THINKING OF THE WORST MOMENT to enter the Chicago technology scene, one would probably pick the end of the year 2000. The tech bubble was in full collapse, many large companies were already vanishing, and jobs in the space certainly were not easy to find .
However, that did not stop a young Shawn Riegsecker from jumping head first into a position at streaming media company, Real Media. Moving here in Oct 2000, Shawn would immediately find himself in one of the most uncomfortable positions he has ever been in – as a new employee dealing with a merger within his first months of arriving.
He had been brought in from Ohio to run their Midwest region and now, as a brand new manager, found himself stuck with the task of liquidating his fellow employees.
“I had to lay off my entire staff two days before Christmas 2000, which was on a Sunday. I had heard that they were going to make me lay people off so I told my staff to take the Friday off so that I wouldn’t have to do it before the holiday. But the company actually forced me through legal means to call them at home.”
Shawn quickly realized he was going to find himself on the short end of the stick in no time and started thinking about his own future.
“I remember when the two companies merged and they were going to lay off most of the people. I was one of ten they were going to keep.”
While he continued to work at Real Media, Shawn began to think about what it would be like to have his own technology company and to be his own boss. As things continued to sink at Real Media, he decided it was time to leave and take direct control over his future.
Leaving a paying job to try a new tech business during the bubble collapse seems highly irrational, but Shawn truly thought he might be onto something with his new idea so he dove head first into entrepreneurship.
“I quit and I can remember the thought of ‘I can’t believe I’m willing to not get a paycheck.’ It’s a hard feeling to not have that security blanket, that safety net in your life. To go without it is the scariest thing in the world. No investment, nothing, so I just quit my job.
Did I recognize at the time what I was really doing? No, I d idn’t. I think you just put blinders on and you move forward. I think if you stop and really think about what you’re doing, you’ll get scared. And so I think I just went out and started.”
Intégrent (now called Centro) was born. Shockingly, it ended up being the best possible time to launch his company.
“If the recession hadn’t happened, there’s no way I could have ever started Centro . The recession killed off all competition. It moved people away from looking at the local space. It froze everyone. You have to remember that I incorporated this company on October 15th, 2001. This is about 30 days after 9/11. We’re in the teeth of a recession. We’ve just been hit. In a weird sort of way it’s the best time in the world to go out – if you’re an aggressive entrepreneur – and start something. Because everyone else is sitting around on their hands not doing anything but waiting for the market to come back.”
Not everyone agreed that the timing or the choice to launch Intégrent was the best idea.
“In October when I quit my job, my father looked at me with this expression like, ‘How did I raise such a stupid child? Wow . You have a good job, you have a great paycheck. It’s a recession, what are you doing??’”
MENNONITES aren’t known for being internet tech savvy. As one of four children growing up in Ridgeville Corners, Ohio, a small town of 200 people, Shawn lived a very simple life.
“My mom and dad still live there today in the same house. Growing up Mennonite is as easy a back ground as you could have – b aseball, softball, biking, not a lot of TV. It was pretty cool . I think it’s a great way to grow up.”
For those not familiar with Mennonites (including myself), Shawn was kind enough to explain it.
“Mennonites and the Amish are very connected. The Mennonites existed before the Amish did; the Amish broke off from the Mennonites 200 years ago because they felt the Mennonites were progressing too rapidly with society. Mennonites follow the teachings of a man named Menno Simons, who really took the New Testament to its core belief that war, killing, and violence are wrong , so we have been pacifists throughout our lifetime as a religion. One thing that separates Mennonites from all other religions is that we will not carry a gun. We will not go to war. We serve if the government calls, but in non-combative positions.”
That non-violent belief system also includes not watching violence as entertainment .
“Yeah, growing up there were just things, like MASH, that I never watched . I didn’t get to see Star Wars because it contained the word “Wars” in the title . Instead, it was The Cosby Show and The Walton s , and Hee Haw, you know Loretta Lynn specials. I think my dad thought he was Johnny Cash at one point.”
Even though he wasn’t heavily exposed to technology as a child, he always felt a strong draw to it.
“You know the funny thing for me is that when I was a kid, I always wanted a computer and technology. Unfortunately, my dad wasn’t making a lot of money and was supporting our family of six and so although I always wanted a computer and was so fascinated by them, we didn’t have one or video games.”
No matter how simple life was for his family , Shawn’s father always had much larger aspirations for his children.
” I can remember that my dad said that his one goal for his family was that all four children would graduate from college because he never did. I’ve never ever remember it questioned whether we would go or not. That was his one goal and he accomplished that.”
It wouldn’t be until college that he would finally get exposed to technology and its business applications . However, it wasn’t a technology topic that would grab his attention, instead it was advertising and marketing.
“I went to a Christian college called Anderson University for two years, but the tuition was so expensive I couldn’t afford the junior and senior years, so I transferred to the state school at Bowling Green. I went into marketing and I loved it. I loved advertising. Actually, no; I loved the concept of advertising. I love the fact that advertising should be art and creativity .”
It was in college in 1994 that he would be exposed to the internet, or what you could call a really archaic version of it. On his tiny computer he got his first taste of the future.
“I think that in ’94, my friend said, ‘ Hey man, this internet thing is really neat.’ That [ computer ] was so terrible. The screen was probably like an 8-inch screen and you got on through dial-up, you know 9600. You would try to look at a photograph and sit there for 45 minutes. However, for me, there was a moment where I just thought – and you didn’t have to be a genius to think – this is going to revolutionize media, the media industry, and the ad industry.”
Shawn now knew where he wanted to work. The web represented a new frontier for selling advertising and he wanted to be on the front lines .
“I had to work for the first newspaper in Ohio that put their newspaper on the web (Ohio.com). I went over to the website and was the ad director for them. Then I went to work for the largest newspaper in Ohio (The Cleveland Plain Dealer/ Cleveland.com) and ran sales and marketing for them. I think that my first jump from a traditional newspaper company to a startup department where we were launching a website was in ’96. That was the first taste of [being a startup] because we had our own offices. There were four of us trying to get everything off the ground and I was the business guy. We had a great billboard that said, ‘Cleveland.com: not the place to go for information in Tallahassee.’ I don’t know why, but I always thought that was funny. And we had that all over Cleveland.”
LEAVING FOR CHICAGO and eventually settling at Real Media and a startup called Everstream, Shawn was burned out from working for other people. Centro’s meager beginnings as a one man company are the stuff dot com legends are made of.
“My first desk was in the server room closet. It was technically an office, but they had the server s in there and a desk. I rented that for $100 a month or something like that. And you know, I had a blanket and pillow and I’d say in the first two years, I slept 30 nights underneath the desk. I was doing everything. You just have to do everything.”
It was the typical bootstrapped beginning that so many have experienced in the tech world : mounting debts, 100 hour work weeks, ramen noodles, and no assurance that the company would be around next month. However, he didn’t want it any other way.
“It was a pure boot strap start up. If you wanted to eat, you had to sell. You had to go find customers and get them to work with you if you were go ing to put food on the table. I think it’s a fantastic way to do it. I think too many people try to get investors way too early in their companies. Not only do they dilute themselves, but then they’ve got people sitting around the table that have their own ideas. I think when you’re a small company you’ve got to be so singularly laser-focused on your next milestone that you can’t have a lot of noise in your world around you.
You have to just go after one thing. I knew I had enough money to last me 90 days and at the worst point I was two months behind on rent, credit cards maxed out, I had $10,000 in unsecured loans at 29.5% interest . I couldn’t buy an airplane ticket. I had to drive to my clients in Minneapolis and Detroit and not stay in a hotel. Those are the times you look back on and say, ‘ That was worth it, though.’”
He doesn’t deny that there are drawbacks as well. As far as bootstrapping and social lives go, they don’t mix.
“I don’t think I could have done it with a wife. I don’t think I could have done it with a family. I’d actually had a very supportive girlfriend at the time. I mean she was amazing. That was just helping me in life, but around the clock, it was eat, sleep, and breathe [the company ].”
At the end of the day though, there was never a doubt of where he would continue to grow the company. He has made Chicago his home and is here for the long haul.
“So, it’s not like I moved to Chicago to start Centro and that’s where I made the headquarters. That being said, I could have easily at any point said, ‘Okay, we’re going to move to San Francisco or New York, where a lot of the advertising technology companies are.’ W e made a conscious decision to build out the hub here in Chicago.
There are advantages here and some disadvantages but I think the advantages outweigh the disadvantages. The advantages are the central location; I like the transportation system and it’s easy for me to get around the country. I can fly direct to the West Coast in four hours. I can fly direct to the East Coast in two hours.
And then, from a work ethic, values, principles, and character perspective, it’s all Mid western values and I think the character of a company and work ethic are precursors to success. Building the company in Chicago, and the Midwest in general, you have a better chance of success being here than you do in some other places.”
IF YOU CAN’T JUDGE A BOOK by it s cover, you can’t judge a company by its name. Starting off as Intégrent was Shawn’s first hard lesson in advertising. It turns out that not only did the name not convey what it was they were trying to sell, but it rhymes with or sounds like about a dozen awful words.
“Everyone pronounced it Intagrant, Indigent, Ignant, or tell me it sounded like ignorant. Just absolutely terrible in every sense of the word. So, that was the name of the company until we went through an entire branding exercise and chose Centro. We changed the name officially in November of ’05.”
From day one, Centro’s mission has been to provide a platform that could connect advertisers, media buyers, advertising agencies, and publishers all together in a single seamless experience. In essence, they make the process of buying and selling online media as simple as possible.
Since their very early bootstrapped days, the company has grown at a pace that even Shawn can’t truly fathom. Between 2001 and 2005 revenue would grow to $5 million. By 2008, revenue had climbed to $82 million, then grew another 50% to $116 million by 2010. No, that is not a typo, that’s one hundred and sixteen million.
Recently, Shawn decided that in order to take Centro to the multi-hundred million dollar company he thinks it can be, he needed to raise some capital. He ended up raising a large enough sum of venture capital to land front page on Techcrunch. $22.5 million to be exact.
You might think with that kind of success, Shawn would revere the advertising industry. However, his strong love of the arts and theatre refuse to allow him to give the advertising industry a pass on what he sees as the death of creativity.
“I think advertising today sucks. I think it’s pretty sad. But it’s got to come back because we, the ad industry, ha ve become way too data and analytic s focused. I feel the pendulum has swung so far to analytics that we’ve really gotten away from the fact that people respond to beauty more than anything else. I look at the advertising of Apple or Virgin and I see the beautiful stuff that they can do. That attract s me to and makes me want to own that product, to be a part of that product. Sadly, I don’t see it hardly at all anymore.”