How to Succeed in the Streaming Industry Without Venture Funding

I just learned about some creators who built a $150 MILLION streaming service in 4yrs.

How were they able to succeed where every past streaming company failed?

By avoiding all mistakes of their predecessors.

Here's the founding story of Nebula:

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

Lesson #1: No Venture Funding

Taking venture funding means you need to grow at all costs.

There's a graveyard of companies in this space that failed for this reason:

• Quibi ($1.75B in funding)
• Vessel ($132.5M in funding)
• Fullscreen (~$500M in reported funding)

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

By not taking venture funding, Nebula was able to:

• Grow on their own terms
• Aligning with creators by sharing funds
• Figure out growth hacks and not rely on paid ads to generate initial customers

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

Lesson #2: Putting Creators First

Nebula developed a system where:

1) 50% of Nebula profits went to creators
2) 50% of Nebula would be distributed to creators if the platform was sold

For the first time, creators would have ownership in the platform's success.

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

This system helped Nebula at 3 levels:

• In the short-term: Made creators believe in the future upside of Nebula
• In the mid-term: Allocated profits to creators
• Long-term: Made it a win-win scenario whenever the platform exited

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

Lesson #3: Launched with a Strategy

Nebula didn't want a massive launch.

They wanted a small alpha group to answer key questions:

• What content did viewers care about?
• What marketing messages resonated?
• How did the users find the product/experience? pic.twitter.com/fKyzrkFoO8

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

On May 23, 2019, they launched via an ad read from one of their creators:

Isaac Arthur.

The launch brought in 4500 signups. More than enough to serve as a beta group.

But still no money for marketing.

They needed a growth strategy. pic.twitter.com/GACMuF66cO

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

Lesson #4: Strategically Hacked Growth

The biggest problem for Nebula in the early days: Cashflow.

As a bootstrapped business, they had nothing to spend on ads.

The unlock: A bundle partnership with Curiosity Stream. pic.twitter.com/P89SjYVxTc

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

Curiosity Stream was already advertising with many of their creators.

They approached them with a deal:

Every customer that signs up for Curiosity Stream would get access to Nebula.

The bundle:
• Increased value for customers
• Raised conversion for both platforms

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

The partnership was a success.

So much so, Curiosity Stream acquired a stake in Nebula at a valuation of ~$50M.

This enabled Curiosity Stream to:
• Build their own streaming tech
• Spend more on their originals
• Grow out their team

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

Lesson #5: Stayed Flexible

Eventually, they knew they could pivot to direct marketing.

The business:
• Proved their content was valuable
• Needed the cashflow

They went from $0 adspend to $500k per month, while maintaining positive cashflow.

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

I'm a massive fan of this story:

• Building based on past failures
• Growth hacky sh*t for early traction
• Aligning incentives to create long-term growth

A playbook on entering a supposedly "unbeatable" space.

— Codie Sanchez (@Codie_Sanchez) June 27, 2023

You can follow @Codie_Sanchez for more biz breakdowns like this.

RT here if you found this interesting:https://t.co/UeFkyowff9

— Codie Sanchez (@Codie_Sanchez) June 27, 2023