May 13, 2024 • 38min

Emmett Shear: How Twitch Changed Media by Merging it with Gaming

Pattern Breakers

Emmett Shear was a co-founder of Justin.tv and went on to become the CEO of Twitch, leading it through massive growth and an acquisition by Amazon for $970 million in 2014. In this episode, he discusses his entrepreneurial journey, key lessons learned, and insights into building successful products and companies.

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Key Takeaways

Non-consensus thinking is crucial for startups, but it's not about being contrarian for its own sake. It's about introspection and identifying what you truly want that doesn't exist yet.
Product-market fit is critical. Almost all startups that achieve true product-market fit end up being wildly successful.
Listen to users with an open mind. Don't just try to validate your existing ideas - be open to being surprised and having entirely new ideas based on user feedback.
Persistence is key. It's better to err on the side of persisting too long rather than giving up too early. As Emmett says: "If you consistently give up two years too early, you will never succeed."
Co-founder relationships matter immensely. Choose co-founders you'd want to be "trapped on a boat with for years."
Management quality often lags behind growth in successful startups. Focus on product-market fit first before worrying about perfect management.
Pivots can lead to breakthroughs. Twitch emerged from a pivot within Justin.tv when they let small teams explore new directions.
Understanding user psychology is crucial. Twitch succeeded by addressing streamers' core needs for money, fame, and love.

Introduction

Emmett Shear was a co-founder of Justin.tv and went on to become the CEO of Twitch, leading it through massive growth and an acquisition by Amazon for $970 million in 2014. In this episode, he discusses his entrepreneurial journey, key lessons learned, and insights into building successful products and companies.

Topics Discussed

Early Days and Justin.tv (0:00)

Emmett recounts how he met Justin Kan in grade school and their early attempts at startups, including Kiko Calendar. After several failed ideas, they stumbled upon the concept for Justin.tv:

The idea emerged from a conversation about streaming their discussions about Yahoo's strategy
Initially seen as a joke, they pitched it to Y Combinator's Paul Graham who saw potential
Emmett admits it was "one of the dumbest business ideas" but turned out to be perfect for exploring live streaming

As Emmett reflects: "We couldn't have been more wrong about the entertainment part. We had this vision of, like, his life's gonna be interesting to watch... And it turned out that lots of people dreamed of being reality stars with no editing and effort and no quality."

Non-Consensus Thinking (13:56)

Emmett emphasizes the importance of non-consensus thinking for startups:

Be willing to hear your idea called "the dumbest idea ever" by investors
Don't be constrained by what others think - focus on what you truly want
Trying to see what's true often leads to non-consensus beliefs

He cautions against reflexively opposing the consensus: "The primary thing is, what does everyone else think that is the most important thing to you is the question, what does everyone else think? And you just regard that in a different way."

Product-Market Fit (15:52)

The discussion turns to the critical importance of achieving product-market fit:

Almost all startups that get true product-market fit end up being wildly successful
Exceptions are rare (Friendster is mentioned as a possible example)
Internal management quality often lags behind growth in successful startups

Emmett notes: "The quality of care your management is not the that that all gets cleaned up later. Your management is always a s**t show for a couple different reasons."

Pivoting to Profitability (21:16)

Emmett describes how Justin.tv pivoted to focus on profitability during the 2008 financial crisis:

They had just raised funding but knew they wouldn't be able to raise again soon
Growth went "out the window" as they focused solely on becoming profitable
This period taught them discipline in metrics and product development

He reflects: "We had real metrics that mattered, that we were easy to measure. We were disciplined, and we learned how to be a disciplined product team."

The Birth of Twitch (23:17)

Emmett recounts how Twitch emerged as a pivot within Justin.tv:

They split into two teams to explore new directions: Social Cam and Justin.tv Gaming (which became Twitch)
Emmett was passionate about game streaming after enjoying watching Starcraft II
They set growth targets for both projects and ended up pursuing both

This led to a key realization for Emmett: "I'm in charge. Can't wait for my co-founders to figure it out. Like, I've gotta personally just make calls and I'm allowed to, I'm authorized."

Learning to Listen to Users (29:07)

Emmett describes a crucial shift in his approach to product development with Twitch:

He realized he wasn't the core user (the streamer) and needed to truly understand their needs
Instead of trying to validate his ideas, he focused on having better ideas through user feedback
He conducted 40-50 Skype calls with streamers to understand their motivations

This led to key insights: "I took away from my interviews with streamers in the first round that streamers wanted three things, money, fame, and love."

Twitch's Growth Strategy (33:18)

Emmett outlines the key elements that led to Twitch's explosive growth:

Money: Creating an ad-sharing system for streamers
Fame: Improving discoverability and video quality
Love: Better moderation tools and personal outreach
Growth: Sales team to recruit streamers one-by-one

He notes: "Once we had all four of those pieces in place, which was like we had met their core needs and we had a customer acquisition strategy, we just started exploding like immediately. It worked almost instantly."

The Psychology of Persistence (35:28)

Emmett reflects on the importance of persistence in entrepreneurship:

It's better to err on the side of persisting too long rather than giving up too early
Startup founders should be prepared for 4-5 years of potential struggle
Choose co-founders you'd want to be "trapped on a boat with for years"

He advises: "If you consistently give up two years too early, you will never succeed. And so on the balance, I really think you want to be, you want to err on the side of over persistence."

Conclusion

Emmett Shear's journey with Justin.tv and Twitch offers valuable lessons for entrepreneurs:

The power of non-consensus thinking and identifying unmet needs
The critical importance of achieving product-market fit
The value of truly listening to users and being open to surprises
The need for persistence and choosing the right co-founders
The potential for pivots to lead to breakthrough success

His story demonstrates how a seemingly "dumb" idea can evolve into a revolutionary platform by deeply understanding user psychology and iterating based on feedback. The success of Twitch underscores the potential for entrepreneurs who are willing to think differently, listen closely to users, and persist through challenges.