The Exchanges

Q I'd love to start this day with a little on you, and it's easy to see Mitch Lasky, GP at Benchmark, Snapchat board member, but what was the start for you in the industry, and how did you make your first foray into VC?

A So, I came to the venture business from an operating background. I had a startup in Los Angeles, and I was there as the CEO from its founding all the way through a NASDAQ IPO and then a sale to a larger company. And I'd been a senior product executive at a bunch of video game companies over the years. And I think all of those are sort of classic failure vectors for coming to the venture business. I think, you know, all the people with that background a lot of times come in with a lot of hubris. But I had been a benchmark portfolio CEO. Bill Gurley had invested in In my startup and was on my board at the time that I went public, and I had an enormous amount of admiration for him and his approach and how he worked, and I don't think I would have entered the venture business anywhere else except Benchmark, but when Bill and his partners made me the initial offer, I was thrilled, and that's kind of how I ended up there.

AI assessment note: “So, I came to the venture business from an operating background.”

Q Staying on the gaming there, you've invested in the likes of Riot Games, as we said earlier, at A, the maker of the first billion dollar franchise in esports, League of Legends. So what's the thesis moving forward with this phenomenal rise that we've seen in esports? Esports. And, and kind of, how do you see the esports evolving in the future?

A You know, I'm very excited about the prospects, but I, I'm also cautious in the sense that, you know, I think sometimes in the venture business, we have a tendency to see something like esports and kind of fantasize that it's a mature market and start investing in all kinds of, you know, what I call epiphenomenon without actually sort of thinking about the thing itself. And I've been pitched a Media rights brokerages, and training dojos, and endorsement marketplaces, and all these other kinds of things, and yet at the same time, I don't, I don't, I don't think we've really established kind of what it is that esports really is. I think what it's not, and this is just, you know, in my opinion, I'm, I'm less interested in sort of the professional team approach, the cloud nines, the mortals, who are raising money at the moment at astonishing valuations. You know, I, I really think that it's more like golf or tennis, perhaps, where it's, It's participatory, but also a spectator sport, maybe more than like the NFL, which I think a lot of people in the games business would like to see it become because that's kind of where the money is or UFC. But, you know, at its core, the competitive multiplayer gaming and a spectator experience, really compelling and a vector that I'm excited to invest more against.

AI assessment note: “I really think that it's more like golf or tennis, perhaps”

Q Do you think esports will ever be as big as traditional sports? That's from Clint at Crosscut.

A I don't just for a lot of reasons, I mean, I think until they solve the television problem, it's going to be very, very difficult. You know, so much of our experience of, I don't want to call them real sports, but of traditional sports is, is mediated by 2030, 50 years of narrative development through television. I mean, what NFL films did for the National Football League, what ESPN has done for, for basketball and for soccer and other sports is just remarkable. And so, I think until we have something like that in the early, unfortunately, the early attempts to put esports on, you know, straight TV have not gone particularly well, but I think until then, it's going to be a bit of a niche.

AI assessment note: “I don't just for a lot of reasons”

Q and it's Benchmarks Fund obviously speculated to be the best performing in history, I think it is. I'm intrigued for you personally, how, how does the kind of motivation around the team improve when the heights of any height, it Desired have already been hit and matched. How, how does one continue to self-motivate and strive for that three AM term sheet when you've achieved so much as a team?

A You know, it's funny. We, I think it's very much unspoken amongst us, but I think we really appreciate doing the work and it's really not, I mean, the results are fantastic. And I would be lying to say that, that we're not thrilled by the performance and our good luck. In the investments that we've made in our, in our fund seven and in our previous funds. But at the end of the day, you know, we get up every day to do the work. And I think that's what kind of keeps us going. And we have a certain humility about it and a sense of humor about what's happening. And, and we also, I think, have a culture where we try and limit our self-congratulation and celebration. I'll give you an example. We, uh, I came back from New York after the Snapchat, uh, IPO. I was in New York for the pricing and to see the stock open on, on the New York stock exchange floor. And, uh, I flew back from, it was on a, on a Thursday on, came back on, on Monday to the partners meeting. And, and our celebration was basically like, Hey, yeah, that went pretty well. And a pat on the back and let's get back to work. There was literally nothing, you know, no champagne popping, no people counting their money or whatever. It was very, very matter of fact. And it was like, yep, that's the job we've been hired to do when we've delivered a good result to our limited partners and let's get back to it.

AI assessment note: “we get up every day to do the work. And I think that's what kind of keeps us going.”

Q I'd love to start this day with a little on you, and it's easy to see Mitch Lasky, GP at Benchmark, Snapchat board member, but what was the start for you in the industry, and how did you make your first foray into VC?

A So, I came to the venture business from an operating background. I had a startup in Los Angeles, and I was there as the CEO from its founding all the way through a NASDAQ IPO and then a sale to a larger company. And I'd been a senior product executive at a bunch of video game companies over the years. And I think all of those are sort of classic failure vectors for coming to the venture business. I think, you know, all the people with that background a lot of times come in with a lot of hubris. But I had been a benchmark portfolio CEO. Bill Gurley had invested in In my startup and was on my board at the time that I went public, and I had an enormous amount of admiration for him and his approach and how he worked, and I don't think I would have entered the venture business anywhere else except Benchmark, but when Bill and his partners made me the initial offer, I was thrilled, and that's kind of how I ended up there.

AI assessment note: “when Bill and his partners made me the initial offer, I was thrilled”

Q Absolutely. No, I think it's an interesting way to, to approach deal flow in some respects. But no, I agree. In terms of kind of your space in particular, the I do have to dive on one element of entertainment, and that is very much more, uh, a buzzword of today, and it's AR and VR. How do you view the current landscape for AR and VR today?

A Well, I've, I've been a pretty well-known skeptic about VR. I mean, I think to go into it in details probably beyond the, the time constraints of the show, but, because I could talk about it for quite a, quite a while, but I really think the essence of it for me is behavioral. And I'm really waiting to see the kinds of behaviors that VR enables that really give it the opportunity to be something kind of mass market and widespread. I think anyone who's, who's used one of the high end head mounted displays understands kind of the visceral impact of it. Standing on the ledge over the city or the, the, having the dinosaur growl at you or whatever. They're, they're emotional, visceral experiences, but they're ephemeral. And I think trying to find that thing that That it's really good at is really the key. And I think one of the things that's, that we've, we've had to deal with, with VR sort of in the short term has been the Facebook Oculus acquisition. And I think that that was an interesting event in the hit in the development of VR, because on the one hand, it gave enormous validation to the, to the space. But on the other hand, it sort of set a ticking clock that it felt like everybody kind of had to respond to To Facebook's move in VR. And I think that happened kind of prematurely in the sense that we didn't really know what VR was good for yet. So I've stayed away from investin…

AI assessment note: “I've been a pretty well-known skeptic about VR.”

Q and it's Benchmarks Fund obviously speculated to be the best performing in history, I think it is. I'm intrigued for you personally, how, how does the kind of motivation around the team improve when the heights of any height, it Desired have already been hit and matched. How, how does one continue to self-motivate and strive for that three AM term sheet when you've achieved so much as a team?

A You know, it's funny. We, I think it's very much unspoken amongst us, but I think we really appreciate doing the work and it's really not, I mean, the results are fantastic. And I would be lying to say that, that we're not thrilled by the performance and our good luck. In the investments that we've made in our, in our fund seven and in our previous funds. But at the end of the day, you know, we get up every day to do the work. And I think that's what kind of keeps us going. And we have a certain humility about it and a sense of humor about what's happening. And, and we also, I think, have a culture where we try and limit our self-congratulation and celebration. I'll give you an example. We, uh, I came back from New York after the Snapchat, uh, IPO. I was in New York for the pricing and to see the stock open on, on the New York stock exchange floor. And, uh, I flew back from, it was on a, on a Thursday on, came back on, on Monday to the partners meeting. And, and our celebration was basically like, Hey, yeah, that went pretty well. And a pat on the back and let's get back to work. There was literally nothing, you know, no champagne popping, no people counting their money or whatever. It was very, very matter of fact. And it was like, yep, that's the job we've been hired to do when we've delivered a good result to our limited partners and let's get back to it.

AI assessment note: “we get up every day to do the work”

Q Absolutely. No, I think it's an interesting way to, to approach deal flow in some respects. But no, I agree. In terms of kind of your space in particular, the I do have to dive on one element of entertainment, and that is very much more, uh, a buzzword of today, and it's AR and VR. How do you view the current landscape for AR and VR today?

A Well, I've, I've been a pretty well-known skeptic about VR. I mean, I think to go into it in details probably beyond the, the time constraints of the show, but, because I could talk about it for quite a, quite a while, but I really think the essence of it for me is behavioral. And I'm really waiting to see the kinds of behaviors that VR enables that really give it the opportunity to be something kind of mass market and widespread. I think anyone who's, who's used one of the high end head mounted displays understands kind of the visceral impact of it. Standing on the ledge over the city or the, the, having the dinosaur growl at you or whatever. They're, they're emotional, visceral experiences, but they're ephemeral. And I think trying to find that thing that That it's really good at is really the key. And I think one of the things that's, that we've, we've had to deal with, with VR sort of in the short term has been the Facebook Oculus acquisition. And I think that that was an interesting event in the hit in the development of VR, because on the one hand, it gave enormous validation to the, to the space. But on the other hand, it sort of set a ticking clock that it felt like everybody kind of had to respond to To Facebook's move in VR. And I think that happened kind of prematurely in the sense that we didn't really know what VR was good for yet. So I've stayed away from investin…

AI assessment note: “I've been a pretty well-known skeptic about VR.”

Q Well, I mean, that was one interesting, uh, kind of application that I was going to ask you about with your gaming background is a lot of people are very much believing the hype with kind of the application to gaming. Is that a particular segment where you feel it does have interesting applications or does the skepticism still kind of continue there?

A Yeah, I think it's relatively obvious as a Gaming peripheral, you know, certainly it's as an enhancement to that pre-existing experience in a three D world. And in particular, the game developers already have a lot of experience creating sandboxes in three D. So I think, you know, it's going to be fairly obvious that there's going to be an early gaming opportunity for virtual reality, but I'm not sure whether that opportunity really is going to be the thing that cements VR as the next generation technology that it aspires to be. On the other hand, it may be that that's, it's going to be its best and highest use, and so I think it still remains to be seen. The jury's still out a bit on that one. Sorry, I was just going to respond to your question about AR, uh, which I think, you know, you, you often hear kind of the, when you, when you're interrogating people these days, I think the, you know, the hype is a little bit off, off with regard to VR, and people will be like, well, I'm not really into VR, but AR is really interesting, and to a certain extent, I, I share that, uh, I mean, I've seen At Snap in particular, a particular kind of, of augmented reality that I think works incredibly well and has a real mass market appeal, but I would say I'm, I'm quite short the approach of the magic leaps of the world that sort of require a visor and maybe for an industrial application, but …

AI assessment note: “I think it's relatively obvious as a Gaming peripheral”

Q Do you think esports will ever be as big as traditional sports? That's from Clint at Crosscut.

A I don't just for a lot of reasons, I mean, I think until they solve the television problem, it's going to be very, very difficult. You know, so much of our experience of, I don't want to call them real sports, but of traditional sports is, is mediated by 2030, 50 years of narrative development through television. I mean, what NFL films did for the National Football League, what ESPN has done for, for basketball and for soccer and other sports is just remarkable. And so, I think until we have something like that in the early, unfortunately, the early attempts to put esports on, you know, straight TV have not gone particularly well, but I think until then, it's going to be a bit of a niche.

AI assessment note: “I don't just for a lot of reasons”

Q Staying on the gaming there, you've invested in the likes of Riot Games, as we said earlier, at A, the maker of the first billion dollar franchise in esports, League of Legends. So what's the thesis moving forward with this phenomenal rise that we've seen in esports? Esports. And, and kind of, how do you see the esports evolving in the future?

A You know, I'm very excited about the prospects, but I, I'm also cautious in the sense that, you know, I think sometimes in the venture business, we have a tendency to see something like esports and kind of fantasize that it's a mature market and start investing in all kinds of, you know, what I call epiphenomenon without actually sort of thinking about the thing itself. And I've been pitched a Media rights brokerages, and training dojos, and endorsement marketplaces, and all these other kinds of things, and yet at the same time, I don't, I don't, I don't think we've really established kind of what it is that esports really is. I think what it's not, and this is just, you know, in my opinion, I'm, I'm less interested in sort of the professional team approach, the cloud nines, the mortals, who are raising money at the moment at astonishing valuations. You know, I, I really think that it's more like golf or tennis, perhaps, where it's, It's participatory, but also a spectator sport, maybe more than like the NFL, which I think a lot of people in the games business would like to see it become because that's kind of where the money is or UFC. But, you know, at its core, the competitive multiplayer gaming and a spectator experience, really compelling and a vector that I'm excited to invest more against.

AI assessment note: “I really think that it's more like golf or tennis, perhaps”

Q Have you seen your investment decision-making change since, since you joined, but in 2007, I think it was. Have you seen that change from kind of the, the mass excitement to a much more rational perspective now?

A Well, I had zero investing experience, uh, when I joined the firm, uh, it's remarkable, uh, in retrospect that they would have even considered me. It was an enormous learning curve for me at, at the firm and incredibly humbling. I joined the firm when I was in my sort of early to mid forties, And I, as I said, I'd been a relatively successful operator, but I was a complete idiot for the first 18 months or so that I was in the venture business. And my partners were remarkably patient with me during that period and sort of allowed me to fail in ways that were non-destructive to the firm, but, uh, encouraged me in the right direction during that period. And looking back now at sort of the way I approached the business compared to the way I approached the business in those early days, You know, it's, it's a bit embarrassing, but, but I have learned an enormous amount over the last 10 years.

AI assessment note: “I have learned an enormous amount over the last 10 years.”

Q Have you seen your investment decision-making change since, since you joined, but in 2007, I think it was. Have you seen that change from kind of the, the mass excitement to a much more rational perspective now?

A Well, I had zero investing experience, uh, when I joined the firm, uh, it's remarkable, uh, in retrospect that they would have even considered me. It was an enormous learning curve for me at, at the firm and incredibly humbling. I joined the firm when I was in my sort of early to mid forties, And I, as I said, I'd been a relatively successful operator, but I was a complete idiot for the first 18 months or so that I was in the venture business. And my partners were remarkably patient with me during that period and sort of allowed me to fail in ways that were non-destructive to the firm, but, uh, encouraged me in the right direction during that period. And looking back now at sort of the way I approached the business compared to the way I approached the business in those early days, You know, it's, it's a bit embarrassing, but, but I have learned an enormous amount over the last 10 years.

AI assessment note: “looking back now at sort of the way I approached the business”

Q Well, I mean, that was one interesting, uh, kind of application that I was going to ask you about with your gaming background is a lot of people are very much believing the hype with kind of the application to gaming. Is that a particular segment where you feel it does have interesting applications or does the skepticism still kind of continue there?

A Yeah, I think it's relatively obvious as a Gaming peripheral, you know, certainly it's as an enhancement to that pre-existing experience in a three D world. And in particular, the game developers already have a lot of experience creating sandboxes in three D. So I think, you know, it's going to be fairly obvious that there's going to be an early gaming opportunity for virtual reality, but I'm not sure whether that opportunity really is going to be the thing that cements VR as the next generation technology that it aspires to be. On the other hand, it may be that that's, it's going to be its best and highest use, and so I think it still remains to be seen. The jury's still out a bit on that one. Sorry, I was just going to respond to your question about AR, uh, which I think, you know, you, you often hear kind of the, when you, when you're interrogating people these days, I think the, you know, the hype is a little bit off, off with regard to VR, and people will be like, well, I'm not really into VR, but AR is really interesting, and to a certain extent, I, I share that, uh, I mean, I've seen At Snap in particular, a particular kind of, of augmented reality that I think works incredibly well and has a real mass market appeal, but I would say I'm, I'm quite short the approach of the magic leaps of the world that sort of require a visor and maybe for an industrial application, but …

AI assessment note: “fairly obvious that there's going to be an early gaming opportunity for virtual reality”