Should more founders listen to their inner pessimist?
Amanda Eilian, co-founder and president of New York-based Videolicious, said this trait is critical to success. “Pessimism is actually a positive thing as an entrepreneur,” she said.
She spoke Friday at the Cornell Entrepreneurship Summit in New York, a daylong event that included Hampton Creek CEO Josh Tetrick, and Brandon Steiner, an old-school Brooklynite who literally found a way to make a buck selling dirt as CEO of Steiner Sports Marketing & Memorabilia.
Eilian’s message was more about not believing one’s own hype, and less about walking around grumbling that everything sucks. Videolicious developed software that lets businesses easily create professional-quality video, without hiring a third party to do the work.
In these days of startup hype, frothiness, and rumblings of the next downturn, Eilian had a solid point. Some of the overinflated expectations that surround entrepreneurs can make it sound like they are skipping gleefully through Candy Land. “Entrepreneurs are supposed to believe they are growing unicorns overnight,” she said. “Any article you read on entrepreneurship will tell you optimism is the number one success factor.”
Eilian said healthy pessimism helped her after her company got started in 2007, and she and co-founder Matt Singer made the rounds to seek potential investors. They landed a meeting with a high-profile West Coast venture capitalist, flew out to California, and gave a pitch they thought was compelling—only for the investor to leave without asking any questions.
Believing it was a moment of triumph, Singer raised his hand for a high five, Eilian said, but she knew the truth. “If they don’t ask questions, that’s a really bad sign, not a good one,” she said.
The duo never heard from that venture capitalist again. Despite that early rejection, Videolicious has survived. That is why Eilian called pessimism “the ability to imagine the absolute worst thing that could happen, and then innovate around it.”
The original plan for Videolicious, she said, was to bring professional-caliber video editing to the masses, but that idea would be tough to scale up. The company signed up a diverse range of clientele, including a record company and a hotel chain, then decided to double down on the retail space and pitch the service to large retailers. But that was not enough for Eilian. “We had revenue from day one,” she said. “Even if we got 100 of the nation’s top retailers, it wasn’t everybody. We weren’t achieving the scale we thought we could.”
She also had worries about the tenuous relationship with her company’s clients. The licensing contracts each brought in five to six figures in annual revenue, Eilian said, yet at many companies only two or three people on staff used the software. That made Videolicious extremely vulnerable to turnover. “If somebody left or got promoted, one of our few points of contact in that company was gone,” Eilian said.
The arrival of smartphones—specifically the Apple iPhone 4, capable of capturing video with decent quality resolution and providing improved processing power—offered a new opportunity for Videolicious to remain competitive, she said. However, it took some arm twisting in-house. “Not everybody in our company was convinced,” Eilian said. “I was telling everybody to turn away from a lucrative legacy product.”
Launching a fully mobile platform was not easy, she said, but her pessimism compelled her to push for the change. “I was envisioning the worst-case scenario, and I didn’t want somebody else to leapfrog us with this technology,” Eilian said.
In 2011, Videolicious released its app for video editing on the App Store, and the reception far exceeded expectations, she said. With the two versions of the app, one for prosumers and a more robust corporate version, catching on, Videolicious once again caught the eye of potential backers. The trouble was they had
