“In the Studio,” GraphScience’s Raymond Rouf Turns Facebook Graph Data Into Dollars

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Editor’s Note: Semil Shah (@semil) is an EIR with Javelin Venture Partners

“In the Studio” closes out the summer months by hosting a repeat entrepreneur who started his first two companies right after college, both of which grew to modest sizes before imploding, and after moving to the Valley about five years ago to work as a product manager at a small venture-backed company, had an insight about the e-commerce potential of Facebook that led to his current company.

Raymond Rouf, founder and CEO of GraphScience, is in an enviable position now, but it didn’t come easily. After starting a healthcare consulting company and a publishing company for young minority professionals after college, he was able to grow both businesses before they fell apart due to a lack of focus, to paraphrase Rouf’s humble and honest admission. When he moved to Silicon Valley and worked for MindKey building Facebook apps back in 2007, he began to realize the power of the Facebook API. Eventually, he founded, in 2008, what would later become GraphScience, working for 30 months with no income, living entirely off savings, where he focused entirely on how to build real, measurable value in his company and avoid the mistakes of his past.

The results with GraphScience proved his focus time around paid off. After running a few tests with retailers on Facebook, GraphScience realized it could leverage the social graph information from Facebook’s API in such a way that it could deliver four to eight times ROI for retailers, a repeatable measure that helps solve one aspect of the large questions hovering around Facebook’s ability to make money today. By focusing on Fortune 500 companies today, companies are actually coming to Rouf for business. And, the timing couldn’t be better for both sides, as all segments of SaaS marketing automation, analytics, and management are exploding in growth (and M&A), as we discussed last week with Karan Mehandru “In the Studio.” Now that GraphScience can deliver on its ROI promises by understanding the nodal relationships between people and brands on Facebook, they’ve been able to convince clients to scale their Facebook ad spend.

It’s unclear if GraphScience can apply their algorithms to other types of companies, other types of social platforms, and the shift to mobile phones and tablets, but it’s still early days for Rouf and his GraphScience team, and as you listen to his personal story of failing twice and now building this, as well as his laser focus on the specific challenges and opportunities provided by the Facebook API, you get the sense that they may just figure out how to close the loop on social advertising and commerce on Facebook, and potentially in a big way.