Inc. Magazine 09.2019

● ● ● ● ● ● SEPTEMBER 2019 ● INC. ● 21

from Playboy and Howard Stern. Tempe12

had a website with photo archives and

decent traffic—but no efficient way to make

money. In 2008, Freestar’s other co-founder,

Chris Stark, joined Freedman, taught him-

self to code, and started scaling Tempe12’s

online ad business. Other publishers noticed

and asked for help, so Freedman and Stark

launched a consultancy—DigitalMGMT.

“Smaller publishers would get requests

from an advertiser to spend money on their

website, and they didn’t even know how to

sell it or how to serve it,” Freedman remem-

bers. He and Stark could help. They had no

secret formula, no proprietary technology,

but they were crafty and entrepreneurial

and understood an industry that was evolv-

ing every month.

“The biggest problem we had at that

point was that we’d take a client from

making five grand a month to 50 grand, and

some other company would come in and

buy them,” says Stark. “Our success meant

having to always find new clients.”

In 2014, Freedman and Stark set out

to raise around a million dollars and then

spent most of it purchasing nine small

publishers—webdesignledger.com,

webresourcesdepot.com, a stock photogra-

phy site called lostandtaken.com—thinking

that they’d “juice the revenue and sell them

off,” Freedman recalls. It was the birth of

Freestar—and it was a big mistake.

Almost immediately, Freedman and Stark

realized that publishing a swimsuit calendar

didn’t give them any real editorial expertise.

They also realized that focusing on scaling

their own websites put them in competition

with the sites for which they consulted.

But around the same time, Stark began

experimenting with a new technology that

was revolutionizing online advertising:

header bidding. Until then, many web ads

had been bought in a split-second auction

process that went like this: A publisher sent

out a request to advertisers to bid on an ad

space, and the software would automati-

cally accept the first qualifying offer. Ads

could be sold in real time—but publishers

couldn’t weigh offers against one another,

potentially missing the best ones. Publish-

ers also had little sense of who was buying

ads, which left their sites vulnerable to

shady operators. “It was as if you were

selling your car at an auction, and they let

only one person into the room at a time,”

Stark explains. “That person could offer

whatever they wanted—and you had to

either accept or reject their offer.”

With header bidding, a snippet of code

sent a request to all potential advertisers

simultaneously—and then selected the best

offer. Suddenly, publishers earned more

from each ad, and they had more control

over which ads ran on their sites. A decade

after Freedman started dabbling in ad sales,

Freestar took off like a rocket.

“The beautiful thing is, when you start

making people more money and helping

them run their businesses better, they typi-

cally have pretty big mouths,” says Freed-

man. “Word travels quickly.” Today, Freestar

works with more than 300 publishers,

including Barstool Sports, Snopes, and

Fortune.

Coindesk, which covers all things

cryptocurrency, saw ad revenue increase

300 percent in the first month it worked

with Freestar, says Jacob Donnelly, the

publisher’s managing director of digital

operations. Freestar, he says, has made it

unnec essary for Coindesk to hire anyone to

handle advertising operations. “That lets

me think more strategically about revenue

generation,” he says, “which is huge.”

Freestar generates its own revenue by

taking a small percentage of the ad dollars

that flow through its technology. The com-

pany hauled in $37 million last year and

expects to cross the $100 million mark

soon. It now employs 40—including a new

face up top. Freedman and Stark aren’t big

on job titles, and neither was ever formally

CEO or president. About a year into the

company’s breakout growth, the founders

tried to hire Kurt Donnell, a well-regarded

media executive in their hometown of

Phoenix, but failed to bring him on.

Two years later, they tried again, and

Donnell joined as president this past Janu-

ary. What changed Donnell’s mind? “They

had executed on everything they said they

were going to do two years prior,” he says.

And, he adds, “the growth was just

astonishing.”

TOM FOSTER is an Inc. editor-at-large.

Companies on the 2019

Inc. 500 are ranked

according to percentage

revenue growth from

2015 to 2018. To qualify,

companies must have

been founded and gener-

ating revenue by March 31,

2015. They must be U.S.-
      based, privately held,
      for-profit, and indepen-
      dent—not subsidiaries
      or divisions of other com-
      panies—as of December
      31, 2018. (Since then,
      some on the list may
      have gone public or been
      acquired.) The minimum
      revenue required for
      2015 is $100,000; the
      minimum for 2018 is $2
      million. As always, Inc.
      reserves the right to
      decline applicants for
      subjective reasons. Growth
      rates used to determine
      company rankings were
      calculated to three
      decimal places. There
      were no ties on this year’s
      Inc. 500.

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