Vinny Lingham: Playing the Angles

Vinny Lingham’s career as a marketer started early. In kindergarten, he made money buying Thundercat stickers and selling the popular ones. In his early teens, he switched to cricket cards and then Magic The Gathering cards. In college, he partially financed his undergraduate studies by playing pool and managing and booking bands.

So it’s not difficult to see why the entrepreneurial aspect of online marketing appealed to him. In 2001, he caught the bug while he ran the search marketing department for a company that marketed on behalf of online casino clients, which had a large paid search budget.

Two years later he left to start his own company. Lingham is the founder and chief strategy officer of incuBeta, an online marketing company based in Cape Town, South Africa. incuBeta owns the super-affiliate Clicks2Customers.com, a paid search marketing company, incorporated in the United States, which specializes in directing targeted traffic to its clients’ sites and is one of Commission Junction’s top five performers.

With more than 50 full-time employees, incuBeta is on track to generate eight-figure commissions this year, as well as over $100 million in sales for its merchant partners. The company was a recent winner of Business Day’s Most Promising Emerging Enterprise in 2005.

Lingham started the company in 2003 with two friends and his then-fiancee, Charlene Troskie, who is now his wife and focuses on new development within the company’s campaign team.

It’s not easy working with your spouse – especially when you’ve been married just over one year, recently bought a house and make an international business trip every month. But Lingham feels that the toughest part of being employed at the same company is trying to keep shop talk from seeping into their home life.

Still, the line between his business and personal life is blurry. The self-described workaholic says he is online 24 hours per day and works 60 to 70 hours per week. He is often toiling at home into the night to keep up with clients on the west coast. Lingham estimates that 25 percent of incuBeta’s clients are in the United States, where he travels every two or three months.

Despite all the traveling, Lingham does not feel that his company’s location in South Africa is a disadvantage.

“Cape Town is considered the ‘Silicon Valley of South Africa.’ And we’re pretty close in time to London,” he says, which is where 60 to 70 percent of incuBeta’s clients are based. The only real issue is having to hop on a plane to get the interaction with clients he feels is so important. “The power of face-to-face is indefinable. But we’re a global company, so we’d have to travel wherever we were.”

Only one thing about traveling so much really bothers him. “I hate airports – taking my shoes off, waiting in queues and taking my laptop out of its case.” He’s also learned not to combine leisure travel with business trips, ever since work forced him to cancel the holiday portion of a trip last year. He did, however, manage to get away for his honeymoon, where he was “forced not to work for 10 days. I only signed on twice in all that time ” it drove me a little crazy.”

When Lingham does have spare time, he likes to spend it watching movies, including “Tsotsi,” which not only won this year’s Academy Award for Best Foreign Language Film, but was co-produced by Moviworld, a company that received investment from TEIM Ventures, the same private equity firm that provided incuBeta with crucial development capital.

Lingham is also a big reader – he’s read all of Dan Brown’s books and loves them. He’s also a big Tom Clancy fan. And his favorite book, Rich Dad, Poor Dad by Robert T. Kiyosaki and Sharon L. Lechter, reinforced his existing viewpoint that there is a huge difference in the mindset of the haves and have-nots.

Originally from East London, a city on the east coast of South Africa where his parents still live, Lingham is happy only when he’s learning. In addition to his more-than full-time job, he is also studying for his Master of Science degree, which will likely conclude with a thesis on incuBeta. He’s also interested in getting an M.B.A., but only in the U.S. His ideal school would be somewhere in the Silicon Valley, where he’s interested in spending a few years to grow the business.

Lingham was recently invited to join the Society of Industry Leaders, which provides knowledge and information to Vista Research, a Standard & Poor’s company. He also belongs to Mensa, defined on its website as “the international society that provides a forum for intellectual exchange among members.” But Lingham thinks the formula for selection is flawed. “I know my IQ but I don’t put a lot of faith in it. It’s your mental age divided by your chronological age,” he says, claiming that means the older you get, the lower your score becomes.

He considers Virgin founder Richard Branson a role model. “We’re similar in many ways, but I’m not as crazy as he is. He has a fantastic brand. Some of his companies have worked and some haven’t. But he does it because he enjoys it – for kicks. It’s a passion. It’s not about the money.” Other mentors include a former manager who inspired Lingham to study at Harvard one day, and Bono of the Irish rock group U2, “because of the work he’s done in Africa and for Africa.”

Lingham is a fourth-generation South African, whose ancestors hail from India. He does not consider himself religious, but says, “I was born Hindu, but I tend to focus more on the spiritual aspects of the religion (Karma, etc.), as opposed to the religion itself.” As for politics, he thinks he has “far too much candor to be a politician, but maybe I’ll become president of South Africa one day. Who knows?”

Proud to Be a South African

Lingham says there’s a lot of erroneous information circulating about his country in terms of drought, poverty and AIDS. “The Rand Water Board has one of the top three water supplies in the world,” he says, referring to the 100-year-old water utility that services South Africa. “Our economy is growing at 6 percent a year and all the urban and semi-urban areas, which house 70 percent of the population, can be considered ‘firstworld’ by many standards. The AIDS contraction rate is actually at a decline in South Africa, according to the latest statistics,” he says. And while the CIA World Factbook lists the poverty rate as 50 percent, Lingham says that is incorrect because “it doesn’t take into account PPP (purchasing power parity) or currency differentials.” Lingham says, “The poverty rate has dropped to around 20 percent, which is exceptionally low for a developing country, but is still obviously not ideal.”

Lingham also feels his country’s low life expectancy rate of 43 years is misleading. “The average is skewed by the number of AIDS babies that are born that die at a young age,” he explains. “It’s not an ideal number, but I guess that’s one of the things that the government is working on. Countries in Africa need relief from first-world debt in order to focus on issues like healthcare and poverty. Bono deserves his Time Person of the Year award for the work he has done in order to drive this forward.”

Lingham loves the weather, the people and the sports of his country. “I will probably spend a few years living abroad before finally settling down and having kids, but South Africa is my home and I truly enjoy living here – it’s a beautiful place.”

Lingham’s passion for his country is matched only by his passion for his business as a performance marketer. He even has a blog – VinnyLingham.com – where he discusses industry issues and events that he deems important to the online marketing community.

The Company He Keeps

In the beginning, Lingham and his associates needed a name for their new company. “We were looking for a word that embodied a start-up company looking for opportunistic ways to grow Internet businesses,” he says. Unfortunately, their first choice wasn’t available. “Someone suggested the name incubator, but obviously, the .com was taken. But incuBeta wasn’t – and seeing as technology is almost always in beta, it stuck.”

Clicks2Customers.com’s traffic comes from search engines – primarily Google and Yahoo. The company works with three affiliate networks: Commission Junction, TradeDoubler and LinkShare. Lingham’s company has had a relationship with CJ since its inception three years ago and was honored with the network’s Award for Innovation in 2004. Lingham’s site works with merchants with defined metrics (leads, sales, etc.) to generate traffic.

But don’t call him an affiliate.

“The term ‘affiliate,’ as it relates to online, was coined back in the day when Amazon and Barnes & Noble were paying commissions for clickthroughs on banners that resulted in sales for their sites. That was almost a decade ago,” Lingham says. “We’re performance marketers.”

Lingham wants incuBeta to become “the biggest performance marketing company – not just an affiliate.”

Given his fervor for the industry, that seems like a real possibility. “Nine times out of 10, we beat in-house and agency bids because our margins are better,” he says.

Lingham says he feels incuBeta is almost guaranteed to succeed, since the company has built-in motivation – it uses its own money to make clients’ projects work. The company is also growing and expanding. It’s opening an office in the United Kingdom this month, which will join the small setup in Woodland Hills, Calif., the Cape Town headquarters and the office in Johannesburg, which is considered the financial capital of South Africa.

Still, finances were once a huge challenge.

“When we started out, cash-flow management was the worst green-eyed monster,” Lingham says.

The difficulties stemmed from paying Google up front for search engine marketing costs, then waiting 60 days for a check.

“You can’t pay your debts with future profits,” he says.

The second-biggest issue was growth – the number of people working at incuBeta increased so rapidly that it became hard to create a functional business culture. But it was Lingham’s previous career ups and downs that made it all possible. “incuBeta wouldn’t have been started unless I had the experience I had. I believe if something doesn’t work, try something else. Failure is only a bad thing if you don’t learn from it.” Another challenge for incuBeta is being able to react to new developments in the search marketing field.

Flexible and Focused

“This industry is new and young, and when the rules of the games change every month, you have to be flexible,” he says.

“I think our biggest success has been in the paid search marketplace. Our focus is on the end user and delivering high-quality and targeted advertising. Whenever the search engines, especially Google, make a move to release new features or functionality, like quality scores or the affiliate policy, which relate to the user experience and relevancy, it always improves our performance because we both understand that user relevancy is the key driver in the search marketplace, and our business focuses on such,” Lingham says.

One thing that isn’t a problem at incuBeta is the dress code. Since only one of the company’s clients is based in South Africa, the office is pretty casual. “Cape Town is a beach town,” says Lingham. “Some employees are surfers and come to work after their morning run. Jeans are considered formal,” he jokes. Despite the laid-back environment, incuBeta is serious about business. Lingham has faith that his company can achieve great things and believes it is well on it way.

His definition of success includes helping South Africa lower its high unemployment rate (estimated to be 25.2 percent by the CIA World Factbook) by adding jobs to the local economy. He would also like to be a philanthropist, “investing in social community projects and education projects, and finding a cure for AIDS.” incuBeta is still a bit too new to be able to give much back to the community, but Lingham says they do participate in “charitable donations. It’s something we want to do more of going forward.”

Lingham says the Internet has made that a real possibility.

“Marketing has always been a relationship thing with no accountability. Performance marketing is different. The beauty is information for results – you can see what you’re getting for your money. If you can find things that satisfy advertisers, you can be successful. You can do it yourself. It’s the cradle of innovation on the Internet.”