Helping Businesses Join the YouTube Era: How Pixability Found Its Groove
If you’re a disciple of the “lean startup” philosophy now in vogue among tech entrepreneurs, you know you’re supposed to “fail fast, fail cheap,” then “pivot to a new vision” before you’re “out of runway.” In ordinary English, the idea is to quickly scrap your product if it’s not flying with customers, and find one that does appeal while you still have some cash.
One lean local startup that has done exactly this, with apparent success, is Pixability. The Cambridge, MA-based company takes advantage of the latest entry-level videocam technology to help businesses make compelling videos for their websites at bargain prices. But that’s not at all the idea that founder and CEO Bettina Hein had in mind when she started out in the fall of 2008. And the story of how Hein “pivoted” to Pixability’s current business model offers some useful lessons to entrepreneurs on how to stay flexible and open-minded. You might even find, as Hein has, that you like your new idea better than the old one.
While millions of consumers own digital or tape-based video cameras and dutifully haul them out for every holiday, birthday party, or beach trip, nobody really wants to suffer through the unedited footage later. Hein’s original idea was to help people pare down these home videos to something more watchable, while adding titles, transitions, music, and other bits of Hollywood sparkle. “Pixability started out taking all that amateur video footage and really polishing it up with editing,” Hein explains.
What made that idea plausible was the plummeting cost of video production and editing. “When Bill Warner started Avid Technology [in 1987], you had to pay $1 million for an editing suite, and he brought it down to maybe $100,000,” says Hein. “Now, for $1,000, you can get a PC and a camera and some decent editing software, so there has been another two-orders-of-magnitude drop.”
Unfortunately, late 2008 wasn’t a great time to be launching a new consumer-oriented service. Amidst the worst economic decline since the Great Depression, “discretionary income fell to almost zero for most consumers,” Hein notes. At the same time, she says, the startup was having trouble getting its message to click with potential customers: “Lots of people don’t understand the value of editing down your memories to something that somebody will actually watch.”
But Hein, a serial entrepreneur who had founded a Zurich-based speech software company called SVOX and then spent a couple of years doing a fellowship at MIT’s Sloan School of Management before deciding to start Pixability, was getting interesting feedback from the other entrepreneurs she spent most of her time hanging out with. “The startup world has been my home for all of my career, and my friends were saying, ‘Bettina, you do this stuff so inexpensively for families, can’t you do this for my business?'”
At first, Hein says, she resisted that idea. But then the company bought a Flip digital camera, which brought about an “epiphany,” she says. “People had been sending us boxes and boxes of videos in different formats, from Beta to VHS to mini-DVD—we were pulling our hair out dealing with the different formats. So we thought, why don’t we just send them this camera as a rental, then edit what we get back.”
By marshalling freelance video editors with their own copies of desktop video editing programs, Hein felt Pixability could assemble customers’ footage into marketing videos that were beautiful, convincing, affordable, and most importantly, short. “Keep it to two minutes if you want to get good viewership,” Hein says. “Three minutes is pushing it.” (Greg wrote last fall about how a Seattle-based startup that makes short animated marketing videos, Lilipip Studios, went through a very similar change of business models in 2008.)
To test the idea, Hein posted a notice at Help A Reporter Out, an online clearinghouse for queries from journalists and pitches from sources. “We said, ‘We’ll send you a Flip camera, you shoot the footage, and we’ll edit it into a professional video.’ I thought that if five people decided to buy this, there might be a market. We immediately got 20 people signed up.”
That was exactly the kind of sign a good lean-startup CEO looks for. “I come from the software world, so we’re all about creating hypotheses, experimenting, and then adapting and iterating,” says Hein. “This clicked. Immediately we started getting people tweeting about us. And when you get that in multiples, and people are willing to advocate for you for free, that’s when you should listen.”
It’s easy to see why companies would be attracted to Pixability’s service. For $595, the five-employee startup will send your company a Flip camera along with a cheat sheet designed to help the designated videographer capture usable clips. (One easy technique, for example, is to ask five employees or customers attending a company event to identify themselves and give a one-sentence answer to the same question.) When the filming is done, you send the camera back to Pixabiity, and one of the company’s 15 freelance editors will distill up to 45 minutes of raw footage down to a two- or three-minute video that includes transitions, music, branded opening and closing graphics, and so forth. (You can watch a few finished examples at the end of this article; the company’s online showcase is here.) The videos can then be posted to your company’s website or YouTube channel.
The unspoken philosophy behind the whole process, of course, is that making a video that shows real employees or customers talking about their passions or experiences can be a more authentic way for your business to get its message out than traditional advertising and marketing.
“The hardest thing in scaling a small business up to a medium-sized business is leveraging the passion of the people in the company,” says Hein. “I can’t go everywhere and talk to everyone. But I can get a video out to customers and speak to them that way. Video is effective because you can’t fake it—people can tell immediately if someone is for real or not. Also, YouTube and handheld cameras have changed the way we perceive video, and lowered the barrier to entry for everybody. It’s a democratization that has opened up an opportunity for small companies, or bigger companies, to market themselves.”
Pixability isn’t without competition, of course: Hein acknowledges that there’s pressure on her startup from at least three directions. One is traditional production houses—Boston.TV and Black Screen Studios are two local examples—where professional videographers have seen the YouTube train coming and are scrambling to adapt their services accordingly. Another is automated, Web-based video editing services such as Animoto (based in New York, and also profiled by Greg last year), which assemble video clips and stills into slick multimedia presentations for extremely low prices. Finally, there’s the DIY phenomenon—Flip cameras and editing programs like Apple’s iMovie are so easy to use, after all, that anyone who’s even moderately computer-savvy can, in principle, make their own videos.
But Hein says she isn’t overly worried about any of these rivals. The automated tools such as Animoto, she says, churn out videos that look robotic and undifferentiated. Few small companies are willing to spend thousands of dollars to hire a professional production house to make a single video. And few of their staffers have the time or patience (or, to be realistic, the creative skills) required to do the work themselves.
“If you remember when desktop publishing tools came out in the 1980s, and everyone said they’d start publishing everything themselves?” Hein asks. “Well, that never happened. There are still professionals who do layout, and most desktop publishing software even today is not used by average consumers.”
Fortunately for Hein and her company, following the lean-startup precepts meant that the company’s burn rate was low, and that it could afford to switch to a new business model without having to raise much new capital. (The company collected just $155,000 in its most recent round of equity-based financing last December, and has raised several times that altogether.) Pixability’s revenues have climbed by a factor of 10 since the switchover to business-to-business services, Hein says.
But what really validates the change, Hein says, is the fact that she’s having so much more fun now that she’s helping other entrepreneurs tell their stories on video, from social-media-savvy funeral directors to scrap-metal collectors, to Silicon Valley Web guru Guy Kawasaki. “I came into entrepreneurship because I wanted to encourage other people to become entrepreneurs,” says Hein. “So this is like Candy Land for me, because I get to see so many cool little businesses, and I get to support people and help their dreams of building a business come true. The family stuff was really heartwarming. But this fits my personality even better.”
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