For as long as I can recall, I’ve referenced the concept of “people ahead of profit,” which goes beyond looking at the bottom line, reinvesting, empathy and not chasing near-term profits
You can blame Facebook for the destruction of democratic institutions and tearing apart the fabric of society, but man that Mark Zuckerberg tugs on my heart strings each morning with his heart-warming “Your Memories on Facebook” feature. This morning I was greeted with the picture above, quite the blast from the past, which I shared with my network, adding:
That moment in Dec 2011 when Roxy was running around was one of the happiest moments in my life. I’d booked this trip (our first pretty much since our honeymoon) on my maxed out credit card and knew I’d have to come back and actually let some of my staff go in Jan 2012. I’d ran out of money in Dec 2007(!) and this was 4 years later (!) when I’d buried myself under a pile of debt... but, I’d also sent out so many feelers to prospective clients before heading out and upon my return, 2 of them panned out (Grab Media and Papagei). We’d actually broken-even in 2011 (but at THAT moment on the beach, I didn’t know) and would go on to earn a profit in 2012... then we went on an EPIC TEAR. I never, in the end, had to do any layoffs due to finances... hiring 100 more people over the years (not everyone worked out but that’s the law of numbers). There is no rush like that of an entrepreneur. #Blessed
Sentimentality aside, there are a few business takeaways. For one, when I say “people ahead of profit,” it doesn’t mean don’t care about profits, it just means don’t focus on profits especially if it comes at the expense of your real asset, which are people – particularly in businesses that thrive off of intellectual property and goodwill (brand equity). Aside from it being the decent thing to do, reality is if you want your business to be valued more, that means you have to treat your clients as well as you can… and that starts with treating your employees as well as you can and understanding that [their] people (their kids, etc) come before [your] bottom-line (it may not be PC, but this is why eventually I matured and parted ways with employees who weren’t team players, because they adversely affect your A-players’s work/life/play… but we’ll leave that for another day).
Indeed, one reason I walked away from an offer to sell the business in late 2019 was because I’d invested so much in my team over the years, and knew I’d never be able to truly replicate our culture and bench strength (or, even if I could, I didn’t want to, because building a world class team is really hard and takes time). Worded differently, it means being long term greedy (to quote Goldman Sachs’ legendary banker Gus Levy).
I knew I’d referenced that period, trip and the business deals in the 10-Year Overnight Success; an excerpt:
The End Of The Road?
Early in the fall of 2011, my wife and I decided to book a family vacation. Although I’d been traveling quite a bit for work, the concept of a real vacation felt alien to me. I picked out the top resort in Mexico’s Riviera Maya, Grand Velas. It wasn’t cheap, but by then I was so buried in debt that the cost wasn’t even noticeable. I remember being in the pool, calmly accepting the fact that upon my return I would possibly need to let some of my staff—some of the WatchMojo family—go.
But, thankfully, that never happened. Somehow, I managed to buy more time thanks to two deals.
With Ted Prince coming on board as an advisor in 2011, I was thinking more and more of the D.C. region as a possible source of capital or as a potential lifeline of some kind.
The D.C. area created a lot of wealth thanks to Aol. Aol.’s former executives had scattered across firms both there and around the United States. We had been working with a company called Grab Media in one form or another since 2006. Originally named Voxant, they merged with Anystream, and renamed themselves Grab Media in 2008. They would syndicate our content and distribute them around the web in their player. Publishers would “grab” their media and add it to their pages, and Grab would sell the ads and give us a cut. They had some distribution, although looking at their reports I couldn’t, for the life of me, tell you where our videos ran!
On December 1st, 2011, I bypassed my day-to-day contacts and emailed their head of corporate development, Andrew Taylor with a vague inquiry. We met in their New York office on Broadway Ave near the Ace hotel two weeks later. Grab Media wasn’t looking at investing or buying a content company, but we did agree to give them a better proportion of revenues if they would commit to a $10,000 monthly deal. That was one deal that helped prop us up.
I actually expanded the scope of our relationship by closing ad deals with marketers and then running them on Grab properties. This also provided us with cash flow, albeit at low margins.
I really enjoyed my interactions with the Grab team. In the summer of 2012, I attended a Washington Nationals game in their beautiful open-air stadium, wondering if my Montreal Expos—who had relocated to the D.C. area to become the Nationals—would’ve ever had the chance to stay in Montreal had they gotten a new stadium. Attending a Nats game may have been blasphemous to some Expos die-hards, but for me it was closure.
Grab also invited me to attend a Yankees game in 2012 against the Tampa Bay Devil Rays. An interesting coincidence: the Rays’ VP of Marketing worked with me briefly at Mamma.
I met Fred Singer, Grab’s Chairman (and, incidentally, a Montrealer), along with members of their management team and I threw out ideas for a possible strategic partnership whereby Grab’s sales force would represent our ad inventory and get a quasi-exclusive license to our content in exchange for a capital injection. They balked. Like so many before them, they didn’t have the appetite to be in the content business.
We had also been licensing our videos to various academic publishers, some of which used them to teach students how to speak English as part of their English as Second Language (ESL) programs, while others used our clips to complement their textbooks. They told us that people will have an easier time learning English by watching a video on a celebrity and then reading a translated transcript. When it came to complementing course books, like one on American history, our Civil War clips could get students better engaged than just reading through a book. We licensed our clips for a few hundred to a few thousand dollars since it helped bolster our Fair Use argument that our clips were educational. But one company, Germany’s Papagei, emailed us and inquired about licensing a ton of videos for an ambitious project. The deal was proposed for tens of thousands of dollars over a duration of time, and it is a deal that remains active to this day.
In all honesty, unless I would have come across a printer that could churn out legal tender, we would have had to scale WatchMojo down upon my return from Mexico, if not for those two deals.
We’d finally turned the corner and were showing modest gains each month throughout 2012.
Now go read the companion piece on being long term greedy.