Russ: This is the BusinessMakers Show heard here and seen online at theBusinessMakers.com. It's guest time on the show, and I'm in Austin, Texas. South by Southwest is clearly in the air, and I can't help but think one year ago this week, I was also here and caught what I think is the interview of the 2010 version of this incredible show. I had with me, William Hurley, also known as "Whurley," as my featured guest, and he told about launching his new company, Chaotic Moon Studios. Well, I've got him again. Whurley, welcome back to the BusinessMakers Show.
Whurley: It's good to be back.
Russ: Well, thank you very much for being here once again. My goodness, tell us about Chaotic Moon this last year. You're still in business.
Whurley: We are still in business. Start-ups are always in one of two phases, as we said last year, they're either struggling or out of business. We're still struggling.
Russ: Well, I can't help but remember the details of that interview, the avant-garde structure of your company, the whole mission, and the way you were grouping just major league, all-star developers. But I want to talk about that in a minute, because my goodness, I keep hearing the stories about what you're most recent project is, and that is the design and launch of The Daily. Tell us about that.
Whurley: It's been a pretty incredible experience. We're really lucky to be involved in the project. I mean, it's one of the largest iPad launches ever. I had a Super Bowl commercial , the first app to ever have its own commercial let alone during the Super Bowl. It was the first non-Apple product to be featured on the home page of Apple.com. The press wasn't really watching it too much leading up to the launch, but it was pretty crazy.
Russ: My God, for those of you who don't know, The Daily is the News Corp's first venture, in my opinion, into the world of digital media. And in my opinion, they're the leading in newspapers and, of course, in television. For them to take this step and to choose Chaotic Moon to do it, how in the world did you get on their radar?
Whurley: Well, you know, a lot of things happened between the time we talked and the time we met the folks at The Daily. We had tremendous success with our ________ __________ program that we talked about.
Russ: Right.
Whurley: We also got into publishing and published a number of hit titles. We ended up being one of the major publishers of Windows Phone 7 apps leading up to the launch. So we had several showcase launch titles that we participated in. We had an original title, The Revenants, that Ben Lamm, who you know, my co-founder, created. That was an Xbox live launch title. So we had been building up a lot of steam and a lot of credibility. You know, you've got the fastest, kind of hottest mobile company, and you get a call and an opportunity like that - the next thing you know, you and your team are living in New York for a couple months to do something you look back on, and you're just like, "Wow, what an incredible experience." You're in the middle of it, and you're just head down, trying to make it happen. It's a brand new publishing infrastructure, brand new company, brand new technique. It's trying to fulfil some incredibly high expectations with a couple of legendary individuals.
Russ: Absolutely.
Whurley: You look back on it, and you're like, "We did pretty good at that."
Russ: I'm just so curious about the whole process. How complete was their vision when you got there? I mean, did that make it easy? You just did what they said?
Whurley: It was not necessarily easy. It is a big endeavor. In fact, the beauty of it is when you look at it, you see it just so simply - the interface and the content, and the focus is on the content. You can't see the incredible stuff that's going on, the business side of the house - Greg Clayman, the publisher, and all the work his team is doing on setting this up. It's not a part of News Corp, it's an entirely new company.
Russ: Right.
Whurley: Jesse Angelo is the editor, whom I consider one of the guys I became close friends with as we were working over the holiday, and he invited me over his house for Christmas. He's just a really nice guy. He has an incredible editorial staff, and there's literally teams and teams of reporters in a newsroom just cranking it out. They're performing at a level that's never been seen before. You look at most of the iPad magazines, and they do 30, 40 pages or so every 30 days.
Russ: Right.
Whurley: They're averaging somewhere between 130 pages or so, somewhere right around there, every 24 hours. And, they update those stories throughout the day.
Russ: Wow. Really interesting. I've had several editors and publishers on the show before that were just having headaches over transitioning their magazine to the digital world. I had Jason Pontin, the editor and publisher of Technology Review. This was over a year and a half ago and just seeing him struggle with it. To see somebody like News Corp say, "Okay. Here it is," they're clearly leaders in the industry. It's just huge. Did any of that change after you got there?
Whurley: Absolutely. I tell you what, they are leaders in this area. They've really taken a jump. People can say what they want - they expected him to, they didn't expect him to. Everybody's got their own opinion, but at the end of the day, when we first go the call, there is a gentleman named John McKinley who is now CTO of News Corp, and John's definitely a "deliver big visions" market kind of guy. You combine him with somebody like Greg and somebody like Jesse, and you end up with a really good team to work with coming from the standpoint of a vendor, like us.
Russ: Right.
Whurley: Obviously there was a lot of vision to find and a lot of room for stuff. For example, among all of the firsts in The Daily, it's also the first app to use Apple subscription system and some of the features in the latest OS. So, vision complete - absolutely; but in implementing that, there were a lot of challenges. Basically because, and we talked about this last time, nobody wants to be the first.
Russ: Right.
Whurley: I mean, when we founded the company, nobody wants to do what we're doing at Chaotic Moon because it's very risky and it's very hard. Everybody wants to see somebody else do it first. I mean, how many startups do you see where there's this one you hear about, then the VCs invest, and then there's 20 of them, right?
Russ: I've been there.
Whurley: Now that some of the risk is let off. This was obviously a high-stakes project that's been incredibly successful. It's gotten great reviews. We were fortunate enough that The Daily and News Corp allowed us to put it on our website as our latest featured showcase app. If you go on there, at chaoticmood.com, and you go through to the page - we have an entire two page website now. Yes, we've doubled the size of our website. [Laughing] On that second page where it talks about The Daily, you can see what gives moto in the New York Times even, which you would think would be fierce competitors, had to had to say about the app.
Russ: Right.
Whurley: There's been a really amazing response and some amazingly good reviews to a project that a lot of people leading up to it were speculating that it was too big a risk, would probably be a dud, this and that. I can understand where those opinions come from, because at the end of the day, what they're doing is hard. But now, we're several weeks past the launch. Every day there's fresh content and issues coming out on time every day. Again, Jesse Angelo and the editorial team are just killing it. Greg Clayman and the business team are just doing great things, and they've got some amazing advertisers that are involved in it. They're getting pounded by advertisers now trying to fight their way into The Daily.
Russ: Sure.
Whurley: John McKinley and his staff have started looking at what's the future of that. Where does it go from here? So, I think it was the right team, the right companies, and the right people at the right moment in time. You know, it was right at the launch of Apple's subscription system, just before the launch of the iPad 2, and all those factors, I think, were really set up for success. And, I have to think that people like John McKinley had a big part in that as far as when they reached out to us and when things were done, that the management team and the leadership did a really good job of hedging their bets and mitigating as much risk as they could on something that now everybody looks back on, and there'll never be a first again, and they're it.
Russ: How involved was Apple?
Whurley: Apple was very involved. They were great. I mean, as you know, most of Clayman's team comes from Apple, right? So Steve Smith spent 15 years in Apple R&D. I worked for him back in the day there. I spent a number of years at Apple. Mike worked at Apple. It was a good relationship, and Apple was a good company to work for. Apple was a great company to work with on this. It's a great credibility builder for Chaotic Moon, which just a couple day ago celebrated our one-year anniversary.
Russ: Right.
Whurley: And to be involved with two really great kind of industry-leading companies in their space on such a revolutionary project.
Russ: Right. Cool. Now you already mentioned sort of competitors to The Daily, there hasn't been competitors for Chaotic Moon in trying to win this project?
Whurley: Ben, as you know, was a lot of the business side. I'm the tech guy and working with Steve on all the technical stuff. I don't think so. Our company has evolved to a place where we have kind of two well-defined sets of customers. One of them are moonshot customers. This project, while I though was very well documented and set up and really wasn't a moon shot, it was kind of that big go-for-the-gusto glory kind of thing that we've built a reputation for doing.
Russ: Right.
Whurley: We dropped a crew in of about nine people literally within a couple of days, living in New York, working hand-in-hand right there doing stuff that a lot of other companies wouldn't do. Right? Some really top talent. Again, our business model allows us to pull in some people that you wouldn't normally be able to get to work with.
Russ: Right.
Whurley: Again, in the press release and on the website, we list everybody from Marcus Zarra and Matt Long, and you know, Patrick Hughes and Elfred Pagan, all of these guys who are just amazing engineers and developers. But we also had guys with the 360 stuff like Brian Greenstone, who's the Pangea Software founder. He helped us out.
Russ: Right.
Whurley: It was like, clearly, Cro-Mag racer and Enigmo, which are incredible top-selling iPad apps, and actually we just poured into Windows Phone 7 and launched with Microsoft - [Crosstalk]
Russ: Cool.
Whurley: Some of those guys don't need to work anymore. So you know, they're not excited about the "Let's work 36 hours before we sleep." [Laughing]
Russ: True.
Whurley: And we have the ability to get the right people on the right teams and kind of build, like you said earlier, these rockstar teams. And that's what you need to do for a project like this.
Russ: Right. Now, I have no idea what the News Corp structure is like, but this is so big I would assume even Mr. Murdoch at some point kind of gave it the thumbs up or thumbs down?
Whurley: Really, we worked, like I said, with John McKinley and those guys. Obviously, you read in the press that Rupert had a vision, he and Steve talked, and there's tons of articles out about that. Those are the two guys - that's the top of the pyramid there. So very involved. I mean, it's his vision. We were lucky enough to be hired to deliver on it.
Russ: Right. Really cool. I assume there might be people who are listening right now that have never even heard of Whurley. I can't fathom it, but there might be.
Whurley: Well, I would be surprised if there are any who have.
Russ: So here you are with this incredible education from Temple High School, and then the funk rock band that launched your interest into digital music, which got you to Apple, to IBM, to BMC, to the open source god of the planet and stuff. I don't remember, was this actually the first startup that you were right in the nucleus of?
Whurley: I was kind of near the nucleus with a company called Symbiot, which is an infamous, or famous depending on how you look at it, security company. We were the first people to create countermeasures on the internet. At the time, Mike Erwin, Paco Nathan, Jamie Pugh and some people wrote that I was looking to participate in, basically on the "Rules of Engagement for Information Warfare" in kind of the network age.
Russ: Right.
Whurley: And a paper that Paco and I did on "Non-Equilibrium Risk Models," which was really interesting. That company didn't fail; it didn't become a household name. It was very controversial technology and very big things. But as far as from the ground startup, yep, this is really my first startup.
Russ: This is it. Okay, now I eluded to this awhile ago, this sort of avant-garde structure. When I interviewed you, there wasn't even a CEO. You weren't going to have a CEO.
Whurley: There's still not a CEO. [Laughing]
Russ: Okay.
Whurley: And we never will. [Laughing]
Russ: And there were kind of like three of you that were founders and were kind of jointly -
Whurley: Yeah, and we have a two-thirds majority, and we have a certain timeframe in which all decisions need to be made. So we rank what a decision is to set urgency of how fast we need to make it. Then Mike and Ben will out-vote me or we all agree, Mike and I will out-vote Ben, or Ben and I will out-vote Mike. So it makes it really easy. I mean, there's a problem with startups, in my opinion, and that is that they have these traditional structures in a very untraditional role. Right?
Russ: Right.
Whurley: You have a CEO and that's great. A lot of people have the leadership, and leadership is great - we have three incredibly talented, very strong-willed founders. I don't know that there's a CEO on the planet who could actually have us work for him. [Laughing] It just doesn't work that way. So with this structure, I think I credit that for some of the decisions that we talked about a year ago that were risky. Right?
Russ: Right.
Whurley: We weren't sure how they were going to work out. I really credit those with why we've come so far so fast.
Russ: But it did seem like you developed this sort of culture that was like a magnet for great developers. I mean, you said these things kind of appealed to them. Perhaps the fact that you don't have a CEO appeals to them.
Whurley: A lot of the developers like that. A lot of the art team like that. They like that kind of avant-garde structure like you've been saying. But, you know, at the end of the day, we're not building a company, we're building a community or depending on which reporter I talk to, some of them call it a cult.
Russ: And you called it a family last time, too.
Whurley: I called it a family, right. With this group of people, there's a lot of equality. I mean, at the end of the day we have to have some structure and some leadership - somebody has to say, "This is what we're doing. Let's go that way," but everybody pulls together and goes in the same direction. I mean, look, we have more strong-willed egos and experience and people who have a right to feel that way and have those very strong opinions working for us than probably any other startup.
Russ: Right.
Whurley: And in most cases, as you kind of eluded to last time, you were like, "Are you worried about that just imploding in on itself?"
Russ: Right.
Whurley: And the answer is no, because there's respect. There's respect for everybody who works with you. They respect you, and we know where the swim lanes are. We know who's the expert so at some point, no matter what the decision is, there's somebody who is "that" person. They are that guy or that girl that knows that better than anybody else. If you're going to work with people who are that talented, you're going to have to trust them. I think if you look at the structure, the trust, and like you said, it's kind of like a family - that's what's making it different, and that's what's making it as successful as it is and put it on a path to be already a dominant force in the marketplace. We're showing no signs of slowing down any time soon.
Russ: And if I recall correctly, there was no exit plan. There was no desire to sell the company ever, IPO. It sounded like it was just much more of a long-term, grow into a major success.
Whurley: We've had a couple interviews this week where people have said, "This is the most amazing lifestyle business ever." But no, what are the plans? You know, I told you this, to not look too far in the future.
Russ: Right.
Whurley: If I would have told you, "We're gonna do the biggest publishing app ever," when we talked last year, I mean, whatever. We pick the right opportunities. We don't accept every customer. If you go to our website, right on the contact thing, it says Don't call us, we'll call you.
Russ: Right. [Laughing]
Whurley: Some people think that's hilarious. Every once in awhile, somebody takes it the wrong way, but it's really about setting yourself up for success and not just going and grabbing everything. I kind of blew off the competition questions earlier, so let me speak that really directly. We don't have competition. A lot of the companies that people think are our competition are good friends of ours. They're people we're subbing stuff to in some cases if they're the expert in that model we have.
Russ: Right.
Whurley: They're bringing us work. Maybe they only do iPhone, and they let us do the Androids or Window Phone 7. So, I mean, I really don't think we have competition. We're part of a much larger community system. We have a great reputation. People trust us. We're very good at working with everyone.
Russ: Right.
Whurley: So, is the plan to go and sell the company? No. Is the plan to go and run it for 40 years? I couldn't tell you. The plan is to find the right people and match them with the right opportunities at the right moment in time so everybody is successful. We look at things on an individual project basis on whether we want to participate or not, and that's led us to pass on a few, and that's okay.
Russ: Before I let you go, I'm thinking, "Man, maybe I'll be back here one year from now again, too." What do you think you'll be telling me about then?
Whurley: We don't really get into it, but we've been approached by a lot of amazing companies - HTC, ____, a lot of companies that might be outside. I mean, about mid-year, we became a lot more than just an app company. We've got a new partnership with Humble TV. We have a new partnership with Mophie. We're going to be doing some stuff that we can't talk about with HTC and ____ that in a year I know for sure we'll be able to talk about. [Laughing]
Russ: All right. [Laughing]
Whurley: And you'll see that we've kind of taken that "All your mobile belongs to us" kind of mantra, and we're in all of mobile. You'll see us doing everything from patents to hardware work to some design work on the products you'll be using this time next year.
Russ: Okay. Whurley, I really appreciate you sharing some of your time with me again.
Whurley: I really appreciate you taking the time, and it's always a pleasure to talk to you. I know we've been kind of chaotic, to coin the phrase, and hard to get ahold of, but we can't thank you enough for not only sharing our story but last year, I think it was the best interview I did at __________. I think it got the most attention and really got a lot of people looking at us and seeing what we were doing. You know, you need that when you're starting off, so thanks for giving us the exposure.
Russ: You bet. For sure. That's Whurley, co-founder of Chaotic Moon Studios. You're listening to the BusinessMakers Show, heard here and seen online at theBusinessMakers.com.
