20VC Lowercase's Matt Mazzeo on Being Chris Sacca's Partner and The 3 KPIs to Successful Investing

In this episode of "20 minutes VC," host Harry Stebbings interviews Matt Mazio, managing director at Lowercase Capital, discussing his journey from Creative Artists Agency to venture capital and his role in founding incubated startups like Funny or Die. Mazio shares insights into the personal brand building, the importance of adding value before seeking it, and the concept of 'hustle.' He also emphasizes the significance of being outside the echo chamber, as he operates from LA, and the evolution of his investment decision-making process. Additionally, Mazio highlights Lowercase's unique approach to supporting portfolio companies, such as Lowercase Alpha, a platform for beta testing new products. The conversation delves into the nuances of VC, the long-term approach to investment, and the personal ethos that guides Mazio's and Chris Sacca's investment choices, including the 'icky rule' to avoid morally compromising investments.

• Matt Mazzeo is the Managing Director at Lowercase Capital, working alongside Chris Sacca.
• Lowercase Capital has a portfolio of over 40 investments, including high-profile companies like Uber, Twitter, Stripe, and Optimizely.
• Matt Mazzeo has a background in digital and venture efforts at Creative Artists Agency (CAA) and contributed to the founding of incubated startups such as Funny or Die, Hussei, and Moonshock.
• Recognized for his influence across technology, entertainment, and advertising, Matt has been named one of the most creative people in business by Fast Company and made Forbes Midas Brink list in 2014.
• Matt is also recognized on Ad Age's 40 under 40 and The Wrap's inaugural innovators list.

"And prior to joining Chris at Lowercase, Matt spearheaded many of the digital and venture efforts at creative Artists Agency, where he played an integral role in the founding of CAA's incubated startup companies, including one of my favorites here, Funny or Die, Hussei and Moonshock."

This quote highlights Matt Mazzeo's significant contributions to the startup ecosystem through his work at CAA before joining Lowercase Capital.

• Matt Mazzeo is described as charming, lovely, and fun, which is reflected in his interview.
• Harry Stebbings, the host, aims to uncover unique insights from Matt Mazzeo, having listened to all his previous interviews.

"And I really have to impress on you that Matt was the most charming, lovely, and fun guy, and that's really reflected in the interview today."

The quote emphasizes the engaging and personable nature of Matt Mazzeo, setting the tone for the interview.

• Matt Mazzeo met Chris Sacca at South by Southwest during a late-night jam session organized by Gary Vaynerchuk.
• The meeting involved discussions on the future of technology and networking with influential figures in tech.
• Matt's uninhibited and knowledgeable participation in the debates impressed Chris Sacca and others in the room.

"And that's where I met Chris, in a tiny little twin bed suite at the Hilton hotel, talking about the future of tech and drinking far too much wine."

This quote provides context for the initial encounter between Matt Mazzeo and Chris Sacca, which would later lead to a significant professional relationship.

• Matt and Chris developed a close friendship over eight years, with their paths crossing in the media and entertainment sectors.
• Chris Sacca had suggested Matt consider joining one of his portfolio companies, but Matt was content with his role at CAA at the time.
• Their ongoing interactions and aligned interests eventually led to Matt being asked to join Lowercase Capital.

"Chris and I became closer and closer friends and kept sort of running across each other as he did more stuff in media and entertainment."

This quote summarizes the growing relationship between Matt Mazzeo and Chris Sacca, leading up to Matt's eventual recruitment to Lowercase Capital.

• Matt Mazzeo enjoyed his time at CAA, valuing the mentorship and relationships formed there.
• Chris Sacca's invitation to join Lowercase Capital was a turning point, leading Matt to leave his established career at CAA.
• The transition involved a shift from a behind-the-scenes role at CAA to a more public-facing position in the venture capital industry.

"The plan was to die in a suit at that place. I loved it. I loved the clients. I loved the agents."

The quote reflects Matt Mazzeo's dedication to his previous role at CAA and the significant decision it was to move to Lowercase Capital.

• Chris Sacca encouraged Matt to shed his corporate mindset and embrace a more expressive and personal approach to venture capital.
• The venture capital industry has been shifting towards personalities and thought leadership, a change from the traditional behind-the-scenes role of agents at CAA.
• Matt was expected to be more front and center with his opinions and personality in his new role at Lowercase Capital.

"This isn't a job where you can actually wear a suit. You get to sort of go out there and express a little bit more of your personality."

This quote captures the advice Chris Sacca gave to Matt Mazzeo, emphasizing the importance of personal expression in the venture capital industry.

• Chris Sacca is known for his distinctive sense of humor, which extends to the gifts he gives, often surprising and amusing in nature.
• Matt Mazzeo shares anecdotes of receiving unexpected gifts from Chris, such as a green bodysuit and a replica of five pounds of body fat.
• These gifts reflect the quirky and humorous dynamic between Chris Sacca and his colleagues.

"Chris has a unique sense of humor for those that have seen him. He likes to send strange."

The quote highlights Chris Sacca's playful and unconventional approach to relationships with his colleagues, including Matt Mazzeo.

• The rise of the "celebrity figure" in the funding environment is a notable trend.
• Accessibility has increased due to social networks focusing on individuals over brands.
• VCs can no longer rely solely on their firm's brand and must build their own personal brand.
• Transparency is important for entrepreneurs to understand who they are getting into business with.
• The traditional venture capital model is changing, with less secrecy and more openness about investors.

"And so for a human being to build a brand is far easier than ever before. And actually these networks give sort of preferential treatment to the person."

This quote emphasizes the shift in branding dynamics, where individuals have an advantage in building a personal brand due to social network algorithms that favor personal over corporate accounts.

"I don't think the VC of today can hang behind a Sandhill Road address anymore and pretend like that brand will become or maintain its supremacy in this ecosystem."

Matt Mazzeo argues that the prestige of a Sandhill Road address—a symbol of traditional VC power—is no longer enough. VCs must actively engage and be visible to maintain relevance.

"And it's not a quiet secret that they share those notes back and forth of good investors that their companies have worked with."

Matt Mazzeo highlights the importance of reputation among investors and how information about them is shared within the entrepreneurial community, influencing decisions.

• Being geographically outside of the main VC hubs can be beneficial.
• Distance from SF allows for a more focused and intentional use of time.
• The ability to work remotely and travel as needed negates many disadvantages of not being in SF.
• Being part of the LA tech scene provides a unique pitch to entrepreneurs and contributes to building a distinct ecosystem.

"We're close enough that I'm in San Francisco two days a week, and on a moment's notice we'll fly up and meet with an entrepreneur, if timing necessitates it."

Matt Mazzeo describes how proximity to SF allows for flexibility and responsiveness, enabling active participation in the ecosystem without being overwhelmed by it.

"I think it's a competitive advantage for us as well, just because I think building up the LA ecosystem is something I'm really passionate about."

Matt Mazzeo sees the development of the LA tech scene as a personal mission and a differentiator for his VC firm, providing a unique value proposition.

• Personal brand building is challenging for individuals joining established brands.
• Authentic engagement through conversations, podcasts, and video content is preferred over traditional blogging.
• Participating in early-stage communities like Product Hunt helps in naturally building a personal brand.
• Authenticity in chosen mediums for communication is crucial for conveying one's true personality.

"I think moments like this are frankly the best version for me. I met Chris in a conversation, in a jam session where we're both going back and forth having a discussion."

Matt Mazzeo expresses his comfort with and preference for natural, interactive discussions as a means of personal branding rather than forced or artificial methods.

"It's less about concerted brand building, but being a part of those communities early is just something that has naturally contributed to us seeing more and people being more connected to me."

Matt Mazzeo's strategy for personal brand building is to immerse himself in communities where he can be an early participant and contributor, which leads to organic growth of his personal brand.

• There is a concern that taking too many meetings can lead to being busy but not productive.
• Balancing meeting schedules with other work and personal life is a challenge.
• Personal interaction in meetings is valued for learning and making an impression.
• Being responsive and efficient in communication, especially via email, is an area for improvement.

"I take more meetings than most people generally, definitely more than Chris, in that I feel like that is where I'm learning a ton and also leaving an impression on somebody else."

Matt Mazzeo discusses his approach to meetings as an opportunity for learning and networking, suggesting that the value of meetings extends beyond immediate productivity measures.

"It means that other things suffer in my life. I think one of the things you wanted to talk about a little bit today was around areas that I can improve as a VC."

Matt Mazzeo acknowledges the trade-offs involved in his approach to meetings and the impact on his life, hinting at the need for better work-life balance and self-improvement in managing his responsibilities.

• Emphasizes the importance of spending concentrated periods of time with people in person, beyond traditional meetings.
• Suggests that trips or unique shared experiences can strengthen professional relationships.
• Indicates that the speaker engages in these types of interactions more frequently than most.

"it in person and having meaningful periods of that time, and not just like a traditional meeting, but something a little bit out of the ordinary, like a trip or something like that, where you're spending concentrated periods of time with people, I do those things probably more often than most as well."

The quote highlights the speaker's belief in the value of in-person interactions that go beyond the norm to create stronger professional bonds.

• Discusses the concept of self-assessment through KPIs, as mentioned by Hunter Walk.
• The speaker is prompted to consider what their own KPIs would be to assess their success as an investor.

"And we mentioned there the KPIs and Hunter walk discusses self assessment through his own KPIs. I love Hunter's kind of assessment." "He's got a great framework."

Both quotes acknowledge Hunter Walk's approach to self-assessment through KPIs and express admiration for his methodology.

• Breaks down the job into three KPI categories: site, selection, and service.
• Site: Ensuring visibility of potential deals at the seed stage, influenced by fund structure, network, and awareness of companies.
• Selection: Judging the difficulty due to the long-term nature of venture capital returns, measured by follow-on funding, company attrition, and helping with soft landings.
• Service: Focuses on providing help and impact to companies, which contributes to reputation and deal flow.

"I break my job down into three categories, site selection and service KPI." "So site is one that I sort of like." "The second, if it's selection, God, this is the hardest one to judge." "If the last is service, this is one I spend most of my time on because I believe it feeds back into the other two really well."

Each quote corresponds to one of the three KPI categories, explaining their significance and the speaker's approach to each.

• Acknowledges the challenge of long feedback loops in venture capital.
• Seeks advice from experienced individuals who have been through multiple market cycles.
• Recognizes that current fundraising environments may skew signals used for assessing selection success.

"It's the hardest thing, I think. I look to people who have been through multiple cycles and get advice from them."

The quote expresses the difficulty of dealing with delayed feedback in investment success and the need for external advice to navigate these challenges.

• Identifies time management as an area for improvement.
• Discusses the challenge of managing a small team and the need to allocate time effectively among various responsibilities.
• A new hire is brought on to help streamline processes and improve time allocation.

"No question. I need to do better on time management." "A third, a third, a third between existing portfolio companies finding and nurturing new portfolio, new investment opportunities, and then sort of building out the service side and network and conferences and lp management and fund management of our world."

The quotes highlight the speaker's self-identified need to improve time management and the division of responsibilities within the team.

• Describes the evolution of investment decision making, including better pattern matching and combating initial biases.
• Emphasizes the importance of understanding entrepreneur motivations and early company indicators.
• Discusses the balance between learning from experience and avoiding dismissive attitudes towards familiar challenges.

"Time will tell on whether the returns reflect successful alteration here." "I think if anything, I've gotten better at pattern matching in some senses and fighting pattern matching in others."

These quotes reflect on the speaker's growth in investment decision making, including the development of skills and the ongoing effort to avoid cognitive biases.

• Plans to rethink service provision at the seed stage.
• Discusses the launch of Lowercase Alpha, a product designed to help portfolio companies gain early product testers.
• Describes the intention to develop scalable services that can benefit portfolio companies, drawing inspiration from other successful venture capital models.

"So I think my selection process is changing, has changed over the last three years, gotten better identifying pattern matching one, anti pattern matching another, and the other sort of category that I'm really focused on for the next year or two is like rethinking the way that service is done, especially at seed stage, for companies." "Product called Lowercase Apple, which is just a text message group that anybody can subscribe to and get products every week or two that are still in early test flight mode, that are generally alphas or betas of products."

The quotes discuss the speaker's focus on improving the selection process and providing innovative services to support early-stage companies, exemplified by the creation of Lowercase Alpha.

• People often overestimate their own role in their successes and underestimate the impact of circumstances and timing.
• The environment and external factors play a significant role in determining outcomes.

"Most people overestimate their personal contribution to success and underestimate circumstance."

This quote emphasizes the common human tendency to attribute success to personal efforts while downplaying the role of external factors.

• Matt Mazzeo reflects on how his father's illness when he was twelve years old had a profound impact on his life.
• The event challenged his family financially and emotionally, leading him to become more ambitious and empathetic.

"My dad got sick when I was twelve years old and we went from having sort of a solidly middle class family to really being challenged."

Matt Mazzeo describes a pivotal moment in his life that shaped his ambition and personal drive.

• Transitioning from CAA to Lowercase was challenging due to the solitary nature of the VC career.
• VC work involves defending investments and sometimes standing alone in those decisions, contrasting with the teamwork at CAA.

"This career is the pantry career, even if you're part of a partnership, can be a lonely one."

Matt Mazzeo characterizes the venture capital career as often solitary, contrasting with his previous collaborative work environment.

• Hustle is about offering value to others before seeking value for oneself, sometimes at personal cost.
• True hustle involves contributing to others' success without expecting a return, not just short-term value exchange.

"Hustle is repeatedly understanding how to offer value to others in advance of asking for value for yourself."

Matt Mazzeo defines hustle as a selfless act of adding value to others without immediate expectation of reciprocation.

• Matt Mazzeo expresses admiration for Jessica Lessin and the content on The Information.
• He highlights the value of Sam Lessin's writing, particularly his ability to simplify complex economic topics.

"I think the writing that they put forth on the information is incredible."

Matt Mazzeo praises the quality of writing and thought leadership provided by The Information and recommends it as a valuable resource.

• Learning from Chris Sacca includes balancing life priorities and maintaining integrity in business decisions.
• The "icky rule" is a guiding principle at Lowercase, which means avoiding investments that feel morally wrong.

"There's not been a single decision that I've had to make while working with Chris at Lowercase, where I felt like it was a compromise of my moral compass."

Matt Mazzeo discusses the ethical approach to investment decisions at Lowercase, influenced by Chris Sacca's values.

• Matt Mazzeo discusses the investment in Mobcrush, a live streaming service for mobile games, highlighting the potential of video content in mobile gaming.
• The decision-making process for follow-on investments is treated with the same rigor as initial investments.

"I think people really underestimate layering video content and context around games and apps."

Matt Mazzeo explains the reasoning behind investing in Mobcrush, emphasizing the growth potential of video content in mobile gaming.

• Harry Stebbings encourages the audience to engage with Lowercase's offerings, including Lowercase Alpha and Chris Sacca's cowboy shirts.
• The show's sponsorship by Wonder Capital is mentioned, highlighting their investment opportunity in solar funds.

"You can sign up for the lowercase Alpha on lowercasealpha.com to try all the up and coming products from Lowercase's portfolio companies."

Harry Stebbings promotes audience participation in Lowercase's ventures and provides information on how to access their services and products.