The 8-Year Journey to Building a $4B AI Company | Synthesia, Victor Riparbelli

1. 0:00 – 1:50

   Intro

   1. VRVictor Riparbelli0:00

      So this year is the world's leading AI video platform. We crossed 100 million ARR. We launched the first product to a million ARR, it took us four months. We then went from 1 million ARR to 3 million ARR in one year. But we basically tripled revenue from there, tripled again, and then we doubled and doubled. Are we doing this because it's fun and new, or are we doing this because it's actually useful for the customer? People are not trying to, like, use a model to do something. They're trying to solve a problem that they have, right? In our case, the problem is making a video for something. And I think a lot of AI apps are feeling this today, where you may go viral, have a lot of people who are interested in your product and that come to you and play around with it, but it's really important to understand who are coming because they have a real use case that's recurring and who's coming because it's a cool, fun thing that they want to try out. Do we actually think that they look real enough to work or is it a gimmick? Sometimes you'll be the hottest company in town and everybody will wanna talk to you. Other times you'll be deemed as the incumbent that nobody cares about, or like, you're not doing something that's fun or kind of in the current sort of hype cycle. And no matter like which of those cycles you're in, I think the most important thing is really just, like... Victor Riparbelli, and I'm one of the co-founders and the CEO of Synthesia. Synthesia is the world's leading AI video platform for the enterprise and for businesses. At its core, really what we help our customers do, to land whatever message they have for their customers, their employees, their partners with the most engagement and effectiveness possible. So we've built a platform that enables anyone who knows how to use a PowerPoint to create a video, where really what we're all about, right, is communicating in video, which is the most effective way to deliver a message today. We crossed 100 million ARR. We've raised $330 million in venture capital. Commercially, we work with more than 70% of the Fortune 100 today. We have more than 65,000 customers all around the world. People are not trying to, like, use a model to do something. They're trying to solve a problem that they have, right? In our case, the problem is making a video for something.

2. 1:50 – 4:15

   Why I Spent 8 Years Betting on a Crazy Idea

   1. VRVictor Riparbelli1:50

      We started the company in 2017. The first three years of the company wasn't very fun, and the tech didn't really work, and it was, it was a kind of an uphill battle. So this was like the first time the world really saw a neural network generate video at a pretty high quality, fully automatically, right? If you saw the output of that face-to-face video, and you would have to do that in a visual effects studio, you would be talking like millions of dollars to create a clip like this, and this thing actually did it in real time. And when I saw that for the first time, my mind started running. I felt like it's gonna change everything about how we create video, but it's also gonna change everything about video itself as a medium. But I felt like it was worth exploring, starting a company around this technology. When we see new technologies, the first thing we do is always imagine all the 1,000 ways it could go wrong, right? Cars, smartphones, AI, video generation, music generation, that's always what we default to. But it just turns out most of the time that technologies end up being used mostly for good things by good people, and there's a subset of people who use it then for bad things. And I think being optimistic about technology, especially in the early stages of it, I think is, like, actually a huge arbitrage in itself. I mean, essentially we went out, right, and we, we told people, "Look, in 10 years you, you're gonna be able to make a Hollywood film from your laptop just with your imagination. You won't need anything else than that, and it's gonna be more or less free to do it." And a lot of people just, you know, thought that that was a crazy idea. It was just, it was in the AI winter. You know, there'd been a lot of, like, disillusionment. Like, a bunch of companies funding in the years before we started the company had all kind of like turned out to not really work because the technology was just too immature. Well, we got turned down by like 100 investors, something like that, until we eventually sent a cold email to Mark Cuban. He was probably the only person we met who totally shared our vision of the future. So he wasn't evaluating the vision. He was bought in on that. He was more kind of evaluating if he thought the team was worth funding, and if he think we had a shot at, at building something real. You need one person to say yes. That's all it takes. And generally, it's easier to try and find people who already share kinda like your vision of, of what's gonna happen in the world, as opposed to trying to convince them of it, especially if you're not doing something that's in the kinda current hype cycle. If in your gut you truly, really feel that you're onto something, and that someone, if it's not you, someone is gonna build a big company around your, the product that you're doing, you should continue. Throughout the entire journey of Synthesia, I've never a day in my life doubted that someone is gonna build a big company around this technology. I could doubt myself sometimes. I could doubt my execution. I could be afraid that I was too early for where we were, but I never doubted that this technology was gonna be extremely valuable for the world, and someone was gonna build a company around it.

3. 4:15 – 7:11

   Are You Building a Painkiller or a Vitamin?

   1. VRVictor Riparbelli4:15

      The hard thing is knowing when to continue and when to pivot, right? We started off with a million dollars, right? Which is, is not a lot of money when you're building a company like what we were trying to build. And so we had to figure out, like, what do we think we can realistically both build and sell before having to raise the next round, right? For which we would have to show some kind of progress. And the first thing we, we, we stumbled upon was this idea of AI dubbing, which is give us a real video shot with an actual camera and we can translate it for you by replacing the voiceover with a different language, but then also reanimating the face so it looks like, uh, the actor speaking a different language. Which would be useful if you're making a Hollywood film and you wanna distribute that all over the world. If you could make it look like it was recorded in French or Italian, that would be good for those audiences. And that value proposition was actually good enough. Like, that is definitely valuable when you can do it. But the technology was very early. It, it only worked if you looked straight at the camera. It took two PhDs, you know, like 10 days to make a 30-second clip. Um, it didn't scale at all. The quality threshold was insanely high, right? 'Cause all these video people, they wouldn't accept anything but, like, the very best in terms of, of the quality. And it was just clear to us that it was a vitamin, it wasn't a painkiller, right? Like, people liked it, they thought it was cool. Um, but if we disappeared, no one is gonna yell and scream. You know, they go, "Ah, you know, we'll go back to translating the way we did things before." So we went back to the drawing board, and we, of course, talked to lots of people during this period. We kind of realized that rather than focusing on the people who are already making video all the time, there was a huge group of people, billions of people probably, that weren't making videos at all, and these people are desperate to make video. And they were basically telling us, "Hey, I wanna deliver this message to someone, and I know I should be doing a video or audio because that's what people wanna consume. I just don't know where to start. I don't know how to use a camera. My boss won't give me any budget to record it. And I know that there are so many problems after I've actually shot the content, even if I get to make a video, because you can't edit a video after you've shot it." And there's all these problems of a video, right? And then we, we spoke more and more to these people and ultimately learned a lot of what these people wanted to do was, like, corporate videos. And corporate videos are a lot easier than Steven Spielberg films, right? And so if we could just essentially help our customers with kinda like the talking head style footage, that would be pretty big. And that was a much smaller domain than make any kind of Hollywood film you can imagine, right? So we built this avatar technology that became one of the central of the product today. That's when the company started to really take off very quickly. We had a lot of, uh, conviction on the technology very early. It was very unclear what the right first use case was, you know, something that was both valuable and you could realistically build. But I think we found our way there. You could argue that we should just have built the avatar technology from day one, but back at day one- None of us had any idea how we would potentially do that, right? Like, the research evolved over the years. We learned the technology better and better, and so I think product-market fit is one of those kind of things which is, is much more art than science. And I think we're very much led by, by deep understanding of the customers we're, that we're serving, and of course, deep insight in- into the technology. It, it ultimately turned out the right way.

4. 7:11 – 9:04

   Fun and Cool Won't Keep Users Coming Back

   1. VRVictor Riparbelli7:12

      Once we launched the product and we had the first avatar MVP out there, we went viral very quickly. And so we had, like, lots of people coming onto the website, lots of people making kind of free demo videos of avatars by typing in things, because it was fun and cool, and they wanna show all their friends, and it's amazing. The first time you see it, you're kind of mind-blown, right? But a lot of these people did not have any real use case, and we could see that in the retention, right? They weren't coming back. They were just making a few videos, showing it to people, not making any more videos. And so that wasn't really, like, a sustainable revenue stream for us. But there was a small group of people, and they kept using the product and they kept coming back, and, uh, we, we, we kind of went into that group, and that... Spent a lot of time speaking to those folks, and that's where we uncovered sort of interesting value equation, right, where these people were not comparing our videos to real videos or camera videos. They were comparing our videos to text documents, and when that's the comparison, then the quality threshold looks very different, right? The feature request that they needed w- looked very different. So it was an o- o- organic thing, I think, of, of letting yourself be guided by customers, but also applying a lot of, like, critical thinking. The critical thinking is, like, difficult when you have so much inbound interest. I think a lot of AI apps are feeling this today, where you may go viral, have a lot of people who are interested in your product, and they come to you and play around with it, but it's really important to understand who are coming because they have a real use case that's recurring, and who's coming because it's a cool, fun thing that they want to try out. Early days of 2021, we have customers who will scream and yell if we shut down the product tomorrow. That's always, I think, a good acid test of, like, do you have something real or not, or do people kind of mildly care, but not really? We all realize that there are lots of unanswered questions, for sure, but there clearly is something here, right? There's a kernel of something that is, uh, that is huge. And I think it was kind of double exciting in some ways, because it felt like it was our little secret, and it was for a couple of years. It wasn't very obvious from the outside that anyone had any real use for this tech. That was a fun couple of years where we felt like we know something the rest of the world doesn't, and, and we're capitalizing on it.

5. 9:04 – 10:49

   The Vacuum Effect of Product-Led Growth

   1. VRVictor Riparbelli9:05

      We figured very early on, actually, in 2021, that we wanted to focus on the enterprise, because that was clearly where there was the most value to drive, and it was clearly where we could, you know, get to the, the kind of biggest contract size. But it was also very obvious to us that the growth channels and the way to get this into the hands of as many people as possible was not through enterprise sales. It was through just giving people access to the product, letting them play around with it, letting them find their own use case, letting them qualify themselves before they spoke with the sales team. What was hard is when you're building both a bottoms-up motion and you're trying to build a top-down motion, those things conflict in many different ways. As a startup, you have limited resource, and a lot of things you build for a big company will have very little impact on a small company, right? Like, if you build admin tooling, uh, for, like, a CIO, a 50-person company is not gonna care about that, so they won't get much value out of it. On the other hand, if you build tools for, like, small businesses, a lot of that will not have value for someone who is, um, is really big business, right? There's always, like, these trade-offs that you make, but I think when you look at the last, you know, 10, 15 years, some of the companies that have had, like, the best and most impressive runs are companies that have managed to combine the kind of vacuum effect of PLG, where when you really get it working right, it's just this vortex that just, like, sucks in traffic and converts it into both paying customers and credit cards, but also spits out, you know, the world's best enterprise leads with 10, 10 world-class sales team that knows how to handle customers, take them through a sales process, make them successful, and do all these different things. And it's interesting, because it's not just in the expression of the product or the product roadmap. A lot of people, I think, tend to think that. But it's also very much in just, like, the people you hire, right? Some people, uh, really love, like, the self-service world, and that's what they're passionate about. Other people really love enterprise sales. And so marrying, like, those two cultures together is definitely a challenge, but, um, I think we've, in broad strokes, done pretty well on it. I

6. 10:49 – 13:57

   Find the Bit-Off Underdogs

   1. VRVictor Riparbelli10:49

      think a mistake people often make, especially people who maybe have already had a job in, like, big tech or, like, successful companies, they go out and then they try to hire people from Google, Meta, OpenAI, like, you know, whatever kind of is the hot companies of our time. And they go out, they, "Hey, I have this cool startup idea. Why don't you join me? I'll pay you not as much, but I'll try and pay you almost roughly as much," et cetera. And of course, this can work. There are very smart people who work there who also want to do the startup hustle. But oftentimes, you just can't get them straight up, or if you do get them, um, they are used to a very different salary, a very different lifestyle, uh, working in a big tech company as opposed to being in a startup. So that's actually often not the best path. So I think that the better way of doing it, which is what we did, is you try and find people that are a bit off, you know? They're not, like, the most obvious people to join your startup, but there's something you like about them. That could be that they have just a lot of hustle, a lot of grit, engineers that maybe haven't worked at, like, a tier one or tier two company, but they are a great open source project that they are managing and updating. Like, there are a lot of other signals you can find with people, right? And if you can find these people who are truly hungry and wants to work at a startup and wants to put in the work, you gather a great group of those, and they will very often outperform the 10 people who used to work at big tech, uh, with their comfy lifestyles. People you can take and you help shape, give them opportunities to do something, that's your only option in the early days, finding that, like, ragtag group of underdogs that have the collective energy to, to go up against the competitors and incumbents. I think that there is nothing that prepares you to really start a business like starting a business. Like, spending four years in McKinsey is not gonna make you a better entrepreneur. May give you a little bit more network and may be slightly easier to raise money. But if you actually, truly, if you know deep in your heart that you want to build a company and you are a builder, I think you should just get started as quickly as you can. Don't be afraid of starting too early. The, the doom scenario is, is rarely as bad as people kind of think it is or make it out to be, and most big companies really value people who have tried to do something themselves, even if they failed. I do think that we will see less and less text in the world. I don't think we will be consuming most of our information in text. I think there'll be, still be a place for text. You know, we still go to the theater. We still listen to vinyl. Like, there'll, there'll definitely be a place for text to exist. But I think in, in the world of information sharing, training, knowledge, et cetera, I do think that we will move into a world where we consume almost everything as video and audio and maybe VR and AR, um, in, in 10, 20 years with those technologies. I do think that's gonna happen. Like, and I don't think it's gonna be as bad as people think it is. A lot of people are very, like, averse to the idea that people wouldn't necessarily be using text as much as, as they are today. But I think as humans, it's very clear that we've always been on this trajectory towards more interactive and more visual and more auditory content that reminds us more of, like, actually being in the real world, right? [outro music]

Episode duration: 13:57