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.

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.*****

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.

As part of our Human Computer Interaction investment theme, we’ve become firm believers that computer vision technology is fundamentally changing many of the ways that people interact with computers.  With our prior investments in Oblong and Organic Motion, we’ve seen the impact of this kind of technology and a future of applications built around computers being able to “see” what is going on in the real world.

As the performance of mobile computing devices continues to improve rapidly, computer vision technologies are ready to be implemented across these platforms as well.  However, the technical hurdles are, in some ways, even more difficult given the inherent limitations in the mobile ecosystem including processing speed and network bandwidth.

Currently, there are companies that have introduced specific mobile applications that use limited computer-vision techniques, but until now, no one has produced a platform that allows developers to create dynamic content that automatically leverages best-in-class computer vision technology.

Occipital is creating this platform, while also creating highly popular applications as specific examples of their technology.  Their goal is to make real world environments computationally interactive via the devices that we carry in our pockets every day.  Their first three applications (ClearCam, RedLaser, and  360 Panorama) have all become best sellers in mobile application stores.

Occipital was founded by Jeff Powers and Vikas Reddy. They were part of the TechStars Boulder program in 2008.  We were active mentors to their company and have stayed in close contact since their graduation from the program.  We are very excited to have the opportunity to continue to work with them.

Our partner and NVCA board member Jason served on the BRP along with a number of senior industry officials. He has been particularly involved with many of the frustrating private company accounting standards. For instance, the sheer stupidity of things like FAS 157 prove how disconnected the current FASB board is from private company accounting concerns.

Hopefully FAF will follow the recommendations of the BRP. Thanks to the NVCA for their support.

We are blessed to have a large number of entrepreneurs who are interested in us as potential partners and the volume of email we receive can sometimes overwhelm us, so we began the investigation for a more streamlined approach.  We hired consultants from McKinsey & Company last summer and after 9 months of working with us to learn how we operate, it was obvious that Twitter was the right choice.

The benefits of Twitter versus other platforms were clear.  First, everyone is on Twitter, so there is no chance that an entrepreneur wouldn’t be able to reach us.  Second, this will greatly reduce the number of spreadsheets and financial projections that we would feel obligated to read.  We realize that financial projects are just that – projections and therefore are never accurate.  We’ve decided to stop pretending that they make sense.  Third, and perhaps most importantly, if an entrepreneur cannot explain their opportunity in 140 characters or less, how focused can they be?

Besides, with the amount of board meetings that we attend, verbosity is not a wanted characteristic.

Speaking of board meetings, we have begun the process of streamlining board meetings with McKinsey, as well.  We’re hoping to devise a similar approach using Skype to eliminate the need for face-to-face meetings and travel.

So, if you are an entrepreneur and want to work with us, Tweet us!  One thing to note: PLEASE do not send us twitter links or multiple tweets per company.  This is just as bad as email and really destroys the spirit of what we are trying to do here.

We look forward to hearing from you:

@bfeld                                                 @ryan_mcintyre

@jasonmendelson                          @sether

Eric has been a great partner to work with on Defrag as well as our Glue Conference in the spring. The post below is a great example of why we love working with him and the passion that we all feel about the conferences we’re involved with. At the end is a special offer on registration. We’d strongly encourage you to join us at the event and the offer below is the best discount going (but note that it ends on Wed). See you at Defrag!