Wes Nichols, a serial entrepreneur and investor at March Capital, discusses his journey from founding MarketShare, a marketing resource allocation software solution, to becoming an investor in enterprise technology companies. His background in entrepreneurship, coupled with his fascination with data and analytics, has equipped him with a unique perspective on innovation and its role in driving revenue and growth.
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Innovative DNA: Wes has always been driven by a desire to innovate and improve, a trait he attributes to his upbringing in an entrepreneurial household.
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Foundational Criteria for Investment: In evaluating companies, Wes looks for innovative ideas that have the potential to be mission-critical and create a global platform. He prioritizes experienced founders and teams, as well as leaders who have faced adversity, which fosters determination and resilience.
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MarketShare Origin Story: Wes sold his first company to Omnicom Group, leading him to a position where he encountered challenges in allocation and measurement within the industry. Recognizing the opportunity with the emergence of digital marketing, he partnered with academic experts to develop a solution for resource allocation, focusing specifically on marketing and sales dollars. This led to the creation of MarketShare, aiming to provide a comprehensive, data-driven approach akin to a GPS system for resource management.
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Scaling and Conversion: The initial challenge was identifying and convincing the first customers, who were often hesitant due to the status quo in their organizations. Wes and his partner successfully secured a large grocer, a large software company, and an automotive company, demonstrating the value proposition of MarketShare. This early success set the stage for scaling the business, driven by lean operations and a clear understanding of the product's capabilities.
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Exit Strategy and MarketShare's Evolution: As MarketShare grew, Wes and his team recognized the potential for an IPO due to the company's strong financial performance, predictable revenue streams, and software-based operations. However, the decision to sell was influenced by the desire to maintain neutrality and objectivity, as well as concerns over the future of cookie-based analytics. After exploring various options, they chose to sell to Neustar, a data analytics company, which aligned better with MarketShare's values and offered access to identity-level data not reliant on cookies. Following the acquisition by TransUnion, the team remained intact, and the company thrived under new leadership, eventually reaching a valuation three times its exit value.
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Investor Perspective: As an investor, Wes advises founders and companies to focus on framing the market need effectively, solving significant problems rather than addressing small, isolated issues. He emphasizes the importance of listening, absorbing, and recognizing patterns to identify viable solutions.
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Journey to the "Sweet Spot" for Investors: Wes shares that the journey towards investment success involves navigating periods of growth and challenges. The key is persistence and strategic adaptation, ensuring the company remains aligned with its core values and market needs.
Through Wes's experiences, both as a founder and an investor, a clear emphasis is placed on innovation, problem-solving, and strategic vision as critical components for success in the tech industry.
