On Building A Decentralized Video Infrastructure For Livestreaming

My name is Doug Petkanics and I’m the co-founder of Livepeer. We’re building the world’s open video infrastructure for livestreaming, using Ethereum to decentralize the behind-the-scenes video processing of livestream video feeds. Developers building video applications use Livepeer to power the streaming infrastructure. The total addressable market is growing at a rapid pace: today, 80% of web traffic is already video. And, with people consuming 27% more creator content, that demand continues to increase.

As video resolutions increase and new mediums like VR and AR emerge, the demands on underlying infrastructure will continue to grow explosively. With existing solutions costing $3/hr per stream, it is cost-prohibitive for startups and companies to grow profitably. Our network gets that down to pennies, which gives companies far more solid financial footing for growth.

We’re witnessing the growth in live-streaming applications firsthand, as 2021 has been a banner year. Our network now includes operators with enough transcoding capacity to handle the realtime workload of all the major social streaming sites. Since September 2021, we’re also now transcoding an average of over 2 million minutes per week. That’s up from an average of around 400,000 minutes per week earlier in the year. That 4x increase in minutes transcoding is a testament to the clear need for affordable transcoding services to support livestreaming’s explosive growth.

What's your backstory and how did you get into entrepreneurship?

I’ve always been interested in building things with technology. As a middle schooler, this involved learning computer programming and making video game websites that I ran as a small business. This passion and early exposure to programming led me on the path to a Computer Science education.

Crypto is also a rocket ride! So for those looking to get into space, the most important thing is to Do Your Own Research.

After college, I built large enterprise software systems at Accenture, but the entrepreneurial itch returned after a couple of years. I had the opportunity to join an early-stage startup right as they were going through YCombinator. That experience gave me a first-hand view of the process behind building a startup, an invaluable asset for me as I continued on my entrepreneurial journey. It wasn’t long before I was ready to start my own company.

Take us through your entrepreneurial journey. How did you go from day 1 to today?

My co-founder Eric and I have worked together on a few companies now. Our first company, Hyperpublic, was a data platform organizing the world's local information. Groupon acquired Hyperpublic in February 2012. After working within Groupon for a year, we both got the itch to start something new.

The following company was Wildcard, a native publishing platform and browser for the mobile web. At Wildcard, I was the VP of Engineering, leading a team solving problems in data structuring, web emulation, network performance, mobile development, and interface/product design. Our product was even awarded one of Apple's Apps of the Year in 2015.

But the tides rapidly shifted as the big tech platforms decided to create their own direct publisher relationships. They changed their developer APIs, making it difficult or impossible for us to provide our service or develop relationships directly with our target customers. We faced challenges with distribution and the reliance on Apple’s opaque review process, which would arbitrarily hold our app updates out of the app store without explanation for months. We eventually had to shut down the startup.

After building on closed platforms proved fatal, we said: “never again.” We wouldn’t subject the future success of our business to the frequently changing policies and whims of proprietary big tech platforms. At the same time, a new open developer platform was emerging called Ethereum. Not only was this an open ecosystem available to all, but it also contained the primitives of “money” and “trust,” the building blocks of building economic incentives into the software.

From that point, we never looked back. We knew that we wanted to build on an open platform that would liberate our company and our users from centralized services. With an interest and first-hand experience in video from our previous startup, we leaned into building the world’s open and decentralized video infrastructure, and that’s how Livepeer was born.

How are you doing today, and what does the future look like?

This year, we’ve made great strides, including making our first acquisition: MistServer, an open-source media toolkit for internet streaming. The acquisition expands our video capabilities as we reach deeper into the video tech stack to invest in both the supply and demand sides of the ecosystem. Together, we offer both open software and disruptive infrastructure that’s a high-quality, low-cost alternative to expensive big tech cloud platforms.

In the short term, this puts us in direct competition with Big Tech giants that have long used their scale to stifle innovation and maintain high prices. That drives us towards the future vision: a flourishing decentralized web, also called web3, overturning the status quo and rebalancing the power dynamics away from centralized gatekeepers.

That vision moves us away from extractive economics, where we are all renters, to additive economics, where there’s more ownership in the services, platforms, and tools they use. The difference this time is that these tools are governed and powered by their user communities rather than by the leaders of a small circle of massive corporations.

As far as revenue and profitability, the model is flipped on its head a little bit in an open network-based business model. There are a few ways to track performance: the revenue generated from day-to-day transcoding operations, licensing and support contracts on the software with enterprise users, and the performance of our protocol’s native token LPT. While we don’t disclose internal revenue numbers, revenue generated for transcoding (paid out to node operators) and the token price is all public information. By all internal benchmarks, we’re outperforming and ready to accelerate our growth into 2022.

Through starting the business, have you learned anything particularly helpful or advantageous?

It’s been beneficial to be guided by our mission: to build the world’s open video infrastructure. It may be short, but it’s ambitious; it requires a multistage strategy that plays out over a decade. Given that long timeframe, there are many different potential distractions. So, when laying out the strategy and evaluating opportunities, we can always fall back to the mission. We ask ourselves: is this initiative, feature, or partnership pushing us toward becoming the world’s open video infrastructure? If the answer isn’t a clear yes, then that is likely an opportunity that we have to sideline for the time being.

Being mission-oriented also helps with team building. Our best source of candidates is inbounds from people worldwide who resonate with the mission and the technology. They know that their work is contributing toward a greater good and not just a corporate gain.

What platform/tools do you use for your business?

We’re all-in on Ethereum. This is a transformative technology that allows you to embed economic incentives and trust into open-source software and networks in a way that lets the operators of those networks become owners. The community and culture around not only our project but the other Ethereum ecosystem projects are positive, encouraging, and supportive, in a way that everyone recognizes that we’re all working together to push the world toward a more open web.

What have been the most influential books, podcasts, or other resources?

Two essential must-reads for doing business in the 21st century are Applied Cryptography by Bruce Schneier and Basic Economics by Thomas Sewell. Bruce provides a holistic and comprehensive look at all types of cryptography, which is a must-have foundation for anyone working in cryptography. And Thomas simplifies the complexities of economics in a way that’s easy to understand and illustrated with helpful, relevant real-world examples.

I also found immense inspiration in the writings of Ethereum co-founder Vitalik Buterin on his personal site. Especially in the early days, his words helped me grasp what blockchain technology enables -- and what the future will look like when these systems are widespread.

Advice for other entrepreneurs who want to get started or are just starting out?

Sometimes it’s the most obvious thing that matters most: listen to your gut and find problems or issues that resonate personally. For us, it was about feeling the power of centralized gatekeepers to limit our startup’s future. That feeling of powerlessness led us to decentralized protocols, such as Ethereum. From there, we looked around at ways to harness.

Crypto is also a rocket ride! So for those looking to get into space, the most important thing is to Do Your Own Research. DYOR is a common crypto refrain that reminds all participants not to follow others and learn for themselves. It’s easy to get caught up in the whirlwind of the industry and yet not truly understand the fundamentals. Those who grasp the values of crypto -- what it stands for and how it aims to improve, replace or augment existing options -- will be most well-positioned to thrive in the long term.

The community of users, investors, and talent is ever more sensitive to the fly-by-night operators and scammers seeking to take advantage of the latest trends. Don’t be one of the dilettantes; invest time to truly understand what’s happening here because it truly is one of the greatest transformations after the mobile revolution and the dawn of the internet itself.

Once you’ve built that foundation, consider applying for one of the various grant programs for startups building in the space. We have one at Livepeer, and there’s the Ethereum Foundation’s Ecosystem Support Program. These can be helpful springboards for building in the crypto space.

Are you looking to hire for certain positions right now?

We are hiring for several positions across our engineering and marketing teams:

• Full-Stack Video Engineer. Are you excited about building the world's most reliable, affordable, and high-quality video streaming solution? Do you enjoy working with a small product and engineering team that values shipping quality software? Are you interested in using new technologies to bring disruption into an existing industry? If you love writing software and are experienced in video streaming, you should consider joining Livepeer's as a full-stack video engineer.
• Senior Video Infrastructure Engineer. Are you a video engineer who has built large-scale video deployments with tools like Kubernetes? Are you excited about the challenges of creating a DevOps stack in various environments instead of only on AWS, GCP, or Azure? Are you interested in distributed systems and open source video software? If so, you should consider joining Livepeer as a senior video infrastructure engineer.
• Senior Software Engineer - Video Transcoding. Are you an engineer who loves video processing software? Are you excited about the challenges of creating a decentralized video infrastructure network? Are you interested in creating open-source software that unlocks the massive video processing capabilities of hardware around the world? If so, you should consider joining Livepeer as a senior software engineer.
• Protocol Engineer. Are you an engineer that is interested in developing cutting-edge smart contracts and blockchain software? Are you interested in building crypto-economic mechanisms that coordinate people around the world to allocate resources for useful computation like video processing? Are you excited about architecting a protocol that serves as the backbone of a decentralized video streaming network and that unlocks new types of video applications that are simply not possible with today's Internet video infrastructure? If so, you should consider joining Livepeer as a protocol engineer.
• Senior Lead Product Manager. You understand what developers care about in a product. You are excited about the challenge of owning important product features at an early-stage start-up disrupting the video streaming industry. You encourage discussions, help the best idea win, and turn it into a well-thought-out plan to help with execution. If you are passionate about developer API products, you should consider the opportunity to join Livepeer as our Senior Lead Product Manager.

• Marketing Manager / Sr. Marketing Manager. Are you a marketing professional who likes to take on new challenges? Do you have experience working in the tech industry? Are you passionate about blockchain and crypto? Are you excited about the challenges of a dynamic ecosystem that involves developers, token holders, infrastructure providers, and creators? Are you intrigued by the limitless possibilities of an open and decentralized video infrastructure that enables completely new capabilities? Are you a highly organized self-starter, thrives in a fast-paced environment, and has exceptional communication skills? If so, you should consider joining Livepeer as our marketing manager/senior manager.

• Senior Product Manager - Public Network. Are you passionate about community-operated networks? Are you experienced working closely with existing users, thinking about future users, and understanding technical tradeoffs to form and execute a plan to create a fantastic user experience? Are you excited about building products for a community with diverse stakeholders that serves as the foundation for new types of video applications that are simply not possible today? If so, you should consider joining Livepeer as a senior product manager.

To apply, visit our careers page. It’s going to be a lot of fun building the open video infrastructure for the decentralized web!

Where can we go to learn more?

Please visit us at Livepeerto learn more about our service. I recommend our 10-minute primer. Video miners can find more information here about joining as a node operator, and developers can start building powerful live video applications by diving into our documentation here. We also have a robust Explorer for all stakeholders, where token holders can connect their wallets to stake our native token to earn a share of the transcoding rewards.