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Think Big. Move Fast.

Education is a topic near and dear to my heart. Today I attended the demo day for Co.lab, an incubator focused on the intersection of edtech and games. Co.lab is a joint venture between the non profit venture philanthropy fund New Schools Venture Fund and Zynga.org. It was a terrific day, with a number of great companies presenting, all focused on improving the educational experience for K-12 students. Co.lab is a great example of how Zynga brought to bear its expertise in game development to serve a greater social good. Zynga‘s involvement got me to thinking about how a startup can integrate social impact with its core mission, and how some other startups have done exactly that.

Sometimes a social movement gives rise to new markets and business opportunities. A great example over the last couple of decades has been the increasing awareness of the health implications of eating organic food, which has driven the growth of Whole Foods. Educating people about the issue also expanded their target market. The key factor in making this work is authenticity.

THE HONEST COMPANY

I think the Honest Company (a Lightspeed portfolio company) is a great example of a startup doing just that. They believe that “chemical free” is the new organic. Everyone prioritizes the health of their children, but not everyone understands all the risks that their children run. Just a few years ago baby bottles were made out of BPA, and now it is banned because of its interference in children’s sex hormones. And we are constantly learning more about the dangers of phthalates, PVC, alkphenols, phosphates and a whole host of other chemicals. The Honest Company is simultaneously educating parents about the risks that chemicals can pose to their children’s health, and providing a safe alternative. Their success and social good are inextricably intertwined.

honestco

Their success comes from the authenticity of their approach. Christopher Gavigan, one of the cofounders, was previously CEO of the nonprofit Health Child Healthy World, where he focused on educating parents about toxic risks, and is the author of a book by the same name. And Jessica Alba, another cofounder, has used her platform as a highly successful actress to vocally oppose of the risks posed by chemicals, having testified on senate committees to this effect and taken an active role in advocacy work. All the founders are parents of young children who came at this problem through first hand research and experience. This authenticity comes through in the brand and has caused the company to see tremendous growth in awareness and sales as more parents embrace this philosophy. We believed in their mission so much that we led their Series A investment round.

UPWORTHY

Another great example of authenticity in combing a social movement with a business model is Upworthy.com. Upworthy is social media with a social mission, in their words, “to make important stuff as viral as a video of some idiot surfing on his roof”. They take meaningful content about important issues, ranging from bullying to global warming, gun control to empowerment, and make it viral to bring it to the attention of the Daily Show generation. And they do it incredibly well. By some accounts, Upworthy is the fastest growing media site of all time, racing to 30 million unique users in its first fifteen months. Examples of the content that they have gotten viral include the video with a police sketch artist, showing how women look versus how they describe themselves, and the video about Zach Sobriech, a teenage musician who died of cancer, who subsequently became the first independent artist to hit #1 on iTunes.

One of the founders of Upworthy is Eli Pariser, the former executive director of MoveOn. The other is Peter Koechley, the former managing editor of The Onion. Together they bring that combination of editorial voice, humor and copywriting that is so critical to getting content to be viral, to a genuine interest in worthwhile matters. And once again we see that authenticity paying off with very fast traffic growth.

ZYNGA

Companies don’t have to have a product that is aligned with a social movement to integrate authenticity into their philanthropy. Coming back to Zynga, they have found a number of ways to align the company’s mission with various social projects, even beyond co.lab.  Zynga.org, a nonprofit organization dedicated to using social games for social good, has raised over $15 million for more than 50 non-profits globally, with most of the fundraising occurring in game. Zynga has also extended its philanthropic efforts offline. One of its most recent endeavors was as lead donor in the construction of a new playground that opened in July opposite the historic Ferry Building in San Francisco. Zynga employees have also built a number of other playgrounds nationally – literally with their own hands. Zynga.org‘s real-world commitment is a natural extension of Zynga’s mission to connect the world through games, providing both financial resources and staff time to build playgrounds for children in the cities where Zynga employees live and work.

Philanthropy and social movements are not something that can simply be stapled to an existing business. Customers detect such opportunism and they reject it. Authentic connections between a company and a social movement align incentives and resonate with customers and with employees, creating a lot of positive value for both society and shareholders.

In what ways is your startup integrating social good into their mission?

 

 

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This morning, John Schroeder, CEO of MapR, shared a great post on what it takes to run a company that is “Built to Last.” As John writes, being “built to last” is an idea that is arguably most relevant in the technology world, where customers invest in products that are strategic to their businesses and where there are relatively high switching costs.  But, I think his post is a must read for anyone looking to start a company today.

Built to Last: How MapR’s Business Model Supports That Goal

As a venture capitalist, we are looking for executives like John that think big and have a vision for not only how a technology can solve a problem, but also how that technology can disrupt a market or even create a new one. John and the rest of the MapR team are not trying to build a good company, they are building an exceptional one with the type of staying power that companies like Oracle, Salesforce and Riverbed have achieved.

If you haven’t yet heard about MapR; the company delivers a Big Data platform that supports the mission-critical and real-time production demands of today’s data-intelligent enterprise.  It has the largest deployment by a factor of 10 in the financial services industry, and is the chosen platform for over 500 customers including the world’s leading retailer. 99% of MapR customers renew their subscriptions, while 88% purchase additional capacity within the first 12 months of initial purchase.

John ends his post by stating that “In a market the size of Big Data, many companies will succeed, but only one will be around in 20 years…At MapR, we are confident that we will be that company.”  I couldn’t agree more.

 

Follow me on Twitter @barryeggers

 

 

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Successful media is entertaining. It has to be to get you to keep coming back day after day, many times a day.

Getting this right requires a mix of serendipity and high value content. Not enough high value content and I feel like I’m wasting my time, and I leave. Techcrunch had a post this weekend speculating that Twitter quitters are leaving because of a noisy feed. On the other hand, not enough serendipity and a service starts to feel stale, and I leave. I may as well be using an RSS reader. Useful, but not fun.

This is the core problem of discovery, balancing novelty with content that is interesting to me. It is a signal vs noise problem. I’m willing to see some things that are not interesting to me (noise) so long as there is enough interesting material to make it worth while (signal), and the “cost” of the noise is not too high.

Users always underestimate their desire for serendipity. They think they know what they want to see, but they don’t. Serendipity, in the form of breaking news, viral posts, “most popular” content, and randomness of all kinds always garners attention even though users will tell you that they don’t want to see it.

Most social media sites solve this problem with the feed. A “friend” or “follow” dynamic puts some initial filter onto the content of the feed. But as the site grows, the volume of content that can go into the feed quickly overwhelms what a user can consume. It has to put some filters on what makes it into the feed. This gets to a personalization problem. How does a site determine what may be interesting to me? And how coarse a filter does it apply? The tighter the filter (executed well), the more likely I am to get items that interest me, but the less room there is for serendipity.

By viewing this as a signal vs noise problem, you can see how different sites solve this problem differently. If you have a site where the cost of “noise” is high, you will want to keep a tight filter and make sure that most of the things in the feed are interesting. But if you have a site where the cost of “noise” is low, you can afford to keep a coarse filter and allow for more serendipity.

Longform video is the most expensive form of noise. When you watch a new TV show, it can take one or more full episodes before you know if you enjoy it. That can be an hour or two of time. So long form video tries to keep a tight filter and guide you towards shows it has high confidence you will like. This can take the form of suggesting different episodes of a show that you have watched a lot, or simply the most popular shows. But it never shows too many at a time.

Short form video is less expensive noise, but still noise. It can take a few minutes of watching a youtube video before you know if you like it or not; the average Youtube video is watched for four minutes. And once again, Youtube keeps a relatively tight filter, relying on subscribed channels and related videos for its recommendations

Long form text is the next most expensive noise. Examples would be most news, blogs, magazine and media sites. Read an article and you’re in at least 30 seconds before you know whether you’re enjoying it or not. Most such sites have 10s on links on their home page, the equivalent of their feed, and the editors spend a lot of time optimizing to determine which articles make it to the home page.

Short form text is pretty cheap noise. In the second or two that it takes to scan a tweet or Facebook status post to see if it is of interest to you, you’re already on to the next item in the feed. So it is no surprise that these are infinite scroll feeds within a single column.

Finally, if a picture is worth a thousand words, then it makes sense that picture based media is the cheapest noise of all. In a fraction of a second you can glance at a picture and know if it captures your interest. So it can have the coarsest filter of all. And that is why you see an endless scroll of photos in multiple columns in Pinterest, Wanelo, Whisper, Poshmark and so on.

The lower the “cost” of putting something potentially uninteresting into your “feed”, the more room there is for serendipity in content discovery. It allows the personalization filter to be coarser. That’s feature, not bug.

 

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Joe Lonsdale (co-founder of Palantir, Addepar and Formation8)  kicked off a meaningful conversation with us on building  multi-billion dollar businesses in big data at one of our recent Lightspeed Dinner Series events this week.

Lightspeed Dinner Series on Big Data with Joe Lonsdale from Formation 8

Lightspeed Dinner Series on Big Data

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In the early days of a startup, every business component, from what to pay employees to new product features seems critical.  But what are the most important measures of success for a startup?

This week, I shared an article on …

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Only occasionally do you meet people who can look past what everyone else is doing and see through to an essential truth. Something that is obvious once they say it, but completely unclear beforehand. The founders of Snapchat, Evan Spiegel …

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The past few years have been an incredibly exciting time to be an enterprise investor. We have seen the rise of the cloud, the shift away from PCs to new mobile computing platforms, and the emergence of Big Data and …

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Numerify announces $8 million in Series A financing to revolutionize business analytics in the cloud. Founded by the pioneers of the business intelligence industry from MicroStrategy, Hyperion and Oracle, the company aims to arm every decision maker with meaningful numbers …

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Last year I recapped a few episodes of season 4 of Sharktank from a VC’s point of view. A few people have asked me to do the same, at least for the Season 5 premier. So here goes! (You …

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There’s nothing better as a Venture Capitalist than to meet an exceptional entrepreneur; one who is driven to impact the world for the better and often, at the same time, build a solution to a personal problem.  What I’ve realized …

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