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Thursday, November 2, 2017

Pitching Your Tech Startup To Hollywood: A Silicon Valley Founder's Perspective


Los Angeles (LA)  is known for its creativity and entertainment. Silicon Valley (SV) is known for its technology and innovation. Because of the new technologies and changing consumer behavior, the fields of entertainment and technology are converging. Netflix, Amazon, Google, Facebook, Apple, etc. are changing how entertainment content is created, consumed, and monetized. The merging of entertainment and tech was the foundation of my own startup, EVER, I launched two years ago to satisfy the human curiosity that occurs when you see and like something new on TV. Pitching EVER took me from Silicon Valley to LA almost every week for over eighteen months. I navigated the entertainment industry relying on what little information was available in the marketplace on how this industry operates and my own background in technology and experience working in the Silicon Valley startup ecosystem for a few years.
In the most simplistic terms, in SV, a startup creates a product and is funded by a Venture Capital firm and sells its product to consumers/customers. If the product sells successfully, everybody involved in the process makes a lot of money. In LA, a production company (startup) creates a product (tv show/movie) and is funded by a studio (venture capital firm) and sells its product to the TV network/distributor (customer). If the product sells successfully, everybody makes money except the production company.  

Photo credit: Wikipedia

I noticed a few key differences in how business is done in Silicon Valley vs Los Angeles. They are: 

1. Introductions: For a startup to do deals, raise money, hire people, you need introductions. In LA, my focus was deal-making. I met a lot of people who were very excited about what we built and were eager to help me. But, this help came with a price tag -- sometimes up to $25k per month. Their point of view was that if they are helping me with an introduction or a deal that will make me a lot of money, they should be compensated for that in cash now; like a lobbyist.   And, in LA, most of the deals are done in back rooms and not through a formal purchase process. In SV, the point of view is different. If people like your idea, they generally introduce you to people for deals, capital, or talent without any expectations. The assumption being that I might do the same for others and when I am in a position to help, I help. If somebody engages with you to work for a few months on a deal then, generally, they get equity in the startup and no cash.    In LA the networking is cash driven and paid up front.  In SV the desire to help make introductions is based on anticipated equity should the startup be successful.

2. Communication: People in LA are very good at making anything exciting. If you want to feel good about anything you are doing then just share the idea/demo with somebody in LA. They will tell you that the demo is the best thing they have ever seen and they can see it taking over the world, etc. They promise to help you get in the door, make introductions, and so on. As a startup founder, you want to hear that so you believe it. Often you never hear from these people again. Your emails and phone calls go into a black hole. In LA, less than ten percent of my meetings turned into good leads or valuable information and in SV the ratio is probably 30-40%.  In SV, the conversations are more honest, direct, and realistic. People are just as busy in SV as they are in LA selling and networking but in SV people tell you the opportunities and challenges related to your startup. Overall, my experience in LA was that of smoke and mirrors, while in SV the culture is more accountable and, generally, people follow up on what they promise. It might have something to do with the players in the respective marketplaces.  Tech people are not known to be great salespeople, we have to hire them.  LA is full of great salespeople because they have to sell all the time to survive.

3. Openness: Every new idea is a secret in LA. People protect their ideas because they can be easily stolen. The entertainment industry is a tight, relationship-driven industry. If your idea is with an established entity, it most likely won’t get stolen because they have to maintain a reputation. The mindset in LA is not to tell anyone about your new idea until it is in production. SV is the opposite. People talk openly about their ideas with other people, get feedback and refine their ideas. It might be because the execution defines the success in SV, not just the idea.  In LA, the execution is relatively easy. You have the producers, studios, and the network. The execution machine works well. In SV, the resources are available but the founder has to create the execution machine from finding people, investors, and customers.

4. Self-promotion: In both LA and SV, people are always self-promoting.The difference is that in LA, people do that for survival. Lots of people who work in the entertainment industry to create TV shows, movies, etc. do not have salaried jobs. They get paid per project. So, if you meet somebody when they are looking to get hired for a new project, you will always be a lower priority because they’re working on getting their next paycheck. In SV, lots of people have salaried jobs so when they are doing self-promotion, it is for their next gig. And, all startup founders are always promoting the startup and themselves but it is not for their next paycheck. Hence, the thinking is more long-term compared with LA.

5. Risk Averseness: Entertainment is a high-risk business.Most tv programs and movies do not make money. The ones that do make money don’t make the producers or the people who have the original ideas rich.  Outside of production cost risks, the producers, studios, the networks are not willing to take any risks. Anything new is considered risk. They don’t do revenue share deals. There is this concept called MG (Minimum Guarantee), and everybody wants that. For example, if you go to a TV network with a business deal that has the potential of generating $10M in a year and you propose to share the revenue 50-50, the networks would want $5M guaranteed, regardless of actual revenue the deal generates.  If the deal ends up generating $20, they still get the upside i.e. additional $5M. And if the deal generates $0, they get $5M. There is no downside for the network. Deals in LA are generally complex. There are a lot of players involved - networks, advertising agencies, and brands (in the case of TV shows), agents, talent, etc. Furthermore, the LA dealmakers are used to extracting value out of every iota. It is not uncommon to have MAG (Minimum Annual Guarantee) for a big deal in the tech world. Generally, MAG is not expected from a pre-revenue startup.In LA, there is an emotional attachment to the content, which often inhibits them from doing a rational mutually beneficial deal.  In SV, revenue share deals are common where both parties take the risk.
6. Tech Awareness: I have met many senior network executives who do not know how to set up a WiFi network. This might be an age thing. Some still think that OTT (Over The Top) content delivery (companies like Netflix and Amazon use OTT) represents no threat to their traditional business models. There is this fear of technology in LA and nobody wants to talk about it.  If you don’t talk about it, it will go away. The video game industry is much bigger than Hollywood today and LA lost on this huge opportunity because executives were not comfortable with technology. Having said that, they only like technology when it is used in content production. SV is about technology and everybody is comfortable with technology.
7. Content: The mindset in LA is that my content is better than your content. In SV, people think that all content is bits, it is all the same. The value of the content is based on the ad revenue it generates. There is no underlying value assigned to content. Netflix and Amazon might have a different view.  In LA, if you are making money off of my content, I want most of that money.  In SV, if I have an asset and you are doing all the work in monetizing that asset, I am happy to get a smaller percentage.
8. Cost of doing business: LA is a glamorous place. You dress extremely well and meet at fancy places, like Chateau Marmont, for drinks or dinner with your potential clients. There is a time factor as well. The LA traffic is so bad that sometimes it can take you an hour to go five miles. In SV, you wear jeans and your company t-shirt and the meetings are at places like Coupa Cafe. The average meeting cost in LA is probably 10x higher than in SV.

9. Sales Process: In LA, you sell things in sequence i.e. you sell it to one party and until they say yes or no, you don’t sell it to others. I think this goes back to the history of Hollywood and is the current business practice i.e when you have a script you send it to one studio and until you hear back from them, you don’t share it with anybody else. If you share it with two studios at once, you are blacklisted and nobody does business with you. To an SV person, this sounds insane. If you don’t have a commitment or any type of paper signed with the party why wouldn’t you approach as many potential clients as possible to you sell your product?
10. Creativity: LA definitely wins in creativity. It is amazing how creative people are. The whole industry is built on fantasy. If we see somebody getting killed in a movie, we feel the pain. People think of a story and make it real for all of us to enjoy. During my visits to LA, I met a few costume designers who are masters of their craft. For example, I was in a meeting with a costume designer and he could name the designer for my blue jacket and my white shirt just by looking at it. SV creativity is more about applications of technology.
Photo credit: Wikipedia 
Despite the challenges of doing business in LA, I met some high-quality people who have been very helpful. In my discussions with Mike Wann, CEO of Mobcrush, a mobile live streaming gaming platform, he pointed out that, “Silicon Valley deals and their relative hotness expands and contracts often with prevailing winds.  LA deal pipeline seems to be fairly consistent. Slow but consistent in extracting value out of media and related technology”. I agree because SV goes through cycles of what new tech is hot and LA is always about the content.
Unless LA learns to embrace technology, it will have a tough time dominating the future of entertainment.  My observations, hopefully, show that in order for LA to maintain its dominance in the entertainment industry it will have to adapt and welcome technology into their industry.  Of course, there are other factors like China has become a bigger market than Hollywood for movies and there is a lot of short-form content available on Snapchat, YouTube, Facebook, etc. The dynamics in the entertainment industry are shifting to a new paradigm and LA has no sense of urgency to change because the change might cannibalize existing revenue. Are we seeing Hollywood’s Kodak moment?
Recently we’ve seen tech companies like Netflix, Amazon, and Apple hire executives from the entertainment industries. For example, Apple hired Jamie Erlicht and Zack Van Amburg from Sony Pictures Television, Amazon executives Roy Price (he resigned recently) and Albert Cheng come from Disney and ABC respectively, and Scott Stuber at Netflix comes from Universal Studios. How many executives have the entertainment industry hired from the tech world?   

The article was originally published on Forbes.com on October 27th, 2017.

Wednesday, April 26, 2017

The New Generation

How does increase in cultural homogenization affect self-identity? 

Wednesday, April 19, 2017

Illusions

A snake charmer plays the music for the audience and not for the snake. 

Sunday, February 19, 2017

What Drives Our Social Behavior?

Why do we do anything? Why do we want anything? What leads to our actions or inactions? What makes us social? Why do we compromise? Some say that human life is driven by fear. It is fascinating how society functions and how many variations there are of society.  However, the core of human nature is the same all over the world. In my observations, our social lives are highly influenced by three distinct fears -LLP: 





1. Fear of Loneliness

2. Fear of Effort (Laziness) 

3. Fear of the Unknown (Predictability)  

Evolutionary biology tells us that a desire to procreate and to self-preserve dictate a lot of our behavior. I think the modern world is much more complex. Reliance on another human is being replaced by commercial goods and services. Time is our most limited resource and it is primarily consumed to earn money and/or to satisfy our senses. Is that all there is? Let's see how LLP plays a role in our daily social lives: 



1. Loneliness: It is really hard for us to sit alone in a room and do nothing. Try it and see if you last more than five minutes. Loneliness can be very painful. It makes you think about the meaninglessness of life. Comfortableness with nothingness is probably the hardest thing to achieve for a human. We look at our phones constantly or watch TV or drink wine or eat food or read, etc., but it is really hard to do nothing. Why do we seek attention on social media? Why are we exchanging messages or pictures all the time? It is to escape loneliness. People have friendships and relationships, which lack mutual respect because people would rather be with somebody than nobody. Human relationships are complex and difficult so many people choose a relationship with a pet rather than with a person. A much easier way to escape loneliness! There are 75M+ pet dogs and 80M+ pet cats in the US. We spend ~8 hours per day looking at screens (TV, phone, laptop, etc.). Why can't we be alone?


2. Laziness: We tend to avoid physical and mental effort. It is much easier to read a tweet than a policy paper. It is much easier to buy a lottery ticket than to find ways of making money, which require a lot of hard work and risk. Some people tend to stay in romantic relationships when all the love and romance is gone because it is a lot of work to date and find someone else. Why do we like TV? Because it is a medium that requires no mental or physical energy and we get entertainment. Reading a book requires much more mental energy. We tend to follow what society expects of us without questioning and making up our mind about issues because thinking is a lot of work. Geroge Bernard Shaw famously said, "Few people think more than two or three times a year. I've made an international reputation for myself by thinking once or twice a week." 



3. Predictability: We like our whole life to be planned and everything to go as we plan. We want to know what the weather will be tomorrow, and if it does not turn out to be as sunny as forecasted, we get upset. People stay in jobs that they find miserable because it is predictable. Going to a new company or doing something else would require dealing with the unknown. Psychic services is a multi-billion dollar industry. We like to plan the future of our children. Stock markets run on predictability. We choose our life partners based on their predictable behavior. Would you marry someone, who does not behave predictably?  Ironically, we are a product of the random selection of genes. 

Loneliness, Laziness, and Predictability are interconnected with Loneliness being the biggest fear. Sometimes, we put effort (not being lazy) into a relationship (to escape loneliness) to have a relationship that lasts forever (predictability). 





Sunday, January 15, 2017

What Is A Person?


Representation of human spirit? 


But whether the visage we assume be a joyful or a sad one, in adopting and emphasizing it we define our sovereign temper. Henceforth, so long as we continue under the spell of this self-knowledge, we do not merely live but act; we compose and play our chosen character, we wear the buskin of deliberation, we defend and idealize our passions, we encourage ourselves eloquently to be what we are, devoted or scornful or careless or austere; we soliloquize (before an imaginary audience) and we wrap ourselves gracefully in the mantle of our inalienable part. So draped, we solicit applause and expect to die amid a universal hush. We profess to live up to the fine sentiments we have uttered, as we try to believe in the religion we profress. The greater our difficulties the greater our zeal. Under our published principles and plighted language we must assiduously hide all the inequalities of our mood and conduct, and this without hypocrisy, since our deliberate character is more truly ourself than is the flux of our involuntary dreams. The portrait we paint this way and exhibit as our true person may well be in the grand manner, with column and curtain and distant landscape and finger pointing to the terrestrial globe or to the Yorick-skull of philosophy; but if this style is native to us and our art is vital, the more it transmutes its model the deeper and truer art it will be. The severe bust of an archaic sculpture, scarcely humanizing the block, will express the spirit far more justly than the man's dull morning looks or casual grimaces. Everyone who is sure of his mind, or proud of his office, or anxious about his duty assumes a tragic mask. He deputes it to be himself and transfers to it all its vanity. While still alive in subject, like all existing things, to the undermining flux of his own substance, he has crystallized his soul into an idea, and more in pride than in sorrow he has offered up his life on the altar of the Muses. Self-knowledge, like any art or science, renders its subject-matter in a new medium, the medium of ideas, in which it loses its old dimension and its old place. Our animal habits are transmuted by conscience into loyalties and duties, and we become "person" or masks.
-George Santayana 

Friday, January 6, 2017

Loss

A loss is shattering of an illusion. 

Monday, December 26, 2016

Society

Can there be society without social conditioning?

Wednesday, December 21, 2016

Time

Most of our lives are spent doing things that, we think, will enable us to do things we desire. 

Empathy

Empathy is directly proportional to the frequency of misfortunes - Ralph Abraham 

Thursday, October 27, 2016

Essence And Complexity

The essence of everything is simple. Details give rise to complexity. 

Saturday, August 20, 2016

Feelings

Sometimes the most rational thing to do is to do what you feel. 

Sunday, July 31, 2016

Learnings From Krishnamurti Awareness Workshop

Last month, I was in Victoria, BC, to attend a workshop on Awareness based on teachings of my favorite philosopher, Krishnamurti (K). The workshop was held at the Krishnamurti Education Center of Canada. It is a beautiful and calm place, perfect for introspection. Following are my random notes from the workshop:




1. What drives our actions? The general understanding is that thought drives action. Hence, we try to control our thoughts with meditation. The idea is that if you control your thoughts then you will control your actions and if you control your actions then you will be happy. Everybody is looking for happiness and the cause for happiness or unhappiness is thought. However, K says that what you think is result of the state of your mind. And, the state of mind is influenced by one's unconscious. So what one thinks is caused by one's unconscious and thought becomes the effect and not the cause of one’s actions.  

2. The Mind, which always wants to satisfy senses, overindulges in pleasures. Why is it that animals don't overeat? They listen to their bodies. Humans listen to their mind more than they listen to their bodies.

3. Social conditioning influences how you satisfy your senses. Some societies prefer beer and others prefer wine. Some like frog legs and others like lentils.

4. The morning is the best time to get in touch with your unconscious because during sleep the unconscious is active and the conscious is resting. In the morning, a conscious mind is not fully active and that is an opportunity to tap into the unconsciousness. During the day, conscious takes control over unconscious.

5. Consciousness is what we are aware of i.e. it has content (e.g. thought and knowledge). Pure consciousness is without knowledge. K says that you  need this pure state of consciousness to see things as they really are.  

6. K's meditation is to observe thoughts. See how the mind transitions from one thought to another. The observation should occur without knowledge and interpretation. This observation slows down the conscious mind and gives the ability to tap the unconscious.

[My question was how does the mind observe itself i.e. there is no separation between the observer and the observee. Apparently, that is when you find The Truth or God when the observer and the observee are one]

7. To understand self, one has to let the mind be in the raw form i.e. no conditioning.

8. Exercise: To slow down the mind, lie down and exhale deeply. Don't worry about inhaling, it will happen automatically. After ten minutes of deep exhales, observe your thoughts.

9. Awareness is consciousness without interpretation i.e. pure consciousness.

10. At physiological and psychological levels all humans are the same. Different conditioning makes us different and creates social or imagined boundaries among humans.

11. "Life is changing." This statement is a conclusion that most people have drawn. Any conclusion about life is dangerous because it obstructs observation. Don't form the conclusion. People tend to start repeating the conclusion and stop discovery.

12. Exercise: Sit at a quiet and comfortable place and write down any questions that come to your mind for half an hour. Don't think about the questions, just keep on writing whatever is coming to your mind. With this exercise, the mind gets cleaned because it has to face itself and you get deeper into your unconscious.

13. At the end of an intense physical or mental activity there is a moment of silence in the mind.

14. When the body is relaxed, it is easier to observe the mind.

15. Meditation is choiceless awareness or thoughtless awareness. With meditation, the mind is aware at the moment.

16. Meditation is not trying to still the mind or seek concentration or focus. When you focus on something, your mind is in conflict because it fights with things you don't want to focus on. A mind in conflict can never be calm.

17. Conscious mind either suppresses or indulges.

18. Meditation is not something you do. Even trying to be aware is not meditation. Just being aware is meditation and not becoming aware.

19. Love = The Truth = Beauty = God

20. Who I am is a product of my thought. The thinker tries to change the thought that created it. How does thought change thought?

[I did not quite get this. Of course, thought can change thought. A person who is product of a society and can change society, etc.]

21. Exercise: No mind meditation. Speak gibberish for an hour. Get louder as time passes by. The idea is to let the unconscious come out because language comes from the conscious mind and when you speak a language the conscious mind is active. Basically, make random sounds without thinking anything. After an hour, lie down and observe the mind.

22. There are always conflicts in our consciousness.

23. Chanting calms the mind and the body because of the vibrations it creates.

24. Most of us are intellectually trained. Society wants only the intellectual output and not the total output that includes emotion and body.

25. Why a part of me, the intellect, has become supreme? It dictates everything - morality, virtue, daily life, etc. Why is the intellect so important in our life?

26. We live in the past or the future and never in the present.

27. The intellect is an isolating process. It creates the idea of I. We start thinking in terms of my this and my that. It creates a separation between me and everyone else.

28. I know nothing but the past. There is security in the past because it is certain. The dissatisfaction of the past is the hope for the future. The intellect creates the security in the past and hope in the future. That is why it dominates everything including emotions.

29. When we like something, we want to repeat that experience and want to have permanence in the experience. E.g I had a glass of wine I like. I must have it again. Or, I have a car for the last ten years so I must have it forever.

30. We live in the center created by the intellect. It is a self-perpetuating center. And, it is all about me. How do we break from this center?

31. Can we live in harmony among emotion, body, and intellect? The idea of harmony is not somewhere in the future. It is harmony now. With harmony, there is no conflict among body, emotion, and intellect (reason). You live as a whole.

32. If you make an effort then the intellect is driving it. With awareness, there is no directive or effort.

33. When you look at things through the intellect there is justification, condemnation, etc. When you look at things in harmony, there is no judgement, condemnation, etc.

34. Control has become important in our lives. We want the body, emotion, and intellect to follow certain direction. Don't resist. Just be aware. It is the awareness that can create harmony.

35. Harmonious life is possible by observing with attention. What you are observing is not important.


36. Joy is different than pleasure. Joy is in the present and is beyond senses and pleasure is sensual and wants to be repeated.

Friday, June 17, 2016

Self Awareness

Don't try to figure out others. Understand yourself and everything will make sense. 

Friday, June 10, 2016

Life And Equations

The most interesting things in life cannot be reduced to equations. 

Friday, May 27, 2016

The point

What is the point of the point? 

Tuesday, May 24, 2016

Commitment

Commitments are tested when better options become available. 

Saturday, May 14, 2016

Need And Expectations

When the need is high, the expectations are higher. 

Progress II

What is progress?

Wednesday, May 4, 2016

Loss

Loss is more memorable than gain. 

Monday, September 28, 2015

Human Senses And Economics

I wonder how life would be like if the law of diminishing marginal utility applied to our five senses.