Gnomedex: Gregg Spiridellis

Overall one of the highlights of the event – an interesting and engaging talk that used JibJab as an example in telling a story, and gave people lessons on what to do next for themselves.

Gregg’s the CEO of JibJab. He started with how the company began – his path was supposed to be investment banking, but the Internet (and his artistic brother) called. They began pre-bust, took only family & friends funding, and survived the bust by going from 13 to 2 people. During six years their model changed every three months, including selling Nasty Santa dolls at Spencer Gifts – they knew that they could build a brand and provide great content and just had to keep finding ways to stay alive.

They learned from a Bush-Gore rap battle in 2000 that they could develop something in July, and if it’s good it could last through November, unlike the short shelf life of so many other videos.

This Land came out in 2004, went to their 130K subscribers they had built over six years, and went from 100K views on Day 1 (normal would be 40K) to 1.5MM by Day 7. NASA sent a copy to the space station, a copy went to Antarctica. Marketing math: 80MM views, 590MM “offline brand impressions.” Meanwhile they’re answering 30,000 mails/week with just them and their wives; the day before the Today Show, they created a Yahoo store with a fake DVD picture, sold 9,000 and then figured out how to manufacture it.

Real business model through 2005 was licensing fees – couldn’t afford to build an ad sales team. Cobbling together revenue streams however they could. Funded about a year ago to grow to the next opportunity…

JibJab is a hit-driven business, and even good CPMs on a hit-driven business can’t build a long-term revenue model, especially with high production costs. (A normal hit for them is 3.7MM views, which at a $20CPM is $74K – hardly pays for production even when it’s a hit.) So how do you create a scalable programming model that’s viable to the tail?

They started breaking down what they did in a “relevance spectrum” (which does sound just a wee bit corporate…). To get long shelf life content, you need content relevant to different people at different times – which is all about social expression/lifecycle events and holidays – birthdays, anniversaries, etc. Realized that American Greetings online is an $85MM business, smileys for IAC (FunWebProducts) is a $100MM business (Zango has a similar story) and pays for IAC investments, etc. HotOrNot & Facebook have gifting businesses, etc. This turns out to be a huge business, and “Social Expression Programming” is an opportunity.

Gregg demo’d Starring You, their new mass-market, compete-with-American-Greetings product, making it easy to make something good – users are good at distribution, not creation. You upload a head shot and can create a quick movie – Hula, Disco, etc. – with them. He had pictures of Chris Priillo and Robert Scoble and the video generated huge laughs and applause – we’re the mass market too, evidently! He asked if we wanted to see another movie and everyone was excited to see another. Can create more of these videos over time. I can absolutely see my family, especially my father, playing with this for hours – will send it to him today.

They’ve designed the content so that it’s embeddable (including the publishing tools) and uncompilable, so every drop point can be a viral hub, but their branding stays in place – critical for their long-term value chain.

Baratunde asks about melanin enhancement for black etc. users – Gregg says that they deliberately designed the dances to be silly enough that it wouldn’t matter, but did note that 2% of their audience was African-American and they had to make a tradeoff. (He also noted that people have done things like dog and Darth Vader heads, and I sort of wanted Baratunde to go postal on the comparison – mostly just for fun – but no luck.)

Some notes:
It does feel disappointing that companies that do have the ability to create high-quality mass-market content can’t make a long-term business out of it online, and while these are great toys, how do you do this and the next “This Land”? How do you make sure that all great media doesn’t have to be simple and single-user consumable? Gregg notes in response to a question that there was a 1-1 tradeoff – it’s opportunity cost, This Life took eight weeks, they can now do it in four. They will still do some of this for brand-building, and they can do narrative (movie trailers) this way, not just dance.

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One Response to “Gnomedex: Gregg Spiridellis”

  1. Deepak Says:

    Gregg’s talk was actually the on stage highlight for me. A lot of lessons and he presented them really well.

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