Post by Draper Associates

When Justin.tv told Tim Draper that 40% of their users were watching strangers play video games, the room got quiet. Most investors heard that and saw a problem. We heard it and got curious. Stewart Alsop brought us into Justin.tv early. Justin Kan had built a platform around livestreaming. First his own life, then anyone's. The piracy concerns that accompanied that growth prompted Michael Seibel to spin off Socialcam, which he built and later sold for $60 million. The video game audience continued to grow on the main platform. Twitch launched as a standalone product in 2011. Amazon acquired Twitch in 2014 for approximately $1 billion. Twitch now generates more than $1.8 billion in annual revenue inside Amazon. 240 million users. The video game industry now outpaces all of Hollywood's combined box office. The team that built Justin.tv and Twitch went on to reshape multiple industries: Michael Seibel became president of Y Combinator. Kyle Vogt built Cruise Automation. Emmett Shear ran Twitch through its entire Amazon chapter. Justin Kan said it directly: without Tim writing that check, Twitch probably wouldn't exist. Michael Seibel said the same thing. Here's what that moment actually looked like from our side: Tim noticed that Justin.tv users were watching TV content they didn't have rights to — and the TV advertising was running alongside it. He asked if the users were seeing those ads. Justin said yes. Tim suggested billing the TV networks for the advertising reach. The best investments don't always look obvious.