Cotter Cunningham of RetailMeNot
Disrupting the way the world sees bargains
Written by Deborah Hamilton-Lynne
Photography by Weston Carls
Chances are good you may be one of the 22 million mobile unique visitors or one of the 7 million active email subscribers who happily grab the deals and discounts RetailMeNot provides daily. With more than 5,000 partners and 70,000 brands, this Austin corporation generated $4.9 billion in global sales in 2018.
You are one of the lucky ones if you happen to work there: RetailMeNot has a 91 percent rating on Glassdoor and is consistently named one of the best places to work in Austin. A recent visit to their Congress Avenue headquarters made it abundantly clear that the rating is well-deserved. Walking around the space while shooting founder and Chairman of the Board Cotter Cunningham, the atmosphere was jovial as Cunningham greeted each employee he passed with a smile and often with a comment that made them laugh. Everything in the space reflects the corporate culture that emanates from the founder who is a believer in hiring people who fit the company personality profile and then in keeping them happy and connected.
The story of how RetailMeNot became a leader in the industry by disrupting the way the world viewed retail is the story of an unlikely entrepreneur who came to the game rather late in life — in contrast to the stereotypical, youthful hi-tech disrupter. Cunningham founded the company in 2009, made more than 15 acquisitions, and raised more than $300 million in venture capital before taking the company public in 2013. He led the firm through it's $630 million acquisition by Harland Clarke in 2017, and in January 2019 Cunningham moved into a chairman role at the company while taking on a new role at MacAndrews & Forbes — owner of Harland Clarke Holdings and RetailMeNot — working on emerging technology ventures and initiatives.
Cotter Cunningham never intended to be an entrepreneur. His career path had led him to several high-level corporate jobs, and at 45-years-old he was serving in the number two slot at Bankrate as COO when he became disenchanted with what he was doing and how things were going. His wife replied to his complaints, “If you think you can do better, you should do it.” That was the impetus Cunningham needed to make the leap, and even though his first company “failed miserably” he never looked back.
Though Cunningham acknowledges that in the fast-paced world of entrepreneurship some people such as Mark Zuckerberg have been successful starting in their 20s, he encourages most aspiring entrepreneurs to “go get a job and see how business works, get a feel for the ebb and flow of work.” Becoming an entrepreneur later in life provided Cunningham with a wealth of experience but also with a load of responsibility.
“When you're 45, and you have a mortgage and a family, and you're trying to save for college and all the things that are associated with that, I would argue the chance you're taking is much greater. Now, it worked out for me, but I'd be lying if I said there weren't moments that I went, ‘Oh God, what have I done?’”
Cunningham's approach to entrepreneurship and to life is to go all in. He values persistence and determination, and those attributes were essential to his success. In his initial venture, Divorce360.com, which he started without ever having been divorced, he invested a million dollars of his own money. The first year the company spent $400,000 and made $19, but Cunningham raised a million dollars from Austin Ventures, “I got lucky. Tom Ball and the team liked what we were doing and said ‘let's keep going,’ and I was able to parlay that relationship into RetailMeNot.”
Bolstered by Austin Ventures’ faith in him, Cunningham moved his family to Austin, took up residence in the “dungeon beneath the beautiful public floor,” and began fishing for ideas. Nine months after the move, he got a hit with the idea of online couponing, and Whale Shark Media was born. In the beginning, the competition was mainly mom-and-pop coupon businesses, but technology has changed everything. He acquired three coupon companies before eventually buying RetailMeNot and merging the companies.
A self-described tech geek, Cunningham realized the benefits of embracing mobile devices early on and saw huge opportunity for in-store couponing. Through the process of geofencing, RetailMeNot could notify consumers of coupons they could use while shopping through pop-up notifications sent in real time — something Cunningham calls a “party trick.”
“To me, it's something you would go to a party and talk about: ‘Oh my God, I had this crazy thing happen to me. I went to the mall and my phone made this cash register noise, and I saw all these coupons, and I was able to save $50.’ That's a cool moment and something that we felt like people would share, and sure enough they did.”
Beyond leaps in technology, one of the factors Cunningham believes is most important to the success of building RetailMeNot is his attention to and approach to corporate culture. In 2011, Cunningham’s was one of the first tech companies to make its home in downtown, moving to its present location on Congress Ave. The location was determined by listening to the employees and geared to making life easier for them — they could walk to lunch without wasting time getting into a car. They could walk out the door and look toward the Capitol in one direction and the lake and the trail in another — sweet inspiration. Cunningham also created an atmosphere with plenty of amenities and activities. People looked forward to coming to work and being a part of a team of like-minded associates. His mindset toward building a cohesive corporate culture was a reflection of his worldview that everyone should be treated the way he would want to be treated.
“Websites are about people. What no one seems to understand is, websites don't run themselves: People build them, people manage them, people run them. Our website will run for a few hours on its own, but it needs people to add coupons to it, to make sure the coupons they add are good and appropriate and valid. There's a care and maintenance and a building on the website that's so important, and so the people are everything. I always make the joke: We’re like an ad agency, our assets have feet and leave the building every night. And so culture's always been something we focused on. And it's always been important to me, because ultimately the difference in us succeeding and failing is the people we have employed here.”
On What Cunningham Looks for in an Entrepreneur/Employee
Our mantra is no a**holes. We work hard not to hire disagreeable people. We want people who are kind, motivated, and aggressive. The qualities we look for in our employees are the qualities you look for in entrepreneurs. People who are willing to take a risk, people that have strong opinions that are backed up by facts, and people who are kind. They have to be driven to succeed. And it doesn’t matter if it’s ping-pong or telling a joke or saving the whale sharks, you want to find people that care and push themselves, because ultimately they are going to push themselves harder than you ever will. It has to come from within.
Although Cunningham has obviously been tremendously successful with RetailMeNot, the “unlikely entrepreneur” remains skeptical of what he refers to as the “cult of the entrepreneur.” Looking back at the process of going public and eventually being acquired, he says it was a financing activity and not to add a “notch to his resume.”
“In my mind, entrepreneurs are not amazing, special creatures that are anointed to be the saviors of business, it's just B.S. Entrepreneurs are just people that took a chance and got lucky and here they are. And so — I think too often — I'll meet with budding entrepreneurs who will say, ‘I have a six-point plan, and I want to get funded by this fancy VC, and then I want to get funded by this fancy VC, and then in my C-round I want to get funded by this VC, and then we're going to go public.’ And it's like a checklist. And I think that’s 100 percent the wrong way to think about it. Rounds of venture funding, going public are just financing activities. And so, yeah, we went public, great. Yeah, I led us through 300-man dollars of private financing. Great. But it was for a purpose, not so you could brag about that number. And if you get confused about that, to me, you've failed.”
Books for Entrepreneurs
For inspiration, read Shoe Dog: A Memoir by the Creator of Nike by Phil Knight
For some fantastic tips and tricks on culture, check out The Culture Code: The Secrets of Highly Successful Groups by Daniel Coyle
To see how not to do it, try Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou
Looking back on his path to entrepreneurship, Cunningham also knows that success can hinge on doing the thing no one else wants to do, going to the place no one else wants to go, and making a pivotal move that influences everything.
“Throughout your career, you will have a million opportunities to take a new job, to take on a new role, to try something new. And inevitably, I always tell people to take the horrible job, take the job no one else wants. Because you can almost always — it's going to be bigger and have less pressure on it than the hot job. You're going to learn more. If it's really a horrible job, then the expectations are low, so anything you do is going to be great. Everyone's attracted to the job that's exciting and sexy and fun and that everyone wants to do and all that. Don't do that; do the horrible one. Do the one that seems bad, because it'll wind up helping you more. I'll give you an example: I was in Kansas City, working at an ad agency, running their online group. And I got a call from Palm Beach, Florida. One of my old bosses had this job at Bankrate that he wanted me to take. They were really having trouble recruiting there because no one wanted to move to Palm Beach, Florida. It's where you might retire to, but it's not where you go to work. I mean, I think I was the hundredth person he called — I wasn't the first. And I leapt at it. It would end up being really a pivot point in my career. The fact that I was COO of a publicly traded company, an internet company in Florida which had grown well and done amazing things really enabled me to raise the money from Austin Ventures, which put me here. So, I owe a lot of my success here to just the fact that I was willing to move to this weird city in Florida when other people wouldn't. And I don't forget that.”
As CEO and personally, Cunningham strives to give back to the community. He and his wife, Edie Rogat, have become very active in supporting organizations and causes near and dear to their hearts including KIPP, Literacy Austin, Boys and Girls Clubs, the Andy Roddick Foundation, and Ballet Austin's initiative to bring children to see the Nutcracker. In October 2018, the pair received the prestigious Torch of Liberty Award, which is given by the Anti-Defamation League to outstanding community leaders who exhibit humanitarian concerns for the principles that the League was founded on — securing justice and fair treatment for all.
Cunningham On Role Models
I have had many mentors but only one role model: My father is a small-business person and was a “citizen legislator” in the Arkansas House of Representatives for over 30 years. I watched in awe as he worked tirelessly and for minimal personal gain to help his community and state. I truly believe if he had channeled all of that energy into his business, he would have made gobs of money — but the world is a better place because he didn’t. I am so proud of him and will never be as charming, kind, or dedicated to others as he is.
“My wife, Edie, and I are both drawn to charities that resonate with us in some personal way. So for example, both of us are fairly obsessed with reading. My wife is dyslexic and so struggled with reading in her childhood. And I was kind of the opposite: I was a voracious reader from day one. And so we have funded a lot of literacy programs and youth education programs and things that help kids learn to read. I mean, the research is so clear, a dollar spent teaching a kid to read has a thousand-fold impact in the community. And not to make it about dollars and cents, I mean, because as you know, it's also just fantastic for the kid to be able to read. But if you can't get there, you can also look at it just economically and know that the impact of reading is everything. And so we've funded a lot of things that do help children.”
In his new role as executive chairman, Cunningham will support and act as a sounding board for incoming CEO Marissa Tarleton, as well as assume a new role working with parent company MacAndrews & Forbes, seeking investments for them. He is looking forward to stepping back and looking at the marketplace and seeing what is new without the day-to-day responsibilities of a CEO. As he hands over the position of CEO to Tarleton, former RetailMeNot director of marketing, Cunningham says there is really nothing he would change.
“I don't know if I'd change a thing. I mean, you can argue you might not go public because that was just a brutal thing. But the advantages of going public is that employees, including me, get to sell their stock. Those are great days, right? My joke has always been, the day you come to work and some employee grabs you and goes, ‘Hey, I just want you to know I sold stock today, and I funded my kid's 529 Plan.’ That's one of the best days of your life. And if it's not, then you're just a cold person, you know? How could you not be touched by that?”
Cunningham’s 10 Trends to Expect or Watch in 2019/2020
1) I anticipate consumers will demand better privacy from corporate interests, and there will be legislation proposed to protect consumers and their data.
2) Along those same lines, consumers will expect more transparency from companies. One area where pricing transparency doesn't yet exist is in the realm of healthcare expenses. For example, websites and mobile apps like RetailMeNot Rx Saver (rxsaver.com) will be front and center for consumers, physicians, and pharmacists to understand where to get the best price.
3) I have a car that supposedly can drive itself — it has a long way to go (especially versus the hype). Based on that experience, I feel safe in saying that true self-driving cars won’t happen anytime soon.
4) I have a car that supposedly can drive itself — it has a long way to go (especially versus the hype). Based on that experience, I feel safe in saying that true self-driving cars won’t happen anytime soon.
5) Consumers want brands to take a stand on values and cultural issues that matter most to them — and brands are taking note. According to RetailMeNot research, 87 percent of brands say taking a stand on social issues is worth the risk.
6) Voice shopping via smart speakers will become a thing. RetailMeNot found that nearly all retailers (96 percent) are investing in this nascent technology to allow consumers to shop for their brand on smart speakers.
7) Cryptocurrency seems dead, for now. I suspect it will be back in a big way. The benefits are too great.
8) Investment capital for entrepreneurs in Austin will dramatically scale in availability.
9) Businesses that provide convenience and ease of access (delivery, ride-sharing, etc.) will accelerate as consumers seek out ways to make their lives simpler.
10) Technical schools/colleges will become more prestigious and will be considered equally viable choices for high school grads (versus college degrees).