Case Study #3: With $12.7 million in funding, this founder is making video production easy and accessible for millions.

Ever wondered how small projects turn into major platforms?

Let’s break it down.

Today, we’re exploring how Julia Enthoven and Eric Lu turned simple video editing apps into a comprehensive content creation powerhouse, all with a $12.7M kickstart.

Key Highlights:

  • Built a responsive product quickly with a focus on user experience.
  • Became profitable through smart growth strategies.
  • Reached millions using AI and intuitive design.
  • Grew organically, keeping advertising costs low.
  • Enhanced teamwork through remote operations.
  • Prioritized user feedback in our development process.

🔥 Check out our latest interview: direct insights from the founders
Julia Enthoven and Eric Lu.

‍Hello! Tell us who you are and what’s your backstory.

I grew up in Dallas with three brothers and a dad who was an entrepreneur and businessman. He brought stories to the dinner table about new businesses and investments he was considering, so I knew about entrepreneurship from a young age.  

During my time at Stanford, I was captivated by the blend of creativity and problem-solving that software development offered. I majored in math and computer science, honing new skills in data analysis and software engineering. I did internships in EdTech, an area I’d always been passionate about, and built a couple of apps that served students. Meanwhile, I also wrote for the school newspaper and took classes in creative writing as I’d always loved storytelling too. 

Post-graduation, I found a job that brought my hard and soft skills together: Product management. My career took me to Google, the heart of Silicon Valley, where I delved into the tech industry's vibrant ecosystem. I learned the ropes, from design to code to the strategic nuances of product development. I built relationships with Googlers, one of whom - Eric Lu –  became my cofounder two years later. We also built relationships with other founders and leaders who eventually would help connect us with investors. 

After two years in Google’s APM program, I was itching for something new, but not sure what or why. I’d met several founders who I really admired along the way, and I dreamed of leaving the comfort of big tech to pursue a riskier, more challenging path of building something new from scratch. Eric, my co-founder, was the first to leap, quitting Google to try to start something on his own. Months later, he pitched me on turning down a couple of startup offers to try to build something with him. I took leave and did a three-week project from here (we built NormalSoftware.com, a blog for aspiring founders), and the journey was so fun that I decided to quit formally and leap into Startup Land. We started by working on an idea for 10 weeks that failed, and we had to shut it down. That idea was called HotBarber, a Yelp-meets-Instagram marketplace for hairstylists. 

Kapwing was actually our second project (third, if you count the blog). It was inspired by our own product pain using old-school video editing software, and we set out to build a fully collaborative, more modern video production suite optimized for social media. Starting with tasks like adding subtitles, resizing, and adding text, we bootstrapped for about 9 months, growing our web traffic to about 100,000/month, and then we raised venture capital and hired a team. With them, we’ve grown our user base to more than 3 Million people per month and a profitable business.

‍Can you give us your 1-3 sentence elevator pitch?‍

We’re Kapwing: we help you make 10x as much video content. Marketing and communications teams use Kapwing to accelerate video production, repurpose long-form video content, and grow an audience with the help of AI.‍

What was the moment or situation that sparked the idea for your business?

‍We started out by making individual web apps for various video editing tasks: Trimming, Resizing, Making a Collage, etc. Each web app did just one thing, and it was very simple to find on Google and to use. After building 12 of these pages, some of which flopped and some of which attracted thousands of users, we started getting requests to chain them together. Users would say “I want to trim my video and resize it to square. Can I use the trimmer and resizer together?” This led us to the realization that there’s a larger problem here: video editing is hard, slow, and inaccessible. There are lots of people out there who need to edit videos but don’t have the time or patience for Adobe Premiere. 

We built Kapwing as an alternative for modern social media marketers and communications teams who make videos at work.

‍How did you test and refine your initial product idea, and were there any significant pivots or changes in direction based on initial feedback or market response?‍

Absolutely. Feedback has been constantly worked into our product roadmap. We have an in-house customer support team that socializes new feature requests and does tons of customer interviews each quarter to prioritize ideas. 

Of course, the pandemic was a huge change and accelerant for our hypothesis around video. Suddenly, everyone and their mother were making videos, and we were trying to support a wave of video editing novices creating for the first time. 

The biggest “pivot” came in 2023 when LLMs and image generator technology were taking off. We realized that we needed to revamp our product roadmap and think bigger about how these impacted video creation workflows, leading us to build and launch our Image Generator, Video Generator, Smart BRoll, Premium text-to-speech, and other AI products. 

‍What specific strategies or decisions significantly contributed to the growth and scaling of your business?‍

SEO has been a core part of our business. 

In addition, we have grown a large YouTube community because we think YouTube is a crucial place for people learning to edit videos. Our YouTube channel provides tutorials on modern video editing techniques.

‍How did you really get to know your customers and market?

‍We also create a lot of videos ourselves. This started with my cofounder and I making articles for our blog and videos for the YouTube channel, then we hired in-house content creators who use the product and give feedback to the engineering team about what needs to improve.

‍What's the story behind your brand and marketing approach?

‍The name Kapwing comes from Calvin and Hobbes, we think. 

In 2022, we revamped Kapwing’s brand, shifting from a simple cat logo to a more sophisticated video timeline-inspired icon. Our brand language - colors, mood, etc - shifted too. This reflected how our business and product had matured, from just a simple meme-maker website to a professional video editing suite powered by AI. 

This brand revamp was driven by an in-house brand designer whom we hired, the amazing Emily Teng. She did the customer and market research to invent our new brand. The cat is still around as a mascot! Check out her blog post about the redesign.

How did you attract and secure your first customers?

‍SEO. We reached our first customers by ranking on Google search. I’ve written some about this on our blog. We also had a strong word-of-mouth effect at the beginning, with creators sharing the tool with each other.

‍What's been your approach to product development?

‍How have you incorporated customer feedback into your product's evolution?

Product development at Kapwing is grounded in empathy and agility. We prioritize understanding our users' needs through direct engagement and feedback, integrating this insight into every design decision we make. Our design process is iterative, allowing us to swiftly adapt and refine our product based on real user experiences.

We employ a lean approach to design, starting with prototypes and moving through cycles of feedback and revisions. We're committed to a transparent journey with our users, involving them in the evolution of the product and making adjustments in real-time based on their input.

Finally, we have an extremely talented engineering team that is constantly learning about and integrating new tech into our stack. By combining customer insights with our design expertise, we ensure Kapwing not only meets but anticipates user needs, driving our product forward in innovative and user-centered ways.

‍How have you navigated the financial aspects of your business?

We raised about $12.7 Million in two rounds of venture capital. Compared to many other venture-backed companies, Eric and I have been committed to growing in a sustainable way. Kapwing grows mostly organically, and we’ve never spent a lot of money on ads. We hired frugally with a high bar, so we haven't needed to do big layoffs. It took us nearly 6 years to become profitable, but now we make money each month, funding further R&D and riskier bets. 

What future do you envision for your company?‍

This year, we’re investing in two new products: our Repurpose Studio, which transforms long-from video into short-form shareable highlights using AI, and Dubbing, which translates a video into a different language using premium synthetic voices. I envision that we will grow these and double the size of our business, continuing to serve content creators.

We also are working on a new product called Tess, an AI Image Generator that pays artists when it generates in their style. These new products may also help us grow and find new ways to serve creators.

‍Is your team growing? Tell us about the roles you’re looking to fill.

‍Right now, we’re hiring for a senior software engineer – send me an email if you’re interested in working with us. 

‍Where can curious minds find more information about your business?

‍Check out the Kapwing website and blog. You can also connect with me on LinkedIn.

‍Do you have any reflections or insights you’d like to share with our community?

‍Start with the people! The people you work with will have a huge impact on your success and your happiness in the startup game.