The Syndicate: Venture Bubbles, Trade Wars, and Investing
Host Matt Ward spoke with our Managing Partner, Chip Meakem, about the ad economy, cybersecurity, venture investing, trade wars, social entrepreneurship, and more.
Our Managing Partner, Chip Meakem, recently sat down with Matt Ward, host of The Syndicate. Matt focuses on strategies, tactics, mistakes, and massive money makers in the startup and VC scene to help future investors learn from more seasoned professionals.
Chip has over 20 years of experience operating and investing in NY tech with a proven ability to source and build $1B companies. Chip’s previous investments include Appnexus (acquired by AT&T); Ingenio (acquired by AT&T); Massive Inc. (acquired by Microsoft); Pantero (acquired by Progress Software); Q-Link Technologies (acquired by Adobe Systems); TRA Global (acquired by Tivo) and Where Inc. (acquired by eBay). Chip was also a seed investor in FreeMarkets Inc., which went public and peaked at a $12B market cap.
Here are a few insights from Chip’s conversation with The Syndicate. You may also want to check out the full episode of The Syndicate: Venture Bubbles, Trade Wars, and Investing in 2020 HERE.
Q1: Advertising. Is the eyeball economy the root of all evil?
It’s not the root of all evil, but it is the root pretty much of most content. You see, we’ve lived a bunch of grand bargains. If you think about TV, you traded your time for content (ads). Then we moved onto display advertising, where you traded a little bit of distraction for content. Then we shifted to search where you trade intent, and finally, social where you traded data. Overall, I don’t think these were bad trades.
I agree that industry players have done the wrong thing with people’s data. However, the unintended consequences of all this regulation are to further bolster the top 3 tech players who have access to data. In the absence of vast 1st party datasets, you can’t really compete against these big players. On a go-forward basis, some regulation is a good thing, but we still need to make sure we can compete against these giant companies. I’m a bit of a contrarian, and most people are really down on Martech because of all the industry changes. I actually think this is a huge opportunity for Martech. With the paradigm shift of the tracking cookie disappearing, tens of millions of dollars will free up for investing in new opportunities.
Q2: If you had to put all of your money into one public company (that wasn’t Amazon), who would it be and why?
First of all, I’m a diversified investor, so I would never do that. *laughs*
Second of all, I think to this day it would be Google. It’s a fairly classic entry-preemption market structure. The cost and complexity to enter that market to challenge Google are so high versus the rent you could extract from the system. Until some significant paradigm shift, I can’t see another company coming after them in an impactful way.
Q3: What is the future of work? Is it the on-demand economy?
I don’t think it’s “the” future, but I think it’s a huge part of the future. I also think it’s a good thing overall. On the margin, someone who has free time and needs a flexible schedule has hundreds of options that simply didn’t exist previously. In terms of aggregate economic output, the ability for people to add more productivity to the economy per unit is a good thing. Obviously, there are other considerations with benefits, retirements, etc. There has to be a means for those people to access benefits, and perhaps there is a public-private partnership entity that can provide that benefit over time.
Q4: Are we in a venture bubble, and is there a crash coming? It sure feels like it.
Venture is a very broad category, but over the last 10 years, you’ve seen a run-up in the amount of late-stage capital. The market demand side has gone up vastly, but you haven’t seen the number of companies growing as quickly. In aggregate, venture investors tend to be enamored with the demand side of the equation. But that pendulum is swinging back, and investors are going back to fundamental unit economics instead of hyper-growth at all costs.
