Matt Salsamendi was barely old enough to drive when he and James Boehm founded a game-streaming startup called Beam Interactive, based on technology that they had developed in their spare time for themselves and their friends.
He was 18 when they sold the company to Microsoft and joined the Redmond tech giant, forming the basis for its Mixer streaming service and helping to lead its challenge to Amazon’s popular Twitch platform, before leaving last year.
And now, at age 22, he finds himself watching as the streaming world reacts to Microsoft’s decision to shutter Mixer and join forces with Facebook Gaming.
“When we started, I was a 16-year-old kid working on what was effectively just a fun side project out of an IHOP, trying to build something for me and my friends,” he told GeekWire this week. “And what it ended up becoming was pretty awesome. Relative to a lot of the potential outcomes, this is a pretty good one.”
Salsamendi said he agrees with Microsoft’s decision, given the competitive challenges Mixer faced, and the investment it required. At the same time, he said he understands and empathizes with Mixer partners, streamers and users disappointed by the outcome.
“It’s a big deal for the community that streams every day or relies as a business on what Mixer did. For a lot of people, there’s a lot of uncertainty. And so if there’s any sadness or frustration on my part, I wish that there was a way to get more of a heads up and notice out there,” he said. “But at the end of the day, it’s hard to look back and be upset about where it ended up going.”
He has been staying in touch with members of the team, including original Beam members days who moved to the U.S. from Europe to work on Mixer.
“For them, this has been a really big part of their life, this is their story,” he said. “For some of those people, it’s coming to an end now, and that’s just a big thing to wrap your head around. So I’m just trying to be present and listen. For me, it’s more about the people than it is anything about what ended up happening to the company, although that is significant. I think I just had a lot of time to process that already.”
Salsamendi has been an entrepreneur for more than a decade, running Minecraft server hosting company MCProHosting since 2011.
He grew up in South Florida but moved to Seattle before launching Beam, and in some ways, his journey so far is Seattle startup success story. Salsamendi credits Beam’s participation in TechStars Seattle in 2016 for helping to connect the company with investors at a critical juncture in its evolution.
“Matt and James were the youngest founders we’d ever taken into Techstars Seattle, and we selected them for their incredible combination of smarts, ambition and fearlessness,” said Seattle angel investor Chris DeVore of Founders Co-op, who was managing director of TechStars Seattle at the time. “It’s not often that you meet an 18 or 19 year old with that unique mix of technical depth and clarity of vision, and we felt lucky that they agreed to join us for that year’s program.”
One of the people they met through the program was Rahul Sood, the CEO of Seattle-based eSports betting startup Unikrn, a former Microsoft Ventures general manager who introduced them to Microsoft Phil Spencer, the head of Xbox, which ultimately lead to Microsoft’s acquisition of the company.
“Ultimately, the success of Partners and streamers on Mixer is dependent on our ability to scale the service for them as quickly and broadly as possible,” Spencer wrote in a blog post this week. “It became clear that the time needed to grow our own livestreaming community to scale was out of measure with the vision and experiences we want to deliver to gamers now, so we’ve decided to close the operations side of Mixer and help the community transition to a new platform.”
Speaking with GeekWire this week, Salsamendi answered questions about the journey from Beam to Mixer to Microsoft, the company’s decision to end Mixer’s operations, the market power of Amazon’s Twitch, what’s next for the streaming market, and his own plans for the future. Continue reading for edited excerpts.
Do you agree with what Microsoft did?
Matt Salsamendi: Yep, I do. I think what we were doing was a long shot. It’s a big investment. If we were an independent startup, I think it would have been really hard to get anywhere near where we ended up getting. And if we were independently raising investment money, you look at the numbers, you start to think, is this really the best use of resources, vs. what Microsoft ended up doing. There aren’t a whole lot of great options.
But they at least tried to match our existing partnership contracts (in the shift to) Facebook, for example. There are people that are concerned about Facebook, and that’s OK. People are going to evaluate that, and they have the option to go where they want to go, but ultimately any Mixer partner can go to Facebook right now and effectively get a matched contract, which I think is a good thing, to have that option available.
Whether people take it or not, that’s up to them, but I generally agree with what Microsoft did.
The business terms are transferring over, but technologically, do you feel that the partners and streamers are in good hands with Facebook, or are they going to be taking a step down?
MS: It’s no secret — what we did at Mixer from a technical perspective is still unmatched in a lot of ways. FTL (Faster Than Light), the sub-second latency streaming protocol, does not exist on any other mainstream platform. YouTube’s pretty close there. They’re around 1 second, which is effectively good for most purposes. But even Twitch is still, at the very minimum, 3 seconds or so, usually around 7 seconds or so. And that starts to become a material difference. …
I hope platforms will start to adopt lower latency now. Maybe they’ll get a little bit more pressure from their user base. Before, if you really want low latency, you just go to Mixer. That’s the obvious choice, but now there will be a little bit more pressure put back on Twitch, YouTube, Facebook. I don’t know how much they’ve talked about it, but Facebook cares about latency and they’re working on some things along those lines, closer to what we have with FTL.
What would you say to a streamer or a partner who’s frustrated with what Microsoft did?
MS: It’s really hard to answer that directly, because on one hand, I am empathetic to what people on Mixer are going through right now. It was, and is, their home. On the other hand, it’s also a business. And it’s not one that was making money. Microsoft is spending money to support what is effectively a free platform.
If there’s not a business justification, just in a totally objective sense, it’s hard to get upset at the fact that Microsoft spent X number of dollars and three or four years working on it. You can’t see what happens on the inside, but this is a huge investment. They thought it through for 3+ years. I’m content with that. I wish everyone knew the numbers. I wish everyone knew all the inputs into this decision. But ultimately what people see is the reality of the situation. And for a lot of people, that’s a really difficult and uncertain transition.
Mixer ascending to the Microsoft afterlife… pic.twitter.com/cZ5UIgeLHn
— SF Shock Cory (@WhatsUpPizzas) June 22, 2020
What was it like to compete against Amazon and Twitch?
MS: That’s interesting. On one hand, I love the product. Even while I was at Mixer, I used Twitch daily. And I think that’s fine. We had a very open policy around our partner exclusivity, trying to really be aware that our success and the inspiration for what we did came from Twitch, so from a product standpoint, I love it.
Yeah, there were some things that made it difficult to compete with Twitch in the market. Namely, the standard partnership contracts are very stringently exclusive. Even their affiliate program, which the majority of Twitch streamers that have meaningful audiences are in, also has a 24-hour exclusivity clause. So that makes it really difficult. When the premise of your platform is bringing over streamers and hoping their communities will follow, you have a lot of inherent risk that you’re putting on streamers that join. And that risk is compounded by the fact that they effectively have to make an all-or-nothing decision.
So throughout the existence of Beam, one of the big challenges was figuring out how to communicate with streamers that were taking on a significant risk when they would either break their contract or cancel their contract in order to join Mixer. That’s a difficult thing. And that’s probably one of the hardest parts.
Is there a risk that Twitch will become too powerful in all of this, if Mixer isn’t there?
MS: I think so. I think we had always wished, starting Mixer, that we would be able to do something that offset how one-sided the decision-making process for streamers was. You know, if you want to stream, you go to Twitch. That is the default answer. Anything else today is kind of a second thought. I’m hopeful that YouTube can do a little bit to offset that.
I think a lot of people understate how small Twitch is in comparison to YouTube Gaming, not in terms of live content, but if you look at total viewing hours across the platform, Twitch is actually quite small, relatively speaking, actually a pretty niche thing. But at the same time, in terms of live, Twitch is much larger in terms of the core community and audience. YouTube’s continuing to grow. And hopefully they’ll be able to leverage the VOD side of their community to grow the live side. We’re seeing that slowly today. But ultimately today that option is still Twitch. So to answer your question, yes. Twitch is, I don’t want to say the word monopoly, but it’s hard to imagine where else you go right now.
I’ve been speaking to a bunch of Mixer partners tonight and it seems like most are moving to Twitch, not Facebook Gaming. Microsoft’s move is a big win for Amazon and Twitch, as many simply won’t touch anything Facebook-related
— Tom Warren (@tomwarren) June 22, 2020
Looking at the deals that were made last year with Ninja and Shroud, it felt like Microsoft was making a big bet on Mixer. In hindsight it looks like that was like the last gasp, one last effort to make it work. Am I off base?
I think there’s a line of thought where that makes sense. I don’t think it was necessarily viewed like that internally. I definitely don’t think it was viewed like that, at least openly, from a leadership standpoint, when we were making those decisions. That wasn’t how we were framing it internally. … At the end of the day, Mixer is kind of this experiment, in terms of Microsoft branching out into a consumer platform that’s very heavily community focused.
There were many big bets, not just Ninja and Shroud, but throughout the time, there were big bets. And I think at a lot of those points, people had questions about viability, and that’s totally fine. At the end of day, you look at the numbers and you make the decision based off that, but I don’t think there was this intention going in that Ninja and Shroud were the last hurrah.
Why did you leave?
MS: It’s not any one reason. You look at a bunch of compounding factors. In October of last year, my boss, the general manager and our corporate vice president, both left for totally different reasons, and not necessarily related to Mixer. For me, my boss was super great and I really enjoyed working with him. And prior to joining Microsoft, I had actually never had a boss before. I had always worked on startups since I was 13 years old. So it wasn’t that I was opposed to change, but that was definitely something that gets you thinking about your own trajectory, and where you want to head.
I had been going nonstop for the last nine years of my life, since MCProHosting in 2011. And I skipped a lot of my adolescence, just sitting there working on the computer all day, so I wanted to take some time while I was young and spend it doing things that weren’t necessarily just with commercial interests. As much as I enjoyed the community side of what we were doing, I didn’t want to just keep sitting there at Microsoft all day, when I felt like there were a lot of things that I missed out on growing up.
After 5 incredible years, tomorrow will be my last day at Mixer. A bit about the story of Beam and what’s next for me below. Thank you, for everything.💙 pic.twitter.com/bvAktSSpPh
— Matt (@MattSalsamendi) October 10, 2019
The third thing is, from a product strategy standpoint, the thing that really excites me is working on net new loops, net new engagement with communities, things that are really cutting-edge in terms of not just technology, but the product experience and the core loop that people participate in when they go to a platform. I had a couple ideas about ways that we could do things a little bit differently. The primary goal for Microsoft, which makes a lot of sense, was growing what we had today. …
The team grew pretty quickly. We had well over 100 people that were just working on growing the product, let alone all of the innovation that we were trying to do. And so the opportunity to really innovate on the core experience, not just new features and whatnot, but to change what we were really about, was limited. If I wanted to do something like that, I don’t think it was right to change course that dramatically at Mixer, just in terms of the responsibility to the people that were working on the core product.
Where do you see the streaming market going, big picture? We’ve seen an expansion beyond games into other areas, even recently with all the protests and streaming platforms becoming a different type of communication medium. Where are things headed long term?
MS: It’s a really cool thing because streaming has given a voice to a lot of people that would otherwise not have a voice or place to talk about big issues. Right now, both on Twitch and Mixer, many prolific community members are coming out and speaking about experiences that they had with sexual harassment. … That’s really cool, that gaming and streaming is giving people a voice. Live streaming and chat communities continue to grow and become more mainstream. Hopefully people will feel more comfortable just expressing themselves.
Anonymity is a big part of it. And it’s one of the questions that people have about Facebook. When you’re anonymous, there’s some bad things about it, you feel it’s easier to get away with bad things. But it’s also easier to communicate things that are sensitive to you. ….
So I think anonymity is a two-sided sword. It’s giving people more of a voice to speak, and that’s a really core part of a lot of these streaming platforms. People aren’t using their real name. You go into a chat room, with 95% of the people, you have no idea who they actually are in person. But at the same time, you speak with them every day and you feel like you know them. It’s a very interesting dynamic, and I would say it’s pretty unique to streaming.
What’s next for you?
MS: That’s a good question. Right now I’m enjoying the time off. I’m spending a lot of time doing lighting laser design, like I talked about in the post when I left. I’m doing some cool projects for musicians. Obviously with COVID-19 and quarantine, there’s not a lot of live shows, but there are a lot of music videos and whatnot, where we’re doing some cool laser performances and things along those lines. I’m really enjoying the creative side.
Maybe in the future I’ll do something — there are a lot of ideas floating around. But for right now, I’m just taking the time to sit back and enjoy the ride and be present where I can in the existing community.
I’m sure you get this all the time, but to have gone through the multiple cycles that you’ve gone through by your early 20s, it’s pretty remarkable. I’m sure you’re tired of hearing that from old people like me.
MS: It is crazy. I think that I have been in a really fortunate position. I would say 75% of where I am is because of timing, not necessarily skill or anything that we did that was super special, but just being in the right place and being really passionate, seeing things through, I think is what led to that. So, I’ve been really lucky to be in the position that I am.