The Come Up

RockWater, Chris Erwin

Interviews with entrepreneurs and executives who are shaking things up and building exciting new companies. In industries like new Hollywood, podcasting, ecommerce, and the metaverse. Entertaining you with stories you won't hear anywhere else, from the next generation of leaders that are going to change the world. Brought to you by Chris Erwin, the founder of RockWater and 15-year veteran operator, seller, and investor of media, commerce, and technology companies. read less

Our Editor's Take

Anyone who loves a success story may enjoy The Come Up podcast. Host Chris Erwin interviews entrepreneurs and industry leaders about their career journeys. These stories will inspire listeners and teach them lessons along the way.

Host Chris Erwin is passionate about entrepreneurs who make a difference. The stories on The Come Up podcast are those listeners have yet to hear. Erwin has been building and selling businesses for a number of years. He founded RockWater Industries in 2017. It provides execs with finance and strategy advice. He showcases entrepreneurs and business ventures that have a significant societal impact.

The Come Up is a business podcast by RockWater. Each episode features a business leader or entrepreneur who is doing big things. The business owners come from startups in industries like new Hollywood, sports media, and the Metaverse. The question-and-answer style format is realistic and informative.

Guests are diverse and come from all kinds of backgrounds. Some popular guests are Sarah Penna, a creator launch executive at Patreon, and James Creech, the founder of Paladin. On The Come Up, Penna talks about what inspired her career in media and entertainment. Before Patreon, she worked at Dreamworks. James Creech discusses the risks he took to found Paladin and his role as a SVP at Brandwatch. They also talk about influencers, changes in the creator economy, and leadership.

When host Erwin brings Adam Rymer onto The Come Up, it's an episode gamers won't want to miss. Rymer is the CEO of Optic Gaming. With a history in digital media, Rymer brings ample knowledge to the conversation. A self-proclaimed nerd, the host of the podcast also explores Napster, esports, and the 1980s.

There are victories for every kind of fandom. Many guests are even first-time entrepreneurs. Taehoon Kim is a co-founder and CEO of nWay. He's founded two high-tech businesses. Camila Victoriano of Sonoro also guests. These are a few of many guests. The Come Up is a good business-oriented podcast.

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Episodes

Taehoon Kim — CEO of nWay on Raising $90M, Selling to Animoca, and Gaming x Web3
Nov 10 2022
Taehoon Kim — CEO of nWay on Raising $90M, Selling to Animoca, and Gaming x Web3
This interview features Taehoon (TK) Kim, Co-Founder and CEO of nWay. We discuss going to arcades with his mom in South Korea, why he wasn't allowed to play console games as a kid in Canada, what he learned from Samsung's work culture, why it's hard for VCs to invest in gaming, finding passion at the intersection of technology and art, the best type of IP for game partnerships, how he ended up selling nWay to Animoca Brands, and how player ownership in games creates attachment and meaning, and prevents gamer exploitation.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow us on LinkedIn: RockWater LinkedInEmail us: tcupod@wearerockwater.comInterview TranscriptThe interview was lightly edited for clarity.Chris Erwin:Hi, I'm Chris Erwin. Welcome to The Come Up, a podcast that interviews entrepreneurs and leaders.Taehoon Kim:So I was really upset when Lightspeed thing fell through. I went out drinking with my friends and I got hammered that night. I had another VC pitch the next morning. I was so hungover that during the presentation I threw up three times. During the pitch, I would say, "Excuse me, I'd run to the bathroom." I would throw up, come back, continue the pitch. And I did that three times., And I did the presentation 9:00 AM I came home and I was, "Oh, my God, I totally screwed that up." I fell asleep. I woke up at 4:00 PM, got a call at 5:00 PM saying that he was in. Usually it doesn't happen that way, but it was a really weird period of time in my life.Chris Erwin:This week's episode features TK Kim, CEO of nWay and a serial gaming entrepreneur. So TK was born in Seoul, South Korea to a mom who was a gamer and a lover of arcades. After studying at Cornell, TK started his career at Samsung, where he helped launch their smartphone and next gen mobile gaming businesses. TK then went on to co-found three gaming companies, and raised over $90 million in venture capital. Today he's the CEO of nWay, which is a developer, publisher, and tech platform for competitive multiplayer games across mobile, PC, and consoles. nWay was sold to Animoca in 2020.Some highlights of our chat include why he wasn't allowed to play console games as a kid in Canada, why it's hard for VCs to invest in gaming, finding passion at the intersection of technology and art, why he doesn't mind getting rejected by investors, the best type of IP for game partnerships, and how player ownership in games creates attachment and meaning and prevents gamer exploitation. All right, let's get to it.TK, thanks for being on The Come Up podcast.Taehoon Kim:Hey, thanks for having me. Super excited to be here.Chris Erwin:We have a pretty amazing story to tell about your career, but as always, we're going to rewind a bit and kind of go to the origin story. So it'd be awesome to hear about where you grew up and what your parents and what your household was like.Taehoon Kim:I was born in Seoul, Korea, and then I moved to Vancouver, Canada when I was in fourth grade. I think I was 10 or 11. At the time, growing up in Seoul, a little bit more strict environment. One funny thing is that my mom was a gamer and she would take me to the arcade, I think when I was super young, five or six years old. That's when I got really into gaming and how fun could that could be. But when I moved to Canada, however, she didn't really let me have any consoles, when that switch from the arcade era to the console era happened.I think she was a little bit influenced from the Asian culture and didn't want me to be getting too loose on academics. But when I got the computer, that's when I started really getting back to gaming. She didn't know I was playing games, but I was really into that. And then when Doom came out, that's when I really also started getting into online gaming, which is a big part of the reason why I'm so into PVP and competitive gaming.Chris Erwin:So your mom was a gamer and she would take you to the arcades in Seoul. What were the types of games that you guys liked to play together? And was this just something special that you and your mom did? Or was it a whole family outing that you did with your mom and dad and your siblings?Taehoon Kim:My dad didn't really like games, so it was just me and my mom. And she was really into Galaga and getting on the top of the leaderboard there. Oftentimes, I would watch her play and I would also try, but I wasn't as good as her. So I mean, I would mostly try to beat a record, but I couldn't. That's how I got into it early on.Chris Erwin:Did you also go to the arcade with a lot of your peers growing up when you were in Korea? And did any of your peers parents play? Or was it kind of like, I have the cool mom, she's into gaming, and we'd go do that on the weekends?Taehoon Kim:Oh, later on when I got older and I got in elementary school, yes, I definitely did go to the arcade with my friends. And then later on, in Seoul, arcades turned into PC bang. I'm not sure if you heard of it, but it's like the room full of PCs and it would play PC games there. I mean, I got in earlier than my friends, because of my mom.Chris Erwin:Remind me, what was the reason that you guys came to Vancouver from Korea?Taehoon Kim:I'm not a 100% sure if this is the real reason, but my parents would always tell me it's because I wasn't really fitting well with the type of education in Korea, where it was more, much more strict and less creative. They wanted us, me and my brother, to get a Western education. I think it turned out to be good for me, I guess.Chris Erwin:Do you remember when you were kind of joined the academic and the school system in Vancouver, I know it was at a young age, you were about 10 years old, you said, did you feel that that was like, "Hey, this is immediately different and I really like it and enjoy it"? Or was it nerve-wracking for you to make such a big change in your life to be uprooted at such a young age? What were you feeling at that time?Taehoon Kim:It was immediately different, lot less grinding. Even at third or fourth grade, back in Seoul, it was pretty tough. After school was over at 5:00 PM, I still had to go to all these after school programs until 9:00 PM or something like that. And I didn't do the homework afterwards and everybody was doing it. So there was a lot of peer pressure for parents to also put their kids to the same kind of rigorous program. And when I was in Vancouver, I didn't have to do any of that. So it felt more free and math was a lot easier.Chris Erwin:Math was a lot easier in Vancouver.Taehoon Kim:You know how crazy it is for Asian countries with math early on.Chris Erwin:So you're probably the top of your class. You were such a standout, and I bet at a young age that was pretty fun because it was easy to you too.Taehoon Kim:People thought I was super smart. I wasn't, it was just that I started earlier doing more hard stuff in math. It wasn't necessarily that was smarter. But again, on the other subject, because my English was suffering, I had to get a lot of help. So I would help them in math and they would help me with the other subjects.Chris Erwin:And you mentioned that in Western education there's also probably more emphasis on using the creative part of your brain as well, and balancing that out with the math or the quantitative side. What did that look like to you as you were going through middle school and high school before you went to college? Any specific applications or stories stand out?Taehoon Kim:Yeah, one thing that stood out to me was how a lot of the homeworks and assignments were project based and group based. Where teamwork mattered, and I would have to work with two or three other students to do a project, where we had a lot of freedom to create what we wanted. And the fact that there's no right answers. And it was really weird for me at the beginning, but I got used to it later on. But I think that's kind of a key difference. And at least at that time.Chris Erwin:During your teenage years and coming of age, before you go to Cornell, what was the gaming culture in Vancouver? And what was your role in it?Taehoon Kim:Early '90s when the console wars were happening with Nintendo and Sega, and there was a lot of cool things happening there, but I didn't get to really partake in that. My parents didn't allow me to have consoles. But same things were happening in the PC gaming, especially without modems and the early stage of internet happened. Me and my friends, we got started with Wolfenstein, which was mind blowing.Chris Erwin:Oh, I remember Wolfenstein, it was one of the earliest first person shooters on a PC.Taehoon Kim:It was mind blowing. It was the first game to really utilize 3D spaces in the way it did. But then the real game changer was Doom because you can... Even with the slow modem, I think it was an amazing feat, think about it now, with limited technology and networking, I could dial into, using my modem, and then connect with my friends, and I could play PVP. And that was when the gaming was the most fun for me, actually, playing with friends live. And I would play it late until night early in the morning, over and over again, the same map.Chris Erwin:I remember playing Wolfenstein at my friend's place, shout out, Adam Sachs. And then I also remember playing Doom, and I remember having the cheat codes where I can go into God mode.Taehoon Kim:Oh, right.Chris Erwin:And I was invincible and I could play with five different types of guns, including the rocket launcher. I can specifically remember from my youth some of the different levels. And sitting at my PC station kind of right next to my family's common room. Those are very fun memories. I don't think I was ever doing... I was never live playing with friends. Were you able to do that within the Doom platform? Or were you using a third party application on top of that?Taehoon Kim:I think it was within the Doom platform. It's pretty amazing. Doom was a fast game, so the fact that it worked, it was amazing. When Quake came out, afterwards, that's when I think e-sports was really ended up becoming more serious and people were going to playing at a more higher tier. But that's when I got out of FPS and dove into fighting games.Chris Erwin:Got it. You moved to Vancouver, you're a standout in school, on the math side just because of all your training in Korea. And you're learning about work in these more kind of project based environments or team based work, where there's also a lot of freedom for collaboration. You end up going to Cornell. When you were applying to school, what was your intention? Did you have a very clear focus of, "This is what I want my career to look like, so this is what I'm going to study in undergrad"? Or was it a bit more free flowing?Taehoon Kim:I really wanted to go into a top engineering school. I knew that was what I wanted to do. I wanted to study electrical engineering or computer science, and I was looking at Cornell, MIT, Stanford, they had really good engineering programs. And I knew that the playing online games and doing a lot of mods and all that stuff in the computer, and looking at kind of the early stage of internet, I knew that was going to be a big thing later on. My goal was to kind of get into that sector by studying engineering or information technology.Chris Erwin:Was there any certain moments when you were at Cornell that to help to point you in kind of this gaming leadership, gaming entrepreneurship career path that you've now been on for the last couple decades?Taehoon Kim:Well, a couple things happened. I was good at math. I was good at engineering, and internet was happening. And then one thing I didn't talk about was that I was also really good at art. At one point, I even thought about going to art school. I think it was because of my mom's side of the family, a lot of artists. And I think it was the DNA from my mom's side. What I love about gaming was the fact that you can kind of combine technology and my love for technology and also my love for art.And when I graduated, Cornell, started work at Samsung and there was an opportunity to go into a new gaming. That's when it clicked for me. I was like, "Wow, I really want to get into this industry. It's as both of what I love." But at Cornell, because we had super fast ethernet, a lot of people were playing StarCraft at that time. And that's how I saw the world in terms of, "Wow, these type of massively play online games. I mean, RPGs or games where you can play competitively is going to be a big thing."Chris Erwin:I don't want to date you TK, if that's uncomfortable, but around what time period was this? What year was this around?Taehoon Kim:College was from 1997 to 2002.Chris Erwin:I have to ask, too, when you say that you almost went to art school, and that you had a passion for arts, since it's very early on, what type of art applications? Was it painting? Was it drawing? Was it sculpture? Was it something completely different? What did that look like?Taehoon Kim:Sculpture, I was good, but I didn't excel at it. I was mainly good at sketching, painting, and doing just a lot of creative art, concept art, which is a big part of game development, actually.Chris Erwin:Your first role, what you did for work right after Cornell was you went to Samsung, and there you were a product manager where you helped start Samsung's smartphone business, and you're also a product manager for next-gen mobile gaming. And as you said, this was exciting to you, because you saw gaming as the intersection of technology and art. Tell us how that first role came to be and kind of what you focused on there.Taehoon Kim:I was part of a team called new business development team. Group of 13 people, and our job was to create next-gen businesses. Three businesses that we isolated as something that we should work on was telematics, which is using the map data to help people and navigations and bring new technologies to the car. Second one was smartphone business, taking some of the operating systems from PDAs at the time and then moving that over to the phone. And then third one was gaming, because Nokia was going big with gaming at that time. And Samsung was second to Nokia in market share and someone wanted to do whatever Nokia was doing at that time.So those were three main things. And I got into the gaming side after one of the first business trips was to San Jose, which at that time was hosting GDC, Game Developer Conference. And it was my first time going to GDC. And, yeah, I was just fascinated with the group. It was engineers, artists, players, developers, publishers. And that community really fascinated me, and that's when I decided, "Hey, I really want to be part of this group. I want to get into gaming." So I came back and said, "Hey, I want to take on this project." And a lot of my peers were avoiding the gaming sector, because they knew that was difficult. And Samsung previously tried to do a console and it failed. So they knew it was difficult, but I wanted to get into it. I was super excited to get into it.Chris Erwin:Was it hard to convince your leadership, just based on the past challenges that Samsung had, to do it? Or did they just say, "Hey, TK, sure if you have an idea, see what you can do and then come back to us"?Taehoon Kim:Well, the leadership really wanted to do it mainly because Nokia at the time, that's when they launched their first gaming phone called N-Gage. I'm not sure if a lot of people remember, but it was a really weird device. They launched that business, and it was getting a lot of press. And our CEO was like, "We also have to a quick follow, and we have to get into gaming phones as well." So it was but different from what they did in the past, because it wasn't just a pure console, it's a smartphone plus a gaming device.So it was a completely different type of environment at that time compared to when they were doing console. But nonetheless, because gaming is a [inaudible 00:14:06] driven and also because it's a tough business, my peers were, "Hey, I want to be in another sector." So it was less competitive for me to take on that project.Chris Erwin:So that must have been pretty exciting. Your first role out of school, you work for a very large technology company that essentially gives you as a young in your career a mandate. It's like, "Hey, TK, you know what? You want to go forward and figure out a new gaming business line for Samsung? You got the green light to go and do it." That must have felt pretty good. And I think you were there for a few years. What did you accomplish? And then what was the reason for why you decided to move on from that opportunity?Taehoon Kim:It was a very unique opportunity for me. I think I got lucky being at the right place at the right time, because that's when Samsung was really taking off as a global brand name. That's when they first overtook Sony in brand value. And that's when the consumers were looking at the brand more than as a microwave company, and a major player in the IT space. And that's when they were also hiring a lot of people from overseas.And I did both undergrad and master's program at Cornell. And when I was in my masters, I got to know the founders of Palm, which was also a Cornell EE grad, through my professor. I got really stuck into Palm OS. I was semi expert with the Palm OS. I think that's why they hired me, because Samsung was the first major mobile manufacturer to adopt the Palm OS into their phone. And then the second thing is, because at that time Samsung's culture was still, it wasn't easy for Western certain people to... A lot of people from the US schools starting there, they weren't lasting that long. So it was hard for me as well, but I kind of decided, "Hey, I'm going to really make sure that I can stick around and tough it out."Chris Erwin:I think this is another important point for the listeners is that you are also building another company that you had founded while you were at Samsung called IvyConnection. Is that right?Taehoon Kim:Right.Chris Erwin:I like this because I think this is the beginning of a ongoing theme in your career that you are a builder and you're a founder. You're working at a full-time role, you're also building something on the side. And then this leads to, I think, some other big entrepreneurial ambitions kind of later on that we'll get to. But tell us quickly about IvyConnection.Taehoon Kim:IvyConnection kind of came out of the school project that was doing at Cornell, my master's program. At first, it was supposed to be a platform to connect tutors and students. And then I quickly realized, when I got to Seoul that there were a lot of parents who were looking to send their kids overseas to top schools, and they didn't know that things were different over there in terms how admissions worked. So I kind of created the category, which is a huge category is now it was the first company to do it. And so we did get a lot of demand. I started that right before I started working at Samsung, and it was just continuously growing. I recruited a whole bunch of my friends, and I had them kind of run the company. I was a co-founder, and while working at Samsung, I was advising and helping the growth.Chris Erwin:It's amazing, because you describe at Samsung it was a very brutal work culture at the headquarters. So you're probably working very long hours, very demanding, and then you're also building something on the side. It's like when did you have time to sleep?Taehoon Kim:I was young though, so I didn't need... I was happy to just work, until I was young and single. I was at my early 20s, so it was not problem for me. But, yeah, it was pretty brutal. We had to get to work right at 8:00 AM and the system kind of keeps record of exactly when you get into the company. And then you also had to come out on Saturdays for half a day.Chris Erwin:I did not realize that, that's the expectation across... Is that across all companies in Korea, as part of the work culture and the work norms? Or is that just unique to Samsung?Taehoon Kim:I think what's pretty unique to Samsung. I think at that time chairman wanted us to start early. You basically only have one day weekend.Chris Erwin:And for you, where you're also building another company on the side, it's almost like you never had time that you weren't working or very little bit, most likely. So you're at Samsung for about three years, but then you transition to Realtime Worlds. Explain why did you transition from your Samsung role? And what were you building at Realtime Worlds?Taehoon Kim:As I said, I was a project manager for a new gaming platform, and part of my job was also to source content for the device. And I remember playing Lemmings and I met the creator of Lemons, Dave Jones who just sold DMA Design and created Realtime Worlds. And I try to convince him to create games for my platform, but him and his co-founder, they ended up recruiting me. They're like, "Hey, join us. We just started Realtime Worlds, and we'd love to get your help, because we want to get into online gaming. And you have a lot more exposure to online gaming from Seoul, from Korea. So we wanted to be part of this exciting venture." So I decided to leave Samsung and joined them.Chris Erwin:How was that experience? Was it a similar work culture? Did you feel your past experience was very helpful and so you got in there and you're like you knew exactly what to do? Or was it still a very steep learning curve at that point in your career?Taehoon Kim:It was a steep learning curve for me, in terms of game development, because I have never done game development. Because Realtime Worlds is a game developer and publisher. That's right around when they just signed a contact with Microsoft for a game called Crackdown. It was like a souped up version of GTA. Dave Jones was also the creator and designer of GTA, the original GTA 1 and 2. So it was creating a similar game. And they had ambition to also create an online version of GTA, which is where I got involved.I got one of the large publishers in Korea called Webzen to do a publishing deal to fund portion of development for the GTA online project, and be a publisher for that. So they wanted me to create the Asia branch for Realtime Worlds, they called it Realtime World Korea. I started the studio here in Seoul, recruited some engineers and designers and also did biz dev work to get that publishing deal with Webzen.Chris Erwin:And I think also one of the highlights from your time there is that, did you also help to raise money from NEA, in your role at the company as you guys were growing?Taehoon Kim:Oh, yes. My professor from Cornell, he was friends with the founder of NEA, and he knew a lot of VCs. And Realtime Worlds was based in Scotland, and they knew very little about Silicon Valley. So I told him, "Hey, we're doing something amazing here and online gaming is a new sector, so I think we should be able to raise some money." So I created the deck, which I learned from school on how to do, so created a deck, created a business plan, and then flew over to Sand Hill Road in Menlo Park and pitched to a few VCs including NEA. I was surprised. I was like, it was fairly easy at that time to raise money. NEA decided to, all by themselves, bring $30 million into the company and we didn't even have product launched at that time.Chris Erwin:This is pre-product. Did you go to Sand Hill Road by yourself? Or did you have a support team? Or was the company leadership saying, "Hey, TK, you know what you're doing here, you have the connections, go make this happen by yourself"?Taehoon Kim:It was just me at the beginning. It was just me by myself, just trying it out, because the first meeting is exploratory anyways. So at the beginning it was me. They love what they saw, and then afterwards it was like everybody, all the partners from the NEA side and also everyone from our side. At the beginning, it was just me.Chris Erwin:Wow. Did you enjoy the fundraising process? I mean, it seems like you're wearing so many hats, you're doing business development, you're fundraising, you're also building out different offices as part of the core game development practice. Was there something that you felt like you were gravitating towards more specifically? Or did you like doing it all and having a broad top down view of the company?Taehoon Kim:Yeah, I think the reason I ended up taking the fundraising process is because I actually enjoyed the process. A lot of people hate it, because part of the fundraising process is just being comfortable with getting rejected. But I didn't mind that at all. I'm like, "Fine [inaudible 00:21:57]." And big part of the process is also not only selling, but knowing what they're looking for. So I got really good at researching all the VCs, and instead of having one deck and just one approach for all the VCs, I would custom create the deck for each of the VCs, and only target the top tier ones. I quickly realized that it's actually easier to raise money from the top tier VCs than the second or third tier VCs, surprisingly. And that approach really worked, and I love the process.Chris Erwin:Why is it easier to raise money from top VCs versus tier two, tier three?Taehoon Kim:It's actually simple. The top tier VCs are able to make decisions on their own, even though it seems odd or different or something that doesn't seem intuitive. They are able to say, "Hey, we're going to take a bet on this," and they can make a quick decision. The second and third tier VCs are always looking to see what others are doing. They're always looking for validation. They're always looking to see what the first tier guys are doing.So a lot more due diligence, it takes a lot more work, and they kind of beat around the bush a lot more. They take a lot longer to make their decisions. And a lot of times they bring in other VCs to co-lead or see what they think. So it's actually a lot more work to get them to lead. So if you have a great product and you have a good vision, then just go to the top tier guys. Go straight to top to your guys. They'll be able to make a much quicker and faster decision.Chris Erwin:That's a great insight. TK, though, I do have to say yet again, while you're at Realtime Worlds, I think the same year that you start working there, is 2005, you also are the co-founder of another company called Nurien Software. So yet again, you're working at a company, it's a very big role, you're working across a variety of different company functions, but you're also building something on the side. Is that right?Taehoon Kim:Right. Yeah.Chris Erwin:What was Nurien Software?Taehoon Kim:So Nurien Software was actually a spinoff off of the Realtime Worlds' Korea office. Dave Jones, he introduced me to the guys at Epic Games, and that's when they were launching on Unreal Engine 3. And he also introduced me to another studio who was doing a music game, and that kind of clicked for me. I was like, "Hey, what if we take Unreal Engine 3, which is very high graphics fidelity, which is usually used for like MMORPGs and then create a music game out of it, because the music is to be very visual." And they wanted this to be kind of separate. So I decided to be make it, instead of doing it Realtime Worlds Korea made it into a separate one.And that also started to get momentum. And it turns out music plus gaming was a huge thing, especially in Asia. Just as we were starting the development for, we call it MStar, a music based MMO, another game called Audition just took off massively in China. It was doing a billion a year. It was a tough time for me because Realtime Worlds and Nurien Software, at the same time, was kind of taking off.Chris Erwin:And again, for Nurien Software, you also led a $25 million fundraise from NEA and top VCs.Taehoon Kim:I pitched them on Friday, and they told me they were in on Monday. So it was crazy times. That's when online gaming was really taking off. So it was actually, it's not just me, but it was much easier to raise money at that time.Chris Erwin:Probably, again, working a lot, building, not a lot of sleep. You're running both these companies. And then Nurien Software sells in 2010 to Netmarble CJ E&M. And what was the end result for Realtime Worlds? What happened to that company?Taehoon Kim:I was only running both companies for a short period of time. So right after Nurien Software got funded, the board wanted me to focus on the new VCs, and Nurien Software wanted me to focus on Nurien Software. So I helped Realtime Worlds find a replacement for me, and I left Realtime Worlds, and I was full-time at Nurien.Chris Erwin:Hey, listeners, this is Chris Erwin, your host of The Come Up. I have a quick ask for you, if you dig what we're putting down, if you like the show, if you like our guests, it would really mean a lot, if you can give us a rating wherever you listen to our show. It helps other people discover our work, and it also really supports what we do here. All right, that's it everybody. Let's get back to the interview.Taking a step back, so, TK, you're part of these very exciting companies. The leadership and the founders clearly, really believe in you, and think you are someone special. So they're giving you the green light to essentially co-found spinoffs, and then go raise additional venture funding for that. Did you feel at this point in your early career that you're like, "I'm exactly where I'm supposed to be. This is an exciting path, These are growing industries. I'm good at it. I have the right international connections. And now it's time where I want to double down on this, and I'm going to be an entrepreneur. I see white space in these gaming markets, and I want to build towards that. And I'm going to go raise capital to make that happen." What was going through your head? Because it feels like the story that you're telling is so exciting for someone to be at your career stage. What were you feeling?Taehoon Kim:That's when I realized that this act of dreaming something up, raising money for it, and actually launching it and seeing it become real and seeing a product go live, and enjoyed by millions of people, is just really fulfilling. And it's something that I knew that I wanted to continue doing. It's something that I really enjoy.So even to this day, that's the main reason that I'm doing this. Well, it's more than financially driven motives. I just love creating new things and bringing it out to people and surprising people and seeing them delighted. It makes all the hard work worthwhile, and it's a very kind of thrilling experience for me. And that's when I realized, "Hey, I want to do this long term. This is what I'm good at. Coming out with new ideas and getting it funded and launching it." Not all of them are successful, but that's fine. The act of doing it is a reward.Chris Erwin:Very well said. So I think, was it that mindset, I think, a company that you did found and you worked at for one to two years before nWay was Pixelberry. What was the quick take on Pixelberry? What was that?Taehoon Kim:So Pixelberry was also a spinoff from Nurien Software. Nurien Software was an MMO company, so, as I said, it was using Unreal Engine 3. It was still very heavy. You had to download a big client, and run it on pc. And back in 2009, 2010, that's when social gaming and hyper-accessible gaming was taken off. So Pixelberry, at the beginning, was an experiment to try to bring over a lot of the core technologies built at Nurien Software and make them more accessible, and make it so that people can just instantly play on a browser.And the first game that we tried to do was a fashion game, because we realized from launching MStar, which was a music MMO, the best way to monetize those games were through, we're making a lot of money by selling clothing for the avatars, selling fashion, in other words. So we wanted to create a game, a social game, focused on creating fashion and selling fashion.Chris Erwin:I didn't realize that Pixelberry was also a spinoff of Nurien Software. So it seems that you had a really good thing going with the founding team of Lemmings that created Realtime Worlds. There was a lot of market opportunity. The founders really believed in you, and you had all these different ways, as you said, to kind of create and innovate as the gaming markets were evolving, and bring these incredible gaming experiences to users. And I think you were part of that team for almost six years, from 2005 to 2011. What was the catalyst that caused you to break off from that, start the venture that you still run today, which is nWay?Taehoon Kim:I was doing Pixelberry and it wasn't doing that well, mainly because, me as a gamer, didn't really enjoy fashion games that much. Maybe that was the reason. Or maybe because the industry was kind of changing rapidly, but it wasn't doing that well. Zynga and a handful of others were kind of dominating the social gaming space. And the co-founders of Realtime Worlds, Dave Jones and Tony Harman, at that time, just sold realtime worlds to GamersFirst. And they're like, "Hey, TK, let's start a new company together." And that's when I kind of jumped at the opportunity, because I really wanted to work with those guys again. And that's when nWay was founded.Chris Erwin:Oh, got it. So Dave and Tony are part of the founding team of nWay?Taehoon Kim:Yes, the three of us that were the founders [inaudible 00:30:16].Chris Erwin:So I think what would be helpful for the listeners is to explain what was the initial vision for nWay, when you, Dave, and Tony were coming together to found the company. What was your vision for what you wanted to build?Taehoon Kim:By that time, I did a lot of different type of games, did [inaudible 00:30:31] mobile gaming at Samsung, I did MMOs, PC MMOs Unreal Engine 3, and then also browser based games at Pixelberry. And the vision at nWay was like, "Hey, a lot of people are becoming gamers now through new technologies, new devices, mobile was really taking off. People were playing games on mobile browsers, smart TVs, and there was new technologies to bring them all together." So the vision was, "Hey, let's go back to the type of games that we love. Let's go back to the days when we were playing Doom online, and playing fighting games with other live players. Let's bring competitive gaming, let's bring real time multiplier gaming to the emerging platforms." So that was the vision.Let's create new technologies to bring console quality, competitive multiplier games that could run on mobile browsers, smart TVs, where people can kind of play together regardless of what device they were on." That turned out to be a big thing, these days with Fortnite and Minecraft, everybody's playing crossplay games. Your friend is on tablet, somebody else is on a Nintendo Switch, and you can play together.Chris Erwin:Okay, so when you start out, that's the vision. So where do you start? What was the first steps? Is it pre-product, we're going to go raise money, and put together a team? Or in the beginning of it self-finance and you were working on a certain game or a certain platform? What were your first early moves?Taehoon Kim:I took a lot of the learnings from the previous products. So by then I knew how to make games that would run on multiple devices. I knew it wasn't easy, but we wanted to do a quick prototype of an action RPG game, where it can have four player co-op and two player PVP mode that would run on a mobile phone and a browser. We were able to create a quick prototype in about six weeks, and the prototype, it did all the selling for us.Because I could just show it to the investors, "Hey, look, I'm over here. There's another guy on a mobile device, there's another guy on another device." And they could see that we're all synchronized, and they could see that it was a very fast action game. A lot of them were blown away at how there was low latency and running so fast just over the internet. And so we were able to raise money from the top tier VCs. But at the same time, 2011, 2012 was a period of time when there were a lot of acquisitions happening, and we were also getting a lot of acquisition offers at the same time, that complicated the process.Chris Erwin:So six weeks into building a prototype, you're fundraising on Sand Hill Road, but you're also getting inbounds from companies that want to buy your business that early.Taehoon Kim:Yeah. They saw the prototype and immediately give us ridiculous offers to buy the company. It was basically VCs and companies trying to buy us competing, which helped the valuation to go up.Chris Erwin:All right. So a couple questions on that.
Zach Blume — Co-Founder of Portal A on 2006 Web Series, the Wheelhouse Investment, and Building with Your Childhood Friends
Oct 13 2022
Zach Blume — Co-Founder of Portal A on 2006 Web Series, the Wheelhouse Investment, and Building with Your Childhood Friends
This interview features Zach Blume, Co-Founder and President of Portal A.  We discuss how he built a 360 monetization strategy for an early Internet video series, launching one of the first branded content studios with his childhood friends, creating one of the most well-known and longest-running digital formats in YouTube Rewind, how Portal A ended up selling a minority stake to Brett Montgomery's Wheelhouse, why feeling like outsiders is central to their identity, and what's up next for the Portal A team.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow us on LinkedIn: RockWater LinkedInEmail us: tcupod@wearerockwater.comInterview TranscriptThe interview was lightly edited for clarity.Chris Erwin:Hi, I'm Chris Erwin. Welcome to the Come Up, a podcast that interviews entrepreneurs and leaders.Zach Blume:We built a business model around it that included merchandise, ad revenue share, ticketed events, and sponsorships. And so we actually ran that show at a profit, even though it was early internet video web series. And the idea was to build an entertainment property on the web that could become multi-season, could eventually travel to TV, which it did. It later became a TV series called White Collar Brawlers. It was super experimental, and I would say, looking back on a fairly innovative for three guys who had really no idea what we were doing and had no training in any of this, we built an entertainment property on the internet that was profitable.Chris Erwin:This week's episode featured Zach Blume, Co-Founder and President of Portal A. So Zach grew up in Berkeley and had a self-described normal suburban life of sports and friends. Zach then went to University of Oregon to study political science and pursued an early career running local political campaigns in California. But an opportune moment reunited Zach, with his two childhood friends to create one of the internet's earliest digital series White Collar Brawlers.After some unexpected success, the friend trio then became the founding team for Portal A, an award-winning digital and branded content company. Some highlights of our chat include his 360 monetization strategy for one of the earliest internet video brands, what it takes to co-found a successful company with your friends, how they landed a strategic investment from Wheelhouse, why feeling like an outsider is central to their identity, and how they're building towards the next massive creator opportunity. All right, let's get to it. Zach, thanks for being on the Come Up podcast.Zach Blume:It's a pleasure to be here.Chris Erwin:From our conversation yesterday, amazingly, I believe this is your first podcast interview ever. Is that right?Zach Blume:It's true. A lot of interviews over the years. Some predating the podcast era, some during the podcast era, but I'm honored to be invited onto yours. I've listened to a bunch of episodes, and we'll see how it goes.Chris Erwin:Awesome. All right, so as is typical, let's rewind a bit before we get into the whole Portal A story, although it actually starts pretty early on. So why don't you tell us about where you grew up and what your childhood was like?Zach Blume:Yeah, I grew up in Berkeley, California, the son of two die-hard New Yorkers who had moved out to California. My dad was born in the Bronx. My mom was from Manhattan. They were part of the New York exodus to California, and I was the first kid in my family who grew up in California and, of all places, Berkeley, childhood filled with lots of sports and playing in the street and all that good stuff. And the really interesting tie to the Portal A story, obviously, is that I met my two co-founders when we were somewhere between four and five years old. The stories differ, but we met in kindergarten, and we're close friends basically since we were little kids and played a lot of basketball together growing up. And the court that we played basketball in was called Portal A, which eventually became the name of our company 25 years later. The founder story of Portal A is very tied up in the childhood story of all for all three of us. I live in Oakland now, so I didn't stray too far from home.Chris Erwin:Got it. I remember in doing a little bit of research for this episode, I was trying to look up Portal A parks around the US, and I kept finding some in Orange County, so I thought you were an NorC kid, but No, you're a NorCal kid.Zach Blume:I mean, I think if there's an opposite of Orange County, it would probably be Berkeley.Chris Erwin:That's probably right.Zach Blume:But the court was actually an El Cerrito, which is an adjacent town to Berkeley, and it still exists. It's still around, and we should probably go play some hoops over there, but we haven't for years.Chris Erwin:Yeah, that'd be fun. So I have to ask, what did your parents do?Zach Blume:My dad has a business background. He runs and, up until actually six months ago, ran an investment advisory firm helping individuals manage their investments. It was a small company, five to six employees, just a great business, really community based, all about relationships and helping people manage their life and their money. And yeah, it's taught me a lot about business growing up, for sure.My mom was a therapist. She's retired now. She was a private practice in Berkeley. They've known each other since they were 20. They actually both went to the Wright Institute, which was a psychology graduate school in Berkeley. My dad was a psychologist briefly for about six months before he went back into business. And my mom was a therapist for 25 years. It was an interesting mix of business and psychology growing up, for sure.Chris Erwin:Got it. And were there any siblings?Zach Blume:No siblings? I'm the only one and-Chris Erwin:Oh, only child. Okay.Zach Blume:Yeah, interestingly, five of my closest friends, all groomsmen at my wedding, were from that same kindergarten class where I met Nate and Kai, my two co-founders. So there's definitely been a brotherly nature of those relationships. And at this point, I kind of consider Nate and Kai almost like brothers. We've known each other for 35 years, and we've been in business together for over 12 years, so it's pretty deep. Those relationships run pretty deep.Chris Erwin:Was there a part of you early on where you thought you might go into business and finance or become an investment manager like your father?Zach Blume:So there was also a lot of political kind of conversation and learning in my house. I remember from a very early age, my dad, when I was like eight, he would try to sit me down and read the Sunday Weekend Review in the New York Times. And it was like torture for me. But I think it got in there somewhere.In college, I actually studied political science and, for years, worked in the political world after I graduated from school. And I really thought that was my path, and it was for many years. I worked on campaigns. I started managing campaigns. I worked for political communication shop in San Francisco for years. I kind of burned out on the world of politics. I've since been re-engaged in a lot of different ways. But when I burned out on politics, that's when I thought I was going to go into business.I left the political world, was studying to go to business school, doing all the GMAT prep, and that's when Nate and Kai came to me and said, "We should make a web series together." Because I had a three-month gap, and it sounded so fun. We had made some stuff together just for fun earlier on. And so, while I was studying for the GMAT, I joined Nate and Kai to make this web series in the early days of internet video. And that's kind of the origin story of where we are today is that that web series, it was called White Collar Brawler. It was totally weird and crazy and awesome, and it started us on our journey to where we are today.Chris Erwin:Got it. So going back even a bit further, I'm just curious because you met your co-founders, Nate and Kai, back when you were in kindergarten, as you said, four to five years old, when you were in middle school, or when you in high school, were you guys part of the theater club? Were you creating any types of videos for your classes? There's something about meeting people early in your childhood, particularly in digital media, that I think blossoms into different relationships. So was there any kind of through line early on where you were interested in media entertainment before getting into PoliSci, which as part of your early career?Zach Blume:Yeah, I think there definitely was for Nate and Kai. There was less so for me. So Nate and Kai started making, maybe not in high school, but in their college years, they both went to school on the East Coast. This is like 2003, 2004, 2005. They started making internet, video, and web series when they were in college. And Kai was a film major, so he had some training, and they started just playing a lot of comedic stuff earliest day pre-YouTube, so quick time player-type stuff.So yeah, high school, I'm not so sure college for sure for them, at least it started building. And then, right after college, the three of us, plus another friend, grabbed a flight to Hanoi, bought motorcycles in Vietnam, and traveled across the country, and we made a web series called Huge In Asia.So it was like a 30-episode comedy travel web series, kind of just chronicling our journey across Vietnam. And then, they went on, I had to come back to the States for some work, but they went on to Mongolia, China, Laos, all sorts of different countries across Asia. That's where it really started for us the idea that you could not be in the formal, either entertainment industry or advertising industry. You could buy a pretty shitty camera, have an idea, start producing content and build an audience. And that was 2006. So the interest in internet video as a medium really started there.Then we all went our separate ways, and all did kind of normal early career professional stuff, but that Huge in Asia as an idea and an adventure was really the starting point for us. So yeah, so I would say the interest in video and film and just the distribution of it online started college years, and then the year after, we went to Asia.Chris Erwin:Got it. So just to add some context here, because I think YouTube was founded around 2004, and then it was bought by Google around '05, '06 pretty shortly after founding. So when you're coming out of college, I think this is around a 2006 timeframe, as you noted, when you guys decided to go to Asia and to do this motorcycle tour, was there a goal of, "Hey, there's an explosion in internet video, we have a chance to build an audience and make money off of this?" Or was it just, "Hey, this seems like a really fun thing to do. We're just coming out of college, we're kind of this in this exploratory phase, we like spending time with one another, let's go do this and see what happens." When you were thinking from the beginning, what was the end goal of that project?Zach Blume:Much more the latter. I mean, it was purely experimental. It was all about the adventure. I think there was a sense that we were at the dawn of something new, and I think that YouTube, Vimeo, I mean all the other platforms in the investment of history at this point, but there was an explosion of internet video technology that was enabling people like us to start making stuff. So I think there was like a sense that something was happening. It definitely was not a money-making endeavor. In fact, it was the opposite. And it was really just to experiment and play and see where it took us.Looking back on it, 15 years later, 18 years later, whatever it is, I think it's 100% served its purpose. We got our feet wet. We started experimenting. We started learning what worked, what didn't work, what audiences responded to, what made us happy. It kind of gelled our relationship as young adults versus as kids. And we never would've known at the time, but it did 100% lead to Portal A, and that's to where we are now.Chris Erwin:Okay, yeah, I hear you. I think, looking back in retrospect, it was definitely a catalyst to the forming of Portal A and where you got to where you are today, but it wasn't because when you came back from that trip, it wasn't like, "Oh, let's found Portal A and let's get going." You actually entered into the political realm for two to three years before founding Portal A, right?Zach Blume:Yep. That was always my plan, and that was the career I was going to pursue for sure.Chris Erwin:So, but the seed had been planted, but yeah, in '06, for the next two years, you become a political campaign manager. What campaigns were you working on?Zach Blume:First campaign was a Congressional campaign in Southern California. That was actually my first job out of college. We got trounced by 22 points in a very heavily Republican district by Mary Bono, who was Sonny Bono's widow. We had a candidate that we really liked, and it was the 2006 election, so it was kind of the midway point or the later stages of, I guess, Bush's first term. And there was a ground swell of just whenever there's a presidential election, two years later, the other party is the one that's like kind of getting their grassroots organizing on.So it was definitely an exciting time. It was an exciting election year. I happened to work on a campaign that was in a... It was Palm Springs. It was like that area, heavily Republican area, but I learned so much, and I was running a third of the district, and I loved it. I loved organizing. I felt like I was on the right side of history and doing the right thing.That then led to this fellowship that I did called The Coro Fellowship. I met one of my best friends on the campaign who had done the Coro Fellowship, and it was a year-long fellowship in political and public affairs. Everybody listening to this podcast will never have heard of Coro, but in the political and policy world, it's well-known and well-regarded, and that was a great experience. I got exposure across a bunch of different sectors, including government, labor unions, business, nonprofits, et cetera.Out of that, I started managing a campaign for the California State Assembly in Richmond, California, with a candidate, Tony Thurmond, who is now the Superintendent of Public Education in California. So he's gone on to do pretty big things. He's an amazing guy.And that led me to work at Storefront Political Media, which was a political media and communication shop in San Francisco that, at the time, ran all of Gavin Newsom's campaigns. He was then the mayor of San Francisco, obviously, is now the governor of California.I ran the mayor's race in Houston, of all places, elected Annise Parker, who was the first lesbian mayor of a major American city. And she was a fantastic executive out in Houston and then had a bunch of different clients, including firefighters unions, individual candidates. Ultimately, I was working for a client that was leading initiatives that didn't necessarily align with my own political values. And that was part of what led me to say I was ready to move on from the world of politics. So it was a fantastic experience, I learned so much, but that's what kind of prompted me to want to go to business school, which is what I was going to do until Nate and Kai came along and said, "Let's make a web series."Chris Erwin:Yeah. When you were working on these political campaigns and also working with Storefront Political Media, which is a national communication media and PR firm, were you bringing some of your grassroots internet video tactics to help build community, to help build influence and sway some of these elections? Was that part of kind of some of the unique flavor that you brought to these teams?Zach Blume:For sure, I was definitely the internet guy at that shop. I mean, there were a couple of us, there was a couple of coworkers who were of my generation. This was just when kind of Facebook was becoming a powerful tool for communications pre-Instagram, pre all those other platforms we're familiar with now. I definitely brought my expertise in video and the distribution of content online to that work. It was an interesting time politically. It was just at the advent of the internet as a powerful communications tool for campaigns.Chris Erwin:So then you're considering going to business school, you take the GMAT.Zach Blume:I got halfway through the class, and White Collar Brawler, that series, came calling. It was all-consuming. It was so fun. And we produced the hell out of that show, and it got a lot of notoriety. We got a big write-up in the New York Times, like big-Chris Erwin:Give us the context for White Collar Brawler again. What exactly was that project, and what were you supporting?Zach Blume:The log line was basically what happens when you take office workers whose muscles have become dilapidated by sitting in front of a computer all day long and train them to become amateur boxers. It just so happened that the two White Collar workers that were the stars of the show were Nate and Kai. So it was very, kind of like meta, we were the creators, and Nate and Kai were also the stars.The experimental part of it was shooting and producing the series in real-time. So there was an experiential element to the show, meaning as Nate and Kai were training to become boxers, fans of the show could actually come out and train with them, run on the beach in San Francisco or go to a training session with a boxing coach. We had events happening throughout the course of the show. It eventually culminated in an actual fight, a licensed fight in Berkeley between Nate and Kai for the Crown. And we had, I think, 1500 people showed up to that site and paid tickets-Chris Erwin:Was it boxing, mixed martial arts? What was the actual thoughts?Zach Blume:No, just old-school boxing.Chris Erwin:Okay.Zach Blume:It was the real deal. And-Chris Erwin:I may have missed this in the beginning. Who funded this? What was the purpose of it?Zach Blume:It was partially self-funded. It was partially funded by a friend of ours who had sold, in the early internet days, had sold his tech company to Google in one of the early Google acquisitions. So he just privately financed, I mean, we're not talking about big dollars here, and we built a business model around it that included merchandise, ad revenue share, events, ticketed events, and sponsorships, which I was in charge of in addition to other things.And so we actually ran that show at a profit, even though it was just an early internet video web series. It was actually a profitable property, and the idea was to build an entertainment property on the web that could become multi-season, could eventually travel to TV, which it did. It later became a TV series called White Collar Brawlers. And so it was actually super experimental, and I would say, looking back on it, fairly innovative in terms of for three guys who had really no idea what we were doing and had no training in any of this, we built an entertainment property on the internet that was profitable.Back to the question, I mean, that's what distracted me from going to business school because I felt like, first of all, I was learning so much, I was having so much fun creating content with two friends, and you just had a feeling that we were onto something and we didn't know what that thing was. We thought we were going to be an original entertainment company that would just make shows like White Collar Brawler, but we knew there was something. We knew there was a lot of activity and interest in this space. And so that took up all my attention and then took up my attention for the next 12 years.Chris Erwin:I will say from personal experience it saved you a couple of hundred thousand dollars and a lot of agony of actually taking that test.Zach Blume:Right, exactly.Chris Erwin:And being two years out of the workforce, speaking from personal experience.Zach Blume:Right. I know, I know.Chris Erwin:So, okay. And look, this is interesting to think about how you guys, as a founding team, were gelling and coming together. When you guys started talking, "Let's do this White Collar Brawler show as a team," what was your specific role, Zach? What was it like? What are you going to focus on?Zach Blume:Yeah, I mean, it actually reflects the role that I now play and ended up playing when we turned White Collar Brawler into a business. So Nate and Kai are more on the creative side, the creative and production side, both had experience. They had both actually before me had left their kind of "normal jobs," moved to LA, and started making internet video with a vision for again, "We don't know what it is, but there's something going on here, and we want to be a part of it."They had background as almost as creators themselves and also some training, actually with the physical act of production. So Nate and Kai were always much more on the creative side and the production side. And then my role was kind of capital B business. I was responsible for sponsorships. I was responsible for the operations of the show. I was responsible for where we were going to have office space, all that type of stuff. Basically the business side of creativity, and that's the same today. I mean, it's kind of like, it was just a foreshadow of the roles that we ended up playing as we were growing Portal A. And we've always had a super clear and complementary division of labor.I would say when looking for business partners, I think that might be, I mean, your rapport and your ability to communicate is lots of things are really important, but making sure that each person, each principal has a clear role and that they actually like that role and can succeed in that role is I think one of the keys to business success. So we've always had very clear roles. We've always liked our roles and felt like we belonged where we were. That's how it started with White Collar Brawler.Chris Erwin:That's awesome. Yeah, I have to give you some real kudos because you take very early on in your career, and in the digital entertainment ecosystem, you take an IP concept, and you create a diversified, sustainable business model around it where you have revenue coming in from advertising, sponsorships, merch, ticket sales, that's what many different IP properties want to figure out today. And many struggle to do that.Zach Blume:The only we could've described it back then as well as you described it now, but yes, that's basically what it was.Chris Erwin:Yeah, you look around at one another, you have this culmination in a ticketed event where there's over 1500 people pay to see the fight between Nate and Kai. And so you guys look around at one another and say, "Hey, we got something here." Is the next step? Let's found a business, call it Portal A and start doing this at scale. Or did it kind of just naturally happen, saying, "All right, let's find the next project and see where it goes from there."Zach Blume:It was much more, again, the latter. I mean, we did know that there was something brewing; I gave ourselves, at the very least credit for that. Did not have a business model. We did not have a plan. We had a kind of a concept and an idea and a good partnership. And I think that was really important too, is just how well we worked together.When we came out of White Collar Brawler, we had this idea credit to Kai. I believe we really wanted to do a show about whiskey, that that was going to be our next piece of IP that we wanted to develop and the concept behind the show, again because we didn't want, we were just going to be doing original series built for internet video was basically a distillery tour type show, but with a twist where there would be a membership model involved. And for anybody who was in a... 99% of viewers would just watch the show for the entertainment value, any type of good travel show that built that type of audience. But 1% of viewers would subscribe to the show and get a drum of whiskey. For each distillery that we were visiting as part of the show, they would actually get samples in the mail, and it would be kind of a whiskey of the month model married to an entertainment property.And we were coming out of White Collar Brawlers, we were visiting distilleries, getting drunk, trying to figure out this model. And we were super hyped on it. We thought it was a really interesting way to monetize internet video through subscriptions. And we even got into the logistics of shipping, and we were really going down that path, and in the meantime, we were broke, we were like 25 years old and-Chris Erwin:That was my next question. How are you funding all of this?Zach Blume:Well, we paid ourselves an extremely nominal salary. I would call it a stipend when we were making White Collar Brawler enough to survive. And then, coming out of that, we were trying to do our whiskey show, but that stipend went away. So we were without income, really. I mean, I remember going to Bank of America at some point, and there was so little... This is one of our funny stories that we tell each other. I remember this parking lot moment where the three of us had gone to Bank of America, where we had this White Collar Brawler account, or maybe it's a Portal A account. I'm not sure. And there was, I think, less than $1000 in there, and it was one of those like, oh, shit-type moments, and I remember going out to the parking lot and being like to Nate and Kai because I was always kind of the rah-rah guy of the three of us. And just, I remember basically having to give a motivational speech about that we were going to be okay, that this is going to be okay, despite the fact that we had absolutely zero money in the bank.That was where we were at that point. We were trying to figure out this whiskey idea, and then all of a sudden, because of the popularity of White Collar Brawler and some big YouTube videos we had made to promote the series, we started getting some inbound interest from brands. And that was never in the plan. We would think about sponsorships on our original series from brands, but never creative service worked directly to brands, and our first phone call was-Chris Erwin:Explain that difference for the listeners. I think that's a good nuance.Zach Blume:Yeah, I mean, if there was a business model, the business model we were considering was building properties like White Collar Brawler that could be sponsored by, in the best-case scenario, Nike or by Everlast, the boxing company, or by Gatorade or that's who we were pursuing for what-Chris Erwin:So think of title cards and brought to you by et cetera.Zach Blume:Exactly. Or like sponsoring events or merchandise or all that type of stuff. And we had some success, not from the big brands, but we had some success on White Collar Brawler with sponsorships from more regional brands, or like there were some beer companies and some smaller merchandising startups that were part of the sponsorship mix.I will say that we sent out about 500 to 1000 sponsorship emails and got about five sponsors. So we worked hard at it. And so that was the model we were going to pursue even for something like the whiskey show. We were going to look for sponsors and brand sponsors in that way. We never thought we were going to build a creative services company, meaning brands, an advertising company effectively, like brands hiring us as a service provider to create content. That was never, ever something we thought about.We started getting these phone calls. I remember being in a car one time, and I got this random call from a number I did not know, and it turned out to be a marketing manager at the Gap. Her name was Sue Kwon. Shout out, Sue Kwon, if you're out there. She was our first real client after White Collar Brawler. And we started making videos for the Gap, as kind of like a little agency production company.Then we got some more calls. There was a Tequila company that wanted us to make a web series called Tres Agaves Tequila. They wanted us to make a web series shot in Mexico about the origins of Tequila. Then we got a call from Jawbone, which was a hot Bluetooth speaker company at the time-based in the Bay Area. They wanted us to make a music video featuring a bunch of early YouTube influencers or creators.So we started getting these, we called them gigs at the time because literally all we were trying to do is pay our rent and so we could make the whiskey shows. We were just trying to get a little bit of income coming in so we could actually go out and make our dream whiskey show. And there were fun projects, and we weren't making advertising. We were making content, and that was a big difference for us. We weren't making pre-roll ads or 30-second ads. We were making web series for brands and music videos for brands and all that type of stuff. And without knowing it, we kind of stumbled across an area that was in high demand, which was brands trying to figure out what to do on platforms like YouTube and social media with video. We had established ourselves as understanding that world.So that's the origin of our branded content business which became the core of our business for many, many years was just one-off phone calls, unexpected phone calls, taking projects as gigs to pay the bills, and just kind of doing our best and seeing where it led.Chris Erwin:Hey listeners, this is Chris Erwin, your host of the Come Up. I have a quick ask for you if you dig what we're putting down. If you like the show, if you like our guests, it would really mean a lot if you can give us a rating wherever you listen to our show, it helps other people discover our work, and it also really supports what we do here. All right, that's it, everybody. Let's get back to the interview.What was the moment where you felt it evolved from, "Hey, it's the three of us rotating between gigs, hiring freelancers as need be, to what became a business, which is called a systematized and efficient way to deliver consistent quality around a good or service."Zach Blume:I think the first year was the gig model. It was just a patchwork of projects in order to generate some form of income. The second year it started to feel real. There started to be a fairly steady flow of inbound interests, and then a kind of something we be started to become known for a type of content. It was kind of humorous, entertaining, felt like it was native to the internet and to YouTube.I think in that second year was when it started to feel like a business, and then some light clicked for me that we actually needed to do some business planning and thinking, and I had no idea what I was doing. I mean zero, negative. Negative idea what I was doing. But I had grown up where my dad was a small business owner, so I had some exposure, but I just remember being it was just like a vast sea of unknown principles and requirements that I had to navigate.Chris Erwin:How did you figure that out? Did you put together an advisory board? Did you call your dad? Were you calling some other friends in business?Zach Blume:One of our earliest advisors was not a business advisor. He was our sensei in some forms in the earliest days. And this is another shout-out to Steve Wolf, who you may know, who was on the executive team of Blip, which was one of those many early internet video platforms. He really helped us understand the space.We did not have a formal advisory board. We did not have a board. And it was truly trial and error. That's the best way I can describe it. It was just using our brains and figuring things out through mistakes and successes. It is a total blur looking back on it, but I think we were a good partnership. We had our heads screwed on straight, and we kind of learned how to operate.Chris Erwin:Another important part, too, is, like you said, when you all looked at your bank account, and everyone's face went white, but you were the rah-rah guy, which is like, "Hey, guys, we're going to figure this out. Where there's a will, there's a way." And I think that's a very important role. Shout to Steve Wolf. He was one of the execs that oversaw the AwesomenessTV network when I was there in 2014, 2015 timeframe. Super sharp guy, OG in the digital space. So not surprised to hear that he was a valuable advisor to you.All right, so then I think there's another pretty big moment where your business takes an even bigger step up. And I think this has to do with becoming the official partner for the YouTube Rewind project. The moment where you felt, "Okay, we're really onto something here."Zach Blume:Yeah, it was coincidental. We were introduced to somebody at YouTube in 2011 as a three-person team that was making internet video content and mostly on YouTube. And Rewind was just a twinkle of an idea. I mean, it was like there was a minor budget. It was basically a countdown of the top videos of the year. The budget was, I think, $20,000 in the first year to make Rewind. And we shot it in a small studio location. It was one of our earliest projects, and it was before Rewind became Rewind, the big thing that many of us are familiar with. It was a major validator for us to start working with YouTube directly as a client. And Rewind eventually became a project that defined our growth for many, many years to come. But it started very, very small.Chris Erwin:From that project. You've been around for now for 12 years, being founded around 2010. What did the growth in scaling part of your business looks like? With YouTube Rewind and other marquee projects, you're starting to get a sense of what are we actually building towards. Was there a point of view there or like, "Hey, we have inbound interests, we're working with brands and advertisers," all of a sudden we're working with publishers, and were you just kind of being more reactive or was it a mix of being reactive and proactive?Zach Blume:The best analogy I can draw is to kind of riding a wave. This may resonate with you, but I don't think we knew what was around the next corner or what the next thing was going to look like. We were just building momentum in those early years and taking each project as it came. We knew we had something. We knew we had a good partnership. We knew we were starting to bring some really interesting, smart people to the team, clients that were really willing to push some boundaries. And I was learning as I went along how to run a business, and Kai was learning, and Nate was learning how to create amazing content, and there was not a lot of foresight. It was mostly about riding a wave and seeing where the wave took us. Then doing a really good job. That was really important because every project, the success or not success for the project kind of dictated what the next chapter was going to look like.So we just focused on trying to build some good fundamentals for the business, trying to make sure we were profitable because we had to be and just making work that we were proud of. That's the extent of our planning, I think, was just what did the next three months look like and how do we keep riding this wave?Chris Erwin:Yeah, and that's something I think worth emphasizing for the listeners where it's, so often people will say you have to be super strategic in planning every single move and where is their white space and how are you going to beat out your competitors to get it? But I think when you are building a small business, and this is something that I reeducate myself on consistently with RockWater, it's really about the basics, which is know your core service offering and nail it and delight clients, from there, that's really the core foundation from where you grow and where other things can emerge. And I think that's a testament to really what you guys have done for well over a decade is you know your lane, and you operate so effectively within it that is now, over the past few years, created some other really exciting opportunities for you, your success in your lane led to the investment by Wheelhouse a couple of years back. So how did that come to be? Because I think that's a pretty big moment for the company.Zach Blume:That fast-forward a bit over years of misery and happiness and everything in between. We threw ourselves entirely into growing Portal A for the bulk of our 20s. It was all-encompassing, tons of sacrifices that were made to other parts of our lives, which I'm okay with looking back. I do think that 20s are a good time to throw yourself and just be completely focused and passionate about something like this. And we built that branded business. We diversified the type of clients we were working with. Projects got bigger and bigger, Rewind got bigger, and all the rest of our projects got bigger.Starting around 2016, we wanted very badly to return to the original thesis of Portal A, which was creating an original entertainment properties for the web. That's where it all started. And we had spent so many years working with brands, and it was fantastic, and it was a good business, and we got to make really cool stuff. But we had this hunger to return to
Camila Victoriano — Founder of Sonoro on Building LA Times Studios, Latinx Podcast Innovation, and Following the Story VS the Medium
Sep 15 2022
Camila Victoriano — Founder of Sonoro on Building LA Times Studios, Latinx Podcast Innovation, and Following the Story VS the Medium
This interview features Camila Victoriano, Co-Founder and Head of Partnerships at Sonoro.  We discuss how fan fiction taught her to see nerds as heroes, being in the room when Dirty John was pitched to become a podcast, her crash course to figure out the business of podcasting, becoming a first time founder during COVID, why the Mexico audio market is like the US four years ago, Sonoro's growth to a global entertainment company, and why there are no limits to Latino stories.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow us on LinkedIn: RockWater LinkedInEmail us: tcupod@wearerockwater.comInterview TranscriptThe interview was lightly edited for clarity.Chris Erwin:Hi, I'm Chris Erwin. Welcome to The Come Up, a podcast that interviews entrepreneurs and leaders.Camila Victoriano:So in 2017, we had a meeting with the editor in chief at the time, and he was like, let me sit you guys down and read you this out loud. And it was what would become Dirty John. That's when we realized there's something here that I think could be our first big swing in audio and in podcasting. And we got to talking and at that point we were like, I think we can do something here. And I think there's a story here to be told in audio. When it launched, it took us all by surprise with how well it did. Obviously we knew it was a good story, but I think you never know when something's going to be that much of a hit. Today, it probably has over 80 million downloads.Chris Erwin:This week's episode features Camila Victoriano, co-founder and head of partnerships at Sonoro. So Camila grew up in Miami as a self-described nerd with a passion for books and fan fiction. She then went to Harvard to study English, literature and history, which led to her early career, starting at the LA Times. While there, she became a founding member of their studios division and a “audio champion”. Then in 2020, she went on to co-found Sonoro, a global entertainment company focused on creating premium, culturally relevant content that starts in audio and comes alive in TV, film and beyond.Sonoro collaborates with leading and emerging Latinx storytellers from over a dozen countries to develop original franchises in English, Spanish, and Spanglish. Some highlights of our chat include how fan fiction taught her to see nerds as heroes being in the room when Dirty John was pitched to become a podcast, her crash course to figure out the business of podcasting, becoming a first time founder during COVID, why the Mexico audio market is like the US four years ago and why there are no limits to Latino stories. All right, let's get to it. Camila, thanks for being on the podcast.Camila Victoriano:Yeah. Thank you for having me. Excited to be here.Chris Erwin:For sure. So let's rewind a bit and I think it'd be helpful to hear about where you grew up in Miami and what your household was like. Tell us about that.Camila Victoriano:Yeah. So I grew up in Miami, Florida, very proud and loud Latino community, which I was very lucky to be a part of, in the Coral Gables Pinecrest area for those that know Miami and my household was great. My dad, he worked in shipping with South America. My mom was a stay at home mom. And so really as most kids of immigrants, I had obviously parents I loved and looked up to, but it was very different than folks that maybe have parents that grew up in America and knew the ins and outs of the job market and schools and things like that. But really great household, really always pushing me to be ambitious and to reach for the stars. So I was, yeah, just lucky to have parents always that were super supportive. Questioned a little bit, the English major, that path that I chose to go on, but we're generally really happy and really supportive with everything that I pursued.Chris Erwin:Yeah. And where did your parents immigrate from?Camila Victoriano:My mom is Peruvian and my dad was Chilean.Chris Erwin:I have been to both countries to surf. I was in Lobitos in I think Northern Peru and I was also in Pichilemu in Chile and yeah, just absolutely beautiful countries. Great food, great culture. So do you visit those countries often?Camila Victoriano:I visited Chile once, much to the chagrin of my father, but Peru, I visited so many times and yeah, they both have incredible food, incredible wine. So you can't really go wrong. I did Machu Picchu and Cusco, and that sort of trip with my mom once I graduated college, which is really great just to go back and be a tourist in our country, but they're both beautiful and yeah, I love going back.Chris Erwin:Oh, that's awesome. All right. So growing up in your household, what were some of your early passions and interests? I know yesterday we talked about that you had an early interest in storytelling, but in some more traditional forms dating back to the ‘90s, but yeah. Tell us about that. What were you into?Camila Victoriano:I was always a huge reader. It's funny because my parents read, but not super frequently. My grandparents were big readers, but I always, always gravitated towards books. I remember, like many people of my generation when I was six, I read the first Harry Potter book and that was just mind blowing for me and I think...Chris Erwin:At six years old? Because I think I learned to read at like five.Camila Victoriano:Yeah. I had help with my mom a little bit but I remember we read it together and we would just mark with a crayon every time where we ended on the page. But I remember that book was like, I think when I first really understood how detailed and how enveloping worlds could be. And I think starting from that point, I just went full on into fantasy, YA, all sorts of books. I was just reading obsessively. It also helped that I was a classic nerd in middle school and high school and all throughout childhood, really. So I think for me, books, literature stories were just a way to see the world, see people like me, a lot of times in fantasy books or in sci-fi books in particular, you have the nerds as heroes.And so I think for me, that was a big part of why I gravitated to those genres in particular. But yeah, I just read all the time and then I did light gaming. So I played the Sims, again, similar idea though. You're world building. You're living vicariously through these avatars, but that was really how I spent most of my time, I obviously played outside a little bit too, but I was a big indoor reader always.Chris Erwin:Got it. This is interesting because the last interview I just did was with Adam Reimer, the CEO of Optic Gaming, and we talked a lot, he was born in the late ‘70s. So he was like a 1980s self described internet nerd as he says, before being a nerd was cool. So he was going to web meetups at bowling alleys when he was just a young teenager. Over through line with you because he was in Fort Lauderdale and you grew up in Miami. So two Florida nerds.Camila Victoriano:Yeah. Nerds unite. I love it.Chris Erwin:Nerds unite. You also mentioned that you also got into fan fiction. Were you writing fan fiction? Were you consuming it? Was it a mix of both?Camila Victoriano:A mix of both. So that's really in middle school in particular, how I really bonded with my small group of friends. I remember my best friend and I, we connected, we were on the bus reading a Harry Potter fanfiction on at that point it was fanfiction.net. And that is also again, similarly because in person with people, it was just like, we weren't really connecting that much. And so that community online was huge for me and my friend. We read all the time, people had comments, you had editors that you worked with and we wrote them ourselves too. And I think, looking back in the retrospective for me, that's where I think I first started to realize the potential of world building really in storytelling and in media and entertainment. It’s like, it didn't stop with the canon text. You could really expand beyond that.We loved telling stories about Harry Potter's parents and how they would go to Hogwarts, like super in the weeds, deep fandom. I don't know. I think for me that was just a real eye opener too, of like, oh, there's a whole online community. And I don't think at that point I was really thinking business. But I think for me, that's where I started to redirect my focus much more seriously too of, oh, this isn't just like, oh, I like books for fun. There's people all around the world that are incredibly passionate and spending hours upon hours of time, oftentimes after hours of school to just write and to really immerse themselves in these universes. And I remember writing them and reading them, just realizing how badly I wanted to be a part of creating things that caused the same feeling. And so for me, that was huge in that respect too.Chris Erwin:Well, thinking about fanfiction, literally there are now companies and platforms that are worth hundreds of millions of dollars that foster fanfiction, the communities around them. I think of Wattpad where you have film studios and TV studios, and a lot of the streamers that are now optioning IP from these fanfiction communities to make into long form premium content. Pretty incredible to see. So you go to high school and then you end up going to Harvard. I think you end up becoming an English major at Harvard. Was that always the intent from when you were in high school, it's like, yes, I'm going to go and get an English degree? What were you thinking? How did you want to spend your time in college? And then how did that evolve after you went?Camila Victoriano:I was typical good student in high school, right, but I think the older I got, the more I realized, oh no, my passion really lies in my English classes, my history classes. Obviously, I think math, once I got to calculus, I was like, all right, this might not be for me. And then science never really gravitated towards, so for me, it was always very clear that even though I tended to be a generalist in many things, my passion and my heart really was in writing and reading and stories and in history too, in the real world and how they intersected and how they affected each other. And so I remember when I was applying to schools again, my parents were like, are you sure you want to do English?Because for them, it was in Latin America, many of the schools don't have that many practical degrees like that. You pick something a bit more technical. So I remember I would tell them, oh yeah, don't worry. I'm going to do English, but I'm going to minor in economics, which never happened. Once I got there, I was like, absolutely not, but that's what I would tell them because I was like, oh no, I'm going to be an English major, but I'm going to have some business acumen to go with it. And I think at that point when I was going into college and applying to schools, what I wanted to do was go into book publishing. And I really wanted to, I remember I had seen that Sandra Bullock movie, the proposal where she's an editor and I was like, that's what I want to do. And so at that point I was talking to, we have this really awesome local bookstore in Miami called Books and Books.And I went and met with the owner, Mitchell Kaplan had a conversation with him. And I remember I told him I wanted to get into books. I wanted to get into publishing. And he's like, look, you're young, you're getting into college. I run a bookstore, but I would tell you, don't worry so much about the medium, just follow the content where the content's going. And that was a huge eye opener. Even though it seems now obvious to, sitting here saying that, I think for me at that age where I was, so it's easy to get one track mind of like, this is what I want to do, and there's nothing else, to get that advice from someone who was running a place that I loved and went to so frequently growing up.And I think that for me, gave me a bit more flexibility going into college, just saying, okay, let's see where I gravitate towards. I know I want to do something creative. I know I want to still study English, but maybe he's right and I don't have to just stick to publishing. So when I got into Harvard I still, again, focused my classes, really liberal arts, right, like film classes, history classes. But I was a bit more, when I got there, unclear of what that would actually lead to in an exciting way, I think. But that was probably a really great piece of advice that affected how I thought about what would come next after Harvard.Chris Erwin:Yeah. So following that thread, I really love that advice of, don't worry about the medium, just follow the content. Clearly I think that really influenced a later decision that you made about doubling down on audio. But before we get there, in terms of following the content, at Harvard, it seems like you dabbled in a few different things where you did an internship with the LA Times, which is maybe news and journalistic reporting. You're also a staff writer for the Harvard political review. So what did following the content look like for you when you were at school?Camila Victoriano:So Harvard can be a really overwhelming place. My mom had gone to college, my dad hadn't finished. So it was a semi first gen college experience where I was like, whoa, once I got there. It was incredibly, the first semester and a half were really, really overwhelming. And I had to get my bearings a little bit, but I think once I got there I tried to dabble in a lot of things. And I think there was literary magazine, there was the Crimson, which is a classic. And then there was a few other organizations like the Harvard Political Review at the Institute of politics. And so I sat in a few things and it's crazy. For people that don't know, once you get there, you still have to apply to these things.You haven't gotten there and then you're done and you're good to go and everything's set up. There's a pretty rigorous application process for most of these clubs, which makes it overwhelming. And so for me, what I ended up finding a home in, in terms of just the community and the way they welcomed you in when you came into the club was the Harvard Political Review. And as one does in college, you get a bit more political, you get a bit more aware of what's going on around you, world politics. And so I think I was in that head space already and wanted to flex a little bit of my writing skills outside of class. And so there I was able to really pitch anything. So I would pitch, I remember like culture pieces about the politics of hipsters, of all things, and then would later do a piece on rhinos that are going extinct.So it was really varied and it allowed me to be free with the things I wanted to write about and explore outside of class and in a super non-judgmental space that was like, yeah, pursue it. And we had all these professors that we had access to, to interview and to talk about these things. So it was just a great place to flex the muscles. But I think mainly my focus in college was building relationships with my friends, if I'm totally honest. I think as someone that's super ambitious and super driven, I was very particular and followed step by step exactly what I needed to do in high school to get into the school I wanted to get to. And then once I was there, I was like, let me enjoy this for a second. Let me meet people and have fun and intermurals and just...Chris Erwin:Wander a bit.Camila Victoriano:Wander a bit, 100%. And I think especially freshman year and sophomore year was very much like let me just wander, take random classes. I took a computer science class, which was a horrible mistake, but just giving myself the opportunity to make mistakes. And I think then by junior, senior year is when I realized, okay, no, I still like this path that I'm going on. I like the storytelling. I like literature. I like writing. Maybe I'm leaning a bit more political. Again, that's why I applied junior year for the LA Times internship because was that through line of, I still want to be in storytelling. I still want to be in media, but now in this college experience and getting into young adulthood, I'm becoming much more aware of the political and socioeconomical world around me. Let me go into media, that's maybe pushing that forward a little bit and a bit more public service.Chris Erwin:Clearly it was a positive experience because I believe that after graduation, you decided to commit to the LA Times full time.Camila Victoriano:Yes.Chris Erwin:And just to go back on a couple of points you noted just about wandering. I think, when I review resumes for people that are applying to my firm, RockWater, my first internship was right before my senior year of college. The summer before senior year. I now look at resumes where people start doing internships literally in high school, and they have six years of working experience before they graduate. It's super impressive. My little brother took a gap year before Harvard and I think that wandering around and figuring out what he likes, what he doesn't like is really valuable. And I always tell people, like my own professional career, I did some things early on that I didn't love, but I learned a lot and it helped shape to where I want to point myself later on. So I think that's really good advice for the listeners here.Camila Victoriano:Absolutely.Chris Erwin:I'm curious, so was there any kind of gap period, or did you just get to work at the LA Times right after you graduated?Camila Victoriano:I went straight into it. I took the summer after college to travel a bit. That's when I went to Cusco with my mom, I went to Columbia. So I went a little bit around Latin America, but other than that, that fall went straight into it. But I think to your point, and again, taking a step back a little bit like freshman summer, I went to study abroad in Paris for the summer. So just again, I had traveled outside the country maybe once or twice, but not a lot. And so for me, that was a really, I was like, let me utilize some of these resources that I have. And so it was, again, that wandering and then the sophomore summer I worked at a literary magazine. So again, going more deep into literature. So I did dabble in a couple things here and there before fully committing, but after graduating pretty much went straight into work.Chris Erwin:And so you get there and are you, again, working in the publisher's office?Camila Victoriano:Working more broadly, for the “business side” of the company, right. So I'm working on business development really broadly. What that started as was how do you diversify revenue streams? How do you develop new projects from the journalism? Basically, what are new ways to make money in a digital space? We pursued projects at this time, and I actually got to see through to fruition because I was there full time, an event series within what was called the festival of books. We developed a new zone focused on digital storytelling. So we brought on VR companies, audio storytelling companies, just thinking about how to expand what the company was putting forward as storytelling, which was cool to me.And also an interesting dynamic for me as someone that loved books to be like, let me throw VR into the mix and into the book festival, but it was really fulfilling, and after pursuing a few different things, developing a couple of platform pitches internally, what really stuck with our team and with me was in 2017, a year into that job, audio as a real business opportunity for the newsroom and for the media company. So in 2017, we had a meeting with the editor in chief at the time and he brought us this story and he was like, let me sit you guys down and read this aloud to you. It was very cinematic, but it was what would become Dirty John.Chris Erwin:The editor in chief read this story out loud to your team?Camila Victoriano:Yes. So just literally, it was a team of me and my boss and that was it. And he was like, let me sit you guys down and read you this out loud. And it was what then Christopher Goffard had the journalist had written as what was going to just be maybe a series online for the paper. And I think that's when we realized like, oh wait, there's something here that I think could be our first big swing in audio and in podcasting. And we got to talking and at that point, Wondery had just gotten started to another podcast company that obviously now sold to Amazon music. And so we met with [Hernan 00:17:57] and the early team there and we were like, I think we can do something here. And I think there's a story here to be told in audio.And so again, a year out of college, I'm there helping put together the production team that would create this massive story or what would become a massive story, we didn't know at the time. And what I was able to do was basically help primarily the launch strategy and help the marketing teams and the sales teams put together what's this actually going to look like when we got this out, there was the first time we had done anything like that. And so it was a pretty wild experience. And then of course when it launched, it took us all by surprise with how well it did. Obviously we knew it was a good story, but I think you never know when something's going to be that much of a hit. And I think today it probably has over 80 million downloads and it's been adapted both scripted and unscripted on Bravo and oxygen and had a season two ordered on Bravo.So it was a crazy experience. And I think for me, it was just like the ding ding ding of, oh, hey, remember what Mitchell told you in high school? Which was, follow the content, not necessarily the medium. And for me I had never really explored audio at that time. My parents were not people that listened to public radio in the car. That was not something I grew up with or that environment. So that was really my first entry point into audio and into podcasting. And as I started to dig into it more, I remember I was such a late listener to Serial and to S town. And I was like, oh my God, this is unreal and something that I've never heard of. I've never heard anything like this before. I probably never read anything like this before. And so I remember I asked my boss at the time, I was like, can I do this full time? I was like, can I just work on building out this audio division and this team? And I think at that point, luckily because Dirty John had been such a huge success, everyone was like, yeah, this is worth doing in a more serious way.Chris Erwin:Before we expand on that, this is a pretty incredible story. So you are in the room as your editor in chief is reading you the Dirty John story. So just remind me, with Dirty John, it was initially just a story. It wasn't like, oh, hey, we created this because we want to make this into an audio series or anything else. It was just, hey, Camila, you're looking at different ways to diversify revenue for the company, looking at different mediums for our content. Here seems to be a pretty incredible story. And was your editor in chief recommending that you make it into a podcast or is that something that came up in the room in real time?Camila Victoriano:No, I think he had already been thinking of it and that's to his credit. Right. And he was like, I think this might be it. And how do we get this done? And then I think Chris Goffard in particular is a great journalist. And he writes these amazing, more feature length pieces. And so his style of storytelling really lended itself to that as opposed to a breaking news reporter. And so he had already thought when he got the piece, this might be a good podcast or it might be our good first podcast. And I think he brought us in because we were the R&D crew of two that existed in the organization to really help make it happen. And so again, once we connected with the Wondery team and put the LA Times team together, it was a match made in heaven, I think. And it worked really, really well.Chris Erwin:It seems like you went right to Hernan and the Wondery team, were you like, hey, we should talk to some of the other audio and radio companies that are out there, or did you just go straight to Wondery?Camila Victoriano:We just went straight to them. And to be honest, I think that was something else our editors suggested. And I think to be honest, it did end up working really well because I think, we were coming from a very journalistic perspective and that's where I started to learn a bit more of the different ways to tell stories in audio, right. Start very character driven, really narrative as if you're making a movie. And so I think that it was a great match honestly, and I don't think we may have maybe looked at other things here and there, but it felt like a good fit right off the bat.Chris Erwin:You said you were working on the marketing strategy and the launch, right, of the series. Do you think there was any special things that you guys did? Obviously it's incredible story and it really resonated with audiences at scale, but were there any initial marketing tactics or buzz that really helped tip that into the mainstream?Camila Victoriano:I think what we decided to do, which was perhaps different than how some podcasts had been marketed before, because till then it had really been public radio driven, was I forget who said this, but it was basically like let's market this as if it was a movie or what would we do if we were launching a film? And so we really went all out in splashing our newspaper with these beautiful full page spreads. We were the LA paper, and so we had all this FYC, for your consideration advertising that would, you'd see those spreads for movies all the time. And so we were like, why don't we just make one of our own? And so it was a full team effort with the designers, the marketing team, me and my boss at the time and just putting together this plan where we really went all out.And I think that definitely caught the attention of our subscribers, which obviously were the first touch point to this story. And we did similar things online where we had, what's called a homepage takeover where basically everywhere you look online, you're seeing advertisements for Dirty John for this story. And so we had newsletters and I think a lot of that 360 approach to promoting it online, in print, although that's not as common, but on social newsletters and really just hitting all the touch points is something that definitely I have taken with me in my career. And I think is also just becoming much more common across podcasting as we launch and others launch more narrative nonfiction, fiction series, that sort of thing where they're becoming really entertainment franchises beyond just a really great maybe non-fiction or reported story. But I think absolutely the way we thought about marketing it helped to change the way that our subscribers and then the listeners that came in through more word of mouth, saw the show and understood it for, oh no, this is entertainment. It's journalism driven, but it's entertainment.Chris Erwin:It's a really good note because an increasing challenge for any content creators or content market is how do you stand out through the noise? There is more content across more mediums today than ever before. And so how do you really cut through the noise, drive mass awareness, but also be focused and really go after a niche community as well? It's not an easy formula. Sorry. I wanted to go a little bit back in time, but that was really helpful context. But then to the point where you said, okay, you're talking to your boss, your leadership. And you're like, I think there's something really big here in audio. I want to focus my efforts here full time. I also think this is interesting Camila, because when we were talking yesterday, you said that you took an atypical path in some ways where you followed the content, you followed your passions.It wasn't like, I'm going to go to school. And then I'm also going to get a dual computer science degree or economics or some quantitative math. And then I'm going to go do two years at McKinsey or an investment bank. And I think you following your heart it then puts you into these serendipitous moments, like being in the room when your editor in chief comes with Dirty John, and then you're like, hey, I've been working on these passion projects. I think there's something to do here in audio, let's go forth together. And then you just happen to be in the room at these incredible moments and then you're raising your hand for where your heart is telling you to go. And it's obviously put you on an incredible path, which we're going to talk more about. That's something that I'm just taking away here from hearing your story.Camila Victoriano:Thanks. That's a great way to put it. It's following my gut a little bit, and I think it just goes back to again, how I was raised and I think my parents were always, there's this funny saying in Spanish, [foreign language 00:25:29], which is like, if you don't cry, you don't get fed, basically. And so I took that to heart and like, yeah, I have a passion. And I think that part of me, the inclination is like, oh, if I work really hard, it'll get noticed. But sometimes it is like, no, you have to really actively say it out loud. And I think sometimes for people that are younger, like I was the youngest by like 10 years in a lot of the spaces I've been in, it's hard sometimes to do that and to raise your hand and say, I want this. But I think when I really felt that I did it and I think it's something I've just been working on in general.Chris Erwin:So you raise your hand and you say that you want to focus on what you perceive as a big audio opportunity for the LA Times. What does that look like for next steps?Camila Victoriano:Really, what that meant was I was the only person working full time on the business side, on this project, which was daunting, but also great because I got to have different touchpoints with all the teams. And so for me, it really became, how do I build essentially a mini startup within this legacy organization and how do we make something that moves quickly and can be nimble and can be experimental in an organization that, as I said earlier is nearly 140 years old at this point? So it was really exciting and really daunting. And so what I did first and foremost was figure out a good cadence to meet with my colleagues in the newsroom. And what it allowed me to do was really focus on offering them insight into the content that was really working well in the space that perhaps is maybe a bit more data driven, I would say.I was really looking at what was working well and also working with our data and product teams to see what were the types of stories that listeners or in our case, readers were gravitating towards and offering that insight to the journalist and to the editors and really working hand in hand with them to figure out based on that, what were they excited about turning into audio or what were they excited about putting resources behind? And so I was focusing a lot on content strategy in the very beginning of how do we follow up this phenomenon, which was also, I think for everyone, you have this huge hit, you want the sequel to be just as good.Chris Erwin:And to be clear. So the data that you're looking at is both in terms of the content that the LA Times is putting out. Like your articles, I'm not sure if you were also doing video as well, looking at who's consuming that, how often are they consuming it, is that type of content performing well relative to other content? In addition, looking at metrics for just podcasting overall, what genres are performing well, what do the formats look like? Is it short form or long form audio? So you are taking that for your own understanding and then educating a lot of the writers and the journalists in the newsroom. Because then when you put that information together, better ideas can start to germinate within your business. Is that right?Camila Victoriano:Absolutely. Yeah. And then what they would be able to offer me was insight sometimes into maybe investigations they were conducting, or they would be able to tell me, yeah, that is a great story, but maybe the sources aren't going to speak on audio. So it was a really wonderful collaboration between the business side and the newsroom in a way that was really organic and really respected the work that they were doing, but also offered them a bit of insight into, hey, we're exploring this new thing together. Here's how we might do it in the best way. And so I was doing a lot of that in a lot of that more high level content strategy, basically to guide the editors into figuring out what might come next. And then also just doing everything else, basically that the journalists weren't doing, right, or that they couldn't do because they were busy reporting amazing stories, which was building on an actual business model for what this might look like, which was difficult, because it was very early days and our sales team had never sold a podcast before.They had sold digital, had sold print, had sold events. And also marketing is like, how do we replicate what we did with Dirty John in a way that was sustainable and in a way that, how do we replicate that by tracking what actually worked well from that experience? Right? Because we could always splash all of our pages and flash all of our online presence with images and with links to the show, but figuring out how to basically make a report of what actually worked to drive listeners. And so it was a lot of in the very beginning, trying to digest and figure out what are the things that we could replicate and what is the “formula” that worked in Dirty John and others. Some of the stuff is hard to quantify and you can't measure, but trying to measure as much as I could to be able to build out a plan for, okay, we think we can make this many more shows and they have to hit these particular metrics. And I was doing a little bit of everything. Literally, like I said, my sales team or the sales team at the LA Times, they had never sold podcasts before. So I was literally calling podcast agencies and selling ads.Chris Erwin:You were selling ads yourself?Camila Victoriano:Yeah, I was. I remember I called ad results. We were doing a show about Bill Cosby, which is not an easy subject to pitch to sales, but I was getting on the phone, calling people and selling ads into the show. So it was really scrappy.Chris Erwin:Yeah. So essentially a one person team where you're creating the vision and the business plan and then also executing against it as well. That's a lot. Did you have a mandate from your leadership, which is like, hey Camila, we believe in your vision here, but we want within one year we expect like X amount of revenue or within three months. Come with a clear business plan and how much capital you need to grow it and then we're going to green light it. What were the expectations from your boss?Camila Victoriano:Yeah. It wasn't anything that specific to be honest, I think mainly the main mandate very broadly was like, Hey, this needs to make money after a certain point. Right. And it can't go on for so long of just, because a lot of people while making podcasts is cheaper than making a pilot, it's also very resource intensive. So while maybe it's not a lot of cash out the door, it's a lot of time from a lot of people to make something that is high touch investigative, like a year of reporting sometimes. And so I was asking a lot of the newsroom and the journalists. And so I had to work with our finance team at the time to build out a model that basically showed at least break even for year one and then started to make some profit after that or some revenue.And so it wasn't as super strict thing, but I think obviously they wanted it to be revenue generating and relied on me and my counterparts on finance department to put that model together. And again, I was an English major. I had never made a spreadsheet. I had never made a model V lookup, it was very new to me. All of that was the first time I was doing any of that. So for me, those next three years or so were an incredible crash course into all of the practical skills that perhaps I hadn't learned in the English major was those were all learned in that time period of building a business model, putting together business plans, content strategy, and then executing marketing plans and sales plans at the same time.Chris Erwin:So I have to ask, clearly your love and your passion is for storytelling, right? So now you're figuring out the business plan for how can you actually create a new sustainable business that's going to tell stories in a different way on new mediums. Did you enjoy doing some of that business work or was it more of like, eh, I don't mind doing it because it allows me to execute towards this primary goal or were you starting to see like, oh, I actually like using both sides of my brain, operating on both sides of the house. What did that feel like for you?Camila Victoriano:I think it was definitely the latter. I think I never expected to “business” as I had always thought of it. Right. I think there were certain things that I could really do without, I did not love sales calling and pitching. I was like, I could do without ever doing this again. But I think for me, what I realized during that time period and working with the folks on the finance team, our COO, our sales, I was like, these guys are all really creative and actually figuring out how this is going to work and how this is going to be sustainable is actually weirdly fun and interesting and
Mike Grisko — CFO at Atmosphere on Raising $150M, Becoming a 2x Founder, and the Future of TV for Business
Aug 4 2022
Mike Grisko — CFO at Atmosphere on Raising $150M, Becoming a 2x Founder, and the Future of TV for Business
This interview features Mike Grisko, CFO and Co-Founder of Atmosphere.  We discuss running an NCAA tourney at age 7, getting laid off during the Great Financial crisis, almost selling the Chive to Playboy, the challenge with professional politeness in UK work culture, raising $150 million in growth capital and quadrupling the team in 5 years, and what he looks forward to next.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow us on LinkedIn: RockWater LinkedInEmail us: tcupod@wearerockwater.comInterview TranscriptThe interview was lightly edited for clarity.Chris Erwin:Hi, I'm Chris Erwin. Welcome to The Come Up. A podcast that interviews entrepreneurs and leaders.Mike Grisko:We have this concept internally, like giving up your Legos. Your job description changes every three to six months when you're going through rapid growth. 18 months ago, we were less than 100 people. Yeah, today we're close to 450 employees just at Atmosphere. And so that requires you to change your roles. Some of the things that I was doing back in 2018, 19, 20, it's just not scalable at that level. And so being able to hire great people, reassign tasks and responsibilities is absolutely critical.Chris Erwin:This week's episode features Mike Grisko, co-founder and CFO of Atmosphere. So Mike was born in the south side of Chicago and was the oldest of five siblings. He then studied at University of Illinois and his early career started in finance and consulting, including Pricewaterhouse Coopers in London and Moelis & Company in Chicago. While at Moelis, he met the founders of The Chive and was recruited for his first C-suite role as CFO. Soon after relocating to Austin, Mike partnered up with The Chive's leadership team to co-found Atmosphere, where he is helping to grow and scale the leading streaming TV service for businesses offering free audio optional TV. Some highlights of our chat include running an NCAA 20 at age seven, getting laid off during the great financial crisis, almost selling The Chive to Playboy, the challenge with professional politeness in UK work culture, raising 150 million in growth capital and quadrupling the team in five years, and what he looks forward to next. All right, let's get to it.Chris Erwin:Mike, thanks for being on the podcast.Mike Grisko:Yes, absolutely. It's a pleasure to join you on The Come Up. Really looking forward to getting into it.Chris Erwin:There's a lot of stories to tell here. As always, we're going to rewind a bit and we're going to talk about where you grew up and your childhood. So I think you're a Midwest kid. Tell us about that.Mike Grisko:I am a Midwest kid. Grew up on the south side of Chicago. 103rd and Pulaski for any local Chicago listeners. Was the oldest five kids. My mother was a ER nurse. My dad worked in engineering sales. It was a great spot to grow up. It was very much a blue collar neighborhood. We lived right across the street from Tally's Corner, which was famous for just so many cops and firefighters that had to live within the city limits. My mom was one of seven. My dad, one of four. And everybody lived within a couple miles of each other. So just cousins everywhere. So yeah, it's a fun neighborhood to grow up in. I don't know what your childhood was like, Chris, but it was very Stranger Things for us. You just go on your bike, you'd be gone all day. You just got to be back before the street lights came on.Chris Erwin:Oh, I hear you. I was born in '82, so I'm an '80s, '90s kid. And in the suburbs I was born Rumson, New Jersey, an hour outside the city. And it was about like, you get on your bike and you just travel all around the county and you get into trouble, you find dirt jumps, you go meet up with your friends late night. I remember taking the bikes out at 3:00 AM during sleepovers. It was the best.Mike Grisko:It was the best. Was Chicagoan through and through before. Now residing in Austin, Texas.Chris Erwin:So, okay. Being the oldest... I have two brothers, I have a twin and then a younger brother who's six years younger. And so you're the oldest of five. What was your role? Did you have a patriarch type role amongst the brotherhood?Mike Grisko:Absolutely. Especially my dad traveled quite a bit for work. It was definitely more of a patriarchal role took on but still. We were just very tight knit crew. Still are.Chris Erwin:Getting into middle school and high school. What were some of your passions back then? What did you like to do?Mike Grisko:We were always playing sports. You had the neighborhood crew. You're playing fast pitch against a parking lot wall. In addition to doing sports, it was also a bit of a nerd. Constantly reading, just super competitive in school. It was less about the learning, it was more just getting better marks than anybody who was around me. But yeah, that stuck with me for quite a while.Chris Erwin:Got it. Well, look today, you're the CFO and co-founder of Atmosphere and you've also had a CFO role at Chive. So were you big into the quant side and into mathematics and other science and other similar subject areas?Mike Grisko:Yeah, there's a bit of that. And then I've just always been incredibly fascinated by business and markets. Grew up in the '80s and when I was a... I think it was six or seven, my uncle started calling me Gordon Gekko. I think because I was the only-Chris Erwin:It's a great nickname.Mike Grisko:I know. I think it's because I was like the only seven year old who was running an NCAA tournament and I was doing betting spreads every NFL Sunday going down the line. Yeah. So it definitely makes sense, the career path that I chose, doing finance, doing the investment banking thing and choosing this direction.Chris Erwin:Kind of makes sense because you end up going for undergrad to the University of Illinois where you focus on finance and accountancy. So when you went to school, what were you thinking that you were going to do afterwards?Mike Grisko:When I got down there I wasn't really sure. It wasn't until I actually did study abroad program, which was in Melbourne Australia, which was some of the best months of my life. It was just absolutely incredible. Yeah, the fact that my best friend and I both got full scholarships to go down there was just such a deal. I mean, we got accepted. We just could not believe that they took both our applications.Chris Erwin:What did you get into? Did you do any surfing while you were out there?Mike Grisko:Did do some surfing, played Aussie rules football. We tried to get stuck into everything, just being able to travel and just the people and just such a fun environment. But that's really when I took a step back and started looking at like, "Okay, when I get back, I got to figure out an internship." And that's when chatting with a bunch of folks, really started to lean towards trying to get on an investment banking track. And so it's amazing. Sometimes you do really need to take a huge step away to start to piece that all together and figure it out. Because I really had no clue probably up until then.Chris Erwin:It's funny. It's almost a bit of the reverse, but it reflects your personality and your interests. Typical consultants or Fortune 500 executives or bankers will go on a sabbatical and say, "I don't want to be in these industries anymore. I'm going to go do something different." But you go to Australia, have the time of your life and you're like, "I need to go into hardcore finance. That's the path." I went in a very similar direction. I was an investment banker right out of undergrad too. All right. So that becomes your focus. What's your first internship or your first role in school?Mike Grisko:So I did an internship for Wells Fargo. Got to see the lending side, their corporate lending group, so did a summer of shadowing the analyst doing underwriting. And it was great. This is in the high times of banking. This was in '07. So the summer of '07, everything's riding high. I remember winning the internship competition. So they flew me out to San Francisco with my brother just for first prize for winning this thing.Chris Erwin:He was your plus one? You're like, "I'm going to bring my bro."Mike Grisko:Yeah. Yeah. And it was a very good learning ground, but I still... There's a few guys who I was friends with at Illinois who had gotten into the investment banking side. And so I decided to double down and just... Thanks Wells Fargo, but I really wanted to take a dive into the IB side and learn how to do M&A and capital raise and the rest. I'm sure probably similar sort of path as you. Must have been at least 20 to 30 different places I was submitting applications doing interviews with. Just running through the whole process.Chris Erwin:Yeah, it's a very intense process. But it's funny. Hearing from the people that have interviewed on the podcast, I think back to Michael Cohen at the Whistle, which was acquired by Eleven Sports. He started out as a credit analyst at Wells Fargo in Atlanta, before he went into do investment banking. And we actually worked at the same firm and I started out as a credit analyst at Bank of New York, which is now BNY Mellon. And you, you now run a free ad supported streaming platform for businesses. You started as a corporate credit analyst and then went to investment banking. If you're going to do finance and media, that feels like the path.Mike Grisko:Yeah. It's got to be. It's tried and true then. You got three examples right there.Chris Erwin:So then, okay, you graduate and then you go full time into Lincoln Financial. And you're an analyst there for about a year. What were those early years like?Mike Grisko:It's a mid-market investment bank, heavy Chicago presence. It was a good shock to the system going from your university environment to full corporate world and pretty intensive as I'm sure you remember from your banking days. So I had started in August of 2008 and so I think it was six to eight weeks before Lehman went under. Things looked like they were riding high and then all of a sudden... I just remember being very new, but then also seeing the senior bankers just going ghost white as deals are just being paused or put on hold or it went from they were closing close to a deal a day, M&A or a debt advisory deal, and then it just completely dries up.Mike Grisko:The first deal I ever did, it was automotive wire harness business. I was being spun out of Alcoa. And it was just bleeding money. Went from, if you remember, with all the automotive ODMs just shuttering production, they were like the fifth player in that industry. Basically overnight, they went to negative 80 million [inaudible 00:09:46] and trying to find a partner for that. That was great learning ground. But I ended up getting laid off into that second wave of layoffs they did in March 2009.Chris Erwin:Laid off in March of 2009 after the debt crisis hit. Yeah. I have some stories of what happened at my bank and I'm curious to hear yours. So yeah. What happened to you and what was going through your head?Mike Grisko:It's a big shock to the system. It's a kick in the teeth. It did a couple things. It really hardened me to, "All right, this is the actual professional and corporate world. Nobody's spots guaranteed." And I think it even that much more determined and more resolved to like, "Hey, whatever is next. I know I'm going to have to really outwork everybody else around me."Chris Erwin:I hear you. I joined the workforce in 2005. I was at my investment bank when the 2008 credit crisis hit. And I was still a young professional. And I felt like, "Oh, I'm insulated. This is a tough time for everyone. But I'm young. The leadership's going to take care of all of us." And I remember getting called into the manager's office one day. Everyone at the company's salary was cut drastically.Chris Erwin:And I was like, "Whoa." I felt the impact personally, in a very meaningful way in that day. And I was like, "All right, this is legit. This is the real deal." And I had to make changes to my lifestyle. I actually negotiated down my rent from my apartment in New York City, down 25%. Something I'm actually still very proud of. I built a nice spreadsheet defending that. But it does gut check you and it questions, "Okay. Is there a job for me here over the next year or two? Is my career derailed?" Is my whole future grand plan that I had sorted out in undergrad have to be completely reset?" But I think it's helpful for it to build resilience, right?Mike Grisko:100%. I thought for sure coming out of school, it was, "Hey, do two years to three years as an analyst. Hop over to PE. Maybe go get an MBA. Just follow the very traditional path." But I think that moment really drove me in a very different direction.Chris Erwin:Tell us about that new direction, because I think you end up going to Pricewaterhouse Coopers in Chicago for a few years before you end up at Moelis.Mike Grisko:In that period after getting laid off March '09, basically bottom tick the market. It was slim pickings out there for jobs. I even looked into potentially doing a program to get into medical school and doing a complete 180, picking up some undergrad science credits so I can apply to med school.Mike Grisko:But then by time, two or three months in, I was starting to get some good looks. And I had an analyst role on a corp dev team in Chicago, and then also got offered a position as an analyst at PWC in their corporate finance group, which they were just restarting. And so they had basically shuttered their investment banking practice, but then were bringing it back. And so I was the first analyst they hired in the US and I thought "Here's an opportunity to get it back on track." And a lot of corporate carve outs, cross border M&A was their big MO and huge selling point for me was they committed that, "Hey, you do a couple years here and hopefully we can get you over to London or one of our other international offices to do a two year program," which I ended up doing in 2011.Chris Erwin:So you went to London in 2011 for two years working for PWC?Mike Grisko:Yeah. It was fantastic. I mean the great, great mid-market M&A group over there. It was one of the coolest experiences of my professional career. Just being able to live and get fully immersed in a culture, especially in a professional culture. Anybody who ever has the opportunity, I highly, highly recommend. Because it really just does stretch you and challenge you in different ways. You knew how to do your job, but it's almost like the gravity's just off a bit.Chris Erwin:Okay. I like that. I've never heard that description, but I'm into it.Mike Grisko:All new faces, all new companies, all new lingo, trying to pick that up and then still trying to understand folks who have Manchester accents.Chris Erwin:What was one of the biggest cultural differences in doing business over there that you learned?Mike Grisko:I'd say the biggest one, you don't realize, there's just a professional politeness in the UK. So both with your superior is just not being fully direct with you in feedback. In addition to when you would be delivering direct feedback to analysts. They were offtaken. You might not be getting the full picture. We tend to be a little bit more direct and blunt here in the US than the Brits are.Chris Erwin:Something I think about is when I studied abroad in Spain, I met a guy named Tim Slee, who co-founded an ad agency with Steven Murphy. Shout outs to these guys. They're still very close friends of mine too today. And they would talk about their professional work culture was every day at 5:30 PM, they're hitting the bars. And they are buying rounds for all their clients and all their team. And they're like, "That's just how business is done over here. You drink a lot of pints and that gets revenue in the door." And I was like, "That's a lot to sign up for after a full day." I remember as a banker, I was just running spreadsheets till midnight.Mike Grisko:I don't know how you could socialize or network or do a professional career if you don't drink over there. I definitely learned how to go to the pub for a pint or two, and then be able to go back to the desk and start banging things out in the evening. It was just an incredible experience. My wife and I, we got engaged over during that two year stint.Chris Erwin:You brought your girlfriend who became your fiance on that trip. Okay, got it.Mike Grisko:Yes. That's a story for a different podcast. Having the conversation with her dad about her quitting her job and moving over with me.Chris Erwin:You're like, "I'm choosing her instead of my brother this time. Now I'm going to take my girlfriend on this trip."Mike Grisko:Yeah. And we ended up getting engaged shortly into our trip over there. But in two years, I think we visited close to 45 different cities. We were just so good about travel. It was a lot easier, didn't have kids then, to be very mobile on the weekends. And the Brits are great about taking time off.Chris Erwin:All of Europe is really good at it.Mike Grisko:When they said four weeks of vacation and they're like, "We expect you to use it." I'm like, "Absolutely will."Chris Erwin:Yeah. Maybe you bring that back to the Atmosphere culture. All right. So look, you spend around five years there. And then before we talk about your rise up at Chive Media Group and Atmosphere, you were at Moelis & Co for around three years. Tell us about your work there.Mike Grisko:I was starting to get to the stage I'd done enough smaller middle market deals. Enough corporate divestiture work. Really wanted to start seeing some more higher level capital markets and some larger transactions. And so I started shopping around at some different banks. Opportunity came up at Moelis and I jumped on it. Everything I was looking for just to gain from an experience level, next level on debt and equity capital raise to deals to getting to work on my first restructuring bankruptcy work to working on hostile defense deal with Ken Moelis.Mike Grisko:There was a pretty cool experience that really did give that next level of professional training. And I think that's the one thing like I started to realize being in investment banking, the true value of the relationships that you build, and just being able to sit in the room as well. In the room with the exact team observing and or advising on the actions to take and some of the biggest transactions or moves that they're going to be making. It's a great ground to just really absorb a ton.Mike Grisko:So in addition to like the financial training, the Excel sheets, and everything that comes with deals and running process, the network that I was able to build, just what I was able to observe and absorb, I think for some very talented professionals, both within the bank, but then the executives I got to work with, incredibly valuable. You just cannot replace that and the level of reps that you get in the career.Chris Erwin:I very much agree with that. You think about the 10,000 hours thing and the amount of time I spent creating investor decks and confidential information memorandums, AKA CIMS. And all the financial models, the merger models, the LBO dilution analysis, et cetera, the most rewarding experiences were when we were in meetings or had conference calls with private equity owners or family offices that own these cable, media, and telecom companies. And they're thinking about how do we drive more enterprise value?Chris Erwin:Do we spin this off? Do we go acquire these other companies and do a roll up scenario where there are synergies and thinking about, we have this network of management teams, who do we want to place based on the strategy that we have here? How are we going to finance with debt or equity or some other more alternative vehicles and just to hear the decision making in the rooms. And it was like, where are these men and women? Where are they being slow and calculated? Then where are they trusting their gut and moving really quickly? Just to be a fly in the wall was so valuable for my career.Chris Erwin:And I take a lot of that into the work that I did at Big Frame and Awesomeness in thinking about when Big Frame made a decision to sell itself and the work and the advice that we give our clients now. And often days, I wish I still had access to some of those calls every week. I get it through my client work, but just to be a sponge and just be able to just listen as a mid 20 year old. So valuable.Mike Grisko:Incredibly valuable. Yeah. That's well said, Chris. That's the big thing. And I have so much appreciation for it now. Just having seen both working alongside a lot of incredibly talented professionals in addition to some ones that were making bad decisions.Chris Erwin:Can we steer them the right way? TBD.Mike Grisko:But honestly, yeah. You're able to just listen, observe. You're just kind of building that muscle memory for when things are coming fast, as they really have over the last couple years, in my current role as an operator, it helps you just really break things down into first principles and what are we really trying to drive towards? It's helped make my decision making very formulaic. I think that's incredibly valuable. I like to say that... I'm sure we'll talk about Atmosphere in a second, but operating, whether it's startup, growth company, et cetera. It is a wicked learning environment. The variables are always changing. The dynamics are always changing. And so you're constantly going to be seeing new things. And so the ability to read, react, and adjust is super critical, a really valuable skill set that banking taught me.Chris Erwin:Well, let's talk about that transition, Mike. So your role as an advisor, as consultant, as a banker, now you make a decision, as they say, you go to the line. You go to one of the portfolio companies. So in 2017 you transitioned to Chive Media Group. How did that come to be?Mike Grisko:Well, it's twofold. I go back to the point on network and I got an opportunity to... One of the deals I worked on at Moelis back in 2014, 2015 was advising Chive Media Group. John and Leo Resig co-founders of The Chive back in 2008, starting in 2012, 2013, they really started to catch fire. I mean, it was a true social movement. You had folks wearing Bill Murray t-shirts and Keep Calm and Chive On. Folks wearing the shirts everywhere. So they brought Moelis in to take a look at strategic alternatives. And so over an 11 month period, we looked at everything from buying up smaller competitors to doing [inaudible 00:20:56] recap, to even potentially selling.Mike Grisko:And so we actually got pretty far down the path with Playboy, but Leo and John couldn't get comfortable with the deal and the management team that was there at the time. They decided to pull out. And so that was in mid 2015, but stayed in touch with both Leo and John. And when the prior CFO, who was part of the founding team was looking to move on in 2017, Leo called me up and I jumped at the opportunity. So that's some of the backstory just on how I came across the opportunity. Leo tells me now, I think I was the only person he reached out to.Chris Erwin:He was like, "I think I like this guy, Mike, he was on our deal team. Let's take a bet on him."Mike Grisko:It's very tight interview process, but it goes back to the point that building network from that seed in banking is just incredibly valuable. That wasn't the first time that I was offered a job by a client. You get so close to your clients when you're working alongside them. But this is the one I jumped at. The biggest thing is if you know Leo and John, they're just real salt to the earth humans. And that meant a lot to me. To be leaving banking into something that was a lot more unknown.Mike Grisko:Yeah. I knew whatever happened with the business, they were going to do the right thing by myself and my family. And I think that was the most critical thing I was looking for is I really wanted to jump into an operational role. I'd spent a little over nine years advising CFOs. There was some that I had incredible respect for. There was some I thought I could do that job better. The opportunity to jump right into this was just too good to pass up. And then there was the personal side of this, which at the time we were making this decision, I had a 11 month old son and then my wife was pregnant with our daughter.Chris Erwin:Oh, wow.Mike Grisko:Yeah. So the ability to go into something that had a little bit more flexibility or control over your hours was big for me.Chris Erwin:You were moving too. Because you were moving to Austin from Chicago.Mike Grisko:Yeah. The full go. And I think it's that personal relationship with John and Leo, that we're two feet in. Sold a place in Chicago and moved down to Austin, away from family again.Chris Erwin:Your 30 cousins and brothers.Mike Grisko:Right. Yeah. And rest is history.Chris Erwin:Hey listeners, this is Chris Erwin, your host of The Come Up. I have a quick ask for you. If you dig what we're putting down, if you like the show, if you like our guests, it would really mean a lot if you can give us a rating wherever you listen to our show. It helps other people discover our work. And it also really supports what we do here. All right, that's it everybody. Let's get back to the interview.Chris Erwin:You make the transition. And I hear you on the point of it's all about relationships. I think I was having a call the other day with Jason Rapp from Whisper Advisors who I've just gotten to know. And he had a note that I really liked. He said, "Companies are not sold, they're bought." And I think the implication there is it's about there being a clear strategic fit, but also this notion of there's relationships developed with strategic and commercial partners over time, and more often than not an investment or an acquisition is made from two companies who have many data points, a trend line of building a rapport and a relationship. And I think that also speaks to how executive hirings and placements, particularly at the C-suite level are done. You weren't out of the blue, it was long term relationship building where Leo and John had been exposed to your work. So I think that's important for our listeners to just be mindful of. We always say that. Say start planting the seeds now.Mike Grisko:I think that has been incredibly important. Those relationships and the relationships that I quickly developed with the other C-suite members at The Chive who are now at Atmosphere. You want to be working with good people. It is just so difficult to get a startup business into a true growth path and on a true path to success. Being able to do that with folks that you trust and truly enjoy working with is so critical. It starts at the top. If you want your entire company growing the [inaudible 00:25:02] in the same direction, it really does start with having a cohesive leadership group.Chris Erwin:So let's talk about when you show up, what are you guys working on? What are the goals in 2017, 2018, fast forward a few years, where do you guys get to? And that's going to set up the story for how Atmosphere was incubated, but take us back to that.Mike Grisko:I walked in at a pretty critical time for the company. There was a lot of different initiatives that Chive Media Group was chasing. It became pretty apparent quickly that we couldn't do all of them. The business needed an overall guiding direction and overarching focus. And so my first three months on the job, Leo and John asked me to, "Hey, just give us your full assessment as an outsider." And spent just a ton of time on a listening tour, diving into data. Became pretty clear that we were sitting on something incredibly powerful with Chive TV, which at the time was maybe in a little over 1000 locations and had six or seven dedicated employees to that product line. We knew that we had something incredibly powerful.Mike Grisko:We thought we had something incredibly powerful with that business, but we also had just many other initiatives, everything from original content creation with Chive Studios to some large initiatives, both on the digital ad sales side to a lot of different facets that they were chasing on the e-commerce side. So everything was set up for big strategic meeting in December of 2017. Myself, John, Leo, Eric Spielman, our chief strategy officer, and Alen Durbuzovic, our CTO. And we made some very critical decisions to really lay out, "Hey, here's our vision for the next three years." It included shuttering some business lines, re-orging some groups. All on the guise of trying to take the Chive TV product line and turn it into a real business.Chris Erwin:You start and pretty soon after you start, you're making some very big decisions at the company, contributing to that to allow you guys to focus on where you think the biggest win is. Atmosphere, I think technically founded in 2018, but Chive TV, you guys were working on this probably well before that, is that right?Mike Grisko:Yeah. So Chive TV was the original proof of concept. It was started in late 2014, early 2015 as an audience extension play. As the landscape got more and more competitive competing for eyeballs with Instagram, Facebook, and every other platform, Roku opened up their marketplace for content companies to build apps. And so they decided that technological opening allowed them to build a streaming TV app. And then they also were able to leverage the strong community on The Chive to help get distribution because the content programming, they realized quickly like, "Yeah, this is good for in-home, but this actually works incredibly well in bars and restaurants." And so that was the initial, "Hey, can we build an app? Can we distribute it? Can we actually make this work?" And that's where in the early days, I mean, they're a lot of learnings the guys talk about.Mike Grisko:And so it really teed up into 2018 where we had to go from, "Hey, this is a product with potential. How can we actually turn this into a real business?" That was the big mission of 2018 to see how we could really craft the story around Atmosphere as a platform. So Atmosphere, as it exists today, streaming TV platform for businesses. Over 50 different audio optional channels. We like to say we have a channel for every type of venue, whether you're a pediatric office or gym or a bar restaurant, we got a channel that's programmed for you. Everything from Chive TV, which is now a channel fully owned by Atmosphere to we have a Happy TV channel. We have Paws TV with cute puppies and kittens. We have partner channels such as America's Funnies Home Videos, Red Bull TV, and Disney's X Games. So we have quite a few.Chris Erwin:Mike, you have this content network, you have all these different channels that cater to different offices, different business environments, et cetera. And you make a decision as a company that it's like, "All right, foot on the gas. This is not just going to be an exciting new growth initiative out of Chive. This is its own standalone business that will probably require a separate growth plan, separate capitalization, and more." So when you guys convene, you, Spielman, the Resigs, and whoever else, what decisions do you make to really amplify the opportunity here?Mike Grisko:You summed it up pretty well from you, Chris. It really came down to this business has the ability to be a platform and like an N of 1 platform, the actual network that can tape over this niche of streaming TV for business. That's a big ambitious plan. So obviously would require risk capital to fund it if we really wanted to chase the velocity that we thought was there. It couldn't continue to be self-funded by The Chive and really drive to where it needed to be.Mike Grisko:Putting together that plan, and it was complications. Spinning the business off all of the shared services that were going to be required to spin it off. The conflict of interest was a big issue for VCs who were concerned if they threw millions of dollars into this new Atmosphere, entity in business, if it wasn't going well, would the entire founding team just turn around and go back to working at Chive Media Group and say, "Sorry, unfortunately, that didn't work out." It was a tough one to sell through. And if you remember in 2018, nobody wanted to touch ad supported startup businesses. Everyone was focused on subscription.Chris Erwin:Oh, how the world has changed. Just think of Netflix launching an advertising platform.Mike Grisko:Exactly. There was several times we thought about pivoting and driving resources hard into venues paying subscriptions. But luckily we stuck with the plan because we saw how much leverage there was in advertising to this massive underserved market.Chris Erwin:All right. So when you think about there's the big, exciting stuff to do, which is all right, what's the new growth plan who we hiring for this go raise venture capital, then there's all the administrative stuff of... All right. Yeah. Like you said, allocating shared services, who works on what, how do we communicate that, how do we set up a dedicated legal entity and put the right resources into that? All these little things that you as a CFO probably had to take care of.Mike Grisko:Yeah. And this is also where you and I met. As I'm pulling a lot of this stuff together with the group and bringing on lawyers, getting advisors all set, you and I got connected through Jason Anderson and you guys did an engagement for us both to... Well, number one, be that initial test run before we hit the market just on materials and the story, the model, just the entire thing, which was incredibly helpful and just help us. Like most VC fundraising rounds, it really comes down to the product, the team, and the TAM. And so helping us to find that overall opportunity in isolating our unit economics. There was a lot there because again, it wasn't just another enterprise SAS software business that was easy to digest and easy for VCs to give seed/Series A funding.Chris Erwin:I will say thank you to Jason Anderson for that intro. And it was a delight to meet you and Eric nearly five years ago now and have gotten to know the Resigs a little bit. But really, yeah, Mike, you're the first point of contact. I remember working arm in arm with you on some of this stuff. I have an image in my head of one of the financial runway slides of "Here's the traction for what we did last year," which I don't even know if it broke a million. "Here's our five year forecast," which was maybe at the low tens of millions. And the numbers that you guys are putting up on the board today are much bigger than that.Chris Erwin:But you guys were very hopeful, very optimistic. You saw a need in the market, but we also could sense that it wasn't a guarantee. It was a big swing. Chive was a business that had been around for over 10 years. It was time to find a new growth opportunity. And also, not just from a value creation perspective, but I think just for the team and for the brothers of an exciting new thing to dig into. And there was conviction and excitement, but it was clear that you guys were taking a big risk and there was uncertainty. I'm curious to hear the early days, when did you realize you really had something special here? Because you hit some big headwinds during COVID and maybe even a little bit before that, but things did change. Walk me through that.Mike Grisko:So our first headwind that we fought through was we'd agreed to heads of terms with a VC in early 2019 to do our initial funding. And they pulled out. They had internal issues that they had to sort out and they just could not do any fundings. And so we had to go back to our underbidder, who was Charlie Plauche from S3. And Charlie didn't try to take advantage of the situation. He stood up and honored his initial term sheet for the most part. And S3 ventures, if you don't know, Austin based VC, and Charlie was willing to roll up his sleeve, all those things we talked about with the conflict of interest, he and the team were willing to do the work because they saw the big potential. And his read on it, not only was this a massive opportunity, but this is a team that's done it before. And so it's an advantage that they've had The Chive business and been operating successfully for 10 plus years.Chris Erwin:Wow. Yeah. He probably had a chance to bend you guys over a barrel. But instead I think he was probably exhibiting the type of partnership behavior
Adam Rymer — CEO at OpTic Gaming on 1980's Internet Nerds, Adapting to Napster, and the Future of Esports
Jul 7 2022
Adam Rymer — CEO at OpTic Gaming on 1980's Internet Nerds, Adapting to Napster, and the Future of Esports
This interview features Adam Rymer, CEO of OpTic Gaming. We discuss what he learned from running Harvard’s campus store, adapting to Napster at Universal Music, why entertainment doesn’t value innovation, being on Universal Pictures’ greenlight committee, scaling Legendary Digital and working alongside Chris Hardwick and Amy Poehler, how to create communities for gamers, why he plays Fornite with his son, and how to follow your own roadmap.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow us on LinkedIn: RockWater LinkedInEmail us: tcupod@wearerockwater.com Interview TranscriptThe interview was lightly edited for clarity.Chris Erwin:This week's episode features Adam Rymer, CEO of OpTic Gaming. So Adam was born in Fort Lauderdale and was a self-described '80s internet nerd. That meant hanging out on internet bulletin boards and attending internet meetups at bowling alleys. His online passions paid off and he ended up going to Harvard after writing an admission essay, comparing entertainment dollars versus grocery store dollars. Adam's early career included Universal Music where three months after beginning his new role Napster was launched. And Adam had to figure out questions like, "What now? And who do we sue?" After rising up to the exec ranks at Universal Adam then struck out on his own to co-founder production company that worked on projects like the Rover and sci-fi hit arrival. He then became president at nerd and legendary networks where he helped build a multi-platform media business alongside stars like Chris Hardwick and Amy Poehler today. Adam is the CEO of OpTic Gaming, where he is helping to grow and scale one of the world's most exciting companies operating at the intersection of gaming and entertainment.Chris Erwin:Adam, thanks for being on The Come Up Podcast.Adam Rymer:Great to be here, man. Good to see you.Chris Erwin:Yeah. So where are you calling in from?Adam Rymer:I am in Dallas, been here about two years now.Chris Erwin:Are you in the Envy offices right now?Adam Rymer:We are. I moved here in the middle of COVID and we've been, believe it or not, working mostly in the office since I got here.Chris Erwin:Like to hear that people getting back to the office environment. Well, we're going to talk about Envy more, but actually want to rewind a bit, Adam. So going back a few years here, I want to hear about where you grew up and a little bit of what your childhood was like to see if there's any kind of glimpses into this media and digital executive that you've become.Adam Rymer:I am a Florida man. I grew up in Fort Lauderdale. Born in Miami, grew up in Fort Lauderdale, '70s and '80s which whatever anybody thinks about Miami and south Florida now is not what it was like when I was there. It was retiree paradise. And then the occasional spring break debauchery but of course, I was too young to really understand and appreciate any of it. So I just saw all these college kids coming in and thinking that would be awesome. And then by the time I was actually old enough to enjoy spring break, that it all gotten kicked out of south Florida and moved to Daytona and Cancun and wherever else. So missed out on all the benefit of all of it. But Florida was an interesting place to grow up in the '70s and '80s. Left at 17, never really went back, but definitely helped shape my desire to stay someplace warm for the rest of my life.Chris Erwin:Okay. So I have to ask you, what was your household like growing up? Were your parents into the same things that you're into now, media entertainment, digital gaming, gaming, what that looked like back in the day was very different, but what did your parents do and what were some of your early inspirations?Adam Rymer:My dad was a physician. He was an immigrant. My mom helped run the household. I had a younger sister who was six years younger than I. And so we were not overly close partially because of the age difference. And partially because we were just into different things, I was probably what you would call a quintessential nerd back in the day when it was very, very uncool to be a nerd. I got an Apple 2e when I was, I don't know, probably like eight or 10 years old and was goofing around on that with floppy discs and playing Zork and all the text base games and whatever else I could get my hands on. I remember connecting to BBSs back in the day. That was how I spent a lot of my free time.Chris Erwin:But BBS?Adam Rymer:Yeah. BBS was a bulletin board system. It was the modern, the old precursor to, I guess what you'd call like a social media network today. It was dial-in multi-communication platform where you could type and talk to other people and play games with people online, text-based games for the most part and south Florida, believe it or not, was actually the hub of some of the biggest BBS companies in the .country every now and then we'd go to meetups with people who were on these, these services, but you'd get online and play trivia and you'd play just chat with each other. And I guess back in the day, you'd consider it pretty weird. And today you just call it WhatsApp.Chris Erwin:So question, you said we would go to meetups. How old are you and who is we? Are you going with your parents or friends?Adam Rymer:Yeah. I was like 13, 14, and I'd have friends that would drive me around. We'd meet at like bowling alleys and family entertainment centers like arcades and mini golf places. And there'd be people from 14 to 40, but everybody was just connected through these online environments of being... At the time, I guess we were outcast and ostracized. And like I said, we were big old nerds.Chris Erwin:Were your parents supportive of some of your interests here with these meetups and the BBSs?Adam Rymer:Yeah, I mean, they didn't really know what was going on. For me, it was just a way to meet people and make friends and met some really interesting folks. Met some really odd, strange folks through it. Some people went on to greatness and do some pretty cool things. Some people faded off into obscurity. I think it definitely helped define and set my career in motion from being part of something that was just on the cutting edge of interactivity and technology. And 'cause there was a lot of steps to it, right. We had to, you had to get a 300-baud modem. You had to connect a phone line to it. You had to pay for time on the service by dropping off some money at a house or sending something in somewhere else. And I mean, it was really complicated, but we made it work. It was a weird time. It was like during the days of war games, if you remember the movie War Games, it was like that sort of universe.Chris Erwin:I've known you for years now. This is the first time I've really asked about your upbringing in your childhood. And within one minute, learn something completely new, but it makes sense. Everyone nowadays talks about how do you build community? How do you build fandom amongst different media brands, participants, creators, and users, et cetera? And you have now three to four decades of experience of building fandom on the internet. It's all becoming much more clear. So as you go to high school and then you're applying for college, what did you think that you were going to do?Adam Rymer:It's funny so we used to go to Disney World a lot in Florida, right? Because it's only about two-hour drive from where I lived. And I was always, I guess, kind of a weird business-focused kid at a certain level. I remember writing my college essay about Disney, but not about the cool entertainment factor of Disney about the business of Disney and how I found it super interesting that when you would go to someplace like Disney World, that you would be totally open to spending $8 on a Mickey bar ice cream that if you were just at a grocery store, you would totally freak out about highway robbery. You would just never spend that kind of money. And, I wrote my essay about like entertainment dollars being different from regular dollars. I did, I guess-Chris Erwin:So precocious.Adam Rymer:... I was a weird kid and at the time I was like, "I want to be Michael Eisner." Michael Eisner was my idol at the time not knowing a whole lot about anything, but knowing Disney and seeing how that was working, I was like, "That's my aspiration." Right? So went off to college. And at the time I was focused on engineering because as a nerd, geeky kid, I thought I was going to be an engineer, but within a year of college, I shifted over to being an economics major and really focusing more on business and really put most of my efforts into pursuing kind of game theory and business and economics.Chris Erwin:You went to Harvard up in Cambridge, right?Adam Rymer:That's the one. Yeah.Chris Erwin:So your essay must have been something special to get into that school. Right?Adam Rymer:God. To this day, I don't know how I got in. I'll tell you, I mean, it's my 25th reunion this year. I look around and I see other people from my class and I see kids today and I mean the quality of students and applications is just phenomenal. And to this day I count my lucky stars that I went there and got in there and survived. It was the hardest experience in my life. I can't even tell you, I felt overwhelmed half the time, lucky half the time. I mean, it was something.Chris Erwin:Well, if you're going to a reunion, my dad, I think is Harvard '70. And I think he's going to his reunion this year as well. So maybe you guys can bump into one another there. So you're at Harvard, you're feeling overwhelmed, but feeling lucky and grateful. And do you think you get more clarity on what you want to do when you're graduating?Adam Rymer:Yeah. Well, look, while I was there, I had my first real work experience. So we had this thing called Harvard Student Agencies. And what that is a bunch of student-run businesses on campus that are sanctioned by the university. And they let students sort of operate businesses through a platform that the university puts together. And I started out running something called the Campus Store, which basically sold futons and refrigerators and class rings and all the stuff you need for dorm rooms. And then my second year I became vice president of the organization. And one of the things that organization also did was produce the Let's Go Travel Guides, which might be a sign of another era, but it was books that you would use to go travel abroad and low-budget travel through Europe and other places around the world.Adam Rymer:And it was a team of hundreds of students that would write these books and go out and travel and run these businesses. And I did that for two and a half years of my time at school. And I found my time working and helping to run these businesses to be maybe the best education that I got over my time there. So by the time that I was graduating, I was pretty dead set on being in the business world, operating, trying to figure out some way to be an executive in some way, shape or form. Didn't necessarily know exactly what type of business to run. So I ended up going into management consulting, coming out of school because to me that seemed like the best landing spot, where I could get a sense of a bunch of different industries, bunch of different businesses, try to solve some problems for different companies and then figure out what I wanted to do from there. Or just do that for the rest of my life. Because from what I heard, that was a pretty cool thing to do.Chris Erwin:Got it. You go to L.E.K. Consulting in the late '90s. Was the experience what you expected it to be?Adam Rymer:So, so late '90s, I got to take you back a minute. I mean, at the time computers were still relatively, they weren't new, but they were not as useful as they are today. Everything was hard. The internet was slow. The amount of data that you had access to wasn't quite there, Google wasn't quite there. So I was building a lot of financial models. It was hard to do the research. We were printing things out on overhead projector slides for client presentations. PowerPoint was not as user friendly as it is today. I think I, when I started there, we were using Lotus 1-2-3, not even Excel. I was working probably 80 to 100 hours. I found the work interesting. I found the rigor interesting. I found the type of things we were doing interesting. I did not find the clients. I was working on overly exciting, and that was a big epiphany for me.Adam Rymer:I found it really hard to stay focused working for industries that I didn't have a passion for. At one point I was no joke... People say these things as jokes, I was working for a vacuum cleaner manufacturer, literally a company that made vacuum cleaners and I was helping them reallocate their sales force across the country. It was just hard. I was on the road and I was looking through maps and I was looking at different DMAs and I was trying to help them figure this out. I also spent a lot of time working in the biotech space, trying to look at different drugs that were coming to market and how they should be priced and talking to a lot of doctors and physicians about whether they would use the product and whether they would get approved by the FDA.Adam Rymer:And look, it wasn't my background. I mean, I purposely stayed away from anything pre-med I don't think I took any biology classes past ninth grade. The work was fun. The hours were rough, but not being passionate about the day to day subject was a real challenge for me. So about a year in, I was trying to figure out what was next.Chris Erwin:I hear you. I mean, I was a banker, right when I graduated from school undergrad. I think from like 2005 to 2010. And yeah, we were able to pull down 10-Ks and SEC filings, from the internet and able to get a bunch of financial information using Excel to create models. And I just remember all my MDs being like, "We used to have to get the 10-K's physically mailed to us." They didn't have Excel and they were doing modeling by hand on paper or in these really basic computer systems. And I was like, "Either that sounds terrible or it was better because you could just focus and do less." Where when you have access to technology your bosses just expect, "Well, you can work on five assignments at the same time." Right? You're equipped. But anyway, I digress.Chris Erwin:So then, okay, you do that for a couple of years and then I think you make a decision that instead of being an advisor and consultant, you want to go work for a company. You go to the line, quote, unquote, "some people say." And you go to Universal Music. So how was that transition for you?Adam Rymer:I mean, it was a magical transition for me. I mean, it was a happenstance lucky break for me and my career and the whole rest of my career, to be honest with you. And it goes down in something I think about still on a regular basis is having been a nerd. I mean, this goes back to the BBS story is I had built a PC. I was living in Cambridge. I was downloading the first MP3 files off the internet from really obscure search engines, like web crawler and LICOs. And I bought the first MP3 player that was ever made. And I would take this MP3 player to the gym and the use case for a portable MP3 player I found fascinating. The other options available at the time were a Walkman with a tape that you had to make a mix tape for, or a CD player, which for those who don't remember them, trying to get a CD player not to skip when you're at the gym or on a treadmill is almost impossible.Adam Rymer:And so I, part of me just realized like this digital music universe is going to be the way to go. This is just going to completely take over the future as the technology gets better. And I went to the consulting company I was at, and I said, "Look, we should sell a project to the music business and help them figure out the future of digital music, because there's no doubt in my mind that this is going to change the whole face of how the music industry works." To their credit they let me help work on selling that project and they successfully did sell the project. To not their credit they didn't let me work on the project.Chris Erwin:You can be the idea, the inspiration, create the pitch. And then it's like, "And you're off the team."Adam Rymer:So I left and that was the impetus for me leaving. I applied for a job at Universal and I was very fortunate to get an interview and then ultimately get hired to go join the strategy group at Universal Music in New York in, I think it was 1999, early 1999. It was a life-changing moment because the beginning in 1999 MP3 files and digital music was starting to be a huge subject of conversation. It was on the front page of USA Today. I was quoted in a bunch of things. It was something that everybody was talking about and knew was coming. But what nobody saw coming was Napster and Napster happened about three months after I got to Universal.Chris Erwin:Oh wow.Adam Rymer:So all of a sudden I was thrown into the fire with, it wasn't just me we had a team of people. But it was the, "Okay. Piracy is real. It's not going anywhere. How do we solve this?" Do we start suing the companies? Do we start suing our customers? Do we create our own technology? Do we create a subscription service, which is no joke, an idea that we presented at the time in 1999. What do we do? How do we solve this problem? Because it's not going anywhere and technology isn't where it is today.Chris Erwin:Follow-up question on that. Adam, did you feel that the leadership, did they understand the weight of the situation? Were they really panicked, very concerned or it's like, "This is an issue we should sort this out over the next five years, but take your time and be thoughtful." What was that sense inside the building?Adam Rymer:I'm going to answer that in a couple ways. I mean, this is a problem that I have seen throughout my entire career, which is that at traditional entertainment companies, the leadership is rarely incentivized to try to really innovate solutions to the biggest challenges that are in front of them. There's a lot of reasons for that. And I don't necessarily blame the leadership that's at these companies. A lot of them are publicly traded. They need to hit their quarterly returns. They're incentivized to hit those quarterly returns. Innovation is very rarely valued at these companies the way that it needs to be. Oftentimes they can buy innovation when they need to. Right? They're big enough. They've got public stock and if there's a startup, they can often buy the company that's going to solve their innovation problem. The difficulty in these cases is when you're dealing with something that's inherently illegal or theoretically illegal, you can't just buy the illegal thing and make that part of your repertoire.Adam Rymer:So the answer that was given was essentially like, "Look, let's let the courts figure this out." It was somewhat of a, "Well, obviously this is illegal. So the government should just stop this and get in front of it and shut it down because we have the right to sell music on discs and all these other things." And I think there was an inherent unwillingness to accept the fact that the consumers get to decide these things. Consumers get to decide how they want to consume content, how they want to live their lives. And ultimately it's the entertainment companies and the media companies who have to answer to the consumers on these things. And that's where I saw the biggest disconnect. And it wasn't just at the music industry. I've seen that through most of my career.Chris Erwin:Yeah. You were at Universal Music for about one to two years. So, and clearly had some early exposure to digital, but we're seeing that this is a theme from very early on in your career and your childhood. But then shortly thereafter you go to Universal Pictures. Why'd you make that transition? Did you feel, "Hey, there's a lot of inertia here, things aren't changing and I want to go to another part of the house," or was it something else? What was that catalyst for change?Adam Rymer:Well, for anybody who remembers the advent of Napster and piracy, also the crash of 2000 from a tech standpoint, just really killed the entire music industry. I mean, the music industry was cratering at that point. People were losing their jobs. Revenue was cut more or less than half very quickly. And I had an opportunity to go to business school. So I jumped and I decided I was going to ride out the storm of 2000 and everything else while I was in business school. And if there was still a music industry to go back to, I loved the music business. I would've gone back to music after business school, but between 2000 and 2002, while I was in school, the music industry kept falling. They couldn't quite figure out the solution. And I spent my summer at Universal Pictures looking at a another side of entertainment.Adam Rymer:So after school that turned into a full-time offer. My thought on it was the biggest challenge the music industry had was technology hit them like a title wave because the technology at the time had already caught up to the feasibility for music, meaning you could download a song in a reasonable amount of time to make it useful for the end-user, right? It only took a couple minutes, 5, 10 minutes at most to download a song, if not an album based on where technology was in 1999. When I graduated from, from school and went off to film the technology, wasn't there to download a movie, right? We were still a long way off from maybe not that long, but technology hadn't quite hit the film business in terms of feasibility for the piracy and the not having enough time to get in front of.Adam Rymer:So the way I saw it was this is an opportunity to get into the film business and try to help them stave off the problems that the music industry faced. How do I take the learnings from music and apply it to the film business and try to do some things differently here that we couldn't do there?Chris Erwin:You go there and you have a seven-year run and you end up rising to become I think the SP of digital for Universal Pictures where you're managing an international staff of, I think over 20 people across the US as well as London and Tokyo, if I'm right. Did you feel that at that point that you were coming into your own as an executive where you have a vision, you know how to solve problems, you know how to build the teams? And did you feel like that was a transformational moment in your career?Adam Rymer:I thought so. I thought so. It was the, "Hey, this is great. My career's really advancing. I'm at the senior levels of a major studio. I'm getting to present to some really cool people." I'm continued to have some really lucky experiences. Got involved in some very cool projects. I was always very much on the business side of it. I was pretty far removed from I'd say the creative side. It wasn't until the very end of my stint at Universal that I got put on the green light committee at Universal, which is where you actually get to have a say over which films get made at the studio, which was a pretty cool experience. Although it didn't last very long.Chris Erwin:How big is that committee and how much weight did your particular vote from the digital strategy side count?Adam Rymer:I'm not sure how much weight anybody's individual vote has, except for a couple of people on those committees. There's about 10 people on that committee across the studio. You've got home entertainment and marketing and production and the head of the studio and those kinds of things. It's fascinating. I mean, it's very kind of closed-door sort of, sort of setting very private, almost Illuminati-ish, but it was pretty cool to be in the room for some of it. But my job was to weigh in on what the digital and alternative revenue streams could be for the titles that we were working on. So things like video games, YouTube content, ancillary products. At the time we were talking about things like ring tones. What's the other stuff that we can do out of these films to generate revenue.Adam Rymer:And then I would be on the hook for delivering those numbers against the P&L for that particular title. It was pretty neat. And I felt like things were going pretty well for my career at that point, for sure. Now the downside was during my time there, we kept getting acquired. And for most people getting acquired sounds like it's a pretty awesome thing. Usually, there's like, "Hey, you got paid out. That's a big success, big exit." Well, in the big giant corporate world, those kinds of acquisitions usually get met with, "Hey, we're just kind of sitting on our hands for a while." So Universal was a big company. And when I started working for them, it was owned by Seagram. Then it was owned by Vivendi. Then it was owned by GE. And when I left, it had been acquired by Comcast.Adam Rymer:And we were always the acquired company, which meant that the acquiring company was taking their people, having them learn about the business that they were buying, meeting with everybody trying to figure out what everybody did, which resulted in a whole lot of work for all of us to educate them. And usually, that met with a whole bunch of reorganization and strategy redesignChris Erwin:Hey listeners, this is Chris Erwin, your host of the Come Up. I have a quick ask for you. If you dig what we're putting down, if you like the show, if you like our guests, it would really mean a lot if you can give us a rating wherever you listen to our show. It helps other people discover our work. And it also really supports what we do here. All right, that's it everybody. Let's get back to the interview.Chris Erwin:So, Adam, I totally feel you on if you're always the target and you're being acquired the reeducation of the new leadership. It's a lot. I mean, I remember when Big Frame was bought by Awesomeness TV and then Verizon, and then Hearst then invested thereafter, and then Comcast NBC U came and bought Dreamworks, which had owned Awesomeness. And there's always the strategic goal shift, the mandate shift there's reorganizations. And there's a point where you're just like, "I just want to get to work." And look, that's the nature of the beast, but was that a reason why after your seven-year run, you then started to explore entrepreneurship? You were the co-founder and COO and CFO of Lava Bear Films. And you did that for a few years. Was that the reason why you made the switch?Adam Rymer:Yeah, look, I mean, there were management changes and to be honest, I had been part of a very big company where I was an employee number. I still remember my employee number to this day, which says a lot, and it was an eight-digit number. So I was just a little tired of being in that kind of structure and part of me who likes solving problems and actually making things happen and not having a whole lot of red tape. There was an opportunity in front of me. The chairman of Universal had left and had an opportunity to start a film production company and asked me to help him put the business plan together for it and raise some capital and go after it. So I thought it would be a great chance for me to not only learn how to start a company from scratch but also learn about the other side of the business, the creative side of the business. How do you actually make content from start to finish?Chris Erwin:Well, you must have been doing something right at universal if the chairman leaves and wants to bring you on board to his next venture, right?Adam Rymer:I would hope so. I would hope so.Chris Erwin:So you're there. You learned the creative side of the business, which I think is, I've talked about this on a few podcasts, right? Usually, in entertainment, you're either on the business side of the house or on the creative side of the house. It's rare for people to speak both those languages. I think of people maybe like Bob Iger or David Zaslav at Discovery in Warner Media. Right. So it's smart to build out that muscle and I think that you are an executive producer on The Rover and you helped finance the movie Arrival?Adam Rymer:That's right.Chris Erwin:Produced by FilmNation and [inaudible 00:28:25] and Glen Basner and they're good friends of ours.Adam Rymer:Great guys.Chris Erwin:Yeah. They're the best. And so you do that for four years and did you see like, "Hey, maybe there's a world where you stay in the creative side of entertainment?" Was that interesting to you?Adam Rymer:Look, it was an amazing experience. I always wanted to see how the whole sausages gets made from start to end and really got to do that. I was going around to film festivals. I was reading scripts. I was handling some of the talent deals. I was negotiating a lot of the financing for the films. We were selling the projects internationally. We were dealing with the studios. We were looking at the marketing for the films when they came out. But for I'm sure you've talked about this on some other podcasts the filmmaking process is very long and very slow. And so for me, it was I like being on the creative side of the business or having involvement on the creative side. But I don't know that filmmaking was the place for me to explore that in the long term, because I'm so used to being in areas where things move very quickly, right?Adam Rymer:Even the music business moves relatively quickly. And on the digital world, I was watching things happen. Snapchat was starting to happen and Twitch wasn't quite there yet, but YouTube was really starting to take off and there were all these other things that were happening in the background. And I just felt like I was missing some really cool, innovative opportunities that were going on. So I had an opportunity to go join Legendary, which was at the time a pretty cool independent studio started by Thomas Tull. They had made Godzilla and Hangover and King Kong and 300. And he asked me if I would help them build their digital businesses over there.Chris Erwin:Was it an immediate yes? Like, "Oh yeah, this makes sense. This is an incredible studio with some incredible IP. There's a lot I can do here. Let's get to work." Or were you evaluating other things too?Adam Rymer:I wasn't evaluating other things. And it was pretty hard decision because you this was a company that I had helped start and I was a pretty big piece of, but the opportunity and it was a blank slate. I was kind of handed a, "We don't know what the right answer is and we need somebody who's got enough experience on both sides of the equation here that understands making some content, understands distribution, understands the business side of it to really help us figure out what we should do with this asset that we have." They had just acquired Nerdist and just didn't have a solid business plan on how to start making real revenues out of it. So for me, it was a puzzle to solve right back to the things that I love, which is trying to put pieces together.Adam Rymer:At a certain level the film business has a very defined path, right? There's not much to solve in that. There's always new innovations that are getting made. There's new ways to finance a film. But for the most part, the business model of making movies is relatively defined. You might say that Netflix has changed that in some way, shape, or form, but there wasn't a whole lot of, "How am I going to do this for the next 20 years and innovate and do some neat things?" And at Legendary, it felt like there was a real chance to try all sorts of new ideas.Chris Erwin:When you enter their first year, they've acquired Nerdist and I think that was... Was that founded by Chris Hardwick?Adam Rymer:Correct? Yep.Chris Erwin:And so what did you think of, okay, these are the wins that I want to get in year one. I think that we are capable of doing this. It also feels innovative. And then I think it's going to set you up to have an exciting career overseeing digital at Legendary going forward. What was that first mandate for you?Adam Rymer:First thing was really figuring out how are we going to generate consistent revenue? Because at the time the video part of Nerdist was founded as one of the funded YouTube channels. Some people might remember that YouTube was putting a lot of money into funding channels for the purpose of creating more premium content on YouTube and right around 2014, they stopped funding those channels. And so a lot of these channels ended up in no man's land of figuring out how they were going to keep their business running. And so for me, the first step was okay, well, now that we don't have this stipend coming from YouTube every year, how are we going to find ways to just generate consistent revenue even if we're still operating at a little bit of loss, something that we can project to keep it all moving. So at the time we had the Nerdist podcast and we had some content that was existing on YouTube, and my first step was, well, how do we start monetizing podcasts in a better way?Adam Rymer:So I was able to take Chris's podcast and structure a deal with Midroll and that helped get us really kicked off with our first seven-figure deal, which let me hire some more staff and start to figure out some new lines of business.Chris Erwin:Did you feel like, "Hey, we figured out a digital revenue model here for media brands and fandoms built around big personalities"? And so did that then inspire you to say, "Well, let's start buying some other companies to add onto this roster"? Because I think you then acquired Geek and Sundry and then Amy Poehler's Smart Girls at the Party.Adam Rymer:That's right. So the idea was, well, if we can create enough of scale around these celebrity-driven community content businesses, then we can justify having an infrastructure that can support all of them the right way. So that allowed us to have a sales team that could support all of them, and start doing branded content deals that could leverage the communities that were built across all of them simultaneously bring some staff efficiencies together, and allow content production to be more efficient. So we had our entire... We had our own content production team. We had our own studio where we produced all of the content that we're making for the YouTube channels ourselves and for our branded content features. And ultimately that led us to start a Twitch channel with Geek and Sundry, which is where I started to learn quite a lot about Livestream.Chris Erwin:So do you feel at this point it's like, "All right." You're attached to a big studio, you have a lot of resources, you have incredible IP to work with, but you also, you're running your own division, which has its own P&L. It seems like you're on both the creative and the business sides of the house, where you have a real strong point of view of what content we're creating. How do we monetize it? What's getting green-lit? What new platforms are we experimenting with? You're building out a team against your vision. Did you feel like, "Hey, I feel like I have it all right now"? This is checking all the boxes for my career.Adam Rymer:In hindsight, I guess so. I mean, at time it felt very stressful. At the time it felt like we were building the plane while we were flying it. And there weren't a whole lot of examples for us to point to say, "Hey, we're doing it like these guys," or we've got somebody else that's done it in front of us. There were the MCNs out there that were aggregating a bunch of channels together. And they had a somewhat different business model, but there was nobody who was really trying to create more premium level content on a regular basis. And I mean, I had to answer to a pretty senior studio executive. So I had a lot of pressure from that side, but I did have the luxury of a good balance sheet. So I wasn't having to deal with trying to raise capital on a regular basis to keep the thing afloat.Adam Rymer:There was a couple years there where it really felt like the coolest, most fun job that I ever could have thought I've had. We were going down to ComicCon. Chris was moderating panels for us in Hall H. Got to go backstage and hang out with the cast of all the Marvel films before they got on Hall H. we had all sorts of fun people coming by the studio to be in the content, got to watch and be part of a lot of the content that was being filmed at our location. I think most of the people that were there at the time will tell you that it was a pretty magical place to be for a couple of years.Chris Erwin:I mean, I remember going to your offices a couple times during that period and just looking around at the different sets and the studios. And I was like, "This sounds like a pretty amazing gig, Adam." I knew that you were working really hard and that it was a lot and you were kind of figuring things out on the fly as you said, but I think everything in retrospect, you
James Creech — Paladin CEO on Selling to Brandwatch, Influencer SAAS, and Recasting Success
Jun 9 2022
James Creech — Paladin CEO on Selling to Brandwatch, Influencer SAAS, and Recasting Success
This interview features James Creech, SVP Influencer Strategy at Brandwatch and founder of Paladin. We discuss how former GE CEO Jack Welch inspired James to be a number one category leader, using his down payment on a house to start Paladin, his make or break pivot when the creator economy evolved in 2018, working till 3AM over Christmas to sell his company, why James and I are kindred spirits, and the power of recasting your success.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow The Come Up on Twitter: @TCUpodEmail us: tcupod@wearerockwater.com---EPISODE TRANSCRIPT:Chris Erwin:Hi, I'm Chris Erwin. Welcome to The Come Up, a podcast that interviews entrepreneurs and leaders.James Creech:Thomas and Ole and I all put considerable capital into the project. To put that in perspective, at the time, Thomas was getting married. His fiancé, she was amazing to say, "We believe in this dream, and we want to put that money that we would have saved for a big, nice wedding with our family and friends towards investing in this startup." I had been saving to buy a house, so I took essentially a down payment on what I would do to buy a house and said, "I'm all in on the business." Every penny to my name and probably even some I didn't have like went into Paladin. Then, Ole had recently gone out and bought a Tesla. He ended up driving back to the dealership and returning the Tesla, so he could take all of that money and put it into Paladin. So, every single one of us was all in from day one.Chris Erwin:This week's episode features James Creech, SVP influencer strategy at Brandwatch and founder of Paladin. So, James was born in Houston, Texas and grew up in Bakersfield, California with parents who worked in oil and gas. Early on, James was a creative. In high school, he made sketch comedy videos with his friends and thought film and TV was his future. So, he went to USC Film School and ended up running the college TV station, but soon realized that he really enjoyed and was good at the business side of entertainment. His career started at a video advertising startup, where he helped scale the team to over 40 employees, but then moved on to Bent Pixels, which started as an early YouTube MCN.Chris Erwin:While there, James took a big bet on launching a technology SaaS product for the early creator economy, which he ended up spinning out and leading as CEO, until its recent sale to Brandwatch just a few months ago. Today, James leads influencer strategy at Brandwatch and stays busy on the side, advising over 10 different companies and publishing content on his podcast and blog. Some highlights of our chat include how former GE CEO Jack Welch inspired James to be a number one category leader, when he used his down payment on a house to start Paladin, his make or break pivot when the creator economy evolved in 2018, working till 3:00 AM over Christmas to sell his company, why James and I are kindred spirits, and the power of recasting your success. All right, let's get to it. James, thanks for being on The Come Up podcast.James Creech:Hey, Chris. Thank you, excited to be here.Chris Erwin:This has been a bit of a long time coming. I think I was on your podcast a year or two ago, and I said, "James, I'm going to have to get you on mine someday." And, we're finally making it happen. When we were doing the prep, I just got even more excited, because I realized just how cool and exciting your story is. So, excited to share that with the listeners, and as always, let's rewind a bit. So, we're going to go back. Tell us about where you grew up, what your household and what your parents were like.James Creech:So, I was born in Houston, Texas, but grew up mostly in Bakersfield, California. So, I always tell people, "You could probably guess what my parents did for a living, right?" We worked in oil and gas. So, I spent most of my life, yeah, in Bakersfield, from ages four to 18, essentially. My childhood was great. I have a younger brother and sister. We're a close family. We had the chance to do a lot of traveling when we were younger, which was fun. I remember soccer practice and tennis and Cub Scouts, mock trial. We were involved in a lot of activities, and our parents were very much a part of those activities and the stuff that we enjoyed as kids.Chris Erwin:Quick interjection, how far did you get in Cub Scouts?James Creech:To the end of Cub Scouts. Never made it to boy Scouts.Chris Erwin:Did you achieve the Webelos badge?James Creech:Yeah, I was a Webelos. I think that's about as far as I made it.Chris Erwin:Nice. I did one up you a bit. I got to Eagle Scout with my twin brother.James Creech:Congrats. Wow, that's a huge achievement.Chris Erwin:It's a lot of work. Back to you, so grew up in Bakersfield, had some younger siblings. Early on, what were your passions? What were you into? Was there any glimpse into the career that you have today?James Creech:I think when I was a kid, I used to tell people what I wanted to be when I grew up, I said I wanted to be the governor of California. I don't know where that came from. I don't know that I have any sort of interest or passion in politics. I think as I got older, I would say I lacked the moral flexibility to pursue a career in that field, but was interested in politics and government early on. Somehow, that morphed into maybe being interested in law and going to law school at a certain point. I was pre-law at USC, so that was certainly a passion. I ended up doing the mock trial, as I mentioned, and then interned at a law firm and realized, hey, a lot of love for the legal profession, a lot of great friends who are lawyers, et cetera, but that probably wasn't the path for me.James Creech:In high school, the thing that really captured my intention was making videos with my friends, essentially comedy shorts. It's interesting, the timing, right? I was inspired by SNL and all these other amazing sketch comedy programs. Had I been a generation later, let alone maybe even five years later, the videos I made probably would've ended up on YouTube and now TikTok. But, because of the timing, I just made videos with my friends, and we made DVDs and shared them with our friends and family. But, it wasn't any sort of big distribution.Chris Erwin:It's never too late, James. It's never too late.James Creech:Yeah. There's an archive of a lot of old, embarrassing footage somewhere.Chris Erwin:Yeah, IP libraries are in high demand, high valuation. So, there could be something there.James Creech:So, that's what I was doing and figured, okay, well, I'm interested in media and entertainment. I applied and was accepted into the USC Film School and thought, okay, I'm going to go into film production, right? Fast forward a little bit, and I realized in college, well, I'm way more interested in the business side than I am in say the creative or the technical side. The stuff I liked doing in high school with my friends was making videos, which was really more about the experience of being together, less about the filmmaking process. But, yeah, that was kind of the early days.Chris Erwin:Yeah. So, I have to ask, what was your role in doing these sketch comedy or sketch segments? Were you a director? Were you a writer? Were you an actor? Was it all the above? And, I also want to hear, if you just have an example of one of the things that you guys did, I'd love to hear about it.James Creech:Oh, boy. So, I was an instigator. A ringleader is maybe the right word. We did all sorts of stuff. We were filming on these really small handheld cameras. I would certainly come up with sketch ideas and get my friends involved. We would shoot them. I would edit them. We would share them. There's plenty of stories that I can tell you, many of which are maybe too embarrassing for the podcast. So, we'll save that for a beer sometime, but one that definitely stands out is we kind of faked this kidnapping of our friend. He had a new girlfriend. He was really invested in that relationship, not spending as much time with our buddies. So, I said, "Okay, let's go to his house one afternoon, dressed all in black like ninjas," and his parents knew. We gave everyone a heads up, but we went in and kidnapped him for the day, which was a lot of fun. So, that's probably one that stands out.Chris Erwin:It's funny, hearing you tell these stories. So, I just started listening to This Is Important Podcast from the crew of Workaholics. They started just by making different sketch videos. They were filming wrestling matches in their backyard. Just hearing about some of their stories and how they started, and then they talk about, yeah, and then we sold the show to Viacom. How did this happen in Comedy Central?James Creech:Yeah, I wish that was the journey, was certainly inspired by Derrick Comedy and some of the other early, early YouTube sketch groups. We didn't get that far, right? It was fun to run around in our backyard and make videos, and that's where it ended for us.Chris Erwin:Yeah, cool. All right, so you get into USC Film School in 2012. I believe that you end up with a marketing and poli sci focus. But, tell us about you showed up at school. What was your initial focus? And, then it seems like it pivoted as you started to understand that you realized the appeal of the business side of entertainment, versus the creative side.James Creech:Yeah, so I went to USC, 2008. So, it was right around the housing crisis, financial crisis, which I don't know, as an 18 year old, you're fairly oblivious to. But, I was passionate about filmmaking. I was excited to be in the film program, also in the poli sci school. So, I was kind of running this dual track of, okay, well, I'm earning my political science degree, but I'm also taking these film courses and think that's what I want to do after I graduate. I got involved at the college TV station, called Trojan Vision, which is the largest TV station in the country. We broadcast to over a million homes, and I just kind of fell into it and fell in love with it. So, I was a producer on a show my freshman year, worked hard, got promoted to senior producer, second semester.James Creech:I was like, "Hey, I really like this TV thing. I like being involved at the station, meeting other students," applied for a staff position the next year and became an executive producer of a show. Okay, my first experience running a show, working in live television, it's exciting. It's the adrenaline rush of making something go on the air Monday through Friday. Through that experience, said, "Okay, I like the organization of the show, coming up with new ideas." We were experimenting with new technologies like HD broadcasts and live remotes and stuff at the time. So, I was like, "Okay, I'm excited about this," and people kept saying, "Maybe you should take some business classes." And, I thought to myself as a sophomore, well, hey, no. I'm doing the film path. I've got political science. I don't know what the business thing's about.James Creech:But, luckily USC has a very flexible structure and approach to curriculum. So, you could kind of dabble and take a couple classes. So, I said, "What's the worst that could happen? I'll take a business class or two," found out right away, hey, this is where I should be, and ended up transferring into the business school as a junior. So, I'm taking these intro 101 classes surrounded by freshmen. So, I had a very different mindset, let's say, going to the business school. I'm really excited to be here. There are certain things I want to learn. I'm finding ways to apply this over at the television station. I had been promoted to the general manager, so I was running the whole station at this point, which is a real budget.Chris Erwin:That's a lot of responsibility at a young age. What you said, it's one of the largest college broadcast stations in the US, and you're going ... Is there live programming Monday to Friday? That's a big deal.James Creech:Money through Friday, yeah, hours and hours of content. I was working essentially a full time load, basically 40 hours a week while going to school. But, I loved it. I loved every minute of it, creating television, working with students, and making something out of nothing, and putting it on the air every night, sometimes better, sometimes worse. But, I loved it.Chris Erwin:Okay, so you start taking these business classes, and right away, you're like, "This is a good fit." Then, what are you starting to think about what you want to do when you graduate?James Creech:Between my junior and senior year of college, I got an internship at Blizzard Entertainment. I grew up as a gamer. I wasn't necessarily a desktop gamer. I was more of a console gamer, but loved the opportunity to get exposure to another form of entertainment and work in a bigger company and try to decide what was right for me. So, as I was going through that process, had a great summer internship experience, came back, and had the opportunity to say, "Do I continue as the general manager of the TV station one more year as a senior?" But, kind of realized, maybe it was time to pass on the baton. So, it was hard to say goodbye, but I ended up getting another internship opportunity at this ad tech startup, this company in LA that was helping brands and media agencies promote video content on YouTube.James Creech:This was pre TruView, very early days, helping to make videos go viral. I was just, I guess, really interested in social media, but also, a USC alum was the COO. She was hiring. It was close to campus. It paid. I'm interested in this career path, but also it checks a lot of the boxes as a student that I want to make sure it's a good fit. So, I fell into that internship opportunity and just got hooked right away on the adrenaline rush of working in early stage companies. So, meanwhile, I had been recruiting, trying to figure out what do I want to do after I graduate. I had out law school or becoming a lawyer from my internship opportunity. I realized, okay, I'm more interested in the business side, so I'm gravitating towards that.James Creech:I like this startup company I'm working at, but I had always thought of myself as going into corporate America. So, I did recruitment on campus. I was offered a job to do business consulting and move to New York, which was kind of my dream. I was very excited as an almost 22 year old getting ready to graduate, moved to the Big Apple, and have this, what seemed like a really exciting, glamorous job at the time with travel and everything else. But, long story short, fell into working at Channel Factory, this ad tech startup, loved the team and the mission and the opportunity. They convinced me to stick around, so ended up declining the offer to do consulting and stay on the startup trajectory.Chris Erwin:I think what I'm starting to see here is you're on a unique path where you have both the creative know how and understanding, as well as the business savvy. That's very rare in Hollywood, right? I think of people like Bob Iger at Disney that has both of those sides of the brains, but it's a pretty rare profile, which probably explains a lot of the success that you've had in a very young career to date. Okay, so you go to Channel Factory, and what do you focus on there? Because, it seems like you start at the company when it's pretty early on, and they're on a really high growth trajectory. And, you facilitated some incredible wins there. Tell us about that.James Creech:Yeah, it was ground floor, right? It was in the founder's living room, essentially. We were building a business out of thin air, which was enticing to me and kind of felt similar to live TV production. Okay, there's this excitement. There's this adrenaline rush. You can have a big impact. So, I was basically the fifth employee, came in as an operator, doing a little bit of everything, strategic projects, built out ad operations group, hiring, training, commercial ops. I ended up working quite a bit coaching and supporting and at some points managing some of the sales team.Chris Erwin:This is all in like your young mid-20s, right? Because, you just listed off a lot of different things.James Creech:Yeah. We were all young, for the most part at that time. We were early 20s. It was a young company. It was an exciting opportunity in an early stage of the business. We ended up, of course, bringing in some more senior experienced folks, but there was this meritocracy to an extent, this excitement for youth and passion. So, we were all kind of figuring it out as we went along, and I was this person who didn't know anything going into it, but was just excited about where the company was going and the type of impact that I could have. So, we grew that business to whatever, 40 plus people, and close to or exceeding eight figure revenues. We opened offices in New York and Chicago. It was this wild ride for two and a half years, so learned a lot of lessons, both good and bad.Chris Erwin:Can you elaborate on some of those lessons?James Creech:I learned a lot about how to treat people, right? I didn't always agree with the founder and the leadership at Channel Factory. I had some great people that I learned from and supported me. Then, there were certainly some differences of opinion at times. I would say the other thing is it taught me a lot about the type of leader that I wanted to be and the type of business that I wanted to build one day. It's instructive to learn what not to do sometimes, as it is to learn what to do. But, I got great contacts and relationships. A lot of the people at Channel Factory have also gone on to do some amazing things, many of whom have become very talented entrepreneurs. So, it was this kind of amazing talent pool and this breeding ground for incredible individuals who were passionate about digital video and making an impact on the space, and that's been exciting to be a part of. There were certainly some things that we did really well, and being a young company, made a lot of mistakes, myself included. And, you learn from that and keep going.Chris Erwin:I love what you said. I always repeat this in interviews. It's very important to learn what not to do or what you don't like. In the beginning of my career where I was an investment banker, I worked with some incredible people and developed some incredible skills. But, there was also a lot of experiences and things that I was exposed to that I really did not enjoy, I thought were not good influences to the rest of my career. I consider that very valuable. When I talk to young people that are emerging from the undergrad and entering the workforce, it's this thought of, I have to nail my first few jobs, and that sets up everything for me. The answer, no, I don't recommend that.Chris Erwin:Try new things and experiment, and if it doesn't go well, that's totally okay. And, you're going to learn from that. That was some of the most valuable experiences for me. So, I like what you just said there, James. I think that's spot on. So, after a few years there, you then end up at Bent Pixels, where you also realized some great wins for the company. So, tell us about some of the work that you were doing there and how this set you up for your first big entrepreneurial venture, which is Paladin.James Creech:So, I entered Bent Pixels as an operator. That's what I had done at Channel Factory. The company at the time was a multichannel network in the heyday of MCNs, right? So, there was this time of excitement around Maker Studios and Fullscreen and Awesomeness TV, and Machinima, this early wave of digital disruptors helping YouTube talent grow their audience, monetize their content, figure out the early stages of influencer marketing, and what now we've grown to know as the creator economy. But, this was ground zero, right? You remember. You were there, too. So, this was the very, very early stages of what these future digital businesses were going to look like.Chris Erwin:And, tell us exactly, what did Bent Pixels do specifically? Were they a software platform for the early creator economy?James Creech:They did three things, right? They were a traditional YouTube multichannel network, so they provided services to YouTube channel owners and creators to help them monetize their content. They offered digital rights management services, so they would help IP rights holders monetize and enforce anti-piracy against their content on YouTube. So, they were using the content ID tools and additional manual services to help manage those content libraries. Then, they did audience development, so they were doing channel management and audience growth for brands that wanted help with their YouTube presence, so not unlike Fullscreen, Maker, many others at the time, right? So, when we came in, Bent Pixels was probably a top 30 global MCN. It was probably in the top five for rights management. I don't know, hard to say where it fell in the audience development or channel management services business, just because so many people were trying to get into that space.James Creech:We were doing all of this and facilitating it through technology, right? So, when I came into the business, I mentioned I started as an operator. And, I looked around, and I said, "This business doesn't need operators, right? We have a very capable COO, a general manager." I was looking for ways to do process improvement, cut costs, or optimize systems. There just wasn't much of that to do. The company was profitable and growing, and it had been fairly well managed, right? Well, what the business needs is growth. That's completely new to me.James Creech:I don't really know the space I was coming from, I say is the demand side. I was working with brands and media agencies, and all of a sudden, I kind of end up on the supply side, right? Now, I'm working with talent and content creators. This business doesn't really need all of the skills that I necessarily have historically had. So, we've got to figure this out, right? So, I just reached out to as many people as I could in my network and then through LinkedIn and said, "Hey, I'm curious to learn more about this space. Are you up for getting together for coffee or having a conversation?"Chris Erwin:This is very interesting. What was your primary networking tool? Were you using LinkedIn back in the day for this?James Creech:I was super early to LinkedIn, and I would just reach out to people. I would say, "Hey, I think what you're doing is really interesting. I think this space is early on. There's probably a lot we could learn from each other. Are you open to meeting for coffee or jumping on a call?" And, you'd be surprised, so many people said yes, especially all over the world, right? I was meeting people in Europe, Latin America, Asia-Pacific. It was this amazing opportunity to meet these other entrepreneurs who were like, "Yeah, everyone's early. We're all trying to figure this out. What are the things that are working for you? What are the challenges?" So, it was a lot of just connecting and sharing and learning from one another. But, obviously LinkedIn has changed a lot, A, over the years, B, post-Microsoft acquisition. But, in those early days, I was a young, snotty nosed kid, very earnestly trying to meet people and be helpful to the extent that I could. And, people were very kind to share their time and experience with me.Chris Erwin:I love that. You and I were actually just talking about this, I think, on LinkedIn. I just started a 30 day LinkedIn challenge. I think LinkedIn is one of the most powerful social networking platforms for professionals, hands down. I've been pretty active on it for the past few years, but our team is definitely ramping up our investment in it in terms of the type of content that we're creating. We've been doing a lot of experimenting, as well as the cadence of content as well.James Creech:Which is amazing. I can't wait to follow your content journey. I did something very similar in 2021, where I wrote every weekday, and it was such a stretch goal. I learned a ton from it, which we can talk about at some point, but I love LinkedIn, very supportive of the platform's evolution into becoming more of a content destination, and like you said, showcasing professional stories and helping people connect. It's getting back to some of those early roots of what it helped me pursue in my career.Chris Erwin:I love that. Well, maybe we'll have to do a mini series of a podcast about LinkedIn best practices. So, you start reaching out to all these different contacts across the world, focused on how do we share mutual learnings, and how do we grow? So, what did you learn? Then, what did you take from your learnings and apply to Bent Pixels?James Creech:So, what I kept hearing was everyone was facing similar challenges, especially as we tried to figure out how to scale. You have to remember at the time, people were focused on initially hundreds of creators. Then, it became thousands of creators. At the highest levels of Maker, Awesomeness, we were managing tens of thousands of creators. Bent Pixels had tens of thousands of YouTube channel partners that they were supporting. This was before YouTube had the infrastructure tools, resources, support to help those creators themselves. So, MCNs were the first line of defense. The demand, the excitement for the space was so dynamic that it was this gold rush mentality, this exciting time of help and enable as many channel creators as possible.James Creech:So, we had been building some software internally at Bent Pixels at the time out of necessity to figure out, okay, how do we find the right creators? How do we manage those relationships, pay them accurately and on time? Eventually, that would become, how do we manage branded content projects with them? Everyone else was doing the same thing. They were trying to build tools in house. They were trying to fit a square peg into a round hole. How do we take Salesforce and DocuSign and all these other tools off the shelf, stitch them together into this Franken-suite, and hope for the best? And, it was expensive, and it wasn't working. So, I kept hearing this, and I thought to myself, well, hey, if everyone's facing the same problems, and we're building what to me feels like a pretty good software solution for this, that should be the business, right? I was a big acolyte of Jack Welch back in the days. I would read a lot of his books, this legendary CEO and leader of GE.James Creech:One of the things that stuck out to me is, if you're not one or two in a category, you should cut it, right? So, it just occurred to me at every leadership meeting, I was like, "We have an opportunity. There's this untapped market potential to build software for this new breed of creative companies, and no one's doing it right. So, we should be first to market. We could be a leader there. It's great that we have this profitable growing business, but we're never going to win, right? We're not going to be one or two in the category. We're going to be ... Maybe we move from 30 to 20 or five to three, right?" So, I was advocating for that. Now, the way it was perceived on the other side is, well, wait a minute. We've built this business, at that point I think over five or six years. It is growing. It is profitable.James Creech:All these other companies have raised massive VC investment. They have a lot more resources. We're happy with our business, and we want to keep developing it, but we're not going to bet the house on James's crazy idea, right? They were advocating, hey, let's get into paid media. It's what a lot of other people are doing at the time. There's a big opportunity. I had that background from Channel Factory. So, they kept saying, "No, forget about that. Focus on paid media." I don't know. I was persistent, probably very annoying, young naivete, saying, "I really believe in this idea. Just give me a shot." They shut me down a few times and just said, "No, let's focus on the paid media thing."James Creech:Until, finally one day in some leadership meeting, with the support of our CTO Ole at the time, they said, "You know what?" I think maybe just to shut me up, "Okay, fine, right? You can have two months, 60 days. Give it a shot. Let's see what happens, right? And, if it doesn't work," which they fully expected it wouldn't, "After the field experiment, we'll go back to focusing on paid media." And, I said, "Sounds like a fair deal to me, right? I'll take that bet." So, in those next two months, I signed Maker Studios, Defy Media, Me Too, Networks, and 2btube, which would later go on to become the largest Spanish language creator community in the world. So, all of a sudden, they said, "Wait a minute. This is really interesting. We didn't think you would sign a customer, let alone four of the top players in the space. This is absolutely what we're focusing on, and you should do this full time."Chris Erwin:Did you have to evolve the technology product to service these clients as well as reposition your services to actually close these prospects? So, you had to do both, because you didn't have a technology background before this. You hadn't built tech products. You weren't a project manager, but you had to become this for this new role, correct?James Creech:Yeah. I am passionate about technology, had never been in product, had been adjacent to it, but said, "Yeah, we've got to figure this out." We built a software application that's meant for internal use. We have to figure out access rights, provisioning, white labeling, to make this an externally consumable tool. We need to figure out how to price it. We have to figure out how to sell this to our essentially competitors, right? We were working with these companies that were also in many respects offering the same services or going after the same talent. So, in some conversations, that was a bit awkward, right?James Creech:It said, "Well, how do we know that you're not going to take this data or use this technology to better your business and not ours, right?" So, that was a tricky thing to dance around and navigate. Huge props due to our technical team, Ole our CTO, [inaudible 00:25:56], a lot of our early engineering design product resources who were making this thing happen behind the scenes. I was out there kind of selling the dream, but they were the ones executing on this. A lot of it was just need finding, listening to the market. What do you need? Does the current tool in some form serve that? How do we adapt it to fit what you need? And, what else should we be building in the future so that we can help you get there?Chris Erwin:Hey, listeners, this is Chris Erwin, your host of The Come Up. I have a quick ask for you. If you dig what we're putting down, if you like the show, if you like our guests, it would really mean a lot if you can give us a rating wherever you listen to our show. It helps other people discover our work, and it also really supports what we do here. All right, that's it, everybody. Let's get back to the interview. It's interesting, because just listening to this story, one version would be ... And, James builds this incredible business at Bent Pixels, and he does that for the next 10 years of his career. But, the reality is that actually, you're there for a couple years, and then you found Paladin. So, after this initial two months of success, what actually caused you to say, "Hey, I want to break out and create a different suite of technology tools for the creator economy?"James Creech:So, I think in success, we got even more excited and probably a bit persistent on my idea that, okay, this is really working. We're now signing more and more customers. We're going to put more resources into this. Now, we are the market leader. We're first to market. We're building a name for ourselves in this category. People are rethinking the perception of Bent Pixels as a software company, as a technology vendor, whereas to creators, there's still this brand identity around being an MCN, being a services business, being a media company. But, I'm kind of casting Bent Pixels in this new light and trying to position or change the branding to be this enterprise software tool. Meanwhile, that business segment is growing. Engineers are expensive, so we're adding a lot of headcount to service the need and the customers.James Creech:It got to a certain point where I'm still advocating, hey, let's sell off or shut down the other business units, because look around. A number of other acquisitions had happened. Awesomeness was acquired by Dreamworks. Maker Studios sold to Disney. There was all this M&A activity happening. So, I'm like, "Okay, it's probably a good time to think about what does an exit look like for the media business?" Then, we can focus. We can really double down on this technology play. So, I was advocating for that. The rest of the leadership team said, "It's very clear that you're passionate about this. We don't necessarily all share the same vision or belief in that strategy, but obviously, the way you run a media company and a tech startup, a high growth tech company, require different fundamentals, principles, capital. So, maybe these businesses should live on their own, right?"James Creech:So, that's when the idea was floated that we should spin it out, right? So, it was at the time myself, Ole, our CTO, and I had convinced my good friend and partner in crime, Thomas Kramer, who worked with me back in the Channel Factory days. So, he and I kept in touch. We would catch up and talk about a lot of these challenges. I said, "Would you come over here and lead product for us?" He got excited about that vision and that opportunity, so it was really the three of us advocating for this opportunity. Initially, I was kind of resistant, to be honest. I said, "No, like, I think this is where the business is going. We should focus on this." Ultimately, saw the light that, yes, okay, we should separate these companies.James Creech:For a long time, I wanted the software business to continue to be called Bent Pixels, and that maybe the media company should rebrand as something, Millennial Studios. There were some other ideas that were floated, but after whatever, six months of back and forth and working it out cooperatively as a team, we decided, okay, Thomas and Ole and James will basically buy the software IP and spin out and form a new company, and then will rebrand it, come up with a new name. Bent Pixels will continue as a customer of Paladin, but there will not be any formal relationship between the two businesses. I wanted to be very clear that Paladin is its own company and eliminate that conflict of interest idea. I think Bent Pixels was very happy to say, "Okay, we can offload these expenses from developers and sales people and everything else off our books, focus on our knitting, and get back to the growth of the media business." We worked that all out to happen April of 2016. So, that was when we took the leap and said, "Okay, we're going to set out on our own."Chris Erwin:Did you raise outside capital to give you and your two other founders the ability to purchase the software, purchase the IP, and kickstart what you called Paladin in April, 2016?James Creech:We didn't. We thought about it, but the way we originally structured the deal was Thomas and Ole and I all put considerable capital into the project. Then, some of our partners from Bent Pixels also came in as angel investors. They said, "We like you guys. We believe in what you are doing. We want to support you." So, they were kind enough to give us a little bit of seed capital to help us get through the early days of burn and very kindly help us figure out how to set up our books and transfer the employee leases and all these things that as first time entrepreneurs, you have to figure out. So, they were very helpful and kind and patient with us. But, Thomas and Ole and I were pretty much all in.James Creech:So, to put that in perspective, at the time Thomas was getting married, and he had promised his fiance this amazing wedding. She was amazing to say, "We believe in this dream, and as part of starting our life together, we want to put that money that we would have saved for a big nice wedding with our family and friends towards investing in this startup, right?" So, that was Thomas's contribution. I had been saving to buy a house, so I took essentially a down payment on what I would do to buy a house and said, "I'm all in on the business."James Creech:Every penny to my name and probably even some I didn't have like went into Paladin. Then, Ole has the best story of all, was living in Norway. He's Norwegian and had recently gone out and bought a Tesla, right? Because, he loved
Michael Cohen — CEO at Team Whistle on Wall Street to Digital, Scaling $0-100M, Leadership, and Exits
Apr 14 2022
Michael Cohen — CEO at Team Whistle on Wall Street to Digital, Scaling $0-100M, Leadership, and Exits
This interview features Michael Cohen, CEO at Team Whistle. We discuss being denied by a Goldman Sachs recruiter, when wearing a suit can be bad for business, being on the launch team of Whistle Sports, why the movie The Martian inspires his leadership, executing an M&A roll-up strategy and going from $0-100M in revenue, exiting to ELEVEN Group, and learning how to “play it where it lies”.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow The Come Up on Twitter: @TCUpodEmail us: tcupod@wearerockwater.com---EPISODE TRANSCRIPT: Chris Erwin:Hi, I'm Chris Erwin. Welcome to The Come Up, a podcast that interviews entrepreneurs and leaders. Michael Cohen:The presenter started off his presentation, and he said, "None of you in this room are going to get a job at Goldman Sachs right out of school." Sort of the most deflating thing ever. I've been preparing for this for an ungodly amount of time. And I was so angry for so long, but what I took away from that has stayed with me for my entire career, because what he then went on to say was, "I didn't start a Goldman Sachs. I started at X company. I then went to Y, then over to company A, and ultimately got to where I am today as a managing director at Goldman Sachs." And his point was that not all career paths are linear. You have to have different experiences along the way that ultimately allow you to become a better managing director at Goldman Sachs, or wherever you were going. Chris Erwin:This week's episode features Michael Cohen, CEO of Team Whistle and chief transformation officer of ELEVEN Group. Michael was born in Long Island and grew up with parents who worked in tourism and technology. He decided to migrate to Atlanta for college, kicked off his career in a financial training program at Wells Fargo, but he soon returned to his home turf in New York City to be an investment banker, where Michael learned how to tell stories with numbers. Of note, this is where we first met and actually worked together for a few years. Chris Erwin:Michael's career then progressed into private equity and strategy consulting, but he left to take an early bet in digital media and helped launch Whistle Sports in 2014. Today, Michael is the CEO and has spent the past year integrating the business into its new owner, ELEVEN Group. Some highlights of our chat include being denied by a Goldman Sachs recruiter, when wearing a suit can be bad for business, why the movie "The Martian" inspires his leadership, executing an M&A roll up strategy and going from zero to a hundred million in revenue, and learning how to play it where it lies. Now I've known Michael for over 15 years, and he's one of my favorites to share industry notes with and riff about all things creator economy. Telling his story has been a long time coming, so let's get to it. Chris Erwin:All right, Michael, thanks for being on the podcast. Michael Cohen:Chris, thanks for having me. Been a long, long time that we've known each other, so I'm excited to chat with you. Chris Erwin:Yeah. This has been a long time coming. I think I've been asking you to be on the podcast for almost over a couple years now. There was some assumed perhaps missed emails or lack of responses or who knows what, but finally able to make it happen today. Michael Cohen:I take the fifth, but I'm glad I'm glad to be here today. Chris Erwin:All right, Michael. I've known you for a long time. I think dating back to 2006. This is ... I know. It's pretty crazy to say that. It's almost over 15 years starting in Wall Street finance into the world of digital media. A lot to talk about today, but let's start where you grew up, if there's any glimpses into your early career. Let's rewind a bit and tell us about where you grew up and what your household was like. Michael Cohen:I grew up in Long Island in New York, a nice, quiet suburban town called Jericho. I have an older brother and my two parents as well. The town was a very small town. Everybody knew each other, which was great, but also a little bit of a bubble. And so I think having grown up in that environment, it was something that I liked a lot, but also knew it was something I needed to get out of and experience the world a bit different. And I think part of my childhood allowed me to do that. My mom worked in travel, which allowed us to go to all different places. Some I appreciated at the time. Some, I certainly did not as a kid. Whish I could go back and appreciate some of those more, but again, this is well before we had digital cameras, let alone Instagram. Michael Cohen:You couldn't experience a culture the way you potentially can today through Instagram or other apps. I got to have a feel for other cultures around the world through that lens. And then my dad worked in and around technology for his entire career, which was pretty awesome. He traveled to Japan a lot. And I would always ... We went to the consumer electronic show, when CES was actually consumer electronics, or at least more prominently consumer electronics. I would inevitably have some new gadget. I remember a small, little TV that had a massive antenna that I got channel two on, which was great, super exciting as a kid. And then I definitely had the first MP3 player, which I think it was called the Diamond Rio. Chris Erwin:It could hold five songs? Michael Cohen:Yeah. It literally had I think five songs. You could upgrade the memory and you might get eight songs. It was literally the coolest thing ever, but you'd use it to go for a run because you had a Walkman. That was the only other thing. And if you do more than a 20 minute run, that's kind of it. But I think being around my mom and dad who were both working, gave me a strong appreciation for hard work and work ethic. I think both of the industries that they were in gave me perspectives that I probably wouldn't necessarily have had. I'd say my older brother, in terms of work ethic, not to say he didn't have great work ethic, but he is wildly smart. And he didn't actually have to work all that hard to do really well, which, on the other hand, I believe I'm somewhat smart, but also had to do a lot of hard work to keep up. That's just something that's always driven me. Chris Erwin:Michael, I think you have many moments of great intelligence, so don't cut yourself short there. All right. With your mother in travel, your father in tech, did you have a sense of what you wanted to do as a kid? Did a lot of people in your community work in New York City? Did they work in finance? What were you thinking about your careers you were preparing for college? Michael Cohen:Yeah, we had a lot of different folks in the neighborhood. Some worked in finance, some accountants, a variety of folks that worked in different industries. I think for me, business was something that was always an area where I wanted to focus. I knew I wanted to be a business man at that time, follow predominantly in my dad's footsteps and be able to work with a great company and travel, be a part of important meetings, a big team. All that stuff was important to me. Exactly where and what that meant was certainly TBD. Again, we didn't have internet, and all that stuff wasn't as prevalent as it is today to sort of understand all the options and choices. Chris Erwin:And actually, a quick tangent to that ... As a kid, what were your hobbies? What were your passions? What did you do outside the classroom? Michael Cohen:Played a lot of sports. I grew up in a neighborhood that after school, all of us would get our bikes. We'd go to a park. We go back to the school. We'd play pick up basketball, roller hockey, baseball, you name it. We were out until dinnertime. And that was just awesome, being able to always be playing sports. And then at home, I would say because I was able to get exposure to a lot of the technology, I probably had the latest and greatest computers, these massive machines, and got to tinker around with that. So played on the computers. I probably had the first CD burner that existed, and turned that into a little entrepreneurial business in high school, selling CDs. Chris Erwin:Burned popular CDs that you would buy at the time and sell them to your friends? Michael Cohen:There was a very popular dance mix. I don't remember what it was, but it was one of those things that ... I don't know if it was Tower Records or one of those [inaudible 00:08:06] things that you get 22 songs or something on. And it's a mix. I had this CD burner. My friend and I, we started selling these CDs for a few bucks to our friends. It was a nice little side hustle back in high school. Chris Erwin:Okay, so there's a little bit of an entrepreneurial bend in you. I see that. You decide to go to college, and you go to Emory university in the south. What were you thinking when you went to Emory? What was the plan there? Michael Cohen:It was interesting. My brother had gone to Emory. I went down to visit him, Emory in Atlanta, Georgia, early 2000s. The "dirty south" was really having a moment in terms of growth, in terms of pop culture, a really awesome vibrant place. I think for me, having grown up in more of a smaller neighborhood where I knew a lot of the people, I think feeling like a bigger fish in a smaller pond was something that was more exciting. And I think looking at Emory, looking at the curriculum, the school wasn't super small, but at the same time, it would give me warmer weather and the ability to feel part of the movement in pop culture happening at the time. Chris Erwin:And so from there, you end up going into finance, right when you graduate, which I think is around 2005. And I think you end up at Wells Fargo. What was your thinking there for your first role out of school? Michael Cohen:I'll back you up a little bit. At Emory, I majored certainly in business, but with a concentration in finance and marketing. And again, I had always had the desire to be a leader, wanting to be the head of a company someday. Didn't know exactly what that meant at the time, but that was always something that was important to me. I remember going to a ... The school had put on a road show of meeting different investment banks. I got to go to Goldman Sachs, the cream of the crop. I remember this so clearly. I had my suit on, I had studied, I had the vault guides. I knew every question that could be answered. I was ready, and the presenter started off his presentation. And he said, "None of you in this room are going to get a job at Goldman Sachs right out of school." Chris Erwin:Why are you there? Michael Cohen:I'm like, "Well, this is sort of the most deflating thing ever. And I've been preparing for this for an ungodly amount of time." I was so angry for so long, but what I took away from that has stayed with me for my entire career, and it's something I pass on. Because what he then went on to say was, "I didn't start at Goldman Sachs. I started at X company. I then went to Y. I went then over to company A, and then I went to company B and ultimately got to where I am today as a managing director at Goldman Sachs." And his point was that not all career paths are linear. You have to have different experiences along the way that ultimately allow you to become a better managing director at Goldman Sachs, or wherever you were going. Michael Cohen:Fast forward, that stuck with me. I didn't get a job at Goldman Sachs and actually, for the first time in my life, I decided to take a different road. I stayed in Atlanta after I graduated when a lot of my peers were moving back to Manhattan and New York. Again, Atlanta during this time was really booming, and I was excited about the city. I worked for Wells Fargo in their corporate banking group, where we were lending money to large Fortune 500 companies. Michael Cohen:It was a really interesting experience because it was so foundational in terms of learning and the training program that Wells Fargo had. It was just an incredible training program, got exposure to a lot of different people, a lot of different industries that we were covering. And it really gave me a very solid foundation. Ultimately, it was something that I would say, started to lay a very strong finance acumen for me down in Atlanta. I stayed down in Atlanta for a year after graduation and worked at Wells Fargo. It was a two year training program and my focus was all right, it's not investment banking, but maybe I can complete this training program in one year versus two years. So I completed all the training requirements. Chris Erwin:This is actually where we have a lot of overlap. Right after undergrad, I also started my career as a corporate banker. I went to the Bank of New York. It's now known as BNY Mellon. Similar to you, we were lending to Fortune 500 companies across a variety of industries. So paper manufacturing, TMT, energy and utilities, and much more. I remember spending a lot of time pouring over financial statements and getting into all the details. I learned a ton. Follow up question for you, Michael, is what did you like most about the training program? Michael Cohen:What was great about the training program is that, and I remember this so clearly, they taught you how to hold your plate and a glass at a cocktail dinner. They taught you how to answer the phone. And you think about these soft skills that you take for granted today. Most people don't even use a phone anymore, let alone know how to actually pick up the phone. Go to a cocktail party, how you're supposed to hold the glass on the plate with one hand so you have the other hand free to shake someone's hand. Little fun things that you learned outside of just the core finance and accounting. Michael Cohen:But what was interesting, and why I ultimately decided to move back to New York, was it was a little too slow for me in Atlanta at the time. Still very much a nine to five attitude in that city in terms of where I was, and the opportunity to advance as fast as I would've wanted. This is when I got the opportunity to move to New York, and I landed a job at Waller Capital, which is where you and I had worked together. Chris Erwin:I remember that first meeting where I think you had just joined within the past handful of months. This is I think in 2006, and very similar experience to you, incredible training program at Bank of New York, learned a lot from the leadership there, but wanted something that was more faster paced. Wanted to jam in the hours while I was young in my twenties. I remember coming to an interview at night in the office, and this was a small office, at 30 Rockefeller Plaza, or one rock, and meeting at the upstairs meeting room. It was in the dark. I walk in and I think we do a 45 minute or hour interview. And I was like, "Wow, look at this guy. He's got a similar background to me, but he's super sharp. He's very confident. And you got me very, very excited about the role." The interview I had was okay. Chris Erwin:But I guess it was good enough to give me the job, because I remember getting an offer letter shortly thereafter and then joined the company a few weeks after that. I'm curious, one of the things we talked about before was building three legs of the stool. Each of those legs being finance, operations, and strategy and leadership. What do you think that you got out of your experience at Waller Capital? And then you moved to The Cypress Group thereafter, what was the financial acumen that you were really building at that point? Michael Cohen:I think it was a few different things. It was a core foundational skillset in corporate finance and accounting, which is really understanding how the numbers work, how an income statement, a balance sheet, a cash flow, not only how that works, which I think I learned in Wells Fargo, but in investment banking and at Waller capital was more of how it's applied. Because what we did was we were advising companies ... As you know, you worked there, but we were advising companies on raising capital to support their businesses and more often selling the companies. Helping them with the most important moment of their lives to sell them to somebody else. How do you write a story based on these numbers and present them to the marketplace? I think that was ...What I learned there was really the combination of how to use numbers to tell stories. And certainly learned a massive attention to detail. Michael Cohen:You talk about Jeff Brandon, who we both worked with. I remember what he said to me. He goes, "In our business, 99% right is a hundred percent wrong." And that's really stuck with me. The detail side of that, because what he was trying to say was one wrong number calls out your credibility to a client, to a potential buyer. And it's cast judgment, cast doubt on the rest of the financial model. So we really, the threshold for being correct was there was really zero tolerance. It taught you how to double check, how to triple check your work, how to work with others, like yourself, to ask questions, to make sure that you were approaching things the right way. Michael Cohen:I would say the storytelling with numbers, the attention to detail, and then again, work ethic. Because we worked long hours together to ultimately be able to deliver for our clients. And you had to find a solution. I'll give you an example of that, which was, we had a pitch, it was a very large pitch. We had done the pitch deck. We were all ready. Again, Waller Capital was media and telecom. I don't think we hit that early, but we spent a lot of time focused on cable companies. These cable companies, if you zoom out of a map of the United States, it's like a puzzle. There's pictures of this map that we would often use in our pitch decks to show how some different assets, where a strategic fit of different areas. Well, that needed to be part of a physical pitch deck. Michael Cohen:And unfortunately the files were so large that they couldn't print out. Again, this is '06, so didn't have these great printers that you can buy off the shelves today. And I had said to the managing director, "Look, sorry, there's just nothing I can do. It won't print. It keeps jamming. It won't print." And the response was like, "That's just not acceptable. I need this for a pitch tomorrow morning. It's got to be at my house in Greenwich by 4:00 AM, because I've got a 6:00 AM flight." So, okay. And I've got my new shoes on, my new suit, my investment banker gear. Meanwhile, I'm living on a couch at this point, and I go down to the financial printers on Wall Street, and begging them to take this file. The financial printers were the people that actually printed out all the 10Ks, all the SEC documents that had to be physically printed back in the day. Michael Cohen:I begged them to find a way to get this file open. Ultimately after going to three different ones, I found someone that was able to print it. They printed it. I bartered with them, so instead of charging with me, we said, "Hey, the next virtual data room that we use will go with you." And I took a black car all the way to Greenwich. I dropped it off. My feet were all blistered up. Ultimately got home, got a couple hours of sleep, and back in the office by nine o'clock. While going through that, I was obviously fairly frustrated and tired and exhausted, but it taught me that every problem has a solution. You just have to work it hard enough. I think those three plus years at Waller Capital really instilled a core foundation in how I work, and not only what I know, but how I work and what I really am able to do. Chris Erwin:Very well said. After investment banking for a few years, you then head to private equity. You head to the Cypress Group and Torque Capital. Tell us about experience and what the training was there that was setting you up for the rest of your career. Michael Cohen:Wat was really interesting coming out of Waller Capital after three years was, I don't know how many different sell side mandates we were on, but probably, 30, 40 over my time there. Sell side is when, as you know, when you're selling a company to the marketplace, so you're representing a seller and you're going out and you're positioning them to a marketplace of buyers to ultimately sell it. Now, what was really fascinating for me, and what I wanted to do, was go on the opposite side. Okay. You sell the company, now what happens? A buyer buys it, what do they do now? How do they operate it? And Cypress Group was a two and a half billion dollar private equity firm. I would say they were focused on diversified industrials and manufacturing. Michael Cohen:And for me, what I wanted to get next in my career was a broader exposure to the economy. No better way to do that than getting more involved in industrials and manufacturing. The other side of it is I wanted to be involved in the actual operations of the company. Cypress was sort of nearing the end of its fun life, but really was focusing on portfolio operations. It would give me an opportunity to really roll up my sleeves, work with various executives in each of these companies that they had owned, and literally be on the front lines of operations. And I think that was an incredible experience, particularly because the fall of Lehman Brothers happened during that. When you have exposure to everything from automotive companies to kitchen cabinets during a recessionary period, how do you operate those businesses? Michael Cohen:It's one thing when you can't stop selling kitchen cabinets. It's another thing when home builds are cut in half, and you've got a massive manufacturing line needs to be retooled or relooked at. And so how do you fix that? I was able to go to many interesting places similar to our days in Waller Capital, driving around the country and various markets, and get on the manufacturing floor. What I remember very clearly are two things. One, the first company I went to that we owned, I was wearing a suit, tie, nice shoes, clearly bringing a New York aura to this company that was in Tennessee, I believe. And it was like, who is this guy? What is he doing here? How can he possibly help me? Michael Cohen:I quickly learned culturally, you can't get things done by decree. What I quickly did was, the next day I changed. I was no longer wearing a suit. I was a little bit more suitable, but I started just asking questions and listening. What I took away was, what are the biggest pain points that the CEO has, that some of the senior managers have. And ultimately I came away from that trip knowing that if I could solve some of those pain points for them ... And some of them were fairly easy. Some of them were, "Hey, I need just better communication between the board and us," or, "Hey, there's this issue that keeps popping up." These were fairly simple, but it just required connecting of dots to do. And I did that, and what was magical out of that was the respect and credibility that I was able to get. Michael Cohen:From that point on, I was able to acclimate and get involved in these companies in a way where I started to be able to understand truly what would move the needle for them as operators, versus me wearing a New York private equity hat. And that was probably the most fun I had ever had. It really reinforced my desire to really be an operator. I had now investment banking, private equity experience. After two years ... Private equity was a two year program. You signed two years, and then you're typically off to business school or you do something else. Ultimately, I had asked the head of the private equity firm for his advice on what I should do next. I said, "Hey, should I go to business school?" Michael Cohen:I had taken GMAT. I had done well. He was a big golfer. He said, "Play it where it lies." He goes, "You're sitting in the fairway. Why would you go to business school? You've already got the education. Everything you would've gotten, you've seen. You've been operating. You've been operating through these tough environments." And this was about the time where we saw an opportunity in the market to create what I would call a lower middle market distressed fund that would focus on these smaller companies that were forgotten during the post Lehman era, that were still extremely valuable, had a lot of asset value, again from manufacturing, whether that was equipment or what they were doing, but just were victims of the challenging environment. Going in, helping to restructure those, bringing those back to life, was awesome. It was the best. After two years, I joined a couple of folks there. Michael Cohen:We created this vehicle called Torque Capital Group. It still exists today. We made a couple of investments. I was really part of the very beginning of a fund, the very beginning of the investment that we made, putting together a hundred day plan, living in places like New Hampshire and outer Georgia, really working with the operators on what is this next iteration of the company. That was just such an incredible experience. What I took from that was ultimately, I was more excited about the top line growth side of things, the innovation that was happening in Silicon Alley. That then led me to the next stage of the career. Chris Erwin:Few interesting notes there. One, in terms of really listening, and being aware, and understanding the cultural nuances when you're working with different companies or leadership ... I feel you on that because I remember you and I used to do this. We used to do the cable tours when we were in banking, and I would show up to the middle of nowhere, Missouri or middle of nowhere, Wyoming to a cable head end, where we were representing the seller. The private equity company, their buyer, and their leadership and diligence team would come out. They'd all just be in general outdoor work gear. And I'm showing up in a suit, slacks, nice leather shoes. I was totally the odd man out. I thought that dressing nice like that would get me respect in the room, or respect in a situation because I was typically 20 years younger than everyone else that was there. Chris Erwin:That was not the case, and I learned pretty quickly that I got to adjust the wardrobe. And I got to listen more to the people that are around me if I'm going to have an impact in this situation. I think that's very right. And your boss, I think at the Cypress Group said, "Play it where it lies." Probably around that time, it's 2011 for you, I decided to go to business school because I think I realized I was making a change where I wanted to change geographies. I wanted to change roles. I wanted to change industries, and I felt that I didn't have the right skillset and I didn't have the right plan. I needed to reset and take two years to get the operating experience that I needed. Chris Erwin:It's funny, we took two different paths, but ended up in pretty similar industries thereafter, and pretty similar roles that have diverged over the past few years. It's just funny to kind of reflect on that. All right, so then after Torque Capital, we're going to get shortly to your rise in digital media at Team Whistle, but I think there was a quick stint of strategy work that you were doing. Tell us quickly about that, and then we'll get to your current role now. Michael Cohen:So now, I've got the finance acumen under me, I've got the operational acumen under me, and I see very clearly what I need next, which is more of the strategy work that was missing. What I was looking for at the time was, do I jump into a startup and take some sort of role that's ... I think at the time everyone coming from private equity or MBAs was looking for a business development role, or a strategy role within these companies. I got some really great advice from an angel investor who introduced me to the CEO of Fahrenheit 212, which their whole mantra, how do we take an existing asset, existing distribution channels, existing marketplace position, and how do we leverage that to create a new product, a new technology, bring that to market and ultimately build a startup within a Fortune 500 company? Michael Cohen:I was advised by this angel investor who said to me, "Go talk to Fahrenheit. I think this is a great bridge that will ultimately get you into more of that operating role, that startup role, but this is a great place to go. You'll have the ability to work with large Fortune 500 companies that you've been working with, but you'll also be able to help them work on new products, new innovation, very exciting activities." And so got the job where I was an engagement manager. My role there was to lead different engagements. I got the opportunity to work with everyone from Citigroup, to Samsung, and a number of others in between, but big companies and big challenges that we were trying to tackle for them. One of the best pieces of advice I got from the founder, a guy by the name of Jeff Valletta, stuck with me. He said, "Free yourself from the fear of failure." Michael Cohen:What he was saying was a couple things. One is, in innovation, you're going to fail sometimes, but if you play your hands scared, you're never going to innovate. The team that we built at Fahrenheit was there to support you. So it was one, the team around you is here to support you, so don't worry about you failing. And two, don't worry about the product failing because you're going to learn from it. And it was about iteration. It was a great environment to frankly, retrain my brain because in banking and private equity, when you hit a wall, you think about how do I financial engineer around this? How do I cut it? In innovation when you hit a wall, that's opportunity. Michael Cohen:It took me a number of months to sort of retrain my brain on that notion that this is opportunity, and so how do we innovate around it? How do we innovate through it? What does this mean in terms of opportunity? That to me was an incredible experience. I was at Fahrenheit for about a year, and then I left and ultimately started my own consulting company. And why did I leave? Well, something interesting happens when you work with Fortune 500 companies and you deliver them, at least in my experience there was you deliver them this great strategy. You deliver them this great idea. They sign off on it. Two things happen: one, the person who's the key stakeholder gets promoted and it's no longer their problem. Or two, they decide to take it internally. They're like, this is great. We're going to run with it from here. The idea of me getting to build a startup within a Fortune 500 company was not really a super viable path. You're able to bring the strategy to life, but often, they're going to run with it on there. Michael Cohen:So obviously lots of internal stakeholders, lots of different things you need to do. And being inside the company was how they were able to be successful with it or take it. But at that point, I was very confident in the skillset that I had built. And so I started my own consulting company called, Who Is M. Cohen Ventures. Chris Erwin:Can I just ask why, Who Is M. Cohen? Michael Cohen:A friend of mine was more advanced in the social media space at the time than I was. In terms of branding and everything, I was like, "I need a Twitter handle. What Twitter handle should I do?" I couldn't redo my AOL handle from high school. So he's like, "What about who is M. Cohen? There's so many Michael Cohens out there. What about who is M. Cohen?" And so I took that as my Twitter handle, and then I just started branding a lot of other things with it. I liked it. Chris Erwin:Hey listeners, this is Chris Erwin, your host of The Come Up. I have a quick ask for you. If you dig what we're putting down, if you like the show, if you like our guests, it would really mean a lot if you can give us a rating, wherever you listen to our show. It helps other people discover our work, and it also really supports what we do here. All right, that's it. Everybody let's get back to the interview. Chris Erwin:After Fahrenheit and after Who Is M. Cohen Ventures, you joined what is now known as Team Whistle back in 2013. I'm curious to hear, from your point of view, how you ended up making this transition. Because I do remember when I was graduating from Kellogg, I was working for a company called Pritzker that actually invested in Big Frame and Awesomeness. I joined Big Frame back in, I think July 2012. I remember increasingly getting calls from you being like, "Hey Chris, I see you're working at Big Frame. You're in the YouTube MCN world, what's going on there? What are you doing? How are you building?" And I remember the frequency of those calls really ratcheting up. I think there was an eventual call I got from you, which was, "Hey, I joined Whistle." And I thought that was awesome. I loved having one of my financial brethren making the move into digital media where there's going to be some more quantitative focused minds and strategy minds entering the mix, which we needed. But how did that come to be from your side? Michael Cohen:I was doing the consulting thing as Who Is M. Cohen Ventures. One of my clients was the Whistle, and I was doing consulting for probably six months. I had a number of clients, probably had five different clients. And I wasn't sure whether I was going to just keep building a consulting company or do something else. It would actually, frankly, gave me the opportunity to date a lot of really interesting companies. I worked with small seed stage companies, some more funded companies, and some actually Fortune 500 companies as a consultant. But, I would say what got me to join Whistle was two things that happened. One, I would come home and I would talk to my wife and she said to me, "What's interesting, you talk about all your clients. When you talk about Whistle, you say, we. When you talk about your other clients, you say they." It was a really interesting, subtle observation that she had made. Michael Cohen:And then too, Chris, as you know, back in time, this was a wild west. Not many people knew what YouTubers were. It was probably the only platform that had creators. I don't think the term influencer was coined yet. And then Disney comes in and buys maker studios for a billion dollars. I sit there and say, well, one, there's a great team, a small team, but really interesting people that are here. And then two, there's just got some validation in this industry that perhaps there is some validation coming from Disney. Michael Cohen:At that point, John West, who was the founder of Whistle, said, "Hey, we got to raise some money, so I can't have my finance person as a consultant. So you going to join? You can create a consulting company anytime in your life. There's not going to be many opportunities you get to join a company at an early stage like Whistle." And he's a great salesman and a great mentor and friend, so I jumped on board. At the time it was called The Whistle and that began the nine plus year journey that I'm still on right now. Chris Erwin:Got it. When you first joined, what was the mandate? Was it, "Hey, Michael, we need to raise money. Let's get the model and the deck together"? And then the money's raised, what was your mandate immediately thereafter? Michael Cohen:They had raised some seed capital. Really I joined in 2013 and I would say our public launch was January 1st, 2014. And the premise of what we were trying to do was if you were to reimagine ESPN today, how would you do it? That was the question that we were asking ourselves at the time. It would be very different than what was happening back then. Traditional media, in our view, underserved today's generation. It was mostly a one way broadcast directly to you from the old guys with gray hair, talking about the glory days, talking about this scandal, that scandal. And, when I came on, the mandate was to help figure out what's the initial strategy that we want to take this on. Our view was, looking at how ESPN came to be and studying it, was ESPN came to be on the back of cable and satellite providers. They bought sports rights and, again, they sold them and then sold it to Telcos and had licensing fees and all that type of stuff. Michael Cohen:Our view was that the next company was going to be built on the back of social media company. Instead of cable and satellite, you're going to have the Facebooks, the YouTubes, et cetera. But our view was that instead of sports rights, it was going to be social influencer rights. And so the first step of what we did was we created a sports MCN, like a Big Frame before us, or a Maker, or Style Hall. All these others that were either generalists, or they were very vertical focused, Style Hall being more fashion and beauty. Tastemade, being more around food. Michael Cohen:There was still room for sports. The first thing that we did and that I was part of, was really trying to come up with that strategy. Once we landed on the MCN strategy, which, our view at the time we came after a number of other companies, was instead of this actually being the destination we're trying to go to, it was more of the vehicle. Michael Cohen:And what I mean by that is, we would create this MCN, we'd have a lot of creators under our belt. It would give us access to tons of data, which would then give us the ability to learn more about the audience and then figure out how best to serve that audience. So I would say the initial part of me coming on was helping with the capital raise, putting the deck together, putting together a financial model. But in order to put together a deck in a financial model, you of course need the business strategy. Looking back nine years, it's very easy to tell a linear story on what we did, but between us that's BS. We all know building a company is not a linear story. So that was the first piece of coming on. Chris Erwin:When you launch in January of 2014, did the launch go as expected? What surprised you? Michael Cohen:We were so
Brendan Gahan — CSO at Mekanism on YouTube in 2005, Selling Epic Signal, and Your First 100 Drafts
Mar 17 2022
Brendan Gahan — CSO at Mekanism on YouTube in 2005, Selling Epic Signal, and Your First 100 Drafts
This interview features Brendan Gahan, Partner and Chief Social Officer at Mekanism. We discuss working with OG YouTubers like Smosh back in 2005, founding Epic Signal and selling it to his former employer, hanging out in El Salvador’s Bitcoin Beach, why it takes him 100 drafts to publish content, the future of the creator economy, and learning how to enjoy what you create.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow The Come Up on Twitter: @TCUpodEmail us: tcupod@wearerockwater.com---EPISODE TRANSCRIPT: Chris Erwin:Hi, I'm Chris Erwin. Welcome to The Come Up. A podcast that interviews entrepreneurs and leaders. Brendan Gahan:I felt like my strengths could be better utilized going off on my own. It was really as simple as, well, I want to do this work the way that I know how to do it and the way I want to do it. And if that takes me going off on my own, then that's what I'm going to do. So I did. In hindsight, it sounds much smarter than it was. It was not smart from like an on paper standpoint, but I just felt like it was the right thing for me to do because I've been doing it longer than most people, I have relationships, I have a sense of what strategically works. I want to do it the way that I want to do it. Chris Erwin:This week's episode features Brendan Gahan, partner and chief social officer at Mekanism. So Brendan was born in Ventura, California, and grew up surfing many local breaks. But although his parents were educators, he entered college without a career focus. But just a few weeks away from graduation, a last minute call from his uncle sparked his entry to media and advertising, and he never looked back. His career started at a creative agency working on some of the first YouTube campaigns with hit creators like Anthony Padilla and Ian Hecox's Smosh. With a growing reputation as a social and digital expert, Brendan eventually started his own agency, Epic Signal, which he ended up selling to Mekanism. Chris Erwin:Today, Brendan is their chief social officer. On the side he also publishes a wide array of content, making it one of the industry's most well regarded thought leaders. Some highlights of our chat include what it was like to sell his company to his former employer, why he's hanging out in El Salvador's Bitcoin Beach, how it took him 100 videos to post his first TikTok, the future of the creator economy, and learning how to enjoy what you create. All right, let's get to it. Chris Erwin:Brendan, thanks for being on The Come Up Podcast. Brendan Gahan:Thanks for having me, pumped to be here. Chris Erwin:We were just having a little chat about, you got a surf in this morning, if that's right. Brendan Gahan:I did. I'm working in El Salvador this week in a little town called Zonte, people may have heard of it referred to as Bitcoin Beach. And there's a nice little right hand point here, so made sure to get out there. Chris Erwin:Are you regular foot or goofy foot? Brendan Gahan:I'm regular, yeah. Chris Erwin:Okay, so you like the right-handers. I'm goofy, I like to go left. Brendan Gahan:Yeah, right hand point in particular, it's like my favorite kind of wave. I grew up in Ventura. So grew up surfing C Street, at the point in Ventura. And then every once in a while I would make the trek up to Rincon and stuff. Chris Erwin:I'm curious, where exactly did you grow up? Were you in the LA County or were you up north? Brendan Gahan:No, I was in Ventura. So there's Ventura County, which encompasses quite a bit of Southern California, but I grew up in the city of Ventura, maybe three quarters of a mile away from the beach, it's like a 15-minute walk or so, and yeah, it was great. Chris Erwin:Great. And do you still have family that's in Ventura? Brendan Gahan:Parents are still there. I've got some aunts, uncles, cousins in the area. And then my younger sister lives, she's still in Ventura County, but about 30 minutes away from where we grew up. Chris Erwin:I often talk about Southern California real estate. And you look at one of the few pockets in SoCal that's near the beach that has been underdeveloped is definitely Ventura. I think that's true for the last 30 years. I think that's finally starting to change, particularly during COVID and remote work. Have you seen that there? Brendan Gahan:Oh my gosh, it's crazy. I was just there this past weekend. And there's all these developments going up, like apartment complexes and condos, and yeah, it's sort of interesting. When you look at Ventura on a map, there's sort of like this no man's land between LA and Santa Barbara. And for years, Ventura was just sort of like overlooked. It was like people would pass through Ventura to go to either Santa Barbara or LA, but then more and more Ojai started to become a place, and Ventura has become a bit of a destination and there's now some startups out there. Before the biggest company there was Patagonia. Ventura, growing up was sort of like this blue collar cowboy meets surfer vibe for the most part. And yeah, that's definitely evolving. Chris Erwin:I think cowboy meets surfer vibe sounds about as good as it can get, you know? Brendan Gahan:Yeah, yeah. Chris Erwin:I forget who, but when I was at Big Frame almost 10 years ago now, I remember there were some industry friends that had set up shop in Ventura and were commuting to LA, and it was only about like an hour, hour and 15 away, not that crazy if you timed it right. So curious, looking at you being at the nexus of digital media and advertising and all the things, were there any media influences when you were there, when you were younger? Did that come from your parents or anything like that? Or was your upbringing focused on completely different things? Brendan Gahan:Yeah, definitely not. LA seemed like the furthest thing in the world to me growing up. And it seemed like a city, it may as well have been New York in my mind. Even though it was only like an hour and a half, we would go to LA on a field trip every couple years, or maybe my parents would take us there and we'd visit a museum or something like that. But it was not like a destination that was really on my radar. And from a professional standpoint where my head was at, I sort of had the cliche jobs in mind, it was like, oh, okay, maybe I'll be a teacher or a lawyer. A lot of people I knew growing up, and a number of relatives were like firemen, so my mind was sort of gravitating towards, I thought I'd either be a doctor, a lawyer or a psychologist. So I didn't have much of like a media or a tech influence until later. Chris Erwin:What did your parents do? Brendan Gahan:They were both in education. So my mom was a teacher's assistant in resource classes. And then my dad initially was like a teacher and then became a principal at a number of the special education schools in Ventura County. And then when he retired, he was the director of special education in Ventura. So education ran deep in the family, I guess. Chris Erwin:Yes. No, clearly understood. But I think you mentioned that you had an uncle that was in the media space, right? Brendan Gahan:That's right. Yeah, yeah. So I had an uncle who worked in advertising and he was at Wieden+Kennedy like in the heyday when it was like Bonos, Air Jordan, all that, when it was as big as it could get, and they lived a ways away. But whenever I saw him, I would just like pepper him with a million questions because to me, somebody working in advertising, in particular on like Nike and in that era, it wasn't just ads. It was like shifting culture, like Spike Lee and all that stuff. So I thought it was the coolest thing in the world. And I'd always ask him a million questions about it. But in my mind I never thought that I would end up working in that space. It seemed like this extra terrestrial sort of thing. Brendan Gahan:But he was always really cool. And he was like a creative director doing a lot of the Air Jordan spots and that sort of thing. So he always had funny stories he would share. And I just thought it was the coolest thing. I remember being in like elementary school, he'd visit or we'd go visit him, and I'd just pepper him with questions. So it was always sort of like seated in the back of my mind, but at the same time it felt unattainable, but I was really fortunate. Brendan Gahan:I don't know if we want to skip ahead too much, but basically he ended up offering me my first internship, totally came out of the blue. I got a phone call one day, I was like two days away from graduating from college. And I was about to go home for summer and work, and yeah, just out of the blue, he's like, "Hey, I got this guy on my team," he had started his own agency at this point, he's like, "And we need some young kid who understands digital," because this is 2005. And so I came up there and I interviewed with this guy he wanted me to intern for- Chris Erwin:But you did not go to college for this, if I understand correctly, you went to, is it UC Santa Cruz and you were psychology and history? Brendan Gahan:Yep. Yep. Chris Erwin:And again, you thought with that you were going to follow in your parents' footsteps, become an educator, or become a lawyer. Brendan Gahan:Something like that, yeah, I thought I was zeroing in on like teacher, lawyer or psychologist. I wasn't really sure what I was going to do. And psychology I always thought was fascinating. So I studied that, and then I realized two, three years in, I was like, oh, I've taken a ton of history courses and if I just take a few more, I can get a double major in apparently history, because of all the writing and stuff if I remember correctly, it was like not a bad thing to have if you were looking to get into law school. So it just kind of like was a circuitous path to get where I ended up. Chris Erwin:It didn't feel like you were overly passionate about anything at that point. I think you were open minded and you had some, call it nuclear, familial inspirations or influences. But when you got this call from your uncle, you're like, hey, this has been the cool uncle that was part of these massive sociocultural movements, Michael Jordan and Nike, I totally hear you. So when you got that call, were you really pumped up or was it, oh no, this sounds like something interesting and there's some direction and let's just go see what happens. Brendan Gahan:I was really pumped. I was also really torn because I was going to go home and work as a teacher's assistant for the summer and do summer school, which I know my parents were sort of excited about on so many different levels, because I'd be home. They would see me. They loved the idea of me getting into education, at least I'm pretty sure that's what they were excited about. And so I was like very torn, but also super excited. Brendan Gahan:And I went out and drove up to San Francisco for the interview. And I still remember walking into the ad agency office for the first time just being like, holy shit, this is so fucking cool. This is an office, people work out of here. It was like this creative space. And I remember thinking, especially as a college kid, wow, there's like a beer fridge and your pool table, and all these things. And obviously I knew work was happening, but it seemed like a great environment to get work done. I don't think I ever overdid it on any of the fun things, but it was like this relief to sort of have that there, and it felt really exciting to me. Chris Erwin:So then you get the job and you move up north. Brendan Gahan:Yep. Chris Erwin:What were you focused on in the beginning there? And then, I think from our notes that you did some early work with Smosh, is that right? Brendan Gahan:Yeah, exactly. So I did an internship and then I eventually got hired, and I was technically like a junior account executive. This was 2005, 2006, 2007, I think, and it was in the early, early days of social media and I was the youngest guy in the office. So people would ask me random questions, like, "What's the deal with MySpace, what happens on that?" Or, like Facebook, nobody else could get on Facebook because you still had to have your college email address. So I sort of found myself being this resource, and at the same time me being flabbergasted by the way advertising was being done. Brendan Gahan:I remember the first time I found out how much a billboard cost, and looking at that and being like, this is almost more than, I mean, I can't remember the number right now, but I remember thinking, this is about as much I make in a full year with my salary and being like, I don't think anyone does anything because of the billboard, or certainly not like a normal billboard ad, and seeing this huge disconnect between what drove people to do things and what people were genuinely excited about and where dollars were being allocated. Brendan Gahan:So I think I slowly started just embracing that and being like, to me, it was common sense to a certain extent, like, look, I can go on YouTube and I can see how many people watch this video. Why aren't we doing this? This shows millions of people. Once again, like walking down the street, I don't know of anybody who does anything because of a billboard. And so that sort of evolved, and I started just pitching ideas proactively. And I remember I even tried to pitch clients and stuff, and stuff I in hindsight probably didn't have- Chris Erwin:Existing clients of the agency, or were you doing some new business development? Brendan Gahan:All of the above. I remember reading about it in the ad trades, like, oh, so and so company fired their agency and I'd be like, well, why don't they work with us? And literally come up with ideas and mail them things, and like try and get a response. And I don't know, just like this sort of, we're a creative industry, let's be really creative. Chris Erwin:Was that the expectation from your role or was that you just having some gumption of being a self-starter? Brendan Gahan:Not to pat myself on the back, but I think it was definitely me sort of having a little bit of gumption. I think I also just didn't know. It was a relatively small loose agency. And so I thought, well, it wasn't like this is exactly how you're supposed to do this job, and this, this and this, I think creativity was really encouraged and so long as work was getting done, anything I wanted to do sort of beyond that was like, all right, yeah, sure, that sounds cool. Chris Erwin:So did that spirit, is that what drove you... Did you work directly with Smosh? What is that story there? Brendan Gahan:Yeah. So late 2006, this client the agency had had before I was even there, they came to the agency and they were like, "Hey, we want to do an ad campaign. We don't have a big budget." And it was a portable MP3 player. And the partners at the agency were talking about it right behind me. And they were about to turn it down. And it was one of those situations where in hindsight, yes, it was not much money, and they should have turned it down by all means. But I just butted in. I was like, "Hey, what if we pitched them this idea of getting these kids on YouTube to promote it. And we just rather than try and squeeze like a campaign into this budget, let's just do one video." Brendan Gahan:And so they were like, "Oh, that sounds kind of cool. Yeah, let's pitch it to the company, to the brand." And they bought it. I think I literally turned around after the partners said it was okay to pitch it to the client and I emailed Ian and Anthony, found their email on MySpace and they emailed me back that afternoon. And I think the next week they came by the office because they were just up in Sacramento area, so it wasn't too far. Chris Erwin:They were one of the biggest YouTube channels at the time, right? Just for context, this is 2005, 2006. Facebook had just started in '04. YouTube had just started in '04. Google bought them I think a couple years later. So Ian and Anthony were probably one of the biggest personalities on the platform at that time. Brendan Gahan:Yeah. I think they might have been number two. I know they eventually were number one for a couple of years, but I don't think they were quite number one yet. It was sort of like early days and there was a lot of jostling for position and stuff. Chris Erwin:So you got their emails from their MySpace page, you hit them up. That definitely wouldn't happen today, not as easy to go direct to the top creators. And then they came by your office, what happened? Brendan Gahan:Yeah, they came by, by that point we had gotten the thumbs up from the client to like, "Oh yeah, sure, we're down, if you can make it work." They came by the office, we literally got in a room and it was sort of funny. I remember nobody knew what you would charge for something like this, you know? So we were literally just kicking around like, what would you want to charge for this? I don't know, how much do you want to pay for this? Just going back and forth. And then finally, one of the partners was like, "Well, I don't know, would you guys do it for like 15 grand or something?" And they were like, "Probably, why don't we go back to..." I think Anthony's dad was an accountant or something like that. Brendan Gahan:And they were going to run it by him. I might have those details wrong, but they were like, it was basically like a, pretty sure that'll work. Let's go talk to our parents. And then they came back and they were like, sure, and so we did it, they made this video called Feet for Hands. I remember when it went live it crashed the client's website, which I thought was so fucking cool. I felt so validated. And then, yeah, it got like millions of views. And I just wanted to do that again and again, and again. And I saw what Mekanism was doing and my first boss at that agency, he'd left for Mekanism, Jason Harris, the president and CEO of Mekanism now. He joined Mekanism, became a partner. And we had a great working relationship. Brendan Gahan:I interned for him and stuff. And I showed in that video, I was like, look, look, look at this thing. It's got three million views. I know I can help you guys. I was so envious of the work they were doing. They were doing like early viral video stuff. And this is like 2006, 2007, when a lot of this stuff, people weren't paying attention at all. And so I was just so envious of the projects they were working on. And they brought me in for a few interviews and I literally met the whole agency, which at the time was pretty small, I think like twice. And then they hired me. Chris Erwin:Was this East Coast based? Brendan Gahan:This is all West Coast. They were in San Francisco, just a few blocks away from the office I was at, at the time, and then got hired, it was like Mekanism was doing a ton of branded content, viral video stuff but oftentimes without any paid media. The platforms, most of them didn't even have paid media as an option. I think at the time you could buy a YouTube homepage banner and that was it. Facebook didn't have it. There was no sort of formal way of promoting that stuff for the most part. So we sort of, myself and a couple other guys, younger guys, we built out a team over time that was the social media team. And we were just constantly coming up with different ways to promote content, doing everything from Reddit seeding to tons and tons of work with creators. We worked with all the big creators in those early days, which was great, because it was a small community. We got to make a lot of deeper relationships at the time. Chris Erwin:Yeah. And you were probably working with a lot of those creators direct versus now there's tons of representatives, managers and agencies, and sometimes you never even talk to the end talent, but back then probably different. Brendan Gahan:Oh, 100%, yeah. We would get pretty elaborate sometimes with these campaigns, we would do like in person summits and kickoffs. We worked with 20th Century Fox on some campaigns, and we would fly like 50 influencers in and a bunch obviously would be in LA, but host these elaborate dinners and events, and sometimes it'd be two, three days long where they're meeting with the execs, meeting with actors, kind of getting a download of the campaign, what the expectations were for them. Then we'd take them out, go partying. So it was cool. Got to spend a lot of face time with people and it was a really fascinating time. Chris Erwin:You were there for about five to six years at Mekanism, right? Brendan Gahan:Yeah. Chris Erwin:And then I think you transitioned to full screen after that for a brief stint, but then you started your own agency, Epic Signal. So what was the catalyst for you to leave this kind of the broader corporate support and other people that were helping elevate your career to say, I want to do something differently, I'm going to do it by myself. Brendan Gahan:I felt like full screen was exploding at the time. You know this, all the MCNs were blowing up, but I felt like there was a lot of distraction and stuff. And the thing that I was really passionate about at its core was the strategy in collaborating with both brands and creators to create something awesome. And I felt like full screen, it was like they were trying to grow this MCN, this network and make a scalable business. So it was a little bit different from what I was really passionate about. And so I left, I thought I was just going to take my time sort of consulting. But I mean, this was like when influencer marketing was reaching this new fevered pitch because... We talked about it yesterday. Sometime around there, Maker was acquired, all these clients that I'd worked with and people at different agencies that I'd worked with over the years came out of the woodwork and were like, we have to have an influencer strategy. Brendan Gahan:We have to have a YouTube strategy. And I'd been the, air quotes, like YouTube guy and influencer guy since 2006. So I was one of a handful of people who had sort of like this deep bench and experience in this niche. So all my old clients started hitting me up. All of a sudden I had more work than I could personally do. And slowly started hiring people just out of necessity, because I didn't want to say no to these awesome opportunities. I was like, oh crap. I get to work with Mountain Dew, hell yeah, let's do it. Chris Erwin:I do want to clarify, but when you went off on your own, I mean I'm sure look, as the industry is growing, Google original channels program happened in 2011, 2012, hundreds of millions of dollars of funding into digitally native production companies to fuel the overall video ecosystem to help you to recruit more advertisers. And so when you decided to go off on your own to start Epic Signal, why was that? Had you always wanted to be an entrepreneur? Did you think like, hey, I want to be an owner and I'm early in a very nascent industry and so this is scary, but I'm going to get an early foothold and see what happens. Brendan Gahan:It honestly wasn't as strategic as that, it was more like, I felt like my strengths could be better utilized going off on my own. And I like being really hands on and strategic. It was really as simple as, well, I want do this work the way that I know how to do it and the way I want to do it. And if that takes me going off on my own, then that's what I'm going to do. So I did. And in hindsight, it sounds much smarter than it was, it was not smart from like an on paper standpoint. I left full screen. I left my equity on the tape because I left just shy of a year, but I just felt like it was the right thing for me to do, because I knew, I'd seen this space grow so fast and I was like, I've been doing it longer than most people. I have relationships, I have a sense of what strategically works. I want to do it the way that I want to do it. And that just made me feel good, and so that's what I did. Chris Erwin:Now did you launch Epic Signal in LA or did you move to New York? Brendan Gahan:So I was in LA, but very quickly was splitting my time up between LA and New York. I was going back and forth. I'd spend two weeks in LA, two weeks in New York, back, forth, back forth constantly, and then was about to move to New York officially, I ended up having more clients there than anywhere else, more brands I was working with there than anywhere else. And then as I was sort of putting the plan together to do that, I ended up selling it. And then I had to move to New York, so it moved things along. Chris Erwin:That happened pretty quickly, right? Because I think you had Epic Signal for, was it a couple years before you sold it to Mekanism? Brendan Gahan:Yeah, I think it was just shy of two years. It was almost two full years, yeah. Chris Erwin:Okay. And when you decided to sell, how big was your team at that point? Brendan Gahan:It wasn't big. It was like a half dozen people. Chris Erwin:Okay. Why did you decide to sell? Brendan Gahan:I found myself in a situation where I was doing so much back office stuff. It was like the very thing that I left to go do was, I wanted to focus on the strategy and deal with that, do the actual work. And then what I found was, when you are an entrepreneur, it's very easy to get sucked into dealing with lawyers and accounts, and payroll, and all this stuff that is not fun, all that back office stuff. Chris Erwin:I'm feeling you right now on that. That's where I feel like I'm at with RockWater. Brendan Gahan:You try and delegate it, but it's like all these things get this overflow back to you. And so I was back in this situation where I was doing the work that wasn't making me happy. And at the same time, I sort of felt like I have this window of opportunity where it's like, this is a really small team, we're lean and mean. We've got great profit margins. We've also got dope clients. We were working with like ABI. We worked on Bud Light campaigns, Corona. We did work with several PepsiCo brands, a handful of others. So we had a dope roster of clients that we were working with, a handful of whom were on retainer. And I was like, we have this niche where we're focusing on helping brands with YouTube strategy and YouTube creators. And oftentimes, especially the bigger brands, like a Pepsi, Mountain Dew, they had multiple agencies and they would have like a social AOR even. Brendan Gahan:And they did have a social AOR, but I was like, it's only going to be a matter of time before I get squeezed out and they start offering this services that I'm sort of in this interesting niche I can offer at this time that they don't have. And so I felt like the cache of the brands that I had, the team in place, people would find it desirable because of the relationships and already booked revenue, and great team. And so I thought I'll try and capitalize on my time and see if I can make a deal happen. Brendan Gahan:And then I had a letter of intent on the table and I would call my old boss at Mekanism for advice. "Hey, I'm negotiating with these guys, and this is a deal on the table. Does this make sense? What should I push back on?" So he was aware that things were moving along. And basically I was in New York, I had signed a letter of intent, things were sort of going through due diligence and all that. And he was like, "Let's grab drinks." So I met up with him for a drink. He's like, "Just come back." I was like, "All right, well, I got a deal in hand if you can beat it, I'm down. Like let's do it." I loved working with him. Chris Erwin:Hey listeners, this is Chris Erwin. Your host of The Come Up. I have a quick ask for you. If you dig what we're putting down, if you like the show, if you like our guests, it would really mean a lot if you can give us a rating wherever you listen to our show. It helps other people discover our work. And it also really supports what we do here. All right, that's it everybody, let's get back to the interview. Chris Erwin:I have to ask, did you run a formal sales process where you decided to sell and then you're like, all right, here's the 20 best fit buyers that are out there and I'm going to go call them or I'm going to hire someone to dial for dollars on the company's behalf. And/or were you also just getting unsolicited in bounds that you were like, oh, hey, this is interesting. Maybe with the market timing, things that you were sharing, where there was a lot of brands had big agencies of record, you felt that you were going to get squeezed out. So now is the time to sell, what was that looking like? Brendan Gahan:Exactly that, but sort of like the inverse. Initially, I sort of had a hunch and so I sort of informally had some conversations and dinners with people where like, I didn't come right out and say, "Hey, I want to sell," I didn't want to come across as desperate. Because I mean, and I wasn't, I wasn't desperate, but I wanted to sell. But I would sort of just seed the idea, like, "Hey, I'm kicking around the idea of selling, I'd love to do X, Y, and Z. And like' Chris Erwin:Just like dating, the classic courting phase, you're just doing the dance. Brendan Gahan:Exactly. And then once people started expressing interests, I was like, okay, I'm definitely onto something. This is something I'm way out of my depth on. So I asked around and some buddies recommended some lawyers and I hired them and signed a deal with them. And I was like, all right, let's make this happen. And that was the best decision I could have made. They earned every dime I paid them and then some, because beyond just the relief of handing it over, they definitely got me more money and I didn't ever have to be the bad guy throughout the process, which I'm very bad at saying no to people in negotiations and stuff like that. They were just like, every step of the way they were like, "No, just pass it over to us. We'll take care of it." And then they would hit me up and they're like, "Here's what's on the table, here's what we advise. What do you want to do?" And the process was stressful enough as it is, but having them sort of take the reins just alleviated so much stress. Chris Erwin:Selling your company is a very unique work stream that requires a very unique set of skills to execute well. And it can be very emotional for a founder, operator and CEO. This is your baby. You could transform your life through a big liquidity event, but it's also going to impact, you might be selling to another company and working for someone else. So having a partner there to guide you along the way is really important. I mean, I saw this a lot because I was a banker on Wall Street back in the day and sold a variety of different companies and helped shepherd the sale with Big Frame to Awesomeness TV. I just talked about that in the last podcast with Sarah Penna, one of the co-founders of Big Frame, and it's a really big decision. Chris Erwin:So I totally get it. I'm curious, who were the buyers that you were talking to? Was it different brand agencies? Was it different brands that wanted to actually just bring you on in house? Was it some of the emerging YouTube MCNs that wanted to build out their influencer sales arm? What was that group looking like? Brendan Gahan:I think it was two MCNs and this holding company, I won't name names and stuff, but it was a fascinating process. And to your point about seeing it and it being stressful and all this stuff, if you think about it, it's like, it's an experience that, as an owner or an entrepreneur you're out of your depth, it's a very unique thing that happens. It doesn't happen that often. And so bringing in professionals is so helpful because they actually do these deals. I'm doing totally different types of deals. I have no experience selling an organization. Chris Erwin:Yeah. You need to create a very compelling story and also urgency, get people excited and the feeling that they're going to miss out. So if you kind of go after the process willy nilly, you can set up a really bad result for your company. And also for your counterparties that are saying, "Hey, we're interested here. We've been in talks for a while. Why is this dragging along? Who else are you talking to?" Chris Erwin:So you can really damage, not only all the value that you've created for your business, but it can impact your team, it can impact the ability of you to continue working in the industry thereafter. So got to do it right. But so many say, I was just talking to a banker about this yesterday. Oftentimes, transactions result from long standing relationships and trust that have been built. So the end buyer for Epic Signal was your past boss at Mekanism, that became your eventual home. So after you joined forces with them, was the mandate, "Hey Brendan, come back on board. You're now part of the senior leadership team. The market opportunity is even bigger. Let's go after it with you and your whole team in a bigger way." Brendan Gahan:Pretty much, yeah. It was a bit of a plug and play option, they had... Obviously there was a social team when I left, the feeling was like there wasn't... A number of people had left by the time I came back, so I was able to bring my team in, merge it with the existing team. And we started expanding the offerings again. When I was running Epic Signal, I deliberately tried to keep it very narrow in niche, because I couldn't compete with a big social agency, it just wouldn't happen. Brendan Gahan:But by having two very key offerings, it streamlined so much of the processes and it gave me a clear point of differentiation. And when I joined back up with Mekanism, it was like full service, social, we're doing everything, community management in the lightweight, social content creation, analytics, reporting, influencer marketing, all this stuff. And so had to scale up the team and integrate with the larger organization as a whole. And it was fun. I think I'm sort of like this entrepreneur at heart or intrapreneur, and I like the process of sort of building and evolving and exploring new opportunities. So it was a really good fit, is a good fit. Chris Erwin:Thinking back on all of the brand and influencer campaigns that you've done, there's got to be one or two that stand out in terms of just something crazy went down. I think back to at Big Frame, working with some talent, doing a six figure brand deal, talent deciding literally two hours before something's supposed to go live that they're not going to post it or having a meltdown on the floor of VidCon and sobbing and crying because they're having a personal breakdown, because look, that life is tough and burnout is real in the influencer space. I remember a bunch of stories when we were launching different content verticals and flying in different 40 creators into like a creator house. This is like back in 2013, before there was like the modern creator houses of today. So any stories from the trenches that you remember from your early days? Brendan Gahan:Oh my God. Yeah, it's like, working with creators I think is one of those things, when you're in it, you're almost like, I'm never going to do this again. Then afterwards you're like, oh, that wasn't so bad. That was really fun. I think probably one that took the cake as far as stress goes, was we were working with Brisk Iced Tea, which is a PepsiCo brand. And we're about to host a summit because Brisk was relaunching, they had Eminem in the super bowl spot, and they were reviving the Claymation look. They did one with Ozzy Osborne, they did one with Danny Trejo, and we were actually having Danny Trejo fly out to New York, and he was going to meet with all these creators and stuff. And this was during the winter before super bowl. So I don't know if it was like December or January, or maybe early February, but there was a massive snowstorm. Brendan Gahan:Flights kept getting canceled and delayed. And I remember being glued to my phone, refreshing constantly, looking at, I think there were a handful of flights that were going to make it out of LA to New York before things were going to get canceled. And I remember, we signed up all these creators, Danny Trejo was going to show and he was going to be the cool, shiny object, and his flight to New York. I remember it kept getting delayed, delayed, delayed, it got canceled. We got him on another flight, delayed, delayed, delayed. And I was just like refreshing my phone and being like, this whole thing is going to fucking fall apart if that flight doesn't take off. It sounds like not that big a deal right now but I remember it was just one of those moments where I was just like, the whole thing was going to fall apart. The world was on my shoulders and I was just freaking out. But I've had a million situations like that, I remember- Chris Erwin:Did that work out? Did he get on the flight and did the campaign come together? Brendan Gahan:Oh yeah, he ended up [crosstalk 00:34:02]. Chris Erwin:He's like, I can't leave the audience hanging. Brendan Gahan:Yeah. He made it and it was freaking amazing. We thought we had him for like an hour, he was going to do a little talk, kind of talk about... His story's amazing first off. And then his spot with Brisk was super cool. And we thought people were going to get a kick out of that. I think we had like 45 minutes for him booked. He was going to come out and hang out and talk with the creators. I