Phil Sanderson — Griffin Gaming Partners

Posted on Wednesday, April 7, 2021
Griffin Gaming Partners is a $250m Fund I focused exclusively on gaming.  

Phil Sanderson says that gaming investing is the new enterprise software–a predictable business model with strong CAC to LTV ratios and increasingly large exit opportunities.

 
We also talk about ultramarathons, a 240 mile race, and how Phil has trained himself to go after even bigger, more audacious goals.

View Transcript

Hello and welcome to the LA venture podcast. This is Minnie Ingersoll host of the podcast and partner at TenOneTen. TenOneTen is a seed stage fund here in LA. All opinions expressed on this show by me and my guests are solely our own. 

Phil Sanderson is one of the founders and managing director of Griffin Gaming Partners. Griffin is a $250 million fund investing in the global growth of gaming. Phil has been investing in gaming entrepreneurs for the past couple of decades with investments that include Discord, Thriller, Pandora, Phoenix Labs, and many others.

At the end of last year, he ran a 240 mile race through the Moab desert. Phil, I’m very excited to talk about gaming and I also hope to save some time to ask you about what inspires you to run 240 miles through the desert. Thanks for being here.

That was a, uh, that was a fun one. Took me 97 hours. I learned a lot about sleep strategy since four of those 97 hours we were sleeping, but I probably should have slept in the first, uh, two and a half days, rather than waiting for the third night to sleep. But that’s another story. I think that that sort of embodied some of the ways I live my life, which is about challenging myself through physical and mental goals, um, and trying to achieve those goals, reinventing myself, and lifelong learning.

So those are three principles I live by ultra running is one of those methods I use to, uh, to keep growing. 

Yeah, but Phil, I was thinking about it. I think 240 miles is like nine marathons. It’s more than nine marathons. 

It’s hard for me to get my head around. Also, is hard that out there, you know, its that 10,000 feet altitude at times, and its 30 degrees, at night 85, 90 degrees during the day. It’s so extreme, but I think, that this is very similar to entrepreneurship. I did a TEDx talk on hacking an ultra marathon, how it’s compared to being an entrepreneur.

It’s about setting goals, having a great team, being flexible with the plans that you have and adapting and having fun. 

Yes, you have some great TEDx talks, but 240 miles is really like hard for me to get my head around. And you know, let’s start with Griffin and then circle back to your extreme life. If we can.

Sure we are a venture capital firm, as you mentioned, focused on gaming, it’s in our name, Griffin gaming partners. We invest in early and late stage, infrastructure and content companies in the gaming landscape all around the world. We’re based in Santa Monica. We have an office in San Francisco as well.

And gaming is the biggest consumer trend in the world. I’ve spent my entire career focused on game investing. As have my two founding partners, Nick and Peter Levin. And we’re having so much fun, uh, in this world today. And everyone’s playing games, as you can tell. And I just want to say the reason why it’s the fastest growing consumer trend in the world.

About 10 years ago, there were probably a hundred million people in the world who played games, electronic games today it’s over 3 billion. That’s hard to get your head around like a 240 mile race, but it’s there. It’s just the fact.

got it. And so, right. So we all hear the stats. it’s bigger than sports and movies combined, all of that. and that’s just accelerating. 

No, it’s true. It’s a bigger than music books publishing. Um, more people watched the legal legends championship. Then the NBA finals by an order of magnitude 

An order of magnitude. It does say a lot about the future. So what did you say you invest in? I think you said infrastructure and content.

Um, well, 

So, how does that guide your investments? I think you said you invest in infrastructure and content.

let’s, let’s talk some about what you said. You said, uh, infrastructure and content. So. Um, maybe within infrastructure. What are the interesting, where does gaming kind of push the tech boundaries are, or what’s going on in infrastructure?

yeah, one of the, infrastructure investments I made, Of midway through my career was discord. I invested in the seed round in 2012. And, there’s a core functionality that was needed for games to be able to communicate with the people you’re playing with in a very robust, safe way in the game and outside of the game.

And discord really has solved that problem. Um, You know, you don’t necessarily want to connect to you. Don’t want to add somebody to your friend feed or your Facebook feed to be able to communicate with them with a, a short, you know, five minute game. You also want to be able to talk about that game in a community.

Um, outside of the actual gameplay and discord has publicly said, they’ve had over 250 million monthly active users. I mean, that’s, that’s game changing. You know, it seems that expression. Um, and I, you know, I have high hopes for discord, uh, There are a lot of companies in the infrastructure category that,  are needed.

And gaming is really, um, at the forefront of a lot of innovation 

tell me a little bit more about discord and how do you think about sort of the community aspects of what games are doing right now?

Well, social component of games is a critical piece of the puzzle. Um, people play. Because they want to spend time with their friends and to have fun. It’s really combination of the two. So, a lot of that is within the game as you play, but so much of the enjoyment of games isn’t necessarily even playing.

It’s sort of, the background behind it, understanding what you’re doing. The meta-story talking to your friends, forming a clan. Uh, communicating with them, but, um, you know, so there’s, there’s a lot of, uh, a lot of it, it goes outside of the game as well. So the community element is pretty important. And I should mention that this court isn’t use just within gaming.

It’s also replacing Slack within the enterprise in many cases as well, given its functionality. So it’s, it’s interesting how it’s created those communities through different servers. You know, that you can, you can, uh, you can set up.

Is it kind of audio, Slack?

In many ways it’s video as well. but it’s, uh, it’s got a lot on the Slack functionality, um, that you would expect, but it’s free. So that’s why it’s just taken off versus Slack, which is a paid enterprise app.

so I think what you said is, is people play games because they’re fun and because there’s a community aspect to it. 

Yes. I mean, I don’t know if I necessarily put them in the order, but the fun factor has to be there so many times everything makes sense on paper, but the game isn’t that fun. And that’s a critical component. The social element, we are social beings and we need to express ourselves socially. And that’s why through COVID.

Gaming has been accelerated just because people are looking for that social outlet to be able to play among us with your friends has really taken the place of getting together with your friends after school or after work or something like that. So, um, that social piece needs to be there when you’ve got a game that’s really fun and social, it’s usually a recipe for success.

And so do you play it yourself to figure out whether it’s fun? Do you have like game testers whose job it is to see whether there are any fun?

Yes. And yes. we play a lot of games at Griffin gaming partners and it’s sort of one of the few people who get paid to play games. Um, we do play every Friday as a team. We get together and play Mario kart or among us, or a super smash bros. Um, but we’re also playing games. Just on our own, not just our portfolio company games, but others as well, just to get market intelligence and so forth.

We’re very data-driven firm too. So we, we sort through data from app Annie and PitchBook constantly, and we’re looking at trends and research and seeing, you know, on steam, what’s on the rise what’s increasing, what should we be paying attention to and trying to get on those trends early. So, um, we’ve got a team of about a dozen people and we’re all focused on, you know, the data, but also with primary research, but also, you know, looking at.

The data and large, because you can’t, you know, it’s hard, it’s easy to fall into the trap that you think that you’re the, you’re the market when you’re just one data point and you, you know, in any business and you can’t do that, but, but it is important to really live and breathe and be of by and for the culture, which is what we are.

Fun. Um, because it’s a fun job. Uh, how about, uh, how about on the content side and, and. Um, actually, no, let me just, let me, let me change a little bit. Do you yourself do more of the infrastructure? Do you guys split it up at all? When someone’s coming to approach you about who looks at what.

One of the nice things about being a sector focused fund, even though we’re a very broad sector, is that we can all work together on an existing company and investment, not just in the due diligence part, but after we make the investment, we all lend our resources to help that company. So we’re all doing infrastructure and content companies.

Equally, um, if somebody comes in, we all, you know, kind of do all hands on deck and, um, and really focus on I’m trying to evaluate the company and make a decision quickly for the benefit of the entrepreneur. Because I think there is a trap in venture where an entrepreneur will pitch to a venture capitalist and sort of not hear anything back.

And, you know, we re we really tried to do a fast yes or a fast, no, and we’re able to do that. Being a sector focus, we don’t have to convince. Some of our partners who are focused on biotech or climate change, what we’re doing within this, you know, gaming construct. And I think it’s really efficient to have a sector focused fund.

Great. Um, well, and maybe just tell me a little bit about your team and, and who’s who and how sort of that process works.

Sure. So, um, just by the way, background, I’ve been a venture capitalist for 25 years. Um, focused on gaming, as I said, and I was a gaming banker before that at Robertson Stephens. And I went to business school along the way. And, um, my two partners are Peter Levin and Nick to us. So Peter had worked at Lionsgate lives in LA, has done more IP integration work than anybody in the industry.

can you tell me a little bit about the IP integration work and how that usually flows? And maybe it depends on the sort of game, but how that, you know, where the overlap is between Hollywood and gaming?

Sure. I mean, it’s, it’s becoming stronger and stronger. We like games that have, a strong IP that’s either licensed or that they’ve created on their own in the case of a, one that they licensed or work with. the customer acquisition costs can be lower because people know about that, that IP already.

And then they end up paying in terms of a royalty or licensed on the backend, which is performance-based also, if you’ve created a. a piece of IP, then you can create books, TV, movies, around it as well. I won’t go into details on our limited partner base, but we’ve got about, 17 of the world’s largest media companies and game companies as LPs.

And they can work with our companies, uh, if they, if they want to. So, You know, we have, we have companies that come to us and say, I would love to work with, just use an example, James Bond, right. Or somebody like that, that, that IP, um, we can make an introduction to almost any IP in the world. And in many cases, we worked with them in the past.

So that could be a huge advantage, for portfolio companies of ours.

So there’s heavy overlap between gaming and Hollywood intellectual property. Is there also a heavy overlap with storytelling and do Gainsborough a lot of that DNA from Hollywood as well.

they do. And many, many games have professional sag writers and so forth. And it is an important element. Um, I do believe there is a trend in gaming to have, um, artificial intelligence based storytelling, which is much more scalable as is AI based graphics. We invested in a company called latitude, which has a game called AI dungeon, which is exactly in this area.

Um, it’s a pretty fascinating piece just to wrap up on your prior question. My third partner is Nick , who is a banker at lion tree. LionTree is our third partner within the fund. It’s a TMT investment bank. And, um, it really, you know, gives us great access to some of the broader M and a, you know, knowledge base out there.

And it’s a huge advantage to our portfolio companies to, to tap into, to understand, you know, what’s happening out in the market. And, uh, what direction they need to go and so forth. So that, that, uh, piece of market intelligence is a critical component of what we do as well.

Are there, you know, are there easy things to summarize there in terms of, you know, where M and a is happening in the broader trends, sort of downstream.

I think so. So as I said, we do a lot of early stage and late stage investing and, um, you can see on our website, we’ve got some investments in companies like app Levin and skills. Um, and discord and others. so they wanted, you know, they’re interested to know what their exit options are down the road.

What companies in may will want to buy and so forth so we can advise them and help them along the way. I will say that there’ve been some great exits in general, in the market recently, like, unity going public and roadblocks, you know, last week. Um, and, um, and many others in the multi-billion dollar range, it’s been.

A golden age for game companies, for liquidity,

well, good for you. Good place. Good place to be investing then.

This

And this is fun one for you guys, right?

is our first time. Yes.

Ah, very exciting. okay, so, um, so where should we, where should we go? As I said, it’s edited. So sometimes I don’t quite know where I’m going with this. Um, I mean, because this is LA venture and we talk about, so the overlap of, LA and, investing, how do you do, like, I saw the Google shutdown, stadia, or some of their, their own, uh, content development.

How do you think tech and content play well together? Or do you think like a company that has tech as its DNA is not going to be able to create great content?

it’s an insightful comment. You know, many tech companies in the past or gaming companies in the past have launched their services, aligning themselves with a major piece of IP like Microsoft X-Box with halo. Right. Or, somebody PlayStation with Spiderman, Google has not been used to paying for content.

They just, it hasn’t been in the DNA and they chose not to do it and they failed because of it. And so that marriage between Silicon Valley and Hollywood didn’t work. so, you know, I think if they were to take another pass at this, which they probably will, they may have a different strategy and really embrace the LA ecosystem and the way.

Consumers, you know, want to see it, want to see it work. Um, so you know that that’s my take on stadia, but I think cloud gaming will come around eventually. Um, we’re seeing different forms of it and, um, the infrastructure is out there, but you need more than just infrastructure, right? You need more than just the technology.

You need the business models, um, to really be paired in the right way. And I think, that’ll happen.

Um, what is, what is going on with business models today?

I mean, there’s, there’s new and innovative, new and innovative ones all the time. Um, one of the reasons why gaming has taken off so much in the last 10 years, it’s not just been because of the new platforms, mobile phones and so forth, but also. The business models of being free to play that allowed many, many users to play games.

And even though typically only three to 5% pay for anything that adds up to the, you know, tens of billions of dollars that we see and in app purchases and so forth, the, uh, battle Royale mechanic that, that was really started with pub G and Fortnite and so forth. Um, that’s, uh, you know, that’s a business model.

It’s only season passes for those things that have really. Taken off, um, and we’ll see different forms of business models. You know, the, the music scene has really the business models are there have changed and are starting to change. Um, and we’re starting to see music within the metaverse.

And that’s fascinating, right? I mean, one of the real questions is we know that that music live music will come back where I’m starting to see festivals start to get on the books, um, for September and so forth. But will people move away from. Consuming music, uh, online, permanently, or, or are those patterns ingrained?

And are we going to see that I happen to think they are ingrained and there will be a continued use of watching shows within roadblocks, within Fortnite and other platforms as well. Um, with a mix of, of online performances too.

And what is it, um, that sort of most compelling within a metaverse to consume? Like, is it concerts? And I always hear about interactive, but they don’t look all that interactive to me. So maybe you could just explain that better to me.

Sure audiences are aggregating, within social media platforms and within games. That’s just where people are today, right? In, in mass. roadblocks, for example, has 30 million. Plus kids every day that show up over half of the U S audience under 16 is on roadblocks every day. 

I didn’t quite realize it was that huge.

It’s incredible. Um, so why not present, you know, media experiences as well? Just like within Fortnite and by the way, there are other platforms that are even larger that you probably never heard of like free fire by greena. Right. Okay. It’s even bigger. But, um, uh, but these are places where people are aggregating and why not watch.

So today, There’s a mix of one dot O and two dot O versions. I’m just showing a live stream, is sort of a one dot over version and that’s happening everywhere. And there’s probably 50 live streaming companies out there today. But when you can show up with your avatar your friends and watch an experience.

It’s actually, you know, even, even more enhanced. And then we’ve invested in a company called wave that I’m on the board of, and they’ve done shows for, um, and just did one for Alison Wonderland. They did one for Tik TOK, and these are not the AR experiences you just watch. Um, uh, you can watch the weekend as he appeared on Tik TOK, or you could watch.

Um, Alison Wonderland or some of the other shows that they have on, on your mobile phone or on your, um, on your computer. And what you’re doing is you’re watching the avatar of a performer DJ over singer perform, and you can interact with that performer. You can send them comments in the comments, appear on the stage.

You can choose what song they want to play next, or, or what action they should do next because they ask you and they can do shout outs to you. This is very common in the East with some big, platforms like Billy, Billy, and so forth where you’re interacting with, an artist, or. Some other contexts, like month bang or something like that, but you’re, you’re consuming media and you’re interacting with that media. And it’s, it’s, it’s fun. You really have that sort of live music feel while not having the exact field.

Hmm. Um, anything else really cool that you think about, uh, when you are looking at how these metaverses are, you know, becoming sort of the CII is being realized within the metaverse.

Um, yeah, I think about the future, like ready player one. I mean, that’s, that will happen. Um, we’ll, we’ll have different forms of heads up heads down displays VR interactions, but being in a virtual world where you do a lot of your interactions. That’s coming. Um, non fungible tokens NFTs are very cool.

Obviously it’s the, it’s the expression of the month. If people are talking about it, uh, in mass being able to buy moments as a collectible. Um, so within the metaverse, if you’re watching a concert and there’s, uh, a song that’s played to be able to buy that song within that show on that day and own it as a serial number and be able to trade it, um, That’s happening in those, those moments will be sold just like they’re done within NBA, top shots, um, or people selling a $69 million, you know, a piece of art.

Crazy. What do you own? Do you own anything?

I do. I own a, um, a bunch of moments on NBA, top shots, a bunch of LeBron dunks and Weisman dunks, and Steph Curry, three pointers. 

Cool. Those are fun things to own. So now we’ve got NFTs. We’ve got half the kids in the United States are like playing roadblocks right now. What else? What else are we going to be doing in the metaverse? I mean, are we going to be shopping in the metaverse?

 Cool. Those are fun things to own. So if that NFTs, um, we’ve got half of the kids in the United States are like playing roadblocks right now. Uh, what else, what else are we going to be doing in the metaverse? Um, are we all going to be shopping in the metaverse?

Interesting. Yeah. A lot of fascinating stuff there. Um, and, uh, and is that changing how game development, you know, works just the I’m sure it’s completely changing game development, right. That there’s so much interaction going on. Um, I don’t know if I have a question. Exactly. Um, uh, okay, so, so we’ve got the metaverse.

Uh, people are spending all their time there. Are we going to be doing shopping? Like, what else are we going to be doing inside the metaverse

Well, it started with, People are playing games and they’re, and they’re having social interactions. And so a natural extension now is consuming media. Yeah. I E watching, you know, um, music and so forth and yeah, shopping is, I mean, look e-commerce is big and there’s a reason why that won’t take off, to have a store that you could browse and find products and have a, a more visual interactive Amazon.

That’s a great idea. I think you should start that company right now. I lack you.

Great. Great. um, okay. And so tell me more about, are you, have you made any bets in e-sports and, and how do you think that that’s going to involve, and did you say season passes also to the e-sports are a big thing or a growing thing?

That was with an Epic, you know, early on when they were sending season passes. Um, we haven’t made any investment in teams. E-sports, you know, the, the physical e-sport showing up at events is obviously been decimated during COVID, but e-sports has never been larger in terms of watching sports. Um, not just in competitions, but also on Twitch in general.

Um, so we’ve made a number of investments in the infrastructure and content, companies in and around the e-sport area. So it’s a, it’s a. Massive opportunity. People love to watch games. I mean, what is it? Something like 80 million people on Twitch every month watching games. It’s fun. Um, and it’s not unlike watching sports on TV.

It’s again, it’s hard to get your head around if you’re not a millennial necessarily, but once you start to watch people play or people that, you know, play either, relatives, your kids, or people that are famous, you start to get into it and you start to realize it. So, one thing that I just love about our industry.

Is that, you know, we just see new and innovative things all the time. That just kind of like don’t necessarily make sense at first, but then you start to say, okay, maybe I should just think about this for a second. Okay. NFTs do kind of make sense. I mean, you and I see bright, innovative entrepreneurs all the time who come up with incredible ideas.

That’s what we love. Right. It’s so fun. So, you know, You do hear people all the time say e-sports, I don’t get it. Doesn’t make sense to me or NFTs that I don’t, I don’t understand it. And then, you know, yeah, a year or two later, they’re, they’re sort of using it and into it. And you know, maybe they’re a little bit the laggards, but you just, you have to keep it open mind in our business.

Cause it’s just, the pace of innovation is massive.

Yeah. Uh, people come around to it. It just, sometimes it takes a little while. The other thing I hear a lot is like, Oh, I don’t want to invest in games. They’re very hit-driven.  Um, do you have that, do you subscribe to that? And you’re just focusing on the things that are more infrastructure or how do you, how do you combat that?

um, well, I do like that expression because it keeps our industry less competitive keeps because it’s just not true. I mean, in general, there is a small component of gaming, which is, hit-driven like investing in a, in indie movie title. Having to go to Sundance and hoping it gets big. you know, those do happen.

And I will say, like, there have been some good examples of that. Like I think candy crush was there, 30 something try at a game and all of a sudden became like one of the biggest games of all time. that’s not what we do. And, there’s a little bit more of that in the, in the casual, hyper casual side versus the, um, active, casual mid-core hard-core style games.

But when we invest in an early stage company, many times it’s based on just an incredible team. Uh, you know, they’ve made money in gaming before they’ve made money within, a large enterprise and they’re just so talented. We’re just going to back them pre PowerPoint and other early stage cases. They have a beta of a product that’s out there.

You, but you can get a mobile game out in nine months. And even without all the monetization features, you can get it out in Canada, Australia, New Zealand, a micro market. Versus the U S and Europe. That’s also English speaking. So it’s a good proxy for those larger markets. And you can look at all the metrics that matter the CAC to LTV ratio, average revenue per daily active user, or opt out is the retention rates based on day one, they, 15 to 30, we know what these retention rates should be per the game category in class.

We’re very metrics. So if these metrics with a large sample set, prove themselves out, We kind of know already that this game will be successful. This is not throwing darts at a dartboard.  

so when you’re, um, D interesting different points. And so when you’re, let’s say you’re doing an early investment and it’s, it’s a great team that’s coming out of somewhere. Great. Um, and you liked the vision, uh, where are some of those places where you just know, Oh, that’s a great shop.

You know, they’re rolling out of, you know, XYZ, uh, S. Game development studio or something. Um, do you have certain places where you just know are always producing great people?

yeah, I mean, there’s, well, there’s not just, um, certain companies, but certain geographies. So there’s a lot of interesting talent coming in Turkey right now. And if Israel and a lot of these come from some of the major, but he’s like, we’ve backed teams out of peak games. or in Turkey or play Tika in Israel and places like this.

So, after there’s an acquisition, A lot of times people leave and we’ll look, you know, look for some of the key participants there. Our contact base is pretty vast and we know most of the executives at pretty much all the major game companies, but also a layer underneath them. And I think those are people who leave to start companies and that’s, um, That’s part of the thing you don’t necessarily hear about in venture capital too much, but the amount of work that VCs do to really build those relationships and to help and, and multiple ways, even before, you know, years before they started a company with contacts and introductions and advice, and that’s playing the long game.

Yeah. Um, the other thing that I hear sometimes, or maybe I used to hear it more was like working at like a game development company or working at some of these. It just, it didn’t pay as well. It was like harder. Like it was, it was like a harder job to have. Um, this is when I was like, you know, first graduating with a computer science degree and I was like, Oh, doing game development.

If for whatever reason it’s harder. Is that still true? Is there a reputation there?

well, there definitely was the reputation that, you’re paid more in, sort of Fitbit the satisfaction than the monetary pieces. Um, I think rising tides have, have risen all boats, people have done well in the industry across the board. And, um, are there certain, certainly still some cases like that, but I think in general, uh, pay rates have gone up in the industry and, um, certainly equity has done well for most, most companies just because game companies have done so well.

So it used to be more of a labor of love. And I think it’s less of that. It’s more of a professionalized industry.

Okay, cool. Um, yes, no, I think I, that’s why I ended up going to Google. Um, they’re just doing it years ago. Um, anything else big on gaming? Cause I do want to save a little time to ask about, your, nine marathon running in one race.

Yeah, I think we covered a lot of gaming. Look, I think it’s, um, it’s becoming what I call the new enterprise software. there’s just so many exits, I don’t think people realize and, and in the public markets, but they will that a lot of gaming is predictable. Right because these cohorts are lasting for months, years, and decades.

And when people value the CAC customer acquisition costs to LTV lifetime value, that ratio most cases, we’re saying, well, if, if a user stays for two years or maybe three, but the reality is once you produce great content and you keep producing content, that consumer will stay with you. In many cases for 10 years.

And so we don’t know how long these lifetime values are of these user bases, but you pay for a user upfront and you’ve got these cohorts that go down over time. Right? Cause there’s, a Rojan but many cases when, when someone pays after 30 days, they’re staying with you for years.

People love playing games. People play multiple games. They play usually two or three games. So it’s a predictable business model. And in many cases, much more cost efficient than enterprise software because you pay a little bit less on front. Once you have that CAC to LTV ratio ratio working, then you can start spending hundreds of thousands, millions, or tens of millions a month on customer acquisition.

If your payback is going to be in nine months and you keep them for years, that’s a great model. So,

I don’t totally understand Why do they stay with you? Like I understand they might roll off one game, but. Aren’t they equally likely to choose another game that was developed by someone else?

Yeah, but I mean, how many people do, you know, have been playing candy crush for like five years and they don’t pay it all the time, but they play it like once or twice a week. Right. It’s just part of their lives. It’s so comfortable for them. It’s easy. It’s fun. They know it they’re good at it. Plus they built up a character, they built up all this stuff.

They don’t want to just give it up. It’s sticky, you know, it’s like, that’s kind of fun or, you know, and then if you keep coming out with new, new levels, new content, new innovation, it’s sort of like a different game. It, you know, they call it games as a service in many senses, but it’s the same thing.

Um, yeah, that’s what it’s just, people love it. It’s like reading a book series. It comes out with a new book and you want to read the next book. It’s kind of the same thing.

I know retention must vary widely depending on sort of what platform we’re talking about, but like within mobile, say, can you break down sort of retention numbers that you might be looking for?

I could, somewhat proprietary.

Fair enough. You can, you can pass.

I’ll pass him that question because it’s very detailed. I mean, there’s different levels of games. I mentioned hyper casual, casual, active, casual, and there’s, you know, sort of mid-core and hardcore and there’s different retention rates for all of them. And most cases, when we talk to portfolio companies or PR our prospects, we don’t focus on the monetization.

Yet. Retention is more important. We really want to see that people love the game again, the fun factor, and if they can stay, then you can start to monetize them with pretty traditional means of monetization.

Right. Okay. So maybe it related to, um, to the retention, which is kind of that, that knowledge that you’ve built up over decades of doing this and tracking the data. Is that why you think VC’s sort of failed to cut into gaming if they’re not focused on gaming? Because a lot of what you talk about, it’s the news enterprise, SAS, it’s CAC to LTV ratios.

It’s things that most VCs are probably very comfortable looking at.

I think most VCs in gaming are more comfortable in the later stage investing because it’s much more metric driven. There’s a lot of revenue there’s EBITDA, or there’s a pattern there’s margins they can understand, but when it comes to earlier stage, it’s hard. And also, I would say I’ve, I remember one board meeting, uh, we had a board dinner and the night and the next day.

We met as a board. And the CEO said, I could tell we had the right board when our topics of conversation last night were around Dungeons and dragons, dune, uh, the marvelous, the universe. I mean, we were just talking about gay and these are the underpinnings of all of games. And so when you’ve lived, lived and breathed in this world, your entire career, and just have invested in it and understand business models and what drives people and so forth.

It’s really hard to pivot your career into that. You really, and CEO’s know it. They sense it. They know that you, you and all CEOs want a board or investor that understands their business. Because if things change, Hey, they want advice to help them. But B they want support and knowledge that the investor knows what’s happening and is willing to continue to back them versus saying, Oh, this isn’t what we invested in.

We’re out. That’s not what anybody wants. So, you know, you really having an industry expertise in anything in any career makes sense. So, No just, it’s nice that we’ve all spent our entire careers in this and that’s, that’s why I think, you know, we’re, we’re, 

I’d say some of the infrastructure stuff feels more approachable to me. Like if you were. Doing something that was broadly, you know, related to GPU is in the cloud that you might do for something else that you also could apply to gaming might feel like, like where traditional VCs might have. Right.

see. That might be the Google. And you saying that.

Is it totally

I, you know, the content side and understand, right. It’s and it’s not to say the content side is more of an art form, but there are certain patterns that are very, very metric based within content companies and, and so forth. And those are very easy to, to identify and trace.

Okay. Okay, Phil, what about, we’d started talking about running, you know, 240 mile races through the desert. Can we switch over to that

Sure. So I, one, 240 mile race, I have done over a hundred, I’ve done a hundred hundred because of over a 50 K or over, I’ve done 20 to 100 mile races, which is more the distance I’m comfortable with, which is still really tough. Every year I do the grand slam ultra series. This will be my fifth year doing it, which is the four original 100 mile races in the U S they’re all about.

Three to five weeks apart, which makes it really hard. Um, it’s the, uh, Vermont 100, the Western States 100 Leadville, 100 and the Wasatch 100. And, um, they’re all in extreme conditions. You know, Leadville is at 10,000 feet altitude. Uh, Wasatch has 27,000 feet of climbing and is at 8,000 feet altitude. It’s 85 degrees. but it’s, I love it. I mean, I just, you know, actually one of the hardest things that I do is. Keeping a quota for myself and running 70 miles a week. and if I miss a day, I have to run 20 miles a different day of the week, and it’s often hard. And, and sometimes I’ll get on my treadmill at 11 at night and say, I gotta run for an hour and a half.

Um, and I don’t want to, but I made a commitment to myself and I’m gonna, like, I’ve got a goal. I’m going to do it.  

Well, I, appreciate having goals, but I’m always, for me, I’m always worried that I set the wrong goals or something like, how do you, why did you decide? Sorry. I just thought that sounded wrong.

no, it’s a good point. I, I don’t think it, it sort of escalated over time. I, you know, I didn’t just jump into it. I’ve been running, you know, I ran cross country and track in high school and college. Uh, Nike had a West coast team in LA and I was working with Goldman Sachs. I ran for them and competed in post-collegiate races and cross country track, which is super fun.

Moved to Northern California. And I live on Mount Tam and I lived near the golden gate bridge. And, um, you know, I just love running trails. So I started running ultras, started to do some hundred mile races every year or every other, you know, every other year. And then I just, uh, I guess my tolerance 

and I started to increase it and started doing more and more.

And, um, I don’t know, I just needed something that was even a higher heightened goal. And again, I, you know, I say that in all seriousness, like my tolerance did increase not necessarily for pain, but just for achievement and trying to try to try new things. One of the great thing about doing that 240 mile race, it was a, it was a new experience for me and a sport that I’ve done my entire career.

So that was really fun. Try something.

I mean that, that trend of sort of doing more and more, something more and more extreme. Does that play out for you in other realms of your life? Like, is that just who you are?

 I think so. I mean, I have channeled a lot of my extreme focus towards athletics. A lot of people have, and it doesn’t have to be athletics. People can do it in different areas, you know, and just, um, want to learn a new language or, you know, Within music or something. But, um, I also like, look, I, I love the feeling of being fit and I love the, um, the feeling of achieving a goal.

And I do like competition, you know, and I have been in situations where I’ve told people at the end of the race, like, it was really fun to run with you, but also to compete with you because it brought the best out in me, you know? And that’s, that’s kinda why I do it. I mean, there was a race. Last or two years ago in the Vermont 100.

And. There was a, there was a guy who was running back and forth with, for 60 miles. He didn’t want to run together. He just wanted to run alone and he was better, faster, cheaper, like he was younger, stronger, faster by far. And I was with him at mile, not with at mile 91. And it was in Vermont. Super hot years is 90 degrees.

During the day and 95% humidity and I was hurting so bad. And I said to myself, okay, if I’m with him, like with five miles ago, he’s going to win. He’s going to beat me. So I have to make my move now. And it hurt so much. And I was running like literally sub eight minute miles, but he’s seven 45 at night.

And I made my move and it was like the heart. But I said to myself, if I don’t do it now, I’m going to feel bad for like three months. And so it’s like, if I don’t like put in an effort next 20 minutes, I can feel bad for three months. Like, that’s a pretty good risk return ratio. Like I don’t want to feel bad.

Like that was my motivating factor. And I just went as hard as I could. And, um, I came in fifth overall, which is like crazy. This is my third race within, you know, third hundred miles within eight weeks. And it was like, I felt good about that literally for a year. Like it made me feel good. Yeah.

That’s awesome. Okay. My summary then is that you’ve got this amazing drive and energy, and so you’ve got to funnel it towards productive endeavors, like being in shape and investing.

Yeah. It’s the same with investing. It’s true. I mean, I put everything into it. I mean, my partners and I are 24 seven. We love what we do. And we’re like tireless, you know, I’ll give you another example here. There was a company in Europe that we were trying to get invest into super competitive.

The CEO said we’re not taking any meetings now. And, um, I checked my phone on a Sunday morning at 4:00 AM. My partner, Peter had texted me like right before that, you know, and said, the CEO said he he’d see us. And I just did a quick search on orbits and I’m like, there’s a flight later today. The three of us were on a flight.

That afternoon on Sunday, flying to Europe. I mean, you know, like that’s a functional partnership and one that we’ve said we have to make this work like, and that’s how it works. You know, you take him to the same, you know, sort of style of, uh, competitiveness and endurance to, to being a VC.

it is, it is it’s competitive and it’s you get a high from it for sure.

Yeah. When, and I think, we define winning as finding great entrepreneurs and being part of their success. It’s so fun. Right. It’s just, that’s what we do. That’s why we do this, right?

Yup. also we argument on time, but, I loved your Ted talks, both. I listened to fasting, voice fasting and food fasting. you, can you give the quick version of those?  

Sure. I would say I’m not an expert in fasting, but this Ted talk on food for us. It definitely resonated, I think a million and a half people have watched it. I think, you know, like I said, you put your life in perspective when you take out. A basic human need, like air, water, food, or shelter. So when you take out food in this case, I just limited it to 600 calories a day for a week.

It was a mental challenge. It was like running a a hundred mile race. And it really, I learned a lot about my body, about goal setting, about people, The voice faceting is interesting too. Just not being able to talk for a week and being able to communicate. And I learned a lot about communication. Um, in both cases, I had the best sleep of my life.

It’s very peaceful, especially when you’re that in tune with your body and your metabolism. And so, yeah, check out this Ted talks.

You said about the voice fast sort of you reevaluate how communication is done or like the use of words?

It’s true. There’s a lot of nonverbal communication. People talk less, it’s quieter. it does stimulate your amygdala in your brain by hearing less words, most people speak 15 to 25,000 words a day. that’s a lot, and that means you listen to that many when you’re interacting with people, but, people are a lot more efficient in their communication with you when there are no words.

Uh, I did have a little whiteboard, you know, it was on some like, uh, um, zooms are, you know,

but you can’t scribble a whole lot yet. You gotta be

no, exactly. It’s very direct. You get to the point. Uh, one of the things I was impressed with early in my career was hearing, I think bill Gates say in every memo that happens within Microsoft, you have to say what you really want to say in the first sentence, and then everything else you can write, but just put that point in the first sentence and that’s that that’s smart.

I believe that.

it turns out making a weekly podcast and you have to listen to yourself. Communicate. You learn a lot about communication.

It’s true. It’s very true.

Yeah. Um, okay. Uh, Anything else that we should get about you, Phil or I, or I could let you go back to your investing life.

Um, you know, look, I’m in, I’m in San Francisco, in LA all the time. and, uh, The LA ecosystem has just been so vibrant in the last 10 years, especially, you know, in gaming. So we’re doing so much in the area.  We’d love to, meet with bright, innovative entrepreneurs who have got good ideas.

Fantastic. Well, Phil, thanks for coming on the pod. Um, I look forward to following Griffin success.