EP 38: Anchor Founder Mike Mignano talks History/Future of Podcasting, Clubhouse & Web3 for creators

Welcome to the 38th episode of Cartoon Avatars. I'm your host, Logan Bartlett, and I am joined again today by Rashad Asir. Rashad, how are we doing?

Excellent, man. I'm fired up about, uh, we have this event this evening, uh, with a bunch of founders that I'm super excited for. So yeah.

That I will definitely be at.

Yeah, totally.

That I am, I am, I'm definitely, I will be there and just like I promised you, and I'm not, I'm not trying to, I'm not trying to back out of anything at all.

Yeah. Well, I don't know what was confusing about my Slack the other week. It was, it was pretty clear.

No, I'm a man of my word and I want to, I will come across town for you.

I know it is pretty far west.

It is pretty far west. I do live pretty far east, but yes. So how is everything otherwise preparing for this talk aside? How is everything else going?

Things are going well. You've got the— I was following your story this weekend.

Oh, the Tennessee game. I was actually thinking I would show up. I was thinking I would show up in like, I joined a board meeting yesterday with this Tennessee helmet over my shoulder on and a full jersey. I like turned on my camera and was all decked out.

Yeah.

It was fun. I actually had someone come up to me while I was down there after the game at a bar when I was like not in shape to be having conversations about like crypto and stuff. You know, because originally it was like we were tailgating and then the game happened. And then for people that don't know, Tennessee beat Alabama for the first time in like 15 years. And so I stormed the field. And so like I'm on the field and there's this tradition of like smoking cigars after the game for the winner. And so like—

But what's the goalpost thing?

Oh yeah. Then people rip down the goalposts. That's just like, that feels like a huge safety hazard slash like, yeah. Oh yeah. Yeah. Yeah. It's been a tradition for a long time that like people rip down the goalposts, but it happens few and far between now. The last time it happened for Tennessee was like 1998. And you would think they would build those things to like tear away because it does, you know, It happens once every 25 years or something. And no, those things like rip and it's like a very sharp end that ends up breaking off from like a metal standpoint. So yeah, the students ripped that down and threw it into the river, which is just like a hilarious thing. They like took it out of the stadium and then walked it over to a river and threw the goalpost into the river. So it was pretty lawless for like, For, I don't know, 8 hours after the game, which is just funny. I know we have people like all over the world that listen to this, and so I have to imagine like, you know, people—

Well, I, dude, I used to live in Beirut, Lebanon.

That's where I went to high school.

And it's truly lawless. I mean, it's a developing country. You could pretty much get away with whatever, but I first experienced the college football craze when I was at Virginia Tech and we beat Ohio State. And that's what your story reminded me of.

It was like, yeah. Oh yeah.

It was total burning mattresses on the street.

100% burning mattresses on the street. No cars. Yeah. Oh yeah. Yeah. All that stuff. It was like absolutely insane for like 6 hours after. And then you just think about it and like, there's an event being played. I guess it's most akin, like college football is most akin to like soccer or football, whatever, in Europe. Where it's just like kind of the fans are pretty unruly. And so then you have like, I mean, there's 100,000 people in their stadium and you have, I don't know, 50,000, 30,000 of them all descending on the field after the game with all the players there and like, you know, police being overwhelmed by the situation.

And these are like drunk 19-year-olds too. It's not like—

100%. Yeah. It was super fun. But yes, I, it's funny when people want to talk crypto or something or talk about the podcast and I had been like out for 15 hours at that point. And so yeah, it was everyone that came up to me at Wagon Wheel in Knoxville, Tennessee and said something. I was not in my best shape, so I apologize to the people that came over, but it was fun. It was a uniquely fun experience that, yeah, I mean, last-second field goal to win the game and all that. Just like, yeah, it's just one of those things that you could go, especially when you've lost to the same team every year for 15 years, right? So it was a uniquely, my dad and brother were there, fiancée was there, uncle was there. So it was, yeah, it was a fun time.

I will say if I was an Alabama fan, And I thought this the same thing when Virginia Tech beat Ohio State. We were celebrating this hard. It's like you kind of want to act like you've been here before.

Like literally, you know, to be clear, that veneer of acting like you've been there before is gone when you lose 15 times in a row to the team. Right. And so like maybe some people made that argument of like, oh, your regular season game, you storm the field. It's just another game for us. Like, And you storm the field and like create chaos in your city when this happens. And you're like, yeah, totally. And we'll do that again if we go on a 15-plus game losing streak this year, your team.

It feels warranted.

It was a wild— it was the wildest environment I've ever been a part of. They broke the stadium decibel record. And so it was just like a crazy experience. So a lot of fun.

In other news, the last episode we talked about the— what was it? Wall Street Journal covered that ghostwriter?

No, Insider.

Insider.

Sorry, Insider. And then on Friday from Knoxville, I recorded— I guess a quick plug— but I recorded an episode with Eric Newcomer and Tom Doden for their podcast called Dead Cat, in which we spent, I don't know, an hour talking about that article of ghostwriting tweets and all of that.

And you got some drama, some backlash on Twitter?

Yeah, I think something uniquely in my Venn diagram of stuff is like VC, Twitter, ghostwriter, humor, like all that stuff. It's like uniquely in my thing. But yeah, I spent a, I spent whatever, how long did we talk about last week? 15 minutes or whatever it was. And then spent an hour-ish talking about it with with them. And, um, the author of the piece got, uh, got upset with me on, on, uh, on Twitter for, for, uh, something I didn't say, which was just like hilarious, uh, that he like came at me, uh, pretty, pretty hard being like, I hear Logan's questioning my journalism integrity.

Yeah.

And he was quoting the headline from the Dead Cat episode, which you obviously didn't write.

It's just the, the funny irony of this person being upset about it is like they're a reporter and like they got caught up Instead of like going to the source material that's out there as a reporter whose job it is, they like got caught up in the aggregation of it and then got all defensive on Twitter, which is pretty funny.

Yeah.

I'm sure this will, I'm sure I'm going to get some response from this guy again about all of it. It was funny once he, once I told him to go listen to what I said, I didn't hear from him again, but a bunch of people told him to like, Delete his account and log off the internet. And, you know, a bunch of people chimed in. So it was, I feel like he got his due course on it. But it was interesting. I've actually had a few people, like since I said stuff about it, that said they have also been reached out to by VC firms to ghostwrite for their partners. So I guess this is more widespread than I expected. It seems pretty consistent that it is like a tier, like the names that people told me, I didn't even know or barely had heard of these venture firms. And so I guess a bunch of people are trying to cut through the noise and all of this stuff, and that makes sense. I don't think it's going to be like the big people that are doing all this, but yeah, that story continues to live on, it seems.

Yeah, I have a pretty naive take on this, just like not having been exposed to journalism and like talking to journalists before I joined a VC, and then now it feels like It's a lot of what happens, whether it's like journalists covering our portfolio funding announcements or things like this. But I don't know, my initial reaction if a journalist reaches out is always like, oh, they're trying to get me or something like that, even though I think that's— it's probably not the right take.

You and most of tech— I, I think the tech community feel that way.

Is that the case in reality, or is that just like the— a bad portrayal of a reputation?

I don't know. I've always had a Journalists have always, I mean, I'll say this until I inevitably get canceled and like a bunch of them pile on me, but most of the people that cover our beat have always been nice to me. And I've yet to have a situation in which I feel like I've been unfairly represented. I'm sure that'll come. And the people like when we've heard from Parker Kamerad or Palmer Luckey or even Dick Costolo, like the people that have weighed in, On this podcast that have talked about it, like being on the wrong side of it. I'm sure it's just terrible, right? Like it's about as bad of a thing as you could possibly have. And so I guess in some ways, like the sins of a few get manifested in a bunch of situations where other people feel it, but everyone's always been nice to me. So I, until that day, until I inevitably get canceled and I have to Shout down at all reporters. I feel like I'll stay on that.

Good stuff.

All right, so what you're going to hear next is a conversation that I had with Mike Mignano, who is the— was the CEO and founder of Anchor, which sold to Spotify. Now he's a partner at Lightspeed Ventures here in New York. I made him promise that I would scrub anything out that seemed like Lightspeed propaganda. So this was really a a conversation just about his views on social, on podcasting, on TikTok, on Clubhouse. We went in a bunch of different directions. He's a very thoughtful person about all this stuff, having spent a lot of time really for people that don't know, Anchor's like the infrastructure that enables us to upload podcasts to Spotify, right? And so it's all the backend, the hosting and the publishing that you can do to Apple, you can do to Spotify, you can do to all these different channels. And so Mike was early to that and built out all that functionality. And so it was a really fun conversation. He, we sort of tell the story of how we actually met, which is funny. It was only a couple weeks ago and he sort of came up to me out of the blue. But yeah, it was a fun, we have a pretty good rapport and I have a lot of respect for both what he's built as well as his opinions about things. So look forward to Everyone hearing that now, it was a really fun conversation. I'm joined today by Mike Mignano. I can't even, I, was that close enough? Yeah.

Yeah. Yeah. Say that.

To give a little bit of an excerpt, I've tried 3 times saying Mike's name and I haven't done it appropriately. So Mike, thanks for doing this.

Yeah. Thanks for having me.

Especially on short notice. I, so I guess for people listening, Mike came up to me, we were, I don't know, 6 months ago or no, not even 3 months ago at a conference. And he came up and he is like, you're the podcast guy. And I was like, Yeah, you quite literally created Anchor and built like the infrastructure for podcasting. So I think you're the podcast guy. I think I, I don't know, I don't know what I am, but I'm certainly not the podcast guy. So Mike, we're going to, you've since, I guess at that point you had joined Lightspeed as a partner, right? But maybe give people your journey to that point, and I'm going to make sure to edit out all Lightspeed propaganda and make sure that there's no commercial for Lightspeed. All of this is just going to be pure. Pure anchor and ecosystem and all that. So yeah, maybe give people a little bit of a background on your journey to Lightspeed and starting a company and all that stuff.

Yeah, sure. So that was actually, that was about 6 weeks ago.

Oh wow.

It was recently.

Time flies.

Yeah. I mean, time is, I can't keep track of it either. And not only that, but it was my second day on the job.

Oh wow.

Yeah. I had just started Lightspeed the day before. And it was at the Primary Venture Summit, which was kind of an interesting event because here in New York, like everywhere else in the world, there hasn't really been events over the past few years. And I kind of forgot about how many people were actually here in New York inside of tech and venture. And that event, I bumped into so many people that I hadn't seen in forever, people that I'd never met before, like you. But yes, you kind of are the podcast guy, but this podcast is kind of a big deal now. A lot of people listen to it.

You know, it's funny. I, yes, it turns out people do listen to it. And I, for a long time, I made the joke that like, you know, it was just my family members or whatever. And then just because I like being deprecating, right? It's hard to be. And now that's just not true. And so I stopped making that joke, right? But it still is a weird thing to get stopped or from people like you that I respect and follow. And I, and also just like random people. So that'll But I appreciate it. It's turned into something. So thank you. I appreciate you coming on. I appreciate you saying that.

So going back, how I got to Lightspeed, maybe going all the way back, I grew up being really excited and passionate about music and art and creativity, but I also taught myself how to program in high school. And when I went away to school, I was like, do I major in music, which is my real passion, or do I do something with technology and computers and Somebody had said to me, oh, computer science, like that's going to be a big deal. There's this thing called the internet happening. You should go do that. And I was like, okay, that sounds a little safer. So I got a CS degree and—

Tell me this was in high school because you graduated like mid-2000s, right? So if someone was telling you that the internet was happening in the mid-2000s, I, you know, I understand like '96, '97, '98, maybe when you're starting programming, but hopefully that wasn't college that they were telling you the internet was happening.

No, this was, I graduated high school in 2001. And like Silicon Valley, you know, the crash, the dot-com bubble had just happened. Got it. But people were like, yeah, there's going to be something here. And people are coming out of school with CS degrees and making all this money. Like, you'll be way better off doing that than majoring in music.

Pressing advice. Was this actually one person or was this en masse that people were sort of like telling you this?

No, it was like 2 people. It was like one, it was like my sister's boyfriend at the time or something like that, who was older than me. And, uh, but like, I had no idea what it meant. Like, I didn't even really know like what a CS degree was, what I would be doing. I had, I had programmed Visual Basic in high school, which, do you remember anything about that?

Yeah, of course.

Very, very different than, uh, than what I ended up doing in college. And obviously like the way people build software now.

By the way, my knowledge of like computer science and stuff, like I know, I know everything at a cursory level, but if you went one tick below that, I would have been like, you know, if you were like, oh yeah, and because it's object-oriented or like whatever you would have sad, I would've been like, yeah, that's where you lost me. But like knowing these things exist, that's where I, that's the level I exist on.

I'm actually somewhat similar, to be honest, even though I have the CS degree, I haven't programmed in forever. And if you tried to get me to do it right now, I would probably be terrible at it. I graduated and I got a job in consulting, big, big consulting firm, and immediately was like, oh my goodness, I've made a horrible mistake. I don't like programming. And I especially didn't like what I was doing at the time. I was programming for this big consulting firm in this proprietary SAP language. To this day, I don't even know what I was building.

Yeah.

It was almost like the programming exercises you do in college, but for some big corporation and you have no idea what the objectives are and what you're trying to do. And I just hated it.

So you graduated in '05, right? And you went to work at Accenture, was your big Consulting.

That's right. Yeah, that's right.

This is just out of curiosity, all the Arthur Andersen, like Enron, how did that overlap with when you were joining? Were you joining right into that or had it already changed and the name had changed and all that, or what was going on at that point in time?

It was after that the name had changed. It was Accenture. I didn't really know much about that stuff until later and I got smarter and wanting to learn more about the company I was working for. This was like straight out of college. This is your job. You show up, You check in at your desk, you program, you go home. Like it was row of cubicles. It was office space. I worked with great people, no disrespect to the people I was working with, but it just wasn't for me.

It's so funny, by the way, when people ask like career, one of my least like conversations I hate the most is college, like recent college grads. And I wish I had some pithy advice to give about like, you know, follow your passions or don't follow your passions, follow your talents or follow your, you know, whatever, like whatever you're best at, find someone that utilizes that or whatever it is. Like I actually don't have, and it sounds like you're similar. I kind of just followed the path of least resistance and like looked up to people that were older than me or like the jobs that recruited on campus and just kind of just followed my way there and wasn't purposeful about anything. Right. And it's not, that's not particularly helpful advice to anyone just to just be like, oh yeah, you know, I sort of followed the path of least resistance and what seemed like it was going to keep the most optionality. And like the older guys I looked up to, what they sort of did, that was like all the inputs that I made to these decisions. It's not very helpful, like advice to tell a college kid, nor is it like a way to land a job that you're really happy about. Right. Similar to you.

I totally agree. And I was the exact same way. I mean, I was thinking about this recently when I was a senior in college and I was nearing graduation. It just seemed like everyone was like, okay, did you go out and get your job yet? Did you go to the job fair? Did you apply for 50 random jobs that could pay you $35,000 a year? There was no notion of, hey, what do you want to do with your life? What are your goals? What are your objectives? It was, you go to high school, you go to college, you start applying for jobs, you take the job that pays the best, and you go work the rest of your life. I feel like I did eventually buck that trend, but it took years of kind of being like, what the hell am I doing with my life?

Totally. No, no, I was the same way. And it eventually, like, I don't know, eventually you take some risk or some leap along the way, but like, I was sort of in risk mitigation mode the whole point. I went to the college that like, I thought, you know, was the right balance of all these things, right? My parents were from the South, wanted me to go to the South. I wanted to play lacrosse in college, like, I, you know, the best academic school that like, fit in the middle of those things, right? It was kind of like a risk mitigation thing. And then at some point you get to the decision tree of making a more purposeful decision. I will say kids today are much more— it's sort of spooky to talk to some college students now where they're like, I'll meet, I don't know, a 19-year-old from Penn or Stanford or something, and they'll be like, no, I want to do early stage SaaS investing, like between seed and pre-seed or something. And I'm like, I literally didn't know what venture capital was graduating from college. And so it's just crazy to hear. I don't know to what extent, like I was in this uniquely stupid bubble versus they're making them different out there today. But it is interesting to see like how much more prepared people are that I'm exposed to than I was.

Totally. I was talking to these kids recently at this college. They wanted to come learn about venture and startups. in New York. And same thing. They're like, yeah, we're really interested in coming and learning about this. We also want to go to France. We know there are great UI designers there. They're building all these amazing social things. I didn't know any of this back in the day. Like literally all I knew was you're supposed to go get a job. That's it. So yeah, I feel like the kids today, the kids today, we sound so old.

I know. I know. I feel like we're really dating ourselves here talking like, you know, back in my day. But I do think Things are moving at such an accelerated pace and the expectations are so different. And so when people ask me, like, how'd you get to where you are? I'm kind of like, hey, here's, I can tell the story. It's not particularly relevant to your experience at all. Like what I did isn't going to work today at all. Like what you should be doing is, I don't know what Harry Stebbings is doing or some other random person out there that's like trying to make content and get out there and respond on Twitter and stuff.

Exactly. So I left Accenture. I said to myself, hey, I made a huge mistake. I actually need to work with my passion. I need to do something that really interests me. I mentioned I grew up really loving music. I was a drummer for pretty much my whole life up until that point. And I just said to myself, I'm going to go work in the music industry. I don't care what, I just want to be around music. And so I was able to get a job at Atlantic Records building artists' websites. So I was actually able to utilize the CS degree, But to go do it in a place where I just felt more at home and more comfortable. And I had a really great time doing that. Like I were, I made a lot of great friends. I had great mentors. I loved being around music.

I'm going to want to spend time at some point doubling down and sort of thinking about the music industry and sort of talking through, given that you were at Spotify for a while and doing audio there, I think it's interesting and where it's going is interesting and the whole A&R and discovery and all the innovation that Spotify did. So I do want to come there, but that's a, it's an interesting experience. experience for you to go have done that and actually work at one of the majors on the record label side as well, particularly in technology. So I do want to come back to that.

Sure, sure, sure.

After that, you did the startup thing, right? And you went to go work at a startup and then ultimately started your own. Can you take us like up to Anchor?

Yeah, sure. So this thing happened while I was at Atlantic, and that is the iPhone came out and the App Store. And this was kind of this light bulb moment for me because for the first time I understood the power and the potential of software, right? It went from being this thing that was very rigid, this sort of boxed software distribution model to being kind of like a form of media, right? You build an app, you press a button, it distributes out to millions of people sort of overnight, not too dissimilar from music or film or TV shows. It became media to me. And I just became, I just started devouring everything I could about startups. I was just obsessed with this notion of like a small team building this thing and distributing it. And I said, I need to be at a startup. That sounds cool to me. That almost sounds like joining a band, right? Again, I was into music.

It is funny that moment in time, by the way, like the App Store. And I think, I think a bigger influence was The Social Network coming out or Facebook going public. Like those 2 things were like, holy shit, This is, you can make a, for our generation, right? The prior generation kind of got Google to some extent, or at least the internet bubble. For our generation, I feel like everyone's eyes were kind of opened by the movie, The Social Network, and quite literally the social network of Facebook. People are like, hang on, I don't have to go slog away at Accenture or an investment bank to make a lot of money. I can go do something else. It's interesting, those like moments in time.

Totally.

And actually, The Social Network, the movie came out around the same time. And we actually, I remember as a department at Atlantic Records, the digital department, we actually all went to go see it together. Everyone was obsessed with that movie and there was something shifting culturally and it just really excited me and gave up the cushy job at Atlantic and went to go work at a very early stage startup. Aviary was in New York, super small. I think it was about 10 people when I joined in a kind of a bad part of town in New York. We got robbed 3 times in my first year while I was there.

Wow.

It was a startup. It was pure, it was raw. But I loved it.

I thought people only got robbed in San Francisco. I didn't realize it happened in New York. This must have been a long time ago.

So it was in 2012, but when I tell you where the office was, you'll get it. It was right near Penn Station.

Okay.

Yeah, yeah, got it. Yeah.

That was tongue in cheek, by the way, on San Francisco for everyone that, you know, I don't have a dog in this fight.

So it was kind of a rough part, which is almost weird to say. I mean, per your point, I mean, you, I think you live in New York now. Yeah. New York, I feel safe everywhere I go, but there are these little pockets of New York that just have always been a little grimy. And like West 30th Street, right near Penn Station, you walk down that street and you're like, this is not a great part of town. So it was right there. We got robbed a couple of times. It felt like a scrappy early stage team that was sort of figuring it out. And the mission really resonated with me. The mission of Aviary was to democratize creativity. This was around the time that Instagram was taking off and we were building photo editing tools in the form of an SDK that could be plugged into other apps. So if you were an app and you wanted to have photo editing in your own experience, instead of building all those tools from scratch, you could adopt Aviary. So our biggest clients at the time were like Twitter and Flickr, and they all wanted photo editing because Instagram was taking off. So they used Aviary.

Yeah. And for people that don't know, SDK, software development kit, it allows you to embed functionality from another app, basically white labeling this type of functionality into your own app. So, hey, I don't want to build all the functionality that requires me to crop and edit pictures and all that. So I'm going to embed it, Twitter. I'm going to have that native through this company.

Yes, exactly. And I was there for about 3 years. The company sold to Adobe. So I went to work at Adobe for about a year, which was also a good experience, really cool company, very aligned with my interests of creativity and all that stuff. And I got to work for a guy there who I had really admired from afar when I was really getting sort of into the startup ecosystem. And that guy was Scott Pelsky, who was the chief product officer.

Friend of the pod, Scott Pelsky.

Yeah, great guy. And learned a ton from him and the founder of Aviary, Avi Muchnick. And during that time, I got really into podcasts. This is around 2014. I started listening like pretty much everyone else on the planet at the time. I started listening to Serial. I started listening to all of the podcasts from the Grantland Network, Bill Simmons' old thing, Startup Podcast. And my co-founder at the time, he was just my friend at ABRN Adobe, Nir Zickerman, same thing. He started getting immersed in podcasts. And we just thought it was weird at how hard it was to make and publish and distribute audio. We had just worked with this company that was enabling 100 million people to take and edit photos. This was happening for videos, photos, text, everything was being democratized except audio. And we just felt like podcasts were going to be massive. And so we said, we need to make this simpler. Like, this is a problem we understand. Let's see if we can go make it simpler. Of course, first time building a company, first time starting a product from scratch, We were pretty naive about the approach. We kind of looked at each other and we're like, well, this is, this should obviously be a social network, right? Social networks make everything easier. They democratize the tooling.

I saw that movie. Like we should, we should go do that thing.

Yeah.

Yeah, exactly. Exactly. So the first version of Anchor was just a nights and weekends thing at the time while we were working at Adobe. It was a feed of audio. You could publish little 2-minute, we called them waves or snippets of audio. You could respond with your voice. And, uh, it started to gain some momentum in like a small beta community here in New York. And after a couple months, maybe 6 to 8 months of doing this, we said sort of to your point about earlier about career and sort of taking these risks, we said, let's take a risk. Let's try this full-time. When else are we going to be able to do this in our lives? We're still young enough that we don't have tons of people who are, who we're responsible for. We don't have kids. Let's try to raise some money and go for it. So we left Adobe in 2015. Raised a tiny bit of money from Betaworks and went to work full-time on Anchor. We did that for a couple of months, basically iterating the product before launch. And then right before we wanted to launch, we went out and we raised like a proper seed round and then we launched it in 2016. And it was a really weird experience for me because we had very low expectations about the launch. The beta community was small. It was kind of floundering, to be honest. But we reached this point where, you know, after building for over a year where we said, we have to just get this thing out there. We don't know what we don't know. Let's launch the product. And it pretty much, at least for the first few months, I should caveat, kind of blew up overnight. You know, started getting a bunch of, a ton of users, a bunch of attention from VCs and press and potential acquirers. And it was very, it was a very disorienting experience and we felt we had made it. We were like, we did it.

Yeah. Well, in some ways. Yeah. So what blew up about, was it that exact same form factor of recording your, like, kind of, I'm picturing Instagram. I unfortunately was not a user during this period of time, but I'm picturing kind of Instagram for audio. Is that what kind of blew up?

Yeah, exactly. So you could record these 2-minute audio segments and then anyone could respond to them with their voice. So it wasn't text comments. It was audio comments. And then a listener could listen to these things all threaded and stringed together. So you could almost listen to these asynchronous conversations as a listener. I think the reason it blew up, frankly, was just, it was novel at the time.

Yeah.

Everything was video back then. Snapchat was really popular at the time, Instagram, obviously. And there was this company that was backed by these credible investors saying, nope, audio is the future. Here's the first audio social network. And I think people were just excited about the novelty of it, frankly, without really putting much thought into whether or not it was actually a good experience. And it wasn't. We found out a few months later when it basically turned into a ghost town that our big problem was, so people were comfortable making content. We actually found there was demand for people to record audio, but turns out letting everyone just talk for 2 minutes unedited, like free-flowing, it's actually like a terrible listening experience. Nobody wanted to listen to the content of the app, and I don't blame them. It wasn't good. So we decided we needed to make a really big change.

What's the feeling at that point? I mean, you had the tiger by the tail, right? And like the world is your oyster and this is blowing up. Did you think at that time like, hey, I'm going to be king and what's cooler is the billion and where I'm going to buy my private island? Or did you think, hey, this moment is fleeting and I don't think this is going to sustain itself. Like what's going through your head as you're trying to keep the server bills paid and the lights on and all of that?

Well, the good news is we were able to raise a quick round of funding during the crazy hype cycle from Accel, you know, and credits to them because they sort of said to me, they're like, we don't think this hype is going to last. That's okay. We actually trust your vision. We think that It's awesome the way you guys have been able to execute and we just want to support you as a team. But no, to answer your question, especially in the first month, I would say, and I recognize, especially saying this in hindsight, how naive this sounds. We did think we were the god. There was Instagram for photos. There was YouTube for videos. We were like, oh, there's Anchor for audio.

I mean, how could you not? Like everyone's telling you that you're getting smoke blown up your ass by, I'm sure, VCs are the worst when things are blowing up. Their ability to distort founders' expectations on who they are and where they're going. I mean, everyone is kissing your ass, right? And it's like, oh my gosh, you remind me so much of Steve Jobs or Mark Zuckerberg, or like, you're the next Evan Spiegel, right? I don't know who you got compared to. I'm sure people were making these comparisons, right? And you're like, you know what? You're right. You're right. I am. Like, I do have a lot of similarities to Steve Jobs.

And they're doing these crazy things. I mean, I remember, so again, we're based in New York, but one of the first few days after launch, I end up out in San Francisco to go to some event and also to start kicking the tires on a VC raise. And like, I literally had people showing up at events that had flown from across the country just to bump into me. Like somebody was coming up to me like, hey, I just got here. I just flew in from wherever. LA, New York, and I'm here to see you. And I'm like, sorry, what real— what alternate universe am I living in right now? Again, this is the first time I'd ever done this. I didn't know anything. So yeah, I mean, we were very naive, but you're right. Sort of the pull can be strong when you have all these people who you've from afar admired on Twitter or whatever telling you you had made it. There were, I won't name the companies, but on that same trip, I'm getting calls, hey, come in. We want to buy Anchor. Come sit down with the the CEO of this major social platform and come talk to this person about potentially selling your company. So very dizzying, very disorienting, but you learn pretty quickly, I would say, fortunately in about a month or so that nope, you were wrong. Like this was all speculation. These are VCs trying to put their money in what potentially could be a winning horse, but they don't know either. Like they're speculating, they're making bets. By the way, that's the job, right? And so it was very humbling. We raised the round, but the product was failing and we said, we need to make a major change. And one thing that really felt really bad is as Anchor was blowing up, we hired this amazing Android engineer and we said, hey, we need to make the Android version of this app so we can keep growing. And this guy just cranked on this thing for months. And just as we shipped it, I think maybe 2 days later, we had to call him up and be like, hey, we're totally pivoting and we're scrapping this app. I'm so sorry. You just invested all this time in this thing. Fortunately, he and the entire team were great, super mission-driven. They were like, nope, we get it. Like, this is just the beginning. So we built a new version of the app. It took about another 6 months, I would say, where we, it was still social, I should say, but it focused more on creator tools. We started giving people effects, background music, lightweight editing tools to basically take these things that again, were just short form and unedited. And make them sound really rich and interesting and sort of help you make something great. And when we launched that about a year after the initial launch, we saw an immediate improvement. The content, the quality of the content immediately got better. It was like, oh, wow. Actually, you know, these other apps, they've been doing something right. If you give people creative tools, they can really make something special. The problem we found after this though was these things all of a sudden started to sound like podcasts. And we had said we wanted to build a social network. We want to build our own unique format. And so with this expectation that these things are podcasts now, because they kind of sound like them, users started saying to us, hey, why can't I distribute this to Apple Podcasts? Why can't I distribute this to Spotify, et cetera? And we tried for a few months, more than that actually, to kind of, no, no, no, we're going to be our own thing. We're going to force this into Anchor. And we reached this moment where we were effectively about to run out of money. We had about 3 months to sort of turn all the metrics around. Otherwise, I was very confident we weren't going to be able to raise a round of funding. And we just got into this mode where like, we have to be willing to try everything. We have to throw our principles and ideals out the window and just ship really, really fast and be willing to try what people are looking for. And so—

By the way, at this moment, do you have the level of transparency with the team that you're going, how big is the team? And do you have the level of transparency with them that Hey guys, we might not make it. And so let's try everything. And are employees worried about their jobs at this point? Or how do you manage the expectations of the employees with what actually needs to happen with the business?

So we were about 7 people, and I will say at this time, I remember 1 or 2 people leaving and being, there's some uncertainty. I don't think right away we were super transparent, but it did get to a point where I remember us sitting the team down, Nir and I, my co-founder and I locked ourselves in a room. We modeled out sort of what we needed to do to the metrics to turn the company around and the timeline by which we needed to do it. And we recognized that we basically had to have 3 months straight where we grew 10% week over week. We were like, we have to grow 10% week over week. If we miss a week, we got to make it up the next week. You don't start over the following week. to get real compounding growth, we have to on average be growing 10% week over week. And so we did sit the team down and we said, look, we, this isn't working. We have something here. There's clearly, there's like something is working now. People are able to make these things. They're really proud of them. But if we don't get the metrics to turn around when we go out to raise our round of funding in September, which is when we have to do it, if we don't have a compelling data story to tell, We're not going to get funding and that's going to be it. And so we committed as a team, again, there are about 7 of us. We were going to hit this 10% week over week. And we vowed to meet literally every single day as a team. And every day we looked at each other, we looked around the circle and we said, how are we doing on this 10% week over week goal? Are we on track? Are we not on track? If we're not on track, what can we do? What feature can we build and ship Really quickly and market, you know, what random viral Twitter campaign can we do to draw more attention and get people on the top of the funnel? It was all hands on deck. Anything goes, nothing's off the table. And in that moment, you start to question some of your original beliefs. And again, one of our original beliefs was this needs to be, it's a self-contained app, a platform, a unique format. But in that moment we were like, fuck it, let's get rid of the unique format and let's just let people distribute to Apple and Spotify because they kind of, it seems like they want to do that. And so we, that was one of the things we sort of put our heads down, we raced to build this RSS delivery engine and we started letting people do that. And like pretty much overnight the company turned around like that one decision and letting people just make podcasts. and distribute them off platform completely changed the trajectory of the company. The metrics started going all up into the right. September comes around, we raise a Series A from GV and yeah, we're like off to the races.

That's great. No, super interesting to go through all that. So then you're off to the races. You're like an infrastructure enabling for podcasts to create and upload and publish across all these different form factors. And then Ultimately, you have to make a decision of whether or not to go at it independent with a Series B and raise a bunch of money or sell the company and Spotify comes in and makes you a good offer. I don't want to pin you down, but someone reported $140, $170 or something million, which is a nice, I'm sure a nice outcome for all the investors involved, employees, even if that's in Zone yourself. And so you make the decision to to sell the company at that point in time. Now, can we talk a little bit about, if we have time, I would love to know all the inputs of like growing, going at it alone or versus selling and being a part of a bigger company. But can we talk about Spotify as a business at that point in time and the incentive structure once you made the decision to sell?

Sure.

Spotify had, I've always been interested in their, the company because of some of the record label stuff that we talked about earlier, Right? They are beholden to the majors in some way. And we've talked about this on the podcast before, but there's basically an oligopoly of record labels that own the rights to the majority of the music that you want to listen to. And Netflix is different than Spotify in the way that, in some good ways, in some bad ways, but there is The element of people want the back catalog of stuff to listen to, right? And like, if I don't have Jay-Z for a long time, I didn't have, and that was super annoying. But for the most part, like people to sign on, they want all the music that they had ever access to. And they don't want to hear that you don't have a deal with Atlantic or you don't have a deal with Warner. And so therefore XYZ artist isn't on there, right? And so that leads to Spotify being inherently beholden to this oligopoly that can negotiate against them, right? And say, hey, here's how much profit you're going to make, right? And that is inherently a difficult business to be in when your COGS are owned and beholden to another entity out there, right? And then also they're saying, hey, we don't want an upfront payment for the rights to all of this. We want a percentage of your revenue, right? And so it's not like you get any leverage on the dollars at all. They're totally beholden to To exactly how much profit they're going to let you make. And so I know a lot there, but at that point in time, Spotify's thinking, hey, we don't want to be owned and beholden to these record labels for the entirety of our business because we'll never be able to show any profit, right? And so they're thinking other form factors that they can get into that are natural, and that sort of leads them to podcasts as a medium. Is that a fair characterization of kind of what's going on at Spotify at that time?

Absolutely. It is a good characterization. I mean, I think, you know, when I think about all the best companies in the world, right? They start at one thing and they sort of master that thing and they become the best in the world at that thing. And then what they do is they leverage the distribution that they have based on that one thing and they ladder into a new business, right? Amazon started as a bookseller, then became the everything seller, then became, you know, the cloud computing seller, right? And before you know it, you don't even know what Amazon is. They're just this great company. Apple, similar path, Google, similar path. I mean, I think Spotify, frankly, probably chasing a similar path, right? They sort of win music. They become the best music platform, music streaming platform in the world. I think to your point, super challenging business, maybe not the best business to increase margins from. And around this time, we were still independent at the time. We had people telling us, friends that worked at Spotify, hey, this podcast is the number one priority in the company. Just like you, Anchor, you believe podcasts are going to be massive. Spotify does as well. And they think they're in a position of strength to go and win that market. And so, yeah, they had this strategy where they wanted to go out, sort of a multi-pronged strategy where they wanted to go out and both produce and acquire the biggest shows in the world. Right? And they did that through acquisitions of companies like Gimlet, Ringer, and then obviously shows like Joe Rogan. And the other thing they want to do is they want to innovate on the format of podcasting to make it a richer, more amazing experience to ultimately convince all the creators and the listeners of podcasts to come do it on Spotify instead of everywhere else.

Which is an interesting thing, by the way, because I mean, Instagram started with tools And TikTok started with tools in some way, right? And then the recommendation engine and Spotify, like enabling the tools as a means of creation actually has a high degree of precedent at this point in time of like, hey, if then you can vertically integrate, then you can capture more market share. Hey, if the creators are coming there and are native to your platform, then that gives you the opportunity To get more of the creators on and therefore drive this virtuous loop from there. So there was precedent of this making sense, right?

100%. Yeah, it made a lot of sense. But I will say in podcasting, it was a really challenging strategy to pull off. And that's because podcasting was powered by this sort of immutable fixed standard called RSS. And so Spotify's strategy and their point of view, which we agreed with and was part of the reason we were so compelled to join them was, oh, wait a second. If you take all of the creators and you put them on the same software stack as all of the listeners, you could actually go around RSS and you could innovate and you could do something that's never really been done before.

Sure.

Turns out they wanted to do the same thing we did. They wanted to reinvent the format of podcasting. They wanted to be able to innovate at will without being beholden to this sort of fixed format that That was effectively immutable. And so it made a ton of sense to us.

Let's talk about this because you've written a blog post about it as well, and nothing podcasters like more than to talk about podcasting, right? And so I think this is just like the perfect navel-gazing kind of— what is the Ouroboros or whatever, where it's the snake eating itself?

Yeah.

Okay. We're the snake eating itself right now. But so RSS is an open protocol. It's a standard, right? And the zealot open source type people will say, hey, protocols are great because it enables fair access to everyone, right?

Yep.

And these standards allow— keep us from being beholden and locked in to these closed proprietary platforms, right? And so that's the pushback that people will often have on innovating at the application level above the standards, right? And so the same way that SMS existed and then iPhone was able to, or WhatsApp or whoever built applications on top that enabled more functionality and a lot of different things that you can just do in a more native way. The standards themselves don't allow you to do that or move as quickly. It's one of the things that's funny when people talk about crypto and like, oh my gosh, we're going to have collective buy-in to move all these things forward. And it's like, We've had these open standards in email and SMS and forever. And like, how long did it take to get images attached to SMS? That, like, that alone took years to do, right?

Like 10 years.

Years. And now, like, Apple can innovate on iMessage within, you know, hours or whatever, right? And so there's kind of this tension between open and no lock-in and lock-in And kind of proprietary. And I'm sure there's an axis that we could come up with of like what the trade-offs are of each. What did you have in your mind of leaving behind RSS and actually starting to develop an application that allowed more functionality, but with the trade-off of more lock-in?

Yeah, I mean, so 100%, I mean, standards are actually great and Anchor, it's not even an argument, it's just a fact, could not have existed and become successful without RSS and without standards, right? We would not have been able to distribute all these podcasts to Spotify and Apple Podcasts and all these places and gain the type of traction and momentum that we did. But if you look back on the history of podcasting and you really study the impact of this standard, you also realize that the podcast industry has been incredibly small and constrained over the past 20 years. Even to this day, it's only like a $2 billion market, right? Compare that to something like YouTube or sorry, video. YouTube alone did $30 billion in ad revenue last year. And so if you think about Anchor and our mission was to democratize audio, we wanted to make it such that anyone on the planet could record their voice, have it heard, and make money and make a living off their art if they choose to. It just wasn't possible with RSS.

What do you think the problem was? It monetization? Because for people to think about this at a very literal level, and I realize we're like Uniquely able to go into the weeds about this because it's part of my business and you, it was your business. But like, if you think about it, RSS from an advertising standpoint, Logan can read this ad, but when it gets published out, it goes to everyone and everyone's going to hear the same ad and there's no dynamic personalization and there's no ability to track data back and say, hey, you know, well, for men we'll do this, or for women we'll do this, or for people over 50 we'll do this or whatever.

Yeah.

And so you end up with kind of the highest common denominator of who's going to advertise. And so it's like these high purchase things that are broadly applicable, like mattresses. The reason people always hear like, you know, whatever, Casper mattresses were all that was advertising for a long time is because it's something that pays back very quickly and it's broadly applicable, right? So I guess how much of the industry not evolving, right, or the open standards not being able to move forward was a function of monetization versus the other thing is like discovery, right? Like there's no intelligence, they're just kind of dumb pipes. And so there's no ability to find anything versus anything else that is maybe inhibited by the protocols themselves.

It's literally everything you just said. It's all of the above. I think the biggest thing is the monetization, definitely, because you can't do sort of dynamic, like true dynamic ad insertion and targeting on the listener level with RSS, you really never have the opportunity to monetize the entire catalog or for every single listen. And so what happens is exactly what you said, the biggest podcasters in the world end up getting ad deals because it's very easy for an advertiser to look at the top charts and be like, oh, I'm going to call that person and offer them an insanely lucrative Casper deal. It's a lot harder to go out and call the hundreds of thousands, or at this point, millions of podcasters in the tail and do the same exact thing. And so you need sort of an aggregated platform that can both monetize sort of on a really scaled basis and target at the listener level to turn this into a really viable and scaled business on the scale of YouTube for video, let's say. And so that was the main thing. But to your point, there were plenty of other things. I mean, you couldn't really do interactivity or comments and listeners interacting with users over RSS. You couldn't do new monetization models, right? Like putting a podcast behind a paywall in a secure way. You couldn't do discovery and really take this gigantic corpus of information and understand what's actually happening on sort of like a topic level and target Based on their interests and such. So you couldn't do any of this stuff. And as a result, the medium was completely constrained. And so when Spotify came to us and said, hey, let's actually put these 2 things together and do the thing that it sounds like we've both been wanting to do for the past couple of years, it was kind of an obvious no-brainer. I mean, yes, we did consider going it alone, but we also saw this sort of ceiling of opportunity of RSS. We said, Hey, actually we don't think we can take this business much further unless we're able to have the demand side as well, which obviously Spotify had.

It makes a lot of sense as a 1 plus 1 thing for both you and Spotify. So you were there and you ran audio or listening. What was the name of the group?

It was called Talk Audio. And it actually wasn't even just audio. It was audio, Or podcast, sorry, podcast, live audio. And sort of towards the, I would say the last year or so, is there video as well? As you know, I think you were an early part of the beta program we turned on.

Yeah, I was in there in their early beta days.

Yeah, exactly.

I do want to talk about maybe Clubhouse as well and how that influenced live audio and all of those things. But maybe to put a fine point on the state of podcasting today, it's funny, I'll get I'll get people now. I'm having even more. I felt like I was kind of late when I got going, and now even more people are reaching out wanting to get going with something related to podcasts. And what do you think the end state is for the industry itself? Obviously, the monetization and the discovery side continues to move forward. Do you think that it ends up being just hyper-personalized and there's A ton of different podcasts for all different things. And we're the industry itself, not from a monetization standpoint, which is, I feel like we're way behind on that. But from an end of podcast standpoint, it feels to me like we might be getting to some point of saturation of like what people actually have the time and willingness to do. But I don't know. I mean, obviously the monetary side is still huge and I also think discovery still sucks, right? And there's no, like most of my ability to publish or have people know this is going on exists outside of any of the apps themselves. Right. And so that feels like an opportunity, but how much bigger do you think the end can be of podcasting?

So I actually still think it can be a lot bigger. That said, I think, and maybe this sounds funny coming from the guy that built a podcasting company, And spent the last 10 years of his life working on it. But I just think like podcasts as a format, as a name, is sort of in this moment of existential risk. I think a lot of the challenges that we just talked about with podcasts, creators, platforms, they're all sort of taking this into their own hands to solve by sort of slowly transitioning the format to video.

Yeah.

Right. You have a video for this podcast. And one of the benefits that you get out of having a video for this podcast is, first of all, it's probably more valuable from an advertiser standpoint because video tends to be a little more valuable from, you know, it's more engaging and therefore it's more valuable from it. You also get to distribute it in more places, right? So you not only put it on Spotify through the beta you joined a year plus ago or whatever, but you put it on YouTube. I'm sure you put it everywhere that supports video, not only the long form, But I've seen that you cut it up into clips, right? You put it on TikTok, you put it, I think you put it, you probably put it on Reels. You are able to distribute this podcast and therefore reach many, many more potential millions of people because you're not constrained to it just being audio. So if you think about the fact that most podcasters' incentives are probably going to follow yours and move to being more of a video medium, I think there's a risk that A podcast is just a video in a couple of years. And if it's just a video in a couple of years, I think there's no reason there can't be 10 times as many people creating what are today known as podcasts as there are today, especially when you consider that we know this from history, the democratization of creation of media on the internet will always get easier and cheaper. What we are doing right now inside of Riverside, which is an amazing product, by the way, I should add, It's only going to get easier to do this. I wouldn't be surprised if Riverside or somebody puts this on their phone at some point, right? And maybe you'll still do it in your room on this awesome, you know, with a great mic and a great camera. But why can't somebody do this from their phone? Like just on the fly, have a conversation with a friend. And again, at that point, it's just a video.

I agree with you in the battle that analysts are going to watch and people are, it's going to be YouTube and Spotify duking this out at the convergence of video and audio. And 100%, you know, it is annoying to have all these discrete platforms by which you need to acquire users. That the fact, I mean, I'll say like a little bit of the sausage making. We have a few people that spend so much fucking time clipping things and like the clips that play on TikTok are different than the clips that play on Instagram Reels are different than clips that play on YouTube Shorts are different than what we play on Twitter. And so all these things, like it's still a lot of work to get it to a certain level of functionality. I only imagine, I mean, back in the day, And people still do this, but record audio locally, right? To get the high-quality audio. And so God bless Riverside having taken this to the next level. But I agree with you, the video form factor is the— everything's going in that direction, right? And it's going to be an interesting next couple years for how YouTube and Spotify kind of play in it, right? I think Apple's kind of left this market behind. And the one thing that YouTube has an advantage of is people are kind of, one, they're going there for discovery more and more and search. Like people will log into YouTube with the intent of searching and they obviously, Google has a very good history with search and the ability to surface up different things and all the auto tags and all that. And that's what's going to be interesting for Spotify is are they able to get to the point of being a destination that people go to to search for things, right? And I'll tell you, I do most of my prep, I'll go log into Spotify and search, and the search still isn't where it needs to be for me to, you know, if I misspell something slightly, YouTube's like, did you mean, you know, whatever, did you mean Mark Cuban? And Spotify's like, here's Mark, whatever, Cubano, who's some random guy in Miami, right? Or whatever it is. And so you're going to need to build all the infrastructure to enable this cross-competition. Which is going to be an interesting thing to watch how it plays out.

100%. Yeah. I think, what's the saying? Spotify's got to figure out how to become YouTube faster than YouTube becomes Spotify, right?

Yeah, that's right.

So yeah, it should be really interesting to see how it plays out, but I think there's still plenty of more opportunity. I think lots of people are going to be creating for this space. And I think the TAM, the total addressable market is going to get bigger, much bigger as some of these things get figured out that we mentioned around, Going around RSS and having like accurate targeting of listenership for advertisers and stuff. So lots of runway left for podcasts in my opinion.

Can we talk about Clubhouse? So you were there during the peak of Clubhouse kind of taking off, right?

Yes.

And can we talk about that moment in time of like, are you guys sitting there saying, how do we miss this form factor? Or hey, we need to get on because everyone, I mean, LinkedIn launched a Clubhouse competitor and Facebook obviously did as well. And Spotify, you guys bought the Green Room, right?

Yeah.

Locker Room.

Locker Room, which became—

yeah.

And so can we talk about that moment in time and what you saw that Clubhouse captured and maybe what was ephemeral about that? Not in a very literal sense. I guess all the audio on Clubhouse was ephemeral, But like, what has led that to not being a lasting form factor in your mind?

Yeah, sure. So what happened was Clubhouse took off. This was during the pandemic, right? Everyone was, and it was early pandemic. Everyone was trapped in their homes. You know, it was still that moment where you don't even know if you're like, can I go outside? Like, what am I doing? You know? And so Clubhouse was great because it almost seemed like every night there was some amazingly rich, interesting conversation happening on Clubhouse and you were home anyway. So why not listen and maybe join? So really, really compelling, awesome experience too. Great product experience. They totally nailed the format out of the gate. At Spotify, what we said was actually we believe in on-demand. That's been Spotify's whole business. Hey, let's take radio, which is synchronous and live, and let's actually make it on-demand because we believe sort of on-demand is the future of media and the internet has proven that on-demand is super valuable, right? Netflix, all these platforms have proven that on-demand is great. But you know what? Here's this app Clubhouse and it's clearly doing something right. What if audio is going to be live? What if live is a format that can work for audio? And so what we said was we need to have a bet here, right? Like in the chance that this actually works out, we have to place a bet in this space because if we don't, and Clubhouse does work out and this format, this live synchronous audio format does take off, we will have been so mad at ourselves for not taking the chance and taking the risk. And so yeah, we did make a play in this space.

So is it fair to say you guys were skeptical of the long-term potential of this, just given your inherent synchronous versus asynchronous biases that existed internally in what you had seen, or Like how much paranoia is at this moment versus calculated risk of chips on the table?

I mean, it probably sounds convenient in hindsight, but yes, it is the truth that we were like, we weren't 100% convinced this was going to work. It was part of it was a hedge. I think that's kind of the question you're asking, but part of it was also, hey, can we do something new here? Can we do something interesting? Can we put the Spotify spin on live audio and leverage our strengths in sports through The Ringer, or leverage our strengths in music, obviously through Spotify, or find new ways to monetize live that hasn't been done before. And by the way, I think that, I think they're still doing this and they've had some success. But I think the, you know, there was also, for all the potential excitement about what we could do to innovate on it, part of it was also a hedge and saying like, hey, We're not sure just like synchronous live audio is that work will work that well with affecting effectively like an advertising model. And the reason for this is, you know, back to, we were just talking about advertising and podcasts, but for advertising to work, you need a critical mass, right? You need a critical mass of consumption of that format to generate enough demand and attention for an advertiser to put down something meaningful. And if you think about live as a format and just like the math behind it, you're just never going to get a critical mass compared to an asynchronous format because with live, you're asking a bunch of people to be available all at the same exact time. And the internet just doesn't work that way, right? This is the beauty of asynchronous on-demand content. This podcast we're recording right now, people, hopefully for both of our sake, people will be consuming this for, on their own schedules for, For years from now, right?

Generations. Generations ago.

Yeah.

And every time they do, our grandkids. Exactly.

I agree with that. And it's sort of like, it's constraining what makes the internet infinitely scalable in certain ways. And it's taking it back to talk radio. Radio. Yeah. Yeah. We're like sort of going back in time. And so I totally get that. I guess, does that make you skeptical about BeReal, for example, which is kind of doing something similar, that it's taking this moment in time and yes, there's not as much live elements of it only.

I think there's 2 ways to think about it. Number one is maybe BeReal's current format can work if they're able to innovate on the business model, right? Maybe there's a business model that works for their format that we're not thinking about, right? I don't know that it's an advertising play because again, With the current format of BeReal, you're only really interacting with that app once a day, if that, right? I mean, I don't know about you, but I miss days all the time.

Like I'm always missing days.

So I don't know if through that format they can get enough scale for like the traditional social network business model. Maybe there's another business model we haven't thought about. I would say on the flip side of that, going back to the Amazon example, the Spotify example, I think more likely what BeReal needs to do is they need to ladder into something new. They've built something really compelling and they've been able to generate a critical mass of people that interact with their format and come back to the app almost every day. What can they do from there? What is the new format or the new opportunity that they can ladder into? And by the way, the original format doesn't, maybe never goes away. It's always there, but there's a new thing. And by the way, all the great social networks do this, right? Instagram was the scrolling feed. Then we had the stories, then we had the reels. Like, I just think that's what an evolving product needs to do to survive. I don't know if the current format can sustain unless they ladder into the next opportunity. Yeah.

What do you think?

Do you agree?

I mean, if you look at all these apps, like they are able to level up and embed other things and reasons to keep coming back. And Snapchat was a, you know, it was always joked about as like a dick pic app or like a sexting app back in the day. Right. And obviously it's so much, they were able to go do so many things. And so these things that What is the Chris Dixon quote that like, what will be the future starts out looking like a toy or something. And so I totally, I don't know, I don't want to presuppose any of it. Totally. One of the questions I want to ask you as well was about TikTok specifically. And you wrote something about recommendation media and after Kylie Jenner kind of pushed back on Adam Mosseri's, hey, we're not going to just follow your friends anymore. Or you're not just going to get access to your friends, but we're going to move more to a recommendation type algorithm. And I think they backtracked on that a little bit. But can you talk about, you wrote an interesting blog post about that. Can you speak to your thoughts of recommendation media or recommendation social?

Sure. So if you think about the history of social networks, the great innovation of the social network going back to the beginning of Facebook was the social graph, Being able to match all your connections in real life and in the digital world to this social graph and then leverage that social graph to distribute content, right? So if you and I are friends on Facebook, I post a photo or a post or whatever, and Facebook uses our social graph to say, hey, Logan should see Mike's content, right? And that was really great for a long period of time for being able to distribute content, but it wasn't that great, right? There were a couple problems with it. Number one, you might not care about what I— yeah, we're maybe we're friends on Facebook, But like, maybe you don't care about what I have to say. And not only that, it gave people that had friend graphs these sort of like guaranteed levels of distribution, right? If I have 1,000 friends on Facebook, those 1,000 friends are guaranteed to see whatever I put on there, even if it's something really, really awful, right? And I personally believe that this is the reason that platforms like Facebook a couple of years ago had so many problems hate speech and problematic content is because they effectively guarantee distribution to everyone on the platform. Then TikTok comes along and they say, we're actually not going to guarantee any distribution. We're going to control the distribution and we're going to use machine learning to do it to match the perfect piece of content with the perfect user at the perfect time. And we're just going to go for maximum efficiency. So whereas like maybe you wouldn't care about what I would have have to post what I wanted to post on Facebook if we were friends. TikTok just can go around that altogether and says, well, Logan doesn't like to look at these types of posts. He likes to see these other posts and we have an ocean of posts that match these interests. So we're just going to send Logan all of that. And then on the hate speech side and like the problematic content, and admittedly this doesn't mean that TikTok doesn't have issues with problematic content, but if everything is machine learning driven, And there's no expectation that somebody just gets this unfettered access to distribution. The platform can just decide what it shows and what it doesn't. And so if it sees a piece of content that's problematic or it's propaganda or it's hate speech, it just buries it. And then it uses machine learning to match it to every other similar piece of content and it buries all of them too. And if you're one of the users that happens to post that thing, well, guess what? Like you were never guaranteed distribution anyway because TikTok decides what gets distributed.

Which is kind of scary though, in a lot of ways, Super scary censorship, right?

Yeah.

I mean, you know, I feel like this is much more mainstream to talk about now, but, you know, TikTok, it is a Chinese, or the parent company is a Chinese-based company and has been reported to have ties with CCP. And what gets shown there is going to be very different than what would be shown elsewhere from an algorithmic standpoint as well. And so, Almost when you're entitled to distribution, you can act more like a protocol, right? To go back to the, it's like, hey, our job is to, if you're SMS and you send to a number, you don't have to necessarily worry about what the content actually says. We're a protocol, right? If you're actually algorithmic in nature and you're making machine learning-based deterministic distribution decisions, then And it's far, far scarier to have that one, that just is a ton of power to exist to anyone, be that an American entity or a Canadian one or a Chinese one. But 2, in particular, when this form factor is a company coming from a company based in China.

100%. No, it's a real concern. I mean, look, recommendation media arguably actually has a bunch of benefits, right? For the user, definitely for the platform, but it also comes with a lot of scary potential downsides as well. Like we're saying censorship, I mean, yes, people can spew really awful problematic content on social networks. But what would you rather have? Would you rather have that or would you rather have a world in which actually a couple of these gigantic corporations basically get to decide what all of us consume and what we don't for the rest of our lives?

Yeah.

There are clearly risks to both sides. So everyone's doing this now, right? Like, Adam Mosseri, you mentioned, came out and said, hey, Instagram's going to recommendations. I think Mark Zuckerberg said Facebook's going to recommend, actually definitely did. Facebook's going to recommendations. Everything is going to recommendations. And the social graph is basically for all these massive platforms, like they're kind of saying, you know what, this actually isn't that important to us anymore. It's not that valuable. And so I actually have been wondering lately, maybe back to the BeReal thing, I mean, if all of the biggest social platforms of the past decade and a half are moving away from the social graph, maybe this actually is an opportunity for a challenger to enter the space for the first time in the past 10 years, right? I mean, penetrating sort of the landscape of social media giants has been nearly impossible for the past decade, but maybe now there's actually an opportunity and maybe it's BeReal or maybe it's something else that we haven't heard about yet.

Yeah, it's the distribution. I mean, we've seen it in starting different social channels, like the ability to I sort of think of it as a spectrum. On one end is historically, I guess, I mean, you could say text message is, or email, right? Is the, hey, you actually don't get an option of whether or not this gets delivered to you. On one end of the spectrum of the protocol is like, if I have your email, it's coming to you and you can put me in spam or whatever, which is actually an application back to our earlier conversation that exists on top of the protocol. But like, that's the pipes. And historically, Twitter has been sort of the force-feeding you, if you follow someone, You're seeing 100% of their content, right? And on the other end of the spectrum has been TikTok that you're actually, I've forgotten that I've followed people. Following people on TikTok is actually kind of like a super like.

It's like not a thing.

Yeah. It's like a super like of a video or something, right? Where the second you start liking slightly different content than that person, it's like, it's as if you never followed them at all. And Instagram kind of has existed in the middle. Where, hey, a follower kind of means something because it could show up at the top of a story, or I guess originally it would show up in their feed. Now it feels like the story is becoming more and more algorithmic of who's furthest to the left. But if you follow someone, you're going to see their stories for the most part. Like, you can scroll all the way through. I'm not convinced if you follow someone on Instagram, Like on the feed, you're going to ever, you could scroll forever. And if you didn't engage with my content, I bet you could scroll for hours on end. And if you hadn't engaged with my content, you wouldn't see it. But it's interesting, that dumb pipe of Twitter, it's obviously getting smarter and smarter in terms of the recommendation algorithm and all of that. And what's just kind of an interesting anecdote is, and to bring it back to podcasting as well, is when we got going with this, when I was originally trying to do this and figure out what platforms worked And all of that. In starting, I had this captive audience of Twitter that I was trying to port over, right? And the risk in starting early on with one, a captive audience that signed up for something, which was my tweets, and then trying to bring them over to something else is one, when you're recording your initial episodes or whatever, it's not going to be the quality that you want. And inherently people aren't going to like— they didn't come for that anyway. And so if you start pushing this stuff on them, They're like, hey, I followed you for jokes and now you're trying to get me to listen to you over here? Like, no thank you. And so one of the lessons that I learned in this is Twitter being a dumb pipe was a really difficult distribution mechanism because one, everyone was seeing it that signed up for me there, right? And so like, not only did they sign up for something different, but then I was also force feeding them all the content that I wanted to send out there into the world. And so it was funny. And then the quality of it wasn't very good when we got going at all. And so everyone, it was an interesting learning that like, if I were to do it over again, I probably would've like not published it to Twitter at all for the first month or 6 weeks or whatever, and just let TikTok, the recommendation algorithm kind of serve as the initial flywheel of getting going. And then once the quality got better, you know, then I would start cross-promoting it a little bit more or whatever. But it was an interesting sort of launch consideration of, of when you're just forcing people to consume content versus letting the algorithm drive it, right? It just leads to very different people's different responses to engaging with that content as well. And so I remember when we initially launched this, there were a lot of people that were very angry with me that this was showing up in their feed on Twitter. They were like, this was not what I signed up for, which is pretty funny in retrospect.

Well, what's interesting about Twitter is, you know, they have the option now where you can sort of You can have the chronological feed or you can have the magic, I forget what they call it, the magic feed. And I definitely feel like they're getting a little more aggressive with that magic feed. I keep hearing from people that they'll tweet something, you know, they'll have a million followers, I don't know, tens of thousands or hundreds of thousands of followers and the tweet will get like no engagement. Clearly it's just being buried now.

Oh, totally. No, no, they're moving much more to the recommendation side of things, which is Which I think, I don't know. I mean, again, it leads to all these risks of censorship and control of these platforms, but also it's clearly, I mean, the proof's in the pudding of TikTok as a business and also the engagement across the board here. Like everyone has voted with their feet, be that Facebook, Instagram, TikTok, now Twitter. Everyone's voted with their feet of which one of these is better for the business and therefore which one users engage with more as well. Like, we know the answer right now. Is the answer a good thing or not? We can debate that, but it's clearly leading to— there's only one path that people are heading here, right?

Absolutely. Yeah. And you hear a lot of people say this, like, they're, you know, they said when I published this piece about recommendation media, I had all these like angry people on Twitter saying to me, I don't care, you know, I want to connect with my friends. I don't care about, you know, funny cat videos on TikTok or whatever. But the reality is, for your point, the data is actually suggesting otherwise. Like Instagram would not be doing this.

Yeah, no, you don't, right? If that's actually true, you're in the vast minority. And so, I mean, it is, sure, it's leading to ultimately, I guess there's this recommendation world and then there's also this like kind of closed circuit friend and family world. And it's clear that the abundance of content that exists in the world is more interesting than your immediate friends and family. I think that's universally true. It is interesting to see these 2 things divorce from each other, right? And as that happens more and more, is there going to be more opportunity for chat apps or different types of social apps that are more focused on your personal group, right? Clearly the much bigger market is the infinitely scalable world of content that exists out there in the recommendation engines that people follow. But as those guys zig, is someone going to zag in the other way and start bringing back this more familial group?

Well, there are, like, I feel like BeReal started this trend, but there are all these, I see all these interesting little closed circle social apps popping up, right? BeReal. There's another one called Flash Tape. There's, you know, what's that other one? Locket is really big. I'm in this other beta for this product called Unfiltered, and it's all like super close friends sharing photos that wouldn't really be widely applicable to a large audience. And I don't know, to your point, there's something here. It feels like there may be a zag that can break through in this moment in time where Facebook's saying, you know what, We actually don't care about the social graph. We're just going all in on recommendations.

Yeah. Now, with the last few minutes we have here, can we make fun of people that think the creator economy is going to be enabled by Web3 and all this stuff? I realize both our firms invest in Web3 crypto stuff, so we probably need to tread a little lightly on some of this, but can we talk about like why, having been in the seat of enabling creators and like why tokenomics and crypto isn't going to totally disrupt this world?

Sure. Yeah. And I wrote a piece yesterday called The Creativity Supply Chain, and it touches on this. I didn't go deep on the crypto part, but I think it's sort of implied.

Yeah, you're new to your job and you don't want to get fired. I get it.

But so my take is this. I actually think creativity on the internet is a massive, massive opportunity, right? I think if you look at everything we all do on the internet now, right? What we're doing right now, the TikToks we consume, the blog posts we write, the messages we send to friends and family with photos and memes in them. Everyone is now a creator, literally everyone. We're probably talking about hundreds of millions, if not billions of people right now. I personally would consider a creator, and I think there is a massive market opportunity to be had around creativity more broadly, the supply side, the demand side, the incentives, what I call superpowers. And when I talk about superpowers, I think of them as, there are many of them, but the ones that I think about most right now are creator tools, artificial intelligence, obviously doing crazy things for creativity right now, machine learning. We just talked about it with recommendation media and also frankly, just quite simply high-speed internet, right? We take for granted that we have 5G here in the US, but the penetration of 5G in the world is only about 30% right now. So you have to imagine over the next 10 years, As more and more people get access to high-speed data, the demand for creativity and for content is just going to explode globally.

By the way, record enough podcasts with enough people and you will not take the internet for granted in speeds. That is a way to get very frustrated with internet. But yeah.

I feel like we've been distracted from this opportunity over the past couple of years in tech by a couple of things. One, what I think people have been calling the creator economy, which is this notion that, hey, every creator can now live off their art. Let's build all these financial tools and the infrastructure to help creators make money, and everyone can go live off of their creations and their creativity online. Turns out it's fundamentally just not true. I mean, we saw this with Anchor. The 99% of creators don't actually make any money, or they make very, very little, certainly not enough to leave their jobs. Finding 100 or 1,000 true fans for those people is almost impossible. And the 1%, the 1% that are actually doing it, quite frankly, in my opinion, like, I don't know if like that's the right problem to focus on right now. Like, I don't know if we need to focus on increasing the margins of the world's top creators. I'm actually much more interested in the creativity and the supply and the demand and the incentives of everyone else. And so to bring it back to your question, I sort of felt a few months ago when everyone was talking about Web3 and crypto being a solution to the creator economy issue, I'm like, is this really relevant to that many people? Are that many people in need of a new format and ownership structure such that they can squeeze more margins out of their content? Certainly there are some people out there and there are certain types of creators that notoriously maybe have gotten screwed in terms of margins. But I think that debate and that focus on the creator economy Sort of ignores the fact that like literally everyone else on the planet is also doing this and there's probably a ton of opportunity there as well.

Then you have to go build all the demand, right? It's one thing to tell all the creators like, okay, here's better economic models for all this stuff, but then it's like, yeah, where's your audience?

Yeah.

It's like, hey, and sure, there's a handful of people like Rogan that people will follow around no matter where they go, but That's the vast minority of people. And we're talking about like, is Rogan going to make $90 million a year or $120 million a year or whatever? I think he's going to be okay either way.

He's fine. He's fine.

On the creator versus creativity point that you blogged about, do you think we are conflating too much of monetization and ability to live with ability to produce as well? And it's sort of like those 2 things. We maybe thought that the market for monetization was bigger than it is, but when you define it as just creativity, is that just putting a finer point on that?

Yeah, that's exactly what I think, actually. I feel like the creator economy, as we've been talking about it, is this monetization stack, this financial infrastructure.

By definition, economy, monetization of the economy.

Economy. Yeah. But I just think that's small. Like, yes, there are a couple of amazing companies in that space. Substack, Patreon, and not even maybe Substack because they have a bunch of other things as well. Patreon as well. Patreon maybe is a really great example. But then if you think about everything else, the creator tools, the platforms that actually drive the distribution and demand, which you need before you can make any money, the tools, now the artificial intelligence. I mean, we're literally talking about, this is not an exaggeration. We're talking about trillions of dollars in public market capitalization. And on the private side, I mean, look at Canva. Canva is doing a billion dollars in ARR. They have 100 million MAUs.

Yeah.

Look at Figma, just acquired, biggest tech acquisition ever, $20 billion, or sorry, venture-backed acquisition. So I think to just focus on the financial layer and the monetization of creativity ignores a way bigger and frankly more optimistic opportunity in that technology has enabled all of us to be creative. I mean, I don't know, could you imagine doing what you're doing right now 10 years ago, 5 years ago? Like you weren't making a podcast back then. You probably had never even thought about it.

By the way, my nerdy software acquisition, I think private acquisition because like LinkedIn and Slack.

Right.

All right.

Yeah.

Sorry.

Good correction. No, I agree 100% with that element of all of this. And it's even when you talk about Patreon and Substack and they're enabling, like people talk about those companies, Substack gets talked about ad nauseam. And at the end of the day, you know, New York Times reported, I think last year they did did $10 million in revenue, right? And they're valued by Andreessen at whatever, $500 or $600 million. And Patreon, I think their last round was at like $2 billion. And so even these success stories, and I don't mean to be dismissive of those businesses, but like even the success stories are very, very small compared to the amount of oxygen they get in this whole creator economy tooling, all that And I also think one of the difficulties from this as in a business, if you're thinking about the enabling infrastructure, is you're always facing the risk of people outgrowing you, right? At the low end, you have a lot of people fail and you have a lot of people churn and you have a lot of shitty customers to say it like very explicitly is you spend money acquiring them and then they don't make it. And then at the high end, the people that do make it often don't stick with you and they go to these other, you know, they take it off platform and build the relationship directly or they—

Or they get a deal. They get a deal from somebody, right?

They get a deal, or then they go to the Adobe Suite because it's just so much more powerful of all the tools you can do. And so it's interesting how big this middle opportunity for enabling infrastructure as well as for monetization can be, right? I don't know the answer to it, but I think your instincts are right that it is, it seems like such a good thing that this is big and it could be over the next 25 years. But in the medium term, the ability to monetize Is just, it's really hard, right? And the dollars are pretty small.

Yeah, exactly. Exactly. I mean, I'm really interested. I mean, as I know everyone else on Twitter right now is as well. I'm genuinely interested to see what happens with AI because to me that is such a, and there have been many tech hype cycles over the past 10 years. And I think in hindsight, it's easy to look back on many of them and be like, well, where was the value in that? With AI, I think it's pretty clear. Right? We talked about at the beginning of this conversation how tech democratizes creativity. And it's very obvious and clear to me, maybe you as well, that AI is going to dramatically democratize creativity for photos, for video, for text, for anything really. And I think it'll be really, really fascinating to watch over the next couple of years.

Well, Mike, thanks for doing this. This was a lot of fun, a bunch of different directions. I'm glad we were able pull all this stuff together and make it work. Yeah.

Thanks for having me. You're the podcast guy.

Yeah. I don't know, man. We're going to keep passing. We're going to keep hot potatoing that title back and forth. So, uh, yeah. Cool.

Thanks, Logan.

So that'll do it for the 38th episode of Cartoon Avatars. Thank you, Mike Mignano, who at some point, uh, I might figure out how to appropriately I'm not going to say your last name, as well as Rashad for coming on. We have another exciting guest next week, someone that is someone I've looked up to for a while. Hopefully this sticks with the schedule and this person actually comes on, because if it ends up being someone random that I don't admire, then this will be an interesting segue. But I Fingers crossed that this will pressure the person to actually come through. Hope everyone enjoyed this episode and look forward to seeing everyone next week on the 39th episode of Cartoon Avatars.