This is the tale of how a group of four founders morphed over the last five years into four distinct companies.
We were the only VC firm crazy enough in 2007 to invest in four kids (age ~22) with a really crazy business – promoting video broadcast 24 hours and 7 days a week by an individual, after whom the company was named: Justin.tv Inc. Indeed we were the only VC firm (joined by Draper Associates, Tim Draper’s eponymous personal investment vehicle) to re-invest in the company in 2008 in a second financing on the way to the company becoming profitable and self-sustaining. That company has now morphed into four separate companies, in every one of which Alsop Louie Partners is a shareholder and from every one of which we have or expect to make a profit.
Crazy is as crazy does, but we do love making money!
The founders of Justin.tv were, of course, Justin Kan along with Michael Seibel, Emmett Shear, and Kyle Vogt. The first three graduated from Yale and recruited the fourth out of MIT to join them when the company was formed.
The four founders went through the Y Combinator program in 2007, during which they set the culture of the company. That culture remains unique in my now-16 years of experience as a venture capitalist: The four co-founders each owned exactly the same number of shares and for the next four years did not make a single decision without gaining the approval of all four founders, including the ultimate decision to break the group into separate companies during 2011.
This is the tale of how this group of four founders has morphed over the last five years into four distinct companies.
Michael Seibel, CEO: His co-founders nominated Michael as the second CEO of Justin.tv after it became clear that Justin himself needed to focus on marketing the company. He ran the company for four years including leading the company, then with about 35 employees, to begin making a profit so that it no longer required outside financing to grow.
After four years, Michael persuaded his co-founders to support spinning out a new company based on a mobile app the company had developed called Socialcam. Michael became CEO of Socialcam Inc., recruited two engineers, Ammon Bartram and Guillaume Lucasano, and the three of them moved into a shared workspace called the Founders Den, where they spent nine months doing agile development on the app. After experiencing explosive growth (to a cumulative total of 16M downloads on the iPhone alone), the company was sold to AutodeskInc. ($ADSK) for $60M in August.
Justin Kan, President: Justin was the original founder of the company, recruited his co-founders, and raised the seed funding to start the company. He then nominated himself as — himself, the guy who wore a backpack with a laptop outfitted with a 24-hour supply of batteries and as many as three cell phones to provide an internet connection and a video camera attached to his hat. (Remember that the iPhone was introduced in 2007.) Justin, it turns out, is pretty much willing to do anything to advance a cause, particularly if it happens to be his company!
Justin is still a director of Twitch (see below), but left the company as an employee in January to create a new company, Exec Inc., of which he is now CEO. That company was part of the Y Combinator group that graduated in May (along with Socialcam), when it raised a seed round (including an investment from Alsop Louie Partners) and then closed a Series A financing in June.
Emmett Shear, VP Engineering: Emmett was the only one of the Yale graduates who actually had a degree in computer science and was trained to write code. (Justin and Kyle also did a lot of the programming as time went along.) It turned out that he’s really good and fast at coding, as well as hiring outstanding programmers and designing distributed systems and – playing video games.
That personal interest in video games has now lead Emmett to become the CEO of Twitch. Twitch started as a small part of Justin.tv’s broad mandate to be the most popular, lowest-cost user generated video platform. But under Emmett’s leadership it has now become larger than Justin.tv itself (see below) and has become the focus and branding of the original company. Twitch provides a platform for users to participate in video games as spectators, watching players play in real life tournaments, watching the player from an over-the-shoulder perspective of the game, or from inside the game itself from a virtual camera, for which the company provides a software development kit (SDK). The company is experiencing explosive growth and has become the worldwide leader in what is now known as e-sports. It has just closed on a $15M financing lead by Bessemer Venture Partners in which both Alsop Louie Partners and Draper Associates also participated.
Kyle Vogt, CTO: Kyle was recruited by the Yalies out of MIT to be the “hardware guy”, the one who could figure out how to make the laptop work with cellular networks and build the backend systems that would allow the video to be delivered on a scalable basis.
Being a “real” geek (since no one who graduates from Yale can be considered a real geek…), Kyle was the guy who figured out how to build Justin.tv into a scalable system that could distribute petabytes of real-time video to hundreds of millions of simultaneous users at a competitively significant cost. Kyle is now the general manager of the Justin.tv business inside Twitch.
Can you tell from the telling of this story that we think our original investment in this team of four kids was a really good idea, of which we are inordinately proud? Feel free to congratulate us, but the sweetest part is how smart it makes us look in hindsight.
Stewart Alsop authored this post.