When serial tech entrepreneur Jeremy Allaire founded online video platform Brightcove in 2004, the idea that people would ditch their TVs and watch everything on laptops and cell phones seemed fantastical. Back then, Netflix was the company that mailed DVDs to its subscribers. Social media barely existed. More than a few people still accessed the Web via slow dial-up modems.
Flash forward a decade. Americans viewed 38.2 billion videos online in the second quarter of 2014, a 43 percent increase from the same period in 2013, according to Adobe. And Allaire's bet on video has paid off handsomely for Brightcove. It's now publicly traded, with annual revenue of $125 million in 2014, and it's the leading business-to-business online video services platform, controlling 22 percent of the market. Clients from the Financial Times and Viacom to Tesla and the Ford Motor Company use its services, including data analysis, consulting, and, especially, its video cloud technology.
Essentially, Brightcove helps companies do all the mundane but lucrative housekeeping tasks associated with publishing online videos. It helps media companies embed ads into their videos, and it has a growing digital marketing business for corporate customers, which want to use videos to sell products--and make sure that anyone watching those videos can be persuaded to leave their contact information behind.
"We believed that video would become as common as text on the internet," says Allaire, now the executive chairman of Boston-based Brightcove. "What's interesting is, 10 years later, we're just hitting that point. It takes a long time for this stuff to happen."
It's still been a rapid rise for the nimble Allaire, now 43, who's always been quick to identify the next digital trend. (His newest business venture involves the bitcoin.) In the early 1990s, his reputation as a precocious, tech-savvy kid was cemented when he helped political theorist Noam Chomsky establish a website.
By the time Allaire was 30, he had co-founded, with his brother, a successful technology company--Allaire Corporation, which created such early website development programs as ColdFusion--and had sold it to Macromedia for $360 million. He stayed on for a time at Macromedia, where he learned to work with Flash and realized its potential to transform our experience of the web and video viewing. That led to Brightcove.
Allaire initially intended to create a more general video company that would offer business video services while also inviting consumers to display their own do-it-yourself videos. But competing with YouTube turned out to be impossible, especially after Google purchased it in 2006, and Brightcove's consumer unit was folded within two years.
Today, Brightcove makes its way financially by using the same strategy Levi Strauss did to make his fortune during the California gold rush. But instead of selling sturdy denim designed to be worn by men mining for gold, Brightcove is hoping to find gold in marketing systems and products that let customers manage, promote, and direct traffic to corporate video content. It sells companies on the idea that it is cheaper and more efficient to use Brightcove products instead of building their own proprietary infrastructure.
So Brightcove, embedded in the current tsunami of digital content and quick to pivot from ideas that don't work out, has the nimble tech DNA of many a startup. But also like many a startup, it's still struggling with turning revenue into profit--and since going public three years ago, that struggle has higher stakes. Its stock has fallen dramatically, trading significantly below its $11 Nasdaq debut price, after once selling for more than double that amount.
That's partially the result of some missteps. A low-cost subscription service was wound down in 2013, in favor of an emphasis on premium, Fortune 500-like customers. Buying Unicorn Media for $49 million in early 2014 allowed Brightcove to improve viewer experiences for video ad insertions, but analysts questioned the deal, saying the company overpaid.
It acquired a major digital media client in Rovio, best known for Angry Birds, but then quickly lost that business, a hit to both Brightcove's bottom line and public perception. The company has only recently reorganized its sales force to acknowledge that its two core competencies are different enough that they need different people to pitch them.
Much of this is par for the course, the sort of thing one would expect from a company barely a decade old. It's not so much that a newly public company can't respond to market changes--if anything, the influx of cash from a public offering makes it easier to do just that. But there is no privacy. All missteps are public and transparent.
"I think one of the key things about being public is you really have to be disciplined about staying focused on the long term," says Brightcove CEO David Mendels, who joined the company in 2009 and replaced Allaire as CEO in 2013. Now he and Allaire are trying to bring Brightcove into the budgetary black by the end of this year.
"That's what we're focused on: How do we re-accelerate growth?" Allaire says. "And how do we get a nice smooth curve to profitability?"
Right now, the men are betting that Brightcove still has the ability to be ahead of the online video curve. "It's still early in this fundamental transformation to everything digital," Mendels says. "Everything is going to devices, consumers consuming all their content over the internet. We want to be focused on taking advantage of that big opportunity."
That's largely his responsibility these days, though Allaire may be able to provide some inspiration from his return to the world of startups. His newest company, Circle, provides a digital payment system based on bitcoin technology.
It's a chance for Allaire to once again be in on the ground floor of an industry-changing technology, this time in the financial sector. "Day-to-day financial products are going to be disrupted and reinvented on internet native platforms," he says. "It's sort of like video 10 years ago."