I hope you are enjoying your Tuesday. Welcome back to today’s episode of Ask Ash, where I ask WatchMojo founder and CEO Ashkan Karbasfrooshan questions about various topics, ranging from what is going on in the news, to career advice and life lessons for students and entrepreneurs.
I wanted to focus on WatchMojo’s beginnings today. To learn more about the early stages of WatchMojo, I asked Ash about things such as how the initial investment of $250,000 was spent to make what WatchMojo is today when he knew that WatchMojo would be a success, and if he created a business plan, and the importance of them.
- How did you use the $250,000 that was invested into starting WatchMojo?
Aside from office space rent, hardware, and software – and of course a lot of coffee – it really boiled down to people, people, people, so labor costs. We also had the legal challenge early on which drained some resources but by and large, it was for the team’s salaries, which is normal since wages account for 66-75% of a company’s costs.
Even when we were cash-strapped, money-losing, and effectively insolvent, I always paid people on time and fully… including freelancers who appreciated the Net 0 terms! I’m sure I think to some extent that explains the loyalty I built with the original team when they saw the personal sacrifice.
I also told the team not to cut corners, and to spend what it took. Ultimately, to focus on value.
I’ve read many posts on startup success criteria and the difference between being cheap and frugal. As an entrepreneur, especially in the early years, being cheap ultimately costs you much more over time and is a loser mentality. But you have to be frugal. I’m not driven by money, but I’m more of a revenue-guy than a cost-focused executive, so while I’m not necessarily looking at expenses, I learned over time to become more frugal because a dollar spent and going out the door is really easy but securing revenue is hard. Revenue always takes longer to grow, is further out in the future, and is smaller than expected, whereas costs are higher than anticipated and hit you faster.
2. When did you know that WatchMojo was your big idea?
I think I’ve actually had many great ideas and continue to have a lot of great ideas – and sometimes people take those ideas and run that without me, but that’s for another post. When I launched the Mojo Supreme incubator, I actually think that the best idea out of it was something else – a tech-based community project, which we did not continue. But, I always felt Content was King and WatchMojo was at the right time at the right place. There was not one moment when I felt this is the big idea. Entrepreneurship is actually not like that, it’s a lot of small, baby steps and “measures of merit” (something I learned from General Wesley Clark) in the face of a perpetual series of setbacks, obstacles, and headwinds. Over time, you accrue progress, create value and build equity. Now sure, I suppose when we were included in Hulu as one of the first digital media partners, or when we hit 1 million subscribers on YouTube in October 2013, when PewDiePie name-dropped us, or when Tom Holland gushed over us, those are also nice anecdotal things. I guess when said and done instinctively I always knew it was going to be a success which is why I fought so hard to protect, nurture, grow, defend WatchMojo no matter the emotional, physical and mental toll it takes on you.
But, when said and done, you have to believe that your best idea, deal, whatever really is around the corner!
3. Did you create a Business Plan for WatchMojo? Why is it important to have a business plan?
Yes and no. I created a lot of executive summaries which are mini-business plans, PowerPoint presentations for media kits, investor decks, and so on… but I don’t think I ever had a proper business plan partly because it was both so embryonic and so far ahead of the curve. Mind you, the industry was so fluid and evolving so rapidly that I did not feel a business plan would remain fresh and pertinent by the time it was done. I think the purpose of a business plan is more roadmap (flexible) than blueprint (rigid). To me, the business plan was actually a) the original HipMojo blog which people like legendary investor Fred Wilson would link to, and b) my articles in TechCrunch and MediaPost which really dove into startups and the media industry, where I would basically gather a lot of industry data and pontificate about what it would mean to the future of digital media and web video, and which publications like Forbes, MSN, CNN, etc. would reference.
I think it’s case-by-case: some people need a business plan, others just need to hit the ground running. It’s a very personal matter. If you spend all your time in the business plan and PowerPoint you probably are foregoing the opportunity before you!
Lastly, if you want to ask questions to Ash directly, you can do so by clicking the link here: https://watchmojo.com/suggest/AskMojo%20-%20WatchMojo’s%20founder%20Ash