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Internet Investing at, and other random stuff…

Investing and Participating in Social Services

October 29, 2010


Chris Dixon had a characteristically smart blog post recently where he states that he can’t take Investors or commentators seriously on the topic of social services when they themselves don’t use social services.
Chris owes it to his cofounder Katerina Fake that he became an avid blogger and tweeter. And I owe my own entry into social services to WordPress creator Matt Mullenweg, who in 2005 insisted that I blog as a condition to investing in the company he was starting,
I wholeheartedly agree with Dixon that to be a good social investor requires that you participate in them. But a caveat: while using social services is critical to understanding the medium, relying on one’s personal taste in social services to shape an investment strategy is a recipe for disaster. It makes a helluva lot more sense instead to look to user metrics and behavior, even if limited, than to rely on a data point of one.

The Best Viral Strategy: A Great App

October 24, 2010


I was chatting yesterday with one of the early leaders in building highly viral Facebook apps. When I asked him what he was thinking of doing next, I was surprised by his answer: NOT another insanely viral app.

His explanation was instructive.  After a few years mastering the viral game, what he came to realize is that the most viral apps need to be purpose built to be viral in a particular channel. The problem this leads to, though, is that this focus on virality comes at the expense of being a great consumer experience.

The flip side is that applications that are wildly popular with users will become “viral” (or at least grow rapidly) in their own right, even if not strictly optimized for it. is a great example, as is well described in this Quora thread.

The social app developer ecosystem is, albeit gradually, waking up to this reality.  To be sure, plenty of energy is going into working the viral channels; but at the same time I am seeing more and more developers realizing that an overemphasis on virality delivers more short term gain than longterm value creation.

The Right Time to Focus is When Your Users Tell You To

October 21, 2010


Earlier this week I had dinner with an up-and-coming entrepreneur in Silicon Valley and he recounted the history of his young but very interesting startup.

During its initial phase the project was directed at using a new technology to solve a range of different problems, and had received funding and a fair amount of buzz for this.

But after a few months he noticed that a particular feature was getting much more usage than the others.  So, at this point, he decided to really focus on that one particular feature, on one particular platform, and really nail the user experience.  Which he did: since launching, he has seen awesome adoption both in terms of number of users and user engagement.

Another great example of how getting product out there, and following your users, can help lead you to success.

And, the lesson here — the right time to focus is when your users tell you to

Another Dogpatch Exit!!

September 29, 2010


Congrats to Jason Shellen and the entire Thing Labs team on yesterday’s announcement that they Thing Labs was being acquired by AOL.  Rich irony that TechCrunch, which originally reported that the deal was rumored, was also bought by AOL on the same day.

We are psyched to report that this is the third exit for Dogpatch Labs in under a year, following Google’s acquisition of AppJet and MTV’s acquisition of Social Express.

We will have exact numbers soon, but between financings and exits the number of Dogpatch success stories now exceeds 50. Way to go guys!

And last but certainly not least, Thing Labs also was a very nice return for Polaris 😉  It’s been a good September for us.  Last week two of our portfolio companies had big exits: Internet Brands was acquired for Hellman & Friedman for $640M, and Asthmatx was acquired by Boston Scientific for about $450M.

Why ask questions thru formspring when you can use Twitter or FB? Btw, I love formspring… just asking.

July 11, 2010


I think what we are learning from the rise of social Q&A sites like Formspring is that this is a distinct category of social behavior. Just like Foursquare shows us that the "checkin" is its own vertical category. And part of what it means to be a distinct vertical is that people prefer a distinct experience or channel for this activity. I expect over time we will see other examples of social verticals. And, having missed Foursquare but gotten into Formspring, I hope to back some more of them!

Ask me anything

What it Means to be a Dogpatcher

July 1, 2010


We are sad to see the inimitable Kamal Ravikant move up and out of Dogpatch SF. But Kamal’s farewell email to his Dogpatch comrades does such a nice job of capturing the spirit we aspire to foster that I asked his permission to reprint the email here (please forgive the gratuitous praise to me and Ryan):

Thank you Dogpatch

Most of you know me – the guy with the crazy hair, sitting by the window.  I’ve been at Pier 38 pre-dogpatch (yup, there was such a time).  It was just myself, the Etherpad team, Jambool, the Mr. Tweet trio (Ming et al), and Socialmedia.  I loved working here, told people that I had the coolest office in the world.  So cool, that I moved and sold my car so I could walk to work and spend more time at the office.  Socialmedia expanded, then contracted.  The Etherpad team ran away to join Google.  Jambool expanded.  Ming became a permanent fixture at the office, here no matter how early you got in or how late you left – there was Ming, working, hunched over his laptop, eating a bowl of…..something.

Then, the office got infinitely cooler.  Ryan and Mike from Polaris started bringing in small teams of highly-talented and motivated folks.  I loved it.  This place became my personal think tank.  Have a question about online payments?  Just walk downstairs and talk to the guy who built Amazon payments.  Issues with building out your team – anyone here can empathize and will share hard earned advice.  Startups came and went and I made close friends.  Our team grew, contracted, and is growing again.

And now, with growth, it’s time to move to the next phase.  We’re leaving Dogpatch.  I’m doubling my walking commute from 4 to 7 minutes – that’ll be tough, but more than anything, I will miss this space and energy of such talented and driven people.

I’ve been in the Valley since the tail end of the first .com boom.  Been part of rather interesting things, but this is my favorite experience so far.  Ryan and Mike are some of the best Venture guys you could ever choose to work with.  Mike genuinely cares about his companies and founders.  You should hear the pride in his voice when he describes them.  And Ryan is a former entrepreneur, as solid as they come.

I want to express my gratitude to them for allowing our team to become a part of this community and highly recommend that you involve them in whatever you do, whether it’s at Dogpatch or after.  I know we will.

If I can be of help to any of you in the future, please don’t hesitate to contact me.



Bringing Your VC Inside the Tent

May 29, 2010


Entrepreneurs are often curious to know what a VCs style is for working with his/her portfolio companies.  And, we usually respond with a bunch of bland generalizations about “collaboration,” “partnering,” “value-add,” blah,  blah, blah.

The reality is, for me at least, that I end up having different styles with different entrepreneurs.  My favorite dynamic is where the entrepreneur sees me as an extension of their team; while not likely (or able) to participate in the same capacity as team members, nonetheless welcomed inside the tent either to offer perspectives or sometimes just to know the company, and its challenges and opportunities, better.

Three of my companies have put their products where their mouths are, inviting me to join the realtime group communication tool they use internally.  Automattic and Thing Labs using their own technology (P2 and Picnic, respectively), and The Start Project using Socialtext.  And each of these has been a great opportunity for me to get closer to the daily lives of these startups, which I am sure will make me a more effective board member/investor/advisor.

So, if you are an entrepreneur, and have some sort of internal messaging system for your company, I’d encourage you to consider using these systems to bring your investors and advisors inside your tent.

Why Polaris is Backing Formspring

March 23, 2010


Yesterday Formspring announced its $2.5m Series A. Led by Baseline Ventures and FreeStyle Capital, the round included a who’s who of other angel investors including Ron Conway’s SV Angels, Maples Investments, Chris Sacca’s Lowercase Capital, Kevin Rose, Travis Kalanick, Dave Morin and Scott Dorsey.

And Polaris.

Though a departure from the typical VC model  (we were a relatively small “follower” in the round, taking a very small ownership position in the company and not taking a board seat), we are thrilled to be involved with Formspring.

Formspring is a “social Q & A site” that makes it very simple for people to invite their friends/followers to ask them questions.  Just as the “check-in” is becoming a particular form of social network activity, so too is the “social q &a.”  As sometimes happens in the consumer web, formspring seems to be simply addressing a strong consumer impulse.

Since launching last Thanksgiving, Formspring has had a meteoric rise to 50M monthly uniques and is seeing a torrent of activity on Twitter and Facebook.  After writing this last sentence, I did a search for “Formspring” on Twitter, and saw 500 results generated in under a minute.  Yes, 500!

What is particularly exciting to my partners and me is that Formspring directly addresses a problem we have been thinking about for a couple years now: helping people come up with things to publish or post.  This was the original thesis behind our seed investment in Plinky, but after several months founder Jason Shellen pivoted and has since been focused on Brizzly. Enter Formspring.

If you are running out of things to post about, don’t sweat it — sign up for Formspring and let your audience do the work by asking you questions. Leave your creative juices on the couch, sit back, and answer!

Why to Advertise in Concentrated Bursts on Facebook

March 23, 2010


Inside Facebook has very interesting coverage of Levi’s Facebook advertising strategy around its “Fader Fort” event at SXSW. One of the takeaways: there are benefits to doing Facebook advertising in short but intense bursts.

Typically, display ad campaigns are designed to maximize reach and frequency. But advertising around a social graph introduces a new dynamic.  If a number of your friends have recently interacted with a brand’s FB app, those actions are more likely to show up in your news feed, which will drive more viral growth of the app.  So, it makes sense to deeply penetrate particular social graphs in a short period of time as opposed to hitting a broader demographic with consistency over time.

Brands like Levi’s are getting increasingly sophisticated in understanding social graph dynamics and developing new advertising strategies for the new media known as Facebook, and it is worth watching them closely to learn the latest tricks of the trade.

All The World’s A Social Game

March 19, 2010


The meteoric rise and billion dollar valuation of Zynga has made social games the hot new thing. So we should all be rushing to fund the next Zynga, right?


The biggest deal about Zynga’s runaway success, for me at least, isn’t that a social games company can be a huge business. It’s that game mechancis are now cool.  Seems like every Consumer Internet entrepreneur I talk to these days is applying game mechanics to make apps outside the game category more engaging and more viral. And I think this is a great thing. Game mechanics are designed to help people have a fun and engaging experience; what consumer app doesn’t aim to offer a fun and engaging experience?