20VC Giphy's Adam Leibsohn on From Being Homeless To Founding a Multi Hundred Million Dollar Startup & The Challenges of Creating One of The World's Largest Search Engine

Summary Notes


In this episode of 20 Minutes VC, host Harry Stebbings interviews Adam Leibsohn, the founder and COO of Giphy, a platform that has revolutionized online communication with GIFs. Leibsohn shares his journey from homelessness to startup success, emphasizing the importance of passion and knowing when to pivot. He details the evolution of digital imagery, explaining how technological advances and our visual predisposition have made GIFs a powerful and efficient communication tool. Furthermore, Leibsohn discusses Giphy's unique workplace culture and its strategy to monetize through contextual search, similar to Google's model. The conversation also touches on the challenges of widespread GIF adoption and the future of Giphy in virtual reality and beyond. Key investors Spencer Lazar and Steve Schlachman contribute to the discussion, highlighting Giphy's potential as a cultural icon and a profitable global business.

Summary Notes

Introduction to Adam Libson and Giphy

  • Adam Libson is the founder and COO of Giphy, a platform for sharing animated GIFs.
  • Giphy raised $55 million from investors including General Catalyst, Re, Lightspeed, and betaworks.
  • Adam is described as a cool, Zen founder who was deeply committed to his startup, even foregoing a permanent home to fund his dream.
  • The introduction also mentions Cooley, a global law firm, and Eve, a UK mattress company.

Now for today's show, I'm not going to do the traditional boring intro because that's just not in keeping with the guest today. So joining me today is Adam Libson, founder and COO at Giphy. Giphy is the company that essentially brings you fun and laughter through gifs, and they raised a phenomenal 55 million c from the likes of General Catalyst, Re, Lightspeed and betaworks earlier this year.

The quote introduces Adam Libson and his company Giphy, which has successfully raised significant funding from notable investors.

Adam's Pre-Giphy Hustle

  • Adam's journey to Giphy involved several years of startups, experimentation, and learning from failures.
  • His first startup was a digital product called Voyeur, a play on words combining "voyeur" and "URL."
  • Voyeur allowed users to see what others were browsing online, provided they had the plugin installed.
  • Adam had no connections to the startup or VC community and decided to fund his project by saving money while being effectively homeless.

So what are the hustle stories? Oh, man. All right, so the hustle stories are interesting and fun and ridiculous, but I don't get to tell them often.

Adam shares that he has several interesting and fun stories about his early hustle days that he rarely gets to tell.

Overcoming Obstacles and Building the First Startup

  • Adam believed in taking risks and having hands-on experience before critiquing others' work.
  • To fund his startup, he saved money by living without a home, couch-surfing, and using facilities like the gym for showers.
  • Adam recruited a team, designed the product, and used his savings for a launch and PR.
  • He networked to find team members and used unconventional methods like search ads targeting VCs and tech reporters to gain attention.

I actually gave up my apartment and I went homeless for a year. And instead of quitting my job, I kept my job, and I paid rent, like I would pay rent, but I didn't have anything to rent. So I paid that rent into a savings account and built my own fund.

Adam explains his strategy for saving money to fund his startup by living without an apartment and saving what would have been rent money.

Innovative Marketing Tactics

  • Adam used targeted search ads as a creative marketing tactic to get the attention of VCs and tech reporters.
  • This strategy was successful and resulted in significant exposure for his product.

Phase two was I started taking out search ads against prominent vcs and reporters in tech so that when they googled themselves, they'd get an ad from me. And it worked astonishingly well.

Adam discusses his innovative approach to marketing by targeting VCs and tech reporters with search ads that would appear when they searched for themselves online.

Startup Hustles and Lessons Learned

  • Adam Libson discusses his experience with advertising against tech personalities.
  • He achieved significant sign-ups for his product, Voyeur, leading to widespread media coverage.
  • Despite initial success, the startup eventually had to shut down due to financial constraints.
  • Libson emphasizes the importance of passion for the project and knowing when to cease operations.

"Just anybody in New York I could get a hold of and anybody I knew who wrote online. And that wound me up on the front page of a lot of main tech news sites, which was awesome. And so that all pointed at my registration page for voyeur."

This quote illustrates Libson's aggressive marketing strategy, which successfully led to high visibility and user sign-ups for his startup.

"So it was a lot of fun. I learned a lot and then I had to shut it down because, honestly, we couldn't raise the money."

Libson reflects on the challenges of sustaining a startup financially, highlighting the harsh reality that even promising startups may fail due to financial issues.

"You better love the thing you're going to build because if you don't, you're going to find out really quickly... it's going to be upsetting... a big frustration and a waste of time."

Libson advises that entrepreneurs must be passionate about their ventures to endure the inevitable difficulties they will face.

"I would actually say with voyeur, I stopped a little too late. I could have done that a little earlier."

Libson acknowledges that recognizing the right time to stop is crucial, suggesting he may have extended his efforts beyond the optimal point.

Recognizing When to Stop

  • Libson shares insights on identifying when to cease pursuing a startup.
  • He suggests that too many "what ifs" and denial are indicators that it may be time to stop.
  • The idea may still be valid, but factors like timing, location, and market fit play a significant role.

"I think the writing's on the wall. I think if you're telling yourself to keep going too much, you're maybe in denial."

Libson indicates that entrepreneurs often know deep down when it is time to stop, but may struggle to accept it.

"This startup in particular dealt with personal data. I wanted to turn people's personal data into currency and let them spend it as money."

He gives context to the unique challenges his startup faced, dealing with personal data as currency, a concept that has been attempted by others and may re-emerge.

The Emergence of GIFs in Technology

  • Libson discusses the historical costliness of image transfer and how technology has evolved to make it cheaper and more accessible.
  • He explains how market dynamics and technological advancements have led to a visual renaissance on the web.
  • Libson points out that human biology predisposes us to prefer visual information over textual information.
  • GIFs have become popular due to their ability to quickly convey visual information and emotions.

"The market dynamics for moving imagery for the last 50 years have been really, really shitty. It's been very, very expensive to move an image from point A to point B."

This quote highlights the historical challenges and costs associated with transferring images, setting the stage for the significance of the technological evolution that followed.

"You've got processing speeds going through the roof, you've got bandwidth penetration very, very prevalent throughout the world... Imagery became cheap."

Libson describes the current state of technology where high processing speeds and widespread bandwidth make it easy and inexpensive to share images.

"We process images something like 60,000 times faster than words... gifts sort of came to the fore because there's this quick, easy hit of visual information."

He explains the biological basis for the preference for images over text and how GIFs capitalize on this by providing rapid visual communication.

Communication Evolution with GIFs

  • GIFs are seen as an addition to text, not a replacement.
  • GIFs offer efficient expression, especially in mobile and fragmented communication channels.
  • The prevalence of GIFs is tied to the rapid consumption of content and the need for quick, expressive communication methods.

"I don't think we don't want to eliminate any modes of communication. I think we enhance and we're additive."

This quote emphasizes that GIFs are meant to augment existing communication methods rather than replace them.

"GIFs are not necessarily the elimination of text, it's really the efficiency of expression."

The quote highlights the role of GIFs in providing a quick and efficient way to communicate emotions or reactions, which is particularly useful in the context of mobile usage and the vast array of communication platforms.

Giphy's Unique Culture

  • Giphy has deliberately created a diverse and creative culture.
  • Hiring friends and previous colleagues contributed to a strong working environment.
  • The company values individuality and supports the varied interests and ambitions of its employees.
  • The culture includes a mix of backgrounds from philosophy to art, media, tech, and more.
  • The "road trip test" is used as a hiring litmus test to ensure personal compatibility.

"We've basically been very lucky, but also very deliberate, to put together a really excellent group of weirdos and creative folks and designers, and everyone just has a very awesome, interesting and varied background."

This quote reflects the intentional effort to build a diverse and creative team at Giphy, which is seen as a key element of the company's culture.

"Could you go on a road trip with someone that you're in the room with and at the end of it not want to ring their neck?"

The "road trip test" is mentioned as a metaphorical way to assess whether potential hires would fit well within the existing team dynamics and culture.

Scaling Giphy's Culture

  • Maintaining the individualistic and creative culture is a concern during scaling.
  • Empowering employees with knowledge about the culture is crucial for expansion.
  • The culture is expected to be maintained even with significant growth by being selective with hires and upholding core values.

"I think everybody worries that at scale, if we have to grow to several hundred people, can you maintain that? I think you can. I just think you have to do it carefully."

This quote acknowledges the challenge of maintaining a unique corporate culture during rapid growth but suggests it is possible with careful management and employee empowerment.

Transitioning Giphy into a Profitable Business

  • Giphy aims to grow its brand deliberately while maintaining trust with platforms and content owners.
  • The core of Giphy's platform is a search engine for culture.
  • Monetization strategies may involve leveraging search behavior and intent, similar to Google's approach.

"So we've been really careful to grow our brand in a deliberate way. We've made sure that we are the number one brand in gifs."

The quote indicates a strategic approach to brand growth, ensuring Giphy remains the top choice for GIFs and maintains trust with key stakeholders.

"It's a giant, giant search engine for culture. Probably the best and biggest there is."

Here, the speaker describes Giphy's platform as a cultural search engine, hinting at its potential for monetization based on user search behavior and intent.

  • Discussing the potential for monetizing GIF search through a paid search model.
  • The goal is to deliver highly relevant and targeted content based on user queries.
  • The company is aiming to be a global profit-making business by leveraging its position as a leader in GIFs.

And so we're looking at the idea of turning GIF search into something that can be contextual, that can be highly relevant, highly targeted, where you're getting delivered content against a query that is directly related to what you're looking for, but may have been paid to be put there.

This quote explains the strategy of turning GIF search into a tailored experience where paid content can be delivered in response to user queries, creating a revenue stream.

Competition and Collaboration with Social Media Platforms

  • Clarification that internal GIF makers like Twitter are not competitors but collaborators.
  • The company powers the GIF buttons on major platforms such as Twitter, Facebook, and Slack.
  • The strategy has always been to ensure that users can find GIFs wherever they are.

No, that's actually good for us. We actually power that button. We power the gif button inside of Twitter. We power the gif button in Facebook. We power gifs in slack.

This quote indicates that by powering GIF functions across various social media platforms, the company is actually benefiting from the widespread use of GIFs rather than facing competition from these platforms.

Personal Preferences and Routines

  • Sharing personal favorites such as books, GIFs, and news sources.
  • Discussing simple personal routines, like hair care.
  • Revealing the importance of personal enjoyment and humor in selecting favorite GIFs.

My favorite book and why is east of Eden? John Steinbeck. [...] I have a lot of hair. So what goes into the hair routine? Nothing. [...] My favorite Gif is I have to send you a link to it.

These quotes provide insight into the personal tastes and daily life of the speaker, ranging from literature preferences to the simplicity of their hair care routine, and the personal connection to their favorite GIF.

Challenges and Future of GIFs

  • Acknowledging that there is still a scale to achieve for widespread adoption of GIFs.
  • Identifying the challenge of making GIFs easily understandable and usable by everyone.
  • Discussing exciting prospects for GIFs, including integration into virtual reality and other novel platforms.

The biggest challenge, making more people happy. [...] Gifts in virtual reality, gifts in your glasses. Gifts outside of computers.

These quotes highlight the main challenge of increasing the happiness of users through GIFs and the ambitious vision for the future of GIFs, including their integration into various aspects of digital and augmented reality.

Reflections on the Interview and Acknowledgments

  • Expressing enjoyment of the interview and the success story of Giphy.
  • Acknowledging the contributions of individuals who facilitated the interview.
  • Mentioning resources for listeners to stay connected with the podcast and additional services for founders.

Such a fun interview with Adam and a huge thank you to him for giving up his time today to reveal the amazing story with Giphy.

This quote concludes the interview on a positive note, showing appreciation for the time and story shared by the interviewee, and also provides information on how listeners can engage further with the podcast's content and services offered to startup founders.

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