Animoto: The No-Infrastructure Startup

Jason Hsiao

Brad Jefferson

---

Related Content

slideshow

8 Things You Can Do With Facebook

In the old days, tech companies faced the substantial capital expense of buying lots of expensive hardware, not to mention hiring IT people to maintain them. Animoto represents a new type of company -- one that outsources virtually all of its computing needs. Animoto is a Web service that automatically creates videos from your personal photos and favorite songs. According to the company, the site has drawn 250,000 registered users, more than 10 percent of whom upgrade to paid service, and another two million have used the free Facebook application. And in July, Animoto was the top Facebook app in terms of active percentage of users.

How did you start the company?

Hsiao: Literally it was over heavy drinks and lots of napkins in the back of one of our favorite sake bars in New York. My friend, Stevie Clifton, and I would get together and shoot the shit. I was producing shows for MTV, Comedy Central, and VH1. Stevie was working over at ABC doing documentary work at the Peter Jennings group. We're particularly interested in how we might use technology to automate creative decision making, specifically automating some of the stuff that editors, directors and producers do in the editing room. There's such a gap between the quality of videos on the Web and stuff you see on TV. Most of the stuff you see on YouTube looks like a third grader shot it with a camcorder. We work with the most cutting edge technologies in TV and film, so we know how easy it can be to make stuff look more professional. We really wanted to give everyday people the ability to make more professional videos.

How did you assemble your team?

Hsiao: We worked on this technology during our spare hours, late nights and on weekends. Over the course of several months we realized that what we wanted to do was actually possible, so we quickly put our team together. The company was founded with four guys. Brad Jefferson, now our CEO, brings a whole history of incredible business experience. We wanted to make sure the business was developed from day one along with the product. We did not want to be one of these companies that developed a core technology and three or five years later tried to cram a business model onto the technology. We see so many businesses where the business model is an afterthought. Tom Clifton, our creative director and Stevie's brother, was just wrapping up a masters in music at Cambridge in England. Like Stevie, he's a technical genius. The four of us were the perfect team.

You guys have known each other since high school and three of you went to college together. What's it like working with your teenage buddies?

Jefferson: There's no politics that play into the relationships. We're all able to be very frank and honest with each other. If we don't like something, we're willing to air that right away and get it on the table.

How did you turn the idea into a product?

Jefferson: We founded the company in August '06. We had this idea that we'd be able to get some sort of working prototype finished by the end of the year. It was really important to hit that milestone because our wives and girlfriends were looking for something tangible for what we were doing with our time. We planned this Christmas party and we wanted to have this great prototype to show them and convince them that, yes, this was a good use of our time. At the holiday party we finally got the first video to render. We showed it to ladies and the video played upside down. We're thinking, "Oh my gosh, we hit the jackpot! We got something to work!" Our significant others were rolling their eyes like, "Oh man, they've got a long way to go."

Why did you decide to outsource all of your computing?

Jefferson: Once we launched the private alpha in March '07 to family and friends, the feedback was very good. I started modeling what this would look like in terms of the systems required if it was as popular as we thought it might be. What was very evident was that buying the infrastructure would be very expensive. We made the decision that we would re-implement the entire stack on Amazon Web Services in lieu of just using a regular hosting provider. That was a tough decision. We had to delay our launch by three months in order to do that. Obviously that would open the door to any competitors to arise in those three months.

You saw a big jump in traffic after you launched a Facebook app. What happened?