Scott Switzer ’92, co-founder and chief technology officer of Authenticated Digital, has made a name for himself in the competitive world of start-ups. We talked to the UVM College of Engineering and Mathematical Science alumnus about working in business and technology, starting companies from scratch, and finding success.
You have been involved as an advisor, investor, or co-founder of multiple start-ups. How has the landscape changed for start-ups over the past 16 years? Is it easier now, or less risky, or more competitive?
Today it is easier to build an initial product without the need for venture capital. It’s less expensive, there are better software libraries to start from as well as co-location spaces. In the past, scaling a server farm would cost hundreds of thousands or millions of dollars, whereas cloud services today cost only hundreds of dollars.
That said, today the bar is much higher for a Series A level of investment, which is the first round of financing given to a new business once seed capital has already been provided. Not only do you need to show that your product is complete and there is some level of traction from your customers, but many investors are looking for revenue growth as well.
Authenticated Digital, which was featured in Adweek, authenticates 90 percent of digital ad impressions. When did a lightbulb go off in your head that there was a need for this kind of technology?
Brands often buy ads for one site, but due to misrepresentation of inventory, they end up paying for an appearance on another. Also, many ad impressions are generated by bots. My previous company, OpenX, is one of the largest ad exchanges today. During my experience building OpenX, I learned that the architecture of ad exchanges relies on information supplied by third parties rather than collecting information directly. This means that there is a significant opportunity for fraud to be introduced by these third parties.
My co-founder and I started researching this, and once we found a way to measure the advertising supply chain directly, we found plenty of inconsistencies with the information that advertisers use to buy advertising.
A start-up sounds great in concept, but there are many logistical and financial challenges to make a go of it. What are some of the realities of launching a start-up?
Starting a company is risky from a financial perspective. For months, founders of a company will build without salary, and when they do have the ability to pay themselves via financing or revenues, their salary is much lower than the market rate.
However, starting a company while you have little commitments—such as a wife, kids, or mortgage—is easier. Also, I have found that even with the companies that I started that did not turn out well, I learned far more than if I had played a narrower role at a larger company.
What do you think it takes to succeed running a start-up?
The most successful founders that I have worked with are able to pivot their thinking quickly and recognize when customers find a product valuable. They are also able to suspend disbelief for a while and visualize a future with their company no matter how bleak the current market looks for them.
What advice would you give someone thinking about working in technology?
Build side projects. I have found that side projects naturally gravitates you to the things that you are interested in, and will give you a level of experience in where more nuanced product ideas can be considered.
How did your experience at UVM help prepare you for your career?
I graduated with a Bachelor of Science in electrical engineering, but have been interested in computer science since graduating. The most important part of my education was learning to be organized, solve hard problems, and make hard choices to get a good outcome. I found the co-founders of my first company through a UVM friend. Everybody’s experiences are different, but I have found that the network UVM provides compliments the education in a great way.
What are the greatest rewards of your career?
Starting something from nothing, see it live on and grow beyond my involvement.
Did anyone ever give you advice along the way that has paid off?
My wife’s grandfather told me that some of the most important decisions that you make are the seemingly smallest day-to-day decisions. I have found that in both business life and personal life, contributing some extra effort in some of the smallest cases will come back to enrich your life in a great way.