”Be Inherently Excited and Driven by the Underlying Market”
Interview with Livepeer Co-Founder and CEO Doug Petkanics
Video platforms are everywhere nowadays, and that’s a trend that doesn’t seem to be going away anytime soon. Livepeer is hoping to build open video infrastructure for the world using blockchain and open-source technology. It’s a lofty and ambitious goal, but Livepeer has already started to make headway.
Livepeer co-founder Doug Petkanics joined startup coach Roland Siebelink on this week’s episode of the Midstage Startup Momentum Podcast to discuss the progress Livepeer has made some of the key lessons he’s learned across his three startups.
- The importance of making Livepeer fit into existing video workflows.
- The flywheel that exists at Livepeer between the commercial product and the engineering side of the company.
- Why founders need to be driven by their industry and not their idea.
- Why founders need to be cognizant of their strengths, as well as the bias they may have.
- How a small collection of advisors and an executive coach have helped Doug find clarity and make better decisions as a founder.
Roland Siebelink: Hello and welcome to the Silicon Valley Momentum Podcast. I am Roland Siebelink, and I am an advisor and coach for scale-ups around the world. And I’m so happy because today we have Doug Petkanics with us who is the CEO and founder of Livepeer, joining us from, I believe, New York city. Is that right, Doug?
Doug Petkanics: Yep. That’s right. Thanks for having me on, Roland. Excited to be here.
Roland Siebelink: Absolutely. Livepeer, tell our audience, what do you guys do, what target group do you have in mind, and what difference do you make for them in the world?
Doug Petkanics: Sure. Livepeer, our mission is to build the world’s open video infrastructure. I think in the last year, more than ever, people have seen how much of a role video streaming and online video plays in their lives. And it actually turns out that building video enabled applications is very, very expensive due to the high cost of compute infrastructure and delivery infrastructure.
Going back four years when we started, we actually saw an opportunity to bring the cost of this infrastructure down in order of magnitude, over 10 X. I’m happy to talk about how we can do that. We actually built on an open-source software and blockchain technology to create an open video infrastructure that anyone can access and build video streaming applications on. And the result is 10 times more affordable infrastructure. It lets developers build great streaming applications to create new video use cases that help creators, businesses, and consumers.
Roland Siebelink: That’s awesome. Your targets customers are really developers of apps of applications that need video streaming capability and want to do that more efficiently?
Doug Petkanics: Yep, absolutely right. Developers and entrepreneurs building video enabled applications.
Roland Siebelink: Excellent. Do you have a few examples that can illustrate for our audience what kind of impact you’ve been having? What kind of customers do you work with?
Doug Petkanics: Yeah, definitely. Our focus has been user-generated content and creator-driven content. These are the types of applications that let their users typically stream for free initially and let them spread those streams publicly to large audiences. A great example is a site called playDJ.TV. This is a streaming platform for DJs, and on every Friday night, they have 50 or 100 DJs streaming sets all around the world. An example of the impact we made is they actually released their initial product on traditional infrastructure, had a thousand DJs sign up in the first two weeks, and they actually had to pause it and shut it down because it was bankrupting them to have to pay video streaming infrastructure bills. We worked with them on our affordable infrastructure to get live, get back online, and now they’re a sustainable site that has grown and found its own effective model that wouldn’t have been possible with traditional platforms.
Roland Siebelink: Your real competitors are traditional cloud platforms, as I understand it. Now any business that is promising to cut costs by - let’s say a factor 10, as I think I heard you say - the second question will, of course, be “Can you guarantee the same quality?” How do you do that? What’s so special about Livepeer that you can actually undercut competitors by such an amount?
Doug Petkanics: Something really interesting has been happening in the world in the last 12 years, but really, in the last five or six years for these types of things to exist. And this is the advent of blockchain technology and the notion of being able to create open-source software and open-source protocols that actually embed economic incentives for people to take actions and contributing to the software and contributing hardware and bandwidth that forms these networks.
I know that’s a big abstract thing. But to make it concrete, for the first time, we’re able to create open-source video software and we’re able to incentivize people who have extra infrastructure lying around to run that software, to form a network that can be used for video streaming. And this gets really interesting. There actually happens to be millions of what are called GPU’s [graphical processing units] spread around the world and data centers that are mining cryptocurrencies. They happen to have video encoding and decoding chips. Through blockchain technology, we can create this open marketplace that routes payments to all of these hardware operators for contributing that compute to this video infrastructure.
And it’s that global harnessing of this ecosystem that can form a network that can be so cost effective because this hardware is already deployed, it’s plentiful, it’s already running in a paid-off working business model. Livepeer enables them to just earn additional revenue with no opportunity costs.
Of course, you needed a solid design and you need to have a belief that this token will be valuable because it will allow you to earn later. But it helps bootstrap the networks. You can actually get over the chicken and egg problem. Bootstrap the supply side. And that’s what we did in the first two years of Livepeer. We built this global supply of video infrastructure before we had to solve the problem with how do we onboard a lot of user content to the network. And that’s really been the focus in the last year is onboarding more and more demand.
Roland Siebelink: Yeah. That’s very good too. Many of the listeners are running a platform model of their own and the chicken and egg problem is, of course, always one that really bothers them. You’re saying you found a way to build one side first, but where it doesn’t really matter that much to them that the other side is not there yet because what you’re selling is more a vision and a belief of what could happen in the future?
Doug Petkanics: Correct. They all get to become essentially collective owners in this vision and this belief. Because these new blockchain-centric business models distribute the ownership of this whole protocol to those who are doing the work through the form of the crypto token.
Roland Siebelink: Excellent. Let’s look at the broader vision. What are the big trends that you’re capitalizing on in building this business? Of course, we talked a little bit about the infrastructure trends and the block chain. But what do you see when you look further ahead 10 years? How big do you see Livepeer becoming and what’s your total level marketing your, in your mind?
Doug Petkanics: Yeah. Good question. Again, big ambitious vision for the world’s open video infrastructure. That’s a 10-to-20-year vision before you could really encompass all the elements of the video stack. We started out with video focus, compute in the form of trans coding. This is a low single digit billions market. Our R&D has been expanding. Beyond just transcoding to AI based smart video tasks. As video is being streamed, you want AI to determine is this violent content? Is this adult content? Does it to be moderated? Interesting things like object recognition. Can we highlight the product that’s being sold in a social commerce streaming application? We’re adding those types of tasks and that expands the market.
And then the world’s open video infrastructure also needs open content delivery, which is a CDN. That’s a big element of the video stack. Video streaming industry is 70 billion. That encompasses many different areas. Video is the way that people consume content, entertain, learn, educate one another these days. It encompasses many areas. But the ultimate vision is Livepeer is the infrastructure that all of the video-enabled use cases on the Internet are built upon.
Roland Siebelink: Love to see the entrepreneurs with the big vision. That’s what we’re all looking for. Now the big vision also then needs to be broken down. What are you actually building today and how do you tell your team what their big priority is? How do you do that? And has that become more or less difficult as you are growing your team?
Doug Petkanics: Yeah, good question. I think the challenge for any early-stage startup is to find product-market fit. It’s great that we have this infrastructure that’s 10 X more cost-effective for transcoding than other infrastructures. Of course, we also have to mature the product and achieve viability numbers. One thing we did is we recognize we need to fit into existing video workflows as they exist today. We can’t expect everyone to just swap out everything in the video stack.
What we did is we said, “Well, we need to build the products and services that drive demand onto this network.”The open project lives at Livepeer.org. We said, “Let’s create Liveperer.com and let’s make that a SaaS service.” Let’s create a API for streaming video that looks just like all the other streaming video APIs out there and hides all the complexity of the blockchain and crypto payments and whatnot. And just lets uses sign up with a credit card, get an API key, and start building their application with some type of documentation. That’s really been a narrowing guiding focus for the team.
Roland Siebelink: Doug, how have you built up your team around that search for product-market fit, finding your initial go-to market? Is it mostly engineers or is it a split between engineers and marketing salespeople. I think you’re at 17 people right now, correct?
Doug Petkanics: Correct. A little bit of background. My co-founder Eric and I are both computer science, software engineers by background. And we’ve built two startups previous to Livepeer together. The origins of the project are very technical. I think in the early days were very focused on the product and engineering. Almost our entire team is product and engineering. And then one of the nice inflection points is that a year ago we recognized, “Okay, we’ll have to build out this commercial entity that goes and drives demand.” And we’re able to bring in some great commercial leadership from the video industry and good research and product insight from the video industry.
Really the core to finding product-market fit, I think, is this flywheel that moves between commercial product and engineering working together to very quickly get information we need to validate a thesis, bring those insights back to the product and engineering team, iterate quickly on the product, and then retest to see what the impact is. That’s the challenge, right? I hope we’re doing a good job. When you’re in the weeds of it, you always feel like we could be moving faster, we could help information flow quicker. And that’s the phase that we’re in and I think many startup founders find themselves in.
Roland Siebelink: Yes, absolutely. It’s also hard to gauge in that initial intuitive mode how much progress you’re really making because it really is about testing as many hypothesis as possible. Trying to get to hone in more on that target group until it suddenly hits. And then you don’t know what happened, right?
Doug Petkanics: One thing that’s interesting is - we talked about the blockchain side and the supply side and bootstrapping - we actually had a taste. We have fit on that side for years. There’s this protocol that incentivizes people to join and coordinate and ramp up the network. That thing hit and took off. We built a great community. We actually have thousands of people who are users slash owners slash running this infrastructure. It’s a whole different world, a whole different user base, a whole different profile, and whatnot. It’s almost like we’re running two separate businesses, if you will. One that is more mature and one that is earlier but has exciting signs of validation but we still have work to do.
Roland Siebelink: You did mention that you and your co-founder Eric did two startups before. What have been the learnings from that, that you can or cannot apply now to Livepeer?
Doug Petkanics: So many learnings over the years. One of the startups previously worked out well and had a good outcome and fit in a specific market. And one of them had a great product and a bunch of users that loved it, but really did not work out as a business. There’s lessons learned across the whole journeys of both. But I think I learned some specific lessons the hard way from the ones that didn’t work. The ones that are highly applicable had to do with the dangers and the risks of building on closed platforms.
We created this mobile browser and mobile publishing platform called Wild Card that was gonna be able to convert any website into a native mobile experience called a card. And we thought these cards would live in Twitter streams and Google search results and Pinterest pins and then Facebook. And it actually turns out - there was a couple of learnings here. It turns out that all of those things that we thought would happen that people would be consuming content inside of those platforms, happened. You share things in Twitter and Facebook, and they expand and they can actually consume them within those apps without the internet.
And we thought that all of those platforms would open up so that others would have a way to push content in and customize the experience and help merchants sell products within there. And it turns out they all built their own versions. None of them opened up. They control the experience. And so we were tied to this belief that there would be a more open Internet, like the way the Internet originally worked. Instead, we got of walled-off gardens. And it was like, “Man, that is a tough place to be, not controlling your own destiny.”
And then the other thing too is we rely on Apple and the app store for distribution of our applications. And we felt our app would be held in review for months or rejected without much reason or communication. And we wouldn’t be able to push an update or a feature or iterate or whatnot. And we were just like “Closed platforms, never again.” The Internet should be this open place where people can control their own destiny, have control over their own economics, build applications in a way where the rules won’t change out from under them. And that’s what drew us to blockchain technology.
Roland Siebelink: Very good. What do you feel you’ve learned about yourself in running those three startups now together with Eric? I’m not sure if you could speak for Eric as well, what he’s learned about himself. But let’s start with you.
Doug Petkanics: What have I learned about myself? I’ve certainly learned that I have a very idealistic, mission-driven view of what we’re doing and what I’ve always wanted to do. I can feel good about that. It can maybe me excited to continue working on this stuff every day. But I also face the realities of not everyone in the world and the ecosystem and business always shares the same mission-centric, idealistic view the world and what they’re working on. Money and investment and whatnot plays a big part of it.
One lesson I’ve learned from through my whole entrepreneurial journey is that - and I always give this advice to founders - is that you have to be inherently excited and driven by the underlying market that you’re entering, and not just the specific idea that you have. Because the specific idea or the specific product is going to change and iterate and be altered 10 different times on your journey. But you’re actually making a commitment to work within your specific market and industry, and solve problems for that industry.
And if you’re not inherently driven and motivated to make that specific impact, you’re going to pretty quickly get frustrated and challenged when the times are rough. And by the way, on the entrepreneurial journey, the times are rough most of the time, and then you get a moment of celebration. And then the times are tough and then a moment of celebration, and then you keep going. Make sure you’re excited about the market that you’re entering in before you commit and lean into any specific idea.
Roland Siebelink: The times when founders reach out to you, most often be the times when they’re feeling down, when they’re not quite sure. How do you help them overcome these down moments? How do you help them reconnect with their passion and find their persistence?
Doug Petkanics: A lot of times people are doing a lot better than maybe they give themselves credit for. This whole journey is really, really hard. But if you just take a step back and like, “I had an idea. I wanted to work on it. I built the first version. I’ve got other people to believe and join me on it. Maybe I was able to raise some capital around it. We have a product in market.” Each of these successes and accomplishments is a small miracle. Reminding people they’re not alone and everyone else trying to build something is going through this and has gone through this can provide some good perspective.
And remind people it’s fun. We’re working on what we chose to work on. A lot of people aren’t necessarily in such a fortunate position to be able to do that. Keeping the perspective and that positive attitude I think is good.
Roland Siebelink: Absolutely. What’s some advice that you have received as a founder that didn’t work for you at all?
Doug Petkanics: That’s a good question. I want to think of a specific example, but I can definitely think of a trend. I think it’s really important that a founder is aware of who they are and what their strengths are and what they’re bias towards. And then the reflection of that is what they want their company to be.
A lot of the times, it’s very easy for people to give advice that takes the form of how they think a company should operate, what may work for a different version of your company. But if it’s not native to who you are and the type of company that you are going to be excited, energized, and enthused to build, it’s never gonna work and it’s gonna make you frustrated and you’re going to feel like you’re banging your head against the wall.
Roland Siebelink: A particular problem with mentors, I think, who will typically give you advice based on a story they have from when they were running a completely separate business 10 years ago. It may not be all that applicable as you were saying. Who do you go to for advice when you may be feeling down or feel like you need to get out of a slump?
Doug Petkanics: I’ve been fortunate to develop a great network of people in the entrepreneurial ecosystem across the 12 years I’ve been building startups and whatnot. A lot of the people are people that I worked with previously at the different startups that we’ve worked on. The investor network of current and past investors has been really, really helpful because they typically have the perspective of not just my own little world, but actually their whole portfolio of experiences and whatnot.
We’ve never been huge on building big advisory boards. But there’s always been a couple of key advises that I lean on for questions, especially when it comes to something specific. Also, I work with an executive coach who’s helping me become a better leader.
Roland Siebelink: That’s a good point, actually. Many founders wonder if an executive coach is something they should invest in, if they could really afford it, and if it would provide a return on investment for them. What’s been your experience? It sounds like it’s positive.
Doug Petkanics: Yeah, for me, it’s been positive. The coach I work with, Jake Bornstein, focuses on helping me basically get to clarity on key decisions or clarity around certain situations or opportunities where often I have my own internal leaning or my own instinct about what I want to do or what I should do. But for some reason, without working with him, it may take longer. I may never arrive there on my own. He helps me see the picture and get to the clarity that I need. Just the time that saved and the impact that it makes, even just a few key events that occur throughout the life span of the company certainly create a definite positive return on investment in terms of the value that’s created within the business as a result.
Roland Siebelink: Awesome. I’d like to close with a new feature, which is a bit of a quick fire round. I give you two terms and you choose which one gels with you most. Is that okay? Are you open for that?
Doug Petkanics: Let’s do it.
Roland Siebelink: All right. First is one-on-ones or team meetings.
Doug Petkanics: One-on-ones.
Roland Siebelink: One-on-ones? And why? Can we get you to always give me one phrase, why?
Doug Petkanics: More honest and efficient.
Roland Siebelink: Okay. Love it. Focus or expansion?
Doug Petkanics: Focus. But I struggle with that.
Roland Siebelink: You struggle with that. Fair enough. Why?
Doug Petkanics: I think focus obviously helps narrow everyone to be running at a common goal and knowing mission and have the clarity that they need. Expansion is always appealing. I’m excited about the opportunities ahead of us.
Roland Siebelink: It sounds like it’s the heart for versus mind conflict, a little bit there. Fair enough. OKRs vs KPIs? Why?
Doug Petkanics: I think the ambitious and orienting nature of a specific objective helps everyone put their thinking hat on and identify how they can actually help the company accomplish that and then set the key results that maybe ended up looking a little bit like KPIs, in a sentence. But I actually think we’re too early, in many respects, to be establishing these years-long KPIs that we’re measuring.
Roland Siebelink: Okay. Fair enough. Maximum valuation or minimal dilution?
Doug Petkanics: Neither. The right partners.
Roland Siebelink: Excellent. I like that. You’re allowed to say neither, of course. I like that. That’s very good. Well, let’s do a simple one: Silicon Valley or Silicon Alley?
Doug Petkanics: Silicon Alley. I like New York. I like the energy. I like the connectedness of it. And of course, you can always spend time in and have connections with people in the Valley. But I think nothing beats New York for the dynamic nature and cross connections with other industries as well.
Roland Siebelink: Absolutely. I do miss visiting New York. I hope that soon we’ll be able to do that again and reactivate the network over there. I love it as the second ecosystem in the US as far as I’m concerned.
Awesome. What can listeners to this podcast potentially contribute to? What are some of the needs Livepeer has? And if people want to know more, where should they go and what should they download?
Doug Petkanics: First and foremost, if you have a vision to build a video application, check out livepeer.com. But the cool thing about Livepeer is that as this open network, this open protocols, this blockchain-coordinated ecosystem, anyone can actually participate in the network and in a way, be an owner in the network. This is all explained in a great primer at livepeer.org. There’s a link right at the top called primary that explains it in 10 minutes. But you can participate in this network. You can earn value for some of the fees that people pay to use the network. And it’s completely open, so anyone can get involved.
Roland Siebelink: Awesome. Very cool. Well, thank you so much, Doug Petkanics, the founder and CEO of Livepeer. It was a pleasure to have you on the show and to increase our contribution from the awesome New York-based founders.
Doug Petkanics: Thank you for having me. This was a lot of fun.
Roland Siebelink: Excellent. Thank you. Thank you, everyone
Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.