Beth Comstock: Failing Forward

I loved the story of Hulu in terms of how you fought for it early and fought for the right team. It’s interesting to see the iVillage acquisition play out and the lessons learned afterward. I’m curious what you learned from that. What enabled Hulu to be successful?

Beth: I almost called my book Fail Forward. My editor didn’t like it as much as I did, but I believe that it’s important. Hopefully, you believe it, too. But let me set the stage:

It’s about 2006. YouTube was just emerging, and the mood at NBC and traditional media was equal parts humorous and petrified. Humorous, like “Ha, ha, ha, cats playing the piano on video. That's just so cute. That is so cute. It's so charming. Ha, ha, ha.” And then it was like, “Oh my God. Total panic. We don't know how to make videos of cats playing the piano. What if this takes off?” So that was kind of the environment. Everybody rushed into doing things. Newscorp bought Myspace. A big play, and we were panicked. I came in six weeks in. We decided we were going to buy iVillage. It was a beautiful strategy. I sometimes think it could have been Facebook. It was about women and community. We wanted to marry it with the TV properties. The problem was, what often happens, it's a very expensive acquisition, probably way too expensive. It was old technology, but really the antibodies of the company at NBC killed it. Everybody tried to say, “But I can do this better. I wanna do this. I wanna create my own version of iVillage. I'm not gonna support you. I'm gonna do this.” And so it ended up being a free for all. The lawyers got involved. We wanted to move it to New Jersey for tax savings. We basically lost 50% of the staff when we moved to these beautiful offices that no one could work in because there was no staff. We basically almost killed it. So it was not a good situation.

It’s frustrating because you know something great could’ve come out of this. We still didn't give up on the cats playing the piano. Google ended up buying YouTube, which made us more panicked. Myspace cratered at Fox, too; they did the same thing we did. We knew we had messed up, so we decided we couldn’t do this ourselves. In fact, we each tried in the early days to launch Hulu on our own. It was a mess. We needed an outside entrepreneur. One thing led to another, and it took us Jason Kilar, who's coming out of Amazon. He founded Hulu. If we had done it, it would have been a clown company. Jason made it Hulu. And what did we learn from that? He needed an entrepreneurial mindset. He needed to have all the ability to take the gems from the mothership and reject any of the bureaucracy and the B.S..

I'll give you a couple of examples. We had made this beautiful video player at NBC, spent a lot of money. We said to Jason, “Good news. You don't need to invest in a video player.” He replied, “Oh my God, that thing looks like Times Square. I'm not going to use that.” We had to write it off, and he had to invest money in creating something that became beautiful. He went without revenue for about a year, made everybody crazy, but he had the right to do that. My job was to protect that team and fight within the mothership of, "No, we're going to give them Hulu." We're not going to give any stock.

We needed to create space for that challenge of branding, and a different set of running rules, and we needed champions willing to take the arrows inside.
I've learned enough in the failure of iVillage, that I knew where to fight, and where the trouble was going to be. In some ways, we needed that failure to understand what the success was going to be.

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