Michael Mignano: Anchor's Founder on TikTok's Potential as a $2 Trillion Company | 20VC #923
This article is a summary of a YouTube video "Michael Mignano: How I Founded Anchor; Why TikTok could be a $2 TRILLION Company | 20VC #923" by 20VC with Harry Stebbings
TLDR The key to success in the social platform space is to have a defensible format that cannot be easily copied, and that venture capital could benefit from more direct communication and transparency between founders and investors.
Defensible Formats and Social Platform Success
"A truly amazing founder would expand the market, find the exact niche within it, and do something to make it bigger."
Michael Mignano's investment focus is on consumer companies that need to go from zero to one, leveraging his experience in building products with no audience to those with hundreds of millions of users.
"There's going to be sort of this vacuum of social experiences and so I think if ever there was a time for a new startup to emerge to create a great new groundbreaking social network or social experience. Now is the time."
The key to winning in the social platform space is to have a defensible format that cannot be easily copied, like TikTok's specific photo format at a specific time of the day.
Building a defensible format is crucial for a social media platform's success, as it makes it difficult for other platforms to replicate and compete effectively.
The best social platforms start with creator tools, as giving people the ability to create and express themselves is crucial for driving audience engagement.
"We don't need to worry about the one percent... We need to worry about the millions or tens of millions of people that haven't yet even earned a dime." - Michael Mignano emphasizes the importance of focusing on enabling monetization for the majority of creators, rather than just the top earners.
Michael Mignano sees encryption as an increasingly important consumer-centric feature, driven by the growing mistrust of institutions and the desire for more control over data and privacy.
Global Expansion and Market Potential
Mignano emphasizes the importance of joining a global platform, indicating his belief that the future is global and not limited to the US market.
TikTok's growth and success have allowed it to become one of the most influential platforms globally.
Asynchronous content, like Spotify and YouTube, has shown to generate more value and be more successful because it can be consumed on someone's own schedule.
TikTok's approach to content distribution challenges the traditional social media model by prioritizing engagement and resonance over guaranteed distribution, potentially leading to more efficient and effective engagement for users.
The speaker is extremely bullish on TikTok, stating that they have never been as optimistic about a company before, highlighting its potential to become a $2 trillion company.
The next couple of years will determine the winner in the battle between TikTok and Facebook Meta, with factors like ocean of content, matching and recommendations, and best-in-class machine learning and computing power playing a critical role.
Communication and Transparency in Venture Capital
"We had this thing missionaries not mercenaries and it was very clear to me that lightspeed was similar."
Michael Mignano believes that venture capital could benefit from more direct communication and transparency between founders and investors, creating a culture of mutual understanding and respect.
Directness in communication is more respectful because it involves giving someone the truth.
"They were telling us that we were the biggest company in the world and they were you know flying across the world to bump into my co-founder and me at random events to try to get us to take their money and so it's very easy to hear. All these super respected people tell you that you had figured it out. But the reality is which we didn't know at the time is that they are sp. They're actually speculating and they're betting that you will win not that you had already won." - Michael Mignano on the misconception of success and the pressure from respected individuals in the tech industry.