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Feb 19, 2016 · 29m · 20vc

20 VC: Niccolo De Masi @ Glu Mobile on Private Market Valuations, Being A Public Market CEO & The Trends Of Mobile Gaming

Niccolo De Masi · 23m spoken Harry Stebbings · 3m spoken
0:00 / 0:00

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In this episode of The 20 Minute VC, host Harry Stebbings interviews Niccolo De Masi, CEO and Chairman of Glu Mobile, exploring his playbook for turning around public tech companies and pivoting to free-to-play mobile gaming. De Masi provides a candid critique of private market valuation inflation, warning of upcoming consolidation while sharing Glu's opportunistic M&A strategy.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 13.7% of the talking time here. How this is scored →

Harry as informed peer 1.4 Guest teaching 4.6 Guest disagreement 1.2 Harry pushing back 0.4
05100:0010:0020:001:47–3:56 · Harry as informed peer 1/10 Niccolo De Masi's Career and Transitioning Glu Mobile Harry asks a basic background question allowing Niccolo to detail his transition from physics and banking into mobile media and turning around Glu Mobile. Niccolo provides a detailed breakdown of transitioning from feature phone ringtones to free-to-play smartphone games.3:56–9:11 · Harry as informed peer 1/10 Navigating Public Market Turnarounds and Platform Shifts Harry asks about managing platform transitions as a public company versus a private one. Niccolo educates on late-stage startup mentalities, drawing corporate strategy comparisons to Lou Gerstner at IBM, GE, and Technicolor while explaining hardware utility cycles.9:11–18:29 · Harry as informed peer 2/10 Corporate Transparency and Private Market Valuations Harry asks about corporate transparency and private market dynamics. Niccolo gives a detailed masterclass on dual-class stock structures, liquidation preferences, down rounds, and 'zombiecorns', while jokingly poking fun at private market burn rates.18:30–24:05 · Harry as informed peer 2/10 M&A Strategy and Market Consolidation Harry asks focused follow-up questions on sourcing acquisition targets and turnaround execution. Niccolo details how Glu acquires distressed assets like PlayFirst at deep discounts and integrates them into centralized support functions.24:05–28:35 · Harry as informed peer 1/10 Quick-Fire Round: Advice, Leadership, and Books In the quick-fire round, Harry asks standard questions about books, advice, and leadership challenges. Niccolo politely redirects the advice question to share his personal core philosophy on remaining focused on mobile entertainment.1:47–3:56 · Guest teaching 3/10 Niccolo De Masi's Career and Transitioning Glu Mobile Harry asks a basic background question allowing Niccolo to detail his transition from physics and banking into mobile media and turning around Glu Mobile. Niccolo provides a detailed breakdown of transitioning from feature phone ringtones to free-to-play smartphone games.3:56–9:11 · Guest teaching 5/10 Navigating Public Market Turnarounds and Platform Shifts Harry asks about managing platform transitions as a public company versus a private one. Niccolo educates on late-stage startup mentalities, drawing corporate strategy comparisons to Lou Gerstner at IBM, GE, and Technicolor while explaining hardware utility cycles.9:11–18:29 · Guest teaching 6/10 Corporate Transparency and Private Market Valuations Harry asks about corporate transparency and private market dynamics. Niccolo gives a detailed masterclass on dual-class stock structures, liquidation preferences, down rounds, and 'zombiecorns', while jokingly poking fun at private market burn rates.18:30–24:05 · Guest teaching 5/10 M&A Strategy and Market Consolidation Harry asks focused follow-up questions on sourcing acquisition targets and turnaround execution. Niccolo details how Glu acquires distressed assets like PlayFirst at deep discounts and integrates them into centralized support functions.24:05–28:35 · Guest teaching 4/10 Quick-Fire Round: Advice, Leadership, and Books In the quick-fire round, Harry asks standard questions about books, advice, and leadership challenges. Niccolo politely redirects the advice question to share his personal core philosophy on remaining focused on mobile entertainment.1:47–3:56 · Guest disagreement 0/10 Niccolo De Masi's Career and Transitioning Glu Mobile Harry asks a basic background question allowing Niccolo to detail his transition from physics and banking into mobile media and turning around Glu Mobile. Niccolo provides a detailed breakdown of transitioning from feature phone ringtones to free-to-play smartphone games.3:56–9:11 · Guest disagreement 1/10 Navigating Public Market Turnarounds and Platform Shifts Harry asks about managing platform transitions as a public company versus a private one. Niccolo educates on late-stage startup mentalities, drawing corporate strategy comparisons to Lou Gerstner at IBM, GE, and Technicolor while explaining hardware utility cycles.9:11–18:29 · Guest disagreement 2/10 Corporate Transparency and Private Market Valuations Harry asks about corporate transparency and private market dynamics. Niccolo gives a detailed masterclass on dual-class stock structures, liquidation preferences, down rounds, and 'zombiecorns', while jokingly poking fun at private market burn rates.18:30–24:05 · Guest disagreement 1/10 M&A Strategy and Market Consolidation Harry asks focused follow-up questions on sourcing acquisition targets and turnaround execution. Niccolo details how Glu acquires distressed assets like PlayFirst at deep discounts and integrates them into centralized support functions.24:05–28:35 · Guest disagreement 2/10 Quick-Fire Round: Advice, Leadership, and Books In the quick-fire round, Harry asks standard questions about books, advice, and leadership challenges. Niccolo politely redirects the advice question to share his personal core philosophy on remaining focused on mobile entertainment.1:47–3:56 · Harry pushing back 0/10 Niccolo De Masi's Career and Transitioning Glu Mobile Harry asks a basic background question allowing Niccolo to detail his transition from physics and banking into mobile media and turning around Glu Mobile. Niccolo provides a detailed breakdown of transitioning from feature phone ringtones to free-to-play smartphone games.3:56–9:11 · Harry pushing back 0/10 Navigating Public Market Turnarounds and Platform Shifts Harry asks about managing platform transitions as a public company versus a private one. Niccolo educates on late-stage startup mentalities, drawing corporate strategy comparisons to Lou Gerstner at IBM, GE, and Technicolor while explaining hardware utility cycles.9:11–18:29 · Harry pushing back 1/10 Corporate Transparency and Private Market Valuations Harry asks about corporate transparency and private market dynamics. Niccolo gives a detailed masterclass on dual-class stock structures, liquidation preferences, down rounds, and 'zombiecorns', while jokingly poking fun at private market burn rates.18:30–24:05 · Harry pushing back 1/10 M&A Strategy and Market Consolidation Harry asks focused follow-up questions on sourcing acquisition targets and turnaround execution. Niccolo details how Glu acquires distressed assets like PlayFirst at deep discounts and integrates them into centralized support functions.24:05–28:35 · Harry pushing back 0/10 Quick-Fire Round: Advice, Leadership, and Books In the quick-fire round, Harry asks standard questions about books, advice, and leadership challenges. Niccolo politely redirects the advice question to share his personal core philosophy on remaining focused on mobile entertainment.

speaking balance: gold is Harry, purple is the guest (3 minute bins)

0:00 · Harry 63.5% · guest 36.5%0:00 · Harry 63.5% · guest 36.5%3:00 · Harry 9.5% · guest 90.5%3:00 · Harry 9.5% · guest 90.5%6:00 · Harry 0.1% · guest 99.9%6:00 · Harry 0.1% · guest 99.9%9:00 · Harry 10% · guest 90%9:00 · Harry 10% · guest 90%12:00 · Harry 6.4% · guest 93.6%12:00 · Harry 6.4% · guest 93.6%15:00 · Harry 0.3% · guest 99.7%15:00 · Harry 0.3% · guest 99.7%18:00 · Harry 9.6% · guest 90.4%18:00 · Harry 9.6% · guest 90.4%21:00 · Harry 0% · guest 100%21:00 · Harry 0% · guest 100%24:00 · Harry 4% · guest 96%24:00 · Harry 4% · guest 96%27:00 · Harry 40% · guest 60%27:00 · Harry 40% · guest 60%
Sharpest disagreement ▶ 15:00 Mocks private market unit economics

Niccolo sarcastically mocks private startups that lose money on every dollar of revenue while claiming they will make it up on volume, teasing Harry directly.

 Hardest push from Harry ▶ 13:12 Harry presses on private market over-enthusiasm

Harry prompts Niccolo to justify his criticism of Bay Area private market valuations and explain how he has seen this play out over time.

 Biggest teaching moment ▶ 15:30 Niccolo breaks down liquidation preferences and zombiecorns

Niccolo educates on how complex VC liquidation preference stacks wipe out prior rounds and common stock, turning inflated paper valuations into zombiecorns.

 Harry holds his own ▶ 20:39 Harry synthesizes M&A turnaround playbook

Harry concisely summarizes Niccolo's M&A thesis, asking whether plugging distressed assets into centralized infrastructure forms the core of Glue's strategy.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Niccolo De Masi's Career and Transitioning Glu Mobile 1300 Harry asks a basic background question allowing Niccolo to detail his transition from physics and banking into mobile media and turning around Glu Mobile. Niccolo provides a detailed breakdown of transitioning from feature phone ringtones to free-to-play smartphone games.
Navigating Public Market Turnarounds and Platform Shifts 1510 Harry asks about managing platform transitions as a public company versus a private one. Niccolo educates on late-stage startup mentalities, drawing corporate strategy comparisons to Lou Gerstner at IBM, GE, and Technicolor while explaining hardware utility cycles.
Corporate Transparency and Private Market Valuations 2621 Harry asks about corporate transparency and private market dynamics. Niccolo gives a detailed masterclass on dual-class stock structures, liquidation preferences, down rounds, and 'zombiecorns', while jokingly poking fun at private market burn rates.
M&A Strategy and Market Consolidation 2511 Harry asks focused follow-up questions on sourcing acquisition targets and turnaround execution. Niccolo details how Glu acquires distressed assets like PlayFirst at deep discounts and integrates them into centralized support functions.
Quick-Fire Round: Advice, Leadership, and Books 1420 In the quick-fire round, Harry asks standard questions about books, advice, and leadership challenges. Niccolo politely redirects the advice question to share his personal core philosophy on remaining focused on mobile entertainment.

Statements from this episode (7)

Insight
De Masi: Phasing out legacy business lines is more profitable than selling
“And it's usually, if not always, more profitable to run off your own legacy business than it is to try and sell it. Because if you sell it, you're gonna get a discount to what the cash, the free cash flow is you can generate.”
Niccolo De Masi Feb 19, 2016 ▶ 6:21
Insight
De Masi: The smartphone market will never be dominated by one model
“The phone market is like the car market. There will not be one model because people have different aesthetic, and they have different utility needs and there's different price points.”
Niccolo De Masi Feb 19, 2016 ▶ 8:01
Prediction Held up
De Masi: Tech unicorns face slow valuation deflation into 'zombie corns'
“I think those days are coming to the end, at least on this cycle. And I think you will see a slow deflation of unicorns becoming zombie corns in a lot of places. A lot of private paper mergers are going to happen.”
Niccolo De Masi Feb 19, 2016 ▶ 15:21
Disclosure
De Masi: Glu Mobile will use $180M cash to consolidate gaming assets
“Glue is turning with our hundred and eighty million dollars of cash and our public currency. We're turning into a potential consolidator of decently priced assets.”
Niccolo De Masi Feb 19, 2016 ▶ 18:13
Disclosure
De Masi: Glu Mobile operates without dedicated business or corporate development teams
“So we're, we don't have a BD department. We don't have a corp dev department.”
Niccolo De Masi Feb 19, 2016 ▶ 18:39
Assertion Partly supported
De Masi: Glu acquired PlayFirst for $50M in stock now worth $10M
“PlayFirst is a great example of a business that I think raised 35, forty million dollars of venture money. We paid fifty million dollars a couple years ago in stock that was priced at six dollars a share, so today we're talking ten million dollars of glue Equi…”
Niccolo De Masi Feb 19, 2016 ▶ 19:54
Assertion Supported
De Masi: Activision paid seven times EBITDA to acquire King for $5.9B
“They paid 5.9 billion dollars for a business that was half the size of glue probably in 20 11, out of tremendous success with Candy Crush, but it's generating real EBITDA. I mean, they paid seven times EBITDA for this business.”
Niccolo De Masi Feb 19, 2016 ▶ 23:17
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