Carla Harris: On this episode of Access and Opportunity, we welcome entrepreneur Sanjay Sharma, Founder and CEO of Marginal MediaWorks, a multifaceted media brand focused on genre storytelling from marginalized voices. Sanjay’s experience is one that is unique to his upbringing as a hip-hop- and movie-loving first generation immigrant. His ventures have focused on underserved communities not represented by mainstream media. In this episode, Sanjay takes us through his eclectic journey from lawyer, to screenwriter to CEO, and how he continues to advocate for the unheard stories in the margins. Come on and join me for the ride.
Sanjay, thank you so much for being here with us today. It's a pleasure to have you on the show and I can't wait to jump in.
Sanjay Sharma: I'm so excited, Carla. Thank you for having me. Longtime listener and fan!
Harris: Let's talk about your journey. Baton Rouge, Louisiana. Now, when I read the back part of your resume, I said, OK, that makes sense, that makes sense. But then I said, Baton Rouge is like me coming from Jacksonville. Talk to me about how do you get from there to here, my friend.
Sanjay: Fellow Southerners. Fellow Southerners.
Harris: Yes!
Sanjay Sharma: So, like many immigrants, it's a funny story. So I was I was actually born in India and we moved to Baton Rouge, of all places, in the late 70s when I was very little, and when we moved there, there was not that many Indians in the city, as you could imagine. And so it was early lessons in code-switching, early lessons in cultural fluency, early lessons in entrepreneurship and hustle, it’s an interesting place. My folks still live there and you know, we try to go back every year. So I love it.
Harris: Wow. Wow. OK. So I think I know the answer to this, but what influenced you to become an attorney.
Sharma: Circuitous path to becoming an attorney. So, I never really wanted to be an attorney. Didn't set out to do that. I grew up really much more interested in film, television, music. I learned, you know, English basically by watching TV and film and filmed entertainment. Popular culture was really kind of impressive on me. I grew up in a very film-centric family. Indians generally, not to stereotype, love movies. And when I was 14 or 15, a guy named Steven Soderbergh was shooting a movie in Baton Rouge called "Sex, Lies and Videotape".
Harris: Oh, I remember that.
Sharma: And so I went to the set and just checked it out. And after that, I thought, that's what I want to do. So, I moved to New York City for college and really went there because of guys like Spike Lee and Ang Lee, and it was the epicenter of hip-hop. And by the time I finished school, basically had a crisis of confidence and a crisis of capital. The film school was amazing. I went—I was fortunate enough to go to Columbia. Most of the peer, my peers were affluent kids from Manhattan or Los Angeles, and when people were talking about raising money for their first films, and I asked the impolite question, "How one goes about doing that?", the answer 10 times out of 10 was, you ask your family for the money.
Harris: That's right. They went to dinner with dad.
Sharma: That's it. That's it.
Harris: Yeah.
Sharma: And so I took a sort of generational and global perspective outside of my body and said, "Listen, dude, your parents grew up with no water or electricity, right? And in one generation, here you are."
Harris: Yeah.
Sharma: "Don't mess it up."
And so, I thought, let me pause this. Let me explore other options that could create a little bit of a security, safety blanket or security for me and for the family. And I always grew up very interested in politics and moved to Washington, D.C., got a job working at the Justice Department, worked for the Attorney General, Janet Reno, for a couple of years—this is in the Clinton administration—and that got me interested in law. Went to law school, moved out to California, went to law school out at Stanford, and that was sort of my, you know, entry into being a lawyer.
Harris: Yeah. The reason when I asked you, when I said, "I think I probably know the answer", is because, as I like to tell people all the time, if you grew up in the South and you were of color and you were smart, there was sort of three lanes that people tried to push you in. 1. Be a doctor or a nurse; 2. Be a teacher, and 3. Be a lawyer.
Sharma: Right.
Harris: And if you didn't necessarily have some love of science or, in my case, you had a parent that was in education, you didn't want to, you know, follow in her footsteps, then law was the one. And I, too, wanted to be a lawyer when I went to Harvard undergrad, and I was also a big fan of Perry Mason. But the main thing that you got at, Sanjay, is that, in your mind, it was also a way to make sure that you could secure a certain lifestyle and not only for yourself, but be able to contribute to the lifestyle of your parents, which is one of the things that pushed you. And it was so very common, sort of in that, in that box, if you will.
Sharma: Yeah, no, that’s exactly it. And I loved Perry Mason and thought, if I can't be the guy making Perry Mason, then maybe I can be Perry Mason.
Harris: Yeah, but that's interesting that you, even thinking about the guy that, I mean, you had exposure that most people don't have just because you walked on that set.
Sharma: Yeah.
Harris: So now, let's talk about what got you into the entrepreneurial ecosystem. Obviously, being at a place like Stanford, being on the West Coast, being a lawyer, probably having the opportunity to work on some of those deals, so let's talk about that transition.
Sharma: So Stanford, at that time—this sounds like 100 years ago—it's the late 90s, it's the, you know, birth of, really, the—call it commercial Internet or the consumer Internet. Yahoo was starting, Google was starting. This is pre-YouTube even. But I was really obsessed by it. And so I taught myself to code, got very, you know, into peer-to-peer file sharing and web-indexing and crawling.
And so, after school, the general counsel of Warner Brothers pulled me in full-time. I always kept screenwriting on the side. Funny side story, I feel like I have to tell you, since I'm a fan of yours; the first movie that my writing partner and I wrote was about a black female banker in New York City.
Harris: Oh, my Goodness.
Sharma: It was an action thriller, and we did the rounds to every studio and every studio said, this is amazing, but that character is not believable.
Harris: They just didn't know, Sanjay.
Sharma: That's right. And so, anyway, so it was, you know, it was, we'd written it with Thandie Newton in mind. But, you know, it was, It was a time, and unfortunately, and we'll talk about this, I'm sure, but not that much has changed. That's about 15 years ago, and that was something that every studio thought, a movie like that can only be led by a white man, right? And so, after a few years of working inside the studio system and trying and failing at writing, I thought, you know what? Maybe I am a guy who loves the movies, but not the movie business. It felt like the second organ rejection from this world, and so I, I looked at the things I liked doing, just as a matter of day-to-day activity.
And I think, this is something I've always carried with me since then, is: Focus more on process and less on outcome, and at the end of the day, you got to be doing something that you actually enjoy doing every day, right? And it might not be in an industry you love, but you got to love the practice of doing it, right? And I remembered working as a young lawyer with technologists and early-stage startup founders and it was a blast. And it was a time in, kind of, young Internet companies. The culture of Silicon Valley has definitely changed, but at the time, it certainly felt less hierarchical, it felt very dynamic, and it felt like best idea wins, but it felt, it felt more accessible than Hollywood, right?
And so I quit. I stopped practicing law. I stopped writing. I left Warner Brothers and I became—I sort of humbled myself and started a new career as junior “bizdev” manager at an early-stage startup here in L.A., an ad-tech that had just started and raised its small-seed round, and I got the bug. Since then, I've loved startups. I've only worked in the startup ecosystem since then. So probably 15 years.
Harris: The reason why I wanted to drill down on the startup piece is that we've talked to a number of founders of color who had an extraordinarily difficult time. And one of the reasons, frankly, we even have his podcast is to elevate the conversation so that we can make sure that capital distributors understand that there are a lot of great opportunities out there that have been created by women and people of color—that these founders are more resilient, even in this time of COVID. I have just been excited and amazed at how many of them have pivoted or who have survived. And I'm not talking about the businesses that are heavily dependent upon foot traffic, like the hair salons, the barber shops and the, you know, the dry cleaners. I mean, if you need foot traffic, you're having a tough time now, but if you're technology-based, you can find a way to survive.
So talk to us about those early days when you said “I love the startup” piece. To me, one of the toughest pieces, and what I hear over and over from entrepreneurs, is raising that capital. So, were there any advantages for you in any way? Because maybe they thought you're of Indian descent and using the, you know, the big general stereotype. Let's talk about that. Was that a struggle?
Sharma: It was. And it is. And there's some stereotypes that, you know, I probably benefit from, that, you know, Indians are smart. They're hardworking. Hopefully that's true.
Harris: That's exactly where I'm going Sanjay. Yeah. And it could be true. But you know what I mean. Whereas they might look at me as an African American woman and have a completely different lens because they haven't had the same interaction, right?
Sharma: Yeah. A thousand percent. And fortunately for me, I have checked some of the boxes of, you know, good pedigreed schools, you know. But I think what you find, and certainly we're more advantaged in that sense because we don't have this history in the country, right? And we have this perception that, in some ways, is a double-edged sword for Asian Americans, in particular. There's a Harvard Business School study from just a couple of years ago saying we're still widely underrepresented in C suites and on boards. And so this sort of, you know, what in the Asian American community called, the bamboo ceiling is very real, right? And so sometimes, Asians, I think, are used in some ways to signal diversity. But this perception that we're sort of a safe minority, right?: We won't push back, we will keep our heads down, we'll do the work and we won't cause too much trouble—one that I think is obviously racist in nature, and two, ends up sort of holding us back because we're not really seen as principals, we are seen as agents, possibly.
The people we think of as visionaries in technology—the Mark Zuckerbergs, the Bill Gates, the Elon Musks—these are largely white men. There's very few Black, Asian, Latino founders that get placed in that category. And so, I think, it certainly hasn't held me back in a sense, in the same way, I think, it's fair to say, for Black people, even if you went to Harvard, even if you went to Stanford, there's plenty of research around résumé comparisons just by name, right?, and names that are different or other, especially Black, just don't get the same treatment.
Sharma: But you know, and so, I've always been very aware of that. But in my last two startups and in this third startup, I've had to, sort of, translate what people think of as niche market opportunities, whether that's video gaming, hip-hop or, in this business, storytelling from people of color, I’ve had, sort of, two setbacks, right? One is explaining to people that these are actually outsized areas of opportunity and two, that this Indian immigrant is the guy to do it, right?
Harris: Yes. Yes. So let's talk about how you did that. So let's take, let's go through your three entrepreneur ventures. I'm really keen to hear about how they came to be, the sale to Warner Brothers, and then the next two.
Sharma: Sure. So the first company that I worked at, in sort of a principal role with a few other folks, it was called Machinima. Machinima was the first YouTube MCN, so, the first digital media company built entirely outside of Hollywood, entirely off the distribution of traditional media companies—call it the cable infrastructure—and built on top of the Internet, specifically and largely on YouTube. So we looked at this as an opportunity that was very much like MTV or the sort of key brands that broke out of the cable networks model. Your friend Bob Johnson's one, BET, right?
The sort of, the idea that categories that mainstream media thinks are small are actually very big. And we thought video-gaming was just such a category. There was a cable channel called G4 that always had relatively small ratings, and so mainstream Hollywood interpreted that data to mean that gaming was niche. And we said that may be true in the world of linear cable, but cord-cutting, Cord-Nevers, we're from the Internet, right? And so, we said, let's look at the data on YouTube. And if you looked at the data on YouTube then, and I'm sure it's the case still today, after music, video-gaming is the single largest content of video-viewing on all of YouTube in nearly every territory of the world, right? And so we said, it's in our view, it's by definition, not niche. It's massive.
Harris: That's right, they had no idea.
Sharma: They had no idea, right? And so it's a good example of using data and sort of fact-checking other people's data, right? Because the data they were using was Nielsen, you know, kind of the traditional metrics of the media business, and we were looking at YouTube analytics, right?
Harris: Yes, yes, yes.
Sharma: Google analytics. And so we said, look, the consumer behavior is here. And so it was an amazing process and journey. But a lot of the first VCs we pitched couldn't pronounce the name, and then you'd spend 10 minutes trying to explain to them the name and what it means. It's a portmanteau between “machine” and “cinema”: Machinima. And then they'd spend 20 minutes asking what video games you made. And we'd explain, we don't make any games, we're not game makers, we make content in and about games. And then you'd show them a video of, you know, a commentary, video of a kid playing video games, tips and tricks or, you know, reviews, and people's eyes just sort of glazed over.
Sharma: And so, finally, we were able to slowly, slowly raise little drips of capital. A dear friend and venture capitalist at Greycroft named Mark Terbeek was our first VC and was willing to bet on this thing and us as the team to go harness the opportunity. And, you know, once you're up and running, and once you're in a certain club, it's not easy. Nothing's easy, but it becomes easier and easier to get tapped in to the further kind of networks in Silicon Valley that can back you. And so, we eventually raised another round of financing from Redpoint Ventures, kind of storied Silicon Valley VCs, and then our largest round from Google Capital. And, yeah, built, you know, built the company from a few people and a, you know, little office in Hollywood, to be a couple of hundred people and eventually, you know, we were able to sell that business to Warner Brothers. So, good run!
Harris: Wow. That was outstanding. And did your relationship with Warner Brothers, the fact that you could get in, you could make a call, you could get a hearing, that was important to the sale, correct?
Sharma: Absolutely. So, you know, it's interesting, these networks, and I know a lot of your guests talk about and you talk about the importance of networks and networking. It's something I've never thought I'm particularly good at. It's something I should work on. I'm not an intentional networker. I find it fairly shameless, right? I'm just not mercenary in that way. But I do love meeting people and I do love connecting people with no gain in mind for myself. I'm just in that, you know, good people should know each other and good things will come of it. And so, I generally have tried to keep up good relationships with people I've enjoyed working with. And many of the people that I worked with at Warner Brothers were still there and were involved in our deal, or were able to make a phone call and say, yeah, we know that guy, right?, so, to do the informal reference-checking, right? And by the way, many of those people are still there at Warner Brothers.
Harris: Wow. But let me, before I go on to your next venture, I just want to make a playbook point for people, because I think the word networking is so loaded that many people, Sanjay, feel the same way that you do. But if you look at it as exactly the way you presented it, that you're curious about people, you like meeting people. There is something that feels good about connecting person A with person B—that is what networking is all about. But when you hear the word networking, it sounds like you have to do this intentional, inauthentic thing that's icky. And so, as a good playbook point, it is really about connecting the relationships you have and making yourself a conduit so that you can create sort of a productive connection for somebody. Full stop. That's it.
Sharma: Love it. Love it.
Harris: So let's take it from Machinima to All Def Digital, because I want to connect back to the point you made earlier in this conversation about your "aha!" in the 90s, that pop culture could actually change and influence our social environment, because that is so important today. So, if you would take that "aha" and you are founding All Def Digital with how you're looking at today. That would be great.
Sharma: Absolutely. So All Def was an early stage company that we started in a similar paradigm, right? If you took the cable networks model—BET, Comedy Central, CNN, MTV—all these networks that, when they launched, everyone laughed at and thought they were too small to be anything, and suddenly turned out to be massive sources of value-creation. And Machinima was sort of a riff on that playbook, which was "let's do that, but in a digital media environment" where people aren't really watching, kind of, traditional television. All Def was an extension of that thesis, but applied to hip-hop. And the idea was pretty simple. Hip-hop is the, arguably I think it is, the single biggest driver of culture in the U.S. and around the world. It's a category of music that mainstream Hollywood had sort of looked at and said, it is great, but is niche, right?, is a niche. And we looked at the data and said, if you look at the Billboard Top 20 any given day of the week, 15 to 20 songs are urban music.
Harris: That's right. That's right.
Sharma: OK. If you look at the data of music-streaming, the single largest category of music-streaming on Spotify is hip-hop, right? And so, I looked at a music, but really, a culture around entrepreneurship, right? And importantly, an art form that had deeply ingrained in its ethos the ability to speak truth to power in a way that I hadn't—I still haven't—really seen anything quite like it, and thought that, if people think that's niche, then we've got a business to build, right? Because it's arguably one of the most ubiquitous things around you.
Harris: Yes. Yes!
Sharma: And it's in language, it's in slang, it's in fashion, it's in streetwear, it's in shoes, it's in how people greet each other. So the idea was pretty simple. Look at this form of music, form of art, form of culture and lifestyle that is so impactful around the world to not just black people, but to everybody, right? The reason hip-hop is the biggest category of music in the country is not because of the 10% of the country that's black, right?
Harris: Right. The numbers. The numbers wouldn't work. That's right.
Sharma: And so, I think, you know, what we set out to do was try to explain something that to this day is hard for traditional media people and Hollywood to understand, which is that the creator or subject of content is not necessarily the limiter of the audience for that content, like, the idea that Black creators, Asian creators, immigrant creators can actually make content that wide audiences want to see is still something of a disconnect, right?
So in Hollywood, people still think that they, sort of, do this logical fallacy that the creator of a certain product, their race, identity, sexuality, is the audience for that product, right? And they never stop to think, well, you know, for most of American popular culture, despite what it stole from American Black culture, was really white, but all of us had to listen to it. Most Western movies were really white, all of us grew up watching them, right? So they never applied that...
Harris: So how could the converse not be true?
Sharma: And why wouldn't the converse be true, right? And so. So you know, we built All Def up over several years, you know, obviously founded by me and Russell Simmons, founder of Def Jam Records, and based, kind of, on that labels legacy and the legacy of a lot of, sort of, iconic hip-hop brands and artists that came out of Def Jam and Universal Music Group more broadly. And we were fortunate to have them as investors, and Mark Terbeek at Greycroft Capital was our first investor. And actually one of my co-founders from Machinima, a guy named Allen DeBevoise, was one of our early-stage investors and, you know, he and I remained friends, and he became a seed investor in the next company I started.
So a lot of, you know, a pattern there of people working together repeatedly, which, you know, it's hard to get to it, you know. It took 15 years to get to that point. But I think, for people of color, we are building these networks in real time. We’ve never inherited them, right? We weren’t born into them, weren’t raised around them. And so you know, we are much later in our careers before we have networks that a lot of, you know, prep school kids that are born into.
Harris: So tell me a little bit about Marginal MediaWorks.
Sharma: I'm so excited to tell you about it, Carla. You know, this is my third startup, and it's the thing I've sort of dreamed of my whole life. The name comes from a Toni Morrison quote, which is something like, "I'll hang out here in the margin and let the center come to me." And the idea was pretty simple. It's, sort of, twofold, and the name alludes to it. Marginal from a cultural point of view is this idea that fringe culture drives popular culture, right? Yeah. The coolest shit happens in the margins.
Harris: Yeah, yeah, yeah.
Sharma: That's people of color, that's immigrants, that's subcultures, that's videogaming, that's streetwear, that's skateboarding, that's hip-hop, right? All of these things that start with mainstream audiences thinking they are small and end up delivering wild, outsized value. So that's sort of one side of it. And then, the other side of it is this notion from a consumer behavior or technology perspective. What I've always thought is so powerful and disruptive about the Internet is the ability to overserve underserved audiences and that, in the world of the Internet, has become an engine for delivering outsized value. Categories that people think are marginal actually are wildly impactful.
And so, the idea was, I took a look at the sort of traditional media landscape and said the movie studios are in a challenged world of continued reliance on big, big budget franchise tent poles that require theatrical distribution—have to be big, right? The biggest movies in the history of filmed entertainment. And they have to open on 4,000 or 5,000 screens in the U.S. They have to be global and they have to be franchises. And that, if you look at the ticket sales in the U.S., they have been declining over the last 20 years, 18 years, steady decline year over year. And most of that decline is coming from independent films, smaller midmarket movies, right? And so, I looked at the technology impact of filmed entertainment and, several years ago, there was a company called Netflix that was jumping into the original content game, and I thought, that's going to work really well for Netflix, right? Because they can make smaller movies that target audiences and they don't care if those movies ever open in the U.S. theatrically, right? They can measure and monetize these movies without regard to the sort of gold media metric of opening weekend theatrical box office, right? They can source and assess and value content and with a fundamentally different mathematics, and they can promote and market and distribute that content in a fundamentally different way, right?
And so, I said that that will work, and as soon as it works for Netflix. A lot of Internet companies are going to jump into the premium content game. Now, of course, that seems obvious. Netflix went from testing original programing to a $12 billion content budget and to doing, you know, 80 to 100 movies a year. Amazon obviously jumped aggressively into content. Apple has jumped into content. And sure enough, Disney, Warner Brothers, NBC, Peacock all started launching streaming services, right? Because the idea of going to direct-to-consumer suddenly is the only way I think those companies can see their way out of reliance on theatrical distribution. And if you looked at product, market fit, I did a ton of demographic research around immigration patterns and just basic demographics in the U.S., and when you look at the composition of the country, most people refer to 2043-2045 as this ominous so-called tipping-point year when the country turns minority-majority. But if you actually look at the millennial cohort and slice it in half and go below, so if you look at the biggest consumers of entertainment, young people, and the biggest influencers of consumer entertainment and creative class of younger people, that cohort is already minority-majority, right? In 2020, kids under the age of 18 are minority-majority. That's today.
Harris: Yes, today. That's right.
Sharma: And so, the idea for Marginal was: Create a vehicle for outsider voices creating original IP and using popular storytelling formats and genres. Horror thriller, sci-fi, rom com, stoner comedy, right? Some of the most wildly commercial formats and the most wildly accessible formats around the country and around the world to build a new kind of media, business and media brand. And that's what we've been up to.
Harris: Wow. Wow. Sanjay, I got to tell you, I don't know if I've ever said this, but I love the way your brain works. I mean, I'm just listening to you and your observation of watching what's going on and going from the center to the outside and figuring out every single time, every story that you've told us today, you've figured out every single time. What is the fringe that's driving the center? And you've gone right there to the obvious places, which is a message that we've tried to send through “Access & Opportunity” and through our lab, that the space where people aren't playing is where there's an opportunity for outsized returns—all day long. And it's just the definition of how people have made money since the beginning of time, yet this is a space where people are still reticent to invest capital.
Sharma: That's right. It's at some point you have to look at it and say it is systemic, right? It's structural, right? The data is there, the audience demographics are there. The consumer buying power of people of color is well over $3 or $4 trillion, right? We overindex on film-going. People of color, Black people, Asian people, Latinos go to the movies more than white people—like, this is all known.
And so, the idea, you know, when I say, well, why don't we make movies with these storytellers that are diverse in nature and that are like “Get Out,” “The Big Sick,” but go way back. Friday, Justin Lin's first movie “Better Luck Tomorrow,” like, there's plenty of examples of this working. And so, at some point, you say, how many examples do we need for movies to work and how big do they need to be? There's just example after example, and yet Hollywood will still make a reboot of “Robin Hood.”
Harris: Yeah, I was thinking to myself the other day in preparation for this and I thought about, you know, you could look from the outside in that Disney got it because “Black Panther” was the biggest. OK. Before that it was “Moana.” I mean, I could go on and on in terms of, you know.
Sharma: “Mulan” just released.
Harris: “The Lion King,” the first one. I mean, we can keep going. All of those had protagonists of color. But Sanjay, I could talk to you for another hour. But I certainly hope I get a part two with you, because I think we could go and reveal some pretty good information for our listeners here. But we like to end with a lightning round where we get an opportunity to know a little bit about Sanjay Sharma, the man. So I'm going to ask you a few questions and you answer the first thing that comes to your mind. Are you ready?
Sharma: I'll try.
Harris: OK, favorite music artists?
Sharma: Favorite music artist is a tough one. There's so many. Let me do a cheat favorite artist. I'll do legend and newcomer. Legend: Pusha T, and newcomer: Baby Keem.
Harris: Oh, OK. Alrighty. Your favorite film?
Sharma: Favorite older movie, “Do the Right Thing.” Classic. And favorite newer movie: “Searching” by young South Asian American director named Aneesh Chaganty.
Harris: Oh, OK. I got you. In the office or working from home?
Sharma: I'm working from home. I'm working from home and I love it, but I can't wait till we get some semblance of normalcy back.
Harris: OK, if you had a talk show, who would be your first guest?
Sharma: Person I'd most like to interview... Let me go legend and newcomer: Barack Obama, Naomi Osaka.
Harris: All right. And one word to describe your legacy?
Sharma: One word to describe my legacy. Hopefully I'm not that old and there's still a lot to be written. “Built things to be bigger than me.”
Harris: All right. And that, sir, you are certainly doing. And I can't wait to see what's next. Sanjay, thank you so much. I loved it, loved it, loved it—would love to hear more. And I just can't tell you how much we appreciate it. Thank you.
Sharma: Carla. Thank you so much.
Carla Harris: Thank you all for joining us on this episode of Access & Opportunity. Be sure to stay tuned this season, as we speak to more influencers in the sports, media and entertainment fields who've committed to reframing the narrative for women and people of color. You won’t want to miss it.
Carla Harris: What did you learn today from Sanjay Sharma? Send us your thoughts at carlapod@morganstanley.com. We would love to hear from you. Subscribe to Access & Opportunity on Apple Podcasts or wherever you listen. Thanks for coming along!
