Episode Summary
Executive Summary: In this episode of 'This Week in Startups,' host Jason Calacanis is joined by Ben Gilbert and David Rosenthal of the 'Acquired.fm' podcast and Pioneer Square Labs. The episode covers several high-profile business stories, including Clubhouse's $100 million Series A from Andreessen Horowitz, the exclusive Spotify partnership with Joe Rogan, potential Uber-Grubhub consolidation, and Facebook's acquisition of Giphy. The conversation explores valuation dynamics, business model sustainability, secondary sales, media trends, and the psychology of venture capital, with a strong emphasis on the importance of product-market-price fit and the dangers of pre-launch hype.
Main Topics: Clubhouse's $100M Series A from Andreessen Horowitz (Priority: 5/5): Clubhouse, a pre-launch social audio app with about 2,000 users, raised $10M at a $100M valuation from Andreessen Horowitz. Highlight includes a $2M secondary. Panel discusses VC product fit, irrational valuations, and incentive alignment. Joe Rogan's Spotify Exclusive Deal (Priority: 5/5): Joe Rogan's podcast moves exclusively to Spotify later this year for an estimated $75M/year for 5 years. This is seen as Spotify's big bet on podcasting, leveraging exclusive content to compete with Apple's dominance. Food Delivery Consolidation: Uber & Grubhub (Priority: 4/5): Uber explores acquiring Grubhub amid pandemic-driven demand surge. Critics like AOC and Elizabeth Warren oppose the deal. Panel debates business model viability: three-sided marketplace vs. vertical integration (e.g., Domino's). Facebook's Acquisition of Giphy (Priority: 3/5): Facebook buys Giphy for $400M (down from $600M valuation). Giphy lacked a sustainable ad business model—most traffic came via API (e.g., Facebook, Slack). Early investors from crowdfunding may see poor returns due to liquidation preferences. Media Industry Under Pressure: Vox, Vice, BuzzFeed (Priority: 4/5): Jason predicts significant layoffs and consolidation due to over-reliance on advertising. Discusses the rise of subscription-based models (e.g., New York Times) and individual expert journalism (e.g., Substack, Inside). Startup Studio Model: Pioneer Square Labs (Priority: 3/5): Ben Gilbert explains the startup studio's co-founder equity model, fund structure, and founding 20 companies (e.g., JetClosing, Boundless). Contrasts with other studios that take larger founder equity. Leadership and Communication in Crisis (Priority: 4/5): Jason critiques political leaders' inability to deliver clear, consistent pandemic messaging. Highlights the need for plain English explanations—e.g., 'if you can stay home, stay home; if you must work, do so safely; wear a mask to protect grandma.'
Key Arguments: Clubhouse's $100M valuation is a case of 'VC product fit'—VCs become addicted and make irrational deals. Jason calls it an emotional/competitive outlier (Benchmark vs. a16z). Ben Gilbert argues that consumer social has huge upside and 100x returns are possible. Joe Rogan's Spotify deal validates the subscription+ad hybrid model; lack of API dependence (unlike Giphy) gives Rogan leverage. David Rosenthal: Spotify's model for podcasts (own, no variable costs) is superior to music (where labels take most revenue). Uber-Grubhub consolidation could create a monopoly in food delivery, but opponents ignore Domino's/Slice as competitors. Jason: 'Politicians shouldn't define rules of capitalism from the bleachers.' Giphy's $400M exit is a cautionary tale: huge usage but no business model. Early investors may be wiped out by liquidation preferences. Ben: 'If you build an API-dependent product, you have no ability to generate ad revenue.' Media companies like Vox, BuzzFeed, Vice will shrink by half because they rely on advertising. The 'chasm' exists between ad-based and subscription models. Jason: 'Hire researchers, not journalists who won't read business books.'
Data Points: Clubhouse valuation: $100M - Series A from Andreessen Horowitz at pre-launch, with 2,000 users Secondary shares: $2M - Founders sold 1% each in Clubhouse round Joe Rogan monthly downloads: 190M - Before Spotify exclusive Spotify podcast market share (US): 18-19% - Ben Gilbert estimate, expected to grow to 50%+ Giphy exit price: $400M - Down from $600M last valuation; Facebook acquisition Uber layoffs: 3,000 - Plus 45 office closures Uber Eats growth: +52% - During pandemic, offsetting 80% decline in rides Giphy total funding: $72M - Last round before acquisition
Pivotal Quotes: "If you get VC product fit, where VCs become addicted to a product, well, then they just set something off inside of them, a spark." — Jason Calacanis: Explaining Clubhouse's valuation phenomenon "I don't think there's a discovery problem in podcasting. … the problem is monetization—there's no good interface for advertisers other than email." — David Rosenthal: On why Spotify's exclusive deal for Joe Rogan matters "If you can stay home and if you can see fewer people, that's helpful for everybody. … These are conflicting, but these are complex nuanced issues." — Ben Gilbert: On pandemic policy communication
Implications: Pre-revenue companies can achieve high valuations if VCs are emotionally invested; this creates new norm for seed pricing. Podcasting's consolidation to platforms like Spotify threatens open RSS ecosystem. Consolidation in food delivery may face political headwinds but is driven by unit economics. Media will bifurcate into subscription- and niche-expert models, shedding ad-only players. Early investors need protections (pay-to-play, information rights) to avoid being washed out by late-stage preferences.
About This Week in Startups
Jason Calacanis covers startups, tech, markets, media, and all the hottest topics in business and technology. He also interviews the world’s greatest founders, operators, investors, and innovators.