OLC attended Deep Focus: An Evening of Disruption at JWT on February 21, 2013. The selected panelists: Adam Klaff, Head of Business Development at VHX; Chantel Waterbury, Founder & CEO of chloe+isabel; Rachael Chong, Founder & CEO of Catchafire; Brian Bedol, Founder & CEO of Bedrocket; Andrew McLaughlin, former Deputy White House CTO and current Entrepreneur at Betaworks were asked a series of questions by Ian Schafer, Founder & CEO of Deep Focus.
"Institutions will try to preserve the problem to which they are the solution," Ian Schafer quoted Clay Shirky. "We tend to stop change for the sake of business," Schafer said. "That's a bad model. We have to fight that notion."
To be disruptive, there has to be a way of discovering, consuming and creating content that is optimized for sharing. "It's not just consumption anymore," Schafer said. "Fast, efficient, exemplification of pop culture—it's what people look for now."
Adam Klaff took the stage and was introduced as a disruptor of film. VHX is a digital distribution platform allowing filmmakers to sell direct to their fans. It lets artists connect in different types of ways.
"What attracted you to Hollywood?" Schafer asked. "There's a combination of things," Klaff said. "The thing that attracted me to Hollywood was seeing that a lot of movies were being pushed out. There used to be a fear of losing capital, but there were fantastic ideas and fantastic people. I think it's spending money to earn money."
Schafer asked how VHX takes films that historically don't make money and make off of them. "With documentaries, for example, the amount of money you're going to spend—what we can do is help the filmmakers reach their audience online," Klaff said. "It's about giving tools to help make the consumption of film easier. We're trying to provide a variety of tools to do that. It's figuring out ways to keep the consumer and filmmaker going. We're trying to feed the filmmakers who their audience is, what their brand is becoming. You can't do that in a traditional setting. For us, it's about building those tools to reach out to people. Okay, it doesn't solve the problem, but having the pieces and having it feed into something is comforting."
"What's different about the stress that you have to go through?" Schafer asked. "The biggest challenge," Klaff said, "is that people think the system isn't broken. The models that exist are made to work the way it is. I think it's explaining how it can work and impact your business." When asked where he sees the biggest disruptive opportunities, Klaff answered, "In spaces where you don't have to play in the workflows."
Chantel Waterbury was brought to the stage as a disruptor of retail. Her company, chloe+isabel is unique in that it is empowering the next generation of women. "We're the modern-day Avon catering to GenY," Waterbury said.
Schafer wasted no time in asking Waterbury about how the company was created. "Well," Waterbury began, "the industry is 125 years old. Avon, for a long time was incredibly disruptive. It gave women a chance to be entrepreneurs, but no one has tried to change the model. Nothing had innovated." Schafer asked how much time she spent on the project. "We didn't start off building tech," she said. "There's no way to attract users unless we have tools to get them interested. We built, shifted and prioritized for their needs."
Waterbury revealed that chloe+isabel's brand has been built up her whole life. "I wanted to make a difference," she said. "I wanted to make a difference in life. The business model really got me excited about the company."
"The fear of failure is a driving factor. How do you keep your team inspired?" Schafer asked. "I think it starts with having the right people," Waterbury said. "To hire and fire people, there has to be three things that need to be considered: passion—are they really about the company, innovation—no one is doing what we're doing, kindness—caring about 'Her'."
"What can people learn about social media? A lot of people have been led to believe that commerce from social is difficult. What are you seeing?" Schafer asked. "I think it has to be at the core of your business model. You have to be a social media maven. I think what's important is sharing things with people that you know. You have to build something and build something authentic."
Schafer asked why smaller brands seem to have an easier time converting users and developing a brand voice than older, more established brands. "I think people can love big brands too," Waterbury said. "It's about catering to people who you care about. I think you have you educate people on what brand you are."
Regarding chloe+isabel's challenges, Waterbury said, "It's how to scale the business—we don't recruit just anyone. Every merchandiser is a store for me. They're a reflection of the brand. The hardest part is choosing the right person. My advice to you is that it really starts with solving problems. Try to solve problems and look at the world with fresh eyes. You have to really care about what you are doing."
Rachael Chong was called to the stage. She was described as a disruptor of non-profits. Her company, Catchafire is an online platform that connects social enterprises with people. It connects talent to purpose.
"Catchafire is a for-profit, but with a social mission. We chose our legal structure because we felt it was the best way to reach our goals," Chong said. "I'm guessing that you're wondering how we make money," she said. "What's important to understand is that what we're doing is trying to get non-profits to use human capital as best as they can. Non-profits get free things, but free can be dangerous. We charge organizations a small feel to get them to start thinking about the value of the donations. It's a very important mechanism to protect the organizations."
"What was it about the environment that demanded the creation of Catchafire?" Schafer asked. "On the non-profit side, the troubling aspect was the inefficiencies of organizations. If you're giving money to an organization and they're not spending it right, it's painful to see that," Chong said. "Giving means giving is now a stale concept. It's simply transaction and not an experience. Volunteering gives you an experience. It connects you to other people. We're trying to reinvent giving."
"What's different today about what you are doing on a daily basis regarding your platform?" Schafer asked. "The first thing working with non-profits, my reaction was, we're charging non-profits and this isn't normal. A question that I had was, 'How do you charge?' We went through many iterations. Today, we have 600 paying members with over 3,000 signed up. We need to figure out now how we can disrupt our own infrastructure to meet the demands of the sector," Chong said.
"Most brands aren't asking for donations, but they're out there to engage people. What have you learned about their brands?" Schafer asked. "It's very hard to work with non-profits," Chong said. "There's a massive gap in communications and i guess the lesson is that there's certainly a way to align it with giving. We're helping non-profits link up with employees."
Schafer introduced Brian Bedol, who he called a "disruptor of TV." Bedol's company, Bedrocket is launching a cable-style target shows on mobile. It began to grow to launch a network of websites to stream content.
"We're trying to serve consumers that are trying to not buy cable packages," Bedol said. "If you look at college graduates today, a majority of them are content with getting internet and they're looking for a platform that can provide high quality streams instead of watching it on TV. You now have the ability to consume media anywhere and at any time. I like businesses where someone doesn't have to fail for us to succeed. In regards to monetizing, it's both advertising and subscriptions. I don't think you're going to see HBO-style $20-a-month subscription fee, but instead a model of business that believes that content is marketing a creating a connection—an emotional connection—between brands and the consumer."
"What are you guys doing that is fundamentally different in production?" Schafer asked. "It helps having a legacy business," Bedol said. "When you have a big company, it's easy to have a high overhead. But with startups, it's easy to find people who want to prove themselves and can share their rewards for cheap. It's having a network that benefits from both. I think there will be a big, meaningful company that will emerge from this time. It's all down to execution. People will consume media in different ways. The traditional media is ill-equipped with dealing with the changing environment."
Andrew McLaughlin took the stage as a disruptor of tech and government. He started out as a lawyer and built internet infrastructure in Africa for two years. He then served as the Deputy Chief Adviser to the White House and spent time at Tumblr. McLaughlin currently works at Betaworks.
"What did you see in the administration?" Schafer asked. "The White House is populated with people were upstarts against Hilary Clinton," McLaughlin said. "The internet has been used to link the administration, but at the beginning, there were a lot of frustrations because of bureaucracy. The White House is less so, but it's still unwieldy. It has been incredibly difficult to implement the process. The White House now treats Twitter like it's an important part of its day."
Schafer asked McLaughlin to quickly describe what Betaworks is. "It's a pioneer," McLaughlin said. "It built a business model in a great way. The basic model is that it's an operating company. It's not sitting on capital, Betaworks basically isn't an incubator and not an accelerator. We run a seed investment operation. Betaworks focuses on real-time social big data, which keeps up close to what's going on. This information gives Betaworks an asymmetrical advantage to what's going on."
"Would you call yourselves a tech or a media company?" Schafer asked. "Both," McLaughlin said. "We're a data company. We're really trying to create companies that fit the moment. Our trick is that we have a core group of people that designs ideas and builds lots of stuff. We then kill weak ideas and iterate on the ones that survive."