Brent Hurley ‘01, director of finance and operations (right) In September 2005, business professor Dave Martin got an e-mail from former student Brent Hurley ’01.
A year later, Brent Hurley helped seal the $1.65 billion sale of YouTube to Google, a deal that made headlines in every media outlet on the planet. In November 2006, YouTube was named the invention of the year by Time magazine. It beat out a vaccine that prevents a cancer-causing sexually transmitted disease. For those to whom “Numa Numa”* means nothing, YouTube is the hottest online video site, where anyone can upload and watch videos – 100 million videos are viewed daily, and every day 70,000 new videos are uploaded by anyone with an idea and a video camera. But let’s not get ahead of ourselves. At Albright, Hurley wanted to be a philosophy major. He decided to combine philosophy with finance because he was interested in business and the practical dimension pleased his parents. What did philosophy bring to finance? “Communication, writing, even in things as simple as e-mail. It taught me about making very clear points and stating my case,” Hurley says. Professors from both disciplines became his mentors: economics professor Dave Martin and former Albright philosophy professor Jeff Barker. Martin also helped Hurley shape internships that in turn helped shape his career. At a financial consulting firm in Reading, and two rounds at a young California start-up company that would fundamentally change business on the Internet — PayPal, which provided a safe, real-time payment solution for companies like eBay. PayPal was also where Hurley’s brother Chad worked. PayPal “sparked my interest in start-ups. The hyper growth of a start-up company was interesting,” he says. But Hurley turned down a job offer at PayPal to come back to school. A post-graduation backpacking trip through Europe was sidelined by September 11, and he ended up in California, living with his brother and looking for a job to “test out my financial background.” Hired as a portfolio accountant with Fisher Investments, Hurley managed high-net-worth clients for what Dave Martin calls a “world-class” asset management firm. Quickly promoted to securities trader, Hurley worked “market hours” for Fisher for three years, getting up at 4:30 a.m., and the idea of his own business seemed more and more appealing. One day he went to lunch with Chad and his PayPal co-worker, Steven Chen. “We had gone out to lunch, thinking about what we could start. We really didn’t come up with anything.” “I was getting sick of trading and was looking to expand my horizons. I took the GMAT, and applied to business schools to start an MBA in fall of 2005 so I could have the skill set to run my own company.” He weighed the reality of a $100,000 debt load plus two years of lost earnings while in school against starting a business. Significant debt would make it hard to incur even more to get something started. “I decided to budget myself $100,000 to start something with the potential to turn that into a lot more money.” Meanwhile, Chad Hurley, Steve Chen and Jawed Karim were busy in a garage building a little online video company called YouTube, conceived as a “place for people to engage in new ways with video by sharing, commenting on, and viewing videos,” according to the YouTube web site. “I was working informally with them, working on investor interest. This is exactly why I wanted to go to business school. There was an opportunity without taking all the risk because I was in it with three other guys.” Chad Hurley became CEO, and by August 2005, Brent Hurley was the first full-time employee – director of finance and operations. “I was a one-man finance team before the Google deal. The utility guy, customer support, finance, payroll, everything.” Hurley worked for free for a few months, calling it a leap of faith that he was willing to take to see what happened. “If after six months we didn’t get any funding, I’d find something else to do.” He began working on the first round of venture capital, $3.5 million from Sequoia Capital, “the best venture capital in the Valley. People invest in the team behind the idea and the market potential more than the idea – a team that can meet the challenge and adapt quickly, a team in it for the long haul. If the wave is big enough, it’s got to be lucrative. We happened to be the top guys on the wave.” The YouTube team had been working at each others’ houses and wherever they could find space to squat. Along with cash, Sequoia provided incubator space and after nine months of beta testing, YouTube launched in December 2005 and “took on a life of its own.” YouTube instantly became a viral entertainment destination, with videos from “Chad Vader, Day Shift Manager,” a hilarious short about Darth’s less successful brother who works in a supermarket (five million views), to sculpting an owl with a chainsaw. And who hasn’t seen the flamboyant, musical, guaranteed-to-drive-the-neighbors-crazy Christmas light display? Much of it is painful – and hilarious, like the pudgy guy lip-synching a Romanian pop song in the “Numa Numa Dance.” Some of it is brilliant. All of it is free, all accessible to anyone with a computer and a video camera. It’s also helping make the careers of a few extremely talented filmmakers. YouTube is “completely democratizing. You program what you are interested in. Videos play right away. It’s the fastest and cleanest site and the most easy to use,” says Hurley. According to Hurley – and writers about new media – YouTube is“changing the landscape of media. PayPal simplified a very complex problem when there was no solution out there. PayPal did for payments what YouTube does for video. No one had come up with a simple solution.” Meanwhile, YouTube has become a “real community of creative content producers and an audience. Video is so captivating and such a low barrier to entry to creating content. It’s different from music, which requires skill, practice and learning.” YouTube now has 75 or 80 employees. Hurley calls the company’s success “overwhelming.”
“The whole thing is a phenomenon,” he says with modesty. “I get caught up like everybody else. I watch so many videos, it’s ridiculous. It’s like a little treasure hunt. You find so much content.” Phenomenal is the word that comes to mind. In case you’ve managed to ignore the news for the past few months, YouTube has been there, everywhere and every day. They closed deals with CBS, Warner Music Group, Universal Music Group and Sony BMG to detect copyrighted material and make much of it available to YouTube’s video makers in exchange for a share of advertising revenues. But the monster deal was the $1.65 billion buy out from Google in November. To put this into context, this is six times the gross domestic product of Micronesia, or what Target paid for 257 department stores and four distribution centers in 13 states, according to an article in Wired magazine. In a testament to their stamina, the YouTube team finalized the Sony, CBS, Universal and Google deals all on the same weekend — while also moving their offices from San Mateo to San Bruno. They announced the first three deals sequentially early on a Monday morning after spending the weekend working and sleeping in their lawyers’ offices, and sent out the press release about Google around noon. After rushing with Google CEO Eric Schmidt back to YouTube to tell the staff the news, the Hurley brothers walked across the parking lot and spent the afternoon celebrating at TGI Friday’s. What does all this mean to the YouTube team? “We are figuring out what it all means, what is integrated and what is independent,” Hurley says. YouTube and Google have a few challenges ahead. They still have to figure out how to really monetize the site. They need to figure out how to get some of the $67 billion that advertisers spend annually as they turn from television to the relatively uncharted territory of social networking and video. YouTube also faces solving the challenge of really protecting intellectual property while running a democratic, open video site. On October 24, 2006, Professor Dave Martin got another e-mail from Brent Hurley.
Dave Martin is very proud of Brent Hurley. “He’s a wonderful man– hardworking, very bright, and with empathy and feeling for people.” Martin is looking forward to introducing Hurley to his business students when Hurley visits Albright this spring. |
