Sramana Mitra: Six years is a long time. How much money did you raise to get through six years with little revenue?
David Moricca: Over the years, probably $5 million or less. This was over six to eight years. It sounds crazy.
Sramana Mitra: I’m not surprised that you were able to survive on $6 million for six years. I’m surprised that you were able to raise $6 million given the fact that investors look for scalability. The whole point of venture capital financing is to go from zero to a $100 million in five years. Investors are notorious for pulling the plug the minute they see things not going in the right direction.
David Moricca: One of the most important things we did was never seek venture funding during those phases. All the capital was raised by high net-worth individuals. It was friends and family.
Sramana Mitra: Angels act as seeders into VCs. They have exactly the same mentality.
David Moricca: They’re making a bet on you. They’re not going to shut it down. We would have been shut down a long time ago if we took institutional capital. It’s one of the best parts of our story – being able to survive for six to eight years of pivoting three times.
Sramana Mitra: I’m not making a value judgement on your journey. I respect your journey and resilience. I’m trying to understand the logic. It was friends and family investment. It was not institutional investment.
David Moricca: When we figured this thing out, rather than restart the company, we kept those investors along the way. They’re looking at a very different return on investment. Five years ago, they had probably written off the investment. These were high net-worth individuals where this was not key for their retirement. These were people who were not thinking about this on a daily basis.
Sramana Mitra: Next pivot, what happens?
David Moricca: Through Mixify, we started getting into the world of video. We created an offshoot of Mixify. It’s a sub-product. We started streaming videos on some of these DJs. We started getting requests from venues in Argentina or Vietnam who didn’t have access to the big name DJs. They really wanted to get access to them. It ended up being the lynchpin or the way we got into video because we started streaming these DJ’s. To make it interactive, we needed to make it two-way, so the video is coming back from the venues.
This is 2015. The latency of video was about 10 seconds. You can’t be truly interactive. We knew we were onto something. Video took things to another level. We were starting to work with a number of brands leveraging the talent we had.
When Facebook Live launched, we started getting requests from some of those brands to take the same streamed sets they were doing and push them in to Facebook. Instead of trying to build your own walled garden or community, build the tools to help folks take adavantage of platforms. You’re essentially empowering them to reach their audience. Facebook Live was the catalyst for that, and is how we got into live streaming for social.
Sramana Mitra: So that is Socialive?
David Moricca: Yes. We took some of the capabilities we had built and turn it into a platform for social marketing teams who wanted to take advantage of Facebook Live but wanted the levels of contol and production value that they couldn’t natively in Facebook. That worked immediately. We started getting request for demos immediately from Fortune-level customers. That model worked. We bulit from there.
Sramana Mitra: How did they find you?
David Moricca: We had one sales rep at that time. We booked 12 or 15 demos in the first week or two. These were meaningful brands. The product already in a pretty good state. Hooking into Facebook Live was the easy part. At that time, Facebook was the place for advertising and content.