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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.

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Interview Transcript

The 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. It's really interesting. One, were you at a point, because you've successfully raised money from Silicon Valley investors, you've had exits for them, where you and the investment funds made money. Were you able at that point, where you felt like you could walk into a room, do a product demo, you didn't need to show up with a deck and they would say, "Yeah, this sounds great, TK, we're going to give you money"? Were you at that point or were you still running a formal process? You show up with the business plan and everything?

Taehoon Kim:

We didn't need the business plan anymore, but we still need a deck. By then, I just became really an expert on how to create a simple deck that walked through the business, and I knew what type of prototype need to be created to fundraise. It was a simple 15 to 20 slides deck plus a quick demo. And simpler story the better, is this basically a storytelling deck walkthrough, why you're able to do what you're doing now. Why it hasn't been done until now. And then you talk about the market and how big the market would get, show a quick prototype, and talk about the technologies involved. And that was pretty much it.

Chris Erwin:

You're getting these incredible inbounds from companies who want to buy you, plus, you're also raising from venture capitalists. How did you and the two other founders come together to decide, do we sell or do we not sell?

Taehoon Kim:

The VCs helped us with that as well, maybe because they were trying to convince us to maybe take their deal. But they would let us know what each of the companies are like, and they would connect us to founders who have sold to that company previously. And I was able to pick their brains or interview them. We decided, "Hey, we really want to try this on our own." So we decided to take the VC route. And I think at that time that was, the VC was Lightspeed Ventures, who gave us a good term sheet and we decided to sign that term sheet.

And the reason in the beginning I told you why things became complicated is because after we signed the term sheet with Lightspeed, one of their portfolio companies, KIXEYE, they also decided that they wanted to buy us. And they give us an offer we rejected, and then they got really mad at Lightspeed Ventures asking them why they're funding a company that could be a competitor to them. And KIXEYE basically threatened to sue them if they invested in us. So at the last minute it kind of fell apart.

Chris Erwin:

Oh, so Lightspeed did not end up investing in you at that point.

Taehoon Kim:

So imagine this Zynga gave us an offer, a pretty good offer to buy us. We rejected Zynga's offer and signed with Lightspeed, but Lightspeed couldn't follow through because of KIXEYE. I'm thankful to them because at that time they actually gave me a check for a million dollars, it was like a loan, with no interest rate.

Chris Erwin:

Lightspeed gave it to you?

Taehoon Kim:

Yeah, I was really surprised by this. They were like, "Hey, we need to talk." I met them at a coffee shop, and they like, "Hey, here's a check for million dollars. I'm really sorry to have wasted your time, and take this money and use it to give more time to find another investor, because it's not your fault that this deal kind of fell through." So if we didn't get that, it would've been a lot harder for us. Because we did spend a lot of time, a lot of cycles with them, and that meant we had less time to finish the fundraising. That million dollar check, give us more time.

Chris Erwin:

Think about that million dollar Check is an incredible marketing for Lightspeed as being a go-to partner, as a tier one VC, right? Because one, for you, TK, in your career, knowing that they did that, that they had your back, they understood the challenging situation that they put you in. And they were very direct with you about how they want to do a make good. Next time you go need to go raise money for the next thing that you found, are you probably going to have a conversation with Lightspeed? I would say the answer is yes.

Taehoon Kim:

Yeah, became really good friends with them. But isn't that incredible? They don't know if they're going to get the million dollar back. What if we fail, and we just kind of go bankrupt or whatever, and then I have to pay them back? But they were, "Hey, here's a million dollars, there's no interest rate. You can pay us back time."

Chris Erwin:

I agree, it is amazing. I think what they were putting a price tag on was, we want to be in the TK business. We want to be in business with Dave and Tony. And so this is not the last time that we're going to have a chance to invest in a company that could make them millions, if not billions of dollars. And so they said, "We're going to invest in that relationship," and probably a $1 million check to them was easy money, right?

Taehoon Kim:

Yeah.

Chris Erwin:

That's amazing. I've never heard of something like that before, but I totally get why they did it. That's incredible. So I understand that Lightspeed and other venture firms were introducing you to founders who had sold their businesses to these potential acquirers of your business. What was one or two things that you learned that made you decide, "I don't want to sell right now"?

Taehoon Kim:

They were describing to me the culture of the company, because once you sell, you're basically getting a job at that company. And if there's a culture fit, that's great. But if it's a different type of culture, then maybe you won't enjoy it as much. Again, I was doing it because I love that process because the actual act of creating and launching is what's rewarding for us. So I think that's main reason why we decided, "Hey, maybe we shouldn't sell." But after Lightspeed thing fell through, we were like, "Oh, maybe we should have sold." Right after that million dollar check and that conversation, literally, the next day or two days from then I was able to get another term sheet from another VC. So this one is actually a funny story. 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, and I was doing a pitch.

Chris Erwin:

During the pitch.

Taehoon Kim:

Yeah, during the pitch, I would say, "Excuse me, I went to the bathroom." I would throw up, come back, continue the pitch. And I did that three times, and whenever I made that trip to the bathroom, people were kind of laughing at me, who were at the front desk. 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. So I was like, "What the..." Because I told him the story of what happened as well, so he said, "Hey, all that stuff just added more color to your storytelling," and then he was in.

But then later I realized that the reason he was able to make quick decision, this is a Baseline Ventures, by the way. Baseline Venture was, it was a very unique firm that they had one partner, so they were able to make decision very quickly. And I pitched to them, I think, two days after Instagram was acquired by Facebook. So Baseline was in a flush with cash and they were very happy about the outcome. And so I think that's one of the reasons why they were also able to make a bet, and make that decision very quickly. I literally made a pitch 9:00 AM, and then got a call 5:00 PM saying, they wanted to put in the money. Usually, it doesn't happen that way, but it was a really weird period of time in my life.

Chris Erwin:

No incredible in a situation in which you thought that that was probably the worst pitch that you've ever given in your life, because you're running to the bathroom to throw up. It turns out that it was, at least one of the more impressive pitches in converting a VC into someone who has interest within just a handful of hours. So it just goes to show you got to stay resilient. And you're human, you just went through this traumatic event where Lightspeed pulled out at the last minute, so you need to go blow off some steam. You go out boozing with your buddies, but you come back the next morning, you put your game face on, and you do what you got to do. That's an incredible story. Thank you for sharing that.

So then you raised the money from Baseline, and a few others, and then when did you feel, "Okay, we turned down some initial inbound offers to buy the company," but when did you feel that you really started to get some real momentum that showed you and the other founders, "Hey, we have something much bigger here"? What did that look like?

Taehoon Kim:

That's when mobile gaming was becoming more serious and evolving from just casual Match 3 games to a device that could run any type of game. So that's when we really got a lot of momentum. So the first prototype they created, I told you it was a four player co-op plus a PVP action RPG game. So we continued to develop on that prototype. We called the game ChronoBlade, and when we had a much more alpha version of the game, that's when things were really blowing up in Asia for RPG games and mobile.

And during GDC, when a lot of the publishers were in San Francisco, we had publishers after publishers lined up, literally, signing offers on a napkin table and presenting us, "Here's how much we were willing to pay for MGM and royalty fees for your game." And we were able to just pick from the top tier ones. So we had offer from Tencent, NetEase, Netmarble, the biggest and the best. That was at the point in the company when we knew that things were becoming really serious.

Chris Erwin:

What year was that?

Taehoon Kim:

I think that was like 2013, about a year after fundraising.

Chris Erwin:

Seven years later you do end up selling the company to Animoca. How did that come to be?

Taehoon Kim:

Oh, this is a complicated story. So in 2018 there was a company called Tron, it's a big blockchain company, who moved in right above our office space. And that company was just taking off like crazy and they had happy hours, they had events. As neighbors we would show up, and that's how we kind of learned about blockchain space, and merging blockchain with gaming could be a new thing. And at that time it was getting really difficult to monetize competitive games because the game has to be fair. So we can't sell things that's [inaudible 00:42:30] base, it can only sell cosmetics. And we were always trying to find new ways to innovate on how to monetize those type of games.

And we quickly realized, "Hey, if we can make items in the games that players can earn into NFTs, and if the players can kind of trade NPS items among themselves, and we don't have to even sell them, they can get them in the game, and then exchange from themselves," which was already happening in the MMORPG space anyways. And if we can charge a transaction fee for each of the trades, that could be a model where we didn't have to do any of the [inaudible 00:43:01] box stuff that the players didn't like, and have a enough steady and viable business model.

And that's how we got into the blockchain space. At the same time, Animoca was investing like crazy into anything related to the blockchain. It's when I met Yat Siu, the chairman of Animoca, and we kind of hit it off. But funny thing happened to my board at that time, I've never seen this happen. I had a five member board, and our lead investor, our biggest investor at the time, Bridge Ventures, which was a IDG Ventures US, who renamed themselves Bridge Ventures, and they separated from IDG. And so they had to raise their own LPs, and their LPs looked at their investment portfolio and said, "Hey, you do a lot of gaming, you do a lot of enterprise, maybe you guys should pick one instead doing both."

And they decided to pick enterprise and get out of gaming. But the partner at Bridge Ventures who was on our board, basically, said, "Hey, then what am I going to do?" And he ended up leaving with Bridge Ventures to create a new VC fund called Griffin. Now it's like the biggest gaming fund by the way, but he left. And then TransLink Ventures, which was our second biggest investor, partner from TransLink Ventures for another whole separate reason, he ended up leaving TransLink. And so he was gone. And then our third board member, Peter Levin from Lionsgate, he ended up leaving Lionsgate. So he was gone from the board. So three of our biggest board members all left for different reasons around at the same time, and they were all replaced by new people and the mandate was to get out of gaming. All of a sudden, boom, my board was gone.

And so they wanted to get out. They wanted to sell the company. So when I went met with Yat Siu, I hit it off with the Yat, and I thought it would be amazing to work together. And that's how the deal went through. If it was the same board and then there wasn't that kind of shake up at the board level, I'm not sure if I'd be able to sell the company, probably would've been the state of independent. But because of that and the special circumstance, the deal was able to go through. So that was a good thing for Animoca.

Chris Erwin:

Good thing for Animoca. But if it was up to you, you would've stayed independent for at least a few years longer, because you saw a bigger opportunity ahead, right?

Taehoon Kim:

Yeah. If it wasn't for that shake, I probably would've stayed independent. But looking back now, I'm thinking that it was a good thing to kind of join forces with Animoca. Right after we joined forces with Animoca, Animoca went through a growth phase. I've never seen a company grow that fast. They basically went from a $100 million valuation to the $6 billion valuation in like two years. They were doubling in valuation every three months. It was kind of nuts. It was really fun to be part of that ride. And right now it's an amazing partnership.

Chris Erwin:

In that sale, was it a cash and equity deal? So are you able to participate in this crazy run that Animoca's had?

Taehoon Kim:

It was mostly equity, so it was a huge upside for the investors.

Chris Erwin:

Got it. A final note before we get to the rapid fire section is now that you're partnered up with Animoca, what do you see as the future for nWay and what you're building together? What gets you excited? And what is some recent success that you want to be building upon?

Taehoon Kim:

I'm super excited about what we're doing. I think that we're still very early stage with about three, and this whole kind of digital ownership revolution that we're going through. I think there are opportunities for companies like us to develop and publish online games where players can truly own things. I don't want to make a game where it's like an instrument for people to just make money, but I do think that there's something special about being able to really own some of the items that you're playing with. I think it adds meaning, and when you have ownership you just get more attached to things. And so our vision right now is to create more meaningful entertainment through real games that players can play and also have ownership in. And we're going to be doing a lot of experiments and try to really bring together the Web3 community and the gamers under one community.

Chris Erwin:

And I know something that you've talked about is some recent wins and partnerships and games that you've done is the International Olympic Committee you published Sean White NFTs, likely a powerful marketing engine for that. And then also you have a Power Rangers game, and a game with the WWE. Do you have similar type projects that are upcoming that build on top of these?

Taehoon Kim:

So Power Rangers and WWE, those are just regular free to play games. They don't have any blockchain or NFT components in there. The innovation there was to have a game where people can just quickly pick up and play and immediately play with another player. Power Rangers especially was super successful. We had over 80 millions downloads, and I think it's in two year five now, and it's continuously profitable. So the game's been amazing.

With the Olympic game, we were able to meet with IOC right when their decades long exclusivity with Nintendo and Sega was coming to an end. And so they wanted to explore a new type of game partnerships. One thing that they were noticing is that the younger audience, who were not watching TV anymore was caring less about Olympics and they wanted to focus on bringing the younger audience into caring more about their brand. And they also at the same time noticed that the younger audience are on Fortnite and Minecraft and they're playing games that are crossplay.

So they were looking for a game developer or game development partnership where they could have their game run on multiple devices at the same time. And a real time game where people can play to have a social experience. And as you know that's like right on our sweet spot. We were able to prove that we have some of the best kind of technology to make that happen. With another Power Rangers game called Power Rangers: Battle for the Grid, I think it's still is the only fighting game in the world where it runs on everywhere, the runs on Xbox, PlayStation, and the Switch. It even ones on a browser through Stadia. And it's a really fast action game and you can play together with anybody on any device, and there's no lag and there's no [inaudible 00:48:45] issues.

So they saw that and they were like, "Hey, we want to partner with you guys." I threw them curve ball and said, "We want to partner with you guys, but we also want to add this thing called NFTs. And we think that there's a 100-year-old tradition that's already there with your brand. When people go to the Olympics they still trade the Olympic pins. We want to make the pins into NFTs, also integrate them to the game, so that when people collect these NFT pins, they could use it in the game to give them a boost in the game." To my surprise, even though they are a very conservative organization, we won the RFP, and they wanted to partner with us. And we launched the project and we got a lot of press from that. And that was a really fun project to launch.

Chris Erwin:

And I just have to ask, this is a minor detail, but this 100-year-old tradition about trading Olympic pins, are these pins like representative? If you're from the United States and you go to the Olympics, you're wearing a US pin, and then the different athletes will trade them amongst themselves. Is that how that works?

Taehoon Kim:

Well, there's tons of variety of pins created from poster artworks, emblems, mascots, Coca-Cola always creates Olympic pins together. But the tradition got started, I think, in 1932 or something like that, when they had Olympics in Paris, and the officials, for the first time, had badges or pins and they started trading that. But right now there's a really high variety of pins out there.

Chris Erwin:

Super cool. It sounds like digitizing those pins and converting them into NFTs that can be traded on chain and in an efficient digital manner that seems it's like a perfect application. I had no idea about the underlying tradition behind that, but makes a ton of sense to me.

So let's go into rapid fire. Before we do that, I just want to give you some quick kudos. Look, I think we first met two to three months ago over a Zoom call. And so this is literally our second conversation ever. I did research into years story online, but hearing it come to life, there's a few things that really stand out. I think, one, that your willingness to really work hard and also try different things and take bets very early on in your career, but align those bets with things that you are really passionate about.

So even if they were risky, you are doing them down these vectors where it was strong, passionate, and meaningful areas to you. And there's almost in a way you were going to will them into existence or make them work. And clearly you took a bet at the intersection of technology and art, which manifested in gaming that has really paid off.

Something also stands out is within the category that you've bet on, in contrast to others that would just say, "Hey, I found myself in this unique opportunity. I'm able to open up doors to raise capital, build businesses." And instead of having the goal just be, "I want to make a lot of money," it is. Instead, "I want to bring delight to users. I have a unique expertise of what the gaming ecosystem, where it comes from and where it's going. And I know what users want. And I want to give them delights. And I'm going to enjoy the journey along the way."

And I think that's probably something that we didn't get into, but this probably speaks to a reason why you've been able to recruit teams that build alongside you consistently, and investors that want to back you is because you're going to enjoy the journey. And I think when you focus on the end user and the experience and delight, the money is then going to follow versus going about it the other way. So it's clearly worked out incredibly well for you and very excited to see what you continue building next.

Taehoon Kim:

Thank you.

Chris Erwin:

Welcome. Let's go to rapid fire. So six questions, the rules are very straightforward. I'm going to ask six questions and the answers can be either one sentence, or maybe just one to two words. Do you understand the rules?

Taehoon Kim:

Yes.

Chris Erwin:

All right, here we go. What do you want to do less of in 2022?

Taehoon Kim:

Less of Zoom meetings, and more of in-person interactions.

Chris Erwin:

Got it. What one to two things drive your success?

Taehoon Kim:

I think it's the ability to read the market, ability to raise money, and then having the optimism to try new things and innovate on things that could be deemed risky.

Chris Erwin:

Got it. What advice do you have for gaming execs going into the second half of this year?

Taehoon Kim:

The advice would be to focus on making a fun game. There are a lot of game companies who are getting funded going to kind of play to earn or Web3 games, where they're kind of losing that kind of focus. But I think at the end of the day, the game should be fun. And if the games are able to create a community of gamers who really care about the game and their kind of community inside the game, then you can create an economy within the game that's not a bubble, that's sustainable.

Chris Erwin:

Well said. Any future startup ambitions?

Taehoon Kim:

I think AR and VR would make a comeback. It's a really difficult business to be in now, but if I kind of look decades into the future, I think that could be something that could be a new space that could be blossoming later on.

Chris Erwin:

Proudest life moment?

Taehoon Kim:

I think that would be a tie between when I got married to my wife and also when I had my twin boys in 2011.

Chris Erwin:

Oh, you're a father of twins. I'm actually a twin myself.

Taehoon Kim:

Oh, yeah, I have twin boys.

Chris Erwin:

Oh, that's the best. How old are they?

Taehoon Kim:

They're both 11.

Chris Erwin:

Very cool. TK, it's been a delight chatting with you. Thank you for being on The Come Up podcast.

Taehoon Kim:

Thank you so much. It was definitely a pleasure.

Chris Erwin:

All right. Quick heads up that our company has a new service offering. We just introduced RockWater Plus, which is for companies who want an ongoing consulting partner at a low monthly retainer, yet, also need a partner who can flex up for bigger projects when they arise. So who is this for? Well, three main stakeholders, one, operators who seek growth and better run operations. Two, investors who need help with custom industry research and diligence. And, three, leadership who wants a bolt-on strategy team and thought partner.

So what is included with RockWater Plus? We do weekly calls to review KPIs or any ad hoc operational needs. We create KPI dashboards to do monthly performance tracking. We do ad hoc research ranging from customer surveys to case studies to white space analysis, financial modeling where we can understand your addressable market size, do P&L forecast, ROI analyses, even cash runway projections. We also do monthly trend reports to track new co-launches, M&A activity, partnerships activity in the space. And lastly, we make strategic introductions to new hires, investors for fundraising, and then also potential commercial strategic partnerships. So if any of this sounds appealing or you want to learn more, reach out to us at hello@wearerockwater.com. We can set a call with our leadership.

All right. Lastly, we love to hear from our listeners. If you have any feedback on the show or any ideas for guests, shoot us a note at tcupod@wearerockwater.com. All right, that's it everybody. Thanks for listening.

The Come Up is written and hosted by me, Chris Erwin, and is a production of RockWater Industries. Please rate and review this show on Apple Podcast. And remember to subscribe wherever you listen to our show. And if you really dig us, feel free to forward The Come Up to a Friend. You can sign up for our company newsletter at wearerockwater.com/newsletter. And you could follow us on Twitter, @tcupod. The Come Up is engineered by Daniel Tureck. Music is by Devon Bryant. Logo and branding is by Kevin Zazzali. And special thanks to Alex Zirin and Eric Kenigsberg from the RockWater team.

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.

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Email us: tcupod@wearerockwater.com

Interview Transcript

The 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 the kind of to our entertainment roots in some ways. And we're not talking at that point about TV shows on broadcast, but about entertainment that was built for internet consumption.

So we started taking steps back in that direction. As we were continuing to grow the branded business and expand in that area, we were committing ourselves to the original entertainment dream and started making shows horribly oversimplified what it took to actually start doing that again. But we started making shows again. We kept the branded business running and growing. And-

Chris Erwin:

When you started making shows, were you deficit-financing these yourself? So you were developing them internally and then taking them out as a slate to pitch and sell? Or were these being funded by other digital and streaming platforms that were going to put this content on their channels?

Zach Blume:

We were developing them internally, as a kind of a traditional development arm, and then taking them out to streaming and digital buyers. We were not doing the White Collar Brawler model, where we were building properties completely independently. So we did kind of slot in a little bit more into back into the entertainment ecosystem versus building our own properties, which that could be a whole separate conversation about the drawbacks and the benefits of that.

So we were finding our way to making original series, again, we hired ahead of originals a guy named Evan Bregman, who's now at Rooster Teeth who's a good friend. And we started kind of trying to build that business again, and eventually, we started to feel like the branded business was running really well and growing year over year. We felt in order to take the next step forward on the entertainment side of our business. We needed a partner.

So we had been a completely independent entire course of our trajectory. We were running a really good business at the time. It was very profitable, and the growth trajectory was really attractive, I think to outsiders. And so we started taking meetings with potential partners with the idea of strategically aligning ourselves to somebody who could level us up. We weren't looking for a sale. We were looking for truly a strategic partner.

Chris Erwin:

Were you running a formal process here where there was a mandate of, "We seek a strategic partner, we're going to take meetings over the next two months?" Or was it, "Hey, these relationships that we create in the industry, we got some inbounds, let's take these meetings with perhaps a little bit more intent than we would've a couple of years ago."

Zach Blume:

It was not a formal process in the sense that we had a banker or some advisor who was guiding us through it. But it was a process in that it was fairly intentional. Remember sitting down with Nate and Kai and listing out the players in the original entertainment world, whether that was individuals or production companies, mostly who we think would be good partners for us, and starting to navigate through our network to see who would be interested in talking. And the thing that I've found, especially in that period, which was 2017, '18 was when we were starting to have those conversations, it was a pretty hot period for digital media. I think there was a lot of consolidation going on. Our experience was once we started having a couple of those conversations, and people started to see our numbers and see the fact that we were running an actually profitable business that was growing year over year.

It just like word got out, and it was a little bit of a domino. And so I just remember over the course of 2017, 2018, we took like 15 or 20 strategic meetings with potential strategic partners. Again, not running it through a banker or anything like that, but just kind of word of mouth. And it was a really interesting experience, and learned a lot about ourselves and about the space. And we just really clicked with Brent Montgomery and Ed Simpson, who were, at the time they, had sold their TV production company to ITV and they were working at ITV at the time but starting to think about what their post-ITV move was going to be, which would eventually become Wheelhouse and just to immediate connection with both of them on a personal and kind of business level.

To them, we looked like a really smart partner. They felt like a really smart partner to us. And that's how that started. And there were other conversations going on at the time, but Brent and Ed and eventually Wheelhouse always felt like the right fit for us.

Chris Erwin:

From that first meeting with Wheelhouse, did they indicate in the room, "Hey, we want to do a deal, we're going to make an offer," or did it take a while to get there?

Zach Blume:

Well, this story I always tell about Ed, who everybody should know, Ed Simpson, he's an amazing guy, is that within five minutes of our first meeting he asked us, "Are you Butellas?" And I was floored. I was like-

Chris Erwin:

Gets right to the point.

Zach Blume:

I was like, we just shook hands. We were just getting to know each other, but I think honestly it's a testament to directness, and I think that actually really helped was kind of just getting our cards on the table from early days. And I think from the beginning. It was clear that Ed and Brent were looking for their first partners. Brent is also like no BS. He knows what he wants, he goes out and gets it, and the intent for an investment, a partnership of some sort, was clear from the very beginning. The eventual process took very long.

Chris Erwin:

How long was that process?

Zach Blume:

I think the timeframe from offer letter or LOI to signed paperwork was about a year. But I think there was a six-month or eight-month, even maybe even a full-year courtship before that. So the whole process from first meeting with Ed, where he asked us what our EBITDA was after shaking his hand, to signing paperwork and then collapsing on the floor because we were so exhausted was maybe year and a half, two years.

Chris Erwin:

Yeah. It always takes longer than people expect.

Zach Blume:

Yeah. It's incredible. And there were multiple points where that deal almost fell completely apart. In fact, I was sure it was done. It was toast. And what I've learned from other founders that I've talked to that have done deals, whether it's a sale or a minority investment or some sort of strategic partnership like this, is every time there's a deal, it almost fails twice or three times or more.

It's just in the nature of things when there's two negotiators that there's going to be some moments of staring into the abyss. And I actually haven't heard of a deal that hasn't had that. So I learned that, in retrospect, at the time, they were hugely existential moments because we had put so much time and energy, and money into making this happen and having the deal almost fell apart multiple times was, it was really intense.

Chris Erwin:

Yeah. After having been a part of many M&A and capital raising processes throughout my career before RockWater when I was a banker, and then also at Big Frame, where I hired my old investment bank to represent us in a sale to Awesomeness backed by DreamWorks. And then at RockWater now, there's so many variables. You have different business models, you have different team cultures, you have leadership, you have investors, and to align on, are we working towards the same mission? Do we want the same thing in the future? Do we want the same thing now when we integrate? Where are we complementary? Will we actually succeed combined, or there alternative ways to do this? And I think it really is a special thing. We read a lot of deal headlines in the trade, so everyone thinks like, "Oh, deals get done all the time, it's easy."

For all those headlines of the success, there's many, many more instances where deals have fallen apart that we don't hear about. I think the best thing that you guys had, Zach, was your BATNA, your Best Alternative to a Negotiated Agreement, but also your leverage. You had a profitable independent business. It was you, Zach, and Kai as the founders. You were growing, and you were profitable, and you could sustain with a partner or without a partner. And essentially, that led to a great deal for you guys. So it's awesome to say.

Zach Blume:

Yeah, it's true. I mean, we were not trying to parachute at our business in any stretch. We weren't trying to sell to then do an arm out to then leave. We were trying to level up, and I agree it was our ability to walk was good leverage for us, but we really wanted to do it because we really had committed ourselves to making this type of strategic move. I think it's very different when you're trying to capitalize on a moment in exit versus when you're trying to make an actual partnership to take the next step up in a business. And we just weren't ready to, and we still aren't ready to sunset Portal A.

This is becoming our life's work. We are committed. We are always kind of doubling down on our commitment. Sometimes I can't believe I've been doing this for 12 years. It's unbelievable. And I hope that we do it for many, many, many, many, many more years.

Chris Erwin:

You found your magnum opus in the first company that you founded pretty rare and pretty incredible, right?

Zach Blume:

Yeah. I mean it's amazing, but it also puts a lot of pressure on that to fulfill a lot of parts of your being and or your professional desires. When you're focused on one thing for so long, as opposed to a lot of entrepreneurs who kind of jump or leapfrog from one thing to the next. We've had to come to grips with the fact that this is our baby, and it's continuing to be our baby. And it's a long play. It's a long run.

Chris Erwin:

This is actually a good segue to think about how this business is fulfilling to you, kind of over the past couple of years, some key changes that you've made of, how you're rewarding some of your most prominent team members, elevating them to partner and then thinking about what you want to grow into. So let's get into that. I look at your business. In your 20s, it was kind of the freshman segment of Portal A really starting to become into a real business. Then in your 30s, it's kind of like the sophomore years where you're starting to scale up and start to realize some pretty incredible success. And now you've got this incredible foundation.

So not to aid you in front of everyone, but I think you and the founding team are entering your 40s over the next year or two years or so, entering the junior and senior years of your business. And for you guys to continue to be excited and fulfilled, tell us about some of the recent moves that you've made at the company and then where you want to go. What does that look like?

Zach Blume:

It's a great question. I wonder what happens after the junior and senior year sets. We're definitely at a different life stage, just on a personal level, then we were when we were on the treadmill moving 100 miles per hour in our 20s and in the kind of like the first half of Portal A and the deal with Wheelhouse was definitely like a marker, or maybe it was the dividing line between the freshman and sophomore era as you put it.

First of all, I mean the last couple of years have been crazy, the pandemic, the election in 2020, there's been a lot of volatility in the world over the last few years, but what we're trying to do in the face of that volatility and kind of coming out of the Wheelhouse partnership, which again marked a new chapter for us is, create A on the business side sustainability and kind of consistency. And we've been able to do that. I mean, we've been profitable, consistent from a numbers perspective for many years, but it definitely felt for many years, we were running on a treadmill trying to keep up.

And over the last several years, we've been trying to do as we enter into new periods of our lives personally, as we bring other people into the business as partners is create a business that doesn't feel like you're about to gasp for air and collapse at the end of every year, but actually create something that's sustainable and supports other parts of our lives that are really important to us. Family, having kids, all that type of stuff.

I think on the business side, it's like, and I think we've done this over the last several years, but how do we move from sprinting to running at a good pace and building something that feels sustainable over the course of the next chapter of our lives as our lives change. And that's been really important, and you mentioned this, but bringing, we brought four new partners into the business. Our head of production, our head of business operations, our managing director, and our head of talent partnerships all had been with us for five to seven years each. And we made them partners a couple of years ago.

We've invested in our team in a way that we always try to take care of people, but we truly doubled down on that over the last several years so that people feel like they're working at a place that they can work at for many years and feel very taken care of and part of a community, et cetera.

Chris Erwin:

Quick question on partnership front. So when you elevate these individuals to partners, does that mean there's a compensation bump but is also a bigger voice at the table for bigger strategic decisions for the company? What is the value exchange for that?

Zach Blume:

They went from kind of executives to partners. I mean, they're always executives, and I think what a partnership means is they participate in the profitability of the company. They participate in an exit. If there is a future, another deal on the horizon, they would have a stake in that. And then they have visibility into all aspects of the business and a seat at the table for really important business decisions around the type of work we take on, the type of things we invest in, the vision that we lay out for the company, the priorities for the year or for the next few years, et cetera.

So it's been incredible, and I think it was a big moment. It was always Nate, Kai, and I sitting in a room, staring at each other's faces and trying to figure things out. And to bring in Robyn, Emma, Elyse, and Brittani, they're all so incredibly smart and powerful in their own ways, and it's just made our decision-making much more thoughtful, multifaceted, strategic, and I think intelligent, that group of three became a group of seven. That's been a major milestone and moment for us.

So that was a big part of things. And investing in our team and doubling down on the team's wellness and creating a pace of work that was sustainable, not working over Thanksgiving, all that type, taking long breaks, giving days, all sorts of steps we've taken over the last several years to make Portal A sustainable business entity over many years.

So that's number one in terms of what this chapter looks like. And I think number two is we just want to make good shit. At the end of the day, when we put ourselves in the future and try to look back on what will feel most valuable about this whole experience, what we make because we are a creative company is at the top of the list. So investing in the quality of the work that we do, investing in projects that may not be the most profitable or they may even not be profitable at all, but that are important to us creatively experimenting in new content formats, longer form, feature-length type stuff, short film, all sorts of getting back to kind of our roots in some ways as experimental content producers and investing in the quality of the work that we're making either on the original side of the business or on the brand side of the business that has become kind of central to our whole vision and identity is just this relentless commitment to quality.

Chris Erwin:

I want to touch on that because when we were preparing for this interview, something that we spoke about was, yeah, your commitment to creative quality and craft. Sometimes that is undervalued, sometimes that feels like it's going against the grain, and like you said, Zach, maybe there's a near-term impact where these new IP concepts, they're not profitable immediately, but there's actually long-term value to it where adherence to that mission keeps the leadership and founding team galvanized and fulfilled. It also keeps your business exciting for new team members that you want to recruit, building towards future opportunity where there can be much more meaningful revenues to generate in the future.

So that's hard to do when you face kind of the near-term headwinds of those decisions, but you got to be steadfast in that it's clearly worked for you guys for over 12 years, and I think that that's just an important reminder that this is a founding value of our company and that's what's going to continue to drive long term success for the next 10, 20 plus years.

Zach Blume:

Everything you just said, I would like you to come speak to our company, and we can all talk about it together. I mean, that's exactly where we are at. What we'll define the next five, 10, however many years of this adventure will be the quality of the work that we're making. I don't want to speak too soon, and I'm going to knock on wood, but I feel like we've cracked the code on how to run this business well and how to find good people, take care of our people, take care of ourselves, find our lane and operate really well in our lane. And what's going to define the next chapter is how good is the stuff we're making. Is it something we're proud of? And that's both from a kind of, almost like, a spiritual or existential level, but it does layer back to business because we believe what will differentiate us is the quality of the work that we're creating. And so it will lead to new opportunity and new horizons when we're making really good stuff.

Chris Erwin:

Last one or two questions before we get into rapid fire and we close out here is, are there any current projects that you're working on or things that you're thinking about that maybe are good signals to the listeners of the type of things that you're going to be doing more of going forward?

Zach Blume:

One really interesting one is completely different from a lot of the work that people may know us for, but my partner Nate is developing a feature documentary. We've done one feature-length documentary, we did it with YouTube original called State of Pride, all about the origins and the genesis of Pride festivals across the country. And it's a beautiful film called State of Pride. It's on YouTube. Nate did a really cool, together with Portal A, did a really cool 30-minute documentary in 2020 about the response from the Trump administration to the first year of COVID.

So we've definitely played with longer-form documentary projects. This project is called Fault Lines, and it is a longer-formed feature documentary about housing in America and about the shortage of housing in America, which is driving up housing costs for everybody. Kind of like the deep backstory on where that all comes from.

No brands associated with that project. It's going to be financed by foundations and private funders, but we're really excited about it, and it's that kind of getting back to telling interesting stories, experimenting with new formats. It's not going to be the core of our business for the next several years, but we are going to be investing in those types of projects where we can kind of make a name for ourselves in new spaces.

And then, of course, we're doing all sorts of cool stuff with our brand partners like big, splashy campaigns that are coming out later this year that I shouldn't talk about yet, but doing a lot of work with Target and Google and we have long-standing partners at Lenovo, the computer maker and all sorts of cool branded stuff. We have original shows in the pipeline.

So I think the business mix for us is branded content. Again, nothing that we make should ever feel like a commercial, and if it does, we've failed ourselves and our partners. So content that is made in partnership with brands feels like something you'd actually want to watch. That's one pillar. The second pillar is original series. We just released Level Up, which is a show on Snapchat starting Stephen Curry mentoring a new generation of athletes. So there's all sorts of series like that that we're working on.

Then this new area, which is short films, documentary feature films that we're investing in as a loss leader, like truly a loss leader, but as a way to diversify the type of content we're making and invest in quality like I was just talking about.

Chris Erwin:

That's great. You guys are doing a lot. Last quick question before rapid fire, how would you succinctly describe how your leadership philosophy has evolved now, being, call it 12 years into the Portal A business?

Zach Blume:

When you're building something, especially for us, we started from zero. We didn't come from the space. We didn't have any relationships. It was completely homegrown and organic. When you're building something, it's like you're captaining a tiny little ship in very rocky waters, and it is survival in some ways. I mean, it's both like I'm just picturing someone on the deck of a little dinghy in the middle of the ocean, just like yelling and surviving and getting thrown all over the place, and you're just trying to survive and make it through the first few years. And I think that was in many ways what leadership, just getting through the choppy waters and trying to grow and survive, was what it looked like for many years in the early days of growing our company.

I think now that we've made it through those choppy waters and kind of established ourselves and built something that has a foundation underneath it. I really focus on sustainability and vision. And so that means creating an environment where people can be fulfilled creatively in terms of the people that they work with in terms of the pace of the work, both for the team that works with us and also for us, for ourselves. So creating that kind of a rhythm that feels not like you're like a tiny boat in a gigantic ocean and just trying to survive, but that feels steady and sustainable and solid. So creating that kind of consistency and strength, and that's one side of it. And then, for many years, it was just eat what you killed. And that was so many years of growing the company.

Now it's like, "Okay, who do we want to be and who are we and who do we want to be?" And I think I spend so much time thinking about that and then communicating that back to the team and then repeating it over and over and over and over again and giving people something that they can understand and hold onto and feel like they're working toward a common cause has become so much more important now than it was when we were just basically in survival mode. So I think, yeah, sustainability and vision have become the most important pieces.

Chris Erwin:

I love that. Very well said, Zach. All right, so last segment from me giving you a bit of kudos at the end of this interview. Look, a lot of the people that I interview on the show, I've known for years, if not decades or more. I've actually interviewed people that I've known for over 30 years on this show. I've really only gotten to know you over the past. I think like two to three months through a handful of conversations. But I will say some of the kudos is it feels like I've known you a lot longer than that. I think we have a really shared sensibility, and I think that that's a testament to in this space.

What I really like about being at the intersection of digital and entertainment is that there's just some really good people in it. And I think that's not the same from a lot of other industries that I've worked in. And I think you really embody that spirit. I think you really care about your people. I think you really care about your clients and your team and your partners, and that's really valuable. And I can even sense that in what the audience isn't hearing in between these segments is I really just love that note, how you are like the rah-rah spirit for your team. You've even been that for me, talking me up about me as a podcast host and supporting our content work where I'm going through a bit of my own existential crisis with RockWater on, I can feel that very positive energy from you, and I think that makes you a very, very, very compelling leader.

Lastly, just to reiterate one of the points I made earlier, you have this extreme focus on your core service and product and on your team and doing right by your client partners. And I think that is actually shows incredible strategic focus and vision versus some really complex framework for how Portal A is going to take over the entire digital entertainment ecosystem with 10 different business models. You guys have nailed your core, and it's given you so much opportunity for what I define as the very exciting junior and senior years that are going to come for you. So massive kudos to you and the team for what you've built exemplary, and I look forward to many more conversations in the future.

Zach Blume:

Thank you. It feels like you understand us, and I really appreciate that. So thank you for that.

Chris Erwin:

For sure. Easy to do. All right, so to the rapid-fire, I'm going to ask six questions and the rules or as follows, you'll provide short answers. Maybe just one sentence, maybe just one to two words. Do you understand the rules, Zach?

Zach Blume:

Yes, I do.

Chris Erwin:

Okay, cool. All right, first one, proudest life moment.

Zach Blume:

Birth of my daughter.

Chris Erwin:

What do you want to do less of in 2022?

Zach Blume:

Worrying about the state of our union?

Chris Erwin:

Okay, what do you want to do more of?

Zach Blume:

Making work that we are proud of and stands the test of time.

Chris Erwin:

One to two things drive your success?

Zach Blume:

Focus and commitment, and loyalty.

Chris Erwin:

Okay, last three here. Advice for media execs going into the second half of this year and 2023.

Zach Blume:

Brace yourselves. I mean, I don't want to fear monger or create an atmosphere of angst or anxiety, but I definitely can see that there are headwinds ahead and many of us have been through these periods before, and we can make it through, but it's definitely a time to focus on fundamentals and be aware of your costs and brace yourselves for what could be a choppy period.

Chris Erwin:

Yeah, well said. Any future startup ambitions?

Zach Blume:

Not beyond what we're doing. I mean, if there's ever sunset to Portal A, I would love to get involved again in the political world. And we've done a lot of political work over the years through Portal A but at the moment, continuing to double down on what we're building.

Chris Erwin:

Got it. The easy final one for you. How can people get in contact with you?

Zach Blume:

I don't know, old school email, I mean, really old school, I guess, would be a landline, but email Zach, Z-A-C-H@portal-a.com, or you can find me on LinkedIn, but that sounds really lame, so just send me an email.

Chris Erwin:

Okay. I think LinkedIn is great.

Zach Blume:

No, I love Linkedin, but I just don't want to be the guy hawking his LinkedIn profile.

Chris Erwin:

Got it. All right, Zach, that's it. Thanks for being on the Come Up podcast.

Zach Blume:

It's been a pleasure, Chris. It's a great service to the digital media, community and world and really appreciated being here.

Chris Erwin:

All right, quick heads up that our company has a new service offering. We just introduced RockWater Plus, which is for companies who want an ongoing consulting partner at a low monthly retainer, yet also need a partner who can flex up for bigger projects when they arise. So who is this for? Well, three main stakeholders. One, operators who seek growth and better run operations. Two, investors who need help with custom industry research and diligence. And three, leadership who wants a bolt-on strategy team and thought partner.

So what is included with RockWater Plus? We do weekly calls to review KPIs or any ad hoc operational needs. We create KPI dashboards to do monthly performance tracking. We do ad hoc research ranging from customer surveys to case studies to white space analysis, financial modeling where we can understand your addressable market size, do P&L forecasts, ROI analysis, even cash runway projections.

We also do monthly trend reports to track new co-launches, M&A activity, partnerships activity in the space. And lastly, we make strategic introductions to new hires, investors for fundraising, and then also potential commercial strategic partnerships. So if any of this sounds appealing or you want to learn more, reach out to us at hello@wearerockwater.com. We can set a call with our leadership.

All right. Lastly, we love to hear from our listeners. If you have any feedback on the show or any ideas for guests, shoot us a note at tcupod@wearerockwater.com. All right, that's it, everybody. Thanks for listening.

The Come Up is written and hosted by me, Chris Erwin, and is a production of RockWater Industries. Please rate and review this show on Apple Podcast and remember to subscribe wherever you listen to our show. And if you really dig us, feel free to forward the Come Up to a friend. You can sign up for our company newsletter at wearerockwater.com/newsletter, and you could follow us on Twitter @TCUpod.

The Come up is engineered by Daniel Tureck. Music is by Devon Bryant. Logo and branding is by Kevin Zazzali. And special thanks to Alex Zirin and Eric Kenigsberg from the RockWater team.

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.

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Email us: tcupod@wearerockwater.com

Interview Transcript

The 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 challenges my brain. And it's funny to put it that way, but again, as an English major, as someone that didn't grow up with parents or in a community where people were doing really traditional jobs or working as high powered business executives, I had never been in that space.

And so I think for me, the brainstorming of what are we going to do, what types of shows are we going to make? How is it going to make money? How are we going to make stuff that's meaningful and powerful and makes a difference, but also not go broke? That was actually really fun for me and really creative in a weird way. Business can be creative. And at the same time, I got a lot of joy from just sitting in newsroom meetings and hearing their stories that they wanted to tell and working with, call them creatives, but the journalists really.

And I think that's when I realized, oh, I can be in this space. I can be in this creative space as a facilitator of all these people that maybe have the boots on the ground, making the stories. And I actually really enjoy the operational part weirdly. And I think my brain does like being in both sides where I can brainstorm stories and I can be a part of green light meetings and I can have my opinion based on obviously personal taste, but also what I understand about the market and at the same time, really enjoy putting spreadsheets together, which sounds so lame, but it was fun.

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 guest, 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.

I think you're hitting on a couple notes, which are important. So just one, I think I can just sense from our listeners, some tears of joy, we are calling finance professionals and the FP&A teams at these media businesses that they have creative aspects to their work. I think they really appreciate that, but I think it is true. And I think, look, I've seen this because I started after my banking career, I was very early in the YouTube MCN, digital video days. And there's all these incredible visions of how to build these new modern media businesses, but the actual business fundamentals of how do we make money? How do we have sustainable profit where we can keep doing this year over year? I feel like a lot of those big questions were not addressed. Now that's fundamentally changed 10 years later, but I think people with your mindset is there's a chance to bring great content to these new audiences that want to consume content in different ways.

But we got to find a way where there's business sense here, right, where there's going to be money pouring in from partnerships and from brands or from investors or from the fans themselves. And that allows you to keep building, to keep iterating, to create something beautiful and great and different. So clearly you have a really sharp mind for this. This is a good transition to talk about how you ended up going over to Sonoro and meeting Josh and being a co-founder of that business. To tie a bow in your LA Times experience, where did you essentially eventually take the business before you decided to do something else?

Camila Victoriano:

By 2019 or so, we had launched about eight or nine different shows. They were true crime limited series, but also what was important to us was to have some more recurring community driven projects. We did a really wonderful show called Asian Enough with two of our reporters, Jen Yamato and Frank Shyong. And it was just about what it means to be Asian enough and how that question is something that they asked themselves a lot and other people in the community asked themselves a lot. And I think that's an in general question that I, as a Latina can relate to. So there was a lot of also really, I don't want to say public service, but really community driven projects as well that I was really proud of. And then also of course, we had Chasing Cosby men in the window, Detective Trap, all these really awesome, true crime series that were our bread and butter by the end.

And luckily all of them did really well. They all would hit the top of their charts. A couple of them I believe are in development for TV. And I was just really excited to see more than anything too, that the process of brainstorming those ideas and of bringing them to life was so much smoother by the end. Our sales team was total pro that's selling podcasts by the end. Now they still have a podcast salesperson. I think what I was most proud of from year one to year three basically, was that it wasn't anymore a struggle to push these things through, it was very much LA Times studios as we called it was really embedded in the organization and podcasts were a real serious part of the business of the LA Times and still are.

And we got to make some amazing shows. All of them had advertisers when they launched, which was again for us a huge success metric. We were able to sell things before they even came out because advertisers trusted us to make it successful. And I think that was a huge success point for me having been on those calls in the beginning. I feel like that's a little bit why too, again, making this jump into Sonoro, why after that point I felt good about leaving because I was like, I feel really great about what I've built and what I've helped set up here. And I feel okay that I can step away now.

Chris Erwin:

Okay. And so were you planning on transitioning out or did this opportunity to work with Sonoro come up and you're like, hey, this is hard to turn down?

Camila Victoriano:

It was a little bit of both in my head. I was itching for something bigger, a bigger challenge, how I mentioned LA Times studios was really this mini mini startup within a legacy organization. I had gotten the itch of building something from the ground up and feeling really excited about that. And so I think at that point, I had been at the LA Times total, including my internship probably for close to five years. And so it had been a really solid run. And I think I was ready to look for my next challenge and as I was in that head space, just so happens, got introduced to Josh through our mutual friend, Adam Sachs. And when I met him, I think our energies, just to jump right into it, but our energies really, really matched well. We met over zoom a couple times.

Chris Erwin:

And when was this Camila?

Camila Victoriano:

This was in early, early, early 2020. So gearing up for what was to come unbeknownst to me.

Chris Erwin:

It was right before COVID.

Camila Victoriano:

Yeah. Yeah. And so we had met a couple times and I'm a real detail oriented person. And I think what was exciting to me about working with someone like Josh was he came in and had a really inspirational vision for what he wanted to achieve. And I got very excited and felt very aligned with that vision and what I had been thinking about recently over the last few years, just being in the audio space and in media.

And I thought, might as well go for it. I felt like it was the right time for me to do something from scratch, to take honestly a risk. And what seemed like a risk at the time, because I had been working in a very sort of traditional company that probably wasn't going anywhere. And in general, I think in my life had been pretty risk averse. I think I had just done everything the way I was supposed to do it. Right. And so I think that for me this was, okay, I'm going to take a risk. I feel like I've gained a lot of confidence over the last five years and a lot of skill sets and I'm ready for the challenge. So, yeah, chose to jump in it with him.

Chris Erwin:

Camila, what's the quick elevator pitch or overview of Sonoro?

Camila Victoriano:

So, Sonoro is a global entertainment company that creates audio content with the goal of developing it into TV, film, books, other audio derivatives, and our community focus is 500 million global Spanish speakers and US Latinos. So our entire shows are made by Latinos and our entire team is a hundred percent bilingual and bicultural.

Chris Erwin:

In terms of being inspired by the vision, were there things from the outset where you're like, hey, Josh, I love this idea, but here's what I would do a bit differently? Was there any of that in the beginning?

Camila Victoriano:

What I was able to offer was the experience being in the industry. Right. And so I think my eagerness really came from wanting to try shows that were outside the podcast norm "a little bit". We had done a lot of true crime at the LA Times, but I was really excited to try stuff that would resonate. For Sonoro, it's really our core consumer are the 500 million global Spanish speakers and the US Latinos. Again, I came from Miami. I'm a Latina. What was exciting to me in general about creating stories that were empowering Latino creators was let's not set a boundary about what the narrative that they have to tell is. Let's let them tell sci-fi stories, fantasy stories, horror, thrillers, that maybe don't have anything to do with being Latino, but are just feature Latino characters in it like they would any other sci-fi.

And so I think for me, what was really exciting was pushing those boundaries a little bit and leaving that creative flexibility to the creators and trusting them and their experiences, knowing that if we really relied on the specifics of their experience and their story, inherently, that would have a universal impact. What we Josh and I talked a lot about in the beginning was the success of shows like Money Heist, and those that hadn't come out yet reaffirmed our point later in the year, like Squid Game and Lupin, that more and more people were consuming global content.

That was, if you're a French person watching Lupin, there's probably so many inside jokes that I totally missed, but I still really enjoyed it. But they're going to enjoy it even more because it's culturally specific to them. And so I think that's what a little bit what I was really trying to push forward in the early shows that we made and still today of we can be really culturally specific, so that if we're making a show set in Mexico, Mexicans, they're like, oh yeah, this is really made for me, and I get this, and this sounds like where I'm from and who I am. But someone that is listening in the Bronx can still really enjoy it and have a sense of cultural community with the story, but it's more universal in that sense.

Chris Erwin:

Got it. Very well said. So, you align on visions with Josh, but you also have your distinct point of view. And then is it like, hey, within one to two months of meeting, you joined the Sonoro, and you helped co-found the company and build it to what it is today, or was there a longer [courting 00:43:24] period?

Camila Victoriano:

I think we literally talked on Zoom twice.

Chris Erwin:

And then it was like, all right, Camila's on board.

Camila Victoriano:

Yeah. I don't know. We just, we really got along really well and we clicked really easily. And I was like, I think this can work. I think we have a good rapport. We always joke, we're both Capricorns, so I think that that helps.

Chris Erwin:

What are the attributes of a Capricorn?

Camila Victoriano:

Very driven, very type A, very low BS. So I was like, okay, I think we can understand each other. So I don't know. It just felt right. It felt like everything was aligning. I was getting that edge to go and build something and start with... In general, I was just saying, I want to start with a really young team. That's what I wanted to do. That's as far as I had gotten in my head space about it, and then to get this connection from Adam, literally as that was happening, it just felt way too serendipitous to pass up.

And also then to have honestly such an immediate connection with Josh of like, oh, okay, I think we can work well together, and I think we understand each other and how we like to do things and how we like to work, that still to this day nearly three years in is true. I think it checks so many boxes that I was like, I just have to, again, it was the first big risk I've taken, honestly; career wise or school wise, if I'm looking that far back. But it felt right, and it felt like the right time to do it. So I just went for it.

Chris Erwin:

Well, so it's funny that you say all this. I've known Josh for a few years now. And in terms of how you describe him of like he's very ambitious, very driven, very direct, no BS. 

Camila Victoriano:

Yeah.

Chris Erwin:

And as I'm getting to know you, I get that sense as well. And literally just, I think we spoke for the first time yesterday, but I'm also seeing just how complimentary the both of you are in working together. So I think that explains a lot of the recent success that we've seen with Sonoro over the past few years, not surprised. After a couple Zoom meetings, you guys partner up and then what do you first start working on?

Camila Victoriano:

So the first year that we really started, and we really formally kicked things off, kid you not, March 2020. So it was weird timing. But really what we were first trying to do is test out if we could actually make things that people loved. That is all we cared about. We were like, can we make shows that people love, that people binge into the deeps in the middle of the night? And can we do it well? And can we do it at a high quality? Because I think that was important to both of us is in general when you're seeing, especially in Latin America and the US, content for Latinos, like traditional telenovelas, the production value just isn't there. And so that was really important to us. And so the first year we launched a lot of traditional bread and butter podcast, chat shows that really quickly climbed up the charts.

Personal interviews, comedy, wellness, your traditional categories in Mexico specifically, and started to build out our network there really quickly, because I think a lot of the creators that were more independent there saw us as a reliable resource to help them grow their shows and to really be; for us, it was like, we want to be the partner of choice for any creator podcast or media company, executive director that wants to work and make really great content that just so happens to be created by Latinos.

And so that along with let's make stuff people love were our two big mandates in the beginning, and it worked really well. Our first original scripted series launch that we did was a show called Crónicas Obscuras. It was a horror franchise that we launched in October. And that came off of a similar premise, which was Latinos over index and horror. We love horror movies, horror shows, anything. But most of the horror shows or movies that do really well are either based on European legends and European horror stories or feature zero to no Latino characters that, and if they're there, do they make it towards the end? Maybe not. And so-

Chris Erwin:

They get killed off early.

Camila Victoriano:

Yeah, definitely not the final character left. So for us, it was like, this is one genre that we know already has a huge gap in terms of how Latinos consume it and how it's being made. And so we said, this is going to be our franchise where we're going to tell Latin American legends, set in Latin America with Latin American characters. And so our first season of Crónicas was about these things called Los Nahuales, which are basically werewolves, but they also turn into other characters like snakes and things like that. And the show, we did it super high production value. We recorded with this thing called binaural audio where you literally have a mic that looks like a head and people can walk around it. And so if you're wearing headphones, the show, you can feel things coming up from behind you, but it's just because of the way that we recorded it with this special mic.

And we had the voice actor who's done Homer Simpson in Mexico for 20 years. That was our big celebrity for that season star in the show. And the show ricochet up to number one podcast in general in Mexico. And it did really, really well. And that was our first success of this is an original show that Sonoro produced fully in-house, wrote, direct, production, casting, marketing. And we were able to launch it and people really, really loved it. Next few months after that, we launched a few similar series. The big one, of course, is a show called Toxicomanía, which launched in April of '21, which was, again, similarly mission driven, but always entertaining. It was based on a true story. A Mexican doctor in the 1940s that convinced the president of Mexico to legalize all drugs for six months, which no one knows happened.

For six months in Mexico, all drugs were legal and you could get them in government mandated dispensaries. And it was this doctor's way of saying, hey, this is how we build a progressive society. This was an obvious one. Again, it's like the combination of our mission, which is, this is a story about Latinos, in particular Mexicans and drugs that you haven't seen before because when you think Mexico or drugs in media, you think Narcos, but this was actually something very different. But then what we did is we turned it into a really entertaining dramatic thriller. We were inspired by movies like The Big Short and things like that, where it was like it was teaching you something about history, but in a way that was really, really entertaining.

And then we partnered with the actor, Luis Gerardo Mendez, who's an amazing Mexican star and really starting to come into his own in the US to executive produce and star in the project. And that show did insanely well. We launched it on 4/20. So again, it was the combination of mission, entertainment, production value, the right partner, and also a really strategic marketing launch of this is obviously a story that people are going to love and it's about drugs, so we're going to launch it on 4/20. And it did really, really well. It was number one in Mexico across Latin America. Number two in the United States in fiction, even though it was only in Spanish.

And now we just announced earlier this year that it's going to be developed into a film at Paramount+. And so that to me is a perfect case study of what we really tried to do that first year is let's partner with the best creators. Let's make the best content and see if people love it. And I think we proved that to ourselves that first year, year and a half.

Chris Erwin:

When you entered the, call, the Mexican creator and audio landscape, was it competitive? Were there a lot of other production companies that were either Latin America based, Mexico based, or from the US that were trying to operate in that market? And two, follow up question, was there a sense of with the creators that were there, did a lot of them want to create in audio and to expand their creator ambitions, or was it something like, oh, we didn't even know that we can do this, but then after talking with you Camilla and your team, they're like, oh yeah, typically, I just create a bunch of videos on YouTube or whatever else, but I'd love to do something in a more scripted or [premium 00:50:55] or narrative form in podcasting. Let's figure out what that looks like together?

Camila Victoriano:

Yeah. I think in terms of the landscape, there were very few to none established. There were a lot of independent creators. So we actually are head of production; Andrés Vargas. He is this great heart of the Mexican podcast creator network. He was really a first mover there for sure. And I think we worked together really to bring on a lot of these early chat show podcasts into our network to kickstart that, but there wasn't a lot of established companies there. There weren't any. And so for us really, it was a mainly an education challenge, not so much the creators. I think there were, like I said, independent comedians or wellness experts that had already started to realize, oh, this podcasting thing is makes a lot of sense for me to expand into. And we focused on working with them, but really more so for the talent.

So for our scripted projects is explaining that, hey, you don't have to have hair and makeup. You can just go into the studio for literally four hours and you make a whole series. And I think for us, that was how, especially when we were early on unknown, reaching out to these huge stars like Luis, being able to pitch it as this is still a really... And this is what I love about audio, right? Is like it's still, even though it's been around for a good chunk of time and you could argue all the way back to radio dramas and radio plays, it still feels like such a creative and experimental space. And I think that's what got a lot of the talent in particular that we were speaking to for our scripted projects excited, that they could try something different. This wasn't your traditional production, where you had to go in with a 5:00 AM call time.

It was very much, especially in early COVID days. It's like you could do it from your house. We'll send you a kit. No worries. We'll do it over Zoom. But it was a lot of education really for them, for their managers, but people were excited. I think they thought this is a chance for me to play and for me to have fun and for me to do something different and which made the whole experience, especially of those early recordings, just really special.

Chris Erwin:

So going back to a point that we talked about with your experience at the LA Times, it was follow the content, but then figure out the business model. How do we make this sustainable? So what did that look like for you working with Josh and the team of like, okay, we found this incredible creator community. We have these shows that are becoming number one in their local markets and they're crossing international borders into the US and more. But how do we actually generate sustainable revenue for this? And what are the right revenue streams beyond what everyone just talks about for podcast ad sales, et cetera? So what was some of the initial work? What did that look like for you guys? And where does that look like going forward as you think about the medium and monetization differently?

Camila Victoriano:

Yeah, absolutely. I think in Mexico, in particular, again, it was all about education, education, education. And I think for us, since we focused that first year really on just launching great shows and making sure that they were hits, then our counterparts in Mexico were able to go to brands and say, hey, look, we already know this works and explain a little bit the medium and how to interact with consumers and how to write an audio ad. So it's still early days in that market, but we've been able to work with really amazing brands like McDonald's, like Netflix. A lot of CPG brands in particular are really excited about this space. And so I think we're really, the more we talk to brands every month, it gets easier. And I think where the podcast market in the US was maybe four years ago is where they're at right now.

And I think we're reaching those innovators in the brand space that are excited to try something new and it's working really well for them. And we're getting a lot of people that come back, come back again because the audience for podcasting is the traditional ones that you see here in the US. They are younger, they have more disposable income typically. And so I think a lot of the brands are really excited about that. And then the US, of course, it's a totally different game. You have your direct response advertisers, which are the bread and butter of podcast advertising, but what we're really excited about is bigger brand presenting sponsorships, especially in our fiction series. That is where we're really looking to double down on in this year. For example, we had a show called Princess of South Beach, which was a 36 episode telenovela in English and in Spanish, and [Lincoln 00:55:02] came on as a presenting sponsor. And we produced this really incredible integrated piece into the content itself.

So it was a funny telenovela set in Miami, and we created a chat show or a TV show basically like an Enews called Tea with Tatianna, where she was talking to people around the family that the show was about while integrating Lincoln in a really seamless way. So for us, it's always about thinking a few steps ahead of what's the market going to look like in a year or two, and how can we get ahead of that? And how can we be really, really creative about the way that we integrate brands, so that it doesn't disrupt the content; number one, but also it gives them better value and it gives them much more seamless integration with the content that we already know listeners are loving. And so that's really what we're focused on in the US in particular is those bigger integrations into, in particular, our scripted content.

Chris Erwin:

Camila, as a young rising leader, where you raised your hand and essentially got to be at the helm of what is the new LA Times studio division, where you're helping to tell stories in different ways. And now you're a co-founder at Sonoro. Looking back on your young career, what are some of your leadership learnings to date, upon reflecting of you as a leader earlier on, maybe a few years back to the leader you are today? What have you learned and what do you want to keep working on?

Camila Victoriano:

The main thing I've learned has probably been more about human interaction, how you work with people and how you build a team. I think at the LA Times in particular, newsrooms are tough, because it's the business side traditionally and over the years has never... hasn't always been super friendly. And so what I learned really well there and also building a team over Zoom these last few years is communication is critical. And over communicating and making sure everyone knows what they're supposed to be doing, why, and just offering up the opportunity to answer questions and to be there as a leader that listens to people and to listens to maybe questions they have about work, about their life. I think for me, that's always really important and something that I've valued from mentors in my life of they're there to listen and they're not going to... I was a very precocious early career person.

I was always like, why is this happening, or what's going on? And I wanted to know as much as possible. And so communication, I think, is something that I always valued as a younger employee or as an early career. And so that's always what I'm trying to communicate or to convey to our employees now and to back then the newsroom is like, I want to be someone that they have a lot of FaceTime with and that communicates a lot with them about strategy and about what we're doing, what we're doing and gets them really excited.

Chris Erwin:

I like that. I run a lean team, but I realize, I can never overcommunicate. So things that I just assume that the team knows, the reality is that they don't. These things are in my head. And so every day it's important to just remind the team, what is our mission? What are we focused on? What were wins from yesterday? What are learnings and what are we maybe changing? That is literally a daily conversation. And I would much rather over-communicate than under-communicate. So I think that's very well said. Another point here is you now have investors. You raised a round of capital a couple years ago from some blue chip firms. And what have the learnings been there for you where you're following the content, you're building community around your shows. You're figuring out the business model and driving new revenue, but you also have to answer to a board. What is that like for you?

Camila Victoriano:

I think that's been the most exciting thing for me, honestly. What I have learned from working with our investors is just really relying on them to jump in when we have questions and using them as experts in the field too. And I think that's, they're there to help us and they're there to work with us and to partner with us on this venture. And so for me, it's really, in particular, we have some younger people that we work with and younger investors that are my age and collaborating with them on how to be leaders and how to build this business. And just, again, having that open dialogue and open communication of not being afraid to ask them questions, I think, has been the biggest learning for me and the part that's been most exciting about working with them.

Chris Erwin:

Realizing that good investors are really allies and partners through your business. These are not overlords that are micromanaging or only coming in when things are tough. They're there to be there for the good and the bad. And when you have a really great set of investors that can really amplify your business an incredible way. Look, a final note before we transition to our rapid fire segment is, Camila, what are you excited about for what's next at Sonoro, for what's coming up in the rest of 2022 and beyond? Tell us about the future vision and what that looks like for you.

Camila Victoriano:

First and foremost, I'm really excited about all of the shows that we have cooking for this year. Earlier this summer, we launched a romcom called Love & Noraebang, which was a really beautiful story that featured a Mexican-American character and a Korean character falling in love that was just incredibly well done with an amazing cast. We have so many other shows in the works that I think are going to get people really excited. I'd also say that we have a lot of really great announcements coming up in terms of derivatives for our projects, that I'm excited to get out into the world, and really honestly, for this year and next year to really bulk up that part of the business as well. We've launched some incredible, incredible podcasts, but now I'm excited for those to start cooking as TV shows or films and for people to start hearing about that and hopefully watching them soon. That is definitely what I'm very excited about.

Chris Erwin:

Awesome. Before rapid fire, Camila, I'm just going to give you some kudos. So I've known Josh for a few years now and spent a decent amount of time with him. I've also known Adam Sachs for about a lifetime, right? He was actually the first person that I interviewed on The Come Up podcast. Both of them have said amazing things about you, but we have never met in person until literally just yesterday. And now I understand why they say such good things. I think hearing how you stayed so true to your heart and passionate about following content and exploring different mediums, how you've then followed this exciting serendipitous path to put you at the forefront of this incredible new media industry like in podcasting and all things audio. I think it's an incredible story for you. And I understand why you are one of these young up and coming leaders because you have such incredible content vision.

You have a very clear understanding of what fans want and how to delight them. And I think you do marry both sides of the media brain of having really strong creative intuition, but really strong business savvy and just leaning in to get stuff done. So I give you a ton of accolades and I've already been excited about Sonoro's business well before this conversation, but walking away from this interview, remain even more excited and I'm pumped to have the rest of this business community and listeners spend more time with the shows that Sonoro's putting out into the world. So, job very well done.

Camila Victoriano:

Well, thank you. I really appreciate that.

Chris Erwin:

Yeah. You're welcome. All right, so we're going to move on to the rapid fire. This is the final segment. Very simple rules, Camila. The rules are as follows. So I'm going to ask you, I think, six or seven questions and the responses are to be one sentence or maybe just a couple words. Do you understand the rules?

Camila Victoriano:

I understand and I'm wary of the rules.

Chris Erwin:

Okay. Here we go. Proudest life moment?

Camila Victoriano:

I think founding Sonoro, closely followed up by, and this might be lame, getting into Harvard was a pretty big deal for me.

Chris Erwin:

Those are both fantastic. What do you want to do less of for the remainder of 2022?

Camila Victoriano:

Less reactivity, more proactivity.

Chris Erwin:

What one to two things drive your success?

Camila Victoriano:

I think our employees, and the work that they do drives me a lot, and also my family.

Chris Erwin:

Advice for media and podcast execs going into the second part of this year?

Camila Victoriano:

Listen to the consumer, listen to the listeners. I think they have... I'm using too many words. I'm going to follow your rules. Listen to the listeners.

Chris Erwin:

I dig it. Any future startup ambitions?

Camila Victoriano:

Oh boy. My heart and soul is in Sonoro right now. So we'll see what happens after, but that's all I can think about at the moment.

Chris Erwin:

Maybe you can have a conversation when Josh isn't listening.

Camila Victoriano:

Yeah, exactly.

Chris Erwin:

I actually want to go back to one of the rapid fire questions. When you say you want to be more proactive. Just tell me a little bit more about that.

Camila Victoriano:

I think when you're building a startup, it gets very easy to get caught up in the day to day and the little fires and the things that pop up and exciting new opportunities. And I think for me, it's really, it's similar to... I meditate quite a bit and just staying present and saying, okay, what am I working on right now? And staying focused and just being more proactive, I think, about thinking of solutions, new ideas, new projects. We do a lot of that, but I think especially in the moment that we're in, it's easy to get caught up in what's happening day to day and what comes up. I think sitting more with thoughts and with our strategy and our content and being more proactive about what's next and those steps that we're taking.

Chris Erwin:

Easy, final question. How can people get in contact with you?

Camila Victoriano:

Well, they can reach me on email, probably; camila@sonoromedia.com. Maybe I'll regret that, but feel free to reach out.

Chris Erwin:

I would say that we have some pretty great listeners. So the quality of reachout should hopefully be good.

Camila Victoriano:

Yeah, I'm not worried about it.

Chris Erwin:

All right, Camila, that's it. Thanks for being on the show.

Camila Victoriano:

Yeah. Thank you so much. This was awesome.

Chris Erwin:

That was such a fun interview with Camila. Like I said, I had never met her before yesterday. So it was really nice to spend time with her on the podcast and hear her story. It truly is remarkable, and I'm really pumped to see what she does next at Sonoro. All right. Quick heads up that our company has a new service offering. We just introduce RockWater Plus, which is for companies who want an ongoing consulting partner at a low monthly retainer, yet also need a partner who can flex up for bigger projects when they arise.

Chris Erwin:

So who is this for? Well, three main stakeholders. One, operators who seek growth and better run operations. Two, investors who need help with custom industry research and diligence. And three, leadership who wants a bolt on strategy team and thought partner. So what is included with RockWater Plus? We do weekly calls to review KPIs or any ad hoc operational needs. We create KPI dashboards to do monthly performance tracking. We do ad hoc research ranging from customer surveys to case studies, to whitespace analysis. Financial modeling, where we can understand your addressable market size, do P&L forecast, ROI analyses, even cash runway projections.

Chris Erwin:

We also do monthly trend reports to track new co launches, M&A activity, partnership activity in the space. And lastly, we make strategic introductions to new hires, investors for fundraising, and then also potential commercial strategic partnerships. So if any of this sounds appealing or you want to learn more, reach out to us at hello@wearerockwater.com. We can set a call with our leadership. All right. Lastly, we love to hear from our listeners. If you have any feedback on the show or any ideas for guests, shoot us a note at tcupod@wearerockwater.com. All right, that's it everybody. Thanks for listening.

Chris Erwin:

The Come Up is written and hosted by me, Chris Erwin, and is a production of RockWater Industries. Please rate and review this show on Apple Podcasts and remember to subscribe wherever you listen to our show. And if you really dig us, feel free to forward The Come Up to a friend. You can sign up for our company newsletter at wearerockwater.com/newsletter. And you could follow us on Twitter @TCUpod. The Come Up is engineered by Daniel Tureck. Music is by Devon Bryant. Logo and branding is by Kevin Zazzali. And special thanks to Alex Zirin and Eric Kenigsberg from the RockWater team.

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.

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Interview Transcript

The 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 of, "Hey, this is how I'm going to act when you guys are in a moment of need and I'm going to be a resource for you guys and positive asset in good times and in bad." That's a fantastic move on his part.

Mike Grisko:

And then you flash forward a year, we did a series A extension in bringing on Valor Equity. And we closed that deal on March 6th. And if you remember, I think on March 8th, that was a Sunday that oil tanked 40%. But Jon Shulkin and the team at Valor, they never for a second wavered just on their commitment. And that's a rocky time to be stepping into a new investment, especially one with its end markets being bars, restaurants, gyms.

Chris Erwin:

Just to be clear, because we glossed over this quickly, when oil had that precipitous drop, that was essentially the week during the massive shutdown for COVID in the US and throughout the world. So the times fundamentally changed.

Mike Grisko:

Our end users of our service are all out of home venues. And so all subject to lockdowns. It was a trying couple months, but great support from our investors. Having a cohesive team to make some moves to change up the cost structure. And we got through it. Very little turnover and an employee base that was just still so bought into the story. And so to your question on inflection point, really then in Q3 of that year, right around mid August, we really started to see things uptick in the dailies. And so the big question on the business back in 2020, great, we're starting to understand that you can truly build a network in a fairly economic way to get distribution into these B2B customers. Get them signed up, get them to stream. The question was, all right, so if you build all this supply, are advertisers going to come? And that started to be answered in Q3. If you remember, everybody pulled back in the advertising world in Q2 of 2020. As they reassessed, they started to redeploy more and more money into connected TV environments and streaming TV environments.

Mike Grisko:

And we were one of the benefactors of that, especially in the programmatic open exchange. And so we started to see that coming through in the dailies and then the narrative really flipped. And then in October we did an inside up round. So, it's all of a sudden like now the story was almost flipped with VCs looking to preempt because they saw the traction was starting to build for what we were building.

Chris Erwin:

And then that leads to, I think in January of this year you announce a blowout round. You announce $100 million in new capital. I think 80 million equity and 20 million in debt.

Mike Grisko:

Yeah. You flash forward to 2021, which was just one of the most memorable, positive years in my career. But I'm sure there was others that shared that sentiment, but Valor Equity preempted and led our series B raised 25 million in April. And then Sageview led our series C that we've announced in January of 2022, an $80 million round plus a $20 million debt facility with bridge. And so over that three year path, we've now been able to raise $145 million worth of capital and really have been able to put that to work incredibly efficiently in building this network where you go back five years, about 1000 venues. We're now streaming in over 29,000 venues today, reaching close to 40 million people on a monthly basis and generating a lot of ad inventory.

Chris Erwin:

And just to make this exciting for potential venue partners. If you want to grow your network, people listening to this podcast, what is the value that you bring by putting Atmosphere on their walls?

Mike Grisko:

Yeah. I like to sum it up as it's better, simple, and free. So it's better content for at least TV. You think TV for business was never broken. It just was never right to begin with. Everything that you see out in bar, restaurant, or gym is content that was built for in-home consumption with audio. It is talking heads. It is entertainment that's going to require the voiceover. We purpose build everything for that audioless experience.

Mike Grisko:

So it's fast paced. Our news and sports channels, heavy typography that allows the viewer to really just consume visually. So it's better content for these screens and it gives you an alternative to live sports because not everybody is a sports fan and there's not always a relevant game on. And simplicity. There are no monthly contracts. We overnight you a device for free. It is a five minute install process, logging onto your wifi and away you go. And for the venue, it's free. For a free product, you're getting better content to entertain your patrons. And depending on the type of venue you are, we have multi TV locations and single TV locations. So if you're single TV location, such as a waiting room, auto repair shop, you're a car wash, why are you paying for cable? This gives you a cut the cord option in providing entertainment in the waiting room. And then if you're a multi TV location, this is just a great alternative for those other moments.

Chris Erwin:

I think that sums it up quite well. I like the notion of "It's not broken, it was just never right." So what would you say to wrap up the Atmosphere segment before we go into the rapid fire and we close this out and as a leader, you're at a company like you were saying that at Chive, I think you guys were around 50 to 75 people. Now Atmosphere, it's over 400. What are some of the lessons that you've learned scaling an organization this quickly? How have your responsibilities evolved? What does that look like?

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:

And what is something as you think about inspiring your team, inspiring the culture there personally. What is something that maybe you do different today than what you did three to five years ago?

Mike Grisko:

Something our exec team talks about a lot is authenticity. I think if you are just real with people, you show them a bit of yourself, but then also give them an environment that allows them to just come to work as they are. They don't have to pretend to be someone different in a professional setting than they are outside of the office. You give that to them and it just engenders great environment, creative problem solving, and just people with good energy that want to be part of this mission.

Chris Erwin:

Yeah. I think it's a great mission. I think a lot of people should join the Atmosphere wave. A final note from me, Mike, in the spirit of authenticity to give you some kudos. Something that came across to me when we first met back in 2018 was just, this is a really sharp guy. He's building something exciting in this business, but he also feels very genuine and very grounded. I have always gravitated towards people from the Midwest. I went to grad school at Kellogg in Chicago, have had a lot of team members at RockWater and some of the other companies I've been at from the Midwest. And there's always just something special about them.

Chris Erwin:

I think you 100% fall into that category. I think of the days where you had so much conviction early on, but you were willing to work so hard to manifest this future that you guys had thought about. And I remember getting late night and early morning emails from you being like, "All right, I've been refining our business model. I think I have a new idea for the TAM. Let's talk through it." You were burning the candle at both ends to really will this thing to life. And it's awesome to see now looking back what you've accomplished for your career. And you guys haven't even had your big exit yet. So I think there's so much opportunity ahead of you and you deserve a special shoutout.

Mike Grisko:

Thanks, Chris. As amazing as this whole run has been. Yeah. I don't know if I'd want to redo 2017 through early 2019 again. A lot of decisions that we made back then in building this thing out that seem obvious now were not obvious then. It was a lot of rigor and work to really position this thing to set it on the right path to where we're at today. But it's great to see the traction and how far we've come as a team.

Chris Erwin:

It's amazing. So we're going to move into the final segment, Mike. It's called the rapid fire round. Here are the rules. I'm going to ask you six questions. Your responses are to be brief. They can be one sentence or maybe just a couple words. Do you understand the rules?

Mike Grisko:

Yep.

Chris Erwin:

All right, here we go.

Mike Grisko:

I'm in.

Chris Erwin:

Proudest life moment?

Mike Grisko:

Outside of my family and kids being born, I would have to say the proudest professional moment was our last all hands and seeing how big this company has gotten and the number of folks that are now underneath the Atmosphere umbrella is pretty incredible.

Chris Erwin:

What do you want to do less of in 2022?

Mike Grisko:

I'm really trying to do less time on my phone at home. The less screen time at home, more time present with the kiddos.

Chris Erwin:

What do you want to do more of? Well, I guess you just answered that. More time with the kiddos.

Mike Grisko:

More time with the kiddos and also more sleep. That's been a big thing this year. So far, so good.

Chris Erwin:

What one to two things drive your success?

Mike Grisko:

I go back to, after getting laid off, I laid out two rules for myself and it was "Always work harder than the guy next to you" and "Do things the right way." It's pretty basic, but that's always how I attack everything.

Chris Erwin:

This is one I actually just want to expand on for a second. When you say "do things the right way," just give us a little bit more context there.

Mike Grisko:

It's treat others how you want to be treated. It's be fair. Work with integrity. That will always get you much further in the end.

Chris Erwin:

Got it. Well said. All right, last couple here. Any future startup ambitions?

Mike Grisko:

I actually helped co-found a business last year. Project Bankman. It's a crypto services business that is building solutions for brands on the blockchain. And so we were looking for a solution for Chive Media Group for effectively a branded social token that could replace our loyalty points. Wasn't really one out there. And so we partnered with a gentleman, Gavin Gillis, who is a ton of experience in the crypto space. And we put together a business plan. We're able to raise seed funding and that business is doing incredibly well in signing up new clients, including The Chive and some other financial institutions and airlines just to build them solutions on the blockchain.

Chris Erwin:

That's awesome. All right. Last one, Mike, this is very easy. How can people get in contact with you?

Mike Grisko:

LinkedIn.

Chris Erwin:

Okay. Hit up Mike on LinkedIn. All right, Mike. That is it. Thank you for being on the podcast.

Mike Grisko:

Chris. This was awesome. Thank you very much. Incredible host. Thanks for making me look good.

Chris Erwin:

Of course.

Chris Erwin:

All right. That was a really fun interview with Mike. That has been a long time coming and I'm very glad that we finally were able to make that happen. All right. Quick heads up that our company has a new service offering. We just introduce RockWater Plus, which is for companies who want an ongoing consulting partner at a low monthly retainer, yet also need a partner who can flex up for bigger projects when they arise.

Chris Erwin:

So who is this for? Well, three main stakeholders. One, operators who seek growth and better run operations. Two, investors who need help with custom industry research and diligence. And three, leadership who wants a bolt on strategy team and thought partner. So what is included with RockWater Plus? We do weekly calls to review KPIs or any ad hoc operational needs. We create KPI dashboards to do monthly performance tracking. We do ad hoc research ranging from customer surveys to case studies, to whitespace analysis. Financial modeling, where we can understand your addressable market size, do P&L forecast. ROI analyses, even cash runway projections.

Chris Erwin:

We also do monthly trend reports to track new co launches, M&A activity, partnership activity in the space. And lastly, we make strategic introductions to new hires, investors for fundraising, and then also potential commercial strategic partnerships. So if any of this sounds appealing or you want to learn more, reach out to us at hello@wearerockwater.com. We can set a call with our leadership. All right. Lastly, we love to hear from our listeners. If you have any feedback on the show or any ideas for guests, shoot us a note at tcupod@wearerockwater.com. All right, that's it everybody. Thanks for listening.

Chris Erwin:

The Come Up is written and hosted by me, Chris Erwin, and is a production of RockWater Industries. Please rate and review this show on Apple Podcasts and remember to subscribe wherever you listen to our show. And if you really dig us, feel free to forward The Come Up to a friend. You can sign up for our company newsletter at wearerockwater.com/newsletter. And you could follow us on Twitter @TCUpod. The Come Up is engineered by Daniel Tureck. Music is by Devon Bryant. Logo and branding is by Kevin Zazzali. And special thanks to Alex Zirin and Eric Kenigsberg from the RockWater team.

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 link

Learn more about our market research and executive advisory: RockWater website

Follow us on LinkedIn: RockWater LinkedIn

Email us: tcupod@wearerockwater.com

Interview Transcript

The 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 redesign

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:

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 get some clarity of like, "Oh, that was a pretty cool moment." You know? And I think that was a very cool moment for you. And clearly, you learned a lot, which has bolstered your career. But I'm curious to hear you so you started experimenting with Twitch. I think that's just an interesting precursor to some of the channels and the partners that you work with today, particularly in gaming, similar to when you saw the power of MP3s when you were up in Cambridge.

Chris Erwin:

And then you saw how that was going to disrupt the music space. When you were first exposed to Twitch, did a light bulb go off on your head and say, "Hey, there's something incredibly exciting about the power of live?" What was that moment like for you?

Adam Rymer:

I'll be honest. I wasn't the biggest, "Hey, we're going to figure out how to monetize this immediately live streaming." I was the suit in the room on it. I had some people from Geek and Sundry come to me and they said, "We think that we can create a channel for Geek and Sundry and stream different kinds of content, just do some stuff out of our office. And we will minimize the cost that it takes for us to do it and we'll give it a shot. And they did it and they got it up and running and they spent as little as they could to create a set and livestream and got a bunch of equipment donated. And it was okay. And Felicia came on and streamed with it and that helped build an audience for it. And it was programmed. I mean, the thing that was most interesting about it was it actually had a schedule.

Adam Rymer:

There were shows that were on certain times of day, certain days of the week, it was a live-streamed TV network. Maybe one of the first of its kind. It started to gain some traction, but it was when Felicia brought in her friends at Critical Role to stream their Dungeons and Dragons game that we really started to see the magic of what live-streaming could be.

Chris Erwin:

What was unique about bringing Critical Role in live-streaming Dungeons and Dragons? What did you feel was special for the audience or to help amplify marketing? What was that?

Adam Rymer:

Well, I mean, what was amazing about it was it found a community that never had a place to call home. So most of Twitch was watching people play video games. There was some what you'd call today, just chatting going on, which is mostly what Geek and Sundry was. There was some game playing, but nobody was really streaming D and D at the time or doing things that were a little more creative like that in a meaningful, well-produced way. And all of a sudden this show found a home and started to spread by word of mouth and it had some great talent attached to it, right? Everybody who's on Critical Role is professional voice actors in their own right. And so they brought a level of confidence to it that don't think many people have seen before. And Matt Mercer's just a genius as a DM at the end of the day. So giving this community, which is spread out around the world a home one day a week, where they can all get together and share an experience at the same time, really became a magical place to be.

Adam Rymer:

So Twitch loved us because we were bringing in a community that wasn't necessarily there naturally again, because most of Twitch was more based around video gaming and the D and D community loved it because it was giving them a place that they had never had before. It was a little bit like lightning in a bottle.

Chris Erwin:

It just goes back to, I think I was listening to a podcast by Ben Thompson a couple weeks ago. And I think a point that was made is never underestimate the ability of the internet to reach these incredibly niche fandoms all around the world. There is interest in anything at a minimum, at least one person will be into something if you put it out there. But I think Dungeons and Dragons has this massive community and like you said, but they didn't really have a place to call home and you guys created that for them. I think that was just like so beautifully articulated. I love that. So you're doing your thing at Nerdist and Legendary you're there for five years, but then at the end of your five-year run, you go into this exploratory phase where you're advising a few different companies.

Chris Erwin:

I think you're reimagining cinema with a company called WeVu. And I remember being in your living room, having some brainstorm sessions around that with a few mutual friends, shout out to Adam Sachs. And then you end up as at the CEO, as of Envy Gaming, a big bet on the gaming space. How did that run come to an end? And then it kicked off. I'm going to make a bet on the gaming space. What did that look like for you?

Adam Rymer:

Sure. So Legendary sold to a big Chinese company called Wanda and I'll make it a short story. It was just the fit for me at the new version of the company wasn't quite the same as it was under the previous leadership. So I left and started advising companies that I just thought were really interesting and cool out there. Did some work with [inaudible 00:40:44]. Did some work with Participant. Did some work with ranker.com, other friends of mine that I had known over the years that I just had a chance to really help out here and there. And then out of the blue, right before COVID hit, I got a call from a recruiter about this position with NB Gaming. And as I've said, I've been a gamer geek nerd most of my life. And I've been paying attention to what's been going on in the gaming and Esports space for a long time.

Adam Rymer:

At Universal, I was responsible for all the video game work that was done. We had produced a couple games while I was there. We looked at buying a big video game publisher while I was there. So the video game space wasn't totally new to me, but the video game lifestyle space was a little bit new. And I had been following the growth of Twitch, the growth of what you'd call the celebrity influencers and creators that were emerging on the platform. And I had seen some of these Esports organizations. I hadn't necessarily known of Envy at the time, but I did know of a couple of the other ones that were out there. And I saw the potential, right? I saw the early days of a new form of brand and community entertainment, which was emerging on Twitch and other platforms because it was interactive. And when I started meeting the people that were here at Envy, it really felt like the next phase of innovation for me.

Adam Rymer:

And if you think about the path of my career, which has always been trying to find where's that edge of entertainment and technology and consumer behavior music with Napster and film with digital distribution and Nerdist with community-based content. This really feels like the edge of the universe at the moment, in terms of where the community is starting to emerge, where you've got a new generation of people who are not watching traditional television. It felt to me like this is a place to plant my flag for a while and see how I can help this develop.

Chris Erwin:

So you end up moving. You were based out of LA. Your family was in LA but the role was in Dallas. Did you just move there full-time in the beginning or were you commuting like four days a week in Dallas? And then back to LA on the weekends?

Adam Rymer:

I moved here to Dallas in the summer of 2020 having never met anybody at the company in person because we were all working from home. And my family stayed back in LA because of the pandemic. And I would fly back home every two weeks to see them. And we did that for about nine months while my kid was finishing the school year. It was an interesting time to be away from home and in a new city that I knew absolutely nothing about. I had never really been to Dallas before. I knew nothing about the city.

Chris Erwin:

Did you take on the role without ever meeting anyone from the founding team, the leadership, or the investor group in person? It was all Zoom calls and then you signed on the dotted line?

Adam Rymer:

Yes.

Chris Erwin:

Wow. That's a big decision.

Adam Rymer:

Yes. That's how convinced I was about the future of this space and also the people that were involved with it. So the interesting part about that period of time is I have a son who at the time was eight years old. And the way that he and I would stay in touch and I think this is telling to the future of this space, the way he and I would stay in touch while I was living in Dallas and he was in LA is we would play Fortnite together. Several times during the week I would get home from work, we'd both load up Fortnite and we'd put on the cameras. And while we were playing Fortnite, we'd catch up on how school was going and what his friends were up to and how he's doing. And that to me was the whole reason why I'm in this space.

Adam Rymer:

Because yes, we were playing a game and we were shooting people and we were like having a good time, but it was really just about us spending time together and talking to each other and interacting with each other. And that's what I think we're going to remember at the end of the day and not what skin we were wearing or any of that kind of thing, which to me shows how gaming is just the natural way of interacting and communicating for people today.

Chris Erwin:

That is so cool. I mean, I think about from our generations like Gen X and Millennials, oh, early memories of your father, it's like going fishing together, right. Going camping. And I think that your son, right, these like Gen Alpha, their memories will be like, "I remember when we used to play that old game Fortnight and we used to talk and catch up about our what was going on in school." It's just going to be a whole transformation of memories of childhood and with their parents, you know?

Adam Rymer:

Absolutely.

Chris Erwin:

I love that. We always say for us, you need to be where your clients are at. Tell our clients to don't resist or to be forceful. And I really like you're meeting your kid where he's at. If you look at the stats, we just did a big research project for a toy retailer of where are parents and kids independently and then also as a co-viewing unit spending their time online. It's on social media and it's in these big gaming environments, like Fortnite, like Roblox, like Minecraft. So I think that's pretty smart parenting, Adam. I am not a parent, but I think that it seems like smart parenting from afar.

Adam Rymer:

Absolutely. It's a new world. I keep trying to explain to people who are in a, I don't even want to say older generation, right because I don't feel like I'm old these days, but I'll just say anybody who's Gen X and older, we tend to use the word gamer, right? As like, "Oh, there's gamers." People are gamers and it's a misnomer now. It made sense for our generation because gaming was such a new thing for people to do. Not everybody had an Xbox, not everybody had an Atari. Gaming wasn't a natural course of business. But for this new generation, for the younger generations, asking somebody if they're a gamer is like asking people in our generations, if they listen to music or if they go to the movies.

Adam Rymer:

Well, you might talk to people and say, "Hey, what TV shows are you watching?" And there might be people who say, "I don't watch TV" and you're going to say, "Okay, well, that's strange. I mean, most people watch TV." But in this generation, I think we are increasingly reaching the stage of saying, "What games do you play?" Not, "Are you a gamer?" Because to me that is the given for this generation.

Chris Erwin:

I love that. Such a poignant point. Couple quick questions before we go onto our closing rapid fire. But when you got in there, I remember I'm like, "Adam, so what's your initial focus there?" And I think that you had a point of view like you've done at your other companies of what is the 360 monetization model? How do you take these teams, these players... How do you build media brands around them? How do you build fandoms? What is the talent-driven model to really take this business to the next level? If you could just tell our listeners what your initial re-imagination and growth vision for the company was in year one.

Adam Rymer:

A lot of it is applying principles to it at a certain level. What we do, isn't very different from other forms of media and entertainment that I've been involved with. And other people have been involved with in the past, which is we have a brand that has stature and meaning and association. It has a community around it. And through that brand and through the content that we create, we reach our users, we reach their eyeballs. It helps our brands and advertisers reach their eyeballs and it helps us connect with them. And so that's no different from any other form of media, whether that was magazines back in the day or television, or filmed entertainment, it is at a certain level. It is reach and it is scale. And so when I came in here first, it was really just understanding the dynamics of the industry.

Adam Rymer:

Where does monetization happen? What platforms does it happen on? How do we actually get in touch with these people? What kind of data is available? But then it was what are the assets that we actually have and what levers can we pull and what is our programming? So when you start thinking of the brand and your programming, you start saying to yourself, okay, well, I've got teams and I've got content creators, and I've got original programming that we put out. And you start looking at the pieces of your organization as what reach to each of those pieces have. So I've got this team and they play a certain game. Let's call it rocket league. Well, what audience does that rocket league team bring to me? Where are those people from? What demographic is that group of people? Are they mostly in the US or are they mostly international?

Adam Rymer:

What age are they? What states do they come from? What do they care about? What brands and industries are they interested in? And then I've got our call of duty team. Same thing. What reach do they have? Switch over to our content creator side. Okay. Well, if I'm going to bring on a new content creator, what's the audience that I'm getting from working with that content creator? It's not overly different. I mean, it is, there are differences in nuances, but if you are Discovery Channel and you're thinking about filling the 8:00 PM slot on Thursday, well, what are you going to put on in that 8:00 PM slot? You don't want to put on something that overlaps with another show that you already get that audience from. This is the whole definition of programming. It's the same reason why Game of Thrones and Westworld aren't on at the same time for HBO. They sequence those things because they want to optimize the programming and make sure that people stay subscribed to HBO for a longer period of time.

Adam Rymer:

So understanding your audience, understanding who's coming in, understanding the reach that you get with the assets that you have available starts to get the company thinking about us as a media property. And once you shift your mindset to thinking about it as a media property rather than necessarily a sports team, you start to build business processes around that in a different way. And that's what we're focused on at the moment.

Chris Erwin:

I don't think I've heard a smarter encapsulation of a media strategy than your past couple minutes, Adam. So very well done. So I'm curious in putting that strategy in place, just over the past almost two years, what are some of your favorite moments of some wins with the team? I was reading on LinkedIn. There's the Valorant Championships and the Green Wall, the Fandom really coming alive, having over a million concurrent viewers of the competition. Is that one of them? Are there others? What has that been for you?

Adam Rymer:

To start with our Call of Duty team won the CDL Championship within a month of me being here at Envy, which was mind-numbing. It's like, imagine joining the Chicago bulls five days before they won the NBA Championship, right? It's that kind of thing. And all of a sudden you've got a ring and you've got a trophy and you've got all this stuff and you barely started to understand what this world is all about. It was a pretty phenomenal moment. It was an amazing way to get indoctrinated into the space and get excited about it all. So now I've got a championship ring that's sitting in my office and that was a pretty fun, pretty fun moment. But yeah, about a year later, we merged with OpTic Gaming, which some of the listeners might know is one of the biggest, most passionate fan bases in the world when it comes to gaming and Esports.

Adam Rymer:

And that has been like wildfire for us. Hector Hex, just an amazing individual who's knows how to work with his audience and knows how to create content, and knows how to bring the audience into the brand in a really phenomenal way. And he's been educating us on a bunch of things that we didn't quite understand, and we've been working with him on some of the monetization things and just really couldn't have put two better organizations together. So within two months of bringing those organizations together, we won the Valorant Championship in Iceland, which is, as you were mentioning, had over a million people watching it. And just again, just another one of those too picture-perfect of a moment for us. Great memories that we're going to have forever.

Chris Erwin:

That's awesome. A final question for you is what's next for Envy gaming? What should people be watching for in some of the upcoming announcements, some new business initiatives? I think I was looking at from your team, there's some new virtual character immersion like CodeMiko. I'm pronouncing that right? Maybe some web three activations. What are you working on right now?

Adam Rymer:

What I think you're going to see out of us over the next year is really continued expansion of optic from a brand perspective, in terms of the areas that we're in. Just really trying to explore new ways to reach our fan base and build communities. I think the whole world of Web3, and I think a lot of people talk about Web3 without necessarily... I'm not saying I'm an expert in it, but I don't think a lot of people quite understand some of the dynamics of what makes Web3 different from Web2. And the biggest thing to me about Web3 that makes it different is community. If you don't have a community tied to some Web3 initiative, then you're missing it. I'll give you an perfect example. Web2 is about user acquisition on a one-to-one basis.

Adam Rymer:

So you've got a game like Candy Crush and you spend 50 cents to bring somebody in to Candy Crush and they spend a $1.50 on the game. You've made a dollar in profit and you can just keep doing that cycle all day. And you find new ways to bring more people in and you get a huge user base. There's a community that maybe gets formed online on Reddit boards and whatever else talking about Candy Crush, but the community is not an inherent part of what makes Candy Crush successful. In Web3 it's a little bit different. Web3 is if you bring somebody in, if you spend 50 cents to bring somebody to your Web3 platform and they get there and there isn't a whole community for them to connect to, they're going to leave. There's nothing for them to do. The community actually makes your project valuable.

Adam Rymer:

So in game terms, it's like bringing somebody in to play Fortnite, and they're just sitting in the queue, waiting for the game to start. And because there aren't 90 other people for you to play the game with, you're just sitting there and you're just waiting and waiting and nothing happens. And so it doesn't matter how much you spend on user acquisition, you didn't get your value for it. So we're going to be spending a lot of time on how do we build our community in new ways? How do we get the information about who our community is? Where do they live? What are they looking for us to do? How do we bring value to them? And how do we find partners that want to provide value back to our community? So how do we find those really interesting partnerships where we can take the Green Wall and OpTic and Envy and work together with those platforms to create really interesting dynamic opportunities together and not try to just have everything operate through our own vertical.

Chris Erwin:

Well said, something that we talk about at RockWater is the sense of valuing your community and communal ownership. I think that there's been a lot of literature over the past, call it year, particularly as you look at the building of different game franchises, where these users, their engagements, all the dollars that they spend on the games, all their engagement that can drive advertising revenues, right? And in-game purchases, the value that they create for a few stakeholders or investors or game owners, and it really gets siphoned to just a few. So the question then becomes, "Well, how do you reward the community for all the value that they're creating?" And I think there's actually a much bigger win there where if there's more of that two-way street, in terms of value sharing, the overall pie gets a lot bigger and everyone can win. And so I think that's a really, really smart mentality.

Chris Erwin:

Adam, I'll close it out with this before we get the rapid-fire. I just want to give you some kudos here. I think we were first introduced when I was probably at Big Frame and Awesomeness. So this is probably around maybe like 2015 to 2017 timeframe.

Adam Rymer:

Wow.

Chris Erwin:

And I know dating us a bit. And I just remember when I met you, you were running Nerdist and Legendary Networks at the time. I was like, "This is a guy who's a super sharp operator." He totally gets it. He's got both sides of his brain activating. I very much thought on the business side, on the creative side, I thought you really understood talent. You knew traditional entertainment, you knew digital. And I thought you were a very, very special mind and operator. And I remember when you were in your, what I call here in my notes, the exploration phase. So like after Nerdist and before you went to Envy Gaming, I think there was a period where you are wondering what really excites you. What's really going to get you going. And I think a lot of things that come across your plate that you weren't too thrilled about. And I just knew, I mean, I don't know if I ever shared this with you the right thing's going to come across Adam's desk and he's going to crush it. And it's going to be a really exciting moment for his career. Now I look back at all the success that you've had with Envy over the past, less than a couple years, and I am not surprised whatsoever. And I can't wait to see what you do there over the next two to three years. So I wanted to just share that with you.

Adam Rymer:

Thank you, my friend. It was definitely an adventure after leaving Legendary. There were points where I felt like I just needed to take something for the sake of taking something. I will wholeheartedly recommend people holding out for as long as you possibly can to find the right thing that feels right. If you can. Obviously don't sacrifice your family in your future and all those kinds of things. But if you can find the right thing, it definitely pays off.

Chris Erwin:

Very well said. All right, Adam. So we're going to get into the rapid-fire six questions. The rules are simple. It is short answer one sentence, or maybe just a couple of words. Do you understand the rules?

Adam Rymer:

I think so.

Chris Erwin:

All right. Proudest life moment?

Adam Rymer:

Birth of my child.

Chris Erwin:

What do you want to do less of in the second half of 2022?

Adam Rymer:

Less stress, more outside.

Chris Erwin:

Less stress, more outside. What one to two things, drive your success?

Adam Rymer:

Paying attention to everything going on out there.

Chris Erwin:

Advice for media gaming and Esports execs going into the remainder of this year?

Adam Rymer:

That's a tough one. Bear with the downside. There's still a huge opportunity in front of all of us, but manage this downside economy at the moment. And there's a bright light, but follow the path.

Chris Erwin:

Got it. All right. Last couple. Any future startup ambitions? Can you see yourself starting something from scratch in the future?

Adam Rymer:

For sure. Never a shortage of ideas that I've got. In fact, I think it's probably maybe a problem that I have. I am hopeful that I'll be launching something again sometime soon. We'll see. We'll see. if you got any ideas, send them my way, but yeah, definitely be starting some things soon.

Chris Erwin:

I think you got enough on your plate. I'm going to hold back on sending you too much, but maybe in a few years time. How can people get in contact with you?

Adam Rymer:

I'm pretty easy. It's Adam@Envy.gg

Chris Erwin:

Adam. This was a delight. Thanks for being on the podcast.

Adam Rymer:

For sure. Great to be here. Let's do it again sometime.

Chris Erwin:

All right. That interview was just awesome. I don't think I've interviewed anyone in the gaming space yet to date. And I stand by my point that I think Adam is one of the sharpest minds that's operating at the intersection of content community in commerce. He's been in the business for a really long time who really understands the business fundamentals. And he's got an incredible set of stories. So a real gift to have him on the show, very excited for what he continues to build with OpTic Gaming. Okay. Also, as many of you know RockWater is market research and strategy advisory for the media technology and commerce industries. We've just introduced a new offering, which allows us to work with more partners. It's called RockWater Plus. It's an offering for companies who want an ongoing consulting partner at a low monthly retainer yet who might also need a partner who can flex up for bigger projects.

Chris Erwin:

So we've worked with a large range of companies from big and small. Big Fortune 50 like Google and YouTube and big cable networks and studios like Viacom, CBS, and Warner Media to a variety of digital publisher, upstarts and retail brands, and more. So with Plus, we do a variety of things. We can have weekly calls to address any immediate business concerns that you have. We can set up KPI dashboards that allow you to make database decisions around how to best operate and grow your business. We can do ad hoc research, ad hoc financial modeling. If you're doing market sizing need to do P&L forecasts or valuations to assess your business before you go out to investors and so much more. So if you're interested in this and you think it could be helpful shoot us a note at hello@wearerockwater.com. And then lastly, we always love any feedback on our show. If you have ideas for guests for just feedback on the format, shoot us a note at TCUpod@wearerockwater.com. All right, that's it. Everybody. Thanks for listening.

The Come Up is written and hosted by me, Chris Erwin, and is a production of RockWater Industries. Please rate and review this show on Apple podcast and remember to subscribe wherever you listen to our show. And if you really dig us, feel free to forward The Come Up to a friend. You can sign up for our company newsletter at wearerockwater.com/newsletter. And you could follow us on Twitter @TCUPod. The Come Up is engineered by Daniel Tureck. Music is by Devon Bryant. Logo and branding is by Kevin Zazzali. And special thanks to Alex Zirin and Felicity Huang from the RockWater team.

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Ping us anytime at hello@wearerockwater.com. We love to hear from our readers.

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 link

Learn more about our market research and executive advisory: RockWater website

Follow The Come Up on Twitter: @TCUpod

Email us: tcupod@wearerockwater.com

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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 the sustainability mission. He loved electric cars, this beautiful new vehicle, right when they had first come out, 2016. 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:

Dude, this is wild, because typically, VC backed founders, if the founders have a new business idea, they will mitigate the risk by saying, "Okay, I'm going to contribute a significant amount of my time, right?" It could be a few years in building out this venture, but they're not putting in their own capital. They're going to get capital from third parties, venture funds. Then, that capital is going to be at risk. You are essentially doubly invested with your time and your own savings. But, I think what that means is that you probably had so much belief in what you are building that you wouldn't have done it otherwise.

Chris Erwin:

I think that belief is clearly very powerful, and for all of you guys to have had that, where you have Thomas contributing his wedding funds, and you have Ole contributing his Tesla funds, and you're even getting from former Bent Pixel employees, angel investment. I think that shows there's really something there. It's almost like with those dynamics, it would've been easy to raise venture capital, because they would've looked at the founders and said, "Oh, my God, their gumption that this is going to happen is so powerful, we want to be in." But, probably better for you guys, because I know you will tell the story of how you sold the company. You guys owned the majority of the equity. I had never knew that story, James. I never knew those dynamics around your business. That's incredible.

James Creech:

Thinking back to the time, imagining how I felt, I remember being 25. Your goals and your priorities at 25 and whatever, early 30s, are very different. But, something inside me just said, "We have to do this, right? We have the right team. It's the right time. It's the right opportunity." You look at the data. Most successful entrepreneurs are in their 30s, 40s, 50s, right? They've had-

Chris Erwin:

The average entrepreneur is older than 40.

James Creech:

Right, and they've had time to build a network. They've had experiences, failures along the way. I had not thought of myself as an entrepreneur up until this point, but something just tugged at me where I was like, "I can't imagine doing anything else." Although I had historically been very risk averse, I was just like, "We can't miss this, right? We have to do it, and we have to do it now. And, if it means going all in, if that's what it takes, then yeah, let's do it. There's no better time to do it than when we're young." So, having that conviction, which I think again is a lot of ... We didn't know any better, right? We were just hoping for the best.

Chris Erwin:

Which, actually I think is a good thing, to be delusional. You have to be delusional as an entrepreneur. The odds are stacked against you.

James Creech:

Big time.

Chris Erwin:

And, you are delusional, but it worked in your favor.

James Creech:

Yeah, exactly.

Chris Erwin:

So, you start the company. All right, you all contribute your capital. Paladin is now a thing. So, what are the first steps? Do you rent an office together? Is it, okay, we've got five new hires that we've got to make? What did that first year look like for you?

James Creech:

Yeah, terrifying, right? You've just jumped off the cliff, and you have to figure out how to build the airplane. Everyone was excited. I don't know if other people were nervous, but we had engineers. We had sales people. We had product folks who were working with us.

Chris Erwin:

What was the total team size from the beginning?

James Creech:

It was small. I want to say it was eight to 10, right? We had three founders and then the engineering team and then some of the business folks in LA. We had an office. So, we continued to rent the office. Basically, everything that was in Los Angeles became Paladin, and Bent Pixels had historically been based out of Las Vegas, so they just kept their operations. But, yeah, we had the office lease. We had all these salaries and payroll we had to be responsible for. So, all of a sudden, it's a lot of responsibility overnight to take eight plus people's livelihoods into account. We were losing money every month, right? We're looking at the burn. We knew we had to sell like crazy to just get out of the hole. Our reserves were not very high. We're talking about, we started this business with a few hundred thousand dollars, not any sort of big investment and no VC capital. So, it was all our money and very quickly needed to figure out, okay, how do we make this thing work?

Chris Erwin:

What were some of the early proof points where it was, okay, this thing is going to exist for more than just six months? What were some of those early wins? And, did you ever think about raising venture capital?

James Creech:

So, we sold like crazy in order to get to the break even point, and that was 100% of my time and energy in those early days. I think one of the biggest turning points was closing Awesomeness TV. So, I was working with a lot of your former friends and colleagues, Matt Levin, Parker Jones, Kelly Day, also worked a lot with Jen Robinson, the CTO. This was the first six figure deal that we closed as Paladin. I'm trying to remember if that's true. Maker Studios, I think also ended up being a six figure deal, but I think the original commitment was smaller. So, when I closed the Awesomeness deal, it was the biggest customer we'd ever signed. It was like, wow, we're a real business all of a sudden, that this huge venture backed company is going to make a bet on this small startup and offload a lot of its cost. Awesomeness was spending significant sums of money and engineering headcount on these processes at the time.

Chris Erwin:

Awesomeness spent a lot of money back in the day.

James Creech:

And, look, they were managing probably the largest network in the world at a certain point, 90,000 creators. We said, "We want to come in and make that easier for you." I think in many respects, we could. Jen Robinson and others saw the opportunity and believed in us and worked really closely with us to make that happen. But, that was absolutely a turning point of, okay, we're signing, as customers, some of the biggest players in the world. They're making this bet on us, and these are real contracts with real budget behind them. That was certainly a turning point.

Chris Erwin:

This is great to hear, considering the current macro-economy that we're going into, right? So, we are recording this podcast in the middle of May. We have faced, over the last quarter, the 1.4% decline in GDP in the US. I think there's a lot of signals of the global macro-economy slowing. Out of China, there's supply chain issues, rising interest rates, inflation. You name it. I say all of this, because companies are going to need to start thinking about ... I think access to venture capital is going to become a lot more challenging.

Chris Erwin:

So, what's the best form of capital? It's revenue, and it's having a business that works. So, you guys, that was your approach in 2016, which is, if we're going to finance this business, we're going to create a product that meets the market need, and we're going to sell it successfully. Then, so you closed some big deals like Awesomeness. So, that early validation must have been very rallying the team, and we got something here, right? So, it seems like that success continues for a bit. But, then there's a point in your business where you were telling me a pivot had to happen, right? So, kind of tell that journey from that founding. You have some initial success like the deal you just mentioned, and then what is happening until you realize something's got to change here?

James Creech:

So, first of all, I love putting it in context, because at the time, people would ask us, "Oh, are you venture backed, right?" As if that were a sign of stability, right? We would do info-sec evaluations through Disney, through Viacom for Awesomeness. People wanted to make sure we weren't going to go out of business tomorrow. I remember thinking to myself, yeah, I would tell people kind of jokingly, "Yeah, we raise money from our customers, and we call it revenue. We have this different model. We're bootstrapped. It's very unusual," and people got a kick out of that. But, to me, it was, okay, we got over the hump. Now, we're break even, profitable. We're reinvesting everything back into the business. So, we closed the deal. We hire another engineer. We hire a new salesperson. But, you had asked, did you ever entertain the idea of raising capital?

James Creech:

We did. Probably the most serious thought we had around it was we looked at potentially acquiring Epoxy. I don't know if you remember those guys back in the day. They had raised a significant sum. They were great entrepreneurs with a good idea that was probably just a few years ahead of their time, backed by some of the biggest VCs here in LA. I think they raised something like $8 million and just were having a tough time figuring out the business model. This was before people thought, well, can we get creators to pay for anything? And, I really liked Juan and Jason, and they introduced us to Mark Suster at Upfront. We spent a lot of time together, saying, "Does it make sense for Paladin to get an additional capital infusion and then acquire the Epoxy asset and turn it into an enterprise product?"

James Creech:

We figured we have relationships. We know how to sell this. For a variety of reasons, we decided not to proceed, and it's a shame. They ended up selling the business to someone else, but that was the most serious discussion we had around it. The business certainly changed significantly over the years, right? So, in those early days, we were primarily focused on helping multichannel networks and other digital businesses, so talent management companies and agencies, figure out how to manage digital talent. First, it was YouTube. Very quickly, it became a multi-platform world. So, it was Vine for a little bit, Instagram, Facebook, Twitter, et cetera. Then, you have things like Twitch come on the scene, and obviously later in our history, TikTok. So, the business was becoming much more multi-platform. The YouTube MCN business evolved significantly, right?

James Creech:

There were phases or stages to that business, but it became very clear that the 1.0 model of mass aggregation and monetizing off of the passive AdSense revenue was a bit of a dinosaur, and the new business model was focused on branded content and paid media and other incremental ways to build a business around the creative portfolios that these talent were were producing. So, we knew our business needed to change to keep up. The biggest signal was influencer marketing, right? If you looked at, well, how are creators making money, sure, they make millions of dollars a year in YouTube AdSense revenue, but there's this enormous opportunity from brands in branded content.

James Creech:

Then, of course later on, we'd see e-commerce, but at the time, we said, "Okay, we need to build tools to help our customers and ideal future customers support this activity. So, let's build better influencer identification and discovery tools. Let's build a much more robust CRM for not just agencies, but for brands. Let's think about creating sales materials, because people are spending so much time generating pitch decks, right?" I remember running influencer campaigns, and it was, okay, go ask the influencer for screenshots and put that into a PowerPoint presentation. Email it over to the client, and then they're going to ask for revisions.

James Creech:

You go back and forth, right? Why don't we just tap into the social APIs, pull all that data on demand, and create this robust real time reporting around the campaign, so that, A, you deliver better results, and B, you can actually monitor and optimize campaign performance in real time. So, that was really the direction that we started to go, was saying, "Okay, as much as we still want to support these customers and this opportunity, we're slightly modifying our strategy, and we're adjusting course to go pursue this influencer marketing opportunity, because it's brands and agencies figuring out how to work with creative talent in the digital economy."

Chris Erwin:

Got it. That was a big pivot that happened around what time, James?

James Creech:

Around 2018, 2019.

Chris Erwin:

And, so did that cause some real friction at your company? Did you have to rethink, hey, do we have the right team? Do we have the right sales strategy? Do we have the right relationships? Do we have to rethink how we're doing coverage? Do we need to build new products and services? And, do we have the right director of engineering to do that? So, what were some of those big key decisions that you had to work through as you pivoted the business?

James Creech:

Well, certainly, changing the identity and the branding of the business a bit, also the product offering, right? So, again, going back to need finding, what do the customers want? How do we build that out? It's easy to build something for one customer, but how do we build something for hundreds or thousands of customers? And, what is the right team composition that will help us to get there, right? It's classic innovator's dilemma of, well, we're still very dependent on these existing customers and their business needs. And, we want to continue to support that. But, at the same time, we need to be investing in this new direction. And, there were some hard conversations and hard decisions that came about from that, right? Some people on the team were very excited, made the transition easily. Other people said, "Maybe this is my stop on the train, and I'm going to get off and pursue other opportunities."

James Creech:

Other people were excited about the direction and couldn't make it work, or performance started to slip as we shifted strategy. So, you have to make some tough calls, but the team worked really hard through that time period to help us change course. It's not the most dramatic pivot in the world, but it certainly felt like a big shift at the time. It didn't happen overnight. We've got this North Star. We're going to move towards it over the course of 12, 24 months. And, I remember we got our entire team together in Poland. We've historically had a big operations center for engineering in Kraków. We brought the whole team in to Poland and said, "This is our vision. This is what we're going to build together." I think that was really energizing, to harness the energy of everyone and say, "We have this shared mission and objective. Here's why we believe it's going to drive business value, better opportunity." And, it wasn't easy, but certainly was the right choice to start to move in that direction.

Chris Erwin:

I like that a lot. We had a team reflection last week, and we're realizing that just having run an advisory business for five years that has gone through a rebranding and a transformation in the last couple years, as we're entering this new macro-economy and just also thinking about who are the clients we work with when we provide certain services? What feels great and is right in our wheelhouse, versus what feels like we're stretched or doing something different? And, there was a big kumbaya moment where we came together. To better service our clients in the industry, we need to really rethink things. It was some tough conversations, but when you just face it head on, and then you empower your team and be like, "You guys are all here for a reason. What are your ideas for how to fix this? And, how do we all rally behind that?"

Chris Erwin:

And, it was a very powerful moment. I'm saying that, because it feels like when you had this conversation with your engineering team in Poland, you have to face this stuff head on. There's certain people, like you said, this is their stop on the train, and they're going to get off. But, for those that it's the right fit, keep going forward. That's best for everybody. I particularly feel very reinvigorated after this conversation, and I see this incredible potential for success going forward. I have a much smaller business than what you have. Did you feel coming out of that, you're invigorated, you're excited? And, did you have that same feeling when you first founded Paladin of, we got this, we're going to crush this? There's no doubt in the world. Were you feeling that?

James Creech:

I wish I could say yes, but I don't think so. Founding a business and running a business is an emotional journey. I'm so privileged to have two amazing co-founders, because sometimes you have a bad day, or you lose sight of what you're building towards. They can help lift you up, and vice versa. But, there were some tough times around 2018, 2019, where we were making this change, because the environment, the business conditions around us had changed. We realized we needed to do something to continue to grow and to survive. Again, I started the business with youthful idealism and ambition. Sometimes, we set really high goals for ourselves, and we don't always live up to them. I'm still very proud of what we built and how we had done it, but it's easy to move the goal post on yourself.

James Creech:

So, looking at that time in our journey, I remember we were committed to figuring it out and moving forward. But, I have to tell you honestly, there were some very tough times in those years of ... Are we doing the right thing? Are we making the right choice? And, are we going to get through it? Because, it was really challenging. Once it started to work, absolutely, it felt amazing, right? Things really started to click in 2020, and I had more passion and enthusiasm for the business than I had back in 2016. It re-lit this fire in us of, okay, we got through the hard work, the two years of making this change. We see where it's going. We're rebuilding in this new direction, and it's fun. We're hitting our stride. Everything's growing really quickly. We're bringing on new customers, new team members. We're winning, and that's the exciting part. But, in the slog of making that transition, it wasn't always fun. That's for sure.

Chris Erwin:

I hear that, but I think you're right. There's just something as an entrepreneur and a founder and a CEO. You have to trust your gut. Are we having fun? Does this feel right? You can have all the KPI dashboards in the world and follow all the numbers, but there's just some intuition that's really important. As I reflect in my career, there's moments where I can specifically say I felt differently about a business decision, and I didn't listen to my gut, and it was a major miss. So, as a business owner, now I'm listening to my gut more. I want to be a database decision maker, but I think instincts are very, very valuable when you have to pivot and move quickly and also really energize your team. I hear that.

James Creech:

You need both.

Chris Erwin:

You end up selling the company to Brandwatch, which I think was just announced over the past month. So, I'm curious to hear the story to exit right after this success, the 2019 pivot to now. How did you end up selling to Brandwatch?

James Creech:

We were evaluating, what is the next step for us in 2021? As I mentioned, the business started to really hit its stride in 2020. We were looking around at the overall market landscape, and look, influencer marketing is a crowded, competitive space. It's great. It keeps us sharp, but we realized if we want to continue to grow and compete in this space, then we need to either raise money and start to double down on sales and marketing or execute on a broader roll up strategy. Or, we can find someone who shares our vision and our passion for this category, but has more resources and can help accelerate our growth, right? So, the calculus for us at the time was ... You look at our well known, well funded competitors. Do we go out and raise money? It's certainly a path. That's an option.

James Creech:

Paladin had customers in over 35 countries, across five or six continents. So, we were competing against different people in Germany, than we were in Singapore, than we were in Dubai. So, it was different by market, but we recognized that, okay, we need to raise capital to help accelerate, or we need to find an exit. So, thinking about the fundraising process, as I mentioned, we're bootstrapped. A lot of us had good, favorable positions on the cap table. If we raise money, you dilute the ownership, and you kick out the goal post, I don't know, two plus years, let's say. And, the other thing I was cognizant of is, well, it seems to be this interesting moment in time where things are happening at such a rate, people want to get into this space. It's probably the right time for us to find a partner. We had had a lot of inbound interest, so we said, "Let's test the waters and see what the reception is. If we don't find anyone we like, we can always fall back on our current plan of just keep growing, or we can look at the fundraising alternative."

Chris Erwin:

So, you were getting inbounds from companies that were interested in kicking the tires around you potentially in an acquisition?

James Creech:

Yeah. We have throughout the history of the business, but it became especially acute interest in, let's say Q1, Q2 of 2021. So, I reached out to my banker friend, Jason Rapp at Whisper and said, "It seems like there's some interest here. We should probably run a process. How should we handle these conversations?" So, he came on to help us with that, very quickly had some phenomenal conversations with great people that I think saw what we were building and wanted to help add fuel to the fire. But, I was fortunate to meet Giles Palmer, the original founder of Brandwatch, who now works at Cision, the parent company. We just hit it off. He said, "Can you spend some time with our product team?" We met the product and engineering team. It was like magic from the first call.

James Creech:

They loved the product. They saw what we were doing. It fit very neatly into their thesis and what Brandwatch has been building in and around consumer intelligence and being a leader in social listening. They have been merging with Falcon.io, which is an amazing social media management tool. Influencer marketing was very clearly just the third leg of the stool. So, we got excited about that. They said, "Hey, can we talk tomorrow? Can we talk Monday after that?" And, very quickly, it escalated where they made an offer, and it was the right offer and the right time. We said, "Yeah, let's go into diligence." So, we ran diligence over the holidays. So, I was at Christmas with my family, Christmas 2021, hanging out with family during the day, and then working until about 3:00 AM every night, because A, I had a lot of work to do.

James Creech:

And, B, I had these colleagues in Europe who were also burning the midnight oil on their holidays. So, going through all of DD, and then we kind of finished that in early to mid-February. At the same time, we were running a parallel path on the purchase agreement documents with legal, reached an agreement on that in end of February. Then, we had to do a 30 day hold for DOJ approvals, announced in March, and then finally closed the acquisition at end of March. So, long process, but a lot of learnings and an exhilarating outcome. So, it's been amazing to see it all the way through.

Chris Erwin:

Wow.

James Creech:

It is such a process, right? It's probably the hardest thing I've ever done. People tell at the end, "Oh, congratulations. We're so excited for you." And, that's amazing, right? You experience all the emotions of joy, excitement, elation, but at the same time, strangely, at least I also experienced this feeling of loss, which I think is natural. It's kind of closing of one chapter and beginning of another, where you're saying goodbye to this thing that you've built and you've poured so much of your energy and time and money and everything else into. It's like a kid maybe growing up and going to college.

James Creech:

It's exciting. It's the next evolution, but it's also saying goodbye to the thing that I knew in its past form. Then, honestly, there's this just overwhelming sense of relief, because a lot of it feels like deliverables and juggling so many plates and keeping everyone happy. Every different constituency has something else they want from this outcome. So, if you're able to get to a point where everyone's satisfied, or as much as you can, you just get it done. It's this amazing feeling of, whew, right? We did it, and that relief is also very comforting and satisfying, I suppose.

Chris Erwin:

One last quick question before we get into rapid fire is, what's next for James? You're going to stay on at Brandwatch for a while. Are you going to go start your next company? What are you thinking?

James Creech:

So, I have come on to Brandwatch as the SVP of influencer strategy. So, I get to work with the global leadership team to help think through how do we inject influencer and creator economy strategy into the entire business, which is so exciting, right? I've spent too much time and energy on this to walk away for now, so I'm very excited to be in this new phase of the business, doubling down on what we've built, adding more resources, combining that with the amazing product suite that Brandwatch has. So, I'm still all in, excited about what we're doing. As you mentioned earlier, I'm still involved in a lot of advisory engagements, and it's fun for me to get to give back and support other early stage entrepreneurs. So, still a big passion for me and something I make time for, but in terms of my day to day focus, yeah, it's 100% all in on Brandwatch.

Chris Erwin:

Before rapid fire, James, I just want to give you some kudos. I have known you for a while in the industry. I think our LinkedIn posts have crossed paths for at least over five to seven years. I think our relationship, we've gotten to know one another better, I think over the past couple. I was on your podcast. Now, you're on mine. I think there could be a fun future ahead where we collaborate on different things. That's a separate convo, but I just want to say, as I've gotten to know you, learning about just how thoughtful that you've been in building your business, how thoughtful, how you are in building for the creator economy, I think one of the things that got me excited when I entered the whole YouTube MCN space back in 2012 was this positive sum mindset.

Chris Erwin:

We can all grow together. There's incredible opportunity. I think that you embody that feeling incredibly well. You just put out a lot of positive, good juju into the world. You're very supportive of so many people. I think it has a really big impact, and I think it's a great inspiration for so many others. So, massive kudos, and I hear you on this notion of loss, loss and relief. You had this baby. You took a huge bet on it. It's worked out incredibly well for you and your team and your co-founders, but James, you're a young guy with a very bright future ahead. You have many, many more exciting wins that lie ahead in your future. Just have faith and the trust that we are lucky that you have the time to go and do that work.

James Creech:

Well, thank you. Thank you for all of that. It's very kind. I'm flattered, and I've felt for a long time that you and I are maybe kindred spirits in a sense, right? Oh, I've got to spend more time with this Chris guy, because you're very obviously very intelligent, well connected, thoughtful in the content that you share, the communities that you curate through your events and dinner series, and things like that. Also, I just think we have a lot of personal interests, like your real estate investing and everything else. So, any chance, any excuse I have to get more Chris Erwin in my life, I will take it. So, just putting that out there, because very much excited about that. And, one other note, maybe just to kind of close things out is, as I mentioned, started the business in my mid-20s. I'm now in my early 30s.

James Creech:

As you go through this process, I think the most impactful thing that I've learned is recasting what defines success. For a lot of people, it's, oh, you sold the business. It's this very rewarding financial and career milestone. But, I don't think that's what it's all about. As much as I'm trying to be present and enjoy this moment and celebrate the win with our team who helped us build this business over the years, the way I think about success now didn't happen on March 31st, right?

James Creech:

Success is measured a year or two, five years from now, if it works. Can we integrate this product successfully into the overall Brandwatch suite and offering? Can we continue to create great career opportunities for our team? Do we continue to provide an excellent product and support level for our customers? Are we meaningfully advancing the creator economy and supporting this industry and its future evolution? So, maybe that's me moving the goal post on myself again, but I'm trying to tell myself, well, what matters is not just check the box. You sold the business. What matters is that it works and that the thesis we all had going into this is successful. At least, we're going to all put our energy into making it as successful as it can be.

Chris Erwin:

I love that, James, beautifully said. So, now rapid fire, all right?

James Creech:

Bring it on.

Chris Erwin:

The rules are, we have six questions. They must be answered in short form, so could be one sentence, or it could just be one to two words. Do you understand the rules, James?

James Creech:

I am notoriously loquacious, but I accept your challenge, yes.

Chris Erwin:

All right, first one, proudest life moment?

James Creech:

Personal, getting engaged to my fiance. Professional, selling Paladin.

Chris Erwin:

What do you want to do less of in the remainder of 2022?

James Creech:

I'd like to spend less time in some of the operational aspects of the business, A, because I don't think I'm necessarily best suited to do that, so handing that off, and worrying. I think I can repurpose my energies.

Chris Erwin:

What do you want to do more of the rest of the year?

James Creech:

Oh, boy, rock climbing, pickleball, time with friends and family, vacation, and pursuing alternative investments.

Chris Erwin:

I like that. What one to two things drive your success?

James Creech:

Servant leadership, which kind of goes back to my childhood, huge examples from both my parents. Tenacity and going out of my way to be helpful to other people in my network, so paying it forward, I guess.

Chris Erwin:

Advice for creator economy execs going into the remainder of this year?

James Creech:

Watch the macroeconomic conditions, because things are changing quickly. Experiment and don't be afraid to change direction.

Chris Erwin:

Got it. Any future startup ambitions?

James Creech:

100%, yeah. Not right at this moment. I'm definitely involved in a lot of early stage companies and supporting other entrepreneurs. So, startups will always be near and dear to my heart, but also excited to drive innovation and entrepreneurship within brand watch.

Chris Erwin:

All right, last one, James. This one's pretty easy. How can people get in contact with you?

James Creech:

LinkedIn is the best way. Find me on LinkedIn, James Creech. You can follow my content there. I haven't been posting as regularly as I should have, but a lot of people are motivating me to get back in. So, certainly that and always happy to chat. So, feel free to reach out.

Chris Erwin:

James, this was a total delight. Thanks for being on the podcast.

James Creech:

Thank you, Chris.

Chris Erwin:

Wow, that was such a fun interview. James is just simply a very delightful human. All right, a few quick things before we wrap here. Our RockWater team is likely going to be at VidCon on Friday, June 24th, so hope to see some of you there. In addition, as a reminder that earlier this year we published our 2022 investment theses where we make predictions and talk about trends across a variety of our coverage areas, including Web3, the creator economy, podcasting and audio, sports media, and so much more. So, if you have interest in checking out that deck, shoot us an email at Hello@WeAreRockWater.com. In addition, on Thursday, November 3rd, we're hosting another executive event in New York City. It'll be for founders, investors, and operators within media and commerce and with a particular focus on sports. If you'd like to attend, just shoot us a note, and we can get you an invite. Lastly, we love to hear from our listeners. So, if you have any feedback on the show, if you have any ideas for guests, shoot us a note at TCUPod@WeAreRockWater.com. All right, that's it, everybody. Thanks for listening.

Chris Erwin:

The Come Up is written and hosted by me, Chris Erwin, and is a production of RockWater Industries. Please rate and review this show on Apple Podcasts and remember to subscribe wherever you listen to our show. If you really dig us, feel free to forward The Come Up to a friend. You can sign up for our company newsletter at WeAreRockWater.com/Newsletter. And, you could follow us on Twitter @TCUPod. The Come Up is engineered by Daniel Tureck. Music is by Devon Bryant. Logo and branding is by Kevin Zizali. And, special thanks to Alex Zirin and Eric Kenigsberg from the RockWater team.

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 link

Learn more about our market research and executive advisory: RockWater website

Follow The Come Up on Twitter: @TCUpod

Email us: tcupod@wearerockwater.com

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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 focused at the time of being a very good for you sports media company that we launched Dude Perfect, as I'm sure many people know, one of the largest creators in the world. I think they were only 2 million subscribers on YouTube at the time. Now they're multiples of that. They were one of our launch partners and a number of others were. We had PR around it. It was great. And then we're watching YouTube videos and we see you can block certain categories that you don't want to run ads. Our whole premise was certainly no alcohol, only really positive advertisements that could go on it. We didn't want soft drinks. We didn't want certain junk food. I think we got served a Pepsi ad or something, and it caused a whole panic of are we having sugary drinks?

Michael Cohen:

Are we allowed to have sugary drinks? Are we not allowed to have sugary drinks? And I think that was a funny moment. But at the time the rally cry was build our subscribers, the subscriber network, on subscribers being on YouTube. We had different targets that we ran after to bring creators on, to hit a certain subscriber threshold, which, was more of a proxy for the size of our audience and how we would be able to monetize it. But I remember that early on, it was getting a little over spooked on a very non-controversial ad that ran in pre-roll on YouTube.

Chris Erwin:

Yeah. And I have to ask, what was it like for you to start working with creators for the first time? For me coming out of finance, so venture capital, business school, Wall Street. I was very accustomed to working with private equity leadership, sophisticated investors, C-suite executives from the companies that we were representing. Transitioning into this intersection of digital media technology and entertainment, working with creators and personalities, working with the representatives that manage them. That was an entirely new world for me, both working with those talent and the reps in house, and then also out of our building as well. Did you have a lot of creator exposure early on at Whistle?

Michael Cohen:

I would say I wasn't leading the creator efforts. We had an awesome person named Julie Kikla who came from YouTube that helped us launch that. Dev Sethi then came on, who I know has been on your podcast here, but definitely got exposure to the different creators. I would say that my diversified experience in the past very much helped me for how to navigate, how to partner with these creators, who very often were not sophisticated businesses. And certainly at the time they weren't. First and foremost, they're in incredibly talented, innovative creators that they're most suited to creating incredibly engaging content. The monetization side of it was where we came in to help them.

Michael Cohen:

And so trying to apply a commercial acumen to a creative acumen often was easy to meet with challenges. But I think my prior experiences ... Where the story in private equity where had to really acclimate to the people around me, working in the strategy roles, and having empathy for what it's like to be in a larger company, what it's like to be in a smaller company, understanding both a commercial desire, but also a creative of desire, and how that all works together. I would say it gave me the tools to have a lot more empathy for it. Certainly didn't prepare me for the world of mom-agers and dad-agers, and how intensely passionate those folks are about their sons, their daughters, but I was prepared. But I've learned a lot in terms of how to partner.

Chris Erwin:

So phase one, with the initial launch of Whistle, call it the MCN stage, and some learnings there. And then I think there was a decision where working with the team, you guys then enter phase two, where you're investing in intellectual property, audience growth, capabilities. This is I think where you transition from Whistle Sports to Whistle. Tell us how that came to be.

Michael Cohen:

We went from The Whistle to Whistle Sports. We started off as The Whistle. When we launched, we were Whistle Sports. It was important to make the point that, we were Whistle Sports. We weren't well known at the time, so making sure that the name stood for what we were was important. As we evolved, and as we studied the data, we learned that sport was being defined very differently for this generation. We were focused more on a YouTuber generation, I would say, mid to late teens, the mid to late twenties. We learned a lot from them and really no greater learning than they are really defined by the intersection of multiple passion points. Sports fans today are very much, yes, I may be a ravenous sports fan, but I also care about the pop culture aspect. I care about the music aspect. I care about the culinary aspect of it.

Michael Cohen:

Very often today we're taking it for granted, because on Instagram you can see an athlete out partying on yacht, and what they're doing behind the scenes. You see them walking their dogs. You have such a more intimate exposure. I think at the time, again, it was really only YouTube was the platform that had the most data that you could get followed by. Facebook's started to get in it. But we learned from the data that there was a white space that we could create content in that was more what I would call sport attainment. As we were talking to a number of our advertising partners, they said, "Look, your name's Whistle Sports, but you're not sports. Sports is, what I would say, classically defined as what an ESPN is doing, what a Bleacher was doing, a Turner was doing at the time, you guys are more entertainment. The content you're creating is more entertainment. And if you focus on sports and entertainment, that's a much bigger pot that you can focus on. So have you thought about dropping the name sports when you're going from your go to market standpoint?"

Michael Cohen:

We started to test it, and all of a sudden we are getting lots more RFPs, lots more inbound interests, lots more PR opportunities, because we were really defining a new category. And early on, I would say in that category definition, people that would say to us, "You're trying to be everything to everyone. You're really sitting in this middle bucket." What we try to convey and what is true today is that no, no, no, that's a category of our own. So trying to define us in yesterday's boxes is not the right way to approach it because we're creating a new box for ourselves. And so that began really where we were consciously investing in our own content, building a diversified network of platforms. We wanted to be diversified across not just YouTube, not just Facebook, as many platforms as possible, not wanting to have the risk of being tied to any one platform in particular.

Chris Erwin:

How was your role changing at the company as you were rising up and as your business was evolving?

Michael Cohen:

As we start to invest in our own product, I got the opportunity to expand my role and oversee that. Now, I wasn't running production, but I was overseeing the production side of things. My role was really focused on, at this point, not only how we operate internally, but the product that we're creating. I think one of the approaches that I took to it was, very often in media companies, there's a separation again of this creative and commercial, and there's a tension, there's a massive tension. And there's often like a wall in true editorials, environments or newsrooms, there is a wall. In our world, my focus really was about trying to align commercial and creative again. And that was something that has really been important throughout my career is trying to get people to see and understand certain things from different perspectives.

Michael Cohen:

I would say one of my strong abilities is to help connect dots that people aren't readily seeing. And so why commercializing a piece of content is important to our ability to do new and interesting creative endeavors. It was really about trying to align the product and revenue needs together so that we're able to create really cool, compelling content, but we're not creating content for content's sake on a gut or a hunch. We're doing it because it is somewhat grounded in, "Hey, this is a commercially viable type of thing that we can be taking to market." I spent a lot of time on the product side, and our product being content for the most part.

Chris Erwin:

After this point, I think you enter what you describe as phase three, which I think began in 2018. This is a bit of the inorganic plan, or this is where you're starting to exercise some of the skills and abilities that you learn from finance, banking, private equity, and you conduct an M&A roll up strategy, enhancing your capabilities by buying other companies. I think there's three specific acquisitions that you led. And I think as you described, you're starting to marry live sports and entertainment in a more meaningful way. Tell us about that point of the company.

Michael Cohen:

This is really, again, focused on IP, audience, and capabilities. I think at this point, as we're building the company, our focus is okay, we have a creator network, which is awesome, and we can help those creators continue to be successful, both in terms of helping to monetize, but also in terms of bringing them into the IP that we're creating. So that creator network, the creators that are a part of our company still to this day are still core to everything that we do. Now we're creating our own IP and we're monetizing it mostly via both indirect programmatic revenue and then direct sales. As we keep expanding into IP and keep expanding into this entertainment area, we saw that there were opportunities in 2018. Really, if you remember, I think this was sort of the nuclear winter of digital media.

Michael Cohen:

We had little things, which they were on top of the world and then a Facebook algorithm shifted. And they went out almost overnight. We had Mashable, which was as a darling at the time, which was frankly fire sold. And this then began I think Cambridge Analytica around the time, lots of scandals around social media, video, compression in CPMs. And so we saw an opportunity that there were a lot of companies that had raised a lot of capital. They had a choice to make. They didn't necessarily get to the scale that they wanted to be. And so the choices were, we shut down the company, we raise more capital from other investors, or we partner with someone else that can potentially get us to the promise land. And so we saw that opportunity that most people would probably want to choose the last piece.

Michael Cohen:

Many investors were tired by 2018. The tolerance to put more capital into these companies was few and far between. The desire, and frankly, the PR nightmare of shutting down was not something that people wanted to do. And so we started to be very smart in terms of, okay, if we were going to build this vertical, or build this capability ourselves, what would it take us to do? How much capital would it take? Or, who's out there that we can go and take a look at? The first company that we had gotten introduced to was a company called New Form. New Form was based in the LA ecosystem. Whistle was still primarily focused in New York and we knew if we were going to be taken seriously in the Hollywood ecosystem, we really needed to have a studio.

Michael Cohen:

And so this is again, the time where lots of streaming platforms are coming out, new types of mediums are being created. And so we bought New Form. They brought in a strong slate of IP that they had already created. They already had a number of distribution partners. Some that we had, some that they had. They had scripted, we had unscripted. It really made us a very strong studio. The who's who around the table gave us a pretty strong signal to the market in a market that frankly was very challenged. We brought in the skillset to integrate these companies, and then be able to do more of them. We then got an opportunity to look at a company called Vertical Networks. Vertical Networks Brother, which was the largest Snap discover channel at the time, but the problem was they couldn't get off of Snap.

Michael Cohen:

They didn't have ... Both from a capital standpoint, and just from a capability standpoint, they just weren't able to scale off platform to other platforms as fast. Well, we already had the other platforms within our distribution, but we also didn't have as much on Snap. So was a nice little partnership where we were able to come in and take a look at Brother, work with a lot of the existing people on that team, rethink what Brother was, reformat some of the shows. That really gave us more of the IP and audience. So now we've got both. We've got IP from both New Form, we've got IP from Vertical Networks. We've got a much bigger audience coming from Vertical Networks and the Brother. And then, what we realized was, okay, now we've got more IP, more audience. We need more capabilities to take this out into the marketplace.

Michael Cohen:

So we acquired an agency called Tiny Horse that was based in Charlotte. The premise of that was really adding more capabilities that we could bring out to our brand partners, that we could help different distributors and other partners with subscriber acquisition, because so many different streaming platforms coming out. How can Whistle not only use their audience, whether those are paid marketing, or inventory buying, other types of strategy work, and identity work that we could do to help these different companies navigate what I would call the digital transformation. We brought that skillset in. We built a very strong company that had this nice puzzle coming together of IP audience and capabilities, serving a younger demographic with a great suite of partners.

Chris Erwin:

A couple quick beats before we get into the rapid fire to close this out. So now you have this incredible platform. You started to put the puzzle pieces together for a really exciting new build, a new growth strategy for the company. And then at this point, I think you guys sold to ELEVEN Sports in 2021. What's the quick story there for how that came to be? Was the M&A all with the intention of, "Let's put the pieces together because we're going to run a sales process for the company," or was the acquisition unplanned?

Michael Cohen:

John West, our CEO has a great saying. He said, "Companies are never sold or bought." So we never thought about putting ourselves up for sale. We had raised a lot of money over the years, and really we had now, to your point, put together a lot of these puzzle pieces and it was really about fueling growth. We went out into the market in 2020 to raise some additional capital to, I would say one, continue to weather the COVID storm that had impacted a lot of media companies. But two, be ready with a war chest to capitalize on opportunities, capitalize on what we already were building. And then other opportunities coming out of that. Ultimately got a number of different term sheets from mostly debt providers because we did not want to focus on diluting the company, and then ELEVEN Sports had put in an offer to buy the company.

Michael Cohen:

ELEVEN was someone that we had known well. Their main investor was Acer Media backed by a guy named Andrea Radrizzani. He sees the world in a different way than most, and frankly, very aligned to the way we see the world. ELEVEN was focused more outside of the United States. They're more of a sports, live rights, more of their focus and they operate in a number of markets outside in Europe and Asia. They saw what we had already been seeing. Sports was being defined very differently. And so what we saw was together, we could unlock the power of live sport and on demand entertainment, and win a lot more hours of the consumer.

Michael Cohen:

If we could better serve the consumer, ultimately we would be able to monetize in more ways. When you start to put these pieces together, you really are creating a global sports media and entertainment company that plays across live and non-live, and both with an entrepreneurial spirit that can continue to be more scrappy than others out there. Our board, John, myself, we all recommended that this was the right opportunity that together we could get to a much more meaningful outcome for all stakeholders. We could better serve our partners, better serve our audience. And ultimately of course our shareholders.

Chris Erwin:

It's an incredible story, Michael. I have to ask, looking back on all this, you've helped the company raise over a hundred million dollars in capital. You've helped take the company from zero to a hundred million dollars in revenue. Going back to the beginning of this interview, the through line of building the three-legged stool. I need finance, I need op, strategy and leadership. Do you think that this is the ultimate culmination of all of your hard work? Do you look back at this and be like, "I did it. I'm content"? And then second, I want to hear about what are the two or three key learnings about how you are now a better executive from this experience and what you will take with you going forward? But let's start with the first one.

Michael Cohen:

First of all, it's definitely not I. The most important thing that I learned is it's always we, never I. I tried to take blame for the failures and would want the team to take, and have asked the team to always take credit for the wins. I don't think you can be a leader in today's environment by being an I person. In terms of looking back at the last nine years, the thing that stands out for me is adaptability is the reason that we are still alive and kicking today. John, our founder, he has a saying, and I think it's been attributed to Darwin, but we'll do that. "It's not the strongest or the biggest of species that survive. It's the ones that are most adaptable to change that survive." That's really been our operating mantra. Between that and a nice quote that I love from the Martian, the movie and the book, it says, at some point everything's going to go south on you and you're going to say, this is it.

Michael Cohen:

This is how I end. You can either accept that or you can get to work and that's it. You just begin. You start to solve problems. You solve one problem after the next. And then if you solve enough problems, ultimately you get to come home. He was on Mars. And that's just been a mantra of ours. Again, goes back to that very first experience in investment banking, was solve the problem. There's nothing that can't be solved by an incredibly talented team that we've built at team Whistle. I'm lucky to have the privilege to work with all these great folks. And it's been fairly humbling experience.

Chris Erwin:

Do you feel on this almost 20 year journey, partially satiated? This is what I set out to do? Of course, with a whole team around you to make it happen. Because this kind of impacts how you're thinking about what's next.

Michael Cohen:

Yeah. I do feel somewhat satiated. I think I felt it probably for a little bit after the acquisition. For me throughout the journey, I started as EVP of finance and operations, I then took on the COO title. I then took on the president title, and then ultimately took on the CEO role. I think each one of those was a milestone that I had. Okay. Have I arrived? Okay, have I? And that's ... Being able to appreciate that in the moment is something that I probably wish I spent more time appreciating in the moment of having arrived at that and celebrating that.

Michael Cohen:

I just thrive on searching for things that haven't been done, doing them, working with a great team, getting to be challenged every day, and working again in a media and telecom space. This intersection of media tech and commerce, it's so dynamic. And so there's always a challenge every day. For me, the satiation come from the challenge, the constant challenge. Maybe that's right, maybe that's wrong, but I'm enjoying what I'm doing now, and continuing to build. And that's what's fun for me, is the opportunity to continue to be challenged and built

Chris Erwin:

Final question before rapid fire. In terms of what's next, with the acquisition, you have been leading the integration and transformation of the company. Your chief transformation officer of ELEVEN Sports. Are you coming to the end of that process? Is there a lot more work to do there? And what are you thinking next for you?

Michael Cohen:

It's been an incredible opportunity. Mark Watson, the CEO of the ELEVEN group, and Andrea's also involved. The whole team have been great. Getting the opportunity after selling your company to help lead an overall transformation effort, not only integrating your company, but working with their company as well has been a really incredible experience. Getting to reimagine, rethink the strategy and how we evolve it. I think we're only getting started. I don't think transformation necessarily starts and stops. There's certainly some infrastructure building, some tactical things that we had to get done. Now we're able to actually just keep executing on that plan of winning more hours of the consumer, whether that's through different types of content, different types of products we're putting out, different types of distribution. That's the fun of it. I would say the journey continues, and as long as I'm being challenged and having fun, and get the opportunity to work with great people, that's something that keeps me going.

Chris Erwin:

Well said. In closing, I just want to give you some kudos. I've known you longer than most people in my professional career over 15 years. And I think you are a big part of what sold me, "I'm coming into investment banking," and also getting my foot in the door. Just like you, all the skills that you learned there was what I learned. And that is what allowed me to get into business school, and then to join the whole digital media revolution and Big Frame and Awesomeness, and actually hire our old bank to represent Big Frame in the sale.

Chris Erwin:

You are a big part of that, Michael. I give you a ton of kudos for that. I think our relationship's been a fun give and take where you got inspired by some of the things that I did, and that was a catalyst to your entry into Whistle, but then you just took it to a whole other level and it's been really awesome to see. I've learned a lot from your rise up. I think you even brought in our advisory firm to help you when you were looking through some different VOD strategies a few years back. So very thankful for that. And it's just been a delight to know you professionally and personally. I think there's much more fun to come for both of us going forward. Like we said in the beginning, we're going to have to do some outdoor activities or some sports or something like that next time we hang out.

Michael Cohen:

I'm all ready for it. And I appreciate the kind words, Chris. All I would say is right back at you. It's been a great friendship, a great partnership, and we're still in the early innings, to use the sports analogy.

Chris Erwin:

Let's get into the closing rapid fire questions. Six questions, the rules are as follows. You can answer in one sentence or in just a handful of words, keep it short and sweet. Michael, do you understand the rules?

Michael Cohen:

I believe.

Chris Erwin:

All right, let's kick it off. Proudest life moment?

Michael Cohen:

Becoming a father.

Chris Erwin:

What do you want to do less of in 2022?

Michael Cohen:

Zoom.

Chris Erwin:

What do you want to do more of?

Michael Cohen:

In person discussions. That fuels my energy.

Chris Erwin:

What one to two things drive your success? Short answer.

Michael Cohen:

I would say just a relentless desire to learn and to be challenged, and to work with great people.

Chris Erwin:

Advice for media execs going into 2022?

Michael Cohen:

Know your audience, know your partners, serve them well. Don't future chase.

Chris Erwin:

Any future startup ambitions? Might we see Who Is M. Cohen Ventures coming back into the mix?

Michael Cohen:

I would say I've always had the entrepreneurial itch, and there's a lot of good ideas out there and great people to partner with. For right now, I'm focused on leading team Whistle, continuing to lead the transformation office at ELEVEN, bringing a great outcome to all stakeholders. But let's revisit this in a couple years, because I think there's something there.

Chris Erwin:

Maybe you can come lead the sports media division at Rockwater. It's an opportunity.

Michael Cohen:

Maybe.

Chris Erwin:

All right, Michael, this is the last one. Pretty easy. How can people get in contact with you?

Michael Cohen:

Always up to chat. You can email me. You can hit me on Twitter. Text message me. LinkedIn as well. I'm always up to collaborate, meet smart, great people, help make introductions, connect people.

Chris Erwin:

All right. Awesome. Michael, this was a ton of fun. Thanks for being on the show.

Michael Cohen:

Thank you, Chris. Appreciate you having me.

Chris Erwin:

All right. That was a really fun interview. As I said at the beginning, I think I've been trying to interview Michael for the past couple years, so thrilled that we could finally make it happen. All right, but a few quick points before we wrap up. We just had an awesome executive event at Gjelina in LA a few weeks ago. We brought together various livestream commerce executives for a panel. Included Popshop Live, Stage TEN, and MARKET. That was a lot of fun and the Gjelina rooftop never disappoints. It was great to see a lot of you there. We do have another executive event coming up in New York in early November. More on that to come, but there'll probably be an event in advance of that as well, maybe around VidCon, so stay tuned. As always, if you want to attend our events or learn more or interested in being a sponsor, ping us at hello@wearerockwater.com. And then we always love to hear from our listeners. If you have any feedback or any ideas for guests, shoot us a note at tcupod@wearerockwater.com. All right, that's it, everybody. Thanks for listening.

Chris Erwin:

The Come Up is written and hosted by me, Chris Erwin, and is a production of RockWater Industries. Please rate and review this show on Apple podcast and remember to subscribe wherever you listen to our show. And if you really dig us, feel free to forward The Come Up to a friend. You can sign up for our company newsletter at wearerockwater.com/newsletter, and you could follow us on Twitter @TCUpod. The Come Up is engineered by Daniel Tureck. Music is by Devon Bryant. Logo and branding is by Kevin Zazzali, and special thanks to Alex Zirin and Eric Kenigsberg from the Rockwater team.

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 link

Learn more about our market research and executive advisory: RockWater website

Follow The Come Up on Twitter: @TCUpod

Email us: tcupod@wearerockwater.com

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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 think it was like 20 or so creators. And we thought that was going to be this awesome experience for everyone before we sort of called it a day and then went out. And he was so cool. He came out, told this story, which is insane. And then he was like, "All right, what are we doing next, guys?" And he hung out... We had all these YouTubers there.

Brendan Gahan:

We had like Nice Peter and Mike Diva, and Tim DeLaGhetto, all those guys. And he made himself available to do cameos and their vlogs or any content they were making.

Chris Erwin:

Wow.

Brendan Gahan:

People would be like, "Hey, can you pretend to choke me out and beat me up for my video?" And he'd be like, "Oh sure." He just was there hanging out all day. And then we were going to take all the creators out to a dinner, take them to [inaudible 00:35:10] or one of those, where drinking and bowling and stuff. And he's like, "Oh, could I come along?" He doesn't drink. So he didn't drink. But he was hanging with the whole crew, all of us until, I don't know, like one in the morning or something. He was the nicest guy, and so it was this amazing sort of transition from like the day before, one of the most stressful experiences of my life. I don't think I slept that night to everything went off better than I could have possibly hoped for.

Chris Erwin:

I just want to call that out. I think that's one of the beautiful things about working with digitally native creators and being in the advertising business, is meeting all these incredible personalities. So I think Danny Trejo, tell me if I'm wrong, but I think he's LA born, Latin, very tatted up, I think had a pretty rough upbringing, but made his way into American movies and TV series. And he often plays like the bad guy or the thug and maybe those roles have been evolving, but what you see on screen-

Brendan Gahan:

It's pretty spot on.

Chris Erwin:

Yeah, what you see on screen is clearly very different than who his actual personality is, and were it not for what you're doing, Brendan, you would never have gotten to meet him, and you probably have hundreds of stories like that, that's a pretty beautiful thing.

Brendan Gahan:

We did one campaign with Virgin Mobile, they were sponsoring Lady Gaga's tour at the time, we got to go hang out with Lady Gaga after one of her shows like, it was wild. I bring up celebrities, but I think honestly hanging out with the creators was my favorite thing, because especially back then, there was a lot of uncertainty in terms of like, how am I going to turn this into a job? Or this is my job, but I'm just kind of scraping by. And it was an interesting mix of sort of a lot of belief in what they were doing, which I found super admirable, and I was almost envious of the fact that they took that leap as well as this sort of insecurity and doubt that they had.

Brendan Gahan:

There's so much pressure to keep making content and to power through, but at the same time, not knowing exactly where it was headed. You think back then, like the daily vloggers, that was a big thing in that era, those guys, we would spend all day with them doing stuff for the brand. And then when other people would go have dinner and drinks late into the night, they would have to go edit and they'd be editing until like three in the morning, running on [crosstalk 00:37:21] of sleep. Yeah.

Chris Erwin:

You ask what kids want to be nowadays, they want to be a creator, but whether it's a daily vlogger, or you're creating content, you're managing a fandom that is always on, and that's a lot to take on and that's why there's burnout. And I hear you, some of those early creators, they were probably just racing because they're like, hey, I have put all my resources into this, all my focus. Maybe this goes away in a couple years because the fans' interests and the passions are going to change or the algorithms are going to change and maybe this is not going to be here. So it was like a money land grab.

Chris Erwin:

But Brendan, when you say that you would look at creators and say, oh, I was jealous how they took the leap, maybe I want to take the leap as well. You took that leap during COVID and you started really building out your own personal audience and thought leadership. And that speaks to that you like to do things on the side. I think you have a strong entrepreneurial or intrapreneurial spirit as you described. And I don't think it just started over the past couple years. I think when we were talking in advance of this interview, you were investing back in the day as well. And I think that you were an early investor in Big Frame, is that right?

Brendan Gahan:

So I did invest in Big Frame, but via Mekanism because I knew Sarah from back in the day when she was working for Phil DeFranco. And so when she was starting it, I was like, oh my gosh, can we get in? So yeah, we made this small investment and I just sort of wanted to be a part of all that. I definitely had like a serious case of FOMO.

Chris Erwin:

Yeah. I think that was really cool. I think Sarah and Steve, we actually had a bunch of different creators and I think peer business partners in our cap table, a way of giving them ownership as a thank you, helping us build this together. And so when we sold, all those creators that were in our cap table got some money. Was it life changing money? No, but it was something. And I think they really represented a pretty special ethos from the top.

Brendan Gahan:

That's awesome. That's so cool.

Chris Erwin:

But yeah, and you are also early on and I think you still are, you're an advisor to the VidCon board, is that right?

Brendan Gahan:

Yeah. So I sit on the advisory board for the industry track specifically. So I mean, I've been to all the US VidCons, a bunch of the international ones. So I was always deep in that space. And I've known Jim since the Revision3 days, he was, Jim Louderback the CEO was the CEO of Revision3, which was one of the big early MCNs. And I'm not sure exactly to be honest how that came about other than... But I think what prompted it was as part of the acquisition of Viacom for VidCon, Jim came on board and I think it was a way to make sure that, I think he put together a few advisory boards to make sure that he was getting a lot of input from multiple points, because for so long the community was relatively insular, and its expanded so much so quickly.

Chris Erwin:

I first met you, I think via an introduction from Chas, Chas Lacaillade who I think was an early interview on this podcast. You guys overlapped at full screen back in 2013 and then have both built your own businesses after that, pretty funny track. And first met you in New York. And I remember a conversation a year and a half ago or a couple years ago, I was asking, what are you focused on? What are you doing? You're a dabbler in so many things, you're at Mekanism, but I'm seeing that you're doing all this incredible thought leadership on LinkedIn, all these incredible posts and you're really consistent about it.

Chris Erwin:

They were really high quality. And you said, "Hey Chris, I'm really focused on building an audience. And I think audience in the modern creator economy is one of the most valuable currencies that you can have." And you weren't completely clear what you wanted to do with that audience, but you're like, I'm going to build and now's a great time to do it. So I am curious to hear that story of how that came to be and what you're working on today.

Brendan Gahan:

You probably said that so much more articulate than I did. I'm going to have to remember that, but yeah. That was definitely the insight. I think the way it came about was sort of like, I was legitimately beating myself up over the fact that I had probably hundreds of pages of writing and thoughts in Google Drive that I'd never published as a blog post. And I would just like constantly beat myself up over this. I'd have what I thought was a great idea. I'd work on a blog post and then it would just sort of get longer and longer and longer and longer. And then eventually it became this daunting task to like push it out, because I had a blog for a while and I would sort of fall into this pattern and then not publish for like a long, long time.

Brendan Gahan:

And the thing I sort of found was the hardest part was to press publish really. And so I was like, okay, well what's the easiest way I can get myself to kind of overcome that, because I did want an audience. I felt like I had thoughts that I wanted to get out of my own head. And so basically I was like, all right, what is sort of the easiest way to do this and inoculate myself to this idea that this fear of pressing publish. And so I started small and basically I was like, all right, well, I'm going to start posting one thing a day on LinkedIn. It doesn't matter if it's simply sharing an article, just writing cool or writing a whole blog post if I feel like it. And that made it very approachable.

Brendan Gahan:

In the early days, I would literally just sit there and press a timer, 20 minutes and write. When it was done, I'd give it a once over and then press publish. And that really helped me sort of start to overcome this fear, and did that for all of, what was that 2020 I believe. And then at some point towards the end of 2020, I was like... We'd already done multiple TikTok campaigns and I'd seen the power of TikTok, and like early days, you can still get in there and you can have an impact.

Brendan Gahan:

It's a softer landing than it will be later. So after seeing all the successful campaigns, I was encouraging my fiance to get on there and do it. And then every time she would post something, it would blow up. Because she had a decent sized YouTube channel and Instagram but it wasn't massive. And I was like, just get on TikTok, trust me. So I found myself sort of giving this advice to everyone, but not taking it myself. And I was like, all right, I should just... These opportunities they only come by every few years if you're lucky, and I was like, I need to just take my own advice. And so in the same way I had to get over writing and sharing my thoughts, I had to get over that with TikTok.

Chris Erwin:

Yeah, putting yourself on video, that's a big difference than writing and text base expression on LinkedIn.

Brendan Gahan:

It was so hard. It was so hard. She used to laugh at me because I would put the camera on me and then I would just try and say something, and I would be like, "Fuck, fuck," and then try and say a word and I'd stutter. And I would sit there for like 20 minutes trying to spit out two sentences.

Chris Erwin:

Brendan, I got to say, I feel you on that because Kevin Gould at Kombo Ventures, he would do these job rec videos on LinkedIn where he'd just be like, call it one or two minutes. "Hey, we're Kombo Ventures, I'm Kevin, we're looking to hire someone, this is what we're doing. And here's who we're looking for." I record these and this is like an inner tip on me. I'll record that like 15 times, it's a one minute video, but I'll say no, I skipped up, I said something I didn't want to say. I don't like how I look. I don't like the lighting, and people think like, oh yeah, you just put it up and that'll be like my one thing I need to get done in the morning, and it'll take me 15 tries to do it. Then you just go to think about, okay, if you're a professional creator doing that for a living, I really feel it then, it's a pretty good glimpse into it.

Brendan Gahan:

100%. And I think one thing I saw Roberto Blake, maybe, I think I saw a video or saw him tweet, you've got to make 100 bad videos to get to your first good one, or maybe it was Mr. Beast. And I was like, oh yeah, yeah, yeah, that's very true. And that sort of made me embrace the fact that the first ones are going to be awful, and I tried to not focus on like each one, but more building the habit because that would, I don't know how else to say it, but sort of inoculate yourself to that feeling of just sheer fear and anxiety of getting in front of the camera.

Chris Erwin:

On the outside looking in, I look at, we're a big content marketing machine at RockWater to drive awareness and legitimacy for the services that we do as the self-described McKinsey of the creator economy, right? Market research, strategy advisory, capital raising, and all of that. We look at what you're doing, Brendan, from your LinkedIn posts to your blog, to now almost I think over 100,000 followers on TikTok. It's very, very impressive. A lot of people in the industry say the same thing, right? Like, oh, do you see Brendan's path and what he's posting? It's incredible. I look at the TikTok videos. They're very well edited. Are you doing that yourself? Do you have a team helping you?

Brendan Gahan:

I'm not editing them myself anymore. I was up until late last year. So I hired an editor out of the Philippines actually who works full time on my TikTok. Then he does design for my blog posts and a bunch of different things basically, he helps me out with a bunch of stuff and that's been a huge relief because now I feel like I'm trying to transition to... There's almost sort of like, as a creator and this is something I observe, but I'm having trouble implementing it, sort of like people find you because of your topic is interesting or maybe you've got a helpful bit of information, but then they stick around and embrace you because of kind of the personality piece.

Brendan Gahan:

And I'm really trying to sort of evolve it into creating something that provides more insight into me at the same time. And hopefully people feel like there's a connection to me rather than like, "Hey, here are just some interesting stats or an interesting strategy." So that's sort of like where my head is at in terms of where I want to take it. I haven't quite figured out how I'm going to do that. But I think similar to just the same way I got started before, I'm just trying to throw things out there and see what sticks.

Chris Erwin:

Loudly from the RockWater team, keep doing what you're doing. We love it.

Brendan Gahan:

Oh, thanks. I appreciate that.

Chris Erwin:

Yeah. A closing theme before we get into some rapid fire questions and close out the interview. What's next for Brendan and Mekanism? And maybe that's a theme of talking about, what do you think is most exciting in the creator economy and how do you want to support it? You've been writing about Web 3 and X to earn models. Is that something that you're thinking a lot about lately?

Brendan Gahan:

In terms of Mekanism, I really enjoy that. And so long as I get to work with great brands and great people and do great work I'm content. In terms of the creator economy and stuff, I love everything that's happening there. And I do a little bit of investing and advising, and I love nothing more than sort of brainstorming with people who are building, it's so exciting. And I think the aspect of the creator economy that I'm really fascinated by is sort of... Rather than, most of the VCs coming in are like, oh, we're going to build this scalable product for creators. And that's interesting, but I think the thing that's more interesting is sort of the creators building their own brands, and I think right now production and productization, that's sort of the commodity piece. The development of a brand and cultivation of an audience is becoming the differentiator and the most valuable asset.

Brendan Gahan:

We were talking about that at the beginning, an audience is leverage. And so as we see sort of this transition from like Web 2 to Web 3, where everybody sort of breaks it down, Web 1 was read, Web 2 is read, write, Web 3 is read, write, own. If the creators of platforms and communities within Web 3 are the users and owners, it makes sense that they would be less likely to embrace traditional methods of advertising. There are some stats out there, like 96% of people hate ads. Yeah, nobody likes most advertising. There are great ads, but by and large people don't want advertising. So those who are sort of able to understand how to embrace communities and build communities, they're going to have a leg up as we sort of transition to Web 3. And we're already seeing the ripple effects of this.

Brendan Gahan:

I mean like iOS 14 impacted the ability to advertise, do targeted advertising. Creators are launching big brands now faster than ever, partnering with creators is the easiest way to have an impact because they've maintained that direct line of communication to their audience. And so I think creators building and owning brands is really exciting. And also, people are like, oh, like creators think it's in this nascent state. And yes, in the grand scheme of things, it is. But there are already multi billion dollar creator brands. It's so funny, I mean, you probably know him, but Richard Ryan, he was a YouTuber back in the day. I used to do a ton of work with him. He and this other YouTuber, Matt Best, they partnered with some other guys a few years back. They were the guys that launched Black Rifle Coffee, which I didn't realize how big that brand was until they IPOed, and like-

Chris Erwin:

Yeah, they just went public, right?

Brendan Gahan:

They went public. I actually was in Austin two weeks ago, I hung out with Richard. It was so wild. It's like, that was built, the platform for that initially was YouTubers. So it's really fascinating. And we're seeing all these other great brands, Logan Paul and KSI, their Gatorade competitor, et cetera. I think that aspect of the business, it just shows how powerful these creators are, which I think is really, really exciting.

Chris Erwin:

The Black Rifle Coffee, we were doing some research into that company a year ago to understand how some of these creator led brands and particularly CPG brands are incubated and looking at their story, and look, I don't want to undersell what they have done, but I think the quality of their coffee is good, but that's not their specialty. It's that they have these personalities behind it. And this ethos founded by former members of the military, pride in country. And they've built an incredible business doing that. And they've gotten a lot of other ambassadors that have helped them build their business along the way. And I think, yeah, it was funny, Chas was telling me about this. I guess you guys maybe hung out with Richard together. I would love to interview Richard on the podcast. So if he's listening, I'm going to be reaching out soon.

Brendan Gahan:

Richard's a really, really good dude.

Chris Erwin:

All right. So Brendan, we're going to enter the last segment of this interview. We're going to do a rapid fire, six questions, and the rules are as follows. With these questions, looking for short answers. So one sentence, or maybe even just one to two words, do you understand the rules?

Brendan Gahan:

Yes.

Chris Erwin:

Let's get into it. Proudest life moment?

Brendan Gahan:

Still ahead of me.

Chris Erwin:

What do you want to do less of in 2022?

Brendan Gahan:

Emails and late night work sessions.

Chris Erwin:

What do you want to do more of?

Brendan Gahan:

IRL time with friends and family.

Chris Erwin:

Okay. Maybe more time in Bitcoin Beach, down in El Salvador.

Brendan Gahan:

Yeah. Serious.

Chris Erwin:

What one to two things drive your success?

Brendan Gahan:

I'll keep this one short, crippling insecurity.

Chris Erwin:

Okay. I dig it. Advice for media execs going into 2022?

Brendan Gahan:

Get your hands dirty.

Chris Erwin:

Any future startup ambitions?

Brendan Gahan:

TBD.

Chris Erwin:

To elaborate on that, that could be some intrapreneurship at Mekanism or other things you're doing on the sides. I think my prediction is, this audience that you're building particularly on TikTok, I think something's going to come out of that in a pretty unique way.

Brendan Gahan:

So long as I can think and strategize, I'm very content.

Chris Erwin:

Here's the last one, Brendan, pretty easy. How can people get in contact with you?

Brendan Gahan:

Just Google my name, Brendan, B-R-E-N-D-A-N, Gahan, G-A-H-A-N. I'm on all the socials. So whatever your platform of choice is, you'll be able to find me.

Chris Erwin:

Yeah. And his website is great, lots of content there. Brendangahan.com. All right, cool. Brendan, thanks for being on the show. This was a delight.

Brendan Gahan:

Thank you. This was a lot of fun. I really appreciate you having me on and I love all the content you guys put out, so I'm really stoked to have made the cut and be on this.

Chris Erwin:

Very welcome, an easy decision.

Chris Erwin:

Wow. That was a super fun interview. And I really learned a lot. I think that Brendan and I are kindred spirits in a couple ways. One, our mutual love for surfing in Southern California, and two, just the vulnerabilities of putting yourself out there as a content creator. So that was really fun. Quick note, we just hosted our first executive event of 2022 just this past Thursday in LA. We did a media and commerce executive dinner at Chilena. It was awesome. We had an incredible array of guests. I think over 50 people came out and I also hosted a panel about the future of livestream commerce. So we had the head of operations of Popshop Live there, and the founder and CEO of both Verb, which is the parent company of Market.live and also StageTEN, just an awesome chat. It was a lot of fun, really great energy, and we're pumped to do more.

Chris Erwin:

So I think we're planning a dinner for investors in media and commerce coming up in the fall in New York City. And then also, we want to put another one together for sports media. So if you'd like to get involved as a sponsor, as a guest, or you want to be on a panel that I will moderate, reach out, you can hit us up at hello@wearerockwater.com. And then as always for all you listeners out there of our podcasts, we love to hear from you. If you have any ideas for guests or any feedback on the show, just shoot us a note, TCUpod@wearerockwater.com. All right, that's it everybody. Thanks for listening.

Chris Erwin:

The Come Up is written and hosted by me, Chris Erwin, and is a production of RockWater Industries. Please rate and review this show on Apple Podcasts and remember to subscribe wherever you listen to our show. And if you really dig us, feel free to forward The Come Up to a friend. You can sign up for our company newsletter at wearerockwater.com/newsletter, and you could follow us on Twitter @TCUpod. The Come Up is engineered by Daniel Tureck, music is by Devon Bryant, logo and branding is by Kevin Zazzali, and special thanks to Alex Zirin and Eric Kenigsberg from the RockWater team.

This interview features Sarah Penna, Senior Manager of Creator Launch at Patreon. We discuss how a trip to India inspired her media career, being one of the youngest YouTube MCN founders,  her $15 million exit to DreamWorks Animation, how she picks co-founders,  marrying a YouTuber-turned Hollywood filmmaker, founding a female-forward entertainment brand, and what’s up next for Patreon. 

Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up link

Learn more about our market research and executive advisory: RockWater website

Follow The Come Up on Twitter: @TCUpod

Email us: tcupod@wearerockwater.com

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EPISODE TRANSCRIPT:

Chris Erwin:

Hi, I'm Chris Erwin. Welcome to The Come Up, a podcast that interviews entrepreneurs and leaders.

Sarah Penna:

We had outgrown the office. We were in the National Lampoon office. It was so janky and eventually we moved the talent team to my dining room table. I would cook dinner for the talent team. We would take talent meetings in my living room, which was just so bizarre and unprofessional but worked. My house was kind of a YouTuber hotel. It was very wholesome and very duct tape and bubble gum feeling. We were just kind of figuring it out.

Chris Erwin:

This week's episode features Sarah Penna, senior manager of Creator Launch at Patreon. So, Sarah was born in Salt Lake City, Utah. Her father was a serial entrepreneur and her mother ran the family construction business. Sarah's first foray into media began while studying abroad in India, when she became the translator for a documentary film crew. So after college, she moved to California and immersed herself in LA's up-and-coming digital media scene, which included working with OG YouTuber Phil DeFranco. Sarah rapidly became a digital expert and started her own digital talent management company in 2010, which eventually became Big Frame and was sold to AwesomenessTV and its parent, DreamWorks Animation.

Chris Erwin:

Today, Sarah runs a team that helps Patreon develop and launch premium talent partnerships, and also advises Frolic Media, a female-forward entertainment brand she co-founded in 2018. Some highlights of our chat include how we first met during an awkward interview moment with a guitar, when having 10,000 subs made you a Top 100 YouTuber, how she picks co-founders, what it's like to marry a YouTuber turned Hollywood filmmaker, and what's up next for Patreon. Now, I've known Sarah for nearly 10 years. She was actually my gateway drug into all things digital entertainment and where it not for her founding Big Frame, I would not be where I am today, and I am forever grateful to her, which makes me super pumped to share her story. All right, let's get to it. Sarah, thank you for being on The Come Up podcast.

Sarah Penna:

Thanks for having me.

Chris Erwin:

We got a little bit of history here. So, we'll see how much of that we can get through in 90 minutes before your next thing.

Sarah Penna:

Yeah, it's a lot. It's a lot to pack in.

Chris Erwin:

As always, let's rewind a bit and let's talk about where you grew up. So, my understanding is that you grew up in Salt Lake City, Utah. Your family had some land in Wyoming. I think your dad was a bit of an entrepreneur, but tell us about your upbringing.

Sarah Penna:

Yeah. I had a pretty cool childhood. I grew up in Utah. My parents were total hippies, just big personalities, did not grow up in the predominant faith of Utah. So, it was a little bit of an outlier, and my parents own a construction company together. So, a little bit of foreshadowing into how I worked with my husband at one point, but I grew up with an older sister and a younger brother. We had a menagerie of animals all the time, like goats, and my dad kept bees at one point. We always had two or three dogs and a bunch of cats and an iguana and chinchillas. We just had this kind of crazy Bohemian, bizarre, Jewish, hippie not Mormon family.

Sarah Penna:

So, my parents owned this construction company and became relatively successful with that but my dad has curse, as I do, which is, always coming up with new ideas and deciding to act upon them. He had a Japanese restaurant and he had a furniture company and he had an emergency preparedness kit company, and I-

Chris Erwin:

Would he do all of these at the same time as the construction business or would it be like stops and starts and all of that?

Sarah Penna:

No. My mom held it down. She really was the mastermind behind the construction company. She did all of the office work and made sure ... she really ran the company and then my dad was kind of the face of it. He was out at the job sites and in the early days, was actually doing the building. So, I got to see my mom be in this, talk about a male-dominated industry. She would come home so mad because she would get a piece of mail that ... her name's Paula and they would always address Paul, because they couldn't believe that a woman was running a construction company. So, I got to see this powerful woman running this super successful business in basically a hundred percent male-dominated industry.

Chris Erwin:

Sarah, I've known you for over 10 years and we worked together intimately for at least three or four of them. I had no idea about your background. I just learned more about you in two minutes. It took a podcast and a 10-year relationship to get here.

Sarah Penna:

That's totally my bad.

Chris Erwin:

All good. So, okay. As a kid, when your father dabbled in all these new business adventures, was that really exciting for you guys? Maybe frustrating for your mother, but as kids you're like, "Oh, dad's up to some cool stuff again."

Sarah Penna:

Yeah, it was fun. I was 15 when he did the Japanese restaurant and I got to work in the restaurant and just, it was cool, and I didn't realize the stress and the financial burden that it was putting on my mom and kind of how frustrating it was for her but I see that now, looking back, and she handled it amazingly. She's an incredible woman. But I'm a very early riser, and as a kid, I would ... my dad is, too. He would get up at four or five in the morning and I would, too. He would just load me up in his construction truck and we'd go get pancakes and go milk the goats and go check on his construction sites. So, I got to see the inner workings of that. Then, I love going to the office and rifling through my mom's office supplies.

Chris Erwin:

Well, I got some important Post-it notes here, got a yellow legal pad, all the things.

Sarah Penna:

It was so fun as a kid. You're like, pens and Post-it notes, and the office supply closet was just like this heaven.

Chris Erwin:

My dad, he ran a psychology business and still does for 40 years and had his own office, and then every year he hosted a conference. One of my favorite things is that he would hire his children, me and my twin brother, and we'd have to lick 500 envelopes and put stamps on them. But we got to use all of these office gear, we thought it was the coolest thing ever. Then, after a few years, we're like, "I think we're getting sick from all of this stamp-licking."

Sarah Penna:

Yeah, probably.

Chris Erwin:

But separate story.

Sarah Penna:

That's really funny.

Chris Erwin:

So, a question, watching your father's entrepreneurial endeavors and also your mother, too, running the business, did you feel like, "Hey, when I grew up, I'm going to have my own business too."

Sarah Penna:

Honestly, no. So, I was an incredibly shy child. I was very quiet. My family likes to joke that they thought I was just going to buy a cabin in the woods and just frolic in daisy fields and that would basically be all I could handle. So, to the shock of everybody, of what I wound up doing with my career, so no, I was very directionless. I went to a very intense high school that was a college prep school. There was a lot of pressure to kind of figure out what you wanted to do. Frankly, I just didn't have any passions. I wasn't thinking, "Oh, I want to take over the family business or I want to be an entrepreneur." I didn't even have that language.

Sarah Penna:

So, in a way, that was great because what I wound up doing didn't exist when I was little. If I had said, "Oh, I want to be a lawyer or an actress or what ... " something that did exist, I don't know that I would've found the path that I did find. My parents never called themselves entrepreneurs. They were just, this is what we do and this is how we do it.

Chris Erwin:

Very interesting, Sarah. So, I'm going to put the puzzle pieces together here. Let's talk about another formative event growing up. You had also mentioned that you studied abroad in India, where you actually learned to speak fluent Nepalese. So, tell us about this transformative moment for you.

Sarah Penna:

Like I said, I was a very shy child. In college, I kind of blossomed, but maybe in the wrong ways. I partied a lot and just, again, was quite directionless. I was a literature major, which is just like the lazy ... No, I love being a literature major, but it is a non-major. It doesn't really set you up for business success. Originally, actually, I was going to travel. I was going to study abroad in Italy and I had this moment where I just looked at myself and said, "You need to push yourself right now. This is a moment." My college had an incredible study abroad program in Nepal.

Sarah Penna:

Long story short, they couldn't do it in Nepal. There were some civil unrest, so they moved it to India. I went to India and I lived in a place that didn't have running water, and I did my laundry for six months in a river. I got perspective that I never would've had. During that time I met up with a documentary film, I will say, crew in quotes, because it was just two white dudes traveling around not knowing what they were doing. They were in this tiny little village that I was staying. I was living in a monastery and because I spoke the language I could just hang out with the locals. It was very funny to them that this tiny, little white girl spoke fluent Nepalese.

Chris Erwin:

Did you take Nepalese in advance of going to India at all?

Sarah Penna:

No.

Chris Erwin:

So, you just picked it up in country.

Sarah Penna:

Yeah.

Chris Erwin:

Wow.

Sarah Penna:

Writing is very hard, but the language itself is very intuitive once you fit the pieces together. So, I would help them. Tourists would come. I lived in this monastery for a couple of weeks. Tourists would come and I would help them translate and negotiate and all this stuff. So, these guys came, they were filming. I was like, "I'll join up with you guys and translate for you and help you get interviews and that kind of stuff." Because if you speak the language, it just opens more doors. So, I wound up traveling with them, and one of them I wound up dating, but that's for another story. He was going to UCLA. I was graduating. He was going to UCLA grad school.

Sarah Penna:

I was graduating college and I wound up learning about documentary film and originally thought I wanted to go into documentary filmmaking. So, 2006 is when I was in India.

Chris Erwin:

Got it. Did you have an interest in media and the arts before you met this documentary film crew/attractive young man that you wanted to date?

Sarah Penna:

No, and I didn't have any connections and I didn't have any ... but, again, I was kind of, not in a disparaging way, but I was kind of an empty vessel, right? I had no idea what I was going to do and this thing really sparked me. I loved holding the camera. I loved seeing the story come together. I moved to Venice with him, and this is way too long of a story, so I'll just make it really short through a series of very wonderful coincidences, which involved me randomly picking a documentary film at the LA Film Festival and contacting the filmmaker. I got an internship at World of Wonder and that kind of started my trajectory in media.

Chris Erwin:

This was the first time you dated a documentary filmmaker. I look at this as a warm up for Joe. We'll get into that later.

Sarah Penna:

I only dated creative people, [inaudible 00:11:39].

Chris Erwin:

Another podcast for your wild party days at Pitzer College. All right, so that led to your first work experience at World of Wonder. So, tell us about what that company was doing and what your role was there.

Sarah Penna:

World of Wonder in 2008 was probably the most amazing place to work, I have to say. It was constantly drag queens coming in the office, and parties. It was just a wild time. They were filming the first season of Million Dollar Listing, which I was an intern on. They were filming the first season of Tori and Dean: Inn Love, the Tori Spelling Show, which I was an assistant on. They were filming Porno Valley. They were filming ... I mean, it was just like a wild, wild time, incredible company. I loved it. I also recognized that reality TV wasn't really for me. While I was working there, I also was making short films and uploading them to these two new websites. One of them was called YouTube and one of them was called Current TV.

Sarah Penna:

Current TV was Al Gore's network based in San Francisco, where you would upload short documentaries and then the ones that got the most votes, they would ultimately put them onto their TV network. So, I had a couple documentaries get bought and put onto the TV network and ...

Chris Erwin:

Were you doing this independently or as part of World of Wonder?

Sarah Penna:

No, no, totally separately.

Chris Erwin:

Got it. Again, I had no idea that you did this.

Sarah Penna:

Yeah. Now, we're in 2007, the first documentary that got picked up was about me getting my medical marijuana license.

Chris Erwin:

Okay.

Sarah Penna:

It was a very new thing at that time, and so I documented the whole journey of what it was like to get a medical marijuana license and I smoked a joint on-screen. When I got hired there, it would play in the rotation, and one time Al Gore came to visit the office and they had the TVs up in the office playing Current, and my documentary came on with me smoking a joint and meeting Al Gore at the same time. It was very embarrassing.

Chris Erwin:

I'm famous/I'm super embarrassed. What a mix of emotions.

Sarah Penna:

Yes.

Chris Erwin:

So, Sarah, I have to ask, you're working at World of Wonder, you're working on these incredible programs that are probably being sold to network TV, right? Not digital outlets and streamers. What was the catalyst that you're like, "I want to put my content on YouTube and Current TV." How'd that come to be?

Sarah Penna:

I just felt something more compelling about it. It felt more free. It felt like, somebody like me coming from Utah with literally zero connections could make something and have it be put on TV within a couple of weeks. Then, on YouTube, you couldn't monetize at the time. It was very rudimentary. I don't know, I just fell in love with it.

Chris Erwin:

YouTube was founded in 2004 and then, was it bought by Google in 2006, if I remember correctly?

Sarah Penna:

I think that's right. Then, 2007 Time magazine made you, the cover and the Person of the Year was you, and it was a mirror. I was like, that to me was a moment where I said, "Okay, this is really a thing and I want to be involved in it."

Chris Erwin:

I think you start meeting some pretty important early personalities and movers and shakers within digital video. I think you met one of the founders of what eventually became Maker Studios, I think. Was it Danny Diamond or Danny Zappin? Is that the same person?

Sarah Penna:

That's the same person. His YouTube name was Danny Diamond.

Chris Erwin:

Got it. So, how'd you meet Danny?

Sarah Penna:

So, I was working at this very small web series production company which, yes, that was a thing in 2008. So, I got laid off right from Current because the financial crisis hit. They laid everyone off. They sold the network to Al Jazeera. I moved back to LA. I had been up in San Francisco, moved back to LA, started working at this web series production company, got introduced to Danny through some mutual friends. He said, "Look, I just got some money from YouTube and I'm filming this thing for this new channel that we're starting called The Station. Why don't you just come up and see what it's like?" So, I go up there and unbeknownst to me, it was every big YouTuber at the time. It was ShayCarl, and KassemG, and Shane Dawson, and Danny, and Lisa Nova, and everybody-

Chris Erwin:

OG names.

Sarah Penna:

Funnily enough, my future husband was supposed to be there, but I don't remember exactly what happened, but he wasn't there.

Chris Erwin:

Okay. So, you're doing this. Are you thinking to yourself, "Oh my God, I'm having so much fun. This is a crazy world." You're embarking on a very exciting career adventure. You're seeing this change in the media industry. Did you feel that at the time or was it more of, "This is fun. I'm meeting some cool people. Let's see where it goes."

Sarah Penna:

It was more the former. I really thought to myself, I want to be involved in this in some way, shape or form. I really don't know what this is.

Chris Erwin:

Yeah.

Sarah Penna:

Not to say that I'm a genius, but I just had something in my gut that said, you've got to be involved in this somehow. You have to make this happen.

Chris Erwin:

That instinct proved to be pretty powerful for you in starting Big Frame, which we'll get to in a little bit. So, you meet Phil DeFranco, a prominent OG YouTuber, and I think you become a producer for him and his team, right?

Sarah Penna:

Yeah. So, he hires me in November of 2009 and I worked for him. We launched a new channel, which was like a gaming channel for him. I did PR for him. I handled brand deals for him. I edited because I still knew how to edit at the time. A skill I'm very sad that I lost. That was just an amazing experience. He had split from Maker TV at that time and so, we were kind of running our own thing. I think Phil, to this day, is one of the most brilliant, genius content creators that's come out of the YouTube space. He's just continually reinvented himself and not, just kept doing what he did and stayed successful. So, that was a masterclass in how to run a successful YouTube channel.

Chris Erwin:

Got it. Also, through Phil DeFranco, you actually end up meeting your future husband, Joe. So, he actually showed up on time for production or maybe a first day that you guys had. How'd you first connect with him?

Sarah Penna:

Before Phil hired me, I got invited to a Halloween party at his house and Joe was there, and I had actually very embarrassingly seen Joe's videos before meeting him. I was producing a short film with a prominent YouTuber at that time named Olga Kay and we were just doing some fun. We actually crowdfunded it. We raised a couple thousand dollars and made this thing called Olga Kay's Circus. We wanted Joe in it because he had a lot of subscribers at the time. He had 10,000 subscribers, so he was in the Top 100 YouTubers.

Chris Erwin:

Oh, my God.

Sarah Penna:

Can you believe that 10,000 subscribers would get you there at that time? So, we wanted Joe in it and we wound up meeting at this Halloween party and then Phil connected us and match made us a little bit, and we went on our first date in January of 2010.

Chris Erwin:

Then, how soon were you married or engaged after that?

Sarah Penna:

So, we went on our first date in January 2010 and then we got engaged in September of the same year, and then we were married the next year.

Chris Erwin:

First date with Joe, January 2010. Engaged, September 2010. Married, 2011. Interesting timing because you launched your first company, Cloud Media, I think in 2010, and you're sharing production space with Joe. So, you're tripling down on the digital media space. You're literally married to a creator. You're sharing space together and you're founding your own media company. But tell us about what was the origins of Cloud Media.

Sarah Penna:

Yeah, so I basically, again, I didn't say, "Oh, I'm going to be an entrepreneur. I'm going to raise money." I didn't have a blueprint for that. I didn't know what I was doing, which I think you'll hear a lot of entrepreneurs say, that's kind of a blessing in a lot of ways. So, I did a very big brand deal for Joe. I was able to negotiate a high six-figure deal for him, and using the percentage that I took as his manager from that, I started what I called the Cloud Media. I bootstrapped that company for a year and a half and just operated it based off of the percentages that I was taking from brand deals that I was doing for influencers and YouTubers, whatever we called them at the time.

Sarah Penna:

My difference was I would start out by not doing contracts with them. We would just have a understanding, which is very common with management companies. Most managers don't have contracts, right? That's more for agents and Maker and Fullscreen at the time were insisting on contract, and Machinima. I was like, "Hey, you don't have to sign a contract with me. Let me just show you what I can do. This is my fee, and if you like it, then you can officially sign onboard and we can go from there." So, that worked really well for me. So, I started signing. I think by the time that we re-founded the company as Big Frame, I had about 30 clients.

Chris Erwin:

I remember, that was one of the things that attracted me to Big Frame. This is definitely the reputation in the space, is that you had built, Sarah, one of the most premium networks of YouTube creators that existed. Really high quality YouTubers that worked together, that worked with you, and there was really good camaraderie and trust and rapport amongst everybody, and it felt very special and different. So, it's clear that was based on these initial values of, I'm going to do good work and prove myself to you, and that's how we're going to develop a business relationship. Until I came in and then I was like, "Sarah, we need contracts."

Sarah Penna:

A big influence on those ... those are, me as a person, my core values. But DeStorm, who was my second client outside of Joe, who I just cold called and was living in New York, he really sort of guided me in how he wanted to be treated, how he felt business should be done. He really helped collaborate with me on some of those foundational core values that we carried throughout the duration of Big Frame really.

Chris Erwin:

So, speaking of that, you're literally learning from one of your clients. Were there any other mentors in the space as you're figuring ... this is the early days. We still say we're in the Wild West of the creator economy, that was the real Wild West of YouTube. So, probably, very few people to learn from. Did you have anyone that you would call on a regular basis and say, "Hey, let's just share notes."

Sarah Penna:

No, I didn't. Unfortunately, I think the space became quickly competitive. I would say at the beginning there was a little more collaboration between, let's say, like Danny and George Strompolos and myself. We would go up to YouTube and talk to them together as a group and what our needs were and share creator feedback. I think once money started pouring into the space we got a little more siloed, which is understandable, but no, I didn't. I was really out there in the woods like, "Okay, this is what we're doing now." Not really knowing what that was. Just saying, "Okay, this is how we're doing it. This is how our contracts are going to look."

Chris Erwin:

How old were you at this point?

Sarah Penna:

I was 26.

Chris Erwin:

So young. So, then, I think, well, as part of that dynamic, as the space got more competitive, George is launching Fullscreen, Danny is launching Maker, more venture capitals moving to the space. The Google Original Channels program launches, $200 million dedicated fund to help creators produce higher quality content for YouTube, which will then attract more advertisers and more revenue. So, I think at this point is when you eventually connect with Steve Raymond, the co-founder of Big Frame, which got its origins from Cloud Media, right?

Sarah Penna:

Exactly, through a mutual friend. I was on the hunt for a CEO. I recognized my limitations. I did want to raise money. I didn't know what that entailed. Frankly, I needed more of a grownup. I think my skillsets were really great on the creator side and the brand deal side but as the industry started growing up, I very quickly recognized I need someone who has a skillset that I just don't have. So, I met Steve and we hit it off, and we had a couple meetings, and he just jumped right on in. We decided to re-found the company. None of us liked the name because people thought it was like cloud computing and, which is fair, and it just made sense to start fresh. It also gave us an opportunity to have contracts with people and just structure it in a way that would allow us to raise money. So, yeah.

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. I have to ask, I started the advisory firm five years ago that I have now. I started that with a co-founder and then quickly realized, "Hey, I have a certain vision and I'm going to build this in my unique way." So, restarted the advisory firm with me as the solo owner.

Chris Erwin:

I've realized bringing someone else into the mix that really gets the vision that I feel comfortable sharing this with is difficult for me. I just know my personality, and founder issues are always like the hardest things in any startup. How did you feel in terms of bringing Steve on? Did you feel comfortable? When you met him, you're like, "Hey, this guy gets it. We have shared values and sensibility." Were you able to develop a sense of trust with him pretty quickly or did that take a decent amount of time?

Sarah Penna:

I trusted him very quickly. Although, I sometimes felt like that scene in The Little Mermaid where she's like, closes her eyes and signs her voice away, I was like, "Am I doing that?" I definitely had that moment where I was like, "Am I letting somebody in I don't ... ?" We had three meetings before. I was like, "Here's a third of my company." We had another co-founder, that's it. We don't need to [inaudible 00:25:56] but basically, here's half of my company. I definitely had people who were like, "Don't think you should have done that." But to me, the value of Steve and the ability ... I did trust him. The main thing for him was, he was very clear that he didn't want to disrupt what I was doing. He was very impressed with the business that I had built on my own and he didn't want me to feel like he was coming in to change that.

Sarah Penna:

He invested some of his own money and valued the contracts that ... I was like, I don't have that money to invest, but he was like, we should value the money that's in the bank for Cloud Media and the value of the contracts or the agreements that you have with the talent. So, I was like, "Okay, that's really fair." He made it easy. That, for me, was important. I don't like complicated things. I don't like long dragged out negotiations, and I was ready to just get to work. So, he was someone who was like, "I know how to do this. I have the connections. I don't want to disrupt your work." He's a good guy, I could just tell, and we made it work.

Chris Erwin:

I love that. I know Steve very well. He was my boss for three or four years and learned an incredible amount from him. But I think you're right, Sarah, the thing that stands out about Steve was just a good guy, good moral compass, and he doesn't let great get in the way of good enough. He'll just say, "This is good. This is thoughtful. We've talked this through. Let's move forward." But like you said, he's very fair in how he wanted to value the company. I didn't know that, but it's totally on brand for him. So, curious, I joined in the summer of 2012, I was ...

Sarah Penna:

Oh, boy, what a summer that was.

Chris Erwin:

So, I went to business school after being a Wall Street banker for a few years. Then, I was in school in Chicago and I worked while I was there for Pritzker Capital, which was an early investor in the YouTube MCN ecosystem. They had invested in Big Frame. They invested in Awesomeness. We eventually joined forces, and that is how I met Steve first. I was talking to Rishi, Rishi or Matt McCall and they're like, "Yeah, when you fly out to LA for these meetings, we invested in this company called Big Frame. You should check them out." I was like, "I don't even understand this company's business model, but digital video that feels like the future. I'll take a meeting."

Chris Erwin:

I remember meeting Steve and we had lunch on the Promenade, and then I came in for my first interview. I walked into the office, this is on Sunset Boulevard in the old National Lampoon building. I walked in and I walked into a ... it feels like we were just working out of someone's semi-living/work space. I was like, is this a company? Is this like what West Coast work is like? Because I had grown up working on the East Coast. I walked into the back room and in the back room there's this little circular table. Steve's there. Grant Gibson's there. Jason [Szymanski 00:28:39] is there. Then, you're at your back desk.

Chris Erwin:

So, you're supposed to be part of this interview, your head's down on your computer. They're like, "Oh, that's Sarah over there." I looked over and I'm like, "Oh, I guess this is what founders do in digital media. They're just heads down in their computers. Maybe I'll eventually talk to her over time." That was my first introduction to Big Frame. So, I just say all of this as I was like, this is like a precursor to just wildness that ensued thereafter. We had just gotten the Google Original Channels funding, raised some venture funding on top of that, and then it was like, build these five different content verticals. I'm curious to hear from you, there are so many memories from back in the day, but as you think about some of the war stories from the trenches, what are some things that stand out?

Sarah Penna:

Oh, my God. Well, your interview definitely. Also, you failed to mention that we had two absolutely crazy wiener dogs running around the office as well. Yeah. I think we had outgrown the office. We were in the National Lampoon office. It was so janky and we ... eventually, we're on three different floors. We moved sales to an office down Sunset. We were sandwiched between a strip club and a Trader Joe's. Then, Joe and I were renting a house off of Sunset, like walking distance, and eventually, we moved the talent team to my dining room table. Joe at that time was putting two YouTube videos a week out on his MysteryGuitarMan channel, and he would stay up all night and then he would sleep until 2:00 PM and he'd come downstairs.

Sarah Penna:

It was like, Lisa, Byron, Megan, Rachel were at our dining room table, and Joe was rolling out of bed as one of our talent but also my husband. I would cook dinner for the talent team at my house. We would take talent meetings in my living room, which was just so bizarre and unprofessional, but worked. We would also throw these wild game nights, board game nights, so Settlers of Catan was very popular at that time. We would have 40 YouTubers in our house playing Settlers of Catan with multiple games going on. My house was like a YouTuber hotel. We had a guest bedroom. Jenna Marbles came and stayed. Lena came and stayed with us. DeStorm. It was very wholesome and very duct tape and bubble gum feeling. We were just kind of figuring it out.

Chris Erwin:

I remember that. I remember Steve explaining, "Oh, we're having a reorg." The reorg was like, "Okay, we're moving the talent team to Sarah's house across the street." Then, production goes upstairs into a semi-new office that we got. For us, at that size, that was like a big deal.

Sarah Penna:

It was. Yeah. Oh, man, when we moved to our Lindblade offices, was that like heaven on earth to have an actual office, but that was later. Another funny memory I had was when Max first started. He had come from a place where he was doing really, really big deals. I handed him off a brand deal opportunity for $1,500 and he went in the bathroom, which by the way was right next to everybody's desk and splashed cold water on his face. We had moved him from New York to LA and he was just like, "What am I doing?" Ultimately, Max, obviously, was an absolute rockstar and built out that sales team to just be very profitable and doing really well.

Sarah Penna:

But that first deal was $1,500, and that was just par for the course at that time. It was shocking to people coming from the outside and then once it clicked, it really clicked and you're like, "Okay, I get what we're doing here." But there was just a lot of duct tape and bubble gum.

Chris Erwin:

I think Max is going to be an interview on this podcast coming up. I have interviewed Dan Levitt. When I think of Dan, we talk about when I first interviewed him and I think he showed up in some shiny suit and Jason Szymanski in the back office is pointing. He's like, "Chris, we're launching a music vertical and we have a new interview candidate coming in." I would just look out the window and I would be like, "These characters." I was like, "I've never worked with any characters like this before." I come from Wall Street, so it's was like everyone's in a suit and tie. I see people coming in shiny suits and I'm just like, "I think this is the new world I'm in. I'm just going to roll with it."

Chris Erwin:

So, it was such a rollercoaster of fun. So, then exciting things are happening and eventually, we move into this big new office, I think on Lindblade in Culver City. We're closer to Maker. We're closer to Fullscreen. Then, we run a process to sell the company. I'm just curious to hear from you, Sarah. Bringing Steve on was probably like, that was a big decision for you, but then hiring an investment bank that's going to run a sales process, we're going to have new ownership and potential leadership. What was it like for you to make that decision?

Sarah Penna:

That was really hard. I just wanted to keep the party going. Like many young entrepreneurs, I think I tied my identity completely to this company. And my husband was in the next office, he was a client. We went home, we would talk about brand deals over dinner. My entire identity was Big Frame. All of my friends were in some way, shape or form involved in this company. My family would tease me when I'd go home for Christmas. They're like, "Are all of your friends under contract?" I was like, "Yeah, kind of."

Chris Erwin:

Maybe a nice way to go through life.

Sarah Penna:

Yeah. I mean, we know where we stand with each other. No, but I just, I was so immersed that the idea of losing control was hard. I think I also felt my limitations as a founder and that's hard to come up against when you're kind of, I don't want to say that I was arrogant, but I was really confident and I felt really good about how I was running things and running the company. Then, we got to a point where my limitations and our limitations became evident and that's hard. It was hard and it was also exciting because it is, under most circumstances, it's a great thing. I also just had never been through anything like that, so I let a lot of anxiety get to me.

Sarah Penna:

I let it completely consume me. I'll be totally transparent. I would cry on the bathroom floor, like, what am I doing? There was a lot of doubt. I think that was probably the biggest strain on Steve and I's relationship, is how to go about this and how to present in the room. That was a big source of stress for us. Who's going to present? Is it me? I've been out there kind of the face of the company. I've been doing all the panels, and the VidCons, and the press, and the creator. Or is it Steve, who is the CEO who, frankly, should be doing it?

Chris Erwin:

That was unclear. We brought in an executive coach to help us figure that out.

Sarah Penna:

We did. Ultimately, like many of these things, it just came about through relationships and less about going and pitching, and the relationship that I had kind of built and cultivated, and changing landscape. There were a lot of factors, but that was very stressful. Then, in New Year's Eve of 2013, while we were in the middle of this process, I found out I was pregnant.

Chris Erwin:

Just to pile it on.

Sarah Penna:

Just for fun. Thought that would be a great thing to add on to the plate at the time. It's so funny because I think back a lot to the moment where I told Steve that I was pregnant, I was hysterical. I couldn't even tell him. I was crying so hard. He was like, in a very nice way, "I don't understand why you're so upset. This is a good thing." I was like, "What?" I thought he was going to be so mad and that this was going to ruin everything. I tell that story only to say, I think that our culture makes young women feel like ... and I had a lot of people tell me, then opened up to me over the years, that they felt like they can't have kids because of ... that moment of, "Oh, my gosh, I have to now disclose this thing."

Sarah Penna:

Even if it's illegal to not move forward with something because someone's pregnant, you can still find other ways. So, I thought I had completely ruined everything and that was ... I'm very sad about that looking back, but Steve really was like, "This is awesome. I'm so happy for you. Don't even think about it. Nobody's going to bat an eye." That was true. I wound up giving a keynote at VidCon eight months pregnant and we sold the company, but that was very stressful. Also, I couldn't drink. It was a lot. We were celebrating and I was like, "You know what? I'm having a glass of champagne because I'm ... You all have been drinking through this very stressful process and I haven't."

Chris Erwin:

More like being pregnant was also a launching pad for you to launch the mom's vertical at Awesomeness-

Sarah Penna:

Yes.

Chris Erwin:

... which came thereafter but, yeah, just to add some context on some of the notes here. I remember in the MCN days, there was the early Awesomeness launch in 2011 and then it was sold to DreamWorks, I think, in 2012, and everyone got really excited. But then, the YouTube MCN winter hit and there was a lack of capital flowing into the space. People were saying like, "Are these businesses real? Are they viable? Are they just going to get consolidated into traditional media?" It was harder to raise capital, and there was a lot of doubt in the ecosystem. Then, in 2013, I think in the second half of the year, Disney bought Maker for $500 million. Then, we made a decision, we're like, "There's a moment in time here, let's hire an investment banker." Shout out to Brian Stengel.

Sarah Penna:

Yay, Brian.

Chris Erwin:

We kicked off a process in the second half of 2013 and sold in April of 2014 to AwesomenessTV. Look, I was very intimately involved in that process with you and Steve. I saw how hard it was on you guys. You guys were just carrying an incredible burden. I think something, too, like a theme of your career, Sarah, where you have this passion for overlooked communities. I think you getting into the digital fears, there's a way to service these new creator voices in an exciting way with new business models and new distribution models. I bet there was some fear of ... A lot of this business was your friends and your friends actually had equity in the company.

Chris Erwin:

You had given equity out to a lot of creators when you launched Cloud Media and Big Frame. What if all that was going to change with this new ownership? I think that was probably a moment that you were concerned about. I don't know if we'll ever make all these details public, but the sales process, I just remember like one week it would be super exciting. We're flying to New York for this big meeting with a traditional publisher. Conversations are going really well and then they completely flat lined and go nowhere. Then, the next week, it's like really exciting, but eventually got to a great result.

Sarah Penna:

At three in the morning, while we were all still at the Big Frame offices collapsed on the floor. Yes.

Chris Erwin:

We end up selling to AwesomenessTV. I think that was a very exciting experience for all of us. I think Awesomeness was, in a way, they were the Goldman Sachs of the YouTuber economy back then. They built an incredible team and network, and I think we all really learned a lot from Brian Robbins and Joe Davola. Just amazing creative visionaries. You also launched a mom's vertical while you're there with Snooki and JWoww, you do the corporate thing for, I think, two to three years then it's okay, what are you going to do next? I think that you start seeing another underserved community, which is the romance community, and you think about launching a company there. So, what's that quick story?

Sarah Penna:

While I was running the mom's vertical, which as you said, I think my big passion in life is finding underserved communities and overlooked communities and creating content around them. I felt at that time that the content that was out there for moms was just not great and it was a huge market. So, Brian had brought on a woman named Lisa Berger who comes from E! and has had a very long traditional media career. He brought her on to do the Go90 programming and the YouTube programming for the Awestruck, which is the mom's vertical. We hit it off and we have a great time together running this crazy thing, and we wind up optioning a romance novel and turning it into a series for Go90.

Sarah Penna:

Very, very, very long story short, we crashed Go90 because of how popular it was, despite everyone telling us it wasn't going to work. I'm a huge reader and I love romance. I was looking out at the landscape and saying, "You know what? I think romance is going to have a moment, like what Marvel did for geek culture, where now it's cool to be a geek." I think we're at this point, this is 2017. Trump is in office. Women are pissed off. We're sick of all of the stuff that we're like being disparaged. We're sick of all of the female characters in popular shows being killed off or assaulted or whatever. We just want happily ever afters. Everyone's disparaging this romance community as just sad cat ladies, single cat ladies eating bonbons.

Sarah Penna:

I was like, "We're going to go prove them wrong. Fuck this." Similar to the early days of YouTube, where I saw these influencers have a chip on their shoulder where, "Oh, you just think I am a single dude making videos in my mom's basement." There was a similar misconception about the romance novel fandom. The romance novel fandom is actually incredibly educated, diverse, not just in who they are, but where they live and their socioeconomic status. They're incredibly feminist and they know that it's fun and cheesy. They know that there's a wink and a nod. We set out to create a space to celebrate that, not make fun of it, not disparage it.

Sarah Penna:

It's a fascinating culture, a fascinating community. I was not part of it in the sense of participating in the fandom, but I've been a long time romance novel reader and I was in the closet about it because I was embarrassed. So, we banished the term guilty pleasure because we don't want anyone to feel guilty about reading romance. So, we set out and we created a digital platform and a newsletter, and then started optioning novels to turn into movies and TV shows. We got a first look deal with CBS. We have a deal with Audible and we have a deal with iHeartRadio. Our daily podcast is going to launch in February. So, really set out to just create a space where people who actually know and love romance are creating the content.

Chris Erwin:

I love that, Sarah. It's also very interesting, when you came to me and I was like, "Sarah, what are you thinking about? What's up next?" You told me about the romance community. I did a double take and I paused because I'm like, "Wait, this is such a huge community." I think in traditional media, think of all the rom-com movies, but nothing in digital. I'm like, "Yeah, this is totally overlooked. Why is no one else talking about this? This is huge." I think it's very interesting how you characterize it as ... yeah, often when I say, even to this day, "I'm going to watch a rom-com." I'm embarrassed as just an older male saying that, but why? Why do we say it's a guilty pleasure?

Chris Erwin:

Why is there any guilt about a really fun love story? When love is one of the number one drivers of happiness and a common theme that all of us talk about around the dinner table and with our friends.

Sarah Penna:

Why is being a horror fan, seeing people get murdered, why is that not looked down upon, but seeing people be happy is? Very interesting.

Chris Erwin:

Very interesting points about the romance community. So, you are at Patreon now. Are you still co-running Frolic? What is happening with Frolic Media?

Sarah Penna:

Yeah. So, Lisa has taken over and is helming Frolic. I continue to be a strategic advisor and obviously, care very deeply about the future of where that company goes, and cheerleading and championing them from the position that I am in now.

Chris Erwin:

I think it's a very exciting space. We interviewed Naomi Shah, the founder of Meet Cute on this podcast as well, which does these, call it like rom-com microcast. I started listening to those over the past six months and I absolutely love them. Bite-sized nuggets of just rom-com joy in audio form. So, I believe in it. Pay attention to RockWater's 2021 predictions about underserved communities because I think this could be ... potentially, we will publish this likely in the end of January. It could be a good cover note that you're sending to any potential investors or partners for you.

Sarah Penna:

Absolutely. Thank you.

Chris Erwin:

Believe in the thesis. Okay. So, before talking about Patreon, I just want to talk about another concurrent journey within your family in the media space, which is your husband, Joe. He's been a creator for over a decade. I think in the past few years, he was digital native on YouTube doing incredible stop motion biography, but always wanted to cross over. I think he's realized some incredible success recently. Why don't you tell us about that?

Sarah Penna:

Joe is just, I obviously am biased, but he has an incredible creative mind. He's good at everything he does, which is so annoying, but I love him for it. He is good at languages, and art, and music, and math, and all of that really combined and you can see that reflected in the fun, playful nature of MysteryGuitarMan. But like you said, ultimately, he really wanted to direct movies. When he first started down the journey, there was a trend of these influencer-helmed, one to two million dollar movies that would be VOD and make back their money. You'd put the how many subscribers that YouTuber had and how much we were going to sell it for, and set download on iTunes, and that was where his agency and his management team was kind of pushing him to.

Sarah Penna:

He said, "You know what? That's not really the path that I'm going to take," and wrote a movie called Arctic, which is a mostly silent movie helmed by a 50-something-year old Danish actor named Mads Mikkelsen. So, quite the opposite of an influencer-helmed comedy. Joe willed that movie into existence. There was every hurdle against him. He had to start from the bottom. His YouTube channel didn't help him because he wasn't doing an extension of MysteryGuitarMan. He didn't want to be in front of the camera and he did it, and that movie got into Cannes. We went to Cannes, and it premiered and got a 10-minute standing ovation.

Chris Erwin:

Whoa, I did not know that. A 10-minute standing ovation at Cannes?

Sarah Penna:

Yeah.

Chris Erwin:

Good for you guys.

Sarah Penna:

So, that was just ... walking that famous red carpet, and for me, it was wonderful because I ... He had finally gotten traditional management. I was no longer managing him. So, I actually got to go to Cannes just as his wife, as his plus one. I was not worrying about logistics and getting him to his interviews on time. I still was but I wasn't [crosstalk 00:47:45].

Chris Erwin:

It takes a village to get Joe to an interview on time.

Sarah Penna:

Truly, especially in a foreign country. That's a whole other story. So, that was just a really incredible moment to see and he, off the heels of that, they announced at Cannes his next movie, which was called Stowaway, which had Anna Kendrick and Toni Collette, and Daniel Dae Kim, and Shamier Anderson in it. It premiered on Netflix last year. Now, he is working on so many new projects and so, hopefully we'll be shooting another one this year. He's loving it. He's very good at it. He has the personality to be a director. Very in control of his set, he's very calm, creative, collaborative and it's just very, very cool to see. You know what? He went through the grieving process of letting go of that YouTube channel and he's out on the other side and making things happen.

Chris Erwin:

That's awesome. I remember when we heard that news, there was a lot of text threads amongst the Big Frame community. I remember texting with Byron and with Max, and with Steve about, "Look, how awesome is this about Joe? Have you heard?" We know that he'd been working so hard and he was just such an incredible creator from day one. So, we're pumped for him and it feels like this is just the beginning for what he's going to do. Right?

Sarah Penna:

It really feels like he's on the trajectory, for sure.

Chris Erwin:

Yeah. So, look, you and Joe, as this media power couple continue to evolve. Speaking of the most recent step in your evolution, as we work to the final segment of this interview, Sarah, you guys moved to Santa Barbara, I think during the COVID pandemic. Then, you recently, someone that we've known mutually for a while, Avi Gandhi, you started talking to him at Patreon and saw an opportunity to join the creator team over there, which is your latest creator adventure. So, tell us about what excited you about moving to Santa Barbara and your new role at Patreon, and what you're doing over there.

Sarah Penna:

Yeah. So, I wanted to move to Santa Barbara for 10 years and it never was feasible or realistic, and I, like many people during the pandemic, had a very hard year. Living in LA just became very challenging. Jonah, my son, our son is, when the pandemic started was five, and now he's seven. We just felt if we were going to do it, it was now or never because he started having his best friends and it just becomes harder as they get older. So, we just pulled the ripcord and we did it with no plan, no idea if it was going to work out and it has been just an absolute dream come true. We love it up here and was fortunate enough to be able to join this incredible company, Patreon.

Sarah Penna:

I joined in November and like many things in my career, it just felt so right that I couldn't pass it up. A big driving factor was, obviously, it's very hard to leave my start-up and to leave Frolic. I did it in the best way I could, but for me, going to a place that really shares my values in that creator space, I started seeing the creator economy and the interest in it heating up in a way that I haven't seen in a long time. Similar to when I met Danny all those years ago, and I was like, "I need to be a part of this." I felt that the train was leaving the station without me and I wanted to get back into the creator space.

Sarah Penna:

I took a lot of time looking at what is the right company for me, for my values, and for what I want to do. Patreon is kind of a unicorn, a unicorn in the sense that it's valued at a unicorn status, but also a unicorn, for me, because it hit this very narrow target of what I was looking for.

Chris Erwin:

Just remind me, how long has Patreon been around for? Because I remember Patreon, early days of when I started Big Frame in 2012. Is that right?

Sarah Penna:

Yeah, eight years.

Chris Erwin:

So, now at Patreon, what team are you running there and what are you focused on for 2022?

Sarah Penna:

I live on the creator partnerships team and I run a team called Launch. We are responsible for giving creators white glove experience for launching their Patreon pages. We have teams that are going out and sourcing those creators. Once they come to us, they are pretty excited about the platform and we help them figure out what tiers are best for them, what banner image is going to look good, and really help them drive towards their launch date. These are creators that range in all kinds of sizes and all kinds of ... I'm talking to someone who makes leather, like leather wallets and leather goods, and we're talking to big YouTube creators and celebrities, and we're talking to everybody in between.

Sarah Penna:

It's just a really exciting time to be at a company like Patreon that's been in the creator space for so long, is helmed by a creator, and is going to continue to be a real player in the creator economy as it goes forward.

Chris Erwin:

It seems that there's incredible traction for your business where I think there was a recent announcement. The team is currently 400, but you're doubling the company to 800 people this year. Is that right?

Sarah Penna:

Yes, that's what they say.

Chris Erwin:

Well, look, I think the market tailwinds are definitely behind them. I think, yeah, it's a really exciting evolution. We've written about this extensively at RockWater. YouTube created these new business models for creators, where they can publish content online and then participate in ad revenue through YouTube's AdSense program. Then, the chance to distribute content to other social platforms and participate in ad revenue there and then doing talent deals, brand integrations, and getting paid off platform. Then now, I think there's this incredible movement with all these creators, the audiences that they bring, the fandoms that they generate, the engagement that they generate on these platforms, they're the real moneymakers.

Chris Erwin:

So, how do you give them more tools though, to also not only build these platform businesses, but their own businesses? So, Patreon doing that, allowing them to have direct relationships with their fans, get access to contact information, monetize in different ways behind a paywall, different types of subscription content, whether it's video or audio, whatever else. I think what you guys are doing is a beautiful thing. We need more companies thinking like you. So, I think that you guys are really well set up for success, and I'm excited, Sarah, for the different communities of creators that you guys can represent, that have a need, that don't have the tools from other platforms that are overlooked right now yet, again, going back to what you do best.

Sarah Penna:

Thank you. I absolutely agree with all of that. I have said for years, as some people, not many, but a lot of people in the creator space, you need to own your audience. Renting your audience is not sustainable. You need to build community. You need to not just be on a conveyor belt of content, You really need, as a creator in this space, the tools are there for you to build a sustainable business and to not be tied to the whims of platforms and algorithms. There's a big conversation about creator burnout. Patreon is positioned to help creators solve some of these big issues, big and, by the way, nuanced issues. It's not just, oh, these platforms are bad and we are good at all.

Sarah Penna:

These platforms are great and you need to build up audiences on your podcast and on your social. If you are able to have ... I'm a really big a fan of Seth Godin's 1,000 true fans idea. If you can build out 1,000 true fans who are on your Patreon, you might be covering your rent. You might be covering your rent plus plus, and you might be making a really good living. That's what we want. We want to empower creators and we're really set up to do that. It's just an exciting time to join the company.

Chris Erwin:

Before we wrap this up with the closing rapid fire round, Sarah, I just got to give you some big kudos here. You legitimately changed my life. I'm trying not to become emotional here. I look back on my past career over the past 10 years and everything that I've done, being able to found RockWater is a function of you, starting Cloud Media and Big Frame, and then taking a chance on me. I had a very different background than someone that you had ever typically hired before. I'm sure that you needed some convincing from the rest of your leadership team.

Chris Erwin:

But what I have learned with you, the pedigree that I've gained and the experience has not only been so personally transformational, all these new relationships that I've built, women that I've dated and just incredible friendships and all of the above, it's really set up an exciting career for me. Something that I wake up to, excited to do every day. I see a lot of incredible potential going forward. It's a function of you taking a chance on me and getting early into the digital video MCN days. So, I am very, very thankful. I think there's many people that have very similar sentiments to what I just shared.

Chris Erwin:

So, I'm probably speaking on behalf of many. So, big kudos to you, and particularly to call out, I don't come from a creative background. When I came in and was very systematic and operational, I wanted to scale the business, it took me a while. But seeing how you ran the creative team, how you nurtured the culture, when you brought in Rachel and Megan Corbett, and Lisa Filipelli, and Byron, and people that I spent a lot of time with and really learned an incredible amount from, it really all stems from you. So, Sarah, you have been an incredible person in my life. You did incredible things for all the talent at Big Frame.

Chris Erwin:

You are now doing the game again, with Frolic and with Patreon, and I wish you the best. As you know, anytime that you need anything, sometimes we don't talk for six months or a year, but when we do, we pick up very, very quickly. I am a massive supporter of everything that you do. So, call me whenever you have a need.

Sarah Penna:

Thank you. Now I'm crying. Thank you so much, Chris. That means a lot to me.

Chris Erwin:

Very well-deserved. Okay. So, now, let's move into closing rapid fire. Six questions. The rules are, you can answer in one sentence or in one to two words. Do you understand the rules?

Sarah Penna:

Yes.

Chris Erwin:

Okay. Here we go. Proudest life moment?

Sarah Penna:

Having my son Jonah.

Chris Erwin:

What do you want to do less of in 2022?

Sarah Penna:

Less complicated.

Chris Erwin:

What do you want to do more of?

Sarah Penna:

More space in my schedule.

Chris Erwin:

I like that. Advice for media execs going into 2022?

Sarah Penna:

Don't believe all of the hype and just keep your eye on the ball.

Chris Erwin:

Any future start-up ambitions, Miss Entrepreneur?

Sarah Penna:

God, I hope not. No, not as of right now. I am very happy not running a company right now.

Chris Erwin:

Not necessarily off the table. That's basically what you're saying.

Sarah Penna:

It's never off the table with me.

Chris Erwin:

Last one. This is an easy one. How can people get in contact with you?

Sarah Penna:

Sarah@patreon.com.

Chris Erwin:

Very easy. All right, Sarah, this was a true delight. Thanks for being on the podcast.

Sarah Penna:

Thank you so much, Chris. This was so much fun for me, too.

Chris Erwin:

Wow. That interview with Sarah just flew by. I felt like there were so many more things that we could have discussed. We'll have to do another podcast together. Yeah, I admit I got a little teary-eyed at the end there just going down memory lane with her. She was really formative in my career and, yeah, that really hit me at the end. I was not expecting that. All right. So, a few quick things. Our Livestream Commerce executive dinner is coming up. The date is now March 10th. We are 98% close to confirming that with our sponsor. But if you're interested in attending, shoot us a note. You can reach us at hello@wearerockwater.com.

Chris Erwin:

Also, we are hiring. We're looking for interns, undergrad and MBA level, and also a full-time analyst. We are growing all things creator economy and we need help. If you're interested, you can apply at jobs@wearerockwater.com. Lastly, we love to hear from our listeners. If you have any feedback on the show, any ideas for guests, just reach out to us. We're at tcupod@wearerockwater.com. All right, that's it, everybody. Thanks for listening. The Come Up is written and hosted by me, Chris Erwin, and is a production of Rockwater Industries.

Chris Erwin:

Please rate and review this show on Apple podcast and remember to subscribe wherever you listen to our show. If you really dig us, feel free to forward The Come Up to a friend. You can sign up for our company newsletter at wearerockwater.com/newsletter and you could follow us on Twitter @TCUpod. The Come Up is engineered by Daniel Tureck. Music is by Devon Bryant. Logo and branding is by Kevin Zazzali. Special thanks to Alex Zirin and Eric Kenigsberg from the RockWater team.

This interview features Dev Sethi, Head of Sports at Instagram. We discuss being separated from his twin in highschool, his side door into sports at YouTube, launching the first sports MCN at Whistle, why NIL is this century’s most important breakthrough for athletes, why he left the incredible team at Complex for Instagram, and the metaverse’s impact on the personalization of sports.

Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up link

Learn more about our market research and executive advisory: RockWater website

Follow The Come Up on Twitter: @TCUpod

Email us: tcupod@wearerockwater.com

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EPISODE TRANSCRIPT:

Chris Erwin:

Hi, I'm Chris Erwin. Welcome to The Come Up, a podcast that interviews entrepreneurs and leaders.

Dev Sethi:

One of the things that I love sharing with the teams that I've managed, and the individuals I've managed and that's important to me is how do you empower those team members' voices, whether you're to 23 and out of college with no work experience, or 35 and have been in social, and digital, or in sports for decades plus, we all see what we do, our industry, what's happening differently than anybody else, and almost by sheer virtue of who you are and the life experiences that we all bring to these jobs. So if I'm, as a manager, as a team leader, able to create an environment or a safe space for people to share, that's how we're going to get better.

Chris Erwin:

This week's episode features Dev Sethi, Head of Sports at Instagram. So Dev was born in the DC metro area, the first generation immigrants from India. Then in high school, Dev's life journey took a big turn after a traumatic family event and some wise words from a teacher which inspired him to become school president and captain of both the baseball and basketball teams. Dev then went on to Notre Dame, and soon after found a side door into sports media at YouTube's new partnership. He then left to help build digital communities at publishers like Whistle and Complex. But after a heart-to-heart with his mom, Dev reverted course, and returned to big tech as Head of Sports at Instagram.

Chris Erwin:

Today, Dev is shaping the future of sports fandom. Some highlights of our chat include being separated from his twin in high school, launching the first sports MCN, why NIL is this century's most important breakthrough for athletes, and the metaverse's impact on the personalization of sports. I've known Dev for over five years. He's one of the sharpest and kindest minds in the digital verse, I'm grateful to help share his story. All right, let's get to it. Dev, thanks for being on the podcast.

Dev Sethi:

Thank you for having me, nice way to spend my Wednesday afternoon.

Chris Erwin:

Yes. And appreciate it because I think you had some last minute dental work that was just done this morning, is that right? Can you still talk?

Dev Sethi:

Yeah. I don't know if folks are going to consume this entirely audio or even visual, but got last minute dental work done this morning so part of my mouth is still numb, Chris might see me drool out one of the sides of my mouth. But hopefully, I'm not slurring my speech too badly, and I promise you, if I am, it's because it's because of the Novocaine, it's not because of any other reasons. Oh, here we go.

Chris Erwin:

Well, Dev, what I can say is I think you sound great, and I don't think many of our listeners will be able to see the video, but you look great as well, as always. So you're good to go for my book.

Dev Sethi:

Making me blush already. Okay, let's do this thing.

Chris Erwin:

All right. So with that, Dev, let's rewind a bit and let's talk about where you grew up, your childhood interests and if there may any glimpses into what you were going to do in your sports media career from an early age, in some of our prep chats, you're telling me about growing up in the DC metro area, is that right?

Dev Sethi:

That is correct. And it's actually where I'm currently based as well, but grew up in Nolan, Virginia, literally adjacent to Washington DC. My parents are immigrants from India and that's where they ultimately ended up settling. So I'm certain that folks that are listening to your podcast can sympathize with me being a long suffering Washington area sports fan, that's basically epitomized my experience being a sports fan in this area, but grew up here and had a great time. It's actually quite a diverse area, and for those who have been to Nolan, Virginia and the DMV overall, it's changed quite a bit since I was a kid, it's virtually night and day how much this area has evolved over time.

Chris Erwin:

Your early household, growing up, were your parents into sports, immigrating from India? Did they have ties to the US leagues, and sports programs, or international? What was that like?

Dev Sethi:

Yeah, nothing prior to them arriving on these shores. My father was a sports fan and played sports growing up, but very different sports obviously in his own country than the US. But for certain listeners who I'm certain have had the same experience as I've had, but sports was and is an incredibly powerful way to assimilate into a new place, whether it's a new community, a new state, or let alone a new country. And so my father quickly adopted American sports as an interest, a hobby, an enthusiasm. And again, for those who are familiar with this area as much, there is a thriving Indian community or South Asian community in the DMV. And one of sort of its rallying cries was and is sports.

Dev Sethi:

And so, I have a lot of great fond childhood memories of going to Washington watch parties, and when you're showing up for Thanksgiving, the guys show up early, because they want to watch all three games on Thanksgiving before anyone starts feasting. And it just really was a big part of my growing up. And I think a great way for my parents to get comfortable in what was then an unknown environment for them, So it's a really big part of, I think, my personal history as well as my parents history.

Chris Erwin:

And did you have siblings that were also consumers of sports as well?

Dev Sethi:

I have an older brother who is four years older. He's not in this industry, so he will likely never listen to it so I can trash his athletic gifts. I think he played soccer and basketball but sort of gave it up early-ish in his life to focus on being more of an academic, which is why he's a lot smarter than I am. But I also have a twin brother who is equally a sports junkie, a passionate fan of pretty much all things sports. And he and I played basketball and baseball growing up together, and we were watching sports ourselves. So a very big sports house so I like to joke that I missed out on all the Disney movies like Cinderella and all those kinds of movies Beauty and the Beast, I have watched virtually none of them because on Friday, Saturday and Sundays, we normally have a sporting game on TV.

Chris Erwin:

I've known you for a few years now. And I don't think I knew that you were a twin. I'm also a twin as well. Did you know that about me?

Dev Sethi:

I did not know that about you, wow. Identical over fraternal?

Chris Erwin:

We are fraternal, but we look a lot alike. He took a very different career path than me, he's in the military, 82nd Airborne at Fort Bragg, ranger qualified, so he's just at a physical level that is well beyond where I'm at. But it's funny, thinking of growing up with him, I grew up in my family, we didn't watch a lot of sports, but we played a lot of sports. My brother and I were very athletic and active growing up. So when you said on Friday, Saturdays and Sundays, you weren't watching Disney movies because you are consuming, my brother and I, we would get up at 6:00 AM and go hit the basketball courts at like 6:30 or 7:00 on a Saturday. As soon as it was like my parents were up and we were allowed to get out of the house. That was what was fun, was having a twin, you always had someone to play with.

Dev Sethi:

Yeah. I don't know if I saw those early hours on the weekends very often as a kid, but to your point, having a partner in crime in more ways than one, and someone who literally is an activity partner. It's actually interesting for he and I, and he would attest to this, so growing up, I hated basketball and I loved baseball and he hated baseball and loved basketball. And you'll appreciate this as a twin and with your parents, my dad said, "Well, tough shit. I'm not driving you all to a million different activities, you're going to do these things together."

Dev Sethi:

And so, we ended up participating in these sports together. And again, the irony of it all is that I love basketball now and played it through high school and then intramurals in college, and he played baseball through high school as well. And so just one of these deals where sort of the forcing function of, "Hey, this is sort of you're a package deal." And parents aren't only chauffeurs, let alone when they've got two the same age that have various interests. But no, we played a ton of sports growing up, and to your point, hit the park and go play pickup together because you already got two out of the five people you need for a team, right?

Chris Erwin:

It's funny you say that, Dev, because I still give my parents, to this day, flack for not letting me do travel soccer. I was really good. And they were like, "No, Sundays are for going to church and other family activities." And I was like, "I don't need you guys to drive me. I have other other friends' parents that'll drive me." And I could have been this great star, but that's a... I'll leave the rest of that story for my therapist. A question that I have for you is you go to Notre Dame, and did you have an intent of getting into sports media when you were going to school and thinking about when you wanted to graduate or were you thinking about something else?

Dev Sethi:

I had, and I'm assuming I am like many former and current college students, where I really had no idea what I wanted to do for a living. And sports as a profession, as it were, was nowhere near my radar. The internships that I had in college, I think the closest experience I had to working in sports during college was an internship in SAP's marketing department. And SAP was a sponsor of Ernie Els and Chad Campbell, who were two then prominent golfers me. Ernie Els' just awesome and probably a hall of fame golfer, and that was the closest I got to sort of a sports experience in an internship in college.

Dev Sethi:

So yeah, to answer your question, I had no aspirations, I had no foresight or vision into how to even break into that. I knew I necessarily wasn't going to go the path of wanting to be an agent or something like that, which would've sort of required a much different kind of education. I really just had the fandom of sports in college and really didn't know what I wanted to do when I graduated. No better illustration than the fact that I was a marketing major but I was also an education minor, because I have a sort of a side, if not hobby, passion around the profession of education and the industry behind education, and it sort of uses a different part of your brain than taking business classes. So I had a number of interests, but really, no direction, I guess, when it came to career stuff at that age.

Chris Erwin:

So what you just said about your interest in the educational field and that you also, I think, did a minor there at while at Notre Dame, where do you think that stems from?

Dev Sethi:

I had some very influential grade school teachers growing up who I thought really shaped who I am today, and also, where I am today in terms of just how I've been able to sort of to grow and have somewhat of a tenure in this industry now. But I do think having had such a positive impact from those educators at the high school level.

Dev Sethi:

It's funny, but the education minor, I needed to take some electives. And I took a course from a relatively new professor at Notre Dame and the course was actually called creativity in the classroom. Whereas you're at business classes that have 50, 60, 150 people in them, and you're using again, on one side of your brain, this class experience was incredibly intimate, it was maybe 12 people, it was focusing on a sort of a unique aspect of education in the classroom. I loved every second of it. And the professor, I thought, crafted the course in a way that wasn't rigid, it actually had a lot of flexibility to who was taking the class. And she was a great listener herself, which I think is, I don't want to say a rare trait for a professor, but I haven't experienced many professors who are nimble in that regard in terms of how they shape their coursework in a semester.

Dev Sethi:

And so anyways, I fell in love with the experience of taking a class that was so different than what I was normally used to taking. And that basically became, "Hey, well, I took that in the fall. Let me take another education-related course in the spring." And before I knew it, I was getting eligible for a minor, so.

Chris Erwin:

It's amazing how intersecting with great people in your life, it could be a professor within the educational department that makes you then want to specialize, it could be someone, a founder, CEO at a company that then recruits you to their vision, or someone in the industry that gets you excited about transforming your career. I hear that, that's an important to note is that these little human touches can be so transformational. Are you still in touch with this professor?

Dev Sethi:

I am. She's actually, really, the only college professor that I remain in touch with, and she still lives around Notre Dame. And so, when I have the occasion to come back and visit, we'll always grab dinner, or drinks, or lunch, or something like that. And I'm very quick to reiterate to her how important and influential she was to my experience, say in the same way an English teacher, who had never actually taught me, was instrumental in how I grew as a person and as a student in high school. And she's actually, now that I'm back in the DC area after a long time away, her and I are actually grabbing lunch next Friday.

Chris Erwin:

Dev, speaking of this high school teacher which had a big impact on you, there's a bigger story behind this that relates to the expulsion of your twin brother. Why don't you tell us about that?

Dev Sethi:

Yeah. I think I'm more comfortable telling this story because fortunately, my twin brother's life wasn't totally derailed by this expulsion and he actually works at meta now, which is kind of funny, so we're technically colleagues even though I've no idea what he does for a living. But no, we were juniors in high school and he got kicked out of our high school 10 days into our junior year. And it was under somewhat controversial circumstances. My mother was pretty furious about the circumstances and she wanted me to leave that high school too.

Dev Sethi:

And it was this teacher, who actually had never taught me before, I had not taken one of her classes. She pulled me aside one day while all this was going down, she said, "Hey, can you come by my class after school for 10 minutes?" I was like, "Sure, why not?" I barely knew her. And she sat me down and she said, "I know this is a tough time for you and your family," yada, yada, yada, "you don't realize this yet, but this could actually end up being one of your biggest blessings in disguise." and what she meant by that.

Dev Sethi:

And what I discovered and learned after I ended up deciding to stay at that school was, my experience in high school, my personality, just my being at that high school had always been inextricably linked to me and my twin brother. It was always Dev and Raj, it wasn't just Dev or Raj. And she sort of was reiterating, you have a chance to essentially be your own person, and to carve your own path and pursue the things that you may want to do, and not necessarily always have that association.

Dev Sethi:

And she was dead on. I ended up doing things my junior and senior year that I never would've thought I would've done. I ended up running for and winning high school president, which, if you know my personality at all, that's definitely not me. But sort of threw my hat in the ring, was captain of our baseball and basketball teams, did a number of extracurriculars. And it's funny because by the time I graduated, there were hundreds of students who had no idea I even had a twin brother, which I think, again, reiterates my then teacher's point.

Dev Sethi:

And so, just one of these sort of inflection points in my life where I don't know if I would've made that decision had it not been for her, and someone who had literally no relationship with me but at least thought enough about my wellbeing and my circumstance to share with me her perspective, and it ended up changing my... I mean, I cannot overstate that, it literally changed my life. So I don't think I would've gotten into Notre Dame had it not been because of that conversation, and all that stuff, and the things that happened, I don't think I would've been on that same path at all. And I would argue my twin brother would acknowledge that too.

Chris Erwin:

Wow. That is an incredible story. We spend so much money on our college and graduate school educations, access to all these world class professors and teachers yet some of my most prominent memories in the classroom, date back to when I was in middle school. And I really remember very prominently, a US history teacher that we had, Mr. Galante, everyone who has gone through his classroom has stories about him. There was no one that was as passionate and cared so much about his students learning. The way he would describe the American Revolution or the civil war, it made every learning experience incredible and fun. In contrast to you, I'm really not in touch with many of my professors, maybe just one or two from business school that I kind of see on LinkedIn every now and then, but it's pretty awesome that you're able to maintain that.

Dev Sethi:

Yeah. To your point, the fact that we're talking about these educators, we're dating ourselves, as I'm dating myself decades after they spoke, they last connected with us in the classroom, I think says everything and also I think it almost reiterates that education is a bit of a lifelong process. And I know that I'll actually never stop learning from both of those people in any of the interactions that I have, but obviously, a bit of a different relationship now that I'm a full-fledged adult at least in some parts of my life, and you have different types of conversations. But I'm very lucky to have had those people in my life.

Chris Erwin:

Yeah. Look, and I think what you just touched on is a broader theme of this particular podcast, Dev. You had mentioned the intersection of social and sport and just how fast this world changes on a weekly and monthly basis. So in talking about learning, it's you have to keep your learning curve steep. You've been in this industry for many years now, Dev, and you're in a senior role. And I think that people can say, "Oh, well, Dev knows everything that there is to know." And it's like, that's not true. Things are literally changing on a daily basis. So I like that when we were prepping for this conversation, you're like, "I acknowledge this, I'm the aware of what's happening, and for me to be effective, and to guide a team, and serve as my talent and business partners best it's like, I got to be learning every day and come in with a beginner's mind, so we'll talk more about that. I am curious, so what was your first role right after undergrad?

Dev Sethi:

Yeah, it was this interesting experience where... and I actually already had a job offer fortunately lined up, going to my last semester of college at a very different company, doing a very different job. It was at the Aon corporation and it was actually doing human resources and communications. And so, that's where I was ultimately going to spend my first years out of college, and this little company called Google decided they were going to show up on Notre Dame campus to meet with prospective candidates for an array of jobs they were hiring for, and this was back in 2006. And they came on campus, I was lucky enough to get an interview with them and it actually ended up being the worst interview I've ever given and I-

Chris Erwin:

Okay. We got to pause there. Wait, why was it the worst interview you've ever given?

Dev Sethi:

I'm not gaslighting anybody or anything, this is objectively the worst interview I've ever given my life. So they came on campus and I thought I was really smart having taken all of one psychology class during my college career. And I was like, "Oh, I'll pick the last session of the day on their interview schedule because a recency effect, I'll be the most memorable candidate," yada, yada, yada. And I got a call maybe three hours before the interview from the interviewer saying, "Hey, we actually mistakenly booked our flights to leave out of Chicago, not South Bend. And for those who don't know South Bend's about, I think, 90 miles or 90 minutes from Chicago, TODR, we have to leave early to catch our flight so we have to miss your interview slot, how can we make it up to you?

Dev Sethi:

And I said, I actually wasn't even feeling well that day. And I said, "Hey, no worries happens. Why don't we just do a phone interview whenever you get back to Mountain View." And we set up a phone interview, I had my twin brother and one of my best friends in high school visiting me in town that following weekend for a football game. And so, on a Friday, I get my car and I drive to some abandoned parking lot so I can take this hour long, two phone interviews, 30 minutes of piece. Well, Chris, I imagine you know this feeling because of what you do, who you are, and how expert you are, but the feeling that I had that maybe some people can relate to is when you're talking for that long and you're basically bullshitting on the questions they give you, but you know that they know that you're bullshitting, that's what the entire hour of this interview felt like.

Dev Sethi:

And I remember, and I kid you not, I hung up the phone. I drove back to my apartment with my brother and my friend were waiting. And I legitimately said that was the worst interview of my entire life, good thing I've got another job lined up. Let's party and have a great time this weekend going to the football game. And I got a call back a week later from Google saying, "Hey, we've enjoyed our time together. We'd love to fly out to Mountain View for in person interviews." And those, fortunately, went a little bit better and I got offered a job, but I still maintained to this day, to anybody who asks, that the only reason they gave me the opportunity to interview in person was because they felt so bad about canceling my first interview and so they gave me a second shot at it that went much better. But it was brutal. I mean, and that is exactly how it went down. And sorry, this is a very long-winded answer.

Chris Erwin:

No, it's interesting.

Dev Sethi:

But yeah, no, so true story. And even to answer your original question, we essentially were interviewing for general roles within two parts of the org. One was AdWords, which is essentially Google suite of sales products and ad products, and one was AdSense, which was Google's sort of publishing network and publishing tools. And so, I didn't know until, I want to say, maybe a couple months or weeks before I started, what role I was even going to fulfill and hearing my mom's voice in here saying," Hey, it's Google. You should probably try." Okay. I'll fly in a little bit blind and sort of see what these roles are about, see what that industry's about because this is 2007 when, again, our world, an industry looked a lot different.

Chris Erwin:

Something I deal with daily and something that just talking to different founders and executives, they also deal with all the time is imposter syndrome. So when you say like, "Oh, Chris, because of your role, RockWater, you're supposed to be an expert advisory firm. We're talking like we advise a lot of the smartest clients in this space. And so then we're supposed to show up and be smarter than them, that can put a lot of pressure on you.

Chris Erwin:

And so I actually flip that around in saying we're smart, we're thoughtful, but we believe there's so much to learn from everyone that we do business with. And I think if everyone goes through life and goes through business with that mindset, that's going to force you to be honest, and self aware, and give the best advice, and also learn the most to really understand where your clients and your business partners are at. And I think that's what sets us apart. But Dev, I'm bad at interviews. I mean, I remember really, various bad had interviews from college, but in contrast to you, I actually didn't get the job offer. There was no flying me out, so you clearly did something [crosstalk 00:22:56]-

Dev Sethi:

I still don't know how off the skin in my teeth, I got offered a position at that company. But I hear you on imposter syndrome too, and to your point, there's too much of where, I'm guessing is the case for you as would be the case for me, you could spend eight hours of your day just on Twitter reading about the industry, let alone participating in the industry. And so, you almost got to trust that information's going to come to you and that hopefully, you've surrounded yourself with a network of colleagues, friends, individuals who can help share their perspective and thus cultivate your own perspective to a degree, because yeah, it's too hard to keep up with it all. I mean, there's so many things happening on a literally hourly basis, let alone a daily basis.

Chris Erwin:

So Dev, you are a strategist at Google for around four years, but then you made a transition to be a senior strategist and overseeing new partnerships and development at YouTube between 2011, 2013. So I think this is where you first began to focus in sports, entertainment, and lifestyle verticals, targeting new creators, and doing a few other things there. Was that kind of like, as you would call it, your side entrance or backdoor into sports media?

Dev Sethi:

Absolutely was. And now, as I've described it previously, a side door into the industry of sports so to speak, because I was at Google, I'd spent a number of years in their sales and consulting arm, which, unbeknownst to me at the time, actually has provided me a lot of great perspective about the industry I'm in just through a very, again, different aspect of the ecosystem and literally, the advertisers who were helping money into our ecosystem.

Dev Sethi:

But it's about a little over half, I think, my tenure at Google there, one of my dearest friends who I've had the great fortune of working with a couple of times now, she mentioned that she had gone over to YouTube to focus on a different role actually within sports, and she said that the vibe just felt different, it felt a little more start-upy, interest points, verticals that I was sort of more keenly attuned to, whether it was sports specifically, or to your point, lifestyle relative to some of the clients I was working with on the sales side that, my last experience was in the finance vertical, prior to that, it was on an agency for portfolio business.

Dev Sethi:

So represented this opportunity, something different, and maybe even align a little bit with some of my passions. And that's where I was introduced, again, to at the time and continues to be one of the leading social media/video platforms in the world, and starting to learn more about that part of the industry. And also, again, focusing on sports and working with individuals, organizations who were producing content that was applicable, if not a good fit, for our platform.

Dev Sethi:

But as you shared dates earlier, that was 2011 were our industry was in its infancy, I guess you could call it, even though it was only a decade ago. I joke that YouTube hadn't even introduced monetization program when I first got there, a fully fledged one, Instagram was photo only, Snapchat didn't exist, Verizon hadn't spent a billion dollars on their own platform and their own content. All this stuff has come and gone in a relatively short period of time, and YouTube was in a much different place back then too, as was the industry, and thus, the conversations that I was having about that platform.

Chris Erwin:

I do remember because in 2012 is when I joined Big Frame. And that was, I think, recently, after Google and YouTube, I launched their Original Channel program, a 200 million dedicated fund to help fund better quality content on the platform to attract more advertisers. You were there during that period, so that must have been exciting. And I think that you were to see the different digital media brands and publishers that were being built from this funding and the complimentary seed capital that was being raised. And so I think, after Google, you decided, you're like, okay, I've been at one of the largest video platforms, but now I'm going to transition over to work for these publisher brands. And so you left, I believe to go to Whistle Sports in 2013, what was the impetus for that?

Dev Sethi:

Yeah, the impetus for me leaving the cozy confines, as I'll put it, at Google and YouTube because there's one thing that a company like that does, it really puts you in a comfort zone and really makes you feel like you're enjoying the employee experience to a large degree. So the same colleague who shared the opportunity around YouTube because her and I actually started together at Google together. She had made the move to YouTube. She said, "Hey, you should check things out on the side of the aisle. I did, took a job there. She actually left to join this then small sports media startup called Whistle Sports. And she basically asked me if I wanted to come over and be her partner in crime and build this thing together. And at the time, what we were focusing on was being the world's first sports-focused collective and multiplatform network, that was one part of the business.

Dev Sethi:

Another part of the business was sort of an analytics consultancy given you could gain a lot of meaningful data and insights about sports on digital and social through working with a collective and all the data they have on their audiences through social media, and then one part content brand, which I'm quick to say I had very little to do with, given the remit was really around partnerships and operations.

Dev Sethi:

But it was this interesting moment in time. And again, I know you'll attest from your time at Big Frame where you have a ton of creators and organizations who are still trying to understand the value they can gain and extract from being on social and digital, what their content strategy should be, what their audience engagement strategy should be, how does that marry with other parts of their business, what are those best practices, what are the things that an individual content creator doesn't have a muscle memory for, whether it's sales, production, et cetera, how do you create value? And that's what we focused on when I was at Whistle and doing partnerships and operations is big a real partner in their businesses. And hopefully, with a little bit of expertise having come from the walls of YouTube, but knowing that the industry was growing quite rapidly, YouTube was quickly becoming one of a number of platforms where people could build and monetize an audience.

Chris Erwin:

When you went there, was Michael Cohen working there, when you first started.

Dev Sethi:

Michael Cohen was a consultant at the time. And he and I got closely acquainted in the work that we were doing together.

Chris Erwin:

Yeah. Speaking of shared history. So Michael Cohen and I, I met him, I think in 2007, when I was interviewing at a boutique investment bank in New York City, and he was one of the guys that interviewed me. We got to know one another. Yeah, this is well before the MCN days. He left the firm, I left the firm, I went to business school. When I graduated, I ended up going to Big Frame. And I remember Michael reached out and was asking me like, "What's this whole like YouTube, MCN, digital video thing that you've got into." And he was picking my brain for a couple years. And then I remember when he made the move to Whistle and I was really pumped for him. Early on in his tenure there, as you guys were thinking about some different VOD strategies, he engaged our firm. I think that's how I first met you, if I remember correctly,

Dev Sethi:

I think it was, we now have so many shared threads together, but I think that was the first introduction, was when either you had informally known him or even, he had formally brought you on to help consult for the business. But it's wild how the scene's coming full circle and now I'm on your podcast.

Chris Erwin:

To think back, all the shared history, how we've worked together and now you're on the show. But I think that's one of the beautiful things, if you were an early mover in digital video, just camaraderie of the people in this space and the shared war stories, it's really fun. And it's incredible how much history people have in such a very short amount of time because the space moves so quickly, but it's also like it's action packed and very intense, so the days, and the relationships just really fill up.

Dev Sethi:

I think you and I both get reminded probably on a daily, if not nearly daily basis, just how intimate the industry can feel. And because of these shared connections, these shared histories, I mean, folks who are member of VidCon when it wasn't at the Anaheim Convention Center and it was the basement of a hotel, that, again, wasn't very long ago, and just, again, a lot of that shared past.

Dev Sethi:

And actually, it makes me think ways in which I can pay some of that forward to some of my team members and other other colleagues, because for lack of a better term, you and I have been working with creators probably exponentially longer than most people today who are trying to tap into or engage the creator economy as it were. And you and I were working with these folks early days when that term barely even existed, and if not, was specific to a platform like a YouTuber as an example. And so, I think it just goes to show how far things have come, but also again, how shared that history can be and again, how intimate the industry can be. I don't want to say we're OGs because I don't feel that way, but-

Chris Erwin:

I think it's okay to say we're OGs and I think this is not like patting ourselves on the back, but if you got into space in like the early 2010s, right around the Google Original Channels program, that's pretty early on.

Dev Sethi:

Definitely. And like I said, when I was there, they hadn't even created the full underpinnings of a monetization program, which the irony being fast forward to 2021, and they're a leader in terms of social video and monetization. So to me, 10 years, it's a long time, maybe the gray in my beard would indicate otherwise. One of the reasons I left those cozy confines was actually to force myself to experience this industry through a different perspective. And I don't want to say you get a narrow lens working at a platform, but it's very easy to view the world in one very specific way.

Dev Sethi:

And I remember talking to my boss at the time, great guy who I still have a close relationship with, and I was letting him know that I was going to make this jump to go from behemoth to small startup across the country because I also entailed to move from SF in New York, and one of the reasons I cited was I want to gain enough experience, ideally expertise, but enough perspective so that if I ever decide to come back, I'll be able to deliver even more value to a YouTube having had the empathy of sitting across the aisle, across the counter, so to speak, and having really had my hands on this industry in a much different way than just the platform. I'm the provider, so to speak. Everyone's coming to work for me or coming to work with me, they wanted to gain that kind of perspective.

Chris Erwin:

I think that experience at Whistle and then at Complex, which we'll talk about in a moment, has really made you much better equipped for the job that you now have at Instagram. I think that's very well said. 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 guest, 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're at Whistle for, call it, nearly three years and then you make the jump to become chief of staff at Complex working under Rich Antoniello, who is incredible, and then also with the rest of their leadership team, including Christian Basler, who was also interviewed on this podcast. Again, what was the impetus for going over to Complex, and what was some of the work that you were doing there?

Dev Sethi:

Yeah, and Rich and Christian are two of my favorite people. I'm very lucky to have crossed paths with them and had a chance to work with them. For I'm certain many of your listeners I've met them before, but if they haven't, it's worth trying to get some time with them because they're just amazing people and brilliant minds in our space. The impetus wasn't as straightforward as it might appear on my LinkedIn profile, but I actually left Whistle in the late fall of 201, and a big reason why I left was because I actually felt like I had given everything I had physically, mentally, emotionally to the job and to the team. And it was my mother who actually sort of called it out on a phone call. And she was like, "You seem like you're always tired, you seem like you don't have much energy for anything else and maybe you don't seem as happy as you normally."

Dev Sethi:

And I don't think the happiness comment was a direct correlate to the work I was doing but first time in New York City, first time in a startup, I describe them both the same way. They are fun, they are exciting, they are intense, and they are exhausting all at the same time. And so, it was probably burning of the candle on both ends for a couple of years. And towards the end of '15, I remember having a conversation with Michael and basically coming to the conclusion that if I didn't want to be the guy who led my part of the company into 2016, then I need to do the right thing and hand this off and transition it and take care of the business and take care of myself. And so, I gave them, I think, three months' notice. I transitioned my role, leading that part of the team to one of my very dear friends, close friends in my first hire at Whistle, his name's Josh Grunberg.

Chris Erwin:

Oh, Josh is great.

Dev Sethi:

Yeah, and I know you got the chance to meet him. Anyways, transitioned the role and then left New York and headed back down to the DC where I'm originally from and just really enjoyed my life for a year. My mother had been sick at the time, she's fortunately much better now, but it sort of put things in perspective. And I wasn't saddled with adult responsibilities like a mortgage or kids at the time, so felt like as good a time as I need to take a break, which had you asked me prior to that, would I ever leave something for nothing? I would've said, "No effing way." But it felt like the right decision. I took that year off, did that for, it was almost a year and I was thinking towards just the fall of 2016, that I was ready to jump headfirst into work again.

Dev Sethi:

And it was actually a buddy of mine who shared that Complex was hiring, its chief of staff role. And I wasn't married too whether I wanted to run a team or be an IC, and I didn't really care about if I came back to New York or not, to be honest. But what I stated that were really important to me were one, working for somebody who could teach me something and who I could partner with and learn from, and the other sort of must-have was whether it was on a leadership team or in the front office, whatever the case would be, working with people with whom I could collaborate strongly, be influential, but also learn something from.

Dev Sethi:

And the reason I even used the word learning a couple of times is because, at times at Whistle, especially towards the end there, you really had to seek out learning opportunities because you could spend your entire day focused on your part of the business and there were some amazing, amazingly intelligent and talented people there who I was fortunately and sort of like through osmosis, able to learn from, but I knew in a new role, I wanted those things. And so, this guy said, "Hey, Complex is hiring their first chief of staff, you should put your hat in the ring." I did, got a chance to meet Rich, we had two conversations and he offered me the job. Before I knew it, I was packing up my things heading back to New York City, so it all happened pretty quickly, to be honest.

Chris Erwin:

That really strongly parallels what Christian told me, which I think... He's like a young media savant and I think he had been working at a European-based media company for like eight to 10 years. And then he was like, "I need to take at least a year off, I'm tired, I'm burned out." Similar to kind of what you were feeling after Whistle where it's like, "Hey, you're going to take a year off." But Rich reached out to him, I think called him, set up a coffee meeting and because Rich is so magnetic, he essentially, very quickly convinced Christian, like, "You're going to come over to Complex and we're going to build something awesome together." And he didn't end up really taking any time off, I don't even think he took two or three months off.

Chris Erwin:

But I thought it was really thoughtful of you and I think this is a theme that keeps coming up more and more is maintaining your mental health and sanity, not only in your overall career but particularly in the industry which we operate in, which is digital media and entertainment, where it moves so quickly and things are changing so fast that, there's concern that if you take time off, you're going to miss the boat, you're not going to learn, you're not going to have an opportunity to step back into the ring. I don't think that's the case. I think that you actually need to refresh and energize because of how demanding it is, what we do, and I think it makes you better, better for it.

Dev Sethi:

Christian and Rich, again, they're such good people, but Chris, this better than anybody, they are completely different. They could not be any different in terms of personality, which I think was amazing to actually see them for just partnership, where they recognized the strength in differing perspectives, different personalities, and how to operate the business. And I just thought it's really cool, it takes kind of its own sort of self-awareness.

Chris Erwin:

No, I like what you've said. I think great leaders have to find where do they fill the gaps in their team and where do they find complementary skills and energies and personalities. Because if you're just trying to replicate yourself, that's not how you build towards a bigger vision and a bigger opportunity. Clearly, Rich has done that with Christian in building out the rest of the team. And I think about that often, we always tell our clients and my own team at RockWater, we're not necessarily looking for well-rounded people, we're looking for a well-rounded team. Now, in the beginning, you kind of have to have some basic functions that are covered by everybody when you're lean and we definitely are, but as you grow, it's a very different mantra. And I heard that when I was... I think literally my first day of business school and they described the types of candidates that they were looking for and why everyone in that room, sitting in this large hundreds of person assembly, they're like, "You are a very well-rounded class because individually, all of you guys are incredible." And that has always stuck with me.

Dev Sethi:

You're reminding me of one of the things that I love sharing with the teams that I've managed, and the individuals I've managed, and that's important to me, is how do you empower those team members' voices? I've said whether you're 23 and out of college with no work experience or 35 and have been in social and digital sports for decades plus, we all see what we do, our industry, what's happening differently than anybody else and almost by sheer virtue of who you are and the life experiences that we all bring to these jobs. So if I'm as a manager, as a team leader, able to create an environment or a safe space for people to share, that's how we're going to get better, to your point. Well, maybe not well-rounded people, but well-rounded teams because you have diverse perspectives. And so, whether you're that 23-year-old or you're that 50-year-old, your participation, isn't just appreciated, it's really required in order for us to get better as teams, as organizations, et cetera.

Chris Erwin:

Very well said. All right, so Dev, so after Complex, I think you leave in around 2018 and you head over to Instagram, where you go over to become the Head of Sports. So tell us about, again, what caused that transition? What was your initial mandate when you went over there?

Dev Sethi:

There's a theme about if you want to call this a career, so to speak, I don't know if I call it that, but if there is a theme or a through-line, it's one I've been the recipient of a lot of great sort of fortune and also the recipient of just great relationships that I've had because that job, as I told you with my colleague and friend who sort of helped recognize and identify opportunities for me, that happened twice, I was actually reached out to, by a friend of mine in the industry who had worked at an agency, Octagon, who I had kept in touch with over the years. He had been in Instagram and my predecessor, the former Head of Sports was departing for a different role at the company and this role was going to be vacant. And for whatever reason, weren't going to consider my friend, so he basically said, "Hey, we've talked about working in the industry together, we like and respect each other, we could probably work well together, do you want to throw your hat in the ring?"

Dev Sethi:

And I did, and months later got a job offer to take on this role with very ambiguous title and perhaps even a more ambiguous remit, but one that was sort of mine to carve out to a degree. But even taking it back to my decision to leave YouTube, it's funny because everything I told my then boss about the reasons I was leaving, came true in the sense that, I gained this, I would call somewhat unique perspective. Having worked at Whistle, having worked at Complex while having the tech background and then having it come full circle and join Instagram and perform this role. Those things did come true, just the only thing I changed was the employer. I didn't go back to Google and YouTube, I went to Facebook and Instagram. And so, just kind of funny how that works out as far as the remit, the objectives of things I work on, I sort of like to describe it as really acting as a connective tissue between my company, its objectives, and priorities, and then the sports industry and its priorities and objectives. And how am I that connective tissue? How might that bridge be able to make those things work cohesively?

Dev Sethi:

And so, for Instagram as all well know, they're focused on things like just being relevant to young people, to having people use their service, both as consumers, but also as creators, they care about products like reels and more broadly speaking commerce, even AR, VR to a degree, and they care about being meaningful to that creator economy, which I know we touched on earlier as well.

Dev Sethi:

And so, understanding those priorities and also understanding the unique priorities that live within the sports vertical, how am I able to marry those. And for sports, as you well know, the needs, the opportunities, et cetera, they're different depending on who you are in that industry. What the NBA needs out of social media or is looking to do on social media is very different than what LeBron James wants to do or is very different than what Bryce Young at Alabama wants to leverage these platforms for. And so, how do I represent and advocate for those needs and interests, while also driving the objectives of my company? I view that as broadly speaking my remit. And on a day-to-day basis, it presents very, very differently on any given day.

Dev Sethi:

Talking yesterday with colleagues about how can we... for folks who don't know there is another Olympics coming up in a few short months here, how do we work to empower athletes participating at the Winter Olympics, to be able to express themselves and engage their fans on social, in a very unique circumstance where the games are in China. So focusing on that to today, obviously, doing this podcast, but also working on an incubator to work with the next generation of athletes and creators at HBCUs, a very storied and proud and critically important part of our ecosystem within sports and college athletics. How do we work with those athletes at those universities, who, again, a community that's largely been underrepresented, how do we work to equip, and empower, and educate them on the value our platforms can bring those athletes, especially in the era of NIL name image likeness, which happened on July 1st. So again, I guess my point is a gamut, focused on, it's very broad at times, but largely speaking it's, again, that sort of bridge between priorities and how can I be an advocate for what sports needs in order to thrive and flourish on social.

Chris Erwin:

It sounds like a very exciting, and as you described, a very broad mandate. There's much more than you could do in a simple day's time, so I think a question that would be helpful is, looking at the modern creator economy and thinking about the different partners that are out there. As you described, the NBA has a different need than say, LeBron James or different talent personalities, and then with also different events around the corner, like the Olympics being hosted in China and what does that mean for the Instagram experience here, for US-based creators and US-based sports fans? What are some of the things that you're seeing that Instagram is actually building for, where like, "Hey, this is what creators want, or this is what consumers are demanding and we need to better support this need." Can you give a few highlights of some examples of that work?

Dev Sethi:

I was just having a conversation with some folks at Endeavor, not even an hour and a half ago, and this term of creator economy, which I'm guessing, Chris, you'll agree is sort of the buzziest term in our industry of 2021, in terms of how we're thinking about it from an Instagram perspective... I'll give you the sports example and then I'll give you sort of the product example. The sports example is, the investments that my team has made in trying to empower the ecosystem around college athletes in the era of NIL. And for those who probably don't know, NIL as an acronym stands for name image and likeness, as sort of a moment in time, as a value. It basically means that college athletes, as of July 1st, for the first time, by and large, could monetize their name, image, and likeness, which also extended to social media and the ability for you to monetize your audience, be able to work with brands, et cetera.

Dev Sethi:

And the true first in the history of college athletics, July 1st will go down as one of the most important days in the history of college athletics in my opinion. So from a sports perspective, how do we empower the ecosystem around college athletes, to ready themselves for this moment, by providing education, by providing resources, by providing incubators like the one I referenced earlier, to support this ecosystem in a world where athletes, especially youth athletes, can really be full-on content creators and embrace the totality of our platforms for the first time. And so, again, that didn't exist seven months ago, and now, you've got to bite at the apple to illustrate the value an Instagram, or Facebook, or YouTube can provide to these athletes in an environment where they're actually probably more interested and inclined to listen and learn than may ever have been before, because there's a real economic opportunity available to them that wasn't there before.

Dev Sethi:

So that's sort of the sports perspective, and how I'm thinking about some of my objectives and things that are happening around us that we want to have some vision and strategy against. The other side of it, at least in terms of what Instagram's focused on in the creator economy, a primary focus on safety and wellbeing, making sure that you as a creator, a user have a positive and safe experience on our platforms. And this year, Instagram has released a number of safety tools to help preserve that safe experience on our platform. Going towards new product development like the ability for audiences to tip their favorite creators during a livestream, which I know is probably more catching up the parody on some other platforms, but we know is an important part of a creator-user experience, in ways in which creators can monetize.

Dev Sethi:

We recently announced last month that we're building essentially a branded content marketplace, where brands have the opportunity to discover creators on our platform and potentially do business with them right then and there. To have that occur on a platform, we know brands are spending their time looking for individuals to partner with, and creators are constantly looking for ways to gain opportunity and to stand out, us building a marketplace to do just that, something we've invested in recently.

Chris Erwin:

No, I really like that and thinking about, yes, Meta definitely has relationships with probably all of the largest brands, marketers on the planet, but something that Facebook has done really well is, enable really targeted marketing for these small and mid-size businesses that can't necessarily afford the 32nd TV spot. So it's like, "All right, you don't have $500,000 to spend, but you got $10,000 to spend, you can run a campaign on Facebook, targeting the clients that make the most sense and are most relevant for your business." And I like the idea that this marketplace would also enable the same, not just for running these paid media spots, but also for influencer marketing campaigns, but also something that you guys are really leaning into a lot, which is social commerce. Really enabling creators to sell product directly through the Facebook and Instagram shop product flows.

Chris Erwin:

And I think to do that, I think the brands and the creators need to come together and need a bit more support there. That's something that we've written extensively about at RockWater is like, "What is this product gap?" It's something that's really holding back the launch of the livestream commerce market in the US relative to that of China. So I think that this marketplace idea that you guys have is a step definitely in the right direction. And particularly as Instagram has so many different social commerce and also these programming products, it needs to be fueled by more collaborations. A couple of quick questions before we get to the rapid-fire and close this out, Dev, so one, some big announcements around Meta recently. Massive reorganization, $10 billion commitment to building out the Facebook Metaverse or this new virtual experience for the Facebook users and community, what does that mean for sports media? What does that mean for the partners that you work with? Is that something that you guys have an idea on? Are you helping to formulate the vision? Tell us about that.

Dev Sethi:

To me, it's exciting because, well, one, so much of this hasn't been written yet, but the potential for what the sports experience could look like at Meta, on our own platforms in the ways that I just described, but also in the Metaverse, the world is everyone's proverbial oyster in that regard, whether it's evolving the co-watching experience from how we experience it on social media today, to a more virtual environment, where we're able to co-watch a football game together, or we're rather able to play a game together, or if we just want to express ourselves in a unique way, let alone the monetization possibilities. And again, I don't want to speculate, but you can imagine the variety of ways in which monetization can come to bear in this new environment and participating in a Metaverse.

Dev Sethi:

I mean, again, I defer to the experts like yourself, who literally write newsletters on these sorts of things, but to me, it all means we can get really creative, our company, but the industry is going to get incredibly creative on that as it all comes to bear and who's going to be positively impacted. And in terms of my job, I guess specifically, I get to ideally represent them more opportunities for how organizations and individuals can work with our company, because you have the inherent value of it, you work with Instagram, then you work with Facebook, and maybe there's an interesting WhatsApp partnership, but it's this tremendous again, sort of holistic opportunity for individuals and orgs to partner with sports partnerships or other verticals and other teams in ways that may have felt fragmented in the past but I think just generally speaking allows us to delve into different areas, and hopefully do some really cool things together.

Dev Sethi:

Yeah, I've given you an example, the conversations even before I got here, with the NBC and the Olympics on Facebook and Instagram were very different in 2016 than they were in 2020. And now, imagine what those conversations look like in 2022 or 2024, and it's because of the evolution of the technology, the evolution of the platforms themselves, and the ways in which the brands and individuals want to engage their fans, which is probably the most important through-line of the entire thing.

Chris Erwin:

It's really interesting, I mean, that can be a whole separate show of just brainstorming, what does the virtual experience mean for sports fandoms of tomorrow? What younger generations want is the personalization of everything, personalization of watching sports, when, and how they want to consume it with the personalities that they care about. So you think about the in-person experience of being in the arena, being at game day, but how do you get that same excitement and energy level, but then also add to the experience of why people also like to watch sports from home, where they have their personalized social feed, and newsfeed, and maybe they have different camera angles that they're watching from their TV and from their phone. How can you put all those exciting dynamics together in this virtual environment and then, in addition, give the fans tools to express their fandom in new and exciting ways?

Chris Erwin:

So the same way of like, you're wearing the Jersey of your favorite sports team. What are some of the digital goods and digital fashion that you can express on game day and then maybe your outfit's rotating between every play or every quarter? The ideas are just really endless and really exciting.

Dev Sethi:

Absolutely, I feel like we're limited, I'm personally not being a very creative person, only limited by my creativity in the sense of everyone wants to point to a reference point, "Oh, this feels like it's the sims or this feels like something that I've seen before." Well, most of what's going to get created, no one's going to have necessarily seen before, the opportunities are essentially endless. And at the core of the metaverse and whoever participates in it, it's still fundamental that it's about communities that can connect with each other in virtual environments when they cannot be with each other in person. And that represents boundless opportunity, whether you're the NFL, whether you're trying to connect with your brothers in Savannah, whether I'm trying to connect with my twin brother who's down the road, that's still at the heart of it. And I think we're just going to see that be expressed and developed again, in a number of ways, hopefully much sooner than later.

Chris Erwin:

Well said. All right, so before we move on to the rapid-fire, I just want to give a closing notice, some kudos to you, Dev. As the listeners have heard, I have known you dating back, I think at least four or five years now. We've stayed in touch. And something that I just really appreciate is how gracious you are with your time and how gracious you are with helping people understand and get excited about all of the work in sports media and digital. And I think I follow some of the feedback that you've given us on our newsletters, the feedback that whenever we have a chance to talk on the phone or on a Zoom chat and just tracking your LinkedIn feed, you really evangelize your work and the spirit of digital media in a very positive some way and it's really appreciated. We've definitely noticed it, you have a demeanor that really points this whole industry towards a really great place and I'm really thankful for that, and I wanted to acknowledge that.

Dev Sethi:

No, thank you, I'd say you're being way too kind and I'm certain that you deliver a lot more value to this industry than I do in the seat that you sit in and then what you've put together and run but I appreciate it. I think there's many of us who have to rely on each other to continue to grow, educate ourselves, and collaborate because that's just sort of how big and gnarly this industry is. And so, you're obviously the center of the value that we all derive. And once you put together this podcast, and newsletter, the consultancy that you've built up, yeah, I just have a lot of gratitude for things that, frankly have broken my way, the core of it's just been, hopefully trying to be a decent person, but also maintain great relationships like you and I, I think we've probably spent at least 75% of that first lunch, just shooting the shit on getting to know each other, 25% on the business stuff. I'd rather take that proportion, frankly. We get to things like today because we have, I think, a great base to build off of, so I'm deeply appreciative of getting to befriend you over all these years too.

Chris Erwin:

Very welcome, such from a guy who has such a powerful position in sports media. So, all right, with that, moving on to rapid-fire, here are the rules. Six questions, answers are to be short and to the point, so it could be just a single sentence or just a single word. Do you understand the rules, Dev?

Dev Sethi:

I understand them, I don't know if I'll adhere to them, but yeah, I understand them.

Chris Erwin:

Everyone says the same thing, but I'm going to hold you to it. All right, first one, proudest life moment.

Dev Sethi:

I've been offered the opportunity to speak a couple of times in front of students at my alma mater, Notre Dame and I never thought in a million years, I would ever do anything in my life or deliver that kind of value that my alma mater would ask me to support them and be of service to them. So that was a crowning achievement in my mind at least.

Chris Erwin:

Okay, cool, what do you want to do less of in 2022?

Dev Sethi:

More sporting events, with hopefully a lot less disruptions and just more grace for, I think our fellow citizens who are all going through tough time but who all have such diverse perspectives. So hopefully more of that too. I'd say hopefully a lot less bad weather, but I don't know if the weather's even been that bad. So I don't have a great answer for that.

Chris Erwin:

Okay. Less bad weather and disruptions in 2022?

Dev Sethi:

There you go.

Chris Erwin:

But I like what you said about more sporting events and the things that matter. What are one or two things that drive your success?

Dev Sethi:

I think having a great, talented bought-in team or teams that I've managed that make me look good. And also just having a personal passion in investing in my team, their career, their goals, and the enablement of them doing great work, that's what gives me joint energy about this role and any other role and I think that's equated to personal success as well.

Chris Erwin:

Advice for media execs going into 2022.

Dev Sethi:

Just continue to embrace innovation, whether it's on platform innovation, some of the things I referenced earlier, but also the innovation in the sports industry. I mentioned NIL a number of times, but try to skate to where the puck is going. And also do it authentically, don't sort of follow the leader all the time in this industry, make that set align with how you want to serve your audiences and what your core competencies are because no one media company should aspire to be just like another media company in my opinion.

Chris Erwin:

Very well said, I love that answer. All right, last couple, so you've gone from the big platforms, to the digital media publishers, back to the big platforms, I have to ask, any future startup ambitions?

Dev Sethi:

I have few entrepreneurial bones in my body. I've thought about starting my own consultancy. Honestly, I should probably just join yours, but-

Chris Erwin:

It would be an honor, it'd be an honor to have you join our rank.

Dev Sethi:

Yeah, I'd be able to listen in to stuff in general, but I think at the core, I just want to continue to be in roles that allow me to focus on strategy and also building great operations as well.

Chris Erwin:

Last one, pretty easy, how can people get in contact with you?

Dev Sethi:

I'd say LinkedIn, although my response times can vary dramatically, but LinkedIn's a good way to hit me up. It's spelled D-E-V, last name S-E-T-H-I. You can hit me up on Instagram, I'll be remiss if I didn't mention that, last name, first name S-E-T-H-I-D-E-V. Feel free to shoot me a DM. And yeah, those are probably the two best ways to get at me.

Chris Erwin:

All right, Dev, so that's the show. Thank you so much for taking the time to do this.

Dev Sethi:

Oh Chris, thanks for having me, man, this is the best part of my week. Glad to spend my Wednesday with you and looking forward to rapping more offline, but above all, I also hope you and your family are feeling safe and healthy and getting to enjoy the holiday season.

Chris Erwin:

Thank you, Dev, same to you. I really enjoyed that conversation with Dev. He's such a good guy and I just walk away feeling really proud that there's people like that in our digital community. All right, so to close it out, a reminder that we love to hear from our listeners, so if you have any feedback on the show, any ideas for guests, you can always shoot us a note at tcupod@wearerockwater.com. And a reminder that wherever you listen to our show, please leave us a review and share the show on whatever social media accounts you have. It just helps other people find our work and really supports what we do. Last quick note, we are all so hosting a livestream commerce event, it's an executive dinner, it's going to happen in LA, probably on March 3rd. If you'd like to know more or are interested in sponsoring it, you can reach out at hello@wearerockwater.com. All right, that's it, everybody, thanks for listening.

The Come Up is written and hosted by me, Chris Erwin, and is a production of RockWater Industries. Please rate and review this show on Apple Podcasts and remember to subscribe wherever you listen to our show. And if you really dig us, feel free to forward The Come up to a friend. You can sign up for our company newsletter at wearerockwater.com/newsletter. And you could follow us on Twitter, @tcupod. The Come Up is engineered by Daniel Tureck. Music is by Devon Bryant. Logo and branding is by Kevin Zazzali. And special thanks to Andrew Cohen and Mike Booth from the RockWater team.