Explore Twitch's remarkable journey in gaming livestreaming, from startup to Amazon acquisition, with one of its co-founders, Michael Seibel.
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My name is Michael Seibel. I work at Y Combinator, and I was the co-founder of two companies, Twitch and SocialCam. Today, I help founders make their companies work. So when I went to college, I went to Yale, I thought I wanted to be a lawyer. And unfortunately, I realized during my time at school that I did not want to be a lawyer. One of my best friends from college, this guy named Justin Khan, he was in the first class of Y Combinator in 2005. One year after college, he decided to start a new company. The time called Justin TV, later called Twitch. And he recruited me. I didn't know that I wanted to do startups, but I thought to myself, when is the next time your best friend is going to ask you to start a company with you? This seems like something might only happen once in my life, and so I should do it. The first version of our startup was actually a reality TV show. Justin would wear a camera on his head, and he broadcast his life 24-7. And I was the producer of the show. The problem is when we wanted to start raising money, Justin couldn't go into pitch meetings because he was broadcasting everything. And so I had to go to the meetings. The investors kept asking, why are we talking to you? You're not the CEO. And what they didn't realize is we actually didn't even really have CEO back then. And so the first thing we did was effectively make me CEO so that I could go talk to the investors so we could raise money. Things were crazy back in the day. From a technical perspective, it was very hard to stream video, so we had to build our own custom hardware to stream video. I would say on the show, the thing that was craziest was that people liked to prank us. People would call the fire department on us, prank us by ordering a bunch of pizzas to our apartment. At one time, people pranked us by calling the cops on us. It wasn't very fun for us, but I think people enjoyed watching us go through that. I would say deciding to go from a show to becoming a platform, that was a very big change. So it was pretty simple. We realized that we weren't very good at making a show, but we were very good at creating software. We decided instead of us being the show, we would make it easy for anyone else to broadcast their lives or whatever they wanted to broadcast on the internet. I think we decided that within two or three months of the show starting, when we got to work on that task. And so maybe the show came out in the spring of 2007, and by the fall of 2007, we had launched a site where anyone could come and broadcast live video. We did YC in 2007. Probably the number one piece of advice that we got from YC at the time was from one of the partners named Paul Buhite. He was the original creator of Gmail. And he was the one who inspired us to build our own video system, our own live video system for Justin TV. This was probably the most important technical decision we made in the entire history of the company. He actually set this to Kyle. Kyle was writing the video system at the time. Kyle basically asked him, should we build our own video system or should we buy some off-the-shelf software? Paul Buhite said, how hard is it to write a video server? It's just bits in and bits out. And when Kyle heard that, he thought to himself, if Paul Buhite thinks it's easy to build a video server, I'm going to do it. And that's what he did. It allowed us to stream video on the order of 10 times cheaper than all of our competitors, which was one of the main reasons why we survived. We were still serving streamers. We still wanted to make it easy for them to broadcast live. I think the important distinction we made was that, at the time, a lot of the content on Justin TV was copywritten content that streamers didn't own or it was content that wasn't very interesting. But about 20% of the content was people playing video games. And people liked that. One of the things that got us to say, maybe we should work on Twitch, was Emmett really liked watching people play video games. And he wondered, if we just focus on those folks and ignore everyone else. It was his idea to say, let's go down that path. That was a big decision, but it was kind of a focusing decision. It wasn't really a changing decision. You know, the technology was the same. The site was the same. And at the time, we called it Justin TV Gaming. And we just built a clone of our site that only had the video game streamers. And then we rebranded that as Twitch later. Probably the most defining moment in that company was when we were about two months away from running out of money. I believe it would have been around August, 2010. We had about 30 million people who would watch video on our site every month. But we were making about $750,000 in revenue every month. But we were spending about a million dollars a month running the company. And we were going to run out of money within two months. We sat everyone down. We told them, we're gonna figure out how to fix the company and make it profitable here. Or it's gonna go to business. And we ended up coming up with a plan that made the company profitable. And that year we generated about a million, maybe a million million and a half dollars in profit. And we just saved the company.