Matthew Ball+ Your Authors @ballmatthew Venture investor, strategist, essayist, that guy on Twitter. Prev. Head of Strategy @AmazonStudios, ex-Otter Media, @MediaREDEF. 🇨🇦 Feb. 06, 2019 1 min read + Your Authors

1/ Why would Spotify pay such a premium for @Gimletmedia (rumored 8-12x revenue!)? Why not just buy enough talent to replicate it (i.e. build v. buy)?

2/ Gimlet has executed superbly to date. Truly superbly. It’s really not clear that you can buy talent that will, or even can, produce similar results – even with more capital. And even then, it would take 2-3 years

3/ Similarly, Gimlet has a strong pipeline already in place – not just of current+library shows, but also future shows. It’s like a pharmaceutical. You can start your own drug research, but there's both a lag and a volume challenge

4/ Spotify needs differentiation + podcast content/capabilities today, not tomorrow – especially before Apple starts bundling Apple Music w/ other products & services It’s a big market, but time and subscriber growth is usually more valuable than money (if you can access it)

5/ Maybe Spotify overpaid, but Gimlet consumption (+M&A dollars) also offset royalties. You can’t double count this. Spotify pays billions a year in royalties (on a marginal basis, versus fixed). Gimlet is theoretically easy to recoup, trivial in comparison, and a fixed cost

Fin/ For all startups, there's value in not being distracted. Buy Gimlet, you just move forward. You don’t need to undertake a multi-month hiring program, strategy process, begin soliciting pitches etc. It’s ready.

(Mea culpa: I once told a VC not to invest in Gimlet. I liked their success to date and the team, but content production tends to be only a good business for founders + operators. Talent was good, but didn't assure true out-performance. But @Gimletmedia ****ing killed it.)

You can follow @ballmatthew.


Tip: mention @threader_app on a Twitter thread with the keyword “compile” to get a link to it.

Enjoy Threader? Sign up.

Since you’re here...

... we’re asking visitors like you to make a contribution to support this independent project. In these uncertain times, access to information is vital. Threader gets 1,000,000+ visits a month and our iOS Twitter client was featured as an App of the Day by Apple. Your financial support will help two developers to keep working on this app. Everyone’s contribution, big or small, is so valuable. Support Threader by becoming premium or by donating on PayPal. Thank you.

Follow Threader