Archive for the ‘Foundry Companies’ Category

Ello World

elloAt the front end of every new investment we hope we’ve found the next break-out company. But it’s rare when you have the feeling that you’re investing in a business that may both be that and has the potential to touch millions of lives. We feel we’ve found that in Ello – a social networking business that’s part Twitter, Tumblr, and Facebook, but at the same time all its own. Ello is a beautiful and easy to use product that allows people to express themselves as they see fit but without relying on selling its users to make money. We’ve just led the Series A financing for the business along with Bullet Time Ventures and FreshTracks Capital. As part of the financing, I’ll be joining the Ello board. You can find the Foundry post about this investment here, and a post from Mark Solon of Bullet Time Ventures here.

Before I go any further in talking about my thoughts on this investment it’s important for me to state unequivocally my support (and Foundry’s support) for Ello’s manifesto to build a company that doesn’t rely on advertising or the selling of user data. We’ll either figure out a sustainable business model that doesn’t rely on compromising these values or we won’t have a business. Below is the mission statement that I’ve signed – along the Ello founders and all other investors – making our intentions around this completely clear (you can click on the image below to see a larger version).

ello-pbcAlong with the financing we’ve also reincorporated Ello as a PBC (public benefit corporation). PBC is a relatively new concept and this is Foundry’s first PBC investment. The idea is reasonably simple – being a PBC allows us to write into our Charter (the founding document of our business from a legal perspective) that we exist to serve not just our shareholders, but also to uphold specific values. In this case we’ve included in our charter a prohibition for selling advertising and user data. While the charter is an agreement among and between the shareholders of Ello, we took the unusual step of essentially restating our mission in our charter because we wanted to emphasize our commitment to building a business on these terms.

I suppose it’s easy to be skeptical about these claims – or for that matter, the fact that Ello has investors in the first place. And perhaps nothing I say here will allay the concerns of those who are looking to take shots at something that is gaining momentum and excitement in popular culture (and it might even be a mistake to try to defend Ello and our involvement with it from those that would prefer the company fail). I know plenty about selling advertising on the internet – we have many portfolio companies that help publishers do this (or that are publishers themselves and who make money selling ads). I’m on the board of several of them (you can see the full Foundry portfolio here). And I’m sure those that want to view this financing negatively will point to these companies as evidence that Ello has somehow sold out or they’re bound to change their business model and lose their way in the pursuit of cash.

Simply put: this isn’t the case.

To be clear, Ello is a for profit business. They plan to make money to support the costs of developing and growing the business. They raised this round to support those efforts. I’m confident the team will develop a profitable business model that supports our investment. This wasn’t a charitable investment by Foundry; our mandate is to make money for our investors and we believe that our investment in Ello will help us do that.

One of the things I’m most excited about Ello is Paul Budnitz, Ello’s co-founder and CEO (and the founder of Budnitz Bicycles and before that Kidrobot). I’ve known Paul for 7 years, and over on the Foundry blog talk a little about how we first met Paul, and the singular position he holds in the history of Foundry. I love Paul’s passion and his creative instincts as well as his singular pursuit of his ideas. Creative Genius is a term that’s thrown around much too loosely in our industry, but Paul truly is. He has a visceral passion for Ello and is unstoppable in his quest to create a place for people to interact with their friends that puts users first. It would be easy to dismiss Ello – a new and of late extremely popular social network – as either a flash in the pan or as too idealistic in their mission to stay true to it. But from our perspective Ello is on the cusp of something huge and potentially game changing. And our belief is that they’ll be successful because of their mission, not in spite of it.

You can find me on Ello at @sether.

October 23rd, 2014     Categories: Foundry Companies    

Trada Update

tradaCompanies rarely grow in a straight line (or the fabled exponential one). Building a business isn’t about getting from point A to point D by passing through points B and C. There are fits and starts. Amazing discoveries and heart wrenching realizations. Huge highs and low lows.

Trada – which has built a large crowdsourced marketplace for search optimization – has been through its version of this crazy growth curve over the past 5 years. We’ve learned a ton and along the way have delighted a large number of customers. But we’re having one of those non-linear moments at the business and came to the realization that we needed to shrink to grow. So we took the harsh medicine and significantly cut back the Trada staff. The result was a business that has real revenue and customers, is growing and bringing on new business, is continuing to build and innovate product and is profitable.

I bring this up because it’s been falsely reported in a few media outlets (and on Twitter) that Trada is shutting down (purposely not linkning here – any reporter who can’t even perform the most basic due diligence on a story doesn’t deserve the extra traffic). Trada is not shutting down. The move the company made last Friday was bold, dramatic and painful. But it was the best thing for the business and its customers. This isn’t the first time we’ve seen a business retrench (Gnip, for example, cut back to 6 people a few years ago before profitably growing back to 80 and counting).

As I’ve said before, building a company is often a 10 year + journey. We have plenty of distance to go still at Trada.

November 20th, 2013     Categories: Foundry Companies     Tags: , , , ,

Hacking Hardware With A Dragon On Your Side

Dragon-Innovation-New-Logo

For years, many of our most high profile hardware investments have had a quiet partner. Dragon Innovation – experts at helping hardware ideas actually happen – have helped companies like Makerbot, Sifteo and Orbotix (all from the Foundry family) move from product idea to product reality. As the startup world shifts from an intense focus on bits to celebrating atoms and the “maker movement” of hackers who give those atoms life, there is bright light being shined on the ability of those makers not just to come up with cool ideas, but to take those projects from ideas, to prototypes to delivered product. This is where Dragon shines, and where they aim to completely change the way great ideas are planned, funded, made and sold.

Today, Dragon is opening up a platform focused entirely on great hardware projects and their makers. With the expertise of their years of consulting and hundreds of products they’ve helped come to life, they’re applying a different filter on the traditional hardware crowdfunding model (which is rife with failure due to improperly scoped projects and overambitious and unrealistic expectations). They’re building what they hope will not just become the platform for makers to launch their projects, but ultimately will become the center of the maker community – where makers come to get help from each other, learn about new products and get feedback on their ideas. 

Of course the Dragon marketplace is also about the other side of the funding equation – the backers. The company believes the experience of backing a a company should be about both the project and the maker and they’re building tools into their site to allow makers to better interact with their backers, simplify and make more meaningful the project tiers and, most importantly, to back projects that have a high likelihood of actually delivering.

The company has launched with 8 initial projects (including a special edition of the Pebble watch). The company is also partnering with companies like GE and Qualcomm to help put more muscle behind what they bring to the table (look for more partnership and some innovative twists in the coming weeks). Go check them out!

September 5th, 2013     Categories: Foundry Companies    

Reputation Matters

Reputation matters. You know that and so do I. But it’s easy to forget that you’re either building or destroying that reputation in every interaction you have. Not to mention widespread reputation travels in our ridiculously connected world.

I was reminded (again) of this today from an exchange on our CEO email list (which includes about 75 CEOs of Foundry portfolio companies). The email read:

To: FoundryExec
From: [CEO of Foundry portfolio company}
Subject: Have you done business with anyone on this list

I'm on my way back from [an] investor conference where we met a bunch of VC & Private Equity guys.

The event was really useful. Not only did I discover a whole bunch of folks wanted to speak with us about investing, but I feel like I’ve been through an intensive two day course on Series B/C financings. Plus, it was useful to network with a bunch of CEOs and I think we made a few sales in the process :-)

If any of you have ever had any dealings with the firms and/or individuals below I’d appreciate your feedback/tips.

[this was followed by a list of 20 or so firms and individuals]

The response was close to instantaneous – probably 20 messages exchanged in the course of an hour or so listing out people’s experience with various firms. Responses ranged from positive: “Good guys, and super smart.  Happy to take meetings.” and “He was nice, quick to provide feedback, clearly smart.”; to practical: “They want $5m run rate before investing” and ” Very good investors but super picky. Min check size $25M”; to negative: “The most negative experience I’ve had with a VC. …the partner was totally disengaged, dismissive, and rude.” and “Generic VC.  Another friend has him as main investor and every board meeting is “Why can’t you grow faster.”; and “He came late to the meeting. Came off as arrogant and bored”

There were tons of other comments, but you get the drift. The point is that people talk (in this case the topic was VCs but you could imagine the same thread on larger technology company partnerships or the best tools for managing metrics across your business, etc.). And while there are always two sides to a story (and certainly everyone can have an off day) it’s important to remember that with every interaction you’re either building or harming your reputation. I forget this plenty. And this morning was a reminder of why I shouldn’t…

August 15th, 2013     Categories: Foundry Companies, General Business     Tags: , ,

Measuring customer satisfaction

trada There was a great thread this week on the Foundry CEO email list about Net Promoter Score and how companies are using it to measure the satisfaction of their customers (specifically in the case of NPS, their propensity to recommend the product or service to others). NPS can be a useful tool when used properly (which was much of the discussion on the email thread – who to measure, how often, etc.). But NPS can be cumbersome to measure, hard to understand granularly and not very helpful in letting you know what any given customer is really thinking about their interactions with your company (other than the extreme outliers).

The discussion and thinking about both the benefits and limitations of NPS got me thinking about a clever way that Trada measures customer satisfaction in their app on a customer by customer basis that I thought was worth passing along.

On most pages in the Trada app (Trada has a b-to-b focused application but this advice holds for b-to-c as well), there’s a small smiley face in the nav bar. It can exist in only one of four states – Happy, Meh…, Unhappy or Confused. It can only be set by the customer themselves (the admin login that the Trada customer service team uses doesn’t allow them to change the state) and customers are regularly prompted to update its status (which does not start “happy” so there’s no bias to just leaving it alone). It’s amazing how powerful such a simple idea has been for keeping tabs on how individual customers are feeling about their interactions with Trada and its application. It’s easy enough to use that customers engage with it. It can only exist in a limited number of states so it gets ride of the gravitation away from the edge that larger measurement scales tend to product, and is a great early sign to Trada’s customer service team that something is wrong with a client. The company uses data from this metric to reach out proactively to customers who are expressing confusion or dissatisfaction with their work on the platform. For Trada this doesn’t replace measuring NPS, which gives management a higher level view of overall customer satisfaction) but has been an extremely effective tool to help them deliver a fantastic customer experience.

Sometimes simple solutions can be very effective.

 

April 17th, 2013     Categories: Foundry Companies, General Business     Tags: , ,

With isocket, programmatic is taking a bite out of the big side of the pie

For about the past 18 months I’ve been talking about the coming of programmatic technologies (machine to machine buying and selling) to the premiums side of the display ecosystem. It was one of my “2012 AdTech Predictions” published last year in AdExchanger and I expanded on that prediction in a piece earlier this year, also in AdExchanger.

The basic idea is simple. Programmatic technology has made a huge difference in online advertising – bringing down transaction costs, allowing for better audience and content targeting, enabling publishers to better manage their inventory while at the same time allowing advertisers to make better buying decisions (not to mention spot ad buys). It’s been a great addition to the ad stack and for Foundry a solid area for investment (our two companies that play directly into this trend are AdMeld, which was purchased by Google late last year, and Triggit, the leading onramp to the Facebook exchange and growing extremely rapidly). Both AdMeld and Triggit – as well as almost all of the other companies that play in programmatic – are focused on non direct sold or remnant inventory. This was a logical place for programmatic technologies to be first applied. Publishers were more focused on the direct sold side of their business since that was where the large dollars were. And the marginal cost for a single impression (and therefore the cost of getting something wrong) was relatively low. At the same time, there was a huge volume of remnant impressions that were available to this ecosystem and because of the way these impressions had traditionally been grouped together for buys by the ad networks, there were significant targeting efficiencies to be gained by adding a software layer to this buying process (allowing more impression and user level information to pass through the system as well as opening up those impressions to multiple bidders through real time bidding).

Fast forward to today and because of these efficiencies and better targeting capabilities programmatic in general and RTB in particular has taken off even faster than most industry observers (myself included, although we’ve been the happy recipient of this trend) ever expected. But how can these same marketplace rules apply to the other side of the inventory equation – those high value impressions that are sold directly by a publisher’s sales force? This buying process is still handled manually, by fax and email primarily, adding complexity and cost to the process that is almost hard to imagine (which is one of the reasons that other forms of brand advertising remain in much greater favor than online). Dealing with premium inventory is a different beast and requires different technology and different rules of transacting than remnant. But the benefits in terms of marketplace fluidity, reach, scope and efficiency have an even greater potential on this side of the market.

I first met John Ramey from isocket about a year ago. We started talking about 16 months ago – after I had started thinking about the coming of programmatic guaranteed but before I was making much noise talking about it. isocket was well on their way building products and the isocket marketplace to go after this market. Over the months we’ve spent time together trading ideas about how this side of the business was likely to evolve, updating me on the progress of isocket, letting me know which ex-AdMelders he was bringing on board, etc. I’ve come away from each of our conversations more and more impressed with the platform isocket is building and more and more convinced that we wanted to have a chip on the table in programmatic guaranteed. John has surrounded himself with an impressive group of advisors, including James Beriker of Efficient Frontier and Dapper who will be joining me on the isocket board.

I’m extremely excited to be working with John and the isocket team and look forward to building a great business together. You can read the full isocket release here (which also talks about the launch of the BuyAds Pro product, the addition of James Beriker formerly of Efficient Frontier and Dapper to the isocket board as well as the addition of Mark Liao from Yahoo as CFO). Exciting times!

October 31st, 2012     Categories: Foundry Companies     Tags: , ,

SideTour’s Ultimate NYC Weekend

Today is the last day to enter SideTour’s contest for the ultimate New York Weekend. It’s a great chance to win a really unique weekend in New York from a company whose business is built around helping people find cool and unique experiences (SideTour is a Foundry portfolio company – in case that wasn’t obvious).

October 5th, 2012     Categories: Foundry Companies    

Linking around with LinkSmart

At the core of the Internet is the ability to connect together content. It was really this hyperlinking between pages that in many ways defined the difference between the early Internet and the bulletin boards and Usenet that preceded it. Google clearly saw the value of links, which they interpreted as people “voting” on the online content which they saw as most valuable. At the core of their search engine is the measurement of that linking activity. However while a huge amount of attention and investment has gone into tools to support publishers’ ability to create and post content and, of course, to create advertising around that content (literally around, by surrounding it in ads), publishers have lacked tools to properly support inserting, analyzing, managing and optimizing links in their content. Inserting links has remained a highly manual activity and a very static one – once a page has been created the links that were initially inserted are the links that remain.

LinkSmart is changing all that with the Total Link Management (TLM) product, which they announced today. TLM is an intuitive, scalable, automated platform that analyzes and controls keyword text linking with the goal of optimizing reader traffic flow – but all under the complete control of the publisher (no spam-like text link ads, no pop-ups). TLM works by identifying valuable keyword links within articles that have the highest performing click engagement, then utilizes the publisher’s own organic traffic to help readers find related content within their site or that of a partner or affiliate. In early results with LinkSmart’s pilot partners, the software performed 15 to 20 times better than other common traffic optimization techniques. The idea is to first give publishes insight into the links on their site and the click behavior of their site visitors. The system then gives publishers the ability to dynamically rewrite existing links, redirect traffic to different locations on their site or a partner site, suggests new words to highlight with links and gives publishers a complete view of how traffic is moving around. This is a huge opportunity for publishers to take control of their key asset – the content which they produce – and use it most effectively to better the experience for their site visitors while at the same time generating more traffic and more revenue for their business.

LinkSmart was built for publishers by a publisher. Pete Sheinbaum came up with the idea behind LinkSmart based on the experiences he had as a web publisher (Pete was the   CEO of DailyCandy which was sold to Comcast a few years ago). I met Pete well before that sale and he actually worked from our office while he was at DailyCandy for a while. LinkSmart was born in the Foundry office several years ago as Pete started working on his next big idea shortly after leaving Comcast.

I’ve written in the past about the benefits of “stealth mode” as well as the debates we’ve had at Foundry around whether or not companies should remain quiet about what they are planning, or be public about it from day one. In the case of LinkSmart, they’ve taken stealth to a new level here at Foundry – spending several years refining the idea and the product and working with early publisher partners to make the TLM both extremely powerful but also easy and intuitive to use.

So welcome LinkSmart to the light of day! We’re really excited about what you are doing!

June 27th, 2012     Categories: Foundry Companies, stealth    

The future of your past (our investment in Mocavo)

It’s funny how things have a way of working out. I wrote recently of our experience with SEOMoz – from initial meeting a few years ago to finally investing in them earlier this month. Today we announced our investment in Mocavo - a genealogy search platform that provides users with the best tools available to find information on their ancestors. More specifics on the business in a minute but the year long journey from TechStars to Foundry investment is worth noting.

I first met Mocavo at the start of last year’s TechStars Boulder. I liked founder Cliff Shaw a lot and appreciated (although at the time didn’t share) his passion for genealogy. When he asked me to mentor them through the program I thought it was a pretty safe bet. “Sure thing Cliff,” I said at the time, “there’s zero chance that I’d invest in a genealogy site, but it would be fun to work together!” Through the summer I held to that party line.  Cliff and I kept meeting regularly even after TechStars (Cliff knows my soft spot for sushi and would regularly invite me to the Mocavo offices for brainstorming sessions with the team over take-out). But over the winter the lightbulb went off on what a big idea Mocavo really is. I had known that genealogy is a huge (and growing) market but was beginning to realize just how novel the tools that Mocavo is bringing to the market are. And the pent up demand in genealogy circles for better access to content, better tools for sharing this content and better ways to bring offline content (the majority of historical content still resides offline). And how passionate genealogists are about their pursuit of family history and as a result how much time, effort and money they spend in their pursuit.

Launched in March of 2011 (although their paid features only launched a few months ago), Mocavo has seen great growth in visitors to its site, searches on its platform and information indexed in its search engine. The company isn’t out to replace existing genealogical tools – it’s here to augment those tools and provide an overlay social experience that is natural to genealogy. I couldn’t be more excited to be working with the Mocavo team (along with Cliff, I’ve gotten to know Richard, Andy, Ryan really well over the last year).

Welcome to the future of your past!

May 16th, 2012     Categories: Foundry Companies, Fundraising     Tags: , ,

What monks, chefs, lugers, singers, graffiti artists and actors all have in common

There’s a wealth of experience and expertise around us every day. We probably don’t give most people we pass running around our respective busy cities a second look, but rushing by you are people with interesting expertise and experience. Artists and actors; olympic athletes and monks; sailors and graffiti artists.

SideTour looks to unlock this community and enable them to market and generate income off of their unique expertise. These experts – “hosts” in SideTour’s terminology – use the SideTour platform to advertise their experiences. SideTour helps them market these experiences and handles bookings, billing, refunds, etc. on their behalf. SideTour events are designed to be shared in groups – often people who haven’t met each other before the experience (although the platform does allow for group booking). And the entire experience ultimately becomes about the event, about the host and about the participants. The results so far have been fantastic.

Importantly, SideTour isn’t just a listing service for events, as some other companies pursuing similar models are. And SideTour heavily curates the experiences hosted on its site to ensure that they are both unique and that the hosts have true expertise. The variety of experience on SideTour really show the effect of this curation (and you thought I was kidding about luging and monks).

I met the SideTour team at the beginning of TechStars NYC and immediately loved what they were up to. And I love the story of four founders, friends and colleagues for over a decade, coming together to form a business (sounds like the Foundry story). They’ve made incredible progress over the summer at TechStars.

The company announced today a $1.5M seed financing led by Foundry and RRE (there’s a great write-up on TechCrunch here). This money will help the company further build out the functionality of the SideTour platform and begin expansion to markets beyond its launch market of New York City.

It’s great to have the chance to work with them!

October 17th, 2011     Categories: Foundry Companies, Uncategorized