How Animoto CEO Brad Jefferson grew Animoto to $31.2M revenue and 130K customers in 2019.

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is jason xiao he's the co-founder and chief video officer of animoto an award-winning online video maker that makes it easy for anyone to create professional marketing videos jason you ready to take us to the top let's do it so you guys have been around a while huh when was launch date we actually first launched in 2007 which sounds like you're like ancient years ago it was actually like before i think it was like before the iphone or no the iphone just came out but like myspace was more popular that like facebook was still kind of up and coming like it was kind of crazy you're jason you're aging yourself yeah i know i know all right tell us for people that are not familiar with you guys tell us what the company does so we are online video maker we basically try to make it drag and drop easy for anyone even if you have no video experience to make professional quality videos to you know to market your business so we're kind of like for those of you know people familiar with like canva or you know squarespace we're kind of like squarespace for video or canva for video and is this a tool i mean i use this back in the day i don't think we paid for it that's why we used it so much is it a free tool or what's the revenue model how do you make money yeah so we have a premium model but we have you know uh subscription plans kind of ranging from 100 a year to 500 a year but we have you know three different plans um but it's free to try what would you say your sweet spot is what would you say so if you take your total customers and total revenue would you say the average pays what 100 bucks a year or it's higher like 200 yeah more like the two 250 kind of range so we kind of have our professional plan the middle plan yeah it's kind of like can someone's popular can someone pay monthly or they have to pay kind of upfront and they and they can pay monthly and what's interesting about video as opposed to i think a lot of other sas businesses is video is still kind of one of those things even though video is everywhere not everyone is actually convinced that they you know yeah that they need to be using video all the time and so it's it's very much like some people have very specific needs they need to do one or two things some people you know come back after six months or 12 months or five years or whatever um so it's a little bit all over the place but i think more and more now we're kind of getting into the wave where people are like okay video is actually kind of like a form of communication now i need to start figuring how to use this more regularly and so the onus is on us to figure out how to make it easier and easier and kind of show people what they should be doing so 2007 was launch date uh walk me through how you got your first 10 customers do you remember yeah well let's see man so we uh so we had we were basically a few of us actually were still working we were working in the tv industry here in new york and we actually kind of started this on the side and we worked we gave ourselves a year to see if we could actually prove out this technology and we thought it was going to take a few months it took us a year to even see if we could if we could do this and it was basically the idea of like rendering video original video frame for frame in in the cloud it's totally nerdy but we're like no one's done this before so we're gonna try to do this and who's we how many of you are there three four there are four co-founders right but there are basically three of us that were kind of more on the product side and i'm like the least smart of the other two were kind of like the the geniuses um and then we got the point we're like okay well should we do this and then like like let's give ourselves and see a year and see if we could pull this off so we raised um basically kind of like i guess what we call a family and friends round but all our kind of friends and family in the seattle area we hit them up for checks of like twenty five thousand and fifty thousand dollars and we're like you probably will not see this money back but if you love us give us this money and you know help us uh chase our dreams so we gave ourselves a year and that we basically raised enough to kind of like how much did you raise we raised uh it was a few hundred thousand dollars it's basically just enough for us to pay rent and feed ourselves kind of like minimal food and get by for a year jason this isn't like there this wasn't a year when money was flying around though i mean you're about to go to one of the biggest recessions in a long long time did you get this money right before right after 2008 this was before this was before um did you have people calling up going wait give me my money back well no we had actually gotten that early around we had actually luckily we had already kind of gotten going with the family and friends round um and then yeah we were actually about to raise kind of our first serious round like literally the day the week of that where everything kind of like everything crashed and sequoia posted their rest in peace you know memo or whatever it was and we were like sitting in waiting rooms at sequoia and other places and then everything fell apart so we kind of had to kind of uh step back and and kind of figure out so let me jason let me sit back down this first year so the first line of code was written in 2007 or 2006 2006 and then we launched our website in 2007. so how much total how much cash did you guys sink into the mvp so between your first line of code and your first dollar of revenue do you remember uh well if you're if you count kind of like the salaries and everything that we kind of give it was probably like we probably put in a few hundred thousand dollars two three and three hundred thousand dollars in total uh kind of our collective efforts and opportunity costs something like that and tell me the story of tell me the story that first customer that first money coming in it must felt great well we got we got kind of lucky somehow uh when we launched honestly we're just we're total product and technology nerds we actually didn't really know who was going to use animoto the one thing we did right well we did a couple things right but one thing we did right because we actually remembered from the first.com bubble uh burst and bubble and burst in the in the late 90s now i'm really aging myself that you know the big lesson learned there was you don't just create eyeballs and then tack on your business model you have to like figure out how to actually make money so we're like okay well we're actually gonna against the advice of so many people because they're like guys no one pays for anything on the internet look at google look at yahoo look at about netscape and like you gotta have to figure out how to do this for free and we're like no we think that if it we can do something well enough people will pay for it and so we kind of stuck to our guns and it was like in the early days it was like three bucks a video and or 30 bucks for you know 30 bucks a year for all you can make and we just kind of made that up because no one else was really um charging for stuff and then uh we launched we didn't really know who was going to use it um and then we got lucky like i think in that first day or two michael arrington she used to be the head of um techcrunch uh techcrunch um you know with the big following he caught wind of us and wrote this really nice thing like here's these guys who are doing one specific thing really really well and he just kind of became a fan and and you know followed us for a few years and so that exposure in the early days really kind of like set us in motion and gave us a lot of good 2007 to 2008 that first 12 months you're in business about how many customers did you sign up do you remember uh well because we were also focused not just on businesses but basically kind of like anyone who wanted to create video i mean we had thousands right away especially if you you know since we were charging per video you know three dollars a video i mean we had like you know tens of thousands of customers in those early days um so it felt it it felt like we were successful in those we're like wow everyone everyone's using animoto and then you know fast forward several years we're like that this is actually not real success because we have no idea where...