At the tender age of 28, high-school dropout turned best selling author Gurbaksh Chahal is now leading a multi-million dollar social ad network. After running three successful businesses, sharing a best-selling book with Oprah, and, most recently, leading a $21 million funding round, Chahal opened up to Fast Company about his own past, the recipe of successful social ads, and the potential doom of over regulation.
During the economic shocks of the late 1990s, young Chahal wanted to help his struggling parents with the bills by doing what most teenagers do: work as a mega-corporation drone for minimum wage. Unfortunately, McDonald’s had no room for his entrepreneurial spirit. “It’s the best rejection of life,” recalls Chahal.
The dejection emboldened 15-year-old Chahal to transfer his “obsessed” viewing of financial TV network, CNBC, into his own business. Watching ad company DoubleClick “go from a $300 million company and an idea to billions of dollars, later inspired me to, basically, see if I could have a crack of this world of online advertising.” Chahal boostrapped his first online advertising business, Click Agents, from cold calls in his bedroom, and within a year, had sold the company for $40 million.
About a year later, a high-school dropout sitting on piles of cash, protected by under the cushy auspices of the company who bought Click Agents, he had every opportunity to live out the teenage dream. Instead, the restless Chahal tells us, he was writhing in the caged bureaucratic world, eagerly awaiting his release from a non-compete agreement. “I learned quickly that in environments like that, you can’t really make change or be an entrepreneur; so, I left.”
Upon release, Chahal duplicated his success with another ad-network and large-valution sale–this time to Yahoo. Instead of watching the clock to expire on the non-compete, he wrote a best-selling memoir, which earned him a coveted spot aside Oprah.
Today, Chahal is driving ads into the burgeoning world of social re-targeting with his latest venture RadiumOne.
RadiumOne’s secret sauce is the sharing that occurs outside of Facebook. RadiumOne uses a patent pending algorithm from public and anonymized data from social networks to build ad preferences based on behavior, rather than brute-force broadcasting to websites with a ratio of certain demographics.
The psychology fueling the technology is a simple idiom, “birds of a feather flock together.” While some users my have hundreds or thousands of Facebook friends, they share data with only a tight circle, which RadiumOne’s algorithm assumes enjoy similar consumer tastes. These coveted “first-order connections,” is what Chahal sees as the untapped cashcow of the social web.
Additionally, RadiumOne sees a special place for sharable, entertaining content. Like TED’s “ads worth spreading,” and the latest round of silly airline videos, Chahal is optimistic that promotional adds don’t have to be “forced upon” users. Instead, an entertaining ad can “send a message that may have your brand incorporated into it, but it can do it in a funny, context way.”
At a time when privacy-conscious governments around the world are either mulling serious restrictions on tracking data (such as the FTC’s overtures against Facebook) or outwardly penalizing corporations (such as France’s suit against Google), we asked Chahal if he’s worried. In short: no.
Years ago, recalls Chahal, there was hand-wringing about banning cookies and behavioral targeting, “Fast forward five years later, here we are in the same boat, where people are still debating what they’re going to do.”
Additionally, any do-not-track legislation would end up with an insignificant number of opt-outs. “Do I think a very small of percentage of people will opt out of messaging, absolutely yes. And its going to be the same percentage of people can opt today.”
However, should the government be bearish enough to mandate opt-in for social tracking technologies, “the government is going to call the biggest Internet recession of all time.”
In the end, Chahal is optimistic, all on fronts, because one simple belief: “Consumers want to see relevant ads.” Faced with more options than pop-ups and flashy banner ads, publishers “can make money through brands and through relevant advertising. And, all that makes everybody happy.”