Ventureminded

Venture capital investments have been on a sustained run (minus a couple blips here and there) for the last decade-plus. However, over the last several years, beginning in around 2014, there was a clear inflection in the types of deals getting done and the types of funds being raised — in short, bigger was perceived to be better.

From 2009 to 2013, the average deal size consistently ranged from $5.1–6.7M. It’s seen a sharp increase from 2014 onward, though, peaking at $13.3M in 2018 and a similarly high $12.7M last year. More importantly than simply looking at average deal size regardless of stage, so-called “mega-deals” have been setting new records annually in both early and late stage venture. Early stage “mega-deals” grew 488% from 9 in 2014 to 53 last year, while total “mega-deals” (i.e. including late stage ones that are more inclined to be large on a relative basis) grew 182% from 84 in 2014 to 237 last year.¹

Median pre-money valuations have also increased more dramatically from 2014 onward than from 2009 to 2013 (see chart below).²

From 2009 to 2013, median pre-money valuations increased 67.9%, 55.0%, 61.6%, 94.2%, and 99.8%, respectively, across the 5 investing stages broken out above. From 2014 to 2019, though, median pre-money valuations increased 50.0%, 92.3%, 115.9%, 151.8%, and 156.0%, respectively, across the same 5 stages with seed, notably, being the only one that has not experienced an accelerated increase during this period (more on that below).

These dramatic increases in deal size and valuations are a function of a few interconnected trends:

Founders’ and investors’ fairly misinformed belief that capital is a moat

A massive influx of LP capital, particularly from new investors in the asset class and those seeking more exposure to it

More venture investors of all types leading to more competition and driving up valuations (i.e. basic supply and demand dynamics)

At the later stages (Series D+), companies raising larger private rounds rather than going public

Venture fund sizes dramatically increasing (in part to meaningfully invest in late stage / pre-IPO rounds and in part to generate more fees), thereby needing to make larger investments with very fixed ownership targets to make their fund math work out, even at the Series A and Series B stages

This last point has played out as median size fund step-ups have grown at a significantly higher rate from 2014 to 2019, particularly 2016 onward, than they did from 2009 to 2013 (see chart below).³

Overall, an increasing number of traditionally early stage firms have gravitated towards becoming “agglomerators” (h/t Nikhil Basu Trivedi and Kanyi Maqubela) and borderline asset managers, have raised significantly larger funds in a short period of time in order to become multi-stage / stage-agnostic, or have raised other investment vehicles to enable their ability to invest at the growth stage and beyond, a strategy that I think makes the most sense for investors, founders, and LPs if you feel the need to participate in growth and late stage venture rounds. Larger fund sizes and a need to make larger investments to make the math work has led to firms having the perceived luxury of waiting for more proof points from companies before deciding to make an initial investment. Meanwhile, a relatively small number of firms have kept fund size and strategy in check during this period when they could have certainly raised funds that are multiples larger based on track record and LP demand.

My belief is that true early stage venture capital (investing in companies that are raising at pre-money valuations between roughly $5M and $30M) is executed best when fund sizes are kept to reasonable levels. You should invest as early as you have conviction and as frequently as you can thereafter to build positions in companies over time. Investing early and often, rather than feeling compelled to wait for a round that is dictated by an inflated fund size, has a number of advantages.

Employing this strategy allows funds to deploy a meaningfully smaller amount of capital (~60–70% less) over two to three financings to reach a target ownership than funds that try to get that same level of ownership with a single investment at that third financing. The earlier investor can also avoid competing in “winner-take-all” financing rounds where there is typically just one new investor, a dynamic that can often drive up valuation. Moreover, an existing investor gets to make highly educated decisions at each successive financing, whereas the new investor is at a distinct disadvantage when it comes to doing diligence. If executing proper portfolio management, the insider should know when it makes sense to follow on aggressively (or not) or when to pre-empt (or not) and have a deeper understanding of how that company is performing than the new investor who is parachuting in to invest for the first time. [Quick tangent on follow-on underwriting: Each subsequent investment after your initial one should be more informed than the prior investment in a company. It should treated as if it’s a de novo investment and underwritten “from scratch” to determine what percentage of your pro rata allocation you are going to invest. In all likelihood, you probably want to own more or less of that company, so simply treating doing your pro rata as the default may not be the best approach.] I believe that executing the strategy outlined above allows you to keep fund sizes in check, which allows managers to better align incentives with LPs and founders, the two constituencies that matter most to them.

Ultimately, this approach, particularly the aspects around thorough re-underwriting of investments and investing often (i.e. pre-empting rounds, getting creative with follow-on structures, and ensuring meaningful allocations when they’re desired) is easier said than done. However, it is certainly possible to execute this strategy, and I believe a lot of it comes down to mindset / approach and active portfolio management — not just investing. It requires knowing how well every company is performing against plan and in the context of the broader market (startup ecosystem and its particular sector); having transparent, communicative, and strong relationships with founders you’ve backed; and having a sufficiently large reserve pool to execute this approach while investing early enough to get meaningful exposure to companies and the ability to track them closely over the course of multiple subsequent rounds. It is a strategy that some of the best early stage venture capitalists still execute today, but increasingly, it feels like a lost art.

Pitchbook and NVCA, Venture Monitor (Q4 2019)

Cambridge Associates, Venture Capital Positively Disrupts Intergenerational Investing (January 2020)

For the last several months, I have been looking to invest with the fervent belief that the largest and most significant companies in the world in the next two to three decades are going to be built in the categories of healthier living, sustainability and the environment, and human capital (education broadly, tools and platforms for small business, and products that facilitate access, identity, or self-expression). I believe now, more than ever, that these themes will attract inspired talent and capital and that opportunities which stress social responsibilities will have a better chance to be successful — looking out for the good of all will drive returns. Furthermore, in the face of economic challenge, I think that these companies will be the catalysts for economic revitalization. These sectors:

Are more durable and resilient. They are solving critical problems that are “must have” versus some other categories, which are more “nice to have”

Attract more mature and seasoned founders. I expect that the founders who build companies in these sectors will tend to have more operating experience (founding or otherwise) and generally be further along in their careers. I fundamentally believe founders should start companies to solve a problem that they have deep professional or personal experience with, and the challenges confronting these categories lend themselves to these types of founders.

Should not be as susceptible to winner-take-all or winner-take-most dynamics, particularly within healthier living and sustainability and the environment. The magnitude of the challenges in these categories should yield many large winners.

I referenced one such company here.

In the face of COVID-19, laws are being re-written, policies are being amended, and consumer behavior is being re-shaped in real time. These alterations will change the face of industries forever. For example, new policies that enable physicians to practice medicine across state lines to meet doctor shortages in certain areas now can accelerate the adoption and growth of telemedicine startups. And, while I believe that in-person interaction is a critical component of teaching and learning for nearly every discipline, the rise of virtual education, broadly defined, during this period is allowing people to access teachers and instructors remotely. Certainly, this behavior was already taking place; however, it has become a necessity during this period, and so new adopters have joined this wave. This trend aligns with my belief that education is being unbundled, as students, just like any consumer, start to pick and choose where they get information and skills on an a la carte basis. These are just two examples of many others, including: regulatory barriers being lowered around HIPAA and telemedicine, increasing attention on the importance of family care, and a re-focusing on the importance of science in everyday life.

With such large-scale changes occurring, I believe that a new wave of enterprising founders will start companies and build products to address the problems and challenges we are facing now; these will scale beyond this moment to solve less acute pain points in the future. Some of today’s biggest companies were started in 2008–2009 in the throes of the Global Financial Crisis (GFC). Uber and Airbnb were founded, and one could argue that their rise and ability to build a strong supply base was due in part to people’s desire for extra income. Other companies started during that period include Stripe, Pinterest, WhatsApp, and Square, among others. While those companies weren’t necessarily a direct outgrowth of the GFC, the founders with the audacity to start companies during that period were likely the ones to be the most mission-driven (i.e. solving a problem and pain point because they genuinely want to; not because they want to be a founder), the most capital efficient (because they had no other choice), and the most resourceful. I strongly believe that we will see a similar emergence of relentless, mission-driven founders in the wake of this period — the exact type of entrepreneur that I love to invest in and support. For all of the reasons mentioned above, I expect that starting a fund around this time and / or having the capacity to invest meaningfully in time for Q3 and Q4 of this year will yield strong returns in the long run.

Lastly, there is no doubt that lots of small venture funds have been raised in the last three to five years. But how many of those are stepping up to invest the amount of capital necessary to lead pre-seed and seed rounds? And, more importantly, how many of them have the conviction (and the stomach) to manage portfolios and continue to raise in the face of economic uncertainty? Too many funds have been raised by people who want to say they’re a VC, and too many funds have been raised by people who aren’t devoting 100% of their time to managing that fund (i.e. they are running another company or working at another company). I expect a number of these to fold or stop trying to raise new capital. I already believed that the seed environment is not as crowded as the data would have you believe (i.e. there are not many funds that submit term sheets and truly lead), and I think this space will continue to get less crowded.

The best brands imbue consumers with positive feelings and emotions that drive loyalty and are fundamentally trustworthy. This is true across fashion and apparel, travel and hospitality, technology, and myriad other categories, yet when it comes to health and wellness, very few brands, outside of some in fitness (think SoulCycle or Equinox), have emerged that cater to a consumer’s mind, body, and spirit. While some like LOLA, Hims, or Headspace have started to make a name for themselves, there is still a distinct void and as an investor, it is up to me to determine whether this void is an opportunity for entrepreneurs or if it’s the status quo for a reason. Perhaps there aren’t meant to be brands in every category within consumer health and wellness, but my working hypothesis is there should be dramatically more than there are today.

The headline macro trend is that there’s a growing importance being placed on overall health and wellbeing. There are numerous other thematic tailwinds like an increasing focus on the value of sleep, destigmatizing mental health challenges and removing it from a list of taboo talking points, the mainstream-ization of meditation and a variety of forms of alternative medicine, and numerous others. Underpinning all of these trends is the mounting influence of Millennials and Gen Z as consumers who are willing to spend time and money on the above areas in a way previous generations weren’t (or weren’t able to due to lack of options). Moreover, when it comes to mental health specifically, these younger consumers have a desire to share and be open and vulnerable, and the internet and software can foster these connections. Below is a non-exhaustive list of products / services / spaces that fall in the aforementioned realm and which I’m particularly interested in:

Horoscopes / Zodiacs / Psychics / Tarot / Astrology / Crystals

Mindfulness retreats / Meditation

Holistic and Eastern medicine / Herbal remedies / Alternative medicine

Acupuncture / Cupping

Yoga

Chiropractic

Reproductive care / Fertility

Skin care

Psychiatry / Psychology

Sleep therapy

Rehabilitation

When it comes to the above list, I’m eager to see how founders are tackling these areas with a range of business models and approaches. For some, I’m particularly excited to see companies merge online and offline experiences and ones that foster community and togetherness. In others, I believe software can augment a brand and facilitate a daily or weekly interaction to help engender initial loyalty and build a veritable habit that grows over time. I think there is a real opportunity to create a lifestyle brand in a number of the categories above through a mixture of commerce (e.g. subscription, marketplaces) and content (e.g. social and UGC, subscription), and in others, I think B2B2C is the right go-to-market strategy instead of going straight to consumers.

Just over four months ago, I took on a new role investing in Series A and later companies after spending nearly three years investing in seed stage startups. While there have certainly been a number of differences to contend with while investing at these later stages, for a variety of reasons, I believe that seed investing was great prep for the investing I’m doing now. Here’s why:

When I invested at the seed stage, I always had to be “on,” or at the very least, I had to be prepared to turn “on” at any moment. I always needed to be prepared to look for or respond to the latest startup given the sheer number of companies being started and the high velocity of deal flow. Consequently, I was meeting more founders and making more investments per year, which ultimately served as great preparation. There is no substitute for meeting thousands of founders and executing numerous transactions. In my current role, we are functionally stage agnostic and take a broad approach to what is a good fit for our fund, so while the deal flow velocity isn’t nearly as high, I’m still always “on” and ready to engage with a new investment opportunity.

The volume of seed stage companies coupled with the fact that the vast majority weren’t publicly launched meant that I needed to be exceptionally scrappy and resourceful when sourcing. It was the only way to uncover the latest company getting started. Now, when the majority of companies are generally known, I’m doing my best to apply the same level of rigor and hustle to getting in front of great founders. It feels like it could be easy to get complacent with sourcing Series A and later companies because the nature of discovering investment opportunities is different, but I think unearthing lesser known or less hyped companies at these later stages is where some of the most compelling investment opportunities reside.

When it came to evaluating companies the choosing to invest, the vast majority of my investments were based on founder and product almost exclusively. Most companies were pre-revenue and several were even pre-product. Now, whenever I evaluate a new investment, regardless of the company’s traction and metrics, I look at it through a founder and product-driven lens first and foremost. This perspective serves as the leading edge of any investment decision I make. Additionally, the later we invest, the more my emphasis on product has been refreshing to founders — in just a short amount of time, it’s been a differentiator compared to other funds making growth and later stage investments.

Similarly, when investing at the seed stage, I had to get conviction on new investment opportunities with relatively little information. Now, I look at companies that have troves of data and information to analyze. Being used to having to develop an investment thesis with little to no information to draw on was great training for the analysis I’m doing now.

After choosing to invest in a seed stage company, the majority of those rounds get syndicated, but they often still require having to compete to be involved. I had to build a strong rapport with a founder relatively quickly and demonstrate that we could contribute and be additive to what she was building. Now, in virtually every round we are looking to participate in, we are competing. We are either leading the round or not participating at all; or, for much later stage rounds, they are syndicated, and there is competition similar to the seed stage. Additionally, since I am used to building a relationship with a founder in relative short order, I now take advantage of the fact that I may have several weeks, months, or even longer to develop an even tighter connection and demonstrate value upfront before making an investment.

Nearly a year ago, I wrote my original VC Code post, in which I outlined how I approach my role as an investor. Given that I recently started a new role at a slightly later stage fund (Series A — C, primarily) and that I have another ~year of investing under my belt, I figured it was time for an update to my original post. What follows is a slightly amended version of my original piece that takes into account investing at a later stage and what I will do in this new role.

Being a VC and getting to work with entrepreneurs on a daily basis is the ultimate privilege. So, the purpose of this piece is to 1) enable founders with whom I meet to know what to expect from me prior to meeting, thereby allowing them to ask more specific (e.g. helpful) questions when we chat and start to build a sense of trust and 2) enable founders and other investors to hold me to this list and call me out if I’m slipping — I’m always seeking to improve.

Before investing…

Bring the same hustle and scrappy resourcefulness to sourcing companies and meeting with founders that I did at the seed stage to these later stages of investing

Meet with founders as early as possible in their companies’ life cycles; get to know a founder and her business and build a relationship and add value well in advance of the stage when our fund would invest

Reply to / acknowledge / engage with every single inbound email — have a first meeting or call when appropriate. In my previous role, we invested in one company that came to me via a personalized cold email

Be as transparent and communicative as possible during the pre-investment process

Immerse myself in a company’s app / product / service as much as possible; always meet at their office when doable, particularly early in the fundraising process

Reply to every email relating to a process with a founder — never leave any loose ends

Do my absolute best to facilitate a seamless evaluation and diligence process (i.e. a quick pass if that ends up being the result)

When passing on an investment, provide a clear reason why, suggest the founder continues to provide updates if she’d like, and offer to help in other ways, if possible. Given that we’re investing across multiple stages, there’s a chance it may be a better fit later on

Offer to make intros to other investors when appropriate, particularly if the company is too early for us

Always make intros to potential partners, customers, and other “strategics” when I have relevant relationships that could be helpful for a company

I’m most appreciative of intros to startups that come from founders I previously passed on

After investing…

Be “on call” for founders — no problem is too big or too small to justify pinging me via text, email, DM, phone call, snap, etc.

Be proactive about continuing to make the relevant intros outlined above

Continue to be transparent and communicative; my best relationships with founders have these traits going both ways

Send an email during the first week of every month asking founders of companies I’ve sourced for us (i.e. ones I work most closely with) what I can do to be immediately helpful; I encourage founders to give me “homework”

Outside of one-offs, allocate an entire day every week to nothing but portfolio-related work: standing calls / meetings with portfolio founders, ad hoc calls / meetings with portfolio founders, calls / meetings with relevant partners for portfolio companies, calls / meetings with other VCs who may be a good fit to invest in our portfolio companies

Gen Z and younger Millennials have been referred to as digital natives who grew up in front of screens, and the implications of that have been discussed ad nauseam. However, and more interesting, in my opinion, is the fact that this population has grown up in front of (and behind) the camera. This generation is like a group of child stars, surrounded by paparazzi in the form of their parents and peers. This unusual comfort being on camera has informed which products and apps get traction and which features resonate with users. Moreover, I believe it’s important to consider the implications of an entire generation that has such ease in front of and behind cameras.

For me, on the other hand, growing up in the ’90s and early ’00s, pictures were reserved almost exclusively for special occasions and distinct moments that were worthy of being captured. Quite simply, I could probably count on two hands the number of moments each year that were deemed picture-worthy—and that included school picture day.

With the rise of digital cameras, the cost of taking a photo and the marginal cost of each successive one decreased. A couple years ago, Benedict Evans wrote a great piece about this phenomenon and the subsequent virtual ubiquity of digital cameras that are part of the supercomputers that we carry around with us at all times. More recently, he wrote about this topic in the context of Snapchat and the camera as a sensor. Both of these posts serve as a worthy framework for beginning to understand the environment in which college-aged and younger people have grown up.

The list of products and apps that has either intentionally taken advantage of this group’s comfort with being on camera or inadvertently benefited from it is lengthy: Snapchat, Dubsmash, Musically, Lively, Periscope, Facebook Live, YouNow, Houseparty, Triller, FaceTime, Tribe, Marco Polo, Masquerade, Spectacles, and a whole host of others that haven’t reached as significant scale or raised as much venture funding. Moreover, this infatuation with being on camera has led to a host of other features, trends, and products.

For example, Wanelo launched a feature called “models” to allow users to share pictures of themselves wearing certain products. The selfie, in and of itself, is a manifestation of this behavior. My friend, Ellen DaSilva, was on to this back in 2013 when she created a blog called the “Year of the Selfie,” taking (at least) one every single day for a year. And it’s no coincidence that the selfie has persisted well beyond being a fad. It’s one of the most expressive, informative, and frictionless forms of communication—Apple even built a native selfie feature! The front facing camera and proliferation of imaging certainly augmented this trend, but it also takes feeling comfortable and generally predisposed to being on camera for this trend to take off with a particular segment of the population. Then, products like Facetune, AirBrush, Perfect365, and Facie emerged to let people smooth / touch up / “photoshop” their selfies on the fly. Even many Snapchat lenses have a “beautifying” effect. And during a trip to Tokyo earlier this year, I saw this taken to the next level in the form of Purikura, essentially a photo-booth version of these apps.

So, besides understanding the willingness to be on camera and how it informs first order products and features that get built, what are the other implications of this behavior? Ultimately, I think understanding these implications is what allows for creating second order products (e.g. apps for touching up selfies) and other social products that are underpinned by this behavior. For instance, I believe that constantly being on camera as well as taking pictures of yourself and others results in being comfortable with a lack of privacy (aside from an inflated level of vanity). When you’re always recording or expecting to be recorded, you grow accustomed to extreme transparency, as if you’re permanently on the Truman Show. And when users have that mindset from the get-go, there is more flexibility when it comes to the types of products you can build. Additionally, I believe that this “photo-centric” behavior leads to a lack of spontaneity or overall willingness to be spontaneous. Not only is there generally an over reliance on texting and the ability to perfect what you’re going to say before you send it, but also when you feel like you could be on camera at any time, you’re prone to behaving like you’re on stage. You don’t want to do anything that could portray you in a less than favorable light since you never know when cameras are rolling. However, one of the most interesting upshots of all this is that when cameras are away and moments are being captured, they are typically some of the most important ones. You are present and immersed in the moment. As the marginal cost of taking a picture has decreased to zero and the volume of photos has increased “exponentially,” the value or importance of a single photo or video to have for later has dropped precipitously, as well.

So, if you’re thinking about this topic, building something related to it, or generally enjoy discussing the future of social products, please don’t hesitate to get in touch.

Throughout my two-plus years in venture, one of the most common questions I’ve been asked (in some form or fashion) is, “what sectors / spaces / types of companies are you interested in right now?” And whenever I’ve been asked this question, I typically give a non-committal answer or mention how I think consumer internet continues to be an area that investors struggle to develop conviction at the pre-seed / seed stages, so I think there’s an arbitrage opportunity of sorts there (and I still think that).

However, generally, I have found that it’s difficult to be too thesis- or thematically driven at the pre-seed to seed stage of investing. First, oftentimes, themes haven’t emerged yet, and, second, I believe this approach can lead to deductive investing. By that, I mean you meet with lots of companies in a space and settle on investing in the best option because you feel like you need to after spending all of that time with entrepreneurs even if that’s not a company you would invest in within a vacuum. And now you’ve just wasted hours of your founders’ and your own time. I tend to find that I have a number of hypotheses about different areas, and if a company crosses my “field of vision” that aligns with one of these, then I’ll dig in and look around to see what else is being built that’s similar. If you’re too driven by trends and themes, you run the risk of not discovering any arbitrage opportunities, to the extent that they exist in early stage investing. (And FWIW, these above paragraphs could / should be unpacked further for a longer post).

Over the course of the last several weeks, though, I’ve flipped this process a bit and begun to spend an increasing amount of time exploring a nascent space that has enough definition to be investable but is early enough seemingly not to be well-funded. While we are investors in WeVR, and I (like many others) believe that VR will be transformative for various forms of entertainment, I’ve grown increasingly interested in the more “utilitarian” applications of VR (e.g. travel, training / education), real estate, and construction). In particular, the area I’m most interested in learning about / discussing / debating / following is virtual reality therapy (VRT). VRT has the ability to be life-improving for millions of people who are suffering from addictions, phobias, depression, PTSD, and diseases associated with memory loss. I’m curious about this area both as an investor and as a generally inquisitive person who loves learning about how new types of technology impact society (i.e. one of the reasons I love consumer tech and my job, in general).

Who creates this content and what background is necessary to do so successfully?

How do insurance companies think about this type of therapy?

How do treatment centers and other similar types of facilities pay for this “content” and deploy it?

How are patients diagnosed? (i.e. Do doctors need special training to make these diagnoses? How do you assess which content will resonate with certain patients?)

What are the societal implications that come from this type of treatment? Is there a slippery slope argument that comes into play depending on the applications of this therapy and the (unintended) ramifications of it?

Now that Google and to a lesser extent, Microsoft, have both released iOS keyboards within the last month, can we please begin to take these things seriously? Since the release of iOS 8 and Apple’s concession to allow 3rd party keyboards, they have consistently been the ugly duckling of the App Store.

Thanks to the emoji keyboard, a significant proportion of iOS users are familiar with the concept of an extra keyboard — it’s like the gateway drug to installing more. However, keyboards are still 2nd class citizens in the App Store for a number of reasons. Partly, it’s because they’re hard to install and manage. Nearly every 3rd party keyboard has a “how to install this thing” as part of its on-boarding flow. When it comes to this issue, it’s on Apple to make it less painless. iOS has improved a bit when it comes to switching between keyboards, but the installation process is still a nightmare.

Additionally, keyboards don’t really feel like apps. Most 3rd party keyboards follow a similar model in that the app itself is just a vessel for the keyboard. Once it’s installed, the icon is this empty shell that typically sits idle on people’s phones until they get sick of it and delete it. Lastly, we are just too hung up on what the definition of a “keyboard” truly is, a notion I believe is holding back how people think about these apps.

Developers, brands, startups, and investors should be thinking of keyboards as a “shop-in-shop” for the app world. A keyboard is essentially a micro-app that gets to live at the bottom of your screen and ride the coattails of whichever app you’re currently in. With the rise of messaging for myriad use cases, the keyboard (how ever you choose to define it) is a nearly omnipresent part of users’ experiences on their phones, so being front and center is that much more important when it comes to battling for attention and usurping traditional search. Products like Slash and Gboard are trying to strike a balance between utility and diversion—a keyboard in its truest form that also provides clear value with a dash of fun thrown in.

Riffsy and Giphy Keys are paradigmatic examples of how a keyboard on iOS isn’t just a keyboard and how it’s really a way to fairly seamlessly distribute content. As a media company and steward of brands (along with being a brand itself), Disney has embraced this strategy. The company released a keyboard of its own to ensure that its content is permeating conversations everywhere. This value proposition for brands is why a company like Snaps is compelling. Give brands’ most loyal fans a way to download a keyboard and have the latest content at their fingertips.

Often has taken this one step further by being the platform for this content itself. Besides having built a beautiful product, one of the reasons I’m a fan of Often is that they take advantage of being an app. Once you install the keyboard, there’s a clear reason to return to the app on a regular basis—you can discover the latest content that their partners are pushing as well as manage your own profile to see how you share using the keyboard. Having a profile (and a community of users) attached to a keyboard can potentially allow Often to build network effects into an app category that rarely has them.

Over nearly two years in venture, I’ve had nearly a thousand first meetings or calls with entrepreneurs. In virtually every one, I share some background on Deep Fork, myself, and how I spend time with founders to help give them meaningful context for our conversation and potential relationship working together.

Below, I outline my personal code / principles / standards that I comunicate in these conversations and strive to follow before and after an investment I source / lead for us, and how I do my best to achieve this task. Some may seem basic and table stakes, and to be frank, much of it is. But I’ve heard far too many stories about VCs not doing these little things for me to take them for granted. By publicly putting this on “paper,” I hope to accomplish a couple objectives: 1) enable founders with whom I meet to know what to expect from me prior to meeting, thereby allowing them to ask more specific (e.g. helpful) questions when we chat and 2) enable founders and other investors to hold me to this list and call me out if I’m slipping — I’m always seeking to improve.

Before investing…

Reply to / acknowledge / engage with every single inbound email — have a first meeting or call when appropriate; we’ve invested in one company that came to me via a personalized cold email

Be as transparent and communicative as possible during the pre-investment process

Immerse myself in a company’s app / product / service as much as possible; always meet at their office when doable

Reply to every email relating to a process with a founder—never leave any loose ends

Do my absolute best to facilitate a seamless evaluation process (i.e. a quick pass if that ends up being the result)

When passing on an investment, provide a clear reason why, suggest the founder continues to provide updates if she’d like, and offer to help in other ways, if possible

Offer to make intros to other investors when appropriate

Always make intros to potential partners, customers, and other “strategics” when I have relevant relationships that could be helpful for a company

I’m most appreciative of intros to startups that come from founders I previously passed on

After investing…

Be “on call” for founders—no problem is too big or too small to justify pinging me via text, email, DM, phone call, snap, etc.

Be proactive about continuing to make the relevant intros outlined above

Continue to be transparent and communicative; my best relationships with founders have these traits going both ways

Send an email during the first week of every month (I missed by 2 days this month as I was out of the country but I was still 100% available and even took a call on the bullet train between Kyoto and Tokyo) asking founders of companies I’ve sourced for us (i.e. ones I work most closely with) what I can do to be immediately helpful; I encourage founders to give me “homework”

Outside of one-offs, allocate an entire day every week to nothing but portfolio-related work: standing calls / meetings with portfolio founders, ad hoc calls / meetings with portfolio founders, calls / meetings with relevant partners for portfolio companies, calls / meetings with other VCs who may be a good fit to invest in our portfolio companies

As someone who grew up playing competitive tennis and now works in venture capital, I’ve become quite used to objective results: the ball is in or out; an investment was successful or it wasn’t. These are objective, binary outcomes. As someone who appreciates art, I’ve often grappled with trying to understand the subjectivity that comes with evaluating a piece and assessing the art market, in general. To sate this curiosity, I even took a class in business school entitled “Entrepreneurial Leadership in the Creative Industries” — essentially a course on entrepreneurs and creators that changed the worlds of music, fashion, food, film, and art.

Throughout my time in venture, I’ve continued to be fascinated by these creative industries and their overlap with technology, whether it’s looking at new types of brands, analyzing the evolution of creative networks to social networks, or, in this case, thinking about how technology influences the creative process in and of itself. In one of my favorite Tweetstorms in a long time (maybe ever) Zach Klein laid out how Facebook’s “victory” over MySpace was the beginning of the end of creative and unique identities on the web. And while there are sites like ShopJeen or creative networks like NewHive, which make one recall the days of Geocities and MySpace, I largely agree with Zach, particularly on this point.

Increasingly technology is all about the “what,” which I’ll define as the output of a considerable amount of work (i.e. the “how” and the “why”). What Zach is hitting on is that tech, in some instances, used to emphasize the process even more than the utility or objective analysis of the output. Conversely, in the art world, evaluating the quality of a work has become increasingly less objective. In fact, in many cases, art is almost entirely about the “how” and the “why” and not about the “what.” Take, for example, Richard Prince’s 2014 exhibit at the Gagosian, in which he took people’s Instagram photos and had them printed on canvases. Forgetting the questionable nature of appropriating other people’s photos for your own profit, many art outsiders would question whether this is even art. [Side note: To better understand this principle, I highly recommend this 5-minute video on why you shouldn’t say “I could do that” when looking at a piece of abstract or modern art.] But this trend of de-emphasizing the pure skill and craftsmanship required to create the final work in favor of the motivation for and implicit meaning behind the concept itself has a significant impact on the ability for technology, in general, and AI, in particular, to play a role in art and creative work going forward. This art-technology paradox of the former emphasizing the process and the latter emphasizing the output is something that I’ve been reconciling for a little while now, but I think we are on the verge of two complementing each other nicely.

Recently, a team from Delft University in the Netherlands analyzed Rembrandt’s works to build a series of algorithms that created a work meant to imitate the artist’s previous paintings. They even used a 3D printer that “reproduced something of the texture and craquelure one would expect of a painting from that era.” In 2013, Phillips Auction House partnered with Tumblr for the first ever digital art auction. This rise of digital art has been a long time coming and is commanding prices well north of seven figures. Even companies like Electric Objects are being started for the purposes of displaying this work, and Mine will be helpful for validating the originality of such work. Pace Gallery has recently set up shop in Menlo Park to get more closely aligned with Silicon Valley, as it launches an exhibit on digital and interactive spaces, and there are even virtual reality art exhibits. Ultimately, though, digital art itself and AI’s influence on the creation process for both physical and digital works is the area I’m most compelled to evaluate because of it’s ability to democratize creativity.

I am far from the first outsider to say that the LA tech ecosystem is worth paying attention to, but I hesitated a little to write this post because part of me felt like I was letting people in on a bit of a secret. However, like a founder who is afraid to share her idea out of fear that someone may steal it, it all comes down to execution and putting in the work. And so, sharing why I’m #LongLA (h/t Greg Bettinelli) more publicly is well worth it for our fund and for the LA ecosystem as a whole—a rising tide lifts all boats.

My infatuation with the LA tech community began in the summer 2012 when I was working with Gumroad. We traveled a number of times to LA and worked with digital teams at ICM, UTA, CAA, WME, and several labels and management companies in an effort to get artists to sell direct-to-fans using our service. At the time, most of these groups were biz dev partners and only a couple were dabbling in making tech investments opportunistically. This, of course, has changed as agencies have ramped up their investment activity alongside groups like UMG, Chernin, SB Projects, Sound Ventures, and Troy Carter’s team. When I joined Wanelo a year later, a significant amount of brand and retail partners were based in LA. That fact, coupled with the number of influencers who could be valuable to the platform, allowed me to spend more time in LA, thereby building new and fostering existing relationships.

And so, when I joined Deep Fork just under two years ago, I was drawn to the fact that there were already a few LA investments from Fund I (RadPad, Bkstg fka Fahlo, and Amplify), and Tim was in the midst of investing in Wevr fka Wemo Lab out of Fund II. In my first year or so on the job, I made a few trips to LA, but it wasn’t exactly a proper routine. And as someone who wants to meet with founders building the latest in consumer tech, I felt like I was potentially leaving opportunities on the table. So, beginning in November 2015, I resolved to go to LA every month (in addition to my monthly SF trips). This month will mark 6-straight months with at least a full day Uber’ing around LA seeing portfolio companies, investors (both traditional VCs and strategics), and potential new investments.

Here’s why:

LA’s startup ecosystem feels like NYC’s in 2009. It is nascent and fresh and hopeful with the same sort of momentum I felt from NYC about a half decade ago. The companies that are being built are predominantly consumer-facing (my personal sweet spot). And while one might argue they seemingly aren’t taking on the big, hairy, audacious problems (though some are) that you find companies in Silicon Valley tackling, they have very favorable macro tech trend tailwinds, which allow them to have significantly higher upside than many of the comparable businesses built in NYC five-plus years ago. I also think a younger tech ecosystem results in having younger founders, and when you’re building consumer-facing businesses (as most in LA seem to be), particularly ones targeting a younger demo, it’s valuable that you yourself are a likely user or customer. It’s a core piece of my hypothesis around founder-product fit, and LA seems to have this in spades.

Given the relative nascency of the ecosystem, for a young investor, there is an ability to grow with it in a way that can’t be done in NYC, let alone the Valley. You can build a reputation over time by being active in the community and doing right by entrepreneurs. The network effects that come with investing (both money and time) in a geography are real. While Snapchat can serve as a magnet for talent and the nexus of LA’s tech ecosystem (it’s the Palantir of Venice) and Science Inc. is doing tremendous work, I believe the startup scene is largely underfunded, particularly when it comes to funds who can stake their claim as a true lead investor. Lowercase, with which we’ve co-invested in a LA startup, is the preeminent seed fund in the area, and Upfront is the dominant traditional VC, but there is plenty of room for others to come in, whether they’re on the ground (as Arena has shown) or they’re parachuting in with regularity. I believe that making monthly trips to LA allows us to be a de facto LA seed fund. I’m fairly confident that no east coast investor is going to LA that frequently and spending that much time there (short of Fred Wilson who literally lives there two-plus months of the year).

LA’s similarities to NYC don’t end with how far along the former ecosystem is. In fact, LA’s diversity of industries (media and entertainment, fashion, finance, and tech), cultures, and general “personalities” within its massive population lends itself to being much more similar to NYC’s mix than SF’s homogeneity. I think being exposed to such diversity makes me a better, more adaptable and empathetic investor. I also believe that launching products, particularly in consumer mobile, in LA or NYC leads to lower odds of false positives than launching in the early adopter monoculture of SF. Furthermore, just as many companies should or need to be in NYC given the industries that the city harbors, there are numerous startups that need to be in LA for similar reasons. As I outlined in a previous post comparing my time in SF to my time in NYC, maintaining a solid “tech-life balance” and cultivating personal happiness fosters professional success. I believe this quality of life leads to more sustainable company-building and a lower likelihood of burnout, especially among so many young founders. The below Tweet came from a meeting during my last trip to LA:

https://twitter.com/Besvinick/status/713492553480294400?ref_src=twsrc%5Etfw

This 21 year-old founder wisely recognized that being close to his college friends and having as normal of a life outside of running a hypergrowth startup would lead to a higher likelihood of success for his company, and maintaining an identity that wasn’t solely bound to his startup would be healthiest.

Given my time at Gumroad during business school and at Wanelo after graduating, I see and evaluate a disproportionate number of commerce-oriented investment opportunities — social commerce, marketplaces, direct-to-consumer brands, subscription commerce, new types of retail models, etc. About 25% of the investments I’ve sourced and led for Deep Fork fall into this category. Consequently, I spend a considerable amount of time thinking about branding. Branding, of course, is not limited to retail and brands themselves. For instance, I am a huge fan of the brand identities that Airbnb, Lyft, and theSkimm have cultivated. However, for the purposes of this post, I’ll focus on “traditional” commerce. What follows is an assortment of startups (Dia & Co, Pinrose, ShopJeen, Stowaway, and Walker & Co.) that I admire along with brief notes on why I believe they are building a brand in a thoughtful way by telling a compelling story and having a distinct point of view.

It goes without saying that the founder is vital to the success of any startup, but when it comes to building a brand, I believe the founder is that much more important. A founder who authentically embodies the personality of the company, and deeply and personally understands the customers she is serving is essential. She simultaneously needs to be the soul and face of the company. Without this influence from the top down and strong founder-product fit, it is unlikely that the brand will develop a distinct identity, perspective, and point of view. The following brands are all led by founders who more than fulfill the aforementioned requirements.

DIA & CO. is tackling one of the most underserved markets in retail: plus-sized women’s fashion. Nadia Boujarwah and Lydia Gilbert are building a phenomenal company by creating an aspirational brand that caters to their target market in a way that no other retailer or brand ever has. Personalized service makes customers feel special — it’s a luxury that few can afford with the added benefit of discovering new designers and receiving a box of items hand-chosen for them. The pride that Dia’s customers have shines through on social media channels, as the brand has helped nurture its community of members to share their favorite looks, thereby fostering positive word-of-mouth and growth. For instance, there are over 1,000 posts on Instagram with Dia’s hashtag, and tons of unboxing videos on YouTube, as women show off the curated items they receive each month. This abundance of organically shared, user generated content underpins one of the brand’s objectives, which is to empower women to feel and look their best, and it’s clearly succeeding.

PINROSE is competing in the crowded perfume and fragrance market among a number of entrenched incumbents, but it’s doing so in a unique and effective way thanks to creative insights from Christine Luby and Erika Shumate (who spent two years doing research within olfactory studies). Quite simply, Pinrose is building a brand that simultaneously straddles approachability and aspiration. The company is able to walk this tightrope with clever on-boarding and strategic distribution channels, among other things. Pinrose’s on-boarding is a fun and quirky quiz on the site, which is applicable to a wide variety of customers. Additionally, a very straightforward naming convention for the scents (rather than flowery, obscure, or foreign names associated with many competitors’ products) immediately grounds the brand and allows it to resonate with a broad spectrum of customers. The company’s distribution channels also contribute greatly to the brand perception and story. Selling through QVC, Nordstrom, Sephora, and on the company’s own site allow the brand to strike the difficult balance of appealing to a wide swath of customers while also feeling fairly upmarket. Selling direct and on QVC allows Pinrose to tell its own story. Bright, interactive displays at Nordstrom also give the company this ability — something that is fairly uncommon when going through retail channels.

SHOPJEEN unquestionably has one of the most uniquely authentic voices and distinct brand identity of any retailer. While most retailers struggle to tell a compelling story because they carry a portfolio of SKUs, ShopJeen has managed to buck this trend. ShopJeen has amassed a legion of fans by speaking to, selling to, and engaging with its audience on virtually every social media channel—Instagram, Wanelo, Twitter, Facebook, Depop, Tumblr, Soundcloud, and Snapchat. The Geocities-esque website, which was built for $1,500, is as quirky and eccentric as the products that ShopJeen sells, whether they’re items the company has expertly sourced or they’re from its private label brand, Netgear 90, named unironically after the company’s office router. The brand’s voice, personality, and point of view is inextricably linked to and borne out of the company’s CEO, Erin Yogasundram, and Creative Director, Amelia Muqbel. As the face of ShopJeen, Erin has built a brand that is virtually synonymous with the company. Whether it’s unfiltered sharing on Twitter, speaking earnestly and passionately on Snapchat, or organizing a meetup at a Chick Fil A, she has made herself nearly as accesible to fans of the company as ShopJeen’s products themselves. She has a borderline cult-like following within the ShopJeen community, and that helps carry the brand that much further.

STOWAWAY is building a direct-to-consumer cosmetics brand. Besides having one of the most cleverly appropriate names I’ve come across, the company’s decision to manufacture and sell smaller-sized products serves as an anchoring point for its brand story. Their products stand out in a crowded beauty market and feed into the brand identity and value proposition: they are highly portable for busy women on the go, perfectly sized for a subscription service, made from materials that comply with the highest possible standards (i.e. EU compliant), and are easy to use up before their expiration date. These thoughtful, minimalist, and functional product attributes also shine through in Stowaway’s strong content marketing strategy with an on-brand blog and quick-to-consume tutorials and tips. Lastly, the founding duo of Julie Fredrickson and Chelsa Crowley has an ideal mix of brand marketing, fashion, and beauty brand experience.

I recently met with a company that told me over half of their users are creating multiple pieces of content everyday. And while it’s a relatively small sample size (I am primarily meeting with seed stage companies), that engagement is staggering and led me to tell that team I believed the 90-9-1 Rule is virtually obsolete and why I thought so. And then to ensure I held myself accountable to blog about this topic, I Tweeted:

“Thinking that the "90-9-1 Rule” is dead (and has been for a while) for reasons that I’ll address in a forthcoming blog post…”

What follows are some of those thoughts I shared with this team — and a little extra now that I’m not on the spot in the middle of a meeting. (Note: for certain content with higher friction in the production process — YouTube and SoundCloud, for example — I think the rule still holds.)

First, the sheer ubiquity of smartphones is the foundation for the dismantling of the rule. When everyone has a device for creating content of all types in their pocket, the barrier to making something has been dramatically reduced. Previously, it took a concerted effort to create a piece of content; now it’s almost second nature.

And it has become second nature for an increasing number of people for a variety of reasons. The rise of messaging apps and a greater acceptance of short form material (thanks, Twitter) have helped with this dramatically by lowering the bar for creating content. These messaging products are essentially serving as training for creating content on other services. People are “writing” more than ever because of the rise of messaging products, which are increasingly replacing phone conversations. Furthermore, there are a preponderance of tools for self-expression, many of which start as creative networks, such as Tumblr, Instagram, and Pinterest, with many more on the way, as outlined in my previous post on creative vs. social networks. Users have never had so many outlets to create content in a variety of media.

Lastly, there’s never been such an opportunity for an unknown creator to go from the long tail to the mainstream in such a short period of time (for myriad reasons outlined here). The allure of going from an Instagram account with a small cult following to Fuck Jerry or from random Vine star to Shawn Mendes entices that many more people to start sharing content with the hope that it goes viral or may catapult their career.

For a long time now, Twitter has marketed itself as the best way to get closer to whatever you’re passionate about, get real-time updates on these interests, go behind-the-scenes, and generally, be an insider. While this approach has helped Twitter swell to over 300 million monthly active users and driven a lot of product decisions, particularly on-boarding, and informed positioning (i.e. you don’t need to Tweet to get incredible value out of Twitter) it’s clear that growth is plateauing. Journalists / tech pundits / wannabe Twitter product managers blame a stagnant product roadmap and the fairly complicated nature of the service.

However, what if, quite simply, Twitter’s slowing growth has much less to do with the current state of the product (Moments excluded) and more to do with user behavior and psychology? By that, I mean Twitter caters to power users, power fans, addicts of various subjects, people who get a rush from being the first to know about or share something. News junkies and journalists, tech / startup community members, celebrity devotees, and sports diehards are born for Twitter. Each “pull to refresh” is like a mini-hit of dopamine for this crowd. I believe that there may be only a finite number of Type A users who need this rush and feed off of the immediacy of Twitter, and perhaps, this segment of the user base is approaching its ceiling. The pace of Twitter is overwhelming, even stressful, for many, and they don’t feel the compulsion to connect intimately with the intricacies of a topic — and that’s OK!

This is where Moments comes in. Many hardcore Twitter users have already proclaimed that Moments isn’t “for us” — it’s for lapsed users and yet-to-be indoctrinated Tweeters.

[As an aside, let me refute this immediately. As someone who lives on Twitter 24/7, Moments is a great way to augment my addiction to the product. Seamlessly having new accounts slide into my feed, and then just as seamlessly disappear after an event ends, was pretty magical during the Astros-Yankees game on Tuesday night. The human curatorial touch is exactly what the product has needed for a while, and it’s philosophically consistent with the non-algorithmic nature of the feed.]

Moments is the ideal hook to re-engage or acquire users who aren’t pulling to refresh like it’s an involuntary twitch. As Ben Thompson has pointed out, Twitter has “just reinvented the newspaper.” Moments should be positioned as the absolute best way to catch up on your day. It should be the first stop for anyone who wants a high level overview of what’s going on or recently took place — it’s the 30,000-foot view of a subject while relying on the feed is getting into the weeds. On-boarding for new users should be focused on high level interests, which can inform the personalization of Moments over time in addition to the ones with which users engage without being prompted. If this works, watch out.

But, in my opinion, the real genius of Moments is how it exposes users, both veterans and recent sign-ups, to new accounts. Hardcore users lament the staleness of their feeds and the desire to discover new people to follow. More importantly, though, following Moments and even browsing through them is a brilliantly clever way for Twitter to help new users build a feed from scratch — a problem that has plagued Twitter from the dawn of time. I’d make it ridiculously easy for people to quickly follow new accounts they discover from tuning into a Moment or surfing the Moments tab. The suggested follower list for all users should also be comprised of accounts that appear most frequently in Moments with which they interact. I believe this will significantly resolve the cold start issue that new users face when constructing their feeds.

The following list contains 15 things I’ve learned / observed in 15 months of venture. Some of these items aren’t novel, but it takes experiencing them firsthand to truly learn them. Others, like anything one learns, may be unlearned over time when presented with new evidence.

“Deal Flow”

1. At the seed stage, my goal is to optimize for serendipity and have as wide a funnel of investment opportunities as possible. I never know where our fund’s next investment is going to come from, so I’m always “on” and receptive to intros, referrals, and in-bound. Cultivating and nurturing relationships are the lifeblood of my approach to the venture business.

2. Chasing trends and what’s buzzy or hot (a company or a sector) is often a losing proposition. At the seed stage, particularly given the lean structure of Deep Fork, being too thesis driven can lead to myopia and deductive reasoning when it comes to making investment decisions. While I have hypotheses about different sectors and trends, I’ll pursue those opportunities if they enter my field of vision. Being nimble is critical to our ability to get involved with great founders and companies.

3. Meetings when a founder fundamentally makes me re-think entrenched beliefs or ponder certain paradigm shifts enable me to be a better investor and usually lead me to other companies tackling similar macro problems / trends.

4. The earlier you invest in the lifecycle of a company (e.g. seed vs. Series A), the less the brand of a fund matters. Personal reputation, relationship with and ability to build a rapport with a founder, and speed to conviction on multiple fronts are what matters. Entrepreneurs at this stage are looking for early believers, champions, and evangelists of their cause.

5. I’d much rather meet a company, pass on investing, and be wrong than never see the company at all. Before I started in venture, it was tough for me to understand how one could handle this level of regret. However, I acknowledge now that I’m going to be wrong much more than I’m right, and there’s no substitute for being in the flow.

Investment Decisions

1. Nearly every round closes much faster or much slower than an entrepreneur expects. Understanding how a round plays out is an art, but ultimately, we strive to come to a conclusion about investing without any artificial pressure due to timing.

2. Deciding to invest or not usually boils down to whether we share the same philosophical belief around consumer or individual behavior / psychology as the entrepreneur — not whether or not the product or service is technologically feasible / sound.

3. If I play out the hypothetical scenario in my mind of receiving an email from a founder letting me know that she wasn’t able to make room in her round for us, and I don’t viscerally feel sick and pissed off, then I likely don’t feel strongly enough about the company to push for us to invest. Receiving a note like this from a founder should make me feel absolutely gutted.

4. It’s still too early to draw conclusions from my track record of sourcing investments for the fund, so, in the meantime and in the long run, the most important transferable “asset” is what founders (in- and outside of our portfolio) say about their interactions with me. Getting introductions to entrepreneurs by entrepreneurs in whom we chose not to invest is the surest sign I’m doing right by them.

5. Founder-product fit continues to be the underlying trait that ties the dozen investments I’ve sourced for Deep Fork together. When I look at how these companies are performing, I feel confident in the decision because of this foundational thesis.

Post-Investment

1. While an entrepreneur likely crafted the syndicate of investors knowing who could be helpful in particular areas, I always do my best to figure out how I can most effectively help a portfolio company. I should know what my comparative advantage is within the syndicate, and let an entrepreneur know how she should lean on me for support…

2. …which leads into always being “on call” for founders. I want every entrepreneur we back to know that I’m virtually always accessible for any problem / help / intro / etc. no matter how big or small. Giving founders this outlet, whether it’s utilized or not, fosters an open / two-way relationship and dialogue early on.

3. As seed investors, our primary objective, whether we led the round or not, is to help in any way we can to shepherd portfolio companies to a successful Series A raise. A core part of this responsibility is developing and fostering relationships with larger funds, keeping counterparts apprised of companies in our portfolio that are about to raise, and back-channeling when necessary. We should be able to explain our rationale for continuing to support portfolio companies and be able to pitch these companies nearly as well as the founders themselves.

4. Some of our most compelling investments so far have been ones that many other investors didn’t “get” or came via intros from other investors who would later pass on that same round. If locked in a room with no external information about who is or isn’t investing, we should still be able to arrive at the same decision. Being successful in venture is as simple as believing when many others do not — relying on social proof is a surefire way to miss out on the most likely sector-defining, world-altering companies.

As someone who spends a considerable amount of time using and evaluating new types of consumer internet products, I find that it’s very easy to lump many of these new startups into the ever expanding “social network bucket.” It’s a safe catch-all, but I find that it’s a description that sells short and / or isn’t aligned with the original value of many of these products, the reason many people use them, and who the earliest adopters are. A more appropriate term for many of these products is likely “creative network.”

Creative networks are fundamentally about providing people with avenues for distributing content. A more daunting task is building a tool, which in and of itself, inspires people to become creators and may sit on top of a network. Casey Neistat, YouTuber and co-founder of Beme (a little more on this product later), considers this aforementioned task to be the highest level of the creation hierarchy. In the first instance, that being simply providing more frictionless routing of content, YouTube is likely the paradigmatic example. Video as a medium wasn’t new, and the format, particularly when YouTube launched, was fairly consistent with what creators were accustomed to.

In the second case, I’d offer up Tumblr, Instagram, Vine, and even Pinterest as some of the most successful creative networks that were simultaneously coupled with a new tool. All of these networks were joined with tools that, in my opinion, unleashed a tidal wave of creative early adopters. While many were naturals when it came to those tools, they also likely inspired people to be creative for the first time or in a particular medium for the first time, whether that was user generated mixed media, photography, stop motion and short form videos, or simply expert curation. All of these platforms have birthed stars and influencers who likely never would have risen to prominence without them (and they will certainly continue to do so). Last night, Sam Gerstenzang posed a related question on Twitter: If Bieber emerged on YT/Vine/Snapchat today, would he stay there? Used be that you needed to leave those platforms to "make it", now less so

While many YouTubers have stayed on the platform, the biggest ones have moved off and will continue to do so. I don’t think it’s a matter of needing to do so to “make it.” I think that that type of talent translates to more traditional forms of media and other similar networks more easily (e.g. Miranda Sings appearing on “Comedians in Cars Getting Coffee”). Interestingly enough, when it’s been a tool on top of a network, the creator has tended to stay within that medium or ones very similar to it. The vast majority of Vine stars have stuck to amassing their following there because it’s such a unique format that their talents often don’t translate outside the network. However, some Vine stars, such as Shonduras, Nicholas Megalis, Logan Paul, and Jerome Jarre, have been able to take their talents to Snapchat Stories because the format and audience is relatively similar.

[Quick aside on Snapchat: Given its origins as a one-to-one or one-to-many messaging app, I don’t consider Snapchat to have started as a creative network by any means. However, Stories began as a sort of creative network within the larger Snapchat ecosystem.]

However, at a certain point, each one of these creative networks leveled up to being a social network. Evolving from a creative to a social network may not be the goal of the network’s founders (or even their investors if they have any), but typically, it is likely beneficial to the sustainability and vitality of the network. A social network isn’t necessarily larger than a creative network, but I believe there is an evolution that may occur, which is defined by a few key attributes.

A creative network may evolve into a social network when an increasing number of people become creators, when there is an acceleration in engagement and responses between consumers and creators, and when there are interactions among consumers with a piece of content serving as a catalyst for discussion. These evolutionary steps are almost always the result of a creative network reaching a tipping point in terms of scale, reach, and / or accessibility, which come from certain necessary conditions, such as a low barrier for creating content and distributing it outside the network.

On Tumblr, there was a moment a three or four years ago when it became the default blogging platform of choice for many people who wanted an easy “plug and play” solution. They weren’t the original cohort of Tumblr creators, but they were consumers of content on the network and were gradually converted. On Instagram, this conversion happened even more quickly in the company’s life cycle. Moreover, there has been an ever increasing amount of discussion in the comments sections within the app. The original photo (or video) is simply the launching point for conversation. A similar social interaction, conversation around content, has occurred on Vine, particularly given the content’s portability to other platforms, like it’s parent company, Twitter. And Pinterest has made up for its relative lack of comments with a explosive growth of consumers converting to creators (i.e. curators).

So, given this hypothesis around the ascension of creative networks, particularly those developing new tools, to social networks, which ones should people be paying attention to?

The first two that come to mind are VSCO and 500px, two creative networks in the photo sharing world that haven’t quite made the leap to being social networks and mainstream recognition (and who am I to say that they want to)? Each has raised a fair amount of money, and each has undertaken efforts recently to layer in more “social” features that make their products more accessible to a wider audience, as VSCO launched Collections and 500px revamped its product entirely. Aside from those two, Fleck is another photo sharing app that is trying to tap into what Instagram felt like during its earliest stages as a creative network.

There are a handful of other startups on my radar which have launched new tools to inspire creativity. SUPER, Byte, and Trio are just a few products focusing on mixed media of sorts. New Hive is tapping into the notion that a web page in and of itself can be a form of artwork. And there’s Beme which seeks to inspire people to be creative by altering the way they share (no video previews) and interact with video content (selfie reactions).