The Future of Media in VC | Erik Torenberg on TBPN

Thank you. A longtime listener, first time caller. Thanks for having me on, guys. Huge fan.

They brought a briefcase to my parents' house and yeah, you know, just been working the family for years.

It's funny. Part of me wants to ask like, why didn't you ask me this a few years ago? Why didn't they try to recruit me a few years ago? But it's kind of like when someone amazing asks you out, don't ask too many questions. Just say yes. Kind of my philosophy. Basically what happened was, so Mark and I have been close for a long time and every year I basically, you know, sort of give him a state of the union on my career and how I'm thinking about things. And this year I was like, hey, I know I want to marry venture into what I'm doing. I have this media company, we've got sort of this founder social network thing, and everything around my career has been either investing or building communities, networks, media for founders. And so I was just like, I want to do it again, but I'm figuring out what is the right structure, how to do that. I can either start something, I can join something early. And then Mark's like, why don't you just do this at A16Z? And I was like, I hadn't really considered it because such a big firm, you know, so specialized. I'm a generalist investor, you know, more talent-driven, early stage. And I think like, would I fit in at, you know, 700-person firm like Horowitz? And he's like, let's talk about it with Ben. So then me, Ben and Mark have a bunch of conversations. Katherine's involved too. The other partners get involved and basically they had had a desire to go much bigger on content, like separate from me, and they kind of liked what I was up to at Turpentine with sort of this network approach. And they crafted the right dual role that's a mix of investing and a mix of kind of media network stuff. And that's how over a few month period we just, you know, like kept falling in love with each other even more, love with the opportunity, and so here I am.

Well, it is interesting. First of all, I would just say I appreciate the compliment. And no one who's good at it wants to be known as the thing that they want it to be like, like Delian's got a good network, but it's like a byproduct of the stuff that he does. And so, yeah, I would say hopefully similarly too. I mean, I think the way I realized it, I was doing this music tech company out of college, Rap FM. It was kind of an idea. It was like Chatroulette for rap battles. It made no sense as a business, but it was just kind of an out-of-college project. We somehow raised some money for it. This is when Twitch was getting off the ground. People were like, 'Hey, Twitch for music. Maybe that'll work.' And live, Justin.tv, live video, etc. And people noticed that I had the skill for evangelism, like getting people excited about things, attracting talented people. What do great founders do? They attract capital and labor, right? And so I had some skill for that even though the idea was dumb and people were like, 'Hey, you have something here.' And then but I didn't put it together until Product Hunt, which is the thing I joined next where like, and you know, Ryan was CEO and he really got that off the ground. But I helped him sort of like bring that out of thin air, like you know, create a strong community and network. And in that period I was like, this is my superpower. Up until that point, up until age 24, 25, I hadn't identified a superpower that I had and I was just like, I'm just going to triple down on this. And so then joined On Deck and Village. And what is it? I think it's just like a desire to, like an obsession with people, like who is everybody, what are they doing, but then also desire to help them and think about sort of people dynamics. But then also this, that's like highest level, but then the next level is like build communities and networks that sort of help each other, where people can help each other like even when you're sleeping. And so that's what I spent a lot of time thinking about and doing.

So I think Jessica Lessin really sort of helped popularize sort of the bootstrapped media company that Turpentine has followed. I think you guys are following. I think it just doesn't make sense for this kind of business for the reasons that you sort of indicated. But people can do very well. And so in general, you know, because I did a music company, a lot of people pitch me music. I'm like, I don't like this business as a business because people... I do media, people pitch me media. I don't want to invest in media companies, but I do want to build a lot of media at Andreessen Horowitz. And I do want to partner with a lot of independent creators like yourselves, like the Lenny Rachitskys, like the Harry Stebbings, like you know, all these guys who are building, you know, really awesome cash flow businesses, super lean, making a ton of profit.

100%. It's interesting. There's this business, Industry Dive, that really taught me about something. It's a business that not a lot of people know about, but it's immensely successful. A lot of people when they think about media businesses of the last 15 years, they think about like BuzzFeed and Vox and these kind of like, you know, Upworthy. These businesses raised a bunch of money in the 2010s and totally crashed, right? There was, you know, there was a bunch of venture firms, you know, this one included, doing sort of, you know, consumer media businesses and people thought, you know, they were going to ride the platforms and they were growing, they were big, you know, they were growing, but then sort of the, you know, as you alluded to, the platforms, you know, took the value, is where the value was. It was in the distribution, not in the... and these were just like content farms on top of them. But an undertold part of that story is that business media has actually done pretty well. This company Industry Dive, which is just a collection of niche trade publications, so things like utilities, HR, pharma, just like valuable niche like newsletters, sold for $500 million I believe to Informa, which I believe is like a $10 billion dollar trade show company. So business media, business events. Yeah, there's quite a good business there in trade stuff on the B2B side because you know if you have the leading HR publication and you know you have 50,000, even 5,000, you know, decision makers reading or listening to your thing, that becomes a great channel for people who are trying to sell to that audience to reach them. And they're willing to, if making one sale can be tens of thousands of dollars for them, they're willing to spend quite a lot to reach that audience. So the premiums on the CPM are just fantastic. And so, and Sean Griffey, the CEO of Industry Dive, has been like educating the market on this. And so I heard him and I then I looked at his... I think they're incredible at business. I think they're incredible at sales. I wasn't like blown away by the content itself. You know, they're a great business and they built something much bigger than I have. But I was like, 'Wow, I think more people could do this.' And The Business of We also is doing this and I wanted to do sort of a Silicon Valley take on that of like, you know, Lenny Rachitsky is the GOAT of this for product managers, the newsletter. I think he's almost at like a million subscribers. I think he's printing cash. And I was like, hey, there's going to be a Lenny for HR, there's going to be a Lenny for CFOs, there's going to be a Lenny for every position in every sector. I want to create that. I want to create this rollup. And we started on the podcast side because that's what I know. I think that there was a gap in the market for like, you know, the best of X and we did that. I think we had, you know, reasonable success and I was excited about adding additional businesses or business models on top of that. Investing being one of them and I think this is the best place to do it.