When your startup consists of you and your co-founder, it’s not that hard to shape the culture. Even though Typeform started with two co-founders , it has grown and in the last 18 months from 30 to 150 employees, and they have no intention to stop growing.

So how are they keeping a healthy culture? It’s not a poster on a wall, we live it, says co-CEO and co-founder Robert Munoz:

Our company culture is a product of what kind of workplace I, David (co-founder) and the first employees wanted to create when we started Typeform. We didn’t have a master plan to define our culture but we knew that a total focus on product, people and creating a collaborative place to work made sense.

Product & People first

Traditionally SaaS companies are all about product in the beginning. Robert and David have always been searching for the balance where product meets people:

We know that if we invest in both our talent and in our product at the same level, revenues will come along with it.

Typeform’s co-founders and co-CEO’s David Okuniev and Robert Muñoz.

That’s why they have created three pillars to put people and product as top priorities:

  • Business to take the market
  • Innovation to be ahead of the curve
  • Culture to create a great work environment

He explains that scaling culture has become more and more important with growth, as the company has been going through three different stages most startups face.

We started at (1) product phase, where it’s all about building the best fucking product. Then moved into a (2) service phase where it was all about giving our acquired users the best service possible. Now we’re at the (3)organizational stage, where building a well functioning business with different teams and functions. Here’s the focus on scaling culture maybe the most important key.

At a time when good work culture is uber important, the founders acknowledges that they’re facing challenging times as they grew from 50 to 150 employees in one year.

The magic number — 150

Oxford evolutionary psychology professor Robin Dunbar created a theory that humans only can maintain personalized relationships with 150 people, so it’s not without reason Robert says they’ve been struggling a bit with communication lately:

We are very aware that we’re crossing this magic line. Decision making based on consensus is not as effective as before and spreading information across the organization is a new challenge, so we need to add more structure in place.

The main challenge with adding structure, according to Robert, is to be efficient as an organization without killing creativity and the startup feeling.

The last year we’ve been focusing on redefining our vision, product mission and values, as this is a big part of creating alignment and improving communication and decision making.

Creating values is hard, especially if it needs to resonate with a lot people. So a while back the Typeform people sat down to draw out their company values.

First, me and my co-founder David met with the creative/content team and some other people to write a list of values that we thought made sense for our day to day. Then we published and announced the values to the company and we realized that some of the values didn’t resonate and that some others were confusing.

They needed a value revolution.

We decided to scrutinize the values with every team of the company and we realized that if you want people living the values, it’s better to make them participate so they feel more engaged and you don’t end up just hanging your values on a wall.

At the end, they threw away their first values and came together with the whole company up with a list of seven values that randomly formed the acronym: CHEF PIE.

Lunch roulette

Another key element when growing fast is making sure everyone get to know each other, no matter how big the team gets, says Robert:

Something we really focus on when growing fast is keeping founders and managers approachable, this is super important, and we are experimenting with several ways of making this happen easier.

One of the experiments is a Slack bot that matches random people for coffee breaks and lunches, so everyone gets to know each other better, also all the managers.

It’s actually been a real success. I love having coffee with people from the office I don’t know that well.

The Typeform barception.

When you walk into the Typeform office in Barcelona, the first thing meeting you is the barception (bar + reception) with free drinks and coffee served by the barceptionist. There’s also free healthy lunches, more benefits than your average day can handle, and a big lofty office.

You would think that even for a company that have raised $15 million in venture capital, this kind of spending would be over the top. Robert thinks the opposite:

Somebody told me that you’ll never over-invest in people. I don’t think investing heavily in culture is expensive at all, at least in our industry. Luckily we have investors that believe in that mentality as well.

Inclusion

The co-founders Robert and David along with the management team is learning as they go in terms of growing a huge, fast-moving organization. To succeed in their mission to make their product a little more human, there’s one element they need to do perfectly.

We need to include our teams as much as we can in the shaping of our culture, and continue to spend a lot of time, effort and resources on making people challenged, happy and at home.

As they’re planning on growing the team substantially the next two years, and with an additional office opening in the US soon, the ultimate test for Typeform lies ahead of them:

As we scale the culture of the company can change a little bit, but we don’t need to freak out about that, it’s like any person’s personality, it changes. However, we want to keep building an awesome place to work. A place where people can be themselves, be heard, innovate, and do big things together.

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T.

The reasons why Disney will dominate the media industry

The perception that Disney is only a producer of children’s content is long gone. The company has managed to multiply by 10 its market capitalization in 10 years and I believe it will do it again in the next 10 years based on 3 factors: content, the entry in new businesses and spillover effects on current businesses.

CONTENT

Disney has been making movies for almost a hundred years. They have been movies for all the family but targeted to kids, which are the ultimate decision-makers when going to the movies. This is an example of the classical content they were producing up until the last 10 years.

Found in Pinterest https://www.pinterest.es/pin/129548926755761740/

Despite having a powerful content library, Disney has amassed the most impressive collection of content in the world via acquisitions:

  • 21st Century Fox: 71B
  • Lucasfilm (2012): 4B
  • Marvel (2009): 4B
  • Pixar (2006): 7B
  • Hulu (2009): ??. They acquired 30% and an additional 30% with the acquisition of Fox

With the recent acquisition of Fox, there are only big four other movie studios left in the market: SonyWarner BrosUniversal, and Paramount.

Just to give perspective. This is the list of the top 3 grossing movies for the last 3 years. Spoiler, they are all from Disney:

  • 2017: Star Wars The Last Jedi (rubbish if you ask me), Guardians of the Galaxy 2 (not great) and Beauty and the Beast.
  • 2018: Black Panther, Avengers: Infinity War and Incredibles 2.
  • 2019: Avengers: Endgame, Captain Marvel and Aladdin (Still not counting with Toy Story 4, Spiderman, The Lion King, Frozen 2 and Star Wars: The rise of Skywalker)

Having content as an asset in the movie industry is relevant because of the fact that over 90% of every year’s Top Box Office Hits are not original. Notice that the 9 hits mentioned above are not original content, including Captain Marvel which is a character well known despite debuting in theaters. Moviegoers are risk-averse and showing characters the public is familiar with is synonymous of success in a market where the production of a movie can cost hundreds of millions of dollars.

Another essential part of the content are the actors. They give credibility to a movie and top talent can’t wait to appear on a superhero movie. Just look at the roster of Avengers Endgame with cameos from the likes of Robert Redford, Rene Russo, Michelle Pfeiffer, Michael Douglas, Natalie Portman, William Hurt, Samuel L Jackson or Ken Jeong, the Asian character on The Hangover. All of this without accounting for the main characters. Where else can you see this?

Source: https://www.editorchoice.com/avengers-endgame-cast/

NEW BUSINESS

One of the acquisitions mentioned is Hulu, a streaming platform in the US which also allows watching live content. I believe this is the future. Cable TV operators are doomed. The number of subscriber to Cable TV in the US has declined over the past years.

Source https://www.statista.com/statistics/536356/cable-shopping-networks-revenue-usa/

It’s clear the consumers are opting in to streaming on-demand platforms such as Netflix, HBO, Hulu, and Amazon Prime. That’s why Disney is launching Disney +.

This is a global trend. People across the world may not own a TV, but they have smartphones and internet connection. Netflix has launched a 3$ monthly cell-only subscription in India. Check this relentless growth of subscribers by Netflix.

Take a look at the last Shareholders report by Netflix, a public company that is burning billions every year -3,5B$ in 2019- and is expected to invest 15B$ in 2019 alone in new content. In my humble opinion, Netflix has by far the best streaming platform and the content is remarkably good, just look at the masterpiece Stranger Things season 3.

Source: https://s22.q4cdn.com/959853165/files/doc_financials/quarterly_reports/2019/q2/Q2-19-Shareholder-Letter-FINAL.pdf

Netflix will be the main competitor of Disney, who will claw back its content from other platforms over the next years, reducing the earnings of licensing rights, but attracting customers to their platform. I believe there will be a time where platforms won’t share much content, but eventually, this will rise opportunities for multiplatform viewing apps and some years from now, platforms will reshare content once they settled a loyal customer base. Users will be subscribed to multiple platforms and they would still like to watch what’s best in every one of them. It’s not a winner take it all market.

My final bet is that there’s another big piece of content that is currently slipping away from streaming platforms, live sports. This is the last resort of traditional TV and cable TV operators who have been able to tell customers when and where to watch TV. This is no more, TV is dead.

SPILLOVER EFFECTS

Let’s get some perspective here. Disney is a corporation that currently (2019) has annual revenues of around 70B$ and a net income of around 13B$ (15–20%). Where do they make money from? This is a comparison YoY between the fiscal years ended on September 30th. of 2018 vs 2017. All areas grow except for merchandising. Figures in B$.

Source: company reports

MEDIA

The main source of income is Media Network, which comes from ESPN, Disney Channel, ABC… Here’s the evolution of this revenue stream fro the last decade.

Source: https://www.statista.com/statistics/193211/revenue-of-walt-disneys-media-network-business-since-2008/

With the acquisition of Fox, this chart is going to experience a huge vertical shift.

PARKS AND RESORTS

Parks and resorts are the second biggest revenue stream of the Mickey Mouse company.

Walt Disney World Resort (Flick: Atiq Nazri)

This is a chart with the number (in millions) of yearly by visitors by each park. Around 150 million people go to a venue managed by Disney somewhere on the planet. This can only be achieved by a great hospitality experience and the best content:

Source: https://www.statista.com/statistics/194247/worldwide-attendance-at-theme-and-amusement-parks-since-2010/

STUDIO

This is the revenue that comes from the distribution of movies and music.

The chart below displays the Box Office market share evolution. Disney has managed to multiply by 2,5 in ten years, and now with the inclusion of Fox, the market share could get just shy of 50%, which is ridiculous. This is a major spillover effect from the massive content acquisition.

Source: https://www.cnbc.com/2019/06/14/disney-on-pace-to-earn-9-billion-at-the-global-box-office-in-2019.html

DIRECT TO CONSUMER

This is where the new platform Disney + will come into play. Disney + is a SVOD (Subscription Video on Demand) as far as we know. Other alternatives are AVOD (Advertising Video on Demand) where the users access for free but get adds (Youtube) and TVOD (Transactional Video on Demand) which is what Google is doing among others.

One of the first screenshots Disney shared for Disney +

So far they have had Hulu in this category, but with the introduction of Disney +, this will become of the main revenue streams for Disney. Eventually, the main one if you ask me. My guess is that in one year, Disney + can produce revenues of about 20B$ and grow from there. This is what Netflix is doing right now.

The advantage of Disney + is that they already have the content and they would only need to produce specific content for the platform such as The Mandalorian or the Marvel spinoff series with Black Widow and more. That would imply big operating profits since most content has already been amortized. The downside, however, will be the loss of the licensing revenue they get from streaming onto other platforms included in the Studio section. I’m betting this will be a money-printing machine.

CONCLUSION

Disney is a company that has endured through decades and over the last years has taken on a path of content acquisition and generation that pays off very well. This is why I am “hodling” on its stock.

Disney’s stock price evolution over the years