Justin Kan knows his startups. At age 23 he started a website for lifecasting. In 2011 he launched the world most popular e-sports streaming site. In 2012 he created a westcoast website he would flip immediately. He’s been around the block once or twice, creating success after success. So, how does he do it?
Justin graduated from Yale with a love for technology. At the same time, he also loves going to parties and having fun. These two interests ignited an idea, a “lifecast.” With the $50,000 he received from the Y Combinator, a startup funder, he created Justin.tv, a website where he streamed what he did, as he did it, in real time. Justin turned himself into an online personality and would do the same for others. By 2008, Justin.tv would have over one million visitors and over 60 channels of other people lifecasting themselves.
In 2011 Justin Kan began work on a video game streaming website. The market for video game streaming and social websites had been tried and failed. None were able to gain any real traction and work in the long term. This would not be the case for Twitch.tv. Twitch has grown and has since become the place for amatuer and professional gamers alike to stream their content. Esports has found their home in Twitch, with League of Legends, Dota 2, and Counter Strike airing on the website regularly. In 2014, this startup was sold for $960 million to Amazon and continues to grow.
These two massive products have created a few guidelines Justin says to follow. First and foremost: pay attention to the user experience. The community is what matters and will be what grows the startup. Making money is important, and is needed for any successful startup, but getting a strong fan base should take priority at all times.
Next comes the money. Passion projects are great, but you need to make money at some point. This means that creators need to build in order to flip. Make the project, foster a community, and find out how to make money without sacrificing those that support it. Startup founders need to keep iterating and perfecting on the project to improve the experience and ways to profit.
There is also set of rules to follow when selling. Don’t sell when it makes sense, after things have died down. If the project is blossoming, if it’s growing and people love it–that is the best time to sell. If the project starts to decline, and there no room for growth, then the opportunity to sell has passed you by, especially if you want the most bang for your buck. The time to sell the startup is when the founder can still make a ton of money. According to Justin, sell as the project is hitting it big.
After selling Twitch, Justin has since stepped back a bit. He has turned his focus away from startups and into creating art. Since the big sell, he has delivered talks on creating startups and now has a place on the board that made the first investment, the Y Combinator. Now he is focusing on projects that aren’t intended to make money, but there’s still time for him to change his mind.
– Evan Stevenson