Pioneer Square Labs’ Greg Gottesman on the studio model for high growth startups

Photo courtesy of Flickr/Randy Stewart. You were a Managing Director at Madrona Venture Group for many years but recently left to found Pioneer Square Labs. You employ a different model for building startups i.e. it is neither a venture capital firm nor an accelerator. How is this new model different or better? The traditional way of starting a company will remain the most common, which is you have an idea and bootstrap it or… Read More

Nexus Ventures’ Naren Gupta bemoans "short-termism" among current Indian startup founders

Naren Gupta, the highly respected Silicon Valley based founding partner of Indo-US cross-border VC firm Nexus Ventures, has published an article in Forbes India highlighting some areas in which the current crop of Indian startup founders could do better. Extract: Over the last few years, I have failed to see this focus or commitment in many of the new-age company founders or management teams

Fewer deals and smaller checks: Startups suffered in Q1 as first-time financing fell 31%

martech-2015-funding-exits-money

While it’s never easy for entrepreneurs to convince venture capitalists to invest in their new companies, it was especially difficult during the first quarter of this year. Fewer startups received first-time funding, and those that were fortunate to do so saw smaller checks.

For the first three months of 2016, initial funding deals declined 16 percent to 297, and the total dollars invested fell 31 percent to $1.7 billion, according to the latest MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association (based on data from Thomson Reuters).

Moreover, the average amount for first-time financing dropped 17 percent from $6.9 million in the fourth quarter of 2015 to $5.7 million in this quarter.

Source: MoneyTree Report

Source: The MoneyTree Report

Of the $1.7 billion of initial investments, software startups garnered $666 million (39 percent) across 121 deals. The next closest industries were media and entertainment, biotechnology, consumer products and services, and IT services, in descending order.

 

Funding by industry 2016 Q1

Source: The MoneyTree Report

The difficulties faced by companies seeking their initial fundings stood out in a quarter that was largely soft, reflecting the continued overall chill in the venture capital ecosystem. Total venture dollars invested in startups was flat at $12.1 billion, with a total deal count down 5 percent at 969, according to the MoneyTree Report.


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Fewer deals and smaller checks: Startups suffered in Q1 as first-time financing fell 31%

martech-2015-funding-exits-money

While it’s never easy for entrepreneurs to convince venture capitalists to invest in their new companies, it was especially difficult during the first quarter of this year. Fewer startups received first-time funding, and those that were fortunate to do so saw smaller checks.

For the first three months of 2016, initial funding deals declined 16 percent to 297, and the total dollars invested fell 31 percent to $1.7 billion, according to the latest MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association (based on data from Thomson Reuters).

Moreover, the average amount for first-time financing dropped 17 percent from $6.9 million in the fourth quarter of 2015 to $5.7 million in this quarter.

Source: MoneyTree Report

Source: The MoneyTree Report

Of the $1.7 billion of initial investments, software startups garnered $666 million (39 percent) across 121 deals. The next closest industries were media and entertainment, biotechnology, consumer products and services, and IT services, in descending order.

 

Funding by industry 2016 Q1

Source: The MoneyTree Report

The difficulties faced by companies seeking their initial fundings stood out in a quarter that was largely soft, reflecting the continued overall chill in the venture capital ecosystem. Total venture dollars invested in startups was flat at $12.1 billion, with a total deal count down 5 percent at 969, according to the MoneyTree Report.


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ASO master class: How to get 40K app downloads for free and other growth hacks (webinar)

app store.shutterstock_302135009

You could spend $10K to drive paid traffic and get some users — or you can growth-hack and land 40,000 downloads in just a few days. What’s the secret? Join top ASO gurus for this free half-hour master class in getting your app ranked, fast.

Register here for free.


“There’s this notion that you build a great app, and people will find it. Unfortunately that’s just not true anymore,” says Steve P. Young, ASO wizard and founder of App Masters.

Young, the host of the top mobile app podcast, has been picking the brains of hundreds of mobile developers since 2013. He’s successfully launched hundreds of new apps with his PR firm, Runway.bz. And he knows what mistakes make an app sink — and more importantly, how to make it rise.

App store and app marketing optimization (ASO and AMO), Young emphasizes, is not optional any more. “With the cost per installs continually going up,” he says, “you’re just going to have to spend a lot more money to get that visibility if you’re not doing ASO.”

App store optimization, he explains, is essentially SEO for the app store, juiced to drive organic growth by finding users with intent: those who are organically searching for your app, or your type of app. And those users are out there looking for you. Approximately 60 percent of app store users are there to search for particular apps.

The users who are pleased to find your app turn up at the top of their search results are going to have a better user experience, which is going to make them a better, and more profitable, long-term user.

Getting ranked requires surprisingly easy tweaks that can be made and updated instantly: ensuring your icon is eye-catching, and optimizing your description. Young has seen downloads double when developers get just these key elements right.

And there are short-term boosts you can leverage right away. “You can get downloads and not have to pay a cent,” Young says. He’s seen his favorite growth hack used successfully over and over: running a paid-to-free campaign where you where you make a paid app available for free for a couple of days. His first experiment with the technique netted him over 40,000 downloads in just a few days.

The key is getting press in the sites that track paid-to-free campaigns. “Coverage in one of these media outlets drives huge amounts of downloads,” Young says. And that’s the kind of action that drives you to the top of the app store charts, netting you more organic users. Not many traditional app marketing strategies are as elegant, easy — and free.

To learn more about the innovative tips, tricks and hacks that get your app onto the phones of the users you want, join our free webinar, “Growthhacking your app store downloads via AMO.”


Don’t miss out!

Register here for free.


In this half hour ASO masterclass, you’ll learn:

  • The tools, tips, and techniques to get your app in front of your audience and top of mind with app stores
  • How to identify the small changes in components, such as your in-app purchase descriptions, that will have big impact on downloads
  • The differences between Google Play and Apple’s App Store, and map how you should adapt your ASO/AMO strategy for both

Speakers:

  • Peggy Anne Salz, analyst, VentureBeat
  • Steve P. Young, ASO ‘wizard’ and founder of App Masters

Moderator:

  • Wendy Schuchart, analyst, VentureBeat









ASO master class: How to get 40K app downloads for free and other growth hacks (webinar)

app store.shutterstock_302135009

You could spend $10K to drive paid traffic and get some users — or you can growth-hack and land 40,000 downloads in just a few days. What’s the secret? Join top ASO gurus for this free half-hour master class in getting your app ranked, fast.

Register here for free.


“There’s this notion that you build a great app, and people will find it. Unfortunately that’s just not true anymore,” says Steve P. Young, ASO wizard and founder of App Masters.

Young, the host of the top mobile app podcast, has been picking the brains of hundreds of mobile developers since 2013. He’s successfully launched hundreds of new apps with his PR firm, Runway.bz. And he knows what mistakes make an app sink — and more importantly, how to make it rise.

App store and app marketing optimization (ASO and AMO), Young emphasizes, is not optional any more. “With the cost per installs continually going up,” he says, “you’re just going to have to spend a lot more money to get that visibility if you’re not doing ASO.”

App store optimization, he explains, is essentially SEO for the app store, juiced to drive organic growth by finding users with intent: those who are organically searching for your app, or your type of app. And those users are out there looking for you. Approximately 60 percent of app store users are there to search for particular apps.

The users who are pleased to find your app turn up at the top of their search results are going to have a better user experience, which is going to make them a better, and more profitable, long-term user.

Getting ranked requires surprisingly easy tweaks that can be made and updated instantly: ensuring your icon is eye-catching, and optimizing your description. Young has seen downloads double when developers get just these key elements right.

And there are short-term boosts you can leverage right away. “You can get downloads and not have to pay a cent,” Young says. He’s seen his favorite growth hack used successfully over and over: running a paid-to-free campaign where you where you make a paid app available for free for a couple of days. His first experiment with the technique netted him over 40,000 downloads in just a few days.

The key is getting press in the sites that track paid-to-free campaigns. “Coverage in one of these media outlets drives huge amounts of downloads,” Young says. And that’s the kind of action that drives you to the top of the app store charts, netting you more organic users. Not many traditional app marketing strategies are as elegant, easy — and free.

To learn more about the innovative tips, tricks and hacks that get your app onto the phones of the users you want, join our free webinar, “Growthhacking your app store downloads via AMO.”


Don’t miss out!

Register here for free.


In this half hour ASO masterclass, you’ll learn:

  • The tools, tips, and techniques to get your app in front of your audience and top of mind with app stores
  • How to identify the small changes in components, such as your in-app purchase descriptions, that will have big impact on downloads
  • The differences between Google Play and Apple’s App Store, and map how you should adapt your ASO/AMO strategy for both

Speakers:

  • Peggy Anne Salz, analyst, VentureBeat
  • Steve P. Young, ASO ‘wizard’ and founder of App Masters

Moderator:

  • Wendy Schuchart, analyst, VentureBeat









ASO master class: How to get 40K app downloads for free and other growth hacks (webinar)

app store.shutterstock_302135009

You could spend $10K to drive paid traffic and get some users — or you can growth-hack and land 40,000 downloads in just a few days. What’s the secret? Join top ASO gurus for this free half-hour master class in getting your app ranked, fast.

Register here for free.


“There’s this notion that you build a great app, and people will find it. Unfortunately that’s just not true anymore,” says Steve P. Young, ASO wizard and founder of App Masters.

Young, the host of the top mobile app podcast, has been picking the brains of hundreds of mobile developers since 2013. He’s successfully launched hundreds of new apps with his PR firm, Runway.bz. And he knows what mistakes make an app sink — and more importantly, how to make it rise.

App store and app marketing optimization (ASO and AMO), Young emphasizes, is not optional any more. “With the cost per installs continually going up,” he says, “you’re just going to have to spend a lot more money to get that visibility if you’re not doing ASO.”

App store optimization, he explains, is essentially SEO for the app store, juiced to drive organic growth by finding users with intent: those who are organically searching for your app, or your type of app. And those users are out there looking for you. Approximately 60 percent of app store users are there to search for particular apps.

The users who are pleased to find your app turn up at the top of their search results are going to have a better user experience, which is going to make them a better, and more profitable, long-term user.

Getting ranked requires surprisingly easy tweaks that can be made and updated instantly: ensuring your icon is eye-catching, and optimizing your description. Young has seen downloads double when developers get just these key elements right.

And there are short-term boosts you can leverage right away. “You can get downloads and not have to pay a cent,” Young says. He’s seen his favorite growth hack used successfully over and over: running a paid-to-free campaign where you where you make a paid app available for free for a couple of days. His first experiment with the technique netted him over 40,000 downloads in just a few days.

The key is getting press in the sites that track paid-to-free campaigns. “Coverage in one of these media outlets drives huge amounts of downloads,” Young says. And that’s the kind of action that drives you to the top of the app store charts, netting you more organic users. Not many traditional app marketing strategies are as elegant, easy — and free.

To learn more about the innovative tips, tricks and hacks that get your app onto the phones of the users you want, join our free webinar, “Growthhacking your app store downloads via AMO.”


Don’t miss out!

Register here for free.


In this half hour ASO masterclass, you’ll learn:

  • The tools, tips, and techniques to get your app in front of your audience and top of mind with app stores
  • How to identify the small changes in components, such as your in-app purchase descriptions, that will have big impact on downloads
  • The differences between Google Play and Apple’s App Store, and map how you should adapt your ASO/AMO strategy for both

Speakers:

  • Peggy Anne Salz, analyst, VentureBeat
  • Steve P. Young, ASO ‘wizard’ and founder of App Masters

Moderator:

  • Wendy Schuchart, analyst, VentureBeat









‘Allumette’ proves that virtual reality cinema is no joke

Allumette

Allumette, a lovely animated feature by Penrose Studios, illustrates why virtual reality film should be taken just as seriously as traditional film.

The folks at Sundance and the Tribeca Film Festival have already figured this out — both festivals showcased virtual reality this year. But in such early days, the quality of each VR experience varies wildly from project to project.

That’s why Penrose Studios — founded by Oculus’ first cinematic hire, Eugene Chung — surprised me yesterday. Here’s a behind-the-scenes teaser of Allumette:

 

Allumette is 20 minutes long — lengthy by VR standards, but it never feels drawn-out. The world Penrose creates for the viewer leaves you wishing it lasted a bit longer. The experience is like a good song in that way; you want to repeat it again right when it ends.

The film premiered today at the Tribeca Film Festival, and Penrose tells us a teaser of Allumette is coming “in the next few days” to Oculus Rift and HTC Vive owners. The full film will become available to anyone with a VR rig “later this year,” on the Rift, Vive, and PlayStation VR, says Penrose.

We sat down with Chung yesterday to learn more about the evolution and future of VR cinema, as well as the challenges the art form faces. Here’s an excerpt of our interview.

Eugene Chung: Most of my career’s been guided by, when I think back, to my parents. … So my mother was an accountant and my father was an opera singer. I’ve always had this duality of left brain-right brain throughout most of my career. They’re very much on each side of the spectrum.

VentureBeat: As far as they could possibly be…

Chung: It’s always sort of guided my career. On the creative side, I’ve been a filmmaker. I’ve made films the normal way, part of stage, part of theater, and then on technical side I’ve been coding and hacking since I was very young. I played a lot of video games as well. … I get a lot of motion sickness very easily, so I can’t play first-person shooters, actually.

VB: I get that!

Chung: You can imagine what it was like working at a VR company.

So I’ve always had this creative and analytical side. But because my dad’s an opera singer, I’ve recognized that art forms change over time. … When we think about the opera, 150 years ago Richard Wagner … called dramatic opera a “total work of art.” … 50 years later, we had this group of guys with cameras come around, and they started making the first films. … And this change was so dramatic that if I were to ask you to name a major movie company you’d say “OK, sure, Disney, Fox, Warner Bros,” but then if I were to turn around and ask you, could you name a major stage play or opera company of the 1800s, you’d have no idea. … It’s because they were completely disrupted. And some people say, “Well, 100 years ago is a long time,” but then I remind them Paramount Pictures is over 100 years old.

So art forms do in fact change. And I was wondering … “When will I see the day that an art form will change? … I probably won’t live to see it.” But then a few years ago I saw virtual reality come back around.

Penrose_Allumette (9)

VB: Were you the first film hire [at Oculus]?

Chung: I was the first film and cinematic hire at Oculus, and I basically had a blank slate, because no one else was doing this.

So I remember thinking: VR and AR are the next major computing platform, in the same way that in the last 50 or 60 years we’ve had five major computing platforms. We had the mainframe in the 60s, then the minicomputer, followed by the personal computer, followed by desktop Internet, followed by mobile Internet, which is the era we live in today, and I think that augmented and virtual reality will be that next phase of computing platforms.

So then I said, let’s go back to the last time we’ve seen a major computing platform. … If you thought about the summer of 2007 when Steve Jobs launched the iPhone, if you asked someone to build an iPhone app, they wouldn’t know how.

VB: You’d get fart apps.

Chung: Well, you’d definitely get that, but if you asked a serious person to build a real mobile app, they’d be like, “I don’t know how to build a mobile app,” and then they’d take Microsoft Word for the desktop and jerry-rig it onto the phone, and that would make for a bad mobile app. So what did Apple have to do? They had to create several example apps. … So I realized we had to do the same, and I hired some of my former colleagues from Pixar, and we created this thing called Oculus Story Studio, and created some of the first VR films, like Lost was our first one. …

But then along the way we got acquired by a little company called Facebook, and that changed the nature of the entire industry. So what I thought would take something like ten years got condensed into something like one year — and that was just an incredible moment. And I stayed on for a while building out the team after the acquisition, but what I wanted to do before even joining Oculus was create my own company, and so I created Penrose Studios.

VB: When did you leave Oculus?

Chung: I guess last year? We’re one of the few companies that has a publishing deal with Oculus — one of the few companies paid by Oculus for content.

VB: Do you feel weird demoing the film on a [HTC] Vive?

Chung: Well, right next to you was CV1, so our premier will have Oculus Rifts and HTC Vives. What’s great about this industry in general now is there’s so much excitement that there’s just a lot of collaboration in virtual reality today, even with different headset makers.

VB: It’s so transparent, compared to mobile platforms which have been locked up.

Chung: So, anyways, we’re a few months in, but we did The Rose and I, which was our first piece, which premiered at Sundance. Our second piece, which is Allumette, is premiering at Tribeca Film Festival.

Penrose_Allumette (13)

VB: What does it mean, Allumette?

Chung: It means matchstick in French. It was kind of a working title … and then, by the time it came to name the film, we were like, “Let’s just call it Allumette.”

VB: So for the movie: One thing that’s funny is it’s absolutely a film, but it’s not like most films, and it’s only 20 minutes long.

Chung: Well, only? The longest VR film of its kind …

VB: “Only” and “impressively”? For people who aren’t in the film world, they’re used to 60 to 90 minute films with a long arc. Everyone in the audience sees the same thing. They watch it at the same time. You can almost see stages [in Allumette], harking back to your childhood, growing up with your father in opera. There are scene changes in a way that’s similar to stage.

Chung: It’s really more like the stage. … We have this team of really talented people who come from CG film land, and there is lots and lots of really good talent there. In the last great art transition, the major stage play directors tried to become film directors, and a lot of them didn’t succeed because they did things like put the camera in front of the stage. And they were like “Oh, this is cinema.” And it wasn’t actually cinema.

It took completely new creators, like D.W. Griffith, who invented the closeup — the new, talented people who crafted the language of cinema.

VB: Do you feel pressured — trying to be that for this?

Chung: I don’t really feel pressured. I think we’re excited to be making this new medium.

Because that was the case with film. With VR, it’s almost like, we have all this talent on the team, and it’s about trying to be humble enough to understand that we don’t know everything that we need to know about this medium. That’s a very difficult thing. The biggest problem with the stage play directors in cinema is that they knew too much.

Penrose_Allumette (10)


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Shopify acquires Kit, the artificially intelligent marketing bot

shopify-logo-white

We’re standing on the edge of the chatbot revolution, and I’m reminded of how I felt when those first apps hit the store in 2007. Only this time, the apps talk back.

And following its announcement at Facebook’s F8 developer conference yesterday — where it became the first commerce platform to announce an integration with Facebook Messenger — Shopify has today announced that it has agreed to acquire privately held Kit CRM Inc. Details of the deal were not disclosed.

Kit is the virtual marketing assistant I’ve covered at length before. It leverages SMS and other messaging platforms to help companies market their online stores by asking salient questions at the right time.

Kit can email your customers, build Facebook ads, sponsor Instagram photos, and send you timely reports to let you know if you sold those last ten pairs of designer jeans. And last month we announced it had launched an API, allowing partners to expand on its artificial intelligence. It can now help you set discounts, retarget website visitors, engage with the customer after an abandoned cart, and handle 404 errors — all through a simple chat interface, and in 20 countries.

“The Kit team has been focusing on the intersection of commerce and messaging since their inception,” Craig Miller, chief marketing officer at Shopify told me. “Their vision of the future is squarely aligned with ours. This acquisition accelerates our product roadmap and also brings top talent to Shopify.”

With Shopify’s announcement yesterday that it is building commerce bots for Facebook Messenger Platform, I wondered how this acquisition dovetails with that intent.

“We believe messaging apps are the gateway to the Internet on mobile, and conversational commerce represents a huge opportunity for Shopify,” Miller said. “The acquisition of Kit, along with Shopify’s integration with the new Facebook Messenger Platform announced yesterday, further supports our focus on helping merchants embrace conversational commerce.”

kit-crm-api-ai-assistant

With so many bot fingers in the messaging and chat app pie, Shopify must be tempted to roll Kit into its Messenger project. For now, though, it appears nothing will change.

“In the near term Kit will remain as a Shopify app in our App Store,” Miller said.

For Michael Perry, founder and CEO at Kit, today’s acquisition is a milestone in a journey that started in 2013.

“Shopify is the ideal company to acquire Kit,” Perry said. “Their commitment to business owners and their view of the future is directly aligned with our own mission and goals. We both want small business owners and entrepreneurs to be successful.”

The original mission remains the same too.

“Kit will continue to work as a team that is laser-focused on building the future of virtual workforce and conversational commerce for business owners,” Perry said. “I feel very fortunate that we have Shopify’s full support to build the future of commerce together.”

More information:

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Destiny fans want better matchmaking, so they’re making it themselves

The FTW app promises to connect like-minded online gamers looking for a group.

Beerock Studios’ founder Brock Busby and resident adviser Mark Norris can easily recall some of their worst online matchmaking experiences.

For Norris, it was a recent Call of Duty match. “The guy who won … his emblem was all White Supremacist stuff,” Norris told GamesBeat in a recent interview. “And so it was a horrible experience at the end of the game.”

The desire to avoid those kinds of situations led Busby to create a community site for Bungie’s popular online shooter Destiny called DestinyLFG.com. “LFG” is an acronym often used in MMORPGs that stands for “looking for group.” If the game lacks matchmaking tools, typing “LFG” into chat is often the only way to connect with players looking to do the same activity, but the resulting group’s quality is often sketchy at best.

Busby recalled an incident from his days playing Blizzard Entertainment’s massively multiplayer online role-playing game (MMORPG) World of Warcraft. “Basically, this is when there were still 15-man Upper Blackrock Spire runs,” he told GamesBeat. After a few hours of attempting to take down the raid’s bosses and failing, he said frustration took over. “You know, you don’t want to give up,” he said. “You don’t want to just bail on this group, but then there’s that one player who decides to run into the room with all the whelps and the eggs and they all break apart, basically wipes the entire group and then they leave.”

In other words, the player pulled a “Leeroy Jenkins.”

“All you want to do is slam your fist down on your desktop,” Busby said.

After Bungie said it wasn’t going to add matchmaking tools in-game for its toughest Destiny content, Busby saw an opportunity to connect like-minded people. His web site allows people to quickly post what content they want to tackle, what platform they’re playing on, and whether or not they want teammates to use microphones. DestinyLFG quickly took off, gaining over 6 million unique users. It wasn’t long afterward that Busby and Norris thought about branching out.

“We actually went out and surveyed our audience to see what they want from the DestinyLFG.com experience and we actually had to turn our survey off after about three days because it was so popular,” Norris said. “And resoundingly, what everybody was excited about was the ability to experience the same kind of tools and features that we’re offering on Destiny for other games.”

With that in mind, Beerock Studios headed to Kickstarter with the idea for a new mobile app called For the Win (FTW). Unlike popular Destiny matchmaking services like DestinyLFG and The100.io, FTW is cross-platform and cross-game. It will give users instant access to a large community that’s looking for teammates. It’s an idea that should appeal to anyone who’s ever had a gaming night ruined by random players.

“Mark and I both believe that random matchmaking is flawed,” Busby said. “That people have a desire to connect with people through communities, and meet other people easily. And they have specific requirements for their gaming, because in the end they don’t want to waste time and they want to have a great experience.”

FTW will support games like Destiny and The Division at launch.

Above: FTW will support games like Destiny and The Division at launch.

Image Credit: Beerock Studios

Beerock is asking for $75,000 to build the FTW app. It’ll support at least seven online games at launch: Destiny, The Division, Call of Duty, Borderlands, DayZ, Minecraft, and Ark: Survival Evolved. Users will be able to create profiles, send messages, schedule events, and receive push notifications on their mobile devices. And, perhaps most important, it’ll have a reputation system, a way for gamers to avoid the Leeroys of the online world.

“We hear a lot of complaints from people who, even using other LFG systems or random matchmaking, they’ll be at the [final boss] or they’ll get to the treasure chest in Destiny, for example, and players will kick them out so their friend can join,” said Busby. “And that’s a very bad, negative experience. So, creating a system like this will basically weed out those negative experiences.”

Beerock plans to launch FTW before Destiny 2 arrives and support it through free memberships with “nondisruptive ads” and paid memberships. The premium tier will remove the ads and include features like bigger friends lists, adding Twitch stream to listings and events, and scheduling more events per week. Membership pricing is still being determined.


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