#15 Jesse Shemen of Papercup on Auto-Translating The World's Video, Building Technical Knowledge and Raising Your First Round
By Nasos Papadopoulos, EF Head of Content
Jesse Shemen is the CEO and Co-Founder of Papercup, a company that auto-translates the voice track on videos into the world’s languages.
People spend an average of 5 hours watching video every single day but the problem for creators looking to maximise views is that while subtitles are helpful, people want to hear videos in their own language and quality dubbing is prohibitively expensive.
That’s where Papercup comes in - they auto-translate the voice track on videos into the world's languages which means that in one click, you can reach the world’s 7 billion people rather than being restricted to the 1 billion English speakers in the world.
Jesse met his co founder Jiameng on EF9 and since founding the company and pitching at the recent EF9 Demo Day, they’ve received a term sheet and are in the process of closing their seed round, as well as securing trials with two large media companies who have sent them their original content.
Jesse graduated summa cum laude from Stern School of Business at NYU. He then co-founded Deloitte’s startup incubator and investment arm and co-launched a new venture at Octopus Investments before joining EF9.
In this episode Jesse and I discuss:
- How he developed the technical knowledge that underpins Papercup
- Jesse’s pitching advice as one of the standout performers at Demo Day
- Jesse’s key lessons from raising his first round
We also dive into Jesse’s experiences on EF and how he started working with his co-founder Jiameng on the program so the conversation will offer you a combination of solid practical advice and insight into what it’s actually like to build a company on EF.
Why I Joined EF
The Thing That Surprised Me About the People on EF
How I Found My Co-Founder at EF
How I Started Finding Product Market Fit
How To Prepare for Investor Questions
What I Learned From Raising My First Round of Investment
Nasos: Jesse, welcome to the show.
Jesse: Thank you very much.
Nasos: It’s great to have you on. To start off with, tell me a little bit about what you do at Papercup and how the world is going to look different if your mission plays out the way you want it to.
Jesse: [00:03:00] Cool. Well the mission will definitely play out as we want it to. Basically, video content is typically held and shackled to one language. What that means is if you watch a YouTube video or a Netflix TV show, it's hard to produce it in multiple languages because it's really expensive. So, what we want to do is auto translate videos so that creators, the people that make these videos, can reach a far wider audience and basically milk their content.
[00:03:30] For example, if you create video content in English you're essentially limited to just reaching the one billion people that speak English. We want to open that up to the rest of the world by auto translating content into other languages. If and when this does crystallize, we envision a world where all the world's videos - whether it's the archive that sits in Amazon videos or Sony and Paramount's premium content or all of Twitch's videos - can be open to any language, to any person on Earth. And that way, all video content will be consumable by anyone.
Nasos: [00:04:00] Other than this sort of big picture vision that you've got to work towards, is there a personal element to this business for you as well? Is there a story or a link, some connection that you have which really binds you to this personally as well?
Jesse: [00:04:30] For me, what was interesting is that I always wanted to build something that had real utility to people and actually made a practical difference to somebody’s day-to-day life. I think the likes of Pinterest and YouTube or any consumption platforms are interesting to me. But I think that what takes it a step further is where you use technology in a way that practically changes somebody’s day-to-day life. Whether that's something like TaskRabbit, where if you previously couldn't commission the task yourself or delegate it to somebody else, you had no option of grabbing groceries or delivering an object somewhere else. Whereas TaskRabbit changed that, the same with Uber for transportation.
[00:05:00] I always thought, “What could I introduce into the world that actually helped somebody in a meaningful way - especially with video creators?” You look at the glitz and glamour of the finished product of what's distributed on a platform. What you don't realize is the time, the energy and the capital investment that goes into making a video. These creators really struggle. It's hard for them to make a meaningful earning just from the videos that they create. But by expanding their reach to multiple different audiences, we can change the game for them.
Nasos: [00:05:30] Well it's definitely an exciting prospect to think that we could have all these videos in any language and in the original creator’s voice using your technology. Let's go into the product a little bit more later and some of the details around it, but for now let's cycle back to your pre-EF experience. You founded Deloitte’s Startup Incubator. What was that experience like? By doing that, did you start to get a bit of a taste that this was something you wanted to do yourself - to found your own company?
Jesse: [00:06:00] Deloitte's a really interesting beast. It's an 18,000-person company. It's been around for over a century. It's an incredible company and Deloitte probably has one of the most well-respected positions with enterprise companies, who have over 1000 employees. I teamed up with four guys in Deloitte and realized that you have a bunch of talented people within the organization and that you have a lot of corporate clients. Why don't we try and industrialize some of the ideas and proof of concepts that people were coming up with?
[00:06:30] That was the premise behind it and that's when we launched what was an internal incubator - which is taking ideas and proof of concepts, putting some actual meat around it, giving them guidance and advice and helping them to launch a product and eventually a business off the back of an idea or an application that they've built [inaudible 00:06:46]. That was really exciting. It was one of the first times that it existed in Deloitte's history.
[00:07:00] That gave me a better idea of building and looking at ideas and concepts from inception and trying to build an actual product out of that, which was definitely exciting.
Nasos: After Deloitte, you were at Octopus where you launched a new venture there. Tell me a little bit about that experience. I'm also kind of interested to know - was this for you, did it become a series of strategic experiences that were building towards you founding your company, or was it more just that one thing came, and the other thing came and then you realized, hey, this is my time. Was it more emergent and deliberate?
Jesse: [00:07:30] Right. So, at Deloitte after the incubator what I did with another fellow was that for the first time in Deloitte's history we launched their investment arm - which is investing in early stage technology start-ups. I saw both sides. One which is building from scratch, which I wasn't necessarily personally doing but it really excited me. And secondly was the investment side. I realized that I'd much rather build than invest. It was certainly exciting to do it in the context of Deloitte. But I realized where my passion lay and what I wanted to do, so that's why I went over to Octopus.
[00:08:00] Octopus had an incredible accelerator that they set up called Octopus Labs. They launched a peer-to-peer lending product called Octopus Choice which grew to over $100 million in loans quite quickly. It was a very impressively set up incubator in the context of a corporate environment. I was brought in to launch their next financial product, whatever that might be, in conjunction with some of the directors and other employees that were already in the incubator.
Nasos: [00:08:30] How did you hear about EF and why did you decide it was for you?
Jesse: A few months into Octopus, I realized that even though it was a really well set up incubator, I needed to just go and do something on my own because if you do something in the context of a corporate environment, you'll still have the backing and the cushion of a company that you can't get away from. That means that you're not going to get the same intensity and the same level of ownership.
[00:09:00] I don't just mean equity, I mean actual ownership of a company where you feel that sense of pride and practical level of achievement. You can only get that if you launch something on your own. I had to convince my wife over some time but we eventually got there. I started working on my own side projects while at Octopus, which they encouraged because it stimulates creativity and your own sense of exposure. I started working on my own product which was like a recruitment platform. It was horrible, but at least I was trying something.
[00:09:30] I ended up going to an EF event, just spontaneously, and I walked up to one of the people who were there and just explained what I was doing. They said that I should apply. I said, “Why would I apply right now? I don't have anything nor am I a programmer.” But they really encouraged me, which I was happy they did. And that was the starting point.
Nasos: What's your dominant memory of the very early stages? So kick-off weekend when you're getting thrown into a room of 100 super smart, super ambitious people who all want to build a globally important tech company. What did that feel like?
Jesse: [00:10:00] It was interesting. I had this pre-defined vision in my mind of what EF was, which was just purely technical people with more academic backgrounds who might be disconnected from what it's like to actually build a company. But I was wrong.
[00:10:30] EF has done a good job of educating people of how it all works and what EF as a whole can actually do for you if you have an idea or if you have this contrarian insight of something big to build. So just meeting the people during week one was shocking for me, because you realize that not only were people incredibly bright, but they also had outsized ambitions to create something really big and that just forces you to think in a different way.
Nasos: How many co-founders did you have to go through before you go to Jiameng, your final co-founder who's helping you build Papercup?
Jesse: I don't disclose my personal relationships.
Nasos: You don't kiss and tell.
Jesse: [00:11:00] It was funny, before the program, EF does a good job of showing you this catalogue of other people that are on the program. I came up with my Trello board, I prioritized who I thought I'd meet. What's funny is you really have no idea. You don't know who you want to found a company with. You might have an idea but you're likely to be wrong about that because you look for social cues instead of looking at who you could actually be most productive with. That is one of the biggest questions you have to ask.
[00:11:30] I met with a bunch of different people before the program started and then I launched. One fellow and I worked on the recruitment idea and quickly concluded that there wasn't a big enough market for us to tackle. And then immediately after that, the day after we split, the second person I teamed up with was Jiameng.
Nasos: [00:12:00] What did the earliest stages of talking about the product and trying to think about a prototype look like? Because obviously what you're building is very complex and requires a lot of engineering on the backend. So how did the idea develop and what did the early customer development conversations look like?
Jesse: Everybody likes telling their own story and dreaming up what their own product is. Then just trying to put that into practice was a big part of it. But what we realized is that we have no idea what the hell video creators want. We basically had two tasks.
[00:12:30] Jiameng had to prove that he could convert what he knew theoretically into an actual product. I had to go out there and find out who cared about this. What did they want? What's important to them? Do they want their videos translated and just as equally, is there an audience for it? Do people want to watch translated videos? That's what I spent a lot of my time doing. In fact, we weren't actually convinced that video was the right market to begin with because there's a lot of audio-based content out there. Whether it's audiobooks, podcasts, learning material, whatever it might be.
[00:13:00] I think just going out there, and it's hard to do this, but intentionally trying to prove yourself wrong with certain hypotheses that you have. That's what led us to where we are now.
Nasos: What if anything surprised you about those conversations? What are things that you learned about the video creators that you weren't expecting at all? Was the most surprising thing - the one that led to your insight of what you actually wanted to do?
Jesse: [00:13:30] Even if you're aware of the confirmation bias that you're looking for things that people will just reaffirm what you believe. Even if you're aware of that which I really was conscious of, it's super hard to fight off. You want to orient the conversation in such a way that the outcome is that you're absolutely right. You are heading down the right path. But it is working to your disadvantage if you do that. So, I think fighting that off was surprisingly hard.
Nasos: [00:14:00] In the run up to Demo Day I remember this sort of talk around the EF team - they were confident that you were going to be one of the good pitches and that you had things handled. How did it feel on the day when you were backstage? Did you feel like you had everything handled and that it was all going to go smoothly?
Jesse: I think there are two things. One is that even for those sort of presentations, people like to tag it as a natural skill which it's totally not. In my Deloitte and Octopus days, I spent a lot of time practicing how to present, how to articulate, who to look at, what hand gestures should look like and how to walk with purpose. All of those things are learned so people shouldn't fear them.
[00:14:30] You can convert yourself into a speaker if you want to. Second, even though I went through all of that training, you are bugging out when you're on stage. You're thinking that even though you've rehearsed your lines 467 times, when you walk on stage you're in this different mindset and it hits you like a hard crashing wave. Equally, there is a counterforce which is the adrenaline and that kicks in all of a sudden when you get into motion. You're in the flow and it just works.
Nasos: [00:15:00] You were opening the show as well, just to clarify for the listeners as well - which is no easy feat. How do the conversations go after that then? Obviously, the second part of Demo Day is when people start coming to your store and having a chat with you. Were you pleased with the initial response, the initial conversations that you had at the first stage of revealing your company to the world?
Jesse: Yeah, the conversations were great, people are incredulous. They don't think you have something, which is exciting when you actually do. And it's not just air and vapourware in the background. I think that's one exciting thing.
[00:15:30] Two, what you realize is that people typically migrate to the same set of questions, which is really helpful because it tells you what you should be preparing for in investor conversations as well as for customers and partners. Rafi, who's from Genie AI, came up with something powerful. He said that when questions stop correlating with each other, that's when you know you've just maximized all the preparation that you can do and you're in a good position.
[00:16:00] Figure out where the commonality is between the questions that people are asking and then you'll cover the biggest risk areas that people have in their minds.
Nasos: And in the weeks following up from Demo Day, so for the last few weeks now, you've been going through all these investor meetings - it's your first time raising a round. What's that experience been like? How have you navigated it?
Jesse: [00:16:30] I want to say there's a secret sauce, but there totally isn't. But there are some interesting frameworks that you should use for navigating investment. One is making sure that you parallel all conversations so that they happen simultaneously. One thing that I didn't do very well was making sure that when you speak with one investor and you’re in mature conversations, that you're at an equal stage with others. The problem is that if you're in the privileged position of somebody offering to participate in your round, you then have this time lag of the investors that you want to target. I think that's one thing that's important to navigate.
[00:17:00] Two, what I think is probably one of the most important things is that people have genuine questions and concerns about your business, but they want to find an opportunity to invest in it. It's not your job to get aggressive and to counter every single point that they make. Digest what they're saying. Figure out what the root of the concern is and try to address that as best as you can. I think taking a more amicable approach to it is really helpful.
[00:17:30] Otherwise, you're more inclined to immediately deny something that they put down on the table but usually there's something in there that you should be listening to and responding to.
Nasos: In one of the previous episodes of the podcast, Dev provided quite an interesting frame on the process of founders going to investors - which is basically that valuable companies are a scarce resource. It's not just about the investor choosing you in some sense, it's that if you have a valuable company and it's something that you believe in and something that you've proven that you're getting initial traction for, you also have the ability to go to investors.
[00:18:00] How have you been thinking about choosing your investors? Obviously not every start-up is in the privileged position to do that, but what sort of qualities have you been looking for in the people who you want to take money from?
Jesse: [00:18:30] That's definitely a privileged position to be in, but I think anybody can ask themselves the question which is, what type of investor do I want? No matter how in demand your company is, or whether or not it's considered a really in demand deal, at the end of the day if you pinpoint the type of investor that you want you're more likely to actually lock one down, because you're more likely to fall into their criteria for an investment. I think for us it was, who really understands media? I realized that that was one of the bigger questions for me in terms of the trajectory of the company. I'm not somebody who was deep into media at all before EF, but it's something that we obviously need to understand and really tackle.
[00:19:00] I think that was certainly one question and two, who could help us with some of the operational questions that we have? One of our big questions is, what's the best route to market? Do you go for a significantly discounted pricing model and then try to build up a community of creators? I don't know the right answer. I'd love to find an investor who has examples in their portfolio that give me the confidence that they can give us good advice in this case.
Nasos: [00:19:30] You mentioned that media is an area that you're looking to learn a lot more about. By definition, it's going to be really important for the business. How are you going about doing that? How are you keeping abreast of things? Are you engaging in conversations? Are you putting yourself in circles where those conversations are happening? How are you thinking about that?
Jesse: There are two big things that I'm doing. Any person that I think is even semi-related to media I ask them, to get an idea of what their knowledge base is and try to really dip into that. But I ask them two questions. One, what are the publications which you read that you feel are most insightful?
[00:20:00] And secondly, who's a person that you think is just super connected in this space who really understands the fundamentals that can help me? That has helped me to build up this small network of people that's continuing to grow and who are super plugged in and can actually help out. Each of those have fed some publication that's really helped me to keep abreast of what's going on.
Nasos: [00:20:30] Given that you don't come from a deeply technical background, how has the process of learning about the tech and working with Jiameng been? How have you guys been able to meet minds - almost so you could get a clue of what he's building and how this actually works?
Jesse: I think there was a lot of calibration in the beginning. Jiameng is incredibly bright. Being super technical, he really understands the meat of deep learning and different aspects of what we're building.
[00:21:00] I come from a different universe and thankfully I was always exposed to product and the technical side of things at Deloitte and Octopus, but not to the degree that your CTO is. In the beginning there was a divide, which was both of our jobs to try and bridge that. On the one hand Jiameng had to figure out how to convert some of the more technical jargon into something that was understandable. Equally, I had to build up my knowledge base so I was taking Coursera courses. I was reading some of the papers and then just sitting down with Jiameng to go through some of the concepts. I think both people have to put effort into it.
Nasos: [00:21:30] Looking back now at the last three months with a term sheet on the table, what do you reflect on as being some of the most difficult moments? Do you look back and think, well I'm glad we kept going there, or I'm glad that we stuck at it as a team? Rather than breaking up and founding it with someone else. Was there a moment or several moments?
Jesse: [00:22:00] We never had that as a team. Thankfully Jiameng and I always worked well together from day one. I think we're lucky in that sense because you couldn't have projected it but I think everybody says that. Founding a company and building something from scratch is incredibly hard. You don't realize how gruelling it can be sometimes because it's not just the idea of rejection. Everybody knows you will get rejected and that you have to take those punches to the stomach. Often, people will say no but they will doubt you. People will be incredibly sceptical who aren't even looking to invest. You'll also read news, you look at what competitors are doing - all of which counters whatever your philosophy or hypothesis is.
[00:22:30] Sometimes it's hard to just stand up and pull through. But if you're not resilient, you're bound to just fall down on the wayside because you're going to get hit by these bullets left, right and center. Especially in the beginning you are in this mode of survival because you're nothing. You're two people, you're a prototype. In theory, anybody can replicate what you're doing. You do feel like you're in quite a precarious state.
[00:23:00] I think having a strong mindset and being convinced about what you're doing, so long as you're not just this insane optimist who's not pragmatic at all. It's important to have that healthy dose of optimism because it really fuels you through the process. Jiameng and I made sure to do that throughout.
Nasos: [00:23:30] In terms of the co-founding relationship - is that why it's important to click personally so that when the times get tough there's an element of moral support between the two of you and you can continue to survive?
Jesse: Well I think there are two things. One is that you often have to learn how to work with your co-founder because it's not the traditional social relationship that you might have with a partner or a friend. If you try to forge that archetype of a relationship it often creates more distance. I think what you have to do first and foremost is to understand who the other person is. What do they care about? What makes them emotional? What makes them tick?
[00:24:00] Once you do that, then you can start supporting each other. Two, you don't need to solely rely on the co-founder relationship. Thankfully, that should be the bedrock of the company and the relationship but look elsewhere for personal mentors as well. You should still be open to that, especially people who have gone through a similar process because they can really empathize with you. They understand where you’re coming from. They know the pain points, they know the self-doubt that you might be going through. I think that's totally acceptable.
Nasos: [00:24:30] How important have third parties and advisers been for you on the journey so far?
Jesse: They’ve been really important. You always hear a range of advice. People will give you totally opposing opinions but it's your job to filter through them to figure out what's best for the company. They are hard decisions, don't get me wrong - but that's exactly what a founding team is supposed to do. They take all the noise, the feedback, the advice from the market, from people that you really trust and then try to make a decision.
[00:25:00] What people also suggest doing which I think is true, is to not try and get this wide spectrum of opinion for every decision that you're making. Don't go to 15 people. They'll just confound and complicate the decision-making process. What you should do is find the one or two people that you really trust and if they're wrong, okay fine. Course corrects. Make sure that it's a decision that you can rectify. It's okay to be wrong or slightly misguided. But I think finding those one or two people are important.
Nasos: [00:25:30] We've spoken about all the lessons you've learned from a business sense - the fundraising process, pitching and working with Jiameng, your co-founder. But what have you most learned personally about yourself over the course of the last few months stepping into this kind of entrepreneurial path and trying to build a company for the first time?
Jesse: [00:26:00] Everybody thinks that they have these certain passions in life. Things that make them incredibly happy and get them into a certain flow. For me, that's basketball or speaking with incredibly bright people about challenging topics. But what you realize when you found a company is that a lot of what you're doing can be quite mundane or can feel outside of the circle of things that you actually thought were a) in your zone of competence, but b) things that you actually liked. But with a switch of your frame of mind you can re-embrace these things. Even now when we're recruiting talent, what do I know about recruiting?
[00:26:30] I've learned about it and I've really grown to love it. I sit down with an individual and figure out what they care about, what their aspirations are, what they want to get out of Papercup, what their dream is, and what their ideal role is. That's something that I never thought I would love and thought it'd be dry and boring. I've actually grown to love it, so I think that just by changing your frame of mind you can embrace a lot of what you have to do as a founder.
Nasos: Great. Well Jesse, thanks so much for coming on the show. Let's end with that.
Jesse: Cool, thank you.