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How a Constant Growth Mentality Resulted in a Multi-Million Dollar Acquisition for This Entrepreneur

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October 8, 2020 9 min read

In this ongoing series, we are sharing advice, tips and insights from real entrepreneurs who are out there doing business battle on a daily basis. (Answers have been edited and condensed for clarity.)

Who are you and what is your business?

I am Rich Hull, Head of Streaming Platforms & Chief Strategy Officer at VIX, the largest Spanish-language video service available for free. I was the CEO and founder of Pongalo, which was acquired by VIX.

How did the pandemic impact the integration of the two companies?

Of course, no one is ever fully prepared for a pandemic, but we had previously spent a lot of time equipping Pongalo for many of the integration challenges that the pandemic ultimately brought. For instance, when the quarantine pushed everyone to their homes, many friends who work in traditional industries marveled at their new ability to successfully accomplish meetings over video. For us, though, we had shifted our mindset around in-person meetings two years ago and had already been highly leveraging video conferencing – both in our daily business routines and, later, as a tool to integrate Pongalo’s Los Angeles-based operations with VIX’s multiple offices in Miami, New York, Mexico and Brazil. Similarly, in 2018, Pongalo moved virtually all of its operational infrastructure to the cloud, which meant that, with the onset of the pandemic, we and our new colleagues at VIX were able to walk out of our physical offices and still immediately have access to all of our key systems from home. I think that operating a company using a growth mentality means that you must be constantly innovating.  So, as a result of our focus on proactively identifying better tools and methods, and then expending the prior effort to incorporate them into our workflow, the pandemic didn’t really disrupt our integration at all.   

Related: A Complete Guide to Prepare Your Startup for an Acquisition

How has the pandemic affected your business in general?

Ultimately, I think history will define 2020 by two important movements – diverse voices gaining new power and the surge in cord-cutting. We’re fortunate to be at the epicenter of both. Record numbers of Latinos across the U.S. and are at home watching our films and TV shows, so it’s a great time to be in the streaming business. To that end, our current challenges include providing those new users with a best-in-class experience through ramped-up content premieres, more customer service, and an intense focus on maintaining uptime for a platform that’s undergoing unexpected peak demand. We appreciate that kind of added responsibility, and I think we’ve been very successful at accomplishing all of those. In the case of content, for example, we quickly sourced and acquired the new Edward James Olmos film Windows on the World, which was planned for a theatrical release. We instead launched the film’s world premiere on our VIX streaming service to much fanfare and .  That strategy earned us a lot of attention, and it allowed our customers to enjoy a powerful film for free in their homes that they would’ve normally only been able to see at a theater.  

Founders often struggle to thrive within larger organizations after their companies are acquired.  How have you fared so far? 

To be fair, this is really the first time I’ve had a boss since I was just out of college. For years, I’ve said that I’m a leader who can also be led, so this has definitely been a test of the latter. And, so far, I’ve found it to be an unexpectedly fun experience. VIX’s CEO, Rafael Urbina, and I have focused on three things in running the business: splitting up the responsibilities to leverage what we each enjoy doing the most; collaborating on things where we make each other better, and teaching each other areas of the business that we didn’t previously know.  For instance, Rafael loves digging into data, whereas I like leaning into deal-making, so we split those up respectively.  We both enjoy leading teams, so we collaborate on managing a team of several hundred people.  And I think Rafael has enjoyed learning about film and TV content from me as much as I’ve enjoyed learning about using social platforms from him, particularly as we both try to innovate new ways to drive user acquisition from those social platforms to our VIX streaming service. I’m sure that I’ll get restless to jump back into a CEO chair at some point, but I’d say that we’ve found our groove and have created a successful partnership that has made the company stronger.

How did your background in the movie business prepare you to run digital media companies?

A movie is simply a startup. The details may differ, but the problems are the same. After 25+ movies, I learned to create products that audiences want, think five steps ahead, and deprioritize everything that doesn’t result in the successful delivery of the film. Likewise, movies are a collaborative art, so, earlier in my career, I had to learn how to navigate competing agendas within a team…while, later in my career, I had to learn how to build great teams. I wasn’t always successful at those things, but, hopefully, I succeeded more than I failed. In some respects, my previous film work was built on being an outsider who knew how to navigate the halls of the major media companies to get stuff done. So, in now running digital media companies, I think that those skills have allowed my companies to punch above our weight by creating seemingly impossible, successful partnerships with the major media players that are often off-limits to growth-stage companies.

What was the market opportunity you saw in the Hispanic streaming space that compelled you to start Pongalo?

My career has always been focused on two pillars: empowering diverse voices and innovating new ways to deliver content. Growing up in Texas, Hispanic media has always been a part of my world. When I really took a hard look at that space a few years ago, I saw an underserved market with a lot of pent-up demand due to the incumbent players largely ignoring the mobile and digital trends. So, I set out to create a Latino-focused digital media brand with mainstream appeal — and one that would disrupt the traditional media players.  After rebranding Pongalo last year as VIX, the payoff to that mission is that we’re now the largest Latino-focused player in the free streaming space.  Streaming is a great equalizer for underserved audiences, and that first-mover advantage we initially secured means that the traditional players are now playing catch-up.

Related: How to Keep Company Culture Alive After an Acquisition

You started Pongalo as a subscription service, but then quickly evolved into ad-supported.  Why?

I didn’t want to compete with Apple! I’m a believer that, if you’re going to fail, fail fast. I could see a lot of major players with deep pockets making noises about coming into the subscription space. Apple TV+, of course, was one of them, along with , NBC Universal’s Peacock and several others. These were all companies I didn’t want to compete with. At the same time, I saw the success that our friends at the free streamers like Pluto TV and Tubi TV were having with the general population U.S. audiences. The free model felt like a natural fit for the Latino market, and it felt like one that I could also expand beyond U.S. Hispanic to Latin America, which was a region that hadn’t yet seen any free streaming services of note. So, essentially, we used the successful Pluto playbook to create a Latino Pluto.

Related: How to Make a Successful Acquisition to Grow Your Company

What do you see as the future of streaming? 

The future of streaming will sit at the collision of advertising, international and content. First, we’re already starting to see the ad-supported and subscription streaming models coming together such that the former can become the free front porch for the latter. This is the driver of Pluto and Tubi’s recent acquisitions by major media companies, and it was a key part of Peacock’s launch story. Second, major U.S. platforms are being forced to accelerate their international presence, and we’ll see more of them integrate international strategies and infrastructure into their thinking around both their free and subscription platforms. And, finally, the smart streaming and streaming device platforms will service all of their efforts with well-funded, internal content studio machines. For instance, Amazon has already seen some early successes using Amazon Studios to drive content across its various verticals.  Those internal studio machines will supply both licensed and original content to a company’s free and subscription platforms.  In the past, these sorts of content studios could focus first on the U.S. and then expand internationally in success.  But, today, you have to integrate both U.S. and international content strategies in a studio from Day One.

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Business

Quibi, Short-Form Streaming Service, Quickly Shuts Down

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Quibi, the beleaguered short-form content company started by Jeffrey Katzenberg and Meg Whitman, announced on Wednesday that it was shutting down just six months after the app became available. The mobile streaming service offered entertainment and news programs in five- to 10-minute chunks intended to be watched on phones by people on the go, but it struggled to find an audience with everyone stuck inside their homes during the pandemic.

Despite raising a combined $1.75 billion in cash from each of the Hollywood studios, the Chinese e-commerce giant Alibaba and other investors, Quibi will wind down its operations and begin selling off its assets. It had searched for a buyer for the company but found no takers.

“Quibi is going to go down as a case study at Harvard Business School on what not to do when launching a streaming service,” Stephen Beck, the founder and managing partner of the management consultancy cg42, said in an interview.

The news of Quibi’s shutdown was first reported by The Wall Street Journal. Mr. Katzenberg announced the news to his 200-person staff on Wednesday afternoon. Quibi did not give an exact date for when the app would no longer be available.

“The world has changed dramatically since Quibi launched and our stand-alone business model is no longer viable,” Mr. Katzenberg said in a statement.

Ms. Whitman added that while the company had “enough capital to continue operating for a significant period of time, we made the difficult decision to wind down the business, return cash to our shareholders and say goodbye to our talented colleagues with grace.”

Quibi produced more than 100 original series, along with offerings like news from NBC and CBS, and sports programming from ESPN. Marquee names like Steven Spielberg, Sam Raimi, Antoine Fuqua, Jennifer Lopez and Chrissy Teigen were involved. But it struggled to attract subscribers from the start and those who did tune in groused that Quibi wasn’t giving them what they wanted. Consumers complained that the programming couldn’t be watched on television sets (something that became more important with people stuck at home) and they criticized the app’s inability to allow them to share content on social media, a feature that could have helped generate word-of-mouth excitement.

Quibi is also embroiled in a lawsuit with Eko, a tech company that accused Quibi of misappropriating trade secrets and infringing on a patent for the technology that allows viewers to shift seamlessly between horizontal and vertical viewing on a phone. The activist hedge fund Elliott Management has committed to funding the lawsuit.

And as the pandemic continued for months, the company’s backers began looking for a return on their investment.

One major challenge in trying to orchestrate a sale was the fact that Quibi doesn’t own any of its content. In an attempt to lure the brightest lights in Hollywood, Quibi offered each of its partners sweetheart deals where Quibi would pay both to produce the content and then to license the programming for an exclusive two-year period. After that two-year term ended, Quibi would still be able to show the programming on its app, but the content creator would be allowed to stitch together the short episodes into a television show or a film and resell it to another buyer.

“Katzenberg created something that was beneficial to content creators,” said Michael Goodman, an analyst with Strategy Analytics. “But when push came to shove, the market spoke that chunking up premium content is not what consumers want. They like short-form video: news clips, sports clips, beauty. There is a market for that. It’s just not a premium market. It’s not a new lesson but a lesson that has to be continually taught over and over again.”

Despite its shortcomings, Quibi did win two Emmy Awards last month, for the actors Laurence Fishburne and Jasmine Cephas Jones in the series “#FreeRayshawn” from Mr. Fuqua. Two of the company’s other shows also scored nominations: “Most Dangerous Game” starring Christoph Waltz and Liam Hemsworth, and a reboot of the comedy “Reno 911!”

“We continue to believe that there is an attractive market for premium, short-form content,” Ms. Whitman said in the statement. “Over the coming months we will be working hard to find buyers for these valuable assets who can leverage them to their full potential.”

Hollywood is marveling at the pace of Quibi’s demise. The company’s advertising campaign for its April introduction included a series of commercials featuring characters facing imminent death, whether by quicksand or from a zombie bite. They all had about “a Quibi” before disaster struck. In the end, the company’s life cycle didn’t last much longer.

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Mexico City Prosecutor's Office is looking for 100 professionals

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The organization opened the call for graduates of the Law career.

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October 21, 2020 2 min read

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

  • Applicants can register from October 19 to 23, 2020, on business days and hours.

The Attorney General’s Office of Mexico City, presented a call for professionals of the Law Degree. With this they want to incorporate 100 new people to strengthen the areas of investigation related to corruption, gender crimes, among others.

In order to apply, people must:

  • Having graduated two years ago.
  • Make a letter of reasons explaining your desire to work in the body.
  • Submit two letters of recommendation.
  • Be at least 25 years old.
  • Be of Mexican nationality and in the case of men have accredited the National Military Service, among other requirements.

The Prosecutor’s Office specifies that they are preferably looking for people with postgraduate studies in matters of gender violence, forced disappearance, anti-corruption or fighting corruption and electoral matters.

How do I register for the call?

Applicants may register from October 19 to 23, 2020, on business days and hours. The required documentation must be scanned in PDF format, each one separately. To consult it in full, you can enter the official website of the Institute for Professional Training and Higher Education.

Once you meet all the requirements, you must request your registration by sending an email to the address: ifprecysel.21@gmail.com , where you have to specify your full name, home phone, cell phone number, personal email and name of the call. in which you are interested (Gender crimes, crimes of forced disappearance of persons, crimes related to acts of corruption, electoral crimes).

You must attach the required documentation in PDF and Excel format, then a recruiter will be in charge of following up and attending to the registration request. Those who meet all the requirements will be given a registration sheet.

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Stimulus Deal May Come After Election, Pelosi Concedes

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Speaker Nancy Pelosi and top White House officials said on Wednesday that they were continuing to narrow their differences on a sweeping stimulus plan to provide pandemic relief to struggling Americans and businesses, even as the California Democrat conceded that a bipartisan deal might not be possible before the Nov. 3 election.

A nearly one-hour conversation between Ms. Pelosi and Steven Mnuchin, the Treasury secretary brought the pair “closer to being able to put pen to paper to write legislation,” a spokesman for Ms. Pelosi said.

And Mark Meadows, the White House chief of staff, said he was “still very hopeful and very optimistic that we’re making progress.”

But with time waning to cement an agreement that could be enacted in time for Election Day, both sides remained wary.

Mr. Meadows, who met with Senate Republicans on Capitol Hill on Wednesday, told reporters that lawmakers in his party had grown suspicious of Ms. Pelosi’s tactics and were “starting to get to a point where they believe that she is not negotiating in a fair and equitable manner.”

Ms. Pelosi said she remained upbeat about the prospects for a compromise, but allowed for the possibility that it would wait until after the election.

“I’m optimistic that there will be a bill,” she said in an interview on MSNBC. “It’s a question of, is it in time to pay the November rent, which is my goal, or is it going to be shortly thereafter and retroactive.”

Across the Capitol, Senate Democrats blocked a move by Republicans to advance a $500 billion plan that would revive lapsed federal unemployment benefits and a popular federal loan program for small businesses, as well as provide additional money for testing.

Democrats, who have argued the package falls far short of the level of aid needed, unanimously opposed it, and it fell short on a party-line vote of 51-44, failing to clear the 60-vote threshold required to move forward.

Mr. Meadows said earlier Wednesday that a call by Democrats for hundreds of billions of dollars more in federal aid for states and cities and their resistance to a liability shield for businesses remained the toughest obstacles to a bipartisan stimulus deal.

“The biggest issue remains state and local assistance,” Mr. Meadows said on the Fox Business Network. “That remains a stumbling block.”

The White House has proposed providing $250 billion to states and municipalities, Mr. Meadows said, while House Democrats have called for double that. He also said that the liability protections were a crucial priority for Republicans, and he chided Ms. Pelosi for resisting them, saying she was being “disingenuous” if she believed that his party would agree to any deal without them.

Ms. Pelosi and Mr. Mnuchin are expected to speak again on Thursday.

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