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The 3 Answers The Investors Really Care About

Ocho entrepreneurs netted a $1.65 million investment from big-name investors by articulating the app’s purpose, core technology, and vision.

The 3 Answers The Investors Really Care About
[Photo: Flickr user Photo Cindy]

What would YouTube look like if it was launched today instead of in 2005?

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That’s the question New York entrepreneurs Jordan Urbach and Jonathan Swerdlin pondered one night in 2012 as they shared their frustration of having nowhere to post the videos they took on their phones.

“There was no place to social share with friends–no app like Instagram is for photos,” says Urbach. “We decided if YouTube was being launched today it would be inherently social, and it would be mobile first.”

Then the pair decided to take it a step further and create the app they longed to use. Launched in November for iPhone, Ocho is a platform that allows users to upload and share videos eight seconds in length or less. An Android version will be released soon.

The number, which also inspired the name, isn’t an accident. The average attention span of a human is eight seconds.

Fortunately for Urbach and Swerdlin, the concept caught Shark Tank investor Mark Cuban’s attention for more than eight seconds. He and other investors, including General Assembly cofounder Matthew Brimer, heard about the app through a mutual friend during its development, and the founders shared the beta version.

“He vetted us through phone conversations, went through our strategy, and decided to come on board,” Urbach says.

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How does an entrepreneur get a big-name investor to buy in? Here are three key questions Cuban asked Ocho founders, and the answers that netted them a $1.65 million investment:

1. What’s Your Purpose?

While innovative products draw in investors, there must be more than that to close the deal.

“A product is very different than a company,” says Urbach. “To attract investors, there must be a company with a purpose built around the product.”

Urbach says Ocho’s purpose is simple. “We believe in the power of video on mobile, and our purpose is to power mobile video across the web,” he says.

Critics say the idea has already been done and it’s called Vine, but Urbach says Ocho is different. “Vine is a terrific platform and it has been so successful,” he says. “Vine videos are six seconds and they usually involve stop motion or dark humor. Most important, Vines are usually not made by you; they’re made by a Vine star.”

“Ocho is the place for sharing your life,” he adds. “It’s a different mindset, and with that, it needed a different platform.”

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2. What’s Your Core Technology?

Any investor wants to know what they’re buying, and the proprietary technology behind Ocho was key.

“You have to do the job of explaining why your company will succeed where others may have failed,” says Urbach.

When building the app, Urbach and Swerdlin had a list of criteria that would make the best user experience:

  • It should be widescreen so it can work in landscape mode.
  • It should have filters that were built for video and not photographs.
  • It should have a shooting process where you can easily upload and edit.
  • It should have the ability to add voice over and change the volume.

“It took us a year and half of continuous development; building things we knew we needed to build,” says Urbach. “We set out to fix the video experience since video went mobile, and everything was built with the deepest level of respect for medium. We knew we had to build a new platform–not just take a photo platform and convert it to video.”

3. What’s The Big Vision?

Great companies get built off of the dominant medium of their time, says Urbach. Viacom was created off of cable, and AOL launched from dial up. Today, video is a dominant medium–the average household has three TVs–but the potential of mobile video has been untapped.

“Until now, there were restrictions for making an app,” says Urbach. “Bandwith wasn’t available to make the viewing experience enjoyable; it took too much buffering. Today, however, the near universal penetration of 4G has taken watching videos from an arduous process to an experience for social sharing.”

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“Ocho is coming at the correct time,” Urbach adds. “Who is it to say that the next great media companies won’t get built off of mobile?”

The concept is attracting partnerships. Vice Sports announced it will use Ocho for sharing short-form content, and Urbach says the potential uses are limitless.

“At this point, we can’t predict everything Ocho will be used for,” he says. “[Fox Business Network reporter] John Stossel posted an Ocho after the Ferguson verdict. The platform is a soapbox for anybody who wants to stand up. It allows you to share your perspective–to skew the lens on all the important things in your life–and share events going on around you.”