Why Lightspeed Bet on xAI, Neuralink, Suno, Granola, & Pika | Michael Mignano

Michael Mignano, Partner at $30B VC firm Lightspeed, and the co-founder of Anchor, a podcast creation, hosting, and monetization platform acquired by Spotify in 2019, joins Sourcery to discuss the next era of creation & technology investing. In this episode, Michael shares how his background building consumer media products informs the way he invests today, with a focus on AI and creativity-driven companies. We discuss his portfolio, including investments in xAI, Neuralink, Suno, Pika, Granola, and Macroscope, and how he evaluates AI businesses when incumbents can move quickly. The conversation digs into what makes AI companies defensible today, from retention-driven moats to why ARR metrics can be misleading. Michael shares his reaction to the Sora launch and avatars, and what these changes could mean for creators. We also touch on evolving early-stage check sizes, lessons from Spotify’s Daniel Ek, his work on Obo, and thoughts on potential IPO candidates. Michael Mignano: https://x.com/mignano Molly O’Shea: https://x.com/MollySOShea Sourcery: ⁠https://x.com/sourceryy 𝐄𝐏𝐈𝐒𝐎𝐃𝐄 𝐋𝐈𝐍𝐊𝐒 YouTube : https://youtu.be/m0lZ3JdZw7s 𝐒𝐏𝐎𝐍𝐒𝐎𝐑𝐒 • Brex https://brex.com/sourcery—The modern finance platform, combining the world’s smartest corporate card with integrated expense management, banking, bill pay, & travel. https://brex.com/sourcery • Turing https://turing.com/sourcery—Turing delivers top-tier talent, data, and tools to help AI labs improve model performance—and enables enterprises to turn those models into powerful, production-ready systems. https://turing.com/sourcery • Deel https://www.deel.com/sourcery—Deel is the global people platform that helps startups hire, manage, pay, and equip anyone, anywhere. Trusted by more than 35,000 fast-growing companies, Deel is the people platform that just works, so teams can scale without the chaos. Visit: https://www.deel.com/sourcery • Public http://public.com/sourcery–Investing platform Public just launched Generated Assets https://public.com/generated-asset, which lets you turn any idea into an investable index with AI. With Generated Assets, you can build, backtest, refine, and invest in any thesis with AI. Gone are the days of one-size-fits-all ETFs. https://public.com/sourcery https://public.com/sourcery Follow Sourcery for the latest updates! https://www.sourcery.vc/ Disclosure Paid Endorsement. Brokerage services by Open to the Public Investing Inc, member FINRA & SIPC. Advisory services by Public Advisors LLC, SEC-registered adviser. Crypto trading provided by Zero Hash LLC, licensed by the NYSDFS. Generated Assets is an interactive analysis tool by Public Advisors. Output is for informational purposes only and is not an investment recommendation or advice. See disclosures at public.com/disclosures/ga http://public.com/disclosures/ga. Matched funds must remain in your account for at least 5 years. Match rate and other terms are subject to change at any time. 𝐓𝐈𝐌𝐄𝐒𝐓𝐀𝐌𝐏𝐒 (00:00) Michael Mignano (01:06) Anchor’s pivot & podcasting’s breakout moment (02:32) Spotify’s Talk org: podcasts, video, and live audio (02:55) Why synchronous (live) formats fail online (03:27) Joining Lightspeed & portfolio overview (03:47) Investment thesis: creativity, product taste, founders (05:24) How xAI & Neuralink fit Lightspeed’s strategy (06:56) Is OpenAI “Sherlocking” ? (08:37) Granola & retention as the real AI moat (09:52) Why ARR can be FAKE in AI startups (11:20) Seed vs Series A check sizes & AI valuation premiums (19:34) Sora, avatars, recommendation media, & creator economics (33:37) Oboe: AI education & human intelligence (40:01) Lessons from Daniel Ek & Spotify’s long-term strategy (42:55) IPO predictions & what comes next

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Molly O'Shea?

  This is like a very hot topic. I'm sure you have a lot of opinions. What did you think about the Sora launch?

• 0:05Speaker 01

  I think Sora is the next phase. It's a whole new chapter for the internet. You know, I hate to say it. It's almost like the end of the creator.

• 0:12Molly O'Shea?

  Okay, so you joined Lightspeed, $30 billion fund. You've invested in XAI, Neuralink, Suno, Granola, Pika. So I'm curious, how do you see creativity as a moat?

• 0:21Speaker 01

  When you think about moats, I think what's really important right now, given how fast OpenAI can move, is getting to a behavior that is sticky and durable extremely early. So one lesson for me is Suno. It's producing the best AI-generated music in the world. They have a shockingly high amount of revenue that I will let them reveal on your podcast. I will do it. But the thesis has been extremely validated. And I think you only get there by being creative and having the courage to go do it.

• 0:51Molly O'Shea?

  What do you think the world's gonna look like once we have superintelligence?

• 0:53Speaker 01

  Uh, well.

• 1:06Molly O'Shea?

  All right.

• 1:07Speaker 01

  All right.

• 1:08Molly O'Shea?

  Michael, welcome to Sorcery.

• 1:10Speaker 01

  Thank you, Molly. Happy to be here.

• 1:11Molly O'Shea?

  As the godfather of podcasting, how does it feel?

• 1:14Speaker 01

  Uh, it feels good to be recording a podcast. I like podcasts.

• 1:20Molly O'Shea?

  Did you expect it to be this crazy?

• 1:22Speaker 01

  No, absolutely not. We, when we started Anchor, it was a very niche thing. I would say in the Apple Podcast store, which Spotify wasn't even really a podcast platform at that point. It was just music. There were like maybe a couple hundred thousand podcasts in the store. And then, you know, we, we didn't even think it was going to be big. So we were actually trying to build a social network for audio. Like we imagined like really short form stuff, kind of like Clubhouse. But then eventually, after a bunch of pivots, we just realized that, oh, wait, podcasts actually are a thing. We actually have to attach ourselves to this. We need to make this really, really easy. And then the whole thing just took off and ran away. And, you know, then there are tens of millions or maybe hundreds of millions of people that have now made podcasts. So it's crazy. We did not expect it.

• 2:07Molly O'Shea?

  And you were head of talk. That was the title?

• 2:10Speaker 01

  Uh, at Spotify, yeah, I think, I think that was my, my title because, uh, talk audio encompassed podcasts. Uh, we were also doing video. This was the start of Spotify getting into video podcasts. And then back then, uh, this was a few years ago, of course, we were also dabbling in live talk audio as well because after Clubhouse, everyone, everyone had to have a live play. The problem with all these live formats on the internet is that synchronous content is really, really hard because the beauty of the internet is that everything is actually asynchronous. So you can consume it on your own schedule, right? Like this podcast or all the podcasts you've done, anyone can consume them on demand. But if you have a synchronous platform, you're sort of forcing everyone to say you must consume

• 2:54Speaker 01

  this at this exact moment. And that's just really inconvenient.

• 2:58Molly O'Shea?

  So fast forward in 2022, you joined Lightspeed?

• 3:02Speaker 01

  Yes.

• 3:03Molly O'Shea?

  Okay. So you joined Lightspeed, $30 billion fund, a mega fund. We had Bucky on. It was great.

• 3:08Speaker 01

  Oh, nice. Buck, he's the best.

• 3:10Molly O'Shea?

  He's the best. Yeah, we, we went into the economics of what it takes to return a $30 billion fund, which was really interesting. And I think we could relate this to some of your portfolio companies. So for you, you've invested in XAI, Neuralink, Suno, Granola, Macroscope, Pika. So you've done all of those. And then I've also read on you that creativity is your moat that you like to go after. So what is your investment thesis?

• 3:36Speaker 01

  My investment thesis, when I started, candidly, I thought it was going to be really focused on things that matched my own experiences and my background. You noted that I, I built Anchor. I spent a lot of time building consumer products for lots and lots of people. Um, and I love those types of companies. I love founders that are, you know, super drawn to consumer and products for everyone. Uh, but the reality is after I joined, AI became a thing. And I think with each day that passes, I think we're realizing that. AI makes it so that we know less and less about the future. And so I think, you know, every investor out there has some thing they're good at, or, you know, some way they see the world that's different than other people.

• 4:18Speaker 01

  But I also think in many ways, we're all having to forget kind of everything we know and dream a little bit bigger because things are moving so, so fast. But for me, yes, I am drawn towards media. I'm drawn towards creativity. And at the end of the day, as like a product builder and a product designer myself, I'm drawn towards founders who just have amazing product taste and sensibility. You know, you mentioned Vernola, the founder and CEO of that company, Chris Pedregal, with his co-founder Sam. I had known Chris for a really long time and I watched him build this company Socratic. And I just knew that this guy had incredible product intuition. Just like, I knew whatever he chose to build, something really great would come out of it because he had shown me that through his previous company.

• 5:03Speaker 01

  And so when he told me he was building something new with Sam, it was like, doesn't even matter what you're building. Sure, we will invest. And so I find more often than not, especially as AI, again, kind of makes you have to forget everything you know, it's, it's really becoming more and more about people, great people. And for me, it's like product oriented CEOs.

• 5:24Molly O'Shea?

  How does XAI and Neuralink, those size investments fit into this?

• 5:29Speaker 01

  Yeah, it's a good question. So maybe taking a step back, Lightspeed, as you mentioned, it's a large, it's a large platform.

• 5:35Molly O'Shea?

  Mega.

• 5:37Speaker 01

  Thirty-ish billion under management. The current fund generation we're investing out of is in the ballpark of about seven billion. To do that, we're basically investing across stages. And I generally focus on early stage, but you know, we're, we're a firm that really prides itself on collaboration, working with our partners across different stages and sectors. And so if somebody has a great relationship, or if somebody has a very specific point of view on the world, we're not a firm that lets sort of the borders of those sectors or stages be a barrier that prevents a deal from getting done. And so I generally focus earlier, but as a fund, we absolutely have a strategy to, to bet on.

• 6:17Speaker 01

  On the biggest and best companies in the world and in the case of companies like XAI and Neuralink, it's like you gotta back Elon Musk if you have the opportunity to. And so that's the idea behind those investments. But but for me, I am more and more drawn towards the earliest stages. Again, as AI is making it such that you kind of have to forget what you believe. And when you're living in that kind of world and operating in that, in a world that moves so fast, the best bet you can make is on people. And so right now I'm doing a lot of seed, a lot of like inception stage. This person's amazing. Let's give them a couple million bucks type of investing.

• 6:56Molly O'Shea?

  I'm really interested to know how you think about this environment because OpenAI just had their dev day. Some would call this like a Sherlocking event. That's what it's called, right?

• 7:06Speaker 01

  It feels like every one of their dev days or every one of their live streams is a Sherlocking event.

• 7:10Molly O'Shea?

  On it, I mean, good for them.

• 7:12Speaker 01

  Yeah, totally.

• 7:13Molly O'Shea?

  Good for them, but like, I'm really curious how you even can get yourself to like write a check and then commit to something because there will be a funding in it. Like this one generative AI company, I'm not going to name it. They had a big like announcement the week before and like funding and blah, blah, blah. And then Sora comes out. Eight hundred million weekly active users, like insane amounts of like power law dynamics there. Like what, like, how would the other one win?

• 7:40Speaker 01

  Yeah, I mean, look, this is, I think this is the thing that every investor is thinking about right now. And I think the best you can really do is invest in great people who are hopefully getting a way ahead of the curve before OpenAI or other incumbents are going to be building something. And in the process, they're they're building some sort of moats and we can talk about what those moats might be. I mean, I think, yes, it's scary, but I should also point out that this is kind of always how venture has been. There have always been incumbents that can, you know, with one flip of a switch, send a team to go work in your space. I think the difference of what we're seeing here is kind of the ambition of Sam Altman and the speed and the kind of ruthlessness. And that's a, that's a compliment to which his organization can move and can move fast.

• 8:24Speaker 01

  But you know, when you think about moats, I think, I think what It's really important right now, given how fast OpenAI can move, is getting to a behavior that is sticky and is durable extremely early. And so, you know, to bring it back to something like granola, you know, granola is doing incredible meeting notes for anyone that uses the product. Have you used granola?

• 8:46Molly O'Shea?

  Mm hmm. No.

• 8:47Speaker 01

  You gotta use granola. It's really, really good.

• 8:49Molly O'Shea?

  Maybe.

• 8:50Speaker 01

  So granola does these meeting notes and it's really, really good. And we find that when somebody uses the product, it's incredibly sticky, right? Like the retention is insane. I've never seen retention like this before for a product. Because each time you use it, it just becomes more and more valuable for you. It has more and more of your context and history. And so at a time where all these companies are spending a lot of money for the latest and greatest AI tools, what you want to do is you want to get them to buy as quickly and as early as possible and get them retained as early as possible. And the hope is that if you can do that, then even if somebody comes along and they build a better granola, you're not going to switch because it has all of your context. And so I think when you hear investors talk about like moats and data moats and things like that,

• 9:35Speaker 01

  it's that, it's that kind of thing that we're talking about.

• 9:38Molly O'Shea?

  Okay, so is that the primary mode you look for? Like, how are you evaluating these companies?

• 9:43Speaker 01

  So one of the things that I take a little bit of an issue with right now in venture is there's so much of a focus on this ARR number.

• 9:52Molly O'Shea?

  Oh, my God, it's fake.

• 9:54Speaker 01

  Yeah, and it's not even defined properly half the time, right? Like, you might just take, some of these companies are literally just taking like yesterday's subscription rate and like multiplying it by 365, whatever. I think it doesn't say anything about the durability or the quality of the revenue. One of my partners says this thing that there's like high caloric revenue and low caloric revenue. And it's like, you want, you want the healthy revenue, right? So I think a lot of rounds are getting done right now based on this revenue. But what I'm really looking at and what all my partners are really looking at is the same stuff we've always looked at, which is retention. You know, how sticky is the product? How often are people coming back? In addition to retention, is it growing organically? Is it growing word of mouth?

• 10:39Speaker 01

  Or have they just figured out a way to go viral on TikTok a few times? Because if you do that, if you can figure out how to go viral on TikTok and you have a very well optimized conversion funnel, you can quickly run up your revenue rate. Like, it's, it's actually like not that hard. That's how good TikTok is. But it doesn't really say anything about the durability or the quality of the product or business. And so for me, it all comes back to the fundamentals. Is the product retaining users? Is it growing organically? Like, those are the two most important questions in my mind.

• 11:10Molly O'Shea?

  And when you're looking at the early stages, what kind of check sizes are you writing?

• 11:15Speaker 01

  Yeah, so this is another thing that's changing as a result of AI. I think, you know, when we're doing really early-stage inception-type investing, it could be anywhere from a couple million dollars, maybe, you know, $2 million to, in some cases, some founders are raising, call it five or six. I think when you're getting more into like a proper seed, you know, it's anywhere from four or maybe, you know, maybe on the higher end, we're seeing some of these larger seeds come in at like 10, again, as a result of AI and the momentum. And then, uh, Series As are sort of also getting bigger, right? A Series A, when I built my company, uh, we raised a $10 million Series A and it was like a big round. It was like, wow, that's a big Series A. That can last us a long

• 11:58Speaker 01

  time. You know, Macroscope, a Series A that I led a few months ago, we led that Series A with a $25 million check. So they're getting bigger.

• 12:07Molly O'Shea?

  They're getting bigger. Karta just put out recent data in their fund performance report and Series As are getting a 30% premium.

• 12:18Speaker 01

  Wow. What do they attribute that to?

• 12:20Molly O'Shea?

  AI. So AI companies get a 30% premium versus non-AI companies. And it's just like the biggest difference in this new cycle. And I would say, you can imagine that power law dynamics will seek in there and the delta is probably much greater between like the good teams and like, you know, the average teams. Because once you get into competitive land and you're going after, let's say, like another like huge mega fund and there's competition, like you're going to run the price up.

• 12:48Speaker 01

  Totally. Yeah, that's actually the dynamic we're seeing a lot. And definitely one of the things that's making us want to go earlier and earlier. Some of these companies, you know, they're growing revenue so quickly that the rounds are happening in such quick succession. And oftentimes, if you're the seed investor and things are going kind Well, you might quickly do the series A. And then by the time a new investor has an opportunity to come in, it's the series B. It's priced really expensively, but nothing has been de-risked yet. So you're paying this really premium price. You're having to write this gigantic check and you don't know anything more about the business, whether or not it'll it'll fail or succeed. And so I think the natural fallout of that is you have to go earlier and earlier.

• 13:32Speaker 01

  And I think to do that is is a new muscle for a lot of big funds. And I also think it's why you're seeing more and more of these accelerators pop up and do so well.

• 13:41Molly O'Shea?

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• 14:27Molly O'Shea?

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• 15:10Molly O'Shea?

  To learn more, visit turing.com/sorcery, spelt S-O-U-R-C-E-R-Y. That's turing.com/sorcery. Are you concerned at all with that rapid deployment? Going back to this report, like. There was a slump in VC, but now we're seeing dry powder deplete within these funds. Like, people are really allocating capital and fast because it's so competitive. Are you concerned at all with that?

• 15:36Speaker 01

  I think it's definitely, probably a concern for broader venture capital. I think at Lightspeed, we have always maintained a very, very high bar. You know, even in this environment, even at this pace, you know, investment, investing partners are still making the same amount of investments on average per year as a partner as we would a few years ago. And I think the only way you can do that is if you hold a really, really high bar. And again, don't get caught up in some of these kind of vanity metrics that we talked about, and you go back to the fundamentals. So I think it's really just about keeping the bar high.

• 16:13Molly O'Shea?

  Yeah, I want to go back to your point on moats because I'd also read some tweets, like you've written about moats a bunch, and one of them was on creativity. How do you see creativity as a moat?

• 16:24Speaker 01

  Yeah, the way I think about creativity as a moat, so I've written a lot about creativity in terms of making stuff and tools and art and music and that form of creativity. I think when I talk about creativity as a moat, I'm talking about creativity in a business sense, right? If you look at every business, every great company, right? Whether it's Apple or Nike or Amazon, and you really study the story of these, of these founders and how these companies came to be, there's something really creative about what they did. There's an ingenuity. It's not something that can just be written by ChatGPT and, you know, and like an AI-generated business plan.

• 17:05Speaker 01

  And so I think as it becomes easier and easier to make businesses, which it will because of AI, right? We keep hearing about, you know, the one-person billion-dollar company. I'm sure, you know, everyone tweets about that. Sure, it's going to be easier and easier to execute on business. But I think the thing that will remain rare and special is creativity in business, right? Who is the person or company or set of people that is coming up with something really, really new and novel in terms of a business model or an approach to go to market? Or an approach to, you know, how they do their product development? I think the best companies are still going to have that quality. And so at the end of the day, maybe the only thing that's durable at this point is creativity,

• 17:50Speaker 01

  when everything else can be automated.

• 17:52Molly O'Shea?

  What's a lesson you've learned from one of your founders on this?

• 17:55Speaker 01

  So one lesson for me is actually Suno. I think something really creative and genius about what they've done. They have a ton of subscribers and a shockingly high amount of revenue that I will let them reveal on your podcast. I won't do it. But, you know, I think when you're looking at that business early on, what you're saying to yourself is, okay, they, they really need to mirror the consumption businesses of, of the past, like a Spotify, like a YouTube, like a Tik Tok. They need to get a bunch of people creating on one side. And then they need to get a bunch of people creating on the other side. And, and to be clear, that is happening. But with the founders of this company, Mikey and Martin and Gayorg, what a belief they had very, very early on,

• 18:40Speaker 01

  which I would characterize as super creative to both believe this and then pursue it was that actually in the future, AI is going to make it so easy to create and such a personal experience to create, that these people that are creating, they're going to listen to their own music. And that's a business right there. We're going to, yes, we're going to, we're going to get these other consumers over here and we're going to monetize them, just like Spotify does. But we think there's also an opportunity to monetize consumption behaviors over here and not just for creation. And I think that early on, I was skeptical. Some of us around the table were skeptical. But it was a really creative and sort of bold bet on the future and a creative business model to pursue. And the thesis has been extremely validated.

• 19:25Speaker 01

  And I think you only get there by being creative and having the courage to go do it.

• 19:30Molly O'Shea?

  I've had so much fun using Suno.

• 19:32Speaker 01

  It's, it's a blast. It's so much fun.

• 19:34Molly O'Shea?

  In the world of generative AI, I want to go into Sora. This is like a very hot topic. I'm sure you have a lot of opinions. I have some too, like, but I want to hear your stance on this. What did you think about the Sora launch?

• 19:46Speaker 01

  Yeah, I thought it was incredible. I thought, first of all, they did a really good job on the product. Just even the onboarding experience of scanning your face was really seamless and fast. And I think they're able to discern a very, very high quality of of you just from a very, very brief scan. I think the other thing they did that it stuck with me was when you first onboard, you encounter a screen and a bunch of people I've talked to don't remember this screen because I think everyone just clicked past it. I don't know. I'm curious to know if you remember it. There's a screen that says, everything you're about to experience is not real or something like that. It says, you know, like the feed, nothing in the feed is real. And my guess is they they introduced that as a sort of disclaimer, right?

• 20:31Speaker 01

  Like, hey, reminder, that's not your friend actually stealing that TV from Walmart. It's not real. But to me, it almost came off like a mission statement. Like this feed is you're stepping into an alternate universe. You're stepping into another galaxy. You know, it's Ben Thompson, I think, made an interesting comment about Meta's Vibes app, where he said something along the lines of this feels like Meta's first real step into the metaverse. It's a completely different universe, right? Nothing is real, but it's people we know and we we identify with or we may even know personally. So I think that alone just kind of blew me away.

• 21:11Speaker 01

  And then I also think, obviously, the cameos thing was just incredibly smart for a lot of different reasons. I think it's the first time we've seen a new type of social dynamic built on AI. We've seen a lot of these platforms out there try to make the new AI-first social network, where they just basically replace humans with AI bots or avatars. And I think that's boring and it doesn't really tap into kind of some of the new and native and interesting things that you can only do with AI. But avatars is like, it's a purely new social dynamic. So I think that's really interesting. I think the biggest takeaway for me, though, is what it means for media and the business of media and the economics of media.

• 21:57Speaker 01

  Do you remember a few years ago when? Adam Mosseri, CEO of Instagram, put out this video and he said, "Starting now, we're going to be leaning into recommendations. We're going to move away from your friend graph and we're going to start doing recommendations." And everyone was up in arms.

• 22:16Speaker 01

  All the users, especially the influencers, I remember Kylie Jenner, put out this huge thing about how she was so upset. And you could, you could understand it, right? Because she had something like 900 million followers. It was a business, right? If she could put out a piece of content, tap a button and it reached 900 million followers, that is immense pricing power and the ability to advertise. So to, for her to learn, actually those 900 million followers, they matter a little bit less. That's a big hit to her business. And so I wrote this piece, which I called "The End of Social Media", and it was all about this new form of media, which I had, I had called "Recommendation Media", and it was really just kind of the TikTok algorithm

• 22:58Speaker 01

  and how the TikTok algorithm was sort of the next phase of media. The follower graph was going away and now the platforms were going to get to decide what somebody saw. Far more efficient way of content distribution. I think Sora is kind of the next phase. It's kind of, you know, I hate to say it, it's almost like the end of the creator. Like if you play this out and think about where this goes, platforms want to amass a huge catalog of content and then they want to program each piece of content such that when you're in the platform and you're swiping, your attention is captured for as long as possible. And that's why the TikTok algorithm is so, is so powerful. But it still requires that human beings make the content and there's a cost to that.

• 23:43Speaker 01

  And so I think where we're inevitably headed is now when you're swiping TikTok or Reels or Sora, we're eventually going to end up in a place where most of that content is generated on the fly, specifically to target you and to capture your attention as long as possible. And unfortunately, like the individual creator just becomes far, far, far less valuable in that dynamic. And so to me, that is the, that is the biggest impact of Sora. It marks the end of the creator, unfortunately, which obviously I find devastating in many ways. You know, I spent my career, the first part of my career, building tools for creators and it's, it's like, it's a whole new chapter for the internet.

• 24:24Molly O'Shea?

  Yeah, I think I read a couple posts on different creators saying like this is a cataclysmic event. Like you should like really come up with a good strategy going forward because it is a doomer standpoint for like creators for sure. But like, I think like with all of these things, you do need reinvention. I was talking to PJ who creates all those like extremely viral AI videos. They did one for Cal Shea, reached like over a hundred million people. Like it's truly insane. Like he's very talented and when he did that, I was like, okay, I gotta learn how to do that. And this was when like Gemini's model was taking off. And so I like spent the weekend like, okay, I'm gonna learn how to do this. Like you kind of have to like mix match on all these different platforms and make something in the end.

• 25:09Molly O'Shea?

  It was like the, okay, defensibility for sure there. Like I did not want to do it at the end of the day like. And then with Sora coming out, I DM'd him and I was like, hey, what do you think? Like, are you still like hiring and training people to like do this and create these viral videos for your huge? By the way, like corporate customers. He was like, no, the game's changed. It's completely changed. I'm only hiring comedians.

• 25:36Speaker 01

  Wow.

• 25:37Molly O'Shea?

  I'm only hiring comedy writers.

• 25:39Speaker 01

  Yeah, I think this is, this is really smart. So, you know, I, I, I mentioned that this is, this is obviously really bad for creators. But I think the flip side is it will probably reward uniqueness. Going back to your point or your question to me about creativity as a moat for business. I think now what you're gonna see is creativity as a moat for creators. Creativity for creativity, right? In fact, I think Sora, the avatar model is a perfect example of this. Sam actually even hinted to this in his blog post, sort of hinted that there's gonna be a new model where they're compensating creators for their likeness, their name and likeness.

• 26:16Molly O'Shea?

  That's cool.

• 26:17Speaker 01

  Yeah, maybe we move from a world in which we're compensating people for however many views they can get. Because now views for a platform are unlimited. They can just get as many views as they want. But what they can't get is uniqueness, right? And so if you're a person or a brand or an avatar, um, and you can do something or appear a certain way that is truly unique, maybe that's what's going to be compensated. And it's scary in a way to think that, uh, the incentives are shifting for creators, but maybe, I don't know. Maybe there's something, maybe there's a positive sort of silver lining to this as well.

• 26:52Molly O'Shea?

  Well, I was excited about that because I don't want to make talking head videos. I don't care, but I know that's like one of the viral hacks for like at least like women on Instagram. Like it just works. A couple of points on the avatars and like the cameos point is I thought it was absolutely genius for Sam to make him one of the stamped cameos because guess what? Now he's going to have more videos on the internet of himself than anyone else. Like the distribution on that is going to be truly insane. And then going back to like understanding monetization on that. I was thinking, okay, like, I don't know if I want to make my cameo public because what are people get like, I don't want them to misuse this or like make me do something crazy. And I was like generating-

• 27:33Speaker 01

  But you might for a price.

• 27:34Molly O'Shea?

  Not maybe for a price.

• 27:36Speaker 01

  You might, not saying you, I'm just saying that's probably the calculation they're making right now, right?

• 27:40Molly O'Shea?

  Yeah, it could be. And like, I was thinking about his because I was trying to recreate, you know, I like, I had this viral clip of like me like pretending I didn't know like Jack and Sam were related, so I wanted to make a clip of me talking to Sam and being like, the results are in. You're related to Jack Goldman. But the problem I had was like every time I did that, I was prompting it to make Sam like anxious and like scared and worried and then happy. But like it only, he was only happy the whole time. And I was like, what did you, what did you engineer in here that you're only happy?

• 28:15Speaker 01

  That's funny.

• 28:16Molly O'Shea?

  Yeah.

• 28:16Speaker 01

  Yeah, I mean, look, um, I think, I think people are going to find ways to, to capitalize on this. There was a, there was a tweet going around today or yesterday about Jake Paul. In six days or seven days has generated a billion views of his face by doing the same thing, by, you know, uh, making his cameo public. And then I guess tweeting that people should go use it. And so- People, there's gonna be a business around this for name and likeness. And, you know, again, at the end of the day, I guess my hope would be that maybe if nothing else, we can reward creativity and uniqueness and people doing something different. So as you said, we don't all just have a bunch of talking head clips floating around,

• 29:00Speaker 01

  because that seems to be the hack that works today.

• 29:03Molly O'Shea?

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• 29:48Molly O'Shea?

  They'll even give you an uncapped 1% match when you transfer your investments over from another platform. If you want to build a portfolio that actually reflects your thesis, visit public.com/sorcery. Paid for by Public Investing. Full disclosures in the description. Maybe this actually like just cannibalizes the cameo. Cameo business is business.

• 30:08Speaker 01

  Yeah, maybe.

• 30:08Molly O'Shea?

  Because do you need cameo anymore? If like you have this?

• 30:11Speaker 01

  Right, yeah. Yes, that's true.

• 30:13Molly O'Shea?

  That's, yeah.

• 30:14Speaker 01

  Yeah, so it's really fascinating. I'm interested to see where it goes.

• 30:18Molly O'Shea?

  So I have an interesting question on Lightspeed's strategy investing into AI, because you guys have invested into like several LLM competitors. What informs your decision there? And I can go through the list unless you have them on top of your head, but you've invested into XAI, Anthropic, Mistral, Stability AI, you've also done Pika and some more. So I'm curious, how do you think about investing in these direct competitors?

• 30:43Speaker 01

  Yeah, I think Lightspeed from a very early, very early on in sort of the AI kind of revolution. And took this took this position that actually AI and foundation models are more akin to software and code than they are to business lines and strategies. And, you know, I think now would it would be silly to say X random software company is competitive with Y unrelated software company. It's all just code. And I think that was the the position we took internally early on. And so as we made these different investments, the way we thought about them was actually, we believe these things are actually quite different, right? XAI has decidedly taken a very direct step into things like

• 31:25Speaker 01

  consumer through obviously the X platform and potentially embodied AI and robotics through potential partnerships with companies like Tesla, et cetera, and Optimus and things like that. Whereas Anthropic is like, we're very, very focused on the enterprise. We're very focused on code, right? And where Mistral is like, we're very focused on your, you know, European sovereignty and open source. And so I actually think we view these businesses as quite different. And we don't just view kind of AI as being competitive with AI, just in the same way as we don't view software being competitive with software.

• 32:01Molly O'Shea?

  Yeah, that makes total sense. I think now we're seeing a lot more of the bifurcation between all of them.

• 32:07Speaker 01

  Yeah. And I think that was, you know, when when we talked to these companies early on, that's how they were talking about it, too. It's like, this is our, this is our mission. This is our vision. We view a world in which we've, you know, we do this part of the world and this company does this part of the world. And so, yeah, maybe on the surface early on, it may have looked like from the outside, it maybe, maybe it looked like that was competitive, but we, you know, we didn't believe that early on and we don't think the founders did either.

• 32:32Molly O'Shea?

  Where do you think the value accrues in the AI stack?

• 32:37Speaker 01

  I think it all, I mean, I think it's such a hard question. I feel like this is the question everyone has. Where's the value accrue? I mean, clearly it's accruing right now to the model layer for companies like Anthropic and OpenAI and X and but there are also amazing application layer businesses generating a lot of value as well. I mean, there are, there, we're not in this company, but there are, there are many reports out there about how much Cursor is generating at the application layer. And there are lots of other companies that are that are generating and accruing value at the application layer. And so. I know it's sort of a cop out answer, but the simple answer is it's at whatever layer, somebody is willing to spend money. And if you're a huge foundation model and you can kind of hit every layer of the stack,

• 33:22Speaker 01

  there's probably more revenue for you to take advantage of than if you're just at the application layer. But we're seeing now that every different layer of the stack is able to generate an interesting type of business.

• 33:36Molly O'Shea?

  What about your AI education startup?

• 33:39Speaker 01

  Yes, OBO. So my anchor co-founder, Nir Zicarman, for a long time, has been thinking about education and about how we as humans, we are spending however many billions of dollars on making machines extremely intelligent. But one thing that we're not doing is we're not doing the same thing for human intelligence. And so he and I have a belief that AI can actually be used to make human beings smarter. And people are obviously using AI and foundation models to teach themselves. But what no one has really done yet is focused on the products, right? Like, how do we make great products to help people learn?

• 34:23Speaker 01

  Everyone talks about, hey, it'll be amazing one day when you have a tutor that knows everything about you, knows everything you've ever learned, knows everything about how you like to learn, what the most efficient way is to teach you, and then actually teaches you things that makes you smarter. And so that's what we're thinking about with OBO. We want to build the products that leverage AI to actually teach people things. And so we launched the first product a few weeks ago. It's called OBO. The whole idea of it is that it creates these magical educational courses for you on the fly about anything and in a way that's customized and personalized to you and what you like to learn. And it enables you to learn them in whatever format best suits, again, the way that you like to learn.

• 35:07Speaker 01

  So we can teach you through audio, we can teach you through text. That's the basic premise of the company. And yeah, it's been really exciting to work again with my anchor co-founder. He's taking the lead on this one. He's CEO. I am, I'm just riding his coattails as a glorified advisor and board member and co-founder.

• 35:28Molly O'Shea?

  Education has always been like a really, really hard space to get returns out of, build companies, get adoption. Why do you think now is the right time?

• 35:37Speaker 01

  We think about this less as ed tech and we think about this more as a horizontal need for every person on the planet. We're all learning every day, right? When you go to Google something, you're learning. When you go to ChatGPT, you're learning. But today, what you also do is you go to Google, you end up on some website, then you realize you didn't get what you wanted. So you go over to YouTube, you search for a video, you watch the video, you bounce around the timeline. You're kind of like piecing together the educational journey and yeah, you might come out of it a little bit smarter, but you wasted a bunch of time and it didn't actually teach you in the way that's best for you. But with AI, we can effectively generate that entire experience for you in real time

• 36:20Speaker 01

  based on anything we've already learned about what you like to learn or what's effective for teaching you. And so we don't view it as like, hey, we're going to reinvent the school. We view it as more every single person on the planet can be learning far more efficiently than what the horizontal tools offer them today. And that's the hole we're going to try to fill.

• 36:39Molly O'Shea?

  What do you think the world's going to look like once we have superintelligence?

• 36:43Speaker 01

  Well, I think the key is to, you know, I'm going to channel my inner Ilya Sutskevar here, but I think the key is aligning intelligence with the needs of humans. And I think that that's a really tough thing to do. Fortunately, we have a lot of great minds thinking about it, but I think superintelligence is going to be able to do things in a far more capable way than we're going to be able to do and think however many steps ahead of us. And so the most important thing is making sure that we can be aligned with it from the beginning.

• 37:20Molly O'Shea?

  Founders ship faster on Deal. Set up payroll for any country in minutes, hire anyone, anywhere, and get visas handled fast so you stay focused on scaling. Deal takes care of onboarding, HR, IT, EOR, benefits, and compliance so your team can grow without borders. Why more than 37,000 fast-growing companies trust Deal to move fast? Visit D E E L dot com slash sorcery. That's D E E L dot com slash S O U R C E R Y. Coming from the podcast world, what, how big do you think this will get?

• 37:51Speaker 01

  Podcasting?

• 37:52Molly O'Shea?

  Yeah.

• 37:53Speaker 01

  Yeah, so I've frequently underestimated, I think, how big podcasts can get. We thought it was this niche little thing. Then we saw that it was becoming a big thing and all of the biggest companies in the world wanted a piece of it. And then, you know, I think around the time that I left Spotify in 2022, I sort of personally felt like, okay, the work is done and it's great and I'm happy with where it is. And then I think, once again, I was proven wrong because in 2024, 2025, as we saw, we had the podcast election, right? And now I just think that podcasts are basically the new television, right?

• 38:31Molly O'Shea?

  Yeah.

• 38:32Speaker 01

  In the same way that you and I grew up watching TV, I think now people watch podcasts. And yeah, today, most of them are maybe people sitting around a table having a conversation like this. But remember that just a few short years ago, podcasts weren't even associated with video. Video is a new format for podcasts. And so I think as people get more and more used to video being the medium, people are going to be more and more creative and fill the space in new ways. I mean, look at your show. You're doing it from all these different, interesting locations. You're not just sitting behind a mic at your computer and using, you know, an amazing tool like Riverside. You're like out there in the real world. And I think we're going to see more and more people push the boundaries of the format. And I think when it's all said and done,

• 39:17Speaker 01

  again, I think it's television. It's television that anyone can broadcast, right? And I think if you view it through that lens, we've got a long ways to go before it reaches its peak.

• 39:27Molly O'Shea?

  From working at Spotify, what is the biggest lesson you learned from Daniel Ek?

• 39:33Speaker 01

  I think one of the amazing things about Spotify and Daniel is there's really like no ceiling to the ambition. He started Spotify in a world where because of piracy, music was effectively free. It was illegal to be free, but it was effectively free. And he built a platform and a company that was effectively better than free. Right? And that was the scope of the ambition. And you've obviously seen that with some of the other companies he's he started companies like like Necco, which Lightspeed is fortunate to be an investor in, but also with sort of his business strategy and ambition inside of these companies.

• 40:13Speaker 01

  So so Spotify, I think, really smartly took their position in music, built up over the course of, you know, 10, 12 years and said, we're going to take this position of strength where we have, you know, hundreds of millions of people listening to music. And now we're going to ladder into a new format that sits adjacent to music and has and has all the same interface. Right? Like, if you think about music, it's largely the same interface as podcasts. So we can ladder into podcasts, right? And then, once you do that and you do it successfully, it's like, OK, what's the next thing we can ladder in that leverages off everything else we've built? So they go into audiobooks. And so I think the biggest thing that I've taken from that experience was just

• 40:57Speaker 01

  how smart and strategic you can be as a big company when you've sort of like won a position in something to be able to leverage that to go into the next thing. That's been a that was a really, really big learning from being there. And I think Spotify in general is a very, very strategic company. They take a long time to make decisions. I don't mean that in a bad way. I think I know every company wants to be fast, but, you know, they're thinking about the future five, 10 years in advance. And I think most of us don't have the attention span to do that.

• 41:26Molly O'Shea?

  Yeah, that's a really good segue into my Brex question. So Brex is all about performance, spending smarter, moving faster, the modern intelligence finance platform. But I'm curious from your standpoint, like, how do you view performance as an investor as you handle all of these portfolio companies of like, when to lean in, when to, you know, let someone bake a little bit more? How are you thinking about that in terms of like, okay, like, talk about the Spotify strategy of like, turning the dials at certain times?

• 41:57Speaker 01

  Yeah, I think of especially because I'm so focused on early stage investment these days. You know, I think performance can easily be measured by the standard things, revenue, Dow, Mao. But the way I like to think about it, the earliest stages is speed of iteration, speed of shipping, speed of learning, like, how quickly are you getting stuff out there into the world and getting signal back and learning and then making the next decision just a little bit smarter? This has always been a thing I've cared about and it's obviously always been important for startups. But again, with AI, everything is moving so fast, you have to be willing to go faster and you have to be willing to take more and more risks. So I think about performance as speed.

• 42:37Molly O'Shea?

  And so then as we close out, I love to end on predictions. So which companies do you think will officially announce an IPO this year? Give me like three.

• 42:47Speaker 01

  Which companies will go public? Boring answer, but OpenAI.

• 42:52Molly O'Shea?

  You think OpenAI is going to go public this year?

• 42:55Speaker 01

  I mean, they're the biggest private company, right? Uh, I'll throw out another one, just for fun. Kalshi, I saw they raised a big round, so maybe, maybe they'll go public next year too. Polymarket, I know a competitor, but also raised a very big round, partnered with New York Stock Exchange, ICE, maybe they'll go public. Cerebrus seems like a candidate. I know they were going to go public. I think they actually just like withdrew their plans to go public, or at least I read that. So that seems like another one that that could happen. Discord, I feel like has been baking for a really long time, large, successful platform. Uh, that seems like a good candidate. And then, yeah, I mean, I feel like any of the AI incumbents or hyperscalers like OpenAI seems like they have a great shot as well.

• 43:39Molly O'Shea?

  Do you think that might be the next strategic, like, momentum milestone? I feel like they're always trying to outpace each other with different kinds of partnerships and announcements and growth and blah, blah, blah. Do you think? IPOs might be the next layer.

• 43:53Speaker 01

  Maybe. I mean, one of the things that I've been thinking about, a friend of mine, really smart friend, said, you know what, maybe, um, maybe more AI companies should be going public because there's clearly a lot of demand for it. Uh, and if you're a public market, you know, if you're a public investor, a public market investor, retail investor, you don't really have a lot of choices, right? You've got Google, you've got Meta, um, you've got Nvidia. And, and so maybe some AI companies, maybe who were even earlier on their trajectory and maybe have less revenue than we've been seeing from typical, uh, companies that are going public. Maybe they should consider going public because there's probably just so much pent up demand from retail investors. So I thought that was an interesting take.

• 44:37Molly O'Shea?

  That is really interesting. Okay. Well, Michael, it was a pleasure to have you on.

• 44:42Speaker 01

  Pleasure is all mine. Thank you so much, Molly.

• 44:44Molly O'Shea?

  Thank you. Hey, it's Molly. If you enjoy our interviews, check out our newsletter, sorcery.vc, where we deliver a once a week top deals and tech headlines email and also go deeper on our podcast interviews. Subscribe to Sorcery today and don't forget to subscribe to the podcast on YouTube, Spotify, Apple, or wherever you listen. Link in description to sign up.