The Strange Origins of Live Streaming: Twitch's Michael Seibel & His Co-founder Justin Kan

0:00He talked about wearing a camera on his head and broadcasting his life 24-7. I think there was clear consensus whenever you describe that idea to somebody that it was a bad idea. But weirdly, that didn't stop it from happening, which I still don't know how to explain.

0:20Justin Kan:Welcome to Leap Forward, a show about founders and the people who believed in them before anyone else. I'm David Rosenko, and on today's show, Michael Seibel. Now, live streaming feels so inevitable today, but it wasn't that long ago that everyone thought it was a horrible idea. And the way it came about was just like this very strange and interesting story. Two friends on a college road trip decided to start this live reality TV show by strapping a camera to a baseball cap. And they tried to get Michael to join in. I was like, you should stay and join this company. And he was like, no, thanks.

0:56Justin Kan:Thanks, but no thanks. And then he flew back to the East Coast. Michael quickly changed his mind and flew out to San Francisco to work on that startup, Justin TV. The show didn't last long, but it also kick-started what would eventually turn into Twitch and invent the phenomenon of live streaming, a market that's now worth over a hundred billion dollars. Today on the show, how one bad idea with ten years of persistence revolutionized entertainment. And now, Michael Seibel.

1:35Justin Kan:So let's actually go all the way back. Let's start at the beginning. And just like, can you describe your childhood to us? Where'd you grow up? What was home like? I grew up in Brooklyn, New Jersey for the first nine years of my life. And both my parents worked. My dad worked in IT for Merrill Lynch and my mom worked in banking. She was an assistant manager at a bank branch called EAB. Do you have any kind of memories of what your parents did for work? Kind of, you know, remembering as a kid what that looked like from the outside? For my dad, my core memories was he was a storage engineer at Merrill.

2:13Like he was the one who taught me the term like terabyte. He was a computer guy. We had a computer at home my whole life. And my mom, I remember her having like equally as challenging a career and like trying to work her way up to a bank. Neither of my parents graduated from college when I was born. My dad went back to school and did night school at NYU. But they were kind of two young people. They were, I guess, 22 and 23 when I was born. So kind of two young people trying to be professionals, trying to make their way in the 80s in New York.

2:49Justin Kan:What kind of kid were you? Like, what were you interested in? I liked my Nintendo back then. I liked my Game Boy. My mom lied to my dad so I could get a pair of Reebok pumps. I don't know if anyone listening to this is like 45 years old, they'll understand what I'm talking about. Likes basketball. I was a big Michael Jordan fan growing up, and my mom and I would watch basketball a lot. Yeah, but otherwise, I don't know, unremarkable. Do you remember what you wanted to be growing up? Yes. In high school, I thought I wanted to be a constitutional lawyer and Supreme Court justice. I was in a school that taught a special kind of class on constitutional law that I really liked.

3:37And that's what I thought I was going to do. That's what I told my parents I was going to do. And that's how in their minds they justified Yale, which I think cost$35 ,000 a year at the time, which sounded crazy.

3:48Justin Kan:I mean, that was a lot of money back then. So you go to, yeah, what was college Michael like? Were you doing a lot of studying? You know, do you actually manage to have some fun? College Michael stopped working. High school Michael realized he had to work really hard to get into college. College Michael realized that the classes were kind of useless. And so, yeah, no, I think I almost completely opted out of school. I think the other thing that became clear was that law wasn't exactly what I wanted to do. I got more exposure to people who were actually lawyers and learned more about what their jobs were.

4:24And it did not seem as fun as debating constitutional law cases in front of the Supreme Court. I learned that that was a small, small subset of lawyers.

4:37Justin Kan:When did you realize that? What did you think you were going to do once you realized that? I think I realized it freshman year. I had no idea what I was going to do. did you ever figure out like hey i'm gonna go into x or is it just i i don't know what was interesting was yell was much more about what i didn't want to do it didn't seem like i wanted to be a banker or a consultant which was kind of the dominant path i think for a while i thought i wanted to do peace corps but not really i knew that i was interested in politics so i knew that leaving school. I wanted to work in a political campaign, but I didn't want that to be a career.

5:16I just want that to be experience. But it wasn't well thought out. Like I definitely 100 % did not have a plan. And to be honest, I don't think I was exposed to anyone that I wanted to emulate. Like, you know, there wasn't, I didn't see anything around me that looked very exciting to do, which looking back is interesting. And so I also feel like during Yale, I kind of had to learn how to become an adult, you know, that was probably my biggest takeaway. And then my second biggest takeaway, which I did not realize at the time was meeting my future co-founder, Justin Kahn. So looking back, becoming an adult, meeting Justin were probably the two biggest, uh, that's what made the money worth it.

6:00Justin Kan:What's up? I'm Justin Kahn, internet entrepreneur, your favorite founder's favorite founder. And I'm, that's it. I met Michael back in college. I think it was 2003. He was a fun, motivated individual. We got along really well. We would just hang out a lot, play World of Warcraft. We became pretty close friends pretty quickly after we met. So do you remember the very first time that you met Justin? I don't remember the very first time. I remember the first time he made a true impression on me, which was we were in the party suite in our college this place called the god quad we hosted these parties my senior year my first senior year because i was on the yale five-year plan and we had enough alcohol to serve half the university probably but justin was concerned that we might run out of alcohol so when he showed up to our party he was the only one i'd ever seen who brought alcohol to the party, which I thought was quite funny.

7:04But we didn't actually become close friends until I was asked to leave Yale at the end of my first semester of my senior year. And, you know, the God Quad now had a bunch of Yale 05 kids in it, and I was in a single. And he kind of embraced me and introduced me to the group, and I became friends with those guys. Those are still some of my closest friends to this day.

7:29Justin Kan:So we have a queued up thing from Justin. Lovely. So here's him telling the story of the first time that he remembers meeting you. Oh, Jesus. He had this party one night that was like a dinner where he made sushi. I think I met Michael then, yeah. Crashing his sushi party. We'd go out together a lot. I would get drunk and then challenge him to wrestling. And then Yale's cold. It's in the Northeast. So I just remember getting thrown into snow banks a lot. Yes. Yeah. Picture that. Yeah, me ripping my shirt off and being like, I'm going to tackle you and then like getting thrown into snow bank. That was maybe our average night.

8:09So I feel like Justin is mushing together a number of years. So one, I definitely did have a sushi party my junior year. That would have been his sophomore year. He was not invited. I don't even remember him being there.

8:21Justin Kan:He said he crashed it. He was not invited. He crashed it. We were not good friends at that point. And then those snowbanks, he was on the Yale rugby team, which is like interesting because I wouldn't say Justin's a small person, but he's not a rugby-sized person. And so he would try to tackle me, and I'm like very big compared to you. It didn't work out well. But no, we had great times together. Yeah, we got together. on each other, like come over to my room and he was kind of watching as we worked on our first startup. And he was like interested in starting companies. So he was kind of like watching as we were working on this company for about a year, end up failing.

9:04Justin Kan:So at that time we were winding up our failing company and we had this idea for Justin TV, which is where I was going to stream my life to the internet 24 seven. So I want to switch over to Justin TV and the idea behind Justin TV. Justin's recollection is that the first time he told you about the idea was in DC at a dinner that he was at with his dad and you. And he remembers as soon as he told you, you said, that's a really stupid idea. Yeah. Do you remember that dinner? I do. So I was in DC because at that point I was a fundraiser for a US Senate campaign in Maryland. He went and did this political campaign where he's like the head fundraiser, which is crazy because like now that you think about it, like making your fundraiser like a 23 year old or 22 year old is like, I mean, I think that campaign was destined for failure.

9:57We were hosting a fundraiser in DC and I actually asked Justin, so he came and actually helped me staff this fundraiser. And so after that event, we had this dinner and, you know, he talked about wearing a camera on his head and broadcasting his life 24-7. And that is a dumb idea. I think there was clear consensus whenever you described that idea to somebody that it was a bad idea. But weirdly, that didn't stop it from happening, which I still don't know how to explain. Like, I feel like we just glossed over the, this is definitely a bad idea, and just like, acknowledged it, and then moved on towards, okay, well, that's what we're doing.

10:35So let's, So how would we do it? But by that time, I couldn't imagine working in tech. I couldn't imagine living in the Bay Area. I couldn't imagine working with Justin.

10:44Justin Kan:He said that kind of the very start of it for you with Justin TV was that you'd never been out West and they were driving out West. Yep. So this is after we lost our primary. I hadn't taken a vacation. And Justin and Emmett had told East Coast Friend Group that they were going to be starting a new company and they were going to take a road trip out to California. Months later, I'm like, okay, now I'm moving out to California to pursue my dream and start this company, Justin TV, with Emmett. So I emailed my friend group like, hey, we're going to go do this. And he responded back to this email like, hey, can I come on this road trip?

11:22Justin Kan:And so we're like, yeah, I guess so. You know, we're driving Emmett's Honda Civic. And the back was filled with our stuff. But we like end up throwing out like one person's, you know, worth of stuff, clearing out a car seat. And then he got in and we picked him up in New York. And then he came out with us to the West Coast. I still to this day have no idea why I invited myself on this road trip. Like they weren't asking for like other people to come. It was more of like a notification to everyone of what they were doing. But I was like, oh, that sounds crazy. And like, you know, road trips, like when you're young, I guess that sounds cool.

12:00And so I asked them, hey, can I join? And they said yes. And then I asked, so what's the plan? Like, well, you know, it's going to be my vacation. What are we going to do? And, you know, Justin was like, we're going to get on Route 80 and drive straight for four and a half days. It was the first time I was west of, I don't even know, probably the first time I was west of Ohio. It was great. Do you remember what month that was? Oh, I do. That was very early October 2006. 2006. And I remember it because it was right before my birthday. My birthday is October 7th. So the first thing I saw in San Francisco was I was driving over on the Bay Bridge.

12:42We stopped in Treasure Island and we looked over at the city and it was Fleet Week. And so the Blue Angels were actually flying over the city practicing for their event. And it was October and it was probably 70 degrees. And I was like, it's sunny. It's 70 degrees. There's fighter jets flying over. This is like a magical plane. I haven't even stepped foot in it yet.

13:05Justin Kan:So at that point in time, you were just on for the road trip. Just a vacation. So then you fly back home. Well, two things happened. So my birthday, I guess at some point I mentioned that I had always wanted an iPod, but I never bought one for myself. And I don't know why. I think it felt like an extravagance or something weird. I don't know. That sounds silly. Can be a mouth mouth. And so for my birthday, Justin bought me an iPod, which was weird. Because dudes don't really give gifts to each other in their early 20s. And then he drove me to the airport. Remember, this is pre-Uber. And on the way to the airport, he asked if I wanted to join the company.

13:46And I guess a little side note, Justin and Emmett were starting to set the company up that second week that I was out there. And so I helped them open a bank account, helped them find an apartment. And I guess they found those things to be useful.

14:00Justin Kan:Yeah. He was like, you have no idea what you're doing. You have no like plan. And so he started like finding us an apartment and stuff like that. He was just trying to be helpful. Like after a while we were like, Hey, you should just work with us. And then he said, no, absolutely not. And he was like, no, thanks. Thanks, but no thanks. And then he left and flew back to the East Coast. I told him no. And he told me, just think about it. And so with that in my mind, I fly back to Baltimore. Maybe about a week later, Justin sends me this PDF from this guy named Kyle Vogt, which was the first design of the Justin TV video camera.

14:39and it was going to be this camera that Justin could wear that could stream live video anywhere he was in San Francisco. And Justin was like, look, we have$50 ,000 investment from Y Combinator. We have this kid who's going to build the camera. Me and Emmett are great software developers. How could this not go well? It seems baked, right? And I remember thinking to myself at that moment, every other thing I could do would be available for me to do later. And this is like, when is the next time your best friend's going to ask you to start a company with him? Like, this is the once in a lifetime.

15:24Justin Kan:More after the break.

15:32What are the consequences of getting on Europe's bad side?

15:36Justin Kan:The rationale is more like, f*** those guys. How is stealth wealth changing retail? You can have taste and still buy jibs. What does a$6.2 million banana have to do with any of us? People don't like the attribution of serious financial value to comedy. Join me, Felix Salmon, and my co-hosts Emily Peck and Elizabeth Spires as we talk about the most important and obscure stories in business and finance. Follow Slate Money wherever you like to listen. And now back to the interview. And so I had to get out of my lease in Baltimore. And by November, I was sleeping in the living room of the apartment that I had helped them find in North Beach in San Francisco, Crystal Towers.

16:26Justin Kan:You know, at the time, Michael was like sleeping on the balcony, actually. We were like, Emmett and I were sharing a room. It was, you know, very, it was very scrappy. Like two bedroom, you know, maybe, maybe a thousand square feet at best. Maybe, maybe. So you're, you're sleeping on the balcony. It's a mad house. You know, you're trying to run this live show, you know, with Justin as the star. Like what, what are your recollections from those early days? You know, my first recollection was we didn't have anything. Like we didn't have a website. We didn't have chat. We didn't have a camera. we certainly didn't have much for me to do as the sole kind of quote-unquote business guy so i think i was probably adding negative value for the first three or four months i would like help with cooking and cleaning and you know stupid shit and as we were getting closer to actually launching i remember i was i was responsible for negotiating some of our sponsorship deals.

17:26We got an energy drink to sponsor us, but the entire sponsorship involved them giving us one case of energy drink and a poster to put on the wall. And then the show launches and suddenly there's a lot to do. You know, the press was interested. He was on the front page of the Chronicle. He was on the Today Show. Like it was just like, boom, boom, boom, boom, boom, boom. So we had all these PR stories and it was exciting. I would say that it was the feeling I didn't know I was looking for, which is, hey, you're kind of master of your own fate here. You know, you're not waiting in line. You're not waiting in turn.

18:03This isn't like an East Coast. If you work really hard and you kiss the right guy's ass in 30 years, you get to do stuff. It's like, you get to do everything right now. Good luck. Don't fail. Everyone fails, by the way. and so it was great and then also it was just a community of people doing a startup in san francisco wasn't weird everyone was supportive you saw people ahead of you you wanted to emulate you saw people behind you that you wanted to help inspire it felt not only the right thing to be doing it but the right place to be doing it but yeah like our apartment was a shit show like Like, Kyle had these massive tables in the living room where he was soldering, like, the new camera build that he was doing.

18:45And the camera would break every couple days. He'd have to repair it. And, you know, Emmett would be writing code. And Justin would be running around the city. And back then, my job was producer. So part of my job was to figure out interesting things for Justin to do. And, you know, suddenly it was a thing that was happening.

19:02Justin Kan:Here's a little clip from Justin describing that sort of early show. We like went and visited a bunch of French startups. We were invited to some events. I can't remember. I think I went and hung out with a personal shopper. We went shopping. As I recite this, this is not, didn't sound that interesting. You know, it was like a really mid, like a D-list reality show we're talking about. Yeah. I think that we thought of ourselves as interesting and funny people. And maybe there was up to an hour of interesting content a day, but the show was 24 hour show. So I think pretty quickly, a couple of things were happening.

19:42The bills were piling up. Money was running low. We were not growing and we realized we weren't great at creating content.

19:50Justin Kan:It definitely got a lot of attention. We've did a lot of media around it and people were coming to check it out because they were like, what is going on? It's crazy. We got a lot of people were swatting us and like calling 911 all the time. You know, So for context, we all lived in the Yscraper when we were starting Weebly. I think we were maybe a few floors above you. There's a whole cohort of people, you know, the Reddit founders, Dropbox founders that were living there at the time. Maybe one of my biggest memories was the famous swatting incident where someone into the live show called in a stabbing into the apartment SFPD thinking someone had just gotten stabbed, barged in with guns blazing.

20:25Justin Kan:I assume that's probably a memory that you won't forget easily. You know, what's really funny about that is that I wasn't there. I saw it on Justin TV later as a clip, but I was in a different apartment at the time, and I probably only showed up about an hour later. So I was not a victim of the swatting. But coming into the room after that, everyone was quite freaked out. And there were a number of pranks. I mean, I think six fire trucks got called because they said there was a fire in our building. There was the Y Combinator startup school conference where they said there was a stabbing and a bombing there.

21:12And so that was an issue. Someone ordered 100 pizzas. yeah, it was, it was interactive. It was, it was an experience for sure.

21:24Justin Kan:Do you remember the last day that you were streaming and what it felt like to turn that camera off? It was kind of like died with a whimper, not a bang in that there was a lot of exciting stuff that happened in the beginning. You know, we planned like one week of content basically, and they like ran out of content. So eventually like traffic slowed to a trickle people, it was not retentive, right? People like come, they log on, I'd be sleeping or, you know, sitting there on the computer and they'd be like, this is the most boring entertainment I've ever watched. And then they would move on with their lives rightly.