 Hello. Hi. So I'm here today with Mark Hornfeldt, the Vimeo president. An engineer by training, he has worked at LimeWire and founded Livestream before it was sold to Vimeo in 2017. And now as Vimeo's president, Mark has been at the center of a transformative project to turn a content platform into a software solution for content creators and businesses of all sizes. Transforming businesses successfully is a daunting task at the best of times. And right now, as we see an economic downturn that's pointed specifically at the tech sector before anywhere else, it's important for us to talk about what that means for platforms today. So to start off with, I wanted to ask you, as someone who has been at the center of one of these transformations, when a company is looking at its transformation and where it's going to go next, what is important when it comes to recognizing the value of what you currently have and where you want to go? Yeah. Hi, everyone. Thank you for having me here. I think there's really two things to consider. First, how big is the distance between where you want to go and where you are? As in how much change do you need to affect? And then the second one is how quickly do you want to affect that change? You know, you have to start, of course, assuming you've found conviction on where you want to go, and that's unmovable. You have to start by assessing what in the current business is going to be an enabler to get you there versus what is going to be holding you back. And that's throughout people, product, organizational structure, all the way to actually your cap table, your shareholders. And once you've done that assessment, you know, partly that will dictate how fast you need to go. If you have a lot of changes to make and you're very far from your goal. But that's when you try to strike that balance. For Vimeo, we've gone through several cycles of that. But about five, six years ago, we realized that we had an opportunity to really go after an entirely new market that was developing right in front of our eyes, a market that nobody was in yet. And when we actually embarked down that path, we knew it was a five, 10-year journey to get there. So there was no case of rushing our way through it. We also had a very and still have a very loyal base of customers that are an extremely important part of what we do. And so, you know, we staged it over a number of years over a number of different milestones and capabilities. And we were fortunate to have investors, owners actually at the time that were supportive of that journey. And at the moment, something that we're seeing from a lot of companies when it comes to the transformations they're seeing, especially when we're looking at a lot of startups that have had huge valuations in the last couple of years. What we're seeing is a shift away from hypergrowth. That's a bit different from the shift that Vimeo recently did, but would you be able to talk a little bit about what you're seeing now in the way that companies potentially need to transform? Yeah, I've heard a lot about hypergrowth over the last two days. I think as an industry, we kind of value that piece a lot. We almost adulate valuations and these sort of overnight successes. I think one thing that is a little bit misunderstood is hypergrowth is a choice. It's a choice that you make on capital allocation. It's a choice that you make on how much risk you want to take. And it's a choice that you have to be willing to make. You also have to be understanding why you make that choice. It's okay to make that choice if there's a strategic imperative. You have a competitor that is coming after you and you have to go really, really quickly and grow really fast, or you need to develop a moat around a market that you're trying to take by being a first mover and capturing the market really fast. The truth though is that if you look at companies that have gone through hypergrowth, and many of us are actually at fault of this, it's not driven by the strategic imperative. It's driven by you can. You're doing hypergrowth because you can because capital is there and it's inexpensive because you have this sort of misalignment sometimes with venture capital and the way that those funds are structured and the timeline, you know, it's sort of you have to grow really quickly, make it really big or fail fast. But these are not real, so to speak. They're not about the customer. They're not about your market. They're not about the product that you're building. So I would say just take a step back from it and slow down. It's okay. If you have conviction on your vision, you know where you want to go. The choice of going fast or slow is yours. And you have to make that choice very consciously. But going off from that, at the moment we're seeing, as speaking as a tech journalist, a huge amount in the tech press about who is to blame for current shifts in our current environment. Obviously there are the broader macroeconomic trends, but when it comes to a question of who should have seen it coming, there's blame attributed to founders for making rapid layoffs. There's blame attributed to investors for pushing those founders to grow rapidly in order to pursue a return on investment. And so at a moment when that relationship could be seen as a little bit strained on a macro level between the founders and investors, what do you think is the way forward for those sort of relationships? And how do you think it's important for founders and investors to communicate well at a time when that it's quite difficult to attribute those funds and also to guide people through a challenging time? Yeah. I think there is actually right now tremendous value that can come from that relationship. For one, I think investors have a really important role to play in giving confidence, giving perspective to the founders. And it's actually little things. Taking a founder out for lunch and saying, I believe in you and I'm here for the long term, it can make a really big difference when you're in deep shit, in your internal operations, when you're going through hard times. But it's the obvious. It's making sure that there's a shared perspective on the long run, on the vision and the timeline to get there. And I think being very open talking about that and having an agreement around that is really critical. And when it comes to a strategy, obviously, it's not just a question of hyper growth. There's also an appetite for growth and continued growth even through economic downturns. And especially when you're looking at B2C products or in the shift that Vimeo has made towards also speaking to businesses, how can you get customers, whether they be individual consumers or whether they be businesses, to take on board a new product at a time when they're probably pretty reticent to part with their own money? Yeah, it's a great question that everybody's asking themselves right now. Look, the ideal is your product is a must have and not a nice to have. I think as a founder, as an entrepreneur, as an operator, it's really key to figure out early on who you're selling to, who has the budget for your product, and whether that's resilient to this change or not. Partly the hardest is selling to the IT departments to the CIO because that's where budgets get cut first. That's also where very often the user is the furthest away from the decision maker, the purchaser. So finding ways to appeal to other buyers in an organization, expanding your product, your value proposition to appeal to these different buyers. The easiest in these times is selling to the areas of the business that drive the growth, marketing and sales. That's often where the budgets get unlocked more easily in these times. Figuring out whether you can find ways to get into these departments. Internal productivity is a huge topic still. Vimeo is fortunate on that side because where video is a big enabler of productivity and in the world of going remote and hybrid, it's a critical concern for organizations. How do you enable more engagement with employees? And so we have the ability to sell to these internal departments that consider this as a must have. It wasn't obvious though. If you think about video where it was five years ago, it definitely wasn't a tool for communicating internally. And the pandemic has changed things a lot. But yeah, being clear on your buyer and where the budgets are being allocated and how you can go after these different departments I think is critical. And to nail down a little bit about Vimeo's transformation itself, when you're making such a seismic shift in a company strategy, is it still very important to reassure your existing users that this is still going to be a platform, something that's relevant to them? Or is the focus and the priority always going to be about acquiring new customers and finding those new markets? Yeah, it really depends what you're trying to do. If you're trying to do a hard pivot and move away entirely from the business you're in, there's obviously less of a consideration there. In our case it was more continuity and expanding rather than exchanging or tradeoff. So yeah, for us for sure it meant that we had to move more considerably. And we did put a lot of focus in making sure that our existing users continued to thrive on the platform. It's easier said than done because of course when you have to make changes and when you make changes you take the risk of evaluating your existing users, you have to manage that. But in our case we definitely wanted to bring them along for the ride. But what's the moment when, for instance, in the case of Vimeo, it's apparent that there was a pivot that needs to take place? Was the principal concern essentially your existing as a video content platform where there is one massive player in the likes of YouTube and then as another player in that space you're always going to be capped? And if that happens in the last couple of years, what were the other factors going into that decision? Where did Vimeo say like, okay, we need to move away from this? We've reached the peak of what we can be doing in this space and we need to find something else. Yeah, it was actually a little bit different for us. So what we started identifying five, six years ago was the growth in our users and our paid subscribers was coming primarily from businesses. We had various segments that we were addressing, consumers, we were addressing creative professionals, prosumers, but we were seeing as businesses were adopting video at an accelerating rate. And so we thought, what is really going on here? And when we started looking at those users, and actually when we started looking at the data, what we saw was a dramatic shift in what video itself was. Coming from a place of being more of a medium for art and entertainment, you were a TV producer, you know that world very well, video became one of the primary ways people were looking to communicate. And the format, it was fascinating when we looked at it five, six years ago, what we saw is that the median duration of content uploaded to the platform was being divided in two every couple of years. And why? Because the format is just so different. It's now 30 seconds a minute, it's vertical, it's square, it's very different from what you used to imagine as a feature film or a 10-minute creative video used for art. And so we looked at that and we saw this space where businesses are trying to be active on social, on their website for content marketing, they're trying to be active with video also internally, but really it's an industry that is built around this video as an entertainment medium. Adobe Premiere, Final Cut Pro, you know all the tools, right? There was really nothing, nothing that would enable businesses to leverage the medium. So it was more realization of that opportunity at an inflection point where actually the market was ahead of us, the demand was ahead of what the industry was able to offer, and then we just decided to go all in on that. We started building tools across all of these different areas of creating, managing, distributing a video, and we were fortunate with the pandemic that everything really accelerated. But it wasn't a defensive move, it wasn't out of concern for the platform, it was more of an offensive move based on what we were seeing in the market. And at the moment, in the case of two of the really large social media platforms, Metta and Twitter, we're seeing seismic shifts happening within those platforms. And something that I have been noticing as a tech journalist is that a key concern in both of those cases is the feeling within the company and how those changes are being recognized as a benefit or a disadvantage to the people who are working there. And in the cases of platforms like Twitter and Metta, you have some of your employees are at the top of their game. There are people who Apple, Alphabet would love to poach. And so how is it when you're entering this space where you're making those shifts that you don't also lose your best talent because they no longer have faith in the product? Ultimately, one, you have to be really, really clear about where you're going, have really strong passion and conviction if you're the founder, if you're leading the organization. And then people have to believe in that mission. That's where it starts. In our case, there was definitely a transformation internally. Not everybody did, but I think the vast majority of folks in the organization really, for us, were mission driven around the richness, the authenticity of video itself, around the medium, the emotional connection with that medium. So we were really able to take everyone on that journey, even though we shifted to more of a B2B platform, serving larger organizations all the way to enterprises, which typically is a difficult cultural shift to do in a business. In our case, it was still around the same team. It was still around the same core. That's also why we could afford not to lose our existing user base, very related. Yeah, so we were very fortunate in that sense. And that's also how we've attracted talent and retained talent throughout our history. And how has that been communicated going forward? For employees who've already experienced one shift to a different, essentially a different medium when it comes to what Vimeo is offering, is there a focus at Vimeo to make sure that communication doesn't just stop with this announcement of the shift, but instead keeps employees informed about those changes and actually has their input into it? Yeah, yeah. Internally, that's true. Precisely, you have to over communicate. And throughout the years, particularly when we started this shift, we spent a lot of time articulating the vision, talking about the signals that we were seeing, showing it, talking about users. Actually, in the end, that's the most important connection that the employee base needs to form, empathy around the user, who the user is and what you're solving for them. Externally, it's harder. Externally, the truth is, if I ask this room what people think about Vimeo and how they know the company, I'm pretty sure 90% of people wouldn't know anything about the shift that we're talking about here. And so, they're striking the balance of being definitive enough so that you can create a real departure, but still keeping your core user base, your loyal user base on the journey with you is not, I don't think it's something that we've nailed yet. It's still something we're trying different things on. And when it comes to communicating that strategy externally, is that something left to the marketing team? Is that something for sales? Who's doing that? It's a team effort, but yeah, marketing is a big driver of what we need to do there. We haven't been really big in brand marketing and awareness marketing, and that's an area that we're investing in more now to help facilitate that shift in the public perception. And we've been talking before about your experience with LimeWire and also then subsequently with Livestream. You've been working within tech, especially in the content, like video space for a long time. I'm curious to know, for a lot of the companies here at Slush, this is their first downturn that they're experiencing. A lot of the newer companies have been experiencing a period of easy money, low interest rates. All of that has created a real appetite to invest. And now there's a lot more awareness of the issues as you've been talking about around this strategy of hypergrowth. And so I'd be curious what you think companies now could learn from your past experiences navigating these sort of downturns? Yeah. It's a tough time. It's a tough time. Also, it's going to be okay. You're hearing it from all sorts of people across the industry. Look, what has worked for me, I'll give you a couple of pointers, I think four primary things that I've learned. The first one is just manage your cash. Statistically, it's the number one reason companies fail. They run out of cash. So stay really, really close to it. Understand your runway really, really well and manage that above everything else. That's the most important. I'd say number two is probably take action swiftly and decisively. You're going to have intuitions throughout this time when the environment is changing around you. And those intuitions sometimes will be quite strong. Generally, I've always regretted not acting fast enough on these intuitions in these periods of fast change of the external environment. The third thing is be brutal with your focus and make sure you focus on the most important things. This is maybe for later stage companies. You cannot believe how much activity gets created in an organization because of inertia. There's more public examples of this these days. But for those who have background in product, you know that if you put a product manager and an engineering team on an area of your product, they're going to do things. There's always a project. There's always support requests. There's always refactoring. There's redesigns. There's always going to be work. The question is does that matter? And so you should just go through your business and figure out and this is by the way it applies to the rest of the organization as well. Go through your business and figure out does everything we're doing really matter? Question the assumptions. And then I think the last one, probably the biggest surprise for me is that people are really more resilient than you think. I remember back in 2009 this was with Livestream. Back in the days we were a two-year-old company, still very much in startup stage. We had 50 people working in the company and we were going to run out of cash in three months, harder in lesson. And it was one of those fuck we're going to lose everything moments. We went in front of the company and we said, look, we need runway. This is going to be a hard time. We're asking folks to take a 30% cut on their salary against equity in the company and we laid out the milestones, the vision, why we were doing it, what we were going to do with that extra runway and out of 50 people 49 stayed. And that was a big learning for me. If people have clarity, if they buy into the vision, they will stick around. They will be there with you. Obviously, you have to do it the right way. And when you mentioned your experience at Livestream, it's got me onto what I believe because of our time is going to have to be our final question, which is in other financial crises, in other recessions, in other periods of economic downturn, the tech industry has sometimes been seen as a saving grace and that was somewhat the case in 2008. It was seen as this is also, that was also slightly further down the road, there was a boom time for Silicon Valley. And so I'm curious what you think is the difference in this current situation with the factors that play here to, for instance, what you experienced in 2008 and 2009. Yeah, it's a very different period. It's hard to find patterns. The world is so entirely different today. There's wars, crisis. We just went through a pandemic. What I would say is the big difference that I have not experienced before is this insane growth that we've seen during the pandemic period, just before a really, really sharp downturn, very quick. And it's, you know, it has to do with the conversation we're having about hypergrowth and investing and stretching yourself. I think the industry stretched itself. Capital was really cheap. Everybody went out and spent that capital to try to grow and make so many different bets at the same time. And I think it's retrenching now. And that retrenchment, you know, that contrast is quite different this time around. Mark, thank you so much. Such an interesting discussion. Thank you. Thank you all.