We are very excited to bring you a special LP interview with Joseph Gordon-Levitt. Aside from Joe's well-known work as a Golden Globe-nominated, Emmy-award-winning actor in films like 500 Days of Summer, Inception, and Looper, Joe is also the founder of HITRECORD, a startup which brings creative collaborators together across film, music, books, and more.
Ben sat down with Joe to discuss:
Thanks to our good friends at Fika Ventures for setting this conversation up!
We finally did it. After five years and over 100 episodes, we decided to formalize the answer to Acquired’s most frequently asked question: “what are the best acquisitions of all time?” Here it is: The Acquired Top Ten. You can listen to the full episode (above, which includes honorable mentions), or read our quick blog post below.
Note: we ranked the list by our estimate of absolute dollar return to the acquirer. We could have used ROI multiple or annualized return, but we decided the ultimate yardstick of success should be the absolute dollar amount added to the parent company’s enterprise value. Afterall, you can’t eat IRR! For more on our methodology, please see the notes at the end of this post. And for all our trademark Acquired editorial and discussion tune in to the full episode above!
Purchase Price: $4.2 billion, 2009
Estimated Current Contribution to Market Cap: $20.5 billion
Absolute Dollar Return: $16.3 billion
Back in 2009, Marvel Studios was recently formed, most of its movie rights were leased out, and the prevailing wisdom was that Marvel was just some old comic book IP company that only nerds cared about. Since then, Marvel Cinematic Universe films have grossed $22.5b in total box office receipts (including the single biggest movie of all-time), for an average of $2.2b annually. Disney earns about two dollars in parks and merchandise revenue for every one dollar earned from films (discussed on our Disney, Plus episode). Therefore we estimate Marvel generates about $6.75b in annual revenue for Disney, or nearly 10% of all the company’s revenue. Not bad for a set of nerdy comic book franchises…
Total Purchase Price: $70 million (estimated), 2004
Estimated Current Contribution to Market Cap: $16.9 billion
Absolute Dollar Return: $16.8 billion
Morgan Stanley estimated that Google Maps generated $2.95b in revenue in 2019. Although that’s small compared to Google’s overall revenue of $160b+, it still accounts for over $16b in market cap by our calculations. Ironically the majority of Maps’ usage (and presumably revenue) comes from mobile, which grew out of by far the smallest of the 3 acquisitions, ZipDash. Tiny yet mighty!
Total Purchase Price: $188 million (by ABC), 1984
Estimated Current Contribution to Market Cap: $31.2 billion
Absolute Dollar Return: $31.0 billion
ABC’s 1984 acquisition of ESPN is heavyweight champion and still undisputed G.O.A.T. of media acquisitions.With an estimated $10.3B in 2018 revenue, ESPN’s value has compounded annually within ABC/Disney at >15% for an astounding THIRTY-FIVE YEARS. Single-handedly responsible for one of the greatest business model innovations in history with the advent of cable carriage fees, ESPN proves Albert Einstein’s famous statement that “Compound interest is the eighth wonder of the world.”
Total Purchase Price: $1.5 billion, 2002
Value Realized at Spinoff: $47.1 billion
Absolute Dollar Return: $45.6 billion
Who would have thought facilitating payments for Beanie Baby trades could be so lucrative? The only acquisition on our list whose value we can precisely measure, eBay spun off PayPal into a stand-alone public company in July 2015. Its value at the time? A cool 31x what eBay paid in 2002.
Total Purchase Price: $135 million, 2005
Estimated Current Contribution to Market Cap: $49.9 billion
Absolute Dollar Return: $49.8 billion
Remember the Priceline Negotiator? Boy did he get himself a screaming deal on this one. This purchase might have ranked even higher if Booking Holdings’ stock (Priceline even renamed the whole company after this acquisition!) weren’t down ~20% due to COVID-19 fears when we did the analysis. We also took a conservative approach, using only the (massive) $10.8b in annual revenue from the company’s “Agency Revenues” segment as Booking.com’s contribution — there is likely more revenue in other segments that’s also attributable to Booking.com, though we can’t be sure how much.
Total Purchase Price: $429 million, 1997
Estimated Current Contribution to Market Cap: $63.0 billion
Absolute Dollar Return: $62.6 billion
How do you put a value on Steve Jobs? Turns out we didn’t have to! NeXTSTEP, NeXT’s operating system, underpins all of Apple’s modern operating systems today: MacOS, iOS, WatchOS, and beyond. Literally every dollar of Apple’s $260b in annual revenue comes from NeXT roots, and from Steve wiping the product slate clean upon his return. With the acquisition being necessary but not sufficient to create Apple’s $1.4 trillion market cap today, we conservatively attributed 5% of Apple to this purchase.
Total Purchase Price: $50 million, 2005
Estimated Current Contribution to Market Cap: $72 billion
Absolute Dollar Return: $72 billion
Speaking of operating system acquisitions, NeXT was great, but on a pure value basis Android beats it. We took Google Play Store revenues (where Google’s 30% cut is worth about $7.7b) and added the dollar amount we estimate Google saves in Traffic Acquisition Costs by owning default search on Android ($4.8b), to reach an estimated annual revenue contribution to Google of $12.5b from the diminutive robot OS. Android also takes the award for largest ROI multiple: >1400x. Yep, you can’t eat IRR, but that’s a figure VCs only dream of.
Total Purchase Price: $1.65 billion, 2006
Estimated Current Contribution to Market Cap: $86.2 billion
Absolute Dollar Return: $84.5 billion
We admit it, we screwed up on our first episode covering YouTube: there’s no way this deal was a “C”. With Google recently reporting YouTube revenues for the first time ($15b — almost 10% of Google’s revenue!), it’s clear this acquisition was a juggernaut. It’s past-time for an Acquired revisit.
That said, while YouTube as the world’s second-highest-traffic search engine (second-only to their parent company!) grosses $15b, much of that revenue (over 50%?) gets paid out to creators, and YouTube’s hosting and bandwidth costs are significant. But we’ll leave the debate over the division’s profitability to the podcast.
Total Purchase Price: $3.1 billion, 2007
Estimated Current Contribution to Market Cap: $126.4 billion
Absolute Dollar Return: $123.3 billion
A dark horse rides into second place! The only acquisition on this list not-yet covered on Acquired (to be remedied very soon), this deal was far, far more important than most people realize. Effectively extending Google’s advertising reach from just its own properties to the entire internet, DoubleClick and its associated products generated over $20b in revenue within Google last year. Given what we now know about the nature of competition in internet advertising services, it’s unlikely governments and antitrust authorities would allow another deal like this again, much like #1 on our list...
Purchase Price: $1 billion, 2012
Estimated Current Contribution to Market Cap: $153 billion
Absolute Dollar Return: $152 billion
When it comes to G.O.A.T. status, if ESPN is M&A’s Lebron, Insta is its MJ. No offense to ESPN/Lebron, but we’ll probably never see another acquisition that’s so unquestionably dominant across every dimension of the M&A game as Facebook’s 2012 purchase of Instagram. Reported by Bloomberg to be doing $20B of revenue annually now within Facebook (up from ~$0 just eight years ago), Instagram takes the Acquired crown by a mile. And unlike YouTube, Facebook keeps nearly all of that $20b for itself! At risk of stretching the MJ analogy too far, given the circumstances at the time of the deal — Facebook’s “missing” of mobile and existential questions surrounding its ill-fated IPO — buying Instagram was Facebook’s equivalent of Jordan’s Game 6. Whether this deal was ultimately good or bad for the world at-large is another question, but there’s no doubt Instagram goes down in history as the greatest acquisition of all-time.
Methodology and Notes:
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Transcript: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Ben: Hello Acquired LPs. Just me, Ben here. While David has been out on podcast or paternity leave, I've got an interview that I want to share with you today. Our good friends over at Fika Ventures introduced me to Joseph Gordon-Levitt for a fireside chat that we originally did for their firm's annual meeting. We wanted to give a huge shout-out to Eva Ho, John Chen, and really thank you just to everyone at their whole firm for hooking this up. We're very excited that we get to share it with you all, our LPs. Because there's plenty of intro in the actual interview, without further ado, let's dive in.
It is really my honor to introduce someone, a creator in the truest sense of the word that I've been a fan of for a long time. Of course, you'll know him from wildly popular films and shows like Inception or 500 Days of Summer, one of my personal favorites, Looper, or his recent Apple TV show that he wrote, directed, and produced, Mr. Corman. Of course, I am talking about Joe Gordon-Levitt. In addition to all of this, Joe is a musician, a gymnast, an entrepreneur, and the co-founder behind the startup, HitRecord that we will talk about today.
He is currently playing Travis Kalanick in a Showtime series called Super Pumped. He took some time out of his busy schedule to be with us here today. Please welcome the Golden Globe-nominated, Emmy award-winning, Joe Gordon-Levitt.
Joseph: Hey. I'm so happy to be with you, Ben. Thank you for that introduction. I've been listening to the Acquired lately and I'm a fan as well, so thank you.
Ben: Thank you. I figure we dive right in. We were recently chatting and you told me this quote that's really stuck with me that the creator economy seems to be about this final finished product and not the actual act of creating, which was a little bit of a lightbulb for me. I was wondering, could you share your thoughts on this with the audience?
Joseph: Yeah, it's true. It's all about the content, it seems. Whereas for me, what I love the most about getting to be an artist isn't the finished content, it's the creative process itself. Even in the movies you just mentioned, you mentioned Looper. When Looper came out and people liked it, it did well at the box office, and it got good reviews, I won't say that that's not thrilling in its way.
But if I'm honest, the things that gave me the most joy and that were the most meaningful to me that I think I'll be remembering when I'm old and gray, it wasn't those things about the finished movie, it was the days on set. It was the making of the thing, the creative process itself. I feel like there's such emphasis right now on the "creator economy."
There's lots and lots of growth. There are lots and lots of businesses starting. There are lots and lots of businesses doing really well, but they're all focused on how do we monetize the content itself, the finished content that these creators are creating.
Coming from my perspective of, oh, but what makes me happy isn't the finished thing, it's the creative process. At HitRecord, we've been really focused on, how can we provide that experience, that joy, and that meaning that comes from the creative process itself? How can we build a platform and orient our community towards that creative process?
Ben: You bring up this idea that not being from the film industry, I don't totally know, but I imagine 30, 50, 100 days on set, whereas you only have one launch day. I'm wondering what you think it is about the human condition such that we index so hard on when we can show our baby to the world, but not the incredible amount of time and particularly the relationships that are formed along the act of creating.
Joseph: That's what gets the most attention. We're all focused on getting attention and I think that's natural. It's probably baked into our biology that if more and more people pay attention to us, we're more likely to survive and reproduce.
I really do think we live in a world whereas more and more people have access to getting creative, it makes sense that one first instinct would be, okay, well then let's see what all these people are making, and let's try to get attention for those finished things. But the other side of that democratization, when you put incredible creative tools in the hands of so many more people that never had them is they all get to participate in the creative process itself.
Here's an example. When I grew up I would play with my family's camcorder and we would always want to make little movies. I'm talking about being eight years old or something, making little movies with a camcorder, and we always wanted to edit them but we couldn't. You just couldn't really edit back then. Editing was something that you had to have equipment that only existed in professional settings, but now you can edit on a phone.
That's a wonderful, as they say, the democratization of creative tools. What do we do with that? Do we then democratize the finished things that people have edited? That's cool, that's great. People are doing that, but there's also so much fun in just the editing. The ability of an 8-year-old, a 15-year-old, or a 35-year-old to make something on their own or with their friends, get to finish it, and get to use all these creative tools that they never had before, what is that process? How much joy and meaning can they get from doing that and doing it together with other people?
I think that with more emphasis on the joys of the creative process itself and maybe a bit less emphasis on the finished product, you'd have a lot happier creative people. I think the orientation around the finished content nowadays can be anxiety-inducing. I think that's part of why you see a lot of folks that are so addicted to these more attention economy platforms feeling kind of [...] all the time. I don't think it has to be that way.
Ben: Yeah, you definitely find yourself chasing likes and having very objective metrics to chase. I think earlier I brought up the human condition. I think this is probably a better place to talk about it a little bit. But before we dive into what drives creators these days, what incentives we've given them, and all that, you mentioned HitRecord. Catch us up to today. What is HitRecord?
Joseph: HitRecord's an online community that I started a long long time ago. It's full of people who love being creative together. It's been a long journey with HitRecord. It started as a total hobby many years ago. It's just something I started with my brother. We launched it as a production company a little over 10 years ago now. We did well as a production company for a while.
We made shows, put out books, records, we won a couple of Emmys, and we're still going with our production company. What we've been focused on a lot lately is how do we build a platform around that production company so that more and more people can have this meaningful and joyful experience of the creative process and doing it together with other people.
Ben: I want to understand, for those of us not from the industry, what does it mean to be a production company versus a platform? I assume production company means you are involved in handpicking all the people who get to be a part of the project.
Joseph: What I mean by production company is when we would make a TV show, we would put out calls to action and post to our site, our app, and stuff and say, hey, we're making a TV show. Come and contribute to it. We were very much in charge of that TV show. I was directing it and our whole team was leading it.
We were incorporating many contributions, collaborations, remixes, and stuff that would happen within the community on our site and stuff, but ultimately, the finished TV show was something my production company was on the hook for to deliver to the network, to the client, or whoever we were working with.
When I say we're now trying to build a platform around that production company, what I mean is, we're still doing our production company stuff, but we want to make sure that there's a meaningful, great experience for people who come and want to participate, and whose contributions aren't necessarily going to make it onto the TV show or into the book, et cetera.
Ben: What's an example of what that could look like? Let's say I'm a creative, talented person who shows up on HitRecord, I start communicating with other people on the site, building a discourse, and maybe building a little bit of a reputation. How could my talents literally translate to becoming a part of the project?
Joseph: Anybody can still start a project. We started some of the projects and we did build tools to let anybody start projects. What we found is, obviously makes enough sense. It's really hard. It takes a lot of skill and dedication to start and lead your own project. While we found that leaders and starters of projects were not something that was probably going to scale, people who wanted to participate and contribute to projects really did scale. We were able to grow those numbers really well.
Now where we're focusing and we just are launching a new part of our platform that's all-around learning. A lot of people come and they have that creative urge inside of them. They don't necessarily have the skills, the practice to excel to the point where they're going to be the contribution that gets picked to be on the TV show or whatever.
We've launched this thing called Class Projects where you can learn a creative skill by doing and learn it in our HitRecord way where you're not just watching educational content, but you're participating in these class projects where you learn by doing.
Ben: What's an example of one of these Class Projects? How is the instruction or how does your action work?
Joseph: I’ve taught two of them so far. I'll give you one example I did one about acting. Instead of sitting down and saying, all right, I'm going to tell you everything I know about acting, it's not an acting class, it's a class project. The one that I've done so far is called voice acting with naturalism. It's all about doing a monologue in a naturalistic way. I am just going through my process and saying, here's how I would do a monologue, here's how I pick the material, here's how I practice that material, here's how I finally perform it.
We break it down into three lessons. Each lesson has a video. At the end of each lesson, you contribute your work in progress. At the end of the final lesson, you contribute your finished recorded monologue. You get feedback along the way from TAs on our staff, as well as your fellow classmates. So it's very participatory and it's very communal.
Ben: That's cool. Is the long-term goal that you're training all these naturally creative people to be able to work on HitRecord productions at some point?
Joseph: Well, I wouldn’t put it exactly that way. We keep doing our production company stuff. That's a really inspiring part of our ecosystem that these productions are going on. One thing that I always am really careful about is dangling unrealistic carrots. I think there's a lot of stuff online, in our world, in the creator economy especially like, here, we're going to be your ticket to being a star.
I really don't like that. I don't think it's honest. I think if you're dangling that carrot, you're going to disappoint 99.999% of the people listening. We really put more emphasis on what I was getting at a second ago, all the joy that can come and all the meaning that can come from just the creative process itself.
I'll give you an example. When you do some community theater, you're not doing community theater because you think you're going to win an Oscar. You're doing it because it's fun to do. When you go and you play basketball with your friends at the park, you're not doing it because you think you're going to make it to the NBA, you do it because it's fun to play basketball with your friends at the park.
Again, like I said at the beginning, there's a lot of emphases right now on the finished content and how you can become a star. I get it. There's a natural desire for that, but I think we're creating a lot of really disappointed people who have that urge inside of them to be creative, do their thing, put it out there, then they don't become a star, and then they consider themselves failures. I think that sucks.
I don't think it has to be that way. If we oriented a creative culture and a platform around instead saying, hey, there's so much to be gained for your life, for your mental health, for your happiness, and just for fun by doing art. Whether it's acting, music, writing, drawing, photography, or whatever it is, and doing it because you love doing it and because it's satisfying to grow as an artist.
It's a great way to explore yourself. It's a great way to connect with other people and make incredibly genuine, intimate friendships when you're collaborating with other people on artistic projects. It doesn't have to be about making it big.
Ben: Can you give us maybe a sense, just so we all understand the scale and scope of it? Maybe how many people have used HitRecord and what sorts of projects have come out totally organically in the community of people collaborating to that
Joseph: There's more than a million. We crossed a million last year of registered users. There are new projects going on all the time. Let me see, how do I put that into a number for you? How public are we? I don't know how much I should say. I think if you look at the scale that we're seeing with online learning especially, this is a space that's really exploding and I really understand why, especially in times of the pandemic, but I think it was even happening before the pandemic.
For example, I'm friends with David Rogier, who's the co-founder and CEO of MasterClass. He actually even invested a little bit of money in HitRecord. He's been a wonderful mentor. MasterClass is just killing it. What we're doing, of course, is different from MasterClass. We've talked about this with David.
They make this incredibly high quality, very premium, high production value educational content. People love watching it. Ours is less about watching and more about doing. We don't spend our money on high production value. We've spent more money on a truly interactive user experience on being able to provide feedback to people's works in progress, et cetera. It's all geared towards learning by doing.
Ben: Transitioning here a little bit. You are the co-founder of a growing technology company and actively a big-name Hollywood actor. I think we've seen a few startups that celebrities have been involved in where it feels kind of in name only. You're really in the guts here.
I've been really floored in our couple of conversations before this of how intimately involved in the product you are. I'm personally curious, how are you doing both? How do you manage your time? How do you think about both of these things working together?
Joseph: The first thing to say is, I'm really full time with HitRecord when I'm not full time on something else. When I am full time on something else like you mentioned, I'm shooting a show right now, I'm acting. My co-founder, Jared, and I have been friends for a long time, are really aligned on things, and we talk every day. But he's the one who's all day, every day on this like a startup founder. I'm a non-traditional startup founder in that way.
I think you are right. I'm very flattered and take great pride in the fact that this isn't by name only. This isn't something I attached myself to later. This is something that I started with my brother years ago as a total hobby. We didn't think of it as a startup at all. I could tell you the whole story, but it grew organically from a very small place to something slightly bigger. It's been a slow growth all this time because we were never focused on rapid growth or anything like that. It's never really been that for me.
I think that honesty, if I could use that word, is part of why the community feels as good as it does. People who joined HitRecord can sense the genuine nature of why the community exists.
Ben: When you say why the community exists and why it feels as good as it does. I think we had a good conversation about it's been a decade. It hasn't been a hyper-growth thing to a million users, it's been sort of a slow build. How do you think that's affected the reasonableness of discourse that happens on the platform?
Joseph: We have a lot of people, a strong core community of people who deeply care about it, who it's part of their identity as well. They've been with us for a while and they've been through multiple phases of it and evolution as it's evolved, I guess. When you have people who genuinely care, then a community will self-heal, self-regulate, or self-improve. Because when trolls come in, those trolls get kind of received.
One of our community core values is damn it, you got to be kind. By the way, I should say, community core values is actually something we just put into writing last year because I'm learning more and more about the conventional wisdom of tech companies and tech platforms. For years, we were treating each other kindly, but it wasn't something we'd ever codified into community core values because I'd never heard that term before.
Ben: Do you deputize people in the community so that it self-regulates in that way, or is there just a critical mass of people who care deeply so that it doesn't become a trolling environment?
Joseph: There are community moderators. There are also community curators, we call them, who have the power to take something that they like and feature it on the front page. That's a great way to surface stuff that our staff doesn't find. We have those people that we deputize like you said, but then there's also plenty of people who haven't been deputized, but just take it upon themselves to care. It's such a gift.
Ben: Moving to the acting and filmmaking world for a moment. How is it different today when we have the internet, social media, and faster than ever news cycles than when you first started your career before all these got going?
Joseph: When I first started my career, I was six years old. I don't think I was aware of any such ramifications. I think in many ways, things are so much better. Things are getting better all the time. Then there are accompanying downsides that come along with the new advances. The democratization that we were talking about before has huge upsides. People are able to do wonderful, creative things, especially more niche things that would never have found an audience before when the channels of distribution were so much more narrow.
Of course, the downside of that currently is that the dominant platforms are these mass surveillance advertising machines that I think are creating some unhealthy incentives. I'm worried about the creative spirit of people today, especially young people today who, at the very embryonic stage of any creative idea, are already thinking about likes and follows because they're so addicted. I think that that's potentially poisonous and something that we really have to address.
Ben: Today, we have the upside of anybody finding a niche, flourishing creatively, and finding an audience so we don't have as many gatekeepers, but you have the downside of people being very tuned in to exactly how well they’re being received immediately.
Joseph: Yeah, and those sorts of extrinsic motivations, I don't think should be ignored entirely, but I think the pendulum has swung too far that way. I think any healthy creative process that's going to make the creator happy, you need to find a balance between being intrinsically motivated, and really just diving deep into yourself and finding what it is that you and you alone have to say and saying it.
Then on the other hand, yeah, sure, understanding how that's going to be received and speaking in a language that other people can understand. I think both of those things are important, but we're so swung over to the extrinsic side because we've got this Skinner-esque, behaviorist, buzzer machine in our pocket at all times that buzz you with pleasure whenever you get a like. It's creating some anxious people. I feel bad about that.
I don't think art should be angst-ridden. Of course, it'll always be to some degree, but art should be a way for people to find peace, happiness, meaning, and joy. It shouldn't be like a slot machine where you're gambling your self-worth all the time.
Ben: It's funny. I can say as a podcaster that releases three-hour episodes on an archaic platform, podcasts don't have the dopamine hits built-in that TikTok or Instagram do. I do find peace in exactly what you're talking about in that when we release an episode, no one can listen to all of it for at least three hours. So I'm not going to get any feedback for a while and even then, it's probably going to be over the next couple of weeks realistically.
People can't immediately go binge something like that. I can definitely validate what you have postulated there that the less advanced media mechanisms on the internet actually provide a little bit, probably better mental health.
Joseph: I think podcasts are wonderful exceptions in our sort of scattered time. I love the rise of podcasts. I love that people are dedicating a sustained period of time where you can actually go into depth in something. In fact, doing Class Projects on HitRecord, I've appreciated some of the similar things. Because making a lesson for one of these classes, I'm making videos that are 20 minutes or a half-hour for each of the three lessons in a class project.
It does give me a chance to dive in deep and be like, here's how I do this, here's why I do it this way, here's how I learned it, and here's another way to think about it, and really focus on something. Because obviously, the more newsfeed-ish way of approaching content where it's just always on to the next, on to the next, on to the next, it's good for keeping attention and it's good for serving ads and making money that way. But I don't think it's good for the slow thinking where humanity gets to really shine.
Ben: In addition to being in these unbelievably popular Christopher Nolan movies that I've seen a dozen times, you're also very much an indie filmmaker. It seems like you do just a lot of passion projects. How has that world of indie production changed now that we have the big tech companies as buyers, as huge distribution channels in a way that before, it seems like you were just hoping to get picked up by the studios? Can you talk a little bit about that and compare and contrast those two worlds?
Joseph: We're at an awkward growing stage in terms of what's the professional internet entertainment industry and what's indie. The word indie is almost antiquated at this point because indie came from a time when we would call something independent. It meant, well it doesn't exist within the five major studios. Now we live in a time where the five major studios are all swallowed up by big tech companies.
Like you said, it's all about these other streaming platforms. What is even indie? Is indie just someone with a phone making a TikTok video? That's more like indie, I guess. I think that the whole paradigm has just changed. I think a lot of us in the traditional, professional, Hollywood entertainment industry are having to confront, is there an indie world anymore? Do we want to work for these huge conglomerates?
As you probably know, I see the main union of the crews right now are about to potentially go on strike because film crews are getting pushed really hard with not enough resources to try to make stuff at a professional level and such that it's not really fair, the working conditions, hours, and stuff that crews are expected to work. So I don't know where this all exactly leads, but I don't think that where we're currently at is exactly sustainable.
To be really honest, having listened to a couple of your episodes about Web 3.0, it makes me think, we might be heading somewhere closer there where artists really are more independent in that they're forming their own relationships with their audiences, both creatively as well as financially, I guess. Maybe that's a good thing.
Ben: Have you ever created something and just put it on YouTube rather than working through traditional channels to get it out there?
Joseph: Oh yeah. Millions of things. I put stuff online all the time. I put stuff on HitRecord. I put stuff on YouTube sometimes, but frankly, I don't love the YouTube environment. We've made some cool stuff for YouTube and in fact, won an Emmy with them last year. So that was nice. As far as my own more little personal things, that's part of what HitRecord is about for me.
It's what it was years ago before we were even a company of any kind. It was just a place where I was putting little things that I was making on my own. I have a lot of fun and it's like a good refresher for me sometimes. Just go on HitRecord and see what projects are going. Just do something really fun and easy, someone will be like, hey, here's a piece of writing. Will someone else read it out loud? I'll just do that really quick just because it's fun to do something that's not necessarily attached to anything industrious.
Ben: Can you share why it’s called HitRecord?
Joseph: Yeah, sure. This is in the mid-2000s. I have been an actor ever since I was a little kid. Then I quit acting when I was 19 to go to college and went to college for a couple of years. Then I wanted to get back into acting and couldn't. No one would cast me in any parts. It was really a painful thing. As you might know, if you've ever talked to someone who's creative at heart but not getting their chance to do their thing. At that point, I was like, okay, I have to take responsibility for my own creativity. I can't wait around for someone else to give me a part. I have to be the one to do it.
My little private metaphor for that was I want to be the one to push the button to hit record. It was just this little motivational, rallying cry for myself. It was also a play on words that hit record, spelled the same way as hit record. In the past, the media was a consumable object of a record. In the future, the media is going to be just something that we all do, less of an object and more of an action to hit record. That was my little bit of wordplay.
I started making little things, little videos, short films, songs, stories, and stuff. My brother helped me set up a little website. We called that hitrecord.org. He suggested we put a little message board on there, my brother did. At first, I was like, I don't know if we should, people can be jerks. He was like, we can take it down if it sucks. I was like, okay, let's put it on there. It was just this little PHP message board. That's where the HitRecord community started. It was on this message board.
What we saw was that some people were coming to check out the things that I was making—these little songs and stories and stuff, and some people were posting stuff that they were making on their own. What a lot of people started to do is wanting to make things together. We thought, oh, that's cool because that's different than has ever been possible in history. Watching someone's video is not that different from watching TV, or listening to someone's song is not that different from listening to the radio.
One person in the US and another person in the Philippines collaborating to make something together, that's never been possible before. We thought that was really cool so we kind of leaned into that. My brother was a software guy. He learned PHP, actually, so that he could build little features on top of this message board to help people collaborate. The community slowly started to grow. We were just doing this for fun in our spare time because we were in our 20s and had [...] else to do.
From there, we started seeing this real culture form. I, at that time, wasn't particularly entrepreneurial. A friend of mine, Jared, said, could this be a production company? Could we make all kinds of things this way? Jared and I started it as a production company. Like I told you, we did all kinds of things as a production company. Then we realized, oh, if our goal is to let as many people as possible experience that joyful feeling of being creative together and having that experience of the creative process, the production company is not necessarily the best way to do that. We need to build a platform around this production company.
That's when we started wading into the tech world. We realized if we're going to build a platform around our production company, we need a much better website and we need an app. We never had any of that. We used to adamantly insist that we are not a tech company. It's not our background. We won't be good at it. But we started learning and meeting people and getting advice. After a couple of years of getting ourselves acquainted with a lot of these ideas, we ended up raising VC money and were able to hire a proper product and technology team. Here we are today launching our subscription service around learning.
Ben: It's so cool. Do you think that there's the future for HitRecord natively building in functionality to shoot and edit video, music, or anything like that natively in the platform? Or is your vision for it that we're going to build the best community collaboration tools in the world and the actual filmmaking or music-making work gets done in what is already best-in-class platforms for that?
Joseph: That's a really good question. We've definitely debated that. It's tempting to be like, let's build a video editor, or let's build an audio recorder. But there are such good ones. At that point, you're going to try to compete with Apple who makes iMovie or something like that. We have built very simple creative tools. I think my favorite one that we've done is, like I mentioned, I teach a voice acting class project. A lot of people come to HitRecord. They'll read a piece of writing out loud and act that way. It's actually a little cumbersome to do that.
To have the text you need to have two screens open. You need to have the text on one screen, and then your microphone open on another device. It’s not the easiest thing in the world. We built a simple thing in our app where you can have a voice acting prompt, and it has the script right in there, the record button, and you can just read the script, perform it right into the microphone, and contribute it to the community all really seamlessly.
That's a very, very simple, creative tool, but it's honed perfectly to something that our community likes doing. When we built that, of course, the voice acting contributions shot up because it was so much easier to do. Creative tools like that, I think, are really interesting. When it comes to more sophisticated creative tools like editing, multitrack audio recording, or things like that, I think I'd be more interested in figuring out how to plug into the existing best-in-class tools.
Ben: There's a thread on the name HitRecord that I don't want to let go because I think it's really insightful. You started it just because you needed some mantra, an outlet to let yourself be creative, to give yourself permission for that.
Here I am, on the other side thinking like, well, if Joe feels like he needs to give himself permission to be creative, it's like everybody's got a boss. In the old world of TVs and movies, you have to get cast, you have to take notes, and then you're allowed to be creative on top of that. It's cool to see you finding some way to say, I’m going to go be creative on my own without anybody giving me permission.
Joseph: Ultimately, that bosses yourself, right? I hate to sound woo-woo, but we all have these demons in our head that say to us, you don't need to do that. You probably suck. Nobody's going to care. Don't do that. Give up. Let someone else do that. Any artist, whether they're a total beginner, a seasoned pro, or anyone in between is going to wrestle with those demons, has to perform the act of bravery of overcoming those demons, and going forth and doing it.
That's that moment where you push the button. What we have found on HitRecord is that it can be a lot easier within a safe, positive, and encouraging community. That's the community that we've grown. I think that's why a lot of people who come to HitRecord feel like they're able to come out of their shells and try things in ways that they might not feel elsewhere online that puts more of the focus on the finished content, the likes and follows, and other extrinsic rewards that come along with it.
Ben: Well, let's pop up for a minute and talk a little bit about film and TV industry dynamics. You're filming Super Pumped right now. Your most recent project, Mr. Corman, both of those are television shows. It does feel like we're in this golden age of TV. I don't know exactly where to start. Maybe with The Sopranos and The Wire in the HBO era in the early 2000s. You have Mad Men. So many great it almost feels like that's the safe place for new IP to come forth and for people to try really innovative things these days on TV and not on film. I'm curious—at least in the most widely distributed box office pictures—if you would agree with that. If so, how did we get here?
Joseph: A lot of what's going on with TV like, Mr. Corman, for example, I was very much thinking about the indie movies that I loved growing up in the ‘90s. Those indie movies were so special because they weren't fitting into the creative boxes that were designated by the Hollywood studios. The truth is, those movies also had really small audiences. I used to go to an arthouse cinema and watch those movies here in Los Angeles where I grew up.
Most cities in the United States don't have an arthouse cinema. Most people never get to see Sling Blade and Big Night. Some people saw Reservoir Dogs because Pulp Fiction was so big, but those movies, the mainstream never really got access to them. I think it's really exciting that now the channels of distribution, like we talked about, are so much wider, there's a desire for these less normal, more specific kinds of content. I think that's a really beautiful thing.
I also understand that people might not want to go watch those things in the cinema because the cinema is expensive. Having to pay to park, then pay for the movie tickets, and then pay for overpriced popcorn and soda, a trip to the movies for someone with a middle income in the United States is an expensive thing. I can understand why people want to see a big expensive movie if they're going to go to the cinema. If they want to watch something that's more down to earth, they want to watch it at home. That trend, I'm sure will continue.
I'm a lover of the cinema. I kind of hate that I'm saying this, but I also think it's probably true that cinema is going to become less and less of a prominent thing in our culture. The same thing happened to theater, 100 years ago, 120 years ago. Everyone would go to Vaudeville Theatres throughout the land. They would go to lecture halls and hear oratory and things like that.
For cinema, then radio, and then television kind of changed all that. There were upsides and downsides. That's just the inevitable evolution of technology and how technology impacts our culture. I think it's up to us in every generation to look at okay, well, the new technology is this. Now, how can we make that a good thing instead of a bad thing?
There are plenty of ways that it could have a negative impact on our culture. I think we're seeing that in our day right now that a lot of the new media technology is having really questionable impacts on our world and our culture. We shouldn't just throw up our hands and say, well, that's the tech. I don't think it's that. I don't think digital technology necessitates a shortening of attention span and a rise in tribalism and authoritarianism. It's a question of how we use that technology.
Ben: You touched on something there about film or about the theater going away. I've thought about this a lot and I am completely from the outside. I'm curious if you would sort of agree with this take that it's not that it'll go away in the same way that the theater didn't go away. But it is true that the only thing that I've seen in the theater in the last three years has been Hamilton. I'm clearly doing that less than I would have 100 years ago.
Do you think the place for the cinema just becomes that’s where I go to see the Star Wars movie and the Bond movie? The thing that costs over $200–300 million to make so they can invest in the production and distribution that they know is going to hit. I go 1, 2, 3, or 4 times a year, but all the innovation and experimentation are on streaming platforms where there's an infinite shelf.
Joseph: I would imagine the culture of cinema is going to look more and more like the culture of theater today. There is experimentation and innovation in theater. It's just a limited number of people who ever experienced that. Hopefully, once we get past this pandemic—let's hope that that happens one day—I do think that there must be innovations ahead of us in what it means to all gather on a Saturday night and experience storytelling. I am certain that that's coming.
It's not something that I've put a lot of focus on in the last number of years. It's something we actually did earlier in HitRecord. We used to have these live events that were really fun. Where we would gather people into a theater and we would play stuff on the big screen that our community was making. But then we would also make new stuff with the people that were there in the audience, bring them up on stage, have them do readings or dance or things like that, and incorporate what we were making that night into what the community was all making online throughout the world.
I feel like that's probably coming. It probably has more to do with fortnight than it does with HitRecord. It probably has to do with augmented or mixed reality, or whatever you call it. I feel like what's so fun about the cinema is you're leaving your house. You're going somewhere where there are other people and you're going into a crowd into a social setting. You're all experiencing a story together. I don't think that's going to die. That's probably something very basic that humans are going to want to keep doing somehow.
It's going to be really interesting to see over the next couple of decades what are the innovations where that keeps happening? I don't think it's going to keep being the same movie-going experience that we've seen for the last 100 years.
Ben: Yeah. No way or it just won't survive, at least on a mass scale. You're talking to a startup audience here. You are currently playing one of the most infamous startup founders of the last 20 years. I know you're just shooting right now and I know there's no marketing or anything around Super Pumped, but could you share maybe just any fun vignettes from what it's been like on set playing Travis Kalanick?
Joseph: Yeah, sure. It's been funny playing Travis because I have over the last three-ish years waded into Silicon Valley and done a lot of learning myself because of HitRecord.
Ben: I mean, you’re a VC-backed founder.
Joseph: Yeah, exactly. If you had said to me in 2014, I heard you raised a Series A from a VC in Silicon Valley, Sand Hill Road, or something, I'd be like, I don't know what any of those words mean. I have learned what those words mean, and so it does provide a certain amount of insight in playing Travis.
Actually, just this week, we were shooting a fundraising montage. A montage is where like music comes in and you're no longer hearing the actors speaking because the music is playing over it. It's usually a passage of time or something. It's usually someone getting better at something or something like that in a Hollywood montage. There's a montage sequence where Travis and Emil are fundraising. I had been in those rooms. I pitched to VCs and did fundraising. Because it's a montage, we're improvising. There aren't scripted lines for us to say because it's just a montage.
The actor and I are having to just improvise and make [...] up to say during these montage scenes. I started hitting Silicon Valley speak. I started talking about customer acquisition costs, lifetime value, churn, and things like that. Then the other actor after they yelled cut, he turns to me like and he’s like how the [...] do you know these words? Did you do a lot of research to play Travis Kalanick? I was like, no, this comes from HitRecord. This comes from actually pitching VCs. So yeah, it's been helpful.
Ben: That's awesome. I can't wait to see how it translates to the screen. It'll be so fun to see how you bring that character alive. Really looking forward to it. Joe, thank you so much for doing this. Any parting words for the audience here or anything you want to point folks toward?
Joseph: I just want to say thank you. I'm delighted to be invited. Thank you to Eva also for inviting me today. Thanks to you, Ben. I really appreciate you doing this. I've found the Silicon Valley community. I know we're in LA, but the tech community is really warm, welcoming, and open to teaching the likes of me who's someone that's eager to learn but doesn't have a background in this stuff.
I've had so many wonderful, enlightening conversations and found really generous people that are willing to share their time and knowledge. I'm really grateful for that. Thank you for inviting me here and for having this conversation with me.
Ben: Thank you.
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