Mike Lazerow is an industry vet who managed to create profitable content sites in the dot-com era before transitioning into the social media age. First came University Wire, a sort of Associated Press for college newspapers, and then Golf.com which he sold to Time Warner in 2006. As the founder and CEO of Buddy Media, he runs the largest third party platform for marketing on Facebook, with eight out of the top ten global advertisers among his clients. In 2011 he launched Lazerow Ventures, a $10 million family partnership and co-investment fund and has quickly become one of the city’s most active and sought after angels.
You always remember the ones that got away. Tell us about the start-up you regret passing on the most.
Well I bought into Facebook pretty early, but looking back, I had the chance to get in much sooner. They were pre-revenue and the valuation seemed high, so I passed. Zynga is like that too. Mark Pincus is a board member of Buddy Media and was at the time he was founding Zynga. I could certainly have been more vocal, could have pushed harder, to be an early investor in that, but at the time I didn’t really see it. Veterans like Fred Wilson or Brad Feld, who can separate the signal from the noise, they looked at Zynga and saw a company with a proven founder entering a wide open space with a huge market. I saw an online poker app.
What “me too” trend should we avoid or invest in?
Inside the beltway consumer tech start-ups, these light apps that aren’t solving a real business problem or a deep human need, are going to get crushed. Foursquare is going to do very well, but even the largest check-in app is 10 million people, compared to Facebook’s 700 million. It’s really hard for me to believe that there is enough real business to support the explosion of mobile and tablet apps I see these days.
What’s the weirdest pitch you ever heard?
I like crazy ideas, so to me most pitches don’t sound strange. I thought Netflix was the worst idea ever. I mean for years, the bigger they got the more money they lost. Reed Hastings had the balls to keep investing in the company and to ignore the markets and the naysayers. Turns out Netflix is one of the biggest and best businesses to come out of the last wave of the internet. Oh wait, I did get one strange pitch recently. Someone pitched me a shoe company for women with six toes. No, I’m not kidding.
What’s the best way to ride out a bubble?
I’ve been angel investing for about five years, but this is the first year I’ve taken it really seriously. I was just heads down with Buddy Media and now its running on its own steam to the point where I can blink, where I can take one percent of my time for something else.
Over the last year I have done a dozen deals in the spaces I know best, ad-tech and social. Because of my position with Buddy Media, and the way social has become central to everything, I am being invited into a lot more deals.
I’m not a very experienced investor, so I don’t like to lead. I look for a great management team and strong partners in the funding. Having really big, smart money in your syndicate is the best way to avoid getting your ass handed to you.
I know I can’t pick the next Facebook, so my strategy is to try and get into as many goo deals as possible and hope a third of them turn out to be hits.
The last thing you want to hear from a founder is?
“I can’t.” It takes someone to will these companies into existence and at the end of the day its not going to be the investors. I look for great DNA in a company, and so often when the founders leave, they take what was driving the business with them.
Explain, without jargon, what the word pivot means to you.
Pivot is a really annoying, overused word. But I think by definition what a good start-up does is to pivot, and to continue to do that until they are a real company and no longer a start-up. Your job is to become a mature, profitable business, and you react and you iterate until you reach that goal. That is the kind of approach that has driven the tech ecosystem in this country for decades. So even with a company like Sticky Bits, which became Turntable.fm, and that’s maybe something beyond a pivot, its such a big change, but more power to them. Now when I see a big established company with 500 employees and they are telling people about how they plan to pivot from a location-based service to mobile games, that is not a pivot, that just means your company is fucked.