Hey everyone, in today’s episode I share the mic with Matt Munson, founder and CEO of Twenty20, a company that provides a photography marketplace for some of the best-looking authentic stock photos and royalty-free images anywhere.
Listen as Matt shares how Twenty20 burned through $10M by trying to scale too quickly and the lessons he learned (including talking about his “failures”), how they built a massive photo catalog of 50M+ images from 300K photographers that Google, Apple & Pinterest use (without advertising for a single photographer!), and how Twenty20 got 1,000 subscribers, 170K in MRR and 10x growth in 1 year.
Download podcast transcript [PDF] here: How Twenty20 Burned $10M and Still Emerged as a Successful Company TRANSCRIPT
Time-Stamped Show Notes:
- 00:54 – Eric introduces Matt Munson
- 01:16 – Matt is one of the co-founders of Twenty20
- 01:46 – Twenty20 sources their photos from a global community of about 300K photographers
- 02:11 – Twenty20 wasn’t the original business model
- 02:45 – They started with InstaCanvas before they moved to digital licensing
- 03:08 – They have built a massive photo catalog with more than 50M images
- 03:47 – Early market testing allowed them to license their content
- 04:20 – Twenty20 never advertised for a single photographer — all acquisition was done through viral sharing
- 05:05 – They were able to bring on some dominant mobile photographers and build a community of influential people
- 05:38 – Photographers get revenue share per photo sold
- 05:53 – Big companies are willing to pay more for photos with nontraditional content
- 06:09 – Time savings for companies allow Twenty20 to charge a premium
- 06:59 – Twenty20 is subscription based with 1,000 subscribers
- 07:29 – Revenue is about $170K MRR which was 10x more than last year
- 07:45 – “It’s been a crazy year from a growth perspective”
- 07:49 – The company is 4 years old and has been in the digital licensing market for just 2 years
- 08:57 – Paid advertising, Facebook, Google, Twitter Ads, and SEO have helped Twenty20 in terms of customer acquisition
- 09:33 – Matt says they already found their company’s voice for content marketing
- 10:01 – Twenty20 started producing more content around the real human experience
- 10:23 – Cold emails are also working for them
- 11:16 – The challenge in sending emails is the list
- 11:37 – Twenty20’s team did something creative to cleanse out bad emails from the good ones which resulted in them being able to send direct cold emails
- 12:06 – The type of content used is also a factor
- 12:30 – Once they get leads, they do inside sales and leverage marketing
- 12:59 – They have started testing a self service approach in August 2016, and are currently now on that platform
- 13:19 – A decent amount of conversion comes from first-time visitors from paid and organic channels
- 13:30 – Email efforts are also being used to provide education and support to convert leads who’ve shown interest
- 14:15 – Matt’s blog post: How I Burned 10 Million Dollars So You Don’t Have To
- 14:36 – Matt describes Twenty20 2.5 years ago – 8 people in the team, on seed stage, just built a photographer community with a large image catalog
- 14:46 – They have a handful of customers and they were running out of money so they raised venture capital to start their digital licensing business; they raised $8M
- 17:06 – They started to market in February 2014 while figuring out who their customers were
- 17:23 – They used matching advertising with the inside sales team
- 18:33 – The started to burn more capital when they scaled up the team
- 18:47 – Matt’s blog post came from the internal pressure he was feeling as CEO
- 19:32 – By the end of the year, the sales team had grown from 4 to 20 people
- 19:56 – In 2016, they’ve been growing about 20-30% monthly on the revenue perspective
- 20:23 – The sales team became 3-4x more profitable
- 20:46 – In January, they attempted to raise more capital
- 21:09 – What they didn’t see coming—the financial markets fell apart in Q1 of 2016 and their entire sales engine fell apart
- 21:46 – They went from $180K to $40K
- 22:04 – They shifted the plan from raising money to making the company profitable again
- 23:09 – One factor from their sales engine fall is they made two mistakes:
- 23:36 – They took the risk of going with just 1 primary acquisition channel
- 24:24 – Second, they deeply under invested in sales leadership
- 25:09 – Significant gaps were present when they promoted their top deal closer as director
- 25:31 – Twenty20 is open about the mistakes they’ve made
- 25:56 – Matt says they could have slowed down earlier, but didn’t—which ended up being the biggest mistake
- 26:38 – In June-July, they still hadn’t had the company turn around
- 27:03 – They were at risk of losing the whole business
- 28:41 – Micah’s blogpost for Twenty20
- 29:13 – The last 6 months has been a huge learning experience for Matt and his team
- 29:59 – “The real risks in a business are not the ones that most people talk about”
- 31:28 – Twenty20 became team and culture centered
- 31:47 – They already thinking about how to build a scalable engine
- 32:23 – They are now a team of 10 people serving a thousand amazing customers
- 32:38 – They are doing $200K revenue per head today
- 34:03 – Matt believes they have internalized all the lessons from the struggle they faced as a business and as a team
- 35:02 – What’s one must-read book you recommend? Shoe Dog and Sapiens
- 36:16 – Connect with Matt on Twitter
3 Key Points:
- Your plans will not always take you to where you thought you’d be—sometimes, they take you somewhere better.
- Don’t put all your eggs in one basket—entrepreneurs should calculate their risk taking.
- Prevention will always be better than the cure, start acknowledging those gaps when you see them.
Resources From This Interview:
- Twenty20
- Matt’s blog post: How I Burned 10 Million Dollars So You Don’t Have To
- Must-read books:
- Shoe Dog: A Memoir by the Creator of Nike by
- Sapiens: A Brief History of Humankind by
- Micah’s blog post: Hindsight is Twenty20
- Twitter @mattmuns
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