Getting to where we are today has been such a long journey. I really thought i should write a bit about it, maybe it will help other entrepreneurs and perhaps encourage a few just to see through where they are in their business. I warn you, this may be boring for some!
A long long time ago (well 5 years ago) I owned a Record label and several radio stations, we had great bands and where doing quite nicely. As with ClickAsnap, my business view was to own everything we could to ensure we always had direct access to whatever we needed with little or no middlemen. As a label, we had magazines, radio stations, CD manufacturing facilities and, soon, our own video and MP3 distribution platform. It was June 2015 and Youtube had announced that they where to launch Youtube Red. This project was going to be the death knell to all independent musicians as the contracts where hugely biased in favour of Google. There was a huge uproar, and i thought that if there was ever an opportunity to break into the video streaming market, now was the time. So, £10,000, one development team and 2 months later we launched our video platform. Users could upload content of unlimited length, we had it monetised and users could use it in a similar manner to Youtube. Things were going well until we received our first AWS bill, it was pretty huge, the reason why? Video transcoding. This is where an uploaded video is compressed and converted into multiple different file formats so that it can be played and displayed on various media. Now, this isn’t my first startup (although it is my first wholly online startup) and i’ve always been wary of burn rates (the rate at which a company burns through money to get to a given point in their business plan) Burn rates is what will kill a startup stone dead pretty damn fast. Alot of startups these days, particularly online ones go for a user base first, usually spending huge amounts on marketing and ignoring hardware and software burn rates. Of course the idea is; you use your limited funds to get, say a million users, then you hunt around for investment to take you to the next stage and so on. Of course 1) you are extremely time limited and 2) if a deal falls through you’re fubared. This model probably works quite well for a truly unique enterprise with absolutely zero competition, however, for a company like our video sharing platform (and ClickAsnap), where, whilst we are unique in many ways we are more of a disruptor company than a wholly unique idea. This means that the company needs to have longevity and survivability and therefore establish credibility which in turn encourages a user base and in turn growth and revenue.
Right, back to the Transcoder and the whole point of that last ramble, when building a company with a long term goal, long term costs must be kept low at the expense of high short term costs. So, we went ahead and built our transcoder, this reduced our costs per minute uploaded of video from £0.034 to £0.00. We where expecting large uploads, and alot of them so this was a nice cost reduction, even at the cost of £5k or so which is what the transcoder cost to build. Over the next year we built up our user base, and audience and ended up with approximately 500,000 annual users. Unfortunately, Youtube dropped Youtube Red and due to us being in competition with a certain platform had our ad network pulled. These two major issues resulted in us pivoting. I have always been a keen photographer and had theorised for a while that if we could stream videos as cheaply as we’d managed, then we could do exactly the same for photos which has the added advantages of being a unique and disruptive technology!
Keep an eye on this blog for chapter 2!