An exclusive interview with Stephen McCluskey, CEO of online video start-up, Vzaar…

Tell us about vzaar and how the company has grown since it was set up.

Vzaar offers a video solution for professional online marketers and ecommerce sites. The business started in 2007 as an eBay only video solution enabling eBay sellers to add video to their listings. In 2008 as the platform matured the service opened its offering to the wider web offering any online business a scalable and affordable video platform.

The company is based in London with sales and headcount growing quickly. Revenue in 2010 has consistently grown 20% month on month with over 1,200 customers around the world.

What is your product range and who are your customers?

vzaar’s video content management service handles the video encoding and uploading, the distribution and analytics of video. The rationale is that by using vzaar a company will be able retain prospects, drive engagement and increase conversions on their site. (i.e. not off-site on YouTube for example). With vzaar you can brand the video player and measure the effectiveness of your video using our analytics engine.

To date we have big brands such as the Press Association, IBM, Toys‘R’us, Budweiser and a multitude of mid-seized companies using our services. Typically, it is the Marketing departments who engage with us.

How are you funded?

At present, a group of angel investors and, Sophrosyne Ventures, fund vzaar.

We also recently announced that Oliver Stone, the celebrated film Director, has invested in vzaar. You should check out the endorsement video he recently filmed with us on http://vzaar.com/about/oliver_stone – we have had amazing traction from this.

We are looking for further investment now to accelerate the excellent growth the company has had in 2010.

Who are your competitors and how are you different from them?

Our main competitors are US based companies such as Viddler, Kaltura and Fliqz who also serve the mid-sized corporate market. The high end enterprise segment is currently served by the two most heavily capitalised companies, Brightcove and Ooyala.

vzaar’s strengths are in the usability of the service, with the functionality/value proposition meeting the needs of online marketers. In a nutshell: a really good affordable service that delivers online video fast.

How do you see the online video marketplace developing in the future?

There are several market trends that play well to vzaar’s positioning. Firstly, the uptake of online video is surging, especially in the USA and the UK, up 30% year on year. Secondly, the proportion of video uploading, encoding and management being outsourced is also increasing as those corporates who do use online video realise that our specialisation is more attractive than managing the video in-house.

Online video is particularly effective and growing e-marketing tool in vertical markets such as fashion, the sports and music industry and corporate communications.

What are your plans for the business moving forward?

We are aiming to take the business through the next growth phase by scaling our marketing initiatives with new partnerships and adding even more functionality for our customers. 2010 has been the year the company really took off and I envisage 2011 being the breakout year for vzaar. We already have over 1,200 customers and I expect this grow very substantially.

We are also making rapid inroads internationally. Over 60% of our current customers are in the USA, and we are seeing new growth from countries such as Germany and Australia.

You have already built up and sold two businesses – Vebra and thinkproperty.com – to the Guardian Media Group. What prompted you to join a small business?

Growing sales, headcount and profitability and then achieving a good exit at Vebra was great. I took a little time out and then decided that I wanted to get into a cutting edge tech, online startup that I could shape and help to grow. Pretty much the definition of vzaar in early 2010.

I’m also really driven by online video. After all, movement, animation, colour, film, etc. switch on humans and most websites today have too much static content – they simply haven’t yet understood the marketing power of video yet … and that’s where vzaar comes in.

How has your experience with vzaar been different?

When I joined Vebra the company was already well established. Joining vzaar was different in that I joined at an earlier stage of maturity. Fast growth and well geared funding is the focus at vzaar today.

Your earlier career was in management consulting, how has this background helped?

Tremendously. I spent almost 15 years at PA Consulting Group. My first decade in the company was in the Technology Consulting Practice advising consumer electronics and telecoms companies on new product development, R&D management and that magic grey area between marketing and development. I then moved into a more strategic consulting role working on business planning, due diligence and M&A work.

The experiences of the high-pressure environment of management consultancy gave me great confidence when making the move into operational management. I saw and learned a lot in my consulting days some of which I hope I have been able to bring to bear to vzaar, notably in sales, marketing and development delivery.

Can you share one of the learning’s from your career and how it has influenced you?

Most of my consulting work at PA was done internationally. This gave me an understanding that different cultural values drive people’s behaviours and work patterns. In my experience, the most effective teams were those which contained people from differing backgrounds as everyone has to make a conscious effort to understand the other team members’ standpoint to deliver well. I saw that diversity actually created delivery.

At vzaar, we have colleagues from Brazil, Jamaica, the UK, South Africa and New Zealand and we are proving my point.

What has been one of the biggest achievements at vzaar you are most proud of?

I think it must be increasing the entry pricing for the service this summer after upgrading the product rapidly and seeing sales continue to grow with no impact on attrition. It proves that we belong where we are.

What advice you would give to people looking to transition into a start up business?

Be bold and be funded.

Action speaks louder than analysis initially: the service needs to deliver to the customers’ needs and revenue needs to happen fast as well – it’s about having an edgy, driven mind-set within everyone.

I think the real issue is how to transition from a start-up to an established business – this requires a clear view of the company’s growth plans, supported by early performance, and access to the right amount of investment capital.

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