Cyriac Roeding - Part 2: From Digital Clocks to Mobile Marketing & CBS Mobile

Intro - 00:00:01: Welcome to The Biotech Startups Podcast by Excedr. Join us as we speak with first-time founders, serial entrepreneurs, and experienced investors about the challenges and triumphs of running a biotech startup from pre-seed to IPO with your host, Jon Chee. In our last episode, we explored Cyriac's early entrepreneurial journey, including selling software at 15 and embracing resilience during his transformative exchange year in Texas. If you missed it, be sure to go back and listen to part one. In this episode, Cyriac brings US on a journey from Texas to Japan, where he pressed the reset button and began bridging the physical and digital worlds in groundbreaking ways. We'll dive into his early fascination with technology, from building a programmable robot in high school to his time at McKinsey, where he developed strategic insights that paved the way for his entrepreneurial career. Cyriac also recounts co-founding a mobile marketing company during the dot-com boom and driving innovative campaigns with brands like Coca-Cola.

Cyriac - 00:01:17: The reset button has been maybe a recurring theme. I literally thought of it as a reset button. I remember sitting on the plane to Tokyo and I thought, okay, the clock is just going back to zero right now. I know nothing about what's going to happen. I don't know that country. I don't know the culture. I don't know the language. I don't know the people I'm going to live with. I don't know anything about this. And it is very uncomfortable. It's very exciting, and it's very difficult at first. I remember the first three weeks. They were not easy. It was very different. And to this day, I thought it was a fantastic experience. You know, there were some things that were so different. I remember being on the subway. In the morning. The subway is so full. In Tokyo, that there are people who wear white gloves, who are employees of the subway line, who push people physically into the subway to be able to close the doors behind them. And when you have a bag with you, you don't need to carry it. You just stick it between you and the next person and it will hold by itself because it's so tight. And yet, you could hear a pin drop in that subway if you had listened because nobody was speaking a word. There were hundreds of people in a single car and nobody spoke a word. That is a completely different world. And nobody makes eye contact, right? Because they're all strangers to each other. So very different, but very interesting. Meanwhile, I was also very interested in technology. What I didn't tell you was that before I went to Texas, I was sitting in the basement of my parents' house. And I was soldering digital NAND and NOR chips to create digital clocks.

Jon - 00:03:08: Wow.

Cyriac - 00:03:09: Because I was super interested in technology. And not just in software, but also in hardware. And in 10th grade, in hindsight, this was actually a pivotal thing. That's why I'm mentioning it. There was a little robot made out of modular pieces that you could build together. And there was a serial interface, a port. That was connected. To a computer through a serial port. So nothing fancy. But it allowed to write a program. Where you would steer the robot's arm to move, and then you could save locations where it was and so on. And I remember looking at this. And I was fascinated with the idea that I could write software code on a screen. That would then physically move an object in the real world. And I could control it with that. I could tell it what to do, and it would physically move. And so the reason why I'm telling you this, this may sound really weird because it seems so obvious. To this day, I'm fascinated with this concept. Because everything that I have been doing since. Has been the intersection of the physical world and the digital world. Where the physical atom meets the digital bit. And that 10th grade experience with that little robot. Was sort of the moment, I think, when I found that passion. And it's never left me to this day, actually. And I'm sure we'll get to that later. The digital clock was literally had a thousand, about a thousand cables in it. It was made of the most basic chips of NAND and NOR chips. Where each chip was defining all you have. And when you have a clock. Not only do you have the display, but you also have logic because it needs to flip over after 12 hours, after 60 seconds. And there were hundreds of seconds. And then I created a second unit with a date. And each month has a different length, right? February, March, April, and so on. That all needs to be hard-coded by chips if you don't provide you software for it. So it was a fully 100% hardware-based solution. Oh, my God. It was fun, actually. But the first one didn't work at all. I made a huge mistake. I built the whole thing. It took me like eight weeks. And then I flipped on the switch. And of course, nothing worked. Nothing worked. And I tried to backtrack what didn't work, right? No chance. There were so many cables, there was no possible chance for me to figure out what didn't work. So I started over from scratch. After all that time, and I build another clock. Only this time, I tested every step before I moved to the next one. Made sure it produced what I wanted before I used that signal as the next input signal for the next one, right? Because it's a rolling signal from hundreds of seconds to seconds to minutes to hours to days to months to year. And all of that needs to work one after another. So at the end, the second one worked because it was very differently designed.

Jon - 00:06:23: Yeah. Yeah. I mean, that's trial by fire. I mean, you tried your hand, you're like, why? And then you give it another shot. And I think a lot of the time too, in like company building, I think people sleep on or underestimate, or maybe I don't know what it is, but just like, I think- This saying, has been stuck in my head. It's like, the secret is that there is no secret. You just have to like, it's like trial and error. A lot of things are trial and error.

Cyriac - 00:06:49: A lot of things require a continuous stream of gradual improvements.

Jon - 00:06:55: Yep. 

Cyriac - 00:06:55: And the result of that is called breakthroughs.

Jon - 00:06:58: Yeah. Yeah. Yeah. Exactly. Tons and tons and tons. And then eventually you kind of reach that critical mass. And, you know, you're wrapping up your kind of academic career, and you're now thinking about going out into the world. And fending for yourself. How did you land your first job? What were you thinking at that time? You know, you just came back from Japan and you're like, okay, like, what's next? 

Cyriac - 00:07:22: Yeah, so I got to put this into context. I'm in Germany here, right? In fact, right now I'm in Tokyo, but I grew up in that environment. And since I was in this environment of business and entrepreneurship, I was fascinated with strategy, business strategy. To me, that seemed like the heart of the whole system, sort of the, or maybe the heart is the wrong analogy, the brains of the whole thing. Sort of the inner core of the brains of a business is this business strategy. So I became obsessed with it. I tend to become obsessed with things, and then I go really deep on that. So strategy, I thought, okay, the place to do strategy is at a strategy consulting firm. It can't be like process improvement. It has to be strategy. So I applied while I was in Tokyo for an internship at McKinsey. The management consulting firm. And of course, I was instantly rejected because they require that you speak Japanese and you can read and write. You know, surprise, surprise. You're not supposed to be illiterate at McKinsey.

Jon - 00:08:29: Yeah.

Cyriac - 00:08:29: Which I was in Japan. 

Jon - 00:08:31: Yeah.

Cyriac - 00:08:32: And so I got rejected. And then I went to the largest European consulting firm called Roland Berger. And they were out of Germany, actually. And they were kind enough to give me an internship. So I actually showed up for my internship in Tokyo. And I worked with Japanese clients. And I wrote a whole paper about what had made Japan so successful and what was the outlook for the economy and so on. So then I went back to Germany and I moved to Munich simply because I love Munich. I don't know if you've ever been there. It is my favorite city in Germany. It's called the Million People Village. Because it's a million people, but in the middle of the town, they only allow, I think, up to five or six floors. None of the buildings are higher or taller, which makes it feel very cozy and beautiful. So it's a very nice place. So I moved there, and I applied to McKinsey again, this time in Germany. But before I did that, I worked as a freelancer for this consulting firm from Tokyo, the German one called Roland Berger. And they put me into the retail section. So retail, and I thought, retail, that's so low-tech. That's not interesting. And then I found out it was super interesting. Why? Because it was so close to the consumer. And from my point of view, the consumer is always right. The consumer is always right. The consumer will ultimately tell you whether something's going to fly or not fly. And consumers have very little patience with you. 

Jon - 00:10:04: Yeah.

Cyriac - 00:10:06: It can't be complicated, convoluted. It has to be glass clear and simple. So there's this whole retail experience thing. Strategy for retail was very interesting. I was sort of the techie guy that they brought on there. There was a big change there. In retail where for the first time, the technology that was available allowed a closer cooperation between the two major parties that were usually adversaries, meaning the manufacturers of the products, like the P&Gs of this world. And the retailers of this world, where you buy them. And technology now allowed suddenly to make this interchange of products much more fluent and better. That have technical implications, but also strategy implications. And Roland Berger's strategy firm, so they couldn't help much on the technology side, but I went out to find them a partner so that they could pitch together with a large technology consulting firm to have them participate in a European-wide request for proposal for this new technology called Efficient Consumer Response, ECR. And we were up against Boston Consulting and all the big guys. It turns out Roland Berger won that thing.

Jon - 00:11:24: Oh, wow.

Cyriac - 00:11:25: And I remember the night before we had submission date, we were still working on the document. And I was then tasked in the morning at 4 AM to get to the airport and fly that thing personally out to Brussels from Munich so that it would still make it on time. And I thought I was like the messenger of this package. It was very fulfilling to me. And we won that thing. So that was Roland Berger. And then after that, I still was obsessed with McKinsey because to me, it was like the brain of the brains. So I applied again. And I barely made it through the interviews. And they took me as a summer associate. And my first job, I asked for a global project. So they put me on a project that brought me back to Texas.

Jon - 00:12:12: Oh, wow.

Cyriac - 00:12:13: So here I was sitting in Dallas. I was to the airport at a hotel for like, three weeks in a row. And worked for a chemical firm on strategy. Chemistry was not really my thing. So then I joined them full time. And my first project became to write a book.

Jon - 00:12:31: Oh, wow. 

Cyriac - 00:12:31: With five other Germans, we were writing a book in English for the American market for Harvard Business School Press, published under their name. And it was about the software industry. The name of the book was The Secrets of Software Success. And we interviewed 100 software companies around the globe to find out whether there are any lasting management principles in an industry where your products are obsolete after 18 months. So we went everywhere. And, of course, also to Silicon Valley. And I will never forget this. When I touched down in Silicon Valley. At SFO and I went to Palo Alto. There is this smell of pine trees in the air for some reason.

Jon - 00:13:18: Yeah.

Cyriac - 00:13:20: And I don't know what happened in my mind, something weird happened, but it somehow permanently connected it to entrepreneurship smells like pine trees. I literally felt like entrepreneurship was in the air and I instantly fell in love with this place. And I thought, I have to move here. One of my meetings, I'm not quite sure why they took this meeting with me, but it was at Kleiner Perkins. It was probably because I was working with large media clients and they were potentially thinking about collaborations for their startups. I remember sitting in the meeting room right next to John Doerr's office. As a visitor, as a guest, I sat in that meeting room and I thought, this is probably where Jeff Bezos came through. And Sun Microsystems and AOL and all these guys that won big, they were probably all here. Because they all got financed by Kleiner Perkins. At the time, this was one of the top venture capital firms in the world, right? And I thought, I have to move here. So then, of course, I was not working there. I was at McKinsey and I applied for a permanent transfer within McKinsey to the Palo Alto office out of Munich. At the time, everybody wanted to go. This was 99. And I got very lucky and it was approved with no return ticket back, a permanent move. Wow. Three months before moving, I quit McKinsey. And just-

Jon - 00:14:50: That is amazing.

Cyriac - 00:14:53: I quit because I had always said, if the right people show up and an idea I believe in, I will quit whatever I do and I will start a company. And so the right people showed up. They were all, you know, most of them were there and we all left and we started a company. And this was out of Munich. And the company was built around mobile devices. And mind you, this was a time when cell phones had green screens.

Jon - 00:15:21: Yeah, yeah, yeah.

Cyriac - 00:15:22: And text messaging was a geeky thing, even in Europe at the time. So we were insanely early.

Jon - 00:15:30: Yeah, yeah, yeah. 

Cyriac - 00:15:31: And our business idea was, I would call it between bad and horrific, because it was essentially auctioning off new products on cell phones without a picture. Through a voice system that described these products that you were about to bid on. And by definition, you had to essentially assume that the product was going to be good. And why would anybody do that without seeing the product, unless it is much cheaper than at the store, which destroys your gross margin on any new product, which is already razor thin. Which means the business model left no margin whatsoever. So that was our business model.

Jon - 00:16:21: Amazing.  

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Cyriac - 00:16:21: I don't know how we got it financed. I guess it was 99 and everything got financed. So then in 2000, of course, the whole thing reversed, the stock market crashed. We had no money left and we had no business model. The other two founders jobs, became to find new money. My job was to find a new business model. I don't know who had the worst summer that year. So then finally, my co-founders actually... Found money on the very last day.

Jon - 00:16:52: Wow.

Cyriac - 00:16:53: Actually, it was one day after we were the last day. And our investors were so kind to not have the whole company fall to them, but rather allow one more day. In the meantime, I had found this thing that I thought we might call working with brands on mobile phones. And to make it short, I thought, let's call it maybe mobile channel marketing or something. And then we thought, oh, let's just drop the word channel. And we ended up with mobile marketing. In other words, there was no term for it. We had to create it. And the first client partner was McDonald's Germany. And our competitors had $5,000 deals, and we signed a $500,000 deal. This was a two-year deal. And it was, at the time, deemed an enormous amount of money for a mobile phone platform that nobody has ever used. And remember, text messaging was just starting to take off. We're not talking color screens. We're talking black and white LCD with a green display background. So that was that. And then we decided, okay, the best way to solve this problem is to not be on the phone until you actually have already seen something. So we went on packaging. And I became obsessed with the biggest brand in the world, which is Coca-Cola. And I thought, if Coca-Cola signs up for mobile marketing, then mobile marketing is established, which is, of course, a complete fallacy. I sort of fell for my own fallacy. And I became very obsessed. And it took me two and a half years to crack the code on Coca-Cola. Who had initially no interest. And I found this amazing guy at Coca-Cola Germany who was open-minded and wanted to try something new. And Chris Burggraeve was his name or is his name. And he and I kind of partnered around this. And the idea was, what if we could print a unique code on every label of 160 million Coca-Cola bottles? And each code on the back of the label is different, and you text it in. And when you do that, you receive a piece of mobile entertainment back to your phone in the form of a wallpaper, a ringtone, or a game. So what happened then? Was that this became the largest mobile marketing campaign in the world at the time. And the kids that were buying these bottles. We're thinking in their head, oh wow, I'm getting a $1 ringtone. With a free Coke attached.

Jon - 00:19:30: Yeah.

Cyriac - 00:19:31: While Coca-Cola thought they're getting a Coca-Cola bottle and they're getting a free ringtone with it.

Jon - 00:19:36: Yep. Yep.

Cyriac - 00:19:37: But regardless, it worked and it drove substantial market share. So we continued that with other brands like McDonald's and with Mars and with Nestle and all these other brands. So then the company actually turned profitable. After all the dot-com crashes happened left, right, and center around us. And when the company turned a profit, I thought my mission was complete.

Jon - 00:20:03: Yeah.

Cyriac - 00:20:04: And I decided to leave and I wanted to move to either Shanghai or Silicon Valley. Because I thought that those two places were the growth centers of the world. So. I embarked on probably the hardest sales job I've ever had because I knew nobody in both places.

Jon - 00:20:21: Yeah.

Cyriac - 00:20:22: And I didn't just want to go and have a job. I wanted to actually lead something and use my experience with mobile entertainment and mobile marketing in the other countries. So I went to both places. And I ended up in Los Angeles at the largest company I ever even talked to by a factor of 30, which was CBS, the television network. And why CBS? CBS had zero people in mobile, and Disney already had 270, and a thriving ringtone and character wallpaper business. Well, and I thought, hmm, so CBS has zero people. Well, zero is a lot better than one or two because it means nobody has set the strategy.

Jon - 00:21:10: Yeah, yeah.

Cyriac - 00:21:12: And so I... Said, okay, I'm going to do this. And the guy who I was going to work for was really cool and said, okay, let's do it. And then I had massive visa problems. I was sitting in an... Empty apartment in Munich on moving boxes for six months, waiting for a visa, and it was almost dead, and I thought I was going to lose my job offer after having fought so hard. Mind you, I had almost no money left at the time because I'd flown around the whole world. I had very little money. I was pretty much out of it. My prior company hadn't been sold yet. So I was pretty much out of my savings. So then in the last moment, the visa process opened. And a week later, I was in LA. So I was so excited and ready to go. I had waited for so long for this opportunity, right? So I came to LA, first experience LAX. I go to the. Avis counter to pick up my car. And I'm sitting, I'm standing in front of this lady and I'm so excited, all talkative. And I said to her, I just arrived in the US. I'm going to live here and I'm going to build a business and join CBS. And she goes, C-33, here's your key. So that was my welcome. So then I went to CBS. On my first day. The guy who had hired me, great guy named David Katz, gathered his team and he said to his team, I've got two pieces of news for you. One is Cyriac has finally arrived. He's here. And two, I'm leaving today. I'm joining Yahoo. To build the entertainment business. So then I was sort of on my own. The next boss didn't really care much about mobile, but there was this president of the network, this wonderful person, Nancy Tellem, who I had only met once, but I thought she was very nice. She was the president of the whole network. And I thought, maybe I'll go see her. Turned out it was her first day of the longest vacation she's ever taken in 10 years of her career, three weeks. She was gone. And. They had given me a windowless office. Nobody had ordered a computer for me. So I was sitting there with a notepad, a yellow pad, and a pencil. And my phone was blocked for international calls. That was my first day at CBS. And I had gotten myself a T-Mobile cell phone in the US because I came from Germany. So I only knew T-Mobile. And I thought it was probably the best one. It was the worst network of the entire US at the time, at least, right? And so I called my sister and it was crackling on the phone. And I said to her. I think this will be a long year. Because, I had told her I'll go for at least a year, maximum three years. So then I thought, okay, I'm already here. I worked so hard to get here. I'm just going to sit down and write a strategy now. So I took my own notebook out and I started writing a strategy for CBS Mobile. And this was so early in the US that they called me CBS Wireless because it had no cable attached. Anyway, so I wrote a strategy for CBS Mobile. And it was... Like six pages long, I think. And then three weeks go by. And Nancy Tellem returns from a vacation. And I was hoping to get five minutes on her schedule after her long vacation because, I mean, she was running the network. But I hoped that she would at least see me, right? Turns out she took 45 minutes on her first day after her vacation for me. We had an amazing meeting. It was like minds meeting. And then we spent the next three years building this business together. And the strategy was very simple. We were obviously behind at CBS in mobile. The others, especially Disney, was way ahead. They were doing a good business with mobile wallpapers, ringtones, and all that stuff. So the strategy was not to catch up at all. The strategy was to leapfrog. To the next generation of technologies in mobile. Because we had nothing to lose, we only had to win. And we had no business to lose or to encumber. So we jumped forward and became the first television network that did mobile video alerts when breaking news happened. That did the first interactive TV shows where people texted in what should happen in the Big Brother house by their own phone and changed the story of the TV show. We started the first mobile television channel, and we created the first CSI game that would call you when you're not playing the game. If you don't show up in the next five minutes, you're losing points because you're a bad agent. 

Jon - 00:26:13: It was like the push notification before the push notification.

Cyriac - 00:26:17: That's right. So before we knew it, we were growing to 30, 40 people and made over 30 million revenue profitable. So then three years later. The time came up for my contract. And I said, if I stay here, it was really a great time. It was amazing, right? But if I stay here. I'm not an entrepreneur. I'm a bullshitter. So I quit. And my then girlfriend, who I'd met at CBS, and now wife and mother of our children, and I, Angel, we took a trip around the whole world. And it was supposed to be just a cool vacation. Because she also quit. And we wanted to just look at crazy, interesting places like Bhutan in the Himalayan mountains and Nepal and New Zealand and South Africa and the Amazon jungle and Costa Rica. But it ended up becoming a trip about how people use cell phones around the world. I took one and a half thousand photos of people using their mobile phones. And it was fascinating. One example, we were in Bhutan at 10,000 feet altitude in the Himalayan mountains. And there were these monks, these young monks in red robes. Huddled over something on the ground, being all excited about something. So I went there to take a peek what they were looking at. And on the ground was a flip phone that was playing a ringtone. And that was their form of entertainment at 10,000 feet altitude. And in that moment, it became very clear to me, this thing goes really deep. This is the next big computing platform. And so then we went to the Amazon jungle in Brazil, offside of Manaus, down the river, right? The Amazon River. There is a village only reachable by little boat of 25 people. There was one washing machine in the village attached to a haphazardly open cable that was running, a power cable running there. You could almost touch it, very dangerous. One washing machine. But there were 20 cell phones in that village. And mind you, they were using 4G when the rest of the world was still on 3G. Because they were leapfrogging everyone else. They didn't have cell phones before 4G. So they didn't have any prior network to replace. So they started with 4G right from the get-go and got the newest technology. Again, they leapfrogged. So I wrote about this experience and I came back to the US and then Angel and I packed up and moved to Silicon Valley. Finally. 

Jon - 00:29:00: Finally. Yeah.

Outro - 00:29:03: That's all for this episode of The Biotech Startups Podcast. We hope you enjoyed our discussion with Cyriac Roeding. Tune in to part three of our conversation to learn more about his journey, including how he navigated the 2008 financial crisis. If you enjoyed this episode, please subscribe, leave us a review and share it with your friends. Thanks for listening. And we look forward to having you join us again on The Biotech Startups Podcast for part three of Cyriac's story. The Biotech Startups Podcast is produced by Excedr. Don't want to miss an episode? Search for The Biotech Startups Podcast wherever you get your podcasts and click subscribe. Excedr provides research labs with equipment leases on founder-friendly terms to support paths to exceptional outcomes. To learn more, visit our website, www.excedr.com. On behalf of the team here at Excedr, thanks for listening. The Biotech Startups Podcast provides general insights into the life science sector through the experiences of its guests. The use of information on this podcast or materials linked from the podcast is at the user's own risk. The views expressed by the participants are their own and are not the views of Excedr or sponsors. No reference to any product, service or company in the podcast is an endorsement by Excedr or its guests.