How Quick Growth Brought Distractions For Tapjoy

The app monetization business saw wild growth, but started biting off more than it could chew. They saw the warning signs of "too much, too soon." Here's how they recovered before it unraveled.

What happens when a business quintuples its revenue in just a year?

After the initial excitement and celebratory high fives, it gets a crash course in growth planning.

That’s exactly what happened to Tapjoy. The San Francisco-based company was started in 2009 by two mobile game developers who realized that the biggest challenges for app publishers were getting discovered and monetizing their product. They created a unique solution to both problems by engaging users with ads and offers embedded into the apps. In 2010, Tapjoy generated $20 million in revenue; a year later that number grew to more than $100 million.

Too Much Too Soon

While business was growing rapidly, leaders felt there was even more opportunity. In 2012, Tapjoy expanded its breadth of advertising, but the diversity brought a problem.

"We were trying to serve multiple customers: app publishers, mobile advertisers, and consumers," says Tapjoy President and CEO Steve Wadsworth. "We were also trying to scale properly, putting infrastructure in place at the same time."

The result was a company that wasn’t fully optimizing its core mission—serving app publishers. Tapjoy wasn’t rolling out new, innovative products fast enough, and it wasn’t adequately supporting existing products with the robust technology it needed to scale.

"We were becoming increasingly less efficient and less reliable," he says. "We had always been a strong solution in our core platform, but our publishers were now telling us they needed more."

Tapjoy had been trying to do too much, too soon, and it wasn’t serving any of its customer groups well. Wadsworth says they were putting emphasis on bringing in new publishing partners and advertisers who wanted to be part of its ecosystem but were losing focus on product evolution and innovation.

"I think this is common with success; when a lot of things are going well, it’s easy to feel like you can chase a lot of other things," says Wadsworth. "That may be true, but unless you’re continuing to nail it with your number one priority and you’re clear that it is your number one priority, these new things can just as easily become a distraction and a problem to your core business."

While Tapjoy was in a high-growth market, the pace of its growth was slowing. The company took this as a wakeup call and reprioritized around innovation. The company also made changes to its organization, adding new executives, including a chief product officer, chief financial officer, and chief marketing officer.

"This team was a big part of bringing the company back to its core focus," says Wadsworth. "Companies at different stages need different skill sets. The people we brought in had come out of larger organizations and were well-suited to scaling a business."

Getting laser focused on serving app publishers ironically resulted in better serving mobile advertisers and end consumers, says Wadsworth. The change reinvigorated the business and put them back as a leading innovator. Once it had its core mission in line, it was ready to expand.

"The punch line is that we are now on the threshold offering a new product suite," says Wadsworth. Last week, the company announced the launch of nGen Platform, an end-to-end suite of monetization and advertising solutions designed to help app publishers engage and monetize more users through targeted advertising and customized messages.

"We’re serving advertisers in an integrated way with the right ad engagement at the right moment," says Wadsworth. "nGen is the first step in a series of things you’ll see from us over the next year—all driving growth by supporting mobile app publishers."

[Image: Flickr user Alex]

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1 Comments

  • Interesting... I still think Tapjoy is a good ad network. Are they Airpush or MM? No, but I don't think their best days are behind them. They just need to get back to innovating like they used to. The are starting to fall way behind in this horse race.