Five Questions With: Tom Burgess

Rhode Island resident Tom Burgess is founder and CEO of Linkable Networks, a card-linked-offer company with the ability to provide digital coupons and offers at the individual product level. A veteran of the advertising and digital media technology markets, he has worked an array of innovative advertising solutions.
In 2001, Burgess founded Third Screen Media, the world’s first mobile advertising network. Third Screen Media set the standard globally for wireless advertising and was acquired by AOL 2007, delivering a 10x return for investors. Prior to his tenure at Third Screen Media, Burgess served as president of Internet portal CollegeLink.com where he guided the company to a successful public offering and later orchestrated sale of the company to Monster.com. He also served as founder and CEO of 9th Square Inc. (later rebranded as Bluestreak.com Inc.), an e-commerce and advertising software and services company and Echomedia Inc., one of the first Internet advertising companies.

PBN: You’re now working at the fifth company you have founded. What are the most important factors in being able to determine what a good business idea is and then getting it off the ground?
BURGESS:
I see industry and consumer problems as opportunities. I search for the pain points, and then create solutions. For example, when I launched my third company – Third Screen Media, a mobile advertising platform – the wireless industry had reached a saturation point on “voice” revenue. The industry was banking on data as the next big revenue opportunity, but they were having trouble getting consumers to engage. The fees were too high and the content quality was too poor. I recognized the opportunity to bring advertising to the consumer via wireless content. Advertising dollars delivered revenue to the wireless carriers so they could lower the consumer fees and grow their user base. Advertising also helped fund content so the big media players were incentivized to get involved with a new revenue stream. A sampling of our first customers were The Weather Channel, Turner, Major League Baseball, and more. It was not an easy problem to solve, so we didn’t have a lot of competition and it scaled very quickly once we proved the model. All my companies are based on this “problems are opportunities” model. Linkable Networks, my current company, is solving two problems – lost revenue to banks from recent government regulation and the need to digitize the paper coupon industry. Both are multi-billion dollar markets. We have successfully completed our first pilots and we are now in the scale stage.

PBN: Malcolm Gladwell’s book “Blink, The Power of Thinking Without Thinking” makes the argument that we should trust our instincts more than long deliberative processes. Does your experience confirm that approach?
BURGESS:
I read this book years ago, and it confirms what many successful entrepreneurs already do naturally, go with your gut. This method has treated me very well throughout my career. It can occasionally be painful for my investors and staff, but in the end it pays off. In fact, it is paying off right now at Linkable Networks. In the early stages of our launch we made what appeared to be a very risky decision and did not follow a major trend in our market. Large and small companies were dedicating significant resources toward this trend, but my gut told me there was a better path to follow. A few companies did well chasing the trend (such as Groupon) but it died out and most companies failed. Linkable Networks is the pioneer in the path we followed, digital coupons linked to consumer payment cards and mobile wallets. Now with two issued patents it has proven to be the core of our value proposition.

PBN: Venture capitalists often take the quality of the management team into account as much as the exact business idea. Why is that?
BURGESS:
I would even go one step further with that and say the smart venture capitalists value the management team higher than the business idea. There is nothing more valuable than real world, hands on experience when kicking off a new venture. It’s impossible to foresee all the pitfalls and barriers a company will encounter along the growth path, but high quality management will know from experience how to react or even avoid the issues that impede success. Entrepreneurial teams need to be well rounded. It is very hard to disrupt markets with innovative products, build competitive barriers while you scale a business, raise capital, and ultimately deliver a return for your investors. Venture capitalists are placing bets and in this game the jockey may be more important than the horse.

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PBN: Speaking of venture capitalists, how do you find the right kind of investors for your ventures? Are they all the same? What makes an investor right for a certain kind of venture?
BURGESS:
It’s not easy to raise money, never mind being picky on what investors you are going to work with. I have built several successful companies and delivered great returns for my past investors, and it is still very hard to raise capital for early stage ventures. You are only as good as your last quarter of results! But, when I have a choice I seek different types of investors based on the growth stage of my companies. In the early stages I feel it is critical to work with investors who have actually launched venture backed companies themselves. In the early days you deal with very different challenges than in the later stages. Money is critical, but advice, experience, and a strong rolodex are far more valuable from an investor. In the later stages I seek investors who are most interested in profit. By the time you reach the later stage you have proven your business model and you have likely built a strong team to execute it. Now you need investors who know the financial markets or have strategic contacts that may lead to a buyout.

PBN: Thomas Edison famously said, “Genius is one percent inspiration, ninety-nine percent perspiration.” Does that make sense to you? Why?
BURGESS:
That Thomas was bright guy. I go with a similar mantra – good things come to those that go out and earn it. I often sum it up in one word … hustle! The only thing that comes to those that wait are the spoils of those that hustle. It makes all the difference in building a successful venture. That extra phone call at the end of a long day. Taking the dreaded redeye so you can cram in one more meeting on the business trip. Never settling for a solution that simply meets the market standard, but punching through until you find the solution that crushes the competition. This is why hustle is the best friend of the entrepreneur.

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