An Interview With Ken Babcock
Don’t overlook the critical differentiators. Right now, when people think of streaming, they immediately think of Netflix. From the name and branding to the longevity in the space (including a longstanding history with consumers as a rent-by-mail DVD service), Netflix was able to establish itself as a premier streamer very early on. In order to achieve a similar level of success, businesses need to not only find but efficiently promote their own critical differentiators.
Startups usually start with a small cohort of close colleagues. But what happens when you add a bunch of new people into this close cohort? How do you maintain the company culture? In addition, what is needed to successfully scale a business to increase market share or to increase offerings? How can a small startup grow successfully to a midsize and then large company? To address these questions, we are talking to successful business leaders who can share stories and insights from their experiences about the “5 Things You Need To Know To Successfully Scale Your Business”. As a part of this series, we had the distinct pleasure of interviewing Stefan Lederer, Bitmovin.
Stefan is the CEO and Co-Founder of Bitmovin, an Emmy award-winning startup that provides online video software and infrastructure to leading global companies, including the BBC, Class Pass, and The New York Times, among others. Stefan co-founded Bitmovin as a spin-off from his research at the University of Klagenfurt in Austria. During his PhD, Stefan co-created the MPEG-DASH video streaming standard used by YouTube, Netflix, Hulu, and many others today, and it accounts for more than 50% of the peak internet traffic. Bitmovin has experienced several stages of startup scale and growth, including various funding rounds (A,B, and C rounds), global office expansions, and product line enhancements. Stefan brings a fresh, energetic perspective to the startup conversation, along with a wealth of dynamic ideas gleaned from his own successes in scaling Bitmovin since its founding.
Thank you for joining us in this interview series. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’?
I co-founded Bitmovin in 2013 when I was a Ph.D student at the University of Klagenfurt. It was right around the time when streaming really became a thing and you had YouTube and Netflix as the first movers in the space. So much of the internet traffic was video, and compared to broadcast, these streaming technologies were not robust yet. At university I devoted a lot of my time to researching how to improve online video experiences, including co-creating the MPEG-DASH video streaming standard, which accounts for over 50% of global online internet traffic. It’s even used by Hulu, Netflix and YouTube, just to name a few!
We realized we should start a company with all the cool things that were possible on the video streaming infrastructure side. We initially focused on building video compression, but we didn’t find a good video player, so we wrote our own out of necessity. Then we got customers and they had all types of problems with devices and connections, so we built an analytics product to analyze the last mile in connectivity. Now we’re here providing video streaming infrastructure for the world’s leading streaming services. We’ve grown to a company of almost 200 people with major offices in Vienna, Klagenfurt, London, San Francisco, Denver and Berlin and built an exciting client list that includes ClassPass, BBC, fuboTV, Hulu Japan, and Discovery.
You’ve had a remarkable career journey. Can you highlight a key decision in your career that helped you get to where you are today?
My background is in engineering, and I had the option to pick my specialization during my PhD. I chose video streaming because my university is globally renowned for its expertise and research in this space. I pursued my Ph.D in video engineering despite having job offers from the likes of Google and McKinsey because I wanted to throw myself into studying a technology set to change people’s day-to-day lives around the world. I was, and still am, fascinated with the technologies behind video streaming and how video is intertwined into almost everything we do. Video has become one of the primary forms of communication, entertainment and education, and it’s been an enormous privilege to work on something that impacts everyone.
What’s the most impactful initiative you’ve led that you’re particularly proud of?
I love helping people develop professionally and personally. I spend a lot of time teaching at the university, and we invest a lot of time in developing our team. It’s incredible to see people realize and fulfil their potential. I believe it’s a huge privilege to be someone’s teacher or mentor; it’s a role I take very seriously.
Sometimes our mistakes can be our greatest teachers. Can you share a mistake you’ve made and the lesson you took away from it?
In the early days of Bitmovin, someone told me startups should hire experienced people from leading brands instead of investing in the training and development of people. This is a mistake many startups make, and it’s advice that is no longer tenable in the current climate for early-stage tech companies. There’s a massive shortage of tech talent, so most companies need to invest in training and development so employees have the right skills to do their jobs well. Furthermore, every single company needs to invest in their team to help the company meet its objectives because businesses have a duty to support employees’ development. I wish I had realized this a bit earlier.
How has mentorship played a role in your career, whether receiving mentorship or offering it to others?
Great mentors can help shape our careers. When Bitmovin went through the Y Combinator seed accelerator, we had several outstanding mentors who helped us shape the direction of Bitmovin. They opened up our eyes to many things, and we would not be where we are today without them. On top of that, many of our angel investors have been amazing mentors to me, but other CEOs from similar companies are a peer group to me whom I consult regularly. All these sources of expertise, feedback, and discussion help me grow professionally and personally and enhance my decision making. Also, providing this type of help and mentorship is something I love because I can help people on their journey by sharing my experiences, and more often than not, I learn something from my mentee!
Developing your leadership style takes time and practice. Who do you model your leadership style after? What are some key character traits you try to emulate?
I don’t model my leadership style after specific individuals, it’s built around the values that I learned growing up: leading by example, ownership, trust, and accountability. However, I look for inspiration from great leaders through mentors or books, blogs or podcasts. As Bitmovin grew, I realized that I needed to continue evolving my leadership style to support the company’s evolution. While I still uphold the values I just mentioned, my approach and interaction with the team have changed to reflect that we’ve grown from a handful of people in Austria to a global team of nearly 200 people.
Thank you for sharing that with us. Let’s talk about scaling a business from a small startup to a midsize and then large company. Based on your experience, can you share with our readers the “5 Things You Need To Know To Successfully Scale Your Business”? Please give a story or example for each.
(1) First and foremost, businesses need a complete understanding of the space they wish to enter and what the consumer base actually wants. It sounds obvious, right? Who would possibly enter a market blindly? But it happens more often than you think, especially when a newer market grows in popularity. This is especially evident in streaming video. There have been a lot of new OTT providers introduced over the past few years — they saw the success of Netflix, Hulu and more recently Disney Plus and wanted a piece of the action. But there are many variables that can make or break a streaming service, starting with price. Businesses should make sure they understand those variables before attempting to enter, and especially before trying to scale, their operations.
(2) As I mentioned, price is a critical factor. Whether selling a SaaS solution to other businesses or a streaming service to consumers, if the price is too high, people will look elsewhere. Consider the streaming industry: PwC expects the market to grow to $94 billion by the end of 2025. That’s impressive, but Parks Associates found that cord-cutters already spend an average of $85 per month on streaming services. As monthly fees rise, the overall price is looking more like cable — and when that happens, the interest in additional services may decline. Before scaling, businesses must consider if they can come to a price point (or a free, ad-supported option) that will be equitable to consumers who may already spend a significant sum on OTT content.
(3) Think long and hard about the reason why consumers are interested in the product or service. In the case of video, people want great content, delivered in an exceptional experience. It sounds simple, but how many companies legitimately question their lineup before entering the fray? How many consider the strength of their content? Can they draw a large enough audience to pay for their massive investment in OTT, or would they be better off selling their content to another provider?
(4) Don’t overlook the critical differentiators. Right now, when people think of streaming, they immediately think of Netflix. From the name and branding to the longevity in the space (including a longstanding history with consumers as a rent-by-mail DVD service), Netflix was able to establish itself as a premier streamer very early on. In order to achieve a similar level of success, businesses need to not only find but efficiently promote their own critical differentiators.
(5) Businesses often underestimate the technology that’s needed to help them achieve their goals. For example, a content creator may have a decent following, but if the company knows nothing about the technology that’s needed to produce a top-notch streaming experience, should they really develop a new service? Certainly, the company could get a leg up on the competition by partnering with an organization that specializes in low latency, fast startup times and future-proof codecs for more reliable streams. But many businesses think they can do it alone or simply don’t understand what’s needed to build a great OTT provider.
Can you share a few of the mistakes that companies make when they try to scale a business? What would you suggest to address those errors?
The mistakes businesses make are often the things they fail to do or simply don’t understand when attempting to scale their operations. For example, overlooking critical technology that ensures optimal performance. Nothing is worse than a product or service that feels broken.
In order to prevent this mistake or any other mistakes from occurring, it’s important to outline what needs to be done in advance of any initiatives. Take the time to properly evaluate the market and determine what end users, whether B2B or B2C, want. And take a good look at what others in the space have done to achieve their success. Are there any lessons to be learned? Any mistakes they made that you’ll want to avoid?
Scaling includes bringing new people into the organization. How can a company preserve its company culture and ethos when new people are brought in?
Company culture and ethos are vital to any firm, but I have found that new people only enrich the culture of Bitmovin. We’re not simply hiring another person today — rather, we are opening the door to someone who will become a critical driver of the innovation and success we will achieve tomorrow.
I think other companies can and should do the same by taking the time to think about their culture, what it means to operate and the goals they want to achieve. Why are they in business and what is the experience they want employees to have? How do they want them to talk about work with family and friends — or complete strangers on social media? By establishing a strong culture up front, businesses don’t have to worry that new people will disrupt it as they come aboard. In fact, the opposite will occur as new hires augment the culture and make the business even better than it was before they arrived.
What software or tools do you recommend to help onboard new hires?
There is no one-size-fits-all software solution that can serve every business. In truth, that’s not even possible. While there are tools like Zoom and Microsoft Teams that have simplified the process of connecting and communicating with colleagues, every business has their own way of getting the job done.
At Bitmovin, Slack is one of our primary forms of communication because it supports asynchronous working. We have team members scattered across multiple time zones and locations and we have found Slack is the best way to facilitate cross functional collaboration.
Because of your role, you are a person of significant influence. If you could inspire a movement that would bring the most amount of good to the most people, what would that be? You never know what your ideas can trigger.
Education, I think. There are so many people in this world with the potential to do great things, but many cannot do these things because they don’t have access to education. It’s a huge pity, and I would love to find a way to help more people obtain education and training to become who they want to be.
How can our readers further follow your work online?
You can follow me @slederer and connect with me on LinkedIn.
This was truly meaningful! Thank you so much for your time and for sharing your expertise!
About the interviewer. Ken Babcock is the CEO and Co-Founder of Tango. Prior to his mission of celebrating how work is executed, Ken spent over 4 years at Uber riding the rollercoaster of a generational company. After gaining hands-on experience with entrepreneurship at Atomic VC, Ken went on to HBS. It was at HBS that Ken met his Co-Founders, Dan Giovacchini and Brian Shultz and they founded Tango.
Stefan Lederer Of Bitmovin On 5 Things You Need To Know To Successfully Scale Your Business was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.