Insider Interview: Ron Yekutiel of Kaltura

Ron Yekutiel of Kaltura

New York–based software company Kaltura recently made headlines when it received a $50 million investment from Goldman Sachs. But it wasn’t Kaltura’s first large backing from an outside investor. Since its founding in 2006, the company has had a total of three big funding rounds totaling $110 million. Why are so many betting big on what appears to be just another video delivery company?

For one thing, Kaltura’s client list is impressive—not only in online streaming, but in education, enterprise and, since 2014, over-the-top (OTT) content. For another, Kaltura owns more than 1,000 APIs. And it doesn’t hurt to have three PhDs on the executive team. But what really captures the attention of the private equity market is the strategic DNA and radical scalability of the business. We’re talking true-blue, bottom-up disruption based on…the Lego brick. Really.

Q: First off, why so many PhDs?

A: I just have PhD envy [laughs]. My father is a PhD, so the closest I got is to have a lot of PhDs around. I’m not supposed to be the smartest guy in the room—I am supposed to figure out how I can do more with all of them together.

Q: So the brain power is clearly off the charts. What does this look like when applied to the challenges of delivering video content?

A: There are a lot of common denominators around the treatment of video as a new data type that can be applied to multiple business verticals. The underlying theme across all these different environments is one of openness and flexibility. So, in the same way, we have myriad products for each of the use cases that we can extend, modify and integrate in a very open way. Based on this model, we now have 170 partners that have created plug-ins to Kaltura. And we have north of 150,000 open source contributors, all because we’re very flexible and open. It’s like how Lego went from producing Lego pieces to selling trucks, planes and cars made out of Lego pieces.

Q: I love the Lego analogy.

A: Everyone who talks about flexibility can talk Lego. We followed the same type of transition. When people go against us they say, well, you know Kaltura, it has so many APIs and it’s an open system so it needs to have a fleet of developers. Not true. We sell these Legos already put together. We have products you can buy off the shelf, but it so happens that if you want to rip off the wing and make it something else, you are able to do that. And yes, it’s true that if you want to have another product entirely, you are able to do that, too.

Kaltura Executive Team: Ron Yekutiel, Michal Tsur, Shay David, Naama Halevi,
The Kaltura executive team.

Q: Can you walk us through the evolution of the various businesses?

A: We started in classic web publishing for media companies, and we clawed our way up from the small publishers to the FOXs and ABCs of the world by powering their web environments. With this, we had a video management system for uploading video, publishing it on the web, etc. That was our first move. Then we got into enterprises by transitioning from an external video player on the website to an internal player by building the same tools for corporates to use for learning, training, collaborating and basic communication. So we essentially transformed the webcasting product into a corporate YouTube product, a full-blown video portal with all the management tools. We’ve since sold that to 20 of the Fortune 100 companies. We then got into universities by building learning into information systems with Blackboard, and later added lecture-capture tools. So it was initially media, then enterprise, then education. Last we added the OTT vertical.

Kaltura MediaSpace portal for streaming video.
Kaltura MediaSpace portal for streaming video.

Q: Does that breadth become too much to manage?

A: The open, flexible design of the company is something we had in mind when we began, so it’s not something we decided along the way and bootstrapped while trying to build. The scalability is something we were very thoughtful about and it’s working very well. I mean, the proof is in the pudding: We’re catering to the largest media companies in the world, some of the largest Fortune 100 companies in the world and the largest schools in the world.

Q: And now OTT is booming.

A: The shift we made from web to OTT was perfect in the way of timing. We purchased Tvinci in May 2014. That October, HBO announced plans for HBO Now, and immediately many others announced direct-to-consumer offerings. So I think the end of 2014 was when OTT stopped being just Netflix, and started being so much more. And we were there with the Tvinci acquisition six months before. We’re very happy the timing was good for us.

Kaltura's OTT NOW sample interface.
Kaltura’s OTT NOW sample interface.

Q: Why did you decide on an acquisition as opposed to growing it organically, like the other verticals?

A: Tvinci was a great company. It was close to our research and development center, and we loved the people and the team. It had this kick-ass platform with superb solutions for telcos and media companies. It was a Jerry Maguire moment when Tvinci completed us: It was more like a Netflix; we were more like a YouTube. We were more ads; it was more subscription. Had we not used that shortcut, it would have been way harder.

Yes, we have a horizontal strategy, but sometimes you need to have a DNA of a certain nature. When you look at pay TV it’s a different type of DNA than web or enterprise. It’s a specific set of capabilities. So we were humble enough to understand that we need an influx of that. At the same time it didn’t affect our strategy of having a unified platform. So we’re true to our strategy, but we’ve doubled down on OTT with the acquisition.

Q: People are talking a lot about virtual reality and 360° videos for entertainment. How can these emerging technologies be applied to the less-sexy sectors like enterprise and education?

A: I am a huge believer in VR, personally. I think from a very high philosophical perspective it is a paradigm shift that is going to happen. At the end of the day, there are two main things that define us as human beings: our constraint on space and our constraint on time. We live in a time where we can’t move back and forth and we’re also limited on space. There is no “Beam me up, Scotty” yet. I see VR as a solution to this.

If I look at education, I see us sitting in virtual classes and feeling that we are all there together, teleported right into the classroom with each other. In enterprise, we’re going to be getting conference calls and, instead of video streaming, you will put the VR glasses on from your camera or your laptop, and boom, you’re teleported to a new environment. With this I foresee a dramatic increase in video. It will be a thousand or more times greater than it is now, because everyone believes that with a distributed workforce, everyone’s going to be using this every day. So the disruption is upon us.

Q: And that’s the perfect enterprise case, this distributed workforce.

A: Totally. And at this convergence we’re getting into video live and we’re adding layers of video conferencing, because eventually the line will be completely blurry between VOD, webcasting and video conferencing. Unified video systems will need to be VR-supportive so we can beam ourselves up and be everywhere. So if we look at the video technology companies, in five or 10 years, they are going to enable you to be everywhere and work everywhere. That’s where we need to get to.

Visit Kaltura’s website here

Photos courtesy of Kaltura.