20 VC 060: 12 Acquisitions, $1bn In Exits, Mike Jones, Former MySpace CEO on Life At Science Inc.

Mike Jones is the Founder and CEO at Science Inc. a disruptive media, marketing and commerce company that creates, invests, acquires and scales successful digital businesses. Their incredible portfolio includes the likes of Medium, DollarShaveClub and DogVacay and their leadership is responsible for an astonishing 12 acquisitions and over $1bn in exits. Prior to Science Inc, Mike was the CEO at Myspace, where he was responsible for the relaunch, one of the most high-profile turn-around challenges in the industry, before selling MySpace to SpecificMedia on behalf of NewsCorp. Mike is also an active early stage investor having personally invested in over 30 startup businesses including Klout, Betterworks, Formspring, ShoeDazzle to name a few. In Today's Episode You Will Learn: 1.) How Mike began his entrepreneurial career, how MySpace came about then how Mike made the move to Science Inc? 2.) What is the mission at Science, what does Science provide and how do they differ from the likes of YC and Techstars? 3.) Science have a specific methodology to identify the best startups and the best sectors. What is involved in this methodology? Has it changed since the start of Science? 4.) What can a startup founder do or show you to impress you? Are there any real red flags for you when meeting startup founders? What are the commonalities of the great founders? 5.) What is Science's involvement with the companies, what are their key value adds at Science? 6.) On Twist Mike said ‘growth is the most important thing, without growth there is no money’? So what at Science how do they approach growth and what are the challenges posed by this need for growth? Items Mentioned in Todays Episode: Mike's Fave Book: The Power of Habit: Why We Do What We Do by Chris Duhigg Mike's Fave News Source: FlipBoard

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

• 0:00Harry Stebbings?

  What an incredible episode do we have lined up for you today to celebrate the 60th session of the 20 Minute VC. I'm so thrilled to welcome Mike Jones. Mike is the founder and CEO at Science Inc., a disruptive media, marketing and commerce company that creates, invests, acquires and scales successful digital businesses. I mean, their portfolio includes the likes of Medium, Dollar Shave Club and Dog Vacay, just to name a few. And their leadership is responsible for an astonishing 12 acquisitions and over a billion dollars in exits. But prior to Science, Mike was the CEO at MySpace, where he was responsible for the relaunch, which was one of the most high-profile turnaround challenges in the history of the

• 0:45Harry Stebbings?

  industry, before selling MySpace to specific media on behalf of News Corp. Mike is also an active early-stage investor, having personally invested in over 30 startup businesses, including the likes of Klout, Betterworks, FormSpring and ShoeDazzle, just to name a few. But before we dive into today's show, are you responsible for the recruiting process? And would you like to have all your candidates' information in a consistent format? Well, HiringScreen's profile builder can do this instantly. Simply select the information you would like displayed, this can be the name, work, history, skills and education, and HiringScreen will automatically generate a profile for each candidate according to your selections.

• 1:29Harry Stebbings?

  This enables a fair and more consistent screening process. And you can find them at www.hiringscreen.com. But now it's time to jump back into today's incredible interview with Mike Jones.

• 1:48Speaker 01

  You have now arrived at your destination.

• 1:51Harry Stebbings?

  Mike, welcome to the 20 Minute VC. It's an absolute pleasure to have you on the show.

• 1:56Speaker 02

  No problem, thanks for having me.

• 1:57Harry Stebbings?

  Now, I'd love to start off by hearing a little about you and your entrepreneurial origins and how MySpace came about, and then obviously with your recent move into Science Inc.

• 2:08Speaker 02

  Sure, well, I, you know, I came from a family of entrepreneurs and I began starting companies in high school, probably like many other entrepreneurs. My first kind of company of actual size and scale I formed during college and as I graduated, I actually continued with that business and that became my first kind of large business. I had raised money for it, it was a, it was kind of a software development agency. It was right during the time of kind of the rise of the web. I was working commercially with lots of different brands on building their, you know, building their kind of products and websites. Sure. I sold that company to a, to one of my partners and that was the first time I'd actually like successfully, in essence, built and sold a business. And how old were you at that time?

• 2:52Speaker 02

  I was probably twenty-two, twenty-three, somewhere right around there. And, and obviously loved that process, like I loved who I worked with, I loved the environment and I got excited and obviously I loved the fact that I was able to build something and sell it and, and I think even before that I hadn't even realized that, that, you know, there was this, this incredible opportunity to actually build and sell companies. Like I thought, oh, I just built a great place to work at and it just turned out that this worked out. So then, after that first, you know, after that first company, I started, I started a second business that subsequently we sold to AOL. I did two years inside AOL as my first kind of official job as an SVP where I kind of learned, learned a big company.

• 3:33Speaker 02

  And then I jumped into private equity, helped buy and sell different businesses and then, and then I jumped, and then I jumped into MySpace where I was recruited to come in after News Corp had purchased MySpace and they needed a new management team to try to figure out the strategy. And was it quite a daunting prospect coming into MySpace at the time? Yeah, I think, you know, ignorance was, was bliss at that time where like I had never, you know, I'd, I'd led, you know, four or five hundred person companies, I'd never tried to lead a five thousand person company or four thousand person company. It's quite a feat. Yeah, it's quite a, it's quite a different thing. I never had really experience in the press and what it meant to especially be dealing with a, a brand that everyone in a certain sense wanted to see fail.

• 4:18Speaker 02

  And I certainly hadn't experienced working with, in an organization like News Corp. And all the politics that come with a big, you know, media organization and all the pressure that comes with that. So, yeah, it was a big feat, but for somebody like myself who just loves business and I'm a student of, you know, of kind of economics, I, I felt like it was a natural point in my career to go experience what, what a big company feels like.

• 4:39Harry Stebbings?

  And now you're at Science Inc. So can you give our listeners a little background on Science and your mission and how you differ from Y C?

• 4:47Speaker 02

  Sure. Well, through, through my personal journey, I did a lot of angel investing and, and spent a lot of my time, you know, kind of whatever, you know, giving any kind of wisdom I had gathered through starting and building companies and I'd be happy to work with entrepreneurs. And I found that at the early stages, there are, you know, critical things that entrepreneurs need to get right. And then there's a lot of things that get in the way of those critical things. And, and I felt that, you know, instead of me starting a typical angel fund, it'd be really great if I had a company and if that company could have a bunch of resources and we could leverage those resources to build successful businesses. And, and so I went out to kind of investors that I knew and I said, hey, I want to, I

• 5:29Speaker 02

  want to start this thing called Science and I want us to, you know, kind of incubate businesses. We'll find great entrepreneurs. Let's put a bunch of resources around them. Let's make sure they have, you know, full teams that can allow them to really execute their vision and we will, and we'll be with them on the journey. So it's not going to be about this side of check or that side of check. It's really about, you know, what are all the things we can do over a multi-year period to make sure this company becomes really successful. And I was fortunate enough to, A, hire a great team where I brought in, you know, five or six people that I'd worked with over, you know, over a long period of time. Tom Dare, Eric Gilman, Dave Fink, Jason Rapp, Peter Pham.

• 6:08Speaker 02

  And Mike McAden and I was able to pull together this partner partner group and said, listen, guys, I want us all to dive into these businesses. And, you know, we raised initial set of money and then we, you know, built a bunch of companies and then we raised more money and we kept building companies and we've just been kind of going ever since.

• 6:26Harry Stebbings?

  And you said before about, you know, company selection and how you choose companies in science and you said there was a specific methodology to identify the best startups and the best sectors. I'd love to hear a little more about this methodology and how you kind of source these companies.

• 6:42Speaker 02

  Sure. Well, through our lens, you know, the first thing I look for are companies that, you know, if the company is is good and the team is strong and the product is, the product is, you know, can, you know, well received by the consumers, I look for things that we that we have exact tactical knowledge on how to grow and build. So unlike maybe, you know, certain investors or venture groups where they they invest in a whole wide variety of different industries, I look for things that we expressly have in, you know, internal information on how to build. So for me, that typically means companies where if it's successful, we can leverage paid media in order to grow that business.

• 7:24Speaker 02

  Because, you know, I fundamentally love the, I love the ability to basically spend money effectively in whatever form of marketing you're doing, whether it's organic or product or viral or search or whatever, and show immediate growth. So I look for things that have, you know, revenue models where upon success, we can spend dollars and quickly grow the company. That just happens to something I like and I think we're pretty good at and I've assembled a team that's very, you know, that has expertise in that. So that's the first thing we look for. Of course, you know, we need incredible CEOs and entrepreneurs that are both, you know, young and eager enough to want to jump into starting a new company, but also receiving enough that they'll that they'll take constructive feedback and hopefully guidance provided

• 8:06Speaker 02

  by by our team that hopefully will make that company, you know, more effective, you know? You know, from a third point, we also look for businesses where we have, you know, direct connections with the the funding groups in in the M and A environment. So I prefer businesses where if they're doing really, really well, I know who to go to to to get them financed and I know who to go to when they're when they're ready for an exit.

• 8:29Harry Stebbings?

  And you said you said there about kind of young CEOs and founders.

• 8:33Speaker 02

  Yeah.

• 8:33Harry Stebbings?

  You know, you've seen probably the most incredible founders in your time with science, you know, Dollar Shave Club, Dog Vacay, Media. So have you seen any commonalities between these great founders?

• 8:46Speaker 02

  Well, I think, you know, that, you know, everyone looks like a great founder in retrospect, but they kind of always look like, you know, a a a one step into the mission entrepreneur when they start, right?

• 8:57Harry Stebbings?

  Sure.

• 8:58Speaker 02

  And I think what we look for is we, you know, probably like you hear many times, is that we, you know, we look for people that are that are very passionate about a problem and that they really personally believe they have a solution to a very intimate problem that's very personal to themselves. We look for people that are definitely on a mission around solving that problem. We look for people where where we're excited to be around them and that we believe others will be excited to be around them because, you know, obviously, you know, you're working in startups, you're typically kind of underpaying the market, you've you've got to have leadership that inspires people, that makes the one, you know, that makes the best people want to work with those individuals. So we look for people that bring great kind of spiritual leadership with them and who

• 9:40Speaker 02

  you believe who one would believe in and who one would be excited about working for. We look for people who are doing it, obviously, for way more than the make way more than the money and way more than the title. You know, I, you know, the people that I, the people that I meet with that are great entrepreneurs, they don't care what their title is, they don't care what their office looks like, they have they're on a personal mission, they want to put the best people around them to, you know, to accomplish that mission, they want to do it for a very long period of time, they want to solve that big problem and, you know, and and they don't enter into this with the thought of money and and capital return that's not sure that's in the back of their minds, but fundamentally, they're doing this for a different reason.

• 10:18Harry Stebbings?

  And then at science, you've got you've got several of these companies under one roof and with these, you know, different personalities, how do you create such an engaged and united kind of company culture?

• 10:29Speaker 02

  Well, you know, many of the big companies at this point are outside science. So, you know, Dollar Shaped Club, Dog Vacay, Home Hero, Fuse. These are businesses that, you know, operate in their own environments and their own offices. And they really need to create their own culture. When somebody's inside the science actual building where we have companies like Wishbone, our mobile media group, you know, Hello Society, Famebit, Prize Campbell, et cetera. These businesses really have their own areas and it's really up to them to create their own cultures. It's actually more important that they create their own cultures than science creates a culture, right? Science's culture is really driven around fast learning, iteration, you know, diving

• 11:10Speaker 02

  in on really big problems, coming to quick solutions, figuring out ways to scale businesses in a highly repeatable fashion, right? But the culture behind Famebit, which is all about working with influencers on great content creation inside of YouTube and other platforms, you know, they're going to create their own culture. And so, you know, that's actually been an interesting nuance of science as an organization, which is that science fundamentally needs to fall into the background. The stars, the stars in our building are the CEOs of the teams that run these great operational businesses. And my team and any cultural, you know, thesis that, that science brings to it really needs to be, you know, really needs to be hidden.

• 11:50Harry Stebbings?

  And what involvement do you and your team have on a day-to-day basis? Do you very split between the companies or do you double down on certain companies for periods of time?

• 12:00Speaker 02

  Yeah, I mean, I'd say that, you know, part of my team has kind of dedicated, you know, involvement with portfolio companies. So that probably means they're working with the management on a daily basis or weekly basis on challenges and opportunities and growth, et cetera, et cetera. And then certain members of my team might, you know, jump in and out depending on the functional need of the business. So Jason Rapp on my team works on larger scale BD deals and, and M&A events. And so if, if there's an opportunity where we could do a big joint venture with a large media company for one of our portfolio businesses, he'll jump in and work with the CEOs during that journey, right? Whereas Dave Fink on my team is, is highly operational and he might be on kind of a

• 12:44Speaker 02

  day-to-day basis, working with the Famebit team or the Prize Campbell team on, on really seeing them find growth and hire people and staff and, and manage finance, et cetera.

• 12:55Harry Stebbings?

  And you mentioned earlier about your strategy towards growth and the importance of growth. And so how do you ensure growth at Science and what are the challenges posed by this?

• 13:05Speaker 02

  Well, there's not really a way to ensure growth. I mean, I guess I'd say that we, you know, going back to the kind of fundamentals of things that I like, I certainly like businesses where when we get something right, we have an economic model that supports, you know, growth through paid media. And that paid media may not be as specific as AdWords or Google or Facebook or whatever, but it's just something where we know that if we get something right, money will directly impact the trajectory of the company. So that's just something we like, right? What that basically means is like at early days, we'll do a lot of testing on business ideas and the way customers react to products or use our different products or engage in our different mobile experiences.

• 13:49Speaker 02

  And we're going to, we're going to look for something where when we get it right, we can put a lot of weight behind it and see, you know, see really good, strong value driven from it.

• 13:58Harry Stebbings?

  And a few years ago, I read that you said the mobile ad network was kind of the next industry to be disrupted. Do you still believe there's room for more disruption in that area or do you think it's moving elsewhere?

• 14:10Speaker 02

  Yes, I firmly believe that the world's being rewritten through the lens of the mobile phone. And I get excited every day about thinking, you know, what we can build on a phone that's going to change the way people, you know, live their lives. And part of that's, you know, services and products and commerce and part of that's entertainment and content and storytelling. We look at both. You know, we have kind of our, our parent moniker is the Science Media Group and inside the Science Media Group, we have, we have advertising and content, you know, companies. And then we also have a mobile division. And inside that mobile company, we have a few trending applications already in the charts and we have many, many more coming. So the main focus today for me is understanding the patterns of mobile users and the types of products that will really redefine their experiences on the phone.

• 14:55Harry Stebbings?

  And Science itself is located in LA, which has obviously seen a huge growth in, in the tech scene. Why do you think that is and what do you think is driving that growth?

• 15:05Speaker 02

  Um, well, listen, I think that, you know... You know, whether, you know, what drives the growth is venture capital. And we're fortunate in that we are at a close proximity to Silicon Valley. We have interesting companies and founders in L.A. And so we have, we have a nice flow of investor capital coming into the city. So that's obviously fantastic for everybody. And, you know, and I think that we're, you know, like, as long as we have a strong sense of venture capital, we'll be able to continue to innovate and build great new products.

• 15:37Harry Stebbings?

  Absolutely. And then I'd love to finish by diving into a quickfire round.

• 15:41Speaker 02

  Yeah, sure.

• 15:42Harry Stebbings?

  So your favorite book and why?

• 15:45Speaker 02

  Uh, I mean, my, my favorite book right now is, uh, is The Power of Habit. And the reason why is really because I'm spending all this time thinking about mobile phones as it relates to habit formation behaviors. And I like to, I like to study that.

• 16:00Harry Stebbings?

  Absolutely. And then career highlights?

• 16:04Speaker 02

  Career highlights, um, you know, although, although, uh, although MySpace, the relaunch was a failure as far as re-engaging the population, there was a moment when, um, an incredible amount of, uh, when an incredible amount of, um, employees of mine worked extremely hard on rebuilding the MySpace platform. And that was both having the ability, for instance, release code without 500 people touching it, uh, pulling down operational costs, being able to do with a 200-person tech team what previously they had done with a 2,000-person tech team and just rationalizing a very old, bloated website. And, um, when we were relaunching that platform, people were so passionate about the project that, you know, they, they put cots inside the office and they, they spent, you know,

• 16:49Speaker 02

  multiple nights there prepping for what was a massive code relaunch. Now, you know, from a consumer perspective, we did not re-engage people. And, um, unfortunately, the brand was not able to kind of get back up to the top, but... There was a moment where I felt so proud of that team and the effort that they put into that journey, knowing it was basically an impossible mission. And for me, that was probably a really strong moment of pride.

• 17:15Harry Stebbings?

  And I'm sorry, this isn't a quickfire question, but I'm just so intrigued. How did you inspire a team to that length, that's true dedication? How do you think you inspired them so greatly?

• 17:25Speaker 02

  I think, you know, I think that when, you know, when you have MySpace, which is already within a large corporation, and you don't have the kind of standard incentives that a startup may have, inspiration's really hard. You know, I had an incredible executive team. We were all very passionate about what we were going after. We all contributed to that vision. And amazing enough, even in the midst of everyday horrible press and everyday layoffs and just, and massive, as you can imagine, traffic declines and revenue declines, we did, we hit this moment that everyone was inspired and they worked really hard on that journey. And, you know, I think it, I think it's, you know, it goes to that entire

• 18:07Speaker 02

  executive team and to all the leaders within MySpace that really brought forth that mission in the wake of so many headwinds, really got people there. And so I think it's PR leadership, it's leading on the edge of, you know, the edge of a journey. And, you know, and I think it was, it was a great moment for everyone involved.

• 18:25Harry Stebbings?

  Sure, absolutely. And then your favorite newsletter or blog?

• 18:29Speaker 02

  You know, that's a really good question. I don't, you know, I use, I use, you know, Flipboard to consume a ton of RSS. I don't have one single news source. I have a lot of news sources. I've kind of been an RSS addict for a very long period of time where I kind of mix my own daily stories. So there's not one single source.

• 18:49Harry Stebbings?

  Okay, absolutely. And then the most challenging part of building science?

• 18:56Speaker 02

  I guess the most challenging part of building science is, you know, science as a structure is a very unique structure. If I was launching a venture fund, it's very easy to talk about what a venture fund is and how it works. If I was launching a single company, it's very easy to talk about that. But when you're launching an incubator or a studio that in essence holds equity in various degrees of a whole portfolio of different companies, it's a very different entity. So honestly, one of the most challenging parts has been conveying the strategy and the vision for science to investors and the press to actually reflect what we do here every day.

• 19:30Harry Stebbings?

  And then finally, which current science company are you most excited about and why?

• 19:35Speaker 02

  You know, I have a lot of excitement right now. I mean, even this week, I think there's three major initiatives launching and I kind of can't wait. It's Christmas morning for me every time those things launch and seeing, you know, what are the results of those tests. There's not one favorite, there's just not. You know, there's things that are at scale and getting bigger, which I'm excited about. There's things that are about to launch that could be huge, which I get excited about. And then there's challenges we have where I think we have solutions for them, which I get excited about to see if the solutions work. So, you know, I can't get to the office early enough. You know, I love what I do every day, I'm excited about the people I work with, and this has been some of the most fun I've ever had in my career.

• 20:15Harry Stebbings?

  Well, Mike, a truly inspirational story, and thank you so much for coming on the show, it's been an absolute pleasure.

• 20:20Speaker 02

  No problem.

• 20:21Harry Stebbings?

  As always, all the incredible resources and items mentioned in today's interview with Mike can be found at the blog at www.the20minutavec.com. And I'd like to say a special thank you to Christopher Jones, who was the second interview guest we ever had on the 20 Minute VC, and this interview would not have happened without his introducing us to Mike. So thank you so much, Chris, that was fantastic. I'd also love to say a special thank you to HiringScreen. It has just been the third month that I have had Jackie, my assistant, who I found on the HiringScreen platform. She's done an incredible job and is exactly what I was looking for in an assistant. Thank you so much HiringScreen, and you can check them out at www.hiringscreen.com.

• 21:04Harry Stebbings?

  screen.com or you can follow them on Twitter at hiring screen RH likewise if you've got any questions about the process or pricing or features do send me an email and you can email me at Harry at the 20 minute VC.com and I'd love to answer any questions you may have thank you so much and we look forward to seeing you in the next episode