#eric paley

[andyhpalmer]

Founder Collective I wrote here about my decision in May 2014 to limit my focus in Koa Labs to go “all in” on…

[fcvoice]

Removing Friction Across The Web—Our Investment in Experiment Engine

By Eric Paley

Google experimented with 41 different shades of blue for the ad links in its search results and found the exact hue statistically most likely to make people click, #2200CC, which resulted in an extra $200 million dollars in revenue. Amazon is rumored to run over 200 tests like this on their homepage, per day, scrutinizing each word and every button’s placement on the page down to the pixel. A single change in the checkout flow of Amazon is reported to have made the company an additional $300 million dollars a year. Removing friction for customers can add up to huge dollars for web companies. Unfortunately, most companies don’t have the design and engineering bandwidth of Google or Amazon to obsess over and test every detail.

That’s why we’re so excited to announce our investment in Experiment Engine, which offers a turnkey service that allows any company to benefit from the same type of A/B testing processes deployed at Amazon and Google. Experiment Engine utilizes automated tools paired with a community of optimization experts to create fully deployable tests at whatever speed a customer desires, without requiring any internal development or design resources. Whether a company needs help refining their landing page or working out the kinks in a shopping cart, the Experiment Engine platform executes solutions to drive optimized conversion. Their platform is being used by companies with world-class optimization capabilities, but limited bandwidth to run tests, as well as companies with less optimization experience, but the desire to remove customer friction.

In a perfect world all companies could establish processes where this type of experimental optimization would run non-stop without draining internal resources. As each test proved to increase signups or sales, it would seamlessly become the new control version of the page and new tests would begin. The faster tests could be deployed and proven successful, the faster the company would learn and benefit. Experiment Engine enables that vision. In concert with other gold standard tools like Optimizely, we believe startups will use Experiment Engine to massively accelerate their learnings and shorten the cycle time to performance improvements just as Amazon and Google do. Jeff Bezos said “If you double the number of experiments you do per year you’re going to double your inventiveness” and Experiment Engine makes accelerating that inventiveness much less expensive.

Experiment Engine's founders, Claire Vo and EJ Lawless have spent their careers helping companies optimize and as experts in the field of Conversion Rate Optimization, their mission is to make this type of sophisticated experimentation accessible, and scalable, for web companies of all sizes.  

We're honored to invest in Claire and EJ’s experiment to help the web perform better for everyone.

[fcvoice]

Understanding Every Beat - Our Investment In Whoop

By Eric Paley

Will Ahmed was captain of the Harvard Squash team in 2011 and has always been obsessed with fitness and athletic performance.  His coach candidly described him as one of the less naturally talented players on the team, but he was named captain because of his innate leadership skills and his willingness to work harder than everyone else.

But was consistently working harder than everyone else the right way to train? Perhaps working so hard meant he was in the best physical shape of anyone on the team, or maybe he was overtraining which led to fatigue on game days. These questions bothered Will.

With the growth in popularity of the quantified self movement, Will became curious to better understand his fitness in a more scientific way.  Unfortunately, counting daily steps or miles has little interest or relevance to the physiology of an athlete.  Daily body weight measurements are more interesting, but somewhat misleading; building muscle increases weight, but burning fat lowers it.  While body fat percentage measurements are also somewhat useful, they are highly inaccurate and not indicative of daily performance.

Will became convinced that the answer to monitoring his day-to-day physiology and his readiness for game days could only be attained by analyzing his heart.  By understanding the progression and variation of his heart rate, Will could get a better understanding of his workout strain, his recovery, his general fitness and his performance on game day.

Will started to wear a chest-strap heart rate monitor to get this data, but he discovered the raw data was messy and highly incomplete.  The device wasn’t comfortable enough to wear outside of training periods, which meant that it only provided data for when Will was training, and nothing on recovery, general fitness and game day performance.  Moreover, the training data was confusing.  What baseline was he comparing it to and what did all those ups and downs actually mean for how well he was training?  How could he compare from workout to workout how he was doing?  How did his results stack up against his teammates or his competition?

Will Ahmed teamed up with John Capodilupo to answer these questions. John is the son of two physiologists and an award winning Harvard math whiz. John met Will at the end of his sophomore year and has since taken time off from Harvard to lead the technology side of solving this puzzle. Sitting across from the two them is a little like peering into the right and left side of a startup's brain.

In founding Whoop, Will and John's goal is to simplify the understanding of heart rate data, on a beat-by-beat basis, to reveal how that data integrates with other physiological sensors, and to create a device so comfortable that it could be used for 24-hour monitoring to track not only training, but recovery, general fitness and game day performance.  

We invested in Whoop because we think it is the next frontier of quantified self; answering questions beyond what anyone has yet answered about physiology.  We too are convinced that the heart holds unique insights about general health and fitness.  We think access to accurate 24 hour beat-by-beat heart rate data is something that will ultimately be of interest not only to performance athletes, but anyone who wants to understand their health, the impact of their life choices, and how they are progressing physically over time.

[fcvoice]

The Transformation of Book Discovery – Our Investment In BookBub

By Eric Paley

It has become almost cliché to assert that software is eating the world. Some of the examples of this concept are futuristic and aspirational. Software might some day eat currency in the form of Bitcoin, but today most of us still use nationalized legal tender for transactions and savings. Other examples of software eating the world are overwhelmingly evidenced in our every day lives.  CDs and DVDs now seem as antiquated as records and cassette tapes.  Brick and mortar retail has lost massive share to ecommerce. Just trying swinging by your local Blockbuster for evidence of this.

Software is clearly eating book publishing.  Over 40% of print book sales have moved online. Ebooks are now 30% of the book industry and growing over 25% per year.  PwC estimates that by 2017, ebooks sales will out sell print.

I love going to bookstores, but they are disappearing fast. Today, national chain and local bookstores only sell 22% of books that consumers buy each year.

Approximately $10 billion is spent annually on sales and marketing by publishers globally, and these dollars are shifting quickly in a rapidly changing market.  Distribution in the publishing industry used to mean building a large sales force to promote books on bookstore displays and shelves.  In the midst of this intense change publishers and authors still need channels to market and distribute books.  What are publishers and authors to do now as fewer and fewer consumers are visiting book stores?

Enter BookBub, our latest investment at Founder Collective.  In the last two years BookBub has positioned itself as the leading independent platform for helping consumers discover ebooks, which in turn, enables publishers and authors to manage this market disruption and drive sales. While just the tip of the iceberg, BookBub's first product already markets digital titles to nearly 3 million consumers per day, leading to the sale of over 1 million ebooks per month.

BookBub has been bootstrapped to date with remarkable success.  The company works with over 3,000 publishers and authors, including all of the biggest publishers in the book industry.

I've known BookBub's co-founder and CEO Josh Schanker for over 20 years and am very excited by his and co-founder Nick Ciarelli's vision for helping consumers find books that they will love and helping publishers transform to successfully serving readers in a radically different future for the industry.

[fcvoice]

The Digital Tuxedo - Our Investment In The Black Tux

By Eric Paley 

Given the cost of my bride’s wedding dress, buying a tuxedo for my own wedding seemed a not completely unreasonable expense. I rationalized the purchase based on the assumption that when I was in my friends’ wedding parties, I’d need a tux and would save on rentals.    Unfortunately, just as my bride wanted all the groomsmen to be dressed exactly the same, so did my friends’ brides.  So after buying a tux for my wedding, I needed to rent for friends’ weddings.  Renting sounded reasonably simple, but was far from simple.  For most of the weddings, we were instructed to rent from a local tux shop and inconveniently, the strong preference was that we’d visit the shop in advance to have our measurements professionally taken.  Those that sent in measurements without visiting, all had frustrating surprises the day before the wedding when they picked up their tux only to find that it didn’t fit correctly and last minute emergency alternations had to be made.   Nearly $200 later, we’d inevitably look like we were back in high school going to prom.  The tuxedos didn’t fit quite right, the fashion was dated, and the garments felt like they had been previously worn by a hundred men and had been dry-cleaned more times than any fabric should endure.  Clearly this is a lousy customer experience, but is still preferable to paying much more money to buy a tuxedo that most guys will only wear a couple of times before several years have passed and the tux is completely out of fashion.   When I first heard the pitch for The Black Tux (link to www.theblacktux.com), it immediately resonated with me that the tuxedo rental business is ripe for disruption.  Today it is a completely brick and mortar local experience.  Hearing about a company that was fully focused on the customer experience, great fashion, and exceptional garment quality, made me certain that even if I didn’t invest, I would never buy a tuxedo or rent from anyone else again.   My biggest concern was the logistics of an Internet enabled tuxedo rental model, but the company successfully worked out how to get accurate measurements and how to ship top quality tuxedos and suits with plenty of time for minor alterations.  Most importantly, The Black Tux makes every guy look like a modern James Bond.  You can rent as an individual or for a wedding party. The Black Tux easily dresses groomsmen from all over the country at a price that is lower than people pay today for the lousy rental experience we’ve all endured. So far, the customer reception for The Black Tux has been remarkable - the company has among the highest net-promoter-scores that I’ve seen at an early stage startup.   Brides and grooms take note: the company is nearly sold out already for this summer’s wedding season – so book before it’s too late.   Software just ate the tuxedo.

Click here to see WSJ's coverage of The Black Tux (link to http://online.wsj.com/news/articles/SB10001424052702303491404579390900885034592)

[fcvoice]

Making Change Easier - Our Investment In Change Collective

By Eric Paley

Change is hard.  Whether it is building better habits; getting into better shape; being more present; adapting to a healthier lifestyle; or performing better at work - - for most of us the odds are against us that we'll create a plan and stick to it.

As a nation we are very aspirational.  Americans spend $12 billion a year on books, coaches and seminars trying to improve themselves and yet very little of this change sticks.  The Journal of Clinical Psychology recently reported that while 62% of Americans make New Years Resolutions, only 8% of those Americans achieve their resolutions.

Persistent change is hard because we lack good feedback and reinforcement mechanisms.  Judging by the change industry's size, many of us read a book and expect to change, but that is nearly impossible.  Once that book is finished, there is very little making us stick to our new learnings, clarifying ambiguities, or reinforcing correct behaviors.  Coaches provide a much more effective experience than books in that they resolve most of these problems.  Unfortunately, change coaches are also very expensive, whether in the form of a personal trainer, nutritionist, or career coach.

Today we're announcing our investment in Change Collective.  Change Collective attempts to correct this gap by bringing all the advantages of mobile to personal change management.  We are convinced that mobile is the most powerful and efficient media for personal change management.  The combination of physical presence, persistent connection, and alerts for reinforcement allow mobile to go way beyond any book or seminar as a change tool, at a fraction of the cost of a personal coach.

I first met Change Collective's CEO Ben Rubin almost 10 years ago, when I was at Brontes Technologies and he was starting Zeo, the personal sleep assistant.  Ben is a pioneer in the quantified self movement.  At Zeo, Ben and his Change Collective co-founder Derek Haswell, studied personal behavior change over many years.  While Zeo didn't live up to Ben's ambitious goals, the learnings that Ben and Derek had at Zeo will be invaluable to making Change Collective a success.

We're excited to co-lead the seed round of Change Collective with our close seed collaborators NextView Ventures.  This is our fifth co-investment with NextView, and I expect we'll be doing much more together as we find them to be kindred spirits in their hard work for their portfolio companies and founder first approach.  Also joining the round are eniac and a group of fantastic seed investors.

As we are all constantly striving to be better, I hope that Change Collective will help us achieve our goals. At a minimum, I look forward to contributing to that mission.

[stevenleeelder]

On Executive Management: The Best Advice You're Not Taking

  Wise men don’t need advice.  Fools won’t take it.

~ Benjamin Franklin

Advice is like snow – the…

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[livingthereallifeisawesome]

I encourage entrepreneurs to focus more on falling in love with the problems they want to solve rather than their initial ideas. As founders dig deeply into that original hypothesis, they will learn, adapt, hit walls, adapt again and build critical expertise that they never considered when starting out. [...] Great entrepreneur build their success overtime, not in a single moment. Ideas are static. Entrepreneurship is dynamic.

Eric Paley, entrepreneur and managing partner of Founder Collective, a seed- stage venture capital fund. Inc. Magazine, June 13, p45