Catanzaro came to the United States from Peru planning to become an engineer, but he dreamed of starting his own business. In the end he did both, founding DataXu and developing technology that helped send NASA to Mars, among many other applications. Discover how he has navigated the world of tech as an immigrant entrepreneur. We also have a full-length video interview here.
Transcript
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Denzil Mohammed: Welcome back to JobMakers, podcast of Pioneer Institute and The Immigrant Learning Center; and I’m your host Denzil Mohammed. The ingenuity of immigrants is boundless, and Americans throughout history have a lot to be grateful for when it comes to people who move here and develop innovative ideas. From Levi Strauss’s idea for using metal rivets positioned at the points of strain in the pants he invented for minors, what today we call 501s, to Helen Grenier, who wants to manufacture robots anyone could afford and co-design the first version of the room vacuum cleaner, immigrant entrepreneurs improve our lives with their ingenuity. Sandro Catanzaro started several businesses in his native Peru, but had no idea he’d end up helping NASA go to Mars or that he’d use that same technology to plan and buy video ad campaigns. Now head of publishers services strategy for Roku, which acquired the company he founded, DataXu, in 2019, Mr. Catanzaro is an emblem of ingenuity and inventiveness. His demand side platform, device graph technology and analytics platform help accelerate Roku’s ad tech road map and ability to [inaudible] advertisers, but he’s not done yet.
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Denzil Mohammed: Welcome, Sandro Catanzaro! Tell us a little bit about what you’re doing right now.
Sandro Catanzaro: So I’m Sandro Catanzaro. I run a strategy for the advertising services team at Roku, and about Roku, our company provides consumers with access to the best entertainment, news, educational content from nearly an infinite selection of content available and that goes directly to your home through streaming TV. And about the approach, I personally work with content owners and people like Warner Media, NBC, CBS to help them reach more consumers but making their content ad supported. Also, we provide consumers with a great TV experience in ensuring that the ad load is limited, they don’t see that many ads. And finally advertisers who want to reach those consumers can reach only the consumers they want to reach without creating waste and showing up to people who are not in the target population. So now I’m on to the specifics of what we did at DataXu. We created technology at MIT to contain the decisions very fast. And that technology was applied to select which ad to show which consumer. So that technology initially was applied to advertising on the web. Eventually we expanded to advertising mobile devices and video ads and eventually we went into TV advertisements. Within TV advertisements, we can select exactly which ad is to be shown to every consumer in real time and that was the underlying pieces which drove the decision by my company, DataXu by Roku.
Denzil Mohammed: I want to talk a lot more about DataXu and what that experience was like but I first want to get to know you. So you grew up in Peru. And once you moved to the U.S., you had quite a journey, I would say. But most Americans don’t know what it’s like growing up in Peru, so tell us what that experience was like.
Sandro Catanzaro: Well, we were in the coast and so right now we are in summer so people are going to the beach. We kind of probably go to the beach almost every weekend, and when I was a kid, sometimes daily, I went to school. It was a religious school, there were French Catholic priests. So it was a very interesting environment. It was a mix of the Catholic content but on the other hand, a lot of social understanding of what’s happening around you and what is the impact of what you are doing. And then you should do things that are actually good for society in general. So many people from my school are even in politics or have made social entrepreneurs as well. And yeah, that was a really new environment. I’ve learned quite a lot there.
Denzil Mohammed: And so you went straight to university after high school. What was your parents’ attitude towards education?
Sandro Catanzaro: Well, very much in favor. So it was expected in my household to do well in school. However, it wasn’t a pressure cooker environment. Due to my father’s business, I grew up around machinery and he liked that a lot. So that was a good inspiration for me and I eventually became a mechanical engineer.
Denzil Mohammed: So you said your father was an entrepreneur.
Sandro Catanzaro: Yes, he was.
Denzil Mohammed: Did that run in your family and what impact did that have on you as an entrepreneur?
Sandro Catanzaro: Well, yes, it does run in the family. I liked not only the freedom but also the creativity aspect of it, that we can actually think what to do or how should it be done and move forward. And we needed to change the world. We really needed to make something out of nothing. I think losing the fear to be in a situation that is not what we expected and losing the fear of making decisions, that’s probably the encouragement we got as kids.
Denzil Mohammed: So you also took a risk by moving to another country. You said you moved to Argentina first and then eventually you moved to the U.S. Why did you come here? And tell us in very real terms, not just as a student or a business owner. Just as a person, what was it like moving here?
Sandro Catanzaro: After coming back from Argentina, I wasn’t in the partnership in Peru for a number of years. I owned a company making steamers and owned a company making industry machinery.
Denzil Mohammed: You also owned a bar, isn’t that right?
Sandro Catanzaro: That is true and the virus still exists. By training I am a mechanical engineer and I think I’m a good one. And I did not have the same knowledge about how to launch a business as I did about how to work with steel and structures. So I wanted to get that more formal education in business and I applied to schools and I was lucky to go into MIT. So initially it was expected to be an MBA. And I came to Sloan here in Boston and as I was doing that, taking extra courses in astronautics on aeronautics and they became operative and one became two and eventually it so happened that there was a project that might be participated in and NASA was reporting this project and this was in the year 2004, 2005. The new project would send people to Mars. So I was involved in that project and then ended up getting a second masters. And that was great. So I got a second masters in aeronautics besides the business degree. And the other benefit was that MIT is great in this way. My second masters paid for the whole career, that was really, really great. And so our project that we did for NASA ended up being the seal for the company that eventually started here in Boston.
Denzil Mohammed: I remember you telling me about being in Back Bay and asking for direction and someone actually gave you a map, right?
Sandro Catanzaro: Exactly! That was super fun. So we are arriving in Boston, my wife and I. And we have our suitcases. And we’re trying to find our way to this hotel where we have to go and waiting in Back Bay and I stopped in one of these newspaper little kiosks, and I asked for directions and the guy says, “Well, the place you’re going is like this way and that way,” and she opens a map and he says, “Well, here is the place, you are going. You have to walk this way and that way.” And back in that day there were no GPS’s, right? So I take the map and he says, “Yes, take it!” I’m thinking at this point that this guy may have these maps and he gives him away. And then I look at the back. I think it wasn’t a lot of money, it was like $8.00. But he took $8.00 from his business and gave a map to me. That was quite an impression for us. At that point we knew everything was going to be okay.
Denzil Mohammed: How did you go from NASA to high tech in the Seaport district?
Sandro Catanzaro: So initially we made this project for NASA, as I mentioned, and this was an interesting project. Typically NASA works with the aerospace conglomerates, the Northrop, the Boeing. At MIT my professor had the foresight of pitching NASA that they actually should hire MIT as if it were one of these aerospace conglomerates for this stage of mediation and operation of the stations for how to auto merge. NASA at the beginning wasn’t receptive, but then one thing was that this guy was really good at explaining how to do things and actually he said, “You are not only investing in getting ideas and we are not linked to any type of hard work, so we have no inclination to work here so why not explore all the options in a very rational way? But you are also investing in who are going to be the operators of these systems down the road. These students who you are supporting with the money will eventually work for NASA or one of these aerospace companies. So it’s actually a great thing that you are doing,” and actually that was well received and we got the money. With funding we developed the project, and as a difference to any of the other companies that were pitching the one or two ideas they had based on the hardware that had developed, being the MIT team, what we developed and we created was a way to discover all the ways that were available to go to Mars. So we discovered that there are 11,052 ways to go to Mars. That’s all the ways that are. You cannot find more ways. Trying to go in a different way will have an orbit that is not possible or a rocket that is not powerful enough or you may not have the time to make the fuel in Mars that needs to be made. And one of them is the one that is in the movie The Martian. That was one of the ways to go to Mars that we had. So that was great and NASA locked the project and many of our ideas were incorporated in what eventually became the dimension from Mars that we’re doing today. And at that point, I graduated. I went to work for another company, doing consulting. But I was always coming back to my team to find out whether we were doing something about this software we created and these ideas we have for Mars exploration and exploring combinations of objects. So eventually we decided, “Well, let’s try to think if there is an application that can be a commercial application.” And we decided to start a company. And the first year of the company was exploring different markets. What can we do with this technology? Where should we apply this technology? And it was a lot of trials and we explored markets like, “How to rearrange the schedule of an airline?” The scale is obstructed by storm, like a snowstorm. How to arrange furniture in a room? How to deal with algorithmic execution in the stock market? But eventually, we saw that finding applications on the Internet was … and this was in 2007, 2008, so it was very early … going to be very, very interesting. So we started looking for possibilities and we discovered that targeting ads in the Internet and doing that in a very efficient and fast way wasn’t a small problem. So we created software to do that selection very quick and we pitched it to, back in the day, the leaders in the market work. Yahoo was in the market and Google.
Denzil Mohammed: Both founded by immigrants!
Sandro Catanzaro: Both founded by immigrants and surprising to us. These were still, probably at this point, six or eight people. We were able to convince both to open a market to create auctions in real time for us. And that point that didn’t exist before eight months later opens the real time exchange for ads that was launched by Google.
Denzil Mohammed: Your company eventually actualized itself and had such a wide reaching impact. What was that like and what was it like when Roku approached you?
Sandro Catanzaro: Since we started the company we always thought TV was the most interesting market. It’s at the end of the day the market where consumers spend quite a bit of time watching TV. It is very persuasive. But initially, obviously everybody was laughing at us, right? For us to even get to show banner ads on websites was even a success at that point. So as the company continued being successful and expanding, we were able to get closer and closer to these TV ads. And the other trend that happened is also TV became closer and closer to digital. So as everybody knows, near TV with the Bunny ears, antenna and broadcast was the way TV was consumed before, but now the future of TV is streaming. And streaming is basically an Internet access to TV where ads are selected in real time and our technology is very useful. So as much as we wanted to go in the direction of TV, TV also wanted to come in the direction of digital. If you think about the TV market and streaming, obviously the leader is Roku. So for us as we started talking with work we saw so many areas of alignment and so many areas where we were thinking along the same lines of what to do and how to face. That was a very easy decision; to decide to join Roku and work together in developing advertising for the future. It was almost natural for us to expand from one way to another way to another way to show us. As these different ways to show us became digital, there was an adapter on the outside but internally, the engine is the same engine we created in 2009.
Denzil Mohammed: Now this is all about big data. You’re looking at a lot of data and it’s helping to shape what you’re doing. Some of Boston’s largest employers in advertising like Digitas are also known for their very data heavy approach to marketing. Can you talk a little bit about how big data is shaping the industry?
Sandro Catanzaro: One of the big issues was the right data center. And we don’t have the money. So what we did is we used building new technology at the time. There was this company, Amazon, and they had this very early thing that was called AWS. And there was an experiment they were making, to make available resources for rent. You could rent a computer for an hour. And we said, “Let’s rent computers because we cannot buy them.” AWS had like six months and it was an experiment, pretty much, they didn’t know if it was going to continue but for us it was a way to continue moving forward. And that’s how we started with big data. So there were computers and those computers could be arranged in a cluster. So for us bigger and bigger datasets were never a problem, so big reveal locks with more and more automated machine learning, which at that point I don’t really think was called machine learning. We were using map reduce and eventually we used high and it always was the same idea. We’d get a data, automatically clean it and train algorithms to select which is the best one and then use those to buy ads in real time. The fact that you can extract a nugget of insight from a lot of data and we cost efficiently that. I think has changed, not only advertising or marketing but has changed many industries. What we do as big data is to guess that you may be interested in that BMW, because for example, you have been looking over Italian recipes. And why Italian recipes and BMW have any relationship, we don’t know. That’s something machine found that people who eat Italian food and are cooking in their house may want to buy a car like that. And that’s okay. And that’s what the machine finds and it may be a very weak inference but the machine is patient enough to find it, and even though it’s not actually something that you will find that may be intuitive. It may not be something that is obvious.
Denzil Mohammed: And give me some more insight into these trends in marketing. I noted that employment in marketing in Massachusetts actually spiked by over 40 percent since the Great Recession. Do you have any idea what’s driving that trend?
Sandro Catanzaro: Boston is in a really interesting position geographically, so we’re close enough to New York that we have access to that market, which is kind of one of the places where most of the advertising is purchased and sold, but we’re far enough that we can come back and think about the problem. So in some ways provides us with enough understanding of the problem through talking with a client who may be the advertiser, or may be the ad agency. And also enough separation and closeness to great talent through many, many universities that are in town to dissect the problem, think hard about it and do something about how to address that problem.
Denzil Mohammed: Boston is obviously a hub for young, bright people who are ambitious and who have a lot of drive and talent. But that talent for you has not always been easy to find. During your time at DataXu, what was it like finding the right kind of skill set and where did you find them?
Sandro Catanzaro: I remember since we started the company, I think we probably have an average of between five and 10 open positions almost all the time throughout and we were always looking to hire either somebody from the engineering team, somebody from the data science team, somebody who can talk with our clients the right way and ask them what their problems are, how to implement those in the platform.
Denzil Mohammed: So you were looking for team members from abroad.
Sandro Catanzaro: Looking for members anywhere, anywhere! The position was open. People who come and if we certainly try to help people, and we have many people from abroad coming to work in the company and it always was the case that different people bring different perspectives. At some point I was running in data science team and he was in United Nations, right? People from all the different nationalities and everyone has a different perspective and bring some different point of view.
Denzil Mohammed: But do restrictive immigration policies hinder that kind of development of companies?
Sandro Catanzaro: In two different ways. So first I want to speak about myself. So when I graduated, initially the plan was to come here to study for a couple years and then go back. Frankly, I felt that wasn’t ideal. Think of it. NASA is paying for my studies. I got an MBA. I wouldn’t say for free but I got an MBA for a very low cost and MIT also was a bridge, supporting me very well. So I felt I owed something. I should pay back somehow. It was the right thing to do. So I looked for work. The first place for me to look for work was NASA. And I went to NASA and I have an internship with NASA. They liked what I was doing. Then the internship ends and I say, “Well, can I work full time?” and they told me, ‘No, you can’t. You’re not a U.S. citizen and you cannot work here.” Okay. So I started looking for work. I wanted to stay at least a couple years to pay back some of what I had received and he was hurt. Very few companies were able to support me with an H1B visa. So I was lucky. And I applied to also work as a consultant and I really like what Bain & Company was doing and I started working with them. But that was one of the few jobs that had the H1B sponsorship at the time. And then as we were about to start a company, this is a startup, right? How startup can support a student? Or whether H1B visa as a father? So it was also quite nerve wracking at the beginning, whether my startup would be able to sponsor for my visa H1B and also at the same time, this is step up, right? Step ups are risky. I’m staying in the country so my startup not going belly up for we should be independent of me doing a good or bad job of running the company. But eventually, obviously the company did well and my sponsor worked and I stayed. I say two ways. The second way is we did hire a member, a great candidate for the data science team and this was a lady. She was a German national. I think she was a PhD graduate in Germany. She was great. And she not only understood statistics, machine learning and data in general but also she was smart and she knew how to apply in advertising. We sent her the position and she accepted and whatnot and she applied for the H1B visa. And she was in the lottery. She was not selected. So we lost the candidate and we lost a great talent.
Denzil Mohammed: We see it with, for instance, farmworkers where they’ve adjusted the numbers and yet for great needs like this, several years ago, needing data scientists are not being able to have that.
Sandro Catanzaro: To me it’s almost crazy. We are shooting ourselves in our own foot by not having the right policies to allow people who are interested in coming to work to just come and work and in many cases, people who are already here and working.
Denzil Mohammed: And as you say, already building a life.
Sandro Catanzaro: Building a life. In my case, within a company. Given employment to many people. So I think we should think not what is expedient politically but what is the way we want to create a country for the next 30 years.
Denzil Mohammed: Ah, Sandro Catanzaro, it was really, really wonderful talking to you and I think you’re just such an interesting person overall and I can’t wait to see what you do next as you continue with your entrepreneurial spirit here in America.
Sandro Catanzaro: It’s going to be a great adventure, that I can say.
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Denzil Mohammed: If you like what you’re hearing and want more of it, become a JobMakers sponsor. Learn more by reaching out to me at denzil@jobmakerspodcast.org. That’s D-E-N-Z-I-L. So happy that you joined us for this week’s inspiring story of another immigrant entrepreneur. Join us again next Thursday at noon. I am Denzil Mohammed and thank you for listening to JobMakers.