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December 19, 2006
Why I Like Our ExpoTV Investment
As I’ve done with others in which I’ve been intimately involved with a new investment here at Masthead, I wanted to write a blog post describing why I believe our most recent is a promising one for our firm (See previous posts on NewsGator, Intercasting, and Tremor Media). Today ExpoTV announced a $6.0M investment co-led by Masthead Venture Partners and Prism VentureWorks, with Brady Bohrmann of Masthead and Will Kohler of Prism joining ExpoTV’s board.
Expo Communications offers short-form video-based product shopping content collected from consumers, produced in-house, and submitted by advertisers. With this asset base of digital video, the company syndicates and monetizes it via distribution to online portals, online e-commerce retailers, comparison shopping engines, and cable video-on-demand outlets. Most visibly, on the ExpoTV.com site you can browse the over 20K "videopinions" - user-generated video product reviews - which the company has collected in the past few months. But the current incarnation of this website is only a partial glimpse into the opportunity which the company has begun to engage in order to create tremendous value for its investors.
The ExpoTV Opportunity: Intersection of Online Video and Social Commerce
When I first discovered ExpoTV earlier this year, it struck a deep chord with a number of themes which I had been pursuing. Not only is it capitalizing on the fundamental shift towards video-based content on the internet, but it is also a prime example "social commerce," something I’ve longed viewed (and blogged about here here and here) as a ripe investment opportunity.
Almost a year ago in January of this year, I posted that "There’s no question that the basic premises – the who, what, where, when, and how – of consumers’ interaction with video content is dramatically changing, and that’s getting people excited." Certainly we’ve seen how the prediction then that 2006 would become the "year of video" has proven true, but I believe that we are still at the beginning of the transformation of how we interact and relate to video content online. We’ve seen the adoption of broadband spur short-form user-generated video content, and the explosion of consumer usage of sites like YouTube and Revver have demonstrated that the visceral nature of viewing video online is extremely powerful. However, the content contained within these sites is often random and haphazard, leaving it difficult to monetize as some advertisers shy from the unpredictability.
The other emerging opportunity, which is less recognized, is to facilitate and leverage social commerce - providing consumers with rich social context to the purchases which they make through the use of web social software. With a significant portion of consumers’ time online spent online devoted to researching and evaluating future product purchases, the tools available today to aid in this activity (user-generated text review sites, price comparison engines, and editorial content publishers) don’t fully provide vivid social relevancy to the process. People are genuinely interested in connecting with each other about and expressing themselves through the products which they buy and their experience with them. Yet there isn’t a primary social destination site where individuals can shop together in a strong community (i.e. social shopping - sharing the act of shopping itself with others. Just as some people enjoy shopping with others in the real world, some will enjoy doing it virtually within a social network).
The opportunity, then, is for purpose-driven content which benefits both advertisers and consumers alike. ExpoTV capitalizes on this need by facilitating, aggregating, and distributing newly available video-based advertorial content (where the content itself is advertising). By value-add packaging of consumer generated videopinions and advertiser supplied video, along with its own editorial impartial product reviews and produced content, ExpoTV possess a highly-monetizeable digital asset for circulation in its own online property, others’, and on MSO’s VOD channels. This product content, in turn, directly facilitates online e-commerce transactions, making it much more valuable than other non-product editorial or user-generated content.
Content creators and community participants benefit from expression and connecting with others; consumers who reach the content via syndication benefit from the direct product knowledge with meaningful social context; advertisers benefit from awareness of their products; syndication partners benefit from added content and increased revenue. And, of course, ExpoTV benefits by providing and monetizing the entire platform for this intersection of constituents.
Founders Daphne Kwon (formerly of Oxygen Media and Walt Disney) and Bill Hildebolt (General Atlantic) have brought on Thi Luu (Amazon.com) and Jorge Escobar (Yahoo!), along with many other extremely important folks, to the team. And they’ve already accomplished quite a bit to date – collecting 20K videopinions in the past nine months, signing and launching a number of notable online syndication relationships (click to see examples of collaboration with Yahoo, AOL, Buy.com, Google, just to name a few; others impending), as well as extending the reach of ExpoTV to 20M VOD homes (on MSOs including Time Warner, Comcast, Charter, and Verizon FiOS TV).
Building on these accomplishments, we at Masthead are excited about our investment and the chance to work with the Expo team and Prism VentureWorks to further extend the platform and help transform consumerism on the web.
December 18, 2006
2006 Was The Year of... Syndication Widgets
There are many blog commentators out there (including myself) who at the beginning of the year predicated that 2006 would be the year of video (here here here here). And, of course, we are all now patting ourselves on our back for what amazing predictive powers we had. But if we all saw it coming, is it really a story (or much of a prediction)? Hardly. I think that the real (and largely uncovered) story of 2006 is the emergence of online syndication widgets. I didn’t see the importance of a few simple lines of portable HTML code affecting the online space so dramatically, and I suspect most others didn’t either.
First, it should be said the rise of online video was fueled in part by widgets – YouTube built a good portion of their own traffic through the syndication of their player throughout the net (and especially on MySpace). Many photosharing sites (like Photobucket and Filmloop) similarly based their viral expansion on syndication of their hosted content through widgets on MySpace and other social networks. The success of these services spurred Fox Interactive Media into launching TheSpringBox, a “widget” platform for MySpace users that also works on the desktop. Similarly, Google released Google Gadgets in May, and Yahoo released “the long-awaited Universal binary of the Yahoo! Widget Engine version 3.1.4” that month as well. In my own daily consumption of information, blogs like Widgify and Flying Seeds became staple reading.
Of course, numerous startups got into the mix – rising social networking star Bebo launched “Bebo Widgets” last week, Widgetbox/PostApp provides a directory of widgets, and most of the social shopping sites leverage them for user-expression. Widgets are now the building blocks of the emerging set of personalized start pages. The Chumby promises to expand the reach of our widgets from our computer screen and into the rest of our homes.
And the introduction of WidgetsLive conference one day before the now seminal Web2.0 Conference became a notable sign of the times. The list goes on and on, as the power of widgets which syndicate content (whether it’s media, interactive software, or otherwise), as they fly across the internet, is challenging the basic assumptions of the web (“are pageviews obsolete?”).
And it all seemed to happen in 2006 without much premonition.
December 11, 2006
Seven Lessons Learned for Startups
In the last few weeks, there has been some chatter in the VC blogosphere about the importance of good mentors. Since my own first job, I personally have been very lucky to have a number of mentors, managers, and teachers who have shared their business wisdom and experiences with me. These folks have imparted a number of lessons which I have deeply internalized and have made a significant impact on how I view the business world. Many repeated mantras which became familiar, but all spoke lessons which I’ve integrated along the way. The following is a list of those quotes which were often repeated to me (along with a nod to those from whom I heard them) – they are the ones most significant to me and those which I believe can be generalized and applied to startup situations.
Seven Lessons Learned for Startups
"Input not consensus." – Scott K. While many have different views on management styles, I favor decision-making processes being inclusive to all parties who deserve to share their opinion, but having the ultimate decision made by a single person who is ultimately responsible for it. The problem with true consensus thinking isn’t that good decisions don’t come out of it, but rather that it’s unclear when final decisions are made. Startup situations aren’t the right place for muddled thinking or unclear directives. Once a decision has been made, owners of responsibility must immediately run off and execute. Although many extremely successful organizations were built on consensus-driven cultures, my opinion is that there isn’t time for it in a startup - but there is absolutely time for everyone’s input.
"Be authentic." – Mark L. As I’ve written previously, I believe most successful entrepreneurial endeavors are sprung from a genuine idea born from true experience or direct & tangible observation. Companies that emerge out of a team with heritage in a particular market and technology have direct understanding of that realm. Furthermore, when employees act in an open and authentic manner with each other, it helps foster a team environment which is productive for everyone. It is with this authentic foundation that great companies are built.
"Dead cats don’t bounce." – Joe G. Unfortunately, many many startups do not succeed. It takes a strong entrepreneur to admit when a particular project, product, or company isn’t destined for success. (Often those failures lead to learning experiences from which new successes are born.) But if something isn’t going to take on life, startups must realize when that’s the case and move beyond the fleeting hope for it to take off.
"Solid-gold relationships." – Bill A. The most important relationship that any company has is with its customers. And the most important of those are the key large or influential customers. It is with those special constituents - whether they are consumers, SMBs, or enterprises – that should be nurtured and cared for. Not only do they provide the (first) notable revenue, but also necessary market feedback for further refining the product offering. With all of the distractions that arise in a startup setting, it’s extremely important to keep focused on cultivating these special relationships.
"Get involved." – John C. I used to have this quote from a former boss hanging above my desk. A daily reminder that when deciding whether to take action, experiment, or try something new, it is usually better to take this route than to not.
"Take time to think." – Kelley M. While action is always a priority, deciding the correct action often requires reflection. Dedicating time during a critical juncture in a project or undertaking to leave time for unstructured individual contemplation of the larger current work situation provides an opportunity for everyone to obtain a richer perspective. It’s an underutilized tool to require that people occasionally briefly pause from the task-oriented workday (not just to provide brief respite from the pile of to-do’s, but) to contemplate what efforts truly will have the most impact on the company.
"Reward those who deserve it." – Kevin M. Credit should go where credit is due, with the right people rewarded for their efforts. And that doesn’t just mean appropriately compensating people financially. Particularly in a startup where there is less cash to share, recognition and acknowledgement of accomplishment goes a long way. A long way.
(The above mantras are obviously not the only, nor are they necessarily the best, words of wisdom which I’ve ever received. However, they are the ones that have sunk in internally for me the most. While this is a professional post, it is also a personal one as well, as I am extremely appreciative of those listed above who have made a direct impact on my own thinking and direction over the years and will continue to do so.)
(This is the fifth installment in my “Sevens” series of posts. See also Seven Founding Sins, Seven Reasons To Become a Founding Entrepreneur, Seven Questions Employees Should Ask Before Joining a Startup, Seven Common Tactical Mistakes Entrepreneurs Make in their Initial VC Pitch which are Simple to Fix.)
December 6, 2006
The Web Energy in Boston - WebInno
One week ago, I organized another meeting of the Boston Web Innovators Group (aka "WebInno"). This periodic gathering of people interested in web and mobile innovation has swelled in the past year since I formalized the group – we had almost 200 people attend the most recent session last Wednesday night (see RSVP list). Each meeting we have two or three self- or angel- funded startups give a five minute demonstrations of their innovative service to the crowd. This segment is followed by a networking portion with five additional companies at tables along the periphery of the room giving informal demonstrations to small groups.
A snapshot from across the blogosphere speaks for the most recent event’s success:
• "…the energy of the room was amazing… The presentations were real people, honest comments." Sudha Jamthe
• "Great location and good networking. My second so far, and I enjoy the theatre/performance of it." Ami Chitwood
• "I got to see some interesting new web apps." John Wall
• "My first Boston Web Innovators Group… I’m starting to feel like the Boston scene is heating up again… It was great to see all the people and feel the energy in the room." David Evans
Last Wednesday’s gathering featured Mike Kowalchik from Grazr (RSS/OPML widget and scripting language) and Brad Powell from Calabash Music (a "global" music destination site). Side demonstrators included FineTune, StartupBusinessSchool, radeo.net, Citysquares.com, and Offertrax. All of these are examples of local companies which are utilizing the web in some unique way. And as the above comments show, these exhibitors gave the crowd plenty of material for engaging discussion in the schmoozing which followed.
This recent gathering was no exception, as the Web Innovators Group has had the privilege of hosting a number of notable startups over the past year including Sconex (acquired by Alloy), Aerodiet (acquired by About.com / New York Times Co.), Reddit (acquired by Conde Nast), Blogniscient (now part of Top Ten Sources), and MyBlogLog.
With the Boston web innovation scene revitalizing, I am looking forward what 2007 brings, and am happy to announce our next WebInno event will be held on Tuesday January 30th, 2007. You can read more details and RSVP on our event wiki page: http://webinnovatorsgroup.com/wiki/webinno10.
There’s more info about the group itself on our dedicated site and blog. And as usual, if you are interested in presenting at the coming in either format, please reach out to me at the e-mail address david at web innovators group dot com.
I’ll see everyone in January at the next Web Innovators Group…
(P.S. I am very appreciative of all past demonstrators who have helped contribute to the Boston scene: Accolade, Assembla, Bloggerkit, Blogniscient, BlueTrim, bvine, Calabash Music, Citysquares, MyBlogLog, Calorie-Count, Echonest, Fat Calico, FindFreeTime, FineTune, Glance, Grazr, Isabont, Lifeknot, Locamoda, LoudCity, Kiko, Pawspot, Plum, Proxpro, tourb.us, Nextcode, Offertrax, radeo.net, reddit, Referral Monitor, Sconex, SmackChannel, Startup BusinessSchool, Swaptree, Tourfilter, and Traineo. And additionally, I’d like to thank all of the attendees to the events – it’s you who have made this a thriving web scene in Boston.)
December 4, 2006
Small Contributions are a Big Deal
Most of the excitement about user-generated content usually focuses around blogs, videos, reviews, social network profile pages, etc. However, microcontributions – extremely small interactions where the user participates in the community of a website – are also becoming a notable trend, and it’s a shame to over look them because they posses a lot of power. The onslaught of AJAXy rich internet applications, giving web pages the ability to accept input without refreshing, has allowed sites to cover new ground in this area.
There are an increasing number of good examples of microcontibutions. Netflix pioneered with its simple one-lick five-star ratings review of movies. All you have to do is “digg it” to vote on a news story which could make it to the top of that blockbuster site’s home page. During the registration process for Masthead portfolio company TripConnect (a social network for travel advice), users click on places that they’ve been or want to go, so that they can later on connect with likeminded individuals. And in the past couple weeks, I’ve seen a number of sites with the meme of pitting two things beside each other to determine which one is better (photos, art, people, karaoke performances). With a simple click of a button, people are engaging with a site, and a community.
Microcontributions are simple and elegant way to get people to connect, to defeat the resistance not to contribute at all. By reducing a user workflow into a series of incremental contributions rather than just a large one, sites which use this tactic can overcome the initial resistance to participate. Once a user is familiar with interacting with a site at a minimal level, s/he is more likely comfortable to expand that relationship. More importantly, in addition to becoming lead-ins to entice people to contribute larger portions of content, microcontributions also become content in and of themselves. Aggregated votes and clicks become interesting, and can be even central to engaging consumers with a facing web app. I think the lesson here is that when designing a social site, it’s important not to just concentrate on gathering content from creators, but also consider gathering microcontributions from participators who may not (always) be creators themselves.
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