Anchors Aweigh, Indeed
Congratulations to Anchor and Spotify on their deal
Approaching a decade in the investing world, I finally have a framework that I’m comfortable with when it comes to making new investments. And I feel silly about it, because it’s so simple.¹ Team. Product. Timing.
Now, the order of importance for these pillars varies based on the stage of the company.² But to me, every investment opportunity boils down to an equation based on: is this the right team, to build this product, at this time?³
Obvious, right? In some cases, yes.
One such case was highlighted today, with the news that Anchor has been acquired by Spotify. Team. Product. Timing. Anchor nailed all three.
I first met co-founders Mike Mignano and Nir Zicherman a few years back, well before GV actually invested. Just the two of them checked the team box right off the bat. Product and timing seemed a bit more murky. But over the subsequent months, they taught me something important: product isn’t necessarily about the product that’s right in front of you. It can be about the ability to iterate on said product; to eventually find that right iteration. And as the company expanded, the Anchor team was able to iterate and ship product as well as any team I’ve ever been involved with.
Timing is always the hardest component because it’s usually out of an entrepreneur’s control. So many products fail simply because they’re too early. From the get-go, Anchor honed in on audio as the space they wanted to play in. And I agree with this thesis! But it’s still early in the general arena.
But there is one sector of the space where it’s not so early: podcasting. Once Anchor put two-and-two together here, it was off to the races. Last year was one of insane growth, in terms of podcasts they were powering — literally expanding the market, in a very meaningful way. Towards the end of the year, the other shoe: getting that fast-growing base paid.
Spotify clearly saw all of this and made an aggressive and savvy pitch to turn this solo act into a duet.⁴ I’ve long been impressed by that company, and I’m more impressed now 🙂.
This is the type of deal that almost makes too much sense.⁵ Just as the Anchor investment did when GV led the Series A. And we could not be happier for the Anchor team today as they kick off this next chapter for the company. Spotify is getting a great team, with a great product, at the right time.
¹ Why I didn’t figure this out on day one, I don’t know. Maybe you need to make some mistakes to truly understand something so obvious.
² For example, in the very earliest stages, pre-product, team and timing will clearly matter a lot more. In the later stages, hopefully timing has been proven out already!
³ There is a lot of nuance here — at least in my head — definitely worthy of another post, sometime soon.
⁴ And perhaps a whole band when you include Gimlet in the mix! (Disclosure: Megan and I were also personal investors in Gimlet — what a day!)
⁵ In a way, it reminds me of another deal, back in the day.
