In this week’s “From the Ground Up” interview, we sit down with Hope Horner, CEO and co-founder of Lemonlight, an UpCity Certified Premium Partner and one of the top video production companies in the United States. Below we discuss how Hope and her co-founders were able to sell $30,000 worth of video in their first month, how they’ve been able to leverage technology to make video production more cost-effective, and more!
Q: So Hope, tell our readers about your history and how your company, Lemonlight, got its start.
A: I grew up in East Tennessee in a small town called Johnson City. For as long as I can remember, I dreamed of moving to Los Angeles and running my own business. At 18 years old, I began pursuing those dreams by moving here for college and attending Pepperdine University. Throughout college and in my early twenties, I worked at several places including Equinox, 24-Hour Fitness, and I even opened my own tutoring business. At 21, I started my first company, BetterYou. I spent a few years building this company and ultimately ended up being selected by an incubator, where I learned a great deal about how to start a company. In the end, I sold off the assets of that company and spent the next few years working at a variety of funded startups in the L.A. area. These early experiences shaped my understanding of entrepreneurship and taught me what it takes to run a business.
One of the last companies I worked with was in 2013, and they made mobile banner ads for small and medium-sized businesses (SMBs). During my time there, I quickly noticed that the SMB market was hungry for more online advertising solutions. At the time, their only options were Groupon and Yelp, but many struggled to find success on these platforms. While mobile banner ads did not appear to be the right solution at that time, we knew there was a hungry market and we were determined to find new solutions.
After doing some research, we discovered that video had the highest likelihood of success, which was both exciting and terrifying for a few reasons. It was great because virtually no one was trying to make videos for the SMB market at that time. On the other hand, producing videos is was traditionally expensive and the results were very subjective. We also had no idea how to do it, but we immediately brought in a third cofounder who had a long history of video experience and we started testing the market.
Our mission was simple, create high-quality affordable video content for brands of all sizes. While the average cost of a commercial in 2014 was $350,000, we were selling ours for $500-$1000.
Q: That’s amazing! Obviously, having cofounders can be tough early on. Can you talk me through that process a bit and what it was like finding the right people with the right experience for your new venture?
A: It all happened really fast. I have two co-founders, Chad and Daniel. Chad and I have worked together a few times before – most recently at the mobile ad company just before we started Lemonlight. After working with this market and doing some research, we hypothesized that we could sell video content at scale. We wanted to test our hypothesis before spending too much money, so we built a Squarespace website for $10, signed up for a free MailChimp account, and started reaching out to potential customers. To our pleasant surprise, we sold almost $30,000 worth of videos in our first month. Since Chad nor I had any idea how to actually produce video content, we immediately brought on our friend, Daniel, who had experience in the film industry. I had also worked with him previously as well so it was a really easy decision for us to make.
Q: What was the hardest part of that process? That’s pretty tremendous growth in a short amount of time, so I’m interested in what your biggest struggle has been so far.
A: I think the underlying struggle has always been balancing supply and demand. We’re completely self-funded—never raised any capital. When you’re investing a lot of money that you’re making into growing your business, it’s a delicate balance. Do we need to hire salespeople? Do we need more account managers? Do we need more videographers? We’ve had to learn how to grow demand, which is related to our sales team, while balancing supply, which is our project team, without overshooting the mark in either direction.
Q: For me, one of the most interesting things about Lemonlight is the fact that you’re trying to make video production accessible to small- and medium-sized businesses. What tips can you give to other agencies looking to make their services more affordable as well?
A: There are a couple of things. The biggest asset is leveraging the technology that’s available today. Video has grown in popularity, and, as a result, there are more people creating video. There are also more companies investing in creating better technology, which also lowers the costs of equipment. By taking advantage of those opportunities, we’re able to create a really scalable process, which is the second biggest part of creating an affordable service. Early on, we tried to figure out what the key components of video production are—those key things that remain the same throughout every production. We were able to identify the aspects of pre-production, production, and post-production that can be templated or automated, which helped to simplify our processes.
Q: That’s great advice. That’s definitely one of the downfalls of video production in general: there’s so much pre-planning involved, and reshooting is extremely expensive. It’s not like a blog post where you can simply delete a paragraph and rewrite it if you don’t like it. As more and more companies start to experiment with video, scalability is going to be absolutely key since not everyone can afford a full production crew and this that and the other. It’s also just great advice for agencies in general. Finding scalable processes that actually work is key to growing a business effectively.
Let’s pivot a bit because I want to discuss your online reputation. You’ve managed to acquire a decent amount of five-star reviews across Google, UpCity, and other local directories. What has your approach to your online reputation been?
A: Fundamentally, it’s just about creating an excellent client experience. When you do that, the results follow; however, you still need to ask clients for their feedback and put processes in place that encourage people to share their experience. We like to use the NPS (net promoter score) so that we’re always in tune with how our clients are feeling at any given time. Because we have such a good pulse on our clients’ feedback, it’s easy for us to reach out and ask for reviews at any time.
Q: That’s so important. It’s not just about asking for reviews. Asking at the right time is even more important.
What drove you to the local SMB market rather than the enterprise video market, and what unique challenges does that market bring?
A: Today, we make videos for brands of all sizes: small, medium, large, and enterprise level. Everyone needs affordable video content – even the large brands because they’ll need to create triple the amount of content for the same budget they used to have for one commercial. Honestly, though, it doesn’t matter what size business you’re working with. The most important thing is understanding their needs, having conversations about their goals, and helping them achieve them. Whether you’re working with Amazon or the plumber down the street, focusing on results is the most important aspect.
Q: Absolutely. The reason I ask is that I think too often people conflate the idea of a “national agency” with the idea that they can’t do great local work. Local agencies can sometimes provide more personalized services in small towns, but that’s not the only solution. Partnering with a national agency like Lemonlight can bring other benefits as well, like lower prices, more experience, etc.
A: Yes definitely, and we hear that too. We’ve definitely lost clients to local agencies based on that exact thought process. For us, it’s about reminding them that we started locally. We started small and have grown to where we are because of the techniques and processes we’ve built, and most importantly the results that we deliver.
Q: Totally. You have to know your strengths, know where you come from, and sometimes going back to that can be the strongest sales pitch.
We have a few more minutes left today, and I’d love to talk a bit more about your relationship with UpCity and how that has positively affected Lemonlight. But first, as someone who has created thousands of videos over the last few years, what are your predictions for where video is heading?
A: You know, I think about that a lot. Based on the increases in technology like augmented reality and machine learning, I predict that personalization is going to be the next frontier. Ten years ago, you could never make a video that says, “Hey Hope! How’s it going today?” because you would have had to make that video over and over again for each person you wanted to send it to. What you see now, and what you’re definitely going to see more of in the future, are ways to automate processes like that. As personalization becomes more commonplace, it’s going to become even more important for customers who will come to expect it.
Q: Personalization has been growing across digital marketing in general over the last few years, so I can certainly see it shaking up the video space as well. For our last question, can you tell us about how your partnership with UpCity began and how it’s affected your business?
A: I don’t remember exactly how exactly we came across UpCity, but we’ve been working with you guys for several years, and we’ve loved the partnership. A lot of our referral traffic comes from you guys, and it’s not just generic traffic—it’s qualified leads. We’ve actually scaled back in other advertising areas at times to invest more full circle in UpCity.
Hope Horner is a three-time entrepreneur that has been featured in Inc.’s Top 25 Entrepreneurs to watch in 2017, Entrepreneur’s 11 Marketing Experts that Could Changes Your Business, and Pepperdine’s 40 Under 40. Horner is a regular contributor at Entrepreneur, Forbes, Inc. and multiple other publications where she shares startup insights and scalable solutions. She is currently working on her third startup, Lemonlight, an LA-based business that produces and distributes branded video content at scale. Lemonlight has been honored in Inc. 500 and Entrepreneur 360 three years in a row.