Foundry Group Blog
We are pleased to announce that we have made our initial investment in Awe.sm. The company provides a powerful analytics platform for social media to developers, marketers, agencies and publishers. We first met Awe.sm’s co-founder and CEO Jonathan Strauss at the Glue Conference in 2009 and have been following the evolution of Awe.sm with interest since then. As Awe.sm’s user adoption increased and their platform vision evolved and came into sharper focus (see today’s launch of the new awe.sm for developers platform), we decided it was time for Foundry Group to invest in Awe.sm.
For the first decade of the web’s existence, the largest single contributor of traffic to a web site was search-engine referral traffic, explaining the rise of Google and its current status as one of the pillars of the web. Following the emergence and hyper-growth of Facebook and Twitter, a new fundamental user behavior has emerged: sharing. As Facebook and Twitter have grown their user base to hundreds of millions of users, referral traffic from social networks has become an equally important traffic source to most web sites. More than 30 billion pieces of content are shared on Facebook each month, while over six billion monthly tweets generate more than three billion clicks per month on Twitter. Social sharing is now a critical user acquisition and engagement driver for any consumer application or site.
However, while search-engine referral traffic is relatively easy to measure, attribute and analyze, understanding how sharing behavior drives traffic is far more complex: understanding which users and actions drive more traffic, user conversions, revenue, etc. to a site requires a social native-attribution model and detailed analytics that can be deeply integrated at the application level and integrated with third-party and proprietary conversion funnels to measure and optimize key performance indicators that are relevant to each specific application developer, marketer or publisher.
Awe.sm has built a powerful on-demand platform and toolset aimed at providing application developers, marketers and publishers with the easiest and most flexible way to harness social data in their applications. The company’s goal is to become the key infrastructure powering quantitative performance marketing across the social sharing channel.
Awe.sm has been adopted by numerous Foundry portfolio companies including Topspin Media, Stocktwits and Big Door. Notably, each of the customers in the Foundry Group portfolio came to Awe.sm without any help or influence from Foundry Group’s partners, and feedback from the developers who have integrated Awe.sm into their applications has been uniformly positive with respect to the flexibility and power of the platform.
Awe.sm fits firmly into our Glue and Protocol themes and is most analogous to companies like SendGrid, Gnip and Urban Airship. With the massive (and still growing) importance of social as a channel to drive traffic, we believe that the social sharing gesture within an application will become as important a part of basic application infrastructure as email or mobile app notifications, which presents a compelling opportunity for Awe.sm to become an important developer infrastructure and analytics platform used by a huge number of application developers, marketers and publishers.
We are very excited to be working with Jonathan and the rest of the Awe.sm team, as well as our co-investors GRP Partners, Neu Venture Capital and kps+p Ventures.
We are pleased to announce that we have made our initial investment in Yesware. Based in Boston, Yesware is a seed stage company that is developing services that connect salespeople, their email and CRM. We believe that mapping this basic relationship – between the application in which salespeople, executives, and the people who support them spend the majority of their time and the app which is used to perform key business functions – is a critical step in driving organizational efficiency and further spreading both the ubiquity and power of CRM.
Salesforce.com successfully disrupted the CRM industry by shifting CRM from heavyweight, enterprise apps like Siebel (now owned by Oracle) to lightweight, easy to deploy, cloud-based apps. As a result, CRM became a mainstream app, replacing traditional SFA (“sales force automation”) products at the low-end and seeing broad enterprise adoption at the high end.
However, as CRM evolved, tight integration with email was missing. As we observed CRM deployments in many of our investments, along with CRM deployments in much larger companies, we saw two parallel universes emerging for a salesperson. A salesperson would spend their day in their email system – typically Outlook or Gmail – and then spend some time at the end of the day (often an hour or more) updating information in their CRM system. If the sales organization was disciplined, the process, while inefficient, was effective. However, if the sales organization wasn’t disciplined, over time the CRM system was garbage, as it was widely divergent from what was actually happening and well-represented in the email system.
While most CRM applications have paid lip service to email integration over the years, a short conversation with virtually any salesperson or sales leader will quickly validate that there is a functional disconnect between the two. As CRM systems continue to evolve, especially along the enterprise social computing dimension, focus on this integration continues to take a back seat. As a result, we think there is a huge opportunity for an application that once and for all provides the glue between CRM and email.
We are very excited to be working with the founding team of Matthew Bellows, Cashman Andrus and Raj Bhargava. We met Matthew and Cashman through an introduction from Raj, and entrepreneur we’ve worked with many times over the past 17 years. Raj was working on a similar concept and decided to team up with Matthew and Cashman to form Yesware.
We are also psyched to be working with Rich Miner and Google Ventures on another investment. Rich has been a good friend, a great mentor for TechStars, and a superb co-investor in Trada with us.
Yesware’s first product is available now. If you are a Gmail and Chrome user, download it today and try it out. You and your sales team will be glad you did.
Today we’re happy to announce that Federated Media Publishing has acquired Foundry Group portfolio company Lijit Networks. The deal is a great outcome for the company and its investors. As part of the transaction, Foundry Group Partner Seth Levine will join the Federated Media board of directors and Todd Vernon (Lijit’s CEO and founder) and Walter Knapp (Lijit’s COO) will take on senior operating roles at the combined business (both will report directly to Federated’s CEO Deanna Brown).
Lijit has built up an impressive business by focusing on providing web publishers with tools to better engage with, understand, track and ultimately derive revenue from their site visitors. Through Lijit’s search, analytics and insight products, a rapidly growing number of publishers are discovering more about their users and finding new and better ways to engage with them. Federated brings a similar passion for publishers to the combined entity (powering “the best of the independent web”). And together we think the two businesses provide a broad set of tools and monetization capabilities to their combined over 77,000 publishers.
You can read more about the transaction from All Things D, The Lijit Press Release or the Federated Media Press Release. Seth also has a post up on his blog about the combination as does John Battelle and Todd Vernon.
Please join us in congratulating Todd, Walter and the rest of the Lijit team on this significant milestone for the business.
Today, Foundry Group, a venture capital firm investing in seed and early stage US-based technology companies, premiered a documentary film illustrating through complex metaphors and stunning montages the secret lives of venture capitalists which has been rarely seen or understood, until now. Set amidst a backdrop of a highly competitive investment environment, the film follows four venture capitalists as they explore the intense relationships between themselves and the entrepreneurs in which they invest. While these relationships are critical to the long-term health of the start-up ecosystem, the VCs chose to communicate only through song and interpretative dance.
The film, entitled “I’m a VC”, is an in-depth, hard-hitting, and emotionally charged look into the human struggle of four venture capitalists trying to make the world a better place. Starring Foundry Group Managing Directors Seth Levine, Ryan McIntyre, Brad Feld, and Jason Mendelson, the film gives insight into the difficult issues venture capitalists face every day, making decisions that impact the lives of many, but perhaps most importantly, their own. The film leaves no stone unturned and delves into topics that few understand, such as determining lunch selections, competing with friends and family for deal flow, and feeling insecure about their choice of college education.
In speaking about the challenges of getting into character, Seth Levine struggled to find his words, “It was particularly hard for me to admit on camera that I had not attended Stanford, Harvard or MIT,” says Levine. “It has always made me feel a bit inadequate as a venture capitalist. But I’m working through it. Playing this role and spending three months growing a beard for it really shouts to the world that I can do anything!”
The film is incredibly timely, as it provides a transparent look into how early-stage VCs are dealing with increasing valuations and intense competition that comes with investing in new startups. McIntyre noted “Seeing my seven year old son pitch his company at a $20 million pre-money valuation to me was tough to take. I thought I would at least get a family discount.” Ultimately, Foundry Group lost the deal to a west coast-based VC firm who offered a much higher price and allowed McIntyre’s son to take some money off the table in the financing, enabling him to purchase the entire Lego Star Wars product line and a 64GB 3G iPad 2.
The film was sponsored by the new book “Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist” written by Feld and Mendelson.
“I am honored to have our book associated with such an important piece of American film making,” said Feld. “I was thrilled that I could find time to play this role between all my other speaking engagements and marathons. And don’t forget to buy my other book - Do More Faster.”
When Mendelson (who wrote and directed the film) was asked why the video was produced, he initially refused to comment, citing attorney / client privilege, but then had a change of heart and offered the following: “It’s been a decade since the balance of power shifted permanently from VCs to entrepreneurs and few people noticed. This film is a wake up call to the start-up ecosystem. VCs have real problems. We have feelings, too.”
The film was shot on location over a two day period in downtown Boulder in June of 2011. The vision came together after months of writing, composing, and choreography in Mendelson’s home studio, but remarkably with no rehearsals whatsoever. The cast was just that talented.
***** No entrepreneurs were harmed in the making of this film.*****
We are pleased to announce that we have completed our initial investment in Sympoz,. Sympoz, located in Denver, CO, creates enthusiast communities at the intersection of education, publishing, social and commerce, which inspire and educate enthusiasts while enabling experts to grow and monetize their followings.
Our distribution theme, including our investments in Zynga and Cheezburger, has shown us that delivering engaging content on a vast distribution network can make for a compelling company. One of the secrets of these companies’ success is spending relatively small amounts on content, over many different verticals and subject matters, and not relying on a “hits driven” content business.
We’ve been continuing to look for companies that fit this mold. The idea of owning content, across many major subject matters, on a large network, where content creation costs are relatively low is appealing to us. As part of this model, it is important to invest in management teams that understand the analytics driving the business extremely well. We feel strongly that these types of companies are best served by management teams that are led by business people with strong operating backgrounds.
Sympoz is creating the type of company described above around the enthusiasts and experts market. Enthusiasts have an insatiable desire to connect with experts and fellow enthusiasts to learn, inspire, buy, sell and trade against their areas of passion. The subject matter can be anything from wine tasting to knitting to music to health and wellness and beyond.
In these areas of passion there are many experts. These experts struggle to monetize their expertise because they are not adept at digital content production, technology development or marketing and lack a platform with which to leverage their expertise.
In short, there is a large disconnect in the market which represents billions of dollars in lost opportunity. Sympoz’s highly differentiated and interactive platform uses video, chat, forums, social media, and gamification techniques to create and market these marketplaces. They create highly targeted and specific content for enthusiasts, while giving a web presence to experts who otherwise would not have a digital content outlet.
We have known the founding team for a few years and have been really impressed with their success and vision to date and are excited to begin to work with them more closely.
Oh yeah – they are hiring too. Please check out their hiring page. And no, they aren’t all engineering jobs, either.
