Tyra Banks Invests in Flixel (MantellaVP portfolio company)!

Tyra Banks Cinemagraph

A big congratulations to Flixel for bringing Tyra Banks on as an investor!  Flixel is deeply integrated into the upcoming season of America’s Next Top Model which airs August 9th on the CW (US).  We are all looking forward to seeing the amazing works of art that Tyra and the team have created using Flixel’s new suite of apps (available in App Store).

For more detail on the story please see the All Things Digital post below or, watch a discussion about Tyra and Flixel on the Wall Street Journal .

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Tyra Banks Invests in Flixel, Will Feature Its “Living Photos” Prominently on “America’s Next Top Model”

All Things Digital

Modeling icon Tyra Banks has invested in the animated-picture app Flixel, and will heavily feature it in the current season of her “America’s Next Top Model,” which airs Friday on the CW.

This goes well beyond normal product placement. Instead of simple static photos from fashion shoots, some 100 professionally created Flixels — that is, “living photos” that combine aspects of still photography and video — will be created and aired throughout the course of the season. Banks’s signature “Tyra Mail” notes to contestants will be Flixels, and in one episode, all the contestants will be creating their own Flixels.

Banks, who called herself “obsessed with technology” in an interview yesterday, started making animated GIFs about a year ago with the app Cinemagram (Here’s BuzzFeed’s compilation of her efforts). This year, when the Twitter-owned mobile app Vine came out, she dove right in with loops of herself belting songs and doing impressions (BuzzFeed also has a roundup).

“It starts off with me being the user. You’ve seen me on Vine being the fool. It’s something I enjoy myself,” Banks said.

The concept of a living photo captivated Banks.

“When I first saw the Cinemagraph, it blew my mind and took my breath away. It had a ghostlike quality. It was a photo but it was alive — it gave me chills.”

Originally created by fashion photographers Jamie Beck and Kevin Burg, Cinemagraphs are moving digital photographs made shareable on the Internet because they are saved as looping GIF files, which Web browsers display automatically. Banks searched for a way to bring Cinemagraphs into her work, and arrived at the app Flixel.

Founded two years ago, Toronto-based Flixel at first wanted to be “the next Instagram” — an iPhone app for social sharing of Cinemagraphs. It wasn’t the only one; close competitor Cinemagram caught the eye of Silicon Valley investors and raised $8.5 million last November after some quick user growth.

Looking for the best way to stand out, Flixel turned its efforts to higher-end tools, with a $9.99 version of its app aimed at people who want to fine-tune living photos from their iPhones and iPads. The 11-person company also built out its own creative agency to help brands make nice Cinemagraphs with its apps.

The combination of high-fashion quality and broad accessibility made Flixel just what Banks was looking for, she said. Banks invested in a previously undisclosed seed round for the company at the beginning of this year, bringing Flixel’s total funding to just over $2 million.

This is Banks’s second public investment through her Fierce Capital, following personalized shopping site The Hunt. Banks said she specifically wants to find female-led or female-focused businesses.

Since investing, Banks advised Flixel on a redesign of its interface to be more accessible to new users (Flixel founder and CMO Mark Homza attested yesterday that her feedback was quite useful).

Banks also dove wholeheartedly into integrating Flixels into “America’s Next Top Model,” now in its twentieth cycle. “The reason we’re still on the air is we’re always looking for ways to push the envelope,” she said.

So are Flixels a gimmick, or will they find a lasting place in fashion? Banks agreed that they won’t work in print, but said she imagines digital Flixel billboards are right around the corner.

What’s clear is that this is more than your standard celebrity endorsement.

“I was an endorser when I was a model,” Banks agreed. “I was a Victoria’s Secret model, I was a Cover Girl model. This is providing strategic help, and advising and bringing them onto my show. It’s a much more robust relationship.”

The 2nd Best Startup Launch Video

 

In the early days of 2012, a small startup called Dollar Shave Club unleashed the greatest startup video of all time upon the unsuspecting Gillette wielding world.  The video was titled “Our Blades Are F***ing Great” and it masterfully combined elements of Old Spice’s classic “Man-Your-Man-Could-Smell-Like” campaign with more traditional notions of rugged blue-collar American individualism.  More than five million views on YouTube vaunted Dollar Shave Club into the mainstream.

This brings me to today’s news – Flixel, a MantellaVP portfolio company and a leader in the emerging “living photos” or Cinemagraph space, has released what is in my humble opinion the 2nd best startup videothe release coincides with Flixel Verion 2 hitting the App Store.  One of the Flixel co-founders, Mark Homza, in conjunction with actress Cassandra Sorokopas (and production team Randy Cole, Adam Zivo), has created a video which feels like an Instagramed music video mixed with a love story in the vein of Joel and Clementine from Eternal Sunshine of the Spotless Mind.  Congratulations to Mark and the team.

Mark’s video demonstrates to me the power of the Flixel app, as well as the broader implications of the emerging Cinemagraph movement, for mass artistic and commercial expression.  Historically new mediums rose to prominence over long time horizons.  Joseph Niepce created the first photographic image in 1827 but it took another 136 for Kodak to release the mass-market instant color Polaroid camera. Sony put out the world’s first digital camera, the Mavica a full 154 years after Niepce’s breakthrough.  In the five short years since the release of iPhone we have seen improved versions of traditional mediums (photos/videos) gain mass acceptance (Instagram/Viddy et al.).  What we haven’t seen are fundamentally new visual mediums, mediums made possible by rise of the high powered mobile computers we call phones.  With Flixel, and the broader Cinemagraph movement, we will.

Conventional Wisdom and the Fragmented Fork

The conventional wisdom states that “platform” or “standards” battles (think PC/Mac, Beta/VHS) are won by achieving a dominant market share which leads to more “content” which leads to more consumers. This position is widely held in the tech world but this outcome could be undermined by two trends: fragmentation and forking.

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A Hardware Renaissance while “Software Eats the World”?

In early August 2011, Marc Andreessen published an unusually long and detailed essay in the Wall Street Journal titled “Why Software is Eating the World”.  Mr. Andreessen argued persuasively that:

“…we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy [emphasis added]”

Sitting at at the head of the Valley’s hottest VC fund, Andreessen Horowitz, and having co-founded Netscape and Opsware, Mr. Andreessen is in as good a position as anyone to observe and comment on such trends.

The point of this blog post is not to argue against Mr. Andreessen’s thesis – especially since, its undoubtedly true – but rather, to take a look at a smaller trend that falls within his broader argument: in the coming years a number of successful startups will appear to be hardware companies (particularly in the eyes of consumers).

This is a non-consensus view.  Think about it, nearly all of the hottest startups in the recent cycle have been software only: Facebook, Twitter, Zynga, LinkedIn, Groupon and Pandora. Investors have been ringing the “software only” bell for 10 years and for good reasons: no inventory costs, faster cycle times and above all, low capital intensity.

Given all this, why are we on the verge of a Hardware Renaissance?  I think the broad trends are well understood and include: the rise of low cost Asian manufacturing, the movement towards universal smartphone penetration (as smartphones will often be the “brain”) and the ability to quickly and easily update hardware over-the-air.

Below are four examples that demonstrate the point.  The first is a clear success story, the second is an emerging success story, while the third & fourth are looking really promising.  Each demonstrates a creative pairing of low cost hardware with smart software.

SquareJack Dorsey’s follow up to Twitter is a small, square shaped dongle that plugs into an iPhone and allows anyone – yes, anyone – to accept credit card payments for 2.75%.   The company is giving away the dongle and as of October 2011 had signed on 800,000 merchants (which is approximately 10% of the Visa & Mastercard accepting world!) and was on track to do $2 billion in gross payments.  Square is combining a simple low-cost hardware package with an insanely smart software backend and the result has been mass adoption faster than anyone thought posible.

JawboneMost people know this company simply as the maker of a stylish Bluetooth headset.  After Mr. Andreessen’s fund invested $49 million in March of 2011 observers began to take notice of Jawbone’s larger ambition, namely, wearable computing.  The firm’s second wearable device, the “Up”, has stumbled due to quality issues but otherwise has generated serious buzz online.  At $179, the device is comparable to Fitbit but with a high-end, jewelry inspired design.  The device ties into a lifestyle management software platform online and intelligently helps consumers live healthier lives.

Twine – In recent weeks an obscure Kickstarter project which looks to be a plastic bar of soap has captured the imagination of early adopters.  Twine raised just shy of $500,000 from 3,500 backers (avg. cost of $142) to produce the Swiss Army knife of programmable sensors.  The device is adept at detecting movement, temperature, IR, moisture, and has a number of switches and inputs. Consumers will be able to let their imaginations run wild and program their Twine’s to do thousands of tasks.  The hardware is a plastic rectangle with off the shelf components inside of it, which is to say, its low cost and simple to build.  The real brains are in the cloud (a DIY platform for consumers to program their sensors).

SurfEasy (MantellaVP portfolio company) – Everyone knows that Internet “privacy” is a big issue but nobody knows what to do about it (and no, quitting Facebook is not an option).   At next week’s CES show in Las Vegas, Chris Houston and his team will unveil their radically simple solution: the SurfEasy USB key.  Pop the USB key into any computer and SurfEasy provides you with fully encrypted access to the Internet – and not just any kind of encryption, this is Bank grade tech. SurfEasy ensures that no data is left on the computer your surfing on and that nobody (hackers, your spouse etc…) can identify who you are!  The stick retails for $59.99 and sits in a credit card sized holder so that it can live inside your wallet and be with you wherever you are: a friend’s house, the office, or the local Starbucks.  SurfEasy quickly pre-sold about $70,000 worth of product on Kickstarter earlier this year and is now taking pre-orders from the general public (first batch ships on February 20).  SurfEasy has done a great job combining an insanely complex backend system with a simple and low cost hardware package.

In conclusion, software is eating the world but often that software is going to come packaged in beautiful, low cost and/or simple hardware.

Feel free to post comments & questions below or message me on twitter (@RussSamuels)

Thanks,

Russell (@RussSamuels)

Geographical Synergies

“Geographical Synergies”, a strange phrase – right?  Geographical synergies … like when Wal-Mart builds a new store near an existing location and can leverage an existing distribution depot? Or is it more like when the The Gap helps to negotiate reduced rent for a new Banana Republic store moving into the same mall (as both retailers are owned by The Gap)?

At Mantella Venture Partners I see geographical synergies being captured everyday.  As they say in real estate, location! location! location!.  All of our portfolio companies work in the same space (alongside Duncan, Robin, Jill and I).  Chango sits next to Unata, Hipsell is next to Brave and Brave is next to SurfEasy.

Come-on, is this really necessary, with Skype, WhatsApp, FaceTime, G+ Hangouts and email is there anything to be gained from startups being physically beside one another?  YES.

When you put a few dozen insanely talented and motivated people into the same room, the whole ends up being more valuable than the sum of the parts: CEOs getting advice from CEOs, front end guys learning from back end guys and lowly investors doing their best to keep up 🙂  The cumulative knowledge in the room is massive – everyone has their specialty: Chango = advertising, Brave = daily deals & carriers, HipSell = marketplaces, SurfEasy = privacy and Unata = loyalty programs.

Earlier this year we saw real geographical synergies when MantellaVP sold PushLife to Google. The PushLife guys needed help getting ready for the notoriously grueling Google interview process and it was Mazdak, the CTO of Chango who took the time to help the team prep.

More recently, as we worked to validate the SurfEasy concept, we turned to a former PushLife adviser.  This adviser provided highly relevant industry expertise and very quickly transitioned from an adviser to a key investor in the SurfEasy syndicate.

In our offices practically any question is answered by looking up from a computer and asking someone who is just a stones throw away.  Its faster than Google, more social than Quora and more detailed than Twitter.

1 Month + 4 Companies = Whirlwind

Time flies in the startup world.  One month ago I made the jump from a Private Equity role at a pension fund to the wild west of “hands on” Venture Capital at Mantella Venture Partners.  In my old role, a typical month would see a few presentations created, a financial model or two built and maybe a couple important conference calls. While these tasks required long hours of diligent work, the sense of pride and excitement pales in comparison to what I have seen accomplished by our portfolio companies in the last month.

Brave CommerceBrave is the company behind “Rogers Mobile Offers” (yes, that Rogers) which are Canada’s first and only carrier backed mobile daily deals.  When I started working at MantellaVP in July, Brave had barely sent out its first deal.  Now, just over a month later, Brave has run ~20 deals from some of the best merchants in town (Extreme Fitness, USTA, W Burger, Jetsun’s Juicy Burger, Toronto Argos etc…).  Brave has processed hundreds of individual purchases, sold thousands of dollars worth of products & services and created value for both merchants and consumers.

HipsellPatrick, Aron and Matt moved into the Mantella offices the same day as me.  This crew of two hackers and Matt (all around all-star) are building a super simple mobile centric solution for buying and selling “stuff” online. On the day we all moved into the Mantella office their dream was mostly that, a dream.  In the last month the three have literally worked around the clock to build an iPhone app and a gorgeous web site for product listings.  The day before their official launch at GROW, the app was accepted into the App Store and the guys formally launched the first real-time social classified service.  Hipsell BETA is up and running, check it out: www.hipsell.com.

SurfEasy – When I started, SurfEasy was just Chris and his team of 5 in a 5×7 prison cell sized office.  Now, a month later, Chris and the boys have upgraded their real estate (probably 10×10!), raised over 100% of their target on KickStarter (join the movement http://kck.st/nDn6QF ) and have a fully functioning prototype that everyone in the MVP offices wants to get their hands on.

UnataChrisMobile Rewards with Backing from Groupe Aeroplan” Bryson is not a name I had even heard of when I started at Mantella.  After closing an investment in early July, Chris and his team have moved into SurfEasy’s old cell and are cranking hard.   Chris is out building relationships with some of Canada’s largest retailers while the rest of the team focuses on tweaking Unata’s world class recommendation algorithms.  It won’t be long now until consumers are receiving Amazon quality recommendations at their favorite retailers.

Check back in coming weeks for more updates from our portfolio companies.

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Like you, we run a lean operation. We spend so much time working with our portfolio companies, we don’t have time to read piles of unsolicited business plans. The best way to get our attention is to be referred to us by someone that knows us, and believes in you. Consider it just one of many business development challenges you have ahead of you.