Conference Conversations: Where Investors See Creator Tools Thriving Alongside AI

This week, we're continuing our Conference Conversations series from last month's conference with a panel called "Betting on the Future: Where Investors See Creator Tools Thriving Alongside AI."

In this panel, Andrew Kahn from Yamaha Music Innovation sits down with three venture investors who are actively shaping the future of creative technology: David Ma from Powerhouse Capital, Jason Yeh from Patron, and Connor Sunburg from Amplify.

They dive into what actually excites investors in the creator tools space, why most creative tooling companies probably shouldn't raise venture capital, and how to think about building products that people will use for thousands of hours instead of just experimenting with for a week.

Whether you're pitching investors next month or simply curious about the creator economy, this panel offers valuable insights on what separates fundable ideas from the rest.

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Episode Transcript

Machine transcribed

12/10- Betting on the Future

[00:00:00] Shayli: All right. Now this next panel is our investor panel. The panel is betting on the future where investors see creator tools thriving alongside ai. Moderating this conversation will be Andrew Kahn, managing partner at Yamaha Music Innovation, who's been so great helping us put all of this together. Let's get a round of applause for Andrew and the rest of the panel, and welcome on to stage.

[00:00:27] Andrew: Oh, thank you. Alright, thanks for coming. it's hot up here. Should have told you short sleeves only. well look, we've got an incredible panel here. we are gonna open up to q and a for the last 10 minutes because I'm sure, a lot of the founders and audience will have. Really good questions.

 it's a really talented group of investors and I'm appreciative to each of you for joining us. I'm gonna go down the line. I'll start with David Ma. David's a principal at Powerhouse Capital. Powerhouse is a Los Angeles based venture capital fund, exclusively dedicated to global technology, investment opportunities, and media, entertainment, sports and gaming.

Followed by Jason. Yeh. Jason is co-founder and general partner at Patron. Patron's, an early stage venture firm, investing in the next generation of consumer technology. And last but not least, Connor Sunburg Connor's, a partner at Amplify. Amplify is an early stage venture capital firm based in Venice, that's dedicated to making early investments in LA's most promising startups.

They've had some, pretty significant exits to Apple, Google, and FanDuel among others. Thanks for joining us.

So I'm gonna start off with a question for the group. So each of you chime in with, uh, an answer. David, you can start first, but, just right now lots of people are building lots of creative tools. Curious for this audience, what's most exciting to you? in terms of the creator tools being built and also just generally.

Where AI fits into your investment thesis.

[00:01:51] David: Yeah. Hello, check. Can you guys hear me? All good. All right. Well first off, thank you for having me, Andrew, and thank you to everyone for Music Tectonics beautiful day, beautiful event. so yeah, as mentioned, powerhouse Capital spin out of CAA focused on sports media, entertainment investments.

 I mean for us, what we've seen a lot of kind of AI music kind of creator tools across the board. We're obviously not a music only fund, but music is a big part of what we cover. I think ultimately, you know, especially at the early stages that we play in, a lot of what we look for is very similar to what you look for in other.

Kind of businesses, which is just really strong management teams now in the creative field. I feel like that differs a little bit, or at least can differ from a lot of other just kind of tech software type platforms. so for us, what really gets us excited is in understanding of what the creative community wants, what the actual pain points are.

And most importantly I think for us is the ability to meet them where they are. Right. So we've seen a lot of creative tools come out and. There's a lot of kind of AI tourists, if you will, right now on the consumer side. It's just been hard to monetize. A lot of the monetization has been coming from prosumer, but mainly like professional artists.

So getting an understanding and having an understanding of that kind of existing workflow and the ability to plug into that existing workflow and actually solve pain points. We also see a lot of people just creating really cool tools, don't get me wrong, like very cool outputs and stuff like that, but it's not actually making creatives faster, more efficient, you know, better at ideation, et cetera, et cetera.

So oftentimes what we look for. Our management teams that really have a connection with that creative community, understand what they're going through, and want to connect and just make their life easier by meeting them where they are. I would say those are the main things. Uh, ai as a thesis, we view it as offensive and defensive, so offensive new tools that are coming out.

But then also the defensive. All of our portfolio companies have to be using AI in some way. I don't care if it's just chat GPT to make you more efficient in search or something like that. But you know, it's kind of across the board, both from a new perspective, investment side of the house, again, meeting people where they are, but then also existing portfolio companies adopting.

[00:03:53] Jason: Cool. thank you, Andrew, for having me and, everyone for being out here. Um, yeah, so I think on, on our side at Patron, We're influenced a lot by where we came from initially. So my co-founder and I were at Riot Games. Uh, I joined the company a couple months before League of Legends launch and I was there for over nine years.

And then our third partner, Amber, was acquired into Discord and was helping Discord kind of expand into a lot of other, verticals outside of games. And so we think a lot about, I think in general, consumers don't necessarily think about, I'm gonna use an AI product versus a non-AI product. I think they just use great products that help them do something they need to do.

And, and I think our bias, from a venture investing side is to find founders building products that can scale to hundreds of millions of people that they can use for thousands that they come back to for thousands of hours. I think as that relates to creatives and creative tooling, I think we generally don't believe that there will be a hundred million people making movies and like making music professionally, making animation, generating images.

 think at the end of the day, a lot of the attention, as more and more content exists in the world, more the attention kind of is drawn to the highest quality, the most depth characters with the most resonance. And so we think a lot about like, how do people discover and consume. The highest quality content.

And, ultimately AI should be a tool that helps in the creation of that. not necessarily in the creation of just like a lot more content. so I think we've generally stayed away from, prosumer tools or trying to monetize a, consumer that's just like experimenting by paying $5 or $10 to like try something for a month or a week.

 and think more about like what are the kind of products that people can. Like come back to for thousands of hours and get to the a hundred million scale.

[00:05:34] Connor: Awesome. Is this working? Everyone can hear. Cool. yeah, I think one of the things that we've been paying a lot more attention to is sort of, you know, with AI it feels like everything is now up for grabs again.

And I think when you have sort of a platform shift like this, there are new primitives that emerge every time. And so I think a lot of what we've been paying attention to are. What are the early primitives that are catching on and that people will, you know, kind of follow and use more over time. Right.

And so I think paying attention to early things like, you know, the Sora launch, right? It sort of had this like meteoric rise and then, you know, now people are kind of questioning was it a flash in the pan? Is that going to stick around? What role does like AI generated video have in broader consumer landscape?

And then at the same time you have, you know, Chat GPT and OpenAI was talking about our products called Pulse, right? Which I think is also very. You know, kind of interesting unexplored territory of this idea of like, you know, how do you kind of make more personalized experiences for end users at scale?

And the fact that you can now use AI tools to sort of, you know, create these new feeds for consumers one-to-one. Right? And so those are just two examples, but I feel like anytime we see a platform shift like this, we pay a lot of attention to what are these new primitives that are emerging, and then what types of both consumer and enterprise experiences are built off the top of that.

I think broadly, like trend-wise, what we've kind of looked at are, you know, democratization pitches are really interesting when you sort of have a function or an idea that used to be relegated to kind of the one to 5% of a market, how does that then, you know, become available to the entire market? and then also I think, you know, historically we've just looked for like staying power, right?

 so how do you kind of find things that are. Going to be relevant to, you know, a broad swath of creators, but then also, you know, kind of, influence, the buyers where the real capital flows are over time, right? And so I think what we've tried to avoid is kind of the trap of like going after the quick bursts of kind of attention or media, and looking for like, what are these things that are kind of like slow shifting or more meaningful behaviors that are moving over time.

But yeah,

[00:07:43] Andrew: actually that's a. That's a, that that was a great answer. Apparently the first person to break a sweat loses. So,

[00:07:50] Connor: it'll probably be me. I'm gonna have use the jacket,

[00:07:51] Andrew: but I'm gonna, I'm gonna stay with you because you brought up an interesting point. so like, what is the sustainable business model?

Like, where do you see moats emerging? What are you looking for?

[00:08:01] Connor: Yeah, I think, you know. There's a lot of like an example, right? Like I, thought, you know, Sora was super interesting just in like, it felt like the hardest invite to get in town for a bit, right? And then you sort of had all of this conjecture over, is this gonna be long lasting, is it gonna be short-lived?

And then now we're seeing sort of like the tail off and attention from there. And I think oftentimes it's not about, a mad dash to a new platform or the first couple videos that get brought around, right? Like I kind of take the opposite side of the bed of like there were people saying that you're going to see all ads will be AI generated from here on out, right?

Because the cost is so much lower and I think you hit saturation points like very quickly and faster than people expect. Right? And I think most consumers don't want to go into a feed and just see all AI generated content. And a lot of the early ads that you saw that were AI generated in large part, I think performed because they were different.

Right? Not because it was like a fundamentally better experience. And so I think those are, maybe it's an inversion to your question, right? But those are kind of things that we look at as like warning signs. Where are people actually going into this? Are they sticking with it because it's just new and different in that moment?

Or is it actually causing like a fundamental shift in like the way they create what consumers have to say? Right? so looking for something that's more of like a deep behavioral shift versus just interesting because of the novelty.

[00:09:22] Jason: I think there's a big gap between like what the technology enables and what people actually want.

So this idea of like, taste, and I think music is probably the best, the best example of this where I think you have some founders of companies where they talk and it, it literally seems like they don't like music. Like they genuinely don't like music, they don't have artists they follow, they don't have songs they like, and they think that the perfect world is I'm gonna type into a text prompt and generate songs that I'm gonna listen to all day.

And that's fine. I'm sure there's people who are like that. And I think those people will spend money kind of, if that's replacing the time they spend on TikTok or other things, like maybe that's sustainable. But I think by and large, like people who love music, who spend the most time around music, who wanna make music, like that's not how they think.

And so I think building around like what people actually want and creating experiences. Again, going back to this idea of like, can something become the primary way that you do something and. is this gonna be a product that you use for thousands or tens of thousands of hours? I think like that's, the big disconnect and I think sora is another great example.

I think OpenAI amazing technology, very little taste like the conversion of the people who use chat GPT to, to the people who download and use sora in the beginning is like actually pretty low. And if you look at like what sora is used for, it's predominantly generating content that people post onto TikTok and Instagram.

And so if it's just like another creative tool to like, put content on other platforms, like that's not gonna be valuable long term. And but like this idea of like, do I want to see a feed of like, all my friends doing stuff with Sam Olin? Probably not, right? So, uh, or with Logan Paul or whatever it is. So I think like there's a gap right now between kind of like what technology enables and what people actually care about and resonates with, like large audiences and helping to close that gap is gonna be really, important.

And the companies that. Kind of capture the most value are gonna be the ones that understand what people actually want.

[00:11:16] David: Yeah. I, I agree with all that. And I think it goes back to kind of what I was saying before about there's a bunch of AI tourists, everyone wants to try it out. You can make cool videos.

I've seen hilarious videos on with sora, on TikTok, but it doesn't mean that. Those people will be, first off, stick around is one thing, but second off, be willing to pay. Right? There has to be some type of ROI, right? If you're paying for a product, and I think that's why for us, most of it comes to, again, kind of B2B kind of workflow plugins.

Meet people where they are, because that's the people who already have a budget are already spending. And it's just more about capturing that spend. And so a more efficient way to do things that are already there. Behavioral shifts are coming, it's definitely gonna come. It's arguably happening right now, but these behaviors from kind of already paying users are already there.

And ai, it's much easier to believe that those dollars will shift to AI than a brand new behavior starting because of ai. Right? It'll probably happen, but it's easier to believe that the behavior just stays the same. So I think that's one. and then. Honestly that was, I forgot my other point.

[00:12:12] Andrew: No,

[00:12:13] David: main point.

[00:12:13] Andrew: No.

I'll stay with you. 'cause it, you led me into my next question. So, and we talk about this a lot. Like if you're replacing or augmenting existing behavior, you're only gonna capture like a sub segment of those people, right? You're gonna get that small margin on what they're already paying. So like if you're making a venture bet and you're trying to hit a home run.

You know, a 2050, a hundred x, you're not actually betting on that segment. You're betting on their ability to get beyond that first cohort, that niche. So how do you think about that? Like how do you say this could scale, this could find bigger audiences?

[00:12:53] David: Yeah, it's a great question. So first off a little bit just about how Powerhouse invests, we are very sports media, entertainment focused, right?

So. We're not, you know, we're not necessarily like deep tech investors. We're not investing in the open ai, we're not chasing the open ai. It's not that we'd be able to get in anyways. so we also have to level set our return expectations and ultimate exit expectations with the size of the market, right?

Which is just inherently. Smaller than just general tech, right? So that's first and foremost, but that's more on the kind of backend investing side. What I would say is that, you know, a lot of people right now, if you're not one of the huge conglomerate, this is my view, not one of the huge conglomerates, we're one of the huge kind of, tech giants that's funding ai where it's okay if they get, they go the consumer route and they don't have kind of right size unit economics for 5, 10, 15 years.

Who cares then? By all means, that's a pretty tough competitor to go against. My perspective is, especially at the early days within media and entertainment, you get two things by going B2B to start one. You get a proof point that the big guys can use you and it's high quality, and you could take them into the feedback loop to actually improve the product.

So that's the first thing. Second thing is you're stealing that share first right of spend that's already there, which early days is really important because one, it shows that you can monetize. And two, it extends your runway, right? So just from a funding capacity and funding need perspective. It's lower than trying to compete with an open AI or something of the sort.

That's a drastic example. So from my perspective, going the B2B route to start is the most prudent way to do it, improve the product, and once the big guys get it, you get somewhat of a halo effect. At least that's the thesis, and then it kind of trickles down from there. It's always right. Do you start consumer and then go up to B2B or go B2B and then go to consumer?

Ideally these products would go consumer. I just think B2B is the easiest place to start right now in the given age. So.

[00:14:44] Andrew: How do you, how do you take it from niche focused to like, how do you think about that, Jason? Like it starts with an active group, but how do you get to the, Thousands

of

hours of sticky

[00:14:55] Jason: Sure.

[00:14:56] Andrew: Users,

[00:14:57] Jason: I think by definition there's not a lot of products that get to hundreds of millions of users and that they use for thousands of hours. And so by that construct, like most things probably shouldn't be venture funded, right? Like most products and most companies shouldn't raise venture capital.

And, and I think it's just about aligning expectations as a founder and also with, investors around how big the opportunity is. I think it's perfectly fine to build. Creative tools that reach like some niche audience and it serves them really well. And maybe at some point in the future there's like a private equity roll up of a bunch of these things in a category.

But again, I, I think the, the disconnect in the early stage startup market is that a lot of companies and a lot of founders and a lot of VCs come together around ideas that from the beginning are just like not set up to be successful. and then the moment you take venture capital, you're on a clock to basically hit.

The next milestone to raise your seed round your series A, your series B, and, and I think the reality right now is like there's never been greater expectation of what a company can show with little capital, given the kind of efficiency gains of ai, small teams revenue immediately, getting to like 10 million plus a RR what whatever a R means.

Um, I, I think like a lot of people are just heading down this path where I think if you kind of. Spend a little bit more time upfront, you'll see that like a lot of these things probably aren't gonna get to venture scale. which is fine 'cause there's a lot of investors and a lot of other types of capital that you can raise to build businesses.

And, and I would actually argue like most creative tooling companies probably shouldn't raise venture capital. I don't know if that's controversial, but it should be obvious by like a numbers standpoint. But, I think that's something we think a lot about. And then, so us coming from games as well, like.

If you look at games industry, like how many gaming infrastructure companies got to venture scale? It's like, not a lot. And like Epic Games only got there because Fortnite became a really successful game. Like the engine business itself wasn't great. And if you're just one of like 50 tools that hope to get distributed through the Epic store, like what are your odds of being venture skills?

Like pretty, pretty low. So I, I think we, think that like tooling, unless it truly unlocks like a new platform that a lot of people have to spend time on. It's just like a really tough space to build a venture scale business.

[00:17:11] Andrew: Connor, you got anything?

[00:17:12] Connor: Yeah, I mean, well said. I feel like that echoes a lot of how we think about it and, you know, not needing to raise venture can be a great thing, right?

Like I think a lot of businesses who are, you know, building great products for creators, for communities, you can build a phenomenal business that way and not need to kind of saddle it with venture. I think the thing that keeps us up at night. Is sort of figuring out where do we deploy capital then, right?

Like it has to be something that has that sort of platform shift potential, right? Or the ability to create, you know, a sort of new paradigm, right? For a lot of creators or, you know, people who are consuming new content. and then the other thing I would say that we've been looking more at, vis-a-vis ai right?

Is sort of these categories where things were impossible before because of the scale or because of, you know, the compute required to do them right. And so there, I think is an interesting area for venture to play, right? Where we're looking for, you know, if you were a top 1% creator, you have teams of people who manage certain functions for you, right?

And a lot of times, like the answer is, don't throw more people at those things, but like, how do you make those people more effective? Or how do you take what those best in class teams are doing and make that accessible to the long tail of creators, right? Who don't have the same kind of reach or audience.

And there, I think there are opportunities for, you know, kind of new tech to take on, you know, a much bigger portion of the wallet there

[00:18:34] Andrew: just for the, founders in the audience changing the tenor. can you share a little bit about your process? How, from the time you meet a founder to the time you might say no or make a decision?

How does that go? Like what, what, maybe if each of you could share a little bit about your process.

[00:18:51] Connor: Sure. yeah, I think the things that we look to do are one, you know, kind of keep it effective on your guys' side, right? And so we're not trying to drive things out for a very long time. I think generally we try to make decisions in a matter of, you know, a couple weeks.

 and most of what we try to do is recognize that we're not experts in every domain, and it's impossible for us to be right. And so a lot of what we spend our time doing is talking to, you know, folks who are building on the ground in each of these different areas. And developing that network on our side.

So the heavy lift of our process is us having conversations with the right people to feel that we understand, you know, sort of the domain that you're building in, right? And so the majority of our time is spent on that. And then I would say a lot of it is just getting to know your team. if you're a B2B focused company, talking to early customers, early partners of yours.

Really just understanding how you fit into their workflows, what they're doing, right? if you're a consumer company, it's a little harder. We can't pull every user, right? but generally there, we're looking for anything we can find, right? What is your early community response? What are people saying on, you know, Reddit or on, you know, discord or on forums, right?

 where can we kind of get early hints of the role that you're kind of playing in, you know, their lives, what's standing out, right? so that's I think, the majority of the focus of our process. but yeah.

[00:20:01] Jason: Cool. Um, on our side, so we're investing out of a a hundred million dollar, seed fund. We typically write initial checks between two to 5 million as a sole lead or co-lead at the seed stage.

 seed is a pretty flexible term. I, I think for us, like we would prefer to invest, like after products have been launched in market where there is a little bit of kind of. Organic traction around or usage of the product and some early hints that business model makes sense and or there's actually real business model traction.

And something we think a lot about, because we typically are the sole lead or co-lead is are we actually the best investor for. Getting the company to the next milestone, the series A round, the next round of funding and thinking through like what needs to happen for that company and in what ways can we as a firm accelerate, the company towards that.

 we spent a lot of time with founders around, and again, I think this is the riot discord bias, like these, those companies built products that got to very large user numbers without spending a lot on user acquisition. And so what is the. Unique wedge or edge around distribution. Like, do you know the early core users of your product?

Can you demonstrate that you already have them, like very close to the company? And does your product actually enable those early users to basically evangelize and build the community? that's something we think a lot about. yeah, but I, I would say like e every company's different. We invest across every consumer vertical, so, it's hard to say.

There's like a checklist of precise things that we look for.

[00:21:22] Andrew: Yeah,

that's

great.

[00:21:23] David: Yeah. And for us, we have two strategies, for kind of what ends up being around a's and Bs. We prefer to lead, co-lead. So that process looks a lot like Jason's process where it's, you know, longer in nature, a little bit more conviction based, a little bit more consensus based.

Uh, we look at your best customers, KY know your best customers. K Ys, BC is what we. you know, retention, all the typical metrics. But again, it does kind of change depending on company because we do things from, you know, gaming companies to talent management businesses, going across, again, just all sports, media, entertainment.

Uh, but that's a little bit more analytical at the earlier stages. it sounds more like Connor's process actually, where it's a little bit more, you know, what's the founder's background, how big is the market, more of the qualitative stuff, but then also. Because we're only focused on sports, media, entertainment, odds are we've probably come across someone that has come across either your business or someone you've worked with or something like that.

So a lot of network calls just to get kind of reference checks. What do you think about the market? What do you think about the approach, et cetera. And then at the early stages too, even though we don't lead. We try to share that all back to you. That way, you know, the feedback from the broader market.

It's one of our value adds we see too, where, you know, we have a very hyper-focused network. Maybe you don't have as broad of a network or it's at least a complimentary network. That way it can help your research as well. So that's kind of how we think about that.

[00:22:40] Andrew: How we doing on time?

 Uh, we'll do one more question and we'll turn it to the audience. also for the founders in the crowd. people building at the intersection of creativity, consumer, and technology piece of advice.

[00:22:53] Jason: I would say like, just think a lot about the audience you're serving, whether that's like the people that are using the tool and or the people that ultimately consume the content and think a lot about, like. Why are they gonna spend time either using the product or consuming that content when there's so much other content that exists in the world?

 we think a lot about this idea of like, can you become the primary way that a large enough audience like wants to do something online? because if you are like the secondary, tertiary, or you're just like doing something that's competing for, like, if you're actually trying to get people to spend less time on TikTok or something like that, like it's actually pretty challenging.

Uh, or playing League of Legends or Valant. and so yeah, I would lean a lot into like understanding your audience and like what motivates them and why they're going to want to use whatever it is, either the creative tool and or consume the content that comes outta the creative tool, as like a primary form of some kind of entertainment or time.

 I think that's something that a lot of people kind of overlook and they focus more on the, what can the technology do? Not like, why are people. Using it,

[00:23:52] David: actually going off that, know your audience, fantastic. And then also know your competitors because I, you know, where we sit, it's our job to see everything, right?

So if you have, if you're building a gen AI VFX tool to help with scripting in post-production, right? We've seen 20 of them, right? So what is your differentiation point? How do you know this isn't gonna be a commoditized market? Right? If there's so many people going after the same thing, we always say.

You know, is this product 10 x better than the next competitor? Right? So I know you guys are in build mode, it's really difficult. I know you guys aren't necessarily out there seeing everything, but do your best before fundraise just to know who your competitors are and know your competitive, advantage.

And then really honing in on that point, on top of the audience point.

[00:24:33] Connor: Yeah, I was thinking, probably different advice depending on what you're looking to do. I think speaking from the frame of things that are, you know, going after that like venture scale kind of vision. Right. I would say they're, and I don't think this is universally the case, right.

But I think I have been a little bit more kind of sad to see in a way. Right. But like some of the rhetoric out of like a lot of the companies that are building like AI tools, I feel like is. Going more towards this vision of like, how do you replace people? How do you, you know, shave like, you know, small percentages off margin, right?

Like how do you kind of, you know, kind of disrupt in that way, right? And I don't think that's inspiring to a lot of people, right? It's not inspiring to your perspective audience. It's not inspiring to investors that

[00:25:16] Andrew: you don't want to cobot.

[00:25:17] Connor: Yeah.

And so I think, for us, right, like we get really excited when people are, you know, thinking much more of this lens of like, how do you empower the people in your audience, right?

It's like, I think if you really believe that like AI is going to transform a lot of what we do and scale, you know, people and their ability to reach, you know, much larger audiences, there's like this fundamentally like kind of uplifting part of that vision that like people aren't kind of going after as much.

And I think it's awesome when we see companies that are really leaning into that. the other thing I would say is, you know, more outta the box, right? I think there are sort of like mediums that are under-explored right now relative to like some of the stuff that we see. Like you see probably thousands of pieces of content about image gen or about video gen, right?

 I think voice is underexplored right now. I think the idea that we were talking about before about like pulse and things like that, where it's sort of like you have the ability to do these like passive data informed experiences where it's sort of like you as a consumer can wake up every day with something that is done a lot of work on your behalf, right?

And that's now fundamentally possible for the first time, right? There's sort of like these new primitives that are starting to, you know, rear up. That I think will be really cool. You know, kind of feeding grounds for new consumer products and experiences. there was a great like thread that I was looking at the other day that was kind of debating like, what is the definition of consumer today?

Right? And I thought it was very funny. because they were talking about like, is Chat GPT a consumer product? A lot of people are like, oh, it's an enterprise business. Is it consumer? but like the same thing would be said of like a lot of the tools in the past that have kind of become these big companies.

I was talking to a friend about Robinhood, right? Robinhood, when it started, you know, I think a lot of people wouldn't have, you know, viewed it as much. As going to reach like the audience that it has, right? But I think it really capitalized off of, you know, a few kind of core innovations that allowed it to create new behaviors for millions of people traders, right?

And so I think you're going to see a lot more things kind of get dragged into the consumer category that people would've said, oh, maybe this isn't right. we're paying attention in healthcare as an example. We're paying attention in law, right? I think those are interesting feeding grounds to create like consumer experiences in the way that you haven't had those before.

So. Yeah, I think, I don't know, like, um, I guess the pitches that are a little weirder right, right now I think are, you know, very exciting to us.

[00:27:31] Andrew: Awesome. That was great. okay. Open it up to the audience. Say your name and speak loudly.

[00:27:37] Tiffany: Anybody else wants the mic? I don't mind taking it around if you need me to.

Andrew. So my name is Tiffany Salas. I'm a graduate student at Berkeley College of Music with a master's in music business. I love, and I'm going to track you down, Connor, but I love the democratizing aspects that you're talking about and then also, the scalability and things like that.

Like I love all of your comments, but essentially my question is because what I want to do for my graduate project. What started out as a business plan has now grown legs and is now becoming a business. Holy shit. but scary as hell. So, good job guys. Everybody here. I, hell yeah. Like you guys are amazing.

I don't know what the fuck I'm doing anyway. but what I wanna ask is, you guys talked about looking into the founders, right? Looking into the team when you're investing. So as somebody that doesn't know. Anything about tech, but I have these ideas that I can tell you about at any point to democratize mental health for the creative industry, but then also to put it in the hands of anybody who wants to use it in any industry.

How, what skill sets are you gonna be looking for? On my team, for example, in the tech side when I'm building these things so that I can actually be looking for those skill sets as I'm building my own team.

[00:28:54] Jason: yeah, I think ultimately it's gonna be, obviously it'll be different for depending on like what space you're building in. I think one question you'll have to ask is, does your product or company being successful rely on like a technical advantage or is it more of like a marketing play where you can just like reach the audience with.

A technology that already exists that you don't have to like build from scratch. Um, so, so I think that's, first and foremost. and then if it is something where you don't necessarily need to build, like do a lot of like r and d, hard tech, like research, to build the product, then I think a lot more time will be spent around like, what is that audience insight and how do you get in front of those users and why do you know better than other people like what they actually want?

 I think a trap that a lot of founders fall into is they recognize an opportunity, a market opportunity based on some observation where it just seems like a great idea in their head and they believe that like it should exist, but they don't have any kind of real way to kind of validate. And the reality is like the, needs of users change over time, especially as new things come to market.

And so I think that's something that. You just have to like over-index on as like a early stage founder, and use that as kind of like your North Star for like what it is you're building. so again, I would focus less on like, this is my idea and what I'm doing, and then try to build a team that kind of does that.

I would think more about like what is your, like for you to win, like what needs to be true and then kind of build around that kind of like idea.

[00:30:24] Andrew: I haven't said anything. I've asked questions, but like it, you know, for us. And everyone's alluded to it, but nobody said the term, but founder market fit, right?

Like that's something you can't teach, and that's a deep understanding of a problem. The belief that you have in solving this issue that you've encountered that is so like deep in you, right? That you won't stop because you are experiencing a challenge, which is you need to find a team. Well, if you don't believe in this, you're not gonna communicate to these founding team members.

The problem with enough conviction that they would come work for you. Right. So, founder market fit. Any other questions?

[00:31:01] Speaker 7: Yeah. You guys spoke about curation as possible, way forward. I am in curations of great news, as what is a value prop that you think can resonate with huge markets and have you seen any companies? In the space doing great job. And why?

[00:31:18] Andrew: Curation of content generally.

[00:31:20] Jason: Yeah. So you mean like you don't actually create any of the content yourself? You're just like finding and then aggregating and then sharing

[00:31:27] Speaker 7: to some degree. Yeah. Matching unique, individual needs, with, relevant content taken from the whole sea of available content that we have today.

[00:31:37] Connor: I can, yeah, I think there are maybe a few things and I'm not going to, you know, give probably the most examples of like, specific companies, right. But I think definitely trends that you're seeing more of. and then I'll maybe bring up one thing that I think is sort of a missing link in a lot of this.

 I think it's been really interesting to watch, like the evolution of, you know, Twitter and X and what they're doing now. and I know, you know. Politics aside, everything like that. Right. one of the things that they talked about recently in an interview. Was this idea that before if you were trying to index on a specific user, right, and personalize an experience to them, right?

 you had to use almost abstractions of data to do that, right? Like you were looking for how much time did you spend on a thing, right? Who are you following? Who are those people following, right? And one of the things that they brought up recently in an interview is that it's now possible for them to actually read, understand, and expand every piece of content that's posted on the platform.

Right? And so this idea that now because of, you know, the ability to leverage compute and a lot of what they're doing with reasoning models, right? They can actually sort of, you know, have a much more expansive view of each piece of content and start to tailor that one-to-one to users, right? Which I think is a lot of the promise of like what these products are going after, right?

It's like if you think about a tool, like a deep research or reasoning model, right? The idea is that it can kind of go on in the background, right? And spend way more cycles than you would as a user, kind of telling you what is relevant, what's interesting about something. And I think that is sort of a primitive that we haven't seen kind of rolled out broadly and a lot of tools just yet.

Right? And then I think one missing link that I would, say, you know, we're actively looking for things in this vein, but I still think there's this missing, you know, link around, personalization to the end user, right? like there's not a great way for all of us to kind of store our context and the things that we're interested in and connect those to the experience on the other side, right?

Like, I jokingly use the example of like, when you talk to Siri, right? And you say, play a song, right? it asks you what platform, theoretically, you know, you should know, right? What am I subscribed to? What platform do I listen to most regularly? you know, all of this data about the user, but right now a lot of the models are sort of like, you know, siloed from that.

And so I think for us to get these sort of like truly personal experiences and things built for us, we're still sort of missing a bit of the infrastructure to do that, right? A lot of people talk about MCP as model context protocol, and there's early teams that are starting to talk about the idea of like, you know, HCP, right?

Or a human context protocol. Like how do you kind of, you know, connect what's going on in the models to like individual user context. But yeah, I'm excited to see more in that vein, what gets developed out of that.

[00:34:13] David: Yeah, I agree with all that. And just to talk a bit more, where we spend more of our time is kind of around just the pure kind of video distribution, music distribution, content distribution side of the house.

I mean, like, the fact of the matter is we've seen a lot of verticalized distribution platforms go after specific markets. the challenge has been is that, that like TikTok, Instagram, YouTube, Spotify, the algorithms are pretty damn good. Like they are pretty, and they have so much scale on the supply side.

That they have an unfair advantage where they can push you any direction, right? I think the argument you have to make to make a verticalized platform work is that you figure it out and there are these niches, but you figured out these niches that are just so willing to spend Instagram, TikTok, YouTube, they're not gonna build specifically for it.

 and there's more ways to monetize as well. Like is it consumer products? Is it affiliate, is it transactional? I think that's the only way, in my opinion, that a verticalized distribution platform works in today's day and age where distribution has gotten so big within a very few amount of players.

The good thing though, on the content side, to take the other side of that is, you know, Jason and I were just talking about this with all the AI kind of slop going on, you know, we hear a lot, I'm sure we all hear. There's gonna be just so much content. But I don't think I've heard anyone in the past 10 years say, we don't have enough content.

We have way too much content already, as is ultimately, the algorithms will service the quality products and the quality content to the top right? That's what they're there for. And when I say quality, I don't mean just high spend, but just content that can find an audience. Now you can make an argument that that's gonna be more talent driven, more authenticity will matter with ai, et cetera, et cetera.

That's all to be debated. But the fact of the matter is, is that, you know, content, quality content, in my opinion, will still rise to the top. And the, these algorithms, to be honest, will just become more and more important because they'll have more supply to play with.

[00:36:00] Speaker 8: Thank you guys so much for all of the, uh, information about. Where your head's at and where you want to put your dollars. my question is about, I've heard a lot about forward facing consumer applications or distribution platforms. You just touched a little bit on my question, but how much are your funds focused on the infrastructure and the backend side of things that are clearly.

Antiquated and now we have more disruption. How much of that are you weighing with these new applications when the infrastructure isn't quite in place even for today's applications?

[00:36:37] David: Yeah, no, it's a great question. I mean, this goes back to, you know. First off, it all depends on the fund, right? So we're a small sample of the market, right? So you know, you may have consumer only funds, you may have infra only funds, you may have B2B only fund. to me, I still think address like, and it has to do with go to market, it has to do with the current market within sports media entertainment.

So maybe a little specific, but I still think that the B2B side building infra for budget that's already there, improving existing processes from an investment perspective is the easiest story to believe. So I think that when we think about investing in the AI market, sure there may be some consumer apps and we've seen some consumer apps that are just killer and like it's really impressive.

To Jason's point, what they've been able to do with ai, of course we'll take those bets. You have to get into the winners. But in terms of getting creative, in terms of building for a specific market like this market, to me it still feels like the best place to start is B2B on the infrastructure side, just making existing processes easier.

So I would say for us. A big amount of our attention is going to that space and then we're kind of opportunistically looking at the consumer side and getting them where we can. It's hard to get into the big consumer guys right now as funds, so.

[00:37:44] Andrew: Alright. Thank you so much.

Let us know what you think! Tweet @MusicTectonics, find us on LinkedIn, Facebook and Instagram, or connect with podcast host Dmitri Vietze on LinkedIn, Twitter, and Facebook.

The Music Tectonics podcast goes beneath the surface of the music industry to explore how technology is changing the way business gets done. Weekly episodes include interviews with music tech movers & shakers, deep dives into seismic shifts, and more.