– So today, we're doing an interview with Matt Munson, who
is the CEO of Twenty20. Matt, how's it going? – Good. Nice to be here with you, Eric. Thanks for the invite.
– Great office, man. So yeah, why don't you
tell us a little bit about who you are and what you do? – Sure, so I'm the
founding CEO of Twenty20, and we run an online marketplace for authentic real-world
stock photography. We source from a global community of about half a million photographers, really people like you and me, who got into photography because they got their first iPhone and realize that they could create really
incredible, authentic imagery. We take content like the type of content that we all add to places like Instagram and Snapchat, and create
a marketplace for it. So it's a way to make money
off your creative hobby. And then we have thousands of buyers that come and purchase subscriptions to license that content, and have built a pretty robust business doing exactly that.
– So this series is called Leveling Up, so I'm curious, how did you even come across this idea, first, and then we'll talk about some of the progressions you made in this business.
– Yeah, sure. So the first product that we launched that had any kind of traction behind it, we built in MuckerLab. It was a product called Instacanvas, and it allowed anyone
that was an Instagram user to sign up, get an online gallery to sell their photos, and then we would print and ship
them as canvas wall art.
So that was where we
started, and that was, that product kind of
took off pretty quickly, was one of the many times that we kind of ended up with our backs against the wall, and saved the business. So our thesis was that, people that are users of Instagram and other photography social networks, had this really massive social reach. And that, if we gave them kind of their own online business to sell their photos, that they would turn around and market that online gallery URL to their following on social media.
– [Eric] And there would
be a kind of viral effect. – Exactly. So that's where we tested, and that's where we only had eight weeks to kind of show something, right? For every 10 people that came in and saw the site, they would then sign up, re-market, and bring in more
than 10 the next time around. And so we went, I don't
remember the exact numbers, but we went from something like zero to 20 or 30 thousand users on this service in the first three or four weeks. – [Eric] Wow!
– Which is pretty rare. – What happens next? I mean you're constantly, you can call it pivoting, or leveling
up, but you're evolving. – Let's call it leveling up. Let's stay on brand. Once we knew that there was interest amongst this kind of core user base, we went and spent a lot of
time talking to those people, which I think is something that we hadn't done enough of, during the time that we were looking
at the education space, and that was a big lesson learned.
I can remember, we went up, and we did this conference up in Stanford, when we were working
in the education space, and it was only like six months, and we were up there for a
weekend for this conference. So when we started even
seeing this early traction with Instacanvas, the first thing we did is we put a request
into the signup flow for these people to talk to us, and we spent about a week doing almost nothing but just
interviewing all of these people, to really shape our understanding of who are they, what do they care about, what are the demographics like, why are they signing up, what
are they hoping will happen? And then we talked about
the hypothetical solution that we were thinking about building. How would it work, how should we price it, how would they expect to be paid? So that, before we actually
wrote a single line of code on the actual solution, we had almost like
soft-tested the whole thing with all of these customers.
And after we did that, we started to build out the actual kind of first version of the
product, and it was very light. In essence, all it
allowed you to do was come and select a photo, and then put in your payment information. And we found our first printing partner down in San Diego, who
would actually print, and ship, and do all the fulfillment, and that was where we started. So we built the entire first iteration of the business, and we went from probably zero to about
half a million in revenue, very unusual, fortuitous, early growth, in that initial four or five months, all off of a pretty bare-bones product, but one where we had some key insights into these users, these people that were kind of very passionate about mobile photography, and felt like this was an outlet
that really allowed them to, can we just say,
level up their hobby, and began to monetize something that was a passion to them.
– Massive key takeaway,
here, most people try to build something first, and then try to go sell it, but what I'm hearing is, you, basically the second time around, you asked people first, got a better idea of what the customers wanted,
and then you built it. – Yeah. Totally novel at the time, and
kind of obvious in hindsight. Lot of first-time entrepreneurs, you get so passionate about the idea that you have in your head, that you just wanna get people
on board and go build it, and there's this myth, I think, that entrepreneurs are
these stubborn visionaries.
And it's like the Steve Jobs myth of like, he just walked in the room, and he knew exactly the
vision of the iPhone, and he just pounded on his engineers until they built it perfectly. The reality is, one, I'm
no Steve Jobs, right? Most aren't, and two, even in his case, but certainly in the way that is a much higher percentage way of doing this, the idea is so malleable
in the early days, 'cause it doesn't exist,
that why not get customers almost talking about, and imagining what it would be like to use it. You get so much data back
with so much texture, and it saves you– – [Eric] So much time.
– So much time.
– Yeah, so go talk to your customers, or your prospective customers first before you waste hours, months, years where, hopefully you don't have to raise a lot of money before
you do something like that. Huge key takeaway. So it sounds like you have
something going there, why did you decide to then
change your business model again? What happened? – That business grew from
zero to a million in revenue. Very exciting, very exciting. For us, we'd been banging our heads against the wall for a year, and we ended up, so we ended up
raising a little more money.
We kind of thought we were
gonna have smooth sailing for awhile, but we didn't. We had about another six
months of steady growth, and then we went through,
about a year after that, where the company was pretty flatlined. We got to about a
million, which was enough to keep the burn rate pretty low, 'cause we only had a team of 10 or 12. – So flatline means business
is just kinda stuck. – Yeah, but at that time we
were printing physical products and shipping them, so the
margins weren't incredible. So even at a million in revenue, we were burning 60 or 70 thousand a month. So basically we hit a point, again, where we are running out of money.
This time we had a product that's working, but not growing fast enough. We can't really figure out how to grow it, and I would say, if the big lesson in the first life of the company and the education time, was talk to your users, and invalidate
your assumptions early. Big lesson. In the next iteration, you need to find, and nurture,
predictable growth engines. In essence, your job, as an entrepreneur, is not to build a product and hire people, which is what I've
certainly thought early on, but it's really to build an engine that will, in a predictable
way, grow, and generate cash. Which, if you talked to someone that ran a business 50 years ago, or a hundred years ago, that
is just so obvious, right? But in today's consumer
Internet mobile world, has become a little bit out of fashion, but hasn't gone away, so it's
a reality for every business. So what we realize is that
we had built a product that people loved, and they used it, and it solved a problem in a real way, but there wasn't a way to
predictably scale the business, either through marketing, because we weren't generating enough
cash off the new users that were coming into the system, or off viral growth, because in our model, the virality drove continued growth of the photographer base, but on the buyer side, it was pretty flat.
And we had some honest
conversations with our investors. There wasn't gonna be easy money to continue to fuel the
company in that iteration. We started, again, kind of brainstorming, now, not from zero, now we have something, back to the conversation of pivoting, and at this point it being, okay, we've got some great core
assets in the business. We built a brand that
photographers really trust, we've tapped into something that other people aren't aware of, which is that mobile has created this democratization of photography, this whole generation of people that are excited to sell their imagery. There's a marketing power behind those people because of their influence on social and mobile. Early on, when we were
first launching Instacanvas, we had brainstormed all
kinds of different ways that we might leverage this
photographer community, so much so, that in our terms of service, from day one, was like, we may sell your imagery to partners.
We may sell your imagery digitally. I would love to say that
we just were visionaries from the beginning, and we just knew that, one thing after another, how
we were gonna build this thing, and I think a lot of companies like to rewrite history in hindsight. The reality is we didn't know. – Hey, so I hope you enjoyed that video. So all you gotta do, now, let us know what you
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