the vc in me....

How We Can Change Climate Change

Given my busy life, I try to to make time to impact at least one important social issue.  There are lots of important problems in our world but I believe the most pressing is Climate Change (often known as Global Warming).  I won't spend much time here teaching or debating the issue as its pretty widely known (look at the EPA site or Wikipedia for relatively unbiased info or watch the Inconvenient Truth from Mr. Gore).

This is a tough problem to tackle as it has a relatively slow impact on our planet which doesn't affect our daily lives at the moment ('the frog not knowing it's slowly boiling in water' analogy is appropriate) and meaningful progress requires the actions of millions across political, geographical, and cultural boundaries.  Finally, humans (especially older ones) are creatures of habit - and habits are hard to change.

I believe one way to spur change is to appeal to those in a position of strong influence to adults, to those who we care about enough that we would change habits to be a good role model - that group is our children.  If we can get children to become aware and then care about climate change and its impact on their world, they may be able to cause change in every household on our planet.   Despite popular culture portraying kids as silent in the household, their voice is heard by parents and they can influence through our hearts like no other.

The hard part is making the issue of Climate Change real and interesting to kids.  I believe the answer is to put a face on climate change and use emotional appeal.  The face is in the form of the tens of thousands to potentially million species (many which are cute and somewhat cuddly) that will be endangered by climate change (check out a great article from National Geographic explaining this).  The idea is to have each household and/or classroom "adopt a critter" that is endangered, learn about the animal, establish an emotional connection, understand why they are in danger and go to their parents with a list of actions they can take to make a difference to save this animal - and the world (e.g. changing energy consumption, engaging in the political process, etc).

This idea came about at a great conference I attend yearly called TED which offers inspiration from people presenting great ideas - such as Al Gore around Climate Change and EO Wilson on biodiversity and species extinction.  The community of people attending TED makes it really special as you can find someone else that is passionate and a leader in making things happen.  My friend (and former CEO of Snapfish competitor - Ofoto), James Joaquin, is a fellow TEDster and working wih me on the plan - he has given a great moniker to our idea - "Critter Crisis".   We welcome your ideas and thoughts in making Critter Crisis a reality...

I believe the millions of children in the world are a catalyst to combat this crisis and they are also the group that will be impacted most by climate change.  I truly hope we can leave this world a better place for them...with their help.

How Will Brand Ads Reach the "Long Tail"?

Online advertising is  continuing to take off with over $25B in global revenue this year and no signs of slowing down.  This has been dominated by performance based ads but brand advertisers have taken notice and are migrating to the web - especially given the increasing shift of audiences from traditional media to the net.   

The challenge for brand advertisers is to find audiences they want to reach (at scale) done in the most effective and emotional way (e.g. rich media) and in the right context (e.g. not next to content they would find offensive or unknown - like most user-generated content or certain news stories).   Until now, they've flocked to premium inventory at the major networks (Yahoo, MSN, AOL) and vertical sites with scale (e.g. ESPN, iVillage) but these networks and sites are selling out the quality rich media inventory in the right context (they have plenty of tonnage in areas that brand advertisers don't care about).    There's a supply-demand mismatch and I think there's an opportunity for the long tail to take advantage of it.

The issue for the long tail is that each site alone is too small and is not "validated" by the advertiser or someone they trust.  The solution actually lies in the "head"...  These sites or media publishers (large branded anchor sites or traditional publishers) can create a large branded network by affiliating with many sites in the long tail.  The anchor typically has a strong brand (e.g. Washington Post or an upstart like Glam) and handpicks long tail sites that meet their quality standard to include in the network.  They then use their trust and relationships with brand advertisers to sell ads across the network - perhaps at a discount to their anchor site.  This is a perfect setup for publishers who have deep brand advertiser relationships but not enough quality inventory (such as traditional magazines who don't have a ton of users on the web).  The long tail may have great content (e.g. high quality blogs or hobby sites) but doesn't have the scale or expertise or relationships to get the ad dollars and can get more revenue per pixel vs performance ad networks.  It's a win win all around.

i'm interested in investment opportunities in this new ecosystem - whether its a new upstart network by a publisher/entrepreneur or a platform to make all this happen (like Adify).  It's inevitable that more dollars will move online (6% of ad spend is online but time spent online by consumers ranges from 15%-35% depending on the demographic) and this seems like the right way for brand dollars to find their audiences.

Simple Solution for What To Buy

Consumers are spending an enormous amount of time researching and buying products on the internet.  According to Pew internet, it's the 5th most popular activity with 550M people participating each month.  The innovation thus far has been focused on "where to buy" products - spawning financially successful price comparison shopping engines like shopping.com.  However, I haven't found a good solution to help the mass market choose "what to buy".  New shopping search engines like become.com or retrevo provide lists of reviews for products but that's still too much work for the mass market.  User generated reviews and comments on products are taking off but the information is very fragmented and often times hard to trust.   

I believe the mass market consumer is looking for a very simple solution - just tell me the best product to buy in a category or subcategory (e.g. SLR digital camera) by distilling all the "collective wisdom" on the web into a simple rank.  The economic implications of this solution are enormous as it would be the first stop for consumers researching any product - whether they buy online or offline.

After much searching, I found the best solution so far at www.wize.com.  They have  a slick, simple service providing users with the singular answer on the best product to buy - no need to wade thru technical specs, features, or dozens of review sites.   They have created a compelling concept of Product Rank which I think will be akin to the power of Page Rank (ranking products instead of web pages using the collective wisdom of the web).   Capturing and distilling the vast expert and user-generated opinions and buzz on products is the next big innovation - I look forward to watching Wize capitalize on this opportunity.

Lessons on Investing in China

I've recently made a few investments in internet companies in China with Mayfield's local partner, GSR Ventures.  Two of my deals are Baihe (the largest dating site in China that is focused on serious relationships - like eharmony) and Qunar (travel meta search in China).  Although I don't claim to be a China expert (nor do I speak the language), I have learned a thing or two about investing in the internet in China.  Check out the article in Business Week that I wrote about investing in China.

Can Social Networks Steer User Adoption?

I did a guest post on Venturebeat covering this topic.  Check it out here.

Advice for Internet Entrepreneurs

I found a good blog post discussing "suggestions for not being a dot-bomb" - it's a nice corrolary to my earlier post on criteria for a successful consumer internet investment.  Check it out

Super-Targeted User Profiles

Thanks to the internet, a wealth of data on individuals that used to be under lock and key in various paper and proprietary databases is swarming around the ether (protected and unprotected).  Consider the following consumer information that is lurking on the net:
- deep user profile information on social networks (ranging from accurate info on linkedin to more questionable data on myspace) along with the strength of our social networks (e.g. size and quality of people links in our network)
- detailed household transaction/purchase data stored in online billpay (I've heard over 65% of online users engage in billpay now)
- credit and health scores for individuals
- behavioral data on what sites and content we view from companies like Revenue Science 
- data on our intent from search engine logs
- all sorts of demographic data from site registrations
- up to date contact information from sources such as jigsaw and plaxo
- location data based on our appointments stored on web calendars
- and of course all the purchase data from e-commerce sites

There's probably a lot more sources of data but you get the point.   This is good and bad depending on who will use the data for what.  Although some companies that facilitate the above data would like to think they own it, the consumer is really in control (and maybe the companies have some rights to it).  Rather than focus on new businesses to suppress others from obtaining such info, I'm more excited about opportunities to empower the consumer to get more out of life with this information - in an effortless and secure manner. 

There's an  opportunity to ask permission of the user to aggregage this information and deliver a super-targeted profile to those willing to reach me - without revealing who I am (via a trusted third party).  These thoughts aren't new as you can see related thinking at attentiontrust.org but I think we are just at the tip of the iceberg.

Mayfield EIR Tom Patterson and I are exploring this space and welcome your ideas.

Getting a VC's Attention

It's hard to get a VC's attention - as much as i told myself I'd be diligent in reviewing all the great ideas coming my way, it's impossible when I get several new plans a day, work hard to help  existing companies, proactively evaluate new sectors, and keep up with my network of friends and associates.

Having been at this for a year now, I can tell you from experience what maximizes the chance of getting the ear of a VC.  The key is to present a crisp, clear, and importantly CONCISE view of your business in a snapshot that we can easily  digest.

I agree with David Cowan's post that the best way to pitch your business is a simple 10 or so page powerpoint.  Check his post out to get some great tips on what to include in the powerpoint.  It's not meant to be an exhaustive plan - just enough to get our attention and get us excited and establish your credibility. 

It may be a bit harder to generate a powerpoint (and some entrepreneurs like to pitch without ot seemingly just to be different) but its worth the effort to help you synthesize your thinking and help  attention-starved VCs focus on your opportunity.  I tend to lose focus and get impatient pretty quickly when wading thru text heavy plans or very hollow one page exec summaries (ideally provide both the powerpoint and one page summary so we can pass around the latter to our partners to get them quickly up to speed on the company).

I would also add the usual but important statement that sending us an email out of the ether doesn't get our attention as much as finding someone who knows us and having them introduce you.  Try a great social networking tool like LinkedIn if you are unsure who you know at a VC firm.

Good luck!

Social Networking Meets Marketing

My take on social networking is that it's a great feature and should be implemented across a wide range of consumer services - it's not the endgame but the grease that enables better discovery and context.  For example, i'm more likely to use a plumber reccomended by my trusted social network than a random listing in the yellow pages (see Insider Pages as an example).

Mayfield recently invested in Jobster under this thesis - applying social networking to recruiting to fix the problem of candidate overload in current online recruiting sites.   

I believe the sector of marketing services is the next big application for social networking.  Can a marketer leverage social networks to come up with cheaper and more targeted ways to acquire customers?  Can the marketer use the social network to virally propagate the message among the network in a consumer friendly manner?  It's not just about using MySpace to acquire customers - its about bringing the social network to a point of transaction or information to "turbocharge" the likelihood of an exchange.   

If you have some ideas around "social networking applied to marketing" - drop me a line!

Personalized Storytelling: Monetizing User-Generated Content

As I expressed in a previous post, users are generating content more than ever - even teens are blogging (I believe the latest stat shows over 30% maintain blogs) - and of course all ages are posting photos and increasingly video and audio (e.g. podcasts).

There's no shortage of creation, hosting, management, and discovery tools/services for user-generated content but what's missing is the ability to monetize all this content and provide a meaningful end product for consumers that doesn't just sit in the digital ether.  It will be tough for advertising to work on a large scale for user-generated content as the advertiser doesn't know what content they are associated with - it will take time for advertisers or publishers to solve/get more comfortable with this content type.  This leaves a transaction model wide open - which I know well from my Snapfish days...

I noticed at Snapfish that our digital photo album books were a very hot seller as consumers  created an end product they know well - photo albums - but done in a  professional book-like manner and in minutes vs hours or days.

I'm thinking there is a twist on this model combining user-generated assets along with professional ("stock") content into tangible physical products (such as books and DVDs) that are personal yet very professional - and would command high margins given their high emotional value.  The disruptive changes in digital offset printing (you can now create a personalized professionally bound book for dollars vs a set up cost of $10k for each run) and cheap DVD burning make this very doable. 

The idea is to create personalized storybooks from user generated content (blog entries, photos, video, podcasts) that combine licensed content (I dare use the word "mash up") and sell the physical products to friends and family who care deeply about it.   The digital version of these "stories" would be offered free and help market the service virally.  The subjects of such books and DVDs should be important life events (reunions, tributes, births, weddings, eulogies, childrens books, etc) that some group of people would be willing to pay to memorialize in DVD or book form.  The digital story should be very easy to create with templates that blend professional content - the design rule should be "create a story in 5 minutes or less" - appealing to the masses.   I know there are several companies that have tried variations of this idea in the past and several in the space now - so far I haven't seen anything I've fallen for - but i'm still looking.

If you've got a similar idea or want to jump on this one with a great team, drop me a line...