Aquto CEO Talks Parenting, Tech Bubble, Mobile Engagement

Susie Kim Riley likes to compare entrepreneurship with childbirth.

“When you’re in the throes of it, you’re like, ‘Oh my God, I’m never doing it again,” the mother of two says. “Then you have the kid, things are wonderful, and you’re like, ‘Hey, let’s do it again.’”

Just as Riley and her husband decided to have a second child, she has helped create multiple companies. They include Maker Communications, which was acquired by Conexant in late 1999 for nearly $1 billion in stock; Camiant, which Tekelec purchased for more than $130 million in 2010 before getting bought by Oracle three years later; and her current startup, three-year-old Aquto, which this month raised an $8 million Series B round.

Her spouse, Bart Riley, is also a serial entrepreneur—he co-founded A123 Systems and is currently working on a stealthy energy storage company, according to LinkedIn.

“Serial entrepreneurs are like parents who have more than one kid,” she says. “You get amnesia. You forget all the pain, remember all the good things, and do it again.”

Riley studied electrical engineering and computer science at Cornell University, where she met her husband. She has spent 25 years in tech, mostly with companies tied to the telecommunications industry. That’s the case with Boston-based Aquto as well, where she is founder and CEO.

The company’s software enables smartphone and tablet users to receive sponsored mobile data. It does this through two ways: “zero-rating,” where consumers can download and use apps, view advertisements, and look at content without racking up any data charges; and data rewards, where mobile data gets immediately added to a user’s wireless account in exchange for taking actions to engage with businesses, such as buying a Hershey’s chocolate bar or booking a flight through Expedia.

Aquto gets paid to manage those processes by mobile carriers, like AT&T and Verizon, as well as by the marketers, app publishers, and other businesses trying to reach consumers.

The 25-person company is providing its service in the U.S., Europe, and Asia, with plans to deploy in Latin America this year, Riley says.

Susie Kim Riley

Susie Kim Riley

Xconomy caught up with Riley to learn more about Aquto, her approach to entrepreneurship, and her thoughts on talk of a tech bubble. Here are a few highlights of our conversation:

Xconomy: The value of your product is pretty clear-cut for consumers—they agree to watch an ad or make a purchase in exchange for mobile data rewards. But what’s the selling point for cell phone carriers and advertisers?

Susie Kim Riley: For advertisers, we have seen that users are much more engaged with their content. For example, video campaigns we have run for brands have consistently shown 50 to 100 percent improvement in engagement—which means they are watching much more of the content than the control group (those users whose content was not sponsored).

For carriers, they now have real business with the rest of the mobile ecosystem of app publishers, marketers, etc. They can add value to the ecosystem by enabling them to get more engagement out of users over their mobile device.

Users can engage with more content without worrying about data usage.

X: Is the appeal of these rewards different for mobile users in the U.S. than it is for users in other countries?

SKR: In the U.S., about 75 percent of users are on some form of limited data plan, and over 60 percent of users in a given year at one time or another have either exceeded their data plan or received usage notifications. So, there is heightened sensitivity around data usage.

Outside of the U.S., in the majority of countries, a significant percentage (50 percent or more in many countries) of users with smartphones do not have data plans. Our goal is to make mobile connectivity more accessible to all those users.

[Editor’s note: Riley says these stats come from a combination of company surveys and data shared by mobile carriers.]

X: You’ve spent 25 years in the tech world. What’s the biggest lesson you’ve learned about startups?

SKR: It’s much easier to start something today than it was 20, 10, or even five years ago. Back then, we didn’t have … Next Page »

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Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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