20VC Kapwing Founder Julia Enthoven on Why Marketing Innovation Is As Important As Product Innovation, Why Every Company Is Becoming A Media Company & The Benefits Of Not Raising Money Too Early

Harry Stebbings interviews Julia Entoven, founder and CEO of Kapwing, on his podcast "20 minutes VC and Founders Friday." Julia shares her journey from being an associate product manager at Google to creating Kapwing, a collaborative platform for multimedia editing, which has raised $13 million led by Sara at CRV. Kapwing's growth is attributed to its focus on solving real consumer pain points in video editing, innovative marketing strategies, and a strong emphasis on SEO. Julia also discusses the importance of building a website over an app for early startups, the shift from serving prosumers to enterprise clients, and the challenges of scaling a venture-backed company. The conversation also touches on Kapwing's future, aiming to become the go-to brand for media creation and management. Harry expresses his excitement by revealing his personal investment in Kapwing's Series A.

• Harry Stebbings introduces the episode of "20 minutes VC and Founders Friday."
• Harry expresses his excitement and investment in the featured company, Kapoong.
• Julia Enthoven, the founder and CEO of Kapoong, is introduced.
• Harry gives thanks to Dylan at Figma for the introduction to Julia.
• Harry highlights sponsors ActiveCampaign, Intercom, and Ezra.

You are listening to the 20 minutes VC and founders Friday with me Harry Stebbings at H Stebbings 1996 with two b's on Instagram and what a special episode we have in store for you today.

Harry Stebbings introduces the podcast and sets the stage for the episode.

I'm thrilled to say that this exceptional founder let me and I personally joined their series A, led by Sara at CR V, announced earlier this week.

Harry reveals his personal investment in the featured company's Series A funding round.

I want to start today with a big shout out to my friends over at Activecampaign.

Harry acknowledges the episode's sponsors, beginning with ActiveCampaign.

• Julia admired her entrepreneur father and aspired to start her own business.
• She studied computer science at Stanford and joined Google as an associate product manager.
• Julia met her co-founder at Google, which led to their startup journey.
• The "aha moment" for Kapwing came from personal experiences with inadequate video editing software.

Yeah, absolutely. So my dad was an entrepreneur when I was young, and I always admired him a lot and wanted to have my own business or dreamed of that when I was acquiring that when I was older.

Julia shares her early inspiration to become an entrepreneur, influenced by her father.

I studied computer science and then after school, decided to join Google as an associate product manager, which is their training program basically for entry level pms.

Julia discusses her educational background and her start at Google as a product manager.

But once we left Google in the summer of 2017, the idea for kapwing actually came from just our own product pain.

Julia describes the origin of Kapwing, stemming from personal frustration with existing video editing options.

• Julia argues for building a website before an app for early-stage startups.
• Websites are easier for user acquisition and monetization.
• Scaling a website internationally is simpler than scaling an app.
• Building an MVP is faster on the web than for an app.

Yeah, and the reason that I have written about this topic and that I care about it is because I think a lot of entrepreneurs sort of think about apps as startups or like as software that they should dive right into and don't think of websites first, even though I think it's wiser to build a website first.

Julia explains why she advocates for starting with a website over an app for new entrepreneurs.

The first is that getting users is easier when you have a website. Users don't want to download apps anymore, and users are more willing to discover new publishers when they're browsing the web versus when they're browsing the App Store.

Julia discusses the ease of user acquisition through a website compared to an app.

The second reason is it's easier to make money with websites over apps.

Julia highlights the financial benefits of starting with a website, including better margins and user willingness to pay for services.

The third reason is it's easier to scale a website than to scale a native app.

Julia talks about the ease of scaling and international reach of websites.

And the last reason I think is maybe the most compelling for an early stage founder is you can just build the MVP faster on the web than you can with an app.

Julia concludes with the speed advantage of developing a minimum viable product (MVP) for the web.

• Kapuang utilizes web-based deployment to push out updates and features rapidly.
• The lack of an independent review process allows for immediate shipping of updates without App Store constraints.
• Engineers work solely with JavaScript, facilitating daily releases without gating features behind release versions.
• This approach was crucial in Kapuang's early days, enabling quick fixes to problems without extensive pre-user QA.
• Validating business ideas benefited from the ability to iterate swiftly on the web platform.

"There's no independent review process, so you can just ship things without having to worry about the constraints or requirements of the App Store."

This quote highlights the advantage of bypassing the traditional app store review process, which can often delay updates and feature releases.

• Julia Enthoven and her co-founder began with a highly iterative approach due to bootstrapping with limited savings.
• They focused on quickly solving user problems, avoiding feature creep.
• Post-seed funding, they hired a skilled engineer with managerial experience who introduced a sprint process, improving the engineering team's cadence.
• While maintaining an iterative approach, they've also recognized the importance of moving slowly when necessary, particularly in investing in quality, performance, scale, and building a competitive moat.

"In the beginning, it was just me and my co-founder working on our own, and we were bootstrapping with limited savings."

This quote explains the early stage of Kapuang's development, where the founders had to be highly responsive and iterative due to financial constraints.

• Julia Enthoven learned the importance of marketing innovation after leaving Google, where the focus was predominantly on product development.
• She emphasizes the necessity of innovative marketing strategies for new companies to gain initial traction and rise above the noise.
• Kapuang's early marketing efforts were experimental, with many attempts not working out, but the successful ones provided significant traction.

"At Google, product is king. If you build great products, people will come."

Julia Enthoven contrasts the marketing strategy at Google with the needs of a startup, where innovative marketing is essential to attract the first users.

• Kapuang leveraged SEO knowledge to drive traffic and build brand awareness.
• They experimented with various marketing tactics, including product hunt, content marketing, and press stunts, to acquire initial customers.
• Julia Enthoven and her co-founder, Eric, took advantage of their willingness to take risks due to their youth and nothing to lose.

"So the first thing was we were lucky in that we knew a lot about search and we knew how SEO works."

This quote emphasizes the strategic use of SEO as a foundational marketing strategy for Kapuang, capitalizing on their existing knowledge in this area.

• Julia Enthoven discusses the importance of brainstorming and being analytical in marketing strategy.
• Kapuang values keeping an eye on the revenue impact of each marketing channel and prioritizes trying the most impactful ideas first.
• Expected channel mortality and the frequent lack of success with new marketing channels are part of the process.

"One of our fundamental values at Kapuang actually is get people talking."

This quote reflects Kapuang's marketing philosophy, which aims to generate conversation and interest through their marketing efforts.

• Julia Enthoven agrees with the notion that owning lines of distribution allows for greater control over a company's destiny.
• Building an audience through personality or brand is key to controlling distribution channels.
• Kapuang focuses on discovering new marketing channels through experimentation and creativity.

"If you have your own audience, then you control the distribution of channel completely."

The quote underscores the importance of having a dedicated audience for direct and effective distribution of marketing content.

• Julia Enthoven sees every company as becoming a media company, emphasizing the importance of controlling one's audience.
• The transition to media-centric marketing is connected to the ability to distribute directly to an owned audience.
• Kapuang takes inspiration from consumer brands, applying tactics like cult following and false scarcity to their SaaS product.

"Every company is becoming a media company."

This quote signifies a shift in how companies approach marketing, with an increased focus on media and content creation to engage directly with their audience.

• Companies aim to build a following for potential buyers and maintain relationships over time.
• Storytelling is a human skill that is superior to what computers can accomplish.
• Automation's rise will likely shift more people towards creative careers in storytelling and media.
• Examples of modern media entrepreneurs include Glossier, Dollar Shave Club, Hims, Kylie Cosmetics, and Gary Vee.
• Storytelling and entrepreneurship hold significant business value across various domains.

"So I think that over the next ten years, as automation takes over more jobs, more people will move into creative careers and sort of storytelling and media."

This quote emphasizes the prediction that as automation increases, human creativity and storytelling will become more valuable career paths.

• Many SaaS companies aim to evolve from serving individuals to serving teams and companies.
• Integration into professional workflows, building team features, and adding value across different roles are key strategies for this transition.
• Challenges include maintaining focus on individual value while innovating for teams and understanding the needs of non-user buyers like managers.

"The first is that you need to create a product that's really integrated into professional workflows."

Julia Enthoven highlights the necessity for products to fit seamlessly into professional environments for successful enterprise adoption.

• Modern SaaS products must cater to both end-users and higher-level company roles.
• The experience for the end-user is crucial to prevent disruption by competitors.
• Even as companies target larger markets, they must remain loyal to individual creators.

"I mean, I think every modern SaaS product understands that the experience has to be good for the end user nowadays, or else a startup just like us could come in and disrupt your access to the end user and ultimately reduce the value that your product adds."

This quote stresses the importance of maintaining a high-quality user experience to retain value and prevent market disruption.

• Bootstrapping allows for validation before raising capital.
• Founders should avoid spending time on a bad business idea and seek validation through traction.
• The decision to bootstrap depends on the type of business and the need for upfront capital.

"We wanted validation before we raised money in the beginning."

Julia Enthoven explains the strategic choice to seek business validation before pursuing external funding.

• Raising capital is considered when there's potential for significant business impact.
• The timing of raising funds can be crucial due to competitive market dynamics.
• Capital can accelerate market capture and is sometimes required due to competition.

"We thought a lot about it in the early days, and when we saw that we had the opportunity to work on building a big business, rather than just a smaller lifestyle business, we wanted to move on it because we want to build something that has a huge amount of impact in the world."

The quote reveals the ambition to create a significant impact as a motivation for seeking venture capital.

• Transitioning to venture-backed life changes expectations and operations.
• Founders should retain a cautious approach to spending and scaling.
• Venture-backed growth allows for hiring a diverse team with new perspectives.

"I think one thing that I have come to recognize is that investors, and sort of most of the literature out there, which is mostly written by investors, oftentimes they'll basically talk about things from the investors perspective."

Julia Enthoven discusses the need to balance investor perspectives with the practical realities and values of the founders during growth.

• Julia Enthoven discusses the steep learning curve involved in growing a company.
• She emphasizes the importance of learning about management, company culture, and aligning roles with people's expectations.
• Success is seen as a remedy for many challenges faced by both bootstrapped and venture-backed founders.
• Deliberate efforts are made to ensure smart prioritization and correct decision-making in what to pursue.

"And it just makes a learning curve even steeper, which is great. I also think I'm learning a lot about being a manager, building a company, thinking about culture and people roles align with the people's expectations of what they want down the road."

This quote underscores the value of learning and the complexities of managing a growing company, especially in aligning company culture with employee expectations.

• The process of building an initial team is crucial for setting company culture and future hiring.
• Julia Enthoven highlights the importance of being patient during early hiring, despite the urgency felt after closing a seed round.
• The first few hires are critical as they will shape the company's culture and influence subsequent hiring.
• Local team building is preferred, and hiring strategies involve experimentation and hustle.
• A creative recruitment strategy using a Facebook ad successfully sourced a hire, demonstrating cost-effective hiring methods.

"It matters so much who your very first five hires are because they're the people that are going to carry the culture and carry who you're hiring down the road."

This quote emphasizes the significance of the initial hiring choices in establishing the company's culture and influencing future recruitment.

• Julia recommends "Influence" by Robert Cialdini for its insights into meaningful communication and persuasion.

"I highly recommend influence by Robert Cialdini. It just gives you a great approach to how you can put more meaning behind your words and move people in the direction that is right."

This quote suggests the book has been influential in shaping Julia's approach to communication and persuasion.

• Julia wishes to increase the number of software engineers, particularly female engineers, due to their impact and value in the tech industry.
• Encourages students to consider computer science as a career path.

"I would say definitely the number of software engineers in the world, especially the number of female software engineers."

This quote reflects her desire to diversify and expand the software engineering workforce.

• Julia identifies her desire to be involved in everything as a weakness, recognizing the need for focus and discipline.

"I like to be involved in everything. And so, especially as there become more and more things to get involved with, I need more focus and more discipline about getting the one thing done that I'm doing well."

The quote highlights the challenge of maintaining focus as responsibilities and opportunities grow.

• Julia questions the emphasis on stock options in compensation, suggesting a need for a more balanced approach that fits into employees' long-term lifestyle goals.

"The likelihood that their options outweigh how much they're getting paid in base salary is rather low, essentially."

This quote critiques the overemphasis on stock options in the tech industry and suggests a more holistic view of compensation.

• Regularity and readability are key to effective investor updates, with a focus on structure and engagement.

"One, cadence. So regularly sending it on the same day of every month and giving your investors peace of mind that they will receive it soon. The second is readability."

This quote outlines the essential elements of a good investor update, emphasizing consistency and clarity.

• Julia credits Kapwing's first customers and investor Wei Zhang at Gen Fund as early believers in the company.

"Wei Zhang at Gen Fund was the first investor to really believe in us."

The quote acknowledges the early support from customers and a key investor that helped validate and propel Kapwing's growth.

• Kapwing aims to become a leading brand and productivity platform for media creation, management, and collaboration.
• Julia plans to expand the team into new verticals and continue leading product and technology development.

"Kapwing will be the go-to brand and productivity platform for media creation, management and collaboration."

This quote outlines the ambitious vision for Kapwing's growth and market positioning in the coming years.