It’s not often in the startup world that you get to build the same company twice, with better technology the second time around. But that’s the basic story behind Extreme Reach, a Needham, MA, company that launched this January with a vision of helping video advertisers and their agencies distribute their ads to cable networks, TV stations, and Web publishers.
The principals at Extreme Reach—CEO John Roland, chief operating officer Tim Conley, chief technology officer Dan Brackett, and vice president of sales Patrick Hanavan—all worked together at FastChannel Network for seven years, until they sold the company to Irving, TX-based DG Systems in 2006. FastChannel helped to pioneer the digital video advertising distribution business, and made $30 million a year at it, Roland told me last week. But at the time, the task required 200 employees, a $15 million centralized data center, and dedicated video servers at 1,200 cable and TV stations across the country.
Extreme Reach, by contrast, has 17 employees and no data center—it stores and serves video ads using cloud-based storage and processing at Amazon and Nirvanix. The startup’s 10,000 clients don’t need any specialized hardware, either.
Roland says when he and his group of fellow FastChannel alums saw what was becoming possible thanks to cloud computing technology and declining bandwidth costs, they couldn’t resist the temptation to build FastChannel over again—but to “completely change the model of how we do it.” They knew they’d be up against their old company, which is now known as DG FastChannel, but Roland says they felt they’d have the advantage, since DG now relies on a satellite-based distribution system and dedicated hardware.
Extreme Reach’s cloud strategy puts it “two generations ahead” technologically, Roland says. Thanks to Amazon and Nirvanix, “I’m able to expand to massive amounts of bandwidth and storage whenever the business demands, and if I don’t have the volume I can go down—so I don’t have any cap-ex [capital expenditure] requirements,” he boasts. “It’s a 100 percent software model, and I can do it for about 20 percent of the cost of
