Fli­pa­gram’s A Big Deal

How big? The last startup that had Michael Moritz and John Do­err on the same board was Google.

Forbes - - Technology - By Kath­leen Chaykowski

Farhad Mo­hit wasn’t pan­ick­ing (he’d started and sold two web­sites be­fore), but at the end of 2013 the en­tre­pre­neur re­al­ized his startup was go­ing to run out of money by Fe­bru­ary. Two days be­fore Christ­mas his wife gave birth to their sec­ond child at home, with the mid­wife stuck in trafc. He promised his wife that, if the com­pany ran out of cash, he would stop adding more of his own to keep it go­ing.

But Mo­hit’s prospects were not as grim as the bank ac­count in­di­cated. His startup owned an app called Fli­pa­gram, which lets peo­ple make “Flips,” a mashup of videos, pho­tos, text and 30-sec­ond snip­pets of hit songs. Start­ing in Oc­to­ber, a se­ries of up­dates to the app, in­clud­ing making it free, were al­ready push­ing Fli­pa­gram up the app charts. By the time his baby ar­rived Fli­pa­gram had reached No. 1 in iphone down­loads in 87 coun­tries and had mil­lions of users per month. Be­fore Mo­hit even had a chance to hit up new in­vestors, Se­quoia Cap­i­tal called to meet right away. Too busy, Mo­hit pushed it into Jan­uary, when Se­quoia sent its bil­lion­aire part­ner Michael Moritz and col­league Tim Lee to Los An­ge­les to meet Mo­hit at his home, which dou­bled as Fli­pa­gram’s ofce. They chat­ted over a home­made lunch of Per­sian food. By Fe­bru­ary, Se­quoia, Kleiner Perkins Caufeld & By­ers and In­dex Ven­tures com­bined to in­vest $70 mil­lion.

What they wanted was a piece of the next so­cial growth mon­ster. By the end of 2014 Fli­pa­gram was up to 30 mil­lion users per month. Face­book took at least three years to get that far. Snapchat took two years. Fli­pa­gram did it in one. The app is still in the top ten of photo and video apps by IOS down­loads in the U.S., and the num­ber of Flips made in the app rose 165% from the third quar­ter of 2014 to the same pe­riod this year. “The [mu­sic la­bels] really be­lieve that Fli­pa­gram will be a ma­jor me­dia cre­ation and shar­ing com­pany on the or­der of a Twit­ter or more,” says board mem­ber John Do­err of Kleiner Perkins. “Farhad is vi­sion­ary.”

Fli­pa­gram’s big insight was that peo­ple want a way to make videos faster than one can post on Youtube and with more cre­ative free­dom and depth than Twit­ter’s Vine or Face­book’s In­sta­gram. “It’s a hu­man thing,” Mo­hit said. “Ev­ery­one has sto­ries worth telling.” Fli­pa­gram’s big difer­ence is in let­ting peo­ple add 30-sec­ond snip­pets of mu­sic (in­creas­ing to 60 sec­onds as of De­cem­ber) to their videos from a search­able cat­a­log of tens of mil­lions of tunes. Mo­hit used some of that $70 mil­lion to strike global li­cens­ing deals with nearly all of the ma­jor record la­bels and pub­lish­ers. In­sta­gram doesn’t let users add mu­sic to videos within the app. Vine lim­its users to a small set of fea­tured mu­sic or mu­sic they own. Fli­pa­gram also adds a prom­i­nent link to buy the en­tire song on itunes or Spo­tify.

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