Congratulations again to Potbelly for the IPO. Make sure you listen to Aylwin Lewis, President and CEO of Potbelly. Watching him speak in this video makes us hungry!
Congratulations again to Potbelly for the IPO. Make sure you listen to Aylwin Lewis, President and CEO of Potbelly. Watching him speak in this video makes us hungry!
Hardware is hard but it’s not stopping entrepreneurs from jumping in
By Iggy Fanlo and David Glickman, co-founders of Lively
As sensors get smarter and smaller, it opens up a new world of connected hardware otherwise referred to the “Internet of Things,” or IoT. We have been excited to see how a new breed of smart sensors is transforming average, everyday devices into something more meaningful to the people who use them – even being embedded in the everyday life of older adults, providing a new safety net and enabling a whole new level of connection for them and their families.
As former software guys, we have been amazed to see the transformations taking place in hardware as internal system components get smarter, smaller and cheaper. So after working in the world of electrons, we decided to make the transition to work in the world of protons. We jumped in to successfully build and launched Lively, a smart system designed to keep older adults safe, independent and connected to loved ones.
Now looking back 13 months later, our belief that hardware is the new software is even more bullish. Software developers can move into the world of hardware, but first they need to know that design is everything!
From our experience, we recommend that entrepreneurs building businesses for the Internet of Things plan on spending more development time upfront with a specific focus on design, design, design. Hardware is not yet iterative (though 3D printers hold promise to bring hardware fixes and updates to all.) For now, entrepreneurs need to be very thoughtful about every design and functionality detail whereas in software, we plan out dot releases to buy more time. For hardware, entrepreneurs don’t have that same luxury, which means they need to do more homework to launch a device with a nearly perfect design. So, more than ever, there’s an incredible importance of having a clear vision to reach critical mass from hardware design, to development to distribution
When we built Lively, we did more consumer research and QA analysis than we had ever done. We studied every curve, angle, fonts, edging, colors and finishes before successfully launching one of many devices ushering in the Internet of Things. Our sleek white hub and multiple sensors should tell you that our research showed when it comes to hardware, looks matter – a lot.
Getting design right, requires hiring the right people with specific hardware experience who believe in the vision as well as have the capacity to help push things forward. For us, at times it felt like we needed an army to get things done, but the fact is, we had to keep things as lean as possible.
Of the 13 months that we started working together on Lively, it was just four of us for the first six months. To keep lean, we hired best of breed consultants with serious hardware experience, something that should be on the checklist for any entrepreneur looking to develop hardware. It’s a great way to quickly bring on an A-team with the right expertise in mechanical and electrical engineering, industrial design, and packaging design. There’s no way we could get the industrial designer of the Nest Learning Thermostat to come on board full-time, but instead of looking for an employee or co-founder we hired him as a consultant, something we will never regret. We also brought on a hardware aficionado, someone who knows manufacturing and gave us great advice based on personal experience and drove us to embrace things we would have never thought of. These consultants became part of our team and we all carried on an unwavering belief that we could make this happen against all the odds, and against all the constraints.
And in the end, only three metrics matter: how many units are sold, the cost of customer acquisition, and customer churn. However, simply focusing on these metrics doesn’t lead an amazing product. When it comes to the Internet of Things, it truly comes down to a team who knows the importance of design, a clear vision for building it, and an insane amount of passion for building a sustainable business. Now with a product in the market, we can continue our charge to rapidly grow our business knowing that we have the right people at the table to help us get Lively in front of the right consumers.
By Dan Levitan, Maveron co-founder and partner
An IPO in the middle of a government shutdown? Absolutely!
Maveron invested in Potbelly in 2001. This morning, the company went public and I could not be happier for everyone involved.
Potbelly is well known for its toasted sandwiches, great shakes and awesome cookies. I have also had the privilege of getting to know the Potbelly team on a more personal level. Their consistent emphasis on integrity, teamwork, accountability, positive energy and coaching is not only remarkable, but also a great foundation on which to build an enduring, game-changing consumer brand.
We look forward to watching (and cheering) their continued success in building the next household restaurant name.
Lively started last year with a passion and commitment to deliver a delightful, loving, and empowering experience for older adults to live independently longer and we’re thrilled to watch them start taking orders today. We were excited to have Lively as part of our seed program and are happy to participate with Cambia Health Solutions in the Series A Financing.
Here’s what Iggy Fanlo, CEO and co-founder of Lively had to say recently about Lively and leadership at our CEO Forum earlier this year.
By Jason Stoffer, Maveron Partner
(Syndicated from PandoDaily)
In 2009, I flew to Washington DC to meet Paul Freedman, an audacious young entrepreneur building what he hoped would be the world’s best community college.
As the son of UC-Berkeley professors, Paul wanted to give the higher risk students who typically attend community college the same educational opportunities he himself had accessed. He envisioned a school that provides individualized student support, gives students the skill set to transfer to the 4-year school of their dreams and incorporates the latest innovations in education technology. We invested in Paul’s company, Altius Education, which aimed to realize Paul’s dream through Ivy Bridge College (IBC), a partnership he launched with Tiffin University, a strong regional school in Ohio.
Since then, Ivy Bridge has changed the lives of thousands of students. Within three years of enrolling at IBC, 64 percent of IBC students graduate or transfer, a rate at least 50 percent better than the national average for other 2-year schools, according to industry-standard benchmarks published by CollegeMeasures and Complete College America.
IBC students have gone on to study at 4-year schools including USC, Penn State, Texas A&M, Pepperdine and Ohio State. We also built a competency-based learning platform called Helix, which uses assessment to understand what a student knows and then serves up course material to fill in the gaps. EDUCAUSE and The Gates Foundation awarded us a Next Generation Learning Challenge grant, to further develop the platform’s features.
In 2010, based on Ivy Bridge’s track record of helping a high-risk student body succeed in their goals, we became more public in our desire to spin out IBC into a separate stand-alone institution. We hoped to parlay our early success into building the most innovative community college in America.
As we began to apply for the necessary approvals, the regulators at the Higher Learning Commission (HLC), the body that regulates colleges in the Midwest, acted to stymie our plans. They forced us into a change of control process when all we wanted was approval for a branch campus in California. In non-regulatory parlance, that means they created additional layers and processes to achieve independent accreditation, in a clear effort to prevent us from ever becoming a standalone university. The regulator’s hostility came to a head in late July, when HLC ordered the Ivy Bridge program to be terminated by mid-October.
In every industry, new entrants, funded by private capital, drive innovation and shake up existing markets. General Motors never could have created Tesla and Motorola couldn’t invent the iPhone. In post-secondary education, new for-profit entrants into the system are just not allowed. Since 2010, HLC has only approved candidacy for accreditation of a single for-profit school that has been started in the past decade – Rocky Vista University. At the same time, it has placed two of the biggest for-profit education organizations in the country, University of Phoenix and Bridgepoint, under regulatory sanctions.
We wanted to make sweeping changes to how colleges are run, changes that would rock the existing system to its core.
The regulators represent legacy constituents that appear ready to do anything to prevent these changes. These hidebound incumbents want to maintain their ability to teach students the same way they did a hundred years ago. This is at a time when new technologies and approaches can truly improve how students learn.
Investors are excited about the potential: $600 million in venture capital was invested in education in 2012, five times more than 2002. However, this investment is largely going into technology tools, services and supplemental education. Regulators have stifled those investment dollars from going to where they could have the most impact – reinventing the core of what happens in the K12 and college classroom.
These regulatory actions are clinging to outdated practices and causing the US post-secondary system to fall behind global competitors. In 1995, the U.S. ranked 2nd after New Zealand in terms of the higher education graduation rate among 19 OECD countries with comparable data. In 2010, its ranking dropped to 13th among 25 countries with comparable data.
Our society is in a place where our government and the regulators they enable are counting on incumbent non-profit schools to transform education in the US. New schools cannot be started because for-profits are collectively demonized as capricious actors who do not have the students’ best interest in mind.
I’d ask where we would be as a society if the legacy AT&T monopoly was in charge of mobile innovation and bringing the Internet to the masses or if agriculture was viewed as a vital national interest like in Cuba and we could only get bread at government stores?
We are allowing the government to behave this way in post-secondary education and, in doing so, delivering a poor legacy product to students while our international competitors are leaving us in the dust.
By Dan Levitan, Co-Founder and Partner at Maveron
On the heels of Maveron portfolio company SeatMe being acquired by Yelp, we’d like to congratulate another Maveron portfolio company Decide.com on the news today that the company has been acquired by eBay. When we met Mike Fridgen and Oren Etzioni in 2011, we were already impressed by their track record of value creation at Farecast. Moreover, we were immediately impressed by their passion to build an exceptional team, laser-focused on helping consumers navigate the confusing world of prices for consumer products.
Throughout the Maveron portfolio, we’ve consistently seen the power of a standout team, a big market, and a differentiated approach to building a brand change the way we engage in daily life—how we shop for our kids (zulily); pursue education (General Assembly); protect our pets (Trupanion); and make sure our parents and grandparents are safe (Lively). In fact, Maveron’s first investment ever was eBay in 1998, which used those three elements to reinvent marketplaces for used goods. In that spirit of the pursuit of excellence, we enjoyed being part of Decide.com’s journey as Mike, Oren and their team obsessively focused on helping consumers shop with no regrets. We agree with the folks from San Jose- the Decide Team will make a significant contribution in helping eBay create an even better shopping experience for their buyers and sellers. It will be exciting to watch eBay develop more of a Seattle presence.
While other VCs have turned away from consumer brands recently in favor of the enterprise, we remain more certain than ever around Maveron’s core belief: great entrepreneurs can use technology to disrupt markets and build great consumer brands more thoughtfully and inexpensively than ever before. We are committed and excited to find and partner early with the next wave of great entrepreneurs building the services, products, and platforms we soon won’t be able to live without.
We’d also like to thank Madrona for bringing us this opportunity. It was a pleasure to work with you Greg. We enjoyed this Seattle-based VC collaboration (working with Madrona and more recently Vulcan) and look forward to partnering on future deals.
By Dan Levitan
Digital communications and social media have empowered consumers, whose voices can be heard loud and clear.
As has always been the case, the fate of a business is often determined by how well it generates consumer delight. However, these new platforms have provided consumers a bully pulpit like never before. Early stage companies able to react quickly to customer feedback are finding they are better suited to grow fast and outpace big, established businesses that are historically slower to move. We have seen the best of these early entrepreneurs pair an ability to foster, harness, and respond to consumer feedback with advanced technology and tools to get to product market fit and scale with far less capital than ever before.
We sat down with some of Maveron’s portfolio entrepreneurs including Jake Schwartz, co-founder and CEO of General Assembly, who have proven themselves particularly skilled at harnessing consumer engagement to quickly grow brands. These pieces of insight provide a decent playbook for any entrepreneur looking to scale a business.
Here’s what Schwartz has to say about big data:
“Without data, you don’t really have a consumer business in today’s age,” says Schwartz, who’s company provides working space and education to entrepreneurs. Now is the ideal time to start a consumer business, he says, because traditional barriers of entry have completely broken down. This open terrain gives entrepreneurs an opportunity to aggressively innovate around product, distribution, and marketing to build brands that resonate with consumers — and, most importantly, to mix the art of brand building with the science of data. Schwartz encourages entrepreneurs to become comfortable with their own internal technology and internal data, and use both as the central tool in making decisions.
By Jane Park, founder and CEO of Julep
Many of today’s marketers are like a bad date at a dance. Sure, they are dancing with you right now, but they keep looking over your shoulder to see if there is anyone hotter. In the new digital world, more than ever before, marketers need to be hyper focused on existing customers (the person you are dancing with right now), which can result in a beautifully choreographed word of mouth phenomenon and brand loyalty.
We’ve watched traditional beauty brands spend millions of dollars developing and marketing new products without ever truly getting to know their customers. John Wanamaker once quipped, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” To me, it’s clear that any dollar that is spent without an intimate knowledge of your customers is wasted. What’s exciting is that today, startups don’t have to spend much to gather information about their customers and engage directly with them through social media. Building an enduring and valuable consumer brand always starts with a genuine conversation, and it’s easier than ever to reach customers this way. Here are three things we’ve incorporated into our playbook for using social media to build a brand in the digital age.
1. Crowdsource Product Development
Now more than ever, customers can help determine your next best selling product. Companies have always relied on customer feedback to help develop products, but now, you can instantly use social media as a 24X7 focus group to solicit ideas from customers and make them part of the product development process. Using social media to help crowdsource products has helped us produce more products in an 18-month span than any other beauty company. If you’re ready to actively listen and respond to customers, they will happily tell you what they want. As you proactively feed their wish lists into the development process, you’ll not only create proprietary products faster than the competition that people actually want to buy, but you’ll also build a loyal and enduring customer base.
2. “Dance” with Customers Every Day
You can’t just talk to customers when you want to have a conversation; you have to be committed to constantly engaging in authentic two-way conversations in order to create previously impossible connections. Not only will this give you access to customers’ feedback and the opportunity to email them with new offers, but it will also create opportunities for you to respond to their needs as they are discovering them. I appreciate any opportunity to anticipate and respond to our customers needs, bringing them closer into the circle of intimacy. But you can’t fake authenticity – you have to always be there, in good times and especially in the bad. I go onto our Julep Facebook page regularly to connect directly to the women who are making an effort to connect with us. I have sent “thank you’s” and apologies from my personal email account. The technical mechanics of social media don’t change the dynamics of an engaging in two way conversations – talking is talking regardless of the vehicle.
3. Don’t Rely on Marketing Titles to Get the Job Done
At Julep, no one has a marketing title because I want everyone thinking about a strategy for satisfying existing customers, acquiring new customers and building products with longevity, which is what marketing is all about. In the digital age of marketing, we want the entire company to be inspired to learn more about customers. Whether it’s engaging personally in the conversations taking place on Facebook, following the excitement on Pinterest, or taking the time to research personal ways to surprise and delight our most loyal customers, we want every employee thinking of new ideas to harness the power of data to find, target, and delight customers in unprecedented ways.
By Jason Stoffer, Maveron Partner
The recent $43 million round of financing for Coursera fuels the growing hype, much of which has been sparked by VCs and industry pundits, around the “death” of traditional education. In theory, massively open online course (MOOC) platforms like Coursera should radically reduce educational costs, give students universal access to the best teachers, and enable better student outcomes. Results to date, however, have not yet lived up to the promise. Completion rates remain low, and there are significant obstacles in the way of MOOCs fully integrating into K-12 and post-secondary education.
Distance education has a 100-year history and has yet to live up to the hype. In fact, the “MOOC movie” has been played before – with the great promise of education delivered through radio and TV. From 1910-1920, the federal government granted 202 radio broadcasting licenses to educational institutions for course credits, yet only one remained by 1940.Then, in 1948, the University of Iowa offered the first correspondence course by TV. Dozens of schools followed, but with limited success.
So how can we make the sequel — the emerging MOOC — more successful than its predecessors? The deck is stacked in the MOOCs’ favor; the Internet, with its global reach and ability to foster community, is a superior platform to TV or radio to deliver and engage students in course content. And there is great value in easy access to content from some of the world’s best practitioners and professors.
Where MOOCs have seen early success is with highly self-motivated students. Open courses offer a brilliant young software engineer or mathematician in a poor village in the developing world the ability to be measured side by side with Stanford students. So that young prodigy on a MOOC is now discoverable by big employers like IBM or Google. These employers are beginning to buy into the promise – with Udacity featuring more than 400 global employers interested in employing their students.
That use case is narrow, though. Only a small slice of students are self-motivated enough to sit alone at home and complete a course in a self-directed way. Completion rates for MOOCS often range from 3 to 5 percent. These low passage rates cannot be compared apples to apples with traditional schools, given the cost of signing up for MOOC class is zero. Even when students pay tuition, MOOCs have lagged in retention and, just recently, San Jose State ended a pilot with Udacity due to extremely low pass rates.
For MOOCs to be more broadly applicable, three things need to happen:
First, best of breed MOOC content should be integrated into existing K-12 and college courses. Recent research from the US Department of Education shows that blended learning leads to stronger results than 100 percent in-person or online environments. To do this requires “flipping the classroom” — with students watching MOOC lectures at home and engaging in more experiential and team-based work in class. However, training teachers to integrate some standardized content and flip the classroom is a huge institutional challenge.
Second, for those students taking MOOCs on a standalone basis. MOOCs need to focus on ways to better replicate the campus environment. Fostering more engagement may take the form of physical meetups, where students connect and study together. These are happening today, but only sporadically. In my hometown of Seattle, there are only two Coursera meet-ups in the next two weeks. Another approach to deeper engagement is through building more robust collaboration tools into the platform. These might take the form of streaming video, better group and team driven activities within courses or creating immersive online game-like simulations.
Finally, MOOCs can’t lose sight of the fact that many people on the platform are there to learn skills of value to real world employers. Employers may have been content to hire raw college graduates in the past, but today they want workers prepared for the modern workforce. One course that does this is Steve Blank’s Lean LaunchPad, which teaches potential employees about the customer development process and launching a product. But courses like this teach hard skills in a lecture format where learning is typically self-driven. These courses don’t teach employees how to work in teams, communicate upwards and downwards, take initiative and drive decisions with incomplete data.
These workforce skills can be taught using courses that include experiential learning replicating real life employment situations. Novo Ed, a new platform spun out from Stanford, is designed specifically for team projects and collaboration (disclosure: Maveron is a seed investor in NovoEd). In courses such as “Design Thinking Action Lab,” students are grouped together with others with similar skill levels and motivation and work together in projects. We’ll see more team-based courses like this across platforms and we’ll likely see game-like simulations introduced as well that replicate real world situations.
We need to collectively stop thinking about education technology and its latest incarnation, MOOCs, as the holy-grail in solving our nation’s education woes. Instead, we should accept MOOCs for what they are – a vehicle to get great content into learners’ hands but one that is nowhere close to maturing into its full potential.
Today’s MOOCs are at the beginning of a long and exciting journey to change education but one that will need to involve better online courses, more blended learning and destroying the “not invented here” complex that prevents professors and universities from using best of breed content created elsewhere.
By David Wu
Congratulations to the SeatMe team on the news today that the company has been acquired by Yelp. Like many entrepreneurial journeys, SeatMe started as an idea jotted on a notes app in early February of 2011. The idea was to make restaurant reservations better — both for members of the hungry public and members of the hard-working restaurant community. I loved the concept when I first met Alexander Kvamme in 2011 and enjoyed getting to know him and the team in a meaningful way, which led to Maveron investing in SeatMe’s Series A in April 2012. Alexander and his team have done an amazing job working day and night to help local restaurants and bars manage their restaurants, while also allowing customers to book reservations online. Now with SeatMe’s solution, more local restaurants and bars can provide an easy way for customers to book online reservations, enhancing the consumer experience for those who discover a great local business on Yelp.
Whether it’s getting to know founders earlier through our seed program or through core investments in startups during Series A, we are committed to passionate entrepreneurs like Alexander who are obsessively driven and strive for perfection. Congratulations to the team!