1Mby1M Virtual Accelerator Investor Forum: With Steve Eskenazi, Angel Investor (Part 3)

Sramana Mitra: Here’s a trend question. You have watched the music business for a long time. What is your analysis of the music business? We see music deals from time to time. A lot of the industry believes that you can’t make money in the music business. Can you talk about that?

Steve Eskenazi: I don’t look at it as binary. Some people say you can’t make money. I think it’s very selectively investable. That has been my approach. I was a private investor in Spotify as well. I’ve raised the bar on music deals more than I would in other spaces. I would probably agree that it’s really tough to make money in the music space.

Sramana Mitra: What business model would you invest in?

Steve Eskenazi: I think it’s a combination. I think people don’t realize how successful GoFundMe has been. You don’t necessarily have to say you need to pay X amount. Interestingly enough, some companies have found that they made more money by saying, “We provide this service for free but we’re students. If you would consider giving us $10 on GoFundMe, that would be great.” That’s a very successful way of funding the company.

Sramana Mitra: What is the steady-state business model? It starts with the GoFundMe campaign.

Steve Eskenazi: In this case, it’s a freemium model where if you want to play disc jockey, you may be able to immediately publish to an NFT. You bring in other aspects of business models. Ultimately, I think there will be a subset that will want to subscribe. They got off on their own without any money. They got to 20 million daily average users. That opens the advertising door. It’s not a single business model. The beauty of the online business is you can test these out. You can do A/B testing in different geographies and communities.

Sramana Mitra: Talk a little bit about NFT as a business model or applications of NFT use cases. What are you seeing?

Steve Eskenazi: Web3, crypto has been one. I would say that NIL and the influencer economy is the other. For NFT specifically, it’s still in the embryonic stage trying to find its footing. We’ve seen some incredible miscalculations in terms of the value. You look at Jack Dorsey’s first tweet. What was it? $4.5 million. Then it was resold for a couple of hundred dollars. I do think there are both niche and broader applications. They would need to be proven out. Sadly, there has been a bunch of scrupulous characters bidding up their NFTs to create artificial pricing. The biggest issue is the stability of the pricing. It’s not there yet.

Sramana Mitra: Do you think the physical art world is going to embrace NFTs?

Steve Eskenazi: I think they will dip their toe and test it out. They will look at some hybrid models. There are ways of combining physical and digital that are interesting. That is certainly something that I don’t see having the downsides that other applications we talked about have.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Steve Eskenazi, Angel Investor
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