20VC News Anchor Founder, Mike Mignano Joins Lightspeed as Partner The Future of Social Media Why Clubhouse Has a Challenging Model Why TikTok Could be a $2TN Company Why BeReal is Defensible What Happens To OpenSea in a New World for NFTs

Summary Notes


In the latest episode of 20 VC, Harry Stebbings interviews Mike Mignano, former cofounder of Anchor and current partner at Lightspeed on the consumer team. Mignano discusses his journey from democratizing podcasting with Anchor, acquired by Spotify, to his prolific angel investing in startups such as Cameo and Pipe. He shares his excitement about joining Lightspeed, emphasizing the fund's global reach, domain expertise, and full-stack support as key factors in his decision. Mignano also delves into the future of social content, the importance of direct communication in venture capital, and the potential of recommendation media. He critiques live content formats like Clubhouse for their lack of on-demand, asynchronous components, and shares his bullish stance on creator tools that enable monetization and distribution, particularly highlighting Opensea and the NFT market as examples. Mignano's insights reveal a deep understanding of the evolving tech landscape and the critical role of venture capital in fostering innovation.

Summary Notes

Introduction to Mike Mignano and his Background

  • Mike Mignano is the co-founder of Anchor, a platform credited for democratizing podcasting.
  • In 2019, Anchor was acquired by Spotify, where Mike became the head of Talk for Spotify.
  • Mike has been a prolific angel investor with investments in Cameo, Pipe, Sandbox VR, and Stir.

"When I first met Mike, he was the co-founder of Anchor, often credited for democratizing podcasting globally."

This quote introduces Mike Mignano and highlights his significant contribution to the podcasting industry through the creation of Anchor.

Mike Mignano's Career Transition to Venture Capital

  • Mike Mignano announces he is joining Lightspeed as a partner on the consumer team.
  • He will be based in New York City, where Lightspeed is opening a new office.
  • Mignano chose Lightspeed because of its global presence, domain expertise, strong partnerships, and full-stack support.

"Today we're announcing that I'm actually joining Lightspeed as a partner on the consumer team and I will be based here in New York City."

This quote announces Mike Mignano's new position at Lightspeed Venture Partners, indicating a significant career move from his previous roles.

Challenges of Transitioning from Angel Investing to Venture Capital

  • Mike acknowledges the difference in responsibility between angel investing and venture capital.
  • As a venture capitalist, he will be investing other people's money and potentially joining boards, which increases the stakes.
  • Mike expresses anticipation and acknowledges the need for adaptation in his new role.

"You're investing other people's money, and now you're not just investing for yourself, you're investing for others who are entrusting you to make really smart decisions."

This quote reflects the increased responsibility and pressure that comes with being a venture capitalist compared to an angel investor.

Improving Venture Capital Practices

  • Mike Mignano advocates for direct communication and transparency in venture capital.
  • He believes founders and investors should have a clear understanding of each other's goals and intentions.
  • Mike suggests that the pitching process could be improved with more efficient and transparent interactions between founders and investors.

"I think venture could use a little more of that. Personally, I think it could use more directness between founders and investors."

This quote emphasizes the need for straightforward communication in the venture capital industry, which Mike believes can lead to better relationships and outcomes.

The Importance of Market Potential and Founder Ability

  • Mike argues that investors often underestimate the potential for a market to develop and evolve.
  • He believes that great founders can expand markets and that the founder's abilities are critical.
  • Mike suggests that a huge market can cover for weaknesses in founders, but a truly great founder can also redefine and expand a market.

"All of the biggest markets were never as big as they were until the defining companies made them that way."

This quote highlights the role of innovative companies in shaping and expanding markets, underscoring the importance of the founder's vision and execution.

Advice for New Venture Capitalists

  • Mike discusses the varying advice he received regarding the pace of making the first deal as a venture capitalist.
  • Some suggest waiting a year, while others advise to act within the first 60 days to avoid overthinking.
  • Mike leans towards moving quickly and applying an iterative approach to investing, similar to product development.

"By making that investment early, you're ripping the band aid and releasing that pressure before it builds."

This quote conveys the idea that making early investment decisions can help a new venture capitalist gain experience and confidence without overanalyzing.

Mike Mignano's Investment Strategy and Focus

  • Mike plans to write a few early-stage seed checks and a small number of Series A and B checks per year.
  • His focus will primarily be on consumer startups.
  • Mike emphasizes the importance of partnership in venture capital and his approach to investing as an iterative learning process.

"I think my inclination is to take a similar approach to investing where it's like, get your reps in, you're going to learn."

This quote reflects Mike's philosophy of gaining experience through action and viewing venture capital as a long-term journey.

Handling Hype and Maintaining Perspective

  • The initial success of a startup can be misleading, leading founders to believe they've "won" prematurely.
  • External validation from respected tech figures can contribute to a false sense of victory.
  • It's important to differentiate between speculation of success and actual success.
  • After the hype dies down, founders must refocus on the long-term journey of building a company.
  • Success is a marathon, not a sprint, and requires continuous work over time.

"We wanted to be the social network for audio... We had thought we had won because all of the biggest and most respected luminaries in tech... were telling us that we had won." "But the reality is... they are betting that you will win, not that you had already won."

These quotes emphasize the distinction between the perception of success due to external validation and the actual state of a startup's progress. They serve as a caution against prematurely celebrating success based on hype.

The Lifecycle of Hype

  • The hype cycle for a startup can be short-lived, lasting only a couple of months.
  • Startups often attempt to reignite the initial hype, but it can prove to be an elusive goal.
  • Eventually, startups must face financial realities and pivot if necessary to ensure survival.
  • This pivot can be a powerful motivator to refocus and make critical changes for the company's future.

"It probably lasted two months... you look at your Runway and you're going to run out of money... you have to do something dramatically different."

This quote outlines the temporal nature of startup hype and the eventual need to face financial realities, leading to strategic pivots to sustain the business.

The Potential for New Social Platforms

  • There's an opportunity for new startups to create groundbreaking social networks due to shifts in the focus of existing platforms.
  • The move of major social media companies towards becoming recommendation engines leaves a void for true social experiences.
  • Facebook's pivot away from the social graph indicates a potential opening for new social platforms.

"If there was ever a time to place a contrarian bet and lean into being the next big social platform, this is probably that time."

The quote suggests that the current changes in the focus of major social media companies present an opportune moment for new entrants to establish themselves in the market.

Defensibility Against Copycats

  • New social platforms must have a defensible format to succeed against larger incumbents.
  • Incumbents can easily copy simple features, but unique, defensible formats offer a competitive edge.
  • Examples of defensible formats include Airbnb's reviews and TikTok's unique content creation tools.

"I think the key for a new social network to break out is it has to do something different that is hard for another platform to travel to."

This quote highlights the importance of creating unique and defensible features that incumbents would struggle to replicate effectively.

The Challenge of Live Content

  • Live content on the internet faces inherent challenges due to the need for synchronous consumption.
  • Asynchronous content has more potential for scale and fits better into users' schedules.
  • Clubhouse's format was defensible but flawed due to its reliance on live content.

"Live content is extremely challenging... It just becomes a really challenging math problem."

The quote explains the logistical difficulties of live content platforms, which limit their scalability compared to asynchronous content platforms.

The Shift from Social Graph to Recommendation Media

  • Social graphs are no longer defensible as they have become easily commoditized.
  • Content distribution based on social graphs is inefficient and potentially problematic.
  • Platforms like TikTok have shown that recommendation algorithms offer a more efficient and controllable content distribution model.

"The social graph, as I said, is completely commoditized... It's a bad means of content distribution."

This quote describes the shift from the traditional social graph model to a more efficient recommendation media approach for content distribution.

Content Moderation and Platform Control

  • Content moderation is a significant challenge for platforms, but control over distribution can mitigate risks.
  • Platforms can use algorithms to decide which content to promote and which to suppress.
  • This control allows platforms to optimize for engagement and revenue while managing problematic content.

"When the platform has control over the distribution, they don't owe the distribution to anyone... They can just bury it."

The quote highlights the advantage platforms have when they control content distribution, allowing them to manage both moderation and engagement more effectively.

TikTok's Vertical Integration and Future Valuation

  • TikTok's addiction level and vertical integration of tools demonstrate its strong market position.
  • The company's in-house development of tools like Slack shows a high level of operational efficiency.
  • There is speculation about TikTok's potential future valuation as a multi-billion-dollar company.

"Every single tool completely vertically integrated... Do you think TikTok will be a $2 billion company?"

This quote reflects on TikTok's comprehensive approach to vertical integration and poses a question about its potential for significant financial growth.

Valuation of TikTok and Meta's Competition

  • TikTok currently has the advantage in the social media space due to inventing and popularizing a new format.
  • Meta (Facebook) has the potential to compete due to its vast resources, including content for matching and recommendations, and machine learning capabilities.
  • TikTok's success over the next couple of years is crucial for it to become one of the most valuable companies.
  • Meta has a good chance to displace TikTok in the near future, with the battle likely to be decided in the next 24 months.

"But the reality is the elements that will end up being critical on this battleground are ocean of content from which to do matching and recommendations, and best in class machine learning and computing power."

This quote emphasizes the importance of having a large content library and advanced machine learning for social media platforms to succeed, which are areas where Meta could excel and compete with TikTok.

Importance of Creator Tools in Social Platforms

  • Great social platforms begin with tools that enable creators to produce content.
  • Early versions of Anchor provided limited tools, resulting in low-quality content that did not attract an audience.
  • Providing advanced creative tools can make content creators sound professional and motivate them to create more, thus attracting listeners.
  • The challenge is to build a defensible format that cannot be easily replicated by competitors like Meta.

"And the moment we did that, they sounded like professionals, and it motivated them to want to create more, and it motivated people to want to come and listen."

This quote highlights the transformational impact that advanced creator tools can have on the quality of content and the growth of a platform.

Creator Economy and the Pareto Principle

  • The creator economy is seen as following the Pareto Principle, where a small percentage of creators earn the majority of the revenue.
  • High costs of creator tools can be prohibitive for the majority of creators who earn less, making these tools cater to the top 1%.
  • There is a need for tools that enable the broader base of creators to monetize their content.

"But my point being that I turned down Riverside, the platform we're on now, because it's like 30, $40 to use every month for a creator that makes $100, $200 a month, it's just too much."

This quote addresses the concern that the costs associated with creator tools can be too high for the majority of creators, limiting their ability to monetize effectively.

Shift to Recommendation Media and New Business Models for Creators

  • There is a shift from follower counts to algorithm-based recommendations in media.
  • Creators need tools to build new business models that do not rely solely on algorithms and advertising.
  • Direct relationships with fans and customers are becoming more valuable for creators.
  • The focus should be on enabling the majority of creators who have not yet earned from their content, rather than the top 1% who are already successful.

"We need to worry about the millions or tens of millions, not the tiny 1% who are already making lots of money."

This quote stresses the importance of focusing on tools that enable a larger number of creators to monetize, rather than just enhancing the earnings of the top-performing creators.

The Role of Creator Tools in Monetization and Distribution

  • Creator tools should either help creators make money or provide them with distribution.
  • Products like Riverside and Descript are used daily by the speaker and are seen as valuable despite initial skepticism.
  • These tools are trying to emulate Adobe's business model by providing best-in-class tools and charging a subscription fee.

"Whenever I meet creator tools or anything in the creator economy, I say, hey, unless it does one of two things, I'm not interested. It either needs to make creators money or it needs to bring creators distribution."

This quote emphasizes the speaker's criteria for valuable creator tools, which must contribute to either monetization or distribution for creators.

Unbundling and Rebundling of Adobe

  • Companies like Riverside and Descript are seen as part of the unbundling of Adobe's suite of tools.
  • Successful companies in this space will likely need to expand into new verticals to grow.
  • The growth strategy for these companies involves establishing a strong position in one area and then leveraging that to move into adjacent markets.

"I think it has to get unbundled and then rebundled again."

This quote suggests that after the initial unbundling of services like Adobe's, there will be a need for reconsolidation or rebundling as companies expand their offerings.

Spotify's Position in Recommendation Media

  • Spotify is well-positioned to benefit from the shift to recommendation media due to its long history with machine learning-based content discovery.
  • Spotify's acquisition of Anchor and other initiatives has created a large pool of podcast content, which is essential for programming and recommendations.
  • The company might have missed an opportunity in social media years ago, but it is ahead of the curve with its current strategy.

"So you could imagine a world in which Spotify is enabling anyone to create, and they end up with a huge ocean of content through which they can program to their listeners based on trends in machine learning and their listening habits and things like that."

This quote outlines Spotify's potential advantage in the recommendation media landscape due to its ability to enable content creation and leverage machine learning for personalized recommendations.

Angel Investing Insights and Mistakes

  • The speaker has written about 50 angel investment checks, focusing on building a diverse portfolio.
  • Consistency in check size was maintained to avoid biases and to acknowledge the inherent risks at the angel stage.
  • Mistakes included backing non-mission-driven founders and spending unnecessarily on legal reviews for standard investment documents.
  • Determining if a founder is truly mission-oriented requires getting to know them well.

"I really like to back founders that are super mission driven. They've experienced the problem personally. They want to be the change they want to see in the world."

This quote reflects the speaker's investment philosophy that prioritizes founders who are genuinely passionate and have a personal connection to the problem they are solving.

Reference Checks and Getting to Know People

  • The importance of thorough reference checks and getting to know someone on a personal level.
  • Spending ample time with a person can reveal their genuine nature.
  • Making quick decisions can lead to mistakes in judging a person's character.

You have to do your reference checks. You have to do off book reference checks. You need to really get to the heart and soul of the person.

This quote emphasizes the necessity of conducting in-depth reference checks to truly understand an individual's character, beyond what is superficially presented.

Missed Investment Opportunity: Opensea

  • Mike Mignano's regret over not investing in Opensea.
  • Opensea's potential as a platform for creators, especially visual artists using NFTs, was evident early on.
  • The missed investment opportunity was a learning experience.

I really wanted to invest in Opensea early on, right up my wheelhouse, naturally, in founding anchor, I'm a big believer in platforms that lower the friction to enable people to create and distribute and monetize and things like that.

Mike Mignano relates his missed opportunity to invest in Opensea to his passion for platforms that empower creators and reduce barriers to creation and monetization.

NFTs and Social Capital

  • Mike Mignano is more bullish on NFTs for creator empowerment than for their social capital aspect.
  • NFTs have enabled artists to monetize work that was previously difficult to profit from.
  • The story of John Januzi illustrates the transformative impact of NFTs on individual creators.

The reason I like Opensea and NFTs is not because of what you just said. I am not long term bullish on the social capital aspect of the NFTs. I'm more bullish on the creator based use case of it.

This quote clarifies that Mike Mignano's interest in NFTs is rooted in their potential to democratize opportunities for creators rather than their role in social status or prestige.

The Future of Web3 and Infrastructure

  • Web3 has potential for specific use cases but is not a cure-all.
  • Investing in infrastructure is seen as a more reliable bet than speculating on specific use cases.
  • Lightspeed's investments in crypto and Web3 infrastructure align with this view.

I think web three can make sense for certain use cases, but I don't view it as a panacea for everything. I believe in infrastructure and that's another thing that Lightspeed is doing that I'm excited about.

Mike Mignano expresses a balanced view of Web3, recognizing its potential without overestimating its applicability to all areas of the internet. He highlights the importance of infrastructure investments.

OpenSea in Volatile Markets

  • OpenSea's revenue fluctuations reflect the volatile nature of the crypto and NFT market.
  • The focus for companies like OpenSea should be on long-term strategy rather than short-term success.
  • Teams need to adapt to changing market conditions and cannot force a market into existence.

The game's not over, as I'm sure they're doing, because they're smart teams, smart founders. I'm sure they're back at work trying to think about the next five years of the product, not what happened last year.

The quote suggests that despite market volatility, forward-thinking and adaptable teams like OpenSea's are likely planning for the future rather than dwelling on past performance.

Adapting to Market Needs

  • Recognizing when to pivot and meet market demands is crucial for startups.
  • Anchor's pivot to making podcast creation easier was a successful response to user needs.
  • Founders cannot force their vision onto the market; they must respond to what the market requires.

At a certain point, you have to stop trying to get the world to want what you want it to want, and you need to give it what it needs and what you're uniquely positioned to give it.

This quote underlines the lesson that startups need to align their offerings with market demands and leverage their unique strengths to meet those needs effectively.

Personal Insights and Relationships

  • Becoming a parent can help focus and prioritize what's important in life.
  • In relationships, listening and empathy are more critical than always trying to fix things.
  • Strong relationships are built on understanding and hearing each other.

Relationships are built on listening and actually, like, empathizing, not on action. I mean, obviously action is important as well. But sometimes people just want to be heard, and you really need to listen and stop trying to make everything about you and about what you can do to fix a situation.

Mike Mignano shares that effective listening and empathy are foundational to building and maintaining strong relationships, whether in marriage or other significant partnerships.

Angel Investing and Empathy in Product Leadership

  • Maya Perhovnik is highlighted as an underrated angel investor due to her empathetic approach to product leadership.
  • Empathy allows for a deep understanding of user resonance and needs.
  • The ability to relate to users is a key trait in successful product development and investment.

Maya Perhovnik. She was the first employee at anchor. She now runs talk at Spotify. She's amazing because she is probably the most empathetic product leader I know.

Mike Mignano praises Maya Perhovnik for her empathetic approach to product leadership, which he believes is a significant factor in resonating with users and succeeding in the market.

Balancing Passion and Personal Life

  • Extreme passion can be a strength but may also lead to neglecting other life aspects.
  • Finding a balance between professional dedication and personal responsibilities is challenging but necessary.

I have a tendency to become extremely passionate about things. I really pour my whole self and my heart and soul into things.

In this quote, Mike Mignano reflects on his tendency to immerse himself passionately in his work, acknowledging both the benefits and the potential drawbacks of this trait.

Encouraging Startup Creation

  • There is a desire for more tools and services that lower the barriers for starting companies.
  • Mike Mignano's investments are often in products that facilitate the startup journey for founders.

I'm always excited about things that make it easier for people to start companies. I want the friction to drop even lower.

Mike Mignano expresses his enthusiasm for products and services that simplify the process of starting a company, indicating that he actively seeks to invest in such ventures.

Recent Angel Investment: Stardust

  • Stardust's focus on women's health and privacy-centric features attracted Mike Mignano's investment.
  • The overturning of Roe v. Wade increased the importance of privacy in women's health apps.
  • Encryption and data control are becoming increasingly important to consumers.

I recently invested in a company called Stardust. It's a woman's health product first focused on period tracking, secure, end to end, encrypted, privacy centric, amazing female founder, mission driven.

Mike Mignano discusses his investment in Stardust, emphasizing the product's focus on privacy and encryption, which became even more relevant in the context of changing legal and social landscapes.

Building Large-Scale Health Businesses

  • Health products need to expand into multiple verticals to build large-scale businesses.
  • Period tracking can be an entry point for a broader suite of health services.
  • Success in one vertical can enable expansion into others, leading to significant business growth.

I view it more as one offering in a suite of health products and services. And obviously, there have been countless massive, massive health businesses.

Mike Mignano articulates his view that a successful health product, like a period tracking app, should be part of a larger ecosystem of health services to achieve substantial growth and impact.

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