I'm Brendan Schwartz, Co-Founder and CTO of Wistia. AMA 💞

:wave: I’m Brendan from Wistia! We’re a video platform for businesses that helps them grow and build their brands.

We’ve been around 13 years, our team is around 115 people, and we believe in sustainable growth and operating profitably. In 2017, my co-founder and I turned down an offer to sell the business and raised debt to buyout investors and employees and convert to a profit sharing model.

Ask me about brand affinity, profitability vs. growth, taking creative risks, long-term thinking, building products, business philosophy, or anything else that’s on your mind.

Also, with Wistia being 13 years old, it means we were around for the last recession. We raised our first angel round in early 2008 (when things were good) and our second one in 2010 (when the economy wasn’t in great shape). Happy to talk about the challenges of being a small, unprofitable company during a recession and how we navigated them.

I’ll be back here this Thursday, April 16 at 10am ET to answer all your questions. Looking forward to it!

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Note: This AMA is closed for new questions, but you can check out the existing conversations below.

In this AMA, we had Brendan Schwartz — the co-founder and CTO of Wistia, and has been running the show for over a decade now, with his co-founder Chris Savage — share his thoughtful insights on building product teams that take on giants (read: YouTube), pricing backward (they released a freemium plan eight years into the business), buying their investors back to build on their own terms, why ‘disagree and commit’ can be bad advice, and more. Dive in!

Brendan’s brain pickings: :brain:

Here are some curated links to help you know Brendan’s journeys and thought process a little better.

On making values-driven investments and bets:

“Our best investments have been the ones whose impact couldn’t be measured in the short term and perhaps may never be fully quantified. We make investments that align with our values, are good for our customers, and are good for us — clearly modeled return-on-investment-not-required. In the analytical world of business, this approach may sound wild, but it’s how we’re building Wistia and we’re darn proud of it.”
Source: How an Offer to Sell Wistia Inspired Us to Take On $17M in Debt

On setting inspirational but realistic goals:

“Setting intentionally out-of-reach goals reflects a cynical way of thinking about human nature and motivation. It’s driven by a belief that people are lazy, and by default won’t be ambitious or creative or try to do more than they think is possible. Goals, therefore, become a way to correct for that laziness. This way, even if people fail, their output can still be decent. Sadly, this way of thinking has become accepted as conventional wisdom. This doesn’t reflect our lived experience at Wistia in the slightest. Since moving away from setting overly ambitious goals, we’ve seen people accomplish more and do it in more creative ways. This is the tragic paradox of modern day goal-setting — companies that set hyper-aggressive goals think they need to in order to make people more smart, creative, and ambitious. But the truth is, those folks will be smart, creative and ambitious by default.”
Source: Why Setting Ambitious Goals Backfires

On building a strong co-founder relationship:

“In our time running Wistia, the idea that you should “disagree and commit” to solve conflicts is not one that Chris and I have found useful… Doing great work, for us, is about passion. It’s about two people with deep buy-in on what they’re doing, not one person with an idea and the other person helping execute on it. For that reason, we avoid committing to something we don’t both fully agree on — and do whatever we can to find that agreement.”
Source: How to Build a Co-Founder Partnership That Can Last (Decades)

On the power of context and knowing your product:

“I’m a firm believer that the best products are built by people with the most context. If you truly understand the vision, the market, your customers, all aspects of design and engineering, and the business model and finances, you will create an amazing product… Aa result, if you’re on the engineering team at Wistia, you’re talking to customers, handling support tickets, optimizing our marketing funnel, and helping solve financial challenges in addition to building product and infrastructure.”
Source: An Inside Look with Codeship: Brendan Schwartz, CTO of Wistia

Stay in touch: :sunny:

You can follow Brendan to stay updated with his discoveries and insights:

  1. Brendan on Twitter
  2. Brendan on LinkedIn

Thanks for taking the time to do this, Brendan! :slightly_smiling_face:

I found your essay on the collective notions of goal-setting, particularly interesting. You’re absolutely right in stating that there’s something cynical in assuming that people, in general, are lazy, and thus need over-ambitious goals to be driven. Such an important thought to consider. I’m curious to learn more on how you think about this:

— For one, how do you define a new goal? If a new goal is a reachable improvement over past accomplishments, what factors (quality of learning? better processes?) are considered?
— How do you ensure that a metric doesn’t become an end in itself and accounts for actual betterment?

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Thanks for taking the time to do this Brendan. Quickly wanted to know a couple of things.

  • What worked for you in the product-led company?

  • When did you move from a Product led company to a sales-driven model

  • Your secret sauce as to how you survived the recession

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Hey Brendan,

Thanks for doing this session!

A substantial part of decisions that lie ahead of founders, tend to come from the tension between short-term and long-term goals. Wistia, unlike most companies, has constantly placed great bets on the latter. And what you wrote sums up where that comes from:

“Our best investments have been the ones whose impact couldn’t be measured in the short term and perhaps may never be fully quantified. We make investments that align with our values, are good for our customers, and are good for us — clearly modeled return-on-investment-not-required. In the analytical world of business, this approach may sound wild, but it’s how we’re building Wistia and we’re darn proud of it.”

What would be helpful to hear is how this plays out/has played out with a specific long-term project (say that Webby-winning, fascinating documentary you had produced :)).

Looking back, how differently were you thinking about quantifying it and what’s your assessment of the impact it has had, today?

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I have read about the various pivots the business did to find Product-Market Fit. Atleast as an outsider for some of the intermediate ideas, later businesses were built e.g. sharing videos privately etc. Was each pivot a discrete step or you saw it as a continuum in your product thinking?
What is your advise for iterating towards PMF?

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Hi Brendan,

Thanks for doing this AMA :slightly_smiling_face:

As an early stage startup founder, would love to learn more on these things:

  1. How did you discover who’ll be your first few customers? How did you get them to talk to you given that you may have been very well in between the recession?
  2. Your key learnings from your journey from the first version of your product to the PMF version. If you were to do it all over again, what is one mistake you wouldn’t repeat?
  3. How do you differentiate in a crowded market today? What was the state of the market when you entered,back in 2008? In case you guys were the early movers, how did you shape up the market?

Thanks,
Anushree

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Hi Brendan,

Thanks for doing this AMA,

How did you manage to convince investors with your belief in best investments whose impact can never be quantified or the model of return-on-investment-not-required?. Because this goes against the purpose of investor’s business (Which i believe revolves around ROI). Curious to know how were you able to sell your point across. The tools/techniques/models/strategy that you used will help us a lot in our journey.

Looking forward!

Regards,
@Logesh @Deepika
Datsy.in

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I’ve got another one, Brendan!

With the unconventional path that Wistia took to go from being a venture-backed company to paying back investors, what has changed in the thinking process? If you were to do it all over again, what filters would you apply before making a decision to raise capital or not to raise capital?

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Hi Brendan

thanks so much for taking the time to do this!

Loved reading your approach to goal setting and also the importance of context in building great products.

Two questions:

  1. The Wistia approach to the goal setting process across the company… Do you follow a top down goal that cascades to the rest of the org, or do you follow a bottom up goal setting process that may not necessarily be tightly aligned to the company goals?

  2. Tell us about some of the things that Wistia does - so that employees have the greatest amount of context possible. Beyond the usual townhalls etc.

thanks!

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Hi Brendan,

Thanks for doing this AMA with us. It was very interesting to read your blogs on ambitious goals, taking on debt, and co-founder partnerships. Very clearly, you have a long term perspective and its great to see your success over such a long time. I am sure you will do very well for a long time to come.

Interestingly enough, my co-founder (my wife as well) and I run our business together. Our business is now in its 16th year and we have pivoted from being a services business to a product led business today in the document collaboration space focused on publishing. I have the following observations and questions for you:

  1. Growth: For the longest time, we have been very satisfied with running a profitable business and not aiming high enough. I guess in our case, our bar was set too low. So we have set some ambitious goals now to allow ourselves to dream as we certainly believe we can achieve it. I guess my question is how do you achieve the right balance between desire and irrationality?
  2. Competing with the big guys: You compete with some very large companies. We would like to as well as we develop further in areas outside publishing. How do you instil the necessary belief in your teams that they can not only compete with but outperform the big guys?
  3. Co-founder: I completely agree with the point you made in your blog about friendship being a higher priority than the business. In our case, our relationship and our kids certainly comes ahead of the business. We have been guilty in the past of a divide and conquer strategy but after several painful missteps have realized that we are better collaborating on all aspects of the business. She did not join the business till a few years ago and it took me a while to get adjusted to the new reality :slight_smile: As we get set for higher growth, what are some of the pitfalls to watch out for?

Thanks again for your insight and sharing.
Best regards
Ravi

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Hi Rajaraman, thanks for having me here and thanks for the question!

The way we’ve done goal setting for the past few years is that our senior management team sets annual goals for company in December (then teams set quarterly goals based off of these). In the past several iterations of this, the types of goals stayed the same. We have a goal for the product, a goal for the brand, a goal related to the team, and a financial goal. Each of these have a few key results. For the most part, this philosophy is put into action by setting conservative numbers for these key results. For example, we’ve had a goal around EBITDA for the last few years. When we set it, we make sure it’s something we’ll be happy with but it’s never a stretch, it’s something we’re confident we will hit even if we don’t hit our other goals for the year.

One of the biggest mistakes we’ve made (and we made it a number of times) is just thinking about each year on its own. In SaaS especially, you build on past success and aren’t starting with zero sales each time. That’s great. On the flip side, it’s often really hard to change the trajectory dramatically over a short period of time. So when we model things and set goals, we try to extrapolate based on the last year or two and set those are the goals then think about creative ways we can beat it.

There are plenty of cases where we set goals and have no historical data. That’s fine too, we usually just caveat it to the team. This year we have a goal of number of customers we’d like for a new product/feature set. It’s really hard to model that. We told the team this was our best guess and we’ll take a look halfway through the year to adjust.

As for making sure the metric doesn’t become an end in and of itself, this hasn’t really been a major problem in my experience at Wistia which is part of the reason my advice around this conservative goal setting is caveated with a big “this is what works for us”. We tend to hire creative folks who are driven a lot by the intangibles. With that said, when setting the key results for a goal, we do often set multiple metrics rather than a single one. For example, last year for Soapbox, we had three key results: increase NPS, increase weekly active users, and an MRR goal.

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Hi Bhavya! Thanks for the questions.

We haven’t moved to a sales-driven model :grin:. We operate as a product-led company and that’s not something we’re planning to change. We have built out a sales team in the last few years, and having a sales team is not incompatible with being product-led in my experience. A big reason we decided to invest in sales is because prospective customers were having a really bad experience. There were occasions where folks wanted to talk to us about the product before trying it or they tried it but still had questions. We used to only have a support team and they often weren’t well equipped to help and they certainly didn’t want to get on the phone with people. The other thing that’s been super valuable for us is that our sales team is on the phone with prospective buyers all day and as a result has really good insights about what to build in the product and how to message and position the product.

I’m not sure we had one secret for surviving the recession and in building our business there was certainly a lot of luck and good fortune, but here’s what I know helped us:

  • Keep burn low — this is an obvious one. We were incredibly thrifty from the start. It takes time to build a product and get fit with the market. You want to give yourself as much time to experiment and try things.
  • Stay super close to customers — in 2008 we only have a handful of customers. We talked to them weekly and made sure we knew what they wanted and were happy. Many of these conversations led to core innovations in our product that powered the business for years and years (e.g. video heatmaps came out of a conversation with an early customer that was doing sales training and asked us how she could know if people really watched the videos).
  • Do things that don’t scale — in good times it’s easy to spend a lot of thought and energy preparing for success and you’re often asking the question “will this scale?”. I’d argue you should never ask that question in an early stage startup, but you definitely shouldn’t ask it at a startup during a recession. Before we had video embedding in our product, Ben (our first teammate) would generate embed codes for videos by hand and email them to customers. We weren’t sure if we should add it to the product, but we wanted to make customers happy and see if it was something they’d use. Needless to say, it was a hit, and we later figured out a way to scale that once the demand was there.
  • Recognize your advantages — many of the things about your startup that are valuable to customers are even more valuable during a recession:
    • Better support and help — your customers talk direct to founders/team building the product.
    • Flexible — you can solve adjacent problems for customers. You can be flexible while bigger companies cannot.
    • Likely cheaper that more established competitors because you have lower overhead. But DO NOT under charge! Your prices are probably too low.
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Hey Brendan,

My co-founder and I have recently parted ways because we weren’t able to communicate well on some problems around our company. And because of this we’ve had to stop the development as well. In light of these events, I would appreciate some thoughts on how should we think about taking care of customers who’re already using our software, a product that will sooner or later die unless my co-founder and I make a decision otherwise.

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Hi Krish — thanks for having me here!

Long-term company thinking is one of our four company values, so I’m proud to hear that’s evident from the outside looking in and that we’re living up to it.

We do point to One Ten One Hundred (https://wistia.com/series/one-ten-one-hundred) internally as an example of this. The idea for it came up somewhat organically after Chris, my co-founder interviewed Adam from Sandwich Video on stage at a user conference that we did that year. After the interview folks on our creative team (Dan and Chris, who are in OTOH) were talking with Adam about how fun it would be to work together and they were throwing around all kinds of ideas. They hit on this idea of making three commercials for Soapbox each with different budgets.

When Chris and I were thinking about this project and investment, we tried to imagine all the ways it could be successful:

  • We’d have an amazing ad campaign for Soapbox
  • The OTOH documentary would be a hit with our core audience and build brand affinity
  • Our creative team would level up because they’re working on a really ambitious project with a team we really admire.
  • Morale boost for the whole team. This type of work is really motivating to the whole company because it’s creative and fun.
  • If part of this flopped, we could write about what went wrong and that would likely be a really interesting story to our audience.

We looked at this list and tried to estimate how confident we were in each. Because there were so many way for this to succeed, even if only one or two worked, we would view the project as a success. For instance, if the ads weren’t successful but our core audience liked the documentary, that would be a success (this is basically what happened).

We try to use this line of thinking when evaluating projects that don’t have specific metrics attached.

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Looking back it’s easy and tempting to remember these as eureka moments, but it was very much a continuum for us. There were definitely cases where we got pretty immediate feedback that an idea was working (e.g. adding the ability to publicly share videos vs purely being for private sharing). But even in that example, for us, it wasn’t “let’s pivot to public video sharing”. We just started giving a few people video embeds. They like it, we did more of it, then decided to add it to the project. And at some point after it was working, we realized we have shifted directions.

I think getting to product market fit isn’t a linear process, and it can take a lot longer than most people would have you believe. We started Wistia in 2006 and it wasn’t until 2009 or 2010 that things started to connect with the market. Take your time and iterate.

Great question! Thanks for asking!

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Hey Brendan,

Thanks for doing this AMA! :slight_smile:

  1. How did you arrive at your pricing structure? I’m intrigued by its simplicity. Why freemium and not free trial even when there is a fixed infrastructure (hosting) cost for every video uploaded to Wistia?

  2. Your customers on the Free plan will have a need to upgrade to Pro ONLY if they create more than 3 videos per month. How do you enable your customers to create more videos every month?

Take care, stay safe!

Cheers,
Naren

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Hi Anushree! Thanks for the questions.

  1. For us, it was all through networking and talking to our first customers in person or over the phone. In our first year of business we built a portfolio website for artists that was ultimately a failure. We took the tech and product learnings from that and built a prototype of a private video sharing service for a friend’s company needed to share videos of surgeries. From there, we started talking to some folks from the video production world who my co-founder had worked with and they became our second and third customers. One thing that wasn’t obvious to us until much later was that we thought being a small company with no customers was something we needed to hide, but it turns out that there are many people in bigger companies who get personal satisfaction from being a really early customer of a startup and helping shape the product. We met a number of early customers at startup events. Many of these folks were working on a side project or startup but worked during the day at a big company. One of our earliest customers was someone we met like this. He ran training at a huge telecom and took a shot on us mostly because it was fun for him :grin:
  2. When we built our portfolio website for artists, we were very naive and had a “if you build it, they will come” attitude. We didn’t understand the power of marketing or building an audience before you have a product. I would start building an audience and doing marketing from day 1.
  3. I think brand is always the right answer about how to stand out in a crowded market. I don’t mean that you need a fancy logo and polished marketing. But you need to stand for something and build an audience who cares about that thing. It doesn’t have to be directly what your product does. We found our brand voice and audience when we started making DIY video content that connected with marketers who wanted to learn how to make videos.
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I think it’s a hard thing to do, haha! This was part of our motivation in raising debt to buy out our investors. We wanted to be able to make those decisions and not have to explain them to folks outside of Wistia.

More practically speaking, it was once we were profitable that we started being able to take those creative risks. Because the core business was strong, investors were happy and didn’t scrutinize investments in content marketing and more creative projects.

If those types of creative risks are what motivates you, I also think it’s possible to find investors who understand that and value it to who will cheer you on when you do it. There are probably a small set of institutional investors in that camp, but I’d bet there are many more angels.

Additionally, there are so many new types of funding available now. I’d take a look at what Bryce is doing at Indie.vc (https://www.indie.vc/) if you haven’t already. That model of funding is designed for folks who really want to grow and run independent businesses.

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Even when we looked like a traditional venture-backed company, our thinking was very much of a long-term independent business, so I’m not sure our thinking process has changed all that much. If anything, it feels like our company’s structure more accurately matches our thinking and ambitions now. It feels very freeing.

I wish things like Indie.vc existed when we were starting out. Early capital brought new, experienced team members and a great network, and was a big part of what made us successful. I love funding options that have more optionality baked in so it’s not this sell or bust model.

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