“The Only Constant in Life Is Change.”- Heraclitus. Reality is even disrupters get disrupted, and no matter how driven & ambitious people may have been at once, they all get complacent, lazy, arrogant. How do you avoid that fate? Reinvent yourself of die.

In business, we’re taught the concept of the Company Life Cycle and its Stages: Infancy, Growth, Mature, Decline.
In my 2020-era articles on Innovator’s Dilemma, I broke down opportunities as
a) Organic vs Inorganic, but finding anything that is even remotely compelling when you run a well-run business is hard.
b) Iterative, Evolutionary, Revolutionary, BHAGs, to ensure the team understood some were heavier lifts than others. 

On episode 4 of InsideMojo this week, we will discuss how WatchMojo found its product/market fit, or as I refer to it in media: platform/format fit. Considering we had such an early mover advantage on YouTube and then had the benefit of others’ inertia and ineptitude, I recognize we may never have that luxury again. Incredibly, due to innovation, continuous improvement & other complexes we need not get into here, WatchMojo is now entering its 3rd growth stage – in the context of a company’s life cycle stages: infancy, growth, maturity, decline. Most firms fail to adapt, get fat off their one hit, and die (at best) or spend an eternity in obsolescence (worse, IMHO). 

After looking for product/market fit from 2006-12, in 2013 we caught lightning in a bottle & grew revenues 10x, experiencing our first “growth” stage in 2013-2016. If interested in this stuff, tune in this week for episode 4.

Avoiding the expensive overhead our peers indulged in prematurely & instead investing in a large evergreen catalog & organic distribution, we benefited from high degrees of operating leverage and grew our EBITDA margins. Before long, it was clear that if we didn’t invest, we would die. We began to re-invest by 2015/17 as we entered our first “mature” stage in 2017-19, but thankfully avoided the “decline” phase as results from Snap and the MsMojo brand (in theory, first discussed in 2013 when Meredith wanted to acquire us) materialized in time. 

A hack hurt our SEO on YouTube & growing competition meant headwinds which flattened revenues in 2017-19, before new investments paid off in 2020. The WM2020 initiative we embarked on in 2016 was intense:
– heavy investments in personnel: C-level execs, development execs, support staff, intl teams, etc.
– content programming: development of many new shows, formats etc.
– marketing: notably sponsoring the NHL’s New York Islanders at the Barclays’ Centre in Brooklyn,
growing expenses, with no obvious or clear path to revenue… but we were able to streamline things and EBITDA grew, again. But that kind of organizational risk seriously pushes an entrepreneur’s sanity to the brink of madness, because in your mind, heart & soul you know you have to invest, but everyone questions you – even the mofos you invested in & only hired as a result of said risk-taking. It’s batshit crazy when I think about it: listening to a newer employee question why we invested in X, with me knowing they were only employed because we also invested in Y. But, I digress. Everyone is a MMQB, whereas you’re the one in the arena. You gotta drown out the noise, which I did… 

As Covid pushed users online & advertisers shifted their spend to home entertainment, we experienced explosive growth in 2020 & 21, not only dodging death but setting a record in revenues & EBITDA, but knowing that we’d merely pulled up future growth (not dissimilar to how Amazon or Shopify grew faster post-Covid, only to experience normalization in the ensuing year). 

The hangover would be severe: when inflation rose, interest rates were raised & the pullback was swift. As Fortune 500 companies let go staff, they also scaled back marketing. The 2022 correction created headwinds which dragged into 2023 but saw 2024 stabilize a bit. But numbers don’t lie: we entered our first “decline” stage in 2022-24, but as the shift of TV ad dollars continued online, and YouTube of note, our general trajectory remained intact. Motivating your team to stay focused on the north star while recognizing that you’re going to be navigating choppy waters is not for the faint of heart, but we used the headwinds to re-evaluate our supply chain & which platforms/brands we should invest, which helped us improve margins in 2024 as we invested (more wisely, with the gained wisdom of WM2020). Left to my own devices, I would love to focus more on the “crazy” BHAG variety of revolutionary bets, but to quote Donald Rumsfeld, you go to war with the army you have, not the one you want to have. In 2016/17, some of our cockamamie ideas included (for example) scripted projects, even going as far as signing a development deal with Sonar Entertainment. But these were too far off from our core, and it didn’t make sense unless I really wanted to run the org in a more top-down, dictatorial way (i.e. a Hollywood studio boss). 

In any case, the investments we made in 2023/24 are now paying off, and as projects like our Vault initiative (where we leverage our back catalog to launch new channels and communities on YouTube) are not speculative bets (like Trivia, AI, Roblox, etc) so the revenues are understandable and by now, demonstrable. We had originally conservatively forecast a 5% growth in revenues & EBITDA for 2025, recognizing that things had stabilized in 2024 and bottomed out mid-year. But as marketers embrace YouTube & our improvements are applied across the channels, we are now seeing 30% YoY growth, with revenues flowing to EBITDA, again. 

When said and done, I remind my team & board that we are a victim of our success: not just for the vision & timing we had to start when YouTube did, but to build a smart successful strategy that seems obvious, in hindsight.

As 80% of our revenues are from programmatic ads sold by our platform partners (YT, Snap, Meta) of which 80%+ is YouTube (thus high margin), it’s admittedly hard to come across other opportunities that present a similar return on investment, and energy. The rest is a mix of licensing, direct sales, ecommerce, services, etc. which I am always looking at growing, natch, but which is incredibly hard given how much YouTube sucked watch time away from everything else. For example,
i) Vault, doubling down on YouTube is common sense, but
ii) launching Games based on our IP (which includes not only the catalog but trivia) is less obvious.
As we grew margins in 2024 by streamlining certain projects, we avoided a round of layoffs (but became smarter about managing human resources).

How to Really Move the Needle

But as I recognize it takes a lot to grow revenues in a sustainable manner, my eyes and inbox are always open. Ultimately, the above-mentioned efforts are akin to a boiling the ocean, especially given the larger prize. The greatest upside to our revenue, turning a so-called ceiling into a floor, is having a global sales force take over our ad inventory. As a former ad sales executive & finance grad, it’s clear.

This “sales engineering” opportunity could more than double our revenues in two ways: 

A) given that our gross revenues are in fact our platform partners’ net revenue, if a company – ACME – owned our channels & ad inventory, they could sell the media at higher CPMs than we currently yield and instead remit payments to the platform. For purposes of illustration, say we only generated revenue on YT, if YT sells $2 worth of ads and keeps ~50%, they would remit $1 to us. Not bad. But if we sold ads at $2 or more, we would pay them say 25% for example and keep $1.50, if not more, since a media company can sell ads at higher than a network/platform. 

B) “Only” 15% of our YT inventory is sold at premium rates, so a global sales team can optimize the ratio of premium ads sold, lifting revenues dramatically with no extra inventory needed.

All to say, if indeed we managed to find a path to growth for a 3rd time, that is yet another stuff of legends for that little company we started 20 years ago.