Patrick Lee, Former CEO & Co-Founder - Rotten Tomatoes

Patrick Lee, Serial Entrepreneur, Rotten Tomatoes, Co-Founder, CEO, Rotten Tomatoes, I met Chuck Barbecue to speak about focus. Basically, this is something that I realized after doing a number of my different startups. The ones that worked, my design firm, Rotten Tomatoes, we were focused. The ones that didn't work, we weren't focused. And it's something I think that all first-time or even multi-time entrepreneurs, early-stage startups, or people who are thinking about doing a startup all need to hear. And essentially, the idea is that everyone tries to do too much. And when they focus and they try and do less and be more focused as far as their feature, doing one category, one market, they tend to do better. And when I think about my friends who are tech founders or any consumer-based company that I've ever seen, they all started out focused. Yeah, so with Rotten Tomatoes, we generally got traffic through two ways. The first is search engine optimization. So it wasn't that people were searching for Rotten Tomatoes. They were searching for a director, a movie, or an actor, usually movies. The second was through word of mouth. And it was just the product was something that was useful for people, so they told other people about it. And it wasn't just word of mouth in person. It was folks writing articles, being in the press, being in the media. And then there was other things like that. Eventually, the studios themselves would promote the fact that they had a high score. There was a certified Fresh logo that we had. And it was basically a movie would have to get 75% or above to get that score. And when studios managed to get that for their movie, they would actually add that to the poster or the DVD or the trailer to promote that fact. And then that actually ended up giving more awareness for Rotten Tomatoes. There's a number of different ways to gain audience. SEO is one of them. But that primarily works for websites. I don't think it works as well for apps. Typically for apps, you can optimize for the app store, but it's not the same as like a Rotten Tomatoes where we literally have hundreds of thousands or millions even of directors, actors, and movies. So each one is a different thing. So I think that's one is a chance for someone to find our content and come over to our site. Whereas for an app, I think it's primarily they're finding that one app. So there's other channels that folks can use these days. I mean, one is obviously paid acquisition. And that's a great channel of growth, assuming you're able to make money from the users. And if you are, then you can spend up to the amount you make from those users to acquire other users. So this is something that I think is really important. It's not news to me yet. Netflix did very well back in the day when we were running Rotten Tomatoes. Netflix was one of the biggest advertisers on the internet. And back then, they were shipping DVDs to people on a monthly subscription basis. And because they knew they could make X number of dollars from the lifetime value of those users, they could spend up to that much acquiring users and it became a huge engine of growth for them. So they were, because they were actually making a lot of money from users, they're buying ads everywhere. And so that's a channel that works if you generate revenue from users directly. It doesn't work if you're trying to do advertising. The other method that works pretty well is a viral loop. So some products out there, especially things like messenger apps, people will be willing to share their contact list, and those products will essentially blast other users. To promote the product or website. So a lot of the social networks did that early on. Things like Facebook and MySpace, the instant messaging apps, they use that to kind of help spread. Even things like YouTube. When they first started, one of the ways they grew was that people would embed the videos in their social networks. And because they were essentially sharing these videos, other people became aware of YouTube and it drove traffic over to YouTube. So I think those are three of the top. That I can think of. I don't know that it's more popular. I think text content and photo content like Instagram are still quite popular. But videos are something that works a lot better than it did in the old days because bandwidth is a lot higher. So people are able to stream the videos quickly and at high quality. And so I think one thing that is good now is it's just a lot more convenient to watch videos. Anywhere. You know, whenever you want to see them versus the old days of going to a theater or renting a DVD or watching something on TV, you know, based on a schedule. So now with Netflix, you know, you can watch anything, anytime. You can binge as many shows as you want. Things like YouTube and Twitch and all the stuff where there's a streaming video and it's just, it's user generated. So there's just a much wider variety of content that you get access to versus the old days. I think these are all things that kind of help lead to the popularity of video nowadays. And a lot of it is going to be based on the content. And the thing with, I think, variety in videos is it's not necessarily something that's super easy to control. It's kind of hard to tell what is going to go viral. You know, you can probably study it. And I think there are things that tend to go viral more easily. The things that are very popular on YouTube, I think, are the things that are going to go viral. Like around comedy, around music, a lot of times. Some combination of those can even work. You know, you think of like Gangnam Style is both funny and music. But I don't know if it's necessarily something that's easily repeatable. There's probably groups that are better at doing it than others. I would say one way that would work potentially is working with influencers or channels that already have a lot of reach. So that when you do make something, potentially like working with those influencers or channels, you already get some distribution. And it has a better chance of kind of getting out there. Something, you know, make things that make sense for people to share or make them want to share. It could definitely help in terms of increasing variety. The one thing that I've always personally liked, I don't know if this is a new trend. I mean, it's something that I've seen over the last decade or so, is just the combination of, of user generated content with either search engine optimization and or virality. So the content sites out there where the users are actually creating the content and that content can be accessed by search engines and or shared are, those are like the biggest sites you can think of on the internet these days. You know, things like Reddit and YouTube and Instagram and Twitter, all these things. If you get that combination, it's the best. With Rotten Tomatoes, we aggregated reviews. So we did have user generated stuff later, but not to the same extent as some of these other sites. And when, if you can actually pair user generated content with SEO and virality, and you actually get users who want to make that content, and it's something that other users are looking for, that's a very strong combination. I don't think it's inherent to video. I think generally when you are creating content, you want to share it. Whether it's like Twitter, Instagram, YouTube, Twitch, whatever. If you have no followers, like what's the point of tweeting or posting something on Instagram, right? So generally you're going to want to share it. And I think that kind of enhances the virality. I would say for something like video, generally the bar is a little bit higher than taking a photo or writing a tweet. So if I was trying to make something around that, I would really think about how to make that as easy as possible.