BURLINGTON – It’s been five years since Mike Lane left Dealer.com, the software company he co-founded with four others and sold for $1 billion.
Lane grew up in the northwestern Vermont town of Georgia and studied engineering and management at Clarkson University before returning to Vermont to help start Dealer.com in 1998.
For about three years after Dealer.com’s high-profile sale in 2014, Lane took some time off, doing consulting work in Vermont and nationally, remodeling his house, and focusing on his role as a board member at the Burlington nonprofit Spectrum Youth and Family Services. He now invests in and mentors other startups.
Two years ago, Lane and former Dealer.com colleagues Eric Mayhew, Scott Gale and Brian McVey started Fluency, a software company. Lane is CEO; Mayhew is president and chief product officer, Gale runs the engineering team, and McVey runs business development.
Fluency is an automation platform for digital marketing. The software (developed by Fluency’s four founders and its staff) facilitates the online advertising that targets people who are most likely to find the ads relevant. Fluency’s role is to use data to create digital advertisements and push them to platforms like Google, Facebook and Bing.
Fluency now has 15 employees in Burlington, with three working remotely, and just marked its second year in business. Lane spoke with VTDigger about his work and the business. This interview has been edited for length and clarity.
VTDigger: Are you the ones who send us the ads based on the internet search we just did?
Mike Lane: We don’t do any of that stuff. We just give Facebook and Google the ads, and they match you automatically.
We facilitate the execution of advertising. Say you have an ad that you want published. You want to target people who are into travel. Let’s say the customer buys airline tickets to Washington, D.C. Google now knows they are going to Washington, D.C., so they might show them ads for an activity or a hotel there. We help produce all the ads that show up there.
It’s all done automatically. We use data that already exist in the world. A lot of people do it manually, typing and creating an ad for the hotel and publishing one ad. We would essentially take all the data for that hotel, the room availability, pictures. So if people are looking for a two-bedroom, pet-friendly hotel, we wouldn’t want to show them a generic ad; we’d want them to see what gets their interest.
We don’t get any private information; everything is encoded. We could go into tons of nerdy detail here, but Facebook will put a pixel on a website — a cookie to track you. Say you went to a car dealer’s website and clicked on Honda vehicles. Facebook now knows this. They don’t know who you are; they just know you are this ID number. Then you’re back on Facebook and the car dealer is running ads on Facebook. They match your ID, and guess what shows up in your Facebook feed: ads for Hondas. The ad could be a picture or an incentive, but it could also be text. We create the ads, or transport them, or change them, or give Facebook the data so they create them. For Fluency, it’s really about taking the data and getting the ads to the right spot.
VTD: Who are your customers?
ML: We deal with digital agencies that have very large portfolios. Brands hire an advertising agency, and the ad agency makes TV commercials, does product marketing, designs the packaging and messaging, signs deals with athletes, gets all that media out there.
They also buy TV and radio spots and digital ads. When people buy the digital ads, the ads that show up on Facebook, Instagram, Google, someone has to take the data that’s out there and create the ad. That’s what we do.
VTD: What are the workers doing at Fluency?
ML: They are writing software. It’s super complex; Google and Facebook constantly change what you can do in the digital ad space. Amazon is in the space now and they weren’t two years ago. It’s very cost-prohibitive for people to do all these integrations – where our computers talk to their computers and give them thousands of ads — and that’s why they use companies like us.
The hard part is the automation around digital advertising; the secret is in the software. There are so many rules and compliance issues. For Google you can only use so many words, and you can’t use all caps. So if you have a piece of data that’s all caps you have to manage it a certain way, then you have to figure out what page to send the customer to. The website might have 10,000 pages. You don’t want to send them to the home page if you’re looking for something specific. You want the customer to click on the ad and see the room with the dog-friendly suite, so you can then hit “book now.”
VTD: Are there a lot of companies doing this?
ML: There’s a whole spectrum. Digital advertising is a massively growing, $100 billion business just in North America. The software companies we compete with, their market share is some fraction of that.
Lots of people advertise, and most businesses advertise digitally somehow. You could open an account at Google if you had a business you wanted to promote, create a couple ads, and publish in an hour. There are companies that help facilitate that. Then there are companies that facilitate that for thousands and thousands of businesses, and those are the companies that we support. They have a massive scale they want to implement.
VTD: How do you find these clients and who are they?
ML: Some of them have found us. Some of our clients are referred to us, some of them know us based on our history and what we are doing, and a lot of it is just relationships.
VTD: Does being based in Vermont affect you?
ML: It depends on the position, but do we have enough people in Vermont to even sustain the economic growth and the job demand here? Everyone is against growth and change in Vermont.
I know people who have been out of work and struggling six months to find a job, and I can’t just hire them because they don’t have the right skill set in a very nuanced business.
Fortunately, we are finding people. Part of that is we have a great reputation, and we know a lot of people. We advertise nationally and we get a lot of applicants; ideally we want people who are here.
VTD: Does the high profile of Dealer.com help?
ML: We started a business that was tremendously successful. People see us with another business that’s growing very, very well out of the gate, and they want to get on that train.
It has also helped us because we have done it before. The first time you do something, it might take you months to get something right. The second time you do it, it takes you two days. It makes it more efficient.
There’s no guarantee, we know that; anything can go wrong tomorrow. It’s a balance of where you put your attention, your investments, our own dollars. You have to hire right and make the critical decisions.
VTD: What do you like about this work?
ML: Not many people understand it. It’s nuanced. It’s really hard, and we have an incredible team; we’re all friends. We’re doing something very, very difficult, and we’re having a really good time doing it, and we’re doing it really well.
I need something to do. Eric and I both came to the conclusion that we like to be doing something productive. We can’t sit still; it’s who we are. We like to build stuff, which is why I’m not a big corporate guy. I didn’t want to stay after those mergers, I wanted to build something.
VTD: What are you good at?
ML: I think I am good at seeing opportunity where it may not be as clear to others, but I am equally good at going after that opportunity. I see it, and I am able to see systematically where we need these 15 things done, in order to get that accomplished.
VTD: What’s next at Fluency?
ML: The first year of our business was really about writing the software, and the second year has been proving out that everything works, and scaling up our business a little bit. The third year is going to be about bringing on more clients and growing.
Our first job is to get the company profitable, hopefully in 2020. We expect to have at least a dozen more people hired next year, a mix of programmers and others related to software development and client support.
We’re not thinking about new product lines or business; we’re just going to keep focused on what we are doing. We’re on the exponential curve and we can’t predict what is next.
No one predicted five years ago we’d be able to use data at scale in advertising at such efficiency now. How technology can grow: I don’t think we really understand and we can’t predict. In every area of the world, in every industry, there is someone hyper-focused on every piece of technology, and it’s all just growing so rapidly.
VTD: What do you see in the Burlington tech community?
ML: I’m pretty optimistic there are going to be a lot of growing companies. Maybe they’re not going to be billion dollar exits, but a handful of people can start a company, and sell it for $50 million, or grow it and it’s highly profitable. In 2000, Vermont, even Chittenden County, used to be very far from the tech ecosystem, but now we’re catching up. There are so many tech startups. The ecosystem has supported it somehow. It’s exponentially larger going into 2020 than it was in 2010.
Due to the exits that have happened, there are a lot more angel investors around. IDX sold to GE – that was a while ago now, but look around and there are seven or eight large healthcare companies that are worth hundreds of millions of dollars, and all the people who started those companies came out of IDX.
There have been smaller exists, BioTek just happened, and that was a monster deal. My hope is that there is one of those deals a year. I don’t think people realize the tax benefit to the state is a windfall when that happens.
So, the capital situation is improving. There are a lot of great ideas and the dollars find their way to the best ideas a lot of times.
Correction: The link to Fluency’s website in this story has been corrected.
