Spotlive CEO Talks Sex Tech Startup Hurdles and the Need for Millennial Entrepreneurs
Jacob Michalak on launching his adult cam platform.
Photo by Tomasz Sagan
If you’re familiar with the sex tech and adult entertainment industries, you’ll know businesses inside these sectors face unique challenges—all because their focus is on sex for pleasure. This concept has ruffled many feathers and led to banks, payment processors, and investors denying them services and funding options open to outside companies.
To shine more light on such frustrating barriers and hopefully help fuel more discussions on how to overcome them, we spoke to Spotlive [NSFW] CEO Jacob Michalak about his experience starting the adult media company.
What is Spotlive and when and why did you launch it?
JM: We are describing Spotlive as a reinvented media company for adult content.
Reinvented because we turn the current rules of the industry about 180 degrees and focus on the performers—their work, success, comfort, and well-being. Our goal is to elevate them as artists in the adult entertainment business and help push their boundaries further.
We truly believe that for the past decade the control on their will and work was taken away from them. That’s why through our actions we want to give the “power” back to people.
A media company because we go beyond being an adult live cam platform and build various tools that will support models in developing themselves, getting knowledge, grow and engage with audiences, connect them with brands, and distribute their content across mainstream media platforms.
The company itself was incorporated in 2014 but we’ve launched our first platform in May 2017.
What has been your main challenge in raising funding for Spotlive?
JM: Definitely finding the right business partner. If you want to raise starting capital, let’s say on pre-seed or seed level, you need to find an Angel Investor or VC that has enough courage to break the pattern. You have to be prepared to hear “sorry, we cannot invest in this area” many, many times. I’ve sent thousands of emails during our investment period and I could frame that sentence and hang it above my desk as a funny irony.
From the entrepreneurship point of view, it could be frustrating. Many VCs and Angels talk constantly and openly about being fearless, that if it comes to investment there are no rules, money rolls money, etc. But when they face real challenges, when you really need to break the barrier and become different from the rest, their beliefs seems to shine less.
What has been the biggest challenge to launching your adult venture? If it has been funding, what has been the second biggest hurdle to overcome?
JM: I wouldn’t say that getting funded was the biggest challenge. It wasn’t easy but we had the same problems like any other startup. There were just different factors that determined the success of getting investment.
But quite a big problem is to find basic services and tools to run your business and product. If you are an aspiring business you want to use the best possible tools available on the market. You want to be attractive for your customers and competitive for your competitors.
Unfortunately, it’s not so easy for any adult business to use any mainstream services. You should prepare for being rejected multiple times from banks, payment processors, marketing platforms and many, many others. We were even banned once from the process of renting the office because of the industry we are working in. At the end of the day, you can find an alternative solution to the problem but it always takes a lot of time that is crucial for startups.
What’s surprised you most about your experience as a young entrepreneur in the adult industry?
JM: The first thing that caught my eye in 2014 was the lack of Millennials on the business side. We can watch young people overtaking industries all over the world, especially if we are talking about business and startups. They are creating new movements, giving a pace to progress, doing serious changes to the world in a short period of time. Unfortunately, in the adult industry the average age of an entrepreneur was above 45. This phenomenon causes a lot of issues that makes the industry behind the rest.
That fact was leading to something that I’ve discovered after a couple of months. Most of those people were constantly talking about the same problems. Over and over, without giving any ideas how to solve them. Not to mention about execution. I was a witness, multiple times, to talks about the issues that are among them for a decade and none of them did anything to change that. I would say that it made me sad but it, at the same time, gave me answers as to why this industry looks like it looks.