From Summly to Silicon Valley: The teen who sold his app for $30 million

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Nick D’Aloisio was still a teenager when he sold Summly, the news summarization app, to Yahoo soon after our interview in 2013 for a reported $30 million. D’Aloisio is also the youngest known entrepreneur to raise venture capital — at just 15 years old .

D’Aloisio has won several awards and accolades, including Innovator of the Year by the Wall Street Journal, and is included in Time magazine’s “Time 100.”

[Below is an excerpt from a 2013 interview I did with Nick, published in Mad Men of Mobile: Leading Entrepreneurs and Innovators Share Their Stories, from Siri to Shazam.]

Newnham: What were you like pre-Summly, and what first got you excited about technology?
Well, I was always quite inquisitive about computers. My parents aren’t involved in technology at all: my mom’s a lawyer, and my dad works in commodities trading, so there wasn’t really a technological background. But what I have discovered — and I think the reason I got drawn into technology and computing — is I like creating things, and when you’re a young child, you don’t have the dexterity or skill set to manifest your ideas into reality that well. Like take drawing but on a computer, that imbalance isn’t there anymore because you’ve got the tools that professionals have, and you are able to create output that’s of a high quality.

So, I actually got more into movie making and 3D rendering when I was like eleven or twelve. There was this professional software called Autodesk Maya, and I got into doing that. I mean, it wasn’t that good, but I was teaching myself. So I guess the two things I really enjoyed doing when I was younger were creative output and also teaching myself things. I have taught myself math before; I’ve taught myself programming; I used to do a lot of stuff on the side of school; and so I think those skills helped get me into programming in this app world.

Newnham: How old were you when you got your first computer?
At nine or ten, I was too young to get a Mac myself, so it was Mom’s that I ended up using, and then I just started using iMovie, which comes with iLife, progressed to Final Cut Express, which is like this intermediary and then after that, I eventually persuaded my parents to get a MacBook Pro because I needed the RAM and CPU to execute these programs. And then I was really into 3D rendering and Final Cut Pro. It was also around that point, in 2008, when the App Store was announced and for some reason, I was really drawn to it, probably more from a business opportunity than a creative opportunity.

Newnham: How old were you then?

Newnham: When did you realize that the path you were going to take was going to be different from your peers?
From as long as I can remember. When I was five or six, I used to live in Perth, Australia, and I was really into astronomy, which I get from my dad. I would spend all my spare time learning about astronomy, and it wasn’t like kid’s level; it was kind of university level - really weird things in the universe, and, to do this day, I don’t really have an interest in universal space or the cosmos or whatever, but it was just this idea of teaching myself, I have always enjoyed learning and knowledge.

I am quite an obsessive person, so I get into something and stay with something. It’s not like a short attention span, but I get very immersed into one thing, do it, and then I might move on to something else. It’s just this getting into something, and sticking with it until you get that output you desire. So, I guess I’ve never been normal, but because of the App Store, I was alongside the biggest publishers which excited me because it gave this equilibrium that you wouldn’t find on any other platform before, really — even on the internet because you still needed marketing to get a website well-known. This was the first real marketplace.

The very, very first app I did for the App Store was like a Steve Jobs app. See, this is the obsession again: I was very obsessed with Steve Jobs at that point. The app was Steve Jobs quotes, but it didn’t get accepted; it was called Steve Jobs Voicer or something, and what it did was just play quotes, and they didn’t accept it because of some weird thing. You know Apple; they’re known for having these really strict guidelines but the first one I did that got accepted in the summer of 2008 was called Finger Mill, which was a treadmill for your fingers. It was just an image with some sound, and you used your fingers to run on the treadmill. There wasn’t much source code.

Newnham: How old were you when you did this app?
Twelve. It was very basic, low-level coding, but it was more the idea. I did it all myself, and I made £79 ($127) the first day it was up, and that excited me as a twelve-year-old; that opportunity you wouldn’t have otherwise. I think the ecosystem is better now; it’s more encouraging for new people to come to it because back then, there weren’t many resources available online or even just in paper because it was so new. Whereas now, if you want to go and learn how to code for iPhone, there are a lot of books. It’s really good: there’s a nice social element to it, a lot of people online helping each other.

So, I dabbled with apps on the side of school, in the summers, for one or two years, and then it got more serious in about late 2010 when I did my first — what I call “proper” app called SongStumblr that was a geosocial music discovery app. The idea was that you’re in the same room as someone and you want to see what song they’re listening to, so it used Bluetooth to connect. I saw those apps more as technical overcomings, so I would learn how to use Bluetooth, for example. The next app I did used Facebook; it was called Facemood, and it would detect the mood of your Facebook friends with an algorithm. So, that was when I was first introduced to natural language processing — or that aspect of it.

Newnham: Did you set yourself these challenges with each app?
Yes, it was kind of like looking into different areas of technology, and Summly ended up being summarization for me, which is extremely niche. Summarization, although it has been around in academia for about fifty years — no one had ever commercialized it. It was really niche, abstruse, and for some reason, it wasn’t being integrated in the mainstream, and I think that was because there wasn’t a use case. There weren’t mobile phones with limited screen capabilities and there wasn’t the abundance of information there is online today. Those two elements have really helped propagate Summly — because we are doing Summly, for those two precise reasons.

Newnham: When did you first get the idea for Summly and how did it translate into a business?
: I got the idea in April or May of 2011. It wasn’t like it just came to me. This is the thing: I had been thinking a lot about this process. The idea didn’t just come like a lightbulb. It took a few months, and it was quite hard. I was trying to do a new app. I was also revising for some exams (GCSE mock exams) at this point, using Google and Bing a lot, and it was at that point that I realized that the archetypal search interface had not changed in about fifteen years, especially on mobile. I was like, “This looks really anachronistic. Why hasn’t it changed?”

I was thinking about how you could show results in a more interesting manner and expressive to what the content was about, and then I thought about textual summaries, which is looking at languages as though they’re mathematics. It’s statistical, and it’s like, “How can I get the relevant points from this passage without necessarily understanding the meaning?” I had done a lot of languages at school, which helped. I had done Mandarin and Russian out of curiosity. I did Mandarin for three years, and I did get quite good at it. Mandarin is syntactical, very structured. You have verb, object, noun; there is ordering in a sense, so you have to adhere to those structures. And that’s how we do the summarization — looking at English mathematically.

What we did with Summly — which is different from anything else — is we’re the first to yield high-quality results that consumers would accept. Summly is an app that goes to hundreds of thousands of people that are consuming the content, so we wanted to make it really legible and readable, so, we came up with this very scalable system. We built a test, a summarizability filter, because not everything is summarizable in the current architecture; certain articles are just not written in a way from which you can take candidates and form a summary, so we detect that. We’ve done a lot of training and have a lot of data that we’ve used to come up with a rule-based filter that tells us if something is summarizable or not.

Newnham: And what if it’s not summarizable?
We just discard it and put it into a database that we will look at in the future. If it is summarizable, we will then test the output, and if the output is good enough, we will produce two different summaries.

Newnham: How does the system know if it’s good enough?
It’s automated, so what you do when you train it is you get humans to write reference summaries and you get the algorithm to compare the reference summaries with their own summaries, and then you start trying to make these mutations in the algorithm to get the computer summary as close as possible to the human summary. It is able to test for two key metrics, which are recall and precision; it’s an AI thing, in general. It’s kind of like, “How much information did you keep from the original article in the summary, and how precise was the summary?” We’ve improved what we think was the industry standard on this by about a factor of 40% because of this filtering process and logic.

It was just me to start with, but not anymore. We are working with the best scientists in the world, so we have a bunch of PhD people at the Stanford Research Institute working on it, and we hired in the person who wrote the original books on summarization, who had actually retired as a Professor. So, we have the best people in the world, really, for summarization.

That’s the thing with Summly. It was my idea, but the whole time we’ve been working with the best in the world, from investors, team, product people. Everyone’s really helped.

Newnham: I was going to ask how you grew your team. Can you talk me through the funding process that allowed you to grow Summly?
To their credit, Li Ka-shing’s fund just reached out, and they didn’t know my age; they just knew it was a good idea. They had read a TechCrunch article on Trimit — the name of the app before we changed it to Summly — and they reached out, so I explained that I was fifteen but they actually saw that almost as an encouraging sign because I was “native,” so it gave me the ability to see insight into new avenues of the industry that hadn’t been exploited.

Newnham: How did you get the article into TechCrunch?
I just reached out to some journalists. Really, what happened is Apple featured Summly as a New and Noteworthy app, and that’s the number one thing you want to get if you’re an unknown. It’s a stamp of validity that this is good enough for Apple to use as a showcase of good design and product.

So, Li Ka-shing’s fund invested $300,000 in the seed round. We’ve been very careful to keep Summly intentionally lean; we’ve only raised about $1.5 million into the company now overall, but I think what accelerated this journey has been having such a high-profile and respected investor come in at that very early embryonic stage who was then able to get advisors onboard to help mentor me. This was a very unique circumstance, in that I was only fifteen at that point. And even now, at seventeen, the delta between fifteen and seventeen is huge, and with the experience I now have, I am lot more seasoned. Back then, I had no idea.

We have all these angel investors now, a network of individuals — some of whom came through the original investor and others not. It varies: Stephen Fry, for example, is known for reaching out to me through a friend; whereas Ashton Kutcher and others were more through Li Kashing’s other people.

We also have a lot of angel investors in the Valley because it’s like when one gets in, they all become interested. But you have to have a very good product; people say there’s this clique, but it’s not true. If you don’t have a good product, no one’s interested, fundamentally. So, when you do have a good product, it does help because when one comes in, they’ll all follow, and we have about fifteen now. They don’t own that much because it’s angel investment, so they all put in around $25,000-$50,000. Ashton put in $100,000, so some people put in more and some put in less, but overall, those figures were the average. It’s a useful scenario because they get to learn about technology; they get to help us; we get to use their contacts. So, it’s a mutually beneficial thing, which is great.

It has been a fascinating experience learning how all of that world works and how to handle investors and the whole process there. And then the product has also been fascinating. The number one thing I did that I think was wise was to get, through some of my advisers, was a Chairman; basically someone who was a very experienced business person, an industry veteran — Bart Swanson, who had been at Amazon and then Badoo. Then, myself and Bart really started finding people and growing the team. Bart hired his old CTO, and I was able to find the scientist; we found one of the best designers on the planet for iPhone and that’s why Summly has won the design award, why we won one of the best apps of 2012 by Apple, and why we were featured in over fifty countries. Those accolades are totally unprecedented for a UK company.

Newnham: A lot of Summly’s reviews do talk about the design of the app. Can you tell me about the process of designing Summly?
I have always been passionate about design, things like typography, graphic design, iconography. All those things have always really fascinated me.

I started off marketing Summly as a technology company intentionally because, unfortunately, investors are getting to the stage where design is almost a given. It’s become something that everyone should have as standard and not new, whereas technology still has that hole. So, I knew I had to market Summly first as really good technology. That’s how I got the original investment, and that’s how I launched the first demo of Summly, as a very technological demo. Then, I wanted 1) to let my passion for design come out and 2) I wanted to spin it into a more consumer-facing product because I thought, “Now, we have attracted the right people for investment; let’s go big-time for the App Store.”

So, we spent eight or nine months just on the UI, UX; we have a lot of gestures and animations in the product that are very different. I wanted nothing about this app to be traditional, so, if you look at the app, the experience, the technology — everything is novel. I like the idea of doing something no one else has done before. It would not excite me to have built upon a previously-implemented idea and just done it a bit better. I like to reinvent.

We have brilliant reviews — 4.5/5 star reviews on the App Store — but some people don’t get the gestures; they don’t like it; they don’t get it or understand it. And that’s cool. I mean, it’s not made for everyone. It’s not arrogant, but we went out to do something, which was to push user interface to another level on mobile — to push technology to another level — and I think we’re on the right track for doing that.

Newnham: What are the most important lessons you took from your previous apps to Summly?
I am technical, but that’s not my passion. I saw the coding as a means to an end and not the thing I wanted to do, but I still kept involved with it. The thing I learned the most was that it’s about the App Store ecosystem and how to play the game. Ranking is so important, and getting featured by Apple is so important for example, we launched on a Thursday so that we got featured on day one.

Playing the App Store correctly is so much more fundamental than the product itself because if you can’t get the discoverability and visibility, it’s not even worth playing this game. The way you do that is even down to the way you do the keywords, the App Store description, the tweeting, the marketing, who you get involved, the press. We got to number one in the whole store two days after launch, which I don’t think has ever happened for a news app. We were the number one free app for a few days, even above YouTube.

I think I’ve got the idea now — how to generate the perfect storm for it. Yes, there’s the media element to it and my age helps, but it’s just the perfect storm of getting the right people to tweet, getting the right journalists to write about it, getting Apple to help. All of those things got it to number one, and that’s quite rare now because the system is so saturated. When I first started, there were 3,000 apps. I launched a piece of junk, but back then, the App Store was built around new releases, so everyone got visibility on the front page. But now, it’s like you can’t even get visibility on new releases in your own sub-category. It’s just impossible.

Newnham: What does Summly have that is different from other news apps?
I think it’s the concept more than the implementation. I think it will end up being the implementation, but it’s the idea of being able to summarize anything or having this concise, efficient, easy way to consume content, and people want that. Whether it’s there today is a different matter. It’s on the right track, and I think what we’ve done with Summly has definitely awoken the industry to summarization, and I am proud of that. If summarization ever takes off, whether it’s ourselves, or we sell the company and it’s integrated, whether it’s another company doing it — even if it’s one of the big guys — we were one of the first to the party, and that’s great. That’s innovation. That’s the only thing that has been driving me. It’s not the money; it’s not the credibility. It’s just getting out there first.

Newnham: Your deal with News Corporation has obviously had a massive impact on the app. How did you strike such a deal?
Wendy Murdoch has been helping us, advising us. From about seven months after we started, she heard about us and reached out, and NewsCorp were very excited about this because they are looking at experimenting with different publisher models and I think Summly has all the right components for a new publishing model. The summary is a new piece of content that is adding value to the original article and doesn’t exist in the original article. It’s this new entity, this new form of content that obviously a publisher can monetize off. It’s engaging with a new audience they wouldn’t otherwise have, which is young people.

I may have subconsciously built this app for young people because I am young, but it wasn’t one of my main focuses in building it. My main focus was to make some noise and disrupt. I enjoy doing that. We’re not the only guys; there are a few other guys in the publishing space that are doing this, but Summly has awoken everyone to short-form content, different user experience, and giving everything away for free, basically. Summaries are free, and then the idea is you pay for the full story. That’s an interesting model because it’s not really iTunes for news, but it kind of is. It’s that pay per story.

Newnham: In terms of the future, what are your plans to monetize the app?
We could do that, but it’s not really my focus. The honest truth is you build to sell, and that’s how I have always seen how a company works. You build so that at one point you can sell. When people say they are building for the long term, it actually doesn’t make sense to do that because if you are building for the long term, you’re also building to sell. You have to build up all of the assets in the business, credibility, have it desirable for other people, in order to generate your own value anyway. So, you are always building to be valued and sold.

On that basis, I have always realized with Summly that it’s probably going to be one of those things where it’s more of a feature or product than a company or business. It’s a great technology; it’s a great product; it’s innovation. Whether or not there is a viable business solution — well, no one really knows that. Even with Facebook, it took four or five years for that to really emerge, so, similarly with us, we’re building with the goal in mind of beefing up the technology, the product, the IP, the design, the concept — and then, if monetization has to come at a certain point, it will come.

Yes, we have ideas and projections, but the real goal right now is to just get as many users as possible in front of the application and as good quality reviews and feedback as possible.

Newnham: What else lies in the future for Summly?
There’s the Android app and maybe a tablet experience. I think there is such an opportunity still. I know news is a very bad space in terms of money, with companies going out of business, but there’s a massive opportunity, taking business models aside. It’s such a fragmented market right now; there isn’t like a Facebook for news. There isn’t a $5 billion news experience company yet. There’s a few trying to get there, like Flipboard, but they haven’t hit it yet. No one’s hit it.

Now, that excites me and I think we’re on a hook that no one else has. You know, we’ve got that extra characteristic of the tech angle, of the NLP [Neuro Linguistic Programming] route, the summarization, that no one else has quite managed to get to. The real question for us for the future is are we better off being integrated into — and this is where I have always seen Summly — a Google or Twitter, into one of these platforms where, all of a sudden, overnight summary is going to be everywhere online? That excites me. It’s like the acceleration will just continue to go on that exponential curve if we do that because it means we will have arrived — because we will be too big for someone else to come along.

So, that’s why, if I was ever to sell, it would be because I can see the added value in going to a company like that, which will still give us autonomy but will allow us to play with a platform of hundreds of millions — if not billions — of people. That’s just totally exciting to me — a great learning experience and just something I think would shake the space up. It’s always cool to be a startup, but when you suddenly join a bigger company and then implement, then you can start dominating a space. So, that’s the long-term goal right now — to dominate.

Newnham: What excites you about the future of mobile?
Design is getting better and better, just in general. Now, every app that comes out has a certain benchmark to hit — clean, crisp, minimalistic. So, it’s getting there.

What else excites me? People are coming out with more and more innovation, I think. More innovative ideas that I wouldn’t have thought of. There’s some real world to mobile applications like TaskRabbit, or you can get a courier from your phone. I mean, I love Hailo right now. I find I am spending a lot of money because it’s so convenient and easy — a brilliant idea. Apps like that are just awesome.

There’s also a relationship between real world and mobile that you can’t have with a computer because you are in the real world with your phone, like in the park. There’s that element of geolocation and augmented reality and all those things.

I think it’s going to be harder, though, in the ecosystem. It’s going to be convoluted because there’s just so much noise right now. Every day, there is a big app that launches. I think three years ago, everyone was like, “Go to mobile” but I don’t think that’s the case anymore. I think you really need to have a very well-formed product because people are competing. People can’t use more than five or six apps a day — there’s like this median — and then it’s just technologists using them, not common people, and you want to get with average consumers who probably have just one social app, one information app, messages, email. It’s just really simple habits that you want to get into.

Newnham: What advice would you give to other young entrepreneurs looking at breaking into the mobile space?
You have to just do it. Do a prototype, whether you pay someone to do it or you have a mate do the development or you do it yourself. You have to go in with something to show. No one listens when it’s just an idea or a PowerPoint; you have to have a working product because that’s when you can say, “There it is. I can see how this is going to work because I can play with it.”

Then, if it is a good idea, it will get discovered, so there is no need to freak out. It will work because Apple will pick it up, and it might get written about; someone will contact you. So, just work on the idea, work on the implementation, and both of those things you can do pretty much for free yourself. Once you feel it’s ready, then you push it out and see what happens. There’s definitely still room for really good ideas.

Newnham: Are there other areas of mobile you would like to explore, past Summly?
There’s a lot of different things. Music personalization and discovery I don’t think has been executed that well. There’s lots of radios and channels, but algorithmic personalization — really, down to what are the brainwaves, and how do you signal what music you are going to like in a different genre? Those genuine algorithmic solutions to music discovery really excite me. That would be really fascinating to look into.

It’s like taking AI approaches or real technology approaches to quite abstract concepts, something you wouldn’t inherently think can be done by a machine or mathematically.

Newnham: Do you consider yourself an entrepreneur?
I am more of a creator. I don’t really see myself as an entrepreneur. I just like to create things. Yes, I love business, and that’s what motivated me, but it was more like I did a lot of movies, a lot of 3D rendering because I like to create. That’s why I started doing apps, and yes, I made it pay from day one, but it was also like I wanted to go on the App Store and see my app; I wanted to be recognized for doing this. Also, the opportunities were there. It will take another ten years for an App Store opportunity to come around again, I think.

Newnham: Finally, who inspired you growing up, and who inspires you now?
Cliché answer, but Steve Jobs. And that was before Steve Jobs was like the Steve Jobs in 2005/2006. Yes, he was known in technology, but he wasn’t what he became. So, he genuinely inspired me a lot. Nowadays, there’s a lot less-known entrepreneurs in the Valley who excite me or I look to for mentorship or inspiration, but no one in particular at the moment. It seems like the industry is lacking a Steve Jobs at the moment.

There’s people like Jeff Bezos who are doing amazing things at Amazon and people turning around various companies — like, Marissa Mayer is someone who maybe will be awesome. She’s awesome as it is, but she could go down as a legend, like a Jobs, if it goes through with Yahoo.

Trailer for Mad Men of Mobile book which features D’aloisio as well as the founding stories of Siri, Shazam, AdMob, ustwo et al

This edited (for brevity) excerpt is taken from Mad Men of Mobile (2013), available on Amazon. #madmenofmobile

My second book, a collection of one-on-one interviews with female founders and innovators in tech — Female Innovators at Work — will be released through Apress in late 2016.

For my filmed interviews with inspirational tech founders and innovators, subscribe here.

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