[editor’s note: Not many owners/CEOs/managers will break down the paradox of Google’s famous 20% time policy, how realistic that is, and how it affects employees’ compensation. This is a modified post taken from an internal memo]
WatchMojo is a unicorn in its own right:
- never raised outside funding
- deficit-finances programming
- creates editorial around third-party rights holders’ intellectual property
- over time works with those same rights holders who have come around and see the value in advertising with, licensing the content for their own needs and ultimately support the editorial
- having recognized the power of YouTube early on, built a large organic audience with deep engagement which leverages our production unit economics to profitably publish content
- uses the revenue stream off that underlying, flagship eponymous WatchMojo channel to expand into new verticals (MsMojo), markets (Espanol), products, platforms and so on.
This week during our monthly show and tell, I asked each platform manager to give an overview. A platform in our glossary is YouTube, Facebook, Snap, Twitter, Tiktok, and so on.
In 2016 we celebrated our 10-year anniversary and expanded in 10 areas: direct sales, international, new genres/formats, and platforms. That experience taught me that revenues are lower than anticipated and further out before they materialize, while costs hit you faster. But if you don’t make any fatal mistakes, those lines cross and you can, indeed, get it right.
As an entrepreneur, you first capitalize on someone else’s Innovator’s Dilemma. But as your business matures, you want to remain progressive and encourage people to do more than just what they are hired to do (even though most of those tasks are for money-losing projects).
How do you motivate people and encourage them to keep trying without the realistic fact that most of their efforts don’t, actually, create value (in the short-term)?
Where Will We Be in 2029?
A decade ago, in December 2009, WatchMojo generated $2,500 in revenues off of 2,000,000 views on the WatchMojo channel on YouTube.
A decade later, that channel generates a couple of hundreds of thousands of dollars, which we have systematically used to diversify and expand into new channels, new verticals, new platforms, new products, new personnel. I can’t stress the People part of the equation enough. Our massive investment in more personnel has come with its share of challenges – “young people want you to pay them for their future, experienced people want you to pay them for their past” – but it’s very rewarding too, when you see it come together. It just takes time.
Exacerbating our challenge is that we operate in a unique industry and segment. We are in the content business, and not commerce where some units support staff (i.e. customer service) are there to drive sales, retain clients, etc.
Our playbook has always been contrarian and fitted to play the long game. Our approach is largely to deficit-finance programming. The WatchMojo channel probably needs a fraction of our total headcount to maintain and operate. As an entrepreneur, you’re driven by many things above money. But when you hire people, you want to pay them more over time. You have to balance that and need more initiatives to achieve break-even sooner. Otherwise, what’s the point? I get that. I owe that to my team. And my team owes it to one another.
When we met this past week to go over each platform, we played “Price is Right” where I asked the team how much the revenue they thought we made per platform. The look on your faces to realize how little some platforms generated was priceless, but I’ve “been there, done that” with YouTube early on. People thought I was
a) a fool from 2006-12, then
b) a genius from 2013-16, then
c) a fool for not cashing out in 2017-18 / bonus marks: an idiot for not pursuing Facebook
d) wise in 2019 for focusing on YouTube while cautiously dipping our toes on other platforms to avoid LittleThings’ fate on Facebook.
I’m the same person: neither a fool nor a genius. I’m an entrepreneur. That’s the constant.
I hope my candor and transparency with the team was helpful to recognize the importance of patience, persistence & perspective. Nothing is profitable from the onset. It boils down to balance.
Platforms & Turnover = A bit like Animal Farm
Not all platforms are similar. I will publish a separate post soon on how the platforms look in 2019, and where they may be in 2029. Stand by for that.
What I will touch on is the importance in people: having the right person who recognizes the opportunity makes all the difference. When you see some employees leave an organization, it’s important to break down the reasons and not paint them all with the same brush. The reality is turnover is healthy and natural, and some of the people left after working on projects, products and platforms that were simply not successful. It’s not about blame or anything, it’s part of business. It’s also a reflection that not everyone finds their groove: seeing young employees who took on greater roles when others left was a reminder that you need the right people helming the right projects.
Need for Agility & Flexibility
Managing people is hard because you want to be rigid on vision, strategy and principles but flexible on tactics, operations, execution and formation. Our ability over 14 years to operate and execute where others lack the comfort to do so has been one of our success variables. We need to maintain that agility, flexibility to adapt as platforms come and go. A decade ago, we were thinking of what could become the #2 to YouTube amongst Metacafe and Dailymotion; today those platforms are irrelevant, we’re concerned with Snap and Tiktok. We’re still admittedly looking for “Platform/Format” fit on Facebook and Twitter (even though we’ll have, I think, our best year on Facebook).
Transparency with your team is required to understand why we line up our soldiers where we do, and why we adapt the playbook as we do. Complacency will be our undoing, so to succeed in this industry requires a constant ability to make these adjustments.
Always about the consumer, and the content.
Ultimately, we also need balance. Focusing too much on near-term revenues has proven to be a disaster to others. In a constant struggle between content/product, revenue/profits and serving your clients/audience – it’s always about the consumer and the content… and our success in content creation & storytelling has stemmed from balance. Balance between quality, quantity, frequency, consistency, brand-safety, the right mix of informational and entertainment.
It’s OK to fail
You’ve heard the saying: in baseball as a batter you can fail 7 times out of 10 and still end up in Cooperstown (i.e. a hitter who hits for .300 can end up in the Hall of Fame). In story development, you’re lucky if you have one hit show in your career. Thus, it’s important to recognize that a lot of what you invest in fizzles. And then, what actually goes on to become a hit – based on vision, execution, ambition, luck, focus, persistence and focus once you know to focus on it – takes a lot of time! The payback period on the Return on your Investment can be years, as it has with what have become successful Verticals (MsMojo), Products (Unity), Platforms (Snap).
Opportunity Costs, Innovator’s Dilemma
As an organization grows, you need to become more disciplined and accountable because everything you do has opportunity costs, which takes me to Innovator’s Dilemma.
Let’s talk macro level (company) before discussing micro realities (individuals). No one will reward WatchMojo’s investment of resources for our effort alone. Effort is the cost of admission to compete and stay in the game. We will be compensated for results. That’s life. A hockey team can play well for 55 minutes, but if they don’t finish, they lose. Business is no different.
Until very recently, we didn’t earn anything on Facebook (but I still saw the merit of sticking to the platform, given the massive 2B+ user base and value as audience extension play). Most of the international channels don’t earn a profit but they are starting to drive audience growth. We have 21 million subscribers on WatchMojo, half are international. We have another 16 million subscribers across the other channels, more than half of which are international. That means about half of our total audience is global.
Ultimately, so much has to go right for us to generate a return on our investments, and admittedly, most of it is out of our hands. But as an entrepreneur and executive, I have to stay committed to projects, people and plans. As the organization grows, we may discontinue things a bit sooner, but we will still experiment and take risks. Otherwise, as a business, you die.
Clarity: be careful what you ask for
On a practical level, that means giving a focused job description to your team but also giving them leeway to experiment. Clarity (or lack thereof) in their roles & their objectives is a double-edged sword.
Regarding clarity, some of the vagueness in one’s job is us recognizing that we need to innovate. We can make everyone’s job really rigid and clear, but it will also become more routine, mundane and monotonous. It also prevents us from having future hits, which companies need to avoid shrinking. To me, it’s a no-brainer than people need wiggle room to think of new ideas, new products, new business units. But, let’s be realistic.
If there’s any career/life advice you take from me, if there’s any lesson you walk away with from your tenure at WatchMojo, this should be it, as it will help you most over time.
WatchMojo wouldn’t exist today if I didn’t realize early on in my career that no one would reward me in the near-term for going above and beyond my mandated job. When I left Mamma (where I supported the CEO / CFO), I joined AskMen. To the AskMen founders, I was someone who was more extroverted who could help in PR. My boss wanted me to assist with their copyright challenges (they used unlicensed images).
I wanted to write (in addition to having business functions). I took a pay cut from Mamma to join AskMen because unlike Fortune and Sports Illustrated (who didn’t need my services), at AskMen I knew I could develop as a writer. Within a few days, I realized the company didn’t generate any meaningful revenue, so not wanting to join a failing enterprise, I took on the sales function even though “selling” was an insult to any self-respecting finance grad (which is BS, since we’re all in sales, whether we know it or not).
I was paid to do PR, help with copyright, and sell. When I started to have success in sales, I was told to do more selling.
I, again, wanted to write. And write I did. I wrote during work hours, outside of work hours. I wrote thousands of articles and eventually, years after I started, things changed.
One day, when both of our distribution partners AOL and MSN linked to my articles and sent us a boatload of traffic, my boss was most supportive. But, I was honest to admit to myself that as good as my articles may have been, MSN/AOL had deals with AskMen and they would have slotted something from our catalog. It didn’t make my contribution any less valuable, but I assure you in the grand scheme of things, I benefited by not thinking small or being stingy with my contributions.
I’m not sure if I was ever paid as a writer/columnist; I was fine to be compensated for my business duties… but while AskMen obviously benefitted from everything I wrote, I won a lot more. Far more. Over time.
That WatchMojo went on to become a larger and more successful business was a direct result of me seeing the forest through the trees. Similarly, the stuff your team does above and beyond may one day possibly be lucrative let alone profitable to you as as entrepreneur, but part of why you support them is that they will hopefully help them more. I am living proof of that.
And, to be candid, it’s not like I wrote Ode to a Nightingale or The Grapes of Wrath; I simply filled a void/demand that someone else would have identified and run with.
Over time at AskMen, we all agreed that as the company grew, I should focus on one or the other. I could have done either/or, but I realized that I would make more money in sales, and at that time in my life, that was the right decision. I continued to write, to this day, becoming prolific and serving me well in business, life, and so on. The point is, I ended up benefiting the most, but over time.
As the leader, you do however recognize people who go above and beyond their day-to-day role, and that’s who you think of when delegating and empowering in the future.
The Myth of the 20% Time
I thought of all of this as I constantly struggle with the myth of the 20% time.
That 20% time led Paul Buchheit to develop Gmail, and likely spawned other huge successes at Google… As much as Google obviously benefited from Gmail, Paul did too… enormously. But the thing is, had he not pursued it, do you really think no one else would have looked into email possibilities while at Google?
We’ve admittedly struggled to find a balance between shifting day-to-day projects/tasks with new innovative ideas. I take great pride in stressing work/life balance. It’s one reason why we’ve had great retention of our best employees who’ve developed the most over a decade, but it’s also one reason why we’ve stayed small.
In 2006, when I would interview people, I would tell anyone and everyone that WatchMojo was a white canvas, and we could do what we want with it. Today, I acknowledge that has changed a bit. Obviously some things make sense, others less so. But you get to write your own ticket. You just have to be realistic about things about business – and life – works.