« swipe left for tags/categories
swipe right to go back »
Everyone needs a diversion. We’ve updated our Foundry Group web site with the new Liquidation Preference beer photo. Yes – we make beer – or at least my partner Ryan McIntyre and our long time friend Matt Galligan does.
If you miss our old web site pictures, you can now get to them via the diversion tab on the top right. Seth as Frankenstein, Jason as Don Draper, or Ryan at Mr. Pink (or was he Mr. Blonde?) – how could that not make you smile.
And with that, I leave you with our hard hitting documentary on the lives of four venture capitalists. Time to stop procrastinating and do my next call.
In the “if you can’t laugh at yourself, who can you laugh at” category, I present the video I’m A VC. The formal press release, Foundry Group Premiers Documentary Film About Secret Lives of Venture Capitalists, explains things more fully.
My partner Jason Mendelson created, composed, wrote, sang, and produced the whole thing and explains the back story of I’m a VC on his blog. It’s awesome working with incredibly talented people who have a sense of humor and a willingness to make fun of themselves while letting me make fun of myself. And no – I can’t dance for shit, nor can I sing.
Entrepreneurs – you make our world go around. This is dedicated to you.
Once a quarter my partners (Seth, Ryan, Jason) and I spend 48 hours together. Unlike a typical offsite that ten zillion organizations have, we tend to spend less time on formalities and more time on wider ranging, forward looking discussions about what we are doing, both professionally and personally.
Last night, over an amazing meal, we ended up talking about what we’ve been investing in over the past four years. When we reflect on the 37 companies we’ve invested in since we raised our first Foundry Group fund in 2007, we’re delighted with the mix of companies and entrepreneurs we are working with. We have a very clear thematic strategy that we’ve discussed openly, along with a few other key principles such as being willing to invest anywhere in the US and being syndication agnostic.
At dinner we zoned in on all of the current activity in early stage tech. There’s an awesome amount of exciting stuff going on right now and a real entrepreneurial revival throughout the US. Sure, there’s all the inevitable bubble talk going on which I’ve encouraged entrepreneurs to simply ignore and play a long term game instead, and once again many VC firms are spreading themselves wide and chasing after whatever the latest interesting thing is. But entrepreneurship, especially throughout the US, is vigorous, exciting, and creating many really interesting companies, some of which will be important in the future.
When we think about what has driven the success of some of our investments, we realize that we’ve chose the macro environments to invest in really well. Our HCI, Adhesive, and Distribution themes are all great examples of this. With HCI, we are at the very beginning of a massive shift over the next 20 years around how humans and computers interact. Adhesive plays the macros of digital advertising – every year meaningful ad spend is shifting annually from offline to online and that will continue for quite some time. And with distribution we’ve benefitted from the application of the concept of social to extremely large existing online markets where innovation had stagnated.
Our conversation shifted to 2015. While we still believe there are many exciting opportunities within our existing themes, we think that given the velocity of technology innovation and the way we use technology, things will shift dramatically over the next four years. Completely new and unexpected innovations are emerging and entrepreneurs who are obsessed with transforming existing industries, creating radical new technologies, or dramatically changing the use case of existing technology are starting to work in 2011 on things that will matter immensely in 2015.
We have one new investment coming up that reflects this and, when we start talking about it, you’ll see the kind of entrepreneur and company we are searching for. We decided last night to look for a lot more of it. While our deeply held beliefs about what we invest in and how we invest are the same, we’ve decided to open up our intellectual aperture and make sure we’ve incorporated a stronger view of “what is 2015 going to be like” into our thinking.
Today Seth posted a new blog on the Foundry Group site titled Foundry Group’s AdTech Investing: Adhesive. While we’ve seen a billion AdTech related investments, we’ve only made a few of them over the past three years. We are huge believers in the macro of digital advertising, but we think the morass of much of the online ad world is just that – a morass. So we’ve avoided large swaths of the digital advertising world, instead focusing our energy on the ones that fit in our Glue theme.
We realized a while ago that we really had two types of companies in our Glue theme. The first set are companies that provide a key layer of software on the Internet, much of it at the application or machine to machine level, such as Gnip and Standing Cloud. The other set are companies that provide glue between systems in the AdTech universe, such as AdMeld and Triggit.
We’ve resisted talking about being AdTech investors since there is so much of AdTech that we avoid. However, when we realized that we were investing in a lot of “Glue for AdTech”, it seemed logical to categorize these investments in a new theme – Adhesive.
The companies we’ve invested in that we categorize as in the Adhesive theme are AdMeld, Lijit, Trada, Medialets, Mandelbrot Project, Triggit and Integrate. For more on how we are thinking about this, take a look at Seth’s post titled Don’t call it AdTech. It’s “Adhesive”. And if you want to see how we’ve categorized all of our investments by theme, take a look at the new portfolio page on the Foundry Group website.
We’ve put up a post on the Foundry Group site about a new theme of ours we are calling Distribution. We’ve been investing in this theme for a while but have continued to formulate exactly how we think about it.
I’ve talked about our thematic approach to investing many times in the past. Every now and then it feels like it’s worth a quick post on our current themes. They are:
Human Computer Interaction: The way humans interact with computers 20 years from now will make the way we interact with them today look silly. Sample companies include Oblong, Organic Motion, and Fitbit.
Glue: Computers love to talk to one another. The amount of “computer to computer interaction” is increasing at a dramatic rate. There’s a software layer that “glues” this together. Sample companies including Gnip and Standing Cloud.
Protocol: Many protocols – both formal and informal ones – support extensive software ecosystems. We’ve been investing in protocols like SMTP, RSS, XML, and SMS for years and expect to continue doing this. Sample companies include SendGrid and Urban Airship.
Distribution: Giant existing online markets can be completely disrupted by new distribution methods like Facebook, Twitter, Mobile, and User-Generated Content. Sample companies include Zynga, Topspin, StockTwits, and Cheezburger.
We’ve got one additional theme that we’ll be talking about shortly. We’ve decided to split our Glue theme into two different themes as we’ve realized a particular pattern in our investment dynamics around this theme. Look for another post on this shortly.