Mar 11, 2016 · 39m · 20vc
20VC: Niccolo De Masi on The Bursting Of The Tech Bubble and What It Takes To Be A Celebrity Partner with Glu Mobile
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Glu Mobile CEO Niccolo De Masi joins host Harry Stebbings to discuss market valuation corrections, startup capital efficiency, and Glu's strategic playbook for celebrity game partnerships and mobile industry consolidation.
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 14.8% of the talking time here. How this is scored →
Harry as informed peer 2.5 Guest teaching 4.5 Guest disagreement 1.4 Harry pushing back 1.4
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 4:10 Rejection of VC blame framing
Niccolo counters Harry's assertion that VCs are to blame for market implosions, reframing the dynamic around how public versus private valuation structures function.
Hardest push from Harry ▶ 26:58 Pushback on teen monetization limitsHarry directly rejects Niccolo's premise that younger audiences spend less on games, pointing out that teens often spend heavily using their parents' money.
Biggest teaching moment ▶ 12:15 Dot-com crash history lessonNiccolo points out that Harry was too young during the 1999-2000 dot-com crash to have experienced it firsthand, using the era to explain long-term tech cycle capacity.
Harry holds his own ▶ 26:58 Countering guest on youth spending mechanicsHarry uses an informed perspective on teen demographic spending habits to push back on Niccolo's revenue assumptions regarding younger gamers.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Public vs. Private Market Startup Valuations | 2 | 5 | 2 | 1 | Niccolo provides a detailed breakdown of how private market valuations diverge from public market realities. He gently rejects Harry's suggestion that VCs are solely to blame, explaining how market mechanics operate differently across public and private spheres. | |
| Venture Capital Responses to Market Downturns | 2 | 6 | 2 | 1 | Niccolo outlines VC credit committee behavior ahead of market downturns. He playfully schools Harry on the 1999 dot-com bubble, teasing him about being too young to have been running a show at the time. | |
| Startup Runway Management and Early Monetization | 2 | 4 | 1 | 1 | Niccolo gives operational advice to founders on maintaining runway and prioritizing monetization early over continuous land grabs. Harry listens passively, echoing a brief joke about San Francisco delivery services. | |
| Glu Mobile's Strategy and Mobile Gaming Consolidation | 2 | 5 | 1 | 1 | Niccolo explains Glu Mobile's multi-cycle strategy and predicts consolidation in mobile gaming similar to historic console market trends. Harry prompts with basic thematic questions. | |
| Emerging Hardware Platforms and the Future of VR/AR | 3 | 5 | 1 | 1 | Niccolo details hardware pricing curves, contrasting $700 niche headsets with $9 mass-market mobile VR options. Harry asks logical follow-ups on AR versus VR and Google Glass strategies. | |
| Celebrity Game Partnerships and the Jenner/Kardashian Slate | 4 | 3 | 2 | 4 | Harry challenges Niccolo's claim that younger teen demographics generate less gaming revenue, arguing teens freely spend parental funds. Niccolo acknowledges the point while maintaining there is still a spend cap. | |
| Criteria for Evaluating Celebrity Partners | 3 | 4 | 1 | 1 | Niccolo shares Glu's internal criteria for selecting celebrity partners, detailing why certain genres fail when mechanics do not match fan expectations. Harry offers ideas like a Justin Bieber game. | |
| Executive Talent, Career Ambitions, and Founder Advice | 2 | 4 | 1 | 1 | In a quickfire sequence, Niccolo shares executive hiring philosophies and founder advice, emphasizing that 7/10 ideas with 11/10 execution outperform brilliant ideas with weak execution. |
Statements from this episode (22)
De Masi: US VCs Overinflate Portfolio Holdings Compared to European Peers
“In the US, VCs hold everything at these tremendously optimistic valuations as if everything's liquid and it's all getting sold at the highest comp they've found out there with the one sale in the sector, and every entrepreneur is convinced that they're sitting…”
De Masi: Venture Capital Cannot Survive Without Power-Law Outlier Winners
“If you study the way venture portfolios are built, they would not be in business if they didn't have the one Uber winner. Without the Googles and Facebooks, they would not be in business at all.”
De Masi: Tech Unicorns Face Forced Consolidation and Declining Valuations
“When I look at the unicorns today, you know, you're gonna see forced consolidation, you're gonna see continued gas error being let out of valuations here, and people resist it Using clever capital structures, endless consolidation, and hope that they can hold …”
De Masi: Well-capitalized startups will see unparalleled deal terms in 2016-2018
“I think this is a good moment for backing your better capitalized portfolio companies to act as a consolidator, encouraging them to be on the offensive, so to speak, because I think you're going to get unparalleled deals in the next year or two.”
De Masi: Startups prioritizing revenue in downturns build enduring businesses
“If you're raising money in oh eight or nine, you know, the firms that focused on proving they have a revenue model that is real usually end up to be great businesses five years down the line because they forced the discipline themselves to think about revenue …”
De Masi: Free services rarely develop pricing power over consumers later
“If you condition consumers for something to be free, you don't usually get pricing power.”
De Masi: Uber and Airbnb are burning massive cash defending network effects
“Other than Uber and Airbnb, I can't think of you with the same sort of network effects. And you can see how much money it's taking them to defend that. I mean, even the private company info that's leaked there is they're all hosing through cash.”
Glu Mobile operates without a dedicated corporate development team
“We don't have a corporate development team. Which means we're not trying to do deals.”
De Masi: Mobile gaming will consolidate into fewer companies within three years
“There's going to be huge consolidation in gaming, and I think that there will be, you know, fewer, bigger, better companies in the next two, three years with better profit margins. Ultimately, less global competition in mobile gaming than there is now.”
De Masi: Only EA, Activision, and Take-Two matter in console gaming
“I mean, console, we're down to arguably three companies that matter. EA, Activision, Take Two.”
De Masi: Only four global markets support a billion-dollar annual game
“Korea, Japan, China, the US, those are the four markets that can support a billion dollar gain in a year.”
De Masi: $9 mobile devices will match Oculus Rift power in 2-3 cycles
“Over the next two to three Moore's law cycles, you're going to see that Oculus Rift power turning up, I think, in handheld devices that cost nine dollars.”
De Masi: PC gaming VR will achieve real revenue generation by 2017
“I think there will be hardcore PC gamers that take to VR in the next two years, and they'll start to be actual money made there in 2017.”
De Masi: Mobile VR/AR will scale to 100M+ devices in 2-3 cycles
“I think the most exciting intersection is going to be two or three more loss cycles away when VR and AR using your phone as the primary device Will be an option for the mass market. It won't be a million of these or even ten million sold. It'll be a hundred mi…”
De Masi: Kim Kardashian Mobile Game Remains Top-35 Grossing After Two Years
“Obviously our Kim game went out on June 22nd twenty-fourteen, did very, very well, and still does very, very well. It's still a top, you know, 35 grossing you know, game.”
De Masi: Glu Mobile's Celebrity Partner Social Reach Hits 1.3 Billion
“On average, our portfolio of celebrity partners is growing organically month on month. So we aim to sign up a billion. I said it on the analyst day last May. We're at a 1,000,000,003 right now, and that's been organic growth across the portfolio.”
De Masi: Kendall and Kylie Mobile Game Set Internal Beta Retention Records
“It has one of the highest retentions we've ever seen. In, you know, in Canada, Beta, it's made ephemera money, and it's done for both, well, well in both the free and the grossing charts.”
De Masi: Female celebrities dominate top social media follower rankings
“Women are social media mavens compared to men. There are very few men that break fifty million, let alone a hundred million followers, and you look at the top 20, 30 most popular people in the world, It's like three-quarters female, especially the over a hundr…”
De Masi: Glu Mobile's James Bond game missed target audience expectations
“We built a James Bond game last year that, you know, whilst it was done over two years in close collaboration with the broccoli, you know, Wilson you know, family, it didn't hit the bullseye in terms of what the core demographic wants.”
De Masi: Kim Kardashian communicates weekly and meets quarterly with Glu CEO
“Honestly, she and I exchange numerous emails a week. There's phone calls every few weeks, and we meet up in person, you know, probably at least quarterly.”