The bittersweet serendipity that gave these two startup leaders a shared mission in on-line privateness
Many of us notice when we’re being tracked online. Ads related to sites we’ve visited, or topics we’ve researched, follow us around the internet, even on unrelated sites.
This happened to Dan Frechtling, too. But in his case, the subject of his research was deeply personal. It was the cancer treatment facing his wife, Annie. And some of the resulting ads still persist, more than two years after her death in 2020 at age 47.
“There’s a social media platform I can go to today, and I will still see the cancer ads, they’ve got such a profile on me,” Frechtling said.
That experience is part of what gives him a direct interest in his work as CEO of Boltive. The Seattle startup, formerly known as Ad Lightning, recently raised additional funding to expand into a promising new area: automated technology to help brands and publishers ensure that websites and ad platforms comply with privacy laws and adhere to the choices of internet users.
“That’s my own story and why, for me, it’s more than just a job,” Frechtling said.
But it’s just part of the extraordinary personal story behind Boltive’s new phase.
A unique degree of empathy
Longtime Seattle tech and business leader Scott Moore, the former Microsoft, Yahoo, and Cheezburger executive who co-founded Ad Lightning in 2016, made an unusual decision in May 2021, shifting to a new role as Boltive’s chief financial officer, and handing over the reins as CEO to Frechtling.
The reason: Moore’s wife, Valerie, was undergoing her own treatment for terminal cancer at the time. Moore wanted to be able to focus on his wife, and on their family, during what would turn out to be the final year of her life.
By coincidence, she had the same type of cancer as Frechtling’s wife did: a form of non-small-cell lung cancer not associated with smoking.
Frechtling worked for Moore previously at Seattle-based marketing firm Hibu, and they had stayed in touch.
They also happen to be neighbors. Their wives connected and supported each other during their respective cancer treatments.
When Moore decided it was time to step back, Frechtling was ready to move on from his prior role, and prepared to become a first-time startup CEO.
Frechtling also had experience in the field. He was previously president of G2 Web Services, and after it was acquired by Verisk in 2017, he expanded its cybersecurity solutions to include the ability to detect bad actors in e-commerce.
After extensive discussions, they came to the conclusion that naming Frechtling and shifting Moore to CFO was the right move for both of them, and for the business.
The result has been a unique degree of empathy and understanding between them, across their business and personal lives.
As the co-founder and former CEO of the company, Moore has been able to mentor Frechtling as he takes on the role for the first time.
Frechtling, at the same time, has been able to help Moore navigate the immense personal challenge from the loss of his wife in February of this year.
“When a person goes through what Dan and I have both been through, as primary caregivers to somebody who’s terminally ill, that is a really unique experience that’s almost impossible, in my experience, to convey to somebody who hasn’t lived it,” Moore said. “Oftentimes, it can be kind of awkward because people feel really bad.”
Frechtling was “incredibly empathic to me in the first few weeks and months after Val died,” Moore said. “It’s just good to know that you’re working with somebody who gets it when you’re talking about something like that.”
Moore did not experience the same kind of targeting that Frechtling did for cancer treatment ads, but remembers his wife being targeted by them, further illustrating the problem that the company is now tackling.
From Ad Lightning to Boltive
The company was founded in 2016 as Ad Lightning. It was one of the first startups incubated and spun out of Seattle’s Pioneer Square Labs. Sinclair Digital Ventures, a division of Sinclair Broadcast Group, led the initial funding in the company. Other investors include Seattle’s Flying Fish Partners.
Ad Lightning started by detecting and flagging disruptive ads, such as videos in display advertising slots. It later expanded to combat malicious ads, a capability that landed customers including NBC Universal, Buzzfeed, Univision, and TripleLift.
Later, the company added the ability to detect ads that specific publishers might consider objectionable, such as swimwear ads on faith-based websites.
Now, as Boltive, the company is continuing to offer those Ad Lighting products, but it’s also expanding to address the problem of surveillance ads, which put publishers at risk of violating digital privacy laws by collecting and sharing personal information without user consent.
The company likens its new solution, Privacy Guard, to a virtual “secret shopper.”
Working with brands and publishers, it creates synthetic personas that appear to websites as authentic users. The technology tests consent management platforms to see if they are properly configured and implemented to block the collection of personal data. It also looks to see if targeted ads are served to the synthetic persona elsewhere online.
Beyond online publishers, there’s also a risk to brands, as demonstrated by a recent $1.2 million settlement between beauty products brand Sephora and California Attorney General Rob Bonta. Boltive estimates that the risk to brands expands the company’s total addressable market from $500 million to $5 billion overall.
“It’s the brands that are most at risk, more so than publishers, when consumers’ data is being siphoned and shared without their consent,” Frechtling said.
He said the new technology arose from three trends:
- Customers: One of the attributes in the company’s dashboard for its core ad quality software is the number of trackers connected to ads by third parties that sync user data. “This attribute has attracted the attention of clients concerned about the flow of consumer data,” Frechtling said.
- Regulation: There has been a huge regulatory push to strengthen consumer privacy online, starting in Europe and California and spreading to other states and countries. Gartner estimates that 75% of the world’s population will be covered by modern privacy regulations by the end of 2024.
- Technology: Apple’s addition of app tracking transparency to iOS and Google’s deprecation of third-party cookies are both transforming the digital advertising market in an attempt to address privacy issues.
“So we have a confluence of three factors all pointing in the same direction — online brands are grappling with data privacy as never before, and current technologies do not create a path forward,” Frechtling said.
‘A smoke test for the internet pipes’
Boltive sees two primary culprits in the ongoing misuse of consumers’ personal data.
- Data skimmers: Entities that appear to be legitimate participants in the advertising bidding process actually position themselves to capture data that they use to create profiles and dossiers of site visitors, which can be extremely lucrative when assembled in bulk.
Boltive detects both. If its system turns up signs of problems, it then provides a detailed forensics report, documenting the breakdown, for its clients to forward to their vendors to investigate and address.
“It’s like a smoke test for the internet pipes,” Frechtling said. “Where’s that crack in the pipes where the smoke is coming out?”
But because the tests don’t use real consumer data, no one is harmed.
Boltive has signed up several paying corporate clients for Privacy Guard. It’s also rolling out its service to consultants at a top 5 global firm, to serve the firm’s clients.
The company uses a tiered software-as-a-service pricing model, based on the number of advertising campaigns monitored or domains protected.
Boltive has 25 employees. It recently raised a new funding round, with $4 million so far from River SaaS Capital and another $3 million expected from other accredited investors, which will bring the company’s total cash raised to date to $14 million. Wendy Jarchow from River SaaS Capital is joining the Boltive board.
Given the fact that privacy regulations are still evolving, including new California regulations set to take effect next year, the primary competition Boltive’s new technology faces is manual efforts to find data leaks.
“These do not scale and are ripe for automation,” Frechtling said. “That’s why we’re raising money now, so we can stay ahead of the competitors that will inevitably appear in 2023.”
Ultimately, the goal is to ensure that consumers’ data isn’t used against their wishes. As someone who has felt the personal impact more than most, Frechtling says he’s confident this privacy problem can be fixed by identifying how websites leak data.
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