Identifying Disruptive Opportunities | Aaron DeBevoise

About Aaron DeBevoise

Aaron is a serial entrepreneur. During his career he cofounded Machinima, a production company focused on action sports documentaries, StyleHaul Inc, a vertical network focused on Fashion and Beauty as well as other projects. Prior to starting his own venture. Currently he serves as the Founder and CEO of Network of One.

Prior to his entrepreneurial endeavors Aaron worked as a Senior Associate for JPMorgan’s Entertainment Industries Group working on deals representing financing in excess of $3B for clients some of which included Legendary Pictures, Warner Bros., Lionsgate and Spyglass Entertainment.

Aaron graduated from Williams College, Magna Cum Laude and Phi Beta Kappa, with a B.A. in Economics.

Transcript of: Identifying Disruptive Opportunities | Aaron DeBevoise

Alan
Welcome back. I’m here today with Aaron Debevoise. Aaron is one of those true entrepreneurs who has taken visions and help to create new companies, and also solve problems in the world today. Aaron, welcome to the show.

Aaron
Thank you very much.

Alan
So, I think on this show, we, you know, we have these entrepreneurs come in, and everyone has a different, different story to tell, and why don’t you give us some background of how you came to be where you are today?

Aaron
Yeah, I mean, I, I won’t start from the beginning, you know, at the time, but I go, I was with, I went to Williams College, where my father went, and my father was very entrepreneurial mind, but never really did anything about it, in the sense of, he’s worked in oil, shipping, and so forth. And when I went to Williams, it was the kind of education that would be one that teaches you to think, or take everyone’s perspective into accounts, and actually come up with a unique approach to all types of problems or ideas from art to economics. And, you know, I’ve had a fascination with the science in general. And actually, at 19, I’d started a company with my father, it’s even this, you know, kind of opportunity for both of us to really connect called Digital, they called C Flix, which was the idea of Napster, you know, kind of really crunching the last mile between colleges and the outside world, right, and the downloading of music and so forth. And that ended up being an amazing experience, where I learned one major thing that became made me an entrepreneur, in my mind, which was, I was very good at hearing problems, whether it was about me personally or about the company, itself, or about outside world and seeing past it, right. What’s the not letting it affect us in a negative way, but be a positive events to think about? Well, what are the alternatives? How do we move past that never took me now, right? And then I went on from there to basically work in a very traditional business, JP Morgan investment bank in New York, that I did that taught me great work ethic, but also taught me everybody in the world is is really a hard worker. And it was not the case. And so I had to learn D learn that and move but JPMorgan gave me an amazing opportunity to go to Los Angeles and work in a financing the financing division for film. And when we did $3 billion in loans, senior secured debt, where we were the only ones that understood the language of film. So someone would say negative cost, right? You’d really what is that? Well, it’s the negative of a film. And the cost of that negative right, from a film perspective, not negative costs were the accounting team was it was mean. But what it taught me was mathematical approaches to something that’s very artistic, right? That watching a film, you would never understand the math right behind? How do you predict that we will be 99 point 9.7% accurate that when we invest in something, that’s what the bank requires. And we never lost the dollar in 30 years, and I joined it for five years of that 30. But it was never three to five, I can’t remember how long it was. And we invested in Superman, Dark Knight biggest films and current day, right. And so it taught me basically portfolio theory, and what I would call Monte Carlo analysis. And so each of these steps I then move on to will teach me things in my life that had a shocking and into it, but you go to the next event was I knew I wanted to be an entrepreneur. I didn’t know what it quite meant. Just like I knew I wanted to go into Hollywood, right? But I didn’t know quite what was available. Right? Once you get in and you see all sorts of opportunity. So I just dove in, right? And that’s typically what they’ll say about entrepreneurs in order to start you got to start right that’s it. You figure it out along the way. That’s the risk taker, right. And so I just started a production company, doing documentary filmmaking, because I wanted to learn the backbone of what I was financing, right? You really see it from the other side, multiple perspective. And I partnered with my uncle roundup of was at that moment, and we did three documentary films, with Red Bull and Lionsgate around the idea of action sports but the athletes were character the scene was a character, Japan, Africa, whatever and the events that occur Archer, right? Someone kayaking in the Zambezi River when it was at its highest point in history. That was one we did was the most famous kayaker in the world. So that was two years where I didn’t make any money pours, as could be. Made sure my wife didn’t understand that. But I said, you know, it was an amazing learning experience. Moving from that to seeing well, as I was there give me time to read and digest what’s going on in the world. What happened previously in history, watching some from like fog of war about, you know how Bay of Pigs happened and missed and perception was always critical right? In the results or actions people took learning from my uncle and his history at TCI as the head of Tci. Investments. Wandering from John Malone, he was telling me a lot of what John Malone taught, and we then decided to be operational jump into something completely operational new with machinima.

Alan
So I need to, I need to take a quick visit here with Aaron device. And we’ve been talking about establishing the background, the history of bringing up today, getting current with what Aaron’s working on today. Aaron is one of those two entrepreneurs doesn’t work on one company, but multiple anytime. And we’ll be right back after these messages.

Alan
Welcome back. I’m here today with Aaron Debevoise. And he’s one these two entrepreneurs who who is working to change the face of the landscape of the world and how we live our lives. Aaron you’re establishing background and before the break we talked about this company machinima which I understand helped to set the foundation for for this next chapter. Can we pick up from there?

Aaron
Yeah, I mean, I think the the end of all this is to result in something that what you just said is the how do you find the true Drive? Drive an entrepreneur and yourself and others right. And so this experience at machinima was just additive to other experiences, even though I explained a little bit about it. But at the end, it really became who is like who am I as a person? And what do I my driven by right and not driven by. So when we launched, machinima was tipped it was originally thought of as a technology, opportunity where rendering real time imagery, right? Rendering imagery. Animation, right was typically not a real time process. It was a very complicated process, you had to be a mathematician of physics, understand physics, and understand how to create animation using Maya and so forth. That was the real, the founding CTO of a company called wavefront technologies had reached out to us myself and Alan saying, there’s an up there kids around the world, rendering animation in real time. And you’re saying What are you talking about? They said, this is not possible is the holy grail of animation. And Alan had worked on the original Tron and at Robert Abel and Associates and understood, that’s this man’s. And he, it was game engines that were doing the physics and mathematics and the imagery on behalf or for the Creator. And the creator was really puppeteering right, the the characters not having to worry about or think about the other stuff, right? So when a bullet hit the shoulder of another soldier, right? It didn’t, the enemy meter typically would have to figure out how that person falls based on the velocity of that bullet in the weight and so forth, right. But in this case, it automatically happens. So you just have to create the scene. So they would literally have five or six people around the room and say, Everybody position and go, right. And that was same as traditional filmmaking. So it opened it democratized animation, right? And then we remember that the days when John Lasseter was around that and he’s still around, but he’s saying before animation was big pitching animation, and everyone’s saying it’s too cold, right? Not never gonna work in Hollywood. And then they showed the lamps of Pixar, right, where the one lamp be tilted to show an emotional state of sadness, right? And they said, Oh, my God, geometric shapes can have a motion, right? And it was a visual and biggest winner in total fun. Homer has been animated. The animated category, right? big budget animation. And so it was interesting. We thought of it as a place for that to happen, the revolution or not evolution, but revolutionary as animation and democratize. It ended up being a too small of an opportunity. And that’s one of the things that I was learning as an entrepreneur is yes, some things you dream of may not be big enough to happen. And or they’re, they’re too complex for the moment in time are many factors. So we really saw an opportunity with the launch of YouTube, right? And it’s growth right over time, when Google bought it to say, most people were using super syndication as a method, every single video network, we said, why don’t we focus just on YouTube where we can learn it, understand it at its depth at its core, and really leverage it to launch many companies similar in nature to machinima as a programming brand, the way that broadcast had reinvented radio and cable reinvented broadcasts, right, more and more channels, more opportunities, and hence, we moved just YouTube in 2007. Actually, yeah, 2007, it was five of us. And we grew it from five to 250 people with 150 under myself, in terms of eight direct reports. And that was a completely new thing for me. But the people we hired were really interesting in the sense that they, the backgrounds were not about their resume or not about what they had done, but who they are, right? It was a lot of young gamers right that we hired maybe think the average age, not usually using age as a measure. But saying the average each year was 24 and machinima. And go ahead.

Aaron
Yeah, so we’re running up against the break, sorry. So we’ll take a quick break visiting with Aaron Debevoise. And we’ve been talking about, you know, the history and the development of the companies. And it when we get back, I’m going to have Aaron jump into this next segment in talking about the future of the intimate internet way we live in the greatest problem today, if you know what’s happening in media. So we’ll be right back after these messages.

Alan
Welcome back, I’m here visiting today with with Aaron DeBevoise. And we’ve been talking about the history of the background. And really, you know, Aaron, I, when I sit down and visit with you, you represent the typical entrepreneur.

Aaron
You know, there are individuals that are currently pushing boundaries. So you were in this company, and also you saw with YouTube and you saw something missing there. Right. And I mean, typically a true entrepreneur will say, you know, what is this guy was the model we’re on is wrong. Right. So what did you see wrong with where you’re at in the problems that needed to be solved? Right? Yeah, well, I think, you know, I started to realize taking on what the CEOs vision of his his my uncle in this case, at a different moment in his life was not the right perspective for me, right what I was doing at machinima, we grew it to 250 million uniques. From zero, we asked 250 venture capitalists to invest. We got one yest, two and 52. And fortnight knows. Right. So no one really understood what we were saying or believed in don’t feel bad Scott Cook and into it. didn’t believe in the Google model. And I, by the way, had an opportunity to sell YouTube to Lionsgate. Yeah. And I said, Why would anyone want to do this? Right, YouTube? This is and I was so wrong, right? I’ve been plenty wrong. And that’s actually the key to success. But isn’t that true? Yeah, yeah, we learn when we when we make a mistake, we learn something in the process. Yeah, I think there were three messages generally that I learned a while that during that process, which was, you know, really, failure is success is learning. Right? And without it you’re never going to succeed or overcome Right? Or or go faster. are bigger. If everything works out, you’re not you just get sideswiped. And that happened every day, every month, every year, every company at this at the end of this journey of machinima, right and what started a new journey in my life I have been involved in the creation of, or investment, or advisory of at least 15 companies across YouTube now. And this core set was three or four, including style, and dance on more style Hall and founded with a, with Alan, as a co founder and Stephanie Herbert Shecky, who was current and CEO. And we’d sold that company, but each company had the same stages, it was like growing up as a kid, it was literally the pimply faced teenage age, there was the young 20s stage and a little bit wild, and then you had to slow it down and figure out how to structure it so that for growth, and it was really unique to learn those events that occur that were actually regular, so that you didn’t find yourself in this position of being, you know, too worried about any single events, right? But also always questioning, which was kind of ingested into me through Allen through John Malone when I was at CCI, of questioning, what if we’re wrong? Are they what would we be doing otherwise? Or what is someone else might be doing? And what if the people that we typically look at and say, are companies, we didn’t believe in what they actually might have taken, like, what Google didn’t buy Netflix, right? And we thought that was really just not the right move for them. What if that was exactly what they wanted it to happen? What would it mean, right? And so I really took that, and after having launched a bunch of companies and been at machinima for almost eight years, it was seven years. And said, in one night, that four in the morning, were morning, one morning, days start to mix. So you’re an entrepreneur, is that I looked at it. I had seen Transcendent Man, which is Ray Kurzweil is a documentary about how he wanted to revive his father through computer technology using data, nanotechnology processing. And with artificial intelligence feeding a computer everything is that read? Saw said and trying to read it, make it so that the computer could answer as if it was his father, right. And seeing the problems that existed, which was AI is really difficult, right? Is that getting the essence of computers are terrible at seeing the difference between a dog and a skunk? By the visuals, right? It knows your text, if you tell it. And I started to look at well, isn’t that a problem? That YouTube and Facebook and all these big mega platforms, right? The way you look at Comcast, in the past was a mega platform. These platforms were unbelievable and scale way bigger than Comcast right way bigger than CBS. CBS had no meaning in 90% of the places that YouTube existed 80% of its views were outside of the US. Right The reason HBO created is it’s it shows the way it was the hit all the you know US audience demographics, right. female male, young, old family, right you go. That is no longer true. With machinima. We focused on male eaching 34. And we got some other audiences. But we got 250 million people. It was the ultimate comic book niche. That was no longer niche. Right. But what did that mean? And what we thought it meant was new cable would reinvent itself the new cable the future model of cable what who was doing mixed with what others? Yeah, as we move into technological advances and cable and you know, the video and yeah, what do you what do you see all this going? That? You know? Yeah, I think there was a phase for us, the biggest moment in my life now is defining who I am now and finding out who I really am. And what’s really going on, is understanding that that idea of redefining cable and media, right alone is not big enough for Google, right? It’s not big enough for Facebook, right there. They’re driven by changing the entire world. And I started to think about moments, right? That happened in the past that were like that railroad caught the car, the printing press, and in fact, the printing press was something that Chris Albrecht from Wired magazine that writes about longtail write it, read the wrote the book, longtail had said at an event said that YouTube is big as bigger than the printing press as a as a it will be and it was little bit, you know, off the wall for me even after being there so many years, but I really was being driven by engineers at YouTube, not creators, right? creators were just uploading, but everyone was uploading wasn’t just a core popular group the way Hollywood works, right. Whereas is a group of directors or writers, you’d say it was a, almost a billion people. And by the time I realized that it was a billion, which to me was taught told by a person named Jason Silva that is actually the youngest futurist I know. And probably Ray Kurzweil is like next, the next Ray Kurzweil on Nat, Geo, and other things, he he taught me that abundance was a book being written, had just come out and said abundance was about this idea that the abundance of technology, the abundance of people, the abundance of the future, can is an exciting moment. And it’s actually going to be better than the past in terms, it’s not going to be harmful. Because that abundance, and if we unleashed the connection, the connectivity of those people, the power of it, that it would actually say that the innovation, the pace of innovation, would accelerate faster than Moore’s Law faster than exponential growth. It would be logarithmic, or something that would step change it. And we now look back in history and say, We just like it. That’s what happens. It was never exponentially smooth. It was always the car came. And then it was it was a little bit like TMZ when a celebrity went crazy. It was you know, spike in traffic. And then they had a programming.

Alan
so Aaron I needed we’re up against a break. I visiting with Aaron demobilize. And we’re talking about the next, the next big movement in the technical technology here. And it’s focused around people, data, and media. So we’ll be right back after these messages and Aaron will love arrow. Give us the predicted for the future. We’ll be right back after this messages.

Aaron
Welcome back. I’m here today with Aaron DeBeVoise We’ve been talking about, essentially what the future for the media is. And you know, Aaron, you’ve outlined some things that some some clues that we have about technology has brought the people data and media together. What do you see this all leading up to? What’s the next big thing that we’re going to see in the transition to technology? Well, I mentioned a forum morning moments. And that in that moment was really asking myself, like I’ve mentioned is what if we’re wrong, right? And what did that mean? And I said, you know, I really looked at it and said, YouTube, whenever you talk to someone, or Facebook or anything like it, that scale has never been it’s the largest video offering, right or platform in history of mankind, right period. And he would say, that’s extremely difficult to organize. Right? How do you know how to feed what video to which person, right? It’s not like programming where there’s turn on television was 24/7. And that’s the biggest most opportunity you have, right? It’s 24 hours a day of programming. Here it was endless, infinite, you know, and as it got to a billion people, which is something Jason Silva talks about as a major moment and change, right, where you can no longer act the same way as you once had, if you had five people to serve. Now you have a billion you’re going per month. What what did it mean? And what it really meant is, well, why are they doing this? And how are they organizing it? Google, right. And my, what I saw was that we as a company, we’re averaging everything and what happens when you average everything it looks average, right? No matter what if it’s really average viewer, okay? Or if it’s not your real eliminating the bad and limiting the good. So I looked at one of the good assets that we had in the past and saw a very pivotal moment right that many people were finding all sorts of assets that we would consider good bad, different, whatever it is not ever make it in Hollywood, extremely important to them around the worlds right and meaning it had I had an asset that at 27 Have a million views I had no idea about because I was averaged into everything. And it would, it was from 2007. And it gained over many years. Right. And that was because of the growth of opportunity, people and the underlying data cell, you know, being used to predict what does a consumer wants when they type in, in this case, the name of a game, right, or something like that? Well, that moment, I also saw that travel and had produced increased 300%. Last year, I mean, you know, in that current year, and 300, but it wasn’t just Google, it was on YouTube. And Google, YouTube was the place where they found where they want to go visually. And Google was data around pricing, what how much the flight would cost, how much the hotel would cost. So it was being used, it was a utility engine, both of them they weren’t entertainment engines, entertainment was one utility, there was a leanback moment where you wanted to just watch something. But entertainment was one of and that was the question, one of what, right? And why. And so we really found when they Google had bought Freebase, Freebase was a topic in June of 83 million term topics in the world. And it wasn’t at this point where you kind of look at it and say, they are what are they trying to do? What is Uber trying to do when it starts to expand beyond the black car service, it was pretty big, good enough for financial when. And I started to understand that entrepreneurs that were getting the future, were looking past the economics, right? Understanding, they already had an economic model, which Google needed from the 2002 moment that made them the second largest market cap company in the world with local advertising targeted, you’d say to fuel what they actually are going to do, that people were looking at 20 year trajectories to determine what they were going to do today. And Google has embraced that. And they’re in their 18th year of that 20 year run. So I said, there’s gonna be a massive change, because of the connected world that ultimately says, we can predict the future, right? And then we can predict the future based on data, right, then what’s critical when you talk about what everyone in San Francisco is talking about what no one in LA understands, right? The Internet of Things, or the Semantic Web. Most people mean, that in here, at least in LA, if they even know what that is, is, you know, or New York or wherever is that they mean the things right? The phone delivers information, if can you make the thing, right? Nike makes its bracelets it delivers billions of data points. But the question, the answer is who controls that world? And those people that control that world? Can they do something good with it, right. And the way to control it is contexts, right, which is data. Mary Meeker just said it is that context is critical, or nothing works, right. But that the image versus text and visuals, transport or transfer, transfer 10,000 times more data to a human being for the same given amount of time, versus texts. Right. And I, Eric Schmidt had told me this in 2010, said that reason they had bought YouTube was that visuals were overcome text, right. And then we just saw it in Paris with the cartoonists, it wasn’t that bad thing, but that the cartoon had transcended language, right. And that was visual data at a billion with the understanding of what the intent of human beings are seeing something like 158 people’s lives, in terms of like, if you looked at age zero to 80, as a lifespan, and all the activities someone would take that amount of activities times 158 are happening every day on YouTube, right? Going, that’s what I’ve measured, it may be a little off little right or wrong, but it’s close. Right? And you’re seeing that happen in a day. What’s happening, you’re actually compressing time, right? Because you’re seeing 158 lives make choices, right? And proactive choices. It was what do you do with that information? Hardest thing that everyone has every everybody’s trying to accomplish? Is prediction. Right? And doing that through and then eventually audit on top of that automation, right, which is what we’ve worked on all day, is predictive analytics that allow us to automate processes, but you need an underlying business model for to grow it to hit a different objective, which is changed the world. Right? Yeah. Aaron, this is this is phenomenal. And I like it just said in one context that the next big phase is going to be more with artificial intelligence of running the business models and delivering things in a more efficient manner. For us. Yeah, yeah. I think what One of the things is yes, there’s a lot of people believe like the what Amazon’s doing with local and all that. But I think right now is the beginning of web for auto, which is the intelligent error, right? A little bit like every revolution we have, right? With automobile or with the Renaissance or all that what, you know, different time periods were also we become more intelligence was that the last 20 years with data gathering? Right? Solely whatever mechanism allows you to gather data and look at Google, right? It was a lot of different offerings, you Gmail, G maps, g plus g, whatever, right? And then YouTube, and you and Amazon, same thing, Twitter, same thing. But it what what they got right, Amazon, Twitter, and YouTube, although I that doesn’t mean I predict those all are the successors differently than Facebook was they thought about you, every time you as an individual, how many choices you make per month, on average, on YouTube? 250, right, I’m going when machinima was around, we were the number one most engaged network in the world voted by comScore and ad at week, right. At that point, that was 10 views per unique. We weren’t taking into account the groundswells of actions that were happening outside of the categories that people typically think are popular music, gaming, movies, TV, what was happening with when you broke your arm that you needed to search and say, Hey, what do I do if I can’t get to a hospital right away, and you find a visual versus text, which one of you probably going to watch and that visuals 30 seconds, right? Or read, it’s clearly visible. And YouTube, for the first time in Google’s life history for around search was a circular internal system, right? Meaning everything led to another video within the system. Whereas Google always was required, unfortunately for them, but it works, right is that it was required to lead out into the world of WWE, the web, right? lead you to Home Depot lead you to wherever you needed to go. Here, it’s leading you within YouTube. So I believe they have given out the algorithm just like Facebook, so it’s like others for what they call the they called, they used to call the Knowledge Graph, right, which was the human action graph. And then there’s the social graph, and the real time graph with Twitter, both but it’s a little skewed celebrity, right? And not normal, everyday person. If you combine all that, what do you build? Right? And that’s called the human intent graph. In my mind, that’s what I’m working on. But you need an underlying business. And I believe that’s the answer to solving all of what Muhammad Yunus was trying to do with microlending, which is solving poverty, right. For the purposes of innovation, we will be at an exponential growth with a smooth the biggest step change where we measure that from in the history of the world, right, in the next few years.

Alan
You know, that’s, that’s quite a bit there, Aaron, but it helps to put in perspective that we’re now transitioning into the next big change yesterday, a pleasure having you on the show that they’re busy here with Darren DuBois. He’s a true entrepreneur pushing boundaries and his outlines the next big step with technology naming Aaron, thanks for being on today. Thank you very much. Thanks again for joining us here in America dreams. So stay tuned and tune in here next week right here in the station.

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This transcript was generated by software and may not accurately reflect exactly what was said.

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