How Animoto Reached About 130,000 Paying Subscribers and 20% YoY Growth with 100 People (Interview with Co-Founder and Chief Video Officer Jason Hsiao)

Nathan Latka

00:00Just 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 thirty 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

Host Intro and Guest Welcome

Nathan Latka

00:18way 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. Alright. For thirty minutes. Enjoy the interview. Hello, everyone. My guest today is Jason Hsiao. He's the cofounder 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?

Jason Hsiao

00:39Let's do it.

Company Background and Launch Year

Nathan Latka

00:40So you guys have been around a while. When was launch date?

Jason Hsiao

00:43We actually first launched in 2007, which sounds like years... Like ancient years ago. That 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. Like Facebook was still kind of up and coming. Like, was kind of crazy.

Nathan Latka

00:58You're... Jason, you're aging yourself.

Jason Hsiao

00:59Yeah. I know. I know.

What Animoto Does and Revenue Model

Nathan Latka

01:02Alright. Tell us... For people that are not familiar with you guys, tell us what the company does.

Jason Hsiao

01:05So we are an 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 kinda like, for those of, you know, people familiar with, like, Canva or, you know, Squarespace, we're kinda like Squarespace for video or Canva for video.

Nathan Latka

01:22And 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?

Jason Hsiao

01:30Yeah. So we have a premium model, but we have, you know, subscription plans kind of ranging from $100 a year to $500 a year, but we have, you know, three different plans. But it's free to try.

Nathan Latka

01:40What 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 pay is what? A $100 a year or it's higher, like, 200?

Jason Hsiao

01:48Yeah. More like the $250 kind of range. So we kinda have our professional plan, the middle plan.

Nathan Latka

01:53Yep. Now it's kind of like Can someone someone's popular. Can someone pay monthly or they have to pay kind of upfront annual?

Jason Hsiao

01:57And they and they can pay monthly. And what's interesting about video as opposed to, I think, lot of other SaaS businesses is video is still kind of one of those things. Even though video is everywhere, not everyone is actually convinced that they need to be using video all the time. And so it's very much like some people have very specific needs, they need to do one or two things. Some people come back after six months or

02:18twelve months or five years or whatever. 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, oh, okay, video is actually kind of like a form of communication now. Need to start figuring out 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

02:35what they should be doing.

Early Days and First Customers

Nathan Latka

02:36So 2007 was launch date. Walk me through how you got your first 10 customers. Do you remember?

Jason Hsiao

02:42Yeah, well, let's see, man. So

02:47we 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 do this. And it was basically

03:05the idea of like rendering video, original video frame for frame in the cloud. It's totally nerdy, but we're like, no one's done this before. So we're going to try to do this.

Nathan Latka

03:13And who's we? How many of you are there? Three, four?

Jason Hsiao

03:15There are four co founders, right? But there are basically three of us that were kind of more on the side. And I'm like the least smart of the other two, the geniuses. And then we got to the point where like, okay, well, should we do this? And we're like, let's give ourselves a year and see if we could pull this off. So we raised basically kind of like, I guess what we call a family and friends

03:34round, but all our kind of friends and family in the Seattle area, we hit them up for checks of like $25,000 and $50,000 and we're like, you probably will not see this money back, but if you love us, give us this money and help us chase our dreams. So we gave ourselves a year and that we basically raised enough to kind of like-

Nathan Latka

03:51How much did you raise?

Jason Hsiao

03:53We raised... It was a few hundred thousand dollars. It's basically just enough for us to pay rent and feed ourselves kinda like minimal food and get by for a year.

Nathan Latka

04:02But, Jason, this this isn't like... There... This wasn't a year when money was just flying around, mean, you're... We're about to go into one of the biggest recessions in a long, long time. Did you get this money right before or right after 2008?

Jason Hsiao

04:12This was before. This was before.

Nathan Latka

04:15Did you have people calling up going, wait, give me my money back.

Jason Hsiao

04:18Well, We had actually gotten that early round. Luckily, had already kind of gotten going with the family and friends round. And then, yeah, we were actually about to raise kind of our first serious round, literally the day, the week of that, where everything kind of like everything crashed and Sequoia posted their rest in peace memo or whatever it was. And we were sitting in waiting rooms at Sequoia and other places, and then everything fell apart. So

04:43we had to step back and figure out what we were now.

Nathan Latka

04:46Jason, let me step back though on this first year. So the first line of code was written in 2007 or 2006?

Jason Hsiao

04:522006, and then we launched our website in 2007.

Nathan Latka

04:55So how much total... How much cash did you guys sink into the MVP? So the... Between your first line of code and your first dollar of revenue, do you remember?

Jason Hsiao

05:04Well, 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, $200,000 to $300,000 in total.

Nathan Latka

05:04Okay.

Jason Hsiao

05:04Kind of our collective efforts and opportunity cost and like that.

Nathan Latka

05:18And tell me the story of that first customer, that first money coming in, it must have felt great.

Jason Hsiao

05:23Well, we got kind of lucky somehow when we launched. Honestly, total product and technology nerds. We actually didn't really know who was gonna use Animoto. The one thing we did right, well, we did a couple of things, but one thing we did right, because we actually remembered from the first dotcom bubble and burst in the late nineties, now I'm really aging myself, that the big lesson learned there was you don't just create eyeballs and then tack

05:47on your business model, you have to 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 Netscape. And you have to figure out how to do this for free. We're like, No, we think that if we can do something well enough, people will pay for it.

06:06And so we kind of stuck to our guns and it was like, in the early days, was like $3 a video or $30 a year for all you can make. And we just kind of made that up because no one else was really charging for stuff. And then we launched, we didn't really know who was going to use it, and then we got lucky, I think in that first day or two, Michael Arrington, who used to

06:27be the head of- TechCrunch. TechCrunch, you know, with a 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 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 great So

Nathan Latka

06:512007 and 2008, that first twelve months you were in business, about how many customers did you sign up? Do you remember?

Jason Hsiao

06:56Well, because we were also focused not just on businesses, but basically kinda like anyone who wanted to create video. I mean, we had thousands right away, especially if you, since we were charging per video, $3 a video, we had tens of thousands of customers in those early days. So it felt like we were successful in those early days. We're like, wow, everyone's using Animoto. And then, you know, fast forward several years, we're like, that... Is

07:20actually not real success because we have no idea where we're where we're at... What we're actually doing and who we're focused on.

Nathan Latka

07:26Yep. And by the way, that that Michael Arrington article posted at 08:10AM on 08/26/2000 The subject title was happy birthday, Animoto. You guys make me happy. I mean, it doesn't get him... You don't get him much stronger endorsement than that.

Jason Hsiao

07:36Yeah. For someone who's, you know, kind of He's a tough for being pretty cynical.

Nathan Latka

07:40Yeah.

Jason Hsiao

07:41But I think he liked that we were, you know, doing one thing very specific and trying to do it really well, and he liked that focus.

Current Customer Count and Churn

Nathan Latka

07:46So good. So your first thousand customers come from this kinda early traction. Fast forward today. How many customers are you serving today?

Jason Hsiao

07:53Well, over... Yeah. Like I said, over the over the years, we've we've probably had, you know, over over a million.

07:58We have

Nathan Latka

07:58But how many active paying today?

Jason Hsiao

07:59Yeah. Active. We've got, like, 130,000 active paying subscribers, and a lot of them are kinda coming back. So... But active, I'd right now, like, you know, over a 100,000.

Nathan Latka

08:09Okay. About a 100... I'll call it 130,000. And so you mentioned you've had, like, way more than that over your lifespan. So you're talking really to churn here, right, which is when people use you once, how do you make them really, really sticky? This price point, right, churn is obviously an issue. Or maybe not. How have you addressed churn?

Jason Hsiao

08:27Well, what we realized because of our type of business, we have to kind of approach it in a very kind of multi layered type way. Right? So, you know, we know that, I don't know, like about 20% of folks who come in will actually just stick around, you know, with us forever. And the rest, like I said, it just depends on where they are in other business. We have a lot of small businesses, some of them

08:46are just getting started. So the idea of like jumping right into social media and posting all the time, it's just they're not ready for that. They're like, I need a video for my homepage or for a cover video for my Facebook page or something, was just trying to get like the basics in place. But if we feel like that we can serve that need really well, that in six or twelve months time when they are ready

09:04to do some more, like start doing ads on Facebook, or start promoting some of their regular product line or something like that, that we can kind of be there when they're ready at that next stage of the company. So we've kind of learned that we just need to kind of almost like sub segment our our businesses and really kind of understand where they are in in their in their business maturity and their social maturity and their

09:27video maturity and kind of catered each one of those. So I know that's kind of like a non answer, but...

Nathan Latka

09:31Well, yeah. I mean, there's lot a of specifics and the insight's good. But for the sake of time, I mean, if you look at the past, call it twelve months, the past year, what would you say gross revenue churn is at? Is like 20%, 30% or higher, would you say?

Jason Hsiao

09:43Yeah, probably about 25%.

Nathan Latka

09:45Okay. I mean, are you guys are happy with that? I mean, that's not horrible for this price point.

Jason Hsiao

09:49Yeah. I mean, it's always hard. You you look at other companies, and I think it's as we just have to understand the type of product we are, which is video, and it's just different from like email or some other things. And so in some ways, we're kind of figuring things out as as we go.

Nathan Latka

09:49Do you

10:02have meaningful expansion revenue or like an upsell team or no?

Jason Hsiao

10:06Yeah. Oh, yeah. We have kind of teams dedicated to, you know, like, how do we, you know, upsell or or win back and all those kind kind that gap?

Nathan Latka

10:14So for example, the customers you signed up exactly one year ago, let's say, 25% of their revenue will churn, but the other customers that say, will you upsell them by more than 25%? Your net revenue retention is above a 100%?

Jason Hsiao

10:27I'd say it's close, but I think where we do where we do better is we're we're kind of strong in our top of the funnel. So our growth kind of comes more from top of funnel and finding new customers. I think we could actually honestly do better and kind of like the win back or retention side of things.

Nathan Latka

10:42Interesting. Okay. So probably no meaningful expansion revenue from upselling, you don't think?

Jason Hsiao

10:48I think part of it will just come from the macro trend of people actually realizing that they need to do video more, and that's becoming kinda more cost effective than some some other traditional marketing channels. So

Growth Channels: Word-of-Mouth and Paid Social

Nathan Latka

11:00Okay. Fair enough. So let's talk about top of Right? So so today, name a growth channel working really well for you that most people might not expect.

Jason Hsiao

11:08Well, I know this this probably... It actually is word-of-mouth. We've tried,

Nathan Latka

11:13you know, Jason, that is the most boring answer you could possibly give. Give me

Jason Hsiao

11:13I know.

Nathan Latka

11:13Give me... Okay. If you're gonna give that answer, give something to my audience where they can really understand how they could replicate how you've done word-of-mouth. Try and make it specific for us.

Jason Hsiao

11:26Well, I'll I'll actually I'll actually say our sec... Our second biggest because I think... So word-of-mouth, and it's because we're a video company, so we happen to be the type of product that people share and talk about, and it's visual and it's exciting, and so people like. But the one that we can actually control better, it is basically direct paid marketing primarily on, you know, on on Facebook, on Instagram, on on social, and using video. So

11:50the nice thing is we're actually, you know, eating our own shit.

Nathan Latka

11:54Dog food.

Jason Hsiao

11:54Yeah. We're eating our own dog food. We're growing

Nathan Latka

11:54You don't wanna

11:56call it shit, Jason.

11:57You wanna call it, you know, something much...

Jason Hsiao

11:58Food. Right?

Nathan Latka

11:59All right.

Jason Hsiao

12:00Is dog food good?

Nathan Latka

12:01What scale are you? I mean, are we talking like a million dollars in ad spend a month across these channels or what general scale you at would you say?

Jason Hsiao

12:07Oh yeah, yeah. Probably. Yeah, it's probably around... It's probably up there around there. And we're trying all sorts of different channels, but I think the big picture, so I guess for just folks listening, I think the biggest mental shift that I think that we've had and that we've been trying to tell people is that,

12:24I think that the impact that social media has had, I don't feel like people have maybe, especially small businesses have really grappled, really kind of embraced it. It's really changed everything in the sense that like, I think traditional marketing, which is how most people do marketing still today, it's like the Holy Grail is getting people to your website. So whatever you can do to lure people to your website, and that's kind of how marketing is done.

12:51But I think what's happening now is you don't actually have to sit around and wait for people to get to your website. You can actually take your message or your content or your information to where the conversation is already happening, and that's on social media.

CAC and Payback Period Economics

Nathan Latka

13:03So what are the economics though on that look like for you? So let's let's use your average price point. Let's call it $250 a year. What will you pay? Like, what's your fully weighted CAC would you say to get a $250 a year account, new account?

Jason Hsiao

13:14Well, we have a lot of different segments of users. So it kind of depends.

Nathan Latka

13:18We'll just use $250. Yeah. Like a two fifty.

Jason Hsiao

13:20So on so on average, we'll say, you know, we should be willing to pay up to $250 to acquire, you know, a new customer.

Nathan Latka

13:25Is that about where you're at though, or are you better or worse?

Jason Hsiao

13:29No. We we run things pretty tight around that.

Nathan Latka

13:33Twelve month payback period no matter the cohort.

Jason Hsiao

13:36Yeah. We kinda use a twenty four month payback period. So we kind of extend it, you know, slightly, but we're... I'd say we're relatively conservative because we kinda found that it works. And so

Nathan Latka

13:45Well, Jason, so how... Sorry. I don't mind. Don't mean cutting you off, but I wanna get a bunch of stuff in before we end. How do you How do you afford a twenty four month payback period? That means the more customers you add today, the bigger your cash gap is, but you know they'll pay off in the future, but twenty four months is a long time to wait to get paid back. How can you afford the

13:58cash gap?

Jason Hsiao

13:59Yeah, well, took growing into, right? So we started with twelve months and then as we felt comfortable that we were reliably getting that cash back, we could extend to a year and a half or two. So now we feel like that we're confident enough in this channel, and we have enough cash in the bank that for any rate that we can extend to twenty four months. And it's a dominant channel, but it's not like... It's not

14:25our only channel. Right? If it was our only channel, you know, we might be a little bit more kind of risk averse, but if we go macro,

Top-of-Funnel Traffic and Trial Conversion

Nathan Latka

14:33I know that's just one channel, but if we go macro in the entire company, what would you say, like, top of funnel total hits to the website is on a monthly basis?

Jason Hsiao

14:42Total hits probably in the in the... Gosh. I should know this. Right? In in in the millions.

Nathan Latka

14:49And how

14:50many new customers will you will you convert in or trials will you get from that users?

Jason Hsiao

14:55Well, we'll get about...

14:56Business customers, get probably average about a 150,000 a

Nathan Latka

14:56Okay.

15:02New trials. So they're trying for free. And then how many of those convert actually to paid would you say on average?

Jason Hsiao

15:06We have about, like, a 7% conversion rate.

Nathan Latka

15:09Oh, okay. That's not bad.

15:10So that would be about 11%. So call it 11,000 convert to paid?

Jason Hsiao

15:15Yep. And those are specific business customers. And we have a bunch of non business customers that we try to figure out what to do with also. Where we're kind of betting is on the business customer side.

Nathan Latka

15:24Yeah. Mean, that's healthy, right? If you get 11,000 new customers at an average price point of $250 a year, you're basically adding almost $3,000,000 in new ARR every month. That's a good growth rate. Did I get that right?

Jason Hsiao

15:34Yep. We like it.

Nathan Latka

15:35Yeah. That's good.

Jason Hsiao

15:35But we have challenges on the churn side, retention side, you know, we gotta get people using video more regularly. So that's, I think,

Team Size and Engineering Headcount

Nathan Latka

15:42what's What's your total... What's your team size today, Jason? How many folks?

Jason Hsiao

15:45We're about a 100 folks, mostly in New York. We have a handful of folks in San Francisco and then some other folks all over the world.

Nathan Latka

15:51How many engineers?

Jason Hsiao

15:53We're pretty heavy on the engineering side. We're over probably over half, probably two thirds of our company is kind of on the product development side, which is mostly engineers. So we're definitely heavy on the development side.

Nathan Latka

16:03And do you have any quota carrying sales reps at this price point? Or is it too cheap for that?

Jason Hsiao

16:07Too cheap too cheap for that. We've we've kind of entertained the idea, but I think it's a... We need to rely more on kinda cheaper channels.

Funding History and Investors

Nathan Latka

16:16Yeah. Now you mentioned covering a forty eight month or twenty four month kind of cash gap. Have you raised like gobs and gobs of money? How much have you raised to date?

Jason Hsiao

16:24We've done... Officially, we've done three rounds, that initial family and friends round, then we did kind of a series B with a VC, Madrona, and a few other folks tacked on, including Amazon. And then we did a series C with a private equity group, Spectrum. So we've raised, know, just over like 20,000,000 or something like that.

Nathan Latka

16:43Okay. Well, the Spectrum one was 25 and the Madrona one was 4.4. Right? So so about 30,000,000 total?

Jason Hsiao

16:48Yep. About 30,000,000. You... You've done your research.

Nathan Latka

16:51Oh, yeah. Yeah. Of course.

Jason Hsiao

16:52But I'm gonna let you say it. I wanna steal I don't wanna steal your thunder.

Nathan Latka

16:55So so now maybe the reason you said it was 20,000,000, not 30, is because $10,000,000 of that was maybe secondary. Spectrum does that a lot. Did did some of those go to secondary?

Jason Hsiao

17:02Yeah. Some of those. Yeah. Some of those went to secondary. There we

Nathan Latka

17:05There's nothing wrong with that, by the way. A lot of founders think the only way to get liquidity and early employees is to sell the company. But, no, you can negotiate a nice kind of secondary as well.

Jason Hsiao

17:13Yep. Yep. That's kind of a newer thing I I found out. But... Yeah. But it's nice because we wanna swing for the fences, but at the same time, you know, we wanna take care of things at home. So

Nathan Latka

17:21Yeah. So just to be clear, the 25,000,000 from Spectrum, some portion of that may call it $5,000,000 to $10,000,000, did go to early shareholders, early employees, and founders.

Jason Hsiao

17:31Yes. Yes. So that's why I kinda say, well, we technically raise, yeah, is probably in the in the twenties, yeah, total.

Cash Flow Neutrality and Profitability

Nathan Latka

17:36That's fair. Now that last run of Spectrum was back in 2011. A lot of people would say, wow. You haven't raised seven years. And once you're on the venture track, if you're not raising every other year, something's wrong. How'd you respond?

Jason Hsiao

17:46Well, we've been pretty lucky, like pretty much from day one, we have run basically a cash flow, call it neutral business. So we were always, we've always been making money. And so really our periods of raising money is just to kind of try to take advantage of some spurts of growth. But we've always run a cash flow positive. So actually we're in a great spot.

Nathan Latka

18:08Jason, can I ask how significant that is? Are we talking like 30% EBITDA margin every year or 50 or 10 or?

Jason Hsiao

18:15Well, we run, I guess basically we run like a cash flow neutral business. So everything we make, we basically put right back in Animoto. So technically it's like, we we we could probably hit, yeah, 30, 40% if we want it, but we're reinvesting everything right now.

Growth Rate and ARR Milestones

Nathan Latka

18:31Yeah. Now can I do this math? Tell me if this is accurate. You said earlier about a 130,000 paying customers, $250 a year. If I just, I can just multiply multiply those together to get about 2.6 a month or about... You guys have crossed a 30,000,000 run rate at this point. Is that accurate?

Jason Hsiao

18:43Yeah. We're in the ballpark.

Nathan Latka

18:43Okay. Yeah.

18:45And if if you're in that ballpark now, call it 2,600,000 a month today, where were we at exactly a year ago? Do you remember?

Jason Hsiao

18:51Just eyelash.

Nathan Latka

18:53So you've been about flat year over year?

Jason Hsiao

18:57Yeah. I think... Well, no, no, no. We've been growing. I don't know exactly where we were faster, but we've been.

Nathan Latka

19:03Do you know what you grew out year over year? Was it, like, 40%, a 100%, 10%?

Jason Hsiao

19:07No. We're we're kind of in the double digits right now. We're kinda like in the double digits right now.

Nathan Latka

19:11Okay. Somewhere between 10... That's a big range. Between 10 and a 100%, that's double digits. Right?

Jason Hsiao

19:16Ten and ninety nine.

Nathan Latka

19:17Ten and ninety nine.

Jason Hsiao

19:18No, no. We're we're probably like in a 20% growth rate.

Nathan Latka

19:20Okay. You say that almost in a shy fashion, but you should be proud of that, right? Considering what you've raised relative to your ARR, why are you shy about that?

Jason Hsiao

19:28Well, I don't know. I think maybe that's good for the stage that we're at. I feel like we're always being compared to... Or I always compare myself to everyone else. And I'm like, oh, we we... I always feel like we should be going much faster.

Nathan Latka

19:38But maybe But you have incredible leverage. Right? When you compare the amount you've raised relative to your ARR. Right? So you really only put 20,000,000 on the balance sheet, 10 of the 30 was secondary. Right? Your ARR is more than what you've raised. That's a beautiful place to be in, and you're cash flow positive. That's a great story you should celebrate.

Jason Hsiao

19:51Yeah. I know. I know. And so... But sometimes we're like, are we being too conservative? Should we be, you know, like, swinging even harder? I think it's... We're always kind of, like, wanting wanting more. So, yeah, I guess we we do have a lot to be proud of, but I think I I think we can do more.

Nathan Latka

20:05That's one the reasons that's one of the reasons I wanted you guys on is is because you've had history, you have scale, you haven't raised a ton. So no, this is exciting. Now, when do you, I mean, what is the next big metric? Do you guys think you'll break 30,000,000 in ARR by the end of this year or what's the next big target?

Jason Hsiao

20:18Yeah, think it is, I mean, yeah, we would like to kind of keep... I think a big push for us is just focusing a lot more on mobile and international. And I think those will unlock a lot more opportunity, but yeah, certainly all those milestones, 40, 50, 100.

Nathan Latka

20:35Is there any is there any... I mean, well, actually, I mean, is 50 a stretch goal for next year or do you think you need like 2021 to get past that? How realistic is that?

Jason Hsiao

20:43Probably a couple of years, maybe a year and a half. Yeah. Seventeen months, eighteen months.

Board Composition and Future Raise Conversations

Nathan Latka

20:46Yeah. Now are you in are you in talks now? You've driven a nice scale since 2011. Are you in talks right now to do any, like, you know, call it a $100,000,000 secondary or any big secondary raise?

Jason Hsiao

20:55No, we're always thinking about it because we're always like, what would we actually do with that money? And in some ways, right, it's raising money comes to the cost, right? It's giving up some portion of the company and changing up the board dynamic. And we actually really love our board dynamic right now. We have fantastic partners from Madrona and Spectrum. Right now-

Nathan Latka

20:55What

21:12is it a five person board?

Jason Hsiao

21:14It's a... Yeah. It's a six person board. We can have two independents, two from the financials

Nathan Latka

21:19Jason, six person board. You're never supposed to have even board members. You're gonna end in a three three three three tie. That never happens?

Jason Hsiao

21:27So far, knock on wood. It it hasn't because we seem to be pretty aligned on things.

Nathan Latka

21:31So good.

Jason Hsiao

21:32We're entertaining those conversations and so kinda have our our fingers in many different kind of chats.

Acquisition Hypothetical and Strategic Conversations

Nathan Latka

21:38Well, Jason, so another hypothetical. Canva's obviously has a lot of cash to work with considering the valuation of what they've raised. If they're looking to drive nice growth, they could come after a firm like you, let's say they offer 10 x your MR, 10 x your ARR, let's say $300,000,000, do you guys take a $300,000,000 deal?

Jason Hsiao

21:51Sure, we'd always we're always, we're always open to conversations. But I think for us, it's whatever we can do kind of fuel our vision. Like, we genuinely we genuinely love video and and see how exciting it is to, you know, empower businesses. So whatever whatever partnerships or opportunities we can take to kind of help fuel what we're doing, we're discussing.

Nathan Latka

22:11But are you in any acquisition talks right now or no?

Jason Hsiao

22:15I'll just say we've always been in various chats with things.

Nathan Latka

22:18Folks, that is a yes. The body language is saying yes, yes.

Jason Hsiao

22:23We've always been in chat with them. I personally... I know that things change, you know, on the flip side of those type of things. I I kinda love what we're doing right now. So in many ways, I just wanna keep doing what we're doing.

Famous Five and Closing Advice

Nathan Latka

22:35On that note, Jason, let's wrap up with the famous five. Number one, favorite business book?

Jason Hsiao

22:40I love Radical Candor. That's probably my my newest favorite.

Nathan Latka

22:44Number two, is there a CEO you're following or studying?

Jason Hsiao

22:48I love Brian Halligan from HubSpot. He's just a super inspiring guy.

Nathan Latka

22:53Number three, how many hours of sleep do get every night?

Jason Hsiao

22:56I would like to get eight. I'd probably get six.

Nathan Latka

22:58Okay.

22:58And what

Jason Hsiao

22:59I have bad idea.

23:00No. No. You don't.

Nathan Latka

23:01What's your situation? Married, single kids?

Jason Hsiao

23:03Married. And I have two twin girls who are seven, which is why I don't get to

Nathan Latka

23:07Oh, wow. Okay. So married, two kiddos. And I meant to ask you, what's favorite online tool for building your company besides your own?

Jason Hsiao

23:12Oh, man. I I was probably the last person to use it in our company, but I actually have grown to really love Slack.

Nathan Latka

23:19Okay. Good. And how old are you?

Jason Hsiao

23:22I am 43, I think, plus or

23:26minus

Nathan Latka

23:26That's good, 20 if you can't remember, that's a good thing, right? All right, last question, take us home. What do wish your 20 year old self knew?

Jason Hsiao

23:33I wish... I think

23:38the biggest kind of bullshit kind of strategy advice we've been given and what a lot of people tout is just try a lot of things and see what sticks. And I just realized, man, especially for any kind of early stage startup time and resources is limited, and you don't have time to just try and time to just try a lot of things. That's what strategy is. So be smarter about making choices and having a strong rationale

24:01for those choices.

Nathan Latka

24:02Guys, Animoto, they help businesses make videos more effectively and quicker. About a 130,000 customers paying, call it, $250 per year. So call it, flirting with $30,000,000 run rate right now, up from just 2,100,000 a year ago. So about 20% year over year growth as they look to continue to scale. They've done this in a very capital efficient way. 30,000,000 raised today to about a 10,000,000 of that went to secondary. So 20,000,000 of the balance sheet. They're

24:22profitable, which I love. A 100 people, 66 engineers, no quota carrying sales reps, obviously, at this price point. 25% revenue churn annually. No meaningful expansion yet as they look to figure out that churn issue, about $500 to get a new customer for two year payback period. Jason, thank you for taking us to the top.

Jason Hsiao

24:37Thank you, Nathan, and congrats on the success of everything.

Nathan Latka

24:41These CEOs rarely give these kinds of interviews. I hit them hard. I get the data, and I wanna do it more. So if you wanna get more of this stuff, make sure you subscribe up here. And then additionally, go check out one of my other CEO interviews right now.