For more than a decade, Scott Stanford has experienced the tech world from all sides: as an advisor, as an entrepreneur, and most recently as an investor and global head of Goldman Sachs' internet and new media investment banking business.
While at Goldman Sachs, the Indiana native left his fingerprints on numerous tech deals, including Zappos, LinkedIn, and Facebook. He recently left Goldman Sachs to launch a new venture that he says is designed to "build, invest in, and accelerate" a whole new round of internet companies.
Stanford discussed insights into the unfolding new media landscape — from Bloomberg's stretch into new businesses to the big tech deals that got away — as a member of the "Investing in New Media" panel at the Future of Media Conference held at Stanford GSB on February 13.
Here's some of what he predicts is ahead for the industry.
What consumer and consumption patterns do you see in the new media space?
Either the content has to be so relevant that I'm going to jump through every hoop possible to get that content, or it has to be really easy to get to. What's happened in the last few years has been amazing with cell phones and iPads. The hardware manufacturers [and] the operating system owners are really steering us. What's the most powerful form of content creation that we do multiple times a day? Photos. Facebook was built on photos. Instagram was built on photos. If you pull out your iPhone right now and I say to take a picture, you have two choices — you can slide your finger once and take a picture with Apple's camera, or you can tap 17 times and get to your favorite app to take a picture. So that favorite picture application better be damn good because there is a lot of friction in between you and that picture application. What I'm baffled by is the emergence of hardware as a potential controller of content we consume.
At what stage should a startup entrepreneur begin focusing on monetization?
I'd start with what your exit strategy is. So, if your exit strategy is to get acquired, then I'd say just make sure you've got the right consumer doing the right thing at the right time, and that will be of value to somebody. Frankly, to maximize your monetization, you should not even begin to hint at the potential of monetization or lack of monetization. Honestly, once you start to monetize, your value might go way down again, and then you have to prove yourself back up to that point. I agree with building scale first and worrying about monetization later.
Do you think of Bloomberg as a technology company, a media company, or a data company?
One of the ways to try to figure out what a company is is to figure out how they make money, and I think we all know how Bloomberg makes money. So you have to ask yourself: Is media a means to an end, or an end unto itself? I think in Bloomberg's case they have this fascinating economic situation where they can subsidize one business with another business. So they have an amazing terminal sales business that is just an incredible franchise. And they can decide to do certain things — like, "oh, let's start a media news organization" — because it will help the core business.
What's an investment you regret having missed?
One company is Twitter. It is definitely a different type of media company. It's an awesome company and has its place in the ecosystem, clearly.
Which 2012 media IPOs were the weakest deals or most oversold?
I can't comment on any specific transactions for a lot of obvious reasons. At the end of the day, all we're really talking about here is how much will somebody pay for growth, and how far will somebody be willing to lean into the future growth potential of the company? The beauty about the investing that we do on the private side is that we lean pretty far. The analogy I used with a very high profile IPO not too long ago is that getting an IPO right is like a bobsled race. You've got eight people running alongside — one's the market, one's the [stock] exchange, one's the company, one's the underwriter. Everyone's got to jump in at the same time. You want to go online as fast as possible, but that's just the start of the race. Then you have a course. But the reality is every little bobsled reaches terminal velocity; it's just a matter of when. So, if you're long-term focused, there are plenty of great opportunities. I wouldn't be myopically focused on how the IPO performed on a single day.