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Posts Tagged ‘Chris Sacca’

Note: This is part two of a look at how radio producer/podcaster Alex Blumberg raised money to start Gimlet Media in 2014. Most of the material in these posts came from listening to the first season of Gimlet Media’s podcast StartUp.

In the episode How Not to Pitch a Billionaire, venture capitalist Chris Sacca tells Alex Blumberg that he’s missing FOMO—Fear of missing out. “Once you have FOMO on your side,” said Sacca, ” you no longer have to ask people for money.”  There comes a point when you are seeking funds where you’re gaining attention from inventors who don’t want to miss out on something that appears to be a big moneymaker. Sometimes at this point investors seek you out rather than you going door knocking.  It’s very clear that when Gimlet started out it lacked FOMO.

The problem was that podcasting had been around since 2004 and no longer felt like the new kid on the block when Blumberg went around pitching his company that he originally called the American Podcasting Corporation. And there didn’t seem to be a public organization that was bringing in major dollars through podcasting.

Sacca explained to Blumberg and Lieber, “It’s difficult to see this as a venture scale business based on what you guys have said. For me to think of this as a venture scale $100 million plus opportunity I would want to see that acquisition model proven out a little bit. Like cost this much to produce a show, X-percent of shows are hits, it’s this much value to listeners, these are the ways to acquire listeners and blended acquisition cost is X, and more or less I know what that looks like and here’s how we scale it in order for me to want to participate.”

Basically what Sacca was saying that he wasn’t interesting in creating a lifestyle business that provided a few people jobs to produce quality shows and perhaps brought him a little return on his investment. Venture capitalists like him want a path to potential earnings that just don’t double their money, but that 10X their investments. Moderate growth in his circle is seen as the enemy.  They want exponential growth. And ideally they like to see that return in 3 or 4 years, not 10 years down the road. And the most likely way for that to happen is for a Disney or a Yahoo! to buy Gimlet Media.

While Blumberg admits that he doesn’t have the drive of Uber founder Travis Kalanick, he’s not quite content with just seeking a lifestyle company. Otherwise he wouldn’t have left a secure producer position at NPR with salary and benefits to set out on his own. A direction full of the unknown. (But I do sense that if Blumberg did sell his company to Disney or Yahoo! in five or ten years that he’d be content to take his millions and create one quality podcast in his basement with a small team of people.)

But in 2014 as he recorded the StartUp podcast, it’s also clear that he had a little fire in his belly to swing for the fences. And fortunately he discovers that not all investors are looking for huge returns. There are other investors in the sea.  Investors that just get on board with your vision, or because podcasting seems like fun in a way that most investments are aren’t. And one investor tells Blumberg that he’ll invest based on his NPR pedigree.

We’ll look at that pedigree in tomorrow’s post.

Scott W. Smith

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