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Interviews with entrepreneurs and executives who are shaking things up and building exciting new companies. In industries like new Hollywood, podcasting, ecommerce, and the metaverse. Entertaining you with stories you won't hear anywhere else, from the ne

RockWater, Chris Erwin


    • Nov 10, 2022 LATEST EPISODE
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    Taehoon Kim — CEO of nWay on Raising $90M, Selling to Animoca, and Gaming x Web3

    Play Episode Listen Later Nov 10, 2022 56:20


    This interview features Taehoon (TK) Kim, Co-Founder and CEO of nWay. We discuss going to arcades with his mom in South Korea, why he wasn't allowed to play console games as a kid in Canada, what he learned from Samsung's work culture, why it's hard for VCs to invest in gaming, finding passion at the intersection of technology and art, the best type of IP for game partnerships, how he ended up selling nWay to Animoca Brands, and how player ownership in games creates attachment and meaning, and prevents gamer exploitation.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow us on LinkedIn: RockWater LinkedInEmail us: tcupod@wearerockwater.comInterview TranscriptThe interview was lightly edited for clarity.Chris Erwin:Hi, I'm Chris Erwin. Welcome to The Come Up, a podcast that interviews entrepreneurs and leaders.Taehoon Kim:So I was really upset when Lightspeed thing fell through. I went out drinking with my friends and I got hammered that night. I had another VC pitch the next morning. I was so hungover that during the presentation I threw up three times. During the pitch, I would say, "Excuse me, I'd run to the bathroom." I would throw up, come back, continue the pitch. And I did that three times., And I did the presentation 9:00 AM I came home and I was, "Oh, my God, I totally screwed that up." I fell asleep. I woke up at 4:00 PM, got a call at 5:00 PM saying that he was in. Usually it doesn't happen that way, but it was a really weird period of time in my life.Chris Erwin:This week's episode features TK Kim, CEO of nWay and a serial gaming entrepreneur. So TK was born in Seoul, South Korea to a mom who was a gamer and a lover of arcades. After studying at Cornell, TK started his career at Samsung, where he helped launch their smartphone and next gen mobile gaming businesses. TK then went on to co-found three gaming companies, and raised over $90 million in venture capital. Today he's the CEO of nWay, which is a developer, publisher, and tech platform for competitive multiplayer games across mobile, PC, and consoles. nWay was sold to Animoca in 2020.Some highlights of our chat include why he wasn't allowed to play console games as a kid in Canada, why it's hard for VCs to invest in gaming, finding passion at the intersection of technology and art, why he doesn't mind getting rejected by investors, the best type of IP for game partnerships, and how player ownership in games creates attachment and meaning and prevents gamer exploitation. All right, let's get to it.TK, thanks for being on The Come Up podcast.Taehoon Kim:Hey, thanks for having me. Super excited to be here.Chris Erwin:We have a pretty amazing story to tell about your career, but as always, we're going to rewind a bit and kind of go to the origin story. So it'd be awesome to hear about where you grew up and what your parents and what your household was like.Taehoon Kim:I was born in Seoul, Korea, and then I moved to Vancouver, Canada when I was in fourth grade. I think I was 10 or 11. At the time, growing up in Seoul, a little bit more strict environment. One funny thing is that my mom was a gamer and she would take me to the arcade, I think when I was super young, five or six years old. That's when I got really into gaming and how fun could that could be. But when I moved to Canada, however, she didn't really let me have any consoles, when that switch from the arcade era to the console era happened.I think she was a little bit influenced from the Asian culture and didn't want me to be getting too loose on academics. But when I got the computer, that's when I started really getting back to gaming. She didn't know I was playing games, but I was really into that. And then when Doom came out, that's when I really also started getting into online gaming, which is a big part of the reason why I'm so into PVP and competitive gaming.Chris Erwin:So your mom was a gamer and she would take you to the arcades in Seoul. What were the types of games that you guys liked to play together? And was this just something special that you and your mom did? Or was it a whole family outing that you did with your mom and dad and your siblings?Taehoon Kim:My dad didn't really like games, so it was just me and my mom. And she was really into Galaga and getting on the top of the leaderboard there. Oftentimes, I would watch her play and I would also try, but I wasn't as good as her. So I mean, I would mostly try to beat a record, but I couldn't. That's how I got into it early on.Chris Erwin:Did you also go to the arcade with a lot of your peers growing up when you were in Korea? And did any of your peers parents play? Or was it kind of like, I have the cool mom, she's into gaming, and we'd go do that on the weekends?Taehoon Kim:Oh, later on when I got older and I got in elementary school, yes, I definitely did go to the arcade with my friends. And then later on, in Seoul, arcades turned into PC bang. I'm not sure if you heard of it, but it's like the room full of PCs and it would play PC games there. I mean, I got in earlier than my friends, because of my mom.Chris Erwin:Remind me, what was the reason that you guys came to Vancouver from Korea?Taehoon Kim:I'm not a 100% sure if this is the real reason, but my parents would always tell me it's because I wasn't really fitting well with the type of education in Korea, where it was more, much more strict and less creative. They wanted us, me and my brother, to get a Western education. I think it turned out to be good for me, I guess.Chris Erwin:Do you remember when you were kind of joined the academic and the school system in Vancouver, I know it was at a young age, you were about 10 years old, you said, did you feel that that was like, "Hey, this is immediately different and I really like it and enjoy it"? Or was it nerve-wracking for you to make such a big change in your life to be uprooted at such a young age? What were you feeling at that time?Taehoon Kim:It was immediately different, lot less grinding. Even at third or fourth grade, back in Seoul, it was pretty tough. After school was over at 5:00 PM, I still had to go to all these after school programs until 9:00 PM or something like that. And I didn't do the homework afterwards and everybody was doing it. So there was a lot of peer pressure for parents to also put their kids to the same kind of rigorous program. And when I was in Vancouver, I didn't have to do any of that. So it felt more free and math was a lot easier.Chris Erwin:Math was a lot easier in Vancouver.Taehoon Kim:You know how crazy it is for Asian countries with math early on.Chris Erwin:So you're probably the top of your class. You were such a standout, and I bet at a young age that was pretty fun because it was easy to you too.Taehoon Kim:People thought I was super smart. I wasn't, it was just that I started earlier doing more hard stuff in math. It wasn't necessarily that was smarter. But again, on the other subject, because my English was suffering, I had to get a lot of help. So I would help them in math and they would help me with the other subjects.Chris Erwin:And you mentioned that in Western education there's also probably more emphasis on using the creative part of your brain as well, and balancing that out with the math or the quantitative side. What did that look like to you as you were going through middle school and high school before you went to college? Any specific applications or stories stand out?Taehoon Kim:Yeah, one thing that stood out to me was how a lot of the homeworks and assignments were project based and group based. Where teamwork mattered, and I would have to work with two or three other students to do a project, where we had a lot of freedom to create what we wanted. And the fact that there's no right answers. And it was really weird for me at the beginning, but I got used to it later on. But I think that's kind of a key difference. And at least at that time.Chris Erwin:During your teenage years and coming of age, before you go to Cornell, what was the gaming culture in Vancouver? And what was your role in it?Taehoon Kim:Early '90s when the console wars were happening with Nintendo and Sega, and there was a lot of cool things happening there, but I didn't get to really partake in that. My parents didn't allow me to have consoles. But same things were happening in the PC gaming, especially without modems and the early stage of internet happened. Me and my friends, we got started with Wolfenstein, which was mind blowing.Chris Erwin:Oh, I remember Wolfenstein, it was one of the earliest first person shooters on a PC.Taehoon Kim:It was mind blowing. It was the first game to really utilize 3D spaces in the way it did. But then the real game changer was Doom because you can... Even with the slow modem, I think it was an amazing feat, think about it now, with limited technology and networking, I could dial into, using my modem, and then connect with my friends, and I could play PVP. And that was when the gaming was the most fun for me, actually, playing with friends live. And I would play it late until night early in the morning, over and over again, the same map.Chris Erwin:I remember playing Wolfenstein at my friend's place, shout out, Adam Sachs. And then I also remember playing Doom, and I remember having the cheat codes where I can go into God mode.Taehoon Kim:Oh, right.Chris Erwin:And I was invincible and I could play with five different types of guns, including the rocket launcher. I can specifically remember from my youth some of the different levels. And sitting at my PC station kind of right next to my family's common room. Those are very fun memories. I don't think I was ever doing... I was never live playing with friends. Were you able to do that within the Doom platform? Or were you using a third party application on top of that?Taehoon Kim:I think it was within the Doom platform. It's pretty amazing. Doom was a fast game, so the fact that it worked, it was amazing. When Quake came out, afterwards, that's when I think e-sports was really ended up becoming more serious and people were going to playing at a more higher tier. But that's when I got out of FPS and dove into fighting games.Chris Erwin:Got it. You moved to Vancouver, you're a standout in school, on the math side just because of all your training in Korea. And you're learning about work in these more kind of project based environments or team based work, where there's also a lot of freedom for collaboration. You end up going to Cornell. When you were applying to school, what was your intention? Did you have a very clear focus of, "This is what I want my career to look like, so this is what I'm going to study in undergrad"? Or was it a bit more free flowing?Taehoon Kim:I really wanted to go into a top engineering school. I knew that was what I wanted to do. I wanted to study electrical engineering or computer science, and I was looking at Cornell, MIT, Stanford, they had really good engineering programs. And I knew that the playing online games and doing a lot of mods and all that stuff in the computer, and looking at kind of the early stage of internet, I knew that was going to be a big thing later on. My goal was to kind of get into that sector by studying engineering or information technology.Chris Erwin:Was there any certain moments when you were at Cornell that to help to point you in kind of this gaming leadership, gaming entrepreneurship career path that you've now been on for the last couple decades?Taehoon Kim:Well, a couple things happened. I was good at math. I was good at engineering, and internet was happening. And then one thing I didn't talk about was that I was also really good at art. At one point, I even thought about going to art school. I think it was because of my mom's side of the family, a lot of artists. And I think it was the DNA from my mom's side. What I love about gaming was the fact that you can kind of combine technology and my love for technology and also my love for art.And when I graduated, Cornell, started work at Samsung and there was an opportunity to go into a new gaming. That's when it clicked for me. I was like, "Wow, I really want to get into this industry. It's as both of what I love." But at Cornell, because we had super fast ethernet, a lot of people were playing StarCraft at that time. And that's how I saw the world in terms of, "Wow, these type of massively play online games. I mean, RPGs or games where you can play competitively is going to be a big thing."Chris Erwin:I don't want to date you TK, if that's uncomfortable, but around what time period was this? What year was this around?Taehoon Kim:College was from 1997 to 2002.Chris Erwin:I have to ask, too, when you say that you almost went to art school, and that you had a passion for arts, since it's very early on, what type of art applications? Was it painting? Was it drawing? Was it sculpture? Was it something completely different? What did that look like?Taehoon Kim:Sculpture, I was good, but I didn't excel at it. I was mainly good at sketching, painting, and doing just a lot of creative art, concept art, which is a big part of game development, actually.Chris Erwin:Your first role, what you did for work right after Cornell was you went to Samsung, and there you were a product manager where you helped start Samsung's smartphone business, and you're also a product manager for next-gen mobile gaming. And as you said, this was exciting to you, because you saw gaming as the intersection of technology and art. Tell us how that first role came to be and kind of what you focused on there.Taehoon Kim:I was part of a team called new business development team. Group of 13 people, and our job was to create next-gen businesses. Three businesses that we isolated as something that we should work on was telematics, which is using the map data to help people and navigations and bring new technologies to the car. Second one was smartphone business, taking some of the operating systems from PDAs at the time and then moving that over to the phone. And then third one was gaming, because Nokia was going big with gaming at that time. And Samsung was second to Nokia in market share and someone wanted to do whatever Nokia was doing at that time.So those were three main things. And I got into the gaming side after one of the first business trips was to San Jose, which at that time was hosting GDC, Game Developer Conference. And it was my first time going to GDC. And, yeah, I was just fascinated with the group. It was engineers, artists, players, developers, publishers. And that community really fascinated me, and that's when I decided, "Hey, I really want to be part of this group. I want to get into gaming." So I came back and said, "Hey, I want to take on this project." And a lot of my peers were avoiding the gaming sector, because they knew that was difficult. And Samsung previously tried to do a console and it failed. So they knew it was difficult, but I wanted to get into it. I was super excited to get into it.Chris Erwin:Was it hard to convince your leadership, just based on the past challenges that Samsung had, to do it? Or did they just say, "Hey, TK, sure if you have an idea, see what you can do and then come back to us"?Taehoon Kim:Well, the leadership really wanted to do it mainly because Nokia at the time, that's when they launched their first gaming phone called N-Gage. I'm not sure if a lot of people remember, but it was a really weird device. They launched that business, and it was getting a lot of press. And our CEO was like, "We also have to a quick follow, and we have to get into gaming phones as well." So it was but different from what they did in the past, because it wasn't just a pure console, it's a smartphone plus a gaming device.So it was a completely different type of environment at that time compared to when they were doing console. But nonetheless, because gaming is a [inaudible 00:14:06] driven and also because it's a tough business, my peers were, "Hey, I want to be in another sector." So it was less competitive for me to take on that project.Chris Erwin:So that must have been pretty exciting. Your first role out of school, you work for a very large technology company that essentially gives you as a young in your career a mandate. It's like, "Hey, TK, you know what? You want to go forward and figure out a new gaming business line for Samsung? You got the green light to go and do it." That must have felt pretty good. And I think you were there for a few years. What did you accomplish? And then what was the reason for why you decided to move on from that opportunity?Taehoon Kim:It was a very unique opportunity for me. I think I got lucky being at the right place at the right time, because that's when Samsung was really taking off as a global brand name. That's when they first overtook Sony in brand value. And that's when the consumers were looking at the brand more than as a microwave company, and a major player in the IT space. And that's when they were also hiring a lot of people from overseas.And I did both undergrad and master's program at Cornell. And when I was in my masters, I got to know the founders of Palm, which was also a Cornell EE grad, through my professor. I got really stuck into Palm OS. I was semi expert with the Palm OS. I think that's why they hired me, because Samsung was the first major mobile manufacturer to adopt the Palm OS into their phone. And then the second thing is, because at that time Samsung's culture was still, it wasn't easy for Western certain people to... A lot of people from the US schools starting there, they weren't lasting that long. So it was hard for me as well, but I kind of decided, "Hey, I'm going to really make sure that I can stick around and tough it out."Chris Erwin:I think this is another important point for the listeners is that you are also building another company that you had founded while you were at Samsung called IvyConnection. Is that right?Taehoon Kim:Right.Chris Erwin:I like this because I think this is the beginning of a ongoing theme in your career that you are a builder and you're a founder. You're working at a full-time role, you're also building something on the side. And then this leads to, I think, some other big entrepreneurial ambitions kind of later on that we'll get to. But tell us quickly about IvyConnection.Taehoon Kim:IvyConnection kind of came out of the school project that was doing at Cornell, my master's program. At first, it was supposed to be a platform to connect tutors and students. And then I quickly realized, when I got to Seoul that there were a lot of parents who were looking to send their kids overseas to top schools, and they didn't know that things were different over there in terms how admissions worked. So I kind of created the category, which is a huge category is now it was the first company to do it. And so we did get a lot of demand. I started that right before I started working at Samsung, and it was just continuously growing. I recruited a whole bunch of my friends, and I had them kind of run the company. I was a co-founder, and while working at Samsung, I was advising and helping the growth.Chris Erwin:It's amazing, because you describe at Samsung it was a very brutal work culture at the headquarters. So you're probably working very long hours, very demanding, and then you're also building something on the side. It's like when did you have time to sleep?Taehoon Kim:I was young though, so I didn't need... I was happy to just work, until I was young and single. I was at my early 20s, so it was not problem for me. But, yeah, it was pretty brutal. We had to get to work right at 8:00 AM and the system kind of keeps record of exactly when you get into the company. And then you also had to come out on Saturdays for half a day.Chris Erwin:I did not realize that, that's the expectation across... Is that across all companies in Korea, as part of the work culture and the work norms? Or is that just unique to Samsung?Taehoon Kim:I think what's pretty unique to Samsung. I think at that time chairman wanted us to start early. You basically only have one day weekend.Chris Erwin:And for you, where you're also building another company on the side, it's almost like you never had time that you weren't working or very little bit, most likely. So you're at Samsung for about three years, but then you transition to Realtime Worlds. Explain why did you transition from your Samsung role? And what were you building at Realtime Worlds?Taehoon Kim:As I said, I was a project manager for a new gaming platform, and part of my job was also to source content for the device. And I remember playing Lemmings and I met the creator of Lemons, Dave Jones who just sold DMA Design and created Realtime Worlds. And I try to convince him to create games for my platform, but him and his co-founder, they ended up recruiting me. They're like, "Hey, join us. We just started Realtime Worlds, and we'd love to get your help, because we want to get into online gaming. And you have a lot more exposure to online gaming from Seoul, from Korea. So we wanted to be part of this exciting venture." So I decided to leave Samsung and joined them.Chris Erwin:How was that experience? Was it a similar work culture? Did you feel your past experience was very helpful and so you got in there and you're like you knew exactly what to do? Or was it still a very steep learning curve at that point in your career?Taehoon Kim:It was a steep learning curve for me, in terms of game development, because I have never done game development. Because Realtime Worlds is a game developer and publisher. That's right around when they just signed a contact with Microsoft for a game called Crackdown. It was like a souped up version of GTA. Dave Jones was also the creator and designer of GTA, the original GTA 1 and 2. So it was creating a similar game. And they had ambition to also create an online version of GTA, which is where I got involved.I got one of the large publishers in Korea called Webzen to do a publishing deal to fund portion of development for the GTA online project, and be a publisher for that. So they wanted me to create the Asia branch for Realtime Worlds, they called it Realtime World Korea. I started the studio here in Seoul, recruited some engineers and designers and also did biz dev work to get that publishing deal with Webzen.Chris Erwin:And I think also one of the highlights from your time there is that, did you also help to raise money from NEA, in your role at the company as you guys were growing?Taehoon Kim:Oh, yes. My professor from Cornell, he was friends with the founder of NEA, and he knew a lot of VCs. And Realtime Worlds was based in Scotland, and they knew very little about Silicon Valley. So I told him, "Hey, we're doing something amazing here and online gaming is a new sector, so I think we should be able to raise some money." So I created the deck, which I learned from school on how to do, so created a deck, created a business plan, and then flew over to Sand Hill Road in Menlo Park and pitched to a few VCs including NEA. I was surprised. I was like, it was fairly easy at that time to raise money. NEA decided to, all by themselves, bring $30 million into the company and we didn't even have product launched at that time.Chris Erwin:This is pre-product. Did you go to Sand Hill Road by yourself? Or did you have a support team? Or was the company leadership saying, "Hey, TK, you know what you're doing here, you have the connections, go make this happen by yourself"?Taehoon Kim:It was just me at the beginning. It was just me by myself, just trying it out, because the first meeting is exploratory anyways. So at the beginning it was me. They love what they saw, and then afterwards it was like everybody, all the partners from the NEA side and also everyone from our side. At the beginning, it was just me.Chris Erwin:Wow. Did you enjoy the fundraising process? I mean, it seems like you're wearing so many hats, you're doing business development, you're fundraising, you're also building out different offices as part of the core game development practice. Was there something that you felt like you were gravitating towards more specifically? Or did you like doing it all and having a broad top down view of the company?Taehoon Kim:Yeah, I think the reason I ended up taking the fundraising process is because I actually enjoyed the process. A lot of people hate it, because part of the fundraising process is just being comfortable with getting rejected. But I didn't mind that at all. I'm like, "Fine [inaudible 00:21:57]." And big part of the process is also not only selling, but knowing what they're looking for. So I got really good at researching all the VCs, and instead of having one deck and just one approach for all the VCs, I would custom create the deck for each of the VCs, and only target the top tier ones. I quickly realized that it's actually easier to raise money from the top tier VCs than the second or third tier VCs, surprisingly. And that approach really worked, and I love the process.Chris Erwin:Why is it easier to raise money from top VCs versus tier two, tier three?Taehoon Kim:It's actually simple. The top tier VCs are able to make decisions on their own, even though it seems odd or different or something that doesn't seem intuitive. They are able to say, "Hey, we're going to take a bet on this," and they can make a quick decision. The second and third tier VCs are always looking to see what others are doing. They're always looking for validation. They're always looking to see what the first tier guys are doing.So a lot more due diligence, it takes a lot more work, and they kind of beat around the bush a lot more. They take a lot longer to make their decisions. And a lot of times they bring in other VCs to co-lead or see what they think. So it's actually a lot more work to get them to lead. So if you have a great product and you have a good vision, then just go to the top tier guys. Go straight to top to your guys. They'll be able to make a much quicker and faster decision.Chris Erwin:That's a great insight. TK, though, I do have to say yet again, while you're at Realtime Worlds, I think the same year that you start working there, is 2005, you also are the co-founder of another company called Nurien Software. So yet again, you're working at a company, it's a very big role, you're working across a variety of different company functions, but you're also building something on the side. Is that right?Taehoon Kim:Right. Yeah.Chris Erwin:What was Nurien Software?Taehoon Kim:So Nurien Software was actually a spinoff off of the Realtime Worlds' Korea office. Dave Jones, he introduced me to the guys at Epic Games, and that's when they were launching on Unreal Engine 3. And he also introduced me to another studio who was doing a music game, and that kind of clicked for me. I was like, "Hey, what if we take Unreal Engine 3, which is very high graphics fidelity, which is usually used for like MMORPGs and then create a music game out of it, because the music is to be very visual." And they wanted this to be kind of separate. So I decided to be make it, instead of doing it Realtime Worlds Korea made it into a separate one.And that also started to get momentum. And it turns out music plus gaming was a huge thing, especially in Asia. Just as we were starting the development for, we call it MStar, a music based MMO, another game called Audition just took off massively in China. It was doing a billion a year. It was a tough time for me because Realtime Worlds and Nurien Software, at the same time, was kind of taking off.Chris Erwin:And again, for Nurien Software, you also led a $25 million fundraise from NEA and top VCs.Taehoon Kim:I pitched them on Friday, and they told me they were in on Monday. So it was crazy times. That's when online gaming was really taking off. So it was actually, it's not just me, but it was much easier to raise money at that time.Chris Erwin:Probably, again, working a lot, building, not a lot of sleep. You're running both these companies. And then Nurien Software sells in 2010 to Netmarble CJ E&M. And what was the end result for Realtime Worlds? What happened to that company?Taehoon Kim:I was only running both companies for a short period of time. So right after Nurien Software got funded, the board wanted me to focus on the new VCs, and Nurien Software wanted me to focus on Nurien Software. So I helped Realtime Worlds find a replacement for me, and I left Realtime Worlds, and I was full-time at Nurien.Chris Erwin:Hey, listeners, this is Chris Erwin, your host of The Come Up. I have a quick ask for you, if you dig what we're putting down, if you like the show, if you like our guests, it would really mean a lot, if you can give us a rating wherever you listen to our show. It helps other people discover our work, and it also really supports what we do here. All right, that's it everybody. Let's get back to the interview.Taking a step back, so, TK, you're part of these very exciting companies. The leadership and the founders clearly, really believe in you, and think you are someone special. So they're giving you the green light to essentially co-found spinoffs, and then go raise additional venture funding for that. Did you feel at this point in your early career that you're like, "I'm exactly where I'm supposed to be. This is an exciting path, These are growing industries. I'm good at it. I have the right international connections. And now it's time where I want to double down on this, and I'm going to be an entrepreneur. I see white space in these gaming markets, and I want to build towards that. And I'm going to go raise capital to make that happen." What was going through your head? Because it feels like the story that you're telling is so exciting for someone to be at your career stage. What were you feeling?Taehoon Kim:That's when I realized that this act of dreaming something up, raising money for it, and actually launching it and seeing it become real and seeing a product go live, and enjoyed by millions of people, is just really fulfilling. And it's something that I knew that I wanted to continue doing. It's something that I really enjoy.So even to this day, that's the main reason that I'm doing this. Well, it's more than financially driven motives. I just love creating new things and bringing it out to people and surprising people and seeing them delighted. It makes all the hard work worthwhile, and it's a very kind of thrilling experience for me. And that's when I realized, "Hey, I want to do this long term. This is what I'm good at. Coming out with new ideas and getting it funded and launching it." Not all of them are successful, but that's fine. The act of doing it is a reward.Chris Erwin:Very well said. So I think, was it that mindset, I think, a company that you did found and you worked at for one to two years before nWay was Pixelberry. What was the quick take on Pixelberry? What was that?Taehoon Kim:So Pixelberry was also a spinoff from Nurien Software. Nurien Software was an MMO company, so, as I said, it was using Unreal Engine 3. It was still very heavy. You had to download a big client, and run it on pc. And back in 2009, 2010, that's when social gaming and hyper-accessible gaming was taken off. So Pixelberry, at the beginning, was an experiment to try to bring over a lot of the core technologies built at Nurien Software and make them more accessible, and make it so that people can just instantly play on a browser.And the first game that we tried to do was a fashion game, because we realized from launching MStar, which was a music MMO, the best way to monetize those games were through, we're making a lot of money by selling clothing for the avatars, selling fashion, in other words. So we wanted to create a game, a social game, focused on creating fashion and selling fashion.Chris Erwin:I didn't realize that Pixelberry was also a spinoff of Nurien Software. So it seems that you had a really good thing going with the founding team of Lemmings that created Realtime Worlds. There was a lot of market opportunity. The founders really believed in you, and you had all these different ways, as you said, to kind of create and innovate as the gaming markets were evolving, and bring these incredible gaming experiences to users. And I think you were part of that team for almost six years, from 2005 to 2011. What was the catalyst that caused you to break off from that, start the venture that you still run today, which is nWay?Taehoon Kim:I was doing Pixelberry and it wasn't doing that well, mainly because, me as a gamer, didn't really enjoy fashion games that much. Maybe that was the reason. Or maybe because the industry was kind of changing rapidly, but it wasn't doing that well. Zynga and a handful of others were kind of dominating the social gaming space. And the co-founders of Realtime Worlds, Dave Jones and Tony Harman, at that time, just sold realtime worlds to GamersFirst. And they're like, "Hey, TK, let's start a new company together." And that's when I kind of jumped at the opportunity, because I really wanted to work with those guys again. And that's when nWay was founded.Chris Erwin:Oh, got it. So Dave and Tony are part of the founding team of nWay?Taehoon Kim:Yes, the three of us that were the founders [inaudible 00:30:16].Chris Erwin:So I think what would be helpful for the listeners is to explain what was the initial vision for nWay, when you, Dave, and Tony were coming together to found the company. What was your vision for what you wanted to build?Taehoon Kim:By that time, I did a lot of different type of games, did [inaudible 00:30:31] mobile gaming at Samsung, I did MMOs, PC MMOs Unreal Engine 3, and then also browser based games at Pixelberry. And the vision at nWay was like, "Hey, a lot of people are becoming gamers now through new technologies, new devices, mobile was really taking off. People were playing games on mobile browsers, smart TVs, and there was new technologies to bring them all together." So the vision was, "Hey, let's go back to the type of games that we love. Let's go back to the days when we were playing Doom online, and playing fighting games with other live players. Let's bring competitive gaming, let's bring real time multiplier gaming to the emerging platforms." So that was the vision.Let's create new technologies to bring console quality, competitive multiplier games that could run on mobile browsers, smart TVs, where people can kind of play together regardless of what device they were on." That turned out to be a big thing, these days with Fortnite and Minecraft, everybody's playing crossplay games. Your friend is on tablet, somebody else is on a Nintendo Switch, and you can play together.Chris Erwin:Okay, so when you start out, that's the vision. So where do you start? What was the first steps? Is it pre-product, we're going to go raise money, and put together a team? Or in the beginning of it self-finance and you were working on a certain game or a certain platform? What were your first early moves?Taehoon Kim:I took a lot of the learnings from the previous products. So by then I knew how to make games that would run on multiple devices. I knew it wasn't easy, but we wanted to do a quick prototype of an action RPG game, where it can have four player co-op and two player PVP mode that would run on a mobile phone and a browser. We were able to create a quick prototype in about six weeks, and the prototype, it did all the selling for us.Because I could just show it to the investors, "Hey, look, I'm over here. There's another guy on a mobile device, there's another guy on another device." And they could see that we're all synchronized, and they could see that it was a very fast action game. A lot of them were blown away at how there was low latency and running so fast just over the internet. And so we were able to raise money from the top tier VCs. But at the same time, 2011, 2012 was a period of time when there were a lot of acquisitions happening, and we were also getting a lot of acquisition offers at the same time, that complicated the process.Chris Erwin:So six weeks into building a prototype, you're fundraising on Sand Hill Road, but you're also getting inbounds from companies that want to buy your business that early.Taehoon Kim:Yeah. They saw the prototype and immediately give us ridiculous offers to buy the company. It was basically VCs and companies trying to buy us competing, which helped the valuation to go up.Chris Erwin:All right. So a couple questions on that. 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. 

    Zach Blume — President of Portal A on 2006 Web Videos, the Wheelhouse Investment, and Building with Your Best Friends

    Play Episode Listen Later Oct 13, 2022 65:18


    This interview features Zach Blume, Co-Founder and President of Portal A.  We discuss how he built a 360 monetization strategy for an early Internet video series, launching one of the first branded content studios with his childhood friends, creating one of the most well-known and longest-running digital formats in YouTube Rewind, how Portal A ended up selling a minority stake to Brett Montgomery's Wheelhouse, why feeling like outsiders is central to their identity, and what's up next for the Portal A team.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow us on LinkedIn: RockWater LinkedInEmail us: tcupod@wearerockwater.comInterview TranscriptThe interview was lightly edited for clarity.Chris Erwin:Hi, I'm Chris Erwin. Welcome to the Come Up, a podcast that interviews entrepreneurs and leaders.Zach Blume:We built a business model around it that included merchandise, ad revenue share, ticketed events, and sponsorships. And so we actually ran that show at a profit, even though it was early internet video web series. And the idea was to build an entertainment property on the web that could become multi-season, could eventually travel to TV, which it did. It later became a TV series called White Collar Brawlers. It was super experimental, and I would say, looking back on a fairly innovative for three guys who had really no idea what we were doing and had no training in any of this, we built an entertainment property on the internet that was profitable.Chris Erwin:This week's episode featured Zach Blume, Co-Founder and President of Portal A. So Zach grew up in Berkeley and had a self-described normal suburban life of sports and friends. Zach then went to University of Oregon to study political science and pursued an early career running local political campaigns in California. But an opportune moment reunited Zach, with his two childhood friends to create one of the internet's earliest digital series White Collar Brawlers.After some unexpected success, the friend trio then became the founding team for Portal A, an award-winning digital and branded content company. Some highlights of our chat include his 360 monetization strategy for one of the earliest internet video brands, what it takes to co-found a successful company with your friends, how they landed a strategic investment from Wheelhouse, why feeling like an outsider is central to their identity, and how they're building towards the next massive creator opportunity. All right, let's get to it. Zach, thanks for being on the Come Up podcast.Zach Blume:It's a pleasure to be here.Chris Erwin:From our conversation yesterday, amazingly, I believe this is your first podcast interview ever. Is that right?Zach Blume:It's true. A lot of interviews over the years. Some predating the podcast era, some during the podcast era, but I'm honored to be invited onto yours. I've listened to a bunch of episodes, and we'll see how it goes.Chris Erwin:Awesome. All right, so as is typical, let's rewind a bit before we get into the whole Portal A story, although it actually starts pretty early on. So why don't you tell us about where you grew up and what your childhood was like?Zach Blume:Yeah, I grew up in Berkeley, California, the son of two die-hard New Yorkers who had moved out to California. My dad was born in the Bronx. My mom was from Manhattan. They were part of the New York exodus to California, and I was the first kid in my family who grew up in California and, of all places, Berkeley, childhood filled with lots of sports and playing in the street and all that good stuff. And the really interesting tie to the Portal A story, obviously, is that I met my two co-founders when we were somewhere between four and five years old. The stories differ, but we met in kindergarten, and we're close friends basically since we were little kids and played a lot of basketball together growing up. And the court that we played basketball in was called Portal A, which eventually became the name of our company 25 years later. The founder story of Portal A is very tied up in the childhood story of all for all three of us. I live in Oakland now, so I didn't stray too far from home.Chris Erwin:Got it. I remember in doing a little bit of research for this episode, I was trying to look up Portal A parks around the US, and I kept finding some in Orange County, so I thought you were an NorC kid, but No, you're a NorCal kid.Zach Blume:I mean, I think if there's an opposite of Orange County, it would probably be Berkeley.Chris Erwin:That's probably right.Zach Blume:But the court was actually an El Cerrito, which is an adjacent town to Berkeley, and it still exists. It's still around, and we should probably go play some hoops over there, but we haven't for years.Chris Erwin:Yeah, that'd be fun. So I have to ask, what did your parents do?Zach Blume:My dad has a business background. He runs and, up until actually six months ago, ran an investment advisory firm helping individuals manage their investments. It was a small company, five to six employees, just a great business, really community based, all about relationships and helping people manage their life and their money. And yeah, it's taught me a lot about business growing up, for sure.My mom was a therapist. She's retired now. She was a private practice in Berkeley. They've known each other since they were 20. They actually both went to the Wright Institute, which was a psychology graduate school in Berkeley. My dad was a psychologist briefly for about six months before he went back into business. And my mom was a therapist for 25 years. It was an interesting mix of business and psychology growing up, for sure.Chris Erwin:Got it. And were there any siblings?Zach Blume:No siblings? I'm the only one and-Chris Erwin:Oh, only child. Okay.Zach Blume:Yeah, interestingly, five of my closest friends, all groomsmen at my wedding, were from that same kindergarten class where I met Nate and Kai, my two co-founders. So there's definitely been a brotherly nature of those relationships. And at this point, I kind of consider Nate and Kai almost like brothers. We've known each other for 35 years, and we've been in business together for over 12 years, so it's pretty deep. Those relationships run pretty deep.Chris Erwin:Was there a part of you early on where you thought you might go into business and finance or become an investment manager like your father?Zach Blume:So there was also a lot of political kind of conversation and learning in my house. I remember from a very early age, my dad, when I was like eight, he would try to sit me down and read the Sunday Weekend Review in the New York Times. And it was like torture for me. But I think it got in there somewhere.In college, I actually studied political science and, for years, worked in the political world after I graduated from school. And I really thought that was my path, and it was for many years. I worked on campaigns. I started managing campaigns. I worked for political communication shop in San Francisco for years. I kind of burned out on the world of politics. I've since been re-engaged in a lot of different ways. But when I burned out on politics, that's when I thought I was going to go into business.I left the political world, was studying to go to business school, doing all the GMAT prep, and that's when Nate and Kai came to me and said, "We should make a web series together." Because I had a three-month gap, and it sounded so fun. We had made some stuff together just for fun earlier on. And so, while I was studying for the GMAT, I joined Nate and Kai to make this web series in the early days of internet video. And that's kind of the origin story of where we are today is that that web series, it was called White Collar Brawler. It was totally weird and crazy and awesome, and it started us on our journey to where we are today.Chris Erwin:Got it. So going back even a bit further, I'm just curious because you met your co-founders, Nate and Kai, back when you were in kindergarten, as you said, four to five years old, when you were in middle school, or when you in high school, were you guys part of the theater club? Were you creating any types of videos for your classes? There's something about meeting people early in your childhood, particularly in digital media, that I think blossoms into different relationships. So was there any kind of through line early on where you were interested in media entertainment before getting into PoliSci, which as part of your early career?Zach Blume:Yeah, I think there definitely was for Nate and Kai. There was less so for me. So Nate and Kai started making, maybe not in high school, but in their college years, they both went to school on the East Coast. This is like 2003, 2004, 2005. They started making internet, video, and web series when they were in college. And Kai was a film major, so he had some training, and they started just playing a lot of comedic stuff earliest day pre-YouTube, so quick time player-type stuff.So yeah, high school, I'm not so sure college for sure for them, at least it started building. And then, right after college, the three of us, plus another friend, grabbed a flight to Hanoi, bought motorcycles in Vietnam, and traveled across the country, and we made a web series called Huge In Asia.So it was like a 30-episode comedy travel web series, kind of just chronicling our journey across Vietnam. And then, they went on, I had to come back to the States for some work, but they went on to Mongolia, China, Laos, all sorts of different countries across Asia. That's where it really started for us the idea that you could not be in the formal, either entertainment industry or advertising industry. You could buy a pretty shitty camera, have an idea, start producing content and build an audience. And that was 2006. So the interest in internet video as a medium really started there.Then we all went our separate ways, and all did kind of normal early career professional stuff, but that Huge in Asia as an idea and an adventure was really the starting point for us. So yeah, so I would say the interest in video and film and just the distribution of it online started college years, and then the year after, we went to Asia.Chris Erwin:Got it. So just to add some context here, because I think YouTube was founded around 2004, and then it was bought by Google around '05, '06 pretty shortly after founding. So when you're coming out of college, I think this is around a 2006 timeframe, as you noted, when you guys decided to go to Asia and to do this motorcycle tour, was there a goal of, "Hey, there's an explosion in internet video, we have a chance to build an audience and make money off of this?" Or was it just, "Hey, this seems like a really fun thing to do. We're just coming out of college, we're kind of this in this exploratory phase, we like spending time with one another, let's go do this and see what happens." When you were thinking from the beginning, what was the end goal of that project?Zach Blume:Much more the latter. I mean, it was purely experimental. It was all about the adventure. I think there was a sense that we were at the dawn of something new, and I think that YouTube, Vimeo, I mean all the other platforms in the investment of history at this point, but there was an explosion of internet video technology that was enabling people like us to start making stuff. So I think there was like a sense that something was happening. It definitely was not a money-making endeavor. In fact, it was the opposite. And it was really just to experiment and play and see where it took us.Looking back on it, 15 years later, 18 years later, whatever it is, I think it's 100% served its purpose. We got our feet wet. We started experimenting. We started learning what worked, what didn't work, what audiences responded to, what made us happy. It kind of gelled our relationship as young adults versus as kids. And we never would've known at the time, but it did 100% lead to Portal A, and that's to where we are now.Chris Erwin:Okay, yeah, I hear you. I think, looking back in retrospect, it was definitely a catalyst to the forming of Portal A and where you got to where you are today, but it wasn't because when you came back from that trip, it wasn't like, "Oh, let's found Portal A and let's get going." You actually entered into the political realm for two to three years before founding Portal A, right?Zach Blume:Yep. That was always my plan, and that was the career I was going to pursue for sure.Chris Erwin:So, but the seed had been planted, but yeah, in '06, for the next two years, you become a political campaign manager. What campaigns were you working on?Zach Blume:First campaign was a Congressional campaign in Southern California. That was actually my first job out of college. We got trounced by 22 points in a very heavily Republican district by Mary Bono, who was Sonny Bono's widow. We had a candidate that we really liked, and it was the 2006 election, so it was kind of the midway point or the later stages of, I guess, Bush's first term. And there was a ground swell of just whenever there's a presidential election, two years later, the other party is the one that's like kind of getting their grassroots organizing on.So it was definitely an exciting time. It was an exciting election year. I happened to work on a campaign that was in a... It was Palm Springs. It was like that area, heavily Republican area, but I learned so much, and I was running a third of the district, and I loved it. I loved organizing. I felt like I was on the right side of history and doing the right thing.That then led to this fellowship that I did called The Coro Fellowship. I met one of my best friends on the campaign who had done the Coro Fellowship, and it was a year-long fellowship in political and public affairs. Everybody listening to this podcast will never have heard of Coro, but in the political and policy world, it's well-known and well-regarded, and that was a great experience. I got exposure across a bunch of different sectors, including government, labor unions, business, nonprofits, et cetera.Out of that, I started managing a campaign for the California State Assembly in Richmond, California, with a candidate, Tony Thurmond, who is now the Superintendent of Public Education in California. So he's gone on to do pretty big things. He's an amazing guy.And that led me to work at Storefront Political Media, which was a political media and communication shop in San Francisco that, at the time, ran all of Gavin Newsom's campaigns. He was then the mayor of San Francisco, obviously, is now the governor of California.I ran the mayor's race in Houston, of all places, elected Annise Parker, who was the first lesbian mayor of a major American city. And she was a fantastic executive out in Houston and then had a bunch of different clients, including firefighters unions, individual candidates. Ultimately, I was working for a client that was leading initiatives that didn't necessarily align with my own political values. And that was part of what led me to say I was ready to move on from the world of politics. So it was a fantastic experience, I learned so much, but that's what kind of prompted me to want to go to business school, which is what I was going to do until Nate and Kai came along and said, "Let's make a web series."Chris Erwin:Yeah. When you were working on these political campaigns and also working with Storefront Political Media, which is a national communication media and PR firm, were you bringing some of your grassroots internet video tactics to help build community, to help build influence and sway some of these elections? Was that part of kind of some of the unique flavor that you brought to these teams?Zach Blume:For sure, I was definitely the internet guy at that shop. I mean, there were a couple of us, there was a couple of coworkers who were of my generation. This was just when kind of Facebook was becoming a powerful tool for communications pre-Instagram, pre all those other platforms we're familiar with now. I definitely brought my expertise in video and the distribution of content online to that work. It was an interesting time politically. It was just at the advent of the internet as a powerful communications tool for campaigns.Chris Erwin:So then you're considering going to business school, you take the GMAT.Zach Blume:I got halfway through the class, and White Collar Brawler, that series, came calling. It was all-consuming. It was so fun. And we produced the hell out of that show, and it got a lot of notoriety. We got a big write-up in the New York Times, like big-Chris Erwin:Give us the context for White Collar Brawler again. What exactly was that project, and what were you supporting?Zach Blume:The log line was basically what happens when you take office workers whose muscles have become dilapidated by sitting in front of a computer all day long and train them to become amateur boxers. It just so happened that the two White Collar workers that were the stars of the show were Nate and Kai. So it was very, kind of like meta, we were the creators, and Nate and Kai were also the stars.The experimental part of it was shooting and producing the series in real-time. So there was an experiential element to the show, meaning as Nate and Kai were training to become boxers, fans of the show could actually come out and train with them, run on the beach in San Francisco or go to a training session with a boxing coach. We had events happening throughout the course of the show. It eventually culminated in an actual fight, a licensed fight in Berkeley between Nate and Kai for the Crown. And we had, I think, 1500 people showed up to that site and paid tickets-Chris Erwin:Was it boxing, mixed martial arts? What was the actual thoughts?Zach Blume:No, just old-school boxing.Chris Erwin:Okay.Zach Blume:It was the real deal. And-Chris Erwin:I may have missed this in the beginning. Who funded this? What was the purpose of it?Zach Blume:It was partially self-funded. It was partially funded by a friend of ours who had sold, in the early internet days, had sold his tech company to Google in one of the early Google acquisitions. So he just privately financed, I mean, we're not talking about big dollars here, and we built a business model around it that included merchandise, ad revenue share, events, ticketed events, and sponsorships, which I was in charge of in addition to other things.And so we actually ran that show at a profit, even though it was just an early internet video web series. It was actually a profitable property, and the idea was to build an entertainment property on the web that could become multi-season, could eventually travel to TV, which it did. It later became a TV series called White Collar Brawlers. And so it was actually super experimental, and I would say, looking back on it, fairly innovative in terms of for three guys who had really no idea what we were doing and had no training in any of this, we built an entertainment property on the internet that was profitable.Back to the question, I mean, that's what distracted me from going to business school because I felt like, first of all, I was learning so much, I was having so much fun creating content with two friends, and you just had a feeling that we were onto something and we didn't know what that thing was. We thought we were going to be an original entertainment company that would just make shows like White Collar Brawler, but we knew there was something. We knew there was a lot of activity and interest in this space. And so that took up all my attention and then took up my attention for the next 12 years.Chris Erwin:I will say from personal experience it saved you a couple of hundred thousand dollars and a lot of agony of actually taking that test.Zach Blume:Right, exactly.Chris Erwin:And being two years out of the workforce, speaking from personal experience.Zach Blume:Right. I know, I know.Chris Erwin:So, okay. And look, this is interesting to think about how you guys, as a founding team, were gelling and coming together. When you guys started talking, "Let's do this White Collar Brawler show as a team," what was your specific role, Zach? What was it like? What are you going to focus on?Zach Blume:Yeah, I mean, it actually reflects the role that I now play and ended up playing when we turned White Collar Brawler into a business. So Nate and Kai are more on the creative side, the creative and production side, both had experience. They had both actually before me had left their kind of "normal jobs," moved to LA, and started making internet video with a vision for again, "We don't know what it is, but there's something going on here, and we want to be a part of it."They had background as almost as creators themselves and also some training, actually with the physical act of production. So Nate and Kai were always much more on the creative side and the production side. And then my role was kind of capital B business. I was responsible for sponsorships. I was responsible for the operations of the show. I was responsible for where we were going to have office space, all that type of stuff. Basically the business side of creativity, and that's the same today. I mean, it's kind of like, it was just a foreshadow of the roles that we ended up playing as we were growing Portal A. And we've always had a super clear and complementary division of labor.I would say when looking for business partners, I think that might be, I mean, your rapport and your ability to communicate is lots of things are really important, but making sure that each person, each principal has a clear role and that they actually like that role and can succeed in that role is I think one of the keys to business success. So we've always had very clear roles. We've always liked our roles and felt like we belonged where we were. That's how it started with White Collar Brawler.Chris Erwin:That's awesome. Yeah, I have to give you some real kudos because you take very early on in your career, and in the digital entertainment ecosystem, you take an IP concept, and you create a diversified, sustainable business model around it where you have revenue coming in from advertising, sponsorships, merch, ticket sales, that's what many different IP properties want to figure out today. And many struggle to do that.Zach Blume:The only we could've described it back then as well as you described it now, but yes, that's basically what it was.Chris Erwin:Yeah, you look around at one another, you have this culmination in a ticketed event where there's over 1500 people pay to see the fight between Nate and Kai. And so you guys look around at one another and say, "Hey, we got something here." Is the next step? Let's found a business, call it Portal A and start doing this at scale. Or did it kind of just naturally happen, saying, "All right, let's find the next project and see where it goes from there."Zach Blume:It was much more, again, the latter. I mean, we did know that there was something brewing; I gave ourselves, at the very least credit for that. Did not have a business model. We did not have a plan. We had a kind of a concept and an idea and a good partnership. And I think that was really important too, is just how well we worked together.When we came out of White Collar Brawler, we had this idea credit to Kai. I believe we really wanted to do a show about whiskey, that that was going to be our next piece of IP that we wanted to develop and the concept behind the show, again because we didn't want, we were just going to be doing original series built for internet video was basically a distillery tour type show, but with a twist where there would be a membership model involved. And for anybody who was in a... 99% of viewers would just watch the show for the entertainment value, any type of good travel show that built that type of audience. But 1% of viewers would subscribe to the show and get a drum of whiskey. For each distillery that we were visiting as part of the show, they would actually get samples in the mail, and it would be kind of a whiskey of the month model married to an entertainment property.And we were coming out of White Collar Brawlers, we were visiting distilleries, getting drunk, trying to figure out this model. And we were super hyped on it. We thought it was a really interesting way to monetize internet video through subscriptions. And we even got into the logistics of shipping, and we were really going down that path, and in the meantime, we were broke, we were like 25 years old and-Chris Erwin:That was my next question. How are you funding all of this?Zach Blume:Well, we paid ourselves an extremely nominal salary. I would call it a stipend when we were making White Collar Brawler enough to survive. And then, coming out of that, we were trying to do our whiskey show, but that stipend went away. So we were without income, really. I mean, I remember going to Bank of America at some point, and there was so little... This is one of our funny stories that we tell each other. I remember this parking lot moment where the three of us had gone to Bank of America, where we had this White Collar Brawler account, or maybe it's a Portal A account. I'm not sure. And there was, I think, less than $1000 in there, and it was one of those like, oh, shit-type moments, and I remember going out to the parking lot and being like to Nate and Kai because I was always kind of the rah-rah guy of the three of us. And just, I remember basically having to give a motivational speech about that we were going to be okay, that this is going to be okay, despite the fact that we had absolutely zero money in the bank.That was where we were at that point. We were trying to figure out this whiskey idea, and then all of a sudden, because of the popularity of White Collar Brawler and some big YouTube videos we had made to promote the series, we started getting some inbound interest from brands. And that was never in the plan. We would think about sponsorships on our original series from brands, but never creative service worked directly to brands, and our first phone call was-Chris Erwin:Explain that difference for the listeners. I think that's a good nuance.Zach Blume:Yeah, I mean, if there was a business model, the business model we were considering was building properties like White Collar Brawler that could be sponsored by, in the best-case scenario, Nike or by Everlast, the boxing company, or by Gatorade or that's who we were pursuing for what-Chris Erwin:So think of title cards and brought to you by et cetera.Zach Blume:Exactly. Or like sponsoring events or merchandise or all that type of stuff. And we had some success, not from the big brands, but we had some success on White Collar Brawler with sponsorships from more regional brands, or like there were some beer companies and some smaller merchandising startups that were part of the sponsorship mix.I will say that we sent out about 500 to 1000 sponsorship emails and got about five sponsors. So we worked hard at it. And so that was the model we were going to pursue even for something like the whiskey show. We were going to look for sponsors and brand sponsors in that way. We never thought we were going to build a creative services company, meaning brands, an advertising company effectively, like brands hiring us as a service provider to create content. That was never, ever something we thought about.We started getting these phone calls. I remember being in a car one time, and I got this random call from a number I did not know, and it turned out to be a marketing manager at the Gap. Her name was Sue Kwon. Shout out, Sue Kwon, if you're out there. She was our first real client after White Collar Brawler. And we started making videos for the Gap, as kind of like a little agency production company.Then we got some more calls. There was a Tequila company that wanted us to make a web series called Tres Agaves Tequila. They wanted us to make a web series shot in Mexico about the origins of Tequila. Then we got a call from Jawbone, which was a hot Bluetooth speaker company at the time-based in the Bay Area. They wanted us to make a music video featuring a bunch of early YouTube influencers or creators.So we started getting these, we called them gigs at the time because literally all we were trying to do is pay our rent and so we could make the whiskey shows. We were just trying to get a little bit of income coming in so we could actually go out and make our dream whiskey show. And there were fun projects, and we weren't making advertising. We were making content, and that was a big difference for us. We weren't making pre-roll ads or 30-second ads. We were making web series for brands and music videos for brands and all that type of stuff. And without knowing it, we kind of stumbled across an area that was in high demand, which was brands trying to figure out what to do on platforms like YouTube and social media with video. We had established ourselves as understanding that world.So that's the origin of our branded content business which became the core of our business for many, many years was just one-off phone calls, unexpected phone calls, taking projects as gigs to pay the bills, and just kind of doing our best and seeing where it led.Chris Erwin:Hey listeners, this is Chris Erwin, your host of the Come Up. I have a quick ask for you if you dig what we're putting down. If you like the show, if you like our guests, it would really mean a lot if you can give us a rating wherever you listen to our show, it helps other people discover our work, and it also really supports what we do here. All right, that's it, everybody. Let's get back to the interview.What was the moment where you felt it evolved from, "Hey, it's the three of us rotating between gigs, hiring freelancers as need be, to what became a business, which is called a systematized and efficient way to deliver consistent quality around a good or service."Zach Blume:I think the first year was the gig model. It was just a patchwork of projects in order to generate some form of income. The second year it started to feel real. There started to be a fairly steady flow of inbound interests, and then a kind of something we be started to become known for a type of content. It was kind of humorous, entertaining, felt like it was native to the internet and to YouTube.I think in that second year was when it started to feel like a business, and then some light clicked for me that we actually needed to do some business planning and thinking, and I had no idea what I was doing. I mean zero, negative. Negative idea what I was doing. But I had grown up where my dad was a small business owner, so I had some exposure, but I just remember being it was just like a vast sea of unknown principles and requirements that I had to navigate.Chris Erwin:How did you figure that out? Did you put together an advisory board? Did you call your dad? Were you calling some other friends in business?Zach Blume:One of our earliest advisors was not a business advisor. He was our sensei in some forms in the earliest days. And this is another shout-out to Steve Wolf, who you may know, who was on the executive team of Blip, which was one of those many early internet video platforms. He really helped us understand the space.We did not have a formal advisory board. We did not have a board. And it was truly trial and error. That's the best way I can describe it. It was just using our brains and figuring things out through mistakes and successes. It is a total blur looking back on it, but I think we were a good partnership. We had our heads screwed on straight, and we kind of learned how to operate.Chris Erwin:Another important part, too, is, like you said, when you all looked at your bank account, and everyone's face went white, but you were the rah-rah guy, which is like, "Hey, guys, we're going to figure this out. Where there's a will, there's a way." And I think that's a very important role. Shout to Steve Wolf. He was one of the execs that oversaw the AwesomenessTV network when I was there in 2014, 2015 timeframe. Super sharp guy, OG in the digital space. So not surprised to hear that he was a valuable advisor to you.All right, so then I think there's another pretty big moment where your business takes an even bigger step up. And I think this has to do with becoming the official partner for the YouTube Rewind project. The moment where you felt, "Okay, we're really onto something here."Zach Blume:Yeah, it was coincidental. We were introduced to somebody at YouTube in 2011 as a three-person team that was making internet video content and mostly on YouTube. And Rewind was just a twinkle of an idea. I mean, it was like there was a minor budget. It was basically a countdown of the top videos of the year. The budget was, I think, $20,000 in the first year to make Rewind. And we shot it in a small studio location. It was one of our earliest projects, and it was before Rewind became Rewind, the big thing that many of us are familiar with. It was a major validator for us to start working with YouTube directly as a client. And Rewind eventually became a project that defined our growth for many, many years to come. But it started very, very small.Chris Erwin:From that project. You've been around for now for 12 years, being founded around 2010. What did the growth in scaling part of your business looks like? With YouTube Rewind and other marquee projects, you're starting to get a sense of what are we actually building towards. Was there a point of view there or like, "Hey, we have inbound interests, we're working with brands and advertisers," all of a sudden we're working with publishers, and were you just kind of being more reactive or was it a mix of being reactive and proactive?Zach Blume:The best analogy I can draw is to kind of riding a wave. This may resonate with you, but I don't think we knew what was around the next corner or what the next thing was going to look like. We were just building momentum in those early years and taking each project as it came. We knew we had something. We knew we had a good partnership. We knew we were starting to bring some really interesting, smart people to the team, clients that were really willing to push some boundaries. And I was learning as I went along how to run a business, and Kai was learning, and Nate was learning how to create amazing content, and there was not a lot of foresight. It was mostly about riding a wave and seeing where the wave took us. Then doing a really good job. That was really important because every project, the success or not success for the project kind of dictated what the next chapter was going to look like.So we just focused on trying to build some good fundamentals for the business, trying to make sure we were profitable because we had to be and just making work that we were proud of. That's the extent of our planning, I think, was just what did the next three months look like and how do we keep riding this wave?Chris Erwin:Yeah, and that's something I think worth emphasizing for the listeners where it's, so often people will say you have to be super strategic in planning every single move and where is their white space and how are you going to beat out your competitors to get it? But I think when you are building a small business, and this is something that I reeducate myself on consistently with RockWater, it's really about the basics, which is know your core service offering and nail it and delight clients, from there, that's really the core foundation from where you grow and where other things can emerge. And I think that's a testament to really what you guys have done for well over a decade is you know your lane, and you operate so effectively within it that is now, over the past few years, created some other really exciting opportunities for you, your success in your lane led to the investment by Wheelhouse a couple of years back. So how did that come to be? Because I think that's a pretty big moment for the company.Zach Blume:That fast-forward a bit over years of misery and happiness and everything in between. We threw ourselves entirely into growing Portal A for the bulk of our 20s. It was all-encompassing, tons of sacrifices that were made to other parts of our lives, which I'm okay with looking back. I do think that 20s are a good time to throw yourself and just be completely focused and passionate about something like this. And we built that branded business. We diversified the type of clients we were working with. Projects got bigger and bigger, Rewind got bigger, and all the rest of our projects got bigger.Starting around 2016, we wanted very badly to return to the original thesis of Portal A, which was creating an original entertainment properties for the web. That's where it all started. And we had spent so many years working with brands, and it was fantastic, and it was a good business, and we got to make really cool stuff. But we had this hunger to return to 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 performanc

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    Camila Victoriano — Founder of Sonoro on Building LA Times Studios, Latinx Podcast Innovation, and Following the Story VS the Medium

    Play Episode Listen Later Sep 15, 2022 67:01


    This interview features Camila Victoriano, Co-Founder and Head of Partnerships at Sonoro.  We discuss how fan fiction taught her to see nerds as heroes, being in the room when Dirty John was pitched to become a podcast, her crash course to figure out the business of podcasting, becoming a first time founder during COVID, why the Mexico audio market is like the US four years ago, Sonoro's growth to a global entertainment company, and why there are no limits to Latino stories.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow us on LinkedIn: RockWater LinkedInEmail us: tcupod@wearerockwater.comInterview TranscriptThe interview was lightly edited for clarity.Chris Erwin:Hi, I'm Chris Erwin. Welcome to The Come Up, a podcast that interviews entrepreneurs and leaders.Camila Victoriano:So in 2017, we had a meeting with the editor in chief at the time, and he was like, let me sit you guys down and read you this out loud. And it was what would become Dirty John. That's when we realized there's something here that I think could be our first big swing in audio and in podcasting. And we got to talking and at that point we were like, I think we can do something here. And I think there's a story here to be told in audio. When it launched, it took us all by surprise with how well it did. Obviously we knew it was a good story, but I think you never know when something's going to be that much of a hit. Today, it probably has over 80 million downloads.Chris Erwin:This week's episode features Camila Victoriano, co-founder and head of partnerships at Sonoro. So Camila grew up in Miami as a self-described nerd with a passion for books and fan fiction. She then went to Harvard to study English, literature and history, which led to her early career, starting at the LA Times. While there, she became a founding member of their studios division and a “audio champion”. Then in 2020, she went on to co-found Sonoro, a global entertainment company focused on creating premium, culturally relevant content that starts in audio and comes alive in TV, film and beyond.Sonoro collaborates with leading and emerging Latinx storytellers from over a dozen countries to develop original franchises in English, Spanish, and Spanglish. Some highlights of our chat include how fan fiction taught her to see nerds as heroes being in the room when Dirty John was pitched to become a podcast, her crash course to figure out the business of podcasting, becoming a first time founder during COVID, why the Mexico audio market is like the US four years ago and why there are no limits to Latino stories. All right, let's get to it. Camila, thanks for being on the podcast.Camila Victoriano:Yeah. Thank you for having me. Excited to be here.Chris Erwin:For sure. So let's rewind a bit and I think it'd be helpful to hear about where you grew up in Miami and what your household was like. Tell us about that.Camila Victoriano:Yeah. So I grew up in Miami, Florida, very proud and loud Latino community, which I was very lucky to be a part of, in the Coral Gables Pinecrest area for those that know Miami and my household was great. My dad, he worked in shipping with South America. My mom was a stay at home mom. And so really as most kids of immigrants, I had obviously parents I loved and looked up to, but it was very different than folks that maybe have parents that grew up in America and knew the ins and outs of the job market and schools and things like that. But really great household, really always pushing me to be ambitious and to reach for the stars. So I was, yeah, just lucky to have parents always that were super supportive. Questioned a little bit, the English major, that path that I chose to go on, but we're generally really happy and really supportive with everything that I pursued.Chris Erwin:Yeah. And where did your parents immigrate from?Camila Victoriano:My mom is Peruvian and my dad was Chilean.Chris Erwin:I have been to both countries to surf. I was in Lobitos in I think Northern Peru and I was also in Pichilemu in Chile and yeah, just absolutely beautiful countries. Great food, great culture. So do you visit those countries often?Camila Victoriano:I visited Chile once, much to the chagrin of my father, but Peru, I visited so many times and yeah, they both have incredible food, incredible wine. So you can't really go wrong. I did Machu Picchu and Cusco, and that sort of trip with my mom once I graduated college, which is really great just to go back and be a tourist in our country, but they're both beautiful and yeah, I love going back.Chris Erwin:Oh, that's awesome. All right. So growing up in your household, what were some of your early passions and interests? I know yesterday we talked about that you had an early interest in storytelling, but in some more traditional forms dating back to the ‘90s, but yeah. Tell us about that. What were you into?Camila Victoriano:I was always a huge reader. It's funny because my parents read, but not super frequently. My grandparents were big readers, but I always, always gravitated towards books. I remember, like many people of my generation when I was six, I read the first Harry Potter book and that was just mind blowing for me and I think...Chris Erwin:At six years old? Because I think I learned to read at like five.Camila Victoriano:Yeah. I had help with my mom a little bit but I remember we read it together and we would just mark with a crayon every time where we ended on the page. But I remember that book was like, I think when I first really understood how detailed and how enveloping worlds could be. And I think starting from that point, I just went full on into fantasy, YA, all sorts of books. I was just reading obsessively. It also helped that I was a classic nerd in middle school and high school and all throughout childhood, really. So I think for me, books, literature stories were just a way to see the world, see people like me, a lot of times in fantasy books or in sci-fi books in particular, you have the nerds as heroes.And so I think for me, that was a big part of why I gravitated to those genres in particular. But yeah, I just read all the time and then I did light gaming. So I played the Sims, again, similar idea though. You're world building. You're living vicariously through these avatars, but that was really how I spent most of my time, I obviously played outside a little bit too, but I was a big indoor reader always.Chris Erwin:Got it. This is interesting because the last interview I just did was with Adam Reimer, the CEO of Optic Gaming, and we talked a lot, he was born in the late ‘70s. So he was like a 1980s self described internet nerd as he says, before being a nerd was cool. So he was going to web meetups at bowling alleys when he was just a young teenager. Over through line with you because he was in Fort Lauderdale and you grew up in Miami. So two Florida nerds.Camila Victoriano:Yeah. Nerds unite. I love it.Chris Erwin:Nerds unite. You also mentioned that you also got into fan fiction. Were you writing fan fiction? Were you consuming it? Was it a mix of both?Camila Victoriano:A mix of both. So that's really in middle school in particular, how I really bonded with my small group of friends. I remember my best friend and I, we connected, we were on the bus reading a Harry Potter fanfiction on at that point it was fanfiction.net. And that is also again, similarly because in person with people, it was just like, we weren't really connecting that much. And so that community online was huge for me and my friend. We read all the time, people had comments, you had editors that you worked with and we wrote them ourselves too. And I think, looking back in the retrospective for me, that's where I think I first started to realize the potential of world building really in storytelling and in media and entertainment. It's like, it didn't stop with the canon text. You could really expand beyond that.We loved telling stories about Harry Potter's parents and how they would go to Hogwarts, like super in the weeds, deep fandom. I don't know. I think for me that was just a real eye opener too, of like, oh, there's a whole online community. And I don't think at that point I was really thinking business. But I think for me, that's where I started to redirect my focus much more seriously too of, oh, this isn't just like, oh, I like books for fun. There's people all around the world that are incredibly passionate and spending hours upon hours of time, oftentimes after hours of school to just write and to really immerse themselves in these universes. And I remember writing them and reading them, just realizing how badly I wanted to be a part of creating things that caused the same feeling. And so for me, that was huge in that respect too.Chris Erwin:Well, thinking about fanfiction, literally there are now companies and platforms that are worth hundreds of millions of dollars that foster fanfiction, the communities around them. I think of Wattpad where you have film studios and TV studios, and a lot of the streamers that are now optioning IP from these fanfiction communities to make into long form premium content. Pretty incredible to see. So you go to high school and then you end up going to Harvard. I think you end up becoming an English major at Harvard. Was that always the intent from when you were in high school, it's like, yes, I'm going to go and get an English degree? What were you thinking? How did you want to spend your time in college? And then how did that evolve after you went?Camila Victoriano:I was typical good student in high school, right, but I think the older I got, the more I realized, oh no, my passion really lies in my English classes, my history classes. Obviously, I think math, once I got to calculus, I was like, all right, this might not be for me. And then science never really gravitated towards, so for me, it was always very clear that even though I tended to be a generalist in many things, my passion and my heart really was in writing and reading and stories and in history too, in the real world and how they intersected and how they affected each other. And so I remember when I was applying to schools again, my parents were like, are you sure you want to do English?Because for them, it was in Latin America, many of the schools don't have that many practical degrees like that. You pick something a bit more technical. So I remember I would tell them, oh yeah, don't worry. I'm going to do English, but I'm going to minor in economics, which never happened. Once I got there, I was like, absolutely not, but that's what I would tell them because I was like, oh no, I'm going to be an English major, but I'm going to have some business acumen to go with it. And I think at that point when I was going into college and applying to schools, what I wanted to do was go into book publishing. And I really wanted to, I remember I had seen that Sandra Bullock movie, the proposal where she's an editor and I was like, that's what I want to do. And so at that point I was talking to, we have this really awesome local bookstore in Miami called Books and Books.And I went and met with the owner, Mitchell Kaplan had a conversation with him. And I remember I told him I wanted to get into books. I wanted to get into publishing. And he's like, look, you're young, you're getting into college. I run a bookstore, but I would tell you, don't worry so much about the medium, just follow the content where the content's going. And that was a huge eye opener. Even though it seems now obvious to, sitting here saying that, I think for me at that age where I was, so it's easy to get one track mind of like, this is what I want to do, and there's nothing else, to get that advice from someone who was running a place that I loved and went to so frequently growing up.And I think that for me, gave me a bit more flexibility going into college, just saying, okay, let's see where I gravitate towards. I know I want to do something creative. I know I want to still study English, but maybe he's right and I don't have to just stick to publishing. So when I got into Harvard I still, again, focused my classes, really liberal arts, right, like film classes, history classes. But I was a bit more, when I got there, unclear of what that would actually lead to in an exciting way, I think. But that was probably a really great piece of advice that affected how I thought about what would come next after Harvard.Chris Erwin:Yeah. So following that thread, I really love that advice of, don't worry about the medium, just follow the content. Clearly I think that really influenced a later decision that you made about doubling down on audio. But before we get there, in terms of following the content, at Harvard, it seems like you dabbled in a few different things where you did an internship with the LA Times, which is maybe news and journalistic reporting. You're also a staff writer for the Harvard political review. So what did following the content look like for you when you were at school?Camila Victoriano:So Harvard can be a really overwhelming place. My mom had gone to college, my dad hadn't finished. So it was a semi first gen college experience where I was like, whoa, once I got there. It was incredibly, the first semester and a half were really, really overwhelming. And I had to get my bearings a little bit, but I think once I got there I tried to dabble in a lot of things. And I think there was literary magazine, there was the Crimson, which is a classic. And then there was a few other organizations like the Harvard Political Review at the Institute of politics. And so I sat in a few things and it's crazy. For people that don't know, once you get there, you still have to apply to these things.You haven't gotten there and then you're done and you're good to go and everything's set up. There's a pretty rigorous application process for most of these clubs, which makes it overwhelming. And so for me, what I ended up finding a home in, in terms of just the community and the way they welcomed you in when you came into the club was the Harvard Political Review. And as one does in college, you get a bit more political, you get a bit more aware of what's going on around you, world politics. And so I think I was in that head space already and wanted to flex a little bit of my writing skills outside of class. And so there I was able to really pitch anything. So I would pitch, I remember like culture pieces about the politics of hipsters, of all things, and then would later do a piece on rhinos that are going extinct.So it was really varied and it allowed me to be free with the things I wanted to write about and explore outside of class and in a super non-judgmental space that was like, yeah, pursue it. And we had all these professors that we had access to, to interview and to talk about these things. So it was just a great place to flex the muscles. But I think mainly my focus in college was building relationships with my friends, if I'm totally honest. I think as someone that's super ambitious and super driven, I was very particular and followed step by step exactly what I needed to do in high school to get into the school I wanted to get to. And then once I was there, I was like, let me enjoy this for a second. Let me meet people and have fun and intermurals and just...Chris Erwin:Wander a bit.Camila Victoriano:Wander a bit, 100%. And I think especially freshman year and sophomore year was very much like let me just wander, take random classes. I took a computer science class, which was a horrible mistake, but just giving myself the opportunity to make mistakes. And I think then by junior, senior year is when I realized, okay, no, I still like this path that I'm going on. I like the storytelling. I like literature. I like writing. Maybe I'm leaning a bit more political. Again, that's why I applied junior year for the LA Times internship because was that through line of, I still want to be in storytelling. I still want to be in media, but now in this college experience and getting into young adulthood, I'm becoming much more aware of the political and socioeconomical world around me. Let me go into media, that's maybe pushing that forward a little bit and a bit more public service.Chris Erwin:Clearly it was a positive experience because I believe that after graduation, you decided to commit to the LA Times full time.Camila Victoriano:Yes.Chris Erwin:And just to go back on a couple of points you noted just about wandering. I think, when I review resumes for people that are applying to my firm, RockWater, my first internship was right before my senior year of college. The summer before senior year. I now look at resumes where people start doing internships literally in high school, and they have six years of working experience before they graduate. It's super impressive. My little brother took a gap year before Harvard and I think that wandering around and figuring out what he likes, what he doesn't like is really valuable. And I always tell people, like my own professional career, I did some things early on that I didn't love, but I learned a lot and it helped shape to where I want to point myself later on. So I think that's really good advice for the listeners here.Camila Victoriano:Absolutely.Chris Erwin:I'm curious, so was there any kind of gap period, or did you just get to work at the LA Times right after you graduated?Camila Victoriano:I went straight into it. I took the summer after college to travel a bit. That's when I went to Cusco with my mom, I went to Columbia. So I went a little bit around Latin America, but other than that, that fall went straight into it. But I think to your point, and again, taking a step back a little bit like freshman summer, I went to study abroad in Paris for the summer. So just again, I had traveled outside the country maybe once or twice, but not a lot. And so for me, that was a really, I was like, let me utilize some of these resources that I have. And so it was, again, that wandering and then the sophomore summer I worked at a literary magazine. So again, going more deep into literature. So I did dabble in a couple things here and there before fully committing, but after graduating pretty much went straight into work.Chris Erwin:And so you get there and are you, again, working in the publisher's office?Camila Victoriano:Working more broadly, for the “business side” of the company, right. So I'm working on business development really broadly. What that started as was how do you diversify revenue streams? How do you develop new projects from the journalism? Basically, what are new ways to make money in a digital space? We pursued projects at this time, and I actually got to see through to fruition because I was there full time, an event series within what was called the festival of books. We developed a new zone focused on digital storytelling. So we brought on VR companies, audio storytelling companies, just thinking about how to expand what the company was putting forward as storytelling, which was cool to me.And also an interesting dynamic for me as someone that loved books to be like, let me throw VR into the mix and into the book festival, but it was really fulfilling, and after pursuing a few different things, developing a couple of platform pitches internally, what really stuck with our team and with me was in 2017, a year into that job, audio as a real business opportunity for the newsroom and for the media company. So in 2017, we had a meeting with the editor in chief at the time and he brought us this story and he was like, let me sit you guys down and read this aloud to you. It was very cinematic, but it was what would become Dirty John.Chris Erwin:The editor in chief read this story out loud to your team?Camila Victoriano:Yes. So just literally, it was a team of me and my boss and that was it. And he was like, let me sit you guys down and read you this out loud. And it was what then Christopher Goffard had the journalist had written as what was going to just be maybe a series online for the paper. And I think that's when we realized like, oh wait, there's something here that I think could be our first big swing in audio and in podcasting. And we got to talking and at that point, Wondery had just gotten started to another podcast company that obviously now sold to Amazon music. And so we met with [Hernan 00:17:57] and the early team there and we were like, I think we can do something here. And I think there's a story here to be told in audio.And so again, a year out of college, I'm there helping put together the production team that would create this massive story or what would become a massive story, we didn't know at the time. And what I was able to do was basically help primarily the launch strategy and help the marketing teams and the sales teams put together what's this actually going to look like when we got this out, there was the first time we had done anything like that. And so it was a pretty wild experience. And then of course when it launched, it took us all by surprise with how well it did. Obviously we knew it was a good story, but I think you never know when something's going to be that much of a hit. And I think today it probably has over 80 million downloads and it's been adapted both scripted and unscripted on Bravo and oxygen and had a season two ordered on Bravo.So it was a crazy experience. And I think for me, it was just like the ding ding ding of, oh, hey, remember what Mitchell told you in high school? Which was, follow the content, not necessarily the medium. And for me I had never really explored audio at that time. My parents were not people that listened to public radio in the car. That was not something I grew up with or that environment. So that was really my first entry point into audio and into podcasting. And as I started to dig into it more, I remember I was such a late listener to Serial and to S town. And I was like, oh my God, this is unreal and something that I've never heard of. I've never heard anything like this before. I probably never read anything like this before. And so I remember I asked my boss at the time, I was like, can I do this full time? I was like, can I just work on building out this audio division and this team? And I think at that point, luckily because Dirty John had been such a huge success, everyone was like, yeah, this is worth doing in a more serious way.Chris Erwin:Before we expand on that, this is a pretty incredible story. So you are in the room as your editor in chief is reading you the Dirty John story. So just remind me, with Dirty John, it was initially just a story. It wasn't like, oh, hey, we created this because we want to make this into an audio series or anything else. It was just, hey, Camila, you're looking at different ways to diversify revenue for the company, looking at different mediums for our content. Here seems to be a pretty incredible story. And was your editor in chief recommending that you make it into a podcast or is that something that came up in the room in real time?Camila Victoriano:No, I think he had already been thinking of it and that's to his credit. Right. And he was like, I think this might be it. And how do we get this done? And then I think Chris Goffard in particular is a great journalist. And he writes these amazing, more feature length pieces. And so his style of storytelling really lended itself to that as opposed to a breaking news reporter. And so he had already thought when he got the piece, this might be a good podcast or it might be our good first podcast. And I think he brought us in because we were the R&D crew of two that existed in the organization to really help make it happen. And so again, once we connected with the Wondery team and put the LA Times team together, it was a match made in heaven, I think. And it worked really, really well.Chris Erwin:It seems like you went right to Hernan and the Wondery team, were you like, hey, we should talk to some of the other audio and radio companies that are out there, or did you just go straight to Wondery?Camila Victoriano:We just went straight to them. And to be honest, I think that was something else our editors suggested. And I think to be honest, it did end up working really well because I think, we were coming from a very journalistic perspective and that's where I started to learn a bit more of the different ways to tell stories in audio, right. Start very character driven, really narrative as if you're making a movie. And so I think that it was a great match honestly, and I don't think we may have maybe looked at other things here and there, but it felt like a good fit right off the bat.Chris Erwin:You said you were working on the marketing strategy and the launch, right, of the series. Do you think there was any special things that you guys did? Obviously it's incredible story and it really resonated with audiences at scale, but were there any initial marketing tactics or buzz that really helped tip that into the mainstream?Camila Victoriano:I think what we decided to do, which was perhaps different than how some podcasts had been marketed before, because till then it had really been public radio driven, was I forget who said this, but it was basically like let's market this as if it was a movie or what would we do if we were launching a film? And so we really went all out in splashing our newspaper with these beautiful full page spreads. We were the LA paper, and so we had all this FYC, for your consideration advertising that would, you'd see those spreads for movies all the time. And so we were like, why don't we just make one of our own? And so it was a full team effort with the designers, the marketing team, me and my boss at the time and just putting together this plan where we really went all out.And I think that definitely caught the attention of our subscribers, which obviously were the first touch point to this story. And we did similar things online where we had, what's called a homepage takeover where basically everywhere you look online, you're seeing advertisements for Dirty John for this story. And so we had newsletters and I think a lot of that 360 approach to promoting it online, in print, although that's not as common, but on social newsletters and really just hitting all the touch points is something that definitely I have taken with me in my career. And I think is also just becoming much more common across podcasting as we launch and others launch more narrative nonfiction, fiction series, that sort of thing where they're becoming really entertainment franchises beyond just a really great maybe non-fiction or reported story. But I think absolutely the way we thought about marketing it helped to change the way that our subscribers and then the listeners that came in through more word of mouth, saw the show and understood it for, oh no, this is entertainment. It's journalism driven, but it's entertainment.Chris Erwin:It's a really good note because an increasing challenge for any content creators or content market is how do you stand out through the noise? There is more content across more mediums today than ever before. And so how do you really cut through the noise, drive mass awareness, but also be focused and really go after a niche community as well? It's not an easy formula. Sorry. I wanted to go a little bit back in time, but that was really helpful context. But then to the point where you said, okay, you're talking to your boss, your leadership. And you're like, I think there's something really big here in audio. I want to focus my efforts here full time. I also think this is interesting Camila, because when we were talking yesterday, you said that you took an atypical path in some ways where you followed the content, you followed your passions.It wasn't like, I'm going to go to school. And then I'm also going to get a dual computer science degree or economics or some quantitative math. And then I'm going to go do two years at McKinsey or an investment bank. And I think you following your heart it then puts you into these serendipitous moments, like being in the room when your editor in chief comes with Dirty John, and then you're like, hey, I've been working on these passion projects. I think there's something to do here in audio, let's go forth together. And then you just happen to be in the room at these incredible moments and then you're raising your hand for where your heart is telling you to go. And it's obviously put you on an incredible path, which we're going to talk more about. That's something that I'm just taking away here from hearing your story.Camila Victoriano:Thanks. That's a great way to put it. It's following my gut a little bit, and I think it just goes back to again, how I was raised and I think my parents were always, there's this funny saying in Spanish, [foreign language 00:25:29], which is like, if you don't cry, you don't get fed, basically. And so I took that to heart and like, yeah, I have a passion. And I think that part of me, the inclination is like, oh, if I work really hard, it'll get noticed. But sometimes it is like, no, you have to really actively say it out loud. And I think sometimes for people that are younger, like I was the youngest by like 10 years in a lot of the spaces I've been in, it's hard sometimes to do that and to raise your hand and say, I want this. But I think when I really felt that I did it and I think it's something I've just been working on in general.Chris Erwin:So you raise your hand and you say that you want to focus on what you perceive as a big audio opportunity for the LA Times. What does that look like for next steps?Camila Victoriano:Really, what that meant was I was the only person working full time on the business side, on this project, which was daunting, but also great because I got to have different touchpoints with all the teams. And so for me, it really became, how do I build essentially a mini startup within this legacy organization and how do we make something that moves quickly and can be nimble and can be experimental in an organization that, as I said earlier is nearly 140 years old at this point? So it was really exciting and really daunting. And so what I did first and foremost was figure out a good cadence to meet with my colleagues in the newsroom. And what it allowed me to do was really focus on offering them insight into the content that was really working well in the space that perhaps is maybe a bit more data driven, I would say.I was really looking at what was working well and also working with our data and product teams to see what were the types of stories that listeners or in our case, readers were gravitating towards and offering that insight to the journalist and to the editors and really working hand in hand with them to figure out based on that, what were they excited about turning into audio or what were they excited about putting resources behind? And so I was focusing a lot on content strategy in the very beginning of how do we follow up this phenomenon, which was also, I think for everyone, you have this huge hit, you want the sequel to be just as good.Chris Erwin:And to be clear. So the data that you're looking at is both in terms of the content that the LA Times is putting out. Like your articles, I'm not sure if you were also doing video as well, looking at who's consuming that, how often are they consuming it, is that type of content performing well relative to other content? In addition, looking at metrics for just podcasting overall, what genres are performing well, what do the formats look like? Is it short form or long form audio? So you are taking that for your own understanding and then educating a lot of the writers and the journalists in the newsroom. Because then when you put that information together, better ideas can start to germinate within your business. Is that right?Camila Victoriano:Absolutely. Yeah. And then what they would be able to offer me was insight sometimes into maybe investigations they were conducting, or they would be able to tell me, yeah, that is a great story, but maybe the sources aren't going to speak on audio. So it was a really wonderful collaboration between the business side and the newsroom in a way that was really organic and really respected the work that they were doing, but also offered them a bit of insight into, hey, we're exploring this new thing together. Here's how we might do it in the best way. And so I was doing a lot of that in a lot of that more high level content strategy, basically to guide the editors into figuring out what might come next. And then also just doing everything else, basically that the journalists weren't doing, right, or that they couldn't do because they were busy reporting amazing stories, which was building on an actual business model for what this might look like, which was difficult, because it was very early days and our sales team had never sold a podcast before.They had sold digital, had sold print, had sold events. And also marketing is like, how do we replicate what we did with Dirty John in a way that was sustainable and in a way that, how do we replicate that by tracking what actually worked well from that experience? Right? Because we could always splash all of our pages and flash all of our online presence with images and with links to the show, but figuring out how to basically make a report of what actually worked to drive listeners. And so it was a lot of in the very beginning, trying to digest and figure out what are the things that we could replicate and what is the “formula” that worked in Dirty John and others. Some of the stuff is hard to quantify and you can't measure, but trying to measure as much as I could to be able to build out a plan for, okay, we think we can make this many more shows and they have to hit these particular metrics. And I was doing a little bit of everything. Literally, like I said, my sales team or the sales team at the LA Times, they had never sold podcasts before. So I was literally calling podcast agencies and selling ads.Chris Erwin:You were selling ads yourself?Camila Victoriano:Yeah, I was. I remember I called ad results. We were doing a show about Bill Cosby, which is not an easy subject to pitch to sales, but I was getting on the phone, calling people and selling ads into the show. So it was really scrappy.Chris Erwin:Yeah. So essentially a one person team where you're creating the vision and the business plan and then also executing against it as well. That's a lot. Did you have a mandate from your leadership, which is like, hey Camila, we believe in your vision here, but we want within one year we expect like X amount of revenue or within three months. Come with a clear business plan and how much capital you need to grow it and then we're going to green light it. What were the expectations from your boss?Camila Victoriano:Yeah. It wasn't anything that specific to be honest, I think mainly the main mandate very broadly was like, Hey, this needs to make money after a certain point. Right. And it can't go on for so long of just, because a lot of people while making podcasts is cheaper than making a pilot, it's also very resource intensive. So while maybe it's not a lot of cash out the door, it's a lot of time from a lot of people to make something that is high touch investigative, like a year of reporting sometimes. And so I was asking a lot of the newsroom and the journalists. And so I had to work with our finance team at the time to build out a model that basically showed at least break even for year one and then started to make some profit after that or some revenue.And so it wasn't as super strict thing, but I think obviously they wanted it to be revenue generating and relied on me and my counterparts on finance department to put that model together. And again, I was an English major. I had never made a spreadsheet. I had never made a model V lookup, it was very new to me. All of that was the first time I was doing any of that. So for me, those next three years or so were an incredible crash course into all of the practical skills that perhaps I hadn't learned in the English major was those were all learned in that time period of building a business model, putting together business plans, content strategy, and then executing marketing plans and sales plans at the same time.Chris Erwin:So I have to ask, clearly your love and your passion is for storytelling, right? So now you're figuring out the business plan for how can you actually create a new sustainable business that's going to tell stories in a different way on new mediums. Did you enjoy doing some of that business work or was it more of like, eh, I don't mind doing it because it allows me to execute towards this primary goal or were you starting to see like, oh, I actually like using both sides of my brain, operating on both sides of the house. What did that feel like for you?Camila Victoriano:I think it was definitely the latter. I think I never expected to “business” as I had always thought of it. Right. I think there were certain things that I could really do without, I did not love sales calling and pitching. I was like, I could do without ever doing this again. But I think for me, what I realized during that time period and working with the folks on the finance team, our COO, our sales, I was like, these guys are all really creative and actually figuring out how this is going to work and how this is going to be sustainable is actually weirdly fun and interesting and 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. Yo

    Mike Grisko — CFO at Atmosphere on Raising $150M, Becoming a 2x Founder, and the Future of TV for Business

    Play Episode Listen Later Aug 4, 2022 47:25


    This interview features Mike Grisko, CFO and Co-Founder of Atmosphere.  We discuss running an NCAA tourney at age 7, getting laid off during the Great Financial crisis, almost selling the Chive to Playboy, the challenge with professional politeness in UK work culture, raising $150 million in growth capital and quadrupling the team in 5 years, and what he looks forward to next.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow us on LinkedIn: RockWater LinkedInEmail us: tcupod@wearerockwater.comInterview TranscriptThe interview was lightly edited for clarity.Chris Erwin:Hi, I'm Chris Erwin. Welcome to The Come Up. A podcast that interviews entrepreneurs and leaders.Mike Grisko:We have this concept internally, like giving up your Legos. Your job description changes every three to six months when you're going through rapid growth. 18 months ago, we were less than 100 people. Yeah, today we're close to 450 employees just at Atmosphere. And so that requires you to change your roles. Some of the things that I was doing back in 2018, 19, 20, it's just not scalable at that level. And so being able to hire great people, reassign tasks and responsibilities is absolutely critical.Chris Erwin:This week's episode features Mike Grisko, co-founder and CFO of Atmosphere. So Mike was born in the south side of Chicago and was the oldest of five siblings. He then studied at University of Illinois and his early career started in finance and consulting, including Pricewaterhouse Coopers in London and Moelis & Company in Chicago. While at Moelis, he met the founders of The Chive and was recruited for his first C-suite role as CFO. Soon after relocating to Austin, Mike partnered up with The Chive's leadership team to co-found Atmosphere, where he is helping to grow and scale the leading streaming TV service for businesses offering free audio optional TV. Some highlights of our chat include running an NCAA 20 at age seven, getting laid off during the great financial crisis, almost selling The Chive to Playboy, the challenge with professional politeness in UK work culture, raising 150 million in growth capital and quadrupling the team in five years, and what he looks forward to next. All right, let's get to it.Chris Erwin:Mike, thanks for being on the podcast.Mike Grisko:Yes, absolutely. It's a pleasure to join you on The Come Up. Really looking forward to getting into it.Chris Erwin:There's a lot of stories to tell here. As always, we're going to rewind a bit and we're going to talk about where you grew up and your childhood. So I think you're a Midwest kid. Tell us about that.Mike Grisko:I am a Midwest kid. Grew up on the south side of Chicago. 103rd and Pulaski for any local Chicago listeners. Was the oldest five kids. My mother was a ER nurse. My dad worked in engineering sales. It was a great spot to grow up. It was very much a blue collar neighborhood. We lived right across the street from Tally's Corner, which was famous for just so many cops and firefighters that had to live within the city limits. My mom was one of seven. My dad, one of four. And everybody lived within a couple miles of each other. So just cousins everywhere. So yeah, it's a fun neighborhood to grow up in. I don't know what your childhood was like, Chris, but it was very Stranger Things for us. You just go on your bike, you'd be gone all day. You just got to be back before the street lights came on.Chris Erwin:Oh, I hear you. I was born in '82, so I'm an '80s, '90s kid. And in the suburbs I was born Rumson, New Jersey, an hour outside the city. And it was about like, you get on your bike and you just travel all around the county and you get into trouble, you find dirt jumps, you go meet up with your friends late night. I remember taking the bikes out at 3:00 AM during sleepovers. It was the best.Mike Grisko:It was the best. Was Chicagoan through and through before. Now residing in Austin, Texas.Chris Erwin:So, okay. Being the oldest... I have two brothers, I have a twin and then a younger brother who's six years younger. And so you're the oldest of five. What was your role? Did you have a patriarch type role amongst the brotherhood?Mike Grisko:Absolutely. Especially my dad traveled quite a bit for work. It was definitely more of a patriarchal role took on but still. We were just very tight knit crew. Still are.Chris Erwin:Getting into middle school and high school. What were some of your passions back then? What did you like to do?Mike Grisko:We were always playing sports. You had the neighborhood crew. You're playing fast pitch against a parking lot wall. In addition to doing sports, it was also a bit of a nerd. Constantly reading, just super competitive in school. It was less about the learning, it was more just getting better marks than anybody who was around me. But yeah, that stuck with me for quite a while.Chris Erwin:Got it. Well, look today, you're the CFO and co-founder of Atmosphere and you've also had a CFO role at Chive. So were you big into the quant side and into mathematics and other science and other similar subject areas?Mike Grisko:Yeah, there's a bit of that. And then I've just always been incredibly fascinated by business and markets. Grew up in the '80s and when I was a... I think it was six or seven, my uncle started calling me Gordon Gekko. I think because I was the only-Chris Erwin:It's a great nickname.Mike Grisko:I know. I think it's because I was like the only seven year old who was running an NCAA tournament and I was doing betting spreads every NFL Sunday going down the line. Yeah. So it definitely makes sense, the career path that I chose, doing finance, doing the investment banking thing and choosing this direction.Chris Erwin:Kind of makes sense because you end up going for undergrad to the University of Illinois where you focus on finance and accountancy. So when you went to school, what were you thinking that you were going to do afterwards?Mike Grisko:When I got down there I wasn't really sure. It wasn't until I actually did study abroad program, which was in Melbourne Australia, which was some of the best months of my life. It was just absolutely incredible. Yeah, the fact that my best friend and I both got full scholarships to go down there was just such a deal. I mean, we got accepted. We just could not believe that they took both our applications.Chris Erwin:What did you get into? Did you do any surfing while you were out there?Mike Grisko:Did do some surfing, played Aussie rules football. We tried to get stuck into everything, just being able to travel and just the people and just such a fun environment. But that's really when I took a step back and started looking at like, "Okay, when I get back, I got to figure out an internship." And that's when chatting with a bunch of folks, really started to lean towards trying to get on an investment banking track. And so it's amazing. Sometimes you do really need to take a huge step away to start to piece that all together and figure it out. Because I really had no clue probably up until then.Chris Erwin:It's funny. It's almost a bit of the reverse, but it reflects your personality and your interests. Typical consultants or Fortune 500 executives or bankers will go on a sabbatical and say, "I don't want to be in these industries anymore. I'm going to go do something different." But you go to Australia, have the time of your life and you're like, "I need to go into hardcore finance. That's the path." I went in a very similar direction. I was an investment banker right out of undergrad too. All right. So that becomes your focus. What's your first internship or your first role in school?Mike Grisko:So I did an internship for Wells Fargo. Got to see the lending side, their corporate lending group, so did a summer of shadowing the analyst doing underwriting. And it was great. This is in the high times of banking. This was in '07. So the summer of '07, everything's riding high. I remember winning the internship competition. So they flew me out to San Francisco with my brother just for first prize for winning this thing.Chris Erwin:He was your plus one? You're like, "I'm going to bring my bro."Mike Grisko:Yeah. Yeah. And it was a very good learning ground, but I still... There's a few guys who I was friends with at Illinois who had gotten into the investment banking side. And so I decided to double down and just... Thanks Wells Fargo, but I really wanted to take a dive into the IB side and learn how to do M&A and capital raise and the rest. I'm sure probably similar sort of path as you. Must have been at least 20 to 30 different places I was submitting applications doing interviews with. Just running through the whole process.Chris Erwin:Yeah, it's a very intense process. But it's funny. Hearing from the people that have interviewed on the podcast, I think back to Michael Cohen at the Whistle, which was acquired by Eleven Sports. He started out as a credit analyst at Wells Fargo in Atlanta, before he went into do investment banking. And we actually worked at the same firm and I started out as a credit analyst at Bank of New York, which is now BNY Mellon. And you, you now run a free ad supported streaming platform for businesses. You started as a corporate credit analyst and then went to investment banking. If you're going to do finance and media, that feels like the path.Mike Grisko:Yeah. It's got to be. It's tried and true then. You got three examples right there.Chris Erwin:So then, okay, you graduate and then you go full time into Lincoln Financial. And you're an analyst there for about a year. What were those early years like?Mike Grisko:It's a mid-market investment bank, heavy Chicago presence. It was a good shock to the system going from your university environment to full corporate world and pretty intensive as I'm sure you remember from your banking days. So I had started in August of 2008 and so I think it was six to eight weeks before Lehman went under. Things looked like they were riding high and then all of a sudden... I just remember being very new, but then also seeing the senior bankers just going ghost white as deals are just being paused or put on hold or it went from they were closing close to a deal a day, M&A or a debt advisory deal, and then it just completely dries up.Mike Grisko:The first deal I ever did, it was automotive wire harness business. I was being spun out of Alcoa. And it was just bleeding money. Went from, if you remember, with all the automotive ODMs just shuttering production, they were like the fifth player in that industry. Basically overnight, they went to negative 80 million [inaudible 00:09:46] and trying to find a partner for that. That was great learning ground. But I ended up getting laid off into that second wave of layoffs they did in March 2009.Chris Erwin:Laid off in March of 2009 after the debt crisis hit. Yeah. I have some stories of what happened at my bank and I'm curious to hear yours. So yeah. What happened to you and what was going through your head?Mike Grisko:It's a big shock to the system. It's a kick in the teeth. It did a couple things. It really hardened me to, "All right, this is the actual professional and corporate world. Nobody's spots guaranteed." And I think it even that much more determined and more resolved to like, "Hey, whatever is next. I know I'm going to have to really outwork everybody else around me."Chris Erwin:I hear you. I joined the workforce in 2005. I was at my investment bank when the 2008 credit crisis hit. And I was still a young professional. And I felt like, "Oh, I'm insulated. This is a tough time for everyone. But I'm young. The leadership's going to take care of all of us." And I remember getting called into the manager's office one day. Everyone at the company's salary was cut drastically.Chris Erwin:And I was like, "Whoa." I felt the impact personally, in a very meaningful way in that day. And I was like, "All right, this is legit. This is the real deal." And I had to make changes to my lifestyle. I actually negotiated down my rent from my apartment in New York City, down 25%. Something I'm actually still very proud of. I built a nice spreadsheet defending that. But it does gut check you and it questions, "Okay. Is there a job for me here over the next year or two? Is my career derailed?" Is my whole future grand plan that I had sorted out in undergrad have to be completely reset?" But I think it's helpful for it to build resilience, right?Mike Grisko:100%. I thought for sure coming out of school, it was, "Hey, do two years to three years as an analyst. Hop over to PE. Maybe go get an MBA. Just follow the very traditional path." But I think that moment really drove me in a very different direction.Chris Erwin:Tell us about that new direction, because I think you end up going to Pricewaterhouse Coopers in Chicago for a few years before you end up at Moelis.Mike Grisko:In that period after getting laid off March '09, basically bottom tick the market. It was slim pickings out there for jobs. I even looked into potentially doing a program to get into medical school and doing a complete 180, picking up some undergrad science credits so I can apply to med school.Mike Grisko:But then by time, two or three months in, I was starting to get some good looks. And I had an analyst role on a corp dev team in Chicago, and then also got offered a position as an analyst at PWC in their corporate finance group, which they were just restarting. And so they had basically shuttered their investment banking practice, but then were bringing it back. And so I was the first analyst they hired in the US and I thought "Here's an opportunity to get it back on track." And a lot of corporate carve outs, cross border M&A was their big MO and huge selling point for me was they committed that, "Hey, you do a couple years here and hopefully we can get you over to London or one of our other international offices to do a two year program," which I ended up doing in 2011.Chris Erwin:So you went to London in 2011 for two years working for PWC?Mike Grisko:Yeah. It was fantastic. I mean the great, great mid-market M&A group over there. It was one of the coolest experiences of my professional career. Just being able to live and get fully immersed in a culture, especially in a professional culture. Anybody who ever has the opportunity, I highly, highly recommend. Because it really just does stretch you and challenge you in different ways. You knew how to do your job, but it's almost like the gravity's just off a bit.Chris Erwin:Okay. I like that. I've never heard that description, but I'm into it.Mike Grisko:All new faces, all new companies, all new lingo, trying to pick that up and then still trying to understand folks who have Manchester accents.Chris Erwin:What was one of the biggest cultural differences in doing business over there that you learned?Mike Grisko:I'd say the biggest one, you don't realize, there's just a professional politeness in the UK. So both with your superior is just not being fully direct with you in feedback. In addition to when you would be delivering direct feedback to analysts. They were offtaken. You might not be getting the full picture. We tend to be a little bit more direct and blunt here in the US than the Brits are.Chris Erwin:Something I think about is when I studied abroad in Spain, I met a guy named Tim Slee, who co-founded an ad agency with Steven Murphy. Shout outs to these guys. They're still very close friends of mine too today. And they would talk about their professional work culture was every day at 5:30 PM, they're hitting the bars. And they are buying rounds for all their clients and all their team. And they're like, "That's just how business is done over here. You drink a lot of pints and that gets revenue in the door." And I was like, "That's a lot to sign up for after a full day." I remember as a banker, I was just running spreadsheets till midnight.Mike Grisko:I don't know how you could socialize or network or do a professional career if you don't drink over there. I definitely learned how to go to the pub for a pint or two, and then be able to go back to the desk and start banging things out in the evening. It was just an incredible experience. My wife and I, we got engaged over during that two year stint.Chris Erwin:You brought your girlfriend who became your fiance on that trip. Okay, got it.Mike Grisko:Yes. That's a story for a different podcast. Having the conversation with her dad about her quitting her job and moving over with me.Chris Erwin:You're like, "I'm choosing her instead of my brother this time. Now I'm going to take my girlfriend on this trip."Mike Grisko:Yeah. And we ended up getting engaged shortly into our trip over there. But in two years, I think we visited close to 45 different cities. We were just so good about travel. It was a lot easier, didn't have kids then, to be very mobile on the weekends. And the Brits are great about taking time off.Chris Erwin:All of Europe is really good at it.Mike Grisko:When they said four weeks of vacation and they're like, "We expect you to use it." I'm like, "Absolutely will."Chris Erwin:Yeah. Maybe you bring that back to the Atmosphere culture. All right. So look, you spend around five years there. And then before we talk about your rise up at Chive Media Group and Atmosphere, you were at Moelis & Co for around three years. Tell us about your work there.Mike Grisko:I was starting to get to the stage I'd done enough smaller middle market deals. Enough corporate divestiture work. Really wanted to start seeing some more higher level capital markets and some larger transactions. And so I started shopping around at some different banks. Opportunity came up at Moelis and I jumped on it. Everything I was looking for just to gain from an experience level, next level on debt and equity capital raise to deals to getting to work on my first restructuring bankruptcy work to working on hostile defense deal with Ken Moelis.Mike Grisko:There was a pretty cool experience that really did give that next level of professional training. And I think that's the one thing like I started to realize being in investment banking, the true value of the relationships that you build, and just being able to sit in the room as well. In the room with the exact team observing and or advising on the actions to take and some of the biggest transactions or moves that they're going to be making. It's a great ground to just really absorb a ton.Mike Grisko:So in addition to like the financial training, the Excel sheets, and everything that comes with deals and running process, the network that I was able to build, just what I was able to observe and absorb, I think for some very talented professionals, both within the bank, but then the executives I got to work with, incredibly valuable. You just cannot replace that and the level of reps that you get in the career.Chris Erwin:I very much agree with that. You think about the 10,000 hours thing and the amount of time I spent creating investor decks and confidential information memorandums, AKA CIMS. And all the financial models, the merger models, the LBO dilution analysis, et cetera, the most rewarding experiences were when we were in meetings or had conference calls with private equity owners or family offices that own these cable, media, and telecom companies. And they're thinking about how do we drive more enterprise value?Chris Erwin:Do we spin this off? Do we go acquire these other companies and do a roll up scenario where there are synergies and thinking about, we have this network of management teams, who do we want to place based on the strategy that we have here? How are we going to finance with debt or equity or some other more alternative vehicles and just to hear the decision making in the rooms. And it was like, where are these men and women? Where are they being slow and calculated? Then where are they trusting their gut and moving really quickly? Just to be a fly in the wall was so valuable for my career.Chris Erwin:And I take a lot of that into the work that I did at Big Frame and Awesomeness in thinking about when Big Frame made a decision to sell itself and the work and the advice that we give our clients now. And often days, I wish I still had access to some of those calls every week. I get it through my client work, but just to be a sponge and just be able to just listen as a mid 20 year old. So valuable.Mike Grisko:Incredibly valuable. Yeah. That's well said, Chris. That's the big thing. And I have so much appreciation for it now. Just having seen both working alongside a lot of incredibly talented professionals in addition to some ones that were making bad decisions.Chris Erwin:Can we steer them the right way? TBD.Mike Grisko:But honestly, yeah. You're able to just listen, observe. You're just kind of building that muscle memory for when things are coming fast, as they really have over the last couple years, in my current role as an operator, it helps you just really break things down into first principles and what are we really trying to drive towards? It's helped make my decision making very formulaic. I think that's incredibly valuable. I like to say that... I'm sure we'll talk about Atmosphere in a second, but operating, whether it's startup, growth company, et cetera. It is a wicked learning environment. The variables are always changing. The dynamics are always changing. And so you're constantly going to be seeing new things. And so the ability to read, react, and adjust is super critical, a really valuable skill set that banking taught me.Chris Erwin:Well, let's talk about that transition, Mike. So your role as an advisor, as consultant, as a banker, now you make a decision, as they say, you go to the line. You go to one of the portfolio companies. So in 2017 you transitioned to Chive Media Group. How did that come to be?Mike Grisko:Well, it's twofold. I go back to the point on network and I got an opportunity to... One of the deals I worked on at Moelis back in 2014, 2015 was advising Chive Media Group. John and Leo Resig co-founders of The Chive back in 2008, starting in 2012, 2013, they really started to catch fire. I mean, it was a true social movement. You had folks wearing Bill Murray t-shirts and Keep Calm and Chive On. Folks wearing the shirts everywhere. So they brought Moelis in to take a look at strategic alternatives. And so over an 11 month period, we looked at everything from buying up smaller competitors to doing [inaudible 00:20:56] recap, to even potentially selling.Mike Grisko:And so we actually got pretty far down the path with Playboy, but Leo and John couldn't get comfortable with the deal and the management team that was there at the time. They decided to pull out. And so that was in mid 2015, but stayed in touch with both Leo and John. And when the prior CFO, who was part of the founding team was looking to move on in 2017, Leo called me up and I jumped at the opportunity. So that's some of the backstory just on how I came across the opportunity. Leo tells me now, I think I was the only person he reached out to.Chris Erwin:He was like, "I think I like this guy, Mike, he was on our deal team. Let's take a bet on him."Mike Grisko:It's very tight interview process, but it goes back to the point that building network from that seed in banking is just incredibly valuable. That wasn't the first time that I was offered a job by a client. You get so close to your clients when you're working alongside them. But this is the one I jumped at. The biggest thing is if you know Leo and John, they're just real salt to the earth humans. And that meant a lot to me. To be leaving banking into something that was a lot more unknown.Mike Grisko:Yeah. I knew whatever happened with the business, they were going to do the right thing by myself and my family. And I think that was the most critical thing I was looking for is I really wanted to jump into an operational role. I'd spent a little over nine years advising CFOs. There was some that I had incredible respect for. There was some I thought I could do that job better. The opportunity to jump right into this was just too good to pass up. And then there was the personal side of this, which at the time we were making this decision, I had a 11 month old son and then my wife was pregnant with our daughter.Chris Erwin:Oh, wow.Mike Grisko:Yeah. So the ability to go into something that had a little bit more flexibility or control over your hours was big for me.Chris Erwin:You were moving too. Because you were moving to Austin from Chicago.Mike Grisko:Yeah. The full go. And I think it's that personal relationship with John and Leo, that we're two feet in. Sold a place in Chicago and moved down to Austin, away from family again.Chris Erwin:Your 30 cousins and brothers.Mike Grisko:Right. Yeah. And rest is history.Chris Erwin:Hey listeners, this is Chris Erwin, your host of The Come Up. I have a quick ask for you. If you dig what we're putting down, if you like the show, if you like our guests, it would really mean a lot if you can give us a rating wherever you listen to our show. It helps other people discover our work. And it also really supports what we do here. All right, that's it everybody. Let's get back to the interview.Chris Erwin:You make the transition. And I hear you on the point of it's all about relationships. I think I was having a call the other day with Jason Rapp from Whisper Advisors who I've just gotten to know. And he had a note that I really liked. He said, "Companies are not sold, they're bought." And I think the implication there is it's about there being a clear strategic fit, but also this notion of there's relationships developed with strategic and commercial partners over time, and more often than not an investment or an acquisition is made from two companies who have many data points, a trend line of building a rapport and a relationship. And I think that also speaks to how executive hirings and placements, particularly at the C-suite level are done. You weren't out of the blue, it was long term relationship building where Leo and John had been exposed to your work. So I think that's important for our listeners to just be mindful of. We always say that. Say start planting the seeds now.Mike Grisko:I think that has been incredibly important. Those relationships and the relationships that I quickly developed with the other C-suite members at The Chive who are now at Atmosphere. You want to be working with good people. It is just so difficult to get a startup business into a true growth path and on a true path to success. Being able to do that with folks that you trust and truly enjoy working with is so critical. It starts at the top. If you want your entire company growing the [inaudible 00:25:02] in the same direction, it really does start with having a cohesive leadership group.Chris Erwin:So let's talk about when you show up, what are you guys working on? What are the goals in 2017, 2018, fast forward a few years, where do you guys get to? And that's going to set up the story for how Atmosphere was incubated, but take us back to that.Mike Grisko:I walked in at a pretty critical time for the company. There was a lot of different initiatives that Chive Media Group was chasing. It became pretty apparent quickly that we couldn't do all of them. The business needed an overall guiding direction and overarching focus. And so my first three months on the job, Leo and John asked me to, "Hey, just give us your full assessment as an outsider." And spent just a ton of time on a listening tour, diving into data. Became pretty clear that we were sitting on something incredibly powerful with Chive TV, which at the time was maybe in a little over 1000 locations and had six or seven dedicated employees to that product line. We knew that we had something incredibly powerful.Mike Grisko:We thought we had something incredibly powerful with that business, but we also had just many other initiatives, everything from original content creation with Chive Studios to some large initiatives, both on the digital ad sales side to a lot of different facets that they were chasing on the e-commerce side. So everything was set up for big strategic meeting in December of 2017. Myself, John, Leo, Eric Spielman, our chief strategy officer, and Alen Durbuzovic, our CTO. And we made some very critical decisions to really lay out, "Hey, here's our vision for the next three years." It included shuttering some business lines, re-orging some groups. All on the guise of trying to take the Chive TV product line and turn it into a real business.Chris Erwin:You start and pretty soon after you start, you're making some very big decisions at the company, contributing to that to allow you guys to focus on where you think the biggest win is. Atmosphere, I think technically founded in 2018, but Chive TV, you guys were working on this probably well before that, is that right?Mike Grisko:Yeah. So Chive TV was the original proof of concept. It was started in late 2014, early 2015 as an audience extension play. As the landscape got more and more competitive competing for eyeballs with Instagram, Facebook, and every other platform, Roku opened up their marketplace for content companies to build apps. And so they decided that technological opening allowed them to build a streaming TV app. And then they also were able to leverage the strong community on The Chive to help get distribution because the content programming, they realized quickly like, "Yeah, this is good for in-home, but this actually works incredibly well in bars and restaurants." And so that was the initial, "Hey, can we build an app? Can we distribute it? Can we actually make this work?" And that's where in the early days, I mean, they're a lot of learnings the guys talk about.Mike Grisko:And so it really teed up into 2018 where we had to go from, "Hey, this is a product with potential. How can we actually turn this into a real business?" That was the big mission of 2018 to see how we could really craft the story around Atmosphere as a platform. So Atmosphere, as it exists today, streaming TV platform for businesses. Over 50 different audio optional channels. We like to say we have a channel for every type of venue, whether you're a pediatric office or gym or a bar restaurant, we got a channel that's programmed for you. Everything from Chive TV, which is now a channel fully owned by Atmosphere to we have a Happy TV channel. We have Paws TV with cute puppies and kittens. We have partner channels such as America's Funnies Home Videos, Red Bull TV, and Disney's X Games. So we have quite a few.Chris Erwin:Mike, you have this content network, you have all these different channels that cater to different offices, different business environments, et cetera. And you make a decision as a company that it's like, "All right, foot on the gas. This is not just going to be an exciting new growth initiative out of Chive. This is its own standalone business that will probably require a separate growth plan, separate capitalization, and more." So when you guys convene, you, Spielman, the Resigs, and whoever else, what decisions do you make to really amplify the opportunity here?Mike Grisko:You summed it up pretty well from you, Chris. It really came down to this business has the ability to be a platform and like an N of 1 platform, the actual network that can tape over this niche of streaming TV for business. That's a big ambitious plan. So obviously would require risk capital to fund it if we really wanted to chase the velocity that we thought was there. It couldn't continue to be self-funded by The Chive and really drive to where it needed to be.Mike Grisko:Putting together that plan, and it was complications. Spinning the business off all of the shared services that were going to be required to spin it off. The conflict of interest was a big issue for VCs who were concerned if they threw millions of dollars into this new Atmosphere, entity in business, if it wasn't going well, would the entire founding team just turn around and go back to working at Chive Media Group and say, "Sorry, unfortunately, that didn't work out." It was a tough one to sell through. And if you remember in 2018, nobody wanted to touch ad supported startup businesses. Everyone was focused on subscription.Chris Erwin:Oh, how the world has changed. Just think of Netflix launching an advertising platform.Mike Grisko:Exactly. There was several times we thought about pivoting and driving resources hard into venues paying subscriptions. But luckily we stuck with the plan because we saw how much leverage there was in advertising to this massive underserved market.Chris Erwin:All right. So when you think about there's the big, exciting stuff to do, which is all right, what's the new growth plan who we hiring for this go raise venture capital, then there's all the administrative stuff of... All right. Yeah. Like you said, allocating shared services, who works on what, how do we communicate that, how do we set up a dedicated legal entity and put the right resources into that? All these little things that you as a CFO probably had to take care of.Mike Grisko:Yeah. And this is also where you and I met. As I'm pulling a lot of this stuff together with the group and bringing on lawyers, getting advisors all set, you and I got connected through Jason Anderson and you guys did an engagement for us both to... Well, number one, be that initial test run before we hit the market just on materials and the story, the model, just the entire thing, which was incredibly helpful and just help us. Like most VC fundraising rounds, it really comes down to the product, the team, and the TAM. And so helping us to find that overall opportunity in isolating our unit economics. There was a lot there because again, it wasn't just another enterprise SAS software business that was easy to digest and easy for VCs to give seed/Series A funding.Chris Erwin:I will say thank you to Jason Anderson for that intro. And it was a delight to meet you and Eric nearly five years ago now and have gotten to know the Resigs a little bit. But really, yeah, Mike, you're the first point of contact. I remember working arm in arm with you on some of this stuff. I have an image in my head of one of the financial runway slides of "Here's the traction for what we did last year," which I don't even know if it broke a million. "Here's our five year forecast," which was maybe at the low tens of millions. And the numbers that you guys are putting up on the board today are much bigger than that.Chris Erwin:But you guys were very hopeful, very optimistic. You saw a need in the market, but we also could sense that it wasn't a guarantee. It was a big swing. Chive was a business that had been around for over 10 years. It was time to find a new growth opportunity. And also, not just from a value creation perspective, but I think just for the team and for the brothers of an exciting new thing to dig into. And there was conviction and excitement, but it was clear that you guys were taking a big risk and there was uncertainty. I'm curious to hear the early days, when did you realize you really had something special here? Because you hit some big headwinds during COVID and maybe even a little bit before that, but things did change. Walk me through that.Mike Grisko:So our first headwind that we fought through was we'd agreed to heads of terms with a VC in early 2019 to do our initial funding. And they pulled out. They had internal issues that they had to sort out and they just could not do any fundings. And so we had to go back to our underbidder, who was Charlie Plauche from S3. And Charlie didn't try to take advantage of the situation. He stood up and honored his initial term sheet for the most part. And S3 ventures, if you don't know, Austin based VC, and Charlie was willing to roll up his sleeve, all those things we talked about with the conflict of interest, he and the team were willing to do the work because they saw the big potential. And his read on it, not only was this a massive opportunity, but this is a team that's done it before. And so it's an advantage that they've had The Chive business and been operating successfully for 10 plus years.Chris Erwin:Wow. Yeah. He probably had a chance to bend you guys over a barrel. But instead I think he was probably exhibiting the type of partnership behavior 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.

    Adam Rymer — CEO at OpTic Gaming on 1980's Internet Nerds, Adapting to Napster, and the Future of Esports

    Play Episode Listen Later Jul 7, 2022 62:25


    This interview features Adam Rymer, CEO of OpTic Gaming. We discuss what he learned from running Harvard's campus store, adapting to Napster at Universal Music, why entertainment doesn't value innovation, being on Universal Pictures' greenlight committee, scaling Legendary Digital and working alongside Chris Hardwick and Amy Poehler, how to create communities for gamers, why he plays Fornite with his son, and how to follow your own roadmap.Subscribe to our newsletter. We explore the intersection of media, technology, and commerce: sign-up linkLearn more about our market research and executive advisory: RockWater websiteFollow us on LinkedIn: RockWater LinkedInEmail us: tcupod@wearerockwater.com Interview TranscriptThe interview was lightly edited for clarity.Chris Erwin:This week's episode features Adam Rymer, CEO of OpTic Gaming. So Adam was born in Fort Lauderdale and was a self-described '80s internet nerd. That meant hanging out on internet bulletin boards and attending internet meetups at bowling alleys. His online passions paid off and he ended up going to Harvard after writing an admission essay, comparing entertainment dollars versus grocery store dollars. Adam's early career included Universal Music where three months after beginning his new role Napster was launched. And Adam had to figure out questions like, "What now? And who do we sue?" After rising up to the exec ranks at Universal Adam then struck out on his own to co-founder production company that worked on projects like the Rover and sci-fi hit arrival. He then became president at nerd and legendary networks where he helped build a multi-platform media business alongside stars like Chris Hardwick and Amy Poehler today. Adam is the CEO of OpTic Gaming, where he is helping to grow and scale one of the world's most exciting companies operating at the intersection of gaming and entertainment.Chris Erwin:Adam, thanks for being on The Come Up Podcast.Adam Rymer:Great to be here, man. Good to see you.Chris Erwin:Yeah. So where are you calling in from?Adam Rymer:I am in Dallas, been here about two years now.Chris Erwin:Are you in the Envy offices right now?Adam Rymer:We are. I moved here in the middle of COVID and we've been, believe it or not, working mostly in the office since I got here.Chris Erwin:Like to hear that people getting back to the office environment. Well, we're going to talk about Envy more, but actually want to rewind a bit, Adam. So going back a few years here, I want to hear about where you grew up and a little bit of what your childhood was like to see if there's any kind of glimpses into this media and digital executive that you've become.Adam Rymer:I am a Florida man. I grew up in Fort Lauderdale. Born in Miami, grew up in Fort Lauderdale, '70s and '80s which whatever anybody thinks about Miami and south Florida now is not what it was like when I was there. It was retiree paradise. And then the occasional spring break debauchery but of course, I was too young to really understand and appreciate any of it. So I just saw all these college kids coming in and thinking that would be awesome. And then by the time I was actually old enough to enjoy spring break, that it all gotten kicked out of south Florida and moved to Daytona and Cancun and wherever else. So missed out on all the benefit of all of it. But Florida was an interesting place to grow up in the '70s and '80s. Left at 17, never really went back, but definitely helped shape my desire to stay someplace warm for the rest of my life.Chris Erwin:Okay. So I have to ask you, what was your household like growing up? Were your parents into the same things that you're into now, media entertainment, digital gaming, gaming, what that looked like back in the day was very different, but what did your parents do and what were some of your early inspirations?Adam Rymer:My dad was a physician. He was an immigrant. My mom helped run the household. I had a younger sister who was six years younger than I. And so we were not overly close partially because of the age difference. And partially because we were just into different things, I was probably what you would call a quintessential nerd back in the day when it was very, very uncool to be a nerd. I got an Apple 2e when I was, I don't know, probably like eight or 10 years old and was goofing around on that with floppy discs and playing Zork and all the text base games and whatever else I could get my hands on. I remember connecting to BBSs back in the day. That was how I spent a lot of my free time.Chris Erwin:But BBS?Adam Rymer:Yeah. BBS was a bulletin board system. It was the modern, the old precursor to, I guess what you'd call like a social media network today. It was dial-in multi-communication platform where you could type and talk to other people and play games with people online, text-based games for the most part and south Florida, believe it or not, was actually the hub of some of the biggest BBS companies in the .country every now and then we'd go to meetups with people who were on these, these services, but you'd get online and play trivia and you'd play just chat with each other. And I guess back in the day, you'd consider it pretty weird. And today you just call it WhatsApp.Chris Erwin:So question, you said we would go to meetups. How old are you and who is we? Are you going with your parents or friends?Adam Rymer:Yeah. I was like 13, 14, and I'd have friends that would drive me around. We'd meet at like bowling alleys and family entertainment centers like arcades and mini golf places. And there'd be people from 14 to 40, but everybody was just connected through these online environments of being... At the time, I guess we were outcast and ostracized. And like I said, we were big old nerds.Chris Erwin:Were your parents supportive of some of your interests here with these meetups and the BBSs?Adam Rymer:Yeah, I mean, they didn't really know what was going on. For me, it was just a way to meet people and make friends and met some really interesting folks. Met some really odd, strange folks through it. Some people went on to greatness and do some pretty cool things. Some people faded off into obscurity. I think it definitely helped define and set my career in motion from being part of something that was just on the cutting edge of interactivity and technology. And 'cause there was a lot of steps to it, right. We had to, you had to get a 300-baud modem. You had to connect a phone line to it. You had to pay for time on the service by dropping off some money at a house or sending something in somewhere else. And I mean, it was really complicated, but we made it work. It was a weird time. It was like during the days of war games, if you remember the movie War Games, it was like that sort of universe.Chris Erwin:I've known you for years now. This is the first time I've really asked about your upbringing in your childhood. And within one minute, learn something completely new, but it makes sense. Everyone nowadays talks about how do you build community? How do you build fandom amongst different media brands, participants, creators, and users, et cetera? And you have now three to four decades of experience of building fandom on the internet. It's all becoming much more clear. So as you go to high school and then you're applying for college, what did you think that you were going to do?Adam Rymer:It's funny so we used to go to Disney World a lot in Florida, right? Because it's only about two-hour drive from where I lived. And I was always, I guess, kind of a weird business-focused kid at a certain level. I remember writing my college essay about Disney, but not about the cool entertainment factor of Disney about the business of Disney and how I found it super interesting that when you would go to someplace like Disney World, that you would be totally open to spending $8 on a Mickey bar ice cream that if you were just at a grocery store, you would totally freak out about highway robbery. You would just never spend that kind of money. And, I wrote my essay about like entertainment dollars being different from regular dollars. I did, I guess-Chris Erwin:So precocious.Adam Rymer:... I was a weird kid and at the time I was like, "I want to be Michael Eisner." Michael Eisner was my idol at the time not knowing a whole lot about anything, but knowing Disney and seeing how that was working, I was like, "That's my aspiration." Right? So went off to college. And at the time I was focused on engineering because as a nerd, geeky kid, I thought I was going to be an engineer, but within a year of college, I shifted over to being an economics major and really focusing more on business and really put most of my efforts into pursuing kind of game theory and business and economics.Chris Erwin:You went to Harvard up in Cambridge, right?Adam Rymer:That's the one. Yeah.Chris Erwin:So your essay must have been something special to get into that school. Right?Adam Rymer:God. To this day, I don't know how I got in. I'll tell you, I mean, it's my 25th reunion this year. I look around and I see other people from my class and I see kids today and I mean the quality of students and applications is just phenomenal. And to this day I count my lucky stars that I went there and got in there and survived. It was the hardest experience in my life. I can't even tell you, I felt overwhelmed half the time, lucky half the time. I mean, it was something.Chris Erwin:Well, if you're going to a reunion, my dad, I think is Harvard '70. And I think he's going to his reunion this year as well. So maybe you guys can bump into one another there. So you're at Harvard, you're feeling overwhelmed, but feeling lucky and grateful. And do you think you get more clarity on what you want to do when you're graduating?Adam Rymer:Yeah. Well, look, while I was there, I had my first real work experience. So we had this thing called Harvard Student Agencies. And what that is a bunch of student-run businesses on campus that are sanctioned by the university. And they let students sort of operate businesses through a platform that the university puts together. And I started out running something called the Campus Store, which basically sold futons and refrigerators and class rings and all the stuff you need for dorm rooms. And then my second year I became vice president of the organization. And one of the things that organization also did was produce the Let's Go Travel Guides, which might be a sign of another era, but it was books that you would use to go travel abroad and low-budget travel through Europe and other places around the world.Adam Rymer:And it was a team of hundreds of students that would write these books and go out and travel and run these businesses. And I did that for two and a half years of my time at school. And I found my time working and helping to run these businesses to be maybe the best education that I got over my time there. So by the time that I was graduating, I was pretty dead set on being in the business world, operating, trying to figure out some way to be an executive in some way, shape or form. Didn't necessarily know exactly what type of business to run. So I ended up going into management consulting, coming out of school because to me that seemed like the best landing spot, where I could get a sense of a bunch of different industries, bunch of different businesses, try to solve some problems for different companies and then figure out what I wanted to do from there. Or just do that for the rest of my life. Because from what I heard, that was a pretty cool thing to do.Chris Erwin:Got it. You go to L.E.K. Consulting in the late '90s. Was the experience what you expected it to be?Adam Rymer:So, so late '90s, I got to take you back a minute. I mean, at the time computers were still relatively, they weren't new, but they were not as useful as they are today. Everything was hard. The internet was slow. The amount of data that you had access to wasn't quite there, Google wasn't quite there. So I was building a lot of financial models. It was hard to do the research. We were printing things out on overhead projector slides for client presentations. PowerPoint was not as user friendly as it is today. I think I, when I started there, we were using Lotus 1-2-3, not even Excel. I was working probably 80 to 100 hours. I found the work interesting. I found the rigor interesting. I found the type of things we were doing interesting. I did not find the clients. I was working on overly exciting, and that was a big epiphany for me.Adam Rymer:I found it really hard to stay focused working for industries that I didn't have a passion for. At one point I was no joke... People say these things as jokes, I was working for a vacuum cleaner manufacturer, literally a company that made vacuum cleaners and I was helping them reallocate their sales force across the country. It was just hard. I was on the road and I was looking through maps and I was looking at different DMAs and I was trying to help them figure this out. I also spent a lot of time working in the biotech space, trying to look at different drugs that were coming to market and how they should be priced and talking to a lot of doctors and physicians about whether they would use the product and whether they would get approved by the FDA.Adam Rymer:And look, it wasn't my background. I mean, I purposely stayed away from anything pre-med I don't think I took any biology classes past ninth grade. The work was fun. The hours were rough, but not being passionate about the day to day subject was a real challenge for me. So about a year in, I was trying to figure out what was next.Chris Erwin:I hear you. I mean, I was a banker, right when I graduated from school undergrad. I think from like 2005 to 2010. And yeah, we were able to pull down 10-Ks and SEC filings, from the internet and able to get a bunch of financial information using Excel to create models. And I just remember all my MDs being like, "We used to have to get the 10-K's physically mailed to us." They didn't have Excel and they were doing modeling by hand on paper or in these really basic computer systems. And I was like, "Either that sounds terrible or it was better because you could just focus and do less." Where when you have access to technology your bosses just expect, "Well, you can work on five assignments at the same time." Right? You're equipped. But anyway, I digress.Chris Erwin:So then, okay, you do that for a couple of years and then I think you make a decision that instead of being an advisor and consultant, you want to go work for a company. You go to the line, quote, unquote, "some people say." And you go to Universal Music. So how was that transition for you?Adam Rymer:I mean, it was a magical transition for me. I mean, it was a happenstance lucky break for me and my career and the whole rest of my career, to be honest with you. And it goes down in something I think about still on a regular basis is having been a nerd. I mean, this goes back to the BBS story is I had built a PC. I was living in Cambridge. I was downloading the first MP3 files off the internet from really obscure search engines, like web crawler and LICOs. And I bought the first MP3 player that was ever made. And I would take this MP3 player to the gym and the use case for a portable MP3 player I found fascinating. The other options available at the time were a Walkman with a tape that you had to make a mix tape for, or a CD player, which for those who don't remember them, trying to get a CD player not to skip when you're at the gym or on a treadmill is almost impossible.Adam Rymer:And so I, part of me just realized like this digital music universe is going to be the way to go. This is just going to completely take over the future as the technology gets better. And I went to the consulting company I was at, and I said, "Look, we should sell a project to the music business and help them figure out the future of digital music, because there's no doubt in my mind that this is going to change the whole face of how the music industry works." To their credit they let me help work on selling that project and they successfully did sell the project. To not their credit they didn't let me work on the project.Chris Erwin:You can be the idea, the inspiration, create the pitch. And then it's like, "And you're off the team."Adam Rymer:So I left and that was the impetus for me leaving. I applied for a job at Universal and I was very fortunate to get an interview and then ultimately get hired to go join the strategy group at Universal Music in New York in, I think it was 1999, early 1999. It was a life-changing moment because the beginning in 1999 MP3 files and digital music was starting to be a huge subject of conversation. It was on the front page of USA Today. I was quoted in a bunch of things. It was something that everybody was talking about and knew was coming. But what nobody saw coming was Napster and Napster happened about three months after I got to Universal.Chris Erwin:Oh wow.Adam Rymer:So all of a sudden I was thrown into the fire with, it wasn't just me we had a team of people. But it was the, "Okay. Piracy is real. It's not going anywhere. How do we solve this?" Do we start suing the companies? Do we start suing our customers? Do we create our own technology? Do we create a subscription service, which is no joke, an idea that we presented at the time in 1999. What do we do? How do we solve this problem? Because it's not going anywhere and technology isn't where it is today.Chris Erwin:Follow-up question on that. Adam, did you feel that the leadership, did they understand the weight of the situation? Were they really panicked, very concerned or it's like, "This is an issue we should sort this out over the next five years, but take your time and be thoughtful." What was that sense inside the building?Adam Rymer:I'm going to answer that in a couple ways. I mean, this is a problem that I have seen throughout my entire career, which is that at traditional entertainment companies, the leadership is rarely incentivized to try to really innovate solutions to the biggest challenges that are in front of them. There's a lot of reasons for that. And I don't necessarily blame the leadership that's at these companies. A lot of them are publicly traded. They need to hit their quarterly returns. They're incentivized to hit those quarterly returns. Innovation is very rarely valued at these companies the way that it needs to be. Oftentimes they can buy innovation when they need to. Right? They're big enough. They've got public stock and if there's a startup, they can often buy the company that's going to solve their innovation problem. The difficulty in these cases is when you're dealing with something that's inherently illegal or theoretically illegal, you can't just buy the illegal thing and make that part of your repertoire.Adam Rymer:So the answer that was given was essentially like, "Look, let's let the courts figure this out." It was somewhat of a, "Well, obviously this is illegal. So the government should just stop this and get in front of it and shut it down because we have the right to sell music on discs and all these other things." And I think there was an inherent unwillingness to accept the fact that the consumers get to decide these things. Consumers get to decide how they want to consume content, how they want to live their lives. And ultimately it's the entertainment companies and the media companies who have to answer to the consumers on these things. And that's where I saw the biggest disconnect. And it wasn't just at the music industry. I've seen that through most of my career.Chris Erwin:Yeah. You were at Universal Music for about one to two years. So, and clearly had some early exposure to digital, but we're seeing that this is a theme from very early on in your career and your childhood. But then shortly thereafter you go to Universal Pictures. Why'd you make that transition? Did you feel, "Hey, there's a lot of inertia here, things aren't changing and I want to go to another part of the house," or was it something else? What was that catalyst for change?Adam Rymer:Well, for anybody who remembers the advent of Napster and piracy, also the crash of 2000 from a tech standpoint, just really killed the entire music industry. I mean, the music industry was cratering at that point. People were losing their jobs. Revenue was cut more or less than half very quickly. And I had an opportunity to go to business school. So I jumped and I decided I was going to ride out the storm of 2000 and everything else while I was in business school. And if there was still a music industry to go back to, I loved the music business. I would've gone back to music after business school, but between 2000 and 2002, while I was in school, the music industry kept falling. They couldn't quite figure out the solution. And I spent my summer at Universal Pictures looking at a another side of entertainment.Adam Rymer:So after school that turned into a full-time offer. My thought on it was the biggest challenge the music industry had was technology hit them like a title wave because the technology at the time had already caught up to the feasibility for music, meaning you could download a song in a reasonable amount of time to make it useful for the end-user, right? It only took a couple minutes, 5, 10 minutes at most to download a song, if not an album based on where technology was in 1999. When I graduated from, from school and went off to film the technology, wasn't there to download a movie, right? We were still a long way off from maybe not that long, but technology hadn't quite hit the film business in terms of feasibility for the piracy and the not having enough time to get in front of.Adam Rymer:So the way I saw it was this is an opportunity to get into the film business and try to help them stave off the problems that the music industry faced. How do I take the learnings from music and apply it to the film business and try to do some things differently here that we couldn't do there?Chris Erwin:You go there and you have a seven-year run and you end up rising to become I think the SP of digital for Universal Pictures where you're managing an international staff of, I think over 20 people across the US as well as London and Tokyo, if I'm right. Did you feel that at that point that you were coming into your own as an executive where you have a vision, you know how to solve problems, you know how to build the teams? And did you feel like that was a transformational moment in your career?Adam Rymer:I thought so. I thought so. It was the, "Hey, this is great. My career's really advancing. I'm at the senior levels of a major studio. I'm getting to present to some really cool people." I'm continued to have some really lucky experiences. Got involved in some very cool projects. I was always very much on the business side of it. I was pretty far removed from I'd say the creative side. It wasn't until the very end of my stint at Universal that I got put on the green light committee at Universal, which is where you actually get to have a say over which films get made at the studio, which was a pretty cool experience. Although it didn't last very long.Chris Erwin:How big is that committee and how much weight did your particular vote from the digital strategy side count?Adam Rymer:I'm not sure how much weight anybody's individual vote has, except for a couple of people on those committees. There's about 10 people on that committee across the studio. You've got home entertainment and marketing and production and the head of the studio and those kinds of things. It's fascinating. I mean, it's very kind of closed-door sort of, sort of setting very private, almost Illuminati-ish, but it was pretty cool to be in the room for some of it. But my job was to weigh in on what the digital and alternative revenue streams could be for the titles that we were working on. So things like video games, YouTube content, ancillary products. At the time we were talking about things like ring tones. What's the other stuff that we can do out of these films to generate revenue.Adam Rymer:And then I would be on the hook for delivering those numbers against the P&L for that particular title. It was pretty neat. And I felt like things were going pretty well for my career at that point, for sure. Now the downside was during my time there, we kept getting acquired. And for most people getting acquired sounds like it's a pretty awesome thing. Usually, there's like, "Hey, you got paid out. That's a big success, big exit." Well, in the big giant corporate world, those kinds of acquisitions usually get met with, "Hey, we're just kind of sitting on our hands for a while." So Universal was a big company. And when I started working for them, it was owned by Seagram. Then it was owned by Vivendi. Then it was owned by GE. And when I left, it had been acquired by Comcast.Adam Rymer:And we were always the acquired company, which meant that the acquiring company was taking their people, having them learn about the business that they were buying, meeting with everybody trying to figure out what everybody did, which resulted in a whole lot of work for all of us to educate them. And usually, that met with a whole bunch of reorganization and strategy redesignChris Erwin:Hey listeners, this is Chris Erwin, your host of the Come Up. I have a quick ask for you. If you dig what we're putting down, if you like the show, if you like our guests, it would really mean a lot if you can give us a rating wherever you listen to our show. It helps other people discover our work. And it also really supports what we do here. All right, that's it everybody. Let's get back to the interview.Chris Erwin:So, Adam, I totally feel you on if you're always the target and you're being acquired the reeducation of the new leadership. It's a lot. I mean, I remember when Big Frame was bought by Awesomeness TV and then Verizon, and then Hearst then invested thereafter, and then Comcast NBC U came and bought Dreamworks, which had owned Awesomeness. And there's always the strategic goal shift, the mandate shift there's reorganizations. And there's a point where you're just like, "I just want to get to work." And look, that's the nature of the beast, but was that a reason why after your seven-year run, you then started to explore entrepreneurship? You were the co-founder and COO and CFO of Lava Bear Films. And you did that for a few years. Was that the reason why you made the switch?Adam Rymer:Yeah, look, I mean, there were management changes and to be honest, I had been part of a very big company where I was an employee number. I still remember my employee number to this day, which says a lot, and it was an eight-digit number. So I was just a little tired of being in that kind of structure and part of me who likes solving problems and actually making things happen and not having a whole lot of red tape. There was an opportunity in front of me. The chairman of Universal had left and had an opportunity to start a film production company and asked me to help him put the business plan together for it and raise some capital and go after it. So I thought it would be a great chance for me to not only learn how to start a company from scratch but also learn about the other side of the business, the creative side of the business. How do you actually make content from start to finish?Chris Erwin:Well, you must have been doing something right at universal if the chairman leaves and wants to bring you on board to his next venture, right?Adam Rymer:I would hope so. I would hope so.Chris Erwin:So you're there. You learned the creative side of the business, which I think is, I've talked about this on a few podcasts, right? Usually, in entertainment, you're either on the business side of the house or on the creative side of the house. It's rare for people to speak both those languages. I think of people maybe like Bob Iger or David Zaslav at Discovery in Warner Media. Right. So it's smart to build out that muscle and I think that you are an executive producer on The Rover and you helped finance the movie Arrival?Adam Rymer:That's right.Chris Erwin:Produced by FilmNation and [inaudible 00:28:25] and Glen Basner and they're good friends of ours.Adam Rymer:Great guys.Chris Erwin:Yeah. They're the best. And so you do that for four years and did you see like, "Hey, maybe there's a world where you stay in the creative side of entertainment?" Was that interesting to you?Adam Rymer:Look, it was an amazing experience. I always wanted to see how the whole sausages gets made from start to end and really got to do that. I was going around to film festivals. I was reading scripts. I was handling some of the talent deals. I was negotiating a lot of the financing for the films. We were selling the projects internationally. We were dealing with the studios. We were looking at the marketing for the films when they came out. But for I'm sure you've talked about this on some other podcasts the filmmaking process is very long and very slow. And so for me, it was I like being on the creative side of the business or having involvement on the creative side. But I don't know that filmmaking was the place for me to explore that in the long term, because I'm so used to being in areas where things move very quickly, right?Adam Rymer:Even the music business moves relatively quickly. And on the digital world, I was watching things happen. Snapchat was starting to happen and Twitch wasn't quite there yet, but YouTube was really starting to take off and there were all these other things that were happening in the background. And I just felt like I was missing some really cool, innovative opportunities that were going on. So I had an opportunity to go join Legendary, which was at the time a pretty cool independent studio started by Thomas Tull. They had made Godzilla and Hangover and King Kong and 300. And he asked me if I would help them build their digital businesses over there.Chris Erwin:Was it an immediate yes? Like, "Oh yeah, this makes sense. This is an incredible studio with some incredible IP. There's a lot I can do here. Let's get to work." Or were you evaluating other things too?Adam Rymer:I wasn't evaluating other things. And it was pretty hard decision because you this was a company that I had helped start and I was a pretty big piece of, but the opportunity and it was a blank slate. I was kind of handed a, "We don't know what the right answer is and we need somebody who's got enough experience on both sides of the equation here that understands making some content, understands distribution, understands the business side of it to really help us figure out what we should do with this asset that we have." They had just acquired Nerdist and just didn't have a solid business plan on how to start making real revenues out of it. So for me, it was a puzzle to solve right back to the things that I love, which is trying to put pieces together.Adam Rymer:At a certain level the film business has a very defined path, right? There's not much to solve in that. There's always new innovations that are getting made. There's new ways to finance a film. But for the most part, the business model of making movies is relatively defined. You might say that Netflix has changed that in some way, shape, or form, but there wasn't a whole lot of, "How am I going to do this for the next 20 years and innovate and do some neat things?" And at Legendary, it felt like there was a real chance to try all sorts of new ideas.Chris Erwin:When you enter their first year, they've acquired Nerdist and I think that was... Was that founded by Chris Hardwick?Adam Rymer:Correct? Yep.Chris Erwin:And so what did you think of, okay, these are the wins that I want to get in year one. I think that we are capable of doing this. It also feels innovative. And then I think it's going to set you up to have an exciting career overseeing digital at Legendary going forward. What was that first mandate for you?Adam Rymer:First thing was really figuring out how are we going to generate consistent revenue? Because at the time the video part of Nerdist was founded as one of the funded YouTube channels. Some people might remember that YouTube was putting a lot of money into funding channels for the purpose of creating more premium content on YouTube and right around 2014, they stopped funding those channels. And so a lot of these channels ended up in no man's land of figuring out how they were going to keep their business running. And so for me, the first step was okay, well, now that we don't have this stipend coming from YouTube every year, how are we going to find ways to just generate consistent revenue even if we're still operating at a little bit of loss, something that we can project to keep it all moving. So at the time we had the Nerdist podcast and we had some content that was existing on YouTube, and my first step was, well, how do we start monetizing podcasts in a better way?Adam Rymer:So I was able to take Chris's podcast and structure a deal with Midroll and that helped get us really kicked off with our first seven-figure deal, which let me hire some more staff and start to figure out some new lines of business.Chris Erwin:Did you feel like, "Hey, we figured out a digital revenue model here for media brands and fandoms built around big personalities"? And so did that then inspire you to say, "Well, let's start buying some other companies to add onto this roster"? Because I think you then acquired Geek and Sundry and then Amy Poehler's Smart Girls at the Party.Adam Rymer:That's right. So the idea was, well, if we can create enough of scale around these celebrity-driven community content businesses, then we can justify having an infrastructure that can support all of them the right way. So that allowed us to have a sales team that could support all of them, and start doing branded content deals that could leverage the communities that were built across all of them simultaneously bring some staff efficiencies together, and allow content production to be more efficient. So we had our entire... We had our own content production team. We had our own studio where we produced all of the content that we're making for the YouTube channels ourselves and for our branded content features. And ultimately that led us to start a Twitch channel with Geek and Sundry, which is where I started to learn quite a lot about Livestream.Chris Erwin:So do you feel at this point it's like, "All right." You're attached to a big studio, you have a lot of resources, you have incredible IP to work with, but you also, you're running your own division, which has its own P&L. It seems like you're on both the creative and the business sides of the house, where you have a real strong point of view of what content we're creating. How do we monetize it? What's getting green-lit? What new platforms are we experimenting with? You're building out a team against your vision. Did you feel like, "Hey, I feel like I have it all right now"? This is checking all the boxes for my career.Adam Rymer:In hindsight, I guess so. I mean, at time it felt very stressful. At the time it felt like we were building the plane while we were flying it. And there weren't a whole lot of examples for us to point to say, "Hey, we're doing it like these guys," or we've got somebody else that's done it in front of us. There were the MCNs out there that were aggregating a bunch of channels together. And they had a somewhat different business model, but there was nobody who was really trying to create more premium level content on a regular basis. And I mean, I had to answer to a pretty senior studio executive. So I had a lot of pressure from that side, but I did have the luxury of a good balance sheet. So I wasn't having to deal with trying to raise capital on a regular basis to keep the thing afloat.Adam Rymer:There was a couple years there where it really felt like the coolest, most fun job that I ever could have thought I've had. We were going down to ComicCon. Chris was moderating panels for us in Hall H. Got to go backstage and hang out with the cast of all the Marvel films before they got on Hall H. we had all sorts of fun people coming by the studio to be in the content, got to watch and be part of a lot of the content that was being filmed at our location. I think most of the people that were there at the time will tell you that it was a pretty magical place to be for a couple of years.Chris Erwin:I mean, I remember going to your offices a couple times during that period and just looking around at the different sets and the studios. And I was like, "This sounds like a pretty amazing gig, Adam." I knew that you were working really hard and that it was a lot and you were kind of figuring things out on the fly as you said, but I think everything in retrospect, you 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.ggChris 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. 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