‘A fundamental shift’: Consumer investor Mags Kala on the growing crypto space

For venture capitalist Mags Kala, all it required was quitting her day job. Kala used to work at Bain Capital, helping out big brand names like Shea Moisture and Virgin Voyages. But one day she decided to leave it all behind and strike it out on her own. After about a year of going solo, she’s become especially keen on the Web3 space. Web3, of course, represents a growing contingent of blockchain enthusiasts — many of whom spend a lot of time on Twitter evangelizing the technology.

On this week’s episode of the Modern Retail Podcast, Kala explained how and why she made the jump.

For her, as a consumer investor, she wanted to be on the ground floor of the biggest changes in regards to how regular people spend their time and money. That’s what initially turned Kala on to the world for crypto.

What was it that made it click? According to Kala, an expensive digital avatar of an ape. “Joining the Bored Ape NFT craze was very eye-opening for me,” Kala said. Here, she was describing the company Bored Ape Yacht Club, which auctions off pixelated pictures of apes using blockchain-based contracts and cryptocurrency. While it’s a phenomenon mostly for people online (with a lot of money to spare), Kala said the rise of these NFT artists made clear many other things as well.

At its core, these types of new programs hit at a base-line question she’s always trying to answer as a consumer investor, Kala said: “What’s truly next for the consumer economy?”

Here are a few highlights from the conversation, which have been lightly edited for clarity.

On Kala’s beginnings as a VC
“I joined Bain Capital straight from college and got the boot camp of investing through that experience — working with some of the smartest consumer investors in the world. I learned a lot and I loved working with my portfolio companies. It’s a very traditional approach to investing: deep diligence and then deep involvement with the companies to help them grow and succeed. So I kind of had that amazing experience doing that across categories: work with a Black beauty brand called Shea Moisture; And then I was actually full-time at one of my portfolio companies, Virgin Voyages, when [it was] launching the brand new cruise line.”

Why crypto
“I knew I was going to go down [the question] ‘what’s truly next for the consumer economy?’ I didn’t expect it to be as Web3 [focused] as it ended up being. But I always say that I invest in how and why people spend their time, money and attention. And the more I went down that the Web3 rabbit hole of: ‘what does that really mean for how people will spend time, money and attention? And, why is it better than traditional ventures?’ There was no going back. It was very clear to me it’s not just a flavor of the moment. It is a very fundamental shift.”

Why the NFT boom may not be a passing fad
“Joining the Bored Ape NFT craze was very eye-opening for me, in many different ways — and very nontraditional ways: just seeing the power of building a brand from scratch that’s so dependent on its core membership and promoting it, but then making open — so that derivative projects can also benefit from that. I know [this is] a very buzzword-y answer, but that was just such an eye-opener: of, essentially, a consumer startup that is less than a year old, and has been able to capture such a cultural moment. And so many interesting people building around the Bored Ape ecosystem is fascinating to me, just from a pure speed to impact and speed to awareness [perspective].”