…Packaging also isn’t everything but ignore it at your peril. Unfortunately, when it comes to fundraising, the sizzle is much more important than the substance. Tech startups are often novel, complicated, and mysterious. The average tech investor has neither the inclination, the bandwidth, or the background to truly understand the details of the company they are investing in. Everybody wants to invest in the next big thing and if you can make a case that you’ve got the next big thing with a compelling pitch, you have significantly increased your odds regardless of the actual substance. Think Theranos or Hyperloop One dazzled investors with their long drawn out business plans? Ha. It was all hype and packaging.
As part of my series about the “5 Things I Wish Someone Told Me Before I Became CEO”, I had the pleasure of interviewing Clark Benson the founder and CEO of Ranker, the #1 digital media company for opinion-based, crowdsourced rankings on just about everything. Launched in 2009, Ranker is Benson’s fifth startup which he built with the concept: the wisdom of the crowd is better than the opinion of a few. Over the last 10 years, Clark’s vision of data-centric correlations has led Ranker to create tens of thousands of votable lists on TV, movies, pop-culture and virtually everything else. Those lists and the opinions of passionate fans determine definitive rankings and result in a treasure trove of psychographic data that has many uses to studios, brands, and consumers and is the backbone of Watchworthy, a new personalized TV recommendation app.
Prior to Ranker, Benson founded eCrush, the parent company to some of the first teen and millennial oriented social networking and online communities. eCrush.com was sold to the Hearst Corporation in 2006. A serial entrepreneur and music fanatic, Benson previously founded Almighty Music Marketing, a music marketing and promotions agency serving the music industry since 1995. He also co-owned the Southern California music store, Off/Beat Music from 1996–2001. He began his career in business affairs at Virgin Records America.
In his spare time, you can find Benson traveling to concerts and festivals to see many new and emerging artists — as well as his favorites such as the Rolling Stones, Phish, and Radiohead. He saw more than 100 bands perform in both 2015, 2018, and 2019. A published author, Benson co-wrote the book College: Your Guide to The Best Five Years of Your Life. He resides in Los Angeles with his wife, Jenifer, and twins, Austin and Zani.
Thank you so much for joining us! Can you tell us the story about what brought you to this specific career path?
I have been in the internet space since the 1.0 era (my prior startup eCrush launched in 1999 and was acquired by Hearst in 2006). The idea for Ranker — which at our core is “democratic rankings of pretty much anything people like to rank” — came about due to both a lifelong love of lists and rankings as well as perhaps a chip on my shoulder from an early age.
When I was in my teens, I was (still am!) a massive fan of hard rock and metal music and I was constantly frustrated that all the music publications and critics showed a huge disdain for those genres. There was a lot less information of course in those days, so I would sit at the library reading, say, the Rolling Stone Record Guide to try and learn about all the bands I loved, and seethe over 2 star reviews of absolute classic Led Zeppelin and Black Sabbath albums (and don’t get me started on what they would say about Saxon or Iron Maiden, provided they even acknowledged these bands).
So from an early age, I had a huge skepticism of professional critics. As time has gone on, of course, classic hard rock bands like Zeppelin, AC/DC and Sabbath have been vindicated in the same publications that habitually dissed them, but this was still a pattern seen over and over again in our culture.
Back in the day professional critics at a small number of publications were the gatekeepers. Today, the promise has been that social media would eliminate gatekeepers, but I’m not sure that’s happened. It seems like the loudest voices on, say, Twitter or Instagram have now become gatekeepers of their own, and those opinions are just as biased. The single biggest drive behind the crowd-ranked Ranker voting concept was to eliminate the gatekeepers and put opinions in the hands of the fans, and that holds true today.
I also wanted to introduce a format that was different from the prevalent internet opinion format — reviews and 5-star rating systems, both of which have their limitations.
Can you share one of the major challenges you encountered when first leading the company? What lesson did you learn from that?
The first challenge we had was building your concept into a website that isn’t as awesome at launch as you hoped. In order to turn your website into an awesome platform and brand you will need more money, but to get money you need to show growth. How do you achieve that growth? The lesson learned was that I was focusing all my energy into the product itself, and the content on Ranker, but I was so under the gun I hadn’t gotten to a crucial piece, which is how do you acquire users quickly.
What are some of the factors that you believe led to your eventual success?
When Ranker launched I had a relatively small team and personally had some remedial knowledge of search engine optimization (SEO). To survive I spent two hours a night after getting home learning everything I possibly could about SEO. Ranker’s unique format for crowdsourced rankings of lists means that our content is constantly changing, and “Best of All-Time” rankings from 8 years ago can drive consistent search traffic due to its ever-changing nature. In the first five years, Ranker’s growth was driven mostly by search traffic, which allowed us to continue to focus on iterating the product and building revenue streams and other important factors to get to profitability without large venture capital injections at any given time.
What are your “5 Things I Wish Someone Told Me Before I Became CEO”? Please share a story or example for each.
I’m going to keep these all focused on the topic of fundraising, which was my biggest blind spot and pain point.
1 . Connections aren’t everything, but damn they matter.
Unfortunately, the entrepreneurial world isn’t a true meritocracy, especially when it comes to raising money. Connections are crucial — sadly, your social network might prove to be the single best indicator of whether you’re able to raise. VCs and many angel investors generally only take meetings when they are referred by a trusted contact of theirs, so even to get to the pitch stage you need an introduction. I had a prior successful exit, so I was generally able to get meetings, but I found I had to really work the networking muscle to properly fundraise, and this took time. Unfortunately, it’s a little bit like high school out there — when I was trying to raise seed rounds I saw numerous cases of junior employees at venture capital firms getting their startups funded faster and on better terms than mine, because although I was an entrepreneur with prior success, I wasn’t “known”.
2 . Geography plays a huge role.
This has changed somewhat, but when I was raising money for Ranker in the early 2010s, LA just didn’t have a lot of options for venture or angel capital. If you are in Silicon Valley and are in the tech space, particularly if you are socially gregarious, you can draw upon your network to get these intros — the Bay Area is the most hyper networked business area on the planet. Not in Silicon Valley? It’s a lot tougher. I didn’t quite understand the math game of “you need X number of meetings to raise” after I had exhausted the much smaller pool of LA dollars. I also made mistakes in not pursuing New York media investor dollars, mostly because the idea of flying cross-country for meetings when the company was at fragile early stages didn’t seem worth it.
3 . Packaging also isn’t everything but ignore it at your peril.
Unfortunately, when it comes to fundraising, the sizzle is much more important than the substance. Tech startups are often novel, complicated, and mysterious. The average tech investor has neither the inclination, the bandwidth, or the background to truly understand the details of the company they are investing in. Everybody wants to invest in the next big thing and if you can make a case that you’ve got the next big thing with a compelling pitch, you have significantly increased your odds regardless of the actual substance. Think Theranos or Hyperloop One dazzled investors with their long drawn out business plans? Ha. It was all hype and packaging.
If you are like me — more of an operator than a hype person — you hate this part of being an entrepreneur. It can literally take hundreds of hours to get your packaging and pitch tight — and in the early days I consistently made the mistake of thinking “I just don’t have this time to perfect this or hire an outside designer, I should be able to sell it on my passion and the concept”. Mistake. I should have spent that time upfront, it would have enabled me to scale much faster down the road. I can’t stress enough the importance of investing the time and money into a well-designed Powerpoint deck — or product demo — and rehearsing your pitch many times in front of audiences to give you feedback.
4 . The “hotness” of your idea is crucial — timing trumps almost everything.
When it comes to getting investment, having a startup in a suddenly hot sector can make a huge difference. I have seen hundreds of startups that got funded not because of how great the business or entrepreneur was but because the timing was ripe for that particular idea, even if the idea wasn’t first to market. When a couple of companies in a sector (or micro sector) get funded, other investors jump like sheep to additional startups in that area and there is typically a window of 3–6 months when a sector is “hot”.
After that, all bets are off. I made the mistake of thinking that because other startups in my arena got funded a year ago at nice valuations and weren’t executing well, this meant that my “better mousetrap” pitch would work.
Unfortunately, it’s probably far more likely that the underperforming competitors will hurt your chances. Why? Investors tend to pattern-match and will see this as a negative pattern. “Hot” sectors more often than not quickly get cold. How does something become cold? Typically, it’s because a bunch of investors jumped on it when it was hot and some of the startups they funded have already started failing, and/or the bigger names in the sector are underperforming.
“Hotness” is a hard thing to game. It’s pretty hard to know whether your startup is going to be in a hot sector or not when you are exploring an idea, and if your sector turns “cold” it’s almost a certainty that you will have to get by with less, if you can get funded at all. Trust me, I’ve been there. While this is super-frustrating, from the investor’s point of view there is some degree of rationality behind this. It is what it is. I’ve missed a “sector hotness peak” multiple times in the course of Ranker’s existence by not paying close attention to hotness signals.
5. Big VCs need to envision nine zeros, not nine figures.
In the earlier years of Ranker I did well over 100 investor pitches and did have some success — I raised money from a number of great investors, investors who have stuck with me in up and down times. But it was always a slog, never as much money as I needed, and never at a particularly rich valuation. When I got past the seed stage, I spent a lot of time pitching venture firms on Sand Hill Road in Silicon Valley. At these “name” firms, I lost count of how many people told me something along the lines of, “We really like you and you’ve got a great business going, we can easily see you getting it up to 9 figures in value, but we don’t see this as a billion dollar company.”
Hear that over and over and you can’t help but think the world has gone mad. At the valuation I was raising at the time, a 9 figure exit would have given the investors a 5X+ return. But as I learned more over time about how venture funds are structured, I did see some — again, just some — rationality with this thinking, particularly as it applies to giant venture funds.
So, what is the lesson? When pitching, always emphasize just how huge your company could get, even if you know in your heart of hearts this is a very low likelihood. It’s what investors want to hear and frankly, what you’re competing against in the funding marketplace.
What advice would you give to your colleagues to help them to thrive and not “burn out”?
Exercise every day. I personally find boxing is the best stress relief. If you need catharsis, spend an hour hitting padded things hard with boxing gloves!
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Hmm, if there is any one person who probably most helped my entrepreneurial career I would have to say it’s my dad. He would be very surprised to hear this because he was a “corporate man” of his era (climbed the ladder at a big company for 25 years), and often compliments me for having the entrepreneurial brain which he never had.
But when I was growing up, my father was just constantly working. He left for the train before we were awake and didn’t get home until 6:30. Then he would often be catching up on paperwork during family time in front of the TV or even on vacation. He had an unassailable work ethic and always finished what he started.
When that is your experience growing up you can’t help but unconsciously institutionalize it yourself. And my experience as a lifelong entrepreneur has been that, no matter what your plans may be, to make them happen almost all of the time you have to just grind it out. I’ve never had to psyche myself into working long hours and staying focused — it’s just a part of me, and I think I must have gotten that from my dad.
What are some of the goals you still have and are working to accomplish, both personally and professionally?
Personally, I’d love to have more time to ski and snorkel and see more of the natural world with my kids, who are now old enough to appreciate it.
Professionally, I’m really excited to launch Watchworthy, our new personalized TV recommendation app that accurately builds users their own cross-platform watchlist for all their favorite shows and new shows from over 200 streaming services. This is just one example of how we’re using Ranker’s IP in new ways. Watchworthy is built on the backbone of Ranker’s voting data across over 50k entertainment lists. While Ranker has been around for a decade, the underlying data that we have built is the sleeping giant and exactly what brands and studios need now more than ever.
What do you hope to leave as your lasting legacy?
Ranker was built to be the definitive rankings of everything pop culture and more, and my hope is that Ranker continues to serve that purpose — there’s really nothing quite like it.
Separately, our new Watchworthy app solves a problem that is paramount in the times we live in. In my lifetime we’ve gone from 3 TV networks running mostly lowest-common denominator fare to the opposite extreme where we have all sorts of programming for every niche and audience taste. This has created a huge problem — there are simply too many TV shows for even TV critics to stay on top of. And as consumers of entertainment, we want to spend our valuable time on the best content for our tastes. Watchworthy solves that problem — in literally 30 seconds. If Watchworthy becomes a utility app for everyone who needs guidance through the future of entertainment, I will be more than happy with that legacy.
You are a person of great influence. If you could start a movement that would enhance people’s lives in some way, what would it be? You never know what your idea can trigger!
This interview is during the very unique time of the great Coronavirus quarantine, but under normal circumstances, my answer would be the following, so I’m going to stick with it.
Climate change is the greatest threat to life as we know it. I don’t have a magic plan to fix it, and I think that it’s going to take thousands of different “ideas” and changes in behavior and consumption, but I do think it is a solvable problem if humanity starts taking it more seriously. It’s been great to see climate change in 2019/20 receiving the attention it deserves, but it’s still not enough.
Ranker CEO Clark Benson: “Packaging isn’t everything but ignore it at your peril” was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.