EGD 080: Phil Sanderson, Griffin Gaming Partners
In this episode, I talking with Phil Sanderson, the Managing Partner at Griffin Gaming Partners, a venture capital firm that focuses on investing across the broad gaming ecosystem. They announced a fund of $235 million that they will invest in game companies and related technologies around the world. I've known Phil for years, since he invested in my previous company Next Games. We talk about venture, how gaming has evolved and how Phil sees the recent boom and M&A activities affecting things going forward.
Joakim Achren 0:05
Hi, everyone, it's Joakim Achren, your host of the elite game developers podcast, a podcast about the entrepreneurs and investors who are building the games companies of the future. In this episode, I'm talking with Phil Sanderson, the managing partner at Griffin Gaming Partners, a venture capital firm that focuses on investing across a broad range of gaming companies in the gaming ecosystem. And they recently announced a fund of 235 million, which they will be investing into gaming companies and related technologies. So I've known Phil for years since he invested in my previous company next games, we're going to talk about venture, how gaming has evolved, and how Phil sees the recent boom, and this m&a activities affecting things going forward for the games industry. Before we go to the episode, here's a few words from our sponsors.
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Hi, Phil, welcome to the show.
Yeah, we're, like just talking about not not travelling. So you've been to Tahoe recently. Do you at all? Like, stop and go anywhere? Like when you're driving over there? Or is it like How bad is it kind of like do and want to, you know, go for a gas station or something like, Oh, yeah,
Phil Sanderson 3:40
it's funny. being outside is okay. You know, people are pretty cautious in Northern California, which has been good. And just stay healthy.
Yeah. Yeah. Same here in Finland. It's now it's so cold. So it's everybodys at home. I think that's going to help. So that's right. -22 Celsius today. It's pretty, pretty damn freezing.
I did miss being back in Finland had some good times there. Huh?
Yeah. We've been to the sauna a few times. Yeah.
Yes. And in the Baltic. Many times.
Hey, let's go back a few years and talk about your origin story in gaming. How did you end up in gaming?
Ah, yeah, so I've always been a gamer. Ever since I had an Apple TV and television used to play Dungeons and Dragons. paper version growing up, castle, Wolfenstein, zork, Lode Runner, you know, all that really. I had a colico just really early days in gaming, I always felt like I was a gamer and I got into finance after college, but gravitated towards game finance and started doing that as early as 1993 at Robertson Stephens working with m&a and IPO candidates like microprose and EA and broder bond. And companies like that. Then went to Harvard Business School. And after that got into venture capital, and really started focusing on gaming, that was in 1997. So I've been doing game finance for about 25 years now a lot of people have, and I've seen the industry evolve over time. It's come a long way. Good house.
Yeah. Yeah. I'm actually doing a panel in pocket gamer in February with the ex CEO of Microprose, Wild Bill Steeley.
Oh, yeah, God, he's got a bigger beard than you do. That is fine. I worked with Gilman Louie on that. As when he merged spectrum hold by. and microprose. That was in 93. Long time ago, but the flight Sims are amazing them. They're amazing today to a lot of fun.
Yeah, yeah, I want to get playing those. I think it feels like just it's not something like, I'm used to much mobile gaming, where everything's so convenient like to picking up a flight simulator is sort of like the opposite. We've seen some mobile flight simulators that are really good. So starting to catch up. Yeah. Yeah. So like, if you think about like, shifting to kind of like investing and you went to finance back in the day, I saw that, that field, what really like, inspired you to kind of like, build a career in that sector?
Yeah. Look, I think you always want to find something that you love doing. And if you do you never work a day in your life. So I guess I'm lucky that I can test play games work with gaming entrepreneurs, watch them grow, help them in many ways. And it's a field that's just fascinating in a lot of different areas. You know, it used to be a niche category. And you know, a few 100 million people play games, they consider themselves to be a gamer. And most people define gamers as hardcore gamers. But today, about a third of the world plays games, almost an hour a day, and depends on who you wanted to find. As a gamer, Sony plays games, Candy Crush can be a gamer, and somebody plays games. So it's great just being in an industry that is the fastest growing consumer trend in the world today. And one where you see the biggest unicorns play Tikka going public today and a massive valuation. I mean, it's, this is where the puck is going.
Yeah, yeah, definitely. He's
a finisher, finish term.
Good, good. Your journey into VC. Like you were doing gaming deals, but what was the kind of like the turning point there where you moved over to this?
Yeah, I think I was a financial advisor as an investment banker for five years. But I also had some small entrepreneurial ventures that I started on my own. And I always saw venture capital as the midpoint of being a financial advisor and an entrepreneur. You know, I spent a lot of time in the venture industry as a venture capitalist. But I was also on the board of the national venture capital Association in Washington, DC, for the four year term representing our industry in Congress and looked at a lot of the data in venture capital, there just aren't that many venture capital firms or even venture capitalists, there's about, you know, 1500 venture capitalists in Silicon Valley, probably about 3000 in the US. But venture backed companies constitute almost 20% of the GDP of the United States. Some of the biggest companies in the United States are venture backed, like Google and Microsoft and Facebook.
So our industry is a critical component of the growth of not only the US, but also countries like Finland and elsewhere throughout the world. What's interesting is, the government really doesn't appreciate or understand how the venture industry works. So we're constantly saying, Let us do our jobs, and keep the company growing. It don't interfere. We're not a hedge fund. Don't treat us like hedge funds, you know, these types of things. So the venture industry is just a critical component of so many industries I loved I loved what it offered from a high level, as I just mentioned, but I really love working with entrepreneurs on a day to day basis. I mean, I'm in an enviable position, I think, where I can talk to 1000 companies a year in my category of gaming, and really choose or mutually decide with the entrepreneur, how we want to work together over a six to eight year period in many cases, which is the early stage and it's so fun, to be able to work with a company, which has a whole unique, unique set of challenges and growth opportunities and then work with another and another and have a handful to work with consistently and really take part in their journey. It's not always easy, but it's Exciting, exhilarating industry.
Joakim Achren 10:02
It is. That's like I've been seeing that now since two years ago started doing angel investing that kind of like all those opportunities there. It's sort of like something that you can be on so many journeys at the same time and see so many cool things getting built. And learning like that's, at least for me been the biggest takeaway is that you learn so much from these people. You're constantly So thinking about like going into like what you're doing right now. With Gryphon. Before we go to like how that came up. Can you introduce Gryphon, gaming partners to the audience?
Phil Sanderson 10:41
Absolutely. So we started the fund in the firm in the beginning of 2019. And really, because gaming, you know, is such a fast growing category. It was underserved their entrepreneurs, were not getting the capital that they needed in this industry, which is growing so quickly. I was investing at prior funds, but only could do so much in gaming, and really felt the need to want to start a fund dedicated in this category. And I had worked with my two partners over the years, pretty consistently. So Peter Levin, who is one of my partners was at Lionsgate for five years. And while he was there, we invested in five companies together set on three boards, including next games. And we're like minded in our approach to working with entrepreneurs, the growth of the industries and how we wanted to work together. So we teamed up and also teamed up with liontree, through Nick to Augusto and Nick and I had worked together as on the banking side, and Peter had worked with line three. So the three of us were natural, I had been a venture capitalist my whole career. You know, Peter was an operator, and Nick is a banker as an advisor. So the three of us have complimentary skill sets. So we came together to form Gryphon gaming partners. And, you know, we're fortunate enough to get some of the largest game and media companies as LPs, as well as some major family offices, institutions, and so forth. And our approach is investing in early stage companies, oftentimes the first institutional money in as well as some later stage companies, doing infrastructure investments for gaming, as well as developers and publishers, and investing domestically and around the world. And so that strategy has played out very well. And we've made a number of investments you can see on our website we have, we've actually invested in 14 companies so far. And they're, they're doing very well.
It's like I met the team recently, like talk to everybody, just you, Peter and Nick. And then you haven't this extensive team of associates of venture partners. It's really big team. And I haven't I haven't really seen anybody start off with such a big team in gaming. Yeah.
Why do we have people? You know, in our organisation so far, there's just a lot of opportunity. And, you know, we're talking to so many companies in so many different areas around the world. And, you know, our team works with our companies pretty extensively, doing research for them. Market studies helping with recruiting, play testing. So, yeah, I think you really need a big, big team to be able to, you know, fulfil the promises you have for portfolio companies, but also just find opportunities to invest.
Yeah. What do you see that kind of teams, the team work evolving from there? I think you also like your focus area, you're looking at deals, you're working with the portfolio companies on the boards? What's the future look like? The future of the team? In terms of getting it out? Yeah. And what you guys are doing as a team?
Yeah. I mean, look, I we're seeing more and more opportunities. So we'll continue to do that. I think as the portfolio grows, there'll be more and more work to do with each company. And I think I think the team is right size, we probably add a few more people. But when you see 1000 companies a year, there's a lot of work to do. And just evaluating those and trying to figure out the ones that you want to work with. Is this a challenge?
Right? And yeah, and helping the existing ones as well.
Yeah. Then thinking about this, this thing that I've noticed as an angel investor, like, there's a lot of deals happening. And it's not always easy to get into, like some interesting deal where there could have been an angel allocation. I missed out on the allocation. And maybe I was like, clear enough that I want to invest the deal was there but I didn't get picked for the deal. Yeah. How do you plan to, to win sort of like these competitive funding rounds, there's a lot of money now. Going through venture capital into gaming the moment it's true, you need competitive advantage. is in any market that you're in? Ours are, you know, we've
got a handful of competitive advantages. One of those is we've got a lot of experience in working with companies. And our networks are very broad. So if you want to recruit a senior member of a team, you know, we can help do that. And we've done that, in many cases, bringing in sea level employees, or even, you know, developer level employees into companies, we can also help extensively with corporate bizdev. So, Nick, who's an m&a advisor liontree speaks with many companies in the market and knows where the market trends are, who the buyers are these types of things, offering that type of advice to companies can be pretty critical in their growth, they may or may not choose to hire Landry, but they're getting his advice and his thoughts and feedback as a portfolio company. Third, you know, Peter has done more IP integration work with companies than anybody. And he did that for five years at Lionsgate. And, you know, he even did it before that when he was at Nerdist, industries, and so forth. So, you know, IP can play a major role in many of these games forth, we've got a very vast strategic LP base, about 17 major corporations around the world, who both technology and on the content side, in gaming, and in media. And if a company wants to, you know, licence, or extend its IP into a TV show or movie, we've got LPs who can do that, or vice versa, they want to integrate in IP from our LPs into their game, we can help with that, too. And our portfolio companies have pretty vast distribution for games around the world and in different geographies, and they've helped our companies with that as well. And then having a keiretsu of portfolio companies focused on this area can also help investments that we make, because it can be working, for example, if you are a company that's moving into the match three category, and you want to share best practices and, you know, around ua and CPI, we can create a forum with two or three of our companies who are in that category as well and share best practices and ideas help accelerate, you know, your growth in that area, that you can do that when you're a sector focused fund in gaming. So we do have many competitive advantages that are recognised by our portfolio companies. And we've gotten in in very competitive situations, because as you as you identified, it is competitive. And I think, you know, really good entrepreneurs realise money is not just money, you really want to have value add from your investors at the angel level all the way up through, you know, the time of exit.
Yeah, I totally agree with like sharing knowledge doing some of the heavy lifting for for seed stage companies like a big deal, for sure. Yeah. Then thinking about your work as a VC your day to day. What do you think, really makes a great venture capitalists from the founders perspective? from your own perspective? What do you think?
So there are different answers from financial and fiduciary responsibility, I think it's really important to find and source great opportunities, and close them and have them be part of the portfolio that drives returns and making the right divest investment and divestment decisions. That's what an LP really wants an investor in our fund. From an entrepreneurial perspective, they want a venture capitalist who understands their business, it can help them with advice. And in real-time, with financing, bringing finances to the table for follow ons, bringing recruiting candidates to the table and bringing advice when it comes to strategy, and so forth. And even more importantly, if the company needs to pivot. The venture capitalists want to understand why and be supportive, as opposed to saying that's not what we invested in, we're out, this can actually kill a company in many cases. So you really want to have that knowledge base and understanding. So there are different answers from an entrepreneurial perspective or from an LP but we serve different two different customers. Those are both of our customers. And we try to do both Well,
yeah. Yeah. And I think like, that's often something that the founders don't have all the visibility into, like that area of what the VC is doing.
Yeah, I would highly encourage entrepreneurs, to check references of venture capitalists before they take their money. By talking to the CEOs who they work with and who they've worked with in the past. That's the best way because you can really find out how they acted in different situations. And that really speaks to who they are reputation.
Yeah, I think you mentioned a really interesting point, though, I kind of understanding what a gaming studio, for instance, would do in a pivot moment. And that's very specialised knowledge. That is easy would have. Yeah, definitely. Didn't think about like that, that deal when it's happening, and you're discussing a price and the valuation of a deal giving a term sheet. How do you, let's put it this way, like how does price and valuation matter? For you guys?
Well, we will look at it in relation to where the exit is, and when our potential return can be based on various outcomes. So we'll build a model based on the company model that they give us. And, and try to see where the where they will be in 357 years, and then try to extrapolate based on what the exit multiples are in m&a and IPO in some cases, and trying to see what their potential exit could be, and what kind of return that would give us in a best case, middle case or worst case scenario. And ultimately, we'd like that to average out to be roughly 30% IRR, which is, you know, a target that we'd like to have for the fun on a gross basis. And you know, if the valuation is too high, and that IRR doesn't seem to pencil out, it's probably too high of a valuation. So that's the basis of where we come up with valuation. But then we also will look at comparable venture financings and see where the rest of the market is to see if that's fair. And also, you know, real time exits in the market IPOs, m&a exits and things like that. So it's on later stage investing, it's done more with a discounted cash flow and a financial analysis show earlier stage, there's a much Ranger much wider range of outcomes that can occur. And you sort of say, Well, this is a home run case, this is an upside case, this is the base case, this is the downside cases got a business case? What do we think the chances are of each one doing a weighted average? You know, he tried to just figure it out?
Yeah, but like one one detail that really comes often for me when I'm talking to founders is kind of the dilution sensitivity of founders, like, what are your thoughts? as like, you're seeing a cap table where there's gonna be a long journey, a lot of rounds? Most likely before there's an exit, like, what are you talking to founders about dilution? Like, how do you advise them regarding like, if they are very dilution sensitive?
Yeah, I think that this sort of plays into… you could grow a company organically, and not have dilution, but then companies can pass you by in a given field. Or you can have a smaller piece of a larger pie, assuming that pie becomes larger by taking venture money, but you really need to assume that you'll use the capital to grow through user acquisition their eye CAC to LTV ratio, which will allow you to raise money at a higher valuation, which will increase asset value faster. So it's a model and you know, sometimes you can raise money at a higher valuation from some other financing sources who are just money and maybe may not add enough and may not grow that pie. As a value-added venture capitalist. Well, it's really based on as an entrepreneur, if you believe that a value-added venture investor who may not have as much of a higher valuation will actually grow that pie larger. And that's really just again, based on talking to entrepreneurs, and, you know, understanding if that's actually played out and worked, you know, for, for other, you know, case other portfolio companies within that existing venture fund.
Yeah, that's a good point. This is an off-schedule question. But I wanted to ask you about the whole m&a like spree and craziness that happened in 2020. With a lot of the Swedish public companies going out and buying stuff… What do you think about what's going on in the industry at the moment, regarding M&A?
You know, companies are trading at pretty high multiples in the public markets, and they're being able to buy companies at lower multiples. So there's an immediate value that's being created because they're trading at that same EBITDA multiple or revenue multiple. So there's been a lot of m&a recently. But there's also been a lot of high valuations look at Unity and Roblox and discord and other companies that are, you know, valued at eight to $40 billion and growing play ticket today. So there's a lot of stock to be able to purchase companies with. And, again, they're buying at a discount and multiple and they're immediately trading at that existing multiple the company as they should because they can there's this positive synergy and you know, it's expanding from there. So we're seeing the start of the m&a spec IPO boom, within the gaming sphere, and I believe it's going to continue,
do you have because you've lived through the.com era? Like how how close is what we're doing right now for the industry like, have we learned from that period? sort of going into this kind of crazy mode that is happening in 2020 and 21?
I think so there's some similarities. Look, I think there's some companies that are overvalued. But underlying that there are core fundamentals. And there's users, there's assets that are growing in, you know, 99 2000, before the bigger bubble, that you didn't have revenue, you had market share. Yep. And, you know, there was no underlying principles, and most of those companies, except for a few like Amazon, and so forth. Today, I think while there are companies that are overvalued, there's many that are undervalued. One thing that's not clearly understood about our industry within gaming, is that we are like a SaaS company, but more predictable in many cases. Because once you acquire a user, and that user stays for 30 days, plus, you're going to keep that user for many, many years. In many cases, as long as you just keep feeding more and more content. You know, a lot of the ltvs that we look at with the CAC LTV ratio are based on three years. But we all know a lot of those users once they're paying, say, for up to 10 years. And it's like a enterprise software company, when you acquire a user, it's a bookings. And you recognise that revenue rate obli every quarter, for as long as that that person stays and pays, and they stay in some years, like the Candy Crush, and many other companies like it, when you've got a cohort that's paying the annual insurance one to 2% per month. So once there's enough time, and people start to see these cohorts, and so how long there, I think the institutional market is gonna look at these companies and say, This is a true asset that they're recognising over time. And the difference between this and enterprise software companies, I say enterprise software companies, because it traditionally has been the biggest part of, of technology in the last 10 years, you spent a lot of money upfront, and then you start to have a Salesforce and sell, then you create a revenue base, and then you have bookings Do you recognise that revenue base going forward? in gaming, you only spend a lot of money. Once you've got that positive CAC LTV ratio, within mobile game, I mean, triple A games are a little bit different on on consoles, but those are going to be hit and they consistently have been. But it's a it's a it's a more predictable model in gaming. And it's undervalued in many senses in terms of what the value of the user base is,
I believe, yeah, totally agree with you on that. Let's go back a bit to the to the seed stage and talk about like companies, companies moving from stage to another, you've observed a lot of companies going from seed to series, a stage? What are the shared characteristics of these companies that managed to move from seed? To series A, in your opinion?
Yeah, well, okay, you can look at it from the infrastructure and from the publishing side. So on the publishing side, what we'll look at is, if there are a mobile game company will want to see how their beta numbers are in a English speaking country that mirrors US and in Europe, so Canada and New Zealand, Australia, and we'll look at the ARP das, we'll look at the retention rates and a D one day seven d 30. basis. And then look at the CAC LTV ratio, if those KPIs mirror, a top 100 mobile game company, they're gonna raise money and raise it very quickly. If they are on their way to that, which oftentimes happens. And they'll say we haven't integrated our PvP mechanic yet, we don't have sales and, you know, events yet, and so forth, we can tell that the arpt hours will increase over time, we're more concerned with retention rates and engagement early on, because we know you can add on the monetization typically. So we're very KPI driven, when you move from a C to A Series A typically in mobile games in an infrastructure play. It's more about the adoption of customers, converting a beta customer to a paying customer seeing engagement and an increase of a contract, those types of things. It can be earlier as well, it can be just moving to an MVP and understanding whether we think this is the right product for the market. That's pre pre metrics, but usually my move to series A and you raise, you know, five to 15 million, you sort of look for those KPIs, I'm old school to a lot of companies are considered themselves to be seed stage. But they've raised five to 15 million to me, that's just an A, even if it's the first round, I mean, to me is, is you know, raising a half a million to $2 million. And getting an MVP out. I think that's a seed round. You know, and people like to it's fashionable to call their their series A a seed round, when they raise 10 million or 15 million they call it C but I mean, whatever. It's just semantics doesn't mean anything.
Honestly. Sure. It's a number. What do you use it for? So think about the companies that you've invested in over the years and have you developed kind of like this. Sort of like some Of what points to positive development and to negative development. Let's think about the ones that aren't the most obvious ones maybe,
in terms of how identify them? Yeah, I do think there's a methodology that we've used over the years such as anything that you experience, in the due diligence phase of a two to six week period, before you invest in a company is only magnified in that six to eight year period, you're gonna be working with them, because it does take six to eight years to get to liquidity in early stage companies. So that is a truism. And you know, you sort of have to magnify those small things, because you just don't have that many data points. Right. That's something we've learned over time. Look, I think our early stage businesses centred around two things, teams and metrics, you know, the markets are there generally. And a lot of technology investing sort of look at some people put markets up there on par with teams is the TAM big enough that we all know gaming is so big, and all these different categories, it's rarely an issue. So on the teams, when you've been in the industry, for so long, a lot of the top teams come to you. So that's the easy part of our business, like we built up that equity over a 25 year period. Now they come so you know, I'll give you an example. When Jason Citroen had sold a openfeint, it was starting discord before it was called Phoenix Guild. And then it was hammer and chisel after that, but two people called me his first week of raising money and said, You got to go meet with Jason. So I sat down with Jason and committed in that meeting to invest in his seed round, which was a note at the time, but it was very clear Look, if you've got someone who's very driven, who sold a company for over $100 million in your category, it's a no brainer, right. And actually, he asked, he asked me to help fill out his seed round, because he didn't know how, and I brought in other people who came into the seed round and so forth. It wasn't easy, it wasn't easy to fill. Many as you saw, they just raise money, it's $7 billion. So those are types of ones that you know, you do those all day, the hardest part of our business is is and then we get tonnes of deals. Like we say, we have 1000 companies coming to us every year, we look at all the metrics and so forth, we try to figure out, do those metrics line up, I find the most interesting part of our business, the whiteboard, the open space, saying, Okay, let's take a step back, even though we're drinking from a firehose, what's happening out there that we should go practically and go find, you know, like, Where are the games for women? I mean, more women play mobile games and spend more money, but what about do you have candy crush? Let's go find those games, you know, and, and we found tactile gains, with Lily's garden who was doing it right, you know, and focus on that demographic. So that's something that I find is it's hard to do to try to remove yourself from the day to day. But it's important because that's where sometimes you find some of the most interesting opportunities as well.
Yeah, that's interesting to like, think about those. So like the founder, who already did a company? Well, Jason is a pretty big exception of Yeah, probably what walked through the door. But like, when that happens, it usually is a signal that they have an itch to scratch sort of like that they're back in the game. I think like, after that, it's sort of been you want to see like, what what are they actually like thinking about as a team, what they're building?
I would say repeat entrepreneurs on the whole are more successful. There have been studies on that they've been studies that female CEOs are more successful. You know, when you start to look through that data, you say, Okay, let's, you know, go with the data. Yeah, it is.
So in gaming, what do you what do you believe will be the area where we're going to see the most growth during this year, next year? 2023,
sort of going forward? Well, look, mobile gaming is the fastest growing area within gaming, I think it's going to continue to grow. I wonder about advertising within gaming, because idfa, if that comes into play would be a major setback for the industry, both on revenue side and the customer acquisition side, we'll see if, you know, Apple leads the charge and taking away data used for marketing based on privacy concerns. So we'll see where that goes. But I do think mobile games will continue to be fastest growing, we'll start we'll continue to see more cross platform games, a lot of the traditional console games moving over to mobile and PC games moving over to mobile. I like the areas of artificial intelligence within content creation. And I think probably more companies in that space are looking and more invested in we're talking to more as well there. And there have been innovations around the casual puzzle space, which is interesting and you know, CPAs are gearing up for traditional bubble shooters and match three games. So there'll be some alternatives that are created. That category in mobile, and see what else? I mean more games oriented to women. I think that's another theme that's going to continue in 2021.
What do you think about Roblox and that whole sector of creator sort of economy yakking off inside gaming?
robots is an incredible company. The metaverse is a major trend. We've already backed companies who are developing for the metaverse for Roblox, and that will continue as well. Super social is one of those companies. And epic is doing a lot in this space as well. They're expanding into different areas, because they're becoming the next social media platform. As opposed to social media platforms like Facebook, who offer, you know, Instagram and other types of things are starting off their gaming, it's interesting, but when you're a game platform that everybody goes to, and then you layer on social media, and traditional media, it's a lot more powerful. I can see both platforms becoming bigger than Facebook over time, which is hard to say. But they're moving in that direction, in terms of market cap, and so forth. We're also doing investments in the music area. So wave is one of our investments and the things that, you know, little NAS x and Roblox and Travis Scott, in fortnight are examples where you've got millions of people who are wanting to consume traditional media within the metaverse, that's a great category are really, really big in that, in that area. I've done a lot of music, space over time. So where music and gaming are merging to
Yeah, one final question about gaming for you like what do you think about the whole, like Apple's activity with with fortnight, and also with idfa? coming? Like, what are your thoughts there? Like, how's that gonna play out this year?
Yeah, I think, you know, I've seen sort of the shelf space wars, emerge over time, where I used to be, you know, major publishers like EA and Activision would buy 51% of a developer because, and they own the shelf space, and the game stops, and so forth. And that's and you had to be, you had to do a deal with EA, Activision, or you couldn't make it. But then things moved online, and the new shelf space became Apple and Google with their stores. And they were pretty critical to get your distribution, and it was worth the 30%. And they also provided payment infrastructure and so forth. But, you know, is it worth the 30%? Today? Probably not. And so large companies are saying, I don't and and, and Apple has cut deals, they don't publicise them, and they, and other companies pay less than 30%. And epic is saying, why are we doing? Why are we paying 30%. So they're entering in this war and saying, basically to the DOJ, you want to have Apple as a as a monopolist, like like Microsoft was before. So there, they pushed Apple into that sphere, and we'll see how it plays out. Who knows. I mean, it is it's a political game at this point. I think the same is true for idfa. Nobody knows where this is gonna play out. There's a real problem with privacy today and there, and Apple has said they're trying to address it, I don't know if they're gonna address it. But they have to say they're trying to address it, whether they do or don't, is yet to be seen. But if you take away, you know, all these tracking mechanisms to be able to do targeted advertising, it's going to make advertising, less effective, but the market will figure itself out. You know, online advertising is such a massive area that we don't know, where things will shake out with Apple, Facebook and epic. We've got these giants who are trying to battle it out. And unfortunately, you've got a federal government who's trying to navigate it all. Yeah, who doesn't understand entrepreneurship, or startups or gaming? Or advertising? So, yeah, it's kind of a mess. But, you know, but the one thing about innovation, people always innovate and find opportunities to expand. So, you know, even if idfa goes into effect, I'm still optimistic about the advertising market. It's just, it just may take it may take us a step backwards, you know, for a short time. Yeah,
it'll balance itself out, I think. Hey, final questions for you, Phil. What's, what's your favourite book? And why?
Ah, probably Dune. I love science fiction. I like the whole geo political economic storyline. I've read all of Dune and Frank Herbert's son's books as well as there's like 18 of them. I probably read them all twice. kind of looking forward to the next movie coming out late, but yeah, and I love science fiction. And I just I like, I mean, it's like gaming to me, you know, it's a fantasy. I do a lot of running. ls now audiobooks. So I run for 100 mile races every summer. I just ran a 240 mile race three months ago nonstop. And I'll listen to audiobooks for hours. Many hours, so yeah,
it's great. You can just watch the scenery and dig into sci fi.
As you're right. Yeah, it's perfect day for me.
Do you have a story that has shaped you in how you approach or work today?
Yeah, I think I kind of defined myself through lifelong learning, reinvention of myself and, you know, pushing myself in massive physical extremes. So running 97 hours non stop? Well, it was four hours of sleep and that 97 hours, but that's, you know, that but I think, look, reinvention is a big one, right? I basically had a great job within venture capital and said, you know, what, I just need to completely change this, like, there's a huge opportunity out there. I'm going to risk it all. I'm going to start a new fund. I'm going to just go for it. And this is what entrepreneurs do. I feel we're an entrepreneur, all three of us as partners, we're entrepreneurs. Anything that these game startups are doing, we're leaving what we're doing before, we're saying I love this category. I believe in this vision, I'm gonna go for it. And it's really important to if you believe in yourself, reinvent yourself and and reinvigorate yourself. I think that's a lesson that we've all done many of us on, who are listening here. I've done that before I can really relate to it. We're all entrepreneurs in that sense. And, yeah, that's kind of the way I define myself.
Yeah. Yeah. I also have, like, just remind myself that there are so many people who started funds, there are entrepreneurs as well. It is a startup that you're building, basically. Absolutely. Yeah. So Phil, thanks so much for for all this. But the last question is like, what's the best way for founders to get in contact with you and Gryphon?
Yeah, well, they can certainly reach out an email. I'm Phil at griffingp.com. And you can also see our companies and our philosophy on our website, which gives you some good background. love to hear from you. And then he'll can really appreciate being on the show. It's been a lot of fun, and I love what you're doing with the podcasts.
Thanks. All right, take care. Talk to you soon again.
Okay, take care. Bye.