"It's about creating new market opportunities. Giving users new ways to be creative…We see our technology as a platform for other things" – Chad Hurley.
Like many other concepts that we now take for granted as part of our everyday lives, YouTube developed from a fragmented series of ideas and became the product of its own popularity. Rather than representing the result of a well thought out business plan, or a journey through the helping hands of various angel investors, the explosion of the ultimate concept propelled YouTube from an unknown to a household name in very short order. Cofounder and chief executive officer Chad Hurley is a graphic designer, but always had an eye for a business opportunity. Little did he dream, surely, that his first venture would be a beauty to behold.
Chad Hurley was born in Birdsboro, PA in 1976. He exhibited a keen interest in computers during high school, but an even keener interest in design arts. In 1999 he graduated from Indiana University of Pennsylvania with a bachelor’s degree in finance. Ironically, his first job position was at PayPal, another quick startup-to-Internet phenomenon. He is credited with designing the initial PayPal logo as part of his job initiation and was to go on to make a significant impression within the company, engaging two company engineers, Steve Chen and Jawed Karim to help him brainstorm his business idea.
The Web 2.0 revolution was really humming at that time and in 2002 auctioneer eBay bought out PayPal as part of its expansion plans. Hurley received a bonus from this transaction which he used, in co-operation with Chen and Karim to launch YouTube. Launch may be too grand a word, as the initial days of the company were spent in less than ideal surroundings, working from homes and in tandem with a couple of handfuls of dedicated enthusiasts, all working more for love than money. Chad was keen to develop something which had the chance to "affect people’s lives," and he had a keen eye for popular culture. He worked on a process of trust and friendship with his compatriots and his skills as a good motivator certainly helped in those early days.
YouTube did not really have a business model, although the team quickly came to learn that they needed core video upload sites to distribute videos in and around the community. It wasn’t too long before the concept became known within the blogosphere and suddenly went viral. YouTube went from virtually nothing to one million visitors per day in a very short space of time.
With some assistance from the former chief financial officer of PayPal, Roelof Botha, Hurley and his team were able to secure significant rounds of funding to fuel explosive growth. Storage and distribution of video files requires a huge server capacity, a team of very knowledgeable people and the ability to scale on an almost unheard-of level. Hurley basically created "a community around video," and the concept seems so simple, yet essential today. "I see our service as one that's been needed for a long time. The pieces to make it all happen just weren't in place until we came around."
YouTube was sold to Google in 2006 for $1.65 billion, with significant portions of the wealth attributed to Hurley, Chen and Karim. In addition to addressing the power of popular culture, YouTube has become the chosen marketing tool for corporations large and small. People love the moving image and they often opt to open a video file before a static file when they surf the net. There are clearly significant options for monetization, although Hurley has always said that "we’re building a community and we don’t want to bombard people with advertising. We’re not in a hurry. We’re trying to improve the experience for people on our site." Nevertheless, as YouTube now represents a significantly scaled search engine in its own right, "pre-roll" ads may yet appear when you click to view your favorite videos.
The YouTube of today likely represents only the tip of the iceberg, for as Hurley puts it, "everybody aspires to be a star."
Matthew Toren
