John Gannon is Founder of The VC Careers Blog and Co-Founder of GoingVC.
Between these two endeavors, John has become one of the goto channels for getting a job in venture capital. He started The VC Careers blog shortly after we graduated business school together in the late 2000s. Since then, it’s scaled and become one of the sources of transparency in the VC industry, listing available jobs, compensation and much more.
In addition to his prolific blogging career, John started an educational program called GoingVC a few years ago. They have graduated over 400 people into the ecosystem with over half of them going into professional VC roles. Impressive stuff.
It was a blast catching up with John and learning more about GoingVC, discussing important VC trends to keep an eye on and much more. Enjoy.
Transcript (this is an automated transcript):
MPD: John, Thanks for being here.
John Gannon: Good to see you Mark. It's it's been a while. It was funny how this came about and just really glad to be here. It's a great way to catch up and also hopefully share a few things that can help out.
MPD: That's awesome. I'm actually really excited to learn more about what you're doing, because I've known about it for a long time, but I don't think I've ever dived all with all the way into the weeds.
So with that, do you want to start by giving us an overview of GoingVC? Because I think that's, your name comes up all the time in regard to that.
John Gannon: Yeah, I'm happy to talk about GoingVC and maybe a little bit of the origin story if that's helpful. Back when we were in business school right together, class of oh eight at Columbia, we were both looking to break into venture and back then there was barely any information out there about how to do it, nor were there many people actually trying to break in.
And once I got into the industry after graduating, I basically just started curating resources to help people break into the industry on my personal blog. And over the years, it's grown and turned into multiple businesses, a 20,000 person email list with venture investors and people who are interested in venture, investing all around the world from analysts all the way through partner level and a few years ago.
I started a cohort based education business called GoingVC. With a co-founder and that business has graduated over 400 people into the ecosystem and over half of them after starting the program have gone into venture roles. So seeing a great success rate there and just super happy about that, because I've always been interested in helping people find jobs, just like something I really enjoyed doing.
And so now to really have a platform to be able to do that. At scale has been super exciting. And then adding to that part of the whole educational component, we're teaching people in a 16 week program, how to break into venture capital and giving them a lot of the skill sets tools that expose them to the right networks, et cetera.
One of the things that's super important as is you want to. Some reps in terms of the actual investing process, right? So sourcing companies, diligence, et cetera. And so we created GoingVC partner. Which is an investment entity we've invested in 20 plus companies. The majority have been sourced by people who've actually gone through the program or alumni.
And this year we actually had our first two exits, which we were super excited about. We've got one company in a portfolio that it unicorn status, so still fairly early, but we're excited about that. And yeah, just looking to really do more there
MPD: a lot to impact there. I love stories when people just stumble into something they care about and it turns into a business.
Do you want to first give a little primer? What's the content? So the 20,000 newsletter subscribers, what are they reading about?
John Gannon: Yeah. So each week I'll email a weekly newsletter to my subscribers and the format's pretty standard. I'll start with a bit of an opener. I'll share some links that I personally read and found interesting over the course of the week.
And then I'll have a feature section where. It's in essence, almost like a blog post, but I only provide it through the newsletter. I don't actually put it out anywhere publicly. And then I shared some venture jobs that were posted in the past week and that's the high level for the newsletter. And then on top of that, I have.
Products that I'll watch to, to the newsletter. Some are products to help people break into venture capital. Others are things like my yearly venture capital salary survey, where we'll survey my newsletter, we'll get 300, 400 responses from folks actively working in VC. And then we'll transparently share a summary of that data to the market and post it right on my blog and doing something like that has been super rewarding as well, because.
It's helped both the candidates, but also the firms to really calibrate on Hey, what is fair? I remember back in the day, there was none of that information really available, affirm and say, we'll pay you X. And you said, okay, he really had no, no leg to stand on. And so now really opening that up has been really empowering.
I've gotten emails from readers who said yeah. Because of. Your blog posts. I was able to get an extra $20,000 in my salary, things like that. And so I just like to be able to level the playing field through things like that. And I have the scale to do that now with the newsletter.
So very grateful to my readers who show up every week and read my stuff. Because without that, I wouldn't really be able to do some of these things to help the broader community. Back
MPD: when we started the business, it didn't even matter if you knew what market comp was. 'cause. I remember when we got out of business school, there were five firms, five major firms in New York.
Maybe it was a few more, maybe it was
John Gannon: 10. And I feel like there
MPD: was a big hiring year in oh eight and they hired four people in the entire city. And it was like four times as big as the prayer. So it didn't matter what you knew about comp it's either you wanted the job and, or you didn't because there was 700 people behind you.
One of the same job, it was crazy.
John Gannon: It was totally, you have that blog post the person who gets the job is the last person standing. I remember that one and it was totally it's still, maybe right, actually, but there are a lot of, yeah,
MPD: it's more of an industry now with some normalcy.
I remember when we started business school on day one, I was already interning in the space. Know, I was pretty passionate about it and I would walk around business school and be like, what are you doing? I was like, I really am into this VC thing. I've been interning for a few months now, and I don't know, it must've been 50, 60, a hundred people throughout the first month or two of business school told me they were going to be VCs. And at the end there were only four of us who had passed up all the other jobs and waited it out. So
John Gannon: while DAS, yeah, for sure. I graduated without a job.
Yeah. We were about to have our twins. My wife was about to have our twins. And so I was just kinda trust me, it'll work out. Unfortunately, I ended up with with a couple of offers and ended up picking the one in New York city. So that that, that worked out
MPD: yeah. Geography was playing against us back then.
But if you wanted to go to Silicon valley, there were just way more opportunities. But if you wanted to stay on the. You're hard-pressed different world. Now I've heard the stat that there's over 150 venture firms represented in New York city now, which is hell of a lot more than there were 15 years ago.
So let's talk about your VC entree program. You throw out some impressive stats, 400 people going through 200 people have VC jobs out of that. That's crazy. That's that seems improbable. Even if it's doing, even if it's a really good program, that number seems wrong. What's happening.
John Gannon: Yeah. So if you think about venture investing roles, right? You've got certainly venture firms, right? You've got corporate VC. You've got accelerators that are writing checks. You've got family offices that are doing venture, so those 200 solidly defined, but that's deep.
MPD: That's still relevant.
That's it? That's what
John Gannon: Are you, yeah. Are you writing checks as a, as a venture investor, that's the key criteria we use and we actually, we post the statistics on our site publicly and you can see exactly how we compete that and define that as well.
MPD: Who gets it? What's in the program.
What's what's the content for somebody who signs up for this.
John Gannon: Sure. So for the going VC program, it's a 16 week program and it compresses a few different components. So the biggest one and the one that we get the most feedback around is really the community that we create. Everyone is, they're really focused on that same goal of breaking into the industry or upleveling in the industry.
And that's something that. At first blessed don't really pick up, but I think it's an important point. We have people joining who are like raising their own fund. And they see the value as this is going to broaden my network in terms of potential co-investors potential people who could perhaps write a check into my fund folks, I can collaborate on deal flow.
Et cetera. So we're seeing some of that. And also we are seeing folks who are, maybe they're an associate at a firm, or they're a senior associate at a corporate venture firm. And they're looking to either maybe move across to the other side or move up. And they feel like we provide a great place for that.
Again, because of the community and the network that going VC and also myself have developed right in the venture world over the last I guess now it's been 12, 13 years. And then in terms of the programming we have. So there is the 16 week program. We have an educational module each week, so we cover everything soup to nuts that you would need to know about venture from due diligence through.
Cap table modeling and sort of everything in between. And we bring in industry practitioners for each of those modules. And so if you're doing a session on term sheets, for example, we'll bring in a venture lawyer who that's all they do, you're doing a session on diligence. You're going to bring in an investor who has some strong opinions around that to talk to the group and.
We've been able to really get a lot of different folks from different firms in to work with us to do these sessions, which I'm super happy about. Cause again, this gives contact to the people in the program with different firms, helps them build their network, et cetera. So we've had folks from firms that, are very small and maybe regional and folks haven't heard of.
And then we've had folks join us from. Spar capital red point, firms like that as well. So yeah, it's been super exciting to be able to bring that to, to people in terms of education, but also meeting those practitioners because that piece is super important. And then another piece that's critical as you might imagine is our career service.
So we help with resume review. We can assist with introductions to firms where we have connectivity, right? Those are the things that can give people a leg up in their search versus just emailing firstname.lastname@example.org. And then the last piece I talk about is. I talked about going VC partners, which is our investment arm.
So we're actually writing checks into startups, right? We've been invested in 20 plus companies already through going VC partners. And so people in the program who have the bandwidth and they feel like they have the time to devote, they can actively get in their source, participate in due diligence.
And like I said, I think give or take about three quarters of those companies were actually sourced by members and alumni. In the program. So this is not just oh, we have this thing and we invest no, we're actually doing deals that are brought to us through the people in the program. And we're taking them through a due diligence process.
Very similar to what you would see at a venture firm. Like we're doing that. We're doing that.
MPD: When we were coming up the program that was like this, which it hearkens back to my mind was the coffin fellows program. And I know we had a buddy in our class at Columbia, Eric wheeze, and is now over.
Who got into that program and it was hard fought, the word on the street was you had to have an extra, a couple of masters, postdoc degrees type thing. I think Eric had was doing a second. Master's had a JD and an MBA was a great candidate for that and very competitive. But that was a really hard spot to get.
Kauffman fellows was very limited. How was this fundamentally different than car?
John Gannon: How do you think about that? Yeah. So first thing I say before I talk about the differences, I think the in fellowship is it's an incredible program. And they've been around for quite a while, as you're talking about our classmate.
Who I think at there had been probably in 2008 when we graduated the differences really are from my understanding. I'm not a cop. And fellow is, we are really a going VC. We're focused on. It's that accelerated educational experience and helping you get a job in venture, that's the core of what we're doing with Kaufman. My understanding is it's more I'm sure you're familiar with YPO or those kinds of membership organizations. It's a little more analogous to that where I think it's creating these different cohorts in classes and there is some programming they used to be in person meetings.
I'm sure. My understanding of Kauffman is you actually have to be employed at a venture firm or running your own fund to to get in it. That's my understanding. It could be wrong about that was the case
MPD: back then the VC firm had a sponsor you that had already decided to bet you.
John Gannon: Yeah.
And the other big piece that's different is Coffman. Most firms are paying for this typically for people. And I don't remember the exact price point, but I think it's like mid five figures a year ish going VC. Is about, say $8,000 and we give a variety of scholarships. We have loan aid, et cetera, for folks who need it.
MPD: great. Now you had mentioned an angel community on the website. I did a little scouring before the pod here.
John Gannon: Tell me about that. Yeah. So with going VC partners, the way we invest today is we for the program and the members and alumni, et cetera. This is how we source and diligence companies.
And then when it comes to investing. What we do is very similar to what you might see in terms of like an angel list. Syndicate. We actually spin up for each of these investments, a syndicate, and then going VC angels. Those are folks who are in essence, high net worth individuals who are interested in investing in the deal flow that we bring them.
And so they're not obligated at all to invest in anything if they don't want to, but that's an essence how we, whatever allocation we may get in terms of an investment. Most of that is being filled out by going VC angels. Got it.
MPD: Got it. Got it. Got it. Is that actually managed on AngelList?
John Gannon: No. So we've built our own engine to do all that. So we use ashore for a lot of the back office and SBB formation stuff. We actually don't use angel list at all and we made a really conscious decision around that. Grow it ourselves and it's working pretty well. Angeles. Yeah. I think angel list, I think is a place that perhaps you would go to build audience, right?
They have some abilities to promote people and there's just a lot of investors already there. Because of what I had built with my newsletter over the years, and then in a way spinning out, I'm not officially spending up like, going VCs a spin out in a way of my newsletter.
We already felt we had the reach to be able to build our own network because angel list takes, carry, if they bring you investors and all these different things. It might have early on. We might've been able to do like bigger checks maybe potentially, but I think in the long-term, it's a good strategic decision to really own our destiny there.
And, who knows, like we have a pretty good process and operation around that, to scale that out to perhaps help other folks run their own Sydney. Cause at some point we don't have any definite plans around that, but that, that, it could be something that we could look into in the future because we've built that.
MPD: Very interesting. So look you, how long have you been going VC? It's been over a decade, right? It's
John Gannon: going on for awhile? I started the blog in oh eight and then going VC was founded the, education, business, et cetera was founded in. I guess it was 2016. Okay. It's more
MPD: reason than I thought.
The market's changed a lot since then for VC, how people operate, the number of firms, the whole things shifting big time. How have you had to adapt the curriculum? How was it? What trends are you seeing evolve emerge from the educational standpoint as you relay this to the new folks entering the space?
John Gannon: Yeah, one thing that we've been spending time on. If you rewind to back when we were going into venture, the topic of fundraising and how to raise a fund, that would be something that in 2008, we'd say, yeah, maybe we'll be doing that in 10 years. It just did, the industry was just much smaller, but now what we're seeing is there are VCs who are raising funds.
There are entrepreneurs who are raising funds. There are folks who are you influencer types, right? Who are raising funds. And so there's just so many more avenues and types of people and also sources of capital now, right? That it's not unreasonable, it's hard, but it's not unreasonable for someone with maybe a limited track record, but a great story to actually put together a $2 million fund and kind of get into business, yeah,
MPD: it's a different world. And part of that is because of Angelos, which you just mentioned, they really facilitate a lot of those micro funds get in business. But a lot of the LPs out there institutional have figured out that they're going to fund those for farm teams for high yield. So there's a whole machine around that.
I agree. And it just seems to endlessly go earlier and earlier as institutionalized, of the the capital stack Preventure. What you've been watching this industry for a while and I think you have an interesting vantage point because you're trying to teach something. You're forced to think a little bit differently about it, how to communicate it and structure it.
What's broken about the VC industry. Now. What bothers you, what do you wish
John Gannon: would change? I think it's still super hard to collaborate, inform an ideal investment syndicate for a company. So an example would be if I saw a company that had. Really excited about. And I wanted to invest in that company and I'm trying to think about as an investor, who are the other folks that would really help this company grow, right?
Like who else would be folks that should be on their cap table. And that exercise even still today, even with LinkedIn and with everything that we have, it's still oh, I was on Mark's podcast last week, and he's interested in the space too, and could add some value. So I'll send this to him, right?
It's like super inefficient. And there's a lot of benefit to startups. If the industry could figure out how to really form an ideal syndicate around a specific company and also to get people involved who maybe aren't investors. Specifically, but could add value as advisors angel list in their syndicates.
I don't think they make a big deal about this, somewhere in the fine print, you can form a syndicate and you can carve out, carry for advisers in a syndicate for a specific company. And so there's just like a lot of opportunity to. Take a lot of inefficiency out and just have these really powerful, helpful, useful syndicates that are made up of a large number of people versus being reliant on the value, add that you would get from say a large institutional VC firm, which they do provide a lot of value in many cases.
But I actually think that there's a world where maybe you get more mileage if it's the right. Twenty-five people who are in your syndicate and are advisers, then you might get up and institutional firm look, I'm sure institutional firm folks might disagree with that. And I think there are some downsides to that, but I know that feels like something that should be possible.
And it's not.
MPD: Yeah, it's hard to do. I think the little wedge of what you're talking about, we were trying to address through thunder. I don't know if you checked out the thunder yet. It's one of our pet projects, but the thunder. What it has. It says about 10% of the VCs in the country, on the platform. And they've filled out these really detailed profiles and it's designed to match founders, angels, VCs, and LPs together based upon fit without any spam, double opt in all this stuff.
Here's one of the best ancillaries of it though. The best thing is what you're talking about is discovery and maybe remembering recollection. I can't remember. There's so many VC investors who is interested in what type of deal. And one of the things I've been using thunder for which, it's not we built it for per se, but just to remember, I'll go back in, click on the VC tab, say seed New York, whatever.
And I'll see a list of investors that focus on that space or that demographic. And just easy to remember who to talk to, even if I'm not always going through the platform. So there, there is a need for some structured data in this market. But I think you're talking about what the syndicates is pretty interesting because there's not a good platform for connecting those dots yet.
Now, what are you seeing? You're also living through some macro changes geographically, silicon valley is still the nexus of innovation, but less so way less. So are you seeing a shift in who's applying for your VC training program? Is it increasingly international or is it shifting, changing at all?
What's happening? What do you see through your lens?
John Gannon: Sure we geographically, we definitely have a mix it's still predominantly us. And I don't have a stat around specific. How many from Europe, how many from Asia pack, et cetera, but just anecdotally, we've had folks from Europe in the program from London, from Australia in the program.
And I think I would expect that to grow just given that venture is. Somewhat a more globalized. The other thing, which, the industry just has done a terrible job at it and is trying to get better, but there's still so much more work to do is around helping folks from underrepresented groups and people of color get into venture as well.
In one of the things that, I'm super excited about, and I think we sell a lot more work to do it. Our program, where we're actually able to reach and bring in those folks as well and become part of our program. And, we'll see those folks participate in our program, but also work with maybe a fellowship program from black.vc or something like that, too.
So I'm excited just to see that folks are really just fired up about trying to break into the industry and trying to take advantage of everything that's out there to be able to do.
MPD: That's important, having onboarding strategies to help people phase in with comfort. That's good. So now you've got another job.
So you do this, but you're also at digital ocean, have day job yeah. I don't know which one's the real job. They're probably better for it. You want to tell us a digital ocean story? It's one of those names that's bubbled around New York so much. But I think because it's, on the engineering side of the world, in terms of the customers.
A lot of the business folks out there aren't as in touch with what's happening, we just hear it every now and then when the, in the technical circles, the water cooler, you want to tell us a little bit about what they're doing and where they're up to.
John Gannon: Yeah. And I have to be cognizant that DigitalOcean is now a public company, so I have to just right, exactly.
Stick to the public narrative, but. Just to share some backstory. I was working on a a company after I left Amazon. So quit Amazon and basically started a software company with a co-founder. And this was in 2013. And I remember him building our first environment to start deploying code.
And he's oh, I'm using digital ocean. And I'm like, oh, like what's DigitalOcean. Like I've never heard of that. And fast forward that company, unfortunately it didn't work out. And so as me and my co-founder, we were trying to find soft landings. He ended up at flat iron health, which worked out really well for him.
And then one of our early customers was actually a digital. And so through that and some previous relationship from VMware, basically what ended up happening is I ended up joining digital ocean straight out of ending that, that last startup. And so I joined the company when I don't know exactly the employee camp.
There were about 300 people or so Ben Jarecki was the founding CEO was still there at that time. And yeah, it was just a really amazing experience for me and continues to be, I think the thing that. They really do differently is really focusing on the user experience for the developer. And if you look at a typical cloud product or a typical enterprise software product, there's often not a lot of.
Attention to the details around the user experience. There are dedicated teams who are focused on making sure that every last pixel is in the right place, and that the overall architecture, in terms of like how the user flows through the journey, that all makes sense and is really high value.
And I think that's really the that's. What I view is the differentiator. And just for me, one of the biggest learnings has been working side by side. Some of the best UX and UI folks in the business and just really learning from them, to really see what does good look like in enterprise software and SAS.
And that's definitely informed some of how I think about companies and investing in that space as well. And I
MPD: think about your background, I always think developer tools like you're always out building infrastructure for the engineering community. If I remember what'd you had a space Turbonomic X material in the company Turbonomic before digital ocean.
John Gannon: Yeah. So back after business school, I was in venture along with you, but then 2008, 2009, recession, market crash, et cetera, hit. And so part yeah. Ended, yeah. Ended exactly really ended. And so most venture firms that we're going to die on the vine. And that was really obvious. So I reached out to my name.
And one of the folks I reached out to was actually someone who I did an internship with it was Peter Bell and Neil Occhio Grosso who were at Highland capital partners at the time. So I'd done a internship independent study with them in B-School and I just reached out. I'm like, Hey, I think I'm going to need to make a move.
And it just goes to show timing is everything they're like, yeah. We just wrote a series of check into a company in Valhalla, New York I'm in Manhattan. So it's they're focused on VMware. They sold their last company to EMC for 300 million and it's five PhDs and they need a business person.
Awesome. And I had worked at VMware so situation. Yeah. So I got super lucky on that one and from a timing perspective and yeah, so I joined the company. I was the first business hire, I think at that point it was the five PhDs and then another PhD that they hired. And there's a lot of PhDs, a lot of very smart folks and built an amazing core technology.
But the challenge was initially, what is the product, right? What do you wrap around that core technology that customers are actually going to pay for? And so in the beginning, we definitely struggled to figure that out, right? Every early stage company does, even though not many people actually talk about that, most of them do struggle and it was so funny.
Overnight. I was one, one weekend, the six PhD came back into the office and he said, was the CEO. And co-founder, he's I built a capacity planner. So over the weekend he basically created a product on top of that tech stack, demoed it. And then we just started in essence showing it to customers shipping it.
And that was the product that actually generated the first rep. And this engineer, basically, it was like, yeah, over the weekend I'm just gonna see if I can have this together. And he stayed all the way actually. So he, I think he's still even there even post exit. So over the summer, IBM purchased Turbonomic for I don't think they announced the final price, but they said it was up to 2 billion.
MPD: makes sense. Now you were there early, usually when someone's early in a company, there's some sort of crazy story or life event, anything wild to happen earlier, Turbonomic.
John Gannon: Nothing like nothing crazy that you wouldn't expect at an early stage startup, you're trying to figure out the product, the team, how you go to market.
Everything is an essence and an open question. So there was nothing outside of the normal craziness that you would have. I do remember that we were building. An inside sales team early on. And that was my responsibility to do that. And I had no experience in building an inside sales team and just figuring out as I went, we had investors who had other companies doing inside sales stuff.
So they, they gave some advice, but ultimately it's really up to me to figure out that I do remember that we, so we can do high volume calls. Have you tripped you 80 to a hundred outbound dials a day. We got the software that would automate that. And. Leave recorded voicemails and just it was just like super cheesy stuff.
I'd registered you. Would've never done it that way, but yeah, we were a little spammy in that way. Not email spam, but yeah, we were smiling and dialing like a lot of enterprise software companies back then certainly did.
MPD: Got it. Okay. With your long tenure in developer tools, what's changing in the landscape and you look at it now.
What are the major shifts happening that investors entrepreneurs. So I'll be thinking about,
John Gannon: yeah, there's a couple of things. One is, I think we're seeing now SAS move towards more of a utility pricing model. So if you look at cloud services, AWS, et cetera they've they went to market early on and productized around this concept of utility pricing.
But we really hadn't seen that as much in pure SASCO. And so I think we're seeing that more now that those companies are really adopting more of a pay as you go type of model, because that's what their customers are asking for. Yeah, sure. So you might have a storage or like a, maybe a database SAS product you could charge.
$10 a month for that, for a fixed amount of capacity, or you could say instead of charging you 10 bucks, I'm just going to charge you a penny per gigabyte that you store in the database. So that second one would be an example of a utility model.
MPD: Okay. Now, okay. So those are the main, there's a shift around the business model.
It sounds like it's getting more sophisticated. Where are the opportunities for entrepreneurs who are looking to build, create help, support innovation? Where should they be playing in the infrastructure layer developer tools?
John Gannon: Yeah, I think there's a big opportunity. And in multi-cloud, so the AWS is the big dog, right?
They've been around the longest, have a, just a huge customer base. And it has been a tremendous success by any measure. Customers do. Want choice though. And they have different workloads that they want to run in different clouds for different reasons. And there's really not a standard way to do that today.
There's not a set of tools that I can point to and say these are the preeminent, like multi-cloud management tools. And yeah, people could argue that with containerization and microservices and Kubernetes, that provides like a unified layer to manage things. But it's really not the case.
And so I think there's a lot of value in being able to deliver some kind of a experience for companies where it just makes it very easy to run your different workloads and applications in a multi-cloud way and not have to really think about it. Cause there's actually quite a bit of engineering work that goes into making an application multicloud today.
MPD: Got it. So building a front end layer more or less. To enable that type of interaction for folks. That's awesome. That's actually very interesting. Maybe someone listening will start that if you do, let us know if you want to write a check,
John Gannon: you got to check ready? Yep.
MPD: Okay. Are there other sectors, I always think of you as developer tools guy.
What else do you look at through the year now, your VC lens or others? What else are you interested in?
John Gannon: So one of the other areas that I'm really interested in. Is the creator economy. And I know a lot of folks are talking about the creator economy and I think web three kind of gets pulled in there and distributed autonomous organizations and all that stuff YouTubers.
That kind of, that's what people think of, I think when they hear creator economy. But yeah, definitely the I actually think there's this whole other segment of the creator economy. That's quite large and it's been ignored and has actually been there for a long time. There's someone named pat Flynn who has a great podcast, it's called smart, passive income.
And he has built a huge audience around people who are creating these very niche businesses that are really very similar to these creative businesses that you're reading about and hearing about in tech crunch, et cetera. They're focused on a niche, maybe it's around homeschooling. And so they'll create, build an email list, create blog content, maybe they'll do some videos.
They'll create some paid information products around those things, right? And there's people in every single niche that you could imagine. And sometimes multiple people creating these kinds of businesses and. I feel like they they've been there forever. Pat's been doing this podcast for, I don't even know how many years, but that's already been a thing it's only now with big YouTubers, Mr.
Beast, et cetera, where people are saying, Hey, this creator economy thing is a thing. It's actually always been a thing. It's just that. I think that whole segment has really been ignored. And so that's a segment I'm excited about. Cause that's where I play personally.
I consider myself a creator, but in the VC space in terms of creating content and courses and in businesses and resources specific to that space. So I'm always interested to, to look at things that fall in there, I'm less interested in the thing that. With, let us say a YouTuber sell a sponsorship, that doesn't really excite me as much as how can some of these niche creators get empowered and really build substantial businesses. I think for every single one of these sort of creator businesses I think there's like a living salary there, like for people who really lean into it, have the right tools, have the rights of.
And so I'm really excited about that area specifically in the creator economy. I think it really doesn't get talked about as much as it should,
MPD: I think that's coming we're investors in two companies in the space. One is great. Bryn helps. The advertisers actually engage with creators and deliver those sponsorships to make it easy.
But they've found that creators or advertisers or ticket, like real authenticity of pushing the product, the creators actually have to like the product they're pushing. And so grin does a good job of helping people build those relationships, gets connects to brands, the influencers in a way that actually makes sense with kind of the human component of product.
And then we've got another one that we're involved with called jelly smack. And both of these are, I think, increasingly pretty dominant in space spaces, unicorns at this point which really does help a lot of the top creators, I think, including Mr. Beast, literally one of their clients monetize on a whole litany of platforms from Facebook to everything else.
But I think you're right. I think what I'm hearing from you is what's missing is the taking those technologies and those solutions and bring them down the long. And that's probably a space where it's been economically inefficient for a lot of brands and advertisers to spend time curating. There's some need for some algorithmic solution to tap into that.
That's very interesting. And I do agree, we talk all about jobs that are being destroyed through technology, but there are a lot that are being created a lot that are being created. And the, it's hard to see the creator economy as being a viable career path for a lot of folks, but it just might end up being.
Something that a lot of people do. I think for people our age, it's hard to imagine. But I think it, I think that's the reality. It's already happening for a small group, relatively small group of people, but it might be more of a career path for folks over time. Yeah.
John Gannon: I would never tell someone like, Hey, go quit your job and become a creator unless they really want to.
But but I, I. What is really achievable for almost anyone because everyone starts at zero in this, creator economy game, right? Like you have no email subscribers. You have no YouTube followers. You have no Twitter followers, is if you come up with something that can deliver value for free.
On a repeated basis, over an extended period of time and you just stick with it and you, the reason you're gonna stick with it is because you actually care about it. And you care about the people you're trying to serve. Like it will turn into something. Will it turn into a $10 billion business?
Probably not. Could it turn into something that helps you get a higher profile in your career? Absolutely. Could it be something that becomes. S six-figure revenue stream for you that maybe you do go work on full-time at some point, or maybe you don't maybe use that as supplemental income. Like it is.
It's like wide open right now, and it's super exciting. And I think that's a really important point for listeners to, to hear that you can actually do this too. It's just, you need to find the thing that you're excited about. You need to put it out there and you just need to do it consistently. And. Almost not care if anyone shows up right.
Just do it because you're really trying to add value to a small niche audience. And over time it will develop. But you really have to stick with it. You really have to love doing it. Sometimes it does take some time to figure out who is it you want to serve. And how do you want to serve them?
MPD: know, interesting. I said this before on this podcast, but my real motivation for doing this podcast is to learn. I want to get people like you on, and I want to grill. You want to ask you all the questions? I wouldn't ask you over lunch because it'd be a little awkward. And so I, I'm, interplays mission and kind of the mission I live on that gives me kind of some dose of meaning in my work is to really help entrepreneurs be more successful because I believe that the Changemakers of society, but this, I don't, wouldn't be doing this podcast.
If it was a content play, this is for me, is learning. And I think, when I started, everyone was like, you have to stick with it, or it's a waste of time. So I think you do you're right on. You have to have something that you actually care about that you want to do for the sake of doing it.
Otherwise it's just hard to sustain. I want to throw a curve ball at you. All right. For folks listening. Now we're recording this towards the end of January 22 and the whole world's heating up right now around Russia and China against the west. What do you think happens to the tech community?
If we stumble into another mass scale.
John Gannon: Yeah. That's definitely a curve ball and I, yeah, and I don't have a strong opinion or vision around that, but what I would say is I think with China in particular, that. China's clearly a geopolitical force and maybe they're in a position to become the number one, if you will.
One way I think we'll see that kind of come into the venture and startup space is, you think about the firms right. In the us, right? Any of the brand names, really? You think about a Sequoia or a client or. A Lightspeed, right? So what as they've become very successful in the U S and then they start to bridge out internationally, right?
So Sequoia might have, or Lightspeed might have an India fund, for example, or a China fund. And I think we, in the next, I would say five to 10 years, we'll see actually, Chinese firms. Enter the U S and be as dominant as competitive for the best deals as our physical is the 16 Z the red points, et cetera.
So I think that's regardless of the geopolitical climate, I would not be surprised at all to see a dynamic like that in the next five to 10 years. And where entrepreneurs are. Actually seeking out and choosing those firms over some of those Silicon valley stolen.
MPD: Yeah. Venture capital has been an American product today.
We export it. Other firms have popped up around the world, but it's mainly been an American thing so far. I totally agree with you that's changing. We're already starting to see a lot of other firms in the states from abroad and their value prop they're selling to the entrepreneurs is look, take our money and we'll help you bridge your business into RGR.
And there's a lot of that coming from China already. None of them carry the brand weight that you're talking about. But I agree with you. It's probably an inevitability. Very interesting. W where do you think we're at? We're seeing some bumps in the stock market right now. Very often I get asked by LPs how does the venture ecosystem and correlate with the public market, but anything's happening at a macro level at the public market.
And do you think we're going to fill it in the startup?
John Gannon: On the public market stuff. If you rewind, let's call it a year and a half, two years ago. And I don't know if you saw this in your investing, but as the market started to heat up the public markets, the early state valuations actually stayed pretty, I would say normal ish right now.
They're not in the sense, you're seeing them things really getting priced up at the earliest stages. But now there's this correction. I think what will happen is those seed valuations. Those early stage valuations will start to trend down. I don't think it's going to be tomorrow, but assuming we stay in the.
Place, we are now with some inflation fears and maybe the Fed's going to do some stuff. I think that we'll start to see those valuations trend a little bit further back to where they might've been two years ago. They go all the way back. I'm not entirely sure, but I think that if you're doing early stage stuff you're not expecting to get any money out for say seven to 10 years.
If at all, assuming the thing exits in you actually. Can make a return. So that's a long time for a stock market to go through a couple cycles to correct, to recorrect, et cetera. So I'm not super concerned with that specifically. I think you just have to be in the market. You still have to be playing the game and over time you'll benefit from that dollar cost averaging.
If you will. I think for the VCs
MPD: out there, when the market crashes, there's a denominator effect for the big institutional LPs, where they're suddenly overweighted venture and they deploy less capital to VC firms. VCs slowed down a little bit, but and that could affect valuations and shakes out some of the companies that maybe shouldn't be getting funded.
We have a lot of capital in the market. Now, I think there's this interesting perspective that I heard recently. On why the valuations have popped so much, it actually takes it away a little bit from hype, this hype concept or over-funding of the market. The argument I heard is if you look back last five to 10 years, not a lot of companies were exiting, so there was no real way to understand or really value. The backend valuations of the best companies in your portfolio, the unicorns, because they never got sold. There's no cup, few companies, big enough to buy them. And the public markets seem to be closed to new to do business. Then obviously we had this flood over the last two years, all the companies going out, going IPO and tons of liquidity, and now we're able to mark up and see those valuations.
So through all of that, suddenly you've got VCs that have performed above the normal returns. So you've got like inflation of prices. Tracking and a bunch more capital. So there's an argument that the price correction, where the valuations have gone up, it's actually appropriate because what it's implying is that early stage valuations had actually been undervalued because we didn't know what the company would be worth at exit.
Now that we know that. And we've seen that the value, the returns have been too high for venture increase. The supply of capital brings down the returns as valuations are going up with early stage. And the concept is that this is a, we're just witnessing a delayed shift and this is actually appropriate inappropriate valuation market.
I don't know exactly where it's going to land. There's a whole bunch of other confounding factors, but it does bring some sanity back to the, what I'm seeing. And also that concept made me glad I was taking, I took macro economics in college are the ones that cost like a waste. What do you think, does that resonate with you?
Or does that sound like it's someone trying to rationalize,
John Gannon: paying up? No, I had not heard that argument. It makes sense. The other thing too, is the winners are so much bigger now, too, right? In, in back when we were, 8 0 9. I feel like if you thought a company you could get 10 to 20 acts, you'd be like, yeah, amazing.
Let's take a look at that right now. You're looking at where can I get a hundred acts? And the thing is, companies are actually right. Seed stage investment. People are getting a hundred X on those. Now, granted, those are the best companies. But it's totally a possibility, you're seeing people, an institutional fund get something that's a hundred X.
They're going to probably do five or six X on the whole fund. Which is, that's great. That's venture capital when it works a hundred percent,
MPD: John. Hey, great to reconnect. Thank you for being on. As I'm a big fan of all things that kind of accelerate innovation, deep down, I just hope a lot of it's going to have major, positive social impact.
So the idea that you're out training a lot of would be VCs to help spread innovation, bring it around the world. That's awesome. That's awesome. I know you're interested in, you're passionate about, I know there's an economic incentive, but that's a great cause I love that.
John Gannon: Thanks for being on.
Absolutely. This was a ton of fun and yeah, it's been great to catch up. Obviously I used to see almost every day at business school many moons ago, so we don't get to do this very often. So really excited to be here. Yeah, so a lot of moons.
MPD: All right. Bye man. Thank you for being here.
John Gannon: All right.
Thank you. Bye. Let's see. Yeah,
MPD: so I love what John's doing. It's very on mission for me and interplay. Helping people find their way into the innovation economy. I believe to be important because innovation, as we know is what drives forward society is where I ask you to help out. If you liked what you heard, please give us like five star review, whatever, push those buttons.
You can find me on Twitter at NPD. And to hear more of my conversations with innovators, subscribe on YouTube, Facebook, or any major podcast platform. Just search for innovation with Mark Peter Davis.