Imagine watching an episode of your favourite TV shows with friends online, chatting at the same time whilst doing some shopping or watching a live football match - nothing beats seeing your mate's real-time expression after losing to your team. This is all what lutebox offers and more.

So what is Lutebox? As described in our full interview below with the founder, Ali Ahmed " It's a social entertainment hub, Lutebox lets people group videochat for free, while enjoying content with friends at the same time. They can watch movies, videos and play games, shop for their favorite stuff, and even broadcast themselves live, all while socializing with friends at the same time."

This is my full interview below with Lutebox's founder, Ali Ahmed

Hi Ali, How are you doing, great to have you on YHP? Could you quickly give us some background information about yourself?

Thanks so much for having me Joseph, it’s a great honor.

I’m the founder of a startup called Lutebox, which is a social entertainment hub. Lutebox lets people group videochat for free, while enjoying content with friends at the same time. They can watch movies, videos and play games, shop for their favorite stuff, and even broadcast themselves live, all while socializing with friends at the same time.

Before starting Lutebox, I was an entrepreneur in residence at Groupon, and prior to that I’ve worked in consulting, brand management and product development. I also have two Masters degrees, an MSc from Lancaster University, and an MBA from the Institute of Business Management.

How did you get involved in entrepreneurship? Were you exposed to entrepreneurship as a child?

I’ve always known that I wanted to start my own business, well since I was in high school at least. Two of my role models, my father and an uncle of mine were and still are great businessmen, and I aspired to be like them. However, they both worked in the corporate world, and never took the plunge to start their own businesses. So I knew from an early age, that rising in the corporate world wasn’t the end all goal. I wanted to be an entrepreneur.

Lancaster University gave me an incredible amount of support when starting up, and I was extremely lucky to have been able to become an external member of Oxford University’s entrepreneurship society and join a great network of young entrepreneurs. I tried to leverage these connections and embed myself into the UK entrepreneurial community, an example of which is where I participated in a Launch48 weekend, where I was part of a team that launched a twitter based business in 48 hours. Experiences like this cemented my desire and resolve to be an entrepreneur.

So tell me about Lutebox and how the idea came about?

Lutebox is real life, online. We’re trying to recreate real life experiences, like socializing with friends by going to the cinema, concerts, and parties, but online. Currently there isn’t any way that people can socialize in real time around entertainment online, and we’re giving them a way to do this, by focusing on group videochats, and shared co-viewing experiences. Imagine watching a film or a football match with five other friends at the same time, while each of you are in different places. This is part of the Lutebox experience. On Lutebox people can also shop for goods, broadcast live events and play games with friends at the same time.

I had the idea for Lutebox while doing my MBA in 2005. The idea was to create an instant streaming video/music app within a social network. Mind you, that this was before Youtube, Spotify etc., so you could say that the idea was a little before its time. However, I didn’t pursue the concept until I got to Lancaster, where I did my entire dissertation on Lutebox and proving out that it would work. After which I convinced one of my best friends Owais Shaikh, a genius computer programmer to join me in the venture, and together we founded Lutebox.

What is Lutebox and how does it work?

On Lutebox users sign up, just like they would to a social network. You’ve got your activity feed and profile pages just like a social network. But then you also have the various entertainment pages, where you can purchase premium films, music videos and games. You can also shop in the Lutestores, and broadcast yourself in a livestream. All while kicking back and socializing with friends through group videochats.

What is your business model?

We take a fixed commission on premium transactions. Users purchase Lutes, our online credits, and then allocate Lutes towards content they want to buy. We take a small cut while returning the rest to the content owner and publisher.

What makes Lutebox different from any service out there?

Although there are several competitors in the new Alive Web space, Lutebox is the only website where you can watch premium content, shop for goods, and broadcast yourself in a live shared co-viewing experience with friends at the same time while videochatting with them.

We’re in the process of patenting our technology behind Lutecasting.

What are the most crucial things you have done to grow your business?

Three of the most important things that we’ve been lucky to get done that have helped grow our business tremendously, have been getting the initial seed capital which created a domino effect with raising investment, winning the IC Tomorrow competition last year which helped get us on the map, and signing a deal with Sony Music and getting 5,000 of their videos on Lutebox which has given us tremendous credibility and traction.

Would you say the business has changed from the first initial idea?

We’ve pivoted our strategy several times, however, the core themes around our concept have stayed relatively the same. Some of the improvements and pivots that we made include adding group videochats, and extending activities on the site to shopping and broadcasts and not just movies and music.

Looking at our prototype then alpha and now to our beta, we’ve made huge changes to the design, UI and functionality, which is something I think is part and parcel of any internet startup.

Who are your competitors?

Being a social network in the new Alive Web space, Lutebox competes against Google+, Facebook, Skype, Yowie, Chill, and Rounds.

The Alive Web space is the convergence of social networking, entertainment, and communications and is the next generation in real-time shared experiences online. We believe that this is the future of social entertainment and communication, and as a result we are trying to position ourselves as one of the leaders in this extremely new and upcoming space.

How have you been able to fund the business?

We’ve been extremely fortunate to raise capital in three rounds, one seed round, an angel round and very recently a bridge round to our Series A. We’ve raised £250,000 of investment in total, and also were awarded two grants.

As someone that has received investment, what do investors look for when investing in startups?

Raising investment is a long and hard process. The main things that I’ve learned are that angel investors tend to look more closely at the entrepreneur’s experience, passion and ability, than the business’ traction or viability. Being risk takers, if they’re convinced that the entrepreneur is a winner, this justifies their investment. Whereas institutional investors like VCs tend to be much more risk averse, they wait for traction, and tend to quantify their upside through financial planning. Angels usually come in so early in the game that they know they can make huge returns in any potential upside scenario. Since VCs tend to come in slightly later, and they often have competing investment interests and startup opportunities, they tend to look more towards generating optimal returns.

What can we be expecting from your company in 2012?

We’re currently sitting at the edge of a new wave of activity in the Alive Web space. If we can take a leading position we hope to really scale up our business.

We’ve just gone live with our global beta, and 2012 will see our mobile apps come out. We’re also going to focus on our social commerce offering, by giving our users the best experience to shop with friends for the best products and services out there.

What three pieces of advice would you offer entrepreneurs starting out today?

1. Keep on shuffling. (There will be countless times where you’ll feel like your idea is worthless, or like there’s no way you’ll succeed, but you just have to keep positive and keep on pushing ahead. Small wins build up into big successes.)

2. Believe in yourself and aim big. (Taking others’ advice is important, but always believe in yourself. Aim for the sky and you’ll land in the clouds.)

3. No excuses, find a way. (True entrepreneurs will always find a way. When you have no money, no social life, no support, no resources, no motivation, you’ll feel like you need others’ support to succeed, but just know that entrepreneurs always find a way. That’s the definition of an entrepreneur.)