Oct 27, 2017 · 21m · 20vc
20VC: Why Decentralisation is Key For Digital Media Distribution, Why Gradual Decentralisation Is The Most Practical Approach and Why Incumbents Are The Biggest Barrier To The Rise of Crypto with Adi Sideman, Founder & CEO @ YouNow
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In this episode of The 20 Minute VC, YouNow founder and CEO Adi Sideman joins Harry Stebbings to discuss the shift toward participatory media, the necessity of media distribution decentralization, and how the Props ecosystem utilizes tokenomics to reward creators and compete against major tech incumbents.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 39.7% of the talking time here. How this is scored →
Harry as informed peer 4.0 Guest teaching 4.3 Guest disagreement 1.0 Harry pushing back 3.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 16:33 Asymmetric warfare reframe
Adi firmly rejects the host's premise that community value dispersion reduces investor upside, assertively framing token alignment as asymmetric warfare that vastly expands market size.
Hardest push from Harry ▶ 16:08 VC fiduciary duty challengeHarry adopts the persona of board member Andy Weissman to directly challenge Adi on how giving away value to the community fulfills fiduciary obligations to deliver maximum returns to LPs.
Biggest teaching moment ▶ 7:00 The $7 Coke bottle shockAdi completely reframes Harry's understanding of virtual item economics by revealing a single virtual Coke bottle costs $7 when Harry guessed 10 cents, forcing Harry to pick his jaw off the floor.
Harry holds his own ▶ 16:08 Host presses on LP return dynamicsHarry showcases sharp VC expertise during the boardroom roleplay by drilling into the precise tension between token value dispersal and investor cash-on-cash return obligations.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Adi Sideman's Background and Career Journey | 1 | 4 | 1 | 1 | Harry asks standard biographical and open-ended industry setup questions. Adi provides historical context on interactive video formats and cites statistics on gaming surpassing Hollywood's market size. | |
| Monetization Models and the Advent of Micropayments | 3 | 6 | 1 | 4 | Adi completely surprises Harry by revealing virtual Coke bottles on YouNow sell for $7 rather than Harry's guess of 10 cents. Harry humorously pushes back on the pricing before asking an informed question regarding why micropayments are viable now after years of delays. | |
| The Case for Decentralizing Digital Media Distribution | 5 | 4 | 0 | 1 | Harry demonstrates strong understanding by contrasting two technical paths for decentralization: integrating protocols into existing platforms versus building entirely new protocols. Adi agrees enthusiastically and quotes USV partner Albert Wenger to support the point. | |
| Gradual Decentralization and the Props Ecosystem | 5 | 4 | 0 | 2 | Harry asks a sharp marketplace mechanics question about whether token distribution solves the classic chicken-and-egg chicken supply/demand problem. Adi details how algorithmic token rewards create network effects to align user incentives. | |
| Boardroom Roleplay: Crypto Mechanics and Value Dispersal | 7 | 5 | 4 | 7 | Harry initiates a boardroom roleplay acting as VC board member Andy Weissman, directly pushing back on Adi's model regarding investor fiduciary duty and LP cash-on-cash returns. Adi spiritedly counters by framing community token alignment as asymmetric warfare that inflates overall enterprise value. | |
| Quickfire Round and Future Outlook | 3 | 3 | 0 | 3 | Harry conducts a quickfire round and throws in a surprise follow-up question regarding how incumbent platforms like Apple and Google will react to crypto. Adi details the 2.5-year roadmap to full decentralization. |
Statements from this episode (17)
Stebbings: YouNow reaches 100M monthly user sessions and 50k daily live hours
“Since founding the company in 2011, Addy has grown YouNow to be a global social network with more than a hundred million user sessions a month, and creators now producing more than 50,000 hours of original live content each day.”
Stebbings: YouNow has raised over $25M from USV and Venrock
“And to fund this immense growth, they've raised over twenty five million dollars in funding from some of the greats of the investing world, including Andy Weissman at USV, David Patman at Venrock, and a future guest on the show, I'm very excited to say, in the…”
Sideman: YouNow was the largest US mobile live streaming platform in 2015
“So I started YouNow, which became the largest mobile live streaming in the U.S. In 2015”
Sideman: Gaming industry reached $100B annually, double Hollywood's size
“And, you know, that's why the gaming industry bypassed Hollywood in size. It's around a hundred billion a year versus Hollywood at less than 50.”
Sideman: Interactive video generates $0.50 per user hour versus $0.07 for TV
“Mary Meeker came out with a report a few months ago that talked about revenue per user per hour, and in interactive video environments like live streaming and gaming, it's 50 cents per user per hour, and on TV and radio, which are mostly ad-based It's less tha…”
Sideman: YouNow creators earn five figures monthly from user micropayments
“We have creators earning five figures per month for micropayments, so it's a really powerful engagement tool, especially for a creator like yourself who engages the audience by definition, and that audience wants to support you.”
Sideman: Apple ended its 30% cut on peer-to-peer user currency transfers
“Apple just changed their guidelines last month, so they don't take their 30% cut when a user passes currency to another user, and that's a big deal, and it was in reaction to feedback from consumers who want to do micropayments, and, you know, with cryptocurre…”
Sideman: YouTube removed hundreds of thousands of Syrian war documentation videos
“I'll give you an example that happened this month. YouTube decided to take down hundreds of thousands of videos that documented the war in Syria.”
Sideman: Centralized platforms capture billions while creators get almost no value
“And then, you know, the second thing is there's a very disproportionate allocation of the value generated from these digital media networks. The internet started with this beautiful promise of a level playing field, but it ends up with what's happening is that…”
Sideman: Two-sided markets derive high value from decentralization, unlike all businesses
“You know, I tend to think of two-sided markets as being prone to having great value in decentralization, and I'm lucky to be working within that space and can benefit from these amazing opportunities to allow others to participate in this ecosystem, but I'm no…”
Sideman: YouNow takes a 40% commission on platform transactions
“We take a 40% commission on our transactions, and we are changing that.”
Sideman: Props will launch a tokenized creator economy later in 2017
“We're launching a decentralized, tokenized economy later this year where creators, whether they're independent like you or MTV or America's Got Talent, both of which are on our service today, will be rewarded with token.”
Sideman: YouNow is shifting business model from transaction fees to token alignment
“Our whole business model changes from taxing transactions of our users to being completely aligned with our users and growing the size of the network.”
Sideman: Apple and Google are the biggest barrier to crypto adoption
“It's the incumbents who control the centralized distribution channels today, like Apple and Google.”
Sideman: Apple's restrictive app review process is unsustainable
“I think that slowly but surely, they're going to be moving towards enabling more and more openness. You know, the fact that Apple still reviews every update by Every line of code is just horrendous in terms of facilitating development, and it's not sustainable…”