People

Why video might be the biggest thing since the internet

Phil Libin comes on the Source Code Podcast to explain why the future of video is much more than Zoom meetings.

Phil Libin on mmhmm

Phil Libin created Mmhmm to give everyone John Oliver powers, but thinks it's also part of a big revolution in video.

Photo: Mmhmm/YouTube

Phil Libin knows his way around a platform shift. At Engine 5, he was one of the early founders betting that the internet was going to change the way people do everything. At Evernote, he led one of the first App Store success stories. Now, as the co-founder and CEO of Mmhmm, he's convinced we're at the beginning of a change that will be just as massive.

So far, most people's experience with online video starts and ends with Zoom meetings. But from fitness instructors teaching virtual classes to massive online conferences, practically everyone has had to figure out how to make their world work through a webcam. Libin thinks that's not going away, even when we're able to be in person again. Why? Because he thinks there are things that work better on video, that we might never want to do live even when we can. (He has a whole theory about not going to the doctor anymore, for one thing.) The future is a hybrid of digital and physical, live and on-demand, and it's going to create a massive industry unlike anything we've seen since the web.

Libin came on the Source Code Podcast to talk about Mmhmm, his vision for the future of video and what the future holds for Zoom, Teams and the rest. Plus, he has a few tips for how to be a better on-camera performer. Because like it or not, that's what we all are now.

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Below are excerpts from our interview, edited and condensed for length and clarity.

Why start a video thing now? In a world where it feels like Zoom is this all-encompassing, totally dominant thing that has sort of won the space where we talk to each other on video, what led you to think there is room for you?

We didn't think too much about it, in those terms. It started as a joke. We were building it for ourselves, because we were all on Zoom and everything else. And it was just kind of dull, and we were goofing around trying to make people smile a little bit. So we didn't have, you know, big total addressable market or competitive analysis thoughts.

OK, so start with the theory that Zoom is sort of dull, and you could make it better. What did better look like, in an abstract way, as you were starting to build stuff?

I don't think it's so much that Zoom is dull. I think Zoom is a great company and a good product. And we're not competing with Zoom! In fact, Zoom is how most people use us; we work with all of the video services. We really just thought that when the pandemic happened, and we were all kind of forced indoors and on video, a lot of things became much less effective because I thought people just didn't know how to perform on video. It didn't doesn't come naturally to people.

And so many of us that were decent at our jobs, in the before times, had figured out how to be entertaining and captivating, and what passes for charismatic in person. Because you kind of have to be, to be effective at any job. And then we were all on video, and no one knew how to do that. And everything just became dull and dreadful, and more important, like, ineffective.

And we just thought, "Well, not everyone sucks on video." There are whole industries of people who are quite good on camera: actors and musicians and athletes and whatnot. What do they know? What can we learn from them? And then, how can we give everybody else the ability to be as captivating on video without needing a video production team and all that stuff? So that was really the thought: We would just make you a better performer, we would make you more captivating on video, regardless of where that video was. Zoom or YouTube or WebEx or whatever. And that's what we're doing.

Is that obviously a different skillset? Is running a meeting over Zoom a fundamentally different thing than running a meeting full of people in a room together?

I think it is. And I also think that it's not even about meetings. I think what happens is whenever there's a major change in technology and in the world — and because of the pandemic and video, we've had sort of several major changes [that] were on top of each other — I think the first-generation thinking by the incumbents is people who are trying to recreate the old reality in the new technology.

So when movies were first invented, films had movie cameras, but they didn't understand anything else about cinema, and their old reality was theater. And so a lot of the early movies are just, you know, a camera filming two actors on the stage. It looks weird. And I'm sure there were all sorts of theater critics in 1915 that were like, "Oh, this newfangled cinema is a really poor replacement for theater, you'll never replace theater." And they're right. But the whole point is, movies aren't meant to replace theater. They're an entirely new thing. But that took a few decades to figure out.

And then the same thing happened with TV, and then the same thing, even in my lifetime, happened with smartphones. When we were starting with Evernote 2007-2008, the major change was smartphones had become ubiquitous, but no one knew what smartphone software was going to be like. Microsoft would say, "Well, we know how to make Microsoft Word. And smartphones are smaller than PCs. So maybe smartphone software is just like a smaller version of PC software." It wasn't until the native generation of Evernote and Uber and Dropbox and Airbnb that people figured out that actually, smartphone software has nothing to do with PC software.

And now that's happening with video. You've got, you know, the incumbent players are sitting around saying, "Well, OK, well, the old reality is meetings. So what were meetings like? Meetings were a bunch of boring people sitting together in a room with a set agenda. But it can't be in the same room anymore, because of COVID. So how do we get as close as possible to a bunch of boring people in a boring room … but on the computer?" So that's what we have for video, for first-gen. And that totally makes sense. That's what you expect. But of course, the real answer, once we and other people invent the native-to-video experiences, there's not going to be anything like meetings. So you need a different way to be charismatic, and it's going to be an entirely different feeling anyway. It's going to be nothing like meetings in a few years.

It seems like what you're saying is video is … I hate the words platform shift. But it's a cultural moment as big as something like smartphones or TV. You think it's that big a thing?

Yeah, I think it's as big as the internet. As big as .com, let's say. It wasn't so much that the internet replaced everything, it's that it embedded itself into the fabric of just about every life transaction. And I think the same thing is happening with video. It doesn't replace in-person interactions. It's just that video is going to be an essential, everyday component to many, many, many things for close to 100% of people and companies.

This is a totally pedantic question, but when you say video, what do you mean? You could go from YouTube to Zoom to Mmhmm to me, shooting on an old camcorder from 20 years ago: That could all be video. When you think of this industry, where does it begin and end?

Yeah, I think it's basically a remixing and resampling of reality on two axes. One axis of in-person versus online, and the other axis of live or synchronous versus prerecorded or asynchronous.

If you think about nine months ago, the before times, almost every experience fit neatly into just one of those categories. Like doctor visits were live and in-person. University classes were live and in-person. YouTube videos were prerecorded and online. There weren't a whole lot of things that existed in multiple quadrants at the same time. But now that's all changing. Almost all of life is being reimagined to be a mixture of each of those four buckets, based on the most effective result.

I'm never going to go back to the way that I used to go to doctors' offices after the pandemic, because it's better this way, right? It's better to do everything online, get prescriptions in the mail, not have to wait in line, not sit in traffic. But then if I need to come in, obviously that'll happen as well. So health care is fundamentally hybrid forever, as will education be, and sales, and just about everything else. So I guess video is kind of the lazy shorthand version. I don't mean necessarily just somebody looking at a video camera, I really mean taking an experience that used to be entirely in one of those four boxes, and reimagining it so that it has components in each of the four.

What is your sense of how big this thing is going to be?

I think it's potentially massive. We're calling this whole industry "personal video presence" or "professional video presence." The idea again, is that the transformation is just like with .com. Just like with the early days of the web.

Over the next couple of years, we're going to see literally close to 100% of people organizations embrace hybrid video for some stuff. And just like with the early days of the web, there were early adopters that could wire it together themselves. But then the tools came along to make that possible for everyone, and not only did the internet become much more accessible, it became much better. You could do a lot more with modern tools than you could do by yourself, typing HTML into Emacs. And I think we're seeing the same thing with video.

I think when we're this early into a multitrillion-dollar transformation, no one has any idea of the line between platform and applications. Is Zoom an application, is it a platform? Is Mmhmm a platform? Is there Mmhmm for dentists and for dog washers? Are we building that? Is someone else building it? No one knows. People didn't know in 2007, 2008 around mobile.

And so for the next like, year and a half, there's going to be this massive, turning cauldron of everyone trying to kind of figure this out. And all the big companies are obviously in the mix. Cisco is trying to do a lot, Zoom, obviously Microsoft, and all of these companies have creative, brilliant people. They're going to do stuff. And there's a bunch of startups. We don't know how it's going to come out. We don't know who's going to be a great partner, we don't know who's going to be our arch-nemesis competitor, we just have no idea. We just need to be around for it. We need to be there when it happens, which is why we decided to raise some significant money and hire a bunch of people. We want to, together with our partners/friends/competitors, figure out this new world, trying to make it better than it would otherwise be.

And I think you know, things will, things will start, like, the landscape will start becoming a little bit clearer in 18 months.

Before I let you go, I want to talk about Phil Libin, the on-camera, on-video performer. Tell me what you've learned about how to be good at video.

Well, I'll let you know as soon as I've learned it.

You said you're better on video than you are anywhere else! So you're the one who's good at it, and you've got, like, The Chainsmokers invested in your company, they know how to do it.

That's part of it, right? Part of it was just realizing that I sucked at it. And that most of us do.

I think a lot of a lot of people don't want to think of themselves as performers. But they are, and they just don't admit it. They want to think that, you know, they're brilliant at their job and thinking about how to be a better performer is kind of beneath them. If you think like that you're going to suck.

And I think even all of those people who were actually effective, they had all internalized and figured out how to be a good performer in person without thinking about it, because otherwise they wouldn't have been successful. And it's just refusing to acknowledge that e-charisma, being charismatic on video, is different than in-person charisma.

But what have you learned? You have to give me something here. Be my management coach.

I guess the single most important thing, if you want to get into tactics, is lighting. I'm just sitting in front of a window. And I've got lights if it's not daylight. The single thing that almost everyone could do, that would massively improve things, is sit facing a window, if possible. Get some decent lights.

Other than that, it's get a microphone, it's think about your hand position. I tend to wave my hands around a lot, that's OK, I just kind of lean into it, but try to be aware of it. Think about where you're looking: I've got my camera set up so that it's easy to look at, so I'm not all shifty-eyed. Most of the time it's basics like that that you can learn from.

I really do think it starts with some knowledge that this needs to be intentional. It's not about necessarily high-production value. It's about intentionality. You can be very effective with fairly little hardware and software and setup.

Image: Yuanxin

Yuanxin Technology doesn't hide its ambition. In the first line of its prospectus, the company says its mission is to be the "first choice for patients' healthcare and medication needs in China." But the road to winning the crowded China health tech race is a long one for this Tencent- and Sequoia-backed startup, even with a recent valuation of $4 billion, according to Chinese publication Lieyunwang. Here's everything you need to know about Yuanxin Technology's forthcoming IPO on the Hong Kong Stock Exchange.

What does Yuanxin do?

There are many ways startups can crack open the health care market in China, and Yuanxin has focused on one: prescription drugs. According to its prospectus, sales of prescription drugs outside hospitals account for only 23% of the total healthcare market in China, whereas that number is 70.2% in the United States.

Yuanxin started with physical stores. Since 2015, it has opened 217 pharmacies immediately outside Chinese hospitals. "A pharmacy has to be on the main road where a patient exits the hospital. It needs to be highly accessible," Yuanxin founder He Tao told Chinese media in August. Then, patients are encouraged to refill their prescriptions on Yuanxin's online platforms and to follow up with telehealth services instead of returning to a hospital.

From there, Yuanxin has built a large product portfolio that offers online doctor visits, pharmacies and private insurance plans. It also works with enterprise clients, designing office automation and prescription management systems for hospitals and selling digital ads for big pharma.

Yuanxin's Financials

Yuanxin's annual revenues have been steadily growing from $127 million in 2018 to $365 million in 2019 and $561 million in 2020. In each of those three years, over 97% of revenue came from "out-of-hospital comprehensive patient services," which include the company's physical pharmacies and telehealth services. More specifically, approximately 83% of its retail sales derived from prescription drugs.

But the company hasn't made a profit. Yuanxin's annual losses grew from $17 million in 2018 to $26 million in 2019 and $48 million in 2020. The losses are moderate considering the ever-growing revenues, but cast doubt on whether the company can become profitable any time soon. Apart from the cost of drug supplies, the biggest spend is marketing and sales.

What's next for Yuanxin

There are still abundant opportunities in the prescription drug market. In 2020, China's National Medical Products Administration started to explore lifting the ban on selling prescription drugs online. Although it's unclear when the change will take place, it looks like more purely-online platforms will be able to write prescriptions in the future. With its established market presence, Yuanxin is likely one of the players that can benefit greatly from such a policy change.

The enterprise and health insurance businesses of Yuanxin are still fairly small (accounting for less than 3% of annual revenue), but this is where the company sees an opportunity for future growth. Yuanxin is particularly hoping to power its growth with data and artificial intelligence. It boasts a database of 14 million prescriptions accumulated over years, and the company says the data can be used in many ways: designing private insurance plans, training doctors and offering chronic disease management services. The company says it currently employs 509 people on its R&D team, including 437 software engineers and 22 data engineers and scientists.

What Could Go Wrong?

The COVID-19 pandemic has helped sell the story of digital health care, but Yuanxin isn't the only company benefiting from this opportunity. 2020 has seen a slew of Chinese health tech companies rise. They either completed their IPO process before Yuanxin (like JD, Alibaba and Ping An's healthcare subsidiaries) or are close to it (WeDoctor and DXY). In this crowded sector, Yuanxin faces competition from both companies with Big Tech parent companies behind them and startups that have their own specialized advantages.

Like each of its competitors, Yuanxin needs to be careful with how it processes patient data — some of the most sensitive personal data online. Recent Chinese legislation around personal data has made it clear that it will be increasingly difficult to monetize user data. In the prospectus, Yuanxin elaborately explained how it anonymizes data and prevents data from being leaked or hacked, but it also admitted that it cannot foresee what future policies will be introduced.

Who Gets Rich

  • Yuanxin's founder and CEO He Tao and SVP He Weizhuang own 29.82% of the company's shares through a jointly controlled company. (It's unclear whether He Tao and He Weizhuang are related.)
  • Tencent owns 19.55% of the shares.
  • Sequoia owns 16.21% of the shares.
  • Other major investors include Qiming, Starquest Capital and Kunling, which respectively own 7.12%, 6.51% and 5.32% of the shares.

What People Are Saying

  • "The demands of patients, hospitals, insurance companies, pharmacies and pharmaceutical companies are all different. How to meet each individual demand and find a core profit model is the key to Yuanxin Technology's future growth." — Xu Yuchen, insurance industry analyst and member of China Association of Actuaries, in Chinese publication Lanjinger.
  • "The window of opportunity caused by the pandemic, as well as the high valuations of those companies that have gone public, brings hope to other medical services companies…[But] the window of opportunity is closing and the potential of Internet healthcare is yet to be explored with new ideas. Therefore, traditional, asset-heavy healthcare companies need to take this opportunity and go public as soon as possible." —Wang Hang, founder and CEO of online healthcare platform Haodf, in state media China.com.

Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.

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