198. Streaming Wars, The Future of Mobile & The Evolution of User Interaction (M.G. Siegler)

198. Streaming Wars, The Future of Mobile & The Evolution of User Interaction (M.G. Siegler)
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M.G. Siegler of GV joins Nick to discuss Streaming Wars, The Future of Mobile & The Evolution of User Interaction. In this episode, we cover:

  • Backstory/path to Venture
  • How’d you find your way from Hollywood to SV?
  • Who was the first VC that, based on your writing talent, saw your potential as an investor?
  • Why did you leave Crunchfund for GV? 
  • A little confusion about the array of venture funds affiliated with Google – can you give us a quick overview and whether there is still an affiliation between Google and GV?
  • Tell us about your thesis.
  • How hands-on do you get w/ portcos?
  • How does Jony Ive’s departure affect Apple?
  • What are the most valuable consumer tech companies by market cap – five years from now?
  • Right now, in the streaming market, we have a fragmented group of services yet know one platform to unify the user experience…  what do you see for the future of streaming?
  • How do you see the competition between Apple and Disney play out?  Who wins?
  • Just heard the announcement that Facebook is acquiring CTRL – Labs. Why do you think this is a good strategic buy for FB? removing monotony…. repetitive tasks….  mental fatigue….  Impact of constant stimulation, content consumption, on happiness, creativity, etc.?
  • You’ve invested in some big names such as Medium, Slack and Stripe to name a few. What’s the single biggest common success factor that you’ve observed across very different companies?
  • What are some of the major trends we will see in mobile in the coming year and what do you think will phase out?
  • Who is your favorite writer in the space?
  • If you ever get around to writing your screenplay, what will you write about?

Guest Links:

Key Takeaways:

  1. There are various different arms within Google that have the capacity to invest in different companies however, GV is the most straightforward in terms of being a typical venture fund.
  2. Due to the massive growth at GV and their portfolio of over 300 companies, they’ve moved away from early-stage investing and naturally moved up the chain to later stages, although MG still tries to focus mainly on consumer.
  3. With the departure of Jony Ive, MG believes it will certainly have an effect on Apple however, he predicts there will be a two or three year lag time until we see real fundamental changes within the nature of what Apple has been doing.
  4. MG predicts that the most valuable consumer tech companies by market cap within the years to come will continue to be big players like Microsoft, Apple, Amazon, Google etc.
  5. There is plenty of opportunity for some of the newer public companies to grow at a massive scale but currently, the core players previously mentioned are very well dug into their markets, that it seems hard to believe that anyone will surpass them in the near future. 
  6. Although Netflix has been a bit downtrodden recently, MG believes they are one of the savviest players in the space due to how well they’ve developed their legacy content, therefore he would not bet against them. 
  7. The only company that MG could currently see as better positioned than Netflix is Disney.
  8. Due to the execution of Disney’s IP deals and the multichannel avenues they have for releasing content, such as Disney Plus, theme parks, merchandise and theatrical, they have components that no one else can tie together in the same way.  
  9. Other players in the “streaming wars” that MG is a little skeptical about is HBO and Apple.
  10. MG see’s HBO as one of the ultimate great curators but recently with them launching new content with Warner, it seems they’re moving along the lines of a Netflix playbook and following what everyone else is doing.
  11. With regards to the future launch of Apple TV Plus, MG is a bit wary about what they’re doing simply because there’s so little content, therefore it’ll be a long time before they can compete with someone like Netflix. 
  12. MG sees what they’re doing with the Apple TV Plus and the Apple TV device as a bit more old school. He believes it would be more compelling to create a service that was predicated around using the iPhone because that is essentially their big advantage.
  13. Control Labs, recently acquired by Facebook, MG states as one of the most interesting startups he’s been associated with in recent years. It still has
  14. With consumer elements embed into it Control Labs is essentially hardware enabling a user to potentially access and intercept what their brain intends them to do.  

Transcribed with AI:

0:03
welcome to the podcast about investing in startups, where existing investors can learn how to get the best deal possible. And those that have never before invested in startups can learn the keys to success from the venture experts. Your host is Nick Moran and this is the full ratchet

0:23
Welcome back to TFR today the long awaited mg Siegler joins us. MG is an investor at GV and is one of the most frequently requested guests by listeners. He is a consumer tech expert who has written extensively about Apple media platforms and user experience. In this episode, we discuss his areas of expertise and his thoughts on the streaming wars, Disney the future of mobile, social media and the evolution of user interaction across voice and even thought activated platforms. Here’s the enlightening discussion with mg Siegler of GV.

MG Siegler joins us today from San Francisco. MG is a general partner at GV GV is a San Francisco based venture firm with investments in Uber nest control labs and retail me not among many others. Prior to GV mg was a founding partner at crunchfund. He also reported on startups in tech as a writer at both TechCrunch and VentureBeat and still regularly writes at his blog, 500 ish, mg, welcome to the program.

1:33
Thanks for having me.

1:34
So what is the origin of the name 500 ish, I’ve always wondered.

1:40
So that that came about, I don’t even know how many years ago at this point, maybe maybe almost five years ago, four or five years ago. So basically, I had been continuing to write and blog post, as you noted, my reporting career just on my own sites, I mean, I’ve used a bunch of different tools over the years, as you can imagine, but we’re actually jeebies an investor in medium. And so when we were getting more involved with medium, I decided to set up a publication over there, but I needed to come up with a new name for it beyond what I had been using in the past. And so one thing that I liked, or at least in my head, I thought I would like was the notion that if I could keep things sort of brief in writing, then I would do it more often, which, you know, I used to do, of course, for a living that in the sort of VC world, there’s just a lot that pulls it at you timewise time constraint wise. And so it’s hard to fit writing into those, you know, times of the day when you’re not doing something else. And so I thought, if I could keep it brief, then 500 ish words, you know, with sort of the the idea that I came up with, keep sort of the the post length to around 500 words, I very rarely do but, but I thought that would sort of inspire me to write work

2:50
to love it. Love it. So talk us through that transition. So you’re you were working, you know, as a writer, and then, you know, crunchfund came about, can you walk us through what, what happened there and how that all came together? Sure.

3:03
So you know, rewinding a little bit farther back from that a lot of people asked, you know, how did you make the transition from sort of being recorded to being a VC? Yes. Sort of the longer story said briefly is that I never intended to be a reporter, I sort of stumbled into that world. It’s not like I studied that in college and go to journalism school or anything. I stumbled into that world, because I’ve been working actually, as a web developer, and just writing about technology on side. I’ve always had an interest in writing. And you know, I’ve done it for a long, long time, getting back to school, of course. So I just been, you know, taking what I was doing for a living and sort of writing about interesting things, or what I thought would be interesting things and technology. And that’s what caught the eye of people up in San Francisco, you know, notably, VentureBeat sort of reached out to me and wanted to see if I, if I would be interested in writing for them. I thought at the time that there’s no way you can make a living sort of blogging compared to what like, you know, you would do as a web developer or whatnot. And so I said, I would do it on the side. And eventually, that pretty quickly morphed into doing it full time and so said VentureBeat for I think, a year and a half, and then eventually moved over to TechCrunch. You know, once I moved up to San Francisco, and I was there for, for a while through the sale to AOL. So that was back in 2010, AOL acquired TechCrunch. And I stayed for about a year. But as I was sort of, after that transaction happened, I started to, I started to think about what was next. And a lot of VCs had reached out to me, mainly with the idea that, you know, they knew that the company I was at at TechCrunch had been acquired. And so they thought, well, maybe this guy is gonna go out and start his own new publications, start his own new tech blog or whatnot. And so a bunch of VCs reached out to see what my thinking was. And those conversations sort of, you know, evolved over about a year span. Like I said, I stayed around for about a year at at AOL at TechCrunch under the AOL brand, and that was a no real hurry to make a move. But as those conversations with various VCs started to To continue to happen, it’s the sort of morphed into this. Well, what you were doing at TechCrunch wasn’t all that different from what we do, at least, you know, at a very high level on a sort of initial basis, right? You’re looking for interesting startups, I was looking for them interesting startups to cover to write about VCs, obviously, look for interesting startups to potentially invest in. And so it became, you know, an interesting conversation about well, do you think you could maybe join a VC firm as someone who’s who’s looking at investing in startups, and eventually, I got far enough down the road in those conversations that I knew I was gonna make the jump, and I and I went to Mike Arrington, who is the founder of TechCrunch. And Heather Hardy, who is the CEO there to say, you know, it’s likely to make a move, you know, in the coming months over to the VC side of things. And that’s when, you know, I think Mike mentioned, well, it just so happens, I’ve been thinking about sort of starting my own fund. And you know, we’re potentially going to set something up with AOL as the LP in it. And so that’s sort of how crunched on came about. Wow,

5:55
very cool. Who was the the first investor that was an avid reader of yours that saw your potential as an investor?

6:04
There were a few different people reached out all around the same time, you know, like I said, sort of those conversations started to form initially around like, you know, what are you doing, actually, one of the first people who reached out to me was Kevin Rose, who was the founder of Digg back in the day, and this all comes full circle, because he was actually the person who eventually, you know, we can get that to this in a second. But he’s the person who brought me over to GV Google Ventures back in 2013. And so it was actually Kevin, though, who reached out very early after the AOL deal, to say, hey, whatever you’re doing next, we’d love to chat about backing it. And that was the one that’s that sticks out. In my mind, I did have a bunch of conversations with, you know, VC firms, you know, and it is in the range from everything from investing in what I was potentially going to do next, I honestly didn’t have a plan to do anything, you know, is out, I did start to think about it a little bit. But I had no real plan of like launching some big new media entity. Maybe that made the transition to VC even easier, since I didn’t have a grand plan of starting my own thing.

7:02
Love it. So talk us through a bit crunchfund itself, you know, founding partner that and then how you made the move to to GV. Yes.

7:11
So crunchfund was started, like I said, Mike Arrington, another guy, Pat Gallagher, who was the, of the three of us, he was the one who had actually been a VC. So I think that was pretty important to have her on the table in starting a fund. And so Mike, Pat, and I kick things off, I guess it was 2011. You know, I think so some of the early thesis was, of course, Mike and I had both been writing for a long time, like, started TechCrunch. And then I had been there for, you know, five plus years at that point, and had built up quite a sort of following amongst people who were following early stage technology companies. And so, you know, we thought there would be an interesting symbiotic relationship between, you know, continuing to write about startups, but also potentially investing in them, obviously, there was the conflict of interest nature of it, and we thought we could do, you know, a good job of, of sort of making those lines clear, and just being transparent about talking about, you know, if if something was going to be an investment, potentially, you know, disclose that. And I think, you know, it sounds like in the earlier days, AOL was on board with that, as I mentioned, they were the anchor lp in the fund. But then things started to sort of get a little bit more murky, as I would say, some other potentially competitors in the journalists world, you know, just started to raise eyebrows about potentially, you know, investing and writing at the same time, and the conflicts around that, you know, as there just became more heat around that topic, it became more and more clear that it just be easier, I think, for both sides to just for us to do it independently. I mean, obviously, as I said, AOL was still the anchor investor in it, but that’s eventually what led to us no longer writing for TechCrunch Got

8:46
it, got it into, did that happen sort of in in concert with GV and your introductions there? Or was did you kind of

8:55
that was a little bit later, you know, crunchfund was was was a fascinating experience, for sure. It’s still going and happens to be rebranded now is, as you may know, like garrington, also left and did his own new font, Arrington XRP, Pat Gallagher is still doing crunchfund. But it’s now you know, he’s rebranded it, it’s called Tuesday, but he’s still actively managing, obviously, current fund has a lot of portfolio companies that were two different funds, I believe raised. And so he’s still managing all that I’m in regular communication with him, obviously, about some of those companies. And, you know, I think, honestly, we did a great job, certainly in timing and sort of launching what was crunchfund off the ground. You know, we were investing in a number of companies that some had exits already, some are still still out there going, you know, like, things like Airbnb, which is, you know, now like, was back then already a massive company, right. And there was some, like, you know, debate about what the model should be because we were in early stage it was around the $30 million fund. We were going to be doing early stage seed investing, but we had these relationships, obviously with many entrepreneurs and other VCs because of our our experience on the writings side of the equation. And so as these opportunities came up to do some of these later stage deals, Uber being another one, you know, we obviously thought about, like, Does this make sense actually for the fund, but it was a pretty easy call to say like, I mean, these are great companies, let’s let’s for sure invest. Obviously, we’re not, we don’t have as much money as some large funds to invest in these companies. But I think, you know, there’s a potential for a good outcome here. And I don’t think we could have imagined though, that, you know, these companies would become 3050, you know, up to potentially $100 billion companies eventually. And so those investments, even though they were pretty late stage end up looking really, really good over time. But that’s sort of, you know, just the times in which we live. And so anyway, so yeah, at crunch fund for about 18 months, we had started, then, you know, we basically deployed the first fund, and we’re starting to think about going out to raise that second fund concurrently. That’s when Kevin Rose reached out to me again, to say, hey, you know, I’m at GV now at Google Ventures, now, we’re actually looking to build up our team, that’s, that’s looking at early stage and seed investing, you know, we’d love the opportunity to work together, if you wanted to come over and sort of meet this team and, you know, hear about our plan, you know, that was a at the time a $300 million a year fund calling versus, you know, what we had, we had it at credit Fund, which was a $30 million fund. And, you know, I thought that it seemed like a natural transition point, if I was going to go make a jump to to do another, to another firm, because again, we were just starting to think about sort of kicking off the second fundraise, talking with Kevin a bit more and talking to the various different people at GV at the time, it made a lot of sense to just make that jump. And here I am, six plus years later. Wow,

11:38
amazing. And mg, you spoken with your colleague, Rick Clough a little bit about this, but there seems to be some confusion about the affiliation with with Google, I know that there’s there’s multiple venture funds that, you know, are affiliated with Google in some way. So can you briefly talk us through how is GV connected with Google Now?

11:58
Yeah, sure. So GV has been around 10 years, this is the 20/10 year anniversary of the of the fund. And when it was being set up, I think, you know, Google was looking around the the landscape, the corporate venture landscape, and the Intel capitals of the world, and some of the bigger companies that were out there at the time, and saying, like, oh, well, what they’re doing with, you know, investing in in the ecosystem is interesting. And I think they wanted to participate in that. But they were being Google trying to think about a different way of approaching that. And, as you know, Google makes a lot of money every single quarter, every single year. And so capital was not the issue, but really thinking about like how you build a world class venture fund from having only one LP a corporate LP as the base of it. And the easy call there, in hindsight, obviously, easy, but maybe not so easy at the time was to set it up like a straightforward venture fund. So our mandate is to make a return on the capital that Google gives us. It’s not to be in nature, it’s not to sell companies to Google, it’s not to, you know, be a pipeline for various BD deals, you know, that, that Google and the startups can execute? You know, some sometimes it happens where Google will acquire one of the portfolio companies, but it happens, you know, just as often with with non Google companies, does that mean, certainly far more often with non Google as a whole, but you know, individual companies, like you mentioned, control labs, Facebook just acquired that company. And so, you know, there’s all sorts of non strategic stuff that that’s happening. And that’s why it was set up that way. That said, Google does have, as you noted, a bunch of other sort of investment vehicles. And so some of them are strategic in nature, you know, most notably, they have, you know, their own balance sheet that they can invest out of, I think they have sort of some very high profile ones like Magic Leap, and SpaceX that they’ve invested in, you know, directly. And so, when they want to do strategic, they can do that they have, you know, in the subsequent years since then they’ve had other sort of smaller funds that have that have rolled out gradient Ventures is another one that sort of focuses on machine learning and AI. There’s also, of course, Google capital, which is also one of our sister companies now under the alphabet umbrella of companies. So they’re also independent, but they do more later stage and growth, equity style investing. So there’s a few different arms within Google that have the capacity to invest in different companies. But I’d like to think that ours is, you know, by far the most straightforward as an actual venture fund. Got

14:13
it? Got it. And then what is sort of your domain within GV? And how do you guys divide up responsibility? So I

14:21
mainly focus on the very nebulous consumer space. But that’s, that could encompass basically everything these days, more or less. You know, when again, when I started six years ago, at GV, it was much more straightforward. It was, you know, find early stage consumer companies, you know, and back then it was it was largely, you know, apps, new mobile apps that were coming out, to invest in and overtime, that’s more for a few reasons. First and foremost, we’ve the fund has just grown in size. And so we’re not doing a ton of early stage investing anymore, both because we have a portfolio of over 300 companies now and so we just couldn’t scale it to 1000 companies if we kept doing all of these early stage investments and also We have, well, we have a large team they do we have a team that helps out our portfolio companies a lot. And those people couldn’t scale to try to help 1000 companies, I think that it wouldn’t move either side for that. So we’ve largely, you know, moved up the chain, as it were, and started doing a little bit later stage, but I still try to focus on consumer. But again, that world has sort of changed a lot. It’s not as common, you know, to have breakout consumer apps like on the iPhone, like you did back then. And so now, like, a good example of an investment is slack, where it’s sort of the quote unquote, consumerization of IT RIGHT, Stewart Butterfield and Cal Henderson was on stage yesterday at disrupt talking about, you know, when they started slack, and sort of, they came to it with a very consumer mindset, because that’s sort of the you know, they’d come from a video game, you’re trying to build a video game time and the adult flicker back in the day, and so they had a very consumer mindset, but they were trying to approach this new enterprise tool with consumer mindset. Now, that’s a very popular and, you know, potentially lucrative thing to do. But you know, so. So anyway, so I skirt the lines between various different segments, but I tried to rope it all into consumer.

16:01
Yeah, so let’s talk more about consumer tech, you’ve written a lot about consumer experience about, about Apple specifically about media. Let’s just start off with with Apple. How do you think Johnny Ives departure affects apple?

16:17
I think it doesn’t have a massive impact. In the short term, I think that Apple, the way that it’s set up is just a very long view company. And so a lot of what they do is, is, you know, build things and set things up to be built out over, you know, a multi year span. And so, you know, the things that we’re seeing that were released, you know, most recently, the new iPhones and whatnot, they were, you know, they’ve been in the pipeline for a few years already. And they were in the pipeline when Johnny was still there, right. And so, we’re not going to see really the the ultimate outcome of of sort of the departure of John AI for another two, three years, I would imagine it I’m sure, there will be some things at the seams that that are different. And, you know, maybe there’s just different design choices that are made, you know, by the by the new people in charge, but I do think it’ll be like a two or three year lag time until we actually see like real fundamental changes, and maybe even like, the design language and nature of what Apple has been doing.

17:13
Great. Do you have a sense for? Or do you have an opinion on what will be some of the most valuable consumer tech companies by market cap, let’s say, three to five years from now.

17:25
Basically, I think over the past two to three years, we’ve seen, you know, these handful of companies that have sort of breaking away from the pack, right, so we have, you know, the quote, unquote, Fang companies that are all north of $500 billion in terms of market cap, and you know, a few of them have skirted the $1 trillion line. You know, it’s interesting that Microsoft has been in the lead right for at least a few several months now, in that art, and Apple keeps going up and up and over that line, and Amazon’s right there, Google’s you know, a little bit farther behind. And Facebook’s a little bit farther behind that. And so I would imagine that those handful of companies continue to be the big ones in in that sort of time horizon. I know that sort of a boring answer. But that’s the nature of how big that they are, and can other get that big. I mean, it’s hard to see any company right now that sort of at the level below that, you know, you have like the sales forces of the world, and some of the newer public companies like Uber and slack and stuff. And so, I mean, there’s opportunities for them to grow into those. But I think it’s going to be a longer time horizon for them to sort of break if they can, if they can break into sort of the the breakaway pack right now. And obviously, we’ll see what happens with all the regulatory talk and, you know, environment changes over the next few years. But as of right now, it looks like those sort of core players are pretty well intact and dug into to the places in the market. I don’t know what their market cap will be in a few years. Obviously, that depends on a lot of different macro things. You know, are they all $2 trillion companies that seems hard to believe that they could grow it at scale at the size that they’re at, but I wouldn’t be shocked if they’re all, you know, just north of the trillion dollars by then bearing any, you know, major recession or downturn in the market that could impact everyone, right?

19:13
You mentioned Fang, one of which one of those companies is Netflix, want to talk streaming a little bit. So right now in the streaming market, we have sort of a fragmented group of services. There’s not really one platform to sort of unify the user experience. And we just saw an announcement, I think, this past week that, you know, Disney, we knew that Disney was announcing their own platform, but they sort of released this trailer and a bunch of promotion around that. What are your thoughts on sort of the future of streaming and kind of this this group of fragmented services?

19:49
So there’s a lot in there so Netflix, as you know, Netflix has been, you know, a little bit downtrodden recently, right, because they missed their earnings, you know, in the last earnings release. You know, there’s there’s trepidation, this seems to be going cycles with Netflix, because you know, for a long time, people were worried like that they’ve accumulated too much debt, and they were growing on top of too much debt for all of the content that they’re putting in too much content spend, right? That ended up being a pretty good call, it seems like in hindsight, given what everyone has noted as entering the market right now, and promising to spend billion hundreds of millions, billions of dollars on content and Netflix was there early and doing it. And now, they have this corpus of content that they built up over time, which seems to position that really, really well, especially in the world now, where you’re seeing the people that own some of the legacy content pulling the content out of Netflix, right? Can you imagine if they were doing that, and Netflix didn’t have, you know, the House of Cards, the stranger thing, or all of their sort of now what’s considered I guess, their legacy content? You know, that would be a whole different equation with regard to them. I think that they’re very smart. And so while they are a bit downtrodden, right now, I still would certainly not bet against them. I think they’re probably the savviest player in the space. I think the only company that I could see that’s better positioned right now from current vantage points would be Disney, just because they have such good IP, and they have so much legacy IP. And they have, obviously a great leader in Bob Iger, who’s also, you know, very thoughtful and very visionary in terms of the way that that he’s been able to execute all his IP deals, certainly acquiring Pixar, Marvel Lucasfilm our catalog. I mean, it’s amazing and and also just being able to execute on top of those. It’s one thing to acquire those that IP, but like, what they’ve done, what Kevin Feige has done with the Marvel Cinematic Universe is is I mean, nothing short of amazing. Yeah, it’s so it’s like mind boggling how they’ve been able to take so many different properties and weave them together in a cohesive manner. And that’s why we’re seeing you know, the results that they’re getting. I mean, they Disney absolutely dominates the box office right now. And it’s hard to see that ending anytime soon. So I think Disney is positioned really well just because of all that, and the fact that they do have sort of these multi channel avenues to get content out there. So obviously, with Disney plus launching, that would be the new one, but they have theatrical, they have their theme parks, they have merchandise, they have things that that no one else can tie together in the same way. So Well, I think Netflix is is maybe a little bit more forward thinking just because they don’t have all of all the legacy on one side, that’s a good thing on the other side, they don’t have all of these different avenues to take their IP to by themselves. And so I think Disney Netflix are the two sort of breakaway folks right now. Obviously, you know, Warner’s launching new stuff with you know what they’re going to do with HBO, I’m a little bit wary of that. Just because I do view HBO is one of like the ultimate greats, just curators. And now it seems like they’re, they’re doing more along the lines of You know, what sort of the Netflix playbook is or just really what everyone else is trying to do now just get a bunch of content out there to be able to compete for eyeballs and time. And I’m pretty skeptical about them being able to scale that, that he certainly the HBO quality and the way that they’re that they’re seemingly trying to with HBO Max and some of the other stuff that they’re going to be rolling out. But they do have, they do have a lot of interesting IP, and they do have a lot of channels again, that they can that they can work with. But yeah, I mean, I’m a little bit more skeptical of them. And then there’s the pure tech players, of course, Apple’s you know, about to launch Apple TV plus, or, and they’re spending a lot of money, I’m pretty skeptical of what they’re doing right now, simply because there’s so little content that they’re actually doing. So it’ll be a long time before they can get there. I do think that they made the right call by pricing, it’s so low, but I really think it was the only call because they have so little content. And now, you know, on the flip side, the consumers are going to have to think about what they want to spend money on. And it’s not going to be every single one of these services. Right

23:48
now. Agreed. And you mentioning apple here. I mean, a number of folks have positioned sort of Apple versus Disney and are writing about you know, who’s going to win between the two? Do you think it’s it’s a competition between those two? Or do you think they’re different enough and they can stay independent and both succeed on their own with in sort of the streaming and the broader media approach?

24:13
Yeah, I think that they’re different enough. I know that that’s a very enticing sort of comparison right now, especially with Bob Iger, obviously, just stepping off the board of of Apple. And he’s writing his book coming out. And they’ve been doing, you know, the media tour and talking about, you know, the time that maybe he thought that Apple and Disney should merge, right when Steve Jobs is large shareholder of Disney and so, you know, there’s all sorts of compelling narratives coming out of that, that’s for sure. But the way that they’re situated now, I don’t view them as being so competitive, because while I do think that there’ll be there’ll be competing for talent in front of the camera and behind the camera, like there’ll be competing for different shows, and you know, that probably is what led to Bob Iger having stepped down from the board. More so necessarily, then you know what they’re doing from a broader perspective. With the technology, I just think that they’re gonna come about it very differently. So as I noted, Disney has all of these channels to be able to put their content through. Apple has none of the same channels. They’re trying to launch Apple TV plus, which would be obviously competitor with Disney plus, but both of those aren’t launched yet. So it’s TBD. But the other channel that Apple has that Disney does not have is, of course, the Oprah a billion pockets, y’all. Right? So their devices in an over a billion hands. And that is very compelling. It seems like they’re not fully taking advantage of it with what the current strategy is, again, with Apple TV Plus, they’re sort of, you know, thinking about it a little bit more old school ways, right, like getting into your living room, and they obviously have the Apple TV device, and they’ve had that for a while. It’s I think it’d be more compelling if they tried to make a service that was really predicated around, you know, being on on the iPhone, because that’s, that’s their advantage, right? I mean, they’ve they’ve a money advantage, they’re, you know, the most profitable company, but then they their real advantage that money can’t buy at this point is those devices in people’s hands, and it’s with a very lucrative segment of the market, right, you know, sort of the affluence of, of iPhone, buyers and Apple products in general. And so I think that there’s a lot of attractive things that they can go after, but doesn’t seem like they’re doing that right now, I wouldn’t be surprised if that’s, you know, something that they, they sort of move more towards down the road. The other thing I would say is that with Apple strategy in the past, it certainly seemed like that they were not trying to launch their own sort of content service. But instead, we’re trying to do be it, you know, hardware with Apple TV itself, or do some sort of service that could, you know, combine all of the various different services that are out there, including cable into a compelling package with a nice UI to be able to serve up to customers. And I think, honestly, I think that’s what they should do. I know that they had issues with getting everyone on board, for obvious reasons. I think people were afraid the Hollywood players were afraid that, you know, they would do what they did with iTunes, which is basically take over the music market, the music industry, and they would have no say over it. And so there are reasons why that didn’t happen. But I think from a consumer perspective, that absolutely needs to happen. I’m not saying that it needs to be apple, but eventually there’s gonna be too many services, and we’re not gonna be able to find what we want to watch, even if we can pay for everything, which obviously, everyone is not going to do. And so someone needs to unify all of this. And so I would be more excited for Apple continuing to work on that than what they’re doing with original content. Agreed.

27:26
It’s not friendly right now, right? I have HBO GO Showtime, anytime, Hulu, Netflix, I mean, it’s it’s tough bouncing back and forth between these things. from a user standpoint, the user experience is not streamlined and not friendly. Apple’s going

27:45
to get so much worse, like, the end of the year and into next year, we’re getting the NBC peacock thing and like there’s all these other services Kwibi there’s all these things that are going to launch? Yeah.

27:56
Yeah, it’s amazing. And you just talking about the catalog for Disney and all the IP they have it, it makes me think actually a long held thought I’ve had is there is a consumer brand that has a tremendous catalogue, tremendous IP, that’s embedded in us nostalgia, that’s kind of under exploited and underutilized. What they have in its it’s not a US company, but Nintendo is one that I’ve felt like long had the potential to be kind of a little brother to Disney. And I just feel like they haven’t fully utilized all the assets that they’ve created over time.

28:36
I totally agree. I mean, I’ve been harping on this for a few years at this point now, largely from the position of should Apple acquired Nintendo, right. Okay. Provocative headline, and I’m hardly the only one also like, you’re obviously thinking about it. Many others have been thinking about it as well. And written things about this. I do you think though, it’s becoming more and more compelling over time. And most recently, with Apple launching the Arcade service, right, which, which is actually very good. It’s the thought for 99 a month, a highly curated mobile gaming effort that they’re doing, and it’s very good. But I do think a way that can make it an absolute just mega mega service would be if they had been intend to IP on it, right. And I’m sure they’re having discussions with Nintendo in that regard, but just bringing over some of the games, but imagine if they owned that IP, and they can have it exclusively. I think that that makes that service, an absolute no brainer, both for it and the strategic purpose as you’re mentioning, but Nintendo still makes fantastic games, I have the switch. There are amazing games on their amazing new games that they continue to make with the IP that they have. And they’re still working on the end. They have new newer IP two that they do a good job with. And so I think that that makes sense from that perspective. The Disney Side is also very interesting, and I wouldn’t be shocked, given what Disney has done in the past as we talked about acquiring different massive pools of IP. As you note Nintendo is one of them and one that Disney could do unique things with in terms of films obviously people have tried to make Nintendo based films in the past that haven’t worked so well I think Super Mario with John Leguizamo and Bob Haskins, that was pretty awful back in the day, but someone eventually will nail this. It reminds me of the comic book movies, right. And in the 80s, too, that people tried to do and they were pretty bad. And then they were pretty bad until they were amazing. And then they were the biggest moneymakers in the world. Right. And so I feel like you can do something similar with some of the IP that Nintendo has maybe, you know, maybe it’s, it’s too aspirational to think that they can get up to the comic book level with superhero movies that we have now. But I they can obviously do better than they have been doing. And Disney would be the one to be able to pull that off from a cinematic perspective. That’s for sure. And so then it becomes a question of, you know, why hasn’t this happened before? There’s a lot of talk of it’s very hard to acquire Japanese companies. There’s cultural reasons. You know why? It seems like it would be very hard to do. But I think you know, over time, it becomes more and more obvious that that’s what should be done. As Nintendo as the video game industry morphs under Nintendo’s feets obviously happened a few times, they’ve been able to come back from what seemed like the brink a few times, first with the Wii. And then you know, now even with the switch after sort of the Wii U is a disaster. And but things are continuing to shift. We have Sony, Microsoft, Google all launching cloud gaming services, right? Can Nintendo if that actually works? And it seems like there’s compelling reasons to believe that we’ll be at least in some capacity, the future of gaming can intend to compete in that I don’t know.

31:28
Well, to your earlier point, if there’s one company that has the machine to leverage the value of assets, and also get a lot of value out of them, it’s it’s Disney. But to switch gears a little bit. So you know, I heard the announcement about Facebook, acquiring control labs. So congrats on that, mg, why is this a good strategic buyer for Facebook?

31:47
So control Labs is one of the most interesting startups that certainly I’ve been, you know, associated with in recent years. And we talked about in the beginning, you know, the, quote, unquote, consumer nebulous consumer. So this one is pretty far afield. It still has consumer elements to it, but it’s basically, you know, hardware that’s enabling a user potentially, to be able to access what their brain intends them to do. And sort of intercepting, the easiest way to think about it is, you know, we all have, we all have hands that we use that take directions from our brain, in order to do various things, typing on a keyboard, playing a video game, doing surgeries that you know, all sorts of things, that the hand is the output mechanism of what’s going on in your brain, or, you know, the external world. Imagine if you could intercept the signal in front of it going to your hand, that’s sort of what controls set out to do with it. But their armband. Amazingly, they were able to do it, obviously, the team there is incredible. They have neuroscience backgrounds, on top of tech backgrounds, Reardon, the CEO, actually was was, you know, he’s considered the father of Internet Explorer when it was at Microsoft. And so he has a very heavy tech tech background, left Microsoft to go get his neuroscience degree and then teamed up with a bunch of other neuroscientists are working on this problem. And again, amazing results. And so when you see the demo of this thing, and you see that you can basically manipulate what’s on a screen without having to move your hands as you would if you were typing, or if you were, again, using controller. It’s just an amazing thing to behold. And so I think Facebook looked at that. I think we all know what, you know, they have aspirations to do with Oculus, but then they have a lot of other things that they’re working on, it seems like internally with with different newfangled technologies, because again, you know, they have to figure out what’s next after the smartphone, because they don’t own the smartphone platform, right, they’ve done a very good job being sort of the main app that the billion user plus service that people use on their smartphones, but at the end of the day, they don’t control the device that everyone’s using it on. And so they’re beholden in some ways to those other companies that do, you know, I have to believe that they think and everyone thinks that innovation isn’t dead with the smartphone, you know, you can make an argument that we might not get to the same scale that we’ve gotten to with the smartphone, but I think Facebook is very savvy and thinking about what is next. And obviously they, like I mentioned, they’ve done a lot of stuff in VR. And it’s, it seems like, you know, the timing hasn’t been exactly right yet, but they’re continuing to invest in it. Obviously, a lot of investment in AR But then what do you do also on the again, interface side of the equation, and how do you interact with these things? And it’s, it doesn’t seem like it should just be a keyboard or a mouse as the old paradigm? No, it was back in the day. And so they’re super savvy, when they look to control it.

34:30
Wouldn’t amazing company control as unreal. You know, while we were talking about smartphones, you know, there’s constantly things coming out about sort of the impact of constant stimulation and constant content consumption and people just being wired to their phones, right. And even I’m noticing like, all these tools that I use for productivity have made, whether they’re on the phone or not, they’ve made me so much more productive and efficient. But it also means I’m doing less monotonous, too. less less repetitive tasks. And so I’m locked into much more strategically demanding things on a regular basis, you know, get to the end of the day pretty wiped out. And so just wondering for your general take, you know, how is all this tech? And how is this constant stimulation and constant sort of mind occupying activity, you know, affecting people’s creativity, happiness? And is this an adverse net effect on you know, the user public?

35:34
It’s a good question. It’s something I think about a lot of certainly coming from Creative sort of, you know, on the writing side background, right. So I try to still access the creative parts of my brain from time to time, but it’s harder, it’s harder than ever to do is, as you note, like, there’s just a million things pulling at you at any given second, with notifications on the phone, with all these TV services, launching, with video games, everything else that we have out there. And I think that it is a very fundamental question, you know, over the next decade, for all of us, the thing that I go back to most recently, I have a pretty young baby just about to turn one actually tomorrow. And so congrats, thank you, I think about her life as she grows up. And, you know, in this world of always on devices always connected to the internet. You know, I’m not that old. But I grew up in a time where that wasn’t the case. And I think now, it’s just going to be totally different. And it seems to be accelerating as we go forward. So I think about like how trying to extrapolate out how her life will play out in the world in which we currently live. And in some ways, of course, it’s impossible. But I want I can’t help but wonder if we actually start to see sort of a natural backlash amongst younger people and younger generations against some of the ways that we’re interacting right now. And I think you already see this with some of the younger generations, maybe teenagers or the generation just below that, in that, you know, there’s sort of this feeling, maybe in some cases of animosity against, you know, parents always being on devices and sort of devices being viewed as sort of a bad thing in that regard, because they’re sort of just taking up so much mindshare of a parent’s life from a child’s perspective. And so my wife, and I certainly tried to be mindful of that already, even though she’s our baby is so young. But I wouldn’t be shocked if there’s just again, this natural sort of progression amongst young people to sort of correct the way that society has, has basically rolled out over the past decade. Again, I think, you know, we can blame ourselves for that. But it’s pretty hard to do, because it’s just, there’s this amazing technology that is in your fingertips, I mean, we have access to the entire world’s information at all times 24/7 in our pockets. That’s incredible. When you think about it, I mean, it’s absolutely incredible. If I would have thought about that, when I was a kid, it would have seemed impossible, if I would have thought about that 20 years ago would have seemed impossible. And now we have it. And now everyone basically has an increasingly everyone on the planet is going to have that access to that as smartphones get cheaper, and they and cell service becomes more and more fast cell service becomes more and more ubiquitous, everyone’s going to have access to that. And that’s, that’s incredible. But again, there’s downsides to that. And so I find it hard to like blame ourselves for taking full advantage of that incredible gift that we’ve been given in that regard. But I do think that, you know, we’re starting to see people being more and more mindful about that, including some of the big companies, right, they’re all everyone from Apple and Google on down are trying to launch things to tell you more about how much you’re using your device and trying to be more savvy about the way that they send out notifications and all those types of things. Sure.

38:33
Sure. You know, it kind of makes me wonder, when the printing press came out, and books became ubiquitous, you know, was there a big backlash that kids are being getting lost in books, right? Or when the phone came out? You know, are people getting distracted? And by conversation or when the TV came out, you know, are people becoming zombies to the TV, and this is a whole new level, right? It’s kind of more of a 20 24/7 access to whatever you want from a content standpoint, but I feel like we’ve seen this movie before.

39:04
I agree. And it’s funny, my dad was actually just in town visiting ahead of the little ones birthday. And he would note like, he basically brought up at one point, what do you say to us when we were kids, which is like, you know, TV rots your brain? And so, you know, the notion of like, you know, you shouldn’t be in front of the TV all the time. And now that seems quaint, right? In some ways, like TV services, which people were around the TV more as ratings fallen, and it seemed like it was going to go in the opposite direction. So I think you’re right, like, obviously, this is a this is a new different beast. But in some ways, it harks back to the beast of your where there was television, there was radio, there was newspapers there and there was books. And one point maybe there was cave drawings that that you know, people were getting a little bit too obsessed with and whatnot. So I think that, you know, history obviously repeats itself, but we have to be careful about the ways that just how quick these things can happen now and how ubiquitous all of this is because even with television, you know, like you had to be at home to be able to do that and it just wasn’t feasible to be at home too. 24/7 Whereas with a smartphone, you really do have it on you 24/7 How many people are suffering from insomnia because they’re always just checking their phones at night. I’m sure it’s a, you know, certainly not a nonzero number. And so So I think we have to be more mindful whenever. But there are certainly things to take into account when you consider that a lot of these things are cyclical in nature. And again, that’s why I think like there might be a natural sort of progression and backlash if you want to call it against using some of the technology and the ways that we’ve been using it right now.

40:29
Does mobile maintain its position as sort of the de facto standard of interaction for people? Or do you think AR takes over, you know, within the next three to five years? Or, you know, what do you think that that timeframe looks like?

40:43
So this is the question that, you know, has come up at basically, since a few years post the iPhone launch, right, because the question, certainly from an investor’s investor perspective has to be, you know, what is the next platform to launch because then that will, that will launch, you know, 1000 new interesting startups, and then, you know, that we could potentially invest in the reality of the situation is that obviously, nothing has launched to the scale of the smartphone. And I think now, most people would recognize that it’s very likely that we’re not going to see any new device that launches that gets out there at the same scale that the smartphone is it’s just a unique device that has unique characteristics that’s allowed it to expand to the base that it has. And sort of, you know, we’re at saturation, it seems like in, you know, the US and some of the other Western markets. And we’re not there yet in some of the other countries, but eventually, it seems like we will get there. And it’s a device that everyone in some regard will have at some point. And so it’s really, obviously, it’s a tall order to be able to think of anything else can get there. You hate to say, you know, never but does seem like it’s just too tall of a task, the way I currently think about it is, rather than it being you know, VR, AR, you know, at some point it was people talking about the watch. And you know, that’s coming back into play, because it’s becoming more of a standalone product. It’s, you know, the Apple Watch, right? You think that all of these things that basically form like what I would just call sort of computing in concert. So it’s not just any one of these devices, in particular that takes over the other one and replaces the other one anymore. It’s all of these things being used together. And sort of I think Apple has been rather smart in the way that they’ve rolled out things like the Apple Watch, and rumors of them doing sort of an AR headset, both of those things, potentially being tethered to your phone, I think is both the smart way to roll them out. Because obviously you can rely on the computing power of the phone rather than having to bake things into smaller devices, which are there watch or potentially glasses be. But also because I do think that they’re all going to interact with one another, I don’t again, think that it’s going to be smart glasses replacing your smartphone or the Apple Watch replacing your smartphone, I think that they’re all going to be used in different capacities and different parts of the day, and will have their own use cases, we’re seeing that already with the watch with healthy use cases. And we’ll see what happens with with future eyewear products and, and anything else that comes out. Again, I think it’s this computing and concert notion where it’s all of these devices together that interact with one another and sort of provide this this interesting data stream that is your computing life. Love

43:17
it and maybe even control Labs has a role to play in that right, exactly. That was

43:22
100% part of the thesis behind that investment that it’s not just going to be one next new paradigm computing paradigm that takes over, it’s going to be a bunch of different ones. And we’re going to need ways to interact with those devices as well. The more

43:37
friction you can remove between intent and result, right, whether it’s steps or time or whatever. Yep. I mean, that’s, that’s where technology is taking us. So

43:47
it’s also just computing fading more into the background. And we’re seeing that already. I mean, it’s sort of hard to perceive because it’s happening so gradually, but more and more, there’s just computing all around us that we don’t really interact with directly, right.

43:59
Yeah, yeah, we invest a lot here in IoT, and that’s central to our thesis as well. So switching gears here, mg, if you had to pick one writer, so this could be a venture investor could be you know, blogger, could be a writer at one of your your former employers, who do you make sure you always read who’s kind of one of your go to folks that you’re definitely going to consume what they’re putting out? Yeah,

44:26
so I have a few people. And it’s, I guess, sector dependent. So like for Apple stuff. I obviously read John Gruber, who’s the guy behind Daring Fireball, he seems to be, you know, continues to be sort of the one of the preeminent sort of thought leaders around what’s going on with Apple itself. And, you know, just a very savvy guy in that regard. On the VC side of things still very much read everything that Fred Wilson puts out there. You know, he’s sort of the prototypical aspirational person who has been able to blog on a daily basis about you know, the venture industry and now, I’m able to write from time to time it would be amazing to be able to read on a daily basis like he As. And then another one that sort of come into my orbit more recently is a guy named Matt Levine, who writes a a newsletter for Bloomberg under Bloomberg opinions, which is just very funny, but also pretty, I think, pretty insightful about just money markets in general, and finance. And so those are three things that I think about on sort of a daily basis that that I’m definitely reading well

45:24
of it. So I got to ask you this question. I, if our research is correct, you’re an Ohio native that went to Michigan, that found himself in Hollywood and subsequently in San Francisco as a venture capitalist. But I believe that you have this passion for for Hollywood and screenplays and media, and it certainly comes through in your writing. So out of curiosity, you know, if you ever get around to writing that screenplay, what what do you write about?

45:48
Yeah, so I thought that’s what I was going to be doing. When I graduated college, I drove out to Los Angeles and started working at the lowest level, you know, Pa jobs in Hollywood, getting people coffee and whatnot, and working on the movies and things like that. And that’s what I thought my career would be with the notion that eventually Yeah, I would like to be doing screenwriting, again, going back to the writing idea. And so one day, I would, as I know, like to write that screenplay, obviously, I’ve tried, I’ve dabbled in it a bit, but haven’t sort of gotten anything out there that I think would be worthy of it. And I laid down that pen a long time ago at this point. But one day, I do aspire to go back to that and figure out a way to, to write in that capacity. And so if I had to think about what I would write a screenplay about, I still, I’ve always gravitated more around more on the science fiction side, but maybe less like less sort of Star Wars or Star Trek and more just like futuristic technology, unsurprisingly, given what I do these days, sort of along those lines, science fiction along the lines of reality based science fiction. Awesome.

46:52
Well, maybe I’ll be interviewing you in a couple of years about your Hugo Award.

46:56
Oh, I mentioned it’ll be more than a couple of years. But there’s some some way to get back to that in the future.

47:02
Love it. If we could cover any topic here on the program? What topic do you think should be addressed? And who would you like to hear speak about it?

47:09
Yeah, that was a good one. I didn’t have a great answer. I do think that there’s, I think that one thing that’s sort of along your earlier lines of questioning, the changing face of VC, I think is pretty interesting. So just the different avenues that people take to get into the industry. Now, you know, back in the day, of course, it was just largely people from the finance industry, right, that sort of overtime, moved over to either from investment banking, from Wall Street, or, you know, something else that was tangential to that, and then moved over to doing investments. In some cases, obviously, over time, it’s become wealthy individuals who have had success, maybe in the tech space, doing, you know, angel investments, and then starting their own firms, by that way. But it’s, it’s increasingly it seems like, it’s moved from what was like a, you know, an older person’s game, maybe because you had to have had the success and or accumulated some amount of capital to be able to do it. It’s now it’s almost feels like a younger person’s game, which is interesting. And I think that there’s a number of like newer VCs that you could talk to who would have interesting thoughts around why that’s been the case. And I think the weird thing there is the jury might still be out in terms of is that the right call? The problem is that the the industry is so slow moving, relatively speaking, and take so long to get to outcomes to actually know quote, unquote, how you’re doing right person, as an investor, but there’s without question, even over my short time horizon doing investing, it’s shifted so dramatically towards, you know, towards younger generations doing this and wanting to do this. And so, you know, people you could have on, on to talk about that, I think would be fascinating, you know, I happen to live and be married to another VC who comes from the operating world, she worked at Google and square after that. And so she has interesting perspectives on it. That’s totally different than mine. But, you know, we have a lot of friends now in this industry for good or bad, but they’ve come at it from different angles, which I just think I find to be interesting,

48:57
interesting perspective. I have not heard that before. But it’s, it’s very true. And gee, what investor has influenced you most.

49:05
And that’s where I once again cut myself off, because I will have to say, my wife here, and that is true. So she’s a general partner at Spark capital right now before that, she was at Kleiner. But And before that, like I mentioned, she was an operator, but she just has a totally different mentality, first of all, because she does growth stage investing. So she, you know, helps run sparks growth stage investment, she has a totally different mentality coming out investments than I do. But when people ask, you know, like, how is that awkward, like, you know, to have a spouse that does the same thing that you do? And it’s not at all in our case, because again, like we come at it, I come at it from the early stage side, she comes at it from the later stage side. And so, in my view, all of all of what we do is about data triangulation and figuring out you know, different viewpoints and trying to get to the ground truth of what’s actually happening both within a company within an industry within a sector and having someone in your home who you can spit ball with and get different points of view on is is immensely helpful. And so, you know, obviously we talked about what we do on a basically daily basis as much as we’d like maybe to take a break. And so without question, she’s the most influential for me.

50:10
Awesome. And finally, what’s the best way for listeners to connect with you?

50:16
Probably on Twitter. That’s, that’s still the most fun, lightweight way to connect. I’ve a long hatred of email. But you know, there’s ways to get in touch with me via the old school mechanisms. But I enjoy actually using Twitter and I can still find it, find compelling conversations being had there. So I’m just at mg Siegler on Twitter. Well,

50:34
mg, thank you so much for doing this, I think I think you may be the most requested guest or we’re very close to it. So super happy we got a chance to go deep on some of these topics and also happy to appease the masses and, and not get so many requests. So thank you so much for doing it.

50:53
Yeah, thank you now

51:00
that we’ll wrap up today’s episode. Thanks for joining us here on the show. And if you’d like to get involved further, you can join our investment group for free on AngelList. Head over to angel.co and search for new stack ventures. There you can back the syndicate to see our deal flow. See how we choose startups to invest in and read our thesis on investment in each startup we choose. As always show notes and links for the interview are at full ratchet.net And until next time, remember to over prepare, choose carefully and invest competently. Thanks for joining us