Growth and Monetization

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Forerunner Ventures’ Kirsten Green demystifies the COVID-19 consumer era

Published May 14, 2020

“In general, the consumer has proven to be more resilient than I would have thought,” said Kirsten Green, founder of Forerunner Ventures, which has investments in breakout D2C stars like Glossier, Hims and Bonobos.

She joined us for an Extra Crunch Live conversation to help us better understand buying habits in the COVID-19 era. With tens of millions out of work and uncertainty all around, people are spending less, but Green showed up with a healthy dose of optimism — while acknowledging that her worst-case scenario planning was wrong.

Her top-line advice for companies

Take a cautious approach, be prepared to make hard decisions, but be thoughtful about that. Don’t just make a knee jerk-reaction, which is “this is the apocalypse, we all need 36 months of runway, fire half your staff and go to the bunker.” I think the biggest opportunity for companies right now in many ways is to create value by demonstrating their flexibility.

How this startup built and exited to Twitter in 1,219 days

Published April 30, 2020

By the summer of 2016, Marie Outtier had spent eight years as a consultant advising media agencies and martech companies on marketing growth strategy.

Pierre-Jean “PJ” Camillieri started as a music software engineer before joining one of Apple’s consumer electronics divisions. Inspired by Siri, he left to start Timista, a smart lifestyle assistant.

When the two joined forces to co-found Aiden.ai, the combination was potent — one was a consummate marketer, the other, a specialist in machine learning. Their goal: create an AI-driven marketing analyst that offered actionable advice in real time.

Humans who manage ad campaigns must analyze vast amounts of numbers, but Outtier and Camillieri envisioned a tool that could make optimization recommendations in real time. Analytics are vast and unwieldy, so theirs was a no-brainer proposition with a market crying out for solutions.

The company’s first office was at Bloom Space in Gower Street, London. It was just a handful of hot desks and a nearby sofa shared with four other startups. That summer, they began in earnest to build the company. A few months later, they had a huge opportunity when the still 100% bootstrapped company was selected for Techcrunch Disrupt’s Startup Battlefield competition.

Interviewed by TechCrunch, they explained their proposition: Marketers wanted to know where a digital marketing campaign was getting the most traction: Twitter or Facebook. You might need to check several dashboards across multiple accounts, plus Google analytics to compile the data — and even if you conclude that one platform is outperforming the other, that might change next week as users shift attention to Instagram, potentially wasting 60% of ad spend.

Aiden was intended to feel like just another co-worker, relying on natural language processing to make the exchange feel chatty and comfortable. It queried data from multiple dashboards and quickly compiled it into flash charts, making it easy to find and digest.

Eventually, instead of managing 10 clients, marketing analysts would be able to manage 50 using dynamic predictions as well as visualizations. Aiden incorporated Outtier’s expertise into its algorithms so it could suggest how to tweak a Facebook campaign and anticipate what was going to happen.

Was appearing at Disrupt a significant moment? “It was a big deal for us,” says Outtier. “The exposure gave us ammunition to raise our first round. And being part of the Disrupt Battlefield alumni gave us many meaningful networking and PR opportunities.”

A few weeks later the company had raised a seed round of $750,000. But not without difficulty. By this time Outtier was in the latter stages of pregnancy. Raising money under these circumstances was difficult, but, she says, “it can be done. It’s tougher than ‘normal circumstances.’ It’s a bit like running a marathon, but with a fridge on your back.”

Indie.vc founder Bryce Roberts: Profitability is ‘more achievable than a Series A round’

Published April 27, 2020

Despite all evidence to the contrary, there’s more to building a startup than raising venture capital.

Founders are finding success without overly relying on VC dollars; some are even sharing profits with their respective employees and customers without the help of traditional funding and Silicon Valley power dynamics.

As some investors slow down their funding pace, it has become clear that profitability trumps funding and venture capital can only take a startup so far when the economy tanks and outside cash streams dry up.

In the Indie.vc portfolio, profitability is its driving force. In fact, its main criterion for funding is that a startup must be on a clear path to profitability with durable fundamentals like high gross margins or the ability to start charging for a product right away, as opposed to companies that need a significant amount of upfront investment for research and development.

Profitability, Indie.vc founder Bryce Roberts tells TechCrunch, needs to be a habit, and founders need to recognize that it’s not a switch they can just turn on. Startups looking to prioritize profitability need to start out as revenue-driven businesses that replace funding milestones with profitability goals.

“Genuinely, it’s not rocket science,” he says. “Profitability isn’t this crazy, elusive thing. It’s literally more achievable than a Series A round. It’s way more achievable than a Series B round. If you look at the kind of fall-off between those rounds, most entrepreneurs would be better off finding their path to profitability and scale.”

Indie.vc, which recently announced its latest batch of investments, advises founders to make sure they have what they need to be stable and then to create and measure value, Roberts says. That value, which differs depending on the company, must be quantifiable as some metric or revenue.

To do that, Roberts says founders should adopt a mindset where they’re focused on creating revenue opportunities, rather than cost savings. Indie.vc’s model also does not prioritize hiring ahead of growth, a strategy that seems to be working for its portfolio during the pandemic.

This Week in Apps: Layoffs at VSCO, Google Play’s new guidelines, TikTok rolls out parental controls

Published April 18, 2020

Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads in 2019 and $120 billion in consumer spending in 2019, according to App Annie’s “State of Mobile” annual report. People are now spending 3 hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week we’re continuing to look at how the coronavirus outbreak is impacting the world of mobile applications, including a dig into Houseparty’s big surge, layoffs at VSCO, Google’s launch of a “Teacher Reviewed” tag, Bumble’s virtual dating, plus changes to Instagram in support of small business and live streaming, among other things. Also this week, Google changed its Play Store guidelines, TikTok launched parental controls, a report suggested Apple may be expanding its Search Ads and more.

Coronavirus Special Coverage

Instagram adds features for supporting small businesses during pandemic

Will podcast ad revenue bounce back after COVID-19?

Published April 13, 2020

There are early signs that media will be one of many industries to take a huge blow from the COVID-19 pandemic, with sharp declines in ad revenue and significant layoffs. Podcasting is unlikely to be an exception; Podtrac recently reported that downloads have fallen 10% since the beginning of March, while unique listeners fell by 20%.

A different picture emerged when I spoke to Ross Adams, CEO of podcast advertising company Acast, which works with both bedroom podcasters and large publishers like the BBC and PBS NewsHour.

Adams said listenership isn’t down — it’s just that audiences have changed when they’re listening and what they’re listening to, with Acast seeing its largest weekends ever in recent weeks. And plenty of people want to start new podcasts; signups for the Acast Open platform increased 49% month-over-month in March.

“What we’re seeing now is an opportunity for people to discover podcasting as a medium,” he said. “And once you discover it, you stick with it.”

Advertising may be a separate issue, with Adams admitting that the downturn is likely to affect “every business that has the majority of their revenue from ads.” But even then, he sees opportunity as marketing dollars move from traditional industries like radio and out-of-home advertising.

We also discussed Acast’s financials, the podcast discovery process and tips for new podcasters. Read a transcript of our conversation, edited for length and clarity, below.

TechCrunch: Let’s start with the good news. One of the prompts for this conversation is the fact that you guys announced some financial numbers — you doubled the revenue last year to $38 million. So first of all, congratulations.

Ross Adams: Thank you.

And secondly, there’s a lot of different factors at play and different conversations about podcasting breaking through in 2019. But when you look back, what do you see as the biggest factors that contributed to your growth?

Recap: Roblox, SuperAwesome and Fingerprint execs discuss kids’ media

Published April 13, 2020

Consumption of all types of kids-focused digital media has soared with a large portion of the world’s children home from school right now. At all times of day, children are playing games, watching shows and using edtech tools — often in a social context with friends online.
This only accelerates the normalization of virtual spaces as social hubs, and it makes protection of children’s data a more pressing concern for entertainment and communications platforms (like Zoom) that haven’t built a product specific to this demographic.
During last week’s TechCrunch Live session on the state of kids’ media, I had an engaging discussion with three industry leaders about how COVID-19 is impacting companies in the space and what long-term changes could result from it:

Craig Donato, chief business officer of Roblox, the $4 billion gaming platform that counts the majority of U.S. kids age 9-12 among its active users.
Nancy MacIntyre, co-founder and CEO of Fingerprint, the company behind Kidimo, a leading subscription video and gaming service for children.
Dylan Collins, co-founder and CEO of SuperAwesome, the London-based creator of “kid-safe” adtech and privacy tools.

Below is the recording of our conversation as well as the full transcript (with minor edits for clarity):

TechCrunch: The COVID-19 crisis has put families all at home together and changed a lot for your businesses. I want to set context first by looking at the couple years leading up to this. What have been the two biggest changes in the kids’ media space from your perspectives?

Craig Donato: One huge shift that we’ve seen over the last five years is the evolution of games into social places — experiences where kids hang out with their friends, do things with them versus these narrow competitive environments. We really see Roblox as a medium of shared experience. That’s a pretty significant shift, and it’s really benefited platforms like Roblox, but also Minecraft and Fortnite.

Airbnb is buying trust during the COVID-19 travel slowdown

Published April 10, 2020

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Airbnb’s recent moves in the wake of a global travel slowdown are interesting and worth understanding in chronological order. What it details is a company spending heavily today to keep up its future health. Demand will return to the world travel market in time — how much, no one knows — and Airbnb wants to be a well-liked participant in the return to form.

Building off our last look at the company, we should understand how Airbnb intends to not only survive, but come out the other side of the pandemic with enough user trust to get back to work.

An IPO promise

Tips, tactics and cashflow strategies for startup survival during a crisis

Published April 10, 2020

Joe White
Contributor

Joe is general partner of Entrepreneur First, a Greylock-backed early-stage deep tech fund; co-chair of GBx, a curated network of British entrepreneurs in the Bay Area; and a former co-founder of Moonfruit.com, a website and e-commerce platform.

We’re in unprecedented times and are likely at the beginning of a long journey back to normal — whatever the new “normal” turns out to be.

While governments rush to get debt-relief packages in place, the high-risk, high-reward tech sector will need something different. To survive, the community requires fancy footwork, hard choices and a lot of shared pain between founders, staff, investors, suppliers and customers.

With my startup Moonfruit, a DIY website and e-commerce platform I co-founded with Wendy Tan-White (now a VP at X) and eirik pettersen (currently CTO at Secret Escapes), we survived the 2001 dot-com crash, when the entire tech sector was decimated for years to come, as well as the 2008 financial crisis, when we were lucky enough to experience rapid countercyclical growth. These experiences made us stronger and ultimately led to our successful exit in 2012 and post-acquisition growth to $150 million ARR.

I’ve spent the last five years as a general partner at Entrepreneur First, raising $200 million of funds and advising hundreds of startups through formation, growth and fundraising — but right now I work with many of them daily on survival.

For most companies, I think this crisis will look more like 2001 than 2008, though there will be some who are lucky enough to grow through it. The good news is, having been through this before, I know there are things you can do as a founder or as an investor that can mitigate the damage. In the U.K., I’m in several conversations about making emergency equity funding more available, and I hope this happens all over the world too.

Here is a tactical guide to surviving the crisis.