Gum Wrapper Ingenuity

The Problem

2001 was a tough year for a number of reasons, but at 24/7 Real Media, we were really having an especially difficult time. Our stock was close to being delisted, we were hemorrhaging cash, and we needed to sell everything we could just to keep the doors open.

Over the preceding few years, we had followed the advice of our board and investors to acquire as many other companies and assets as we could. This way we could get big fast and create a stability that our competition didn’t have. One of those purchases was a company called Exactis, which we had bought the year prior for $490 million.

24/7 Real Media was an internet advertising business at its core, and Exactis had these data centers that would help us close a gap that we needed to fill in 2000. But in 2001, we needed cash. The decision was made to sell Exactis, hoping it would put us in a good enough place to survive a little longer.

How long was yet to be determined.

A Sense of Urgency

While a few companies would poke their nose in every now and then to say they were interested in Exactis, for the most part, we heard crickets. Then a data marketing company came along, and all of a sudden, we got a bite. It looked like we just might pull the sale off.

To do this, we had to put a few things in place. Back then, there was no easily downloadable PDF or spreadsheet containing all the company’s data, so if someone wanted to see our books, they had to come to our office to view them in person. Companies in this scenario would set up what was called a data room, which was essentially an empty conference space with a bunch of tables covered with binders, each filled with information. Prospective buyers would come in, walk through the room, flip through the books, and see if everything was to their interest. Then, after a period of time, they would leave and take their knowledge to their higher-ups to make the call.

Now, if you want to sell something, one tactic you can use is to build a sense of urgency. In this scenario, if you were a person who walked into a very clean and tidy data room with untouched stacks of paper, then that meant there wasn’t a lot of traffic in the space from other buyers. But, if the paperwork had been clearly gone through, and maybe it wasn’t as tidy as you might want, that extra traffic showed buyers that they had competition. If they wanted to buy the company, they would have to move fast.

We had no buyers other than this data marketing company and no data room. But we told them our data room was ready for viewing. Within a day, we had all the proper paperwork put together and neatly placed on the tables. Then we acted as if we were buyers, messed up the paperwork just enough, and looked at the room. It was still missing something to give that extra sense of urgency.

Our lawyer took out a fresh pack of gum. He then unwrapped multiple pieces, crumbled up the wrappers, and threw some in the garbage can in the room, and a few more on the floor as if someone had attempted to toss them in the trash and missed. Now the room appeared to have traffic. Visitors had come and stayed long enough to chew gum—maybe even a few pieces—and leave.

And just like that, our sense of urgency was created.

Think Ahead

The gambit worked. The data marketing company bought Exactis from us for $13.5 million, which was enough to keep the dogs at bay for a little while longer.

Would it have happened without our general counsel’s gum wrapper idea? Who knows. But it’s thinking like his that can be the difference between a lost sale and a check.