Interview: CEO Jerry Hug Talks About Accelerating Growth at SITO Mobile

About a year ago, Jerry Hug took over the reins of Jersey City-based Single Touch Systems, becoming the company’s CEO after a short stint as interim CEO. During his interim period, Hug oversaw the company’s name change and rebranding to SITO Mobile, closed a financing deal with Fortress Investment Group (New York, N.Y.), and began the acquisition of DoubleVision (New York, N.Y.).

Formerly a company that offered only SMS marketing options, SITO Mobile now addresses location-based mobile advertising as well, thanks to the DoubleVision deal. SITO Mobile is growing, having just doubled the size of its Jersey City offices, and may need to find additional space in its current building. When Hug took over, the company had 16 employees. Now there are 51.

SITO Mobile has been located in Jersey City for four years. “We chose Jersey City as our headquarters because it has easy access to Manhattan,” Hug, a New Jersey native, told us. “We work with a lot of the big advertising agencies right across the river.” He added, “There is an incredible amount of talent here for all types of our business needs.”

The company is continuing to hire, especially in sales. “We are always looking for talented advertising and media sales people.” In addition, Hug said, “We have also decided that we have gotten to the critical mass where we should hire a human resources person in-house. We had typically outsourced that role or it’s been a duel function of our CFO. However, he is now operating a much larger business. We are going to bring on a senior-level person in HR who has experience scaling a technology business with an entrepreneurial culture.”

NJTW: Tell us about SITO Mobile today.

JH: SITO Mobile is a mobile media company. We operate a mobile engagement platform that primarily has two products, the first being in mobile marketing though SMS, and the second a location-based mobile advertising product. The mobile ad business is executed through mobile applications. We serve ads to mobile users within their mobile apps in real time.

NJTW: What were three goals for your first year as CEO?

JH: I became interim CEO starting in August 2014 and was permanently handed the job in September 2014. So I am now approaching my one-year anniversary. The first of three primary goals we wanted to focus on was completing and accelerating a shift to mobile advertising. A year ago we had just completed the acquisition of DoubleVision. This company was our point of entry into the mobile advertising business. It was doing about $1 million in revenue, and our goal for this year was to grow that business to about $8 million in revenue.

A second goal was to raise the profile of SITO Mobile and list it on one of the major exchanges, either the NASDAQ or the New York Stock Exchange. We had traditionally traded on the Over-the-Counter Bulletin Board, but we felt that the company was poised to be traded on a bigger stage.

Lastly, we wanted to diversify our revenue and our revenue concentration away from our largest customer. A significant portion of the legacy SMS business was due to our relationship with Walmart. Whenever you have a concentration in revenues, investors tend to focus on a potential risk element.

NJTW: And did you achieve your goals?

JH: We are approaching our year end, and I’m pleased to say we are on target to achieve our revenue goal. We did launch on the NASDAQ on August 10 of this year. That was a fun day for us, the board, our employees, shareholders and key stakeholders. For the first time last quarter, our mobile advertising business revenue eclipsed our mobile marketing businesses. We have successfully taken the concentration out of the mix and diversified across customers and businesses goals.

NJTW: What changes did you make to get to where you are now?

JH: We set milestones that we felt were achievable from a corporate perspective and would put the company on a different playing field and growth trajectory. To achieve our revenue growth and diversification goals we had to hire a sales force, which we’ve successfully done. We started the year with five sales people and we are going to end the year with about 16 or 17. Onboarding experienced sales people who have sold media and advertising was one of the drivers around our being able to achieve the goals.

We also prioritized differently. The mobile advertising business is very different from the mobile marketing business. It has a different sales process, there’s a different sales cycle, it has a different set of benefits and return on investment to the customer and it has a totally different way of executing from a technology perspective. The acquisition of DoubleVision was our initial strategic move to begin to diversify our revenue, and then we had to go out and really drive the revenue growth in that business to achieve our goals.

NJTW: So what were some things that weren’t so successful during your first year?

JH: Fortunately, we achieved all the milestones we set out to achieve. One of the things we would have liked to have done more of is go international, which we think will be a huge opportunity for us. We are looking at the UK as a potential growth driver. We didn’t accomplish this during my first year as CEO, but we definitely have our eye on international expansion in the next year.

NJTW: We hear that you are a big believer in establishing a corporate culture. Can you explain?

JH: One of the things I consistently do is to talk to existing employees and make sure that new employees are aware of what I call the three core principles of our corporate culture. Everyone needs to buy into these principles, and if they don’t buy into them and don’t agree with them, then SITO Mobile is probably not the right place for them to be.

1.     First, this is a “check your ego at the door” organization. I don’t have any patience for egos within this company. I myself don’t have an ego, and I expect everyone working here to check their ego at the door because we are all working together towards a common goal.

2.     Be accountable to your peers and to yourself. Accountability is a big piece of what has to happen here on a daily basis because different business groups need to rely on each other in order to be successful. Everyone needs to understand what we are trying to accomplish, and the pace at which we are trying to accomplish it. People need to get their work done and be accountable to one another.

3.     Stay paranoid. We operate in a very, very fast-paced, fast-moving mobile technology world. On any given day you can open up The Wall Street Journal or The New York Times and there will be information or a story about how mobile usage and mobile technology is changing the way we consume media, communicate with one another and interact with one another. It’s a very, very fast-moving ecosystem, and we all as a company need to understand that we have to stay ahead of that pace in order to continue to deliver great mobile products and solutions to our customers. Being paranoid and worrying about what is coming around the corner next and trying to anticipate that, I think, is definitely something we’ve instilled in here, and it’s allowing us to grow very rapidly.

NJTW: How would you describe your leadership style?

JH: I believe in empowerment. I am passionate about hiring smart, talented and motivated individuals and empowering them to succeed and thrive within our environment. I don’t believe in micromanaging. I believe in trying to get people to perform at their highest level. I think if employees understand what the mission is, what the corporate vision and goals are, and you give them the leeway to success, they will be driven and will succeed on their own.

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