Andrew: Hey, they’re freedom fighters. My name is Andrew Warner, and I’m coming to you from Austin, Texas from a very rambunctious and wild house today. I’ve got with me IRA Belsky. He is the founder of art list, which, um, it’s subscription service that offers royalty free music and sound effects for people who are for you tubers podcasters, like me and anyone who’s creating and doesn’t want to have to.
Deal with copyright strikes and other issues, and frankly wants to pay the artists and get good collection music, dude. Here’s why it’s crazy here. My, my kid’s teacher got COVID fine. She seems to be doing okay. I take my kid into school suddenly. They say school’s closed and. What am I going to do? And so we have just been inviting their, my kids’ friends over to the house.
And every day it seems to be another kid and another kid at another kid. We basically have, uh, a kindergarten up there of kids who are screaming. I don’t know what’s going on. That’s where I am. You’ve you impacted by? COVID like this.
Ira: Um, pretty much. That’s why I’m in the office, which is actually closed. The no one is in here, but I’m here because. Everyone’s told me. Yeah, my, my, uh, daughter kindergarten as well. I think today was the first day after a week. She haven’t gone because they had COVID as well. Um, yeah, I think we’ll just, uh, pushing through it.
Right.
Andrew: Yeah, it is, I guess, for the most part we’re doing okay, but it’s, it’s challenging me because it is a lot of noise and I’d like to know if the audience could hear it on Mike, I’m doing everything I can to reduce the pickup, but they literally are screaming right now. They’re wrestling. I might get arrested, but this Texas, nobody cares as long as they’re not shooting like other people at this Texas.
They’re fine. Um,
Ira: I don’t hear any of it. And, uh, I think this, these are the COVID type problems. You know, I have a little girls dressed up as snow white coat goes into all of my meetings, taking stickers from behind me and I’m like,
Andrew: Yeah, I guess to some degree, it’s nice that it brings in some atmosphere. The other part that I like is that it’s making me want to understand the equipment that I use better and create equipment collections that allow me to record and loud noises outside of the house and so on. And dude, that’s where I ended up finding you.
Your people aren’t fricking YouTube. I get lost in these videos about mikes and stuff. They talk about you because you pay them an affiliate commission. Am I right?
Ira: We, we use a lot of affiliates. Yeah. In terms of like influencers, YouTube, there’s all of that.
Andrew: Yeah. And I shouldn’t say that it’s just because of the affiliate commission, it’s that there’s an affiliate commission. They also like you. And once you get hooked in with a certain provider for music, you just kind of have your, your favorites and your playlist and your selections and you’re into it and you get excited about it.
And so I’ve seen that a lot of people are excited about art list. We’re going to find out how you built up this company. We’re going to find out why you’re not going to tell me what your revenue is and how close you will come to telling me your revenue. And we can do it. Thanks to two phenomenal companies.
The first, if anyone. And who isn’t these days you should go to lemon.io/mixer. G I’ll tell you later why they’re going to get you great developers at a fantastic price. And if you’re paying people 10 99, W2’s whatever you need Gusto. And I’ll tell you later why you should go to gusto.com/mixergy. IRA. Why are you not going to tell me your revenue, man,
Ira: Private company, you know,
Andrew: give me a sense of the ballpark. Where, where are we? Are we in the, in the thousands in the millions? Give me a, give me a
Ira: No. Well, in the opposite, tens of millions.
Andrew: Upper tens of millions. How much funding do you guys take on
Ira: Uh, we don’t ex like tell full amount. Uh, we had one external round that we actually announced it was $48 million from KKR? Um, but other than that, we haven’t disclosed numbers of.
Andrew: KKR? Those are the people behind the, um, the movie barbarians at the gate, Colbert, Kravitz, and Roberts. I used to admire them so much as a kid.
Ira: Yeah,
Andrew: business person like that?
Ira: a good brand name to have on your side for sure.
Andrew: Yeah. Did, were you the type of person who would read about Kohlberg, Kravitz and Roberts? No. What were you, what type of kid were you when I was fantasizing about being like a big shot entrepreneur, what were you fantasizing as, as a kid
Ira: um, play. Football or in the rest of the world, football in America, soccer?
um, drawing, making silly videos on and how to do video. I think that was me growing up.
Andrew: I heard that you were trying to be a filmmaker as a kid.
Ira: Yeah, I was actually, that was the beginning of my professional career. So I started as a, as a filmmaker. I did like editing, shooting after effects. Um, did a bunch of like corporate videos, music, videos, commercial. Type of things, uh, over in Israel and they actually, that’s how I was like, you know What the sites I’m using for music, aren’t that great, they think have, are not serving me the way I want to
Andrew: What was wrong with them? W wait, we’re talking about what year was this?
Ira: this? was 2000. So I was doing it 2000, probably a nine all the way through 2015, 16, when I started art list, um, still did. While starting artists, but you know, pretty quickly we realized this could be a big thing and I stopped. Um, and Yeah. look, the, this industry like create our economy in general, have been growing through a tremendous change.
So you’re going from few people, fortunate people doing shows for HBO and cinema and all this cool stuff. That actually can have the tools to create, but also to distribute the nature of people, watch it and the rest of the world, which, you know, you couldn’t really, without big budget create anything and that’ll let alone distributed to anyone to watch.
Um, and then fast forward to today, and we’re talking about like a 10, 15 years transition, tens of millions, if not hundreds of millions of people have access to equipment, but also. To distribution And they are creating content for the world.
Andrew: And the idea, even back when people were creating 10 years ago for YouTube, the idea that they would care about the music that they have was just, just laughable because no one would invest money in music for background, they might use something that was copyrighted, maybe not, or just not have any music in the background at all.
But now every amateur is professionalizing their stuff, and they know that even if they’re doing an explainer video with a talking head, they still need some kind of background music. And if they’re going to do that, they don’t want to get their stuff taken off and they don’t want something to feel, blah.
So that whole thing changed. But when you were doing it. Where are we talking about this? Wasn’t the seedy days. This wasn’t the hunt around for music days. This was, there were online services back when you start 2009, you can go in, you could do searches. So tell me what are the problems that you saw in them?
Because to me, it felt like they were on the right track and they were, they were right for them.
Ira: So I think there, each of them.
was rightful they’ll sort of time. So when we fast forward from 2009, when I started doing this professionally to 2015, when we decided to start art lists, most of the service says the will, will build for this sort of demographics. Um, will really sort of focusing on old stock libraries.
They won’t like good quality music. And when you wanted a good quality music, it was very expensive, hard to license. So for me as an individual, I was like, I need a lawyer to help me read through this license
Andrew: Because you have to license individual tracks.
Ira: individual tracks.
but also specify, you know, How many people watch the video, who is your client?
What is it for? And it was really intimidating for me is like, you know, small-time creator, um, combine that with the fact that it was expensive. Uh, We saw this gap between like, okay, these, these services, I can afford them, the licenses easy. And on the other side, you know, I really want this music, but I, you know, it’s hard for me to afford it, but also it’s very complicated.
How can we bridge that gap? Um, so we thought of it in the lens of, can we create a one universal license that covers everything? A hundred percent sort of clear peace of mind. On the other hand, offer this through a subscription, an annual subscription Where you can get unlimited downloads. The price point is in a range.
Well, most people who do this more than once or twice can afford it? Um, and I think that was, Uh,
and then combining that
Andrew: you’re a filmmaker though. Why would you want to stop being a filmmaker to be an entrepreneur? Is it because everyone in Israel feels like they have to be an entrepreneur because they see people getting rich.
Ira: It’s it’s funny, but when we started this, I think I was furthest away from thinking I’m becoming an entrepreneur. It was like, I, and I did that. I didn’t think back then that I will stop being a filmmaker. So I was like, okay, this seems like a good product that people will love using it. I think we can do it as a side gig.
Like I, you know, we were full co-founders. Two of them came from the music industry. One came from tech. I think we can just build this on our own and then have This BR side gig. So that was the,
Andrew: This was going to be a side hustle.
Ira: at the beginning. It was, I don’t know. I don’t, I don’t think we even knew what it’s going to be. We were like, this makes sense.
Let’s build it and see where it takes.
Andrew: Let tell me what, what was the site called back then? Because I went to internet archive and when I do art list.io search on there, nothing comes up for before. What? 2016. So what was it?
Ira: No, it will. it?
launched in 2006.
Andrew: Oh, so 2009, you’re buying your competitor’s products. You’re still not happy with it. It took you like seven years to say, you know what, let’s finally go and create this thing.
Ira: Uh, it was me, you know, just learning how to become professional freedom. I kept thinking this is my career path. Um, and yeah, I was, I was just doing video and yeah, one day after telling my friends for many, many years, you guys should submit your music to the services. I was like, why won’t we build a service of all.
Know, I think we can, we can build something that would have enough value for people to switch to it.
Andrew: Okay. All right. And then when you built it, what did you build the first version using in 2016.
Ira: Wow. A I’m not a tech person. I can tell you that I was designing it and I was designing it on Photoshop. So this was pre Figma days and all of that. And it was like Photoshop to HTML.
Andrew: It also gives me a sense of like the artists that you are, that you’re the person who’s going to sit and actually use the software to design it and make it look good.
Ira: Yeah, it was, Um,
I always liked doing all types of, of sort of creation, digital creation. I Like, all of it. I’m not a talented musician, so I don’t do music, unfortunately, but all visual, um, art forms, I really, really loved, you know, since being a kid. Um, so ESI, I actually designed. The first versions of the website, some of the later ones as well.
Um, I don’t consider myself a designer per se. I think, you know, I respect people who learn this and this is the profession, but I think I’m a good designer for art list because I know so much, and I have so much already accumulated in terms of like, you know, who we are, what we should
Andrew: like
I wonder what sticks out for you. Here’s what sticks out for me now that the original site is loading up on my screen top, right? It says there’s a button that says all artworks and that’s like one of the indications you could see that something was created outside the U S for the U S like in the U S you would say all artwork, but once you go outside, it’s artworks
Ira: Whether you see it.
Andrew: top, right.
Of the, uh, art list site from April 2nd, 2016.
Ira: Oh, 20 seconds.
Andrew: I’m going way, way back. I liked it. That bothered you, that you were wondering, did somebody put that up on the site right now? I gotta
Ira: That does
Andrew: to stop the
Ira: belong on the site right now.
Andrew: So what, what stands out for you when you think about the first version, what did you proud of having put on there?
And what do you feel like? Uh, this is not really.
Ira: A lot of it wasn’t right. But I think we were so focused on user value that it didn’t really matter, you know, it had. Enough focus. And we understood enough of what we thought users would want, um, to be in a position where we can do this as a bootstrap where we didn’t have any investors and people actually bought it before we had the dollar to spend on marketing. And we can then later on in spend the revenue and marketing. So I think we identify a few things back then that total. All through today. I think one of them in terms of, and I’m talking specifically on music for video, cause we did so much more than that. I’ll do so much more than that now, but we identify the fact that stock libraries at the time or really generic.
So you had. And I’ll go home with an image, like a generic image of a sun on it. And it called it was called happy tunes, corporate something. And the sound sounded like all of this. And we were like, no people, artists want work from real artists. And we were like, we’re not going to put song name on the front.
We’re going to put real musicians. We were really high on. But the musician faces and the real names, real album covers because we knew we had Seville music that comes from re working the calling musicians. So I think that’s something that we still divided today. I think focusing all of our choices around the creative freedom of the users, something that we started back then, and haven’t changed one bit all the way to today.
So the main value we always look for is create creative freedom.
Andrew: Sorry. My, my five-year-old is here. What’s going on. Read where your backpack is. No, it’s probably upstairs. Sorry, bud. I told you where to go kit. Um, I liked that he’s aware, and this was at 200 bucks a year. That was the offer. Was it hard to get them the musicians to sign up and participate?
Ira: Initially, we, we, this was a good, the good part of having two co-founders who are musicians. So they reached out to people that already knew they recorded a whole bunch on their own. So we worked on this while you’re there and a half. So they work with. Talented musicians trying to compile a decent catalog to start with after we launched.
And we started, it was easier after the first deal of pain royalties, it exploded. And to, to a point, well, you know, we get thousands of submissions a month and it’s more work of just figuring out what’s right. Will highly curated. So we expect except very low percentage out of submissions to join the catalog. yeah.
Andrew: I don’t want to, by the way, what you said before my kid came down here, I don’t want to brush over the idea that there were people who just had generic music and then they had a generic look, dude, I fricking signed up for a service like that recently because it was one time price and you get to keep the music forever.
And I said, why am I paying subscription? Let’s sign up for this. Everything sounds like the crappiest corporate videos from 1980. It’s so bad. It’s so bad. And there’s a ton of it. So I think what’s wrong with me. I’m not searching, right? Why am I not? And then I finally just after spending it on. Some costs, except that you paid what?
A hundred, 200 bucks, whatever it is, just wave it goodbye and move on. It is so bad, so bad. So that is terrible. What
Ira: And then you need to ask yourself, does this save. The money worth the time I’m going to spend in the quality of videos I’m going to produce with this,
Andrew: yeah. It’s, it’s so bad. It’s so
Ira: there is no way of providing like a good service this way. We have teams of like tens of people curating, choosing music, creating
Andrew: deal IRA in the beginning was give us your music. We’ll charge you an annual fee. We’ll take some portion of that annual fee for us and we’ll divide the rest among all the artists based on their percentage of downloads. Am I right? That was it. How much did you say that you were going to keep for yourself?
Ira: Um, So we, we don’t fully disclose the percentage amount, but I can say that we on average pay more than any other. So. Like, like, like I
Andrew: like your.
Ira: even say that it’s in the thousands of dollars on average. If you go on average on different services, some people make pennies.
Andrew: No, but I mean, do you, do you disclose what percentage you keep for yourself as a company versus what percentage you share with the, with the artist? Is it 50% for art list? 50% for the artists?
Ira: So obviously we shared it with, uh, with contributors. They sign an agreement, but we don’t, we don’t share it publicly
Andrew: don’t. Oh, I see. So a contributor, a musician who submits music we’ll know what
percentage that musician and all the pool of musicians share among themselves. Got it. But you’re not going to share it with, you’re not going to tell us.
Ira: Yeah, of course. And they get a dashboard that they can track the performance on real time and all
Andrew: and see what works. All right. I get that. And so that’s a pretty straight up easy deal for you to manage.
It’s not like you have to put up money upfront, you get musicians to contribute their content. Then you have the website built. What did, do you know what the website was built on? I still can’t figure it out from back then.
Ira: Uh, as I said, I’m not tech person, probably very, very old technology with, uh, I’m not the right person for.
Andrew: Okay. All right. So you had the site, you had some artists. Do you remember how many, how many songs you got in the first version? I’m still trying to hunt that down.
Ira: I think Six 700. That’s it.
Andrew: Six or 700 and then $200 a year. All right. That makes sense if it’s curated. So let’s, let’s then talk about how you ended up getting customers, but you know what, I’m going to take a moment and talk about my sponsor and that sponsor is Gusto. I’m actually, you know what? I had this. Instead of me telling you why people should go sign up for Gusto.
I’m actually going to switch tabs away from you IRA. So I can’t tell if you’re disappointed in this or not, but we should still keep talking. I’m just going to read what us news and world report says only because that’s the first search result. When I did a S uh, a search for Gusto payroll software, software review.
Here’s what they say. They call it the best payroll software of 2022. They give it 4.3 out of five stars. Here’s what they say. I’m just going to read them. Instead of me doing my own marketing Gusto started as Zen payroll back in 2012. It’s three founders live together in Palo Alto. This is actually not that.
Let me go back to the review. Here’s the review Gusto places. Number one in our radio. Of the best payroll software for 2022, it offers three plans that range in price and are designed to meet a wide variety of needs at $39 per month. Plus $6 per employee its core plan. Isn’t the cheapest we’ve reviewed, but it’s still affordable and it comes with everything you need to run.
Payroll. All three of Gustos plans include automated payroll for salaried employees, unlimited payroll runs direct deposit tax filings. And 10 90 nines and so much more Gusto offers health insurance. In most states, you can use it to build benefits package for your employees. This is just, I’m going to keep on going and going, but oh, it keeps on going.
I’m not going to keep on reading it instead. I’m just going to jump to the pluses and minuses. Here’s what they have for the pluses. Gusto is. Companies that needed to file taxes in multiple states, tech lovers, new businesses companies that are only paying independent contractors. And for people that hate extra fees, Gusto is not recommended for businesses looking for the most affordable self service payroll software, though.
I’ve got to say $39 a month, plus a few bucks per employee. That’s not expensive and it’s not recommended for people who want to run household payroll. I agree, and it’s not recommended for users who want expert support during evening and weekend, but you will get it during the week. I had a call with them yesterday.
Yesterday happened to be Malcolm, uh, Martin Luther king day. They weren’t there today. They’re there, but there’s a phone number. I can talk to a human being today and I can’t do it in the middle of the night, but I can do it once you and I are done with this, uh, with this podcast, are there good service, good people standing behind them.
I’ve talked about them. I guess I’ve talked about them. If you want to sign up, go to gusto.com/mixergy. They’ll let you use their service for free for a limited time. And then you’ll have that low price that. Us news and world report says is not very low, but they’re $9 a month. It’s not, they’re not, it’s not a lot, right.
Are
Ira: Nah, I, again, I’m not, I’m not that, that big on, on how these shoot costs. So I
Andrew: You’re not
handling the business side of things
Ira: yeah, I’m, I’m handling the business side of things
but we’re using, you know, we have a CFO, we have people doing like, I dunno what services.
Andrew: the early days. Were you the person who is paying people, doing payroll that.
Ira: Um, we actually, when we started within a payroll at all,
Andrew: It was just you co-founders working
Ira: yeah, it was us. Um, and later on we took this like external accounting firm that helped us all the way till we can fold like our own. So they did payroll and all that.
Andrew: Let’s talk about then how you got to the place where you can start bringing in people to help out. Where did the first customers come from?
Ira: So we actually ran these, um, sort of, because I knew where I was getting my information from like blogs and YouTube bells. I just reached out to them saying, Hey, we’ll build buildings, these things, do you want to be a part of a test, better beta testing? And then we said, okay, we’re gonna, we like did an analysis.
Coming out.
They say,
Andrew: Oh, which one do you have? Do you have the, the Google speaker?
Ira: know the bang and Olson. I don’t know how they call it
Andrew: what’s a smart, uh, what’s a smart assistant service on their
Ira: I think Google. I think
Andrew: Ah,
Ira: She thought I said, Hey, Google, um, in any, in any case. Um, so. So we reached out to them. We rolled out like a pre announcement and then we said, okay. we’re giving away five free, free songs to anyone subscribed to the newsletter, the just traditional old school marketing, no funds at all.
Andrew: I got to say, though, that’s good marketing though, because for most people, five songs will get you through one video, get you through multiple, um, multiple piece of content. That’s a great idea.
Ira: I agree. And then. And then by the time we launched, all of them wrote about us, um, or at least a few of them, the big ones and,
Andrew: one that wrote about you.
Ira: uh, the, the big in the filmmaking community. So it was a cinema five D and now the cosine, the news shooters, no film school, uh, it’s like big blogs in the, in our space.
Andrew: And this was you sitting down, emailing them all saying, will you write about this? I think this is good. Can I give you a free membership? Is that what it
Ira: Yeah, yeah. It check it out. Give us feedback. Um, all of that, I believe that they’re going to write about it because I knew that the value we’re bringing so much better than anything else out there. So I thought, you know, this is a good news story. This is not a promotion. And once they did, you know, we started and people started to buy the subscription without us.
You know, there’s a funny story we tell, well, we. day before we said, we’re going to launch. We said, okay, let’s put the site up for like five minutes and test the real finer, like with credit, with a credit card. And before we were able to buy it, someone else actually bought the subscription before us.
So people will actually going in and refreshing, waiting for this to launch. And back then we were like, Okay.
those, you know, something’s going on. And then later on the day after when we actually put it up, People started buying it, then we’re like, Okay.
there’s an opportunity. At the beginning, I started to use the money to advertise on Google and Facebook.
Zero idea on how to do that later on one of our first employees who is currently the COO joined, there’s a friend who was doing online marketing and started helping us with that. Um, And yeah, we just grew it from.
Andrew: And so as the thing that I’m wondering is that’s the beginning, what’s the thing that got you, like the burst, what’s the, I find that their milestones and they’re these things that just. Uh, audience size. What’s the first one.
Ira: it’s. Sort of gradual. So we grew like a hundred percent, the Oroville level since we started. So the first day was easy cause we gathered subscription and then the second deal started. Now we have two years, we have another year of renewal. We have good retention rate. People are sticking great. Then we said, okay, what are we going to do next?
And we thought, we looked at the audience and said, okay, what else do they need? What do we think as a company? We’re good at that. We can start doing more of it. And we’re like, we’re good at understanding what they need. And we’re good at building catalogs. So we said, okay, let’s build a Stock footage It.
Um, we call it art grid, followed all of our first sort of principles of how we should building. And by the way, this was an idea we had before launching the music website. Uh, but we, we put it aside and
Andrew: footage is video that people can use in their videos. So you may not be able to get a drone over the golden gate bridge because they don’t allow them, but somebody had a helicopter over took video and they’re making it available. And for someone who just wants to set the scene and say, we’re in San Francisco, it doesn’t matter that they didn’t shoot it.
Two second clip, they get it. And then they, they use their own footage for the
Ira: Yeah.
you can do amazing things with it. You can, if you do a YouTube video telling a story of something you and you’re talking about, I don’t know, whatever, traveling to a destination, you know, you can put on your voiceover footage of airplanes and then the destination without traveling anywhere. And all of it is super high quality.
So we launched that and then we got sort of two products and they’ll grow in. Great. And we start building brand name, um, and then where the sound effect to the music website, they just following the same principles. And then in 2000, 20 at the end of the year, we acquired a company called motion and motion.
Ray was doing what we did, but was very famous around templates. So they had a lot of like pre ready-made effects projects that you can import to premier pool and the other editorial or after effects. And you can edit everything to make it your own. Uh, So, and we acquired them in 2020. This was actually we, we announced the deal price and all of this.
So there was, this was for $65 million. Um, and this was another boost. So now we have. A big array of solutions for video creators. And we’re a well-renowned name in this space, mainly in assets, in digital assets. And then for us was the, you know, the obvious next step was how can we get into the creation process?
What do they need before they need to license assets? Is they need something to edit on. So. About six months ago, we also acquired another company called F exome and they have been developing for the past 20 years editing solutions after fixing the alternative solutions, um, image editing solutions. Um, and we’re now working with them on a first PR new release of the product under our sort of branding and all of that.
Uh, that should be rolling out soon with new features and new onboarding. And with that, we’re pretty much covering all pre-production video needs that’s sort of our set of mind.
Andrew: Is ethics home about Mo it’s. I could edit my full YouTube video on FX home.
Ira: You can edit Hollywood videos but you can edit your YouTube video.
Andrew: You know, I want to go back a little bit before we get into all this. I like the big summary, but I want to go back to the first year because you told our producer in the first year you surpassed a million dollars in annual recurring rent. And at that point, you said we’re quitting our jobs. We can focus on this full-time.
Was that just from the blogs that we’re writing about you and the limited amount of advertising that you were doing? IRA.
Ira: No. So I think it took us a few months to start doing more professional advertising. Um, well, um, we, we got the first sort of real marketing person in and he was doing more professional, um, um, advertising. So this was, this happened during the first deal, but I can tell you that I think. A few weeks, if not like one or two months to cover all of our investment, um, and be on the upside where we said, okay, now we can invest back.
Um, and that was all like organic. Like we didn’t invest anything by that point.
Andrew: So no advertising, you are able to make back the money you invested in the business, which was how much this was your own money.
Ira: Yeah. Nothing like a.
Andrew: 10
Ira: 10. Yeah. Tens of thousands of dollars. I don’t even remember.
Andrew: Okay. All right. And so then it’s just because these blogs are writing about you. People are paying $200 at a time and so you get to bank the money early and then spread out your expenses, uh, over the year based on how much they’re, they’re being used by.
That’s a pretty decent model there. And so, and then once you got good at advertising was, was advertising. What got you to the next, say $5 million in revenue.
Ira: Yeah, I think we are. Extremely good at marketing and creative. So I think we have extremely talented people over the hill. Um, at the end of the day, when we started, we knew that we’re advertising to a tough crowd, people creating video, very judgemental about. And we’ll, we’re selling them with ads that they’ll video, essentially, most of them, but we saw an opportunity as well.
We were like, okay, most brands are doing a mix of performance marketing and branded marketing. We, I don’t know if anyone else uses this term, but it’s something we call sort of Brentford Formance or, Uh, where we say, okay, we can do a performance. But we can do it in a way that speaks to how we as a brand create things.
So if we do it high quality, if we tell a good story, if the craft is good and we’re consistent, then we’re building a brand through like highly performance tile commercials. And I think that’s something we started very early and have been developing ever since. And is, is, is a good part of how.
Andrew: Where were you doing? These commercials? Are these YouTube videos of you’re talking about?
Ira: YouTube Facebook, Instagram now tick-tock everywhere people watch videos.
Andrew: Got it. And so you are starting to put these videos out and that’s what brought you customers.
Ira: It was a mix of that and like traditional search and banjos advertising. But I think that would sort of build the brand.
Andrew: Okay. And then you said the next thing was having a video. What is it? Stock video to include. How did you know that would be the next thing.
Ira: It was just so intuitive for us. Like we knew that the same problem existed in stock video, and we knew we have our way or thinking about how we can solve them. Um, so it was like, okay, we know how to build the catalog. We know the audience, we know what are the gaps in the current. so it was like, you know, we checked all boxes, it’s across sell to all our existing users.
Um, just makes a ton of sense. We didn’t have a ton of data back then to support all decisions. Uh, but, uh, you know, it was, it was a lot more gut driven than we do things now, but it worked out.
Andrew: What’s the process now then to figure out what to add.
Ira: Uh, 2021 in general was AOA. We focused on data as, as a company where we said, okay, we need to sort all of it out. We need a full, dedicated team to bring us to a situation. Well, um, with insight where, when we released a new features, we have KPIs measured already when it goes live and are tracked in real time, uh, where we can provide analysts.
every type of, sort of employing the company from content to marketing, to design, um, finance, obviously, and all of that. So I think now we’re at an amazing point where we can actually have visibility on how things work.
Andrew: Meaning everyone at the company needs to know how their, their piece of the company performed.
Ira: I think. When we build it right from the grounds up with teams, work with personal teams, all chaos and KPIs, and they understand what they’re trying to achieve and optimize for. And that’s, by the way, uh, one of the biggest way you can give them. And autonomy as well while they can, you, you can trust them to work on their own because they know what to optimize for.
Then they need good data tools to help them keep track and make sure if they’re in the right direction and analyze if not what’s going wrong or if there’s an opportunity where the opportunity lies. So, yeah, I think data is, is a crucial way to help decision makers.
Andrew: Do you have an example of a part of the company that’s not easy to give a metric to, that you had to wrestle with? Yeah. What is that
Ira: Legal legally still have.
Andrew: really?
Ira: Yeah, it’s hard
Andrew: did you end up doing?
Ira: some of them are really responsive. You’re like, okay, what are we going to do? We don’t know. Cause we don’t know what happened. What will happen in the future? We have a percentage of work that will go to do. How do you measure it? How do you optimize for it?
Because at the end of the day, You also need to be very, very smart with setting up goals. Because just as an example, you want to set up goals, like let’s say for original music production and you’re like create these amount of songs, but then maybe the, the songs are in good, full the users. How do you know that?
They’ll not just filling the OCA with songs and they actually work. And then you go to like downloads of those songs, but that doesn’t only. Yeah, determines by them. Cause there are other teams like product and curation that influence that metric. And then you start the, it becomes very complex and every team needs to sort of isolate what they can track that actually identify something that they can control and measure the success in producing.
Andrew: So, what did you do then about music? So if you say we need to have more music on the platform that we create in-house how did you make sure that it was the music that your creators wanted? And I could imagine that what you do is you, you base it on downloads. Wow. And suddenly there’s a helicopter going over.
Um, but even if there’s, even if you base it on downloads, that doesn’t come in until. Far into the future until after the music’s created. Right. And people discover it. And sometimes you don’t need a lot of downloads. You just want to know that that hole in the library is filled. So how did you handle that?
Ira: Yep. So we tried like, and there’s a fine balance as well. Cause you do original production and then you, you know, it’s very easy to say. Let’s try to get as many royalties as we can. But that’s not the goal for us as a company for us to go to as a company is to create the most value for the user. So if he’s searching for something and an external song that?
we didn’t produce is better for him, we want that song to appeal first.
We don’t want to prioritize out things in the risk of having user value. So the goal was always creating the best product for the user. So it’s a joint effort between like a, an external artist and original to feel sort of the scope of the catalog in a way that is sustainable. Um, but then you can also say, okay, downloads reflects which song the user heard, and that does not get controlled by original someone else salted or an algorithm
Andrew: Right, Right,
Ira: you can start building like metrics that are. The ratio from place to download. so and then you measure like percentage of success in that. So it really, really depends, but it is tricky. It’s.
Andrew: when you told our producer that the challenge of changing the way that you lead, when the company went from what? From like something like here we go grown from five to 10 million was managing. Growing to tens of millions in revenue was daunting. And you want it? Am I, am I right about that?
Ira: Daunting,
Andrew: you didn’t use the word daunting.
What’s the word you used? What would you, how would you
Ira: maybe demanding.
Andrew: Okay.
Ira: you know, the it’s funny when we started, I, I think no one says it to me right now, but when we started, I remember it was just the full of us. And then we started to get to hire extra people and we’re like 20 or 30. And I worked out though, and some of my friends were like, now you have employees.
Why do you work out? I was like, it works the opposite. But do you have employees who just have more work around everything? And obviously now we cross the 300 employees actually this week. Um, the work is more demanding. You have, you know, at the end of the day, leading a 300 people company, me and my other co CEO, co-founder you have more responsibility to these people.
You know, we do what we do in big portion to them. Uh, for them, for the contributors, for the users and the more you have, the more responsibility you feel in making sure you build the right infrastructure for all of them to create. Cause all of them will create those. The employees create the product, the musicians create the music, the users create something, a video from it? and we need to solve at the end of the day, support creation, wherever and just get more and more demanding.
I think.
Andrew: So I wonder what you did to get good at that, but you know what, let me take a moment and talk about, but, and don’t give me the, it’s not a problem. It wasn’t difficult. Like really go deep and say, here’s the one thing that allowed me to get there. And then I want to know why you’re getting into a space.
Oh, B and apple. And so many others are in when it feels like that’s daunting video editing. But first I should tell you that my second sponsor is lemon.io. I don’t think so. I don’t think that actually reading directly a review from a g2.com is where I got the review was. No, that last one was from Newsweek was very good.
I’m going to try from G2 a review for lemon.io. I want you to be open with me. IRA. Tell me, does this sound too stilted? Does it sound too? I’m going to try it. And I’m trying to like mess around with these advertising. Here we go. So the first review that I saw right there on G2 for lemon was, um, which is a service where you can hire developers, inexpensively that are vetted and are amazing and are quick to get started with.
Um, What do you like best person says great service. lemon.io connected us with a great dev who understands exactly what we want and produces quality work. What do you dislike? The first developer we had was not the best. His communication was poor and he overcharged us with more hours than required.
However, when we asked for a new director, Mulkey who is the person over@lemon.io connected us with Anton. And we have been happy ever since. What problems are you solving with this? What are the benefits you realize? This person says we needed a reliable dev to finish developing an MVP of our app. So there’s a thing about lemon.io.
IRA. I’m just in total. They have these developers who are, I think almost all in Eastern Europe, they’re vetted, they’re less expensive than developers, um, in, in San Francisco. And frankly, I would bet that they’re even less expensive than developers that you hire on your team and you can get started with them really quickly.
If anyone wants to just have a conversation with lemon.io to see if it’s a good fit, I urge you to use my URL because when you do, they’re going to give you a discount. If you decide to sign up with them and they’ll take great care of you, frankly, they’ll take good care of you. And if you hit you say, Hey, Using the URL will be good for me and get you a nice little discount on their already low service.
So here it is, go to lemon.io/mixer to here. I was scrolling around for the prices here. We’re an average developer. It might cost 60 to $95 an hour. They would go 45 to $80 an hour, and they’ve got the 24 hour miraculous match guarantee. Get all that and so much more. lemon.io/. All right here comes my son down here.
Oh, and he’s got his lasso come to Texas. You gotta get a lasso.
Um, all right, kids, I’ve got 20 more minutes or so maybe a little bit less. You’re going to play outside and you’re going to keep it quiet. All right. And then we’ll do a video IRA. This is, uh, it’s. It’s okay. You guys can just lean that up, pull it out and then lean it up against the house. We’re in a temporary place here.
Get another Airbnb in Austin. We keep moving around and trying to figure out where we want to live. I just knocked something out. Um, so we were talking about the difficulty and how you overcame it. What’s one thing that you did that allowed you to grow as a leader.
Ira: I think. A that you need to reinvent yourself. You have to realize the fact that everything you learned that was for example, good for running a 100 employees company. Would completely change in 200 completely changed again, 300 and probably will continue completely changing in the future. And just realizing the fact that you need to be humble.
Always use advice from people who already went through these phases. Um, and I think also try to surround yourself. Management that actually had, has experienced that you don’t have that a smarter than you and , um, I think all of that really, really helped us. I have a co CEO, which is a whole other thing that I think really helped me and him because we sort of complete each other in a lot of places, but that’s very specific to us.
So I don’t know how relevant this.
Andrew: who who’s an advisor that you turn to and what do you turn to them with?
Ira: So, for example, we like to talk, uh, in the early days we had a few conversation with the president of Wix, um, who gave us some solid advice and other like the, like him. Um, we added to the board at some point. Uh, one of our board member currently is the former CEO of GoDaddy, uh, president, uh, CEO. And then.
CEO of GoDaddy gives us a ton of relevant advice for us. So I think if you surround yourself with?
these types of people, we also have, like in the company, our CFO was the chief. It was the VP finance of fiber. When they went through the IPO, uh, chief strategy
Andrew: help that now Israel has this big ecosystem. All these people that you’re mentioning were like non-existent as entrepreneurs 10 years ago or so, and now they’re, they’re incredibly successful fibers, huge fiber one from this little silly site of $5 deals to an amazing resource like that is the go-to spot for businesses now to get freelancers.
Ira: And now we by the wheel. So, I have the hour. Uh, strategy offers also came for that. It was the VP of, uh, strategy in fiber as well because they have a
Andrew: you give me a specific thing? You could give me a specific thing that you got from bringing somebody in from Fiverr that allowed you to grow the business.
Ira: Well, it’s all of it. Like you were in a stage where we have a finance team that can support an IPO, just because, you know, when you go through an IPO and you build another finance team, you just use the same practices and you see. You know, company that knows how to handle a budget and have responsibility for initiatives, you know, back then it was like, I need five or employees in my team and I’m going to do this and this and this and that.
When you build the right budget, like the way it should build it, then you’re like, how are these people adding value that makes them worthwhile? Cause it’s really hard when numbers become big to just blend everything in. Um, so it really gives everyone. Ownership of what they do. Um, and if you can prove those value will the first one to invest, Uh,
but just bring so much structuring into everything you do before that everything was like conscious gut feelings.
Andrew: and this is all in like five years.
Six years now. So near Zohara, that’s a guy from Wix who you’re talking about. So do you have an example of something that you took to near an issue that he helped you think through?
Ira: Um, I think he helped us realize what we want. Like he was, I remember we came there and we told him our situation was like three or four years ago. And he was like, okay, that sounds amazing. Like you guys an amazing opportunity, why do you want to grow more? And we’re like, what? That’s the obvious thing?
You know, we have an opportunity we can grow. He said, oh, you guys sure. You want to be like in my position right now does a lot that comes with. Growing through this size, we decided that the answer is yes, but it took us to a place where we had to consider why we’re doing what we’re doing. What is interesting about pushing forward, um, how the opportunity we look like, and these are things that we might’ve never considered otherwise.
Andrew: It’s not enough to just say yes, we want to grow more because we want to serve more customers, make more money.
Ira: That’s great. But personally, you know, you, uh, at the situation where, when we started, I would have told myself at this point I would sit on a beach and drink margaritas, but then you reach that stage and you just are so hungry to keep growing and seize the opportunity and work with more people and more contributors and sell more users.
And you have to ask yourself why. Why this drives you? What do you want out of it? Do you want to be a public company? Do you want to be a private company?
Andrew: Do you want to be a public company?
Ira: think it’s inevitable at some point. Um, but I think we need to figure out the right timing. We will, we will a cashflow positive business. We don’t need to raise, you know, to be sustainable ever since inception.
And this is something that we already, uh, said publicly. Um, so it would be a matter of like, Just size and opportunities that we’ll see, that will require us to raise public capitals. But, um, I think it’s inevitable, but, uh, yeah, we’ll have to wait and see.
Andrew: All right. So then I don’t, the part that I don’t understand is why you got into FX home. Apple has final cut pro right one-time payment. They also have I movie, which is crappy, but then Adobe has their creative suite. Uh, what is it? The Vinci has a free app. That’s really powerful. What are you bringing?
Why, why jump into this Mac mix?
Ira: Because we believe that the same things we identified in the. Music licensing and asset licensing space exists in this space as well. So what I mean by that is Adobe and final cut. And all of them are built for people who want to be editors. People who create content today don’t want to be editors. Some of them don’t know what the job of an editor is.
They want to turn their ideas into video. But the tricky part is if you oversimplify. Then they reach a point where they have to drop to Adobe because they just want to create better, more things and off to final cut. So what we believe that we will be able with FX, some that have very complex tools is to simplify it in a way that can open up to sort of a professional use, but start in a way that is very intuitive, very straightforward to people.
We don’t want to learn a new profession. They just want to turn the video ideas into.
Andrew: Okay, I get that you’re right. That there is this middle ground, somewhere between you’re using whatever free thing that you get on your phone or iPad or computer and the really expert stuff. Uh, there is a whole. And so what’s an example of something that FX home does that makes it easier for that early, early editor to, to
Ira: So we’ll still building that part. Why we believe in ethics som is because there aren’t many companies out though that are not Adobe or apple that have the professional side sorted, like FX som hat when we acquire them. And that’s the hard part. A lot of companies are building this smaller. Simpler side of things, but supporting creation, like the professional level is extremely complicated.
So we knew if we have this tool set, then working out, simplifying it. Getting a way better onboarding experience for newsers, but then figuring out how they can open new panels and create more and more all the way through if they want to create.
like Adobe final cut level production or the Vinci, um, then we will have the ability to do it, which is not trivial.
As I said, most of these
Andrew: No.
Ira: um, either Adobe or like extremely simple,
Andrew: Like Luma fusion on the iPad. Super simple makes it really tough to even edit to the beat because you can’t really see where the beat starts in. Right. You’re you know what I’m talking
Ira: Exactly. And then if we, and we’ll play on building everything from the ground up, we’ll also have the ability to build something that we feel will be better for the new generation that can be. It’s almost a cloud experience where you can open your project from your phone to your laptop, to your desktop, include content in it.
So we can have it in the subscription that you have music and everything inside the software already, um, include other cool things that we think are lacking, like suggestions and other cool stuff that other types of software have, but not video creation. Um, so yeah, we have a ton of ideas on how to make this, you know, disrupt.
Andrew: What do you think about automation in it? I feel like, um, a lot of what, what creators show me when I look at how they edit their videos on YouTube is. It can be automated, like cut to the beat, for example. Right. GoPro has that app that they have quick, they bought that that’s another Israeli company. I think they bought.
And all it does is cut every, every action video you shot on your GoPro to the beat, but it doesn’t allow you to create beyond that.
Ira: And that’s the problem, though. A lot of these services that try to make these one click generate or video
Andrew: right.
Ira: will not around people who want an end video we’re around. People want the creative bosses. So there’s a big difference between, I just want to make a video out of this too. I have an idea. I’m inspired.
And I want to create this. So edit to beat automation is a great addition. It’s like a great extra tool, but if you can then manipulate it, maybe, you know, it’s, you can’t really create with it. So maybe the Right, way about it is like let’s not set or, or cuts to the beat. But let’s say if the cat is here in the meta zoo, let’s pop in and little suggestion saying, Hey.
We suggest moving the catio except the client, for example.
Andrew: yeah, yeah,
Ira: can all come at it in a way that is more creative, cautious, while you still have control as a creator.
Andrew: Yeah, I see that. I see where you fit in. And I do see that that’s a big hole and that is a problem. And it’s all right. One of the things that you, you told our producer was bootstrapping created an amazing mentality in you that you’re able to keep costs down, stay focused, learn things on your own.
Am I right?
Ira: I stole this sentence that I’m going to say, but I really, really love it. Is that. Startup works for the investors and boosts surplus for the users. And I think that’s something that kept with us. Although we now have investors, Um,
that mentality of when we started, we paid salaries from users, believing in us and our products, meaning everything we do is around user satisfaction.
Andrew: meaning if the users aren’t satisfied, we can’t pay these people. So we better make sure that we’re satisfying the
Ira: Yeah. The users. are the
Andrew: I see.
Ira: when you are.
Andrew: Now that you’ve taken on money, more money than you will tell me publicly, which is fine. Um, I I’m wondering then how did it change your mentality for the better? And where’s the part that you, that you.
Ira: allow yourself to be more aggressive. Like we couldn’t acquire two companies otherwise. Um, but then the other hand, I think we’re still very, very efficient in the way we do everything. So we optimize for growth, like any other growth company, but we try to do it in a very sustainable way where we don’t have to run and raise capital in order to sustain the business.
And I think that’s something that is unique and is very much attributed to bootstrapping.
Andrew: What about you personally? The fact that it’s not all your money on the line, is that reassuring and calming a little
Ira: That’s the, one of the biggest benefit of raising kids. I think more that when you start as a booster for like every dollar come, you feel like it comes out of your pocket. And then when you have investors, you become a bit.
detached and you’re like, I have a role to play and I do need to serve all stakeholders.
That includes all employees, that all of them have options that include everyone. And then you become more strategic, more critical with your choice choices versus.
Andrew: Hmm. Well, congratulations. I had no idea. Artless was this big, to be honest with you, I just. Because you have competitors and many of them are pretty they’re sizable, but they’re not as big as you are. And I just thought here’s another company in, in this batch of companies. I had no idea what was going on behind the business, and I’m glad that I got to find out about it now.
It’s artless that IO still? no.com.
Ira: No.com we’ll we’ll stick into the IO. All future product will have IO as well. Um, yeah, I think we’ll, we’ll just run with It
Andrew: It doesn’t seem to have hurt you any alright. Art list.io, and I’m grateful to the two sponsors who made this interview happen. If you’re hiring developers, go to lemmon.io, they’re also. Lemon.io/mixergy. They’ll sign you up with a discount because you’re coming from me. And when you ready to pay your people, right?
Even if you’ve already used a different service switch over to Gusto right now, or get started with Gusto right now, go to gusto.com/mixergy can’t believe art list.com is not even using their domain. That feels like squatting almost.
Ira: They don’t use it. Yeah.
Andrew: They don’t use it. What a, what? A pain it for nothing. Alright, congratulations though, on what you’ve done with art list.io as a domain and as a business.
Thanks Syrah. Thanks everyone. Bye.