Interview with Ron Yekutiel, CEO of Kaltura

Kaltura is a platform that enables groups of people to collaborate together in the creation of rich media. Kind of a YouTube meets Wiki. We’d like to say that we bring forth the collaborative concept that is enabled in the Wiki platforms by way of text into the realm of video. We do so, as I’ve said, as a platform that would like to enable any other sites and social networks to empower their own users in that collaborative action. We also have our own kaltura.com website that exemplifies the use within a separate domain. However, we’d like to basically empower different sites and social networks to do so.

A number of different founders came together and began asking ourselves about the next step, the next level. Between us, we have a co-founder of ICQ, Cyota, a secure online service fro VISA.

We felt that the world is moving from telling to selling to sharing and then to collaborating. And we’ve looked into platforms like the Wiki, as I’ve said, and like SourceForge that are promoting collaboration between people and have asked ourselves what’s the next step within the collaboration realm. And the natural answer that we believe is that it will come by way of rich media. That’s how we had come up with the idea.

Ron: That’s a very good question. I think one of the points that we looked at was the number of cell phones are out there with video cams. How many potential contributors are there to bring video into the net? We see that this is immensely high compared to the amount of contributors at YouTube and at other video sites.

Therefore, the main goal as we have seen it was to lower the barriers of contribution, lower the barriers of participation to enable a great group of people to go ahead and participate. We looked at YouTube and looked at the lowest nodes within that pyramid, which is the people who are uploading video, and asked ourselves if there’s a way to add another lower node under that. Is there a way to add a whole new base, knowing that there is a ratio of one to 99 between creators and viewers?

Our answer to that question was the collaborative concept. The nature of the lowest contributor in the YouTube environment was a creator of a composition. Somebody who is out there who is looking for something that’s globally appealing, and effective. We’d like to get that person to contribute something.

Participants in the Kaltura platform need to do far less than what that they need to do on YouTube for three reasons: number one, they need only contribute a very small piece and somebody then edits. It could be somebody from their community or somebody else, but it’s enough that they bring forth a picture, a small video clip, something small. Therefore their needs or their barriers are lowered.

Second is the fact that they’re actually invited to do so. If you take into consideration somebody wanting to do a collaborative greeting card and inviting all their friends to participate, the fact that they get a direct request from the person managing this makes it easier then for them to come up with the idea to start with, like with YouTube.

Third is that they have a vested interest in the result. Whatever the collaborative group creation is, each of the individuals has something to gain by it. So if it’s a call for action that’s done by a group of people, they have something of an up side. If it’s a group of travelers that would like to do a collaborative travel log, they have something to gain from that. If it’s a greeting card, something as well.

So these three points, we believe, are such as would empower more people to participate in the concept of collaborative creation and as such add a whole new layer with a lower barrier and with that break the limitation that you have mentioned with the amount of participation in the web today.

I think what’s always interesting in regards to being online is that you don’t know what people will want or do.

Some of the stuff is more obvious. We see a lot involving music people creating music clips together in groups. We see stuff involving travel. We see stuff involving short fiction or creation of humorous videos different formats of that nature. We see greeting cards done together. Sometimes its citizen journalism somebody that just came back from Burma and took a lot of pictures there, and somebody adds to that.

Well, we found today music to be a key component. There’s thousands of bands that have started up stuff on our site. I think that it is less the actual nature of the collaboration but the tools that we empower. Kaltura.com has a full widget strategy in which the site itself I would say is the factory where the collaboration takes place. The promotion of that collaboration is done completely within the realm of other social networks.

So if you are a band, for example, and you have a MySpace page and you’d like to engage all your fans to create together a collaborative clip between all the fans, you will come to our site as the band startup page that’s completely customized and post that widget within your MySpace page. It’s there actually that the viral component will take place. Then when the people see that and click on our widget they will be able to come to our environment, add clips, edit clips together, etc.

That’s a pivotal question. Insofar as the general question about building startups and timing in the market and what you want to achieve, I think that we have over the course of the last few years a growing amount of affinity groups being formed on the net. Had we been here maybe a few years back it may have been the right strategy to go ahead and created a destination site.

With a destination site, you have earn 100% of the revenue associated with advertising and can create a stronger brand. Having said that, it is much more difficult to build a market. You need to convince the market, with a lot of marketing money, and divert people from otherwise being at other sites into your own site. Our core understanding when we looked into the aspect of collaboration is that people will not just meet for the sake of collaborating. They will already meet for the sake of a different purpose, be it the subject that they are all passionate about or a site that they all feel comfortable to use as their platform.

The advantages of creating a platform are huge insofar as penetration rates. It’s enough that you’ve closed several agreements, and people embed your tool. Immediately, you have access to a great amount of users, but you get the support of that but set to market this.

In some cases, if you let them host the actual videos, it may take away complexities and cost associated with the streaming. We enable both sides that host so that it was on one end as well as letting our partners host it.

In terms of technicalities, it produces for us a lot of other complex issues related to security, related to education, related to an open architecture for databases all of the scalability and reliability issues that relate to an SDK.

But, I think that part of the advantage is having a group of technical and business people that have done so successfully in the past and know how to do this as well here at Kaltura.

It would be something very premature, but I would like to focus on the advertising because that’s probably going to be the lion’s share of our revenues. That is also divided into two parts. One is our sites that are directly driven or applications driven by Kaltura; in our case, kaltura.com and Facebook applications which we actually manage and therefore we’re going to enjoy the benefits of sponsorship opportunities as well as advertising opportunities.

In addition we do license our tools to some partners. The licensing fee is essentially a revenue share based upon advertising.

A huge advantages if you focus primarily on revenue share is the barrier of entry with partners is lower because when they gain the money you gain the money as well. I think that the huge benefit that most of these partners appreciate is the swarm effect, if you may, that is created because of our platform enabling end on end interaction between the users. You just see right now is more of a dialogue in which people can talk directly to the brand and back, submit stuff and get things back. In order to really open up the conversation to be between any user and any user in which you can create what people call now the swarm effect they need to use a platform such as ours. The repercussions of that are a dramatic increase in the time spent inside the viral effect as well as potential revenues coming out from that.

Well, I think first of all that it’s important to know what you don’t know and it’s important to pick your partners accordingly. We have four cofounders in the company, all of us complimenting each others’ abilities.

We put a lot of focus on running things through us and through additional people on our team, with a very robust advisory board where there are professionals in their field. The key is first and foremost knowing what you don’t know and making sure that there are people out there that can help you.

I think beyond that, it’s important to remember that the solutions that are successful tomorrow are often not the same ones that were yesterday. I think that often a broad approach and broad experience may develop a solution that’s better than a very specific approach. I think there are a lot of things that could be learned from industries that are outside of the Internet, definitely from things that are more from the professionals here inside.

If you look at distribution as an important aspect in how you capitalize on partnerships to create, in our case a nesting egg strategy, more so than just a destination site may be a more fitting strategy as a shared review of what we’re trying to do now in the market. I think I would focus on that people and a strategy that is not just about enviro marketing but about partnerships and how they would lead to the right expansion into the market.

Many people build something that is nice with a viral component, but it doesn’t necessarily have lasting power. That’s a mistake. You have to pick a team that you feel comfortable with.

You also have to grow with your business. Many times, entrepreneurs won’t gauge the need of their business accurately and are either at a loss for resources or have too many.

We’re looking for people who mesh well with groups, with people who are open minded to different ideas. In addition we are looking for people who are not afraid to be opinionated. Who are goal oriented.

We’d like to become an industry standard for the collaborative creation of rich media objects. Our repository site at kaltura.com will be the place, the directory, to come and find these if you’re not looking for them in any of the discrete partnership areas. You may common search I would like for people to come and know that if they’re looking for something that’s created by a group they go to kaltura.com. They search for it. They will immediately find it where ever it’s hiding at whatever site it’s at.

First of all, there are excellent people in all walks of life with all experiences in life. So, nothing I’m going to say right now is going to take away from the ability to find the exact same person without a military background. So, I don’t think there’s any one way to reach those traits.

Having said that, people who have served in the military have learned about planning and execution to achieve their objectives.

There is also a high degree of loyalty. You know how to stick with people in a foxhole and how to cover their back.