A Slow Unexpected Death for Mirror.xyz: Mirror Investment Memo

Despite raising capital from Tier 1 VCs such as Union Square Ventures, Andreessen Horozwitz, Atelier Ventures (now part of Variant Fund) the platform seems to be dying a slow death.

Whilst Mirror got off to a great start with $WRITE RACE driving FOMO and onboarding some of the most respected names in crypto including Jarrod Dicker, Linda Xie, Coophatroppa and Chris Dixon their performance has struggled recently.

Since opening up the platform (October 13th, 2021), Mirror has seen disappointing growth in the number of writers of its platform – going from 380 to 607 writers. This represents ≈60% in 7.5 months or 6.45% MoM. Contrast this to Substack, Mirror's web2 counterparty that has ‘hundreds of thousands of paid newsletters on the platform’ according to The Times.

The situation becomes bleaker when digging deeper on Dune and comparing them to Juicebox.eth, a crypto fundraising platform. Whilst Juicebox may be less well known and have a less diverse product line-up they are significantly outperforming their competition.

istoria-research.com

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Given all this let’s have a look into Mirror’s market size & opportunity to try and assess the problem.

Market Size & Opportunity

Fundamentally I believe this is where Mirror’s problems lie. Right now Mirror positions itself as a publishing platform which is limiting. We’ve seen that companies like Substack, despite far greater adoption are generating disappointing revenue ($9m in 2021) and have struggled to raise a Series C.

https://preview.redd.it/0j1of35o6vi91.png?width=1456&format=png&auto=webp&s=28029cc6652ac18685137340c362885d7fbfbcb2

So whilst the ‘Content Creation’ market TAMs are extremely attractive (projected to reach $38.2 billion by 2030) this comes with major caveats.

1. This includes far more popular means including VOD (YouTube) and Live Streaming (Twitch)
2. We’ve seen that the media industry is a pretty horrible business for venture capital
3. Substack shows there is not a massive market for supporting individual writers

However, Mirror may be missing a trick. I think there is a far greater market opportunity if they were to position themselves as a tool to raise money (for personal projects or crypto businesses).

The Crowdfunding Market

Over recent years we’ve seen the popularisation of private market investing whether through the likes of Kickstarter, investment DAOs, angel investing or new start-ups like SeedInvest & EquityZen.

The crowdfunding market alone is estimated at $12.27 billion globally and is forecasted to double by 2027, growing at a CAGR of 11%. Crypto, in my opinion, will enable and accelerate this (look to “Business as a Game” by Not Boring).

So, where should Mirror go from here? If you're interested here's the full investment memo with info on the team, product and recommendations on growth: istoria-research.com