SaaS Interviews with CEOs, Startups, Founders
666: Sentient $100M+ Raised, A/B Testing With Artificial Intelligence with Exited Founder and SVP Jon Epstein
21 May 2017
Chapter 1: What led Jon Epstein to start GameSpot and GameSpy?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per talk. Five and six million. He is hell-bent on global domination. We just broke our 100,000-unit soul mark.
And I'm your host, Nathan Latka.
When I do webinar interviews or I give big speeches to thousands of people all over the world, I usually will talk about data and sometimes show my dashboards, like my SaaS dashboard as I'm growing my SaaS company to top inbox, or my website dashboard, which shows how I take impressions to convert them into email leads and convert them into customers for NathanLacke.com.
The funny thing is, guys, I build these dashboards with myself, no developer, and it's basically free, and I use one tool to do it. You can see the tool at NathanLacke.com forward slash dashboard. analytics. I'll tell you more later in the show. This is episode 666, and coming up tomorrow morning, the PayU CEO comes on, Laurent Damol, and I get him to reveal how much revenue they've done.
Hint, it's above $150 million. Now, the way they've done that is with a new risk assessment product to grow their financial services arm.
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Chapter 2: How did Jon achieve a successful exit with GameSpy?
He was the ex-PayPal CEO of Europe. You don't want to miss it. Good morning, everybody. My guest this morning is John Epstein. He is currently, he just moved into a new role as a Senior Vice President for International at a company called Sentient Technologies at sentient.ai, the maker of Sentient Ascend, the first conversion optimization solution powered by evolutionary artificial intelligence.
Epstein has been in many companies at the forefront of technology and media, including GameSpot, which he was the founding CEO of, OMEC, which was sold to Intel, and GameSpy, which was sold to IGN. John, are you ready to take us to the top?
Absolutely. Let's go.
So you're like a nice breed. You're not the CEO currently of Sentient, but you've had a lot of success with your own companies prior to Sentient, GameSpot and GameSpy, correct? Correct.
Yeah, GameSpot, GameSpy, Omech, IGN had a good exit as well.
What's a good exit?
I've always enjoyed staying on the forefront.
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Chapter 3: What innovative AI solutions does Sentient Technologies offer?
Say that again?
When you say a good exit, what's a good exit mean to you?
Well, it ranged anywhere from in the tens of millions into the hundreds of millions of dollars. Some were better than others. Some of the startups didn't fare so well. That's such is the nature of startups.
Was GameSpy your baby? Were you the founding CEO?
GameSpy, yes, GameSpy was the president. Actually, it was more of a turnaround. GameSpy had been sold to ZDNet and then CNET and had invested in GameSpy. And when 2001 came and sort of the website market was contracting, I jumped over to help the CEO of GameSpy turn it around and achieved a pretty successful sale to IGN.
And what was the, so I want to kind of dig more into your history. These companies, I mean, are these gaming companies like the names would suggest?
You know, yes and no.
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Chapter 4: How does evolutionary AI enhance A/B testing?
So I have worked at an actual gaming company. Most of my life has been, you know, except for the last eight years, was focused on media and other elements related to gaming. So I started out at IDG as a magazine publisher, originally on the technical side and then into the multimedia space. That's what brought me into gaming because
Games were the applications that really have always stretched our PCs and our phones the most in terms of requirements for new features, which back then was sound and CD-ROM. So GameSpot was the first really professional online reviews site for games.
Game Spy had a editorial element and also published content about games, but it also had middleware and a software client that was used for matching up players in server-to-server gameplay. These days, online gaming is par for the course, but back then, People were playing Quake and Doom and it was kind of hard to find players if they weren't on your land.
And so GameSpy had a really great piece of software that we then ended up licensing into games from folks like Electronic Arts and 2K Games and many other.
And John, so GameSpy was your first kind of venture in entrepreneurship, is that accurate?
Yeah, that's right.
And how old were you when you launched that? What year was that?
GameSpot was launched in 1995.
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Chapter 5: What is Sentient's revenue model and customer acquisition strategy?
It wasn't my first startup. I had launched the magazine Digital News, and then I had launched the magazine Multimedia World. But that was sort of entrepreneurship for IDG, which is a great company that, you know, values.
So just to be clear, you were working for that company, and you launched those magazines under their brand.
Exactly.
my own startup it was 95 i was 31 years old oh that's okay got it and walk me through you know a lot of the feedback i've got from the show and i like to keep close kind of tabs what my audience is wanting they say nathan you can't just talk about billion dollar companies every day and i get a lot of those guests on ceos of big companies they like to hear the beginning stories too what i mean what gave you the confidence in 1995 to leave your gig which it sounds like you had a lot of freedom on you were launching whole magazine brands what gave you the confidence to leave and start game spot
Yeah, so I guess it was, so first of all, I had great partners. I mean, I think it really starts with that. People are what matter. And there were two guys, Vince Barati, who now runs This Moment, and Pete Deamer, who's one of the top agile consultants in the world, I believe. And these guys worked for me, and they were just a really great team.
Were those founding partners, though, John? Was it three co-founders?
Yeah.
game spot right and the original idea came from the two of them they wanted to call it g spot though i like it sign me up i'm the one out there uh selling media to largely female media buyers so um i don't think so so so that was part of it i think the second one it was clear it was clear at the time hey this you know we had started put it we'd put pc world online and multimedia world magazine online it was clear this internet thing was happening
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Chapter 6: How has Sentient performed in terms of customer retention?
And that if anything, the gamers were ahead of the curve in terms of their use of online. And then there was this problem. The problem was, you know, if you look at the individual video game or PC game, their shelf life in the store, it's pretty short. But magazines have this really long lead time.
of two months like so by the time a magazine came out either the review had been written before the game was done or the game might have even been off the shelf so there was this this information gap and we realized that online with the real-time nature of online publishing would allow us to really serve the gamer community better and not just give them you know john hold on i don't mean to cut you out this is all still under game spot or have you transitioned into game five
Okay, well, hold on. Wrap out the GameSpot story first. So 1995, you launched, you were 31. What happened? Did you sell it? It went under what?
No, yeah, so we took in some external investment. We ended up selling it in parts to Ziff Davis, to their ZDNet subsidiary. Okay. In retrospect, maybe a little early, but it was for some younger guys, and I was the oldest of the three.
Chapter 7: What insights does Jon share about raising capital for tech startups?
It was a decent exit.
What did you sell it to them for, or the assets?
We sold it for stock in ZDNet. So at the peak, it was worth about $45 million as an exit. And by the time we were able to sell the ZDNet stock, we're worth a little bit less than that. So I think, you know, we view it as like we all got a pretty nice house out of the deal.
Yep.
And some track record.
And then you take that capital, you snowball in a game spy, which helped bridge the information gap between kind of games and all that by moving a lot of this content online.
Yeah.
Not quite. I spent a couple years after having sold it to ZDNet. First of all, we ran it inside of ZDNet for a while. And I stepped into an international role. I really wanted to get experience in doing business in different countries.
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Chapter 8: What advice does Jon give to aspiring entrepreneurs?
And ZDNet had joint ventures. It had wholly owned subsidiaries. It had licensees in something like 30 countries around the world. So I ran that for a while. And then as, you know, 2001 happened and, you know, the internet advertising market dried up, it was clear it was time to, you know, maybe go on again. We had invested from ZDNet into GameSpy.
I was on the board there and they made a very concerted effort to recruit me. So I joined Mark Surface.
Oh, interesting.
And then did it again. It wasn't my former partners at GameSpot were not super happy with this move since they said I was going to a competitor company.
but uh such as the well well tell us how that works you're you're a rational guy they must incentivize the hell out of you how they what they give you what character they give you uh game spy yeah um a nice salary in about eight percent of the company so you know it's a good package for uh for a ceo um game spy was pretty unique in that the founder mark surface had not taken in external money and he owned more than half of it so um and then in you know two and a half years we were able to
What year is this, by the way, John? Let's keep the thing going.
This was 2001, and I joined there in September 2001. The company was sold March 2004 to IGN, and the two bidders were IGN and GameSpot. That's funny.
Okay, so you sell it. It sells in 2004. So your kind of first big kind of financial moment was when you sold GameSpot. You were in your kind of mid-30s. It got you a nice new house. You then took that into a big salary and 8% of GameSpot, which you helped grow. That sold for, you said, 10 to hundreds of millions. You gave a big range, which is fine.
But that was, I guess— That one was around $61 million, if I recall. And so I made more money on GameSpy than I did on GameStop.
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