On this episode of Recode Media with Peter Kafka, Ben Rubin came by Kafka’s hotel at South By Southwest for a relaxed chat about Meerkat (Rubin’s SXSW hit three years ago) and Houseparty (the app Rubin pivoted Meerkat to).
You can read some of the highlights from the interview here, or listen to it in full in the audio player above. Below, we’ve provided a lightly edited complete transcript of their conversation.
Peter Kafka: This is Recode Media with Peter Kafka. That’s me. I am part of the Vox Media podcast network. I am recording this at Vox Media Headquarters in New York City. In a minute, we’re going to go back in time to my hotel room in Austin, Texas, where I talked to Ben Rubin, the founder of Houseparty, also the founder of Meerkat.
Okay. We’re about to go to Austin. Sometimes the media podcasting business is very glamorous. You get to record in a really cool space. Sometimes you’re in a pretty small hotel room with two other dudes, one of whom is sweating a lot and sitting on your bed. That was this situation, but it was cool because I talked to Ben Rubin, a really interesting entrepreneur. A few years ago, came out of nowhere with Meerkat, which was a really hot app for about a minute before Twitter crushed it. He pivoted that into Houseparty, which I think is a pretty popular app right now. We talked about that process, how you pivot a company, what he’s learned.
Amazingly enough, Ben Rubin is the kind of guy who comes to South By Southwest not to promote his company but to hang out and to drink a beer with me. We drank a beer during this podcast as well. That was exciting. All right. Enough preamble. Here is me and Ben Rubin talking in Austin.
I’m here in a hotel room. It’s not that fancy of a hotel room, but it’s a hotel room, in Austin, South By Southwest. If you hear ambient noise, that’s South By Southwest’s ambient noise coming to you. I’m here with Ben Rubin, who I’ve had conversations with before, back when he ran Meerkat. Now he runs Houseparty. Welcome back, Ben.
Ben Rubin: Hey. Thanks for having me.
You’re right off the boat, too, so thanks for coming straight from the airport to come talk to me in my tiny hotel room in Austin.
It’s very cozy in here.
I want to talk to you about Houseparty and what you’re doing now, but I want to go back in time a little bit, because the last time I talked to you in Austin was three years ago, is that right?
You had launched Meerkat.
You were, I think, we were just talking about this off the air, you were like the last big, hot app to come to South By. There was a ton of excitement about you. It was a livestreaming app.
I’ll let you talk in a second. You’re good at talking, but the story was — and you can go look it up — you had launched. People were excited about what you were doing. It was on. You were acquiring users through Twitter. It was really interesting. Then it turns out that Twitter had spent their own $100 million buying Periscope, which did more or less the same thing. They sort of made it more difficult for you to do work, but people loved your story because you had become this viral app, and I was talking to you three years ago when you were in this swirl of publicity, and now things are much calmer.
Thank you for having me.
That’s my long preamble. I was just asking you, I assumed that you were going to be promoting something for Houseparty here, but you’re just here to hang.
Yeah. I’m here to see friends and colleagues and it’s a great opportunity to get both coasts in the same place and get to have some beers and enjoy it. I haven’t been last year.
Is South By still a useful place if you have an app, a consumer-facing thing that you want to promote? Is it useful to come here for that reason?
When you ask it, you’re alluding, like, I know how it works to promote an app here, but what happened, for example, with Meerkat was that it caught us by surprise. We didn’t plan anything. Even if I did know — and I don’t know, you know, I don’t have the answer. What happened with Meerkat and South By was the two weeks before the conference, people were already streaming and talking about Meerkat at South By.
Yeah. It looked like this carefully planned publicity blitz you’d done.
Yes, but it was just me, a chubby guy with a yellow T-shirt that didn’t even know that he was going to South By four days before that, so yeah.
I do want to talk about Houseparty, but what was that experience like because Meerkat blew up, became this huge thing, or at least press-wise it became a huge thing. You raised a bunch of money. You pivoted out of that company within the year, right, I think by that fall?
Within three months.
I think that what we realized is that people stopped having meaningful connection, but they never stopped wanting meaningful connection, so they just ... If you look at how a broadcast is and if you look at how the one-too-many medium is, what we learned very quickly — Meerkat was a third iteration of other livestreaming apps or products — and what we realized very fast is that we cannot get what we set our mission for. We cannot get the things that we wanted to, which is to connect people in the most human way possible when they’re apart. What we saw is that the amount of people that can create meaningful live content on a daily basis is very, very few.
It’s not rocket science to make content, but it actually turns out it takes some work, and to do it live is a really specific skill set and that’s why, by the way, when you watch Stephen Colbert, he has ...
There’s 40 people working 24/7.
He has ... Exactly. He’s not just getting up and riffing.
Exactly. When we realized that, that it’s going to be about content, we said, all right, the big companies are, Facebook just said, “All right, we’re going to go live as well,” and Twitter was, “We’re going to go live as well.” We were looking at the metrics, and one thing for sure was that retention for broadcasters was not there.
People were broadcasting once or twice and then going away?
Yeah, something like that. We realized that we have to rethink our position in the market and what we want to do with our mission. The metaphor that we used is that live video is a stage and what we want to do, actually, is a houseparty, because not every person can go on a stage every day, but a houseparty is something ...
Again, because you have to sort of go back and look at the coverage and you can go back and look at the video, but people were so excited about you. You raised, I think, $12 million kind of immediately. I get eventually deciding, “Hey, this thing we thought was going to work isn’t going to work. We’re going to pivot.” But you said you did it within three months.
Is that you looking at the numbers and going, “This isn’t going to work”? Is it your investors coming to you and saying, “Dude, you’ve got to rethink”?
Oh, no. There’s two kinds of pivots. There is a pivot from courage and there is a pivot from fear. The pivot from fear always comes too late and three months before you run out of money, and you always pivot to something weird.
Where you realize way too late that you’re screwed.
Yes. A pivot from courage, this is the one where everybody is shaking in the chairs in the board meeting. Actually, everybody was afraid because I was kind of this crazy guy who just raised $12 million and comes to the board room after three months and says, “This is not going to work. You’re going to see that it’s not going to work, and the reason it’s not going to work is because we now have millions of users and we see that they don’t broadcast the way we thought they would.” And even now when you look at live, one too many, as a space, it’s not as big as everybody thought it was going to be.
Yeah. You can tell. Meerkat didn’t succeed, but really Periscope doesn’t seem to be blowing up and Facebook Live was a thing because Facebook was pushing it, but now they’ve stopped pushing it and it seems to have gone away.
What I’m trying to say, basically, is that sometimes you need to just back your career and what you’re working on it because you feel that something is right, and I feel that this is what we did. We realized that it’s not going to get us to the place of a meaningful connection that we want to get, and we shift the way we think about the product as a metaphor and we started adapting from the new metaphor that we wanted, the houseparty metaphor, versus the stage metaphor.
So, you have this thing baked in your head. You go to the board. You say, “This is what I want to do.” Is it a vote right then and there? Do you have to persuade them?
You go into the room and you show the data and you will see viewership goes up, but broadcasters is flat, returning broadcasters. And actually a side note, the only big healthy ecosystem of live one-to-many platform is Twitch, and guess what’s the KPI they optimize for?
This is the live gaming thing that Amazon now owns?
I don’t know.
Let’s explain it, because KPI isn business speak that doesn’t always ... The main metric they care about ...
Key performance indicator.
The main metric they care about is what?
Is their attention of the broadcasters. Like, how many people come back and continue to stream.
That’s how you believe Twitch is valuing?
That’s what I know from Justin Kan, actually.
That’s the thing they care about the most is, are broadcasters coming back?
The logic there, right, is that if the broadcasters are coming back they’re doing it because they’re getting value out of it.
Which means there’s a healthy ecosystem.
Exactly, and I feel like Meerkat and everyone else that was in the space, we’re all kind of optimizing for the time people are watching and how many people are watching.
Like TV, exactly. And when you’re doing cable, when you’re doing content, then whoever has the money will have the content, and that’s exactly what the pitch for the board is like, the people who have the money are going to have the best content and they’re going to have the platform. We cannot compete with Facebook or Twitter on that. We think we have a better idea that actually, if you think about it, if one out of 100 people is a person that can be onstage, then we’re going to do something for the 99 people.
Was there any thought that said, “Well, look, instead of pivoting, why don’t you either, one, return the money back to us, or two, why don’t we figure out how to sell this thing before someone realizes it’s not working?” You’ve got a hot app. You’re smart enough to figure out that it’s not going to be hot eventually, but going and trying to create another thing from scratch is a lot of risk there. Was there someone saying, “Let’s figure out how to just save what we have here”?
I did that practically. I’m like, “If you guys don’t believe in that road, we can give you back the money.” Nobody wanted that, so that was great.
And, so, here we are with Houseparty because Houseparty ... you launched it a few months later, right, by like the fall?
Houseparty was launched a year after we decided to pivot.
We took this time to beta test it, and by September 2016 we had a million users.
We were writing about it before, but you hadn’t formally launched it.
Yeah. You guys got some info and intel about the beta that we were working on, and, yeah, since then, early 2017, we raised $52 million from Sequoia.
I wanted to talk about Houseparty. Your holding company is Life on Air, right?
Houseparty is the app. Usually, you’re going to come tell me about how great the app is and how many users you have. You’re not doing that today, though, right? You’re not giving me numbers?
No. I think that at this point everyone has access to all the other services, and they can know for themselves.
Yeah. The idea of the app is it’s a group chat streaming video.
That’s, yeah. If you have to write it.
If you dumb it down.
Yeah. If you dumb it down, yeah. The point of Houseparty is presence. Even on a meta level I feel like we kind of lost the point of being present, even when you look at it as mindfulness. Like, am I really here with you? Are we talking? Do we have a connection? If you really want to dumb down Houseparty it would be a video chat that is organized around presence. Like, I’m here. I can talk to other people.
It’s FaceTime with a bunch of people? Is that it, if I really wanted to stupid-fy it?
It’s FaceTime, yeah. It’s FaceTime as if every one of your friends on FaceTime would know that you are there and they can join and know that you are talking and who you’re talking to and jump in and out, just exactly like real life. Yeah.
The older I get the more sort of social media, digital media stuff becomes not for me, I’m out of the demographic, but I really can’t imagine a scenario where I want to talk to multiple people at the same time and for an extended period of time. Who are you designing this for?
Before I answer that, I’ll ask you if you still grab beers with friends, more than one friend?
One or two, max, yeah.
The thing is, everybody has this two or three friends that they would FaceTime to, and they can FaceTime any minute. They have a license to FaceTime them out of the blue. But there’s another 20 people who you kind of, it’s going to be weird if Peter kind of FaceTimes me out of the blue. Why should I answer this?
What we’re trying to do with Houseparty is saying, that’s actually okay for you to say, I’m around, and for your friends to opt in and then their friends or your friends or your mutual friends can join in. And there is something very beautiful about that moment because that’s, I think, one of the beautiful things about the internet and about connected networks of the internet, the ability to have connection that you would otherwise not have. I think that when everything became flat as a two-dimensional feed where things are being cropped and edited and you can “Like” and comment, a real dialogue between people is bringing back empathy that I think we’re kind of missing from the ...
But, who wants to talk this way? Do you think this is 20-year-olds? This is 12-year-olds? Even if 12-year-olds are using it, you can’t say that’s the case, right, because of COPPA laws.
We thought that Houseparty was usually used by tweens, teens.
Yeah. You really mean tweens, you just can’t say it.
What we realized, especially last year as we got bigger and bigger and we started knowing more things about our users, is that there is the utility use case that really appeals for almost half of our users, 24 and older.
For doing work with it.
Doing work or just finding it as the best way to talk to their friends, period, because they don’t need to set up a call. There is not the transactional format of, “I’m calling you. Will you pick up?” “Oh, why did Peter call me? Do I need to call back?” All of those things. We see different types of adults use it on different times of the week and different times of the day than teens, and teens really use the use case of hanging out with their friends. Because the app is so simple, kind of both sides of the users found value in this. The reason we thought that teens, last year we were convinced that teens were most of the users, is because ... You have two kids?
7 and 9.
7 and 9. I don’t know if you know that, but they are probably going to have much less sex than the same age group when they are adolescents. They are probably not going to get into crash accidents. They are going to hang out with their friends 40 percent less in real life than the same age group that you and I were pre-internet.
This is a mix of things you’re telling me. I’m processing it all. All right. Go on.
They’re less likely to explore outside, and outside of their comfort zone, between 20 to 40 percent, and that means that they are in danger less and that means they are exploring less. That also means that they are talking to people in real life 40 percent less.
That part I believe, because they use screens.
All of this, I can send you the full research. What I think is happening, and we see it across multiple channels, is that since 2011, since smartphones crossed 50 percent penetration in the states and social networks became ubiquitous, people are moving more and more — kids, basically, under 21 — are moving to spend more of their time with where they define their social territory from outside to their bedrooms, around two or three hours a day, actually now.
Yeah. I can imagine a scenario where they’re going to be on some device and they’re going to figure out that Instagram is actually a messaging platform and they’re going to, or whatever the next thing is. This is actually why I also would think, from the outside, Houseparty would be a hard sell because you’ve got a world where everyone’s texting each other and they’re doing it asynchronous. If you call someone right now, as a reporter, the reaction you get when you actually call them on the phone, like, “Why would you possibly call me?”
You can always call me.
I do call you. The idea of synchronous live conversation seems very counterintuitive right now.
You would be so surprised to see how many kids who didn’t get ... Think about it that way. When you and I were 13, 14, and we wanted to hang with friends, you would have this sheet from the teacher that says, like everyone and their number and you would call their home and say, “Hey, can I talk to Peter? Hey, peter, do you want to hang in the library?” We would actually go and talk to each other and we would walk around and maybe meet another friend. That’s how we would build our social skills and our social tools. When this thing is becoming more and more diminished and people are having a different understanding or perspective of what their social life consists of, I think it’s a bit skewed. It’s not that there is something wrong with social media, but I think we need to balance it.
No, no, no. You’re making the case about why you think it’s a good thing that people do this, but what I’m saying is you’re building a product that, from the outside, would seem like you’re swimming against the stream. It’s hard enough, as you know, to build a company. It’s hard to run a startup. If you say, “I think people should do the following,” and if the opposite is what people are actually doing, it seems like that’s not the best way to run a company.
Actually, last year we did a half a billion parties, which is a conversation with more than two people. Our average users use it for 51 minutes a day. What we are learning from this — and this is going to the point that, like, why we thought teens are using it — is that we are bringing back an aspect that is actually missing from the age groups of teens, for the teen demographic, that they don’t have now, which is how can I have a conversation with someone I would not otherwise have? That brings back empathy that we lost in the past decade.
I feel like it’s easier to troll someone from behind the keyboard, but if you’re going on a Houseparty and a friend or friends joins your room and it is someone from a different socioeconomic background or somebody you usually wouldn’t talk to and you’re face to face, you cannot be a dick to them. Like, you cannot be an asshole.
There’s a lot of tough guys on Twitter that if you meet them in person don’t really, are not so tough. Although, you imagine the number of adults who don’t get that idea. When you did Meerkat, you built it on sort of the back of the Twitter graph and Twitter came and said you can’t do that.
You have something that’s not exactly parallel here, but you’re building Houseparty. It’s an interesting product, and then Facebook starts looking around and they suddenly become interested in live group chat and they now have a group viewing thing they’re playing around with. How do you think about operating in a world where Facebook — it could be anybody, but really Facebook — could come and say we are going to absolutely do what you’re doing except we’re going to launch it across two billion people with enormous leverage? How do you think about participating in that world or navigating through that world?
I think you need to accept that the way the game works is when you’re building something that is interesting and people spend time on it and like it and use it more and more, you should be okay with the fact that other people would come and say, “Hey, we want to be inspired from your idea. We’re going to use the things that we think work from it, and we’re going to do it ourselves.” Why?
You sound very Zen about this, but I can’t imagine you’re that Zen at night.
Let me tell you why I’m Zen about it. Because when we are going to be that big and there’s going to be somebody who’s doing something very interesting, we are going to learn what is interesting about it and we are going to see how we can do it ourselves because this is just ...
You’re going to crush the life out of some little guy one day.
I’m not. No. That’s definitely not what I’m saying.
I should get you a second beer. This is our first beer podcast, by the way.
That’s nice. I’m glad I could be the first beer podcast.
You have a chilled-out answer, and you’re basically, it sounds like you’re saying, we have to do my job and one day I may return the favor and steal someone else’s idea.
I think that when you bucket things as steal or crush, I think that’s not the intention at all that I have in mind, but I think that you’re right. There is a good-faith way of being inspired by ideas, and that’s what we do all the time. I’m sure that when you read somebody who articulates something very good in an article they wrote, you’re like, “Wow, that’s a really interesting perspective of how they break down a topic,” and you take a little bit of this just in the back of your head, right? There are ways to do it without being an asshole.
What is different for you as a startup CEO this time around than during the Meerkat phase, which was a short phase? You’ve done stuff in the past, right? You said that Meerkat itself was a pivot from a couple different things. What have you learned along the way that you didn’t know last time I talked to you in Austin?
For me, my best friend was the vision. It was always the same thing: Bring people together in the most human way possible when they’re physically apart. When I went to college to study architecture, that was creating new encounters for people. That was the thing that got me into the door, and when I realized I can do it with live video, that was where I decided I’m moving on to, with live video. I feel like a lot of times an entrepreneur would go to a problem and they would try to become the entrepreneur, not solve the problem. And this is where it doesn’t a have strong foundation to deal with whatever shit they throw at you — and they will throw shit at you.
For me, I care a lot about the work and what we’re trying to do, and I also know that we’re not curing cancer and we’re not solving the problem of clean water, like clean water for 80 percent of the world, but there’s something beautiful about making sure that your kids are going to add also the best facial expression to their conversation, not just the best emoji.
You’re this positive guy. That’s one of the reasons I like talking to you, right? It’s one of the reasons I think a lot of people like you is that you’re positive and you’re ebullient. That’s a good word.
Wait. I’m not from here. What is bullient?
Ebullient. We’ll Google it afterwards. I think I’m using it correctly. It’s a good SAT word. I think that’s really one of the reasons you have the success you have. There’s also some blocking and tackling and sort of learning how to lead a team. I’m assuming you’ve figured out some stuff over the last couple years that you didn’t know.
Yeah. I think that a lot of assumptions ... Like, you go into something and you think it’s about the product and then you understand that it’s about the team that makes the product and then you understand how you could be very beneficial, but also very distracting to the team if you’re not conducting yourself or surrounding yourself with the right people. It’s something that I learn every day and I always have this joke that I say to Josh Elman.
Greylock, a VC that invested in Meerkat. That his $12 million was to pay my tuition.
What does Josh Elman say when you tell him that?
He laughs anxiously.
Hello, Josh, if you’re listening. He’ll probably hear this now.
You’re not here to promote Houseparty, in Austin. How do you think about, in the app ecosystem, when you do sort of want to tell people, “Hey, I’ve got an exciting new feature or there’s a new thing, and you haven’t tried Houseparty yet, but you should?” Do you feel like you’ve got a handle on how to sort of message people? I think that’s one of the hardest things as a developer is to even, we just had Steven Soderbergh on this thing, and he’s got an app called Mosaic, and you get to watch your own movie and assemble your own scenes, and no one’s heard of it.
That’s HBO and Steven Soderbergh, and he has a hard time getting attention. How do you think about marketing?
I think that what I’ve realized is that there’s so much noise. There’s so much fucking noise, and everybody wants to be the new Mark Zuckerberg and everybody wants to do something. The best way to get publicity is to understand what it is really that you’re solving and when you solve it, the aha moment in the product, you need to slap it in the face of the user as soon as possible. If you do that ...
The aha moment.
The aha moment in the product. In Houseparty, around two minutes after you sign up, at least the median of the users sign up, they get to talk to somebody they know. Within that 24 hours, 67 percent of them will have a conversation with three people or more. That’s the aha moment of Houseparty. They’re like, “Wow, I just did something I couldn’t do before.” The best marketing technique you can ever have is to slap your users with your aha moment as soon as possible, as soon as possible.
You’re saying once they’ve already picked up the app.
Yeah, but the thing is that if you’re doing something really valuable, the first 100 people that you can do ... Literally, you can get your friends and family, they will use it and they will talk about it with their friends.
It’s make something awesome and assume/hope that the people who are using that will tell other people.
You should never assume.
You should always build some instrumentation to make sure that it keeps, non scalable, not through media and stuff, put in more and more hands, and you would know pretty fast if you have something because the moment you would go to two or three schools, or colleges, in our case, when we started the beta and every week were in a different college, we knew by the sixth college that we had something because the first college has picked up and the second college picked up. That’s where you can start seeing some conversation happening on Twitter about people talking about their moments and people getting excited.
This is the thing that you can go to, whoever it is you want to pitch something, to show them exactly what it is. The thing is, it always comes down to the product, at least when we’re talking about product and not a sales company or something like that. It always comes down to the product. If you’re not excited about it, then your users are not excited about it. If your users are not excited about it, no one’s going to write about it, and it’s just going to go. It is what it is. You see people just like going to the wall and trying to do it over and over.
Okay. Is that a positive note to go out on? It’s reasonably positive. Make a good product. Don’t bang your head against a wall.
Yeah. Make a good product. Exactly. Make a good product. That’s the best marketing tactic, I think, that exists.
I’ve got to say, I like talking to you because you surprise me, and the biggest surprise is you came to South By Southwest not to do business but to have a good hang.
Good for you. Thank you for coming. Thanks for coming to the hotel room.
Thank you for having me.
This article originally appeared on Recode.net.