This Week in History : April 23, 2005: A Trip to the Zoo and $1.6 Billion Later …
On April 23, 2005, at exactly 8:31:52 pm local time, the first ever YouTube video was uploaded. It was titled ‘Me at the Zoo’ and is a 19 second recording of the co-founder of YouTube (Jawed Karim) standing in front of an elephant enclosure. It’s grainy and with poor audio – yet it made history.
If you’d like to see this seemingly insignificant clip, link to it is here https://www.youtube.com/watch?v=jNQXAC9IVRw … so far it’s had over a quarter of a billion views.
The recording was taken by Yakov Lapitsky, Karim’s high school friend at the San Diego Zoo and the top comment made by the San Diego Zoo amassing around 2.8 million likes, making it the second most liked comment on YouTube. The first one being ‘I’m the bald guy’ by SethEverman on the ‘Billie Eilish – Bad Guy’ music video.
3 former PayPal employees founded YouTube – Chad Hurley, Steve Chen and Jawed Karim in February 2005. We all know YouTube as a video sharing platform yet their original idea was for YouTube to be a dating platform. It even had its very own slogan: “Tune In, Hook Up.” The idea was that people would upload videos of themselves talking about their dream partner. But that idea proved troublesome from the beginning and in desperation for actual dating videos the founding trio turned to craigslist to offer women $20 to upload to the site. But- nobody came forward and the trio decided to open the site up to any video, and the rest is history.
Shortly after YouTube became successful and grew, the 3 founders sold it to Google in November 2006 for a total of $1.6 billion. Sequoia Capital, YouTube’s venture backer walked away with approximately $500M after investing around $10M into the startup. Not too shabby! Today, YouTube is the second most visited site in the world and over 70% of viewers watch YouTube using their mobile phones and spent around 23.1 hours monthly using the app. That’s around 6 books read, or 11 movies watched. All this indicating that YouTube has become a major player in the entertainment industry, outcompeting other leisure activities in the bid for our attention.
So, how did Google’s investment back in 2006 work out? In 2022, YouTube’s annual Ad revenue amounted to $29.24 billion, higher than the $28.84 billion in the previous year. That is 18x what Google paid to acquire YouTube in just one year’s revenue.
Jawed Karim went on to create Youniversity Ventures which offers startup capital and consultation services to young entrepreneurs in the technology sector and is simply known as YVentures. Notably, Karim became a seed investor for Airbnb in 2009 making him one of the first investors.
Chen and Hurley would join forces once more to create MixBit a competitor to Vine and Instagram in the video sharing market. However, it ceased operations on 21st April 2018.
The Moral? Selling a successful startup can generate generational wealth off just one deal. However, they are also highly risky. You can buy established businesses and secure significant advantages (financial, operational, strategic) with a lot less risk.