The college grad with a "stream" dream

Streamload, today the leader of personal media center on line, born of a dream of a Pomona College graduate trying to solve a personal frustration with large files. At that time, existing technologies offered too little capacity and speed to send, receive or access large files easily across the baby boom Internet of the 1990's. The boy needed also a follow up for his undergraduate thesis "about adaptive data compression algorithms", a complex theme that gave an answer to his frustration. But to put the dream in a package, the college boy needed some help.

The company was founded in June 1998 at the founder's apartment and only one year after was accepted into the San Diego Technology Incubator. The founder, Steve Iverson, 22 at that time, raised a small friends and family round of equity financing, and got the help of some technologists. One of them, Michael Balloni, worked for pizza helping to complete the beta version. Balloni would be its first full-time employee in 2000.

After "exhausting" nine credit cards during two hard years to fund his dream and understanding that venture capitalists weren't open to a young college grad, Steve closed a first Series A round from a private investor, a kind of business angel, Charlie Jackson, a Californian legend of the software industry. Charlie is today the Chairman of the company.

The first service went public in April 2000. With a great success. A gallery of fans, from music enthusiasts, digital photographers, media center PC users, graphic designers, architects, software developers, home office business owners and students got Streamload version 1.0 and became addicted.

Then the City of San Diego's Emtek Fund supported the company and Streamload relocated to Pacific Beach. Surprisingly, a first year of profitability was achieved. Steve thinks that this "anomaly" derives from the innovative profit model - Streamload charge a subscription to access an account. From its fans, the company got a sustainable base of clients that surpassed the crash of the Digital Economy. The argument sounds like this: "The invention has created an innovative profit model with a technology that focuses on dynamic mobility, not static storage like its competitors."

In 2004 the start up got a first round of institutional financing from Windward Ventures and moved to the fancy Gaslamp Quarter in downtown San Diego.

This year, the company just launched the most powerful services - please check at its website www.streamload.com. And is currently in the early stages of seeking a second round of venture capital. Also is in the process of engineering something greater - but Steve answered Gurus online: "We Can't let the cat out of the bag just yet".

Steve is a young in the middle of a board of veterans, with an average of 50+ years old. A young dreamer surrounded by knowledge of the software business. A successful mix, we bet.

The website just got a "refresh" from a Portuguese team of designer and illustrator, Patricia Carvalho and Paulo Buchinho. Paulo designed Steve's illustration in the up of this page.

Jorge Nascimento Rodrigues, editor of Gurusonline.tv, May 2005

INTERVIEW WITH STEVE IVERSON, Founder and CEO of Streamload

Which was the market opportunity that you see in 1997/1998?

Born out of my college dorm room, I wanted a better way to store and send entertainment, photos and software files across the Internet versus trying to transfer files using CDs and storage devices. As you know, Streamload was created based on a concept for my college thesis. After college, I brought together some innovative software engineers who had the foresight to see that existing technologies offered too little capacity and speed to store, send, receive or access large files easily. To solve this problem, we created a unique, easy-to-use technology that allows consumers to store and send gigabyte-sized media and data files, to anyone, anywhere on any Internet-enabled device.

But nobody believes what you proposed at that time?

It was tough going for me at the start. Even in boom times, VCs weren't open to a young college grad. I developed the concept in my apartment while hitting every VC conference in Southern California. Once the technology was developed and proven, I had just exhausted 9 credit cards to fund my dream before scoring seed investments from the City of San Diego's Emtek Fund and personal investor, Charlie Jackson.

«It's something I felt I had to do.»

What was the <click> that pushed you for the entrepreneurial decision?

I don't know that there was an exact moment. It just seemed to be a natural extension of my thesis in "adaptive data compression algorithms." We know this technology today as high-speed online file transfer and centrally managed network attached storage. However, the decision to pursue Streamload as an enterprise basically came down to the belief that with this technology, we had the opportunity to create something different and make a lasting contribution to how people shared and accessed data that was important to them. It's something I felt I had to do.

Which was Streamload differentiation advantage?

We believe Streamload has survived because our differentiation in the market. Instead of an off-the-shelf solution like competitors offer, Streamload allows today's massive files to be uploaded in a fraction of the time, and if the file is file common to many users' accounts like an MP3 duplicate, it's simply saved once. The invention has created an innovative profit model with a technology that focuses on dynamic mobility, not static storage like its competitors. The system charges for downloads (or access) to the user's personal media server account. Streamload's ability to engineer the technology around minimal storage requirements and unlimited bandwidth has allowed the company to use a different business model than their competitors for keeping people connected.

What's exactly the difference?

While competitors focus on storage revenue to support their services, Streamload gives subscribers free storage and only charges nominal subscription fees for access to their stored files - thus consumers only pay for what they consume. It's a model that works exceptionally well with large media formats like digital videos and large media collections where storage is used up quickly and continually grows in size, but on-demand consumption of those files is often far less and bandwidth fees are nominal. This has proven to be an innovative approach to solving a difficult problem - how to manage large digital media files -- one that has yielded operating profits for more than three years running.

«We built a base of loyal customers who told other people about our service.»

Why Streamload survived the hi-tech bubble implosion?

Streamload has survived as our competitors have gone out of business or gone bankrupt en masse. In fact, our biggest competitor received $100 million in funding in the heady days, undertook aggressive marketing campaigns with their bulging war chest and declared bankruptcy in 2001. Unlike so many of our early competitors who went out of business, Streamload chose to grow very organically. We built a base of loyal customers who told other people about our service. This referral marketing helped us secure 10s of thousands of early-adopters who are, for the most part, still loyal customers today. That was a very inexpensive way to grow the business while we dedicated our attention toward engineering a superior product around media management services. As more people adopt large-capacity digital devices like MP3 Players, MPEG video devices, DVRs, and high-resolution digital cameras, digital camcorders, and as Media Center PCs begin to take hold in the home, the desire on the part of consumers to easily and securely store, transfer, and share massive digital files will continue to increase dramatically.

So, you think you have a window of opportunity for massification?

The proliferation of all these different media devices in the home affords people more new ways to create, capture, and access digital content than ever before - making Streamload's core set of services a basic need for anyone with a large capacity digital device. And now that the adoption is catching up with our technology and the "common user" is actively seeking ways to manage their growing media collections, Streamload is more relevant than ever. We are now really focused on direct marketing and business partnerships what will help us bring the Streamload service to the masses.

«A complete online media management system»

What will be the next step of Streamload after the recent XStreamMail?

We are in the process of engineering our greatest service overhaul to-date. We can't let the cat out of the bag just yet, but you will continue to see the service evolve to better serve a wider market of people. I am honestly the most excited I have been about any new product plan. Our goal is to build a complete online media management system that enables people to enjoy their personal media files from anywhere and share them with any person or device.

What steps to go abroad?

Right now 40% of our customers are International. We have a data center in Germany and are currently localizing our site in four new languages (to be released in the next couple of weeks of May) to better serve our International customers. We have a good sense of how our International customers use our services, but we want to continue to improve our services for a broader international audience. I don't have specifics for you on how and when we will be expanding our marketing and operations into specific foreign markets, but it is on our radar screen.

FACTS ABOUT STREAMLOAD

Since the service launched on April 2000, Streamload has:
- Achieved a 300 percent growth over the last 3 years
- Capped 3.5 consecutive years of profitability (profitable since June 2001)
- Increased subscriptions by over 80 percent in 2004
- Retained over 22,000 paying subscribers (most current customers by word-of-mouth)
- Attained more than 3.2 million user accounts.
- Hosted more than 2.5 billion files
- Stored more than 400 terabytes of user data and is adding a terabyte of unique user data each day

© Gurusonline.tv, 2005