Benchmark’s Mitch Lasky and Blake Robbins on The Art of Business in Gaming

1. MLMitch Lasky0:00

   I will say, I wanna give you guys just a, a pre-recording compliment. I forget what it's called, I- there's a name for it, but basically, it's where you're reading something in the newspaper about something that you were a part of, right? And you go, "People don't know anything," right? "This is so damn stupid." And then you turn the page, and there's something about foreign affairs, and you're like, "Wow, super interesting." Like, the thing you know about, you don't apply that same logic to the second thing. And I have to say, I have so much trust in your podcast because the stuff that you do that I was a part of, and there are many things you've done that you don't know that I was a part of, that I was a part of. [laughing]

2. DRDavid Rosenthal0:35

   [laughing] Oh.

3. MLMitch Lasky0:36

   You guys are so good. Like, it's so accurate. It is really remarkable. Somehow you're able to tell a story that is actually as close to true as, as true exists.

4. DRDavid Rosenthal0:46

   Well, the secret is, we don't have people on the show, so-

5. MLMitch Lasky0:49

   Right. [laughing]

6. DRDavid Rosenthal0:50

   ... this is not gonna be that, but- [laughing]

7. SPSpeaker0:53

   Who got the truth? Is it you, is it you, is it you? Who got the truth now? Is it you, is it you, is it you? Sit me down, say it straight, another story on the way. Who got the truth?

8. SPSpeaker1:10

   Welcome to this special episode of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert.

9. DRDavid Rosenthal1:18

   I'm David Rosenthal.

10. SPSpeaker1:19

    And we are your hosts. After our deep dives into Nintendo and Sega, we wanted to do something special to cap off our gaming extravaganza, and we wanted that something to be a special with guests who are actually in the belly of the beast of the gaming industry. Fortunately, we knew just the people. So today, our conversation is with Mitch Lasky and Blake Robbins. Mitch is perhaps the best games investor of all time, generating literally billions of dollars of returns from early investments in Riot Games, Discord, and That Game Company, not to mention Snapchat. Mitch was also an executive vice president at both EA and Activision, and took his own gaming company, Jamdat, public in 2004. Mitch, of course, was a partner at Benchmark in the Fab Five era that we chronicled on our Benchmark episode.

11. DRDavid Rosenthal2:11

    Which actually, we stole that line from Mitch when we were talking to him- [laughing]

12. SPSpeaker2:15

    [laughing]

13. DRDavid Rosenthal2:15

    ... in the research, and that's how he referred to it.

14. SPSpeaker2:17

    So we are joined by Mitch and Blake Robbins, Benchmark's current principal, who has also come up on previous episodes. Blake is one of the best thinkers in the world on the gaming landscape today, and Mitch and Blake just launched an incredible podcast called Gamecraft, that chronicles the history of the gaming industry from the business perspective.

15. DRDavid Rosenthal2:37

    And one other thing, if you are listening to this on the audio feed, we did a full video on this. It's up on YouTube. You can find it on our website or there. Uh, we did it at Benchmark's Woodside office, at, it turns out, they have another triangle table. [laughing]

16. SPSpeaker2:53

    [laughing]

17. DRDavid Rosenthal2:54

    So we have now recorded Acquired episodes at both of the famous Benchmark dinner tables.

18. SPSpeaker3:00

    Well, listeners, as you know, we have an interview show called ACQ2. We've had back-to-back killer discussions with the CEOs of Retool and AngelList. AngelList, in particular, was, like, very mind-expanding for me on how to leverage AI to get huge, huge leverage in your business, like, specifically on the operations side of the house. And, uh, I think Avlak is one of the best thinkers about how to apply AI to kinda turn something that looked more like a services business historically into a true tech venture scale opportunity. So you can find ACQ2 in any podcasting app. Join the Slack. There's an incredible discussion of gaming history going on right there, right now, including a bunch of episode follow-ups, where David and I are learning from you all in real time, acquired.fm/slack. And without further ado, this show is not investment advice. David and I may have positions in the companies we discuss.

19. DRDavid Rosenthal3:55

    As may our guests, and of course, their firm, Benchmark Capital, today.

20. SPSpeaker3:59

    [chuckles] Yes, and this show is for informational and entertainment purposes only.

21. DRDavid Rosenthal4:05

    Well, I think an appropriate place to start might be, what inspired the two of you to go talk about this and create Gamecraft and create this podcast?

22. MLMitch Lasky4:15

    Well, I think after I retired from Benchmark a couple of years ago, retired from active investing, obviously, the glide path out of venture [chuckles] is kind of a long glide path, so I'm still a- i- involved to this day. But, uh, after I, I retired from frontline investing, I really started to think about ways that I could be useful and, and helpful in the video game business, and whether that was, you know, doing boards without compensation, or whether it was helping young entrepreneurs or mentoring younger venture capitalists. And I thought, "You know, m- maybe I should just write a book." So I was very much inspired by a book that I think you, you know as well, right? The Genius of the System by Thomas Schatz. And that book is a remarkable book, in my opinion, because it really takes the business side of the film business back from the '20s to, say, the '50s, and really elevates the business side of the business, and shows how a lot of what we understood to be the creative part of the business really was a collaboration between creative people and business people. And I've always had that same sense of the video game business, and so I thought it might be fun to do something in that vein, where we, we showed the- what h- was happening on the business side and how it was informing what was happening on the creative side.

23. BGBen Gilbert5:28

    And I think the common narrative is, video games are something created by creative geniuses, a Miyamoto-type person, and then the business models sort of rearrange around the creative vision, having consumers that flock to it. And I think already you're intro- introducing this interesting wedge of, uh, actually, there are very clear business models that guide where the water of creativity can flow, and that has been, for the last fifty years, what has defined the video game industry, not the other way around.

24. MLMitch Lasky5:56

    Yes, and not to take anything away from people like Mr. Miyamoto, who I have-... infinite respect for him. I mean, he is a l- he's a l- a legend. He's a god amongst the video game designers, and I've had the great pleasure in my career of working with some incredible designers. And they, they are the leaders of the industry in many ways, but they are constrained quite a bit by the business models in which they operate. So just to give you an example, in the packaged goods era, y- your, your goal was to sell a disc and then get somebody to come back a year later and buy another disc. And that's a business model choice, and therefore, what you're gonna put on that disc is going to be informed by that business model. It's gotta have a degree of planned obsolescence to it, because if it doesn't, if you just bought one game and played it forever, that's the end of the video game business.

25. DRDavid Rosenthal6:47

    And that's how you get Final Fantasy VII.

26. MLMitch Lasky6:50

    XIV! [laughing]

27. DRDavid Rosenthal6:50

    XIV. [laughing]

28. BRBlake Robbins6:53

    Yeah, I mean, think about how many FIFAs or Call of Dutys there's been at this point, and, and, and it's still firing on all cylinders, despite sort of the, the business models, which we'll talk about, rotating right underneath them, and those still thrive, uh, even to this day.

29. DRDavid Rosenthal7:07

    I think one of the super cool things for me, and the reason why Gamecraft, I think, has been listened to by far more people than just in the games industry, is that this dynamic applies to a lot of industries. Like, when we did our LVMH episode, the whole time I was thinking that, like, it's the same dynamic in any creative industry. Like, if you want to achieve success either as a creator and have people use and appreciate your work, or on the business side, like, you have to work together. You can't be at odds.

30. MLMitch Lasky7:38

    Yeah, it's interesting. I actually... W- I really admired that LVMH episode, and, and there was a part of it where y- where in your Nintendo episode that kinda reminded me of the LVMH episode as well. Because w- those of us who had worked as competitors to Nintendo in the console business, and I did for par- a part of my career when I was running the studios at Activision, um, they had this-

Episode duration: 2:15:41