Disruption
David Pakman's Blog www.pakman.com

The Price of Music

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Mar 18
The Piano Man

Will the recorded music industry ever grow again? Since 1999, the industry has been in rapid decline as CDs became unbundled into downloaded singles. The digital download market never came close to the size of the physical music market. Now we are in the midst of another format transition, this time from downloaded singles to streaming. The question many people ask, like the thoughtful Marc Geiger, is how big will the streaming market be? I think the answer lies not in consumers’ appetite for streaming songs but in the price services charge consumers for streaming.

Recorded Music Industry Sales

At the 1999 peak of the recorded music market about $40 billion of recorded music was sold. How much did the average consumer spend per year on recorded music? Hundreds of dollars? Nope. According to IFPI at the time, across the total 18-and-over population (both across many countries or individually within one), the average amount spent came to $28 per consumer. But that includes people who did not buy any music that year. If we look at just the consumers who bought music, they spent $64 on average that year. And that was at a time when one had to buy a bundle of 12 songs in the form of a CD in order to get access to just one or two. What has happened since?

Once the bundle broke, the average spending per consumer decreased. This is predictable, since bundles artificially raise the amount of total dollars a consumer spends. The chart below shows the average spending per capita in various countries according to IFPI (note UK Pounds):

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Another study by NPD Group in 2011 found similar spending, about $55 per music buyer per year on all forms of recorded music (they note that this spending is slightly higher among P2P music service users.)

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But the one retailer on the planet who would really know what consumer are willing to spend on recorded digital music today is Apple. They are the largest music retailer in the world. Their data is very consistent, about $12 per iTunes account per quarter is spent on music, or about $48 per year. Note that this figure declines year by year as iTunes users are confronted with many more choices on which to spend their disposable income like apps and videos. Also note that total disposable spending, on average, is decreasing per account as iTunes gets bigger and bigger. As a service becomes truly mass market, it reaches fewer and fewer consumers willing to spend as much as previous consumers.

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So, the data tells us that consumers are willing to spend somewhere around $45 – $65 per year on music and that the larger a service gets, the lower in that range the number becomes. And these numbers have remained consistent regardless of music format, from CD to download.

Curiously, the on-demand subscription music services like Spotify, Deezer, Rdio and Beats Music are all priced the same at more than twice consumer spending on music. They largely land at $120 per year (although Beats has a family member option for AT&T users at $15 per month.) This is because the three major record labels, as part of their music licenses, have mandated a minimum price these services must charge. While it may seem strange that suppliers can dictate to retailers the price they must charge end users for their service, this is common practice in digital music. The services are not able to charge a price they believe will result in maximum adoption by consumers. The data shows that $120 per year is far beyond what the overwhelming majority of consumers will pay for music and instead shows that a price closer to $48 per year is likely much closer to a sweet spot to attract a large number of subscribers.

For this reason, I believe the market size for these services is limited to a subset of music buyers, which in turn is a subset of the population. This means that there will be fewer subscribers to these services than there are purchasers of digital downloads unless one of two things happen:

(a) consumers decide to spend more than two times their historical spend on recorded music or

(b) major record labels allow the price of subscription music services to fall to $3 – $4 per month

I think the former is highly unlikely given the overwhelming number of choices competing for consumers’ disposable income combined with the amount of free music available from YouTube, VEVO, Pandora and many others. The data shows consumer spending per category decreases in the face of many disparate entertainment choices. The latter is the big question. My experience with the major labels when I was CEO of eMusic was that they largely did not believe that music was an elastic good. They were unwilling to lower unit economics, especially for hit music, to see if more people would buy. Our experience at eMusic taught us that music *is* in fact elastic and that lower prices lead to increased sales. If the major labels want to see the recorded music business grow again, I believe the price of music must fall.

 

 

 

 

 

An Emerging New Model for TV? Crunchyroll.

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Dec 02
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As the viewer trend data make clear, legacy TV is undergoing a dramatic transformation, led by the many alternative ways of watching video. Cable subs are in decline, network TV viewership has tanked, and now even cable TV viewership is eroding. We frequently discuss the new streaming providers (YouTube, Netflix, Amazon, Hulu) and the on-demand show/movie retailers (iTunes, Amazon, Vudu), but a new model is emerging and worth discussing — the over-the-top (OTT) TV network. Our recently-exited investment in Crunchyroll provides a prime example.

Crunchyroll is the largest provider of Japanese anime online. They license scores of hit and long tail anime shows from Japanese media companies for streaming throughout the world ex-Japan. They offer a free ad-supported viewing option and attract millions of unique monthly viewers. They also offer a paid commercial-free offering at seven dollars per month which makes available a deeper selection of shows. They are available on the web for PC streaming, and have an app available on every mobile and connected TV platform available (iOS, Android, Roku, AppleTV, PS3, Xbox, etc.).

Crunchyroll has amassed hundreds of thousands of paying subscribers and is profitable with net margins many internet and legacy media companies would envy.

While they don’t benefit from the incredibly rich we-will-pay-you-a-fee-even-if-no-one-watches-your-network affiliate fee model of legacy cable TV, they enjoy a more accountable dual advertising/consumer subscription model. While most of us would consider this content niche, their total active actual viewers are considerably larger than most cable networks on your cable grid. Perhaps most impressively, like most technology companies, they are highly efficient, employing fewer than fifty employees.

This model benefits from many of the advantages of the web. An embedding/link-sharing culture helps Crunchy, as everything viewable can be shared and discussed throughout the web. The product is highly mobile and feeds our preference for snackable media consumption on phones and tablets. Non-subscribers get easy access and a thorough chance to experience the content without paying. And the team is staffed by fantastic technologists who rapidly adopt and optimize the service for every new platform that emerges. The team has already started expanding their successful model to new content verticals.

Their success, I think, points the way for niche programmers to deliver great video services directly accountable to their viewers and advertisers alike, and not polluted by the MVPD indirect affiliate fee model nor the antiquated Nielsen people viewer/sweeps model.

For these reasons, Peter Chernin’s The Chernin Group is the new owner of this impressive company and team. I look forward to watching the continued success of Kun, Brandon, James, Brady and the whole team. Without much fanfare, they have pioneered a way forward for much of the video programming world. We are honored to have been investors since 2007 and to have watched you succeed.

Will the Internet Unbundle Higher Education Too?

Nov 27

I was fortunate enough to be asked to deliver the keynote address at this year’s Sustainable Scholarship Conference, put on by ITHAKA. Here, I attempt to review how the internet has disrupted bundled industries and consider the question of whether it will unbundle higher education too.

ITHAKA is a not-for-profit  that helps the academic community use digital technologies to preserve the scholarly record and to advance research and teaching in sustainable ways. They run the popular JSTOR service, a growing digital library of more than 2,000 academic journals, nearly 20,000 books, and two million primary source objects provided to colleges, universities and scholarly communities. I serve as a trustee of ITHAKA.

My slides from the presentation are here:


Thank you to Kevin Guthrie, ITHAKA’s CEO, for the invitation to speak and for the overly-generous introduction!

Some Thoughts Coming Out of TED
(We need more entrepreneurs!)

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Mar 01
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With my mind fully stretched in various different directions, a bunch of thoughts are coalescing, coming out of another fantastic TED. Three main points are loosely stitched together in my mind and they point to a bunch of future opportunity.

First, we heard convincingly from economists like Robert Gordon, Erik Brynjolfsson and Andrew McAfee that America’s manufacturing jobs which, for so long, powered our healthy middle class, are not coming back in any big numbers. Many of us scratch our heads to understand how to fill this enormous hole. At Venrock, largely informed by a similar Hunter Walk observation, we believe this dirth of fruitful middle class employment is leading to so much of the activity in the shared resources sector (AirBNB, etc.), in the peer to peer marketplace sector (PoshMark, etc.) and in the digital labor market sector (Uber, TaskRabbit, etc.) as income supplementation. This will help and is a highly investible opportunity. But still, is this enough?

Second, we marveled at Elon Musk and his unrivaled appetite to tackle the planet’s largest problems through commercial endeavors filled with enormous risk (SpaceX, Solar City, Tesla). He is an international treasure and it simply begs the question…why aren’t there more of him? Of course, there are many fantastically successful entrepreneurs and we celebrate them all. But how many Elon Musks are there on the planet? One hundred? One thousand? Ten thousand? Why aren’t there ten million? What are the specific experiences, personality traits, education paths, parenting, and DNA necessary to produce the planet’s super humans driven to defy the odds on such interplanetary scale? It is clear the planet needs more of them, and so why aren’t we unlocking the answer to the question of how to make more? A speaker reminded us of the Chinese proverb…

If you want one year of prosperity, grow wheat. If you want ten years of prosperity, grow trees. If you want one hundred years of prosperity, grow people.

We need to grow more Elons (and Steves and Bills, etc.)

Finally, Sugata Mitra delivered a compelling argument that our schools are simply obsolete for the task of turning out the kind of people we now need in our modern society. He argues for far more self-organized small learning groups of kids with cloud-based tools and light direction from a teacher. That may be part of the solution, but it is likely only a part of it. If our future doesn’t need line workers but needs more inventors, creators, risk-takers, builders, and makers, where will they all come from? Surely there is no natural limit on the number of people with these strengths in our species, right? Surely we can teach and encourage more people to excel in these areas, right? In order to do that, just how much of our society needs to change? Isn’t it more than just our schools? Isn’t it the goals we set for our kids as parents? Is the over-whelming emphasis on organized team sports in our suburban communities part of the problem? When we reward kids at spelling bees, perhaps the ultimate test of rote memorization, are we not helping? Shouldn’t every kid on the planet be playing Minecraft? How deep must we dig to get at the real root here?

I suspect this is perhaps the greatest issue we face as a society. How do we produce more entrepreneurs?

(Special thanks to fellow TEDster Juliette LaMontagne for the helpful brainstorming.)

Dollar Shave Club − The Power of Asymmetric Marketing

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Nov 01
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Today we announced our investment in Dollar Shave Club, a consumer subscription service focused on men’s grooming. I am honored to be joining the board of the company Michael Dubin has so successfully introduced to the world.

eCommerce companies can be challenging for venture investors. They tend to require lots of capital and usually have low multiples. There are a few cases where outliers can emerge. In subscription commerce, a few rules have to be met for large companies to be created. First, the market must be enormously large. Subscription, by its very nature, usually appeals to a subset of any market it aims to serve. Consumers must intend to make a long-term commitment to a brand in order to subscribe and must not tire of of the service. My experience running eMusic taught me the key metrics to look for in subscription models in order for large companies to be built. Churn rates must be very low. If your average customer leaves after, say, nine months, a large company cannot be built. Your average customer must stay in the service for many years. Think cable, satellite radio, and Netflix. These companies have average monthly churn rates of less than 3%. In the razor market, brand loyalty is measured on the order of twenty-five years. You generally can acquire a customer for a lifetime. And that is exactly what Dollar Shave Club aims to do.

Even more exciting, however, is how Michael sets out to build the brand. He believes that brands are now publishers and must market themselves largely through content. His overwhelmingly successful launch video, viewed more than seven million times, instantly went viral and jointly conveyed the brand personality and the benefits of the service deftly. In this age where social media dominates our collective conversations, we believe very large brands can be built without the widespread use of paid traditional media. It will take several years for the incumbent CPG companies to master these new marketing arts. In the meantime, companies like DSC emerge and get very large despite the massive spend of the traditional guys. We refer to this as asymmetric marketing — no matter how much money spent by the incumbent, the new brand can still become very large for tiny fractions of that spend.

Michael and his fine team have exciting plans. They look to build an enormously successful men’s lifestyle brand. I hope you’ll give Dollar Shave Club a try. I loved the product so much, I invested in the company. ;-)

Author David Pakman
Category eCommerce, Startups
Comments 3 Comments

Not All Traffic Is Created Equal

Sep 26

To build the online media giants of tomorrow, companies need models where the costs of both content and distribution are near zero. Google, Facebook, Twitter, Instagram, Pinterest and countless others employ this model. These models allow scale to emerge at very low-cost.
And in these particular examples, the scale achieved is astronomical — on the order of hundreds of millions or billions of users. In thinking through how to build businesses around this scale, a lens emerges: what kind of traffic produces that scale?
In the case of social media companies like Facebook, Twitter, Instagram, Pinterest and Tumblr, the root activity on the site is the sharing of content. But the content shared on those sites differs widely, particularly around which content attracts the most engagement. Broadly, Facebook attracts photo sharing and light-hearted personal content. Twitter responds far better to true news and topical information sharing. Tumblr seems to resonate around entertainment and creative media. And Pinterest lights up around home design, apparel, food and other commercial items. (I am taking some liberties by generalizing, but you get the point.)

At the scale of Facebook, you could have your users share almost anything and still be able to build a large business, purely by loading the site up with lots of advertising that is (at very least) rudimentary targeted. At that scale, you can reach billions of dollars in revenue. And I believe, even at their scale, their ad load will need to further increase (along with their targeting abilities) in order to signficantly grow the business. (They also must move advertising off-site, as they are now doing, which I detail in this post.)

But if your service attracts particular verticals of content engagement, not all content is created equal, and some is much more valuable than others.

I divide traffic/content engagement into three buckets: topical, informational and transactional.

  • Topical content engagement is what is mostly taking place on Facebook, Tumblr and Twitter. It is comprised of posts generally linking to news, information, family, entertainment, photos, etc. The signal in this stream is the lowest of the three in terms of monetizeable traffic.
  • Informational content, often found on sites like SlideShare, Zillow and automotive blogs is the sharing of information that is near the top of the funnel for demand creation. Things like business white-papers or product reviews are perfect examples of informational traffic. This traffic has significantly more value than topical traffic, and excels at attracting endemic advertisers in the key verticals of travel, auto, tech, financial services, real estate and pharma, to name a few. Intent is well understood in this traffic and the signal is strong.
  • Transactional content is traffic that is essentially one click away from a purchase. Obviously, traffic found on ecommerce sites is the prime example of this and search traffic is a close second, but increasingly Pinterest is proving itself to be a massive source of high-converting traffic. Here, intent is clear and the signal is strongest.

I believe, with the Facebook share price correction, we are entering a period where sites based on topical content traffic are going to struggle in generating value for themselves. Much of the valuations around the consumer web are rationalizing, and because of that, investors are once again focused on understanding business models. Social media properties building traffic around informational or transactional content will be significantly more valuable than topical ones in this forthcoming period. This general notion that every social property with scale will be able to create their own custom “social ad” units and monetize themselves consistent with their earlier valuations, I think, is flawed, unless those properties are in the two higher tiers of content.

As Big Media Goes Digital, Markets Shrink

Jan 16

Lots of debate, lately, about Big Media and their bumpy transitions from analog incumbents to digital providers. Over the past few weeks we have had debates around the proposed PIPA and SOPA legislation, Rupert Murdoch (that bastion of new media savvy) railing against Google as a “pirate” and @fredwilson chiming in on the predictable monopoly actions of his cable company, Time Warner Cable in their dispute with MSG Networks. Yesterday Fred posted his views on the weaknesses of Big Media extending their scarcity business models to the internet.

My long-time opposition to scarcity models for digital media content online is well established on this blog and before that at Apple, N2K and eMusic. One thing Fred mentioned inspired me to revisit this subject, and that is market size. Fred says,

[quote]But the studios themselves are likely to do better in a direct distribution model where they reach a broader market at lower effective prices to the end customer. This is what happens in digital distribution. Prices come down, markets expand, customers see lower prices and broader availability. Producers do better. Everyone else does worse.[/quote]

A bunch of things happen when analog media markets go digital. First, prices come down. The cost of distributing digital content is far less than physical goods that used to carry that content (printed books, plastic CDs and DVDs, etc.). Consumers understand that and expect prices to fall. The music industry hated selling songs for $0.99 when CDs used to sell for $18. But almost no one bought tracks for $3.49 when digital music was first sold online. At $0.99, consumers bought a lot. Next, bundles break. Consumers expect to pay to hear or watch only the songs or episodes they want. TV shows sold as 22 episodes on a DVD for $49 will fail when you can watch any episode for $0.99. Consumers don’t like bundles when they have a cheaper alternative. And then competition increases. Because the old guard doesn’t have monopoly distribution anymore, lots of alternatives enter the market. Consumers get more choice. These are all good things.

But finally, and this is where my view diverges with Fred’s, markets shrink. I used to posit that when content is offered widely online with few restrictions, more of it will be sold. But because prices fall, bundles break, and competition increases, I think the legacy content owners end up with smaller markets. They may reach more people, but in many cases they will ultimately make less money per title.

This is not necessarily a bad thing. Since it costs almost nothing to distribute it digitally and the cost of online marketing is far less than on traditional media, content creators can still have great businesses and make lots of money. But the main reason, I think, so many legacy content companies resist the new digital markets and their new business models, is because their businesses will shrink. And that means significantly changing your cost structure. Fewer private jets and executive dining rooms with 4-star chefs (remind me to tell you about my lunch at News Corp a few months back…)

Because the new economics are scary, the incumbents resist it. But the startups embrace it. And this is why we do what we do. As digital media entrepreneurs, we are not working to preserve a legacy business model, we are hoping to create new ones.

Got Klout?

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Jan 04
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Marissa and I are pleased to discuss our latest investment (and our first one as a team). We are excited to join with fellow firms Kleiner Perkins and IVP in investing in the internet’s standard for measuring influence, Klout. As the internet moves from pages to people, Joe Fernandez‘s vision of the need for “Pagerank for People” is spot on. Klout’s algorithms score the actual influence of people as they share on the social web. They attempt to measure your influence by observing interactions on the social web. As we all work to build and manage our online identity and profile, Klout helps measure our reach and topics of influence.

In every other mass media, measurement provides a benefit to the advertisers who subsidize that media. Large companies have emerged based on, frankly, less than perfect measurements systems. In TV and radio, panel-based inference measurement somehow have passed as a legitimate way for advertisers to make decisions on where to spend billions in advertising. These incumbent measurement firms became standards for measurement within their domains. Klout has the benefit of being able to measure actual data, not inferred data. They aim to score the entire social web. They currently have scored more than 300 million users and are scoring and re-scoring a mind-boggling amount every day. With more than one billion people on the social web today, they are by no means complete. Nor are their algorithms perfected. Just as Google changes their PageRank algorithms hundreds of times a year, Klout will evolve their data science as the social web changes to provide the most accurate influence scoring on the web.

Klout has the distinction of being one of the few companies whose monetization plans actually benefit its users. Using Klout to identify influencers in particular topics, brands offer new products or special “Klout Perks” to you in the hope that you will like them and share your point of view with friends and followers. This relationship, unlike interrupt-driven advertising, benefits both parties. Klout has worked with more than 100 brands like Starbucks, Audi, Spotify and Microsoft and has hundreds more lined up to do the same. Joe speaks infectuously about his plans for taking Klout to “the real world”. He imagines restaurants knowing your Klout score when you call to reserve a table, airlines printing your Klout score on your boarding pass, and of course call centers knowing your Klout score when you call to complain. Already hotels are using your Klout score when you check in to decide upgrade policies.

Aside from this exciting vision and stellar progress, two other themes draw us to Klout. One, we hold a passion around seeing the relationship between a brand and a customers changed. We believe that the social web requires brands to respect us more. To take our point of view more seriously. To adopt policies consistent with good service and fair treatment. No human should have to sit on a plane for seven hours on the tarmac, of course. But also, utility companies should be held accountable for poor service, cable companies should be held accountable when we stay home from work for a day and the repair crew never shows up. Banks should be called out for imposing hidden fees in the dark of the night. And finally, our governments and elected officials should hear from more of us more often. In this age of declining influence of traditional media, Klout enables our individual voices to be more influencial with instutions who hold power. That is exciting to us.

And finally, Klout supports our view that we are shifting from an attention economy to a data economy. The last ten years of digital media on the web have been built on attention. Those web properties that amassed our attention (generally by stealing our eyeballs away from traditional media) and reached scale have been rewarded with great businesses. Yahoo! got our attention with email. Google got our attention with great search. Facebook gets our attention with photo sharing. We believe the next ten years will be built around data, and in particular, social data. We have invested in M6D for its leadership in social ad targeting. We invested in Singly for its leadership in building a social data locker and app platform. And now we are investors in Klout for its leadership in social influence measurement. We salute Joe and his team for amazing progress so far, and are pleased to be along for the ride.

“Great” is Tough to Pick out of the “Good” Crowd

Dec 02

The following is a guest post by my partner, Bryan Roberts. (@brobertsvc) He is one of those legendary VCs who, at about my same age, has invested in many of the most spectacular healthcare companies created over the past decade. He has been the highest-ranking healthcare investor on the Forbes Midas List since 2008. He is wise beyond his years and a great mentor to me. I found this post quite inspiring and wanted to share it widely.

The oldest adage in start-up’s, for entrepreneurs and VC’s alike, is “the key to success is the quality of the people.”  Markets and innovative approaches are important, but my experience supports this notion unequivocally. I have had the good fortune to be involved from an early stage with several billion dollar companies, and most found success after a material pivot from their original approach – Athenahealth, Ironwood Pharmaceuticals and Sirna Therapeutics to name a few.  “I invest in people” is the start-up ecosystem’s version of motherhood and apple pie, but how do you identify “Great” prospectively?

Whether explicitly or not, everyone has their own answer to this question, and based on the success rates, those answers by and large stink. I don’t have a Magic 8 Ball on the topic, but two things make this the issue I wrestle with most: (1) the often-unpredicted success or failure of “nobodies” or “sure things” respectively, and (2) the outsized rewards for locating great, juxtaposed with the probability of abject failure when settling for good. The A+ entrepreneurs with whom I have partnered have come in unusual packages – simply put, there has been no central casting: a biology post-doc who thought about opening a microbrewery B&B; a large animal veterinarian who went to business school in his late 30’s; an x EMT who was also nephew to the President among others.  The best VC’s seem to show the same diversity of background.

I now focus on these attributes:

  1. Great talent finds a way to win… and is relentlessly driven to do so with a real sense of urgency.  They follow through and complete the task – starting is easy, finishing takes real will.  It is not that they think out of the box, there simply is no box.  They view ambiguity as opportunity, not risk. When things get uncertain is when they really perk up and start to pay attention because that is when real change is possible.  Most of all, they exceed expectations. They bend the space-time continuum in some fashion and their accomplishments are extra ordinary.
  2. Experience is overrated. By and large, the world is changed by the young and the hungry. Experience can be enabling or constraining, but it is not even close to the silver bullet many believe it to be.  If you are seeking a VP marketing or head of sales at a 100+ person company, absolutely look at a resume.  But to find someone with the passion and uniqueness to actually create an early stage venture, you have to spend the time: watch them and see what they do, talk to them and see what they think, ask around and see how respected they are.
  3. Balance exploring/driving with learning/listening. Great people have a very clear grasp of the their vision, while understanding that the world has a lot to teach them. They are humble students of the game, but very confident in their abilities, and never “do what they are told.” They don’t avoid conflict and will always bet on themselves rather than shy away from risk.  They ask questions and argue on facts, balancing their gut with innumerable data streams to get to what they believe is the right answer.
  4. Great people are magnetic. They are not only smart and driven, they attract resources when all the data suggests they should not – whether capital, people or partners – and thereby become larger than just their singular efforts.

While potentially controversial today, I have come to believe that great entrepreneurs and great VC’s are two sides of the same coin.  Both embody these characteristics.  They are maniacally focused on changing the way we live with innovations others thought were not possible. They are passionate about building a great company and put the company before themselves.  No great VC takes solace in having a portfolio when an individual company struggles – like entrepreneurs, this is deeply personal and about so much more than just money.  Their roles are complementary, like looking down opposite ends a telescope, but those different perspectives to a problem can be extraordinarily synergistic.  Great future entrepreneurs can look like great young VC’s, and vice versa – three of my recent investments are stellar companies started by these “crossover” folks.

All venture firms are simultaneously never, and always, looking for team additions.  I believe this is a direct result of how elusive it is to identify those who will be not only smart, passionate, personable and high integrity, but also successful in this ever-changing, ambiguous entrepreneurial world where what worked last time is no recipe for future wins – and more likely charts a path to mediocrity.   In fact, my own difficulties in finding conviction around potential team additions for our firm is what spurred putting these thoughts on paper.

Author David Pakman
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Is Social Data The Next Investing Frontier?

Oct 19

Much of the excitement around internet startups over the last five years has been around social services. From Facebook to Foursquare, from Twitter to Instagram, from Yammer to Zynga, significant investment dollars and entrepreneurial effort has gone towards capitalizing on the fact that we are all linked together by connected devices. These connections present great opportunity to disrupt the traditional ways of attacking markets like shopping, travel, communications, media consumption, gaming, etc. There are plenty of other big investment themes, of course, like local commerce (Groupon) and cloud services (Cloudflare and Dropbox), but social has been the dominant theme. The first wave of social companies were social utilities and social media (including gaming).

I believe that is shifting and has been for some time. Other agree. We have been pursing alternate investment themes these past few years and the largest recurring theme for us has been data. This is also not a new theme, but it is growing in prominence and awareness, punctuated by this week’s Web 2.0 Summit whose theme is “The Data Frame”. We have invested deeply in data-based businesses whose efficiencies disrupt their less-efficient or less powerful legacy brethern. AdTech is one such area. Healthcare is another. Payments is a third. Security is a fourth. And soon, the consumer web is likely to be further transformed by businesses based not on social utility, but on social data.

Plenty of consumer startups use data to make product decisions. That is not what this post is about. It is about consumer businesses actually based on the value of our individual social data. Through the use of so many exciting social utilities, we are creating more data about ourselves at an increasing rate. This data becomes more valuable to us when developers can access it in an aggregated and trustworthy way.

Today, an investment we seeded back in March called Singly is making its intentions known at Web 2. Their vision is audacious; individuals must be in control of their social data. I blogged a little bit about this opportunity here. Today Singly emerges as a developer platform to bring that vision to reality. John Battelle blogs about it here. I think their emergence shines a light on the investment opportunities around social data as well as the opportunities to launch open personal data platforms.

Jeremie Miller, Singly’s Co-Founder will present today, Wednesday October 19 at 2:20pm PT/5:30pm ET. You can catch the livestream here.