In this engaging episode of the 20 Minutes VC, Harry Stebbings interviews Addie Seidman, the innovative founder and CEO of YouNow, a global social network platform with significant user engagement. Addie discusses the evolution of YouNow, which has seen immense growth since its 2011 inception, now boasting over 100 million user sessions a month and creators producing vast amounts of live content daily. The conversation delves into the company's recent venture into crypto-economics with the launch of Props, a next-generation platform aimed at decentralizing digital media, and the strategic funding that has propelled YouNow's success. Addie shares insights into the decline of traditional TV viewership, the rise of participatory media on mobile devices, and the potential of microtransactions and cryptocurrency to revolutionize content monetization and creator compensation. The discussion also explores the benefits of digital media decentralization, including control, value distribution, and innovation, and the practicalities of transitioning towards a decentralized model using existing centralized assets.
"I'm thrilled to welcome the incredible founder to the hot seat in the form of Addie Seidman, founder and CEO at you now."
The quote introduces Adi Sideman and sets the stage for discussing his background, the growth of YouNow, and the new Props platform.
"Your most important job is people operations, whether that be hiring execs, developing managers, or retaining top talent."
This quote underlines the significance of managing and developing people within a company, suggesting that it is a top priority for business leaders.
"I'm a consumer video guy."
Adi Sideman explains his long-standing interest and experience in the consumer video space, which led to the creation of YouNow.
"Traditional television viewing is on decline for many years now, and it's being replaced with time spent on mobile devices."
This quote summarizes the shift in media consumption from traditional television to mobile platforms, particularly among the younger audience.
"I started you now, which became the largest mobile live streaming in the US in 2015."
Adi Sideman talks about the success of YouNow in the mobile live streaming market, setting the stage for the introduction of their new platform, Props.
"The gaming industry bypassed Hollywood in size. It's around 100 billion a year versus Hollywood at less than 50."
This quote highlights the significant growth of the gaming industry as a result of its interactive nature, surpassing the traditional film industry in revenue.## Evolution of Media Consumption
But more and more people don't want to just lean in, they want to jump in.
This quote highlights the shift from passive media consumption to a desire for interactive experiences where users can be part of the media they enjoy.
And we already see that in gaming and in live streaming. Mary Meeker came out with a report a few months ago that talked about revenue per user per hour. And in interactive video environments like live streaming and gaming, it's fifty cents per user per hour. And on tv and radio, which are mostly ad based, it's less than $0.07.
Adi Sideman references a report by Mary Meeker to compare the revenue generated per user in interactive environments versus traditional media, emphasizing the monetization potential in newer media formats.
We set the price because we want it to be scarce within the experience. If it was cheaper, there would be too many exploding coke bottles and it wouldn't be fun. So when it shows up on the screen, it's a real celebration.
Adi Sideman explains the rationale behind pricing digital goods, like the virtual Coke bottle, to ensure they remain special and create a memorable experience for users.
We have creators earning five figures per month from micro payments.
Adi Sideman discusses the significant earnings content creators can achieve through microtransactions, indicating the viability and potential of this revenue stream.
When you consider the benefits of digital media decentralization, first one is leaving control for digital media distribution in the hands of few decision makers is a real issue.
Adi Sideman highlights the problems with centralized control in digital media and suggests that decentralization could address these issues.
There's two schools of thought around this. One, integrate new protocols into existing services, and then second choice being build entirely new protocols and exact the decentralized networks through those protocols.
Adi Sideman discusses the different strategies for achieving decentralization in digital media, suggesting that both have their merits and challenges.## Promise of Decentralization
"The promise of decentralization is real and valuable and promotes innovation and equitable distribution, and it's a great disruptive opportunity."
This quote emphasizes the inherent value of decentralization in fostering innovation and equitable opportunities, highlighting its potential as a disruptive force in various industries.
"If Reddit or Twitter existing services found a practical way to decentralize, is that a good thing? It will certainly advance us towards a more decentralized future, educate more individuals and companies on the possibilities, expose hundreds of millions of users to this new dimension."
The speaker suggests that if large platforms like Reddit or Twitter were to decentralize, it would not only be beneficial but also serve as an educational tool for individuals and companies, highlighting the widespread impact of such a move.
"When the new protocols that you mentioned, which are purely decentralized, like ethereum, and know reach maturity in the years ahead, they hold undeniable."
This quote acknowledges the potential of emerging decentralized protocols, such as Ethereum, to shape the future as they reach maturity and become more widely adopted.
"Gradual decentralization is a practical approach whereby you leverage your existing centralized assets like users revenue, proven product market fit, and you achieve an ultimately decentralized network over time."
Gradual decentralization is described as a strategic and practical method that utilizes the strengths of current centralized systems to eventually transition to a decentralized network.
"I tend to think of two sided markets as being prone to having great value in decentralization."
The speaker believes that markets with two distinct user groups (e.g., buyers and sellers) stand to gain significant benefits from adopting a decentralized structure.
"Props is an ecosystem for decentralized video applications and rise is the first application on it."
Props is introduced as a platform for decentralized video applications, with Rise being the inaugural application to launch within this ecosystem.
"We're launching a decentralized, tokenized economy later this year's where creators, whether they're independent like you or MTV or America's Got Talent, both of which are on our service today, will be rewarded with token."
The speaker outlines a significant shift in their business model towards a decentralized, token-based economy where creators are compensated with tokens for their contributions.
"You can jumpstart the economy by allocating a portion of the tokens to a reward pool that logarithmically and algorithmically every day over a period of years, rewards all the contributors to the network, big and small."
The speaker describes a mechanism where tokens are used to incentivize all participants in the network, effectively kickstarting the platform's economy and encouraging growth.
"We're moving from a relatively small opportunity of running a single video use case and a single app with a currency that works only within that app to a cryptocurrency that is liquid and has value in the real world and powers a platform and an ecosystem that enables endless use cases."
The speaker explains the shift from a limited, app-specific currency to a real-world, liquid cryptocurrency that facilitates a broader range of use cases and opportunities.## Token Incentivization and Ecosystem Value
"Well, sir, the enterprise value of our ecosystem stands to increase significantly if we're able to incentivize masses of users, developers, creators and all people who contribute to the network in the ecosystem."
This quote explains the strategy of increasing an ecosystem's value through community incentivization.
"It's not that us alone are eager to see it appreciate, but a community of millions is now incentivized to appreciate our asset."
This quote emphasizes the collective effort in appreciating the value of the ecosystem's token.
"And I call that asymmetric warfare."
This quote introduces the term "asymmetric warfare" to describe the strategic advantage of community-driven token appreciation.
"The last lion. If you haven't read it, it's Winston Churchill's biography by William Manchester. It's a masterpiece in leadership, and it's a riveting story about the 20th century."
This quote shares Sideman's favorite book and the reasons for its significance to him.
"I believe that George Harrison was the best Beatle."
This quote reveals Sideman's personal belief, which is contrary to the common opinion.
"Well, Alan Kay, the famous software developer, said the best way to predict the future is to invent it."
This quote indicates the influential advice that has guided Sideman in his career.
"It's the incumbents who control the centralized distribution channels today, like Apple and Google."
This quote identifies the major players that pose a barrier to the adoption of cryptocurrency.
"The fact that Apple still reviews every update by every line of code is just horrendous in terms of facilitating development, and it's not sustainable."
This quote criticizes Apple's stringent review process and predicts a shift towards more openness.
"People want to participate and they want to impact their surrounding. It's human nature."
This quote speaks to the innate desire for participation and influence, which the new ecosystem aims to fulfill.
"Programmable video is here today and we're all over it."
This quote highlights the current capabilities and focus areas of Sideman's company in the media landscape.
"Well, our businesses are now global, and I would like to see more cross border investing."
This quote expresses Sideman's desire for investment practices to adapt to the global scale of contemporary businesses.
"Harry thank you so much. This was so much fun. Thank you."
This quote is Sideman's expression of gratitude for being on the show.
"What a guest."
This quote from Harry Stebbings shows his positive reception of Sideman as a guest on the podcast.
"You'Re a founder or operator, your most important job is people operations, whether that be hiring execs, developing managers, or retaining top talent."
This quote emphasizes the significance of managing people effectively in a business setting.
"And they have the ability to not only increase revenue by 7%, but also reducing the all important churn rate."
This quote highlights Recurli's impact on increasing revenue and reducing churn rates, which are crucial for subscription-based businesses.