By: Ben Freeberg
What is “Digital Efficiency” you ask? Fundamentally it is the ability to do things better through digital tools, products and services; essentially anything that saves time and money through digital enhancements. Since their inception in 2013, this has been the core investment thesis of our partners at Indicator Ventures, a Seed and Series A venture firm based out of NYC.
Uber didn’t create any ‘new’ technology.
Uber simply built an app that connected consumers to drivers. They made it easier and quicker to take an Uber than it was to take a cab, and the instant it became cheaper, the competitive landscape was upended.
Salesforce didn’t create a new CRM technology, they replaced bulky on-premise CRMs and Excel spreadsheets by putting spreadsheets in the cloud and building features on top of that. This made it easier for sales professionals to do their job and therefore saved them and their companies money.
How does Indicator Ventures’ thesis play out in its investment portfolio?
Shibumi helps enterprises execute initiatives and deliver results faster, leaner and with a focus on results. Today, managers, project leaders and executives spend countless hours tracking down updates, attending status meetings and generating reports, leaving little time to actually focus on delivering value from their initiatives (cost savings, merger integrations, regional expansion, change management, etc.). The largest, most complex Fortune 500 organizations are still living in Excel, PowerPoint and e-mails while trying to execute massive-scale initiatives.
It’s 2016, and there’s a much better way to address this. Shibumi’s turnkey cloud application lets businesses refocus their efforts on delivering results, not executing tasks, measuring and assessing program health, effectiveness and progress in a single solution, all while saving time, money and human capital (some of the largest companies on the planet now rely on Shibumi to execute company-wide initiatives and optimize their work flow).
Bond built a platform that allows people to send handwritten notes through their mobile phone. This same platform enables corporations to send and track handwritten notes at scale, (driving greater consumer loyalty on a number of levels). Their robots can hold a pen and write notes in your exact handwriting (if you are confident enough to choose to go that route). It is your note, written on your own custom stationery, just crafted in a more efficient way, saving time, saving money and bringing back a lost form of personal connection that truly resonates in this era of ever increasing digital formats. Bond was recently acquired by Newel Brands (NYSE: NWL).
Did you know that direct mail still offers some of the highest ROI of any marketing method? And, that it is quicker to send a letter from Chicago to NY than it is to send a letter from NY to another part of NY?
Unfortunately, direct mail campaigns can be incredibly inefficient at scale. In addition it is difficult to track conversion on direct mail, especially compared to digital formats like e-mail or online
advertising. Lob’s platform allows you to run a direct mail campaign on a per instance basis with constant tracking and analysis. Through a suite of APIs that connect to their network of on-demand printers (which were already in place) users pay the same price, or less, than a bulk ma iling campaign with less time and the backend analytics to support the initiatives. Another example of getting better data, while costing less and saving time.
What is the threshold? What’s next?
Digital efficiency doesn’t have to be about creating a complex new technology in order to save time and money, but there is a point of saturation in the marketplace where newer, more innovative technologies will need to be leveraged. How many ride sharing companies can there be? Salesforce took spreadsheets to the cloud, and so began the cloud migration; from file storage (Dropbox) to marketing (HubSpot) to accounting (Xero) and so much more. In other words, the threshold for saturation is approaching.
There will be, and already are, digital efficiencies driven by newer, more innovative technology. Virtual Reality, Augmented Reality and Artificial Intelligence are three buzzwords in Silicon Valley bright now, but also incredible examples of how people will save time and money through the next frontier of tech. The big names in the tech ecosystem have been investing in companies in these verticals for the past few years, and Google’s $500 million+ acquisition of DeepMind islooking pretty good.
Indicator has begun to invest in these spaces as well, with msg.ai, who is building a platform for brands to leverage AI and build bots to help communicate with customers at scale, predominantly through mobile messaging platforms, like Facebook messenger for example. And,IrisVR, which allows users to translate 3D files to a native VR file format with just one click, (previously a manual process that was both expensive and time-consuming). When dealing with these more tech forward investments the fund places a strong emphasis on the business component, focusing on companies that are generating real revenues with a clear path to profitability – msg.ai and IrisVR are two prime examples of companies that leverage highly innovative technologies while still generating significant revenues early in their company life cycle.
About Indicator Ventures
Indicator provides their portfolio companies with access to a valuable network via a team of 17 advisors, venture partners and ‘resident experts,’ to help scale and grow their business. The team prides themselves on being practical, fair and hardworking – there for their portfolio companies for whatever they need, whenever they might need it.
They are very hands on, but with a take it or leave it approach to be sure that they will let you do what you do best, run your business. They know their founders have extraordinary visions and they’re investing in them to help bring those visions to market, in the most commercially successful way possible. According to Ben Luntz, co-founder and General Partner, “Venture Capitalists do not build exceptional companies. Entrepreneurs do. We do not want to run, overtake or redirect any startup. But let it be known, we have the resources to help, and we’re not afraid to use them!”
Thank you to Ben Luntz and the Indicator Ventures team for assisting us with this post.