Ryan Weber has a shy and reserved manner, and almost never finishes his own sentences. It’s hard to tell whether his brother, Rob, notices he talks over Ryan on purpose, or if this is how every conversation with identical twins goes.
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Fun Fact: Rather than live lavish lifestyles, the brothers use much of their wealth for their angel investment fund, 32 Degrees, which aids mostly tech and advertising start-ups.
While they may appear in sync, beneath the surface is a healthy and sometimes fiery competitiveness.
Growing up, “we were always trying to one-up each other,” Ryan says. Rob relates a childhood story of how he ripped a leg off a chair and jabbed Ryan in the arm after losing to him in a video game. “We don’t like to lose,” they both say.
The 34-year-olds’ competitiveness has fueled NativeX, a business built on video games, which generated 2012 revenue of more than $50 million. The mobile native advertising platform creates ads that integrate the user into the experience of applications and games, rather than “tacky banner ads that everyone ignores,” Rob says. It creates advertising transitions and designs that are individually customized to coincide with the content of users’ games. The company is in its 12th consecutive year of profitability and has about 120 employees in offices in Sartell, Minn., Minneapolis, and San Francisco.
“We speak very candidly with each other,” says Ryan, who leads product development, while his twin leads business development. “In a lot of companies, you don’t have that level of trust between executives. You can’t have more trust than in your identical twin brother.”
They also had to have just as much trust in their older brother. In 2000, the twins, along with their brother Aaron, launched Freeze.com, working out of their dorm rooms at St. Cloud State University. The website served as a free email service that provided clip art, wallpaper, screen savers and a directory of other free content. It made roughly $1 million in revenue its first year from online advertising and membership subscriptions, averaging a little less than $100,000 a month in revenue.
The three brothers had outside guidance in Brian Schoenborn, an attorney at Hall & Byers in St. Cloud. Schoenborn had a lake home in the same neighborhood as Young Sohn, the current president and chief strategy officer of device solutions at Samsung. Once Schoenborn introduced Sohn to the Webers, Sohn pooled about $300,000 in seed funding the same year Freeze.com launched.
But Freeze.com’s success didn’t last long. Ad rates in the industry began to plummet as the bubble popped By mid-2002, the Webers’ profits had plunged 85 percent. Revenues were only 15 percent of what they were in the past, Ryan says, and they had to deplete most of their angel funding and savings. They had just opened an office in St. Cloud, but were forced to lay off a third of their employees.
Ryan says at this point, the business was close to shuttering.
The solution was to change the way it advertised. Contrary to their old CPM advertising model, where NativeX was paid based on the number of impressions advertisers used on their site, they employed affiliate marketing, so advertisers paid NativeX based on commissions to promote their product. They began sourcing ads from affiliate networks and evolved into their own affiliate network. Profits began to soar once more.
Meanwhile, the Webers were still in college. “We lived like normal students,” Ryan says. “We saved money, we boot-strapped it and we continued to fund the business through its own profits.”
In 2006, they sold 30 percent of the company—roughly $15 million—to Boston-based private equity firm Alta Communications to diversify risk and boost liquidity. Most of this money was distributed among the three brothers; Rob and Ryan own just more than 50 percent while Aaron, who left the company in 2007 to launch his own startup, is the next leading shareholder.
Until 2010, NativeX, which was rebranded in March 2013 from W3i, primarily focused on serving ads to help monetize the demand for free PC software and websites. Once the iPhone shipped, advertising platforms had to run at high speeds to catch up with the app craze. The Webers shifted their focus to a mobile platform that would support apps. They introduced a “freemium” model for mobile apps, which allows users to download games, which the brothers monetize through micro-transactions or advertising.
Within roughly two years, Ryan’s product development team of three produced the company’s first mobile app, Apperang, which paid users to download mobile applications. The app is now defunct, but Ryan says they developed relationships with mobile app advertisers and learned about the technology to support mobile apps, which steered them in the right direction.
“There’s no reason you can’t do something like we did here, and there’s a lot smarter people than us around the Twin Cities,” Rob says. “But it’s not just going to fall in your lap—you need to be driven.”
What’s vital to their success is the time they spend on personal development, Rob says. When he goes running, he listens to tech podcasts. Both read up on psychology, analytics, design and leadership in their spare time.
They don’t spend their fortunes lavishly, they say. They both live suburban lifestyles. They married within two months of each other, and each had their first child within two months of each other. Ryan has a lake home in northern Minnesota stocked with a boat, JetSkis and a four-wheeler. Rob takes family vacations.
Their biggest investment, they say, is their angel investment fund, 32 Degrees, which mostly aids tech and advertising startups. They also own two commercial properties in central Minnesota.
The future of the company and, in turn, their personal wealth, will be shaped by the mobile app ecosystem with a focus on where their competition and passion first started: games.
“If we’re the leader in this ad technology for native games, I believe that’s a billion-dollar business or greater,” Rob says. “I guess we’ll put it to the test.”