Bessemer (a Skype VC) invest in Bokee
Bokee is growing daily and doing deals with A+ Partners from feedburner(distribution) to Bessemer - who just announced an injection of capital. With all the action in China, and the global action in blogs (and lack of public securities to buy in this space) Bokee looks like a home run investment, also note these are the guys that invested in Skype after 3 months due to the viral downloads. While David Weatherall at CMGi, early days Softbank etc may still be maligned, where there's consumer smoke, as I like to say, there is potential business fire. Great post and investment : Extract from David Cowan, from Bessemer, who Brad Feld profiles : "David’s had way more success as a VC than we had with DataRoute, having made a long series of successful investments since he joined Bessemer in 1992 including Verisign, Ciena, Flycast, Keynote, NetGenesis, ON Technology, PSINet, Register.com, and Trigo. We’ve currently got one active deal with Bessemer (Postini ) and hope to have another one soon.David’s extremely smart (even though he went to Harvard), an excellent writer (ok, he went to Harvard), and never shy about speaking his mind – his blog promises to be a good one. "
"..That's why we funded Skype when it was only 3 months old with no revenue (and no idea yet of how to generate it). Having observed 2 million people download the alpha client in the first month and 150,000 concurrent users, we didn't have to worry about User Behavior risk. Clearly Skype had developed something of great value to users. The same pattern applied to Gracenote, Bokee and Blue Nile when we funded them--each had millions of registered users who found their way to the site without expensive marketing to acquire them. Had we developed this screen earlier, we would have funded eBay based on the strong, organic growth they were seeing in traffic finding its way to their homegrown site.
The focus on "eyeballs" sounds like 1990's bubble investing, but the difference is that bubble investors valued eyeballs no matter how expensively they were acquired (since capital was free). We are looking for organic growth--the kind that's easy even for VC's to mentally extrapolate into a large capital-efficient business. That's why we believe that the formula for any successful consumer venture is to be as scrappy as possible until you see that exponential growth curve. Twist, tweak and test until you find the mark. Only then is it time to raise lots of money, hire expensive VP's, and "monetize" your users. (Be sure to read this excellent post from Brad Feld on finding the next killer app.) If Google taught the world anything, it's that you start with the customer experience, and then build the business only after you've got that one nailed."
"..That's why we funded Skype when it was only 3 months old with no revenue (and no idea yet of how to generate it). Having observed 2 million people download the alpha client in the first month and 150,000 concurrent users, we didn't have to worry about User Behavior risk. Clearly Skype had developed something of great value to users. The same pattern applied to Gracenote, Bokee and Blue Nile when we funded them--each had millions of registered users who found their way to the site without expensive marketing to acquire them. Had we developed this screen earlier, we would have funded eBay based on the strong, organic growth they were seeing in traffic finding its way to their homegrown site.
The focus on "eyeballs" sounds like 1990's bubble investing, but the difference is that bubble investors valued eyeballs no matter how expensively they were acquired (since capital was free). We are looking for organic growth--the kind that's easy even for VC's to mentally extrapolate into a large capital-efficient business. That's why we believe that the formula for any successful consumer venture is to be as scrappy as possible until you see that exponential growth curve. Twist, tweak and test until you find the mark. Only then is it time to raise lots of money, hire expensive VP's, and "monetize" your users. (Be sure to read this excellent post from Brad Feld on finding the next killer app.) If Google taught the world anything, it's that you start with the customer experience, and then build the business only after you've got that one nailed."
posted by redbarren at 8:05 AM
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