"What's happening in general on the internet is an evolution to visual storytelling. The image is more powerful than ever, but it's also much harder to be seen than ever due to saturation. What's happening is the exchange is in social capital - the exchange is in being seen." NFX partner James Currier sits down and chats with Mikael Cho (CEO & Co-founder) and Luke Chesser (Head of Product & Co-founder) about their Founder journey to creating Unsplash, solving the chicken and egg problem within their marketplace, the psychology of their users, and what the future of digital advertising will look like.
Mikael Cho:
But the original way that humans communicated was drawings and visuals. The cave wall didn't scale that well, so you started to have language, right? So you could vocalize and things spread faster. And the internet was good with text, but what's happened with improving bandwidth and quality of the internet, it's just like becoming all visual. It's much more communicative and much more rich of a medium.
James Currier:
Today I'm here with Mikael Cho and Luke Chesser, who are the co-founders of Unsplash, and we're going to get to know them and talk through their founder journey and then get into some of the learnings they've had tactically and philosophically around how psychology works and then where the advertising model is going on the internet. So, good to have you guys here today.
Mikael Cho:
Thanks for having us.
Luke Chesser:
Thanks for having us, James.
James Currier:
I heard about you from Eric Ward, our creative director here at NFX three years ago. And he said, "There's this really interesting photos platform that I'm using and I think is great, and you guys should meet these guys." And we thought it was very cool, what you were doing, and so we've known about you a long time. And Eric I think has become maybe one of your top 100 contributors. We're going to learn about that, but it's through him that we've gotten to know you guys, and it's really great to have you here. I'd love to understand sort of your founder journey from the beginning. First, where are you now? You're in Montreal, right?
Mikael Cho: Yeah, that's right.
James Currier:
And you've got how many employees?
Mikael Cho: 22.
James Currier:
And you've raised how much?
Mikael Cho:
We've raised 10 million. The reason why it's an interesting pause there is because Unsplash was a spin- out. We'll talk more about that story.
James Currier:
Great. And so, Unsplash, if I go to the website, what do I see there today? What do I do?
Mikael Cho:
It's all high resolution images that you can use for anything.
James Currier:
And if I'm a photographer, I upload them there, and then I have people find my photos?
Mikael Cho:
That's correct. And the definition of photographer is sort of evolving. People who contribute on Unsplash, you don't need to be a professional. In fact, a lot of people who contribute images there consider themselves to be amateurs.
James Currier:
Got it. And if that's the photographer side of your marketplace, who's on the other side?
Mikael Cho:
On the other side is creators, and it's all the way from sort of an independent creator to mainstream, major publishers.
James Currier:
Got it. And they'll come on to look for the photos that they want to use in their creative works, whether it's from a marketing purpose for business or whether it's just expressing themselves?
Mikael Cho: That's correct.
James Currier:
Amazing. Okay. And look, you guys have a ton of buzz in the creative community. I hear about you everywhere. I see links to you guys showing up everywhere. It's wonderful to see the sort of spread, the sort of virus around the internet. It's sort of a horizontal photos platform that is now being used a little bit like my experience when I invested in Flickr back in 2003. I'd love to understand the founder journey. You guys started in 2013, and then what happened?
Mikael Cho:
Yeah. Unsplash wasn't supposed to be a company in the beginning. We had started another company at that time, looking for ways to make it grow. It was another creative marketplace but different. It was a talent marketplace. And one of the things that a lot of people needed was visuals, and we thought, "Hey, this is a creative way to market our marketplace." And it's a way of maybe keeping people coming back as we develop our actual core company. So, we made Unsplash in an afternoon. We were very familiar with the problems. My background is as a designer. Luke was a designer as well. And we just kept seeing like, "How do you find these great photos?" There was companies who would find this great stuff. Like Path, the social network mobile app, they had great photos all the time. I'm like, "Where are they finding this stuff? because we can't find anything that's nice that we know that we can use for sure. And I bet a lot of other people are having this problem, so let's make the thing that we wish would
exist."
James Currier:
And how did you start?
Mikael Cho:
So it was a Tumblr blog with 10 images that we had leftover from a photo shoot for the first version of that, our other company's website. And we said, "This is an opportunity to try and make that thing. Let's time box it because we're focused on another company. We'll minimize the risk with it. We'll see what we can do, and see if we can create something that people would come back to regularly."
James Currier:
God, how did you time box it? What did you give yourself?
Mikael Cho:
A day. So we said, "If you can do this, aim to do it in an afternoon," something ridiculous. So put these constraints where you didn't have time to make anything custom. We just took the 10 images, used public Dropbox links, used a Tumblr theme for $19, registered the Unsplash.com domain for $9. So the whole thing was built for under 50 bucks, and put it on Hacker News. It was the only place we put it because we were so embarrassed by that first version. And we just sort of didn't look at it. And then the photographer we worked with on that said, "Hey, I'm getting all these messages on my portfolio site. Where did you guys put that? What happened?" And we went back to Hacker News, and it was number one. There was 30,000 signups right away, within those first couple hours. We were doing it all with a Google signup form. We actually hit the maximum limit of rows that you can do in a Google sheet, so we sort of knew that we're sort of hitting on a chord with this.
Luke Chesser:
And it was also ... it was limited to just 10 photos. Like we had 10 photos, and so we uploaded those, and those were the first 10 photos. But one of the things Mikael did was he said, "10 photos, 10 every 10 days." So we didn't have 10 more photos, and I think that shows you like how little thought we'd actually put into it in terms of expecting it to go somewhere. But we put it out there, and we were like, "If in 10 days we need to find 10 more photos, we're going to figure out some way to do it."
James Currier:
God, so you gave yourself 10 more days by saying, "We're going to do 10 photos every 10 days." And then you said, "Okay, we now have nine days left to go find 10 more good photos."
Luke Chesser:
Exactly. The classic punt.
James Currier:
So you time-bounded yourself. You made it about the timing. Like, "What can I get done in 10 days?" Not, "I have this great vision of this giant thing I'm going to build, and now let me go build it." You just said, "What can I get done in the next 10 days?"
Yeah. And I think there was some thought to the mechanic of ... That solved two purposes. One, we didn't have access to content like this. There wasn't a ton of it. We made a new license. Essentially we said, "Let's just make it totally open, as open as possible." We couldn't find enough good stuff, so let's start it on our own. We'll be the ones to put up the first images, and we can probably keep up with 10 images every 10 days. A side effect of that was people would actually ... It would give them a reason to come back. So, every 10 days, you would see the 10 new images, or you could subscribe by email. And so we ended up having this like 80% open rate email because we would send the images by email every 10 days as well. So it ended up being this really interesting way to grow at the beginning too.
James Currier:
And then did you say to people, "Please submit your photos, and we'll pick the 10 best and then send them out to the whole community"?
Mikael Cho:
That's right. Yeah. So we added a submit photo link. I think we had maybe 12 words total on that Tumblr blog page. Submit a photo was one. And within that second week when we were posting, so the second 10 days, we were fortunate to have at least 10 good new photos that were submitted by people.
James Currier:
You guys are in Montreal. It's just the two of you. You've been working on this other business. It wasn't going anywhere. You've got this huge demand from people, and then here you go. What next?
Mikael Cho:
We had four of us at the time, so we were four co-founders. We started to see Unsplash taking off, not even really ... Like after those first two days when it sort of blew up, we just left it and came back into Mailchimp, our email provider, to see the next 10 days, and it had doubled. We were like, "Wow this is growing even faster than the core business, but we understand the purpose of it. It's doing what it needs to do. It's the number one referral source now for our company, so we'll keep running it like that." But what happened after a year, it grew even more, to the point where we actually had to take it off of Tumblr because there was so much traffic. And we needed to make decisions then because now we're going to be supporting a hosting bill. And the traction it was getting, it was being used for more than the original use cases that were super relevant for our original businesses' customers. It was moving into whole other markets, and so that's when we actually had the first conversations about splitting the two companies.
James Currier:
That's fascinating. So, the first year, you're still in the mindset that the old business is still worth doing?
Mikael Cho:
Yeah. Eventually, it became this feeling of almost like you have two hands in blackjack sitting next to each other. One is a 16, and the other is a 20. And you only have this number of chips, and you have to put them somewhere. So we had raised funding for the other business, and that's when we made the decision, "We need to push this all into one spot." Interesting. And you had raised money from who? BDC Venture Capital and Founder Fuel?
Mikael Cho:
So we had raised BDC Real Ventures were the major Canadian funds. We had done a series A investment that was led by, at the time was called Atlas Ventures, so Fred Destin and Ryan Moore, which eventually ... has now been rebranded to Accomplice, and Bold Star Venture Capital. Those were the main people in that first round.
James Currier: Got it.
Luke Chesser:
How much money did we have at that time? We probably had like eight million?
Mikael Cho:
When we first made Unsplash, we were on like six months left worth of our seed money, which was like 400K, so I think we had maybe 150K of that left. That's why we were trying to be really creative with the way we grow. And then after Unsplash, about six months later is when we raised the two million dollar series A.
James Currier:
And how did you make that decision and who was involved in the discussions about, "Do you go with the old business, or do you go with this new photos-related business?"
Mikael Cho:
Ryan from Accomplice was on the board, so we involved him in that discussion. When we saw what was happening ... Everyone's on this hunt for product market fit and what that looks like, what it feels like. I think we had actually the benefit of having two companies at the same time and being able to see the difference. So what I felt with Unsplash was we could stop doing everything on the site, and it would still grow. We just couldn't fathom this, the thing that just kept growing no matter what we do. We could probably even do things to harm it, and it would still grow.
James Currier:
Right. So you had product market fit with both businesses, but you could see the difference between having tremendous product market fit and just regular product market fit.
Mikael Cho:
Right. And I would say we were still even a bit on the hunt for product market fit in the core business.
James Currier:
You have to make the decision, what, 2014, '15?
Mikael Cho:
2014 is when we first thought of making the decision, but we didn't really like finalize that decision until
sort of the end of 2015, early 2016.
James Currier:
That's also fascinating. I mean, for all the founders who are listening, it's like in retrospect they've got this great, growing horizontal platform for the whole internet that everyone's so excited about. But at the time, it's not clear. There's part of you that wants to stick with the old business. There's a part of commitments that you've made to your employees that you're going to be doing X type of a business not Y type of a business. You've got investors that you've told things to. You've got relationships outside of work that you've told what you're doing and who you are. And to move off of that, to change your identity into being something different is actually a difficult decision for many people, right?
Mikael Cho:
I think that was ... Luke you can probably speak to this. That was one of the most ... probably the most difficult time period that we've had through all of this. Even though our company almost died maybe three or four times, this time period was probably the hardest.
Luke Chesser:
Yeah, absolutely. And it's one of those things where when you're building a company, you go through a lot of steps where you think you know what product market fit is, and then you get to another level, and then you hit like a growth hurdle essentially. You kind of see things either flatlining out a bit. But it can be really tempting at that point to jump on another project and be like, "Let's work on this thing because it's right at the start of it, and it's growing, and the problems are so fresh and they're so kind of obvious and easy to solve." It's really an internal battle of like, "Do you stick with this thing?" just because it's gotten hard, but you're so close to breaking through to another level. And that was where we were at kind of with our core business, we felt. It's really difficult because you don't know, and you don't have the ability to look back, to have the hindsight that we have now of like, "This is such a massive market, and this is where it's going to go, and it's going to continue on that trajectory."
James Currier:
Right. You don't want to deceive yourself into thinking that the new thing, because it's sparkly and shining and you haven't hit the hurdles yet is any better than the thing that you're working on. And just remind us what the core business was again?
Mikael Cho:
Yeah. It was a marketplace for matching high quality design and creative talent with high quality projects. So it was automating all the crap that gets in the way of the creative process, and you only focus on the creative work and, "let's connect people," and make that be the whole thing, and have it be ... The end result is great work.
James Currier:
So a labor marketplace for creatives, and now it's a photo marketplace for creatives. Got it. Okay. So that was a hard back and forth. Was it hard between the two of you? Was it hard with your other co- founders? How was it hard?
I think with the co-founders it was super helpful. I think this is one of the most important things that I really learned. Like if you solve for two things in your company, I think you can solve for pretty much everything. One is the people you work with, and especially the people you found the company with. And the second, how good your idea and eventually your execution of that idea. If you hit on those two things, I think a lot of other things fall into place. And so when you run into something like this, we had so much support. Like we were all just thinking and trying to put the best idea. There wasn't a lot of ego attached to different things.
Mikael Cho:
I remember, I think one of the most important things that we did in that process to finally make the call, one of our co-founders, he pointed out in a meeting. I remember him saying it to me. We've said we're going to do these things. We were talking about how we think we can get the core business to grow for the next couple quarters. And he's like, "And I really believe this." And he said, "But I think we should look back at each quarter in the past. And we've said similar things like this, and how have they turned out? And I think that's an important thing. I think we should put a stake in the ground at a certain point where we say that ... We think these things are going to happen. Did they actually happen again? Are we fooling ourselves for the fourth, fifth, sixth time?"
Mikael Cho:
I think that was a really valuable exercise, and that's been something that we've even carried into Unsplash. If we're working on something new and challenging, we put these stakes in the ground to evaluate, to put our heads up and look. "Here's what we said we were going to do. How did that turn out? How were those decisions?"
Luke Chesser:
Because you're always like two months away from solving the next problem essentially, and that's often times not the case. But if you actually ... If you send yourself calendar invites for like in two months or something, and you say, "I expect to have done X, Y and Z," and you haven't done that ... It really makes you reflect on where you're at.
James Currier:
Right. And so again you're time bounding things. You're saying, "Did we get there? Am I pushing the rock up hill on this side, and over here the rock is running down hill?" Got it. Okay. So when you said it was a hard time, it wasn't that hard because you had each other. You had two good ideas, not one good idea, but it still felt hard because you were afraid of making the wrong decision?
Mikael Cho:
I think there's that, plus we had investors, and investors that are all-in on what we've got with that first idea. They are also very interested in Unsplash, but when you come to sort of saying, "We're going to split these two," there's different expectations then of what's going to happen. Are you going to sell this and make sure that we're making a gain on that? And then are we moving everything into this next one? Also, we're a Canadian company, and there was a bunch of stuff written about ... It's actually very easy to do sort of spin-outs in the US. It's very difficult do them in Canada. So we were just trying to even figure out the mechanic of doing that deal. And I think the hardest part was those tough conversations of, "What are we going to do with both businesses with the capital that we have?" and how all the
stakeholders thought about those things.
James Currier:
Everyone had different opinions?
Luke Chesser:
A lot of different opinions.
James Currier: Of course.
Luke Chesser:
Yeah. And if you think about the investors, also they are two quite different companies. The types of investors you would get to invest in a creative marketplace are quite different than the kind of hybrid marketplace consumer product that Unsplash is, and so you're going to have different kind of appetites for that risk, but those people are still your investors, and so you have to convince and get them onboard with it. So there was definitely a certain amount of challenges there.
James Currier:
And so how did it resolve?
Mikael Cho:
We made the decision with a board with our major investors. We all had a conversation to do the spin- out. What that meant is we're going to take the capital, put that towards Unsplash. We had a portion of capital that we were going to put towards the core business to get it to profitability. We were very close to being profitable. We also split the team, so we had team members who were fully on Crew. Crew was what the original business was called, and we had a very small team that was starting to crop up around Unsplash. So, Luke was core number one on it, and then we had two or three that were coming, and we were going to move a couple of folks over to Unsplash from Crew. At the time, I think the split was like 7-3, right Luke? Something like that.
Luke Chesser:
Something like that. Yeah.
Mikael Cho:
We had to reduce the team sizes as well. I think in total we had like 30 people at the time, so we had to make some team cuts, which was really difficult. We had to split those teams. And after all that, I mean, we made a lot of hard decisions very quickly. I think that was really important. We didn't let this stuff draw out. Once we made the decision, everything was done within like a month.
James Currier:
That's interesting that more people went over to the Crew labor marketplace business, and most of the money went over to the new high potential-right.
James Currier:
But that each company ended up with the same cap table because the investors kept their same shares, and you kept your same shares in both. And did you guys go off and run one company, and then the other two co-founders went to run the other?
Mikael Cho:
I was between both. Luke was on Unsplash fully. My other co-founders, we had one on one fully each, and then two of us were splitting. So we have four co-founders. Two of us were splitting, and we had one on one on each.
James Currier:
So this is 2016, four years ago. Then what happened?
Mikael Cho:
So, Crew, we had some interest from folks who wanted to actually buy the company. So once they sort of heard the news of the spin-out, the push towards profitability, there was an opportunity to actually make it be part of another company in that sort of situation. It wasn't necessarily ... It didn't have all this venture capital anymore, different needs and different opportunity. So we actually had a partnership that was going with ... We were in talks with Dribbble, the online design community.
Mikael Cho:
I didn't know this, but Dribbble had just been acquired by Tiny, and Andrew Wilkinson is the founder of that. I wrote to him because I'm like, "Hey, we just did this thing. We just did a spin-out. We're thinking about different ways to do things. I know you've run a lot of different businesses at the same time. How have you thought about this?" And he's like, "Oh by the way, I don't know if you know this, but I just bought Dribbble, and I think Dribbble could buy Crew." It was this fortunate, interesting thing that happened. Within a couple months, we ended up closing that transaction. Crew became part of Dribbble. And then this Crew team became Dribbble Pro, which was rolled out like a year and a half ago.
James Currier:
Okay. And then so you've got the smaller team working on Unsplash.
Mikael Cho:
Yes. We had three million of capital. We knew the growth was there, but there's some challenges now. So, at the time, we had evaluation, that was on the previous company, that now they're sort of like, "What do we do with this next round? Where's the three million going to get us? Are we going to be raising a two million dollar round, five million dollar round, 10 million dollar round?" So there's that interesting dynamic. We basically have a year to do this. What do we need to prove, and how can we do that within a year? So that whole year was ... We also needed to set the story and the vision of the company because, James, as we've been speaking, a lot of how Unsplash started was more around just pure utility that we saw for ourselves. We weren't necessarily looking externally at the strategy and
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vision, and so we spent a lot of time on thinking through that because we knew that there was going to
be an imminent fundraise.
Mikael Cho:
And I remember the ... Luke, you remember sort of the energy. We had to basically go from you're grinding it out in a labor marketplace for three, four years, and now you're immediately hopping into a fundraise for another company. That's what that first year really felt like at Unsplash.
James Currier:
So you're kind of tired at that point?
Mikael Cho:
Yeah, we were pretty tired. I think, Luke, you were in a good spot.
Luke Chesser:
I was excited. Yeah.
Mikael Cho:
You finally got the resources and focus. I remember that was a moment where it's like you're on the last couple miles of a marathon, and you just pick it up. This is one of those moments where you just have to do the work and close. And I remember that was the mentality that I had because I knew that I was going to lead the fundraise.
James Currier:
What was the business model in your mind at that time, and then what did you need to prove during that year?
Luke Chesser:
Because I was the sole person who was most on Unsplash, it was the thing that I spent all my time thinking about, I had a lot more time to think about it. And so really we were seeing massive, massive growth in terms of the ability to put an image anywhere on the internet. We were going from a billion views on images up to 10 billion views on images like very, very quickly. And we built out essentially this network of API integrations inside of all these creative apps. And when we thought about that, where that was going and how people needed access to images in this distributed environment and all the different kind of new use cases that were coming up meant that we had to think of a different business model. We weren't going to do something where it was going to be a premium upsell or charge for images or something. We wanted to do something that would last for five to 10 years, not something that would work for two years.
Luke Chesser:
And so the thing that we looked at was let's grow this thing and continue growing the audience and make that really large. In the back of our mind, we had this idea that we could build an ad model based on that, but this was very ... Compared to where we're at now, this was very early on, and we just had this kind of understanding that if you build it big enough, there'll be something you can do with it. So your feeling at the time was, "Guys, let's just make this thing huge and have it touch everybody and touch everything, and we will figure out an ad model on this later"?
Luke Chesser: Basically. Yeah.
James Currier:
Got it. That was the idea. And so during that first year, what did you feel like you needed to prove?
Luke Chesser:
There was a whole bunch of questions. At each step of Unsplash, there's always been naysayers who basically say, "You can't get to that next step." And so, Unsplash started off with our own photos, and then it was, "You can't get anybody else to submit to this thing," and then we did start getting people to submit, but they were only certain types of photos. And so we kept knocking down these different barriers of, "Okay, let's get people to submit these types of photos." We had to prove out, again, on the library side, that we could cover all the different visual use cases, so we had to build out the product mechanisms, the supply, and getting all the different types of contributors motivated, so that we could build a really like good flywheel there.
Luke Chesser:
And so we were working on that, and we were like, "We need to have that piece really boarded up." The other piece was that we needed to really, again, show that the market was significantly larger than it had been with Getty Images, or Shutterstock, or these kind of traditional professional creators. We were seeing this in our data that there was a lot of people using images, and basically everybody needs to use images, and so we really needed to actually have data points there to show that the potential market of people who need images is 100 times the size of what has traditionally been there. And so really, yeah, we were focused on collecting that data and also then growing, obviously. Growth was the number one thing for us.
James Currier:
Got it. And what were some of the breakthroughs that you had during that year? I mean, you'd talked about changing the sort of regulatory situation or the licensing, if you will.
Luke Chesser:
There was a whole bunch of different hurdles that we had to kind of knock down, so there was the whole licensing/legal area. And it sounds really easy to be like, "Oh, just create a license, and give the thing away for free," but laws across all the different countries are so complex, and kind of crafting that all into specific terms and making it, at the same time, something so simple that a regular person can understand ... Because if you ask people the difference between royalty-free images, free images, the different CC, creative commons licenses, attribution, no attribution, all those different things, it just gets confusing. And so we were trying to solve on the legal side.
Luke Chesser:
We were trying to solve on the API partnership side. So one of our co-founders now has spent the last three or four years closing some of the biggest creative apps. And at the time, we didn't have really any major creative apps using us, and so we were really pushing there to build out an API that was easy to use, get it into all these different products. And there was just a whole host of kind of general growth things. SEO was a huge part of how we grew.
Luke Chesser:
Getting the product out there is really hard because there's actually a kind of interesting flip side to the psychology where when you find something really good, you sometimes don't want to share it. And so it was this thing where like people would find Unsplash and kind of keep it as their own secret and wouldn't necessarily want to share it with all their friends so that they could use the images. So, getting in front of search terms and really trying to create these discovery mechanisms for people realizing that Unsplash existed was huge.
James Currier:
Interesting. So anti word of mouth virality, and so SEO was really critical to busting through on that. And now I understand that sort of a photo future on Unsplash is see more than a photo on any other platform. Is that right? More than Instagram, more than the front page of The New York Times?
Mikael Cho:
Yeah, that's right. It's regularly happening.
James Currier:
So you've also said that film makers distribute trailers for free on YouTube to sell a movie, and musicians release free songs or entire albums on SoundCloud to sell concert tickets. Authors give free chapters and pour thousands of unpaid hours into blogs to sell a book. Is that what's happening here?
Mikael Cho:
Yeah, it's very similar to what's happening here. I think what's happening in general on the internet is an evolution to visual storytelling. Text has been there for a while, but the original way that humans communicated was drawings and visuals. The cave wall didn't scale that well, so then you started to have language, right? So you could vocalize and things spread faster. And the internet was good with text, but what's happened with improving bandwidth and quality of the internet, it's just like becoming all visual. It's much more communicative and much more rich of a medium. So for us that's what we've seen as a big sort of tailwind that's been pushing Unsplash forward.
James Currier:
Talk to me a little bit about the psychology here. Why are people ... If someone had told you three years ago, "You can't get people to upload these photos," yet you now have 200,000 people who have uploaded over two million supremely high quality photos. What's going on with the social proof or the social payoff people are getting? Because they're not getting paid a ton of money for it, are they?
Mikael Cho:
The exchange is all free, right? So it's a new ... what we call is a new social compact. What's happening is the exchange is in social capital. The exchange is in being seen. And what's happened, I think the image is more powerful than ever, but it's more harder to be seen than ever, the saturation. I think I saw something where it's like 95 million posts a day on Instagram. And it's like, "How do you stand out in any of that?" The majority of people just have an audience of their friends and family. And to break through that requires an immense amount of effort. What Unsplash does for people is it allows you to be seen. And specifically what's going on in photography and what we look at is creative industries. They all evolve at sort of different paces, and they're all in different places.
Mikael Cho:
Where photography is, it's sort of evolved to this spot where the camera has become so good. We all have professional level cameras in our pocket, and that has changed the supply dynamics. The way people are using images has totally changed, so that has just created a totally different economic range around this and what's happening. So, to put images for free, it's actually creating a downstream effect. You remove the license. You allow people to use the image. It's now even more beneficial than just entertainment. Most of what all the image platforms are is entertainment. What Unsplash does is it also attaches utility. And when you attach utility, it creates sort of this out-sized viewership that happens on an image. And that viewership leads to downstream benefits. So the best way to do well in photography is to book custom gigs. And so what you're doing is you're leveraging, almost like a developer would leverage an open source project. Some company is going to see that on GitHub and say, "This is a really great project. We want to hire you." A similar thing is happening with Unsplash, where people see that work that you're doing, and they're able to connect and hire you for that custom work, which is really where a lot of the value sits in photography.
James Currier:
Got it. So that's why people are sharing. They're sharing their stuff because they want to be seen and because it also is sort of the top of the funnel for some sort of high margin payout that they will get later, once they are seen and once they are known.
Mikael Cho:
Right. And there's a bit of a pie that happens here too. That's one reason. What we've noticed with our contributors is it's not just one reason. It's sort of a pie of maybe two or three reasons. Another reason is to feel a part of something. That's what internet communities do for a lot of people. You feel like you're contributing to something bigger, so a bit of a Wikipedia effect. Wikipedia, you really don't get any ... I doubt any of us can name a user name on Wikipedia, but we all use and see all these entries that people are putting there.
Mikael Cho:
And then there's also actually a reciprocity factor that's happening. So most of the people who are contributing images, they actually start as people who are downloading images. So they're downloading and using the site, and they're saying, "How do I give back to this? I have a few images. I can contribute and help build this library."
James Currier:
And is that maybe social context, that community context, is that maybe helping people when they take a picture from Unsplash, and they use it on Instagram, they will often site the person who took the photo and give them credit?
Correct. Yeah, that happens most of the time. There's a behavior that a lot of people have done for many years is crediting image use. I think people do it as, "It's like the least I can do. I found so much value from this."
James Currier:
So it's not money. Everyone keeps talking about money. I mean, even in the context of Facebook quote unquote ruining democracy or something, "They sell it. They're just trying to do it for the money." They're not. They just want to win, right? That's it's not about the money. In this case, we're also seeing the same thing. The motivation isn't necessarily money. It's more social cap. Have you thought about how to codify that social capital, measure it? A lot of these social networks have done something simple. Like Path, that you mentioned earlier, they said, "Look, if we can get six people to connect to someone, then they're a member." Facebook said, "If I get 10 people to connect to Facebook." So they've put some metrics around the density of their network and what causes it to sort of tip. Have you done that with social capital at this point?
Mikael Cho:
The big thing for us that we've seen ... We haven't necessarily used that to accelerate the number of contributions, but we are intentional with what we build into the product to help show those things, to help a contributor who wants to see what's happening. That's the whole purpose of why are they contributing to Unsplash, so we started with views. Views and download counts, that was sort of the original thing, kind of primitive, but that was already a natural comparison then that people would do. So you say, "This is how many views I'm getting on Unsplash. This is how many views I'm getting on Instagram. This is how many views I would get if I just kept it in my folder doing nothing." It's like blown away. It's not even close, 100 times, 1,000, 10,000 times what you're getting anywhere else. You're seeing sort of a comparison there.
Mikael Cho:
And then there's sort of this next level, so you start contributing even more. But eventually views kind of become numb unless opportunities happen from them. So if you look at ... I draw this comparison to like YouTube. You reach certain numbers of views, things start happening to you, right? I don't know what the number is, but let's say you hit 10 million views, that's when you get your call from Ellen DeGeneres. It levels up as you go along. With Unsplash, that also tends to happen, but we're trying to show them inside of their stats a bit more, so they don't just have to hope for these opportunities to happen.
Mikael Cho:
So, downloads was another thing. And inside of download, you can start to see where your images are being used. So I think that's big for people who one of the purposes of why they contribute is to be a part of this creative community. So, "How am I moving creativity forward? Show me." Views, views are great for me versus where I do other things, but now I've moved on to my next level. Like, "What impact am I making?" The download count was good, but the next level of that was showing where they all are, and we recently released that. And eventually we'll be able to get smarter around this. Like when people reach certain levels, we see certain contributions that start to happen and people submitting more images. That just hasn't really been the priority number one problem for us right now.
James Currier:
Right, to sort of gamify it even further. It's interesting. It sounds a bit like a business intelligence platform where you're getting a report on how your business is doing, but in this case it's not a business with money. It's, again, the social capital, not the capital capital.
Mikael Cho:
Yeah. We even released messaging before we released the download uses because we wanted to accelerate the opportunities happening for people.
James Currier:
Got it. So can you run a business on social capital? And if so, how long does it last?
Mikael Cho:
I believe you can run a business on social capital. It depends on the conversion, right? So I think a lot of ... actually people start most careers, it's just been done in different ways, with social capital. Look at everyone's first job, the real job that they wanted, they probably did a whole bunch of stuff for free. Now that like free money, but they spent their time. And to me time is sort of that equation that fits into social capital. You're doing something, and it's not an immediate like dollar dollar exchange that's happening, but it's actually for a bigger thing that you see happening in the future. It's in service of a bigger thing that you see coming down the line. I think that's what a lot of our contributors use Unsplash for. This is in service, "I'm going to post images here because it's in service of something bigger."
Mikael Cho:
I think blogging has similar things with that. Blogging, you are contributing there. You don't know exactly who's going to read this, if it's going to live online, public for people to see, and you believe some downstream benefits are going to come from that versus just holding those ideas in, and they're essentially like waste.
James Currier:
And what have you said to people on your product that gives them a sense that they're part of something bigger, that gives them a sense that they're part of this tribe?
Mikael Cho:
I think we've gotten very intentional about our onboarding for people who submit images. So, at the beginning when you would submit an image, it would kind of go into like an abyss. You had like the drop the photo and, "Cool. We'll get back to you if it fits in the 10 every 10 days." But now, you submit a photo, even whether ... We review all the images, and even if it isn't selected, whatever it is, the second you submit a photo, you're getting an email back talking about the community, like now. "What is this? What is this thing that you just submitted a photo to, so we talk about it. We say, "Unsplash is this. This is what it means to participate and submit images. This is the impact that we've seen happen. You can actually join and communicate with other members here. You can join and communicate with the team here. This is what we believe." So it's almost as if ... You know when you're onboarding a new employee? It's like the same thing. We're talking to people like they're now part of something, and this is what it means to be part of that.
James Currier:
And so you lead with the why. You lead with the community. You lead with the people and the meaning
rather than, "You're going to get X for Y."
Mikael Cho:
That's right. And even the language, we're very sparse on language on the entire site. But on the homepage you'll see, "Powered by creators. Unsplash is this, but it's powered by creators," because we want people to know that this isn't just us scraping images. This is people who are submitting these things. There's people behind the scenes making this happen.
James Currier:
You do have investors. You are a for-profit company, and so how are you making money today? How has the advertising model evolved?
Mikael Cho:
The scale that we've reached now, so we do about 20 billion image views a month. The site's still growing a ton. And what we see is that ability to get image distribution for any photo, we can do that for any brand. And we're doing this not in a way that is like every other advertising platform. It's like Facebook and Google and everybody else who's building something, usually what they try to do is that, "Hey, we're going to target people better, and we'll get your CPC down, and you can do that, and we'll convert ads." That's not how we're looking at this. What Unsplash is doing is we're changing people's minds in how you think about your product. So this is what TV and emotional sort of advertising has done for a lot of brands, and it's why a lot of money is still put into TV. I believe more is in TV than, still, is in Facebook and Google. It's not growing a lot, but it's still sitting in there because, brands, they know this impact of changing people's minds and emotions.
Mikael Cho:
And so what Unsplash does is you're taking your branded visuals. You put them on Unsplash. You have them rank on the top of relevant searches. I'll give you an example. We work with Harley Davidson. They want to be synonymous with motorcycles, but they also want to be synonymous with bigger categories like travel or adventure and freedom, these things that people resonate with the brand. When you put your images on Unsplash, yes, you get in front of this great creator audience, but it's really about reaching the entire internet through those creators. So you're going to go reach these pockets of audiences that you can't reach with any traditional digital advertising because these creators are choosing these branded visuals. They're taking them by choice and putting them in front of their audience. So if I'm a blogger, and I'm going to write something about what would you do with complete freedom, and I search freedom on Unsplash, Harley Davidson images shows on top, and I use that, I'm now putting that in front of my audience in the best visual real estate. It's not sitting on the outskirts where we've all like starting to ignore that. We're blocking ads. It's actually relevant, and it's part of that content.
James Currier:
Right. And that influencer has a trusted relationship with their viewership, and so that's a really wonderful place for Harley Davidson to have their ad.
Mikael Cho:
That's right. It's an evolution on what we've been seeing with influencers, right? When an influencer keeps posting this branded content, they lose trust. Every time they're doing that, they're losing trust a little bit because we all know they're getting paid, and so we don't really trust that. What happens with Unsplash, because that creator is using that image by choice and putting it in front of their audience, that is completely different. So they're saying, "This image is useful to me, and I'm going to go and put it over here to help me tell my story." And that keeps all of the trust on.
James Currier:
Got it. The creators don't get paid more to do Harley Davidson ... to include Harley Davidson branded photos at all. That's not part of the deal.
Mikael Cho:
Yeah. There's interesting mechanics that are happening. So, brands have an option. They can either submit images that they've already got. A lot of these brands have run marketing campaigns. They've got images in folders. They can submit those to Unsplash, and/or they can actually hire Unsplash photographers, and they do that through us. About half the brands we've worked with have hired the photographers, so what's happening there is another loop, and this was unexpected. We knew that people wanted to get in contact with photographers, but we didn't think at this level of scale. So now you're working with some of the greatest brands in the world who these photographers would love to be doing work with, and we now have access to making those relationships and those opportunities happen.
James Currier:
So you're going back to the business of Crew.
Mikael Cho:
Yeah. It's a lot easier with photography than it is software design and development projects.
James Currier:
And if I'm a creator or a photographer, and I've uploaded 100 images, how much am I getting paid? Not that much, right?
Mikael Cho:
Yeah. You're not getting paid to submit those images, but what you're looking for is either that build in social capital that leads to a downstream opportunity, or you're just looking to be a part of this because you're getting value by using the images freely. And so you're sort of saying, "Hey, I'm going to come back and give images." Now, in the case that you get hired by a brand, that's ... Yeah, you're making significant cash on that.
James Currier:
And what's your thesis generally about the future of advertising?
Luke Chesser:
I think the way we see it is that there's been a shift in terms of Facebook and Google taking over all of the direct advertising. They're great platforms. There's no doubt about it, that Google and Facebook
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have built the best direct response advertising platforms, but there's still a ton of money tied up in TV and specifically in brand advertising, and that's a completely different behavior and need than direct response. Direct response is the idea of like, "Click on this to get X or Y." And that's all based on interruption advertise, as Mikael was saying before, but what really happens in brand is you're trying to create this aspiration, or influence, or this perception. And the way that you go about doing that, you can do on Facebook and Google, but they're really not built for that.
Luke Chesser:
If you think about how they're being presented inside these platforms, they're just not conducive to the idea of being highly aspirational or really influential. And so we looked at TV, and we know that images are super powerful. We've seen this, that we can put these images across the internet at an unparalleled scale. So if you think about Unsplash's supplying, it's the dominant platform for supplying images to the internet. So if you can then take a percentage of that and shift it towards your brand, you can then change across all of these different mediums.
Luke Chesser:
Multiple times a day, you're going to see these images, and they're going to subtly influence you to understand something about that brand. And so we're really trying to build something that's focused on impact and not necessarily on targeting. And that's what you'll see with Facebook and Google is they're all about optimizing and highly targeting. But because these views that are generated are so massive, and they're spread across the internet, we're able to get across a much larger audience but with less targeting, but that's actually really important to shifting a kind of global understanding of a brand. Because if you buy Nike, you're saying you not only have your own perception of Nike, but you want to make sure that somebody else who sees you has that same perception of Nike. And so what brands are really trying to do is they're really trying to influence massive numbers of people, and that traditionally has been done by TV, and Unsplash is this way to do it digitally on the internet, and that's something that we're building towards.
James Currier:
Well guys, I think it's fascinating. And I just want to thank you for coming on to the NFX podcast. The psychology and the sharing and the platforming and whatnot is just such a great antidote to the sort of coin-operated vending machine mentality that's invading Silicon Valley right now because of all the money. And the way you guys are thinking about it is like it's the way we thought about things 20 years ago, and I think it ends up producing the most impactful things, so thank you for taking that approach. I think that all the founders out there are going to really enjoy this.
Luke Chesser: Thanks again.
Mikael Cho:
Yeah. Thank you for having us.
Speaker 4:
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