20VC Why It Is All Still About User Growth and How To Address Retention For A Consumer Social App with Mike Mignano, CoFounder & CEO @ Anchor

In this episode of the 20 minutes VC, host Harry Stebbings interviews Mike Mignano, co-founder and CEO of Anchor, an audio-sharing platform that's been likened to "radio for the people." Mignano discusses Anchor's journey, from its inception to becoming a standout at South by Southwest, and how it simplifies the process of creating and broadcasting audio content. He emphasizes the importance of building a diverse beta-testing community and how user feedback led to key product improvements, such as the introduction of a two-minute cap on audio segments. Mignano also touches on the platform's growth, the potential for user monetization, and the future integration of audio into various technologies. The conversation highlights Anchor's community-centric approach, the natural human interaction facilitated by voice-based replies, and the engagement that keeps users returning to the app.

• Mike Mignano is the co-founder and CEO of Anchor, a platform that simplifies audio broadcasting, making it like "radio for the people."
• Before Anchor, Mike was the head of product at Avery, which was acquired by Adobe.
• Anchor gained attention at South by Southwest and received funding from various ventures including Homebrew, SV Angel, Beta Works, Eniac Ventures, and others.

"And joining me today is a guest who when I spoke to the VC community, they all said they wanted to hear from this man. Therefore, I'm thrilled to welcome Mike Minano, co-founder and CEO at Anchor."

This quote introduces Mike Mignano as a highly anticipated guest in the venture capital community, establishing his credibility and the significance of his platform, Anchor.

• Anchor was founded about a year and a half ago by Mike Mignano and his co-founder Nier Zickerman.
• Both founders have a passion for audio, podcasts, music, and radio.
• They recognized the difficulty in creating audio content and saw an opportunity to make broadcasting one's voice easier.

"Anchor started a little over a year ago, about a year and a half ago by my co-founder Nier Zickerman and I. We both shared a passion and a love for audio and podcasts and music and radio, and we felt like there was an opportunity to enable people to broadcast their voice much easier than they were able to prior."

This quote explains the motivation behind creating Anchor, highlighting the founders' passion for audio and their desire to simplify the process of broadcasting for the average person.

• There has been a significant resurgence in podcast listening.
• Skepticism exists about this renaissance, but it is a real phenomenon, with millions of Americans tuning into podcasts monthly.
• Factors contributing to this resurgence include the discovery of streaming audio, smartphone proliferation, and the realization of high-quality content available.
• The podcast "Serial" played a key role in bringing podcasting into the mainstream.
• As more people consume audio content, there is a natural inclination for them to want to create and contribute, despite the traditional difficulties associated with audio content creation.

"The latest Edison report I saw that came out a month or two ago showed that something like 57 million Americans are now listening to podcasts monthly, which is an extremely large number."

This quote provides evidence of the increasing popularity of podcasts, indicating a significant audience for audio content in the United States.

• Mike Mignano believes the consumption of audio and podcasts will continue to increase.
• Factors that will drive this increase include greater data availability, car connectivity, and advancements in voice recognition and commands.
• The integration of technology like Amazon Echo and Apple TV into homes, cars, and offices will reduce friction and make it easier to access and interact with audio content.
• Mignano sees podcasts as complementary rather than competitive to Anchor due to the different levels of friction involved in starting a traditional podcast versus an Anchor post.

"I absolutely see it increasing. I think what will drive it will be some of the things you just mentioned. Data increase in data increase in bandwidth connectivity of cars. Absolutely."

This quote reflects Mignano's optimistic view on the future growth of audio content consumption, underlining the technological advancements that will facilitate this trend.## Anchor's Complementarity to Podcasts

• Anchor is seen as a complementary tool for podcasters and radio broadcasters.
• Podcasters use Anchor to source interview questions, while radio stations collect listener feedback.
• Anchor's network and community aspects offer utility for professional audio creators.

"We've had podcasters on the platform, we've had professional radio broadcasters on the platform, and they're using anchor to do new and interesting and different things with their listeners."

This quote highlights how Anchor is utilized by various audio content creators to enhance their engagement with listeners, indicating its versatility and usefulness in the audio creation industry.

• The importance of community in Anchor's success is emphasized.
• Mike Mignano references Fred Wilson's blog post on consumer downturns to underline challenges in consumer tech.
• Anchor's launch success attributed to focus on product and community.

"I think it's all about community and making people feel like they're a part of the product."

Mike Mignano stresses the significance of community engagement in Anchor's strategy, illustrating how involving users in the development process can build a strong user base and contribute to a successful launch.

• A year-plus beta phase was used to understand user behavior and make informed product decisions.
• Early assumptions were corrected through beta testing, leading to smarter product changes.
• The Anchor team's openness and accessibility foster a sense of user ownership and input on the product.

"We spent a year in beta, a year plus in beta before we released the app. And the purpose of that was to really study the product and study the behaviors and study how people were using it."

Mike Mignano explains the rationale behind Anchor's extended beta period, highlighting the importance of analyzing user behavior to refine the product before its official release.

• Diversity in beta testing groups is crucial to represent a wide range of users.
• Small, diverse groups can provide valuable feedback without needing large numbers.
• Anchor implemented insights from Jacob Nielsen's study on user testing efficiency.

"You always want to have a diverse set of people because that's what you're going to have when you're live and when you're in the store."

Mike Mignano points out the necessity of having a diverse beta testing group to ensure the feedback represents the actual user base, reinforcing the value of diversity in product testing.

• Anchor maintained a small, communicative beta group for effective feedback.
• Frequent updates during beta allowed for observation of user behavior changes.
• Adjustments to features, like the length of audio waves, were made based on beta feedback.

"We also shipped very often, we shipped updates to the beta very, very often, so we could see what these small shifts in the product would mean for the behaviors."

Mike Mignano discusses how regular updates during the beta phase allowed the Anchor team to quickly iterate and respond to user feedback, demonstrating an agile approach to product development.

• Anchor's beta testing revealed incorrect assumptions about user behavior.
• The team learned to adjust the maximum length of audio waves to improve content quality.
• The method of recording in Anchor was also refined based on beta testing feedback.

"When we looked and we saw that the sweet spot, the best length for waves, was about a minute and a half to 2 minutes in length."

Mike Mignano shares a specific insight gained from beta testing, which led to setting a time limit for audio recordings to enhance content engagement, showing how data-driven decisions can improve user experience.## User Behavior and Product Design

• Anchor observed that people were more comfortable recording voice messages by holding the phone to their ear, similar to a phone call.
• This observation led to a design choice that made recording feel like talking on the phone, thereby increasing user comfort with the app.

"We realized that talking into the telephone was a behavior that pretty much everyone in the world was comfortable with."

This quote explains the rationale behind designing the recording feature in Anchor to mimic talking into a telephone, as it is a universally familiar behavior.

• Sarah Tavill's hierarchy of engagement is applied to analyze Anchor's user engagement.
• Anchor aims to create a self-perpetuating cycle of content creation and discussions to improve user retention.
• Retention strategies are based on natural human behaviors, such as voice-based replies, which feel more personal and engaging.

"We also try to model ux patterns off of things that we all do in real life."

The quote highlights the approach of using real-life behaviors to inform user experience patterns within the app, aiming to make interactions feel natural and intuitive.

• Voice-based replies are used as an engagement mechanic, driving user retention.
• Group conversations with voice increase engagement and expand the virtuous loop of interaction.
• The feature of replying was not initially planned but was added after observing user behavior in beta.

"Replies have now become that engagement mechanic for us, that drives people back, that keeps them coming back into the app, that retains users over time."

This quote explains how voice-based replies have become a key feature for engaging users and encouraging them to return to the app, thus retaining them over time.

• Users have different interaction styles; some are listeners, while others are more active repliers.
• Conversations can vary greatly in the number of replies they receive, with some garnering hundreds.

"It all depends on the user and it all depends on the conversation."

The quote indicates that user interaction with the app varies based on individual preferences and the nature of the conversations, suggesting a diverse user base with different engagement levels.

• Users on Anchor discuss a wide range of topics including news, comedy, sports, wellness, and random conversations.
• The voice-based platform facilitates personal connections and discussions on varying subjects.
• The lack of visuals on Anchor may contribute to the personal and unique nature of the connections formed.

"A fascinating thing about anchor is that it's connecting people in a way that I don't think we've seen people connect before on the Internet."

This quote emphasizes the unique way in which Anchor enables connections through voice, which is personal and distinct from other internet platforms.

• Anchor's current focus is on building a large and stable audience before considering monetization.
• The demand for audio content provides optimism for future monetization opportunities.
• Monetization is not the immediate priority, but the potential is recognized due to the growing market for podcasts and other audio content.

"You got to make sure that there's something stable here. You got to make sure that you have an extremely large audience that's going to stick around for a long time."

This quote reflects the strategy of prioritizing audience growth and retention over immediate monetization, ensuring a solid foundation for future revenue generation.## Anchor's Monetization Philosophy

• Anchor's mission revolves around democratizing radio and audio.
• They prioritize giving users control and ownership of their content.
• The monetization strategy will allow content creators to earn a living from their work.

Our mission is all around democratizing radio, democratizing audio, giving the people radio that they can control, giving the people audio and a medium that they can take ownership over.

This quote explains Anchor's core mission, emphasizing the empowerment of individual creators and users by providing them with control over their content.

• Medium allows content creators and the platform to monetize, which is a model Anchor seems to be considering.
• Anchor is exploring various monetization ideas and is inspired by companies like Patreon.

Slightly like medium. Is it with their publishers now? I think they allow both the content creators and the platform itself to monetize.

Harry Stebings draws a parallel between Anchor's potential monetization approach and Medium's existing model that benefits both creators and the platform.

• The size of the audience may be less important than the engagement and retention for monetization.
• Anchor aims to monetize within the next few years, focusing on a dedicated and active user base.

I think it may be less with the overall size of the audience and more with the stickiness, the retention, the engagement of a large enough audience.

Mike Mignano highlights that the quality of audience engagement could be more critical for monetization than just the number of users.

• Mike Mignano's favorite book is "Cat's Cradle" by Kurt Vonnegut for its dark comedy.
• If given a chance to start over, he would start working on his own product and company sooner.
• He had to find the right problem and the right co-founder, which he did with Anchor.
• "The Skim" is his favorite blog for getting a quick news download.
• He would like Larry David to use Anchor because of his humor.
• Mike enjoys fundraising due to the opportunity to meet and connect with smart people.
• In the next five years, he wants Anchor to expand to all platforms where audio can live and be voice-controlled.

Oh, yeah, I'm ready. Let's go. Okay, so your favorite book and why cat's cradle? I love Kurt Bonnegut. I think his humor also mixed with sort of the bleakness of a lot of his stories. I don't know. It's just up my alley. I'm into a lot of sort of dark comedy.

Mike Mignano shares his literary preference, highlighting his appreciation for the blend of humor and somber themes in Vonnegut's work.

• Mike wishes he had started his entrepreneurial journey earlier.
• He waited until he found a problem he was passionate about and the right co-founder.

I'd start sooner. I would definitely start working on my own product and my own company sooner.

This quote reflects Mike's desire to have begun his entrepreneurial efforts earlier, suggesting the importance of seizing opportunities quickly.

• Finding a compelling problem and a suitable co-founder were crucial before starting Anchor.
• Mike found both with Anchor and credits his co-founder for their success.

I think for me, it was something I had to work up the courage to do. First of all, I think I never really had an idea or a problem that I wanted to tackle that I felt as passionately about as I do with anchor.

Mike explains that his previous hesitation was due to not having a problem he was passionate enough about or the right partner to pursue it with until Anchor.

• Mike's must-read for daily news is "The Skim."
• He appreciates the concise format for staying informed.

I love the skim. I think the skim is fantastic. It is a way that I sort of get my download on the news every morning.

The quote reveals Mike's preference for "The Skim" as a quick and efficient way to stay updated on current events.

• Mike would like to see Larry David on Anchor due to his humor.
• He enjoys listening to funny people and thinks Larry David's rants would be entertaining.

I think he's hilarious. And I love listening to funny people on Anchor. And if I could just fire up anchor every morning and hit play and just hear sort of a daily rant from Larry David, I would be very happy.

Mike expresses his admiration for Larry David's humor and how his presence on Anchor would be enjoyable for him.

• Mike enjoys the fundraising process for the opportunity to meet intelligent people and build connections.
• He views fundraising as a positive experience.

So I actually kind of like fundraising.

This quote demonstrates Mike's unconventional enjoyment of fundraising, as it allows him to network with other professionals.

• Mike envisions Anchor expanding to all possible audio platforms.
• He anticipates voice control to be a native feature for audio technology.

I want Anchor to live anywhere that audio can live, right? We're seeing products like the Amazon Alexa, and we're seeing products like Apple TV and connected cars and basically anywhere that audio can live.

Mike outlines his strategic goal for Anchor to be universally accessible across all devices and platforms that support audio, emphasizing the importance of voice control.

• Mike thanks Harry for the opportunity to share Anchor's story on the podcast.
• Harry encourages listeners to try out Anchor and follow the 20 minutes VC for updates.
• Harry promotes Lisa mattress, highlighting the convenience and charitable aspect of the company.

Thank you, Harry. I appreciate you having me on the show. It was great chatting with you.

Mike expresses his gratitude to Harry for the interview, indicating the value of such platforms for sharing company narratives.