The JibJab Story. Maybe The Most Inspiring Mixergy Interview Ever! – With Gregg Spiridellis

Posted on Jul 29, 2009 - 10:20 AM PST

This is the story of two brothers who took on the established entertainment industry, succeeded for a while — and then almost went out of business when the dot com market crashed. And it’s the story of how they rebuilt their business and became one of the most celebrated digital entertainment studios.

It’s the story of JibJab. Co-founder Gregg Spiridellis came to Mixergy to tell you how he and his brother Evan built their company.

If you’re running an internet company, this story will inspire you AND teach you how to hustle for every piece of business.

The FULL program


Video excerpts

About Gregg Spiridellis of JibJab

Gregg SpiridellisJibJab

Gregg Spiridellis is the co-founder and CEO of JibJab, a digital entertainment studio. Before launching JibJab, Gregg was an MBA student at the Wharton School of Business, and Evan, his brother and co-founder, was an accomplished independent animator creating festival-winning short films.

Edited excerpts From The JibJab Story

When production costs dropped, they spotted an opportunity

The vision for JibJab was to take advantage of the fact that production costs were falling significantly and distribution was opening up to build a brand.

My brother, who is the creative and visual force behind JibJab, was out of Parsons Art School. He and his friends were using off-the-shelf technology and software to produce content that, just five years earlier, would have cost big studios hundreds of thousands, if not millions of dollars to create.

At the time, I was doing my MBA. I went to Wharton, and was looking at this thinking, “Production costs are falling, distribution is opening. Here’s an opportunity for us to build a new kind of media company.” That was the big idea back in 1999.

So they jumped in

I think it was very much based on a gut instinct that there was a once in a lifetime opportunity to be a part of a new medium, and even if we had no visibility into very specifically how things were going to unfold, there was no doubt that it was an incredibly powerful medium, and that people who were early could aggregate an audience, build a brand, and carve out an identity for themselves in the medium.

So, it was a big, big leap of faith. It was a lot of fun, and it was just something that we dove into and said, “We’re just going to figure this out as we go along.”

They raised a little money and hustled to earn the rest

We raised $50,000 from friends and family to turn the lights on.  And then the model was “Let’s go do a project with the Sci-Fi Channel,” or “Lets license something to Atom Films.” And when a check came in we said, “Lets make sure we can pay the rent for three more months and then reinvest the rest of it in more original content to keep building our audience and keep building our brand.”

Consulting work helped bring in revenue in the early days

So we did something with Sony.  We did a campaign with Kraft.  We did work with Anheuser Busch and we did a lot of sponsored entertainment work.  The problem with that business is it’s completely not scalable, but it was great to pay the bills.

Consulting is a wonderful thing when you can actually generate the capital you need to pursue your big idea based on your service business, but at some point  you want to get out of if you want to get into something scalable.

You need to be disciplined.  You need to turn down jobs.  You need to say, “I could really use that $50,000 gig, but if we do that, we’re going to be locked down for three months and we’re not going to be able to do these other projects.” So it does require discipline and passing on opportunities.  Knowing what to pass on is a really important skill that we developed.

But most of their money came from licensing

Our business was originally licensing our original programming that we would do exclusive deals on with third party distributers like Atom Films.  They’d pay us, they’d sell the ads, we’d reinvest in more programming.  Now YouTube killed the exclusive licensing business on the web, but that’s okay, we thought of a better model.

[Andrew's note: listen to the section on ecards to learn how their model works.]

Their audience grew because they made sharing easy

What we did seems obvious and simple today. We had an above the fold “email to a friend” form. On every piece of content, we made sure there was an exposed tool set for users to easily share it with all of their friends. And we made sure there was a persistent section on our pages that said, “Like this?  Find out when we release something new.  Enter your email.”  Very simple.

Business was good, and then the dotcom crash wiped their customers

Oh it crushed us.

In 2001, all of our clients went away. We had to go from 13 people down to just the two of us. We packed everything in a U-Haul and drove out to California with no idea where we were going to land. Just kind of looking for new pastures and a place — a shelter through the storm — where we could wait for the online entertainment business to come back.

But they stuck with it

We just loved it. We were passionate about it.

And they had a list

We had over 100,000 people on our newsletter by the time that the world fell apart. So people cared.

Psychologically when you’re releasing things, and you’re seeing results, and you’re seeing engagement from your audience, I think that sustains and helps concerns like, “Does anyone care? Am I doing this for a reason?”

We released something and 100,000 people wanted to know about it, and more people came to see it. So we never felt unloved, I don’t think, during those years.

Then they had a hit with “This Land” and everything changed

When we created This Land we knew we had something special.

But because we had been doing it almost five years, we never in a million years knew how special it was. I mean, we thought, “Oh, this is hands-down the best thing we’ve ever produced,” but we had no idea it would get us on the Tonight Show and the Today Show, or that Peter Jennings would name us People of the Year in 2004. I mean, the scope of the success from that one video was way beyond anything we could have imagined, because we had been doing it so long, and never seen anything remotely close to that.

They capitalized on the hit

We went back to what we knew worked. So we leveraged the success of This Land to close exclusive licensing deals. We did a deal with Yahoo, that payed what was for the two of us a significant amount of money, to commit to two more pieces to be distributed on Yahoo.

The second thing we did was make sure we got the brand out there, in a way unrelated to the political content that was on the web. So we were invited to do all the trailers at the Sundance Film Festival, the ones that play before every movie.

Then they discovered a new revenue model

I said, “What is our core competence in creative programming? How do we leverage that to actually make money? I wonder what the greetings business looks like online.”

I opened up American Greetings’s 10k, they’re a public company and they broke revenue from out their American Greetings Interactive segment, and it was an $80 million business. And I said, “Holy cow – look at this!” I went to by brother and said, “look at this! We can do this!”

He said, “I’m not making ecards, Gregg.”

But we decided these don’t have to be bad. Yes, ecards are terrible. They have this awful kind of quality connotation. But that’s an opportunity. We can actually redefine what this programming format is and go after this premium business model because, unlike the political videos we did, there is a big distinction with ecards and why people were paying subscription fees.

I’m not going to pay to watch a video that’s going to make me laugh. That’s consumption. I demand free consumption on the web. That’s the way everyone is. However, if you’re giving people content that they can use that’s got utility that they can use to express themselves in their lives – they’ll pay for that.

That was the kind of, the “aha” moment with greetings. They’re not going to pay to watch a two minute short, but if they want to wish a friend a happy birthday, people are paying and they will pay if it’s going to be quality and it’s going to reflect on them really well.

They still have big ambitions

We are going to be a major studio, there’s no doubt on my mind.

The big shift happening right now is that the whole traditional media business has been organized to create a relatively small number of very large, very capital-intensive productions. We are literally building an organization that’s turning that on its side. We have to build an organization that can create a very large number of very, very small productions.

Why you should hear the FULL program

- You’ll get the whole story of how this scrappy startup grew its audience, brand and revenues.

- You’ll hear a very honest conversation about entrepreneurial doubt. If you ever felt like you’re the only entrepreneur with doubts, then you need to listen to this now.

- You’ll understand how JibJab turned its business around. What you learn from their experience could help YOU resuscitate your company one day.

Suggested comments

- How would you rate this program?

- What do you think was missing? What’d you love about it?

- This interview was edited by my new editor Paola. How do you like her work? How can she & I do better for you?

- Do you see any typos in the transcribed excerpts?

Thank you Mark Jeffrey, CTO of Mahalo & author of The Max Quick Series for helping to put this together!

  • michaelL

    What a great $##$%-ing interview!!!
    A few shows back I commented about the need to shorten the interviews.

    I take it back.

    I could have listened to Mr. Spiridellis answer your Qs for another two hours – I found his answers so insightful, energetic, and helpful. What I found hugely informative was how he recounted the need to keep adapting and creating new business models on the fly, as market conditions changed. And then maintaining a lean infrastructure, creative thinking, and speedy response as a key competitive advantage.

    Hearing that really can help clear the cobwebs of thinking one can't start until they have it all figured out. Not only is that impossible, more times than not it's a thinly veiled disguise to procrastinate or never start.

    Maybe the answer to the interview length question is to let them go long for great interviews but keep the less stellar ones on a shorter time leash (and do so in a professional, deft manner).

    Fantastic work!!!

    Michael

  • http://mixergy.com AndrewWarner

    Thank you Damon D’Amore for helping me fix an error! If anyone else sees an issue, please point it out. I want to keep improving here.

  • jtillery

    Awesome interview, but for some reason I find Jib Jab's content extremely boring. I try to watch the videos, but I can't even watch 30 seconds of anyone of their videos without shutting it off.

  • http://mixergy.com AndrewWarner

    I'm surprised to here that Jay. Their work is insanely viral. But even
    if you're not a fan, there's a lot to learn from how they built their
    company.

    Andrew Warner
    (sent from my mobile)

  • jtillery

    Andrew,

    I learned tons from this interview and others on Mixergy. What Jib Jab has done since 99 is phenomenal! I just can't find any humor in any of their videos. Most of them are downright annoying to me.

  • http://mixergy.com AndrewWarner

    Michael, I just saw him for breakfast this morning and told him pretty much
    what you said. He could go on for hours and I'd still be riveted and the
    info would all be helpful.
    I would love to edit down some of the other interviews, but I don't think
    it's feasible yet.
    I'd need to hire an editing staff to do that on a regular basis. In
    time, I'll get there.

  • David

    Best take away for me was that Gregg at one time had that feeling everyone starting out has: “what the hell am I doing, how long is this going to last, maybe I should just get a job”. This is important b/c when you see lightning in a bottle stories like adsense millionare Marcus Frind with Plentyoffish or Gurbaksh Chahal with selling Click Agents after only 2 years when he was 18. You sometimes forget how much work and time it really takes to create something out of nothing, and how you can't give up and you have to overcome your fear of failure. Good interview.

  • http://kirstenwinkler.com KirstenWinkler

    This brings back some memories. Can still remember watching JibJab videos in my office around 2003. Great times. Was founding my first business during that period and JibJab always made me laugh no matter how challenging the day has been :).

  • Shaan

    In my opinion, two things about this interview were absolutely fascinating to hear.

    For one, the importance of scalability. We heard several times from Gregg that he had to turn down opportunities so as to help grow his business and achieve scale. He also mentioned that even after he got funding and was working on these big production projects, they weren't scalable. They were successful no doubt, but it was not going to make them a $100 million dollar business. This is the difference between just making money and achieving scale and the mind should always be focused on expansion and growth.

    The second really interesting idea was about how they were revolutionizing the media business. With big media companies, you see huge budgets set aside to a few massive projects. However, with JibJab its more about distributing a much larger amount of brief quality content. That alone creates a whole different ball game with some amazing monetization potential, especially in taking advantage of the web.

    I can see why they are so successful today and why venture capitalists are giving them so much funding and attention. They are a game changer with huge ambitions.

    On a more personal note, I had a warm feeling in my stomach when you mentioned that Gregg probably went to bed at night sometimes thinking “what the hell am I doing?” I am glad I am not the only one.

  • jericolandingin

    Another great interview Andrew…

  • http://mixergy.com AndrewWarner

    Me too. Just hearing their name before a video sends me back.

  • http://mixergy.com AndrewWarner

    Me too. Just hearing their name before a video sends me back.

  • http://mixergy.com AndrewWarner

    Me too. Just hearing their name before a video sends me back.

  • kirandarisi

    hey hi i like to download the video rather than downloading the mp3 ? can u plz provide that option

  • zerocarboncomputing

    Another awesome job Andrew. Keep 'em coming. Adam.

  • steve

    Wow, that kinda scared me. Having to re-invent yourself on the fly after you see the world changing and your business model dying… I don't know if I could do it. I think I would have been happy making the couple hundred grand and then going to live in a cave :) But I realize that is way too short-sited. How can you go back to a job after creating your own company, even if that company failed? I don't think you would ever be satisfied, if you had the true entreprenuer bug in your pants. I'd think you would always feel like a loser. Feel like you could have been more, made more. And I'm sure you would be tempted to live large on the hundred grand, but then you would use it up right away, and you'd have to find another source of income. So this interview really opened up my eyes to the importance of thinking big (which I've read before – but it seems to take a while for these theories to sink in).

    It was interesting to hear the artist say “I'm not making e-cards” because that is what I feel sometimes, that I'm not bowing down to the crap of creating surveys to capture people's email addresses for marketing, etc… but I guess you have to do sometihng to reach the bigger goal, so sometimes you have to do things which you may not feel proud about when you first think about them, but your mind will probably find a way to convince you that you're doing something that is important.

    I don't have time to search the site right now, but I need to hear interviews with people who managed to dig their way out of a hole of despair, when they didn't have the fire in their bellies anymore, when none of the self help mumbo jumbo works, when they don't feel like trying anymore. I need that right now. Does that mean I still have the fire, but I dont know how to get it burning bigger to accomplish something worthwhile? thanks Andrew.

  • http://mixergy.com AndrewWarner

    Thanks!

  • http://mixergy.com AndrewWarner

    I haven't made the option available yet. Only MP3 for now. I'll see what I can do though.

  • http://mixergy.com AndrewWarner

    Thanks!

  • http://mixergy.com AndrewWarner

    Many of my interviews are with people who had to find a way to climb back up
    after big setbacks.
    Here's one with a guy who was so depressed he didn't want to get out
    of bed in the morning. Listen to how he climbed back up:
    http://mixergy.com/real-entrepreneur/

  • SRSimko

    Great show very interesting, Gregg and his brother were very nimble and not afraid to try new things, they could have easily shut it down but they persisted. My hat is off to them.

    For anyone interested, I produced a Q&A recap of this show at http://thisweekinstartupsrecap.com/mixergy-trial

  • http://www.hiphopmakers.com/ Hip Hop Makers

    Great interview. Very inspiring. Failure is what you make it, and he shows you dont have to give up.

  • Pingback: Mixergy, Gregg Spiridellis of JibJab « TWiSTR

  • http://mixergy.com AndrewWarner

    The new link for this is here:
    http://thisweekinstartupsrecap.com/2009/08/20/m

  • http://mixergy.com AndrewWarner

    There's a myth in our space that every success happened overnight by a
    couple of kids in their garage. So when we're working on our companies and
    they don't hit right away it's natural for us to ask “what's wrong with me.”
    The mission behind posting interviews like this is to break the myth and
    keep smart entrepreneurs going.

  • Pingback: The Biography Of Wordpress – With Matt Mullenweg

  • http://www.DrugCritics.com/ Paul DiGi

    Cool story. It will be interesting to see if they can become a major production studio. Good interview Andrew.

  • http://www.DrugCritics.com/ Paul DiGi

    Cool story. It will be interesting to see if they can become a major production studio. Good interview Andrew.

  • Pingback: Thank You Past Mixergy Interviewees For Continuing To Support My Work!

  • Pingback: Film/Animation Studios.

  • Pingback: 7 Inspiring Interviews To Listen To On Your Thanksgiving Vacation | Business Tips

New Here? Start With These