Loading
Zach Klein

By Zach Klein

In this interview, Zach Klein reveals why the era of having a single career is over and why you shouldn’t start a company that you couldn’t imagine making for the rest of your life. We then touch on community building and why great communities have a few profound rules.

Since 1998, (mt) Media Temple has been the web host trusted by innovators and thought leaders. Use code DRT for 25% off hosting.

“There are intangible qualities of companies that you pour your heart into that are impossible to purchase. And it’s really special when you create a company that provides that. Nothing tops the feeling of being a part of that.”

Tweet quote
Zach Klein is best known for co-founding and designing Vimeo in 2004. He also co-founded the on-line shopping site Svpply and assisted in the development of CollegeHumor. He later served as the chief product officer of Boxee and is currently the CEO of DIY.
Co-founder of Vimeo
San Francisco
Blog
Wake Forest University
The Third Wave
Strava
Jonny Appleseed
Zach Klein is best known for co-founding and designing Vimeo in 2004. He also co-founded the on-line shopping site Svpply and assisted in the development of CollegeHumor. He later served as the chief product officer of Boxee and is currently the CEO of DIY.
Close

Zach Klein - Rethinking your Exit Strategy

Zach Klein
2013-12-30T16:18:14Z
In this interview, Zach Klein reveals why the era of having a single career is over and why you shouldn’t start a company that you couldn’t imagine making for the rest of your life. We then touch on community building and why great communities have a few profound rules.

N.B This is the unedited transcript of the interview.

Can you introduce yourself?

My name is Zach Klein, an entrepreneur and community builder. I live in San Francisco, but I just moved here from New York where I spend about ten years, a big chunk of it co-founding and designing Vimeo.

What do you do now?

I'm now the CEO and co-founder of DIY based on San Francisco. It's a service to help kids learn new skills.

How did you stumble across that idea?

It came from a lot of places. It first came from a very personal place. My younger brother was involved in an auto accident, and it was really devastating to my family. My dad had to quit his job because he really wanted to be at the hospital around the clock with my brother. What was interesting for all of us was that my dad never seemed to really enjoy his job, and at the hospital, in the children's ICU, he became animated for the first time in his life. He began tending to the children in the rooms near my brother and would give their families updates when they would stop in, and he just became a character in the hospital.

All of us felt really passionate that this is what he should be doing; we'd never really seen him come alive. We told him as much, and he could never bring himself to make the switch, to change careers. He would always say sometimes to me that he's too old, and he already made his decision about what he would do in life, he made that a long time ago.

I found that so heartbreaking, that many people live with this idea that they can only be one thing, they can only be one expert, and that they make a decision about what they can do when they were practically a child.

That combined with a whole bunch of other things like working on Vimeo and witnessing millions of people discover that they can make creative video themselves led me to meeting some people, and together we came up with this idea that we should teach children to be fearless about learning new skills so that we could better prepare a generation for what we feel is the reality, that you can no longer count on one career to fill your life, that it's likely that most of us will have many careers in our lifetime.

We shouldn’t settle for jobs that don’t make us passionate. I encourage people to change jobs and change professions, and to gain new expertise whenever they find themselves becoming dispassionate about what they're working on.

Something that you're passionate about is devoting your life to a life cause. I was watching a video that you gave at the Do Lectures, and I liked the point that you made about people are very caught up in this exit strategy when doing a startup, and you're saying that we should take a long-time horizon. Why?

I want to clarify that point, though, before we get in. The talk you're referencing at the Do Lectures, I was assigned the topic of exit strategy. When I received that assignment, it was so amusing to me that, as a culture, we're so focused on exit, especially in startup culture, and so my message in response to that mandate, to speak to exit strategy, was to, in fact, try to build the company you would never leave.

But I also want to clarify that this would be inconsistent with what I just said about multiple careers. I don’t think people should expect to work on one company their entire lives, but I think it's important that, from the onset, you try, that you only settle for a company or an idea that you think is worth spending a lifetime on, because I think that causes you to make a lot of early decisions that will ultimately lead to a better company whether you spend a lifetime on it or not.

Any aspiring founder now has multiple ideas. They probably have a list of different startup ideas. How do you assess an idea?

Typically I've selected ideas because they were able to attract people that I really wanted to work with and spend some of my life with.

That’s interesting. So you don’t look at how much money you could potentially make from an idea?

Oh, no. Honestly that’s probably to my fault as an entrepreneur. It's a double-edged sword. But it's never really been my prioritizing feature.

Why?

Why?

Yeah, why not? Everybody wants to be a millionaire. From the articles we read, it's all about how much money they raise and how much they’ve been acquired for, right?

Right. The thing is that you have to live your life while you're running this company, and because a large percentage of startups never really get anywhere, never lead to that big exit that everyone fantasizes, you might as well design the company you want so you can enjoy yourself, doing something that makes you passionate. Because it'll be worse when it doesn’t exit and you'll have just spent two or three years of your life pouring yourself into a trivial idea.

But you never know which idea is trivial…

I'm wagering that the ones that aren't trivial are the ones that make you most passionate and the ones that you can imagine spending the most of your life devoted to. That’s exactly why I think that rubric is important, to set out to build the company you would never sell, because I think if it doesn’t pass that test then it's going to be a hard time. Unless it's immediately financially successful, it's going to hard to keep yourself enthusiastic to work on it.

Tell me more about this idea of building a company to work with amazing people. Was that what happened with Vimeo?

Yeah, in a way. It wasn’t that clear cut. What happened was I went to college, this place called Wake Forest University, and it's in North Carolina, USA. I met a classmate named Ricky Van Veen who had started this website, CollegeHumor.com, and he and his business partner, who went to another college, needed help. They brought Jake Lodwick and me into the company as partners.

Jake and I, we were the technical and product side of the thing while the other two guys handled business and editorial content. After a couple years we got that thing humming along, and it didn’t really need much work from Jake and I, so we switched our focus to something that we were passionate about.

Jake was a lifetime filmmaker, and I was really into digital photography and was thrilled by Flickr, which had just come about. It was the most interesting social network that I've ever been a part of, so Jake wanted to make a website for storing his videos, and I wanted to work on his idea but add the social components that I had found so interesting about Flicker, and we just started hacking on that at night.

I think Jake and I became closer through that process. It was a very intense relationship, a very special kind of relationship that you can only have when you're creating something with someone.

Since then I've sought out those sort of relationships. I've sought out partnerships with people that have new skills and new perspectives that can help me grow as a person, and I feel that the most interesting thing is to form a relationship with those sorts of folks is to make something together.

We've seen Vimeo grow, we've seen it evolve, we remember it from the beginning and what it is now, it's almost a part of us. But then part of that story is YouTube as well and this race for dominating video sharing. What did you learn from that dynamic with YouTube in terms of who's going to be the first one to get there?

It's pretty funny the way that it developed. You look at the two now and they obviously have their points of differentiation.

Yeah, totally.

At the time, Jake and I really weren't thinking about anything other than just wanting to make a cool place to post our personal videos. We weren't even thinking beyond our 200 collective friends that made videos.

That’s crazy.

In fact … this is the thing that I think is most interesting is that there was a time, like right around when YouTube got started, where people started posting clips from Saturday Night Live as well on Vimeo, and we would immediately remove them and email them, and ask them not to post those clips again. People always assumed it was because of copyright concerns, but the issue was that those videos would get the most traffic, and Jake and I and our business partners were paying for this out of our pocket. We couldn't afford for Vimeo to become popular. We were intentionally keeping it small.

I don’t know how long this was the case, I forget, but for at least a few months there was actually a really low cap as to how much video you could upload because we didn’t have the money to pay for the hosting. That’s largely symptomatic of just having started Vimeo in New York where there wasn’t much of a startup scene, and the options for getting venture capital were few. Right when Vimeo started to pick up steam, we took it to a few local investors and they couldn't get past the fact that there were 150 video startups at the time, and they weren't really interesting in investing in us.

We decided to move in a direction that we could afford, really, which was to make a service that was focused on quality and social for videos that were original, that were created by the people that uploaded them. The rest is history.

It was more about the constraint, really, that a strategic move. It's paid off now, though.

After a year or so we made it our strategy. We decided that we had discovered something, we had discovered how important this slight mutation of quality, of interface and content, could really affect the social dynamic.

You compare any YouTube page with any Vimeo page and examine the comments side by side, and you're going to see a much different perspective on life and the world. We noticed that very early on, and we decided that that’s what we wanted to bet on.

Why do you think YouTube has that issue with comments?

I think it's because they're afraid to have rules. I think that’s something I've noticed in many places on the web. Because the web is this utopia, or meant to be a utopia, that is possibly where we can truly achieve democracy. Everyone, many service providers or communities, are afraid to have rules. They're afraid to put constraints on their users. We didn’t do that. At Vimeo we said very early on, "There's one rule. You can't be a jerk." Then we introduced a second rule that is, "You have to have made the thing that you uploaded."

I think that basic framework spawned a culture that people are now very passionate about defending and promoting within the community, and I don’t think on YouTube, in comparison, I don’t think that there is any binding culture. I don’t think there are any rules that everyone agrees to and respects.

Something you really excel at is this community building. You’ve done it with Vimeo, and you're doing it with DIY now. How do you do that?

I'm afraid my answer won't be too different from the one I just gave you, which is really think that you have to give your community things to respect. You have to make them feel like owners. I'm sorry, you shouldn't make them feel like owners, you should make them owners of the community. You should give them responsibility, you should give them tools to author the community, and you should create experiences that make people emotional, that give people responsibility, that treat them with respect. I think that they’ll behave in kind.

Building community around Vimeo was attracting people like yourself. That’s different than what you're doing now at DIY where the community is based around teens and kids, right?

Yeah.

How do you get that empathy where you know what they want?

It's fascinating because this is the thing. What you’ve just described is the single most challenging aspect of creating DIY, is the gap between us and the people that we want to use it.

In the first versions of DIY that we launched about a year ago we were so far from understanding. None of us actually have kids ourselves, and we didn’t obey the most basic rule that we had created for ourselves when we started the company, which is not to infantalize children, which is what we see so many institutions in our world doing to children is treating them like they're dumb when, in fact, they're the most efficient learners of all human beings.

It's not that we talked down to them, it's just that we created a service that treated them like children instead

How did you do that?

It was mostly through language and graphical treatment, we didn’t really hone in on the age range that we were interested in. We undershot it, and we were attracting much younger children and their parents. We really wanted to appeal to kids that had some autonomy, that we using the web by themselves.

It took a couple go-rounds, but we figured it out. We just had to make a service that was interesting to us and give kids the benefit of doubt, that they could figure it out. That strategy seems to be paying off.

That totally comes through. When you go to your landing page, it's not a design for kids. It's just a design for a product.

Exactly. That’s exactly it is that we removed the kid part of it. Just make something that’s interesting to people, and likely kids will get it, too.

How did you know that you were on the right path?

We have some empirical data, but it's more perceptive. We see the types of projects being shared on DIY changing. We started off with lots of projects of crude drawings, the kind of stuff you'd see hung on your kitchen refrigerator if you had kids. We started to see the project shift to kids clearly in a room by themselves with a camera, showing off something that they had build with real materials and living in their own internal world, and expressing their big ideas with a lot of personality and humor.

That, for us, demonstrates a shift in age, in maturity.

How did your life change after the exit?

Honestly, at that moment I wanted to just quit the internet. When I got started I didn’t want to work on the internet. I didn’t imagine that I'd have a career on the internet. I thought there were, and I still think this way, there are so many ways to experience the world, so many different ways to contribute to it, so many ways to explore it, and I just didn’t have any money when I moved away from home and I was 17. The internet was the only place where I could find a job, or rather, where I could get paid the most to use the skills I had, and that just snowballed and culminated with the sale of our company when I was 23.

I was really grateful for what I had achieved with my business partners and what we had earned, and I wanted to go do something else.

I largely did that. After we sold the company, I stayed with the company for a year and we built a modern version of Vimeo. Then I left, and really I got an apartment in the city so I'd have someplace stable. I just met hundreds of people.

In the years preceding, I had lived in New York for a few years by then, I just hadn't really met that many people. We were cooped up every single night just hacking always, and most of my personal relationships I had let go. I just felt starved for friendship and wanted to really live in New York for the first time.

Is that necessary, to be isolated when you're doing a startup and just constantly on the product? Would you do that again?

It's confusing. Honestly, I don’t know. I'm starting up DIY now under different conditions. I'm 31 now. I have a wife. I live in San Francisco rather than New York, and there's arguments that it's changing, but on the whole, to me, it feels much more balanced. It feels like the people here worship a balanced lifestyle more so than New Yorkers. I don’t really know what's right because I'm still so early in DIY, but I do feel that, in New York in those early days, I was much more productive and ambitious, but I'm not sure that I spent that energy as efficiently as I might be doing now.

When is it the right time to take an investment, because when you take an investment the assumption is that for us to make a return, this company has to be sold. Correct?

That’s not always the case. I think a great example of this is what Perry Chen, Charles Adler, and Yancey Strickler have done at Kickstarter. They raised institutional money from investors to get started, and as far as I understand they don’t have any intentions to sell. They’ll find probably some other means of compensating their investors, but those three founders see Kickstarter as an idea that they discovered, they didn’t invent, and they see it as their responsibility to be guardians of it. They don’t really want to sell it for fear of putting it in control of someone who doesn’t respect it as much as they do.

So no, I don’t think that falls, I think that dichotomy is a false one. I think that you can raise money without selling. Maybe it's as simple as sharing dividends and profits, or maybe IPO-ing and selling some percentage to the public.

Coming to a close now, what have you learned from your journey?

Here's the thing that I learned most. My partners and I made a huge mistake selling our company as soon as we did. We knew nothing. We were really frightened that what we had made would lose its value quickly because the internet seems to work that way. We sold as soon as a rich person made it be known that they wanted what we had.

For all of us who didn’t have very much, it seemed like a no-brainer, and now, after the sale, we all have some money and we're able to work on whatever we want. Our lifestyle has changed, but I know for a fact that, for all of us, we wish we could have that company back because there are things, there are intangible qualities of companies that you pour your heart into that are impossible to purchase, one, just the social bonds you have with everyone that you work with in a situation like that.

As an entrepreneur, what I've discovered since is, and this can be recreated but shouldn't be underestimated, is just the joy of having creating a lot of great jobs, because most jobs are crap and it's really special when you create a company that provides great jobs that a lot of people lead really fulfilling lives. There's nothing that tops the feeling of having been a part of that.

I think it can really just be summed up by that adage, "Stop and smell the roses." When you're running a company, take stock in all the great things that having this company in your life does for you, and be very careful about estimating that

top

Welcome to Dorm Room Tycoon

Interviews that cut to the chase and extract wisdom. Learning from the most influential innovators. Founded by William Channer.

An unusually information-rich resource.
Jeffrey Zeldman

Join our world

Follow us on Twitter, subscribe on iTunes or SoundCloud and enter your email below to get new interviews.