Episode #213: David Sanderson, “The Average Household In The US Uses 5 Streaming Services”

Episode #213: David Sanderson, “The Average Household In The US Uses 5 Streaming Services”

 

 

 

 

 

Guest: David Sanderson is the founder and CEO of Reelgood, a complete, unified guide to the world of online streaming content with the ability to track & play all your content across 250+ streaming sources from a single interface.

Date Recorded: 3/25/2020

Run-Time: 38:54

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Summary: In episode 213 we welcome our guest, David Sanderson, founder and CEO of Reelgood. We get into David’s frustrating experience of juggling multiple streaming services and how that ultimately led him to launch Reelgood.

We talk about the buildout of the product and how important data management and processing is to product implementation. Later on, we chat about the bet he and his company made on fragmentation in the streaming market, and one of the greatest challenges he has faced with his company.

Don’t miss this great episode with Reelgood founder and CEO, David Sanderson.

 Links from the Episode:

  • 0:40 – Intro
  • 1:31 – Welcome to our guest, David Sanderson
  • 2:01 – Overview of Reelgood
  • 2:38 – Founding of the company
  • 5:46 – The early steps of the platform and its rollout
  • 8:44 – Educating the consumer
  • 11:53 – Features and most common use cases of Reelgood
  • 15:01 – The first acquisition and why they did it
  • 15:59 – Current state of the company and challenges
  • 17:08 – Monetization considerations
  • 19:35 – Competition and flaws in data collection for streaming video content
  • 24:17 – Evolution of the television, movie and streaming world
  • 27:30 – Coronavirus impact on streaming figures
  • 29:13 – Managing a startup during the pandemic
  • 31:19 – Biggest struggles as a startup
  • 32:51 – Most memorable moment
  • 35:41 – Favorite shows right now
  • 36:18 – Connect – Reelgood

 

Transcript of Episode 213:

 

Welcome Message: Welcome to the “Meb Faber Show” where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here.

Disclaimer: Meb Faber’s the co-founder and chief investment officer at Cambria Investment Management. Due to industry regulations, he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com.

Meb: Hey, podcast listeners. We’ve got an awesome quarantinisode for you today. Our guest is the founder and CEO of Reelgood, which is a complete unified guide the world of online streaming content with the ability to track and play all your content across 250 streaming sources from a single interface. In today’s episode, we get into our guest’s frustrating experience of juggling multiple streaming services and how that ultimately led him to launch Reelgood. We talk about the build-out of the product and how important data management and processing is to product implementation. Later on, we chat about the bet he and his company made on fragmentation in the streaming market, one of the greatest challenges he has faced with this company, what is it like running a remote company in this environment, and more importantly, what’s he watching in quarantine? Please enjoy this episode with Reelgood Founder, David Sanderson. David, welcome to the show.

David: Hey. Thanks for having me.

Meb: We’re recording this mid, late March. So, listeners, whenever this does come out, maybe late at March or early April, you can’t see us, but we’re both in our respective quarantine headquarters. I’m in my bedroom in Los Angeles. David, where are you?

David: San Francisco in the guest bedroom

Meb: Deal. Same thing. So, listeners, much like the podcast we did from Hawaii where you get to hear roosters the whole time. So if you get to hear toddlers and dogs, it’s part of the scene. Founder of Reelgood, what’s Reelgood?

David: The short version of it is we’re a streaming service aggregator and what that means is if you have subscribed to Netflix, and Hulu, and Amazon, and HBO, you have to use five different apps. What we do is we put all of that into one application for you, so it takes all the shows and movies from whatever combination of streaming services that you use and puts it into one application so you can browse for something new to watch, we’ll tell you if there’s new episodes of any of your shows across your services or if a friend recommends a show to you and you’ve searched for it, we can tell you, “Yeah, you already have access to it all on your services,” Or, “No, you don’t, but here’s where you can go get it.”

Meb: What’s the origin story? What was the original inspiration for creating this idea?

David: I moved down to California with Facebook, talking about 10 years ago. I’m originally from Vancouver, Canada, and I was getting my apartment set up down here. I looked at cable and I just thought, “I don’t really watch live TV that much.” Comcast was pretty expensive and it just didn’t seem to make sense. And I thought, “Well, you know, I Netflix, I watched that primarily anyway.” So I didn’t bother getting cable and then just watched on-demand stuff. But then “Homeland” came out, so I got showtime and then “Game of Thrones,” so I got HBO and then “Brooklyn Nine-Nine” so I got Hulu. So I ended up with all of these streaming services and I was flipping between them every night and, you know, I was really busy during my time at Facebook, so I’d maybe have like an hour at night where I could watch something and having to deal with this, flipping between all these different apps every night, trying to figure out what to watch or is there a new episode on one of the shows that I like, I thought that was just silly. And for a couple of years, I thought, “This is an obvious thing, someone else is gonna solve this. I can’t wait to be a user of it.” But a couple of years went by and no one had done it. And luckily, I had launched some big products at Facebook and, you know, I knew how all of it worked and I had a good sense of how to create the solutions. So I left about coming up on five years ago now.

Meb: All right. So you leave Facebook. Is your idea then to, “Hey, I’m gonna go build this in my guest room,” did you have to partner up with some people? What was the on-ramp, how to work?

David: I got lucky with funding right out the gate where a long-term mentor of mine just said that I needed to have lunch with one of her friends and I did and I didn’t know anything about who he was or any of the background. But anyway, I just had lunch with this guy we were just talking and, of course, we got talking about this idea that I had and at the end of the lunch he just said, “Look, I wanna fund this. I wanna invest, I want you to do this thing, and I wanna be part of it. And at the time, I had absolutely no idea about how investing works or any of it. And so, luckily, it was a very good and, like, upstanding guy. And so, the funding came through very quickly because I just sort of got it right away. And I remember I even said, “How does this work when we’re looking about valuation?” And he said, “Well, I’m gonna make up a number and you’re gonna make up a number and we’re gonna meet in the middle.”

So luckily, that got squared away pretty quickly but then with the funding, I remember, yeah, I was sitting in my living room and just was kind of thinking, “Okay. Well, I need to start hiring people. How do I start to get this company formed?” And one of the problems was with my Facebook contract, I had a non-solicit agreement. And that was the majority of my network down here and all the engineers I worked with were at Facebook. So I hunted around. And long story short, I actually ended up hiring this guy that I had read, interviewed, made a piece about our space who had launched a very successful product and like I said, kind of in our world or the world I was looking to get into and he would actually been one of the guys behind Popcorn Time, which was really big. It was to do with Torrance, but it was in a different way. It was trying to solve a similar problem to us, which was just letting people get to their content. So anyway, I hired him and he really liked working here and then luckily sort of over time, he brought in the whole rest of the team there and that was our very beginning.

Meb: What year would this have been?

David: This would have been spring of 2015.

Meb: All right. So walk me forward. What’s the next steps? And was the original idea kind of this similar vision you have now or was it a little bit different in the early days?

David: It was a little bit different. Sorry, there’s three things and then eventually we boiled it down just to the line. But at the time when I started, mobile was like the name of the game. Mobile-first was huge when I was at Facebook and everywhere. It was just sort of the industry thing to be mobile-first. And then social was also very hot at the time. So we kind of followed the times with that where we had a mobile app and it still had some of the streaming stuff and just trying to help people decide what to watch, but it had a big social component to it. And so, we launched that and we saw success with it but then when we really looked at the metrics, what we saw was that people were using what we call the where to watch information, like where they could stream it. We saw them using that very heavily and at a certain point we decided, “Look, let’s cut the fat here. Let’s remove the social stuff, let’s just make it the streaming service aggregator because that seems to be the biggest need.” And then we’ve done that for the past few years and what’s actually kind of funny is now it’s coming full circle. Now that we’ve proven the sort of utility product is working very well, now we’re actually starting to add back in some of the social elements.

Meb: It’s such an obvious idea. And I say that as a compliment because so many…

David: No. I mean, I thought it was too.

Meb: Look, I still wake up and my son’s like, “I wanna watch ‘Octonauts’ or ‘PJ Masks,'” or any of these like three-year-old shows and I ask my wife, say, “Is this on Netflix? Is this on HBO? Is this on TV?” Like, it’s a mess. And so, kind of walk me through the rollout of the product. For the people who are listening who have never heard of it, how do they find it? In the years since the initial founding, how has it evolved? Kind of give me the little more of the story on how it’s been built out.

David: We transitioned from…we had our mobile app and we kept that and then we also…we launched our website about three years ago and what we wanted to prove with those two platforms was just that this is something that people want, this is something that people like to use and show retention and growth in those with. What the real end goal for us is always to be across all of your devices. So if you think in the same way you can watch Netflix on your phone, your iPad, your TV, your laptop, whatever, that’s kind of the direction that we’ve always been heading but we had to start with platforms that we could control, which was obviously mobile and web, show success there so that then we could make our way onto the other platforms and luckily, that proved to be the case. We’ve had a lot of success with our web product and our mobile apps and with that, we actually signed a deal with LG last year where we launched on the home screen of every LGTV in the U.S. and a handful of other countries and we’re working with a handful of other TV manufacturers right now as well as we’re working on something that’s not launched yet and I can’t say too much about it, but it basically bridges the gap between the phone and the TV a little bit better to make that a more seamless experience.

Meb: What was the go-to-market education of people? Was it largely a digital outreach? You mentioned the partnerships with some of the TV manufacturers. How did you go from like, “Hey, we have this cool idea,” to getting people to use it or getting it implemented? Because I feel like one of the bigger struggles, and I don’t know this, would be whether or not some of the manufacturers would say, “Hey, we wanna build this, or some of the services, try to do it in-house.” Was that a roadblock? Tell me a little bit about the implementation rollout or the actual product.

David: Well, so it actually kind of…it’s weirdly come full circle because when we first were looking to build this, we went out into the market because a big piece of what we do is largely data. It’s a relatively simple frontend experience. There’s a huge amount of data processing that actually happens on the backend because all the different streaming services have different IDs for what may be the same show or same movie. So the analogy I always give is if you had two identical chairs, one is at West Elm, one’s at Crate & Barrel. If both of them have a matching barcode on them and a sales rep in both stores scans them, a computer can just say, “Yup, that’s the same chair entered in the system.” The problem is, what if you don’t have barcodes on those chairs? How does the computer tell that those aren’t the same chair? Well, then it needs to look at the shape of the chair, the dimensions, the weight, and with all of those dimensions, no two chairs are actually perfect. So it needs to make confidence scores for all those different variables or different factors and then combine it and to say, “Yeah. You know what? With 97% confidence, I can say this is the same chair.”

So that’s what our system does with movies and shows because it’s in real-time. We support somewhere around 300 different streaming services so in real-time, it’s constantly making sure that things are accurately matched across all of those. And when we first got into this space, we were just looking for a data provider for that data. We didn’t wanna reinvent the wheel. The problem we found was the providers of this data, the quality of the data was just not nearly good enough for our product and it was really hurting our retention and user trust because we would say, “Hey, this movie’s on Showtime.” And then they’d hit play and then it wouldn’t be. Or there would be a new episode of “Game of Thrones” and we wouldn’t reflect that.

So because that was having such a negative impact, we did a big project where we said, “Look, our current data providers aren’t working. Who else is there in the market?” And we did a quality check of all the different providers. We ended up going with one, which actually we later acquired about a year-and-a-half ago, and beyond that, we had built a bunch of stuff on top of even the data provider that we were using because it didn’t have the quality that we needed. So that was something that we just nearly built out of necessity for the product that we were looking to build and then strangely, what’s kind of come full circle is now pretty much every player in this space actually licenses that data from us because some of them have spent five, seven, eight years trying to perfect the data and they haven’t been able to really crack it. So a weird kind of other side of our business is actually we do license this data to other people that are trying to build things in this space.

Meb: That seems like a interesting part of the moat over time would be that idea. And maybe describe in a little more detail to the listeners who are interested in this, what the exact sort of features are and how they use this product. So let’s say they have an LGTV or they wanna download the app, just kind of walk through what the main use cases are for people because I can think of two big ones but we’d love to hear it from your mouth.

David: Even just walking through the flow, whether you go to Reelgood.com, our website, or you use one of our apps either on a TV or on your phone, the way that the onboarding looks is it’s pretty simple. We just show you a list of the streaming services. All you have to do is check off the boxes of the services that you use, so you don’t have to worry about logging in with us because we have all our own metadata to present that. So you simply check off, you know, I have these five different streaming services and then it basically takes you to now your personalized home screen where it has all the shows and movies blended together from all of those services. So it’s sort of your personal massive catalogue of content that any all of it is, you just click play on and it will start to watch.

And so, with that then, yeah, like I said, kind of the three main things are one, we have all the next episodes of any shows you’re watching queued up for you. Two, if you don’t know what you wanna watch and you wanna browse instead of having to flip between five different apps to see five different catalogues, you can browse all of that through us and we have Rotten Tomatoes scores and IMDB scores and you can pick a genre so you could kind of slice and dice it to really find your best piece of content. We also have a recommendation system that will help you find new content. And then lastly, is if you know you wanna watch something and you don’t know where it’s available, like I said, we’d tell you either, A, it’s available to you and here is where it is or no it’s not, it’s on this other streaming service, or it’s rent or buy and here’s how you can watch it.

Meb: And what do you see is sort of the main use case that consumers are using this for? Is it like 90% for discovery? Is it mostly for finding the shows they already care about? Do you have any kind of general takeaways?

David: Honestly, it’s a healthy mix, kind of, of those three different ones. I would say like the most casual user just uses it to say there’s something I wanna watch and they wanna know where they can watch it and then you go to our more heavy users and like they have all of their shows tracked through us and they like to get the notifications when, you know, a new episode comes out or if they track a movie and then we tell them…like if there’s a movie that’s in theatres right now, you can track it and then we’ll notify you if it comes to one of your services. So it’s largely where can I watch and what can I watch, are basically the two main use cases that we see our users use it for.

Meb: I feel like I was looking at it this week and I think the cool part is you can kind of sort by IMDB or you mentioned Rotten Tomatoes for some interesting ideas and it kind of eliminates the old wandering around the Blockbuster for two hours when you used to rent movies or scrolling through Netflix for an hour to find something decent, which is pretty cool. But I laughing because I think like “Contagion” was the number one thing people were watching. So consumers have a funny sense of humour, a dark sense of humour, I’m not sure which. And you mentioned acquisition. Can you talk about that at all, what the process was around that?

David: Yeah. So I mean, we had been customers of this data provider for a couple of years and luckily, the guys were actually in San Francisco, the cofounders, so, you know, I’d just gotten to know them a little bit over the years and at a certain point, it made sense for us to bring it in-house because like I said, we’d built a lot of technical stuff kind of on top of what they were providing and we realized it would be a lot easier to plug that in if we could control the pipe itself and we apply fixes to it and update that, it would make our life easier as a whole. So that was what led us to buy it. And yeah, I mean, I spoke to the founders about it. All in, it did take probably six months. It was a pretty big time suck admittedly, but it’s been really helpful to have it in-house. And then too, I mean, we largely got it for the technical stuff that we wanted to do and then…but then the icing on top was it did come with a book of customers.

Meb: So you’re five years into this, a lot of the tech is built, what is sort of the challenges for the company at this point? Maybe describe…you said you guys got some new offices, maybe what’s the headcount and then what’s kind of…is the main initiative at this point trying to monetize? Is it growth of users? Kind of where are you in the life cycle of the company?

David: We’re primarily focused on the consumer product and the growth of that. So it’s been growing really nicely to date. It’s to a certain extent keeping up with that as well as addressing our users’, kind of, wants and concerns and like largely that is they want to use us on other platforms. So that’s been a big focus for us recently. Like a good chunk of last year was building out our TV products and we were many years behind on it but we finally just launched your Android mobile app because we had a huge amount of demand from our users for that too, including just things like I said, some of the social features like ratings and reviews and those types of things that our users have wanted. It’s been building those into the product and just basically enhancing it and making it a better product and always growing it and increasing retention and engagement.

Meb: To the extent you’re willing to talk about it, what’s sort of the vision for monetization? Because I believe for the most part it’s a free service for the end consumer right now. How do you kind of envision the way the company pays the bills and grows over time?

David: Like I said, primary focus being the user, but at a certain point you do need to keep the lights on. So right now, I mean, we do make revenue by licensing our data, some of the data that we’ve built for our product, so we license that to like Microsoft, and Roku, and pretty much most of the players in the space. But the longer-term view is probably a combination of, one, at an aggregate, at a high level, we have a lot of information about what are people doing in streaming space and we have hedge funds that license that data from us and that’s relatively nascent right now but we’ve had a lot of inbound interest in that. So that’s where we see there being a basically a large amount of revenue. And we actually recently had the global head of measurement from Neilson who had been there for 14 years recently joined us because Nielsen historically has made, I think that they make somewhere about $7 billion, $8 billion a year from their viewership data, which is basically what are people watching on live TV?

Meb: Wow.

David: Yeah. I mean, some of these contracts, I guess I can’t say who it is, but one of the like networks, they have $1.5 billion contract, a three-year, so it’s a half-billion-dollar a year contract. With Nielsen, just because they need to know how are all of their shows and movies performing in the live TV world, whereas the problem is they’re not very set up for this shift that’s happening where viewing is shifting away from live towards on-demand over the internet viewing and they don’t really have any way to capture that. Whereas with us, just by the nature of our product, by people using it, we do end up seeing what people are watching across different services and that’s how you see like “Contagion.” We’re seeing the viewership of our viewers and it’s like, “Okay, that’s popular.” So that fills our popular row.

So that’s what, like I said, we had an increasing number of hedge funds reaching out, looking to get this information. So we started to package that up and that’s what the Nielsen guy, like I said, he saw at Nielsen, they weren’t really adapting with the times, so he went to the market and tried to find who he thought would be that kind of future of this data and sought us out and, like I said, we ended up bringing him on board. So I think that that’s gonna be a growing piece of our revenue business as well as we may…I mean, I worked on the ad products at Facebook. We may at some point tried to do some very unobtrusive ads within the product itself, but that’s years away.

Meb: Does Nielsen fall under the umbrella of competitor? Are there direct competitors at this point who’s trying to elbow you guys out? Because it seems like when you mentioned Nielsen, it seems like a very large opportunity. Who else is in the game? Anybody?

David: They’re definitely the big one. I mean, they’re kind of the name brand. I mean, they have been for a long time. So I’d say it is by far the biggest. I’m trying to think of any. There’s a few others in the space. No one that we’ve seen that….And when I say in the space, I mean largely around live TV viewership, there hasn’t really been anyone that’s done the on-demand viewership. Nielsen has tried and from what I understand, they have like a very, very small panel. And I’ve actually heard from customers that for some of the providers of this data in the space that I’m trying to provide data around the on-demand, they’ll say, “Here’s the viewership on one of the streaming services,” and then they look at the data and it shows viewership for shows and movies that have never even actually been on that streaming service. So there’s some pretty big flaws with…you know, it’s a small sample size and flaws with some of the other providers in this space.

Meb: When you say streaming, does this include…outside the normal big ones, does this include YouTube or podcasting or anything else yet or is it mainly just confined to the HBOs and Netflixes of the world?

David: So right now, yeah, we only support…kind of the breakdown is TV shows and movies. So that’s what when we say like TV shows, I mean, you know, like a show with multiple episodes and movies, obviously, being self-explanatory. So we only handle those. I mean, again, even with that, that includes to give all the industry lingo, you know, there’s like TVOD basically you have to pay, the rent or buy services, there’s the subscription services, and now AVOD, the advertiser streaming services like Tubie with ads in them. Those are growing in a huge way right now. So we support all three of those and we do hope to expand sometime in the next probably year or so to some other types of content, but it would largely be, like you said, YouTube or short-form content because, obviously, I think thinking that viewers are only watching shows and movies, that’s obviously not the case. You know, they’re watching shows and movies, but they’re also watching TikTok and whatever influencer they follow on YouTube.

Meb: You get to hear my rant that I’ve been on ranting for like three years is that all the streaming services, but also almost any app you have on your phone allows you to rate them so you can rate your Uber driver, you can rate your Uber app, you could rate Netflix shows, you can rate anything. But as a podcast host and consumer, nothing drives me crazier than the fact that none of the dozen or two dozen podcast apps, including Apple, they let you rate the show but not the episodes. And so, it drives me absolutely batty because like many hosts, this is gonna be an amazing episode, five-star, for sure, but there are episodes I have that maybe are two or three and certainly a gazillion others and it was an idea that for a long time, we considered doing as an app but the problem is it seems more of a feature than an actual full company.

So you ever wanna start getting into the podcast rating app world when you guys got some extra engineers that wanna work on a Saturday night, let me know because it drives me crazy where the podcast world seems to have transitioned from…the early days it was all about discovery. You had to find a new show, but most people now already have 10, 20, 30 podcasts they listen to, so being able to curate it seems like a more obvious expansion. Anyway, maybe something to think about.

David: I mean, I would love that just as a podcast user too. And actually, that’s why just yesterday, we launched episode level rating at least for shows because you’re right, it’s like if you think about it when you talk with your friends, you’ll say, “Oh, the first two seasons were really good and then it really felt long.” But short of your friend, you don’t have any way of knowing that.

Meb: And also, it varies. Like it may not make as much sense for, say, “Game of Thrones,” but if it’s like a cooking show or you’re doing David Letterman interviews, it makes a ton of sense because you’re saying…and I’ve actually, the one that has worked has been, and it’s the most basic because all is that lets you do is like a star or a like, is Breaker allows you to. But the actual signal in that as basic as it is that you can sort the episodes by that is actually extremely high. Anyway, unrelated to most of the things we’re talking about, but it’s…our poor listeners have heard me rant about this over the years, but if anyone wants to build it, let me know. I’ll help fund it. All right. So we’re in 2020, it’s a new decade. We’re starting to look out on the horizon. Put on your forecasting hat, your crystal ball. What’s the evolution of this world look like in a year, in three years, five years streaming as people cut more and more cords as more and more companies like Disney have these siloed offerings, what’s your general commentary on the space?

David: We’ve admittedly been very lucky. There’s obviously been a huge amount of blood, sweat, and tears, and a million late nights as you can imagine, but we’ve also been lucky with the direction the space has gone. The big bet that we made was that the space was fragmented and it’s going to continue to get more fragmented. And luckily, over the past year or two, that’s happened a lot. As you mentioned, Disney pulling their stuff from the other services to have Disney+ and Apple TV launching their service and with NBC is coming out with Peacock and they’re pulling “Friends” to bring to their services and HBO Max if you’re more into media. So all the heavy hitters are entering the space as well. So all that to say, it’s good for us. That was kind of the bet that we made and now with the big dogs doing it, the space is getting more fragmented, which obviously, we just become more and more useful.

And I think with that, there’s A, more fragmentation, and B, there’s just the data showing that people are starting to make the shift away from their live TV and their cable subscription and more and more people are moving towards this on-demand world. I mean, I think really, it’s just a little bit of history repeating itself. Like if you think about the history of television, when TVs first came out, there was just three channels and that was very easy to switch between them, you’re fine. But then more and more and more channels came out and it got to a point, it was overwhelming for people and confusing and there needed to be a guide to help people figure out what to watch. This is kind of the same thing, but with the internet and simply, you know, is moving to the internet. There was just Netflix and, I don’t know, maybe Hulu or Showtime, like there was just sort of the few big providers but now it’s basically, again, the equivalent of having a lot of different channels or a lot of different streaming services.

And I think I saw stat a few months back and I think it’s the average household in the U.S. uses five streaming services. I mean, I think they were careful to say users because obviously, there’s a lot of password-sharing going on, but that’s how many the average house is actually using. And I think what we’ve seen, I mean, that number a year or two ago, I think it was two-and-a-half. So it’s like nearly doubled over the past year or two. So I think that’s gonna continue to ratchet up. And one kind of just random interesting thing that’s happened for us is the majority of our users are, I’d say, about 18 to 35 and then there’s a bit of a gap and then we have users kind of in their 60s and 70s, which are people that are…they’re making the shift, like they see the opportunity or they like their on-demand services but they find it too confusing and that’s what’s hurting their transition away from cable, is it’s just too confusing. So weird thing, we’ve had, like, the older demographic that are Reelgood users because they find it just makes it a lot easier for them to understand, you know, it’s one single interface as opposed to five.

Meb: These youngins don’t know how easy they got. When we used to have to get up when we were kids and change the channel or even use a remote or watch SportsCenter four times in a row, they got it easy. Obviously, we would never wish a global pandemic on everyone. I imagine the adoption and acceleration of the change is going on in this world. Have you guys seen an increase in people using the various services as most people are kind of working and stuck at home?

David: Yes is the short answer. I mean, it’s obviously a very scary and weird time and it feels weird that we’re luckily doing well as part of this when I see other startups and other people I know struggling and so there’s like a weird certain amount of guilt to it, but the honest truth is yeah, we’ve been exploding. Since the lockdown happened, we’ve been struggling to keep up with it. And just new trends too that we’re seeing in some of the viewership, just looking at our own data, I saw something one of our data analysts pulled up the other day, which was…and surprising, but kids content, it’s up I think, 50% from the week before or maybe even more. There’s a huge jump and it’s higher than Christmastime in terms of kids content being watched, which is no surprise. I mean, that’s what I’m seeing in my house, right? Like my wife and I trading off with our kid because we don’t have the nanny. Well “Peppa Pig” does become the babysitter sometimes.

Meb: Well, it’s funny because you saw these at the beginning of the quarantine and a lot of people posting, “Hey, I’m gonna approach this like summer camp.” And so, 8 a.m. to 9 is breakfast and then play in the park and then art time and then it gradually, it’s just like stream time. It’s just like my sanity, “Go watch TV, child.” I got to do what it takes to get through this. So is most of the team remote now as far as how has managing y’all’s company in this time, has it proven pretty seamless because it’s something you guys do already or has this been an interesting wrinkle for the past month?

David: So we are quite lucky where two-thirds of our team is distributed and yeah, so we have an office in San Francisco, an office in Quito, Ecuador and another in Victoria, British Columbia. And those are the main spots where we have people. And then we also have a couple in Australia and one in…well, he’s usually an Amsterdam, he’s in Ireland right now. And then we also have some people in the Philippines, so we are quite used to being a remote company. I mean, I do miss the…there are the pockets like in Victoria and here and Ecuador where it is nice to be able to work in person with those people. But it’s actually been a pretty seamless transition.

I’d say if anything more, it’s just weird like conferences that we were scheduled to speak at, those have all been cancelled and some of those are good sales opportunities and just transitioning to meetings that would have been in person. You know, when you’re talking to a potential client or an investor or whoever it may be, I always just strong preference for meeting in person and obviously, now that’s all just done over video chat. But actually, even yesterday, I mean, I had my first virtual board meeting, you know, we’d been meeting in person for five years and then we did first one all online yesterday and one of the investors, you know, his kid was coming in and hugging him in the middle of it, but like it actually went really great. It was a lot more seamless than I thought it would be.

Meb: Yeah. I think any of the stigma associated with working from home really started to end when that guy was on TV and his daughter ran in and then the nanny, then the mom. I feel like once everyone’s been through it…although you see a lot of funny Zoom videos from teams where people seem to forget that they’re on-camera and half are walking around naked or doing something embarrassing. So people are gonna learn quick.

David: I saw one of those worst nightmare things where she was on a conference call with a bunch of her teammates and she walked into the bathroom, put the computer on the ground, I don’t think she knew her camera was on and I was like, “Oh, that’s my worst nightmare.”

Meb: Yeah. That’s funny. Oh, man. What’s been some of the challenging parts of this? Being an entrepreneur, we tell people, and this is in the investing world too, I say the biggest compliment you can give someone is just surviving. So the good news is you’re still here and then thriving is gravy. What have been some have been the biggest challenges and struggles?

David: I completely agree with you. And something I think about a lot is a founder that I really respect gave me this advice early on, which was survive long enough to get lucky. And that’s been kind of my mantra and wow, has that been accurate. Because like I said, we were pretty early in the space and there’s a graveyard of companies that were in our space that just didn’t make it. They ran out of money or they just couldn’t figure a way to keep the lights on. And so, we weathered those storms and luckily survived to this point where now the market, over the past year, the market’s just being exploding with like especially the Disney+s of the world, really being kind of the markers of that. So luckily, we’ve been sitting very pretty for the past good chunk of time, but I mean, historically, there were things even just around fundraising when this was not as hot of a space as it is now, we saw the opportunity and we were making the bet that the space would go to direction it’s had. Not everyone necessarily knows that, especially if you’re talking to venture funds, and I always say they just got pitched like Uber for cats and then you’re trying to convince them of this whole other market.

So there was some trials and tribulations earlier on with that. Like I said, luckily now, everyone’s well aware of this space and where it’s going, but we definitely have had to weather some storms in the earlier years.

Meb: What’s been the most memorable moment? Has there been one you look back, good or bad, where you’re just like, “Wow, that was seared in my brain as something I’ll never forget?”

David: Yeah, I mean I have one moment that I try to tell this story just because I think there’s a lot of lore and legend around the startup world of everything is great. You know, you hear about the successes and you don’t hear about any of the hardships or the realities of it, which every founder that I know, we’ve all weathered storms. I remember once, and this was several years ago, maybe three more, four years ago. It was after our angel round when we were looking to do our seed round. The market, A, had shifted a lot. Like when I first raised, Facebook was just setting the world on fire with ads and then Twitter thought they could do the same but then they weren’t heading kind of the same basically ad revenue that Facebook was and that caused a big souring amongst investors around consumer startups because it used to, at the time when I first raised, it was like, “Well, if you have an audience, you can make a ton of money.” And then when Twitter’s didn’t quite go as well, they thought, “Oh, maybe that’s not the case.”

So for our second round, there was a lot less interest around consumer investments, not to mention, again, we were early in the space. And so, I mean it was definitely one of those things where I just pitched everyone that would listen to me and we were definitely having a hard time with it and there was a point where I was looking at the bank account and was like, “Okay, there’s the finish line and we’re coming up on it pretty fast.” And I was, as you can imagine, pretty stressed about it. And I remember I went for a walk with my wife just at a park nearby and I just kinda told her, I was like, “I don’t know if we’re gonna make it. I think this might be it. I think this might be the last like month or two.” And she was really good where she was very level-headed about it and she said, “Okay. Well, let’s think through. Let’s look at that scenario. What does failure look like? How do our lives look after that?”

And talking it through, we realized, “Okay, we’ve made a plan.” We’re like, “Okay, if we don’t pull through this, we’re gonna go to Thailand for a couple of weeks. We’re gonna take a vacation, we’re gonna come back…” Like she worked at big tech companies. I’d obviously worked at big tech companies before and like, “Okay, worst-case scenario, we’re gonna go back to one of those companies, we’re gonna get a job there.” Everything was good and there was something about, you know, in your head, you can build these things up just to be like, “Well, my life is over if this startup fails,” like you get so tied to it. And I remember that walk so, so vividly because it was looking at failure and then in that walk I really, like, accepted failure and I was like, “Okay, I uncomfortable with that.” And then it was one of those classic stories where I think it was the next day we got a term sheet and then all of a sudden the term sheets started pouring in.

Meb: Yeah. Well, maybe when it succeeds you can go to Thailand too. Either way, you get to go to Thailand. I like that approach.

David: Still trying to get over there. Yeah.

Meb: Never really spent any time in that part of the world. I need to. What are you watching these days? You got any good recommendations, any favourites, any discoveries on Reelgood, whether it’s movies, shows, good things for three-year-olds?

David: I mean, “Peppa Pig” can’t go wrong, but…Well, it’s actually kind of interesting. I mean, I find this as a consumer and we’re trying to help all our really rapidly growing user base right now where I don’t think…I mean, depending on how long this COVID thing goes on for, new content’s not coming down the pipe right now. And I think that’s, you know, what we see a lot of viewership, is people watch the new stuff that comes out. But in a world where that might not happen for a while, all of a sudden, people need a little more help digging through the catalogues, existing catalogues to find good stuff to watch. But purely on my level, it’s like a six-episode documentary, “Cheer,” on Netflix. I don’t know if you’ve seen it. My wife started watching it.

Meb: Oh, I know what you’re talking about.

David: It’s phenomenal.

Meb: I know exactly.

David: I watched it twice now. Totally hooked on that show.

Meb: That’s funny.

David: And then obviously, the new “Westworld.” We’ve been so busy because juggling childcare as well as the business has been exploding right now, it’s just been eat, sleep, work, childcare, sleep. But I’m desperately trying to watch the new “Westworld.”

Meb: I hear you. That’s funny. I was like, “Cheer,” I don’t know what that is. I’m like, “Oh, that…” I think my wife watched the entire thing and like one night, so it’s in the cube.

David: Oh, it’s good, man. I’d never think about watching a documentary about cheerleading, but I think the person that made it is just a very, very good storyteller.

Meb: Yeah. She said intentional or not, the casting is exceptional. This has been a blast. Where do people, if they wanna track what you’re up to personally as well as Reelgood, where do they go? What do they do? How do they find you guys?

David: Yes. So we’re at Reelgood.com. Reelgood on the Google Play Store, and on their iPhones. We’re coming to more TVs, so keep updating that. If you sign up for an account on Reelgood, we’ll keep you updated on all those things, but those are the main ways. For myself, I’m very bad though, I don’t really do much social media, so kind of just following Reelgood and us in the news is probably the best way.

Meb: Cool, man. David, thanks so much for joining us today.

David: Of course. Thanks for having me on.

Meb: Podcast listeners, we’ll post show notes to today’s conversation at mebfaber.com/podcast. If you love the show, if you hate it, shoot us feedback@themebfabershow.com. We love to read the reviews. Please review us on iTunes and subscribe the show anywhere good podcasts are found. My current favourite is Breaker. Thanks for listening, friends, and good investing.