Interview with Mike Hale, Tibesti

Story by Benjamin F. Kuo


Los Angeles-based Tibesti ( is launching its new social shopping site this morning. To understand why the company decided to jump into this market, we spoke with the firm's Chairman and CEO, Mike Hale a few days ago. Mike explained how he went from the founding team at Starz Encore to the startup.

What's the idea behind Tibesti?

Mike Hale: The whole concept behind Tibesti, is we really want to transform ecommerce into "we" commerce. In other words, we really want to take social shopping to the next level, and make it product focused. The concept is divided into 3 areas: myTibesti, where people can put up their favorite products, create wish lists, and where people can click on those items and buy them, we share 50 percent with our registered users. It's a way that users can have no inventory, no shipping, and no risk--to create lots of entrepreneurs out there. They can set up pages, and if people go through them and buy items--whether they are friends, families, or strangers--they are racking up money. We pay it out in cash, not points. We're really taking social shopping to a whole new level.

The other area we have is expert product reviews, where he have 120 experts and over 5,000 products reviewed. Ninety-nine percent of those reviews are exclusive to us, with the rest from, which wanted to do a content and link exchange with us--we're doing that on a test basis. We own all of the expert product reviews, which are unbiased. We do no advertising on that part of the site, and make sure it is fair and balanced.

The third module is done for a giggle--which is theWorld's Most Expensive. For example, the $30 million dollar bikini, the $1.8 million dollar dog collar, or every man's dream, the $50,000 remote control. The big picture, is we are providing a site that combines social networking with products, to create a whole new niche--social product networking.

What's your background--you mentioned you were on the founding team of Starz--and how did you go about starting Tibesti?

Mike Hale: I was on the founding team in the early 90's at Starz Encore. It was a recession, DirecTV was a big question market, and this was before digital cable. But we were lucky to have John Malone as a backer, who saw the future and invested. He's a long term investor. We went from a couple of guys in a borrowed office in Denver, and we took it to a billion dollars in revenue. It had an enterprise value of 5.5 billion in ten years. The Tibesti concept came up after I left Starz Encore, after 13 years, and moved back to L.A. I was doing a variety of things, and looking for recommendations on products, and trying to find a site to do that. I was using Consumer Reports, and found I had to subscribe or pay a transaction fee to get information, and I also got frustrated by user generated content sites. I thought--I could start that. I assembled a team of smarter people than me, and we built the expert product reviews, and grew from there. We wanted to give users of Tibesti a way to share in the wealth of the web, a part of all those billionaires becoming gazillionaires. It's the American dream. If you do the work, set it up, have an audience, and create a transaction, you should get 50 percent of what we get. It's a fresh approach to social shopping. We're just scraping the surface, and hopefully in 30-45 days we'll have an announcement of further enhancements to the concept, and give more revenue opportunities to the consumer.

What is your audience, and who are you looking to attract to the site?

Mike Hale: From the research we've done so far, we're targeting the female audience first. It's no surprise, they are very, very interested in the social component, and expert products reviews, and we feel we already have a strong female audience. However, if you look at sites like Facebook--which started with people in college, and expanded to people out of college, and now has retirees on it--our demographic will be pretty broad based. If you look at Tibesti, everyone can identify with products, have their favorite products and brands, and wants to talk about them. We've got a great venue for people to talk passionately about products.

There are lots of social shopping sites, why another one--and how do you get above the noise?

Mike Hale: How we will stand out, is we are aggressively sharing the upside with our users. We have enhancements that are going out on the site over the next thirty to ninety days, which will further differentiate us, and create excitement. Over that period of time, you will see us clearly distance ourselves from the more established incumbents. We have a social shopping site, but we also have expert product reviews. Say you weren't interested in social shopping--we've got the best advice, and the best products, and help you make the smartest use of your money. Or, if you want to come to our site for a chuckle, you can look through products you might never be able to own and afford, the most expensive--sort of like the Lifestyles of the Rich and Famous. We're trying to appeal to a wide swath of people, based on their interest, with one site. We're looking to take a wide and all encompassing view, and cater to everything from the late teens to people in their 50's, because everyone is buying products.

Having been early in on the founding team of Starz Encore, what did you learn from that experience, and how are you applying that here?

Mike Hale: At that time, people used to launch one channel, and once that was doing well, you would announce your second channel in about a year, and then if that did well, you might launch a third channel. What we did, is we sat and looked at the future. It happened in a conference room on Saturday, and we came up with the idea of launching lots of channels at once. Everyone kind of laughed--it was enough running one channel trying to compete with folks like Showtime and HBO--but we decided we only wanted to be an Avis to Hertz. HBO is always going to be the winner, but we decided to take a different approach, and instead of pricing one channel for $10, or 2 or 3 for $10, we decided to come out with themed channels with Starz, and offer 10 for $10. It created a different value proposition that people hadn't seen before. We launched with DirecTV, and it took off, and digital cable helped secure even more distribution, and everyone followed suit. We just happened to look at the world differently, when people though we were crazy. However, everyone loves movies, and we packaged them and gave people unbridled choice and themes. If you look at Tibesti, even in our beta stage, we're giving people different themes, different ways to participate, and different ways to use the site based on consumer interests. We'll see how far this can multiplex out. Also, we are keeping a low overhead. Going through recessions, depressions, or booms, you've always got to watch your overhead and head count. One thing I learned from Johnny Malone, is that companies can get carried away in good times, overhire, and overdo everything. You need to always act like you're down to your last buck. It's a kind of Denver attitude, a town which has lots of people driving old pickup trucks.

It looks like you were here in LA before--how did you end up here in the first place, and why did you come back?

Mike Hale: When I first came to America, I came to Boston, because of my girlfriend. When I got a job, I moved to New York, ironically, for a job at the Times Mirror, the parent company of the Los Angeles Times. I was doing cable TV when it was still a questionable distribution system, and got into cable programming in Los Angeles, trying to start my own cable channel. In the unsuccess of that venture, my partner and myself got to talking with Liberty's Johnny Malone, and he became Chairman. I got involved and helped to launch and put the strategic package together, and I worked there for 13 years. After a decade in Denver, I came back to Los Angeles, because, frankly, you can't beat the weather. What's great about both places, is there's a spirit that anything is possible. Obviously, I'd love to take this to Liberty at some stage, but right now I'm funding this personally, including all the early seed stage and angel series A round, because that way, any mistakes we make will be our own money. When we take it out, it is going to warrant serious attention from even the most cynical VCs or hard-nosed media investors.



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