Chris Savage of Wistia talks about the power of video in marketing and learning

Chris Savage of Wistia - Podcast Transcript

Singer:	When your troubles are mounting in tax or accounting, you go to Kruze from Founders and Friends. It’s Kruze Consulting. Founders and Friends with your host Scotty Orn.
Scott:	Welcome to Founders and Friends podcast with Scott Orn of Kruze Consulting. And before I get to an excellent podcast with Chris Savage of Wistia, quick shout out to Rippling. Rippling is the best payroll, benefits and IT integration solution for startups. Rippling makes payroll super easy, the benefits very easy to manage, and then they also are able to spin up or provision new users for your company when you hire someone. It makes it really automatic to get them into all the web services you use. We love Rippling, check them out. And now it’s my pleasure to introduce Chris Savage of Wistia. Welcome, Chris.
Chris:	Thank you for having me, excited to be here.
Scott:	I’ve been a huge fan of the company for a very long time because I’ve just watched a ton of your videos and you’ve taught me how to do some very basic tutorials and online videos, but maybe you could just kind of tell the audience what you do at Wistia and really how you have the idea to start the company.
Chris:	Wistia’s a video platform focused on helping marketers get more out of video, use video better. And today that means that you can host and track and understand how things are performing. You can present the videos on your site through channels. We integrate into all of the major marketing platforms, so you can understand the impact of your videos. We have a product called Soapbox, which allows you to quickly create videos. It’s a Chrome extension. Let’s record via your webcam and your screen simultaneously and then you can add transitions, so you can make something really quick. And then when you add the transitions, it makes it look really professional. And the interesting thing about our story is like we’re not your average tech company. We started almost 14 years ago and my co-founder and I went to college together and we saw the fundamentals of online video changing. I majored in film and video at school. I had all this video I was always trying to show people. Back then we were sending DVDs around. It was insane. That was the only way to get things to people. And then we watched YouTube and 10 other companies are all exact the same, like just carbon copies, show up at the same time. We’re like, what is happening? Why is this happening all at once? And we looked into it and they were all using the same open source tools to do the encoding of the video. And so, suddenly, anyone could encode into Flash. And what that meant is you went from like all the formats of [inaudible] if you put like a video out there on QuickTime or you put it out there on Real Player, whatever, it’s like 55% of people could see it and Flash is like 99% of people could. And so, it just took off and we thought, wow, online video is just going to take off. It’s going to be huge. It’s going to happen so fast. And so, we started the company with the plan to try to take advantage of that. And it was a crazy idea at the beginning, it was a filmmaking competition website and then, that didn’t work and took us a year to focus on businesses. And the long and short of it is like we were right that online video is going to change everything. We were right it was going to change it for businesses, but we’re super wrong about the timing. It took way longer than I ever would have thought. But it was actually fun to do. You might be able to hear my children upstairs right now. This is the [inaudible 00:03:12].
Scott:	I’ve got my two-year-old, too. So, she made barge in at any moment as well. And it all ended up working out for you because instead of probably going after that consumer opportunity, you’re doing it for businesses and making them successful online with video.
Chris:	That’s exactly right. We’re trying to help artists and filmmakers get their content online. And we built a product that had probably like 500 people using it. It was called [inaudible 00:03:33]. It was just kind of a portfolio website and we had to make money to survive because we didn’t have any funding. And so, we went to all those folks, we were like, do you love the product? They’re like, yes. We’re like, would you pay for it? They’re like, no. We’re like, oh my gosh, what? And it’s like well, these starving artists couldn’t pay for it. And we didn’t think we’d get to enough scale to make money with advertising, but we started talking to companies who we had met in that first year. And they had all these interesting video challenges. They’re trying to bring video online. They’re trying to share it securely. And it turns out that they had a budget. And so, within a year we focused on businesses and we found a little niche where no one else was really focused, which was helping people privately share video. And that is where we got our foothold. And then we just kept widening what we were focusing on over time and kept building the company.
Scott:	And now like the integration to the marketing software, maybe you can talk about it a little bit, because that’s a really big deal for people who are trying to get their messages out. They want to be able to know who’s watching the videos or how many people are watching the videos and things like that.
Chris:	Exactly. And so, in Wistia, we actually built this initially for sales compliance training, it was like the ability to track how people were watching your videos. And there’s like legal reasons why you have to do that in certain sales compliance training. And then the moment that the company took off is when we started allowing embedding and focused on helping marketers and they were getting this insight. And it’s similar to like when you’re in a room of folks and you give a talk and you’re like, are they nodding, are they laughing, are they into it versus like just getting no response. Now we’re all living in this world in COVID-19 were all at home and you can’t get that in person feedback. But that, at the time, was a really big deal. And it turns out that that fundamental thing of understanding how people interact with your content, how they skip through and watch and rewatch pulls out all these interesting insights. That was like the base of it. And that what we’ve done over time is integrate that into other platforms. Basically, if you’re doing marketing automation campaigns, you can be like, show me the people who are interested in this product and not just like hit the page where they spent 20 minutes watching content about it. And so, it’s a very, very different level of insight that you get. And then also by looking at the kind of audience graph over time, you can start to figure out for your audience, what they actually want. We’ve had lots of folks over the years who have built courses in Wistia and then seeing where people are dropping off and they like rework those sections of the video until once someone starts and clicks play, they actually stick with the whole thing. That was like the fundamental thing we figured out, we were first to market on it. And then we built all of these other tools around that that ended up being pretty useful.
Scott:	That’s amazing. And I can totally relate to you do want to know where people are watching and the fact that people or marketers can improve their message, improve segments of videos, it makes so much sense. That’s phenomenal. Well, you mentioned we’re in the COVID-19 world right now and I got to assume video content is just exploding. Are you seeing this in your customer base?
Chris:	Yeah. We’re seeing quite an explosion. I think we feel very fortunate through sheer luck given this scenario of like what’s happening out there. But yeah, people are watching a lot more video. People are making a lot more video. People are uploading a lot more video. And we’re seeing content that is like to stay in touch with their customers, especially if your business was partially online, but also lots of in-person stuff. You’re missing all of those client meetings and all of that stuff. And so, we’re seeing people make lots of content for their clients to like keep them in the loop about what they’re thinking about and how they’re dealing with this huge challenge that we all have. We’re seeing a lot of internal company communication, people staying in touch with their teams and using video. And realizing, I don’t know if you’re like me, but Wistia before this, we’re mostly an in-person company. We’re 120 people, 15 of which were some degree of remote. But I go to the office every day. That’s what I did. And I was in a lot of meetings. And it turns out when you go into a fully remote world, you can’t be in meetings all day. It just doesn’t work. Like it just drains you in a way that is so, completely different and you have to make more stuff asynchronous. And we’ve seen that with like my two kids that are two and four and they’re home and they’re upstairs and it’s harder to make meetings happen at the same time. You need more asynchronous communication. And so, we’ve seen a big uptick in people. Our product Soapbox has had quite an uptick and it’s been people who are making a lot of content to like add tone and context to the messages that they’re sending. It’s like, oh, we need feedback on this product. Here’s the feedback. And it’s so much easier to get that nuance through in the way if you were sitting next to somebody in person than if it’s just text.
Scott:	I got to believe, especially for like tutorials or things like that, like us as accounting firm, we’re doing that constantly, screen-sharing videos. And you said it so, well, I think one of the great things about video for internal communications is that you can add context. I really liked that because I just find that our team, we’re remote so we haven’t really changed much, but we’ve adopted tools like Wistia over time just to teach people faster and it does add so much more context. It’s really effective. That’s phenomenal. Do you have any great specific customers you want to highlight or are use cases that make you really proud to be you’re powering their communication with patients or their team?
Chris:	Right when we saw what was going down, we almost like in our data before we really recognized how big of a deal it was, we had a few sets of customers where like their usage just like took off to an unbelievable level. And there was some hospitals and some folks working directly on COVID-19 like sharing information about what they’re learning and context and stuff. One of the hospitals just made a simple video about how to make your own mask, which of course, now that we’re in this world, yes. I went to the grocery store today. I wore a mask. Would I have imagined one month ago that I’d be wearing a mask to the grocery store? No, but I am. And where are these masks going to come from? It’s actually a lot of us, we can make them at home, you can use old tee shirts and stuff like that. We saw a slew of hospitals that were putting content like that out and we wanted to do something to help, especially in this moment where communication is just so important. And so, what we’ve done is we’ve made Wistia free for anyone who’s working directly on COVID-19, any hospitals and any educators. You can use soapbox or Wistia totally for free. And if you’re listening and you’re in one of those camps, you want to do it, just sign up and hit us up at support@wistia.com and we’ll get you all set up with all the right stuff. We’re trying to do that. It’s made me really proud that we’re connecting people better together. We have professors recording classes on Soapbox and like crazy stuff that I would never have imagined.
Scott:	Good for you, man. And it all came from 14 years ago. You and your co-founder, you just saw the opportunity. It must be so rewarding to have seen the opportunity back then and to now see all the use cases, edge cases and that you’re helping humanity.
Chris:	It’s really shocking actually. It’s like one of those findings, like if I go back in moments of time when we were five years in, we’re still five people. And I remember thinking that like, if you had told me that five years in, we’re going to be five people, I would have thought this is a pretty big failure. And yet, it was so, fun. It was so fun when we were five people. It was so fun when we’re two, but it was so fun when we’re five and we’re figuring it all out. And then if you told me like almost 14 years and you’d be 120 people and there’d be like a pandemic and our tools are being used to help people communicate better, I would never have believed you. And I’ve never been prouder. And I think that I’m so proud of the team, really. The team has rallied together, worked so hard. There’re tons of support requests coming in and lots of hard intricate questions and stuff and everyone is rallying to help. It’s really heartening to see.
Scott:	That’s amazing. Well, shout out to the Wistia team for answering all those questions. I know we’ve had the same thing and the intensity level and the urgency for everybody in the economy right now is so, so, high. I know that it’s weighing on us. I’m sure it’s weighing your team, but I’m super proud of how we’re doing it and it sounds like you’re super proud of the Wistia team as well. Hey, so, the way I first got to know Wistia was through your content marketing videos. And maybe they’re not, I shouldn’t say their content marketing, they’re just like amazing how-to videos on how to take a video, how to do the lighting, what equipment we should be using. Where did the kind of the idea come from to do that? And how has that been? Maybe you can kind of tell the audience how successful that’s been.
Chris:	The funny thing, like many things, is we made some videos that we thought were fun, that were some behind the scenes videos of the team and this was when we were probably six or seven people. And we had this filmmaker come in, who’s a friend of the company and he shot the video for free. And it was the silliest thing. It was like us at our desks with like three texts of everyone’s names above their heads. And we thought it was super cool. And it’s like, we could show our friends, be like, look how legit we are. That was like what we thought this is going to be. That was really all we’re hoping for with that. But it turns out, then it got shared around a lot and people discovered Wistia because of this like team video. And then the next question was like, how you shoot it, what’s the light, what’s the camera, what’s the whatever? And we’re like, that’s not important, like this is a video about our team and we’ve making all this content about video hosting. I’m like, this is what video hosting, the 10 reasons why you need video hosting, but people just kept asking. There’re just all these comments on the blog posts and stuff. And like, please, please, please tell us how you’re doing it, why are you using this light, why are you doing this stuff? We just basically made a video to shut everyone up. We thought like, oh, we’ll just explain this once. Then we’ll go back to our marketing. This was almost like we didn’t think what we were doing was marketing until we made a video that we shot entirely with an iPhone. Shot on an iPhone, lit with an iPhone, and it was the early years of the iPhone. And of course-
Scott:	I think that’s maybe the video I watched, like I started learning from you guys on it.
Chris:	It probably is. And it took off. And then people were like, yeah, but I have more questions about when you’re shooting in front of that screen. And so, then we made a thing about how you can turn a conference room into a studio for 200 bucks. And we just kept going. And at some point, we realized all of these videos we’re making to quote trying to shut people up were actually really good marketing. And they were very far removed from our product. They had nothing to do with video marketing and analytics and stuff like that. And even if you did what we said in the videos, you were not going to buy Wistia. There was a disconnect. You could buy Wistia, but you did not have to. But we just figured out that the audience for this stuff was like way bigger. We were building a brand through that. And I didn’t understand the power of it when it started. But over time, more people felt like they knew us. They felt like they had an authentic connection and we kept going bigger with the content. And so, a couple of years ago, we actually ended up making a feature length documentary called One, Ten, One Hundred and we worked with another production company called Sandwich Video that are like the Don Draper of launch [crosstalk 00:00:14:57]. And then we gave them a budget of $111,000 and they made us three different ads at different budgets, like one with $1000-dollar budget, one with a $10,000 budget and one with $100,000 budget. And then we documented their creative process and how the production was different and released an hour and 42-minute-long documentary.
Scott:	Wow. I’ll check that out. That’s amazing. I love how you said that epiphany of like, you didn’t really realize you’re building a brand early on, but how that’s turned into such a brand building. It’s brought you so much goodwill in the community.
Chris:	And it’s one of those things, a lot of that content, I wouldn’t describe it as viral. It was like 10,000 views on this, 30,000 views on that if it’s like a huge hit, 5,000 views here, but the connection to the viewer was so strong. It was like there was a smaller audience, but the connection was really strong. And then we saw that exact same thing that happened with One, Ten, One Hundred, which was so, cool because we released it ourselves in October of 2017. Within the first two months it was out, there was more time spent with our brand for people watching One, Ten, One Hundred than had been spent over every single act marketing activity we’ve done in the previous year.
Scott:	Wow. That’s amazing.
Chris:	And then we saw everything lift. We saw searching for Wistia lift. We saw direct traffic lift. We saw new customers lift. Basically, we saw this connection between the affinity that was created with One, Ten, One Hundred and people actually coming in and buying our products. And it was this lesson all over again of like, wait a second, the content didn’t have to be short. It doesn’t have to be just in a blog post. We can actually make entertaining content. We can make more long form stuff. And that set us off on a whole other journey of like, wait, how many other companies are doing this? I started talking to other businesses that had made documentaries, like InVision made a documentary four years ago and it was unbelievably impactful to their business. And it was just about how product design is actually really important. That’s basically what the documentary was about. It’s called Design Disruptors. And I started talking to people who were making podcasts and people who were making real shows and started to realize that all these companies have figured out that actually, instead of just like spending money on ads or spending money on content to kind of like meet [inaudible] demand, they could actually make content that was about building brand affinity and that could lift their whole business. And that was probably like early 2018 to 2019, we started to realize this like fundamental trend of brand affinity was coming, which is what we’ve actually re centered the business around now was like helping people market that type of content, present that type of content learn from that type of stuff.
Scott:	That’s an amazing story. Thank you for sharing that. I’ll definitely check out those two docum… What was the InVision one called again?
Chris:	It’s called Design Disruptors.
Scott:	Design Disruptors. I will check that out. That’s phenomenal. Well, I just want to thank you because you helped me. You got me like on the on ramp basically, onto the highway. You taught me how to do very basic videos and make the lighting good enough for people to want to watch. So, thank you. You’ve actually made a huge, huge difference at Kruze Consulting. So, thanks-
Chris:	That’s [crosstalk 00:18:03]. So, great to hear. [inaudible 00:18:03].
Scott:	I think the final thing I wanted to ask you about, I was just curious, I remember reading a while back that you opted for a debt financing package instead of doing like the traditional, Silicon Valley, Sand Hill Road, big term sheet and equity, which I’m sure you could have done. What was kind of the logic behind that and how’s that worked out for you folks?
Chris:	In 2017, midway through that year, we had the opportunity to sell the business. We had three different companies pursuing us, trying to buy the company. And there’s always been people poking around. I feel like if you have a tech company, at some point, someone’s poking around whether it’s an Acquihire or if there’s some IP they want to buy or whatever. And we’d always just said, no, but in this case, all these three companies, we respected them and we talked to them and we got some offers. And my co-founder and I were sitting there looking at them, talking about what we’d do if we sold the business. We’re like, well, we’re going to have to work wherever that we sell this place for like two years and then we’re going to be back on our own. That’s normally how it works. And Brendan and I were like, well, we’ll definitely start something together again, we feel like we have a unique partnership. We’ll definitely do that. What space would we be in? Start talking about that. We’re like, well, there’s actually all these other things and opportunities in the video space that we haven’t even really touched yet. Like, okay, probably go into that space. But what kind of brand would we build? We’re just going through this whole exercise and we’re literally like, wait a second, we’re going to rebuild Wistia. Why do we think we need to rebuild it? And then we admitted to each other, we are both unhappy.
Scott:	Oh wow.
Chris:	And we had both become unhappy, but had been afraid to say it to each other for the fear that that would create like a rift or we, I don’t even know what. And we realized we were unhappy because we didn’t like how we were running the business anymore. We had switched the business a few years before to really being like a growth at any cost business. We’d hit about 10 million in revenue with 3 million in profit a few years before. And everyone I talked to was like, whoa, that’s amazing, but like, you could be growing faster if you didn’t have that profit, think about how much faster you could be growing. And 99% of people we spoke to said that and at some point, we actually listened to them, thought we were wrong and we threw the pedal to the metal. And we took on all these new projects and hired all these new people. And I think like from the outside, it looked like we were really successful because you kept seeing new launches, you kept seeing new things, but on the inside, we’d lost our focus. We lost our ability to say, no, or we’d say, yes, to something. And instead of saying like, new great idea, let’s do that, what should we stop doing, so we can do it? We just stopped saying, what should we stop doing. We had these like zombie projects going on and really good people on bad projects and all that kind of stuff. And then we had the stress of like running the business at a loss, which caused us to get very short term focused. Even though when we said it’d be long-term, we were very, very short term. We realized this in this like epiphany because of this opportunity to sell the business. And we’re like, you know what? We put our heart and souls into this company. It’s been the thing we’ve loved. Can we actually fix it? Can we take a risk and get this back on track? And we decided we want to do that. But the second we decided we want to do that, we were misaligned with our angel investors. We never raised venture capital, but we did raise 1.4 million from just like individual angels. Obviously, they would want us to sell. And it would make us misaligned with all our early employees who basically worked for nothing so they could get equity because we told them we’d sell the business. We had to do something and settled on doing a leveraged buyout using debt to fund the deal. And so, we did a tender offer to all employees and to all of our shareholders or investors, let them sell as much as they want. And then they knew that Brendan and I were going to be in this for the long term and that if they stayed in, they’d be aligned with us for however we get money out of the company. But we wanted the business to be profitable, having debt to service would force us to be profitable, we thought we’d be more creative, we thought we’d get more focused. We thought it would make the business stronger. But of course, we did this at a moment when the business was at a loss, running at a loss. It was a very scary thing for people. But, we raised 17.3 million in debt and did that deal in 2017 and I’m happy to report that it worked really well.
Scott:	Wow. Good for you. I love [inaudible] to just even take care of those angel investors and early employees, too, because some people might say like, oh, they’re in it with us no matter what, but you guys actually took care of them and let them get off if they want to get off. And then now everyone’s aligned, I love that. That’s amazing.
Chris:	It was one of those things. We do an all hands meeting and someone asks a question like, well, how much are options worth before this? And I’d be like, well, it depends on what the multiples are right now. It depends on our growth rate, the multiples of other companies like us, how many people are bidding [inaudible] the company versus raising money versus secondary. Was this long explanation, which basically meant no one could predict how much this stuff is worth? And so, it was a really nice moment because we were able to take care of everybody. Brendan and I felt like we were taking the risk on ourselves and we felt like we could afford to take the risk because we own the business. In the worst-case scenario, if we couldn’t meet our covenants, all that stuff, we’d probably have to sell the business anyway, which is kind of back to where we were.
Scott:	[inaudible] with you, like everyone going forward was pulling on the same side of the rope, whichever [inaudible 00:23:26].
Chris:	And so, it switched that. Right after we raised the debt, it was funny because we just give everybody cash and then we had people start to leave the company because they got liquidity. We had bad Glassdoor reviews and someone literally wrote, let’s see if I can get it right, the quote was like, “Wistia is a sinking ship loaded with debt. You should jump, like save yourself.” And I remember reading that review being like, oh my God, this is so, brutal. This is what people on the team think? You’ve got to be kidding me. But then of course what happened is, in 2017 we had evened a loss of half a million. In 2018, we had positive EBIDTA of 6 million.
Scott:	Wow, incredible.
Chris:	We swung hugely and revenue growth accelerated because we got more focused and the people who were on the team wanted to be there. Then we had profit sharing and everyone had really good profit sharing and that continued into 2019. And so, it’s one of those crazy things like by getting focused and raising debt, actually we were able to grow faster and more sustainably, which I feel so fortunate that we were able to do that. And that put us in a position now where we came into all of this, we’re profitable business, we have a buffer from the get go, which is just very lucky.
Scott:	Wow. That is a great story. And congratulations. And I think that demonstrates the power of focus and the power of everyone kind of being on the same page. It’s amazing. And there’s been times where we had someone write something not very flattering about us on Glassdoor, too. You just got to realize that everyone has a different perception on life and you just move on, but that’s a real success story. That’s incredible. Well, hey, this has been amazing. Can you tell everyone how to reach out to you at Wistia, how to get involved and how to use the company software?
Chris:	You can find everything at Wistia.com W-I-S-T-I-A dot com. If you want to chat with me, I’m on Twitter at CSavage, open DMs, say hello. And if you are someone who is working directly on COVID-19 or you know an educator who would benefit from Wistia or Soapbox or a hospital, hit us up at support@Wistia.com. We want to help out and look, thanks for having me on it. It’s been great to chat.
Scott:	Thanks, Chris. Really appreciate it. And we’ll be checking you out and I’ll continue to check out all the tutorial videos you guys put out so I can get even better at making videos.
Chris:	Awesome. Thank you.
Scott:	All right, bye.
Singer:	When your troubles are mounting in tax or accounting, you go to Kruze from Founders and Friends. It’s Kruze Consulting. Founders and Friends with your host Scotty Orn.

Chris Savage of Wistia talks about the power of video in marketing and learning

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