Part 3: how we did 15 startups in 21 months.
[Update] — Logitech buys Streamlabs in 2019 for $145m
Its been almost 2 years since I wrote the last update — Part 2. Sorry its taken this along to get an update out.
As I predicted in my last post, the daily fantasy industry hit road blocks. DraftKings / Fanduel are no longer the unicorn darlings they were 2 years ago. They’re surviving but given the preferences of the combined $1B they have raised, employees and founders are going to suffer.
Back in June 2015 we saw this coming and decided to pivot the company (yet again). Doing a pivot with 5 employees is easy. I’m PRO at it. But doing a pivot with 60 employees. Well thats a shit show.
From June 2015 — March 2016 we went from 60 FTE and nearly $1m/month in revenue to 15 FTE and $0/month in revenue. And thats the best thing we could have done for the business. Let me explain.
We intentionally killed our revenue — we shut down vulcun.com etc despite the on going revenues. The reason: we did not see this working long term and any short term revenue just served as a distraction. We need to be doing what was going to build long term enterprise value. So yep, we pulled the plug. Unfortunately as part of that we lost a lot of good people who had put their heart and soul into the company. That part really sucked.
On a personal level the pups, Seda and Ali kept me going on. Some days were down right shitty. But we kept marching…
We knew Twitch / Gaming is where our hearts were and wanted to do stay within the industry. So we used our fresh VC funding and bought couple of companies (twitchalerts & streampro). And in a few months made the hard transistion from daily fantasy into building tools for twitch streamers.
We changed our name and combined everything under Stream Labs.
Then came the important lesson of technical debt. Twitchalerts was written by a single founder (Tom) as a weekend project was never meant to scale to the level it did. We realized that if we wanted to add more features and build out our vision we would have to first begin by re-writing everything. Everything. That took 6 months and a lot of thankless effort on behalf of Salman and Morgan.
Then came the job of paying our bills. We added a Viewer Pro feature that helped us with that. We’re not out of the woods, but its been a nice not worrying about running out of money. Our team size is up to 32 FTE now, so it takes some $$ to keep the lights on.
Most of the core team from the Vulcun days are still with us. Salman, Jeff, Morgan, Mike, Tom, Marilyn, Aaron, Chelsea, Harsha, Karl. They survived the lay offs and pivots.They’re fighters. Its been amazing to see them grow personally and be the founding core of whats about to become an important company. As a founder thats one of the big reasons of what makes this journey so rewarding.
Things are going quite well right now. If you know me, you probably know i’m quite cynical — so thats a big statement even for me. Last post, we had just raised $12m and I wrote about why our industry & product was doomed!
Heres why I think we have a legit shot at making a very important company right now. I believe that the future of TV is the ‘Twitch/Youtube format’. Its going to be live. Its going to be long tail. Its going to require a lot of two way interaction between the people on stream and the audience. 10 years from now, this is how most video content will be consumed. Don’t believe me, read this study. Right now its mostly young kids, but they will grow up and when they do, this will become main stream. Its going to be very difficult for media companies to adopt to this change. Same thing happened with Facebook 10 years ago. Now FB’s is worth more than all other traditional media companies combined. I’m not sure who is going to win the battle for live video, but everyones got a horse in the race (MSFT: Mixer, Twitter: Preriscope, Amazon: Twitch, Facebook: FB Live+Instagram live, Google: Youtube Live).
All these content producers will need tools to run their business. And the under lying technology of letting viewers and streamers interact will become the foundation of why live succeeds. We’re (finally!) in a position that puts us strategically in a leadership position on a wave thats going to continue for the next 10–20 years. It took 15+ pivots and 6 years of trying to get here. But I think we’ve finally arrived at a business that will scale.
Some highlight numbers from our reports here and here. You can see its already a big business and tens of thousands of people are supporting themselves full time by streaming on Twitch and Youtube. Its not very different than people earning on AirBnB or driving for Uber. But in this case, we’re helping people do what they love — play games all day and get paid for it.
Not sure if it makes sense to do a Part 4. I think the story has been told. I’ll update this post once theres an ‘End’. Until then, ho’oponopono.