FreeWheel

Authors:
Jacob Alderman, Zachary Harker, Brian Herman

Innovation Framework:

Diagram-Freewheel

Founded in 2007, FreeWheel has become the premier advertising platform providing targeted ad insertion to on-demand and online video streaming services. Over the next seven years FreeWheel grew rapidly until it was acquired by Comcast in 2014 for $360 million. The company’s software innovated by providing a unifying platform that works across many distribution channels. It runs on website-based streaming services, like Hulu. FreeWheel also provides insertion to more traditional channels such as Comcast’s X1 platform, and various other on-demand providers.

FreeWheel’s innovation may seem like a no brainer today, but in 2007 it was barely much more than a theory. Most people structured their lives around the media they were consuming. Streaming and on-demand turned this structure upside down. Rather than consumers scheduling their lives around content, they fit content into their lives. While media companies were ready to provide their product through new channels, the advertising industry was not prepared to monetize this effort. Enter Freewheel, a simple overarching solution to a complicated problem.

However, innovation on the product or service level is not enough to keep a business afloat in Silicon Valley. The company must be constantly self-renewing, or rather searching for the next big break, in order to survive in the competitive market. FreeWheel’s success is due to this realization. When they initially launched, the software wasn’t perfect; through listening to market feedback, the engineering team restructured, and added features, which optimized the platform.

FreeWheel’s growth was substantial enough to get noticed by Comcast, and the company’s hiring has been explosive since then. The company went from one hundred eighty employees when they were purchased in 2014 to just north of four hundred today. The acquisition has given Freewheel the capital needed to make these hires, which in turn allows them to execute two key functions.

The first is the ability to take greater risks on new hires. Prior to the injection of capital from Comcast, each Freewheel hire had to pan out. They needed every single person to be brought on board quickly to be able to support their rapid growth. Now the company has the resources to hire talent just to have new employees on standby for the next big development cycle.

Other than the ability to take greater risk on new hires, the capital from Comcast has forced Freewheel to changes their processes. The flexibility and lack of structures that can be present in a start-up would run a larger company into the ground. This is the tipping point Freewheel is at today. As the company has more than doubled in the last sixteen months, since the acquisition, their processes did not change as they scaled. Freewheel had some breakdowns in communication, and inconsistencies with roll out because the company had outgrown the operating mechanisms. Today Freewheel has innovated these mechanisms to match the company’s current size and growth trajectory for the future.

The media industry is in a state of disruption. As traditional distribution channels are rapidly being replaced by new online sources the commercial delivery systems must move with them. Freewheel had an innovative idea at the right time and has continued to improve their product. As long as FreeWheel continues to innovate their product and watch competitors, the company will continue to grow and flourish. Fortunately, the acquisition by Comcast gives them the resources they need to do so.

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