Company Of
The Month

Ustream

 

Through the growth of rich video streaming, all types of events - from breakthrough product launches and international demonstrations to simply two Shiba Inus playing in the snow - are now being broadcasted live over the web. And one middle market business, Ustream, is leading the charge. 

Since broadcasting its first video back in 2007, Ustream has been offering enterprise video services for an impressive list of clients, including Sony, Samsung, Viacom, and NASA. In 2013 alone, Ustream served nearly 400 million viewer hours of live streams, streamed over 21 million broadcasts, and featured over 1.3 million broadcasting channels. Ustream, which is headquartered in San Francisco, has also grown internationally, with over 250 employees worldwide.

We recently sat down with Brad Hunstable, CEO and co-founder, to find out more about the live streaming business and Ustream's success.

Q: Tell us a little bit about Ustream. What was the impetus for founding the company and how has the company grown since then?

A: The original vision for Ustream came from mine and my cofounder's experience from the military. I graduated from West Point in June 2001, so literally right before September 11th. What I saw when I was in the military after I graduated was people missing some of the most important events of their lives, whether that was their kid's high school soccer game, their daughter's university graduation, and even missing major sporting events such as the Super Bowl or the World Series all because it wasn't broadcasted over the internet at the time. In my case, my younger brother was in a rock-and-roll band that I never once got to actually go see live.

So we first started the company as this means for connecting people, no matter where they were in the world, and communicating through that product. While serving in the military, it really solved this problem of being displaced from their hometowns or being away from their loved ones. And, since that time, we've obviously grown to be something much bigger than that. We've seen it all. We've seen everything from major press events which you see on television, to major sporting events which have been broadcasted, to major concerts, even things like international protests to church services to puppies. The list goes on and on.

Regardless of the broadcaster or the event, the core of what Ustream is has remained the same. It's a robust, live-video platform that helps broadcasters become successful. Today, our primary business is serving enterprises and other organizations. They use our platform as a tool for their marketing playbook and for their internal communications. The power of what we've created, this live video platform, helps them be more productive and more transparent as a business. And that's really what we focus on and how we make money today.

Q: With other major online video services out there, what do you think makes Ustream stand out as the hallmark in the industry?

A: The biggest thing is that we've focused on the live experience from Day One. We were really the first to do this. We've powered more live streams than any other platform in the world. More than two billion hours of viewer content has been viewed on Ustream. We've seen streams with viewership sizes as large as prime-time TV audiences. And so the core of that difference is really a function of our technology. We built our own content delivery network, our own Ustream media server, and our own protocols for delivering. And so what this really advanced technology stack allows us to do is that no one can match our redundancy, our resiliency, and our reliability. And, because of our architecture, we can stream seamlessly to millions and millions of people simultaneously to any device in the world in the right format that always results in incredible and beautiful playback that is unrivaled in the industry.

Q: In getting to where you are today in 2014, what were some of the challenges your business had to face?

A: Our original business model was very similar to what YouTube does, which was based on advertising. About two years ago, we started to see businesses using our platform in very creative ways. Customers like Salesforce, Cisco, LinkedIn, and Sony started using Ustream for everything from product launches and press announcements to earnings announcements and CEO town halls, even using this for internal communications, like sales training or customer onboarding. As we saw that behavior start to happen, we made the decision that we were going to switch from a primarily ad-based business to a SaaS (software-as-a-service) model. Anytime that you make a transition like that in a business, there are all sorts of challenges that you can potentially encounter. But we've overcome that by continually reminding our team why we do this, what the vision is, making sure that we're all very clear on what the goals are and what we're trying to do here from a strategic standpoint. That's certainly been a challenge but we're coming off our best year ever. 2013 was by far our largest revenue growth and our largest total revenue stream that we've ever had.

Q: Did you have any growing pains in scaling your business to meet customer demands in such a short amount of time?

A: In the early days, we had a lot of trouble scaling to large viewership sizes. What we decided to do about four years ago was to build our own technology. Previously, we had used a lot of technology that was written by other companies or we were serving the video by platforms that were built by other organizations. We realized that these just weren't going to fit our needs and that we had to build it ourselves. So that's when we built the Ustream media server which has allowed us to stream to these massive audiences on a global scale at the quality we need to deliver. There were definite challenges and our solution to that was to develop the technology ourselves.

Q: Let's shift gears to your customers, many of which are household names. How are you using their feedback and insights to shape the strategy of Ustream going forward?

A: In a traditional software company, you would just build a piece of software and you would mail it or the user would download it and they would have that piece of software on their computer. In a SaaS company where you operate in a cloud like we do, you have access to such a tremendous amount of data that you can utilize to build the product. You can look at how they are using the product, what's working, and what's not working. So a couple of years ago we created what's called our Business Intelligence Team. We're collecting all sorts of different data points and running various algorithms to capture and understand that market so that we can continue to be innovative, competitive, and stay ahead of the curve.

Access to that data and the analysis and interpretation of what's happening and what that means is critical for technology companies like mine to compete today. We also have done things like work with analysis firms to really do market research data around the foundations of what we're trying to build. We're a video enterprise product for business communications. Some interesting stats have come out of that. We interviewed over 1,000 executives. Nearly 80% of them saw live video as an effective means for business communication. Over 70% felt that live video was more effective than VOD (voice-on-demand) for business communications. So we look at the data, we talk to customers, and the combination of all that with analysis continues to show us that this is a really big market opportunity.

Q: What programs does Ustream offer its internal employees to grow and enhance their skillsets?

A: First and foremost you need a philosophy that's about employees growing. Some of our most senior directors in this company started out as first-line, very junior workers. I have a Vice President that started off as a very junior worker and has grown over the last seven years. So we really encourage growth opportunities in a number of ways, everything from making sure we open growth opportunities internally to internal/external workshops for career development, training, and networking.

There's also a tremendous amount of cross-functional collaboration that happens in the organization. We allow people to even spend a week in a different department to understand their roles and what their challenges are working those jobs. So we're constantly encouraging our employees to learn other skill sets. As a small company, we need a lot of athletes that can do a lot of different things as much as we need specialists. In fact, many of our employees switch from different departments to different roles, and that's a product of them getting exposure to other opportunities within the organization. We also have a mentoring program. I'm a big believer that junior employees especially can benefit from mentors that might not even be their own boss and might be from a different department.

Q: If you had to give advice to other middle market executives about how to grow in the current economy, what words would you offer them?

A: As you move from a start-up to a middle market, you have to put processes and systems in place to scale. It's the whole concept of work smarter, not harder. You're still not as large as IBM or some of these other companies that you're competing with. One of your big competitive advantages is still the ability to move fast and be nimble. Make sure you have the right amount of bureaucracy and value protection in your system so it's not a burden to act quickly. I've seen other companies make this mistake. The other thing I would say is to stay true to your core, your vision, your values, and be willing to say no to things even at this stage of your growth in order to stay focused. Our culture here is one that's always best when it's trying to learn. So continue to look at the data, continue to be involved and become increasingly more data focused. Testing and learning is still key at this stage of the game.

Q: For a student that's graduating and considering different avenues of employment, what are some of the advantages of working for middle market businesses?

A: As I was saying earlier, one of the advantages of the middle market is that it's typically going to be more stable in terms of the financial picture. You're not joining something that's as risky as a start-up. But, you're joining an organization that's potentially still small and nimble and can act like a start-up. Being able to be a part of an organization and still have a major impact because of its size and because they're pushing decision rights down to lower levels provides a tremendous amount of opportunity to get experience and decision making authority. With a Cisco or an IBM, you're still such a small piece of the larger picture. To me, that's the biggest advantage and perhaps the most exciting part about joining a middle market company.

Q: What's the next great frontier for Ustream?

A: In terms of the next five years, we definitely see expansion of live video adoption, particularly within businesses. Our belief is that one of the last blue oceans within video is the enterprise. It's going to be for a variety of external communications like a press conference, product launch, or earnings announcement. But also internal communications and new exciting video solutions we want to build around things like learning management. This next wave after that is also social commerce around video. A lot of our customers are starting to use video as a way to drive actual sales. We're building video products to help drive sales. Not just ad revenue, but drive physical sales of products. I think businesses are really starting to crack the nut on how video can drive more product sales. We want to help make them successful at that.

Q: Tell us a little bit about your latest initiative, Ustream for Change.

A: Ustream for Change is a really exciting new non-profit program that we've launched where we are empowering our employees with an internal committee who can go out and help organizations or citizen journalists who are doing social good in the world. This technology that we've built is a major force for good. We've seen it over the years with the Arab Spring, the Occupy movement, the Chilean miner rescue, and the Japanese earthquake. We know that our technology has the ability to change lives and as we focus more and more on business, we feel like we have a moral responsibility to make sure that this technology is still being utilized to promote social good. So this organization will be funded by Ustream and have the ability to provide everything from free enterprise services to public relations support to training, and sometimes even equipment if the organization that we're working with is supporting internet freedom, stable societies, or emerging democracies, or if it's for a traumatic event like what happened with the Japanese earthquake.

For more information on Ustream, visit www.ustream.tv.