Fabrice Grinda on growing Zingy into a $200 million business

The entrepreneur and angel investor relies on a business-oriented approach to select, build and grow successful companies.

Fabrice Grinda is one of the world’s leading Internet entrepreneurs and investors, with over 150 exits on 500 angel investments. The first time I interviewed him for this podcast, way back in 2005, the then-31-year-old French native was in the process of packing up his office at Zingy, the mobile media start-up he’d founded in 2000. After growing Zingy to $200 million in revenue, Fabrice had sold the company for $80 million in 2004. Eighteen months later, he was stepping down as CEO and looking ahead to his next adventure.

At the time we spoke, Broadband, iTunes and podcasting were all new, and Fabrice saw it as “the beginning of a hundred year revolution.” He recognized that there were going to be huge opportunities ahead for the entrepreneurs who were willing to take the risks and go all in on a big idea. And as Fabrice’s story shows, you don’t have to be the one who comes up with the groundbreaking product to become a wildly successful entrepreneur. Listen now on Apple Podcasts, Overcast and Spotify. If you love it, please help more people find it by leaving a review!

“I don’t come up with brilliant new ideas, but I’m pretty good, once I find an idea that I like, at executing against it and building and growing the company.”

While many of the entrepreneurs I’ve interviewed for Venture Voice fit the mold of the founder with the big idea, Fabrice Grinda is the first to tell you, that’s not him. In fact, he says he looks more like a businessman on paper than a creative type. He just knows that he doesn’t want to work for anyone else. 

His entrepreneurial journey goes back to his college days at Princeton, where he made several hundred thousand dollars arbitraging computers between the US and France. By the time he graduated, though, he feared that he’d missed the boat on the internet and that all the great ideas had already been taken. So he went and got his real education in business, working at McKinsey & Company. As you’ll hear in this interview, that experience proved invaluable in helping him develop his own selection criteria for evaluating business ideas.

“Most of the people that started businesses in Europe were not going at it with a very business-oriented approach.”

With two years at McKinsey under his belt, Fabrice was ready for his own venture. After using his selection criteria to assess a few different American business ideas that he thought could be successful in Europe, he determined that an auction site like eBay had the most promise and would fit well with his own interests and capabilities. In June of 1998, he went all in on the idea, selling his New York apartment and entire stock portfolio and moving back to Paris, where he started Aucland, an eBay-like site for Europe, and Deremate, a similar site for Latin America. 

Fabrice’s business acumen gave him a leg up when so many other auction sites had failed to gain traction in Europe. He understood and focused on the critical business success factors as he structured and built the companies. Since the time of this interview, I’ve gone on to found my own companies, including the PR platform Muck Rack, so it was particularly interesting to listen back to him talking about the importance of public relations in getting the liquidity engine going. As they started getting press, they started getting buyers and sellers, and then, he says, “we started getting approached by every VC on the planet.” He would ultimately raise over $120 million in venture capital.

Fabrice sold both companies in 2000, with QXL Ricardo buying Aucland in an all-stock deal, and then, “unfortunately, the stock promptly crashed.” When all was said and done, Fabrice ended up making $700,000. In the interview, he describes the five mistakes he made with that first business, and they’re excellent lessons for any entrepreneur.

“I had to become an entrepreneur again.”

In October 2000, Fabrice started looking for his next venture. The mobile media market was just beginning to take off, and he saw an opportunity to bring the ringtone business concept to America. In July of 2001, he founded Zingy. The site would launch just a few months later, on September 5. 

Building on the lessons he’d learned from his previous company, Fabrice was able to grow the company to over $200 million in product sales by 2005. But it wasn’t all smooth sailing. There was no VC funding for B2C telecom companies at the time, so Fabrice invested every last penny he had into the business, raising smaller amounts from friends and associates. By early 2003, with the business still losing $100,000 a month and no funds available to cover payroll, “The easiest place to find money was my checking account,” he says. As bad as that sounds, Fabrice was undaunted. “By then,” he explains, “I think I’d sown the seeds of success.” In August 2003, a half-million dollar check from Sprint would prove that his instincts were right.  

“So I sell the company and blow out all the numbers that we ever expected to blow.”

In just a couple of years, revenues at Zingy skyrocketed to over $4 million a month. The VCs came calling, and acquisition offers started rolling in, but Fabrice decided to build and grow the company rather than sell right away. Once he did decide it was time to cash out, he hired an investment banker to put the company up for auction. In April of 2004, he sold Zingy for $80 million to the first bidder, a Japanese company that had previously approached him with an offer of $40 million. Fabrice, who owned 53% of the company when he sold it, stayed on as CEO for about 18 months, during which time they achieved and exceeded all the objectives he’d set out for the business. “And that’s why I stayed,” he says. “I stayed because it was a lot of fun.”

“You succeed a lot better if you do something that you like.”

Fabrice is the consummate businessman, but like most successful entrepreneurs, it’s not all about the money for him. Instead, he’s driven by the desire to create a great business, work with interesting people, grow with them and have fun. In fact, he says, most people who build a business just to make money don’t end up being as successful because they’re not willing to sacrifice it all. When I interviewed him in 2005, he told me that not much had changed in his life with the sale of Zingy. He was still hungry for the next venture and looking ahead for new ideas, correctly predicting that devices would become much more powerful and create a plethora of new business opportunities for entrepreneurs. 

While it’s true that taking the leap might mean maxing out your credit cards and dipping into your own checking account to cover payroll, Fabrice’s advice is to go for it. As he reminds us, “We do this because it’s fun.”

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