The news broke today that Oculus is joining Facebook for $2 billion, and we couldn’t be happier for Palmer, Brendan, Nate, Laird and the amazing crew over at Oculus. These guys are the kind of people, and a mission, that startups are all about. As Santo wrote about, we fell for this company hard from the first moment we saw them.
There will be lots of stories about what this means for Facebook, Oculus, and the world of virtual reality but I think mostly about how this team has executed so incredibly well while carving a very unique path every step of the way.
These guys are the epitome of a missionary company trying to bring a truly amazing product to the world. That missionary nature has allowed them to ignore much of the standard startup ethos and follow their hearts in several ways that defy convention.
1. Don’t be afraid to be small - Oculus started as an ambitious hobby project, and they have fought hard to not lose those roots. A lot of startups try to look bigger than they are, but Oculus has taken a different track by just being transparent about their position.
I was sitting at The Creamery coffee shop a couple months ago with a friend, who without much segueway started raving about a local company called The Juice Shop. “Have you tried their A+ Deep Green juice? Life changing!” I was of course open to try it but their nearest location was in Cow Hollow, and so I resigned myself to likely forgetting this recommendation by the next time I was in the neighborhood.
Not to be deterred, my friend whipped out his phone and 10 minutes later a Postmate walked into the coffee shop where we sat and delivered our juices. I’ve been a regular of The Juice Shop since then.
When people talk effusively about Postmates it’s often stories like this. From the point of view of the customer this is another example of your phone as a “remote control to the physical world,” much like Uber or HotelTonight. Postmates is also often described as Kozmo, probably the most beloved of the late 90s flameout startups, only with a business model.
For a firm like Spark where we guide ourselves by the product, the strength of the experiences Postmates generates is incredibly compelling. We’ve seen the type of businesses those reactions can build. But the long term effects on the supplier side are actually just as interesting.
(the team at Spark trying the Oculus Rift for the first time)
"Every great dream begins with a dreamer."
Conventional wisdom is often neither. Conventional wisdom said that virtual reality was an interesting conceptual idea in the 80s but ultimately just not interesting enough. Thankfully, there are founders like Palmer Lucky who simply ignore conventional wisdom and follow their passion.
The first time Santo brought up Oculus in our partner meeting I will shamefully admit being skeptical. But, as Gears of War designer Cliff Bleszinski offered in a sagacious observation. “There are two types of people when it comes to the Oculus Rift,” he said. “There are those who haven’t seen it, and those who have seen it and believe.”
This was also the story of Etsy, of Google, of Flickr. Starting in spaces that would never be in the upper right of a four quadrant chart made by an MBA, but nevertheless have the opportunity to transform or create a new market.
Oculus is creating a new kind of experience, something that transforms our world and reminds us that technology can still take our breadth away. More importantly Brendan is helping to put together an amazing team to actually take what is currently a mind-blowing developer experience and turn it intro something that could end up in every living room in the future.
When people talk about changes in computing over the last 40 years, the discussion usually focuses on two things: 1) computational power (Moore’s Law) or 2) the growth of network effects (Metcalfe’s Law). But just as pivotal have been the big leaps forward in interfaces.
The mouse was once a new kind of input device, and it became the catalyst for the creation of the modern graphical user interface. More recently, multi-touch technology was used by Apple to reinvent the smartphone market. Today we are in the hobbiest days of wearable and contextual computing, struggling with how we are going to interface with these new devices, whether they are glasses, watches, or something we have yet to see.
The team at Thalmic Labs have been working on exactly this problem, and they’ve come up with something quite remarkable. Their first product, the Myo, feels like a light armband. It allows you to interface with other computer devices in a natural and seamless way, combining inertial sensors with a unique muscle recognition engine — but just as importantly it does so in an easy-to-use manner. Here’s a video showing it in action:
Steve Jobs famously said, “In consumer electronics companies, they don’t understand the software parts of it. And so they can’t really innovate because design is how it works, not just what makes it work.”
Despite all the press it has received and the millions of dollars in pre-orders, the Myo is still in its early stages of development. The team knows it faces not just hardware challenges, but also challenges in software and greater ease of use. The introduction of multi-touch came to the public fully formed with the iPhone, accompanied by applications like Calendar and Mail that were custom built for it. With the Myo, that process is going be done in the public eye with new applications being developed by the team, key partners, and a growing developer community.
And so I’m excited to announce that Spark Capital is leading a $14.5m A-round in Thalmic Labs along with our friends at Intel Capital, Formation 8 and First Round Capital. The founding team members at Thalmic Labs — Stephen, Aaron, and Matt — are the kind of people I dream of getting a chance to work with. A young, phenomenally smart, band of folks determined to change the world of computing. We believe that new interfaces — like the Myo — can create new platforms, and that wearable computing is one simple interface away from reaching the mainstream.
The first time I raised venture capital, over a decade ago, I was hit with the same shock that I think every founder goes through, “wait, what, I have to pay the VCs legal bills?” It just seemed strange when the whole point was to talk about how much money the business needed to succeed, not to start siphoning it off immediately for other stuff.
I’m happy that we can say we are now footing the bill for our portion of legal expenses. Bijan has a good post on the details: “My partners and I at Spark Capital are going to pay our own legal fees at the earliest days of the company up to a cap of $25k going forward. If this cap lasts a few rounds even better. The only fine print we can think of is if there are multiple co investors we would ask them to pay their own way as well. If not than we wil just pay our pro rata.”
It’s a small thing, but it’s another way we can keep the focus where it should be - on helping to build great companies not financial engineering.
It’s almost on the exact one year anniversary of me joining Spark that we’re happy to announce the raising of our fourth fund.
As a firm we spend a lot more time helping promote and assist our portfolio of companies than ourselves, so it was nice to have an occasion for my partners Todd and Bijan to talk about the values that matter to us.
We’re a pretty odd firm, really. The nine folks around the table have incredibly diverse backgrounds, both ethnically and professionally. Plus we are in Boston & NY, not the center of the startup ecosystem, but have been able to get a chance to work with some of the best companies both locally and around the globe. And while a bunch of other folks have tried prolific seed strategies and late stage growth deals, we have been successful by investing in what we love and know best; early stage consumer startups at the precipice of turning from product into purpose.
As Sarah talked about in her coverage, it’s not exactly a model that most folks thought would have worked when the firm started. But that’s the nature of startups, the winners can always surprise you. All you can do is get behind a mission you believe in and work with people you respect and admire.
I feel privileged to get a chance to do that with these partners and the entrepreneurs we work with.
You would think the story of how Spark came to be investing in Picturelife would be simple enough. After all the Founder, Charles Forman, was also the founder of OMGPOP, another Spark portfolio company. But actually Charles had been keeping a low profile with his new gig, so it initially came to our attention in the best way possible, as a user.
I used to categorize, tag, and lovingly care for all my photos on Flickr. But the product stagnated over time and, thanks to the cameraphone, the volume of photos I take has gone up so much that that those old solutions didn’t seem to apply anymore.
In Flickr’s place was Instagram and Facebook. They are wonderful experiences, but they are communication mediums for the 1% of photos worth sharing. What about the other 99%? iCloud was great but I want more than the last 1,000 photos on my device, I want all of them, and shareable to the services I care about like Tumblr and Twitter without hurdles. Google, and Microsoft had solutions of course, but they seemed more obsessed with locking you into their platforms than creating new experiences.
Finally the team at Picturelife let us in on their project. I was hooked. Hooked on the product, on the vision for where it was headed, and hooked on the team.
Charles, Jacob, and Nate talk with passion about the subtle difficulties of managing our ever-increasing collection of photos in ways that are universal and understandable. They talked about how Gmail made you never want to delete an email, and what a photo interface might need to be some day in order to achieve something similar.
We’re glad to be partnering with Charles again, and to be supporting their mission to safely store the 360 billion photos taken each year, organize them beautifully, and make them accessible everywhere.
Today I’m thrilled to say I’m joining the team at Spark, making the switch from entrepreneur to investor. I’ve known the guys at Spark for years and have admired the unique approach, and the unqualified success they have had. This is a big switch for me, but made easier by working with close friends that I respect.
As you could imagine I thought about this decision rather carefully. I’ve been an entrepreneur as long as I’ve been anything, and I still have boundless energy to work in startups. For me it felt like time to see if I could shift my focus from building a single company to impacting the broader ecosystem.
Anyone who knows me knows I’m a deep believer in startup culture. Not the “startup scene” - who cares about that really - but the engine of learning, risk, and ownership culture that draws so many of us in. Thankfully that ecosystem feels really healthy right now, with more companies starting, and more angels supporting them, in those early days. As more startups are getting started, the friction has shifted up a level.
We need for entrepreneurs to be able to stick with a startup, become CEOs, figure out how their product development scales, and get past the “initial traction” phase. Its a difficult transition, one that I struggled with in my twenties at internetsoccer/Teamtalk, as the company grew from 6 employees to over 300 in a little over a year. More recently for a little under two years at Zynga this same question of how to scale while still being able to maintain an entrepreneurial culture was a constant focus.
Becoming an investor for me feels like allowing myself to work full time on the things I’m already obsessed with. Getting to partner with great entrepreneurs, work with a great team, and making startup growth my field of study.