Why Lightspeed is going all-in on creator-led venture capital

0:00Josh Machiz: Hello and welcome back to Equity, TechCrunch's podcast about the business of startups. I'm Dominic Midori-Davis and this is the episode where we bring on industry experts to help us dive deep into tech world trends. On the show, we're often talking to founders trying to build the next big thing. But today we're looking at a shift happening on the other side of the table. How venture firms build trust with the next generation of possible founders before a check is even written. Lightspeed Venture Partners just made a notable hire to do exactly that. bringing on Claire Zhao, a seed investor with a major following across Instagram and TikTok, to source deals and co-host the firm's AI podcast, Lightwork, alongside CMO Josh Matches.

0:35Josh Machiz: It's a bigger part of VC firms building in-house media operations. Think A16Z's Turpentine or OpenAI's acquisition of TBPN. We wanted to dive deep into whether the creator investor is becoming a real function in venture or just something firms are still trying to figure out.

0:54Josh Machiz: Hey, guys, welcome to the show. Hi, thanks for having us. It's so lovely to be on Equity. We've been fans for such a long time. So very cool to be on the show. I'm going to dive right into the conversation because I love talking about the creator economy, the Instagram, TikTok world. Claire, I love the content that you create. And then I was so fascinated when I heard that you were hired at Lightspeed to kind of be this creator investor. And so first question is really, who pitched who on the idea of you coming on board? because I know that you were doing this kind of before at your last firm.

1:27Josh Machiz: Well, actually, I got an Instagram DM from Josh or actually was it TikTok? I think it was Instagram. Yeah, I like TikTok DMs are harder. Yes. Yeah, I might be the only VC hire that has come through an Instagram DM, which is interesting. But I actually only started that account a year ago and a couple months into it, I was, you know, experimenting with building what tech content could look like. And then naturally, I got a DM from Josh and then an email as well and had known what Josh had done in the space. He's very well known for being a pioneer in a lot of media, new media now as it's been rebranded.

2:06Josh Machiz: So when he reached out, I thought he just wanted to chat about strategies and what was happening in the space and had no expectations. And he kind of shared his broader vision and just felt super aligned. And Josh, what made you, I guess, slide into the DMs? Like, what was it about her profile and the content she was making? It's undeniable, right? Like, I feel like Claire took over my Instagram feed and mostly TikTok. I feel like TikTok is my feeder for discovering new creators. And when I saw her content, I just actually thought she was a good Instagram, like a good creator. And then the deeper I went, I was like, actually, Claire's an investor.

2:43And this is there's a reason she's so smart and her takes are so deep and she has such nuance to them. And they're not like, you know, an influencer reading a script. Like this is somebody who actually understands this deeply. And so it was really intriguing to me. Obviously, you know, I have a history of hiring creators, like what we did at Redpoint, but this is pretty different, right? Like Claire is not just an influencer for Lightspeed. She's, you know, of course hosting Lightwork, our show, but also going to be creating a ton of content with our portfolio. I don't know if you saw the really cool video she did with Neco Health, but there's just these like ways where I think she's going to be able to make our companies so much more accessible, all while hopefully finding that next generation of young entrepreneurs who want to be backed by Lightspeed and writing that initial check.

3:36Josh Machiz: Something I'm just curious about, because I know a lot of people might think that the tech community is all on Twitter, Tech Twitter, Tech X or whatever, But there are a lot of people on TikTok and Instagram who they might not be in the tech community, but they're very tech curious. And so I guess, you know, when it came to initially creating content and also how you see creating content in the future, how do you kind of market or create content for this audience who they might not be in the Silicon Valley bubble, but they definitely are really intrigued by what's going on? How did you kind of walk that line in creating that?

4:08Josh Machiz: Yeah, I love this question. I was wrestling with that when I first decided to create content. Naturally, having been an investor for six years, I was spending all my time on X, watching shows like Dark Kesha's show, TBPN. I just felt like tech content was so saturated. Everyone had a newsletter. Everyone had a podcast. Everyone had a show. But what I realized over time was that this type of content was limited to the people that exist on tech Twitter. What I was realizing was I had a lot of friends who worked at tech companies, who worked in finance, who worked in various other industries, who were tech curious, but they didn't have an entry point or a way to understand where the world was going.

4:54Josh Machiz: And so I figured there might be an interesting opportunity to take all these high quality insights and viewpoints and bring them to this audience where naturally there were a lot of eyeballs, but I felt like a lot of content was limited to relatively oriented around how you use AI to, you know, here are five workflows to get a job in AI or seeing a lot of content that was more oriented around, I would say, how to use the tech. I didn't feel like there was a lot of dissection of the news. So I wanted to experiment with that. And what I found was, at first when I started, I had a goal of trying to reach maybe 15 ,000, 20 ,000 people and thought would be very happy with growing a small audience interested in tech and startups.

5:44Josh Machiz: And what I realized over time is that you have this large audience of people who are curious about technology and genuinely want to participate in the future, but again, just don't have an easy way to access it. I think to your question around, you know, traditionally, VCs have gone after people who have founders on X. And I think that community, highly valuable. It is something that we are continuing to build an audience and get in front of. But at the same time, I think if you think about a venture fund, really building audience, getting in front of people as early as their entry point into technology, even before they've gone on X.

6:21Josh Machiz: So if you can share your brand, if you can build credibility and build trust, even when they're still on Instagram and TikTok and still in the tech curious realm, then you're already getting in front of them before they've migrated to the tech X Twitter world. Yeah. And the battle is like really moved to inception stage, right? Like That is where all venture firms compete today. And to that point, X is where the conversation is, but it's such a minuscule number of people when you look at the monthly active users, when you compare it to Instagram and TikTok. And to your point, it's not like that's your first, if you're a young adult who's either building a startup, it's not necessarily the first platform that you're on in your social journey.

7:09And so the fact that we're now in those places is like broadening Lightspeed's brand reach in a really big way.

7:16Josh Machiz: And I've also, I think, recognized that, you know, so much of the VC relationship building can often be transactional. And if you want to build a relationship even before they've started their founder journey, it's a great way to get in front of them when they haven't even entered the founding journey. And so I think of it even in the ways that I've gotten DMs from people saying that, in your coverage of startups, I've been able to apply and find this great team and join them. And so even though these people are currently still operators, if you have the belief that one day these people will convert into founders and start great companies, taking all the operational knowledge that they've gotten, if you were the person that got them exposure to this startup in the first place, that holds weight.

7:58Josh Machiz: And so I think this is really a bet that you have to go both breadth and depth. And on X, we're continuing to think deeply about how Lightspeed can expand its depth, but also recognizing that in the place where you have all these eyeballs, it's important to get that breadth as well. Interesting, because I imagine also being on Instagram, because I mean, I assume the users are very, very different, where I'm just thinking about being in the tech bubble on Twitter. And I imagine when you're on Instagram with such a much broader audience, I imagine that you kind of start to understand the different ways people use technology, because I like in tech Twitter, everyone talks about the same things and there's the same buzzwords.

8:35Josh Machiz: But when you were talking to like the general public. I'm curious, have you found any different or haven't has anyone brought to you some of the different ways they're utilizing a lot of the technology that is kind of hyped up in Silicon Valley right now? And how, if any way that that's changed, maybe how you've perceived some technology? Yeah, definitely. You know, as I mentioned, I was previously in venture for six years at a fund that was focused on a tech and workforce tech and, you know, had driven and spearheaded a lot of our investments in AI and education. Obviously, still very excited about that thesis.

9:10Josh Machiz: But what was interesting is about a couple months into my content creation journey, even though I had a pulse about how people were thinking about this technology, it was so interesting and almost even humbling to have such a live sounding board with how the general public was reacting to these technologies beyond just my XFeed. So for example, I would write a check into a startup. It'd be exciting, great news. Everybody's excited about this product that is becoming this AI for educators product. When I would talk about it in Instagram and social media world, I think getting a sense of, contrary to popular opinion, Gen Z is actually quite anti-AI.

9:52I mean, actually, where I got that sense was not necessarily from reading on X.

9:58Josh Machiz: It was just that I had a direct audience to, you know, at the time I was just starting to grow. But, you know, hundreds of thousands of people, including many of these end users. And so I think it was, you know, I would say even humbling that, you know, I lived in the Silicon Valley bubble. And once I started creating content, I was able to get direct feedback and get a sense of how people were perceiving these technologies, how people were perceiving Silicon Valley. And I think it's really impacted how I move in the space. I think it's impacted, especially as someone who's spending a lot of time on the app team and our early stage investments in this space.

10:33Josh Machiz: it's so helpful to have basically a real-time visibility into how people are using these technologies, what kinds of narratives are hitting, and what kinds of messages are hitting. Yeah, I was going to ask for you and Josh, like, how do you take this feedback, and does it impact any decision-making behind the scenes? Oh, I think it does. I also think, like, Claire's instincts with some of these things, like, she has an idea, especially when we're putting together our episodes of Lightwork, is we're trying to make things that are both for the venture audience, but also for that tech curious. And I think her lens and what she's learned from all the insights she's gained from her channels have helped us produce a better product that's more accessible than I think a lot of the venture content that's out there.

11:19Josh Machiz: Do you think that founders, like this new generation of founders, they're looking for investors now to have more of a creator presence online? I've always, you know, contrary to being someone who has a big creator presence, and I always tell people I'm like the accidental influencer, I would say I'm like a pretty private person. In general, I never really set out to be a big influencer. But I always recognize the importance of brand building in this industry. And I think it's been talked about a lot. People have been brand building even the days of writing blogs. So then it became Substack and then it became podcast.

11:53And now it's short form media.

11:55Josh Machiz: I always tell people who are curious about building brands in this space is that it is a fantastic door opener. And, you know, for a big fun like Lightspeed, you want to have every part of the stack. And being a door opener is part of that. That being said, there is so much more once you open that door that you also need to close. And I think that's what really drew me to Lightspeed Opportunity was that you have this team that is, has such a track record and brand in this space. And they also recognize that if you are building a generational firm, there is not only brand presence of your investors, brand presence of your firm.

12:34Josh Machiz: Having a influence is an important part, and it can get you a lot of places in opening up opportunities to other founders, to buyers for your portfolio companies, to talent for your portfolio companies, the general noise for your portfolio companies. But at the same time, it's also important to have other parts of the stack, whether that is talent support, our broader platform team, BD. There's all these things that I think contribute to like the actual closing process. So for me, I've always viewed the brand and the media presence as just an extension and one part of the superpowers that you need to build for a firm like Lightspeed.

13:13Josh Machiz: Something I actually wanted to go back and ask was how long do you spend creating content? Because I actually I remember one of my friends, she's in media and she was like, I'm going to make a day in the life video. And then she called me one day and she was like, that took me six hours. She's like, this is so hard. How involved is Lightspeed with you and coming up with ideas? Yeah, I have immense respect for full-time content creators and people who have built media brands because it does take a lot of work and it's often behind the scenes work. I've seen people spend six hours or actually I personally have spent maybe 10 hours to produce a 15 minute YouTube video.

13:50Josh Machiz: So I can speak firsthand about the editing pains and YouTube I'm still mastering, but I still edit and create everything myself. And I think it's been interesting to think about how I can start to delegate things. But generally, just because it was a very scrappy process of me experimenting and treating this like a mini startup of my own, have tried to have a lot of editorial control and curation of what I put out there. I think for a standard video, it usually takes me anywhere from five to 15 minutes of research. Obviously, if I'm doing something really robust and detailed, like a breakdown of a business or a more technical paper, that will require more research.

14:39Josh Machiz: But research actually takes the shortest amount of time. I actually never run out of content ideas because it feels like this space is moving so quickly. is often a matter of choosing what topics to cover. And then filming takes a pretty short amount of time. You know, if it's a five minute video, then it'll take seven minutes of filming. What does take a lot of time is actually editing. And I still do that by hand, but I've learned a lot in the course of editing. You know, I think a lot goes into telling a great story. I've seen it even just in the content world. And when I was learning about the space, I was maniacally, again, just analyzing and learning how different stories translate.

15:19Josh Machiz: You know, 20 people could cover the same story, but why does one reach a disproportionate amount of viewers? And I think there's, there are mechanics to it. And I think people gamify it, whether that's like, you know, rage baiting their audience or, you know, overly doing the hype related stuff. But I think for me, yeah, I try to put in as much care as I can into the output. On that note, does it seem like a lot of investors now or a lot of VC firms are trying to build up their Instagram, TikTok presence. And do you see kind of this, how do you stand out in this space? Because I know that like A16Z is doing stuff.

15:56Josh Machiz: OpenAI just bought TBPN. And so there's a lot of movement in this space. And so how do you stand out to your audiences? Or is there one category that you're really trying to own in a way? I might pass it to Josh, because he was actually, I mean, he was the first VC person I saw on TikTok or Instagram. This was like three or four years ago when I was still early in my venture career. Yeah, I think it's still really nascent, right? Like there are a couple of VCs that are doing good creator work, like Erica Wagner at Park Rangers Capital, Animal Capital, like smaller firms are doing this more scrappy, let's talk to the audience and get exposure.

16:38But as far as big firms putting the investing lens onto those platforms, I haven't seen it yet other than the work that Claire will be doing on our channels, which is exciting. But I think that it's still such a greenfield opportunity. It's amazing to me how much time is spent on X when, yes, you can get such great outcomes from it. Like TBPN was built on X, right? And you're like, it's a smaller audience, but it's an audience of journalists and VCs, and it's like a high value audience. So it absolutely makes sense. But I think for future founders, if that's your end goal to reach, you know, is to reach them, the place to reach them right now is TikTok and Instagram, because those are the platforms that people use in their day-to-day lives.

17:30And I also think for our show, for the content that we're trying to make, and hopefully demystify venture, kind of pull down the walls of this garden and make it accessible to people, that the only way to do that is to meet people where they are. So I hope that more firms do it. And I've seen some of the bigger firms start to put a concentrated focus on Instagram content for Instagram, but I haven't seen as much in terms of explaining venture and all of those things that I think some of the smaller firms are doing quite well at this moment. And so it'll be interesting to see whether some of the larger ones join us.

18:11Josh Machiz: Yeah, why do you think it's smaller firms? Well, I think it's more people being scrappy and realizing that, you know, untouched places are a place to build audience. I also think that there's risk, right? It's not as easy as putting out a tweet. And it does mean like putting your face out there. I'm sure Claire had like the misgivings of like, oh, you know, what happens when people start to think about me as an influencer instead of an investor? And does that mean I'll be taken less seriously? And so I think that that's part of the calculus for a lot of big investors is just to be taken seriously.

18:50Josh Machiz: Has that come up yet? Like, do people do is it I mean, I might just be so very Gen Z in my head where I'm like, surely we're all like influencing is like a whole real thing. But has it come up where people might take you less seriously? Like, has it come up like LPs or other peers in the industry? I haven't faced any of that, I think, just because of a lot of my content. I would say the role that I play in the ecosystem is that I am here to explain and curate a set of Silicon Valley insider news. And so I don't have very much of my personal life on there. I would say I've always thought about this as a media product.

19:30Josh Machiz: And so what I am sharing with the world is not Claire as a human and her personal life and what I'm buying or what I'm spending my money on, but rather this is like a TV piano or like what Lex Friedman has with his podcast or the BG2 podcast. These are assets where you know what you're getting. And I think at least my sense is I've tried to create a space where you can have conversations and breakdowns of what's happening in the tech ecosystem. That being said, I'm still constantly learning. I think some people have perceived my role as like influencer turned VC or, oh, VC person has started doing influencing.

20:15And so I think it's my takeaway is always that this world and our jobs are all so much

20:22Josh Machiz: more multidimensional. And I've always just viewed narrative building and storytelling as part of the venture role. This is just another evolution of that. And I think we're now seeing a lot of firms also recognize that, yes, traditionally short form videos have been dominated by short five second dancing videos, but there's also a lot of eyeballs there. there are a lot of people who just want quick bite-sized knowledge. And so there are ways to build assets and diversify and take learnings from traditional media or take learnings from long-form media and bring that into the short form space where there's so many opportunities to build different assets.

21:02Investors, whether they want to or not, like I always think of them as like their own little marketing funnel. And so it depends what you want to attract in terms of founders for your investors. But I think at the end of the day, your online presence is your reputation. And the more that's there for founders to discover about you makes you more accessible for future conversations. Yeah.

21:25Josh Machiz: I think I've always thought of it as like, how do you expand the surface area? And this job is all about creating top of funnel to the people, what to people you'd like to reach, whether that is founders or potential talent for your startups or buyers for your startups. And I just have a few more questions. How does Lightspeed, how do you guys kind of measure the ROI on this? Because we kind of touched on that throughout the whole conversation, but how do you kind of measure the success of this content creation and what are you looking for? Yeah, I think at the end of the day, it's about brand awareness.

21:58But I do think that since we started this journey, not just with this new show, Lightwork, but with the Investment Memo or other podcasts, just the clipping has generated such a big increase across our following on X and Instagram that at the end of the day, if you measure a venture firm through brand awareness, you're kind of taking an amalgamation of all of the different social channels and the views that you're getting across those channels, and then some of those other touch points, right? Like events and all of the other things that venture brands do. And it's a little bit hard to measure like founder conversions from social engagements, but you can very clearly measure the ROI of your increased social media following and brand awareness.

22:45And then, you know, with that brand awareness comes other great opportunities with traditional press. And so it's all related. And I think that the end of the day, the value of what we're building for Lightwork is that we're creating a show that is going to have a following that will give the Lightspeed team exposure to a whole other generation of investors. Every week, we're trying to have on a new Lightspeed investor to break down a complicated topic in a digestible way for this audience. Hopefully, they realize that that person is either the expert on data centers or healthcare or whatever the topic or the area of which Lightspeed is a core investor.

23:30We want them to know those people and to kind of go a little deeper with them. And we hope that this is kind of that way. And then the other thing is, I mean, you know this, there's less and less traditional journalism out there because of layoffs and the consolidation in media. And so if you're a startup, it's harder to get your story out there. There are less places to go to get it out. There's now pretty heavy bars to get your funding story out there. And so what we hope to also be able to provide is just like, in the new media world, another opportunity to tell your story. And that's not to say that traditional journalism isn't super important.

24:15It is. It's actually even more important in this world where AEO is so important because I feel like TechCrunch and every other journalistic property ranks so much higher in terms of what the LLMs are looking for that it's really important that you have that story. But it's just like in the world of telling your story, you have to be everywhere. And so why not, you know, if you can partner with Lightspeed and we can help you tell your story, it's going to be a big piece of our offering to founders future and current.

24:47Josh Machiz: Actually, I do want to talk about your podcast. Before I get there, there was one question I had, which was, what is, I don't know if this has happened to you guys yet, well, probably, but what is kind of the craziest founder discovery story you've had from some of the content that's been created so far? Has there been a company or a founder that you've found through the content creation? I mean, it's crazy to think I get again, sometimes I like wake up and I'm like, the platform that I've built is like this, the most amazing little monster that I just like could not have ever imagined building.

25:21Josh Machiz: One of my favorite ones is even before I joined Lightspeed, I was fascinated with this company, Neko Health that is in our portfolio. And I just did a quick video on, you know, what Daniel Eck, the founder of Spotify, what his second act was, what he was building in the healthcare space and talked about Neko Health, ended up hitting 400 ,000 plus, actually maybe 500 ,000 plus people. And then it got in front of Shaq and both Daniel as well. And then that led them to being like, okay, you were able to broadcast our story to so many people. Would you like to actually try this health scan? And so I was in London, was able to try one of the health scans and just an amazing experience.

26:07Josh Machiz: And I think that's a great example of the ways that me directly cold emailing a Daniel Eck or a Shaq or one of the people on their team, maybe you have a slight chance of getting in front of those people. But if you can create value for these people and show that you know how to tell their story, even before they've met you, again, in this non-transactional way, they will also realize how much value you can bring to them as an investor, as a partner. For example, cover the controversial companies that were in the Orchid and Nucleus, which basically help you screen your embryos. I had no expectations.

26:49Josh Machiz: I was just covering a controversial tech topic. But I have a friend who works at one of these companies, and they were saying that entire week on their Slack, she sits a lot on their business and strategy team. She could see that it's like, ping, ping, thing. How did you hear about us? And this is for reference, a$6 ,000 embryo screen. So this is not cheap. She's saying that, heard about this from TikTok and Instagram. And she's like, we never activated those channels. So it was just you driving that. And so I think those were little moments where I was like, okay, this is, the flywheel is working in that I see how this works in getting in front of founders and being able to create value for them even before I've met them.

27:30Josh Machiz: But I'm also seeing how it might work for a portfolio company or a company I'm interested in and even driving talent to join them or driving actual business for them. And that all kind of brings me back to my rap question, which was just talking about the future. I mean, what is the future of this new media empire housed within a VC firm? What is the future? What does that media empire look like? I mean, you have the podcast. What are the what are the plans? What's the future? Yeah, well, we have two podcasts today. We're going to be launching at least one more this year, maybe more. Our goal is to be the place where hopefully future founders learn about venture, understand the ecosystem.

28:11If they're thinking about a company building, I think if you think about the importance of just being top of mind for founders as one of those premier venture brands with which you would like to partner one day, that is super, super core to it. And I think with Lightwork, what we're trying to just continue to refine this product. And we're still early days. We've been publishing for a little over a month. And every week we're getting better. Our graphics are getting better. We're doing little micro upgrades to the studio. And Claire and I are thinking about what stories will resonate with a general tech audience and which will resonate with a little bit more of a technical audience and kind of figure out different things that'll work for different platforms.

28:57I think this whiteboard segment that we've been doing is seemingly starting to bubble up and hit on the Instagram algorithm. And there's other things we're just going to experiment with. But I think the end goal is like, let's open source the Lightspeed universe in every way that we possibly can, because that increases the surface area for meeting some of the greatest founders of, you know, today and tomorrow.

29:20Josh Machiz: And with that, we are about out of time. But where can our listeners connect with you and find all this amazing content creation? Yeah, well, I mean, that every episode is on the Lightspeed YouTube channel. It's also on Spotify and pretty much every other Lightspeed channel out there. So we're very excited to have hopefully a few TechCrunch equity followers come join us on the on the Lightwork journey. Well, thanks so much again for joining us. And to our listeners, you can find me at Dominic Vidori on Instagram. Please help me get my followers up and equity at equitypod on X. Talk to you next time.

30:00Josh Machiz: Equity is hosted by TechCrunch Senior Reporters and produced by Teresa Locansolo with editing by Cal. Subscribe on YouTube or wherever you get your podcasts and find out what's next at techcrunch.com slash events. Thanks so much for listening and we'll talk to you next time.