20 VC FF 030: Gimlet Media's Matt Lieber on The Future of Podcasting and Life @ Gimlet

Matt Lieber is cofounder and President of Gimlet Media. In a previous life, Matt produced radio shows (On Point, Fair Game) and podcasts (Slate Culture Gabfest). He also worked as a management consultant at The Boston Consulting Group, where he focused on media and digital business. Then he chucked it all for Gimlet. He holds an MBA from MIT Sloan. In Today's Show You Will Learn: 1.) Matt reveals the origins of Gimlet? 2.) What were the dilemmas for Matt in raising Gimlet's round? What determinant made Matt realize raising was right? What advice would Matt give to founders who are unsure if they should raise or not? 3.) One of the main concerns with raising suggested by Alex Blumberg was that the company would feel like a totally different company, and by different ‘I mean worse’, to quote Alex. So how can a Founder maintain company culture as they grow excessively? 4.) Why did Matt decide to play it cool and not announce to VCs Gimlet were raising? Did Matt expect to get a term sheet as quickly and easily as he did? Were there any hiccups to the funding process? Were Gimlet tempted by any other offers? What value add about Tim O'Reilly made Gimlet most attracted to him? 5.) Question from Matt Hartman at Betaworks: How does Gimlet decide which new shows to create? Is it about creating new shows for an overlapping audience or to expanding audience demographics?? 6.) Where does Matt see the future of podcasting going? Many do not believe in it’s potential to be a big business, what does Matt say? What are the challenges, what needs to happen to combat them? Items Mentioned In Today's Episode: Matt's Fave Book: Great Plains by Ian Frazier Matt's Fave Blog: Stratechery by Ben Thompson As always you can follow The Twenty Minute VC, Harry and Matt on Twitter here! Likewise, if you would like to see a more colourful side to Harry with many a mojito session, follow him on Instagram here!

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

• 0:00Harry Stebbings?

  You are listening to the 20 Minute VC and of course Founder's Friday with your host, Harry Stebbings. Now, if any of you didn't know, I love podcasts. And for all of you who join me in this love, I think we can all agree, there's one podcasting company that is the supreme storyteller, producing the most beautiful episodes and narratives. It is of course Gimlet Media. And today, I'm so thrilled to welcome Matt Lieber, co-founder and president of Gimlet Media. And in a previous life, Matt produced radio shows On Point and Fair Game, and also podcasts Slate Culture and Gabfest. He also worked as a management consultant for his sins at the Boston Consulting Group. Then he chucked it all in for Gimlet Media. And you can follow him on Twitter @Mlieber.

• 0:45Harry Stebbings?

  In today's show, we discuss the future of podcasting, Gimlet's latest fundraise, and a little on what life is like working at Gimlet. Here's a little preview.

• 0:55Speaker 01

  Showed up to work, tripping on acid.

• 0:58Harry Stebbings?

  But before we dive into that very interesting story with Matt, I'd like to say a huge thank you to Erin Glenn at Choir for introducing me to Matt, without which this episode could not have happened. And finally, a huge hand to Mattermark for being the legends that they are, and providing the 20 Minute VC with all the data and analysis used in today's episode. And if you have not done so already, sign up for Mattermark Daily. It really is the one-stop-shop for all things operator and VC reading material. And that's all down to @Thinker for that one, so a massive thank you to @Thinker on Twitter. But now, it's time to dive into the show today. Therefore, I'm thrilled to interview and welcome the main man, Matt Lieber, co-founder and president at Gimlet Media.

• 1:48Harry Stebbings?

  Matt, a huge welcome to the 20 Minute VC. Thank you so much for joining us today. It really is a pleasure. I'm a big fan of Gimlet.

• 1:55Speaker 01

  Thanks for having me.

• 1:56Harry Stebbings?

  Now, I'd love to kick off today's show by hearing a little about your background and the origins of Gimlet.

• 2:02Speaker 01

  Uh, yeah, well Gimlet is a, we're a media company and we make narrative audio. And so another way to say that is we're a podcast network. And my own background, actually, I have, I did two really different things. I was a radio producer and a journalist, mostly with NPR and public radio stations here in the States for almost 10 years. Like, I was a radio kid. I grew up in love with the radio. I would listen to it all day and I would go to sleep to it at night. But kind of lifelong dream was to be a radio producer, if that, if you can believe that.

• 2:36Harry Stebbings?

  Of course.

• 2:37Speaker 01

  And I ran my college radio station and then, you know, I was a producer for a number of years. And at some point, I decided that, one, the whole, all of media was changing so much. And I sort of saw in the late, in the mid to late, you know, 2000s that what was happening to, what, what the web was doing to newspapers and what iTunes was doing to music, like the same thing I felt was going to happen to radio, which is that audiences were going to continue to listen to, to news and storytelling and talk shows, but they probably weren't going to do it exclusively over AM, FM broadcast towers. They would do it digitally through their smartphones.

• 3:20Speaker 01

  And I thought, that's a big change that's going to come and I would like to be, like, participate in that transformation. And I also felt like the impact I could have would be greater if I understood business and if I hopped over to the business side. So I went back and I did an MBA and then spent a few years as a management consultant, working mainly on digital businesses and media companies. And then I met Alex Bloomberg, who's my co-founder. And that was about a year and a half ago.

• 3:47Harry Stebbings?

  And, and from then, it's been the meteoric rise of Gimlet. And first, quick question then, why did you not start a, a radio show or, you know, producing more seriously your own in 2009 when you had the insight that it was moving to digital?

• 4:01Speaker 01

  Well, I had, I did start radio shows. I had launched a show. The idea was to do almost like the daily show for public radio. So it was a nightly news and entertainment show. It had live mu- live music, comedy, and then serious interviews. And what we found is to distribute it to a really large audience. There were actually a lot of gatekeepers that we had to go through. So we basically had to market by market. We had to convince program directors at local radio stations all over the country to pick up the show, to distribute it. And that meant that we actually weren't really working for the listener. We were working for this intermediary. And we found it hard to do something that was like actually ambitious and that carried creative risk in that scenario. And so I sure did do radio shows.

• 4:46Speaker 01

  But it felt to me like the really exciting thing was happening in podcasting. Like there was just, there was more creative, ambitious work happening there. And that was exciting in a new kind of way.

• 4:58Harry Stebbings?

  And were you nervous to leave the security of a financially secure consulting career for a potentially more risky podcasting startup in Gimlet?

• 5:11Speaker 01

  I was nervous, but you know, when I met Alex, pretty immediately I recognized that he is a very special person. And he, like, I asked myself, is there a real market here? And is it big enough to spend the rest of my life doing, doing work in? And do I have a partner who I really believe in? And I think like I could work with for a very long time and go through hard times with and build something with. And the answer to both of those things was yes. I mean, Alex is one of the best people in the world at what he does. He's one of the greatest editors and he is a creative visionary. And I don't think you get that many opportunities in your life to partner with someone like that.

• 5:50Harry Stebbings?

  And what do you think makes Alex so brilliant then at that? Is it his, is it his vision? Is it his knowledge of what people want in a story?

• 5:59Speaker 01

  Uh, yes, and his curiosity and just his boundless optimism for being able to make something better and pushing to make these stories or these shows like better tomorrow than they are today. And his, like, one of his main kind of theses is like, all first drafts suck.

• 6:19Speaker 01

  And it's the second, third, fourth and fifth where you can make them better. And he is a person who makes you believe that you can do better.

• 6:26Harry Stebbings?

  And and as a VC show now, uh, with your latest amazing episode, uh, the pitch, I think it was called, being about your series A, we have to talk about the raise. So in the show, you stated that constraint breeds creativity. So in your head, what were the dilemmas around raising the series A? And what was the determinant that made you realize that raising it was right?

• 6:49Speaker 01

  Well, we'd had a pretty good first year. We had launched three or four shows and all of them were doing well. Um, like they had grown to to scaled audiences and they were doing interesting creative work. And unlike, I think, most sort of Silicon Valley startups that have started in the last year or two, we had revenue from the very beginning because we were selling advertisements on our show. In fact, we had conversations with some VCs who we would begin to talk about revenue and they're like, we don't want to hear it. Um, we're not actually interested in that. We want to see just a really steep user growth curve. And like, we know that if you get a large audience, you can worry about the revenue later.

• 7:30Speaker 01

  Um, but for us, actually, it was important to do it from the beginning, both because we wanted to prove out the business model, but also because we didn't want to, um, like, we actually felt like the advertising business model, the ads were part of the product. And that they it made sense to have them there from day one. And actually, the business was going so well that we thought we could have a way to self-fund our growth. We thought there might be a possibility if we continued to make these hits and churn them out at a pace, a certain pace, that we could actually use the cash flows to fund our growth, like the way normal businesses do. And that is actually a very exciting proposition because it means you don't dilute yourself and your shareholders.

• 8:15Speaker 01

  And it means you maintain control of your own destiny. And if you can self-fund through profits, that's a fantastic thing. Um, and so that was kind of our dilemma. Ultimately, we decided we had really ambitious plans for the new, the next set of shows that we want to do, and we need to build out the company. Like, the first year of the the uh, Gimlet was really about building up these shows. And now, I think, is the time to build up a company, meaning like you have. You know, a real sales team and, you know, a whole like full operations to support the kind of creative work that the shows do. The atomic unit at Gimlet is always the show, but we have a company and a set of shared services that can support shows to, you know, take all of the things off their plate that

• 8:59Speaker 01

  isn't, you know, having ideas, going out and executing them and then feeling the support to do ambitious work.

• 9:04Harry Stebbings?

  So the fundraising allowed you to ramp up excessive growth quickly. Was that the key determinant for you then?

• 9:10Speaker 01

  Yeah, and to feel like we could place bigger bets and do more. So risk can take a lot of forms and like, obviously, investing involves risk and VC involves extreme amounts of risk. In our business, there's also creative risk. There's like doing, there's trying to create and execute shows or creative ideas that haven't been done before and that involves risks. And sometimes they fail, actually. Sometimes they fail before they even ever even get out into the world. But the most successful media properties are ones that are trying to do something that hasn't been done before. You know, Mystery Show, which is one of our shows, is a format that had not ever been done before in this medium.

• 9:51Speaker 01

  You know, solving mysteries with a kind of personal point of view, but using real journalism to solve actual mysteries out in the world and doing it in a way that feels like a film that had never been done before. That's one of our most successful shows. Startup, a reality show about starting a business, hadn't been done before in this medium. Reply repeatedly does things on their show, it shows about the internet, where they break format and come up with whole new formats for an episode. And it's when you do that that the audience really notices and you see growth. And so we wanted to be well capitalized to be able to take that kind of risk.

• 10:23Harry Stebbings?

  And you mentioned those three incredibly successful shows and incredible shows in themselves. Have Gimlet had any attempted shows that haven't worked out, maybe? Has that ever happened?

• 10:33Speaker 01

  Yeah, we have a new show development team whose sole job is to create new shows. We have a kind of methodology that we've developed around that that includes essentially prototyping. And so we will make an app, we'll have an idea for a show and we'll make an episode of it. We make it, we make enough of an episode to know like, hey, is this gonna work? Like, how does this feel? Does it have the right elements? And we've certainly made episodes of show concepts that we felt like. Either they weren't, what they weren't working, or it was gonna take so much luck for it to work repeatedly. Or it was working well enough, but it wasn't, it didn't feel exciting enough and we didn't pursue them further. So yeah, we've had that.

• 11:15Harry Stebbings?

  And one of the main concerns with raising, suggested in the episode by Alex and Chris, uh, was that the company would feel like a totally different company. And I'm quoting him, quoting Alex. Uh, and by different, I mean worse. So how do you, as the co-founder, try and maintain this kind of sense of small company culture? With deep links internally, as you do grow excessively. I think you mentioned that you were gonna be sixty-five or seventy staff. Uh, in two years' time. How do you keep that small company culture?

• 11:46Speaker 01

  Yeah, we do it. So we do a few things to, um, to, uh, Gimlet does have a, a culture. Um, I think it's a fa- a fairly strong culture, although we haven't been that explicitly about communicating it. And what it is, and I think that's something we'll probably start to do. And the ways we, uh, I, I mean, I think the way culture gets communicated is the behavior of the leadership. And also you can design in certain kind of signs and the language and vocabulary that people use. So we started something recently called Gimlet Guides, which is every new employee who starts at the company now. It's something we started just a few months ago. We didn't have it at the beginning, but when we got to like twenty or twenty-five people, we decided to get formalized about the onboarding process into the company.

• 12:29Speaker 01

  And so now when you come into the company, you're introduced to someone who's called your Gimlet Guide. And Gimlet Guides are people who are selected because they are, um, they get our culture and they're very empathetic and they have ment- like they have it in them to be a mentor. And so it's sort of their job to also like establish and communicate what the culture is here, um, how we work, um, what we believe in, what we don't believe in.

• 12:54Harry Stebbings?

  And how long does that mentorship last for? Is it a month or is it kind of indefinite?

• 13:00Speaker 01

  Indefinite. And so, you know, your Gimlet Guide takes you out to lunch once a month. They're your kind of resource if you have any questions about, I mean, anything from like, where's the bathroom to like, hey, how, how do you, how like, how do promotions here work or? I'm thinking about doing, um, like doing this. Do you think this makes sense? Who should I talk to about that? This sort of thing.

• 13:19Harry Stebbings?

  Are you a mentor?

• 13:21Speaker 01

  I am not. I mean, I am in the company, but actually, we decided that your Gimlet Guide would not be a co-founder of the company and would not be your direct manager. It would be someone else on another team who doesn't work like immediately on your team. Because we also wanted to stitch together all the teams in the company. So one of the things we found is because the atomic unit here is the show, shows aren't always as connected to each other as we kind of want. We think there's a lot of value in having a network and the shows working all together and being greater than just a collection of shows being one company or one network. And so this was also a way to connect the shows to each other and the people.

• 14:03Harry Stebbings?

  And moving back to the raise, I'd love to discuss Tim and Graham Holdings now, your lead investor. And we had a little on the show about the raise, but were there any hiccups? And were you tempted by any other offers, maybe the value Gimlet hire? What was the situation there?

• 14:21Speaker 01

  When we set out to raise a Series A, we sort of explicitly told each other that the terms were not the most important thing to us. So we weren't out trying to drive the highest valuation. What was more important to us is that we could have a partner that really understood us and that was aligned on the vision and had experience investing in media. Because I think investing in media is different than investing in technology companies. And the returns have a different timeline. And the way the dynamics of media companies are just different than tech companies. So those were the things that were important more than the valuation, I guess, or the other stuff. I mean, it was really important

• 15:04Speaker 01

  to Alex and I that we both still controlled our own destiny, that we controlled more than 50% of the company, and we wanted to have a small board. And then when we, um, the round went very well and there, there, there was a lot of interest in our company because podcasting is kind of a hot space, but there aren't a lot of investable companies in the space.

• 15:24Harry Stebbings?

  Well, this is, I've spoken to lots of VCs about the podcasting industry and, and ninety percent of them say it's not actually an investable proposition. And that always rather infuriates me. What do you think about that? As a podcaster, funnily enough, it infuriates me. But it is infuriating because I see huge market potential in it and I, I'd love to hear what you think. I mean, obviously you do, but why do you?

• 15:47Speaker 01

  Because there's a sea change in how people are, like how a whole generation of people are going to consume audio.

• 15:55Harry Stebbings?

  And do you believe in its ability to monetize on a mass scale?

• 15:59Speaker 01

  Uh, yes, I do. I mean, there's, uh, there's, so I mean, one way to look at the, you could look at the market size very, like the simplest kind of most direct way to look at the market size is that, well, what's the size of the radio market? You know, radio does, I don't know, seventeen, eighteen billion dollars a year in advertising in the US market alone. So that's one way to look at it. Another way to look at it is what's the, what's the entire like digital, like mo- mobile media advertising market? That's another market that we touch. One of the big themes that's happening right now is with like use of personal technology, but also in media is that consumption is shifting to mobile platforms. Like people are spending more time on mobile and mobile is, is hard to monetize if you're a media company.

• 16:43Speaker 01

  Because the sort of ad- advertising models that worked um on desktop, like where you have display advertisers, advertisements just doesn't work as well on mobile because it's a small screen and ads are really annoying. And um, we're, we're like, we're totally mobile media company. It's like eighty percent of our listening happens on mobile devices. And our listeners love our ads and it's a great medium for brand advertising. So we think like consumption of on-demand audio is is is gonna be is gonna be big as as smartphone penetration becomes universal and as we get better data connectivity as connected cars come online.

• 17:22Speaker 01

  And yeah, I mean, our the way we come at this is is that, you know, Alex and I have been doing radio in one way or another for the last fifteen or twenty years. What we see is that the shows that we're making, the stories that we're telling have like real relevance to the audiences that we're reaching and that it creates a greater sense of connectivity in the world, a greater sense of understanding and empathy. And we're doing that currently at like a moderate scale. And we're really interested in doing it at a much larger scale because if you're doing something good, it's better to do it in a big way than a small way.

• 17:56Harry Stebbings?

  Absolutely. And then stepping away from the kind of mass podcast market now and talking about Gimlet specifically, a question from a dear friend, Matt Hartman, who actually has just released his own podcast, Doing Your Business, which is actually very brilliant, so must check out to everyone there. But Matt asks, how do you decide which new shows to create? Is it about creating new shows for overlapping audiences or do you try to expand to new demographics?

• 18:25Speaker 01

  Both. I mean, one way, so we certainly have, you know, the most recent show we launched is called Surprisingly Awesome. And we saw a segment in the market of people who are listening really because they wanna learn something. They wanna be entertained, but they wanna learn something. Like you're going on your commute and you if you can spend twenty-five minutes listening to an episode about interest rates and learn more about how the economy works, that's really valuable. And that was their most recent episode. And there are some shows out there that are doing this with very large audiences and we felt like we could compete there. So we teamed up with Adam McKay and Adam Davidson to make that show. There are basically, when we look at whether to do a show, like there are three things that we need to see.

• 19:10Speaker 01

  And one is that element of learning, like are our listeners gonna hear this and like come away with it? With some greater understanding or some greater angle of empathy on the world? Two is, do we have a host who listeners can connect to? Like, are they companionable? Do we wanna hang out with them as listeners? And then three is narrative, like is there a story here? Is there, are we, do we have the pacing and suspense and emotional payoffs to really hook people? Cause those are the three things that when we see them are the ones, the shows that that go biggest with um with large audiences.

• 19:42Harry Stebbings?

  And talking of the biggest shows, of the three shows we mentioned earlier, cause surprisingly awesome is obviously um very new. Uh, where where startup, I presume is the biggest?

• 19:52Speaker 01

  Um, they're they're all kind of in the range. I mean, um, if you look at like downloads per episode, mystery show is uh, is the biggest and but reply all and and startup are are um not far behind.

• 20:07Harry Stebbings?

  Absolutely. And I'd love to dive into a quick fire round now.

• 20:11Speaker 01

  Yes.

• 20:11Harry Stebbings?

  So your favorite book and why?

• 20:14Speaker 01

  Oh, man, I forgot to ask about, are you gonna, do you edit this show?

• 20:16Harry Stebbings?

  Yeah, we can edit it. It's the beauty of podcasting, isn't it?

• 20:22Speaker 01

  Yeah, it is when done right. Uh, my favorite book, uh, Great Plains by Ian Frazier.

• 20:28Harry Stebbings?

  Which founder do you most look to emulate?

• 20:31Speaker 01

  I don't have a good answer for that question. I tried to think about it. I don't, I don't have that.

• 20:37Harry Stebbings?

  That, did you, that is, that's really interesting for me. Like, I always had Steve Jobs since I was like.

• 20:42Speaker 01

  Oh, my god.

• 20:43Harry Stebbings?

  What?

• 20:45Speaker 01

  Well, he's like, yeah, you're sorry, go ahead. I I interrupted you.

• 20:49Harry Stebbings?

  No, no, I just always held him up as kind of the cornerstone of revolution and technical advancement. Uh, and so he was always mine. Do you, why, oh, my god?

• 21:00Speaker 01

  Uh, because he, he, I mean, he is, he is a revolutionary and he's a visionary and he created incredible products that changed the world. But he, I don't think people loved working for him. And I think that he also has like monomaniacal behaviors that I would not want to adopt because that's not who I am. I guess the thing, um, I, I guess the thing that I want to do is, but and Alex and I really try to do is be authentic to ourselves. And that's why, I mean, I certainly look at a lot of founders and say, and look at specific things they did. Um, and we try to adopt them, but there's no one person who I'm like, I don't think either of us are modeling ourselves after.

• 21:43Speaker 01

  Um, I think the thing we try to model ourselves after is ourselves.

• 21:47Harry Stebbings?

  And then the most challenging aspect of growing Gimlet?

• 21:50Speaker 01

  Um, scaling editorial, creating a system to grow and teach editorial capabilities in this medium.

• 21:59Harry Stebbings?

  Your most read blog or newsletter?

• 22:02Speaker 01

  Uh, Stratechery.

• 22:03Harry Stebbings?

  Ben Thompson, brilliant. Uh, having Chris Sac as an investor, what's it like?

• 22:07Speaker 01

  Um.

• 22:11Speaker 01

  Uh, it is, it is fun and challenging.

• 22:18Harry Stebbings?

  Uh, expand, there was, there was a good brief pause there, wh- wh- uh, is Chris?

• 22:24Speaker 01

  I mean, Chris is, I think Chris is really smart and has great ideas for the business. And having he and Matt Mazzio too, like having lowercase in the company, I think has really pushed us and challenged us to think about how we can grow. Um, and as you hear on Startup, Chris is, um, like is uncompromising and feisty.

• 22:47Harry Stebbings?

  Yeah, in the, in the last episode with Alex, he was, I felt sorry for Alex, whatever he should do, like it wasn't right, Chris was not happy. Okay, fantastic. Uh, the biggest area of potential to monetize Gimlet, what are we looking for? Are we looking for white labeling shows? Is it advertisements? Is it, uh, a potential Gimlet software?

• 23:07Speaker 01

  I don't think Gimlet will become a software company. I, I think the, the, the, uh, the, the advertising business and then down the road, um, the subscription business has the biggest potential together.

• 23:18Harry Stebbings?

  What in Gimlet's future are you most excited by?

• 23:22Speaker 01

  More shows.

• 23:23Harry Stebbings?

  Anyone in particular?

• 23:24Speaker 01

  The thing I'm always excited, most excited about is the next one and we, we just, um, launched the trailer for a show called Sampler. Which is a podcast about podcasts.

• 23:33Harry Stebbings?

  Okay, brilliant.

• 23:34Speaker 01

  And yeah, it's hosted by this wonderful woman, Brittany Luce. I'm excited for that one.

• 23:38Harry Stebbings?

  And then what's the best piece of advice you've ever been given?

• 23:41Speaker 01

  Uh, be nice.

• 23:43Harry Stebbings?

  Awesome. Well, Matt, thank you so much for coming on the show. I've hugely enjoyed chatting with you and it's been an absolute pleasure as a huge Gimlet fan that I am.

• 23:52Speaker 01

  Thanks Harry, it's been a pleasure, uh, it's been fun.

• 23:54Harry Stebbings?

  Again, I would like to give a huge hand to Matt for giving up his time today to be on the show. If you, like me, are a listener of Startup, you know that Matt is pretty busy at Gimlet, so that really was kind of him to come on the show today. And if you're loving the 20 Minute VC, do not forget to sign up for our newsletter on the20minutvc.com, where you can stay up to date with all the latest episodes. As always, it's been an absolute pleasure bringing you today's show, and I'm so looking forward to bringing you Monday's show with Fred Destin at Axel.