 And we are live. Good morning, good evening, good afternoon, good day, internet. Welcome to another week where we hang out with Alexis Ohanian, the host, co-founder of Reddit, host of Small Empires, co-founder of Reddit, and a whole bunch of other stuff. And Kirk. And Kirk. Yeah. Who helped create Small Empires, which is an awesome show on the internet about startups hosted by Alexis Ohanian, the dude in our hangout. This week, the episode was about, actually it was a really interesting episode. I watched it this morning. It was on a company called Sandwich, or Sandwich Video, who makes those Kickstarter videos or Indiegogo videos or just like startup videos. And they're actually pretty interesting because I have backed Kickstarter projects and I've backed Indiegogo projects and it sucks to admit, but a lot of those projects I backed because of the video. Like the video is compelling. I'm like, oh, this company seems legit. Their video is good. That's like what Kickstarter is. It's like, oh, do you have a good video? And even in the episode, that cooler, they failed, they flopped, and then they were back a few months later, and they shattered Kickstarter's record because they had a good video. So let's talk about this company, Alexis. What do you think about them and what's the deal with them? I was really pleased. I really, like, Adam's a hell of a guy. He's a founder with a great beard. I have become more and more aware of their work over the last couple of years because I've seen more and more companies that I've advised basically trip over themselves to try to get a sandwich video made. To the point where it's become a don't mean, like, or this idea of a sandwich video. There are plenty of people, like the cooler guys, people might see that and think, oh, right, it's like a sandwich video. I mean, it wasn't per se, but what Sandwich has done has really created a type of video, which is like a, it's like the 21st Century infomercial. Their tape is just so authentic. You know what I think is actually an interesting part of the whole thing? It's like, yeah, a good video will make me more inclined to donate to a Kickstarter or Indiegogo or even just be interested in the project, but on the converse side, like a bad video, I'm just, I'm like running for the hills. You know what I mean? It's better to just have a good infographic or even just a good paragraph than a bad video. A bad video, it's like you don't even take yourself seriously. Right, and I think that's also partly because Kickstarter is unlike that. You hit the project and it's like nice, bold title and then boom, you're already, you're hit with that video right away. But I do agree with you, like if some company has some jank video, you're like, okay, these guys can't even afford or create a good video. Why would I believe in the project? And I think that works inversely too, which is why Sandwich is so successful. And it's interesting the way they got started too, for those that haven't seen the episode yet, I'm going to spoil it for you. They made like an app and he, the guy, Adam his name is, he starred in his own video and then this sort of got his own ball rolling because people were like, oh, we want our own videos made. And now it seems like a majority of those great Kickstarter videos are done by Sandwich. And I had no idea they did things for Square and the coin video they did. And now I kind of want to go back and watch some of them because he's in all of them. Like that's such a good troll. He creates the videos. He is the man behind this and he's just right there in front of you selling you these things or actually not really selling you these things, just straight up, this is a thing, here's how it works, do whatever you want now. It's just like explaining and then like suggesting, like I think it's dope, I don't know. You know like, which is the way that it's just nice because it's almost like, Alexis, like what you're saying, it's like the modern day infomercial but it's like, it's almost more of like a conversational, like it's like, it's kind of like talking to a friend, it's like here's a thing that I like, here's some dope graphics that I made that explain the thing that I like but basically I'm just telling you about what I like. I don't know, get it if you want. Like, that's exactly the way that I like it. I mean if they did it like Billy Mays, I think it would fail. There is something like, this is very unique to the world we live in now where people are craving like authenticity and so even, yeah, I mean everyone knows these are pitch videos for a product but their approach is like, okay look, we all know this is a pitch video but let me just talk like a dude. Yeah, basically. Alexis, do you think they have the right business model approach? I mean they've got to be taking 5, 10 something percent equity in order for them to make it worth it. He said they did 50 videos in a year, that's one a week and they're a team of nine he said. But granted, their videos kick ass and they usually really do help. He was even saying it's almost as if Sandwich is launching these products for these companies. Do you think that that approach is the way to do it or do you think it would be better off in the long term to get a huge sum up front like charge like 50 grand video or something? Well I mean they are, there are some clients who they are charging a sum up front but it lets them, basically it lets them pay the bills to pay employees and take the bigger bets on the upstarts with the equity revenue share thing. I mean I think like look, this is, if they weren't doing this, this would be like every other, just about every other production company I've encountered. And none of those businesses can really scale because when you're talking just pure revenue, like you're only going to be able to charge so much and then when you do, you have to hire a certain number of people in order to get the product, to get the thing made. And that's a business that like fundamentally does not scale because you just have to always be hiring more people as you're creating, as you're growing, you have to hire more people and you still have to keep quality up really high. Those are two very hard things to do if you're talking about building like a billion dollar company. It's doable but it's really, really hard and it takes a really, really long time. So I love the fact that they're thinking about other ways to make money that are working with their partners, taking bigger risks but potentially getting bigger rewards. If they make the video for the next Facebook, forgive the expression, they could very quickly find themselves with a lot of cash flow. Right, I think they own some part of the company. I think it's like, we kind of make this point in the video but like there is no reason why they shouldn't be factored in equity wise along with everyone else. Like we were saying, if there's a bad video, it's as bad as having a bug in your code that makes it so every time you try to order something, the thing crashes. Like people won't use it again or they'll never use it at all. So it's like it makes sense that they should be a part of it. It makes – I don't know. It was the first time that it actually made sense and it will help them make good business. It's so interesting because I can't think of another company that does something like this. They're able to get their hands tied with so many different companies. It's kind of like a really awesome business idea and can it be done with any other type of service besides like this video thing? I guess like a PR company maybe but PR companies never ask for like a share of the company, right? Yeah, I mean the only thing that we were able to find were in like the 2000s before the first bubble burst, there were a lot of design, like web design firms who were taking equity and since antiquity, lawyers have been taking equity in exchange for work because legal fees are so expensive. Right, that makes sense. The thing is, I think if they brought this model to – you know, there are a lot of production companies who do like small businesses of all stripes and if they brought this to like a baker or you know, even if it was like Melissa's Cupcakes, like a big baker, I think the response would be like, who the hell are you and what the hell are you talking about? Yeah. Since it's the start-up world, that sort of equity trading and like talking a lot about equity and valuation is just part of – it almost seems more part of the start-up world than the other sorts of entrepreneurs or entrepreneurship. So it's like Sandwich happens to be in the perfect space for this to be happening. So I can see like a tech PR firm trying to do something like this but like the tech PR firm would be pushing the Sandwich video. Basically, yeah, basically. They are literally like the production company, they are doing everything to make that video created. Right, creating like part of the product. Right, right. In a sense. I mean can this business continue lasting like will Kickstarter continue? Go ahead Alexis. Well it's less – there's definitely the crowdfunding part. Excuse me and there's that – we talked about this in the August episode. It's one thing, you know, it's great to set expectations really high which is what these great videos do. It's another thing to actually meet them. Hard work is hard. It's hard. But that's only a portion of what they are doing. There are a bunch of startups that have actually built products that are ready to ship, that are great, that they just want help spreading the word around. These tend to be software ones but regardless, it's really – I think what's interesting to me is a PR firm can't really demonstrably show that they had an impact. I mean it's like – I've been doing this for a little while and if you've got a cool thing that you're launching, people are going to want to write about it. So it's more like how do you help us create a cool thing or a good thing or an interesting thing and Sandwich is actually creating that. I think because there's so much competition now with early stage investing, so like seed investors, the first bit of investing – look at this, I'm referencing all kinds of stuff. It's like part pick. You cobble that seed from different angel investors and so you go around with a hat, you know 10, 15, 20, 30 people might be in your seed round and these kinds of investors really have to compete over cool deals, over good companies that have sort of traction and hype because there's plenty of money to go around for these companies. And so if you're one of the lucky companies that has the hype, you basically can take your pick of investors or at least has the promises, the magic, whatever you call it. And having someone like Sandwich in the mix is really interesting because like Joe Dentist who is like an angel investor on the side, his $10,000 or his $50,000 of angel investing is really just dumb money. Sorry Joe the Dentist. Like he can't add a ton of value to an early stage company but if Sandwich comes in and offers to do this video for some portion, that's hugely valuable to the company. So now all of a sudden they're acting in a world of investors where they're bringing value that like 95% of early stage investors can't provide the value that Sandwich can. No one is asking – you don't ask an investor or even usually a developer or even sometimes a CEO to frame and tell the story of what you're trying to do. And sometimes people make great stuff without even realizing how great it is or how to tell people how great it is. And like I can see like Sandwich making these videos that are like here's how to use this thing, it's awesome. I would imagine that there have been certain occasions where the people who hired them to do it didn't even realize how dope the things that they were presenting. You know what I mean? Like oh, I can explain it that way. Like push for pizza isn't a great example of that because push for pizza is like oh look I pushed it and there's pizza. But like I don't know, even just like seeing the thing in action is so much different than hearing about it. If that makes sense. No, I totally agree with you. And it's just I guess it's fair to say that Sandwich has like a very – like they play an important role for these companies. Like sure, like Alexis you were saying the $10,000 seed is like it's cool but it's like okay you have $10,000 in cash, what are you going to do? But coming like the videos that get made and his like creative direction, he's like effectively creating the product in video form for them and that is like invaluable. You really can't put a price on that. Well you can, you charge for equity but – Well it's like a pitch to customers. And I think a lot of times sometimes when I'm seeing people pitch their startup or their idea, it sounds like they're pitching to an investor and I don't want to hear someone talking to them. Like I don't care about most of the things that as like a consumer, I don't care about Sandwich. Yeah, he's really good at telling that consumer facing story. Yeah, because that's – it's basically just telling the truth about what it's like to use the thing. Right, and it was interesting, the dude with the beard I think, someone in the episode was saying that a lot of the companies they work with, they are products that they would actually like use. So it's cool to see that they are sort of enjoying and not just like – they're not just doing it for the money, they actually enjoy these products and they get to sort of put them in the best light possible. It's pretty interesting. Yeah, really cool. So Alexis, you think they're going to be able to like continue going? I know there's like Kickstarter projects happening all the time but this can't last forever. Can't it though? I mean Facebook has been around for 10 years, so yeah. But like advertising has been around since prostitution started. That's also true. You know what I mean? Like there's always been somebody saying, hey, here's the good thing, go over here. So then do they move away from doing just startup videos, like startup company videos to like I don't know, making TV commercials for things? They have. They've done TV commercials for like – Oh, they have. They've done TV commercials for mostly like internet based companies. But I think that they've also done some bigger stuff with just normal brands that like just because they're good and brands want to be involved. So is it – are they special because their videos are so good? Like is that just what it is? Is that the magic? I think so good. Like commercials are – the production quality of commercials is fairly across the board great. You know what I mean? Like their videos are production wise on the level of commercials but the tenor of them and the tone of them is so distinct and so aligned with the way that it seems like many – it seems like it resonates with many, many, many people. And so I don't think that there's – they're not necessarily like objectively better than anyone else. They're just better at doing exactly what they do. You know what I mean? Like Chipotle wouldn't want to – Chipotle mostly does like stop motion ads, right? Like you wouldn't hire a sandwich to do like a stop motion Chipotle ad. But like if you want someone to beautifully and simply present what your product, service or idea is then that's when you go to sandwich. Interesting. You know what I mean? That's at least my takeaway. It's like they invest in what they do bar none hands down. I guess it's only a matter of time before a competitor comes along but this Adam, this creative vision is like that's everything of the company. Like he was one person before like he was just one human with – and he still sort of has like all the – he seems like – I don't know when you guys were there did you watch them film any videos by any chance or no? Yeah. Unfortunately we weren't able to actually go on set. We had to have a stringer in LA go on set. But I think basically it's like he has a team of folks who work for him and with him and I think it's like – I think that he's found a way to make sure that there's a consistent vision while being able to trust people and it's like a typical creative director. It's like a Neelai at the verge. It's like he's guiding but a little bit more than maybe an editor in chief would. Right. And he's also starring in his own videos too. Many times starring, many times writing, many times directing. But I think they figured out a way to provide a level of autonomy to their directors that's pretty admirable while still maintaining Adam's vision. Yeah. It's crazy. It's a crazy, crazy company that he started. And he's everywhere. He's really, really everywhere. Yeah man. I saw him on my TV a couple of days ago on Hulu. He was doing the next set. I was like oh. Great. Wait, he was – wait, he's in the Hulu ad? No, he's on the CarMax ad that was playing on Hulu. Ah. Yeah, I was in college football this weekend. Yeah, I was like hey, what's up man? How you doing? Wow. Wow. Okay, cool. Well, I guess there's nothing – there's not much left to say about this company other than that they're awesome and Adam is a really awesome creative genius. Yeah. I mean, do you guys have anything else to add or should we wrap it up? Adam has a really dope son. He was jumping all around the office. He was just a cool little dude. He's like – Shout out to Adam. And I'm sorry for spilling seltzer everywhere. Yeah, you spilled shit everywhere man. Did you break any electronics in the process of you spilling the seltzer? I missed so many electronics but I just – it was just everywhere. Except for electricity. Jeez. Well, thanks for everyone that tuned in. Thank you Alexis and Kirk for sitting in and chatting with us. We will probably be back next week with another one of these. What – Thursday. It's Thursday. Okay, so we'll be back on Thursday. World Star. World Star. World Star. Okay. World Star. World Star. So you can share it here first or maybe on Alexis' Instagram or front back account. But there is a small Epires episode on World Star. There is, Bennett. It's going to be awesome. Cool. Well, we'll be back on Thursday. Definitely check out the episode this week, sandwich video. It is found on YouTube.com slash The Verge or TheVerge.com, our video player right below the hero. Check out Alexis on Twitter. He's at Alexis Ohanian and Kirk. If you want to be found on Twitter. Kirk Larson. Kirk Larson. He's a cool dude. Yeah, I see him. Not Owen. Not Owen. Kirk Larson and Alexis Ohanian. Thanks for joining. And we'll see you guys on Thursday. Bye. Bye-bye.