20VC Benchmark's Mitch Lasky on The Snapchat Journey From Series A to IPO, Why Small Is Beautiful In Venture Partnerships & Why Venture Is Very Much Like Hollywood

In this episode of 20 Minutes VC, host Harry Stebbings interviews Mitch Lasky, general partner at Benchmark, discussing his transition from CEO at Jamdat Mobile to venture capital, the unique decision-making process at Benchmark, and his skepticism about VR's mass-market appeal compared to AR's integration into social experiences. Lasky also reflects on the evolution of esports, comparing it to traditional sports and questioning its potential to match their scale. The conversation delves into Lasky's experiences with Snapchat, highlighting the importance of adapting VC practices to fit the needs of visionary CEOs like Evan Spiegel, and emphasizing the role of deep product thoughtfulness and consumer understanding in driving success. Lasky's insights reveal a cautious but optimistic outlook on emerging technologies and the role of venture capital in fostering innovation.

• Harry Stebbings is the host of the "20 minutes VC" podcast.
• The show focuses on the world of venture capital.
• Harry Stebbings can be found on Snapchat.
• Personal messages are sent to all new ads on Snapchat.
• Mitch Lasky, a general partner at Benchmark, is the guest.
• Benchmark is one of the world's leading VC funds.
• Benchmark's portfolio includes Twitter, Uber, Snapchat, eBay, WeWork, Yelp, and others.
• Mitch Lasky has been involved with companies like Snapchat, Riot Games, Discord, Outpost Games, and Synogen.
• Mitch was the CEO of Jamdat Mobile, leading it to an IPO and sale to Electronic Arts.
• Thanks were given to Tim Chang and Peter Fenton for introducing Mitch Lasky to the show.

You are listening to the 20 minutes VC and welcome back to another week in the world of venture with your host Harry Stebbings at h stebbings with two b's on Snapchat.

This quote introduces the podcast and its host, Harry Stebbings.

And today I'm very honored to say we are joined by Peter's partner Mitch Lasky, general partner at Benchmark, one of the world's leading vc funds...

This quote introduces the guest, Mitch Lasky, and gives background on his professional affiliations.

• EShares is a cap table management platform recommended for equity management, 409A valuations, and liquidity.
• EShares serves companies of all sizes and is trusted by over 5000 customers, including Squarespace, Kickstarter, and Doordash.
• Fond is an employee engagement suite with rewards, perks, and Engagement IQ products.
• Fond's offerings are designed to engage employees and measure organizational health.

...eshares most certainly is. EShares is the number one cap table management platform...

This quote highlights the importance of EShares as a cap table management tool in the venture capital industry.

...that's where fond comes in. Fond is the employee engagement suite with three core products...

This quote introduces Fond as a tool for enhancing employee engagement within organizations.

• Mitch Lasky entered venture capital from an operating background.
• He was a CEO of a startup that went through an IPO and a sale.
• Mitch had been a senior product executive at video game companies.
• He acknowledges that his background could lead to hubris in VC.
• Mitch was a Benchmark portfolio CEO, with Bill Gurley investing in his startup.
• He joined Benchmark because of his admiration for Bill Gurley's approach.

So I came to the venture business from an operating background...

This quote outlines Mitch's journey from an operating role to venture capital.

...I don't think I would have entered the venture business anywhere else except benchmark.

Mitch expresses his specific interest in joining Benchmark due to his respect for Bill Gurley and his approach.

• Benchmark operates with a "small is beautiful" approach.
• The firm values mutual respect and trust among partners.
• Benchmark avoids a hierarchical structure, allowing for unified decision-making.
• The firm's culture emphasizes fun alongside professional respect.

...there's a sort of small is beautiful approach that really works.

This quote describes Benchmark's philosophy of maintaining a small, tight-knit group of partners.

• Benchmark uses an advocacy model for investment decisions.
• A partner or partners act as advocates for a company during discussions.
• Other partners provide balance and protect against overenthusiasm.
• The process is collaborative, aiming for a good solution rather than adversarial.

Well, we have kind of an advocacy model...

Mitch explains the unique approach Benchmark takes to investment decision-making.

• Mitch had no investing experience when joining Benchmark.
• He experienced a steep learning curve and was initially inexperienced.
• His partners allowed him to learn through nondestructive failure.
• Mitch's approach to investing has matured since joining the firm.

...I was a complete idiot for the first 18 months or so that I was in the venture business.

This candid admission by Mitch highlights his initial lack of experience in VC and the growth he experienced at Benchmark.

• Venture capital and Hollywood share similarities in unpredictability, hit-driven nature, and talent evaluation.
• Both industries are speculative, with no guaranteed formula for success.
• Hits in both sectors create significant economic impact and drive the pursuit of similar successes.
• The venture business and Hollywood can overvalue experience and pattern matching, potentially at the expense of innovation.
• Venture capital has adopted a celebrity-like status, which may not be entirely positive for the industry.

"First, sure, it always pains the Silicon Valley folks when I make that comparison to Hollywood, but I think it's kind of apt."

This quote introduces the theme of similarities between venture capital and Hollywood, acknowledging the discomfort this comparison causes in the tech community.

"Both are incredibly hit driven. I think the value of hits like Facebook and Google in the venture business, or the Star wars movies or the Marvel franchise in Hollywood create sort of orders of magnitude more gravity in our business than even good or very good results with other companies."

Mitch Lasky explains that both industries are driven by major successes, which have a disproportionate impact compared to moderate successes.

"I think both of the businesses are very much about access to talent and value and ability to evaluate talent."

This quote highlights the importance of talent in both industries and the need for accurate talent evaluation.

"And I think both share a tendency to overvalue experience and sort of historical pattern matching, potentially over taking chances on really non continuous innovations."

Mitch Lasky discusses the risk-averse nature of both industries, which may prioritize experience over groundbreaking innovation.

"And I'm not sure that's necessarily a good thing."

The quote expresses skepticism about the increasing celebrity culture in venture capital, implying it might not be beneficial for the industry.

• Mitch Lasky is skeptical about VR's mass-market potential and is cautious about investing in the application space due to high costs and uncertain market development.
• The Facebook Oculus acquisition is seen as both validation for VR and a premature push for the industry.
• Gaming is recognized as an obvious application for VR, but its potential to define VR as a next-generation technology is still uncertain.
• AR is viewed more favorably, especially as implemented by platforms like Snapchat, but skepticism remains for visor-based AR solutions.

"Well, I've been a pretty well known skeptic about VR."

Mitch Lasky introduces his stance on Virtual Reality, setting the stage for a detailed exploration of his views.

"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."

This quote emphasizes the behavioral aspect of VR adoption, indicating that widespread use would require VR to enable new, compelling behaviors.

"I think that happened kind of prematurely in the sense that we didn't really know what VR was good for yet."

The quote criticizes the timing of the Facebook Oculus acquisition, suggesting the industry wasn't ready for such a significant move.

"But at some point we may have a huge market. At some point we may have a market that looks more like a video game console market, which would be an interesting market, but it would be very different than the sort of next cell phone that I think some folks who are more boosters for the virtual reality business believe."

Mitch Lasky speculates on the potential future of the VR market, comparing it to the video game console market rather than the ubiquitous cell phone market.

"Yeah, I think it's relatively obvious as a gaming peripheral, certainly it's as an enhancement to that preexisting experience in a 3d world."

The quote acknowledges the clear potential for VR in gaming as an enhancement to existing 3D experiences.

"But AR, in terms of when you look at Snapchat usage, it's fully integrated into kind of social life where you add bunnies to Mitch Lasky's head, or do you know what I mean? Which is a completely different social experi"

This unfinished quote suggests that AR has successfully integrated into social experiences through platforms like Snapchat, offering a contrast to VR's more isolating nature.

• The speaker is bullish on AR due to its potential to merge real and virtual worlds.
• Pokemon Go is cited as an example of AR's compelling applications.

ence. So for me, that's why I'm so bullish on AR and not VR. This quote expresses the speaker's preference for AR over VR, highlighting the significance of AR's ability to integrate with the real world.

• The speaker has invested in successful esports ventures like Riot Games.
• There is a cautious approach to investing in esports due to its perceived immaturity.
• The speaker is skeptical about investing in ancillary esports businesses without fully understanding esports itself.

I'm very excited about the prospects, but I'm also cautious in the sense that 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 what I'd call epiphenomenon without actually sort of thinking about the thing itself? This quote reflects the speaker's cautious excitement about esports and concern that the market may not be as mature as some investors believe.

• The speaker believes esports is unlikely to reach the size of traditional sports.
• The "television problem" is a major barrier to esports' growth.
• Traditional sports benefit from decades of narrative development through television.

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. This quote conveys the speaker's skepticism about esports reaching the size of traditional sports, citing the challenge of adapting to television as a key hurdle.

• Epiphenomenon refers to secondary effects or byproducts that arise from a core phenomenon.
• In the context of esports, it includes businesses that are enabled by, but not central to, esports itself.

I mean, basically, the things that are sort of embroidered are riding on top of the core phenomenon. This quote defines epiphenomenon as peripheral businesses or aspects that are built upon the primary esports phenomenon.

• The speaker reflects on Snapchat's growth from a small team to a major company.
• The speaker discusses learning how to work with a CEO like Evan Spiegel and adapting to his unique approach.
• The speaker highlights the importance of adapting venture capital practices to the specific needs of a company like Snapchat.

I really think it just taught me an enormous amount about being a VC in particular, and how to work with a CEO like Evan, who's really a kind of once in a generation talent. This quote shares the speaker's experience of learning from working with a unique CEO and the satisfaction of watching a company grow.

• Understanding the CEO's needs is crucial for a venture capitalist.
• Adapting traditional VC strategies to fit the company's unique circumstances is vital for success.
• The speaker emphasizes the importance of flexibility in the VC role to support a visionary CEO.

I mean, I think partially it's about understanding what he needs me to do as opposed to what I think I ought to do as a traditional venture capitalist would do. This quote highlights the necessity of aligning venture capitalist actions with the specific needs of the CEO and company.

• Evan Spiegel is described as thoughtful and confident.
• His understanding of product development and user experience is emphasized.
• Spiegel's instincts and approach to technology are seen as key to his success.

I think it's a combination of real thoughtfulness... He's got tremendous instincts about particularly young people's desires and how they look at technology and how they want to use technology. This quote attributes Evan Spiegel's success to his thoughtfulness and instincts, particularly regarding the desires of young people and their interaction with technology.

• The speaker discusses maintaining motivation despite past successes.
• The question of self-motivation is raised in the context of a high-performing venture capital fund.

How does one continue to self motivate and strive for that 03:00 a.m. Term sheet when you've achieved so much as This incomplete quote raises the issue of self-motivation within a successful venture capital team, questioning how one stays driven after significant achievements.

• The team at Benchmark values doing the work over celebrating successes.
• They maintain humility and a sense of humor about their achievements.
• They limit self-congratulation and focus on delivering results to their limited partners.
• The Snapchat IPO was met with a subdued celebration, exemplifying their work-focused culture.

"And it's really not. I mean, the results are fantastic. And I would be lying to say that we're not thrilled by the performance and our good luck in the investments that we've made in our fund seven and in our previous funds. But at the end of the day, we get up every day to do the work, and I think that's what kind of keeps us going."

This quote emphasizes the team's focus on the process of work rather than the outcomes. It highlights their commitment to daily effort and a culture that prioritizes consistent effort over resting on laurels.

• Mitch Lasky is an avid reader who finds it difficult to choose a single favorite book.
• He mentions "The Genius of the System" by Thomas Schatz as a notable book on the business history of early Hollywood.

"I'm a pretty voracious reader, and it would be hard to pick a favorite."

This quote reflects Mitch's passion for reading and his broad interests, suggesting that reading widely is a valued part of his life and potentially his work in venture capital.

• Benchmark sees opportunities for rejuvenating the firm with younger partners and increasing awareness of diversity.

"I think we have an opportunity, as the current group of partners comes to the, in the next decade or so, comes to the end of their careers, to really reinvigorate the firm with youth and I think an increasing awareness of diversity."

Mitch Lasky identifies the potential for generational renewal and a focus on diversity as areas for improvement, indicating a forward-thinking approach to the evolution of the firm.

• The Snap IPO stands out as a significant highlight in Mitch's career, representing a culmination of many aspects of his work.

"I think the snap IPO clearly was just the culmination of so many aspects of the practice for me, and I guess I put that one at the top of my list."

The quote signifies the Snap IPO as a milestone achievement that encapsulates much of Mitch's experience and success in the venture capital industry.

• Mitch enjoys Bill Gurley's blog and soccer-related podcasts such as The Guardian's Football Weekly and The Football Ramble.

"And I'm a big soccer fan. And so I listen every week to the Guardians football Weekly and to the football ramble."

Mitch's interest in soccer and specific media content reveals his personal hobbies and how they intersect with his professional life, suggesting a balance between work and personal interests.

• Venture capital is seen as a young person's game requiring hustle.
• Mitch is focused on mentoring the next generation of partners and maintaining a fresh approach to evaluating new companies.
• He emphasizes the importance of fighting against biases and staying engaged with the evolving aspects of the industry.

"I think staying engaged with that aspect of the practice and really also trying to keep that sort of childlike approach to new companies when they come in."

This quote illustrates Mitch's commitment to continuous learning and development within his role, as well as his dedication to nurturing the next generation of venture capitalists.

• Outpost, a company building an audience participation platform for multiplayer gaming and esports, is a recent investment.
• The company is transforming the gaming experience by creating a more interactive audience presence.

"But the last announced one, I guess, was outpost, which is a really interesting company that's building an audience participation platform for multiplayer gaming and esports."

The quote explains Benchmark's investment in Outpost, highlighting the company's innovative approach to enhancing the gaming experience, which aligns with the firm's investment interests.

• Mitch expresses gratitude for the opportunity to be on the show and for the introductions facilitated by Tim Chang and Peter Fenton.
• Harry Stebbings offers a personal connection to listeners on Snapchat and thanks Mitch for his time.

"And cannot thank him enough for giving up his time."

Harry's closing remarks convey appreciation for Mitch's participation, emphasizing the value of the time and insights shared during the interview.

• Eshares is recommended as a must-have for equity management, 409A valuations, and liquidity.
• Fond is suggested for employee engagement with rewards, perks, and engagement surveys.

"Eshares is the number one cab table management platform, allowing for equity management 409 a valuations and liquidity all in one place."

The endorsement of Eshares and Fond underscores the importance of these tools for venture capitalists, highlighting their utility in managing various aspects of investment and employee relations.