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With a culture built on mutual trust and respect, online video advertising network SpotXchange is experiencing tremendous success and growth. The Westminster-based company was recently ranked 40th on Deloitte's Technology Fast 500, a list of the 500 fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America. SpotXchange’s co-founders, CEO Mike Shehan and CFO Steve Swoboda, also won the 2013 regional Ernst & Young Entrepreneur of the Year award.
According to Swoboda, company culture is a key factor in SpotXchange’s success. That culture is based on trust and getting important tasks done, with politics and ego kept out of it as much as possible. The goal is to be confident and humble at the same time, he said. “It sounds super simple and kind of trite, but we just focus on getting stuff done. There’s not a lot of hierarchical management, not a lot of politics, and there’s very little ego in any of it. We think we’re doing a good job, and we’re super proud of the business and the jobs we’ve created.” At the same time, he added that not every decision turns out to be the right one. “Everybody makes mistakes. You have to move forward.”
Their approach seems to be effective, since some engineers have been working with Shehan and Swoboda for over a decade, and there is very little turnover at the company. Members of the SpotXchange team are well-compensated, get to work on interesting and challenging projects, and enjoy unlimited vacation time. “Nobody has to punch a clock,” said Swoboda. “We’re trusting you that you’re going to participate with your team and get your stuff done. We’re not going to micromanage or babysit you.”
This culture of trust comes straight from the beginnings of SpotXchange’s existence. Shehan, a serial entrepreneur, and Swoboda, an accountant, have very different backgrounds, strengths and competencies. Swoboda handles finances and understands the business from the inside out. Shehan works with product innovation and provides vision based on where the industry is headed. And CTO Allen Dove takes that vision and designs the software. Since they trust each other to each do their own piece, they don’t waste any time or energy second guessing each other. “Even though we all have different strengths and competencies, we all have this shared vision and that sets the tone for the whole company,” said Swoboda.
Shehan said it’s vitally important for entrepreneurs to work together with partners whose strengths round out their weaknesses, and vice versa. “I can’t underscore this enough,” he said. “For any entrepreneur you’ve got to have partners. You’re not going to be good at everything. You just aren’t.” His advice for anyone starting a company is to find one or two people you can completely trust to do what you can’t do. “That’s the key. That’s probably 90 percent of success,” he said.
Other success factors Shehan mentioned include spending time with fellow entrepreneurs and finding the right advisors. Meeting with other entrepreneurs is a great way to get ideas, inspiration and advice. And having some experienced and knowledgeable advisors on your team provides an incredible advantage. “Our board is a huge resource for us,” he said. At first, SpotXchange was primarily self-funded, but when the company got to a point where it had a lot of potential, was growing rapidly and was profitable, Shehan and Swoboda sought out experienced advisors who would ask hard questions and help them come up with the answers. They found what they were looking for at HIG, a private equity firm. “These guys are so smart,” said Shehan. “They’ve been giving us so much great advice. I’d say right now they’re our biggest resource for growing this company.”
While the core of the SpotXchange team is in Colorado, the company also has offices in New York, London and Sydney and exports its video services to more than 80 countries.
SpotXchange’s expansion into the global market came about naturally, since as a marketplace of buyers and sellers of video ad inventory, some buyers and sellers were located outside of the U.S. “We were automatically a global company,” said Shehan. “However, to really accelerate that and get a foothold into all those markets, we had to start investing in a physical local presence.”
With 20 percent of their business now international, the biggest lesson has been that expanding outside of the U.S. requires a great deal of patience. “It’s been slow going, but I think we’ve established a presence in those markets that’s operating more toward the long term view,” Shehan said. “Each country is very different in terms of how they buy and sell media, so we understand that we have to go about it in different ways to assimilate to how they actually operate.”
Success in international markets goes back, once again, to that all-important trust. “We have hired awesome managing directors in both Australia and the UK,” Swoboda said. After making sure these MDs have a thorough understanding of how SpotXchange operates, Swoboda and Shehan trust them to take that knowledge and determine what resources are needed in order to be successful in their market. Communication is also vital to advancing business in international markets.
Swoboda cautions entrepreneurs to avoid the misconception that everything needs to be lined up just right before they can move forward. “You’re never going to have an environment or situation where it’s all perfect,” he said. “Anybody who knows the inside of anything, whether it’s a relationship with your partner, your family, your best friend, or the inside of your business, they’re all kind of a mess.” And that’s perfectly okay, he said, because that’s how life is. “Even if you ever got the point where everything was lined up perfectly, something would change,” he added. “It wouldn’t last, because nothing is static. Everything is always changing.”
A key to being a good entrepreneur, Swoboda said, is to accept and work with what you have. “A big part of success is just surviving long enough, and adapting and changing,” Swoboda said. Early on, they learned how to make do with very little. “We were massively underfunded when we started the company. I went out and got another job for a while, and Mike worked for no pay for a year, but we kept it going until we got more traction.” The lessons from those lean times carry over to the present day, he said. “You always know you can figure out a way to make it work if you get creative.”
