developers would place AdDuplex’ ad control into their apps and show ads for other apps on the network, and those other apps would return the favor. Our business was in taking 20% of that exchange inventory and selling it to advertisers. At its peak AdDuplex was the widest ad network on Windows with more than 10,000 apps participating. We’ve raised €400,000 of seed capital and became profitable within a year or so (not great in the “Silicon Valley” world). We couldn’t figure out a way to scale beyond the indie developer market and then Microsoft pulled the rug from under our core mobile ecosystem. We’ve tried to pivot a few times but eventually had to admit that all those attempts failed and as our core market was dwindling, we decided to slowly coast into the sunset with it. Surprisingly, that took about five years to come to the inevitable conclusion.
Lesson learned 0.1: Always give people an elevator pitch of what you do.
I almost made the same mistake right from the get-go of this post that I made numerous times during my tenure as the CEO of AdDuplex. Quite quickly we became a “household name” in a small niche community and since everyone in that community knew who we were, I sometimes projected that to a wider audience — and most people had no idea. So, when you talk to someone about your business don’t ever assume they know what your business is. Obvious, but hard to remember when you are in the thick of it.
Part 1. Genesis
Back in the late 00s I was working in a small consultancy firm we’ve founded with a few friends. My area was everything .NET related. I did ASP.NET projects, I did WinForms projects, WPF projects. At the same time, I always wanted to be a “software entrepreneur” — meaning that I wanted to build my own products not work on someone else’s projects. So, I dabbled in that in-between consulting gigs with some moderate successes under my belt.
I also was interested in smartphones. And I mean the pre-iPhone days. I had a Symbian phone that I was contemplating programming for but never got beyond tweaking stuff. And then Windows Mobile 6.x seemed like a better fit for someone with .NET experience so I tried to get into that but never really made anything meaningful. And then came the iPhone era… which I kind of missed because… my family had to eat.
Lesson learned 1.1: Don’t freelance/consult if your goal is to make products.
Freelancing or consulting seems like a logical steppingstone towards building your own products. Theoretically, it could be. In practice though, when you sell your time for actual money per unit of time, it’s very challenging to take a chunk of that time and dedicate it to some pipedream when you could’ve sold it for real money. It’s much easier to come back home from your 9-to-5 job and make your future business your hobby (in my opinion, obviously).
Anyway, by the time the whole app economy blew up I felt like I was lagging behind on the iOS and even Android fronts. At the same time, it was clear that Microsoft will reenter the game in the near future and, most likely, use the tech I’m fairly good at as the platform.
In 2010 I won a trip to the Microsoft MIX10 conference in Las Vegas. And that’s where the whole Windows Phone 7 Series (this name still sounds funny) story was unveiled.
Before going there, I was certain of my plan for the year: I will develop a bunch of small apps for this new Microsoft mobile play and have them ready at launch (rake in millions of dollars and all). I arrive at the conference and one of the first things I learn is that developers from just 30 (if I remember correctly) countries will be allowed to join the developer program at launch. With no clear plans to expand that number. And I live in Lithuania which while being in the EU is rarely considered to be one of the first 30 countries that come to mind of an American MBA. My initial reaction was to research establishing a small business in the UK. But suddenly that “rake in millions” part starts to feel less certain and since I don’t have a large safety cushion I decide to wait and see instead.
I stay active in the .NET/Silverlight/Windows Phone communities on Twitter and other places and actually develop some simple charting controls for Windows Phone apps in the process — don’t need a developer account for that (suck it, Big Corp!). I watch how the phones launch and how my [internet] friends struggle to capitalize on the same “vision” that I wanted to pursue. On the one hand, I feel like I dodged a bullet. On the other, I feel for my friends who struggle to jumpstart their apps and games, and as a result don’t make any meaningful money whether from sales or in-app advertising. And that’s when it hits me…
Seeing how people are struggling to earn any meaningful money from their apps and in turn have no money to spend promoting it, I realize that this thing is backwards. Yes, in a real serious business you would have a marketing strategy and a budget. But don’t forget that these were still the gold rush days. “Build it and they will come” worked quite well for those iPhone devs in the late 00s so most early Windows Phone developers came with the same mindset and nothing but development and design skills. I decide to flip the narrative.
I can’t remember whether the AdDuplex’ cheesy slogan came before the whole thing crystalized or later, but it was right there in the first announcement post.
“Advertise before you monetize” was what I thought indie developers needed to do but since they had no money to spend on advertising, I proposed they should flip that advertising space in their apps on its head and earn “free” promotion instead of cents from it. So, after some research and pitching the idea to a few friends I decided to just build it.
Luckily, I had all the technical skills to build the MVP on my own: I’ve built the backend and the client area in ASP.NET and an ad control in Silverlight (experience building those charts came in handy). And it only took me a couple of weeks.
Lesson learned 1.2: Range matters.
I was only able to pull this off with zero budget because I had some skills across all areas that were needed to be build the MVP. It is common for us to idolize people with insane skills in one area (athletes, etc.) but unless you are able to get into the top 0.01% in that particular discipline it’s much more practical to have decent skills in multiple areas and then combine them to create something top performers in those separate areas just couldn’t do on their own. Range by David Epstein is a good read on the subject (referral link — someone has to pay for me writing this 😉.
One related skill that I’m lacking in is design. Sure, I can tell nice things from terrible things, but I find it to be an invaluable for an independent developer to be able to make the thing not only work well but also look and feel good. If you have technically inclined kids, I would definitely try to cultivate some design skills in them as well. Design for Developers by Stephanie Stimac seems like something I’d need to dive into (not yet available at the time of this writing).
On January 9th, 2011, I’ve announced AdDuplex to the world and on January 17th it launched (in invite-only mode).
Lesson learned 1.3: Release date is a feature. Shipping is more important than doing it “right”.
Later I’ve learned that someone else (whom I’ve later met) was working on a similar product but approached it more… ermm… thoughtfully, if you will. I’ve launched in two weeks with a half-assed implementation, but it worked and took the wind out of them. Some highly priced consultant would look at what I did and conclude that we will pay for it in the future! And we did, to some extent. But we’ve launched, grabbed the market, and got an opportunity to “pay off” that technical debt. Something that the other person doing everything “right” never got.
I was able to quickly gain some initial traction mostly thanks to my network of social media friends most of whom I haven’t met at that point.
Lesson learned 1.4: Networking works, unfortunately.
As an introvert I find this lesson to be the most annoying. But I must admit that a lot of good things that happened to me can be directly or indirectly attributed to human connections. Luckily for us introverts, we live in an internet age and many of those connections form without actual face-to-face interaction. So, when someone says that you are wasting time on Twitter (hi, honey! 😉) tell them and know that right at that moment you may be forming a connection that will define the next 12 years of your life.
AdDuplex was born, getting the first traction, and taking most of my time and close to 100% of my brain cycles. But it didn’t make any money yet. How did I survive?
My friend Antanas built a very successful charting library amCharts. At the time it was in Flash, now it’s JavaScript, obviously. We were sharing an office and seeing his success with Flash and being in the .NET ecosystem I asked if he’d be interested in partnering on a .NET version and he said yes. That was a few years before AdDuplex and while my .NET version wasn’t as successful as the Flash version it was still bringing some passive income that was enough for me not to starve while working on AdDuplex.
Lesson learned 1.5: Passive income or massive savings are essential.
I’ve mentioned before that I don’t believe in building startups in parallel with freelancing. And with a 9-to-5 job you can only spend as much time on your startup. So, when the time comes to go all-in the money question comes to the forefront. Sure, you can look for funding right away but unless you have a reputation and the market is frothy, you are unlikely to get funded based on a prototype or even an MVP. Especially, if you build it alone. And you’ll spend valuable time chasing that money. Amassing some savings (that you are OK to use/lose) or building something that will bring you above-poverty-line passive income is the most realistic approach to funding your startup idea in the earliest stage.
Another interesting aspect of the whole thing was that I’ve built an “ad network” on a $8/month shared hosting account — something that would get me laughed out of the room in any professional developer setting. The thing is that this whole setup worked for us through the year without any major problems and enabled me to have an extremely low burn-rate in the first year of existence.
I’m a little apprehensive of making a “lesson learned” out of this as I see it as a fault in my overly risk-averse nature. It worked out in this case, but I definitely killed multiple ideas just because I couldn’t see a way of running them “on the cheap”. And who knows maybe I’ve destroyed something genius just because I was too scared to act on it.
I wasn’t planning on selling ads to advertisers for some time and had no user interface to either order them or even track the stats. But very shortly after launch someone contacted me and offered money to run an ad campaign. I think it was something like $100 but it was money I didn’t even ask for yet. It proved that I’m onto something both in terms of a value proposition for app developers and advertisers.
Once you launch a product into the world you start hearing from the real customers, as opposed to your own theories or deep thoughts from people with no vested interest. One of the first things I didn’t anticipate from the start was that it’s not a zero-sum concept. Some people only want to make money from their apps, some want to jumpstart the app in the market and don’t care about revenue at this stage, others want a little bit of both. So quite quickly a use-case materialized where developers would use AdDuplex “part-time” in conjunction/rotation with other ad networks or as a fallback for when they had no ads to show. Coincidentally, this became the most common use for AdDuplex and allowed us to keep apps on the network even after they got bigger.
Lesson learned 1.6: Shipping may open unexpected opportunities.
When we come up with ideas, we usually have a vision of what they bring to the table. But only after shipping do we see if they hit the mark and, sometimes, realize that the mark was actually different than what we imagined.
In half a year we’ve got to 200 apps on the network and some advertisers. And I was working as a backend and frontend web developer, SDK developer, DevOps, designer, marketer, salesperson, etc. It started to get overwhelming. AdDuplex was bringing enough money for me to sustain myself (and the $8 hosting 😜) but not enough for me to convince myself that I can hire someone and commit to paying them a salary.
My first idea was to sell one of my developer friends one the idea of becoming my co-founder. Unfortunately, none of them were in a position to risk slashing their current incomes for a future potential.
Lesson learned 1.7: The worst time to launch a startup is in your 30s.
This is obviously a controversial statement and definitely not universal. But what I’ve learned from an anecdotal experience is that most people in their 30s either have kids or are about to have kids. And none of these kids are adults yet. Which makes 30–40-year-olds the most risk-averse group. You can risk everything when you have nothing in your 20s. And you may have some cushion and fewer dependents in your late 40s-50s. But in your 30s you often trade a pie in the sky for a steady paycheck.
So, I decided to go the other route — find someone to invest a little money to give me some runway and peace of mind to promise a steady salary to my first employee.
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In the next part I cover our first angel investment, company formation, first employee, and the path towards the seed round.
