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Pinecone lands $10M seed for purpose-built machine learning database
Pinecone, a new startup from the folks who helped launch Amazon SageMaker, has built a vector database that generates data in a specialized format to help build machine learning applications faster, something that was previously only accessible to the largest organizations. Today the company came out of stealth with a new product and announced a $10 million seed investment led by Wing Venture Capital.
Company co-founder Edo Liberty says that he started the company because of this fundamental belief that the industry was being held back by the lack of wider access to this type of database. “The data that a machine learning model expects isn’t a JSON record, it’s a high dimensional vector that is either a list of features or what’s called an embedding that’s a numerical representation of the items or the objects in the world. This [format] is much more semantically rich and actionable for machine learning,” he explained.
He says that this is a concept that is widely understood by data scientists, and supported by research, but up until now only the biggest and technically superior companies like Google or Pinterest could take advantage of this difference. Liberty and his team created Pinecone to put that kind of technology in reach of any company.
The startup spent the last couple of years building the solution, which consists of three main components. The main piece is a vector engine to convert the data into this machine-learning ingestible format. Liberty says that this is the piece of technology that contains all the data structures and algorithms that allow them to index very large amounts of high dimensional vector data, and search through it in an efficient and accurate way.
The second is a cloud hosted system to apply all of that converted data to the machine learning model, while handling things like index lookups along with the pre- and post-processing — everything a data science team needs to run a machine learning project at scale with very large workloads and throughputs. Finally, there is a management layer to track all of this and manage data transfer between source locations.
One classic example Liberty uses is an eCommerce recommendation engine. While this has been a standard part of online selling for years, he believes using a vectorized data approach will result in much more accurate recommendations and he says the data science research data bears him out.
“It used to be that deploying [something like a recommendation engine] was actually incredibly complex, and […] if you have access to a production grade database, 90% of the difficulty and heavy lifting in creating those solutions goes away, and that’s why we’re building this. We believe it’s the new standard,” he said.
The company currently has 10 people including the founders, but the plan is to double or even triple that number, depending on how the year goes. As he builds his company as an immigrant founder — Liberty is from Israel — he says that diversity is top of mind. He adds that it’s something he worked hard on at his previous positions at Yahoo and Amazon as he was building his teams at those two organizations. One way he is doing that is in the recruitment process. “We have instructed our recruiters to be proactive [in finding more diverse applicants], making sure they don’t miss out on great candidates, and that they bring us a diverse set of candidates,” he said.
Looking ahead to post-pandemic, Liberty says he is a bit more traditional in terms of office versus home, and that he hopes to have more in-person interactions. “Maybe I’m old fashioned but I like offices and I like people and I like to see who I work with and hang out with them and laugh and enjoy each other’s company, and so I’m not jumping on the bandwagon of ‘let’s all be remote and work from home’.”
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The 5 biggest mistakes I made as a first-time startup founder
June 4, 2019 should have been one of the happiest days of my life.
At 11:30 a.m., a press release hit the wire announcing that the cybersecurity company I had spent more than eight years building was being acquired by a larger cybersecurity player.
What’s not to love about a successful exit? I’d be set financially, the investors who had given us $70 million would make money, and the technology we created would get new legs in an organization with broader reach and resources.
Still, I had regrets. For one thing, I initially hadn’t wanted to sell. (More on that later.) For another, I was nagged by the feeling that our company had fallen short of its true potential, and that the reason was me — specifically, several rookie mistakes I made as a first-time entrepreneur.
I don’t stew about those errors any longer. In fact, I believe my miscues at my first startup will help define my career from here on out. That’s why, as I grow my next company, I’m thinking about not only the things I want to do but those I’d never do again.
Here are five of them.
Trying to do too much myself
In management theory terms, I was a “pacesetter.” I’d be the first to jump into any project or task, I’d execute it as quickly as possible and I expected everyone else to keep up. I thought that was how a startup leader acted — super helpful and scrappy.
But it came at a big price: disempowerment of the team. I was hoarding not only control — nobody felt like they personally owned anything — but also the institutional knowledge that needs to be spread around as a company grows. I became a human GPS: People could follow my directions, but they struggled to find the way themselves. Independent thinking suffered.
I became a human GPS: People could follow my directions, but they struggled to find the way themselves. Independent thinking suffered.
After a few years, I had a frustrating sense that I had all the answers and no one else did. Well, no wonder.
I’m now leaving the pacesetting to NASCAR and marathons.
Thinking people can read my mind
I believed all I had to do was say something once and everyone would get it. I became irritated when that didn’t happen. “We talked about this three months ago,” I’d bark. Intimidated team members would say to themselves, “Yeah, but we really only got 50% of it.”
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‘Anti-superficial’ dating app S’More raises $2.1M
S’More, a dating app that’s focused on helping users find more meaningful relationships, announced today that it has raised $2.1 million in seed funding.
S’More (short for “something more”) ensures that users can’t focus on physical appearance, because photos are initally blurred — they gradually un-blur as you interact with someone. The startup has introduced new features like video chat (also blurred initially), and it launched a redesigned app of the beginning of this month — CEO Adam Cohen-Aslatei said it’s a “completely rebuilt product” with new features like real-time conversation prompts and the ability to pay to promote your profile.
Cohen-Aslatei also said that S’More’s focus on “anti-superficial relationships” is attracting a real audience, with 160,000 downloads in its first year and “thousands” of paying users, including a 50% increase in subscriptions after launching the new app in January.
Looking at how dating will evolve after the pandemic, Cohen-Aslatei suggested, “I don’t think we’re going back to the way things were.” He pointed to a recent survey of S’More users in which 80% of respondents said they hadn’t gone on a single live, in-person date in 2020.
“Do you want to meet for casual encounter on Tinder, or do you have to want to have a conversation get to know a real person on S’More?” he said. Assuming that many people will choose the latter, the next question is: “How do you make discovery fun? There’s got to be multimedia, video, audio, games, all of those features are part of our product roadmap … S’More will feel like Hinge meets Nextdoor.” (Apparently, there’s “a huge cohort” of users on Nextdoor who are single and looking for relationships.)
Image Credits: S’More
The new funding comes from a long list of investors: Benson Oak Ventures, Mark Pincus’ Workplay Ventures, Gaingels VC, Loud Capital/Pride Fund
SideCar Angels, AppLovin Chairman Rafael Vivas, Joshua Black of Apollo Management, Plus Grade CEO Ken Harris, Harvard geneticist George Church, former Meet Group CEO John Abbott, former IMAX CEO Brad Weschler, Aaron and Sharon Stern, Justen Stepka/Enterprise Fund, Boston Harbor Angels, Grit Daily CEO Jordan French, Kind.Fund founder Marty Isaac, Craig Mullett and Dating Group.
Cohen-Asletai told me the funding has already allowed him to hire what he’s calling a “founding team,” including chief architect Long Nguyen, head of operations Sneha Ramanchandran, head of product and design Regina Guinto and senior developer David Lichy.
S’More is also announcing that it has signed a production deal with producers Elvia Van Es Oliva and Jack Tarantino, who have worked on shows like “90 Day Fiancé.” Cohen-Asletai said the startup will work with them to create “anti-superficial” dating content for digital platforms and TV networks.
This deal builds on the success of S’More Live, the startup’s celebrity dating show on Instagram Live, which has aired 60 episodes so far.
“We’re using that show to build our brand, to gain awareness and then … we’re actually able to leverage all of the viewers and retarget them with content from S’More, which has made our cost to acquire a user [very affordable],” Cohen-Asletai said.
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SetSail nabs $26M Series A to rethink sales compensation
SetSail wants to upend the way sales people get compensated by paying them throughout the sales cycle, rather than a single commission after the sale closes. Today, the startup announced a $26 million Series A.
Insight Partners led the round with participation from existing investors Wing Venture Capital, Team8 and Operator Collective. Today’s investment brings the total raised to $37 million, according to the company.
SetSail connects to your CRM, email, calendar and other systems that have signals about the progress of a particular sale, and then using machine learning looks at points in the sales cycle where it would make sense to reward the sales person for the progress they are making.
As CEO and co-founder Haggai Levi told me at the time of the startup’s $7 million seed round in July, the single commission system discourages risk taking:
“If I’m closing the deal, I’m getting my commission. If I’m not closing the deal, I’m getting nothing. That means from a behavioral point of view, I would take the shortest path to win a deal, and I would take the minimum risk possible. So if there’s a competitive situation I will try to avoid that,” he said in July.
He said the idea of changing the way we think about compensation resonated with sales executives during the pandemic, especially as everyone’s role got altered and teams became distributed because of COVID, but he says while rethinking compensation was certainly a big factor so was SetSail’s ability to connect to all of the sales systems to help build these new approaches to pay.
“I think it’s even beyond just compensation. […] It’s also connecting to all of your data using an end-to-end platform that helps you understand what’s happening between you, your reps and your customers and allowing you to tie that back in using behavioral science to machine learning-based compensation,” he explained.
The company began 2020 with five customers, a reasonable start for an early stage startup, but it ended the year with more than 20 including Cisco, Dropbox and HubSpot. It now has over 5000 sales reps using the platform.
In spite of the growing number of users, Levi says they have no plans to aggregate data, leaving each customer’s data as distinct to build the compensation packages that make sense to them. “We try not to play kind of the data, aggregator role because we want to make sure that every customer’s data is encrypted and secured in a completely different container. The trade off between getting knowledge between customers versus receiving their data is is too high in our opinion,” he said.
The company now has 35 employees with five more hired who will be starting in the next several weeks and plans to reach 70 by the end of the year. They are thinking hard about how to hire a diverse workforce. For starters, Levi says that the company board has two female members. He says hiring in general is a challenge for every CEO, especially early on, and hiring a diverse group even more so, but he says it’s important to be thinking about this from the start because from a gender perspective at least, you are losing half the talent pool if you ignore it.
When the pandemic is over, he sees having at least some in-person office presence in spite of being spread out across San Francisco, New York and Tel Aviv, but it will be probably be a hybrid approach and not require as much office space as they might have rented prior to COVID.
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Vectorized announces $15.5M investment to build simpler streaming data tool
Streaming data is not new. Kafka has existed as an open source tool for a decade. Vectorized was founded on the premise that the existing tools were too complex and not designed for today’s streaming requirements. Today the company released its first product, Redpanda, an open source tool designed to make it easier for developers to build streaming data applications.
While it was at it, the startup announced a $15.5 million funding round, which is actually a combination of a previously unannounced $3 million seed round led by Lightspeed Venture Partners and a $12.5 million Series A, which was also from Lightspeed with help from Google Ventures.
Redpanda is an open source tool that is delivered as an “intelligent API” to help “turn data streams into products,” company founder and CEO Alexander Gallego explained. It’s built to be a Kafka replacement, while remaining Kafka-compatible to help deal with backwards compatibility.
At the same time, it takes a more modern approach. Gallego points out that teams building data streaming applications have been getting lost in the complexity and he recognized an opportunity to build a company to simplify that.
“People are drowning in complexity today managing Kafka, ZooKeeper (an open source configuration management tool) and the data lake,” he said, adding “We enable new things that couldn’t be done before for several reasons: one is performance, one is simplicity and the other one is this store procedures.”
He says that the key to developer adoption is making the product free through open source, and having Kafka compatibility so that developers don’t feel like they have to just dump existing projects and start from scratch. While the company is launching with an open source tool, it plans to use the funding to build a hosted version of Redpanda to put it within reach of more organizations. “This funding round in particular is to power our cloud,” he said.
Arif Janmohamed, a partner at Lightspeed Ventures who is leading the investment in Vectorized sees a company looking to improve upon an existing technology with a better approach. “With a simple, elegant solution that doesn’t require any changes to an existing application’s code, Vectorized delivers 10x better performance, a much simpler management paradigm, and new functionality that will unleash the next set of real-time applications for the next decade,” Janmohamed said.
The company has 22 employees today with plans to add another 8 in the first half of this year, mostly engineers to help build the hosted version. As a Latino founder, Gallego is acutely aware of the need for a diverse and inclusive workforce. “What I have found is that being a [Latino] CEO, it attracts more people that look like me, and so that’s been a big thing, and it’s made a difference [in attracting diverse candidates],” he said.
One concrete thing he has done is start a scholarship to encourage under represented groups to become developers. “I started a scholarship where we just give money and mentorship to communities of Latino, Black and female developers, or people that want to transition to software engineering,” he said. While he says he does it without strings attached, he does hope that some of these folks could become part of the tech industry eventually, and perhaps even work at his company.
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Jam collaborative software launches Jam Genies to give small startups access to experts
As the world moves towards remote work, the collaborative tools market continues to expand. Jam, a platform for editing and improving your company’s website, is adding to the trend by introducing a new arm to its product today called Jam Genies.
Jam Genies is a network of highly experienced product experts that Jam users can tap for guidance and advice around their specific issue or challenge.
Cofounder Dani Grant explained to TechCrunch that many small and early-stage companies don’t have the deep pockets to hire a consultant when they run into a challenge, as many charge exorbitant rates and they often have a minimum time requirement. It can be incredibly difficult to get bite-sized advice at a reasonable cost.
That’s where Jam Genies comes in.
Genies hail from a variety of ‘verticals’, such as investors, designers, brand people, and growth hackers. The list includes:
- Brianne Kimmel – Angel investor and founder of Worklife VC. Investor in Webflow, Hopin & 40+ software companies building the future of work.
- Erik Torenberg – Partner at Village Global, a fund backed by Bill Gates, Jeff Bezos, Mark Zuckerberg and others. Founding team at Product Hunt.
- Sahil Lavingia – Founder & CEO of Gumroad, first engineer at Pinterest, and angel investing $10 million a year via shl.vc.
- Iheanyi Ekechukwu – Engineer turned angel investor, and scout investor for Kleiner Perkins.
- Soleio – Facebook’s second product designer, former head of design at Dropbox, and advisor at Figma. Invests in design-focused founders at Combine.
- Dara Oke – Product design lead at Netflix, formerly designed and built products at Microsoft, Twitter, and Intel.
- Katie Suskin – Designed many products you know and love like Microsoft Calendar, OkCupid, Tia, and … Jam.
- Julius Tarng – Helped scale design at Webflow and led design tooling at Facebook.
- Abe Vizcarra – Currently leading brand at Fast, former Global Design Director at Snap Inc.
- Tiffany Zhong – CEO, Zebra IQ. Recognized by Forbes as one of the Top 10 Gen Z Experts.
- Nicole Obst – Former Head of Web Growth (B2C) at Dropbox and Head of Growth at Loom
- James Sherrett – 9th employee at Slack, led the original marketing and sales of Slack.
- Asher King Abramson – CEO at Got Users, a growth marketing platform widely used by startups around Silicon Valley.
Users on the Jam platform can choose a Genie and set an appointment through Calendly. The sessions last half an hour and cost a flat fee of $250, all of which goes to the Genie.
Jam raised $3.5 million in October, from firms like Union Square Ventures, Version One Ventures, BoxGroup, Village Global and a variety of angel investors, to fuel growth and further build out the product. Jam Genies is, in many respects, a growth initiative for the company to better acquaint early-stage startups with the platform.
The main Jam product lets groups of developers and designers work collaboratively on a website, leaving comments, discuss changes and create and assign tasks. The platform integrates with all the usual suspects, such as Jira, Trello, Github, Slack, Figma, and more.
Since its launch in October 2020, the company has signed up 4,000 customers for its private beta waitlist, with 14,000 Jam comments created on the platform. The introduction of Jam Genies could add momentum to this growth push.
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Run:AI raises $30M Series B for its AI compute platform
Run:AI, a Tel Aviv-based company that helps businesses orchestrate and optimize their AI compute infrastructure, today announced that it has raised a $30 million Series B round. The new round was led by Insight Partners, with participation from existing investors TLV Partners and S Capital. This brings the company’s total funding to date to $43 million.
At the core of Run:AI’s platform is the ability to effectively virtualize and orchestrate AI workloads on top of its Kubernetes-based scheduler. Traditionally, it was always hard to virtualize GPUs, so even as demand for training AI models has increased, a lot of the physical GPUs often set idle for long periods because it was hard to dynamically allocate them between projects.
Image Credits: Run.AI
The promise behind Run:AI’s platform is that it allows its users to abstract away all of the AI infrastructure and pool all of their GPU resources — no matter whether in the cloud or on-premises. This also makes it easier for businesses to share these resources between users and teams. In the process, IT teams also get better insights into how their compute resources are being used.
“Every enterprise is either already rearchitecting themselves to be built around learning systems powered by AI, or they should be,” said Lonne Jaffe, managing director at Insight Partners and now a board member at Run:AI.” Just as virtualization and then container technology transformed CPU-based workloads over the last decades, Run:AI is bringing orchestration and virtualization technology to AI chipsets such as GPUs, dramatically accelerating both AI training and inference. The system also future-proofs deep learning workloads, allowing them to inherit the power of the latest hardware with less rework. In Run:AI, we’ve found disruptive technology, an experienced team and a SaaS-based market strategy that will help enterprises deploy the AI they’ll need to stay competitive.”
Run:AI says that it is currently working with customers in a wide variety of industries, including automotive, finance, defense, manufacturing and healthcare. These customers, the company says, are seeing their GPU utilization increase from 25 to 75% on average.
“The new funds enable Run:AI to grow the company in two important areas: first, to triple the size of our development team this year,” the company’s CEO Omri Geller told me. “We have an aggressive roadmap for building out the truly innovative parts of our product vision — particularly around virtualizing AI workloads — a bigger team will help speed up development in this area. Second, a round this size enables us to quickly expand sales and marketing to additional industries and markets.”
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Bloomreach raises $150M on $900M valuation and acquires Exponea
Bloomreach, an API company that helps eCommerce customers with search and web site creation, announced a $150 million investment today from Sixth Street Growth. Today’s funding values the company at $900 million.
At the same time, the company announced it has acquired Exponea, a startup that gives Bloomreach a marketing automation component it had been missing. The two companies did not reveal the acquisition price, but along with the pure functionality, the company gains 200 additional employees, which is significant, considering Bloomreach had 300 prior to the acquisition. It also gains 250 net new customers, giving it a total of 750.
“Historically, we have had two major pillars of the business — the search part of it and the content part,” Bloomreach CEO and co-Founder Raj De Datta told TechCrunch. The content management component lets customers build websites, while the search powers the search box, navigation and merchandising. He points out that all of it is powered by an underlying data analysis engine that matches data to people and people to products.
Exponea will give the company more of a complete platform of services, allowing marketers to target and personalize their marketing messages across multiple channels. De Datta says the two companies had similar missions and made a good fit. “We have a common vision and common sort of product direction. […] Both companies are data-driven optimization technologies[…] and both are entrepreneurial product-driven companies,” he said.
It also helped that they had been partnering together for six months prior to the sale, which has now closed. Exponea was founded in 2016 in Slovakia and has raised over $57 million, according to Pitchbook data. The plan is to leave Exponea as a stand-alone product, while finding ways to integrate it more smoothly with the other components in the Bloomreach platform. They expect the integration parts to happen over the next year.
While De Datta did not want to share specific revenue figures, he did say that the company had a record second half as business was pushed online due to the pandemic. Michael McGinn, partner at Sixth Street and co-head at investor Sixth Street Growth doesn’t see the demand for eCommerce abating, even post-COVID, and that will drive a need for more customized online shopping experiences.
“Technology serving more bespoke customer experiences is a rapidly expanding market and we are pleased to join Bloomreach in its leadership of the digital commerce experience and marketing sector,” McGinn said in a statement.
De Datta says the money was used in part to buy Exponea, but he also plans to invest more in engineering to continue building the product line. The ultimate goal is an IPO, but as you would expect, he wasn’t ready to commit to any timeline just yet.
“I wouldn’t say we have a timeline, but our goal is that the company over the course of 2021 should make investments towards that, so that it’s an option for us.”
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10 VCs say interactivity, regulation and independent creators will reshape digital media in 2021
The digital media industry will give us plenty to talk about this year.
When we last surveyed venture capitalists about their media investments, the big topic was the impact that the pandemic would have on the industry, and on the prospects for new startups.
Obviously, the pandemic hasn’t gone away, but when asked to predict the biggest storylines for 2021, VCs pointed to themes as varied as new distribution models, new kinds of interactivity, new tools for creators, the return of advertising business models and even the role of media in a democratic society.
“We are headed toward a content universe where consumers’ power of choice grows to new heights — what premium content to consume and pay for, and how to consume it,” Javelin’s Alex Gurevich wrote. “The consumers will have the final choice! Not traditional media and content distribution companies.”
For this new survey, we heard from 10 VCs — nine who invest in media startups, plus a tenth who’s seeing plenty of media pitches and was happy to share her thoughts. We asked them about the likelihood of further industry consolidation, whether we’ll see more digital media companies take the SPAC route and of course, what they’re looking for in their next investment.
Here’s who we surveyed:
- Daniel Gulati, founding partner, Forecast Fund
- Alex Gurevich, managing director, Javelin Venture Partners
- Matthew Hartman, partner, Betaworks Ventures
- Jerry Lu, senior associate, Maveron
- Jana Messerschmidt, partner, Lightspeed Venture Partners
- Michael Palank, general partner, MaC Venture Capital (with additional commentary from MaC’s Marlon Nichols)
- Pär-Jörgen Pärson, general partner, Northzone
- M.G. Siegler, general partner, GV
- Laurel Touby, managing director, Supernode Ventures
- Hans Tung, managing partner, GGV Capital
Read their full responses below.
What do you think will be the biggest trend or story in digital media in 2021?
Daniel Gulati: Defining media’s role in a democratic society. What accountability exists when an individual company’s pursuit of scale leads to the spread of disinformation? When a platform’s terms of service appears to collide with constitutional rights, who makes the call and what happens? To what extent should governments support the viability of local media organizations in the face of global competition and a rapidly changing digital landscape?
These are high stakes issues that will be front and center through the year.
Alex Gurevich: The continued disruption of content distribution models, whether that’s the debundling of cable via the plethora of SVOD services, or the way new content is released (i.e., on-demand at home versus movie theaters). We are headed toward a content universe where consumers’ power of choice grows to new heights — what premium content to consume and pay for, and how to consume it. The consumers will have the final choice! Not traditional media and content distribution companies. The pandemic has greatly accelerated this trend.
Matthew Hartman: The two largest social networks, Twitter and Facebook, removed the account of a sitting president and a set of related, follower accounts. This has fundamentally reset the media stack. This will accelerate action the government had already planned to take, including to reshape Section 230. The ripples will be felt throughout media, affecting how news is distributed through social media, what startups can use bigger platforms to grow, what the exit options are for small talent acquisitions and the fragmentation already occurring.
Second, the rise of synthetic media. Algorithmically enhanced or created media is a shift we identified at Betaworks in 2018 and in 2021 it will only increase in scale and scope. Yes, this affects deep fake detection (with companies like Sensity.AI leading the way) and other nefarious uses — but it will also start to fundamentally reshape the way media is created, from the cost of animation to the cost of writing stories, to editing and creating CGI.
Third, game streaming will continue to grow, with audiences that are starting to blow away those of regular TV. An enormous number of people tuned in last year to watch Alexandria Ocasio-Cortez play Among Us on Twitch with popular streamers (she hit 435,000 concurrent viewers at one point). And that wasn’t even close to the biggest event ever on Twitch, David Martinez, aka TheGrefg, hit 2.4 million concurrent viewers for the unveiling of his new Fortnite skin. Game publishers have finally started to understand the power of streamers not just to launch a new game, but to revive old ones, with games that groups of streamers can play together (like Among Us or Rust) soaring in popularity this past year.
Jerry Lu: The emergence of interactive media platforms outside of just gaming.
Because of their isolation due to COVID, people are yearning for social interaction and we’re seeing greater engagement across platforms like Twitch and Zoom, which make interactive communications possible. Previous iterations of media platforms were top-down broadcast, whereby companies produced content they thought consumers would like. Over the past five years, we’ve started to see a greater shift toward the long tail, whereby content comes straight from the consumer.
Gaming and esports were at the forefront of this shift from passive content viewing to interactive entertainment experiences. I believe that 2021 will be the year when we see platforms beginning to embrace interactivity as a form of audience participation, blurring the line between viewer and active participant. I’m excited at the prospect of seeing this form of interactive content consumption applied to other sectors, like education, childcare and commerce, to name a few.
Jana Messerschmidt: We will see a proliferation of products that enable content creators to build businesses outside of traditional media companies. These creators will leverage their existing brand, following and social media engagement to become entrepreneurs, building revenue streams across multiple different products.
There are a plethora of new tools for creators: for writers (Substack, Medium), personalized video shoutouts from creators (Cameo*, PearPop), new audio platforms (LockerRoom*, Clubhouse) or all-in-one tools for creators that include merch, subscriptions, tipping and more (FourthWall* ). Now is the time for creators to be rewarded by their fans for their content creation.
Historically, the big social platforms (Facebook, Instagram, Snap*, Twitter, TikTok) have failed to create meaningful paths for their creators to monetize. They make money from advertisers and thus their resources are focused on those advertising customer demands.
- denotes Lightspeed portfolio company
Michael Palank: If 2020 was the year every major media company either announced or grew their direct-to-consumer video/audio/gaming offering, 2021 will be the year where those offerings optimize and differentiate or die. We expect the hunger for original content to continue, but we feel the type of content will continue to diversify from both a story and IP perspective and a format perspective. It is not unthinkable that a major media company like Apple, Amazon or Disney looks to acquire Clubhouse in 2021.
As the lines between video games and filmed entertainment continue to blur we can also envision new companies popping up to take advantage of this trend. I also feel these content platforms will need to differentiate by way of better discovery and personalization.
I fully expect every major media company from Disney to Apple to Amazon to Microsoft will be looking for new and innovative ways to separate themselves from the rest of the pack in 2021.
Marlon Nichols: I think that the continued creation of streaming platforms from content creators/owners (e.g., Disney+, HBO Max, etc.) will force downward subscription pricing adjustments across the board and streaming platforms will need to revisit advertising as a revenue stream. That said, we know that watching ads on a paid platform won’t fly with consumers so I believe we’ll see contextually relevant product placement become the accepted form of brand/content collaboration going forward. I led MaC’s investment into Ryff because of this thesis.
Pär-Jörgen Pärson: Institutions and legislators will have a big effect on social media platforms. I think there will be pushes on antitrust behavior, and social networks will have to behave like media — meaning that they also need to take responsibility for the content that’s on their platform, not only from a user agreement standpoint like today but from an editorial standpoint. I think we’ll see many more editors-in-chief in this industry, as editorial becomes more and more important in our polarized world. This has the potential to change the social media platform landscape quite dramatically, and I’m not entirely sure yet on the long-term impact commercially.
M.G. Siegler: It’s sort of boring, but I wouldn’t be shocked if we see a swing back toward advertising-based models. I think there are two parts to this: First, if and when the pandemic recedes, I think a lot of traditional big advertising players like travel, will come roaring back. Second, it feels like there’s been a move away from advertising to paid subscriptions for a while now and I think these things are cyclical.
To be clear, I think both will continue to exist, I just think that after years of underindexing on paid subs, now we’re perhaps on the verge of overindexing on it … Obviously, advertising never went away, I just think it may be due for a bit of a renaissance (though I say that hoping the powers that be make those ads a better user experience — I think that’s the only way there’s not another backlash against them).
Laurel Touby: The biggest trend in digital media will be companies that don’t call themselves media companies, but that clearly draw from the business model playbook of media companies. For example: Companies that monetize their communities by giving sponsors and advertisers access to their audiences; or technology startups that sell wearable products and upsell their customers with access to premium high-value content.
Hans Tung: Contextual social networks: Video and livestreaming with the likes of TikTok and with other players like Instagram and Snap will continue to drive creativity and engagement. Clubhouse is now garnering a lot of attention as audio captures the attention of a new generation. This also creates new opportunities for established audio players like YY or Ximalaya. At the same time, apps like Clubhouse are an evolution of Snap or Twitter where influencers of all sorts gather to build a new following on new platforms.
However, one of the most interesting things we’re seeing is the emergence of contextual social networks that are focused on solving real-life problems. We see a lot more companies taking the best of audio and video experiences and experimenting with the next iteration of apps like Headspace and Calm, to solve societal issues, personal issues such as how to deal with anxiety, etc. These social networks may not scale as quickly or grab headlines like Clubhouse but they’re designed to bring people together to solve problems. We are also seeing professionalized networks such as Valence or Chief use these audio/video networks to address issues for a particular gender or underrepresented group, or apps that create virtual networking for communities.
Digital media delivered with differentiated experiences: Peloton may not immediately jump to mind as a digital-media company but they are one of the best at producing a high-value experience using extremely high-quality content that goes far beyond simple fitness or even the need for hardware. Increasingly more categories will become “Netflix-ized” where content is king and the experience is delivered through your smartphone.
As with Peloton, the experience is further enhanced with social interaction, such as leader boards, access to the best instructors, etc., which in turn expands the reach of the content. It’s a powerful loop that is driven by quality content, and the components feed off each other to make it more accessible. If you then couple it with Affirm to make it more affordable, you’ve got a flywheel on steroids. This pattern will emerge in other categories.
Consumerization of enterprise communication: Another aspect of media is communication, which we are seeing evolve in the enterprise space. It started with Slack a few years ago and Zoom more recently. Now with companies like Yak or the emergence of various conference apps, we see a higher usage frequency between companies, companies and their customers, and within the enterprise itself.
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Opal raises $4.3 million for its ‘digital well-being’ assistant for iPhone
Many people want to develop better screen-time habits, but don’t have a good set of tools to do so. A new startup, Opal, aims to help. The company, now backed by $4.3 million in seed funding, has developed a digital well-being assistant for iOS that allows you to block distracting websites and apps, set schedules around app usage, lock down apps for stricter and more focused quiet periods, and more.
The service works by way of a VPN system that limits your access to apps and sites. But unlike some VPNs on the market, Opal is committed to not collecting any personal data on its users or their private browsing data. Instead, its business model is based on paid subscriptions, not selling user data, it says.
Timed with its public debut, Opal also today announced its initial financing in a round led by Nicolas Wittenborn at Adjacent, a mobile-focused VC fund. Other investors included Harry Stebbings, Steve Schlafman, Alex Zubillaga, Kevin Carter, Thibaud Elziere, Jean-Charles Samuelian-Werve, Alban Denoyel, Isai, Secocha Ventures, Speedinvest, and others.
Image Credits: Opal, founder Kenneth Schlenker
The idea for Opal comes from Paris-based Kenneth Schlenker, a longtime technologist who previously founded and sold an art marketplace startup ArtList and later led mobility company Bird’s expansion in France.
Schlenker, who grew up in a small, quiet village in the Alps, says he got into technology at a young age.
“I sort of got obsessed, like many of us, by the potential of technology and its amazing power of attraction — making connections, learning new things, all sorts of incredible opportunities,” he explains. “But I’ve then spent the last 10 years and more trying to seek a balance between this need for connection and this need for disconnection.”
In more recent years, Schlenker came to realize that others were having the same problem, including those outside the tech industry. That drove him to build Opal, with the goal of helping people better achieve balance in their lives so they could reconnect with loved ones, spend time in nature or just generally go offline to focus on other areas of their lives.
At a basic level, Opal’s VPN allows users to block themselves from using dozens of distracting apps and sites for certain periods of time, including social media, news, productivity apps and more.
Social media, in particular, has been a huge problem in recent years, Schlenker says.
“In particular, Instagram, Facebook and Twitter — social media is where you feel like you’re learning something, and you feel like you’re connecting with people. So it’s good. But on the other hand, it’s very hard to stay intentional,” he explains. “It’s okay to pick up your phone and go to Instagram, but when you ‘wake up’ 30 minutes later, you usually feel really bad. You feel like, ‘where’s the time gone?’, ‘what did I just do?,’ ” he says.
Opal addresses this problem through a handful of features.
Image Credits: Opal
The free service allows you to block distracting websites and apps and take breaks throughout the day. By upgrading to the paid membership, Opal users can schedule time off from apps to establish recurring downtimes — whether that’s for family dinners or working hours, or anything else. They also can use a more extreme version of this feature called Focus Mode, which locks you out of apps in a way that’s not cancelable.
While the company is using a VPN to make this system work, it’s being transparent and straightforward about its data collection practices.
“There is zero private browsing data that leaves your phone,” Schlenker insists. “Anything you do on your phone outside of Opal’s app stays local on your phone and is never stored on any of our servers or any other servers. That’s very important to us,” he says.
From inside Opal’s app, the company claims it only collects usability and crash information — not browsing data. And the usability data is completely anonymized for another layer of privacy. Opal also doesn’t require an email to begin using the app. It only asks for one if you choose to pay.
Image Credits: Opal
These core principles are also documented on Opal’s privacy page, and are why Schlenker believes his app won’t face the challenges that other screen-time apps on the App Store have experienced in the past.
As you may recall, Apple cracked down on the screen time app industry a couple of years ago — a move Apple said was focused on protecting user privacy, but has also been raised as a possible example of anticompetitive behavior. Many of the apps at the time had been using techniques Apple claimed put consumers’ privacy and security at risk, as they gave third-parties elevated access to users’ devices. This was particularly concerning because many of the impacted apps were marketed as parental control services — meaning the end users were often children.
Opal, meanwhile, is targeting adults, and perhaps teenagers, who want to develop better screen-time habits. It is not selling this as a parental control system, however.
Image Credits: Opal
At launch, Opal can block over 100 apps and sites across several categories, including Facebook, Instagram, Snapchat, TikTok, Reddit, Pinterest, YouTube, Netflix, Twitch, Gmail, Outlook, Slack, Robinhood, WhatsApp, WeChat and others, including those in the news, adult and gambling categories.
Users can choose to block the apps for short breaks — 5, 10 or 60 minutes — throughout the day. You can also set an intention and set a timer before using an app, to help you avoid the issue of losing track of time. And you can set focus timers or scheduled times to automatically shut off app usage.
You can track your progress by viewing the “time saved” and you can share your successes across social media. In time, Schlenker plans to add more of a scoring mechanism to Opal that will help you stay accountable to your original goals.
Image Credits: Opal
Though work on the app only began in 2020, Opal began attracting attention as it publicized its plans on Twitter and ran its private beta, which grew from hundreds to thousands of users this year, saving its users an average of two hours per day.
Though Schlenker had connections with many of the angel investors who have since backed Opal, he says the interest from institutional and larger investors was all inbound.
“It was not our intention to raise so much, so early,” Schlenker notes.
The funds will be used to help Opal grow its team, particularly engineering, design as well as product. The company will also soon launch a version of Opal for Chrome and later, Android, and will experiment with more social features around sharing and hosting group sessions.
The app is currently a free download on the App Store with an optional $59.99/year subscription plan.
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