The Consumerisation of Enterprise IT is now the Standard

I was reading the book “Super Founders” by Ali Temaseb in which he breaks down the data behind billion dollar startups. When he asked founders and investors of billion dollar companies what spaces they thought will create the next billion dollar companies, he received a very diverse set of ideas.

Some said synthetic biology, the future of food, healthcare, but one theme that struck me, suggested by Neha Narkhede of Confluence was ‘the consumersation of the enterprise’. As we at Remagine Ventures invest in consumer tech and the suppliers (b2b) to the biggest consumer trends, I became instantly curious about the convergence of the two.

The consumerisation of enterprise was a big investment trend in 2011-2012.

In this Techcrunch article written by Aaron Levie of Box, he refers to it as the rise of enterprise ‘toys’, citing the acquisition of Yammer by Microsoft for $1.3 billion. “Toys” are new startups attacking a narrow or unattractive segment of the market. They are predictably dismissed by the incumbents as lacking key features or being too narrow.

“Students of the Innovator’s Dilemma know that a new technology starts out being just “good enough.” Often, an early solution only serves a niche part of the market with limited requirements. This naturally shields it from the incumbents’ radar, but what starts out as a nascent product attacking an unprofitable or unattractive market segment can quickly mature into a disruptive solution that becomes more than adequate for a broader population”

The idea of the niche, or wedge is well articulated in Lenny Rachitsky’s recent post and in the graphic below:

But even in 2012 it was pretty obvious that in Enterprise tech, a field that was known for long sales cycles, boring/safe UI and on-prem enterprise installations, things were about to change radically:

Today, nearly every internet-connected, employed individual is a potential user and buyer of enterprise tools. And by making these tools accessible to users with just a few clicks, enterprise software providers can reach markets at a scale and speed that were impossible in the client-server paradigm. Across mobile and web, new solutions will emerge that help workers connect and communicate better with their customers, analyze business data, gain new clients, manage their payroll and expenses, and more. 

The rise of enterprise “toys” – Techcrunch, 2012

What changed since 2012

If you think about it, the consumerisation of enterprise tech is now the standard.

  • Employees got used to working with the best tools and expect them to be available
  • Good UI/UX for B2B software is now table stakes
  • Anyone can purchase the product with a credit card
  • Freemium model used to onboard new users
  • Mobile, remote access is key

As evidence, consider how many billion dollar companies have been started in this space that many of us use on a regular basis:

  • Notion
  • Monday
  • Slack
  • Airtable
  • Calendly
  • Zoom
  • Figma
  • Superhuman
  • Canva

Aaron Levie put it nicely in 2019:

Many more startups are still growing and on their way as you can see in this future of work landscape:

The future of work landscape (Source: Digital Native)

The opposite is also true – the “enterprisation” of consumer software

Equally interesting is the ‘enterprisation of consumer software’, especially when it comes to the creator economy – where creators are a small business of one. Readers of this blog are aware of my research in this space, which centres on the ability of creators (experts, hobbyists, influencers, etc) who create various formats of content (courses, videos, streams, newsletters, etc) and build an engaged community around their areas of passion and monetise them.

The creators are suddenly in need of tools that were previously mainly available to companies at the enterprise level:

  • Manage payroll
  • Hold virtual events
  • Edit and create quality content
  • Advertise
  • Sell
  • Customer success
  • Loans/ insurance/ Financing needs

I touched on this topic in “opportunities for startups in the creator economy“. I also recommend Rex Woodbury’s take on this in the “Blurring lines between consumer and enterprise“.

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5 Israeli Creator Economy Startups to Watch

Readers of VC Cafe already know that we’re fascinated by the creator economy and its potential to completely disrupt the $2 trillion media and entertainment industry. When you boil it down, the innovations around the creator economy consist of new ways to create, distribute and monetise content as well as direct to consumer models for fan engagement, monetisation and commerce.

Value of the global entertainment and media market (Source: Statista)

As a fund that covers entertainment and media tech in Israel, we at Remagine Ventures keep a close eye on interesting developments in the Creator Economy. You might also be interested in my post on the biggest startup opportunities in the Creator Economy. I was recently asked by Sifted to recommend exciting Creator Economy startups to watch, that are not part of our portfolio. The post is behind a paywall, so I’m sharing a slightly expanded list below.

5 Israeli creator economy startups to watch

  • Lightricks – video and image editing mobile apps
    • Why is it interesting: started in 2013, Lightricks rose to fame with Facetune, a ‘selfie’ editing app as Instagram was becoming popular. It became the perfect “companion” app – edit your pictures before sharing them. It has since built a lucrative business and crossed the $100M in annual revenue. The company recently raised $130M in September, but also came under scrutiny with the recent Facebook reports on Instagram’s impact on teens self esteem.
The growing app portfolio of Lightricks: from Facetune to small businesses, Lightricks wants to be the mobile photoshop and video editor
  • Riverside – an online podcast and video interviews recording studio. 
    • Why is it interesting: I believe that audio is under optimised and that creators will leverage podcasts and social audio as an important channel to engage their audience. The tools in this space are still lacking and normally require a hodgepodge of software and hardware for editing and post production. Riverside streamlines the process online and is getting rapid adoption in the podcasting community. 
The full suite tools for podcasts and video casts (source: Riverside.fm)
  • Nas academy – an online creator school – live classes, feedback sessions and community
    • Why is it interesting: founded by world-renowned Palestinian-Israeli video creator, Nuseir Yassin, better known as Nas Daily, Nas Academy taps into one of the biggest needs in the creator economy – education for more creators to enter the space. It turns creators into educators. This picks and shovels approach has the potential to rise with the tide in the entire creator space, as more enthusiasts and hobbyists consider becoming creators.
Learn from experts on how to develop skills to become a better creator (Source: Nasacademy)
  • Wisio – A Follower-to-Creator platform that enables followers to receive personalised video advice messages and services from their favourite creators. 
    • Why is it interesting: monetisation is the key for unlocking creativity. Wisio monetises attention by enabling creators to share their wisdom with their followers via 1:1 paid video consultations. Fans can book a chat with their favourite vocal coach, astrologer or ASMR artist and receive an exclusive video, tailored for their question.
Get 1:1 private interactions with your favourite creator (Source: Wisio)
  • Audiolabs – building monetisation and engagement tools for social audio creators
    • Why is it interesting:: Clubhouse put a big bullseye on social audio (see my blog post) and every major platform is experimenting with the format. Monetisation for social creators remains an unsolved problem, and Audiolabs wants to do for this emerging space what Stream Elements, who recently raised $100M to continue to grow their suit of production and monetisation tools for gaming streamers.
udAudiolabs offers tools for both audio creators and brands (source: Audiolabs)

There are many more worth mentioning, I’ll showcase another batch next!


Remagine Ventures is a seed/pre-seed fund investing in the future of where consumers spend their time and money. We focus on the intersection of tech, entertainment, gaming and commerce with a spotlight on Israel and the UK. If you’re an Israeli founder building solutions for the creator economy, let’s chat!

The post 5 Israeli Creator Economy Startups to Watch appeared first on VC Cafe.

5 Israeli Creator Economy Startups to Watch

Readers of VC Cafe already know that we’re fascinated by the creator economy and its potential to completely disrupt the $2 trillion media and entertainment industry. When you boil it down, the innovations around the creator economy consist of new ways to create, distribute and monetise content as well as direct to consumer models for fan engagement, monetisation and commerce.

Value of the global entertainment and media market (Source: Statista)

As a fund that covers entertainment and media tech in Israel, we at Remagine Ventures keep a close eye on interesting developments in the Creator Economy. You might also be interested in my post on the biggest startup opportunities in the Creator Economy. I was recently asked by Sifted to recommend exciting Creator Economy startups to watch, that are not part of our portfolio. The post is behind a paywall, so I’m sharing a slightly expanded list below.

5 Israeli creator economy startups to watch

  • Lightricks – video and image editing mobile apps
    • Why is it interesting: started in 2013, Lightricks rose to fame with Facetune, a ‘selfie’ editing app as Instagram was becoming popular. It became the perfect “companion” app – edit your pictures before sharing them. It has since built a lucrative business and crossed the $100M in annual revenue. The company recently raised $130M in September, but also came under scrutiny with the recent Facebook reports on Instagram’s impact on teens self esteem.
The growing app portfolio of Lightricks: from Facetune to small businesses, Lightricks wants to be the mobile photoshop and video editor
  • Riverside – an online podcast and video interviews recording studio. 
    • Why is it interesting: I believe that audio is under optimised and that creators will leverage podcasts and social audio as an important channel to engage their audience. The tools in this space are still lacking and normally require a hodgepodge of software and hardware for editing and post production. Riverside streamlines the process online and is getting rapid adoption in the podcasting community. 
The full suite tools for podcasts and video casts (source: Riverside.fm)
  • Nas academy – an online creator school – live classes, feedback sessions and community
    • Why is it interesting: founded by world-renowned Palestinian-Israeli video creator, Nuseir Yassin, better known as Nas Daily, Nas Academy taps into one of the biggest needs in the creator economy – education for more creators to enter the space. It turns creators into educators. This picks and shovels approach has the potential to rise with the tide in the entire creator space, as more enthusiasts and hobbyists consider becoming creators.
Learn from experts on how to develop skills to become a better creator (Source: Nasacademy)
  • Wisio – A Follower-to-Creator platform that enables followers to receive personalised video advice messages and services from their favourite creators. 
    • Why is it interesting: monetisation is the key for unlocking creativity. Wisio monetises attention by enabling creators to share their wisdom with their followers via 1:1 paid video consultations. Fans can book a chat with their favourite vocal coach, astrologer or ASMR artist and receive an exclusive video, tailored for their question.
Get 1:1 private interactions with your favourite creator (Source: Wisio)
  • Audiolabs – building monetisation and engagement tools for social audio creators
    • Why is it interesting:: Clubhouse put a big bullseye on social audio (see my blog post) and every major platform is experimenting with the format. Monetisation for social creators remains an unsolved problem, and Audiolabs wants to do for this emerging space what Stream Elements, who recently raised $100M to continue to grow their suit of production and monetisation tools for gaming streamers.
udAudiolabs offers tools for both audio creators and brands (source: Audiolabs)

There are many more worth mentioning, I’ll showcase another batch next!


Remagine Ventures is a seed/pre-seed fund investing in the future of where consumers spend their time and money. We focus on the intersection of tech, entertainment, gaming and commerce with a spotlight on Israel and the UK. If you’re an Israeli founder building solutions for the creator economy, let’s chat!

The post 5 Israeli Creator Economy Startups to Watch appeared first on VC Cafe.

5 Israeli Creator Economy Startups to Watch

Readers of VC Cafe already know that we’re fascinated by the creator economy and its potential to completely disrupt the $2 trillion media and entertainment industry. When you boil it down, the innovations around the creator economy consist of new ways to create, distribute and monetise content as well as direct to consumer models for fan engagement, monetisation and commerce.

Value of the global entertainment and media market (Source: Statista)

As a fund that covers entertainment and media tech in Israel, we at Remagine Ventures keep a close eye on interesting developments in the Creator Economy. You might also be interested in my post on the biggest startup opportunities in the Creator Economy. I was recently asked by Sifted to recommend exciting Creator Economy startups to watch, that are not part of our portfolio. The post is behind a paywall, so I’m sharing a slightly expanded list below.

5 Israeli creator economy startups to watch

  • Lightricks – video and image editing mobile apps
    • Why is it interesting: started in 2013, Lightricks rose to fame with Facetune, a ‘selfie’ editing app as Instagram was becoming popular. It became the perfect “companion” app – edit your pictures before sharing them. It has since built a lucrative business and crossed the $100M in annual revenue. The company recently raised $130M in September, but also came under scrutiny with the recent Facebook reports on Instagram’s impact on teens self esteem.
The growing app portfolio of Lightricks: from Facetune to small businesses, Lightricks wants to be the mobile photoshop and video editor
  • Riverside – an online podcast and video interviews recording studio. 
    • Why is it interesting: I believe that audio is under optimised and that creators will leverage podcasts and social audio as an important channel to engage their audience. The tools in this space are still lacking and normally require a hodgepodge of software and hardware for editing and post production. Riverside streamlines the process online and is getting rapid adoption in the podcasting community. 
The full suite tools for podcasts and video casts (source: Riverside.fm)
  • Nas academy – an online creator school – live classes, feedback sessions and community
    • Why is it interesting: founded by world-renowned Palestinian-Israeli video creator, Nuseir Yassin, better known as Nas Daily, Nas Academy taps into one of the biggest needs in the creator economy – education for more creators to enter the space. It turns creators into educators. This picks and shovels approach has the potential to rise with the tide in the entire creator space, as more enthusiasts and hobbyists consider becoming creators.
Learn from experts on how to develop skills to become a better creator (Source: Nasacademy)
  • Wisio – A Follower-to-Creator platform that enables followers to receive personalised video advice messages and services from their favourite creators. 
    • Why is it interesting: monetisation is the key for unlocking creativity. Wisio monetises attention by enabling creators to share their wisdom with their followers via 1:1 paid video consultations. Fans can book a chat with their favourite vocal coach, astrologer or ASMR artist and receive an exclusive video, tailored for their question.
Get 1:1 private interactions with your favourite creator (Source: Wisio)
  • Audiolabs – building monetisation and engagement tools for social audio creators
    • Why is it interesting:: Clubhouse put a big bullseye on social audio (see my blog post) and every major platform is experimenting with the format. Monetisation for social creators remains an unsolved problem, and Audiolabs wants to do for this emerging space what Stream Elements, who recently raised $100M to continue to grow their suit of production and monetisation tools for gaming streamers.
udAudiolabs offers tools for both audio creators and brands (source: Audiolabs)

There are many more worth mentioning, I’ll showcase another batch next!


Remagine Ventures is a seed/pre-seed fund investing in the future of where consumers spend their time and money. We focus on the intersection of tech, entertainment, gaming and commerce with a spotlight on Israel and the UK. If you’re an Israeli founder building solutions for the creator economy, let’s chat!

The post 5 Israeli Creator Economy Startups to Watch appeared first on VC Cafe.

The 2021 Israeli Unicorn Map

The global rise in venture capital didn’t skip Israel, which has been breaking new records the amount of venture capital raised by companies in 2021. In the first half of 2021, Israeli startups raised a staggering $12.2 billion a 125% increased compared to the equivalent period in 2020, the number of Unicorns, private companies valued at $1 billion or more has grown significantly, with several companies achieving “Decacorn” status – achieving valuations of $10 billion and up, including eToro, soon to complete a SPAC merger, and Rapyd payments.

According to CB Insights there are currently 832 unicorns globally, valued at a total of $2,702 billion. Generally speaking this breakdown applies to Israel as well, with a number of huge outcomes in fintech (Melio, Rapyd, eToro, Papaya Global, etc) and of course Cybersecurity.

What is less obvious is the growing number of Unicorns that grew in the consumer space in Israel and how diverse they are: consumer health, consumer insurance, media, music, gaming etc. Israel was historically known for semiconductors and cybersecurity but it’s now punching above its weight in consumer (B2C), gaming and commerce. As a fund that specialises in consumer tech, we at Remagine Ventures find it very encouraging and we believe we’ll see many more billion dollar companies built in Israel in the consumer space.

Global unicorn breakdown by category (Source: CB Insights)

Unicorns aren’t rare in Israel, but it’s hard to track them

Unicorns often attract media attention, as it’s not trivial to build a business valued at $1 billion. But they are by no means a rare occurrence – according to my updated list below, there are 57 current Israeli founded Unicorns. more than 20 new Israeli unicorns were added to the list so far in 2021.

But they are often hard to spot in global databases like Crunchbase, Pitchbook or CBInsights, because even though they originate from Israel, they are registered as US companies. In some Unicorns, the company was co-founded by Israelis but the centre of operation is US (like in the case of Coursera), so curators have to apply their own judgement on whether the startup is considered Israeli or not.

Another challenge with keeping this list current is that many of the Israeli unicorns ‘graduate’ by getting acquired or going public via SPACs or traditional IPOs. More than 17 Israeli unicorns graduated so far in 2021. In this post, I’ve included a visual for both current and graduated unicorns.

Without further ado, below are the updated 2021 Israeli unicorn landscape as well as recently graduated unicorns (with some exceptions):

The updated list of Israeli Unicorns (sep 2021), Credit: Eze Vidra (Remagine Ventures/VC Cafe)
Israeli graduated unicorns (2020-2021), with minor exceptions (Checkppoint, Wix, Mobileye, Autotalks) which exited earlier.

Worth remembering that Unicorn status isn’t necessarily runaway success

Becoming a unicorn doesn’t equal immortality – it’s just a value pegged in the private markets and Unicorns are susceptible to failure like any other startup. Case in point, Israeli startup Infibond, which delivered insights on users personalities based on their phone usage patterns, reached unicorn status and subsequently sold for scraps.

Moreover, several of the Israeli startups that chose a SPAC merger as an exit, are trading at lower valuations than they entered Wall Street with given that the valuations were set on future projections and not current revenues.

Israeli unicorns have evolved in recent years

In an interesting analysis published by Israeli venture firm Viola earlier this month, there are some new characteristics of the 61 Israeli unicorns companies included in their list:

  • Companies can reach Unicorn status in less than 5 years – compared to 6-10 years up to 2015
  • The average amount of capital raised by Israeli unicorns stands on $109.2 million, with a standard deviation of $55M
  • Companies are hitting Unicorn valuations with $25M or less in revenue, compared to $75M-$100M in the period of 2013-2016
  • The majority of Israeli unicorns are still managed by their founders, who come from relatively diverse backgrounds and prior experience. The CTOs of Israeli unicorns, are typically 8200 alumni or come from a strong tech units in the IDF
  • Most unicorns founding teams have 2-3 co-founders
  • Over 50% of the Israeli unicorn CEOs are based in Israel – a departure from the Israeli startup adage that in order to succeed the company has to be based in the US. Examples include: Monday, Similarweb, Wix, Ironsource,

Thousands of new millionaires, but more work is needed for Israeli tech to continue to thrive

High Tech represents 15% of Israel's GDP -  Israel's Innovation Authority
High Tech represents 15% of Israel’s GDP (Source: Israel’s Innovation Authority)

The impact of these new unicorns and especially the graduated unicorns which provide liquidity to both investors and employees (after lock up periods), have meant that potentially thousands of employees have become millionaires. For example, in the case of Ironsource alone, Israeli newspaper Calcalist estimated that over 230 employees made over $1 million. That’s generally great, but it hasn’t all been well received in the public opinion.

Much of the new riches have been going into real estate, which contributed to price increases and some public backlash on the increasing gaps in the Israeli society. Only 400,000 Israelis participate in the high-tech sector in Israel and there’s low inclusion in tech by large parts of the Israeli society, including Israeli Arabs and Orthodox Jews. Several great initiatives are getting traction and funding (Kamatech, Moona, etc) , but a lot more work is needed in order to increase the diversity in the tech industry, and address the talent crunch that Israeli startups already feel – competing with cash-rich unicorns, multi national tech giants and other startups.

Further reading:

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Opportunities for startups in the creator economy

If you’re new to the creator economy it basically consists of a new set of tools designed to support content creators from all walks of life (from doctors to hobbyists). Let’s start with a short definition:

[the creator economy] is defined as the class of businesses built by over 50 million independent content creators, curators, and community builders including social media influencers, bloggers, and videographers, plus the software and finance tools designed to help them with growth and monetization.

The creator economy market map, Singalfire

A new flock of startups has launched to support content creators to craft (videos, art, newsletters, music, games, courses, etc), find an audience, generate income (subscriptions, tipping, ecommerce, NFTs, etc) and engage their communities.

I’ve written a lot about the rise of the creator economy and its abundance of challenges, why monteziation is the key to unlock creativity, who are the creators and how they make money and how tools like link-in-bio became a hot piece of digital real estate for the creator economy. I’ve also shared my insights with Techcrunch, in “5 creator economy VCs see startup opportunities in monetization, discovery and much more“.

As venture capital investors, one question we think about a lot at Remagine Ventures is “where are the opportunities for startups in the Creator Economy?” In this post, I will take a stab at how we think about the current trends and opportunities for startups in the creator economy.

Challenges with the creator economy today

Can people make a living by being creators? The answer is not trivial. While Signal Fire estimates there are 50 million creators in the US alone, and that the number is expected to grow significantly in the coming years, the real number of creators who able to make a living from their passion is much smaller, approximately 2%-5% only are able to generate enough income to make their passion a career.

The Creator Economy was supposed to offer financial freedom to creators to live off their passion. But the New Yorker argues that at the current state, the Creator Economy resembles the gig economy for digital content:

But this emerging field, in many ways, resembles a gig economy for digital content. Participants are still precarious workers, relying on the whims of corporations for their livelihoods. Much like an Uber driver or a twenty-tens Instagram influencer, the creator is responsible for her own marketing, health care, and tax contributions. She makes money for the platform that hosts her without receiving the legal and financial protections of employee status, or the stock options typically given to the platform’s engineers, designers, and managers.

“What the creator economy promises, and what it actually does”, The New Yorker

Li Jin, in many ways the face of creator economy venture capital, says that the creator economy is broken.

But just as the gig economy mode of work brought about negative consequences, strong parallels are emerging between the gig economy and creator economy, rooted in the commoditization of work and erosion of worker leverageAs we’ve traveled up the adoption S-curve, social media platforms have shifted from supporting creator individuality to commoditizing creators in order to maintain their grasp on user attention, a necessary ingredient for advertising-based business models. This dynamic undermines creator success and independence, making the creator economy just as corrosive for online workers as the gig economy.

“The Creator economy is in crisis, now lets fix it”, Li Jin’s newsletter

So where does it leave us? To be a successful creator, you need to be an influencer after all. The creator economy offers independence and the ability to monetise fan’s attention in a variety of ways (as opposed to advertising/sponsorship only), but the road to get there is riddled with challenges. This is where new startups can help.

Social Media platforms remain a serious threat for creator economy startups

Many of the creator economy startups have conjured different ways for creators to generate revenue outside of advertising, which has been the bread and butter of ‘influencer’ platforms like Instagram, Youtube, TikTok etc.

The social media giants have internalised the fact that all these creators are already active on their platforms and having creators migrate their fans outside of their platforms might risk their ad revenue. So most of them have fully embraced the creator bandwagon, especially when it comes to monetisation tools. This chart by Axios shows how much diffusion there is between the platforms – nearly all the major platforms introduced tipping and creator funds.

Social media platforms adding creator offerings and copying from one another (source: Axios)

This represents an additional challenge for startups in the creator economy space – competition for the creators comes from the platforms as well as from other startups. The platforms have shown that they won’t hesitate to copy a successful format (i.e. TikTok and Reels/Youtube shorts or the explosion of social audio following the early success of Clubhouse).

A look at Creator Economy Startup Landscapes

A quick look at the various creator economy landscapes reveals that there’s a growing number of startups entering the space. According to CB Insights, there are approximately 125+ startups innovating across the creator value chain.

The creator economy startup landscape cbinsights
From hobbyists selling PDF’s to professional creators, CB Insights considered about 125 creator economy startups in their landscape.

Arm the creators, a popular newsletter published by Hugo Amsellem, mapped over 150 startups in a landscape published on December 2020.

A more recent landscape, Creatorscape 2021, published by Influence.co shows over 438 startups active in the creator economy (click here for the full list of companies). This is quite a broad look at creator startups, including music streaming services like Tidal, and enterprise video editing platform Descript, both are not limited to use by creators and therefore this landscape is a bigger than what I’d consider ‘creator economy’ startups.

The 2021 Creatorscape by Influence (source)

Note that most of the density in these landscapes is around ‘business model’ – ad revenue, marketplaces, memberships, affiliate. The other half is more distributed, but consists on tools for content creation and distribution and finally a minority of tools focused on admin tools (fintech, managing the business, back office, etc).

According to CB Insights, the Creator Economy has attracted over $1.3 billion in investments in 2021 (up to June 15), more than 3x the amount raised in this space in 2020.

There are already a number of Unicorns in the Creator Economy space, which are likely increasing the overall VC interest and belief that it’s possible to build large companies in the space.

Source: The Information

Several funds, such as Andreessen Horowitz, an early believer in the creator economy, have made several prominent bets in the Creator Economy in the first half of 2021. A combination of platforms (clubhouse, substack, Turntable), monetisation tools and back office (Maven, Whatnot, Stir) and Web3/NFTs/Crypto (RTFKT, Bitski, Opensea).

Source: “The Next Creator Economy Unicorns” by The Information

So where are the opportunities in for startups in the creator economy?

Looking at the list of unicorns in the space may suggest that the biggest outcomes are in platforms. And indeed, I’ve seen a large number of pitches of startups trying to become a platform – for example, become the place where people come to consume video, or offer 1:1 paid consultations with their favourite creator. It’s very hard to scale a new platform and compete with Twitch in live streaming, Zoom in video calls, Youtube in video, etc. It’s not impossible, especially in new areas like social audio where the foundations are still a bit shaky (Clubhouse was famously built in one week), but it’s a steep hill to climb and execution is key.

Below are a few suggestions or themes that I believe are where there are opportunities for startups in the creator economy in the near term.

Creative Automation

At the heart of the Creator Economy is content creation. Much of content creation is still manual and time consuming.

For example, HourOne (disclosure: Remagine Ventures portfolio) only requires text to create high quality synthetic video using human characters. Copy.ai can help creators create engaging social media content or marketing campaigns to promote their digital products, etc. I covered this in detail in my previous post, the state of Creative Automation

The growing landscape of creative automation offers a lot of opportunity for the creator economy (source: CB Insights and VC Cafe)

Help create a creator economy middle class

This a big theme on its own, described by Li Jin of Atelier Ventures as the biggest challenge for the creator economy – how to enlarge the pie so more creators are able to make a living from their passion. There’s no silver bullet but Li offers 10 sub areas of opportunity. I’ll mention the top 4 in my opinion:

  • There are riches in niches – understanding where there’s demand. This framework offers a proven structured way to finding a niche. Companies like Whatnot, which just raised $150M series C to enable people to do live auctions for collectibles like Pokemon cards, is a great example. Online shopping is not new – but live auctions for collectibles, is a market that’s growing quickly and Facebook and TikTok aren’t yet offering the service.
  • Algorithmic content recommendations – discovery is still an issue for the long tail
  • Funding for creators – social tokens, creator funds, and the equivalent of invoice lending for creators (Juice,
  • Creator education and training – Think about how many of Ycombinator startups develop products for other startups? In the creator world, we’re seeing a lot more ‘personal saas’ tools where the creators are expected to be the client. Kajabi is a great example of this (and a unicorn in its own right). Check out Nas Academy, who raise $11m for creator education.
Source: Building the middle class of the creator economy, Li Jin

Creators as SMBs

Looking at creators as a new type of small business (SMB of 1), translates to a slew of needs that are currently under served:

  • Fintech:
    • Creator banking
    • Creator lending
    • Creator insurance (health, life, etc)
    • Creator accounting, invoicing, tax
  • HR tech:
  • Back office and admin:
    • Creator bookkeeping
    • Creator expense management
    • Creator payroll
    • Creator office space
    • Creator advertising
If you replace “SMB” with “Creator”, what needs do you see emerge?

Connect the creator economy with Web3

According to A16Z partner Katie Haun, the fund’s investments in web3 are closely linked to the creator economy as “crypto and NFTs would catalyze new business models for creators”.

There’s a new slew of platforms offering creators to leverage Web3 and crypto to control how their content is being used and monetise in various ways. Two categories have emerged:

  • NFTs (non-fungible-tokens)– platforms enabling creators to ‘mint’ their art/music/tweets/videos/ etc as and sell them directly to their fans as digital collectibles. This is usually done via marketplaces like Opensea, Rarible, etc and the fans essentially purchase a unique digital collectible (using Ethereum) that comes with verified ownership on the Blockchain. The NFT can be traded (and potentially increase in value) and the minter (i.e. the creator) receives a fee from every secondary transaction as well.
  • Social tokens – creators, communities, and artists are minting their own digital money (ERC20 tokens) in a way that is branded and specific to their audience. In theory, a creator will only need a loyal audience to grow her income, and fans can cash in on their loyalty by being early supporters of the creator and seeing their social tokens rise in value. without the dependancy on platforms like TikTok, Facebook or Youtube.

Since your typical designer/musician/gaming streamer isn’t always also a crypto expert, there’s been a rise in the number of platforms offering “NFTs as a service” for content creators. Examples include Bitski, offering NFT storefronts, Rally or Roll for social tokens.

This topic probably deserves its own post, but I recommend watching “The Rise of Social Money” by Singularity university and reading Packy McCormick “Status Monkeys” as a good primer.

The rise of user generated capital, by Bradley Miles (Source)

Final thoughts

The creator economy will continue to grow and we are just in the early innings. The social media giants will continue to invest in creators, in an effort to keep them engaged on their platforms to support their multi-billion dollar advertising businesses. The challenge for founders will continue to be finding niches that can start small, but have the potential to be very large in a short period of time. They will be copied in time, but venture capitalists are betting they can grow category winners so fundraising rounds are compressed in a short period of time at growing valuations.

Pre-seed founders building interesting tech in the creator economy space? I’d love to chat!

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The State of Creative Automation

“Learn the rules like a pro, so you can break them like an artist.”

Pablo Picasso
Creative automation - VC Cafe

Like many other parts of our life and work, creativity, the ability to invent or design something new from scratch, might have seemed like it’s the last job safe from automation/machines. With new advances in AI, creativity is now being transformed by technology and offered as a services for consumers and companies.

Creative automation is the ability to create original, high quality content (text, video, images, music, art, etc) leveraging data and technology. Gartner predicts that 90% of large organisations will embrace some form of RPA (Robotic Process Automation) by 2022, so the kind of technology mentioned in this post is likely to grow quickly in the coming months.

A judge ruled last week that AI cannot be the author of a patent because they are not a person. I believe that the Creative AI landscape is ripe for disruption and will advance leaps and bounds in the next five years. We are not too far off from the ability to segment customers in real time, create and launch marketing campaigns generated with AI and iterate on the creative materials based on the conversion data – a fully autonomous marketing cycle. In this post I cover a non-exhaustive list of content categories that are being re-invented with AI.

Text

GPT-3, a complex algorithm for AI text generation, is making text automation broadly available. In 2021, more than 1,000 new startups will be powered by this technology.

  • Full scale generative text engines:
    • GPT-3/ Open AI – launched only in May 2020 by OpenAI, GPT-3 quickly made waves as the largest neural network ever created. GPT-3 is able to write paragraphs and even poetry, with minimal input. GPT-3 licenses are controlled by OpenAI and Microsoft and it’s not yet open and free for the public.
    • AI 21 Labs – an Israeli startup led by Stanford Professor and NLP expert Yoav Shoham focuses on more fundamental research for NLP. It released Jurassic1, a free, widely available text generator model (like GPT-3) which is made of 178B parameters, the largest and most sophisticated language model ever released for general use by developers. The new developer tool AI21 Studio, builds on Haimke, a research model that generates full paragraphs from bullet points and Wordtune, a chrome plugin that suggests text re-writes on twitter, email, slack, etc to improve your style of writing.
    • WuDao 2.0 model – created by the Beijing Academy of Artificial Intelligence (BAAI) in June 2020, WuDao 2.0 was trained using 1.75tn parameters parameters, 10x those of GPT-3, to simulate conversations, understand pictures, write poems and even create recipes. It’s also multi-modal and can learn from both text and images.
  • AI copywriters for marketers – I’ve been seeing more and more startups focused on text automation for marketing/advertising by commercialising GPT-3, offering companies quicker turn around times around content creation for social posts or ads. A number of early stage startups are showing promise in this space:
    • Copysmith / Anyword / Copy.ai / Conversion.ai / Jarvis – all similarly positioned and priced, narrowly focused on product descriptions and ads, these AI copywriters focus on content for marketers to automatically generate copy for higher conversion including: ads, emails, websites, listings, etc.
  • Automated creative writing
    • Kafkai / Contentbot – generates unique and readable blog posts using AI.
    • Hyperwrite -wants to write your emails for you by suggesting ‘autocomplete’ for your sentences.
Text generated by AI21 Studio – my input was ‘Creative automation is”

Video

With the advancements in GANs (Generative Adversarial Networks), AI is rapidly advancing the space of video production using real human characters. This a relatively new space, as the processing power required to generate these videos in near-real time over the cloud has only recently become possible.

  • Character based video generated with text
    • Hour One – offers companies the ability to create video using one of their 100s of human characters by simply editing text. There’s no need in video production/editing background, and the videos can also connect to structured data sources. The characters can speak in any language and it’s possible to create your own characters. Disclosure: I’m an investor and board member via Remagine Ventures)
    • Other companies in the space of text-to-video using human characters include Synthesia and Rephrase.ai.
  • Automated video ads
    • Lumen5 – uses AI to automatically match stock photos, stock video footage and music to a text-based script to create video ads.
A video generated by HourOne for Berlitz using virtual characters to teach languages
Nvidia’s vid2vid is able to generate a video of a person based on a single image. Watch this impressive demo.

Images

The majority of the startups in the creative automation space focus on this category with a focus on marketing tech (ads), eCommerce (listings, reviews, etc) but also increasingly art.

  • Synthetic media: using GANs again, we now have the ability to create completely new images of people, landscapes, etc
    • This person does not exist – started by Nvidia, might be the poster child for the capabilities of GANs and synthetic media. The Internet quickly caught up and created multiple categories of in ‘This Does Not Exist’ – from AI generated cats, landscapes, real estate, meme, etc.
    • MetaHuman Creator – launched by Unreal, is a free editor that can generate realistic virtual humans within a few minutes
    • Rosebud – used to focus on creating synthetic faces using GANs, but seem to have pivoted to animating portrait photos,
    • Deep Nostalgia – similar to Rosebud, Israeli startup D-ID collaborated with family tree platform My Heritage on this feature that brings old portrait photos to life.
  • Create images from text
    • Image-GPT – the image equivalent to GPT-3 – “just as a large transformer model trained on language can generate coherent text, the same exact model trained on pixel sequences can generate coherent image completions and samples“. 
    • Dall-E – another brilliant app from Open AI, lets users create images from text. See my previous coverage on VC Cafe.
    • Deep AI – similar to Dall-E, but I found the results very disappointing
  • Art
    • NVidia Canvas – enables users to turn simple brushstrokes into beautiful art
    • Artlify – Israeli founded startup Art AI, lets users ‘commission’ a piece of AI generated art, by simply typing text in a box. Try it!
AI Generated Art by Artifly – commission your own art and get a printed canvas home

Audio and Music

The experience of creating music has always been human-centric, but technology is now able to offer AI beats, vocals and text-to-speech engines that sound increasingly human.

  • Music
    • Open AI jukebox – a neural net that generates music, including rudimentary singing, as raw audio in a variety of genres and artist styles. It’s worth mentioning that OpenAI acknowledges that this is still in its infancy: “While Jukebox represents a step forward in musical quality, coherence, length of audio sample, and ability to condition on artist, genre, and lyrics, there is a significant gap between these generations and human-created music
    • Amper Music (by Shutterstock) – is basically the ‘stock photo’ of music. I generated my own track within minutes.
    • Solaris – an AI “singer”. From the company’s crowdfunding page: “Similar to how text-to-speech is used to have your computer “read words aloud,” vocal synthesizers let you write music and have your computer “sing” it. This can be a way to draft songs before hiring a real person to sing them, but vocal synthesizers are more often used to feature on songs, giving the songwriter more creative freedom and flexibility not available in a real voice“.
    • Virtual concerts are here to stay. Platforms like Roblox and Fortnite are making virtual concerts with big acts a recurring event with artists like 21 Pilots, Ariana Grande and others joining the fold and attracting millions of viewers.
  • Dubbing and Voice avatars
    • DeepDub– an Israeli startup is able to generate AI voice clones of actors in multiple languages, while keeping the actor’s unique tone of voice. It’s also able to add accents, i.e. English with a Brooklyn accent. Currently working with major studios.
    • Papercup – a UK startup offering automated video localisation using AI dubbing. Working with broadcasters such as Sky, BBC and Discovery.
My virtual synthetic music studio, by Amper. It costs $5 for a personal license if you want to download it.

Gaming

AI in gaming has been largely geared towards improving computer controlled opponents., the extent of which can be seen in DeepMind’s victory against the world champion in Go. But now, leveraging reinforcement learning, gaming companies like Sony and EA are developing intelligent, creative, life-like characters. Microsoft for example, is hiring for a reinforcement learning expert for a new gaming initiative, so I suspect others are working on this as well.

  • AI Dungeon –  a free-to-play single-player and multiplayer text adventure game which uses artificial intelligence to generate content. When it launched, it got real dark, really fast, so the developers took it down to make modification that restrict sexual content for minors. Read the story on Wired.
  • Promethean – uses AI to fill virtual worlds with trees, rocks, etc. It can be trained by artists to imitate an artist’s style. It trains and learns through machine learning techniques and makes suggestions in the creative process.
  • Sonatic – focuses on AI generated voices for games. It recently received headlines for helping Val Kilmer, who suffered from voice loss after throat cancer. They were able to recreate his voice using past samples, and it’s now available via API for video games.
AI generated game scene by Promethean

What’s next for Creative AI tech

Creative AI technology offers to save time and money. In marketing tech, it won’t replace human creativity, but will make the process of creating and testing visuals quicker and more efficient. Synthetic media in particular, also offers the possibility to create more personalised, diverse characters/models rather than pick a generic one.

My post is by no means an exhaustive list, but you can find a database of creative AI tools here: https://creative-ai.org/

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The Tipping Point for 3D content is Now

The tipping point is that magic moment when an idea, trend, or social behaviour crosses a threshold, tips, and spreads like wildfire.

Malcolm Gladwell, The Tipping Point

Some tech revolutions happen quickly, like a tsunami. For example, smart phone penetration. Others take time, and multiple waves, until they become mainstream. I believe we’re now at the tipping point for 3D content adoption and why it represents a huge opportunity for startups.

3D content has been around for a while. What’s driving 3D content adoption now?

Image source: Twitter

1) Improved infrastructure

The advancements in infrastructure, including the launch of 5G networks, new Nvidia chips with nearly 100% increase in GPU power, Lidar sensors embedded in consumer smartphones, to cloud gaming becoming widely available with offerings from Google, Amazon, Microsoft, etc. These advancements are creating huge opportunities in the world of 3D content by increasing download speeds and streaming capabilities to make AR and 3D content creation/ consumption widely accessible.

Improved infrastructure is a catalyst to developer adoption. Anecdotally, we at Remagine Ventures are investors in EchoAR, a CDN and CMS for 3D content which has seen the number of developers on its platform grow from 300 in March 2020 to over 10,000 in April 2021, with almost zero marketing effort. The According to Alon Grinshpoon, co-founder and CEO of EchoAR:

“3D content is now everywhere. Users are flocking to multiplayer 3D universes such as Fortnite and Roblox that allow people to interact with 3D content and use it to represent their identity – these are the new 3D social networks. All camera-first applications and games that incorporate 3D content like Pokémon GO, Snapchat, and TikTok are seeing unprecedented adoption and revenue which points to the fact that new solutions are required to manage and deliver 3D content for all future applications.”

Alon Grinshpoon, EchoAR

The future of infrastructure looks bright: from the rumoured Apple smart glasses, expected to launch in 2022, to Snap’s new Spectacle 3, 3D content will continue to grow in demand and finally ‘explode’ when it has its ‘iPhone moment’.

Apple Glass – Image credit: Martin Hajek/iDropnews
Spectales 3, image credit: Snap

2) The Metaverse and Gaming

The July 2021 Mobile gaming report by Israeli gaming startup CrazyLabs, shows that 3D games consist of 90.8% of the mobile gaming market. In consoles and PC it’s probably 100%.

Last week Epic Games announced the acquisition of 3D content marketplace Sketchfab to support the “open and interconnected Metaverse”. What exactly do they mean? that there will be much more 3D content needed to ‘populate’ a virtual world/game/virtual experiences in whatever form the Metaverse will take and it’s important to put the tools to create and port this content in multiple environments. Here are some of the quotes from the official announcement:

“Joining Epic will enable us to accelerate the development of Sketchfab and our powerful online toolset, all while providing an even greater experience for creators. We are proud to work alongside Epic to build the Metaverse and enable creators to take their work even further.”

Alban Denoyel, Sketchfab’s co-founder and CEO

“As the adoption of real-time 3D technology continues to grow, demand for web-based solutions will only increase”

Marc Petit, the general manager of Unreal Engine

Tim Sweeney, CEO of Epic Games openly talks about the Metaverse as the company’s mission. With over 400 million Fortnite players that gather on Fortnite not just to play, but also to hang out, socialise and listen to live music concerts, Epic is perhaps the leader in driving the Metaverse vision forward, but it is certainly not alone.

In an interview with The Verge on July 22, Mark Zuckerberg shared his vision for transforming Facebook into a Metaverse company over the next 5 years:

“It just touches a lot of the biggest themes that we’re working on. Think about things like community and creators as one, or digital commerce as a second, or building out the next set of computing platforms, like virtual and augmented reality, to give people that sense of presence. I think all of these different initiatives that we have at Facebook today will basically ladder up together to contribute to helping to build this Metaverse vision.

And my hope, if we do this well, I think over the next five years or so, in this next chapter of our company, I think we will effectively transition from people seeing us as primarily being a social media company to being a Metaverse company.”

Mark Zuckerberg

For the younger demographic, Roblox offers a ‘third place’ for children to play and socialise in the virtual world. The company successfully IPOd this year, reaching a market cap of over $46 billion, and it continues to grow by offering its own users to become creators on the platform. In 2021, the company is on track to exceed $500 million in payments to creators, double the amount of 2020.

The Metaverse is getting a lot more attention, and will continue to be a big driver for 3D content adoption. From avatar technology, to game engines. For more in depth analysis on the Metaverse, I highly recommend Matthew Ball’s 9 piece Metaverse Primer series.

2) VR adoption

According to the Global Entertainment & Media Outlook 2021–2025 report by PWC, Worldwide VR content revenue surged 31.7% in 2020 over 2019. While VR consumer adoption is still slower than expected, the Oculus Quest 2 launched in October 2020 by Facebook is widely considered the first ‘mainstream’ VR headset.

VR adoption PWC

Now sold out on the official website, the Oculus Quest 2 is priced at $300 for 64 GB of storage, cheaper than any of the main gaming consoles. Industry estimates put the sales of the new VR device at 2 million units in Q1 2021 alone. While tiny compared to smart phones for example, VR headset owners are willing to pay for premium content.

Oculus Quest 2

In February 2021, Facebook’s Oculus team released some numbers: over 60 titles on the Quest VR platform made over $1M in revenue.

Leading the pack is Beatsaber, a popular VR fitness game that generated over $180 million in revenue until February, with the rate of adoption steeply accelerating.

Beatsaber sales estimates – source: RoadtoVR

AR gaming is also a big business. Pokemon Go, the mixed reality mobile game by Niantic, has generated over $5 billion (!) in revenue in five years from player spending.

Pokemon Go is one of the top grossing mobile games ever with $1.3 billion generated in 2020 (Source: SensorTower)

VCs are starting to take VR content and apps more seriously. VRChat raised $80M series D in June 2021. RecRoom, another VR social app, raised $100M back in March at a $1.25 billion valuation.

4) Augmented Reality in eCommerce/ Social

Everyone wants to see themselves as a cartoon. Image credit: Techcrunch

Snap just reported Q2 2021 was the company’s best quarter in four years with 293 million daily active users, a 55 million users growth YoY. Much of this growth is driven by augmented reality – from transforming images to cartoons with AR filters to virtual try on of fashion items, in partnership with Farfetch and Prada.

According to Snap’s consumer AR report 2021, people are 94% more likely to buy something after they tried it with AR.

Snap recently acquired Vertebrae, a company that lets brands create and manage 3D versions of their goods.

According to Evan Spigel, Snap’s CEO: “More than 200 million Snapchatters engage with AR every day on average, and over 200,000 creators use Lens Studio to build AR Lenses for our community”.

This consumer use of AR today is somewhere between ‘Toy’ and ‘Tool’. Users engage with AR not even realising what AR is, and sometimes just for fun. However, the move to leverage AR for shopping becomes more of a utility (i.e. will this shoes/ glasses/ make up look good on me?) and the apps putting an emphasis on AR are reaping the benefits.

5) Interactive content

The use of 3D content and AR filters goes beyond social and gaming. New content experiences leveraging AR are getting traction with users. The applications range from advertising, Edtech, gaming and experience and even books.

Another example from our portfolio is Zoog, a interactive entertainment content hub to connect families, starting with books. As Yoav Oren, co-founder and CEO of Zoog describes:

“We’ve seen that AR can act not only as an enhancement to content and its experience, such as seen on Snap and other platforms, but also act as a communication bridge between generations.

The first thing we did, is make AR accessible to every user, regardless of age or demographic. We allow any person to become an AR content creator and use AR masks and filters to communicate with others. The result is experiences that grandparents love to create and grandchildren love to receive and even think is cool. We compliment the AR event with sound effects and motion animation, making the experience even more engaging.”

Yoav Oren, Zoog

The enterprise use cases for AR/ 3D content are growing as well. From training tools for doctors leveraging MagicLeap or Hololens headsets, to industrial AR for manufacturing, using the new incarnations of Google Glass Enterprise Edition.


The ‘Emerging Technology Sentiment Analysis Q2 2021‘ survey by Globaldata reveals that 70% of respondents stated that AR would disrupt their industry most out of a selection of seven emerging technologies including AI, cybersecurity, cloud computing, IoT, blockchain, and 5G. 3D content adoption is not going to happen over night, but as it has already started and will only grow more from here.

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Help me celebrate International Firgun Day 2021 (July 17)

Tomorrow, July 17, is International Firgun day ( #internationalfirgunday ). Readers of VC Cafe are familiar with the concept of Firgun on VC Cafe, but in case you’re seeing #firgun for the first time, and since there’s no real equivalent in English (apart from perhaps the opposite of ‘schadenfreude’) here is the short definition:

Firgun (Hebrew: ??????) is an informal modern Hebrew term and concept in Israeli culture (originally Yiddish), which describes genuine, unselfish delight or pride in the accomplishment of the other person.

Source: Wikipedia

Starting sometime the fall of 2020, during the Covid lockdowns, I wanted to find a positive angle in a time filled with negative news, anxiety and isolation. I embraced the concept of Firgun and started collecting the news on the movers and shakers in Israeli tech every single week, posting a short LinkedIn post that celebrates and shines a spotlight on the founders, investors and execs driving the industry forward. It is a labor of love and it’s been heartwarming to see so many messages of support over time, including this cool custom t-shirt from my kind friend Ella :-)

Now, for International Firgun Day tomorrow, I’d love to see more people embracing the concept and tagging others in their community of industry that deserve recognition for a milestone or impact they achieved. By helping recognise your peers accomplishments you will selfishly feel good. As simple as that.

“Everything good that has happened to me has happened as a direct result of helping someone else. Everything.”

Danny Trejo

So, what are you waiting for? Take the #internationalfirgunday challenge tomorrow. Pick your social platform of choice and choose at least three people that you’d like to call out (and explain why). Tag your post with #firgun and voilà, help pay it forward.

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How to get your mobile app discovered in 2021

The iOS app store officially launched on July 10 2008 with 500 apps. Almost overnight, a huge new industry was created around mobile. According to Statista, revenue generated from apps (paid downloads and in-app advertising) will reach $935 billion by 2023, and that doesn’t doesn’t include the many trillions of dollars transacted via apps in the last decade alone (think Amazon, Uber, games, etc).

Worldwide mobile app revenues in 2014 to 2023(in billion U.S. dollars) (source: Statista)

Yet despite the huge size of the mobile market and the economic opportunity it presents, the process of discovering new apps by consumers has been pretty static in the past decade. As a VC that invests in B2C, I often try to put myself in shoes of a founder looking to grow the audience for their new app to consumers. What are the main channels for app marketing and distribution today?

Think with Google study 2016 – How people discover, use and stay engaged with apps (Source Think with Google and Ipsos)

?App discovery today:

  • Word of mouth – family and friends remain the #1 channel for new app discovery. Referrals or invite mechanisms remain a strong incentive for app downloads. What’s the last app you recommended to someone or installed because of a recommendation?
  • App Store lists/ features – not surprisingly, but a big % of app installs is influenced by app store recommendations and by being featured by the app store. Owners of new smartphone devices are more likely to install a number of new apps at once.
  • Blogs/ press – to get consumers to learn about your new app, PR remains a viable source, especially when it comes to buzzy/social apps.
  • Social media – while a lot of the social media exposure to apps is done via targeted advertising, with over 2.5 billion users for Facebook and Instagram app startups cannot afford NOT to be discovered on social media. Instagram, Tiktok, Facebook, Snap and Twitter are the top destinations. This works particularly well with visual content apps (like Reface and the various cartoon apps that for a while appeared to dominate my feeds) or by creating incentives for users to share (get 10% off if your friends sign up etc).
  • Ads – targeted advertising is perhaps THE most reliable channel to market and distribute a consumer app. Google, Facebook and Amazon are main beneficiaries, by the virtue of the fact they have the most data on consumers and therefore able to slice and dice the target audience and help advertisers find lookalikes. That said, the new privacy settings of iOS 14.6 introduced a feature that stops apps from tracking consumers, which led to reduced spend on mobile ads for the time being.
  • Youtube/ Tiktok/ Twitch influencers – while it can be considered part of social media, the use of influencers, particularly in video/streaming platforms has been a recent addition to the app distribution arsenal that so far justifies the ROI. The challenge is that there are millions of micro influencers and still no standard way of booking these campaigns in a programatic approach in the same way that can be achieved with ads.
  • ProductHunt/ Reddit/ Directories – another form of PR/social media, directories of new products and forums solicit feedback from users and contribute to discovery.

If you build it, will they come?

Unfortunately not. In June 2021 there were 34,300 new apps released on the iOS app store alone. The current limited discovery methods give huge benefits to established brands/apps, but make it difficult for new apps to stand out. The reality for startups is that it’s not enough to build, design and ship a great looking app – marketing and distribution are critical to success.

New apps released each month on the iOS app store (source: Statista)

Consumer app startups have to frantically watch their CAC<LTV ratio. So while ads can be an effective way to grow, spending on user acquisition before figuring out monetisation is a sure way to shorten runway for early stage startups. Therefore, my recommendation for startups who are pre-monetisation is to experiment with new organic distribution ways.

How the biggest consumer apps got their first 1,000 users (Lenny’s newsletter)

Lenny Rachitsky shared the 7 strategies that got the top consumer apps their first 1,000 users. Below I added some additional suggestions for increasing your app discoverability in the early days:

  1. Invest in content – these days, everyone is a creator. More and more platforms are available for apps to tell their story and engage users in new, creative ways. To increase word of mouth, the most popular app discovery method, creating original content and crafting a voice is key to standing out. Video, audio, text and images – it’s all part of the content game and there are plenty of platforms with an existing audience you can leverage. Tiktok, for example, is proving to be a viable organic distribution channel for consumer apps. Several startups, like Copy.ai are trying to automate the process of content creation with GPT-3, but in the early days, there’s no substitution to creating your own voice.
  2. Build virality into the product – it might be counter intuitive to launch your product as “invite only” – after all, the goal is to grow the audience, not to restrict it. That said, the ‘velvet rope launch‘ approach of signing up for waitlists, sharing limited invites or rewarding user engagement with access codes seems to be gaining popularity (Some of you might be old enough to remember this used to be a popular launch strategy in the early days of web 2.0). Recent examples include Clubhouse, Racket or Polywork. It can also backfire, so execution is key.
  3. Build a community – often overlooked, but building a community around your app can help you build better products and dramatically increase retention. As Peter Yang puts it in “Why Community-Led Product Development Wins’:
    1. Announce your product early and invite interested customers to join an online community (e.g., Slack or Discord). Ask them to introduce themselves and start building trust.
    2. Ask customers about their pain points and share product ideas and designs early and often. Give them product demos and show them how you’re making adjustments to your roadmap based on their feedback. 
    3. Build a casual environment where customers feel comfortable talking about anything. This is the best way to uncover new pain points and walk in your customer’s shoes.

      Examples of startups that successfully built a community around their early product include Phil Libins’ mmhmm, Clubhouse with their weekly town hall meetings and many gaming apps like PubG or Fortnite.
  4. Create multiple ‘launch’ moments – Airbnb famously ‘launched’ their product multiple times. As Brian Chesky shared in a Stanford class with Reid Hoffman: “We actually “launched” multiple times. If you launch and no one noticed?—?you can just launch again. We had press that wrote about us multiple times for launching.
  5. Don’t just design the product, design the whole experience – another important lesson from Airbnb is the need to think about the whole user experience, not just about the app itself. I LOVE Brian’s story of designing an 11-star experience

“So what would a 10-star check in be? A 10-star check in would be The Beatles check in. In 1964. I’d get off the plane and there’d be 5,000 high school kids cheering my name with cars welcoming me to the country. I’d get to the front yard of your house and there’d be a press conference for me, and it would be just a mindf**k experience. So what would an 11-star experience be? I would show up at the airport and you’d be there with Elon Musk and you’re saying: ‘You’re going to space.’”

How to Scale a Magical Experience: 4 Lessons from Airbnb’s Brian Chesky, by Reid Hoffman

Any founder of a consumer should read these lessons and let them sink in.

Shameless plug, but as a VC investor at Remagine Ventures, I’d love to see startups tackling the marketing and distribution of apps and software in new creative ways. If you’re one of them, you don’t need a warm intro to speak with us, just get in touch.

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