Interview with David Niu, CEO of BuddyTV

Our goal is to bring entertainment and content closer to fans. We do that by creating communities around popular TV shows, like “Lost,” “24,” “American Idol.” Fans can find news, interviews, gossip, and also befriend other people who are also part of the community.

BuddyTV has a steady stream of news. If a show is on a Wednesday, you’ll see a traffic spike starting on Tuesday, Wednesday, and Thursday. Then it dies down the rest of the week. We make sure that we have the news before that show comes on. Oftentimes, we have spoilers, so if you want to know what happened on “Grey’s Anatomy” before it happens, then we have it.

We usually have live postings as the show is going on, on the East Coast feed. So if you can’t wait to find out what happens on “American Idol,” we have probably the most recent news of any outlet out there. Afterwards, we have a very fervent community that posts about the show and interact with other readers.

It is this community that differentiates BuddyTV.

We have a lot of people who will help us out, too. We have relationships with other websites who specialize in spoilers. We also have publicists, and people who will write us with tips and hints about what’s going on, or tip us off on interviews that we should be conducting.

We also get a lot of feedback mechanisms from our own community and people who want to see the vitality of BuddyTV and share their news with other members of the community.

We do definitely have some people who are counter-cyclical, and they sleep during the day and do a lot of writing at night. They watch a lot of TV at night, and if they don’t write about it live, they’ll write a recap. That usually goes well into the night, so our fans can get the most up-to-date coverage as possible.

I would say that the Buzz Team is important to us from the sense that we want to also get buzz for BuddyTV about what we’re doing. So what we do with the Buzz Team is we reach out to individuals who have expressed an interest in BuddyTV. Then we keep them in the loop, in terms of new things that BuddyTV is doing, before anyone else finds out.

These are people who are urban hipsters and influencers amongst their friends, who always want to be on the cutting edge. So we provide them that avenue, to let them know what things are coming up, and hope that they will also be able to evangelize us to their friends.

In the past, a single person can only reach out to just so many people. Now, with social media, along the lines of MySpace or Facebook, they can reach many more people.

It’s actually a very effective way for us to do viral marketing. But at the same time, we also get very valuable feedback from the people about what they would like to see in the future of enhancements and news and so forth.

Recently, it came out that Isaiah Washington was not going to be renewed for Grey’s Anatomy. So we had to write a story on that, because it’s important and Grey’s Anatomy is a big, pop-cultural show. We are very attuned to the news cycle. We want to be on top of that.

However, there are also other people, who are doing a lot of searches on their favorite actors and actresses, or just coming to the community, who aren’t as time-sensitive. So we make sure that we also have a lot of content and features to placate those individuals as well.

Right now, the process is really drawn from our editorial

team, where we decide weekly what is important and what we want to publish.

And a lot of that is also driven by our fans. Every week during primetime TV seasons, we publish our FPR, which is our fan popularity ranking: we rate the ten shows most popular on BuddyTV.

Sometimes, that overlaps with Nielsen ratings. Often, it doesn’t. A show that does well on Nielsen, like CSI, may not translate well to the Web. A show as Lost will do very well.

So we take all those feedbacks and messages, and that’s the filter we use to determine what’s newsworthy and what we should keep on top; and then we publish that for our fans. We can see whether people are reading these articles, commenting on them. If they aren’t we can change very quickly to make sure that we’re covering what our fans want to see.

The main revenue source that we’re going after is the online-advertising market space. The online ads are traditional and innovative ways of reaching consumers that come to our site.

On the other hand, we also do premium services for people who may want to reach our customers with a survey. Or maybe they want to get feedback on a certain product or promotion that they have. So we also are in that business, since we reach a lot of people. As long as it fits in to the genre of TV entertainment.

The key person is my co-founder, Andy Liu. He and I met in business school, almost ten years ago. We’d already started a company called Net Conversion, which we later sold to aQuantive. Basically we’ve had a great relationship since then, and we’ve learned a lot about starting companies and about each other.

After we left aQuantive, we decided that we wanted to take some time off and then start another company together. And that’s how BuddyTV came to be. We were actually hiking in Machu Picchu, as we were taking some time off. And I don’t know if it was the altitude or the beers, but one thing led to another.

I grew up in Texas, and I said, “Hey, I’m a Cowboys fan. It’s really hard for me to find communities of other people while I’m watching a Cowboys game. I have to go to cowboyszone.com and hit “refresh repeatedly, ” whenever I make a post, until someone else vindicates me and says, “Yeah, I don’t know why Bill Parcells is calling that same play over and over again, when it keeps getting stopped.”

We just thought there was a better way, and especially with convergence in media. It seemed somewhat more feasible to connect people with similar interests. So that’s how the company got started. Andy and I were the key founding members, and then we brought on the team to build around that.

The second time around, we’ve been able to really accelerate the growth, because we learned a lot. First of all, be very passionate about what you do, because you’re going to be doing this for a very long time.

The second thing is team members. Right out of the gate, I knew I was going to be working with Andy. That takes a lot of stress off when you have someone who you trust and who you can work with. So I think that’s very valuable from any startup.

If anyone is thinking about doing a startup, or has done one in the past, always be on the lookout for good people that you can add to your team. And people who will be able to grow and add a lot of value for you.

Another key lesson that I learned from NetConversion days, is flexibility. We adjusted mid-slide during the dot-com crash, and were able to turn it around and make it a very successful venture.

I think that amount of flexibility and agility and adapting to market conditions, especially when you’re small, is something that is a gift to small companies. A lot of people may be a little bit stubborn and say, “I want to do this, because this is what my company is about.”

If you can be flexible, that’s something that big companies can’t be. That’s a competitive advantage and is something that should be embraced.

I knew that we’re going to be working with these people a lot, so first of all, I needed to like them. Second is I wanted people who are really bright. A bright person can be equivalent to three or four people who aren’t as super-sharp.

We also look for people who are very passionate about what they’re doing, because they’re going to be working hard, and we’re going to be jumping into the foxhole together.

Yes. What we did is we took some of the proceeds from selling our previous company and used it to kick start BuddyTV. On top of that, there have been certain select angels that we had met in the area, from our previous venture, who we really liked, and who we invited to also participate in the angel round.

The relationship with the investor is instrumental. Its about the connection you have, because every startup is going to have highs and lows and you need an investor who you can communicate with directly…

When it’s low, it isn’t about pointing fingers, it’s about, “OK, we’re in this situation, but how are we going to be able to think creatively to get of this situation. And learn from it?”

And I think that some angel investors will look over your shoulder to determine the company’s performance for the key metrics that you have identified. Angel investors who are, I think, more shrewd and more prudent are the ones who take more of a, “Hey, when we invest in you guys, we trust you guys. When you need help, we’re going to be here to provide it. And we’ll be as active or as passive as you want us to be.”

From our experience, that’s worked really well. We try to be very active, in terms of engaging them. When we’re doing well and we’re implementing a lot of things that we’ve agreed upon then we’ll be able to ask for them to be a little bit more hands-off, which they accommodate. So, a lot of that’s on communication and trust and rapport that you build with the investors.

One mistake I have made in the past and I believe many entrepreneurs make is to spend too much time focusing on financing.

It’s something we learned from NetConversions, that you could spend hours and hours of your time. It’s sexy. It’s cool, but it takes away from your core goals. So if possible, hit milestones, and then the financing will follow.

VCs and angels are very smart and savvy, and they want to spend their time with cool companies that are executing. So if you could think about, “Well, where should you spend your time?”

As an entrepreneur, it is very easy to get sucked in with the financing side of the business, while the biggest bang for the buck is to focus on the business itself.

Another key lesson is that you can never control the top line revenues, however you can control bottom line expenses. I believe that to be financially prudent from the get-go is a good mantra to have for a company.

Having worked at big management consulting companies in the past, and having gone to business school, I know that â€?sales’ is never emphasized in classical business school training. It’s almost a dirty word, like you’re tricking someone to buy my product. But in reality, sales is so, so important. And it’s what saved NetConversions, and it’s what is allowing us to really accelerate BuddyTV.

Essentially, you’re always selling yourself, or your company, in some way, shape, or form, so the ability to be able to understand sales processes is crucial. Even though we’re not a B2B company like NetConversion, we still need to sell to advertisers and agencies. We have to understand how sales work, the process, why a no better than a maybe. Those things are just so critical.

When people ask me, “David, what should I do, in terms of getting experience to be a successful entrepreneur?” I say, “Go sell something. Learn to sell.” And if you can sell, well, you’ll never go hungry. Its going to benefit you and your company tremendously, in ways that you don’t even imagine right now.

Hire slow, fire quick. Take your time to grow and hire the right people, but if they don’t fit, one of the thing that’s surprising is you may agonize over, “Should you let that person go?”

Then after you let that person go, what probably will happen is other people on the team will come up to you and say, “Wow! What took you so long?” It’s good for you, and it’s good for that other person to be able to have a clean start somewhere else.