RATESPECIAL INTERACTIVE
Pasadena
BUSINESS: Internet advertising agency.
FOUNDED: 2007
TWO-YEAR GROWTH RATE: 7,258%
2010 REVENUE: $13 million
David Tam could have been just one more victim of the housing bust.
In 2008, he was operating a residential mortgage brokerage when he noticed something funny: A side business he had started was growing rapidly.
So he changed his game plan.
He closed First Life Mortgage to focus on RateSpecial Interactive, an online advertising and marketing agency.
“Even though we had 95 percent of resources in mortgage, the online marketing company was outpacing the other,” said Tam, 33, co-founder and chief executive of RateSpecial. “Focusing on the Internet side made more sense. There was more opportunity there.”
That’s an understatement.
In 2008, RateSpecial had $200,000 in revenue; last year, it was $13 million. That’s a more than 7,000 percent growth rate, making the company the fastest-growing private company on the Business Journal’s list this year by a wide margin.
Tam, an L.A. native who earned an M.B.A. from UC Irvine and had a sales background, co-founded RateSpecial with partners Bertrand Seow and Thomas McErlane.
“We were duking it out day in and day out. We were easily pulling 16-hour days on the mortgage side,” said Seow, the company’s chief technology officer. “When we really decided to focus on RateSpecial and immediately saw the opportunity there, it absolutely felt great.”
The company’s clients are largely drawn from the financial services industry and include Goleta’s Nations Info Corp., one of the country’s largest foreclosure information services companies, and London-based credit information provider Experian PLC, for which it advertises the company’s free credit reports.
RateSpecial drives traffic to its clients through a combination of display advertising, website design and marketing. It employs traditional banner ads as well as ads integrated into online services that might include an invitation to visit a site.
The company also has created brands for clients. In the case of Nations Info, RateSpecial took that company’s existing brand, Realty Store, a website that provides foreclosure listings, and created a website called UltraForeclosures.us. The two brands work in tandem to represent the same product, but use slightly different advertising approaches.
Tam said many clients won’t trust ad agencies to do website design and rebranding like what RateSpecial accomplished for Nations Info.
“We’ve earned that right. We really take pride in understanding their business,” he said.
So has there been an overriding principal behind the company’s success?
Tam thinks so. When he and his partners shifted exclusively to online advertising in 2008, they were faced with a crucial question: In which industry should the company look for clients?
The company ultimately decided to look to the financial industry, where Tam and McErlane had experience and contacts.
“We don’t venture out into areas we are unfamiliar with, such as health and beauty – more of a distraction there,” Tam said.
Indeed, he has looked to the late Steve Jobs for inspiration, taking stock in the Apple icon’s maxim that one should “say no to 1,000 things” in order to be a successful innovator.
Early on, every idea sounded like a good idea,” Tam said. “We really had to stay focused and excel in a few key areas.”
