Partnering with Houseparty: Building the Internet’s Living Room

Sequoia partnered with Houseparty in 2016 and in 2019 the company was acquired by Epic Games.

Editors note: This piece was originally posted by Mike Vernal on Medium

Social communication used to center around the land line. After school, teenagers would go home and camp out on the phone with their best friends.

The past twenty years have seen a complete rewiring of social communication. Real-time, asynchronous networks like Facebook, Snapchat, Instagram and WhatsApp have 100x’d both the frequency and breadth of our communication.

But these networks have trade-offs. In enabling you to broadcast to the entire world, you lose some of the magic and intimacy of a face-to-face conversation.

When we first met Ben Rubin and Sima Sistani, it was clear they were on a mission to fix that — to connect people in the most real, human way possible when physically apart. And they were willing to run through walls to make it happen.

We’re excited and grateful to be on this journey with them. I sat down to talk about how they got here and where they’re going.

The Pre-Party

BEN RUBIN: I’m originally from Israel. I grew up there. I went to the army when I was 18. But I always knew I wanted to become an architect. Shelter is one of the earliest products in the world. It’s something people use every day. I wanted to work on that.

What drew me to architecture was the ability to create encounters between people in a space. A cool building is alive. You see it with the Pompidou Square. You see it with buildings by Herzog De Meuron, Foster and others. Good buildings work in all scales — from the neighborhood to the floor plan.

What I’ve realized is that apps are just like buildings. They have a function. They are a living organism that need to coexist with their users.

When studying architecture, you also learn about art. In the third year, we were focused on the pop art movement — Lichtenstein, Warhol and others. Instagram was just taking off. For me, the little squares and the fact that people can share a repetitive image of themselves at scale to the masses, it was just like the epitome of what Warhol was talking about.

And I thought, “I can do the same thing in architecture …” which is a physical space for synchronous interaction. So I decided to build a live video product to do just that.

In a sense, Houseparty is one of the largest buildings in the world. It has rooms. It has people that are meeting other people. It has people that are falling in love and out of love. People spend a meaningful amount of time every day and we have a building that does all these things.

The First Iteration: Yevvo

BEN: We started with a one-to-many product called Yevvo, which is a very Israeli name for a live video product. It had this cute, little owl, and it basically let you go live to whoever.

Yevvo had something called Flashbacks which meant that as you were streaming, you would click on the screen and it would take screenshots of it. You would swipe and it would do a stop motion of the host, and people would comment. And you were able to tag locations, add hashtags, tweet, and go live.

This product was really the first time I got to be “in the kitchen” — and I just wanted to cook everything. I wanted to do all the features and I think it really slowed down our team’s learning curve.

Some people were using it and it started to go viral in places like Brazil, Mexico, and Sweden. And then it all died out.

We tried to understand why and I came across James Currier from Ooga Labs. And I said, “Look, I have this problem. I really believe in this thing, but I think I’m doing too much. Can you guide me?”

He said, “Break it down to all the use cases. Take the tech that you built on Yevvo and try to build the simplest app ever for every use case, and every two months, release something else.” Obviously, it was part of a much larger conversation, but that became our plan.

One of the things that happened on Yevvo was somebody going live and tweeting in a Lady Gaga concert with the hashtag of the show. Then, the huge fan accounts started retweeting that stream and more and more people watched from the web. So that was one instance where we realized, “Okay. That’s one use case, an app that is just to go live on Twitter.”

Next up was an app we wanted to call Five Tomatoes — Five Tomatoes is how you remember how many feet are in a mile. When you opened the app, everyone within a mile would get a push. When they responded, you’d have a conversation.

Another thing was based on our own experience with our families. We thought — what if you can broadcast to just people you care about?

The Next Iteration: Meerkat

Our cofounder Itai said, “I’m going to do the ‘tweet live video’ version. It will take me four weeks.” What was nice about this new product was that a lot of things were super obvious because the limitation was to make the simplest product ever.

The question we were facing was, “Can we build the product that from sign-up to go live to your audience will be one click?” We ended with two clicks, but two clicks to sign up and go live to your audience was an amazing innovation at the time.

And that was Meerkat! Tweet Live Video. You download the app, you sign up with one click, you go live with one click. And then after that, it’s only one click to go live every time.

The rest of the team was working on the one-to-few model of private broadcasting, a project called Air. But Itai and I were just like, “Let’s do Meerkat.”

For every stream, you couldn’t decide not to tweet it. We were okay with it because the name of the product was Meerkat: Tweet Live Video. Itai noted that if every stream is a tweet, we can make every comment a reply to the tweet and we can make every re-stream, which is something we had in Yevvo, retweet. We can make every “like” a favorite.

Now, at this point, I was very cautious with telling the board that we’re doing all these different experiments, because in their mind, we committed to Air. But Itai was like, “Look, all the backends work. I’m good at just being in my own room and hammering stuff out, so I’m just going to do a different project.” He finished before the rest. He finished after eight weeks while the rest were still four weeks away from launch.

I sent Meerkat to the board and I think they were interested but also a little bit annoyed that there were multiple pots on the stove.

We launched Meerkat in February 2015. It took on a life of its own. (Air was introduced and completely flopped, so we just moved everybody to work on Meerkat.)

The app really blew up at South by Southwest. I’m very happy that I had to shut down two different products before Meerkat. Had I not, and given all the attention, I would’ve probably been the biggest douchebag on earth talking to all the reporters. So luckily for me, reality shaped how I view success.

SIMA SISTANI: I first met Ben at South by Southwest. I was there speaking about the end of live within the context of media. And during that Q&A, the guy who was moderating just had his phone out the whole time. And afterwards, he told me he was Meerkating and I was like, “What is that?”

A mutual friend introduced Ben and I at a party. We got to talking and I was delighted to discover that he was down-to-earth, even though he was the toast of the town. What instantly attracted me to Ben and Itai was they had this dogged focus, they were really optimistic, and they had a clear mission. For someone who had spent most of my career at the intersection of media and tech, I had a feeling. If the last decade was about sharing, then the next would be about participating.

Maybe Meerkat wasn’t it, but I believed this was the team to figure it out. Meerkat may not have ultimately been a success, but it definitely moved the needle for mobile live video. And it gave us the foundation for Houseparty.

The Pivot

BEN: Three months after we launched, we had a very simple product which was about tweeting live video. But then we saw that the retention of the broadcaster wasn’t there.

And while the news was celebrating this Twitter versus Meerkat story, we were able to see that for millions of users the simple value prop was just not working. People are just not that interesting. If you’re the 1% who is a celebrity or in the media, there is a useful utility for you in live video, and if you’re the 99% like us who is just normal person, we get excited from the first time we go live, but after that you stop unless it’s a special occasion.

Four months in, we made a decision to pivot.

It’s an interesting dynamic to raise a lot of money and then go to the board saying, “Look, it’s not going to work because in order for it to work, it either needs to be a feature on top of an existing platform or we need to have this media use case.”

Periscope and Facebook are coming, they’re going to have the media use case. If we want to focus on people where it’s not a media use case, we need a fundamentally different product. And to their credit, the board asked a bunch of questions, but they ultimately supported it.

The whole company was now focused on the new proof-of-concept which was basically an app that whoever has it, when they open it, the rest of the people get a push, “Somebody’s online,” and they see each other. By October, everybody was working on that. In March 2016, we had a stealth beta and started showing it to schools.

Houseparty

SIMA: When we saw we couldn’t get users engaged, that’s when the entire team sat down in a room and talked about what people were really enjoying. Everyone had a story of when my friend joined my stream or my mom went live. It was about your real-life friendships and connections.

What came out of that was this concept of making it about one-to-few or few-to-few; flipping the synchronous model to just your IRL network.

The phone call and social behaviors around it haven’t changed in half a century, despite major changes in technology. When you think about it, we just took all the trappings of landline calls — call waiting, conference calls, answering machines — and applied them to our mobile phones. In a world of News Feeds, phone calls feel like a weird intrusion on someone’s time, but people still crave human interaction.

My brother, for instance, he’s 10 years younger than me. My parents are 20 years older than me. I could never get them to Meerkat. But they couldn’t stop using the proof-of-concept that became Houseparty. Everybody here has a story like that that gave us the confidence and emboldened us to quit Meerkat even though everyone was still talking about it.

Ultimately, our mission is to connect people in the most human way possible when physically apart. That never changed.

The hypothesis for solving that through broadcast live video, that failed. And instead, what we figured out was it’s going to be not broadcast. It’s going to be this private synchronous social network that with presence at its core, rather than calling.

BEN: What was great about having Sima on board and why we’re very blessed that she didn’t run when it was clear Meerkat wasn’t working is that she was able to take part of the team and make them a complementary arm to the product/market fit research.

They had this goal to be in a new school every week. And we had a goal in engineering to get a new version or a tweaked version of Houseparty every week. Each week we would go to a new school and we would get this feedback about Houseparty.

For instance, there was no way to tell other people to come online, so we added the “Hi.” And then there was not enough privacy, so we added the Locked Room. And then the notifications didn’t work, so we kept tweaking the notifications because they were too much. All of those little things are a result of six to seven months in beta where Sima and team would go to schools in the Midwest and the Southeast to get feedback and we would react to it.

That could have easily been a three-year period. But because we were able to get feedback on a weekly basis from new users it accelerated and reduced that uncertainty.

SIMA: Then there was a viral pop that took place in May 2016.

BEN: It was the first time we realized that our backend couldn’t hold thousands of people at the same time. We figured out that we needed to have the whole team in the same place and we needed people experienced with scaling the backend. We decided to move our operations to the States and rebuild the team here.

Around September last year, we started growing again. But because we just moved our operations here, we only had three engineers on the team and we were growing 20–50% week-over-week. We had three engineers supporting a million daily active users. And then we started growing even faster than we imagined and that led to even more issues of scale.

SIMA: This was actually when we decided to come out of stealth. We had actively pursued a go-to-market opposite of Meerkat — no PR, no influencers, no hype. That was a recruiting nightmare. We were having difficulties hiring because everyone thought of us as the Meerkat team even though it had been a year since we had written any code for it. We would say, “No, no we have this other product that is even bigger than Meerkat.” We had so much to explain.

BEN: Around December last year, Vernal and I had this conversation where we said, “Do we want to be a place where we continue releasing product features right now or do we want to fix the problems?”

Now, I think it’s dangerous when people say, “We need to make it perfect before we move on.” But we were at a point where we were dropping 30–40% of the sessions, and people were still using it. We made a decision to not build product, which was tough because we felt the need to constantly give our growing user base new things.

The first half of the year was rough. We were in full feature freeze while we rewrote the app — a complete rewrite of two clients and a backend, all while millions of users were using it. Once we rolled it out, you literally see the moment that the entire system stabilized.

And then we could finally get back to our roadmap, releasing new features again, and since then our growth is accelerating, which is great.

We’ve built an amazing team, we have a new head of engineering who joined us from Spotify, and we’re back shipping features which is great. But it’s not easy. People think things are easy. It’s not. But it’s fun.

SIMA: Do people think it’s easy?

BEN: People always think things are easy.

“The Best Career Advice I Ever Received…”

BEN: People don’t want to be impressed. They want to feel valued. And for me, I think trying to impress shows you are focused on the wrong things. We have a saying here at Houseparty that ego is the most expensive thing, and I fully believe in that.

SIMA: For me, it was my managing director at Goldman Sachs. It was my first job and I remember when she sat down with me, I was thinking about doing something else.

She said, “You will spend more of your life working. Not sleeping. Not with your family. You better love what you do.” And it’s led me on a wild career track, but every morning, I wake up so excited to be where I am. So that’s far and away the best career advice I’ve been given.

The other thing I’ve been thinking a lot about recently is that there’s no one way to do it. I think that as an industry, we’ve done a poor job of showcasing all the various types of entrepreneurs that exist out there.

And part of that is because a lot of the best of breed are coming out of Y Combinator and they very much espouse, “You live together, you eat together, you breathe together. You’re on ramen until you grind and you find it,” and that’s great. That works for some people. But not everybody can do that and Ben and I are really different. We complement each other, and I think that there’s something to be said for being a well-rounded person, for having time outside of work. That makes you think more creatively and bring new ideas to the table.

For me, if you’re eating ramen and living and breathing your cofounders and nothing else, you’re not going to be able to rise up enough to see above the clouds. So that is one route, but there are others, and I think we can all do a better job of showcasing those people as well.

The Future

BEN: I think for me, it’s very important to get into a cycle of thinking about what is the best next thing for the users, and putting it out there and seeing people use it. I think it’s an important part of maintaining and growing your platform that, because of all the challenges, we haven’t had a chance to have yet.

SIMA: We have an awesome team, millions of users right now who love our product, and we’re trying to understand, even better, why they love our product, why they get it and how we can help others understand that better.

Join the party at https://houseparty.com/