GE 158: How Ghostery Skyrocketed from 700K to 50M Browser Extension Installs without Spending a Penny to Acquire Users (podcast) With Scott Meyer

Scott Meyer Ghostery

Hey everyone, today our guest is Scott Meyer, CEO of Ghostery, which alerts users about web bugs, ad networks, and web trackers allowing people to manage their privacy and data. Scott was previously the CEO of About.com and GM of The New York Times on the web before starting Ghostery.

Today we’ll be talking about how Scott went from politics to business to a successful media career before founding Ghostery, how he’s helped make the web suck less for 400 enterprise customers, how they sold $1M in contracts in less than 2 years, and the trick to opting out of those targeted ads that follow you around the web.

Download podcast transcript [PDF] here: How Ghostery Skyrocketed from 700K to 50M Browser Extension Installs without Spending a Penny to Acquire Users TRANSCRIPT

Episode highlights:

  • [02:44] – Ghostery is a SaaS product that uses data that people contribute to anonymously. They then use that data to create a suite of software tools that are popular across the industry.
  • [03:16] – They charge a flat annual fee. They have million of users that have opted in to share data, so they can provide data to solve problems almost instantly.
  • [4:14] – All enterprise customers are using the browser extension.
  • [4:51] – They are growing about 30% a year for the past 4 to 5 years, and will generate north of $20 million in revenue this year.
  • [5:12] – They have the ability to be profitable but are focused on growth.
  • [6:17] – The original idea for Ghostery was to power Ad Choices. They bought the extension from David Cancel to get a source of real user data to see if companies were complying with the program.
  • [7:33] – Companies started asking for a software service that would explain all of the tracking software they found in the browser extension.
  • [8:17] – At Warburg, Scott did a lot of listening and looking for investments that were interesting. Seeing a gap in the market is the time to go for it.
  • [10:21] – They have over 400 enterprise customers and the browser extension has been installed over 50 million times.
  • [10:34] – They bought the company with the extension. The secret sauce to increase installs was that they knew they hit a niche, and they were very good at social media.
  • [11:59] – A free, lighter version of the product creates a lot of inbound inquiries
  • [12:53] – Building a widget that people will use is great for lead building
  • [00:15:05] Ghostery communicates with users and the code is open source—transparent to a fault.
  • [15:52] – If you see your friends running in one direction, think hard about why? It may be really smart or really dumb. Have your eyes open and go in the best direction for you.

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Full Transcript of The Episode

Show transcript
Scott Meyer: The way that we went from 700,000 installs to 50 million installs, the secret sauce there was we really figured out ... We just hit a niche in the market, and we were very good at social media.

Voiceover: Do you want to impact the world and still turn a profit? Then, you're in the right place. Welcome to Growth Everywhere. This is the show where you'll find real conversations with real entrepreneurs. They'll share everything from their biggest struggle to the exact strategies they use on a daily basis, so if you're ready for a value-packed interview, listen on. Here's your host, Eric Siu.

Eric Siu: Before we jump in to today's interview, if you guys could leave a review and a rating, and also subscribe as well, that would be a huge help to the podcast. If you actually enjoy the content and you'd like to hear more of it, please support us by leaving us a review and subscribe to the podcast as well. Thanks so much.

All right, everybody. Today, we have Scott Meyer, who is the CEO of Ghostery, which alerts users about web bugs, ad networks, widgets on visited web pages. Scott was previously the CEO of About.com and GM of The New York Times on the web before starting Ghostery. Scott, how is it going?

Scott Meyer: It's going great. Thanks for having me on today.

Eric Siu: Yeah. Thanks for being here, so why don't you tell us a little bit about who you are and what you do?

Scott Meyer: I'm the CEO and co-founder of Ghostery. In terms of what the company does, we try to make the web suck less because it's tough out there. There's this what we call a "frankenstack" of marketing technology that's watching you on ... Really, on every page you visit, and that can be very frustrating for regular people, right? You go to a webpage, it's really slow. Your ads are following you around the internet. You don't feel like you have a lot of control.

Ghostery gives you transparency and control over what's happening, and our business model is based on the same ... solving the same problem for companies because companies actually have no idea what's happening on their sites, which initially seems a little absurd, but it's true. It's a huge problem because inside of this frankenstack, and what I mean by that is there's like 3,500 companies growing all the time whose business is marketing technology, and each of them has a line of JavaScript code that they want to put out there, which by itself is great, but it gets out of control, and so companies have the same problem.

Their site is getting slow, which hurts them in conversions, data leaking out to competitors, not getting to the right places, security gashing up on the site and challenges with compliance with tricky privacy laws around the world. We have a SaaS business that uses data that people contribute to us anonymously on an opt-in basis from the Ghostery browser plug-in, and we built that into a suite of software tools that have become very popular across the industry.





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Eric Siu: Got it. Okay. I've been a Ghostery user for God knows how long and just feels as a ... Just as a consumer, I'm looking at ... I'm interested to see what sites ... what kind of technologies websites are running. Now, talking about the SaaS product a little more because this is leading into my question. I guess the main question is, how does Ghostery make money? What's the value proposition for these ... I guess for these businesses using it, your SAAS product?

Scott Meyer: Absolutely. We make money. We charge a ... Generally, we charge a flat annual software license fee, and the value proposition is that because we have millions of Ghostery users around the world who've opted in to shared data with us on what they see on the sites they visit, we're able to provide these companies with the level of insight to make their websites cleaner, faster, and safer that no one else can provide, and the beauty is because we already have all the data from those users, there's basically no implementation, so we can start solving problems for companies, start making more money almost instantly.

Eric Siu: Got it. Okay. If I'm a business coming in, and then I start ... I subscribe to your SAAS product, you guys are going to provide me reports and insights on what I should be doing and where we should be going based on all the data that you've collected?

Scott Meyer: Exactly right, and what's great about it is pretty much all of our enterprise customers either are already using the browser extension or once we show them what we're talking about, they start using the browser extension right away. About 10% of the active users of the Ghostery browser extension aren't using it as regular people trying to speed up and clean up their web experience. They're actually using it for their jobs. They're using it for QA, for web operations, and for competitive intelligence, so it's got a pretty big following in the professional space, and that's what we build on.

Eric Siu: Great. Okay. What numbers can you share around the business today in terms of growth rates, number of customers, things like that?

Scott Meyer: We're growing very fast. We've been growing consistently over the past 4 or 5 years at north of 30% a year, and we'll generate, well, north of $20 million in revenue this year, and we have the ability to be profitable. We're just investing in growth. It's a very strong and capital-efficient business that we have built. We only raised a fairly small amount of equity for a software company of our size. We've raised $26 million in equity from Warburg Pincus.

Eric Siu: Got it, and you were part of Warburg Pincus in the past, right?

Scott Meyer: Yes, so I had a really cool transition. I was a ... As you saw and mentioned, I worked for The New York Times for 8 years. My last job there was CEO of About.com when they owned it, and I had essentially reached the end of my time at The Times. I love the company, and my next job wasn't there. I've been friends with the Warburg folks for a long time, and they offered me a role as entrepreneur residence, where I got to go in and just hang out with them, and they're super smart. Man, what a



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great, great group of investors, and I got to go and hang out with them.

I had some ideas for doing a roll up of some companies in the publishing space, and that was end of 2008, so as you can imagine, the world came to an end, and then we threw a series of ins and outs, and ups and downs, came up with the idea for what became Ghostery. The original idea was to power the AdChoices program. Most of your listeners will see every day in the display ads on the internet, they'll see this little blue icon. It's a little blue triangle in the corner of most of the display ads. It says, "AdChoices." That's a compliance program.

In the ad industry in the US, Europe, and Canada created it to give consumers more control over how ads are targeted to them. We're a key part of that backend of that program, so we ... If you click one of those icons, it will show you how the ad was targeted to you and enable you to opt out. We provide that service to about 300 companies around the world every day in 52 languages. That's where we started, and we bought the Ghostery browser extension from David Cancel, who's still an investor and advisor in the business, because we needed a source of real user data to see if companies were complying with the program.

Over time, the Ghostery browser extension took off in popularity, and the privacy laws in Europe changed, and companies started coming to us in that professional context. Companies saying, "I'm using your browser extension. I'm seeing this list of tracking that's happening on my site, and I have no idea what it means. Can you build me a software service that tells me what it means and what I should do?"

Eric Siu: Interesting.

Scott Meyer: Yeah, like any good set of entrepreneurs, we're like, "Yeah, we'll do that," and we sold like a million dollars of contracts in less than 2 quarters, and all of a sudden, we realized we're on to something.

Eric Siu: Interesting. Yeah. It sounds like you guys had the ... It all started with the plug-in first, and then people just started asking for this additional offering, and that was what started the ... Spiked your revenues, right?

Scott Meyer: Yeah, that's it, and that's [inaudible 00:08:02].

Eric Siu: Great. Okay, so what is the ... I mean, what does a day in the life of an EIR at one of the top private equity firms look like?

Scott Meyer: It's awesome. It's also really weird for an operator because not a lot happens in one sense, and it's not for everyone, so I had a ... Between whole-time employees and contractors, I had almost a thousand people working for me when I was at About.com, and then I'd go to Warburg, and I'm ... For the first time, I'm not responsible for anybody except my immediate family. I have no direct reports. It's just you're there to look for great interesting opportunities, and the Warburg folks were very generous.



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What I used the time to do was essentially I picked up the phone and called everybody who I either knew or always wanted to get to know and said essentially, "I'm buying lunch. I'm buying dinner. I'm buying breakfast. I would to just hear what you're working on and see what you think isn't getting done well because I have nothing to sell you today, but in a year, I'm going to be back with something I think that I want to sell you. I want to make sure it's the right thing. Are you free?" That's a pretty easy invite, especially when the Warburg guys were supporting this. I learned a tremendous amount, and it was really cool because I just got to listen. You do a lot of listening.

It's very quiet and studious relative to running a company, but what I think makes the EIR experience most successful is that every private equity fund has the investment bankers bringing them the deals that aren't on the market, and the bank ... The Warburg guys like everybody else take those meetings when they see something interesting, and going to those is very helpful, but what you really learn is the Warburg guys were very open with letting me into some of their key partner meetings, so I can see how the folks who now are on my board think about investments, going to board meetings of portfolio companies to see how a good board meeting is run because I hadn't been the CEO of a standalone company before, and then where it really breaks out is when you come up with the ... You see a gap in the market that no one else sees, and you go for it. That's what has happened with our company, and I think it's a reason we're feeling very good about how things are going right now.

Eric Siu: Interesting. Okay. Now, rough range, how many customers do you guys have today?

Scott Meyer: We have over 400 enterprise customers, and the Ghostery browser extension has been installed more than 50 million times.

Eric Siu: Wow, 50 million. Okay, so let's just talk about the browser extension. How did you go about acquiring the first, let's just say, thousand customers or users I should say?

Scott Meyer: In our case, we bought the company. David Cancel had acquired the first 700,000 installs.

Eric Siu: Okay.

Scott Meyer: But the answer ... and we were fortunate that we found ... David had built this very cool niche brand, but the way that we went from 700,000 installs to 50,000,000 installs, the secret sauce there was we really figured out ... We just hit a niche in the market, and we were very good at social media. We've never spent a penny to acquire a Ghostery user. We don't pay for distribution. It's all organic, and that's where ... When we acquired Ghostery, we had a small team that we put on it, and those guys were just incredible at taking the Ghostery brand promise and



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communicating it out to users, and that led to very ... a lot of very positive reviews in the press and in the app stores, which led to high rankings, which led to a lot of downloads.

Eric Siu: Great. What's one thing that you're doing today in terms of customer acquisition that's working well?

Scott Meyer: We have opened up our enterprise platform, so you can go to ghostery.com today, and right at the top of the page, you can get a real-time analysis of what's happening on your site for free. We're getting over a thousand increase a month, and almost all of it is organic, so by making a lighter version of the enterprise product available for free, we're generating a lot of inbound, and that's something that's break out, and it's also ... It's great because it forces, and it forces a discipline on us to try to make the enterprise solution. It doesn't really have any direct competitors, so it also means that not everybody understands what it does and what it is, so it requires us to be ... to try to be smart about explaining it simply, so that someone can right away engage with the product and come out feeling like, "Wow, this is very cool. I get it."

Eric Siu: Awesome. Interestingly enough, David Cancel, a couple episodes back, he talked about how today's "lead magnet." A lot of people are doing eBooks, driving traffic to eBooks and trying to get opt-ins that way, but he says the new lead magnet is really trying to build some type of widget that you can get people to use, and that has a higher ... I think there's a much higher value attached to that, and I think that's exactly what you guys are doing and just another testament to that.

Scott Meyer: Yeah. That's exactly right because this meeting where I met the CEO of New Relic, and he said ... His last company said that the success of New Relic was built out of "the failure of my last company." Now, I had to laugh because that last company was a company he sold to Computer Associates for $375,000,000, so [loose earns 00:13:28] threshold for failure and success is pretty high. I had to laugh, but he said, "I used to spend all this money, whitepapers, webinars, big outside sales team, trying to get meetings with the CTO of the company, of these big enterprises. Now, I give a basic New Relic product away for free, and people can start using it almost instantly with their credit card, and now, the CTO calls me because he says, 'I've got 50 people in my company using your stuff. We should talk.'"

Eric Siu: Right. I think people tend to think that, "Oh my god, it's such a big investment," but you think if you're playing the long game, it just pays off in the long run, right?

Scott Meyer: Yeah.

Eric Siu: Great. Okay. Obviously, you bought the company. You have 700K users already. What are some big struggles you faced while ... I guess after buying the company?

Scott Meyer: We're going back a ways, but I think it's very interesting that you bring that up. Right after we bought the Ghostery browser extension, and this is 6-1/2 years ago.



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The company at that time was called "Better Advertising," so the big fear that a lot of people had was, "Oh, no. You're going to start collecting our data and using them for advertising. Oh, no. Oh, no. Oh, no. Ghostery is sold-out." The day where the transaction closed, Firefox had also pushed out a new update that broke the browser extension, so all of a sudden, everyone's worst fears seem to be getting fulfilled. They're like, "Holy smokes, these guys just sold out to a bunch of ad guys, and look at this. See, now, Ghostery is acting weird. Oh, they must be collecting our data," and people went nuts.

The first thing was very quickly, "How do we make sure we're way ahead of communicating what we're doing to Ghostery users because they appreciate this tremendously?" to the point we're now ... Ghostery will not open source. All the browser extension code is out there on the internet. We bent over backwards to make it clear what we're doing with our data, what code is out there, what data we use, and what we do with it, and we try to just be as ... I think [we're taught 00:15:30] transparent to a fault, which is great, and we do it not only externally. We do it internally. We're very transparent in terms of how we share things in terms of our company.

Eric Siu: Right, so it sounds like that ... I guess the key takeaway there was being able to communicate well, and I guess fostering that sense of community and transparency, right?

Scott Meyer: Yeah, you got it.

Eric Siu: Great, so switching gears right here. We talked about the big struggles you faced. I guess what's one piece of advice you'd give to your 25-year-old self?

Scott Meyer: Oh, man, so here ... Well, I'll tell you the advice I would have given to my 22-year-old self. Let's start, which was I ... So, I studied ... My degree from undergrad is in public policy, but that's a bit of a misnomer because I spent most of my last 2 years in college doing a lot of statistical work. Computer programming. A lot of time in front of an SPSS terminal. This is a long time ago. It's 1990, 1991, and a friend of mine said, "You probably have enough of the pre-reqs done that you can do another year in college and maybe get a CS degree." That was a big mistake. I should have done that. I should have stayed an extra year and gotten a CS degree.

Now, it's not like my life has turned out terribly at all. I've been very fortunate, but I know that if I had a CS degree, I think it would have opened up more opportunities for me, and I would've had a better view of where a market was going. That's the first thing. I think the second advice to my 25-year-old self is ... I'm not going to tell about the personal stuff. Say from a business perspective is ...

Eric Siu: Why don't we talk about the personal stuff? Unless it's too personal, I think. I feel like it's something that's really helpful.

Scott Meyer: Yeah. I think it's a little too personal in that sense in terms of just what happened



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to my life when I was 25, but I think in terms of the business advice for a 25-year-old self. If you see all your friends running in one direction, think hard about why they're all running in that direction because it may be really, really smart, or it may be really, really dumb. In my case, I ran in the same direction as just about everybody else in my business school class. For the summer, I got a great gig out of very prestigious consulting firm. After school, a year later of going, I ran back to those types of secure jobs, and that was 1996. I think if I had had my eyes open more, I would've gone in a different direction and gone into technology then as opposed to 3 or 4 years later.

Eric Siu: Interesting. Okay. That's great insight. All right. What's one must-read book you'd recommend to everyone?

Scott Meyer: You have to read Ben Horowitz's, "The Hard Thing About Hard Things."

Eric Siu: Great.

Scott Meyer: You must. Do not start a company until you read it.

Eric Siu: You are ... Let's see. I believe you're number 25 to recommend that on this podcast, so that's the ... I think that is the number one recommended book here. I guess what would be number two for you? I'm just curious now.

Scott Meyer: Yeah. Wow, so number two. It depends. I actually have 2A and 2B. I love to read big historical biographies, especially now that I could carry them around on my Kindle, so they're not a thousand pages. I think if you want to really understand managing a team in a complex environment, read the Lincoln book, "Team of Rivals." Don't see the movie. The movie covers a very small piece of this. Read the whole giant, thousand-page Doris Kearns Goodwin book. The other one, which is a much shorter read is probably Clay Christensen's book. Oh gosh, what's it called? It's a very short ... It's based on his final lecture from HBS that he gives every year.

Eric Siu: It's not "Innovator's Dilemma," is it?

Scott Meyer: No, it's not. It's not. It's much shorter.

Eric Siu: Crossing the Chasm?

Scott Meyer: No, no. Give me 1 sec. I'll tell you. It's not "Innovator's Dilemma." It's actually ... Oh, it's "How Will You Measure Your Life?" It's based on ... It's usually his last lecture in his first year class. It's very short. I should probably reread this. I haven't read it in a while. One of the best things that Clay thinks about is ... Remember, there are people in his business school class who ended up in jail, so his last chapter is "How to Stay Out of Jail?"

Eric Siu: I love it. Great. Well, we'll drop these in the show notes. I'm glad I asked for 2A and 2B because those sound really compelling for sure, so I'll add these to my list



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personally as well, but Scott ... I mean, this has been fantastic. What's the best way for people to find you online?

Scott Meyer: Hit me at Twitter, @scottmeyer. That's usually the best way.

Eric Siu: All right. Perfect. Well, everyone, check out Ghostery. I've been using it for God knows how long. It's been super useful just because I'd like to see what the heck is going on on the web, but once again, this is Scott Meyer from Ghostery. Thanks again, Scott.

Scott Meyer: Thanks, Eric. Take care.

Voiceover: Thanks for listening to this episode of Growth Everywhere. If you loved what you heard, be sure to head back to growtheverywhere.com for today's show notes and a ton of additional resources, but before you go, hit the "Subscribe" button to avoid missing out on next week's value-packed interview. Enjoy the rest of your week, and remember to take action and continue growing.





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