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David Kreiger
(WG'07) |
Welcome Gregg. Thank you for joining the 2nd WEP Online Alumni Chat. Thank you also to current students and alumni who have logged on to participate in this online conversation. |
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As many of you know, Gregg graduated with distinction from the MBA program at Wharton in 1999. Since then he and his brother Evan co-founded JibJab Media, a company that has become an international sensation after developing the election parody, “This Land is Our Land.” The two minute short and its follow up, “Good To Be in DC!” were seen over eighty million times online on every continent, including Antarctica. |
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Gregg and Evan have been able to leverage this success by also launching JokeBox.com a website where you can store all of your email jokes in one place. In addition, over the past few years Gregg and Evan have also developed viral marketing campaigns for companies such as Anheuser Busch, Disney, Cartoon Network, USA Networks, Sony, Kraft, Revlon and many others. |
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Thank you again Gregg for being with us. I will ask the first question and then open the floor to students and current alumni that have joined us today. |
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David Kreiger |
With the introduction of the internet, DVR and other such technologies, the advertising industry is going through a period of tremendous change. JibJab Media seems well positioned with your expertise in online entertainment and viral marketing to help companies successfully adapt their advertising strategy to these changes. How do you see consumer advertising evolving over the next five years and how are you trying to leverage your talent at JibJab to take advantage of this evolution? |
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Gregg Spiridellis |
The biggest challenge for consumer advertising in the future will be the fact that you can no longer “BUY” peoples’ attention. The 30-second spot can be easily skipped with a DVR or stripped out of programming altogether. That leaves advertisers a few options: first, they can try to “integrate” their brands more seamlessly with the entertainment content. Second, they can create ads that people want to watch. |
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Integration is a real challenge from a creative standpoint. Television writers (with the Writers Guild of America) are up in arms about the mandates from the studios to �jam� brands into their storytelling. It�s not an easy thing to do and if it doesn�t feel organic, it can really ruin the entertainment product. |
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The other option is to create ads so good that people WANT to watch them. Budweiser and Bud Light (both JibJab clients) do this on a consistent basis. People LOVE their commercials. The problem here is that beer is a fun brand. How do you create a product for �Depends� that is funny without insulting your potential customer? |
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JibJab has an advertising-based business model so we will need to work with marketers on both these fronts. When we do brand integration, the integrity of our brand is CRITICAL. The JibJab brand vouched for the entertainment value of the content and the second we start putting Coke/Pepsi cans in the foreground, people will call us a sell-out and move on to someplace else for their entertainment. |
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I should add here that people always think of the DVR as a dangerous thing for advertisers. That is true if you make crappy ads. On the other hand, if you make great ads, it can be a positive. My wife has used our DVR on multiple occasions to rewind commercials she liked and show them to me. The battle for people�s attention is now Darwinian and advertisers need to create content that competes with everything else that is available to the consumer. |
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Peter Winicov |
Did you conceive JibJab as a growth business or did you consider it more a fun venture that found a profitable niche? |
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Gregg Spiridellis |
I graduated in 1999 when the dot com boom was in full swing. My dad was an entrepreneur and I always dreamed of doing something entrepreneurial. I knew if I didn't do it after I graduated, I never would. I'd get used to an investment banking lifestyle and it would be hard to walk away from the $$! My brother was an independent animator and I thought it would be great to start something. I believed that the Internet offered a huge opportunity to create a new entertainment brand (because there were no gatekeepers between us and the audience) but the worst case scenario was that I got to start a fun business, satisfy my desire to do something entrepreneurial and set my brother up in the production business. |
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Robert Thompson
(WG'07) |
Was "This Land" made as a product for a client, or was its intent to draw traffic to the website? |
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Gregg Spiridellis |
This Land was made for a client... the client was US! :) Our viral animations have been a cost effective way to advertise our brand from the very beginning... we spent very little to produce them and they spread the JibJab brand around the world without the cost of any media buying. |
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Emily Cieri |
I know you and your brother each bring a different expertise to JibJab. Beyond you, what other types of people have you hired? What have you outsourced? |
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Gregg Spiridellis |
Great question. Scaling the people side of the business is the biggest challenge for us because of how personal our product is. Recently we have scaled our technology team and our art team. Our plan is to keep the high level tech architecting and artists in-house and outsource the less specialized talent to other tech firms and animation production companies. Our goal is to stay as lean and mean as possible. |
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Jeff To
(EAS'04) |
So, Gregg, did you already have a business plan in place, cash inflow, or customers at the time you quit? Or did you just take the plunge and build it from scratch? |
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Gregg Spiridellis |
We took the plunge! It was a pretty scary thing but I really believed in my brother's talent and the opportunity that the Internet offered to distribute our work directly to the audience without a studio gatekeeper. Luckily, our timing couldn't have been better. Within a few months VCs were throwing crazy money at "entertainment portals" and we were able to build a very nice client base. Of course, they all went bankrupt a year and a half later but by then we had established ourselves and discovered other revenue sources to survive... |
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Sean Petersen
(WG'06) |
Gregg, given your comment about ads being compelling to watch, have you considered a funniest commercials section to your jokebox.com? If you did do this, do you think you could convince advertisers to pay you for the eyeballs or would you view this as a sell out? |
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Gregg Spiridellis |
Do you want a job? :) |
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Seriously... we are doing it with Bud Light right now and we are planning to do it in a broader way in the very near future. Stay tuned! |
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George Lin
(W'08, EAS'08) |
Do you feel that your site has reached a critical mass in terms of growth? Is there an additional direction into which you feel you can expand? |
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Gregg Spiridellis |
Our site traffic is nowhere near where we think it is going to be in a year. We recently soft launched a new application called JokeBox on our website that is a hub for all the viral videos, photos and text jokes on the web. It has already doubled our daily content views and is growing traffic organically every day. Our goal is to be the place people come for laughs online. That means we need to extend the brand beyond dancing presidents to include everything online that's funny. |
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Peter Winicov
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Internationally how do you approach two issues close to your business model: 1) you mentioned outsourcing but do you sacrifice quality with low cost off shore animators and 2) does the challenge of "translating" JibJab's trademark American humor overseas concern you? |
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Gregg Spiridellis |
First, we do not outsource overseas. All of our outsourced contractors on the art side are screened and selected by my brother. Quality is key and we cannot risk poor quality art. |
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Second, "translation" issues are major when it comes to our own original work. Comedy is the worst genre for international distribution (action is best). However, with JokeBox, we are creating a technology for people to submit, organize and share whatever they think is funny so we have high hopes that the JibJab JokeBox platform will take off in other markets. |
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One more thing... International currently accounts for approx. 20% of our traffic. The UK and Australia really like our original political satires! |
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Sean Peterson
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Yes Bud Light, but would you be able to get other advertisers- or would they see this as brand dilution? For instance, a funny Miller and Bud Light Ad in the best commercials section? |
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Gregg Spiridellis |
Great question. Ultimately, we serve our audience. We cannot be exclusive in the long term. Advertisers will have to compete for audience attention and accolades on JibJab the same way they will have to compete in all other media. The second we start letting political considerations affect our programming is when we lose our audience. Our strategic philosophy is make the audience laugh and the rest will take care of itself. But obviously there will be tough moments when we have to give up immediate revenue to live up to that commitment. |
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Jeff To
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Have you ever considered licensing some of your concepts, characters, and other JibJab copyright material to merchandisers as a potential revenue source? Or will you remain focused on content-creation? |
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Gregg Spiridellis |
I expect character licensing will be a very large part of our business in the future. As opposed to creating one-off animations (like THIS LAND) we are starting to build franchises with characters that we can monetize in lots of different ways. |
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Clare Leinweber
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Were there particular experiences at Wharton -- classes, interactions with faculty, club activities, etc. that you would credit with being particularly helpful as you launched JibJab and in the years since then? |
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Gregg Spiridellis |
Legal Aspects of Entrepreneurship was a great class. Also, I had a number of friends who left school and started their own businesses and that social network was (and is) incredibly valuable. |
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Jeff To
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What long-term strategic directions are you considering? Partnerships with Google/Yahoo/MySpace/YouTube to reach bigger audiences? Mobile content (e.g., Blackberries and cell phones)? Becoming a full-service ad creator? |
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Gregg Spiridellis |
Our long term strategic objective is to establish JibJab as THE place people come for laughs. We have a licensing deal with MSN on the web and V Cast for mobile. Both of those partners help drive traffic to JibJab where we focus a lot of energy on trying to convert people to members - so we can let them know when we do something new. |
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Peter Winicov
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In the last Alumni Chat (which is archived in the WEP Alumni section), Farhad Mohit of Shopzilla said, "VCs are managing a portfolio... many have never been operators... they don't have time or inclination to get into the details and really understand everything." How do you feel about VC involvement? |
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Gregg Spiridellis |
I don't have a lot of experience with VCs. We self funded JibJab with friends and family money and then built a service business to support our more speculative endeavors (e.g., original animations and JokeBox). However, I do agree that most VCs are managing to an exit - that's their job. All of my friends who are entrepreneurs have given me one bit of advice when it comes to VCs - be careful. |
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Ka-Wing Tam
(SAS'04, EAS'04) |
What advice do you have for aspiring digital artists? |
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Gregg Spiridellis |
Get your work out there! Never before in history has it been possible for an independent artist to make something and distribute it to a worldwide audience without someone telling you what to do. THIS LAND would have never gotten made if we were counting on a creative exec at a TV network to give us the green light. Seize the opportunity to put your work out there and if it is good, it will get passed along. If it's not, you'll learn from the feedback you get from your audience and do it better the next time. It took us 4 1/2 years to make THIS LAND. |
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Jeff To
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How much startup capital did you need? Can you disclose how much you're doing in revenues today? And how many people visit your site each day? |
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Gregg Spiridellis |
We took $50,000 from friends and family. I put in about $40k (money I had managed to save by taking Stafford Loans my second year). Unfortunately I can't disclose revenue or traffic right now but when we did our last animation (which premiered on the tonight show in December) we did 8 million visitors. |
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Tomo Takebe
(EAS'04) |
What do you feel about P2P and video distribution services like YouTube being able to distribute your content? Will you use that as an advantage to cover bandwidth costs? |
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Gregg Spiridellis |
Re: P2P... I love it! All of these new platforms will require new forms of storytelling/entertainment and that's what we do best. JibJab is a platform-agnostic brand. |
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With re: to YouTube. The problem for us is that there is no monetization opportunity there. We have exposure. Now we need revenues. There is a company called Revver that solves the bandwidth issue you mention and gives independent artists an opportunity to monetize their content, but luckily bandwidth costs are no longer an issue for us. Bandwidth is a commodity product and if you have the right person buying it, it's cheap. |
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George Lin
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You mentioned earlier that you want to establish JokeBox as the clearinghouse for internet humor, are you afraid that you will lose control over the quality of content then? Secondly, in doing so, wouldn't you be giving up the differentiation that separates you from the rest of the internet? |
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Gregg Spiridellis |
That's the biggest challenge we face. With regards to quality, we have built a very robust, proprietary system that keeps anything dangerous (porn, violence, etc.) off the site. When we launched JokeBox, we knew we needed to invest substantially to protect our brand and we did. The benefit is that I think we will have one of the safest online user-generated content environments for advertisers. Look at the problems MySpace has encountered. |
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With regards to differentiation, we are actively building our pipeline of original content and that will always be the most prominently promoted content on the site. We are in a transition phase at the moment and JokeBox is prominent, but that will change shortly... |
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Sean Petersen
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Since Revver, Brightcove and others allow ad insertion, do you somehow see JibJab becoming a "channel" with these services? Given recent developments at YouTube and Yahoo Video would there be a way to create a revenue stream with YouTube/Yahoo Video where you share ad revenue? |
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Gregg Spiridellis |
We are currently a channel on MSN and it's been a great deal for us - Joe Michaels at MSN is a Wharton alum :) MSN has already helped us create a revenue stream via ad share and their support has enabled us to expand our production efforts. |
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Karen Burns
(WG'86) |
Yesterday NPR had a story titled "Network Neutrality Unites Political Foes" on new legislation in congress. What is your take on this legislation? |
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Gregg Spiridellis |
Net neutrality is key to our business, but more importantly, key to ensuring that independent artistic voices can reach audiences in the future. The great commentary/entertainment of the future will not come out of mega-media conglomerates. It will come from independents. I fear that without net neutrality, digital content programming will be as processed and homogenized as network television... |
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Jeff To |
I'm working on a creative venture as well. How do you balance between the business requirement of meeting deadlines/budget vs. artistic requirement of taking one's time to get the job done right? How do you incentive artists to get things done on time? |
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Gregg Spiridellis |
It is very, very hard. In addition to my business role, I also write. Switching hats from budgeting to creative endeavors is THE biggest challenge in my professional life and I struggle with it every day. As for the artists, we have a line producer who makes sure goals are met on time and on budget, but managing artists is a very tough thing to do. They are not money-motivated and need a lot of emotional support. We try to make JibJab a place they feel safe so they can produce great work. |
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John Dillon
(WG'03) |
How much of the humor content on your site do you expect to be produced in-house versus user generated? Do you hope/intend people will visit your site more for laughs you create or those created by others? |
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Gregg Spiridellis |
Ultimately, in the world where everyone is a creator, it would be foolish to think the work we originate and produce in-house could compete for a significant amount of overall audience mindshare. That's why we are actively expanding our brand to include 3rd party produce content. Ultimately, we want people to think of JibJab as a place for laughs. The trick is to leverage our brand equity without damaging it. In the near term, we think we can create the original work that drives traffic every month, then we hope to hook that audience with JokeBox so they have a reason to come to JibJab everyday. |
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Louise Borke
(W'76) |
I am wondering if JibJab has anything planned for the 2006 elections that can possible top the "This Land is Your Land" piece? |
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Gregg Spiridellis |
Most likely, we will never top THIS LAND. It was a global phenomenon. The worst thing we could do is to set goals that would be based on "stream counts" and "reach". It was a unique moment in time, we seized the opportunity and now we are asking ourselves how we can form a deeper relationship with the 650,000 members we already have instead of how we can create something that will get passed along 100 million times. It is very hard to generate something with mass appeal on the Internet. The long tail is working against us (http://www.longtail.com). |
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Alan Cantor
(WG'73) |
Do you have or do you foresee any relationship(s) with AFI or USC Film school or other "creative" engines and sources of emerging talent? |
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Gregg Spiridellis |
As ways to recruit talent, absolutely. But that talent usually needs a lot of experience and practice to hone their craft before they can produce quality work. We are also focusing on sketch comedy and improv troops as talent feeders. |
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Tomo Takebe |
Who are your competitors when you mention "competing for audience mindshare"? |
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Gregg Spiridellis |
Anyone programming comedy content is a competitor from Comedy Central, to NBC to Google. I think we have a very unique perspective on both the creation of digital content and how to distribute to mass audiences that gives us a unique advantage. It won�t last forever and we are seizing the moment to leverage that experience and insight to become the online comedy brand. |
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John Dillon |
"Discovery driven" planning is a big buzz phrase at Wharton. Did you and your brother make small initial investments to test the market and your assumptions about the market when you launched? Did you discover anything that caused you to re-define your business model substantially? How different is your business model today from what you envisioned when you began the business? |
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Gregg Spiridellis |
Interestingly, our big vision is still exactly the same. We wanted JibJab to be the "Saturday Night Live" of the digital world and that is where we are still moving. Tactically, we have had to change our business model at least a half dozen to a dozen times since 1999 to deal with the reality of the marketplace (especially after the dot com collapse). As for "discovery driven planning", I guess you could say all of our early animations were discovery driven planning. We invested very small amounts in the productions and we learned each time what worked and what didn't. Because we can track how our audience consumes and shares our content, we are always learning from them. |
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Emily Cieri |
Since you took the plunge initially with JibJab without any business plan, have you taken time to develop a plan? Or do you continue to roll with it? |
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Gregg Spiridellis |
We had a business plan at an operating level when we started, it just wasn't bound with lots of color graphs to make VCs happy. :) As we grow, we need to be much more careful about planning, however we still maintain the nimbleness we need to change course on a dime. It's that operating flexibility that has enabled us to survive while most of our competitors from 1999 have all gone bust. |
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Karen Burns |
Can we count on you for more political parodies in the future? |
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Gregg Spiridellis |
Absolutely! It's what we love to do! Nothing is scheduled at the moment but sign up at JibJab and we'll let you know first when something new is coming down the pipe (sorry for the plug). |
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David Kreiger |
Unfortunately, that is all the time we have for this morning's online chat. |
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Gregg, thank you very much for taking the time to chat with us today. I believe that this conversation has given us all great insight into your entrepreneurial experiences and the world of online media. |
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Also, I hope that everyone can also join us for the 3rd WEP Alumni Chat on Friday September 29th at 11:30AM EST. We are excited to be hosting Seth Berger Founder & Former CEO of AND1. Seth will be able to share his insights on building his athletic brand into a $150M business as well as the sale of the company. |
