How AI and analytics could solve healthcare’s big data problems

What’s bigger than one trillion? The number of data points the healthcare industry is producing globally. The industry currently generates 30% of the world’s data volume, and the International Data Corporation (IDC) predicts that there are over 2,314,000,000 terabytes of data today, which has grown a staggering 110X since 2013.

By 2025, healthcare will have become the fastest-growing source of data worldwide. The problem is that while bad data in enterprise means a lost sale, bad data in healthcare could mean a lost life. But that’s also why we at SignalFire see huge opportunities for startups to build better data infrastructure for the healthcare industry.

Why the sudden data explosion within U.S. healthcare? We’re seeing increased adoption of electronic health records (EHRs), regulatory enforcement, and a growing popularity of wearables and other health tracking devices. These are producing a breadth of data types, including patient information, clinical notes, test results, imaging data, and claims data.

However, managing and analyzing this massive amount of data presents significant challenges. To get anything done with the data, you have to solve for the interoperability problem of systems communicating effectively with each other, data normalization, privacy, and security issues—before you even get to the sophisticated applications of data science.

‎Now’s the time, though. The world just got equipped with fresh AI tooling that can make sense of the seas of data flowing out of healthcare. And with everyone thinking about AI, many slower-moving incumbents will feel a sense of urgency to modernize their data stack.

In this post we’ll lay out some of the biggest technology and regulatory shifts affecting the healthcare data space, and a dozen specific opportunities where SignalFire is looking to invest. We’re going deep on healthcare data and the AI space given our bread and butter—we spent the past decade building our own proprietary AI data platform, Beacon, which tracks more than half a trillion data points, giving our portfolio companies unique insights into market intelligence. Our in-house expertise on data and machine learning gives us a unique lens into the power of data in healthcare and specific areas where we’re excited to back founders.

Now let’s dive into the trends and opportunities around AI and analytics for hospitals, payors, pharma, and patients.

Part one: The data infrastructure layer

With AI, it’s garbage in, garbage out, so the industry first needs infrastructure to improve data quality. Before a model or analytics can be built on top of a data set, we need to address the following questions:

1. Where do we get access to raw data?
2. How do we cleanse and structure the data?
3. How do we accurately join different datasets to create a full data record on a single patient?
4. How do we store this data in a way that protects the patient’s privacy?

Until recently, raw healthcare data was becoming increasingly commoditized. But beginning in 2016 major new regulations emerged, starting with the 21st Century Cures Act.

The Cures Act mandated the bi-directional exchange of patient clinical data through the Trusted Exchange Framework and Common Agreement (TEFCA), with a growing number of approved use cases for data sharing. Essentially, TEFCA required every healthcare organization to make their data more accessible across states, hospitals, and provider networks so patients’ care teams always had the information they needed.

Now, in order to be eligible for access to this shared data, entities must receive the Qualified Health Information Network (QHIN) designation. After QHIN networks are fully established, only QHIN designees will be permitted to access the broader network of U.S. healthcare data, thereby raising the bar for other companies trying to solve the challenges at the data infrastructure layer.

To be awarded the QHIN license, businesses need to build a highly compliant platform that can scale to enormous volumes of data. Among the first six entities to get a QHIN license alongside incumbents like Epic and Commonwell was SignalFire portfolio company Health Gorilla.

With a data lake that has access to the full longitudinal medical records of more than 90% of the U.S. patient population, Health Gorilla is opening up an extremely powerful data source for healthcare software developers and modeling how newer companies can work in tandem with regulators. They’ve solved a lot of the raw data access, cleanliness, integration, and privacy-safe storage issues to build a technical foundation for the next generation of solutions.

Part two: Building analytics and AI models on top of data

With improved infrastructure, companies can build unique analytics and AI models in highly verticalized categories within healthcare. These use cases often require specific data sets, allowing startups in this space to build data moats as a core part of their defensibility. Given this is a highly regulated space involving sensitive patient data, solutions here can distinguish themselves with top-grade privacy and security practices.

1. Analytics and AI applications for providers and hospitals

Providers are one of the major contributors to healthcare data—every time someone in this country completes a doctor’s visit, a medical record is generated. This data set, called clinical data, is one of the most valuable data sets because it captures the essence of what we need in order to practice healthcare—what are the patient’s symptoms, blood test results, medication history, etc. Here are a couple of areas where SignalFire is particularly excited:

• Personalized patient engagement: Knowing everything we ought to about a patient’s medical history, demographic information, and their consumer preferences, how do we proactively engage with them in a way that encourages them to come in for preventive visits, obtain further education on conditions they may be at higher risk for, provide education on offerings available to them, and ultimately help them achieve better outcomes? This would help providers proactively engage with their patients over the long term, increasing the hospital’s brand loyalty while reducing costs vs. reactively seeing patients as they need care.
• Clinical intake intelligence: How many times have you sat at a doctor’s office with a clipboard and pen in hand, already five minutes late to your appointment but still needing to fill out a basic questionnaire? There’s been an effort to digitize this experience, but Health Note takes it to the next level by sending patients a digitally powered (i.e., via SMS) dynamic questionnaire (the next question changes based on your responses to the previous question) before their visit, mirroring what a doctor would ask in the first five minutes of the actual visit. The solution not only saves time for a front desk administrator but also a doctor whose clinical note is already halfway auto-generated at the time of the visit.
• Clinical decision support: Having access to the entire patient medical record plus an AI tool enables more precise diagnoses and real-time intervention at a higher accuracy than what humans can accomplish alone. The overall adoption of these models is relatively limited today and typically needs continuous data from outside the four walls through an integrated continuous management system like all.Health. Where we see great potential is in tools that can assist clinicians, not replace them (e.g., providing a second set of eyes), speeding up diagnosis time by providing an assessment that a clinician can review. For example, Recora Health’s virtual cardiac platform is able to surface to providers who is more likely to have another heart attack after only several virtual visits.
• Coding automation: Empowered providers get paid faster and bill more accurately using AI models to autogenerate a billing code based on an unstructured doctor’s note. SignalFire led the Series A in CodaMetrix, which has a unique competitive advantage in this space, having spun out of Mass General Brigham—making it a data moat around high-quality training data (read more about our investment here). ‎

Tomorrow’s machine learning startup opportunities

‎2. Analytics and AI applications for payors

Payors’ business models—effectively an insurance business—inherently create incentive alignment with solutions that are using AI and analytics to drive down the cost of care while improving outcomes. Below are several examples of problem statements solved by companies using data and AI:

• Medication adherence and management: The entire payor ecosystem pays an estimated $300 billion annually for: medications that don’t get consumed; more expensive medications vs. generic equivalents; and medications that patients no longer need. Better data can help create a fuller picture of a patient’s existing conditions and engage with them in a highly personalized way, using behavioral economics principles to nudge them to take the right medicine at the right time. It’s why we invested in Wellth.
• Population health management: Every payor typically manages hundreds of thousands to millions of lives. Because they’re ultimately responsible for paying the bill, it’s important they understand how healthy their population is and which segments would benefit from proactive management of their health. A data-driven solution like Color would review the entire patient population data across all attributes and help patients navigate to the appropriate care they need.
• Payment integrity: Annually, $200–300 billion is spent on claims waste, fraud, and abuse. Ninety percent of the time, the reason payors overspend on claims comes down to human error—the person on the provider side has made a mistake and asked for more money than they should collect for a visit. The autonomous coding solution from CodaMetrix not only directly addresses this problem, but—with increased adoption—could establish the common language that would allow payors and providers to transact in an equal and fair manner.

The Patient Engagement Revolution: Why we led Wellth’s $20M Series B

3. Analytics and AI applications for pharma

Pharma spends, on average, over $1 billion and 10 years for a successful drug to come to market. Any data-driven and AI solutions that can expedite the drug development timeline or reduce costs are highly attractive to pharma:

• Drug discovery: For researchers to identify what drugs to develop, they need to first know what conditions are becoming more prevalent in our population, and more costly. Access to anonymized patient data can create a high-level view of conditions; and it can allow for subsequent deep dives into the patient journey for those living with a given condition who are undergoing different treatments. A strong, valuable dataset like that of  Ovation.io can help more quickly identify which drugs to develop—a key benefit when considering it can take years to get a new drug to the market.
• Synthetic clinical trial arm: Real-world evidence data helps pharma recruit the most relevant patients for clinical trials as well build a “synthetic control arm”—instead of collecting data from patients recruited for a trial who have been assigned to the control group, synthetic control arms model those comparators using data and thus save pharma both time and money on the other half of these long and expensive trials.
• Post-FDA targeting: After a new drug has passed stage-four approval—allowing it to be marketed—the question is, who is the best target market? Data can help identify key opinion leaders, as well as the prescribing physicians for patients whose profile is a match for the drug.

4. Analytics and AI applications for patients

At the end of the day, all these solutions above that work with providers, payors, and pharma will always benefit the patient downstream in one way or another, as the patient is the center of our healthcare ecosystem. However, here are several other ways in which data insights and availability can help us directly:

• Individual medical record access: Patients with chronic and rare diseases are currently tasked with manually assembling their information to get the best treatment possible. Currently under TEFCA, only certain use cases of data sharing are approved—a provider can pull information if they’re treating a patient, but a patient cannot directly pull information on themselves. We think an individual use case is going to be unlocked in the next year, helping everyone from the overburdened patient with clinical illness to the person who’s simply trying to keep track of their immunization records.
• Patient payments: Better data can help patients afford their healthcare. Payzen uses large amounts of patient data—spanning medical history, demographics, frequency of visits, and more—to provide patients with a personalized medical bill payment plan that has a 0% interest rate.

‎Building for healthcare? We want to hear from you

If you’re working on a startup in this space, we’d like to chat. Cold emails are welcome at [email protected] to connect with Yuanling Yuan (she goes by YY) from our healthcare investment team. You can also subscribe to our email updates for more on healthcare startup trends and opportunities

‎At SignalFire, we like to say, “Think of us as an extension of your team that scales with you.” Beyond our in-house Beacon AI for help with recruiting, we built our full-time Portfolio Experience team with world-class operators across a variety of functions, including the former chief people officer at Netflix for developing an engineer hiring strategy, the chief marketing officer at Stripe to optimize your sales process, and the former editor-at-large at TechCrunch to help you convert the value you deliver into a persuasive story. Our XIR program, meanwhile, pairs top industry leaders with high-potential companies as they scale and includes healthcare luminaries like Evolent Health ($EVH) founders Frank Williams and Tom Peterson.

We love helping healthcare companies solve their internal problems so they can heal the world. That approach of providing value far beyond our capital is why we have a net promoter score of 85 among founders, with 85% saying we are the most valuable investor on their cap table.

If you’re working on a company in the healthcare data, analytics, and AI space, come talk with us. We’ll share our full research and connections, and hope to earn the chance to hear about your next fundraise. By unlocking the secrets trapped within our medical data, we can build a healthier future for everyone. We can’t wait to see what you’re building.‎

 

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SignalFire may engage Affiliate Advisors, Retained Advisors, and other consultants as listed above to provide their expertise on a formal or ad hoc basis. They are not employed by SignalFire and do not provide investment advisory services to clients on behalf of SignalFire. For more information on their specific roles, please contact us. Portfolio Company Endorsements: Certain portfolio company founders or Affiliate Advisors listed above may or may not be current investors in a SF fund in which they receive a fee reduction. Such fee reductions were not provided in exchange for or an incentive for their feedback, nor contingent upon the individual’s approval for SignalFire’s continued use. Please refer to our website for additional disclosures.

SignalFire’s Guide To Distributed Team Management

Are you working remotely and wondering “How we can make this better? And what if we do this permanently?”  Or maybe you’re a new company and think that a remote team is the move but it seems complicated.

Well, at early stage venture fund SignalFire, we spent Q2 2020 hosting four workshops across six hours with 26 experts discussing remote team management, recruiting, on-boarding, and culture. You’ll see these leaders’ profiles throughout the playbook, so feel free to investigate their profiles and connect with them. We’re here to bring you the frameworks, tools, and best practices from pioneers like Gitlab, the world’s largest all-remote company.

You can also check out the  Full Resource List for all our suggested vendors of tools that can help your team adjust to remote work and find our top picks for each section as you move through the playbook. And for a broader view of startups in the space, check out our new Remote Work Market Map.

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Is a remote team the right approach for you?

If you’re considering whether or not to go fully remote, here are few questions you should ask yourself:

1. Exactly how flexible are you in terms of time zones/locations?
2. How much faith are you willing to put on employees you may never have met in person?
3. How would you grade your leadership team’s communication and remote management capabilities?  Are you willing to adopt new methods and invest in best practices?
4. How do you plan to build/maintain/evolve your company culture?

The answers to those questions may not give you a definitive “yes or no” to whether a remote team is the right approach for you, but they may guide you in how deeply you embrace remote work.

Where to expand?

If you’ve landed on yes, a remote team is right for you, congrats! Now comes the hard part: building one.

There are no shortage of resources out there to help you evaluate the best markets for the talent and/or lifestyle that you’re seeking but below you’ll find a list of tools we think offer comprehensive solutions that balance affordability and quality.

Compliance, Local Regulations, Insurance

We recommend that you explore working with an Employer of Record (EOR) or Professional Employer Organization (PEO) to determine if you need to be following specific rules & regulations in the locations where you may want to expand.

ShieldGeo and Papaya Global are two great companies that can both help determine where to distribute talent and how to do business from those locations.

Hiring & Recruiting

How to hire the right people and feel good about it

Key Takeaways for Hiring & Recruiting

• When recruiting across time-zones, consider the impacts of your team’s availability.
• Build a well-defined recruiting process with a point person on your team for each candidate. Use mock interviews to train your team for remote recruiting
• Transparently establish company values you’re looking for as you assess candidates for culture fit
• Compensation can differ across geographies – use calculators from GilLab and ERI so you have a consistent formula!

Hiring Globally Can be a Double-Edged Sword

While recruiting across global locations can be outsourced or assisted, the impact on how your team works together and the way products are delivered is something that is yours alone to bear.

In order to work best as a distributed team, you will need to be comfortable with asynchronous communication.  Be honest with yourself about how asynchronous you’re willing to be. Is a three-hour lag in response OK? What about twelve-hours?

Another important consideration is thinking through how a global team can impact your product shipping goals. One one-hand, asynchronous communication handled improperly can be a major blocker (it’s expensive to wait hours for a response from collaborating colleagues); on the other hand, if managed properly, you could activate your team to be working seamlessly over a 24 hour period without risk of burnout. The key is building a hand-off process, which we’ll touch on in the Managing Your Team section.

A Defined Process is Essential

A purposeful recruiting & interview process is essential for your company when you are in-office; the same is true — and amplified — when building your distributed team. It’s tougher to course-correct on hiring when working remotely, so it’s critical to measure twice and cut once.

First, establish who will be the point person for engaging a particular candidate.  Think of this person as the candidate’s sherpa throughout the process – they are essential in helping to tease out nuances, prepare the candidate each step of the way, and ultimately play a major role (if not leading) the closing process.

Anticipate and solve for potential choke-points, such as scheduling across time-zones, or how you’ll handle handing off candidates from one colleague to the next. Will you have separate video chats? Or is there a specific video chat account dedicated to interviews? The best way to do this is to put someone on your team through a mock process.  Consider all the psychological subtleties of the candidate experience, and remember ALWAYS BE SELLING.

? Pro tip: Don’t schedule day-long interviews because you think you need to. Your process should be designed to get you the information you need in order to make the right (informed) decision. Try to keep your processes tight and don’t waste time!

Transparency wins the day

Have you thought about “brand” in the context of a recruiting process? Have you considered how you’re communicating those values to would-be employees via all channels? If not, now is the time to outline it, communicate it, and own it.

You won’t be able to meet a candidate in person to hire them so the heuristics you rely on to build trust need to be re-calibrated. Your values should guide you and your interviewing team here, and should be expressed openly in order for candidates to get a genuine sense of who you are and what you stand for. Ensure that candidates have seen this information prior to your interview and try to include questions that will allow you to assess whether or not a candidate will espouse those values with you.

Be clear and consistent on your compensation

Growing a distributed team may be an opportunity to reduce your cash burn — be methodical in how you approach this.

Gitlab, the world’s largest fully-distributed company, has a handy calculator that they use for adjusting salaries based on geography. Additionally, the Economic Research Institute can help you determine the median income for given positions in different places. No matter what tool you use, be consistent and communicate it. Employees will take note of the way that cost of living impacts each other and candidates should be clear about how they will be impacted before they sign-on with your team.

Consider: even though your compensation benchmarks tend to determine the type of candidates you attract, value and vision for what you’re trying to accomplish still play a HUGE factor in the decision making process. Don’t by myopic on comp and always remember – the best candidates will join you for your values & vision, not for the immediate payday.

Onboarding New Employees

A self-directed process with guardrails and check-ins

Key Takeaways for Onboarding

• Offer a written onboarding plan for each position so new hires can be self-directed.
• Provide a home office supply budget – you want people to be comfortable and feel taken care of.
• Be clear about how different communication and collaboration tools are used at your company. When should an email be a video chat instead?
• Embrace new hires with an “on-boarding buddy” program and mail them your company’s swag upon signing.

There are three components to a successful onboarding: organizational, technical, and social.

Organizational

Now that you’ve hired a candidate, it’s time outline the onboarding process with them. A few things are necessary for the process to be seamless and welcoming:

• Make a clear, written plan for every position outlining expectations with a relevant timeline.
  • Slack channels to join, contacts to have, general schedule (trainings you should be in, what module you should be on when, etc.).
• Be collaborative in your onboarding process with your new hires.
  • Gather feedback and be open to refining and changing the process.
  • Create an Onboarding Satisfactory Tracking system.
• Set up your new hire with a supplies budget and provide an example list of typical supplies that other employees get set up with.
  • Consider allowing new hires to buy the right office equipment, where appropriate, for themselves.

Technical

In addition to getting new a hire’s credentials for the internal tech stack, there are onboarding-specific technical considerations to take into account.

• Use a platform to direct new hires on company policies/compliance – this will relieve administrative burden and provide new hires the opportunity to complete training at their own pace.
• Keep managers in the loop by setting up Slackbots that send alerts when a new hire has passed an onboarding milestone.
• Be clear about which tools are used and when: Slack messages vs. video chat vs. a shared notebook vs. a digital whiteboard, as well as what email list to use for which occasion.

Social

In order to establish culture that goes beyond 1s and 0s it is imperative that you build in explicit opportunities for your team to socialize with their new teammates.

• Develop an onboarding buddy program – ideally someone from within their team or an adjacent team.
  • Engineers also get a second, non-engineer buddy to understand greater product influence.
  • Support the buddy program by rewarding the best buddies (make it fun!)
• It’s generally a good idea to create a swag package ready to be mailed upon a new hire’s acceptance of an offer. T-shirt, mug, home cocktail kit – whatever it is, make them feel like they are joining a team and not just a bunch of faces in a video chat gallery window.

Managing Your Team

Learn to let go — just a little bit — and breed trust

Key Takeaways for Managing Your Team

• Your various synchronous and asynchronous communication channels serve different functions. Outline norms about what’s discussed where and expected response times
• Structure each week around goals, have your team document those goals, and close the loop at the end of the week with a check-in on progress and your team’s general well-being.
• Start from a place of trust — remember, you’re hiring adults! — and allow employees to be self-directed but do build a communication cadence to verify and hold people accountable.

Trust, but verify

In a distributed environment you can’t casually pass someone in the hall and chat about what they’re working on; you’ll have to be willing to empower your employees and let them be self-directed.

• Architect general guard rails for communication best practices: team-based standups, 1:1’s, all-hands, etc. all become more difficult in an asynchronous environment. However, also understand that part of the magic in startups happens in random places at random times – generally outside the context of a defined day.  Embrace that!

Communication must be intentional

As you begin to grow your remote team you may find that communication across the team is not meeting your expectations. This is where communication planning becomes essential.

• Think through your communication channels and how they should be used: written communication is a form of thinking and keeps a record. Synchronous conversation is richer. Asynchronous communication is for updates and handoffs.  Where does each channel fall on the spectrum of ideation → iteration?
• Consider your communication traditions and norms. Be okay with dumping those that don’t work and/or don’t scale and find a new way to meet your goals.
  • eg. did you introduce new people on a company call when you were smaller? Now that you’ve grown, perhaps move to intro videos, then move to Slack.
  • Don’t avoid starting a new tradition just because it won’t scale. Do what works now and continually evolve.

Relationships can thrive remotely – but you have to work for it

Managing your team in a combination of video chats, emails, and asynchronous Slack messages can be a challenge but with a little bit of pre-planning and intentional structure your team can thrive.

• Ask at the beginning of each week “what do you hope to accomplish this week” and check-in at the end of the week.
  • Have employees write these goals down and share with their manager. This makes it easier to hold people accountable and shift if needed.
    • Keep it at the goal-level, not the day-to-day level.
  • Managers should always be asking: “what can I do to make it easier/how can I support you in this goal?”
• Don’t forget to check in on people’s wellbeing. The type of “softer” information you get from people can help you better manage them and build camaraderie in the absence of regular physical gatherings.

Cultivating Team Culture

It won’t be the same as an office — and that’s OK

Key Takeaways for Cultivating Team Culture

• Be intentional about implementing remote work practices – it’s likely that not every tip and tool are relevant to your unique culture.
• Memorialize your values in writing and communicate them relentlessly – there is no informal & inherent way to reinforce them in a remote environment.
• Social opportunities must be designed and as a leader, you need to participate in order to build a permission structure for people to lean all the way in.

Build your culture like you build a product

Discard your expectations of what culture looks like when generated from an “in-person” perspective. A distributed team environment is wholly different and requires a bespoke approach.

• Start from first principles and consider what problems you are trying to solve/prevent.
• Don’t pick and choose random features of “remote work” to implement. Reflect on your first principles and implement tools/processes to meet you goals accordingly.

If it’s not written down, it will not persist

In a distributed team environment, your company culture does not exist unless you write it down, share its tenets, and actively champion it.

• Culture is often viewed as energy in office – a distributed team democratizes culture (since office culture can often be dictated by the most gregarious people on the team).
  • Gitlab’s Values page is an excellent example of memorializing values – the key is being sure to regularly reflect those values through concerted action.

? Caution: Power dynamics can be exacerbated in a distributed environment: people who don’t feel heard may be less likely to speak up in a Slack channel.

• • Give credit for good work.
  • Even post on their behalf (giving them credit) to lend your power.

Build a team, not just a cadre of workers

• Be intentional about creating social opportunities. Everyone should feel they have a place in your company beyond their title. Suggestions include:
  • Giving house tours via Zoom.
  • Budgeting for a lunch/coffee between team members.
  • Coffee chats twice a day for 15 minutes- anyone online at the time can quickly pop in for a “watercooler” chat.
  • “Lunch & Learns” where team members can teach the team something they care about (yoga, cooking, beekeeping, etc.)
  • Weekend updates.
  • Crowdsourced cookbook.
  • Photo competition: Best Zoom background.

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Now that you’ve made it to the end of the playbook, do you feel like your company is ready to join the remote work world? We hope so! You’re in good company. Here’s ourRemote Work Market Map of all the startups in the space.

Building a distributed team? SignalFire can help. Our early stage venture fund’s talent team equips our portfolio companies with our predictive recruiting engine called Beacon that helps them find the best and most poachable job candidates to contact. Our in-house recruiters then ensure they bring their top job candidates on board. SignalFire’s specialists and invest-advisors can also help you with engineering challenges, go-to-market strategy, PR, data science, and fundraising. Get in touch with us here.

Since the challenges of remote work are not going away, we will continue to host sessions with experts on related subjects. Click the button below to get on our list for updates and future events.

And here’s another look at our top takeaways. Thanks for reading and sharing!

Google made sense of the web. Docugami does that for documents

When data gets structured, value emerges. We’ve seen it over and over. Google structured web links into PageRank. Facebook structured your social graph into content ranking. Tesla is turning footage of city streets into navigation algorithms. Documents are another near-infinite naturally occurring resource of unstructured data. Docugami can become a generational technology company by distilling what’s inside.

85% of enterprise information is trapped as unstructured “dark data.” That’s why Jean Paoli is finishing the job he started more than 20 years ago when he co-created XML for the World Wide Web Consortium. As Paoli himself admits, he is “obsessed with documents,” and has devoted his career to unlocking the potential of unstructured data. It’s what drove much of his work at Microsoft, where he helped create four billion-dollar businesses and spearheaded the effort to add a data layer to Office documents.

Now, with his new startup Docugami, he’s built customizable AI that will enable businesses to convert their unstructured information into data and put it to use.

“Only 15% of enterprise data is in a database. Everything else is a big mess” explains Paoli. But by bridging the languages of humans and computers with Docugami, “We can literally change how information flows across the enterprise.”

Sign up for early access to Docugami

That vision of a common tongue for data and Paoli’s extraordinary founder-market fit convinced us at SignalFire to lead Docugami’s seed round. Docugami can make the world’s unstructured document text — in PDFs, contracts, and Word files — structured, organized, and accessible for a myriad of use cases,” SignalFire’s CTO and former Googler Ilya Kirnos says, echoing his former employer’s tagline.

SignalFire’s Beacon data engine first spotted Docugami in 2018 when it detected an uncanny level of engineering talent at the new startup. “I remember this company came up in our Beacon Alerts meeting, and I go to their homepage and under Jean’s career highlights it lists him as a co-creator of XML, and I thought ‘Sure, yeah. And I’m the emperor of Atlantis,’” Kirnos remembers with a laugh. Turns out it was true. The other four co-founders all had deep domain expertise too. Andrew Begun, Taqi Jaffri, Mike Palmer, and Martin Sawicki were responsible for shipping critical parts of Word, Outlook, Office, and other products used by hundreds of millions of people.
“You can’t think of a more canonical team to go after this document problem.”

The Father Of Semi-Structured Data

 

It feels a little bit like destiny. Paoli was born in Lebanon, home of the Phoenicians who invented the alphabet, and grew up speaking French, which he credits with his appreciation of the written word despite becoming an engineer. Even as a child, he was drawn to seeing and applying structure to the world, building an enormous electric abacus out of a bed’s headboard.
Paoli rose through the French computer science institute Inria and studied with famed researcher and pioneer of the semantics of programming languages Gilles Kahn. “I was always the engineer working with scientists” Paoli remembers from his time leading two Inria-incubated startups. That’s when he got the first taste of the problem that would define his career. “There are text and documents that humans understand, but there’s this other thing called data that computers understand. Why are these different and how can we bridge that divide?”

Then Paoli got the big call. Bill Gates was staffing up Microsoft to embrace the web, and the company wanted him on the nascent Internet Explorer team. He joined under one condition. “I’m going to work on something that moves data on the internet, not on how the data looks.” In 1996 for the WC3, he co-created the Extensible Markup Language — XML — a format that’s both human-readable and machine-readable. That led to the X at the end of the DOCX, PPTX, and XLSX file formats we use today, augmenting these documents with a structured data layer.
But while this effort started to dig the wells to the crude information buried inside of documents, someone still needed to extract and refine it into semantic data that can fuel a business. Over the course of his Microsoft career, Paoli built four businesses that each grew to over $1 billion in revenue. In his final role, he led Microsoft Open Technologies, accelerating open source technologies and paving the way for more than 60% of Microsoft Azure usage today.
After 20 years at Microsoft, Paoli recognized that advances in AI and cloud infrastructure had finally reached the point that he could use them to solve the “document dysfunction” opportunity he had been pursuing his entire career. He left Microsoft to start his seventh business, Docugami, and build the missing algorithms and services that would transform documents into data.

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How Docugami works

 

Docugami combines Deep Learning, natural language processing, Bayesian, Evolutionary, and other AI techniques paired with declarative markup approaches to scan and understand business documents in any file format. It can examine a large group of documents, categorize them by type and function, and identify common and unique elements. From there, Docugami’s AI can recognize, catalog, and analyze items across documents such as:

• Payments
• Dates
• Contract terms
• Patterns
• Deadlines
• Disparities
• Relationships between terms and clauses

Docugami then generates automatic reports and summaries, helps you author new documents, and feeds the data into your other software like CRMs, Robotic Processing Automation, or analytics dashboards.
For example, Docugami can help a bank compare terms across its entire loan portfolio, a government agency identify agreements that need auditing due to regulatory change, a real estate firm track millions of dollars in contractual obligations, or a health clinic simplify the process of doctors creating patient notes.
In an open letter to the software industry, Paoli writes that “We envision a world where AI helps people construct documents that are engineered for maximum data reuse from the start, fostering human creativity and unlocking billions of dollars in increased efficiency, improved compliance, and business insights for companies around the world.”

Docugami is focused on mid- to large-sized businesses in legal, finance, consulting, human resources, and real estate that live and die by contracts. Users can upload partnership deals, service agreements, NDAs, leases, loans, RFPs, proposals, and all manners of sales contracts. Docugami then lets their teams and technology understand exactly what’s inside and help them create new documents. The technology can be customized in 30 minutes to understand the nuances of a particular business and can easily scale to other verticals such as healthcare or manufacturing. Docugami never jeopardizes privacy by applying AI learnings from one customer’s documents to another.
After being founded in March 2018, the startup was processing real customer data sets within months thanks to the credibility of the team. Currently, Docugami has dozens of businesses and organizations using its private beta, across a diverse array of industry sectors, including professional services, construction, real estate, law, health care, finance, and many more. Docugami’s document engineering solution is available in private beta today (sign up here for early access) ahead of its public self-serve launch in 2021.

SignalFire digs in with Docugami

 

“When I entered, I saw dozens of people actually working, doing stuff in a very nicely disorganized way with a bunch of tables and whiteboards. I thought, ‘Whoa, this looks like how I work’” Paoli recalls from his first visit to SignalFire’s San Francisco office in 2019. Encouraged by a recommendation from SignalFire portfolio company Grammarly, Paoli took the meeting.
Another factor stood out for Paoli at his first sit-down with SignalFire. “Finally, somebody asked me a question that wasn’t ‘how much ARR (annual recurring revenue) do you have?’ or ‘Why doesn’t this screen have a nicer design?’”
Instead, the first question Paoli received was “Does this thing work?” followed shortly by “Well, can we try it?” from Kirnos and our AI Ph.D. Adam Vogel. Since roughly a quarter of our team at SignalFire are data scientists and programmers building out our Beacon Recruiting and Market Data engines that we provide to our portfolio, we actually have engineering bays (or we did before going fully remote due to COVID-19).
“It was awesome. It reminded me a lot of Microsoft. I did not need to repeat what we were trying to do 15 times” Paoli remembers. “You know, it felt like a very familiar place, like ‘Okay, I’m talking to techies.’”

In fact, Vogel and Paoli were geeking out together before they’d even met. After Beacon first sniffed out Docugami, Vogel tried the demo and started asking about their named entity recognizer and how the algorithm was trained. He tells me Docugami’s team responded, “‘What? You opened that? Nobody ever goes there!’ And I was like, ‘What are you talking about? These are the goods! The rest is just UI!”
Paoli says “Adam’s role was critical! He went and tested the stuff, he tried it with his own documents. If he found bugs, which you would expect with a pre-seed startup, he went around them. He was not scared about it. We had these experiences with a few other VCs telling us ‘Oh your dialog box doesn’t work.’ Really? Are you serious? I’m showing you an AI algorithm and you’re telling me the dialog box doesn’t work” he says with a grin. Kirnos beams “We’re proud to come across as more entrepreneurial and more like builders versus asset managers or financiers.”
Beyond the code, it’s been a pleasure to support a legend like Paoli. We’ve used our Beacon Recruiting tech and talent team to help fill several of Docugami’s engineering roles. In just six months after receiving their seed round from SignalFire, Docugami grew from 8 to 30 employees, hiring senior engineering, scientific, sales, and operational leaders, and continues to hire with a commitment to both excellence and diversity. Paoli and his team have joined 18 of our expert council events on topics like enterprise influencer marketing and freemium strategies. And our executive briefing team has introduced Docugami to sales leads inside and outside of our portfolio that have turned into pilot deals.

For a fund full of engineers, it’s easy to get excited about the potential of Docugami. “There are a lot of office workers who have this mind-crushing work of data extraction where they’re doing not quite the same thing over and over” Vogel explains. But Docugami can learn and be customized to automate what otherwise couldn’t be. “I really think this could be a liberating technology for people with crap office jobs.”
“You can take all the data that lives inside a PDF that isn’t recorded anywhere else, no one knows how to find, and no one knows how to aggregate, and all of a sudden you can run a query on this unstructured data as easily as if it was a spreadsheet” Kirnos says.
“The market is just absolutely ginormous because every company has contracts” Kirnos explains. “At Google, I saw the power of making information organized and accessible. Now I see it with Docugami.”

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SignalFire’s Creator Economy Market Map

What is the creator economy? It’s defined as the class of businesses built by over 50 million independent content creators, curators, and community builders including social media influencers, bloggers, and videographers, plus the software and finance tools designed to help them with growth and monetization.

The three top trends in the creator economy are:

• Creators moving their top fans off of social networks and on to their own websites, apps, and monetization tools
• Creators becoming founders, building out teams and assembling tools to help them start businesses while focuses on their art
• Creators gaining power in the media ecosystem as fans seek to connect with individual personalities rather than faceless publishers

More than 50 million people around the world consider themselves creators, despite the creator economy only being born a decade ago. It’s become the fastest-growing type of small business, and a survey found that more American kids want to be a YouTube star (29%) than an astronaut (11%) when they grow up.

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We’ve created a crash course on over 100 of the top startups and tools built to help influencers, so whether you’re a creator seeking help, a founder identifying opportunities, or an investor looking for the next rocketship, this market map will give you both a broad and deep view of the creator ecosystem. I promise that the next 10 minutes of your reading will not be interrupted by ads. No premium membership required.

Using platforms like YouTube, Instagram, Snapchat, Twitch, TikTok, Substack, Patreon, and OnlyFans, content creators can earn money through:

• Advertising revenue shares
• Sponsored content
• Product placement
• Tipping
• Paid subscriptions
• Digital content sales
• Merchandise
• Shout-outs
• Live and virtual events
• VIP meetups
• Fan clubs

If you are a founder building something special in this space, SignalFire would love to hear from you! We’ve funded tools to help influencers operate and monetize like credit card Karat, and led the seed round for YouTube co-founder Chad Hurley’s new company GreenPark. We fund both early and mid-stage startups, and help them with recruiting, advising, go-to-market strategies, and PR. So don’t be shy about sliding into our DMs or smashing this newsletter subscribe button.

So how did creatorship grow so quickly? There’s been a societal shift in consciousness towards caring more about feeling fulfilled in our jobs, having control over how we spend our time, and being our own boss. Fans see creators doing what they love for a living and aspire to follow that path that never leads to a cubicle.

Meanwhile, better cameras on phones, larger screens, faster mobile networks, and creator-focused social networks have spurred an inflection point for the industry. Now all you need to join the creator club is a phone, an idea, and a willingness to be judged by strangers. Simple? Not quite. That will guarantee you 12 views (maybe 15 if you have many cousins). And don’t even dream about brand deals. To succeed, creators have to be incredible storytellers, relentless hustlers, and leaders of their fan communities.

Luckily, a ton of companies have been built to support creators, especially the 2 million people able to make a full-time career out of it (just imagine all the tools and infrastructure that are needed if the entire population of Lithuania were to become YouTubers).

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How many creators are there?

Here’s our bottom’s up TAM (total addressable market) analysis, which adds up to 50 million creators:

• Professional Individual Creators (~2M+) – Making content full-time

• • YouTube: Of the 31M channels on YouTube, ~1M creators have over 10K subscribers (source)
  • Instagram: Of the 1bn accounts on Instagram, ~500K  have over 100k followers and are considered active influencers (source)
  • Twitch: Of the 3M streamers on Twitch, ~300K have either Partner or Affiliate status (source)
  • Others: including musicians, podcasters, writers, illustrators, etc total ~200K

• Amateur Individual Creators (~46.7M) – Monetizing content creation part-time

• • YouTube: Of the 31M channels on YouTube, ~12M have between 100-10K subscribers (source)
  • Instagram: Of the 1bn accounts on Instagram, ~30M have between 50-100K followers (source)
  • Twitch: Of the 3M streamers on Twitch, ~2.7M are non Partner or Affiliates
  • Others: including musicians, podcasters, writers, illustrators, maybe a total of ~2M

Here’s a video from SignalFire’s Wayne Hu that reveals how the creator business grew so fast:

State Of The Creator Economy: A Brief History

Before we dive into all the types of tools, it’s important to understand the evolution of the creator economy, which can be divided into 3 distinct layers that build on each other.

• Layer 1: Foundational Media Platforms. Since the late 2000s, we witnessed the birth of platforms like YouTube, Instagram, iTunes, Spotify, and more recently Snapchat, Twitter, Medium, Twitch, TikTok, etc. Platforms help creators get discovered and establish an audience by investing heavily in their recommendation and curation algorithms — they solved the distribution problem for creators. No longer were creators at the mercy of large production companies who decided what content to produce and who the audience would be. These platforms contributed to the rise of multi-channel networks like Maker and Fullscreen. They aggregated creators and equipped them with audience development tools before they were bought for hundreds of millions, while new networks like Brat TV and Tastemade emerged. The platforms also necessitated the creation of multimedia editing tools that helped creators polish their content. But platforms don’t always have content contributors’ best interests in mind so the smart creators learn to cross-promote and diversify their presence on different apps to minimize “platform risk”. That way they’re not vulnerable to one platform’s decline, change in priorities, removal of features, or reduction in opportunities that can hurt them, which is known as “platform whiplash”.
• Layer 2: Monetizing Influencer Reach. Once top creators had built an established audience who trusted what they had to say, brands started to recognize the return on investment of paying creators to harness their on-platform reach to advertise products and services. While some platforms split traditional ad revenue with creators, others left it up to the content makers to figure out how to monetize, leading to the rise of sponsored content and companies like Niche that brokered the deals. There are now hundreds of companies in this space including influencer agencies, sponsorship marketplaces, talent representation companies, and more. According to Mediakix, the current influencer marketing TAM is ~$8bn and it’s expected to grow to $15bn by 2022, making it one of the fastest-growing business sectors. Ideally, creators work with sponsors that match their personal brand, and don’t sacrifice content quality to overtly push a corporate message. However, as influencer marketing grew more common and more brands started paying for it, influencers noticed a pattern: with each paid post, they’d lose some of the trust that they established with their audience, hurting their engagement and growth. Which brings us to the latest wave of creators’ evolution…

• Layer 3: Creators as businesses. This is where we are today! Having developed fandoms that follow them off-platform, creators can become full-fledged businesses with multiple revenue streams beyond ads. Companies have arrived to help creators earn money by selling products such as premium content, merchandise, books/ebooks, newsletters, or selling services such as fan engagement, coaching, consulting, speaking engagements, etc. This lets creators focus on delighting their biggest fans and making more unique niche content, rather than desperately seeking the biggest possible audience and making more generic clickbaity content.

Essentially, creators have to balance the distribution potential of certain platforms with the risk of becoming dependent on them, and monetize by either earning a little off of each fan from mainstream content for a big audience or earning a lot off of deeper connections to a smaller set of fans through niche content.

The big trend we see here is that over time, creators are becoming more diversified in their revenue streams and are being funded directly by their fans.

Creators have shifted from being paid by platforms like YouTube with ad revenue shares in exchange for bringing in an audience to the platforms, to being paid by brand sponsors on Instagram and Snapchat in exchange for their reach to an audience they access through the platforms, to being paid by fans via patronage or tipping or ecommerce in exchange for entertainment and community beyond the platforms.

Now that we’ve gotten the brief history lesson out of the way, let’s talk about specific subsectors and exciting companies within them! We’ll also discuss the COVID-19 impacts as well as our assessment of the investment opportunities within each.

Layer 1: Birth of Media Platforms

Media Platforms

A list of all the usual suspects. No additional explanation needed, right?

• Video / Streaming: YouTube, TikTok, Twitch, Instagram Live, Facebook Live, YouNow, Vine, OnlyFans

• Photography / Graphic Design: Instagram, Snapchat, Pinterest, VSCO

• Music / Podcast: iTunes, Spotify, Pandora, Soundcloud

• Writing: Twitter, Medium, Quora, Substack

COVID-19 Impact? Large tailwinds as consumer engagement in entertainment has increased. As users spend more time on these apps, they follow more creators, consume more of their content, and earn them more money. This, in turn, can grow the platforms’ revenues while making creators more willing to pay for tools that help them.

Opportunity Assessment

• Pros: Once these platforms gain traction they can grow rapidly thanks to virality. There have been huge outcomes in this space.
• Cons: Very saturated market with the winners in each category already identified. Difficult for new entrants as incumbents all have strong network effects.

Content Creation Tools — Without Networks

Some platforms have their own embedded content creation tools (i.e. TikTok video effects and Instagram photo filters) but there are many companies that provide point solutions for making enhanced content. Historically, content creation tools with social networks attached have been the most financially successful.

One meaningful exception is the giant incumbent in this space, Adobe Creative Cloud, which includes Photoshop and several other famous tools like Premier Pro and Illustrator. In 2013, Adobe shifted its business model from selling individual software licenses ($1,300-$2,600 for the full suite) to selling a subscription ($52/month for the full suite). However, the majority of Adobe’s customers are business creators (i.e. people who work on the marketing team of some corporation) as opposed to the individual creators who publish on the social platforms.

Some platforms have made acquisitions to become an “all-in-one” destination for discovery, creation, and monetization. In 2017 Spotify acquired Soundtrap, a music production software developer, so it could offer ways to make music rather than just distribute it.

Today, it’s common for creators to cobble together multiple tools for editing and earning money off their content they then share on social networks. For example, Instagram creators might finance a shoot with Karat, record in Snapchat, edit with inVideo or Pixlr, then post to Instagram where they monetize on platform with Grin or Captiv8, earn money off-platform with Teespring and Cameo, and track their analytics with Delmondo.

A breakdown of content creation tools by type of media:

• Video: Streamlabs’ OBS (Open Broadcaster Software), an open-source app for recording livestreamed video, Tools like inVideo and PlayPlay are mobile and web-based video editing tools that help creators format their videos into socially shareable formats on Instagram, Facebook, etc. Vochi is an app-based video editor that takes it a step further and makes really cool video effects. Other tools like Kapwing take a more horizontal approach and help with editing video, audio, and even GIFs. Apps like Trash and Quik automatically edit together short video clips with music to make mini-movies you can share in Trash or on any social network. Creators are even renting out rooms by the hour on PeerSpace and Breather so they have a place to shoot their videos.

• Photography / Graphic Design: Affinity is a UK-based company that has been challenging Adobe’s throne. At only $50 per full access license, Affinity offers a much more affordable professional photo, design, and layout editor for creators. Other low-cost web-based photo editors include Pixlr, PicMonkey, and Fotor. Companies like Canva and Snappa focus more on being a graphic design editor for all mediums — flyers, business cards, brochures, invitations, photos, etc. Then there are also companies like Piktochart that are made for infographic design. And of course, Meitu and FaceTune let users smooth out blemishes, whiten their teeth, and even change the shape of their face to appear more attractive. Canva has recently been making headlines with its $6 billion valuation, making it arguably one of the most valuable content creation companies in recent years. Surprisingly, all of Canva’s revenue comes from individuals upgrading to a premium membership, which gives users instant access to 60K templates (vs. only 8K for the free tier) and a library of 60 million stock photos, GIFs, videos, graphics, etc. What makes Canva a 10X better tool than all the others is their extensive treasure chest of design building blocks that make it easy to create something beautiful.

• Motion Photos: Apart from the two largest GIF creation platforms Giphy and Gfycat, a new type of media format, the “video meme”, has been on the rise. Check out Pinata, which should be launching its public beta soon.

• Music: There are really not that many startups in this space, probably because it’s a much smaller market than some of the other media formats. Many artists use GarageBand which has most of the basic functionalities to create music. Professionals might purchase a license from one of the several large, legacy companies that sell downloadable music production software such as FL Studio and Ableton Live, or turn to Splice for music production collaboration and either buying or selling audio samples for use in songs. Meanwhile, distribution through streaming platforms, marketing via social networks, monetization through patronage platforms, the death of physical formats like CDs have eliminated many of the needs for traditional record labels.

• Podcast: A hot space as the podcasting format has become more popular in recent years. One of SignalFire’s portfolio companies, RedCircle, helps podcasters reach new audiences and monetize their content by connecting them with brands for advertising opportunities. Other companies that help with publishing podcasts include PodBean, Megaphone, Buzzsprout, and Anchor.

COVID Impact? Large tailwinds as more people are staying at home and either becoming creators for additional sources of income or existing creators have more time to devote to their creations.

Investment Opportunity Assessment

• Pros: Innovative tools that get adopted by creators can go viral on social media.
• Cons: Adobe is a huge incumbent in this space with clear network effects (it has become such a standard of file types that enables sharing amongst creators). Point solutions for creators are tough to monetize unless it has a clear ROI for the creator / product is very differentiated and defensible.

Layer 2: Emergence of Influencer Marketing

Influencer Marketing

There are several types of companies in this space:

• Specialized Influencer Marketing Agencies. Brands hire these agencies to identify high-performing influencers to reach specific audience demographics, negotiate influencer contracts, maintain consistent communication with influencers, launch multiple cross-channel campaigns, and conduct in-depth post-campaign analysis as well as ROI assessments. The largest dedicated influencer agencies include Mediakix, Pulse Advertising, WHOSAY, and Everywhere. Brands hire them because they don’t have direct connections to influencer talent or in-house teams to work with them. But because these agencies are extremely hands-on and personalized, they are very expensive for both the brands and influencers. PR giants like Edelman and Weber Shandwick have also joined in as middlemen between creators and brands while ensuring their clients aren’t besmirched.

• Influencer Marketing Platforms and Marketplaces. For brands, this is a much cheaper solution to access a large database of influencers that they can filter from. The platforms typically charge a Software-As-A-Service fee plus a take rate on each campaign. While the platforms may have built-in analytics and reporting capabilities, the downside is that brands typically won’t get access to the largest influencers as those usually only work with agencies. The supply is mostly on small-to-medium-sized influencers that may not have as wide of a reach and thus, ROI on marketing spend. Some influencer marketing platforms include Grin, Captiv8, AspireIQ, Tapinfluence, Klear, The Shelf, CreatorIQ, and Arthouse (formerly Niche, owned by Twitter) where brands are able to set a budget for their campaigns and search the large database of influencers who meet their criteria. Traditional Hollywood talent agencies like CAA, UTA, and WME often partner with the influencer marketing giants to make their mainstream celebrities available to brands. Platforms like The Plug take a different approach by giving influencers the power to choose which campaigns they want to work with. However, advertisers on their platform only pay on a performance basis (i.e. if someone downloads the advertiser’s app). Unlike traditional brand campaigns, the influencer’s pay, in this case, is directly proportional to the ROI they generate for the brand. Platforms like Pixlee help brands automatically find and curate content created by their users on social media, which can sometimes be more cost-effective and authentic because viewers know that the content was generated by an existing customer. Other players in this more quantified influencer marketing and analytics space include: Collectively and theAmplify (owned by You & Mr Jones), Delmondo (owned by Conviva), and Whalar. Fans and brands alike look to the rankings on Famous Birthdays, the Wikipedia of influencers, to find stars to follow or work with. Some influencers sell creative services for conceptualizing and producing content without having to spam their followers, some focus on the low-effort business of selling distribution of existing content to their huge audience, and some do both.

• CRM Tools.  Since influencers sign up for multiple influencer marketing platforms and often have several brand contracts going on simultaneously, CRM tools built specifically for influencers like Tubular Labs, MoeAssist, and CloutJam have recently popped up to help influencers manage their workflow.

COVID Impact? Minor tailwinds as corporate and brands cannot do in-person professional shoots so they are reaching out to creators for user-generated content, but other brands have largely paused marketing efforts to conserve cash.

Investment Opportunity Assessment

• Pros: There is an opportunity to build a large, scalable business in the platform/marketplace segment given that brand marketing is still the #1 way that creators generate income. Who will be the DoubleClick of influencer marketing
• Cons: There has been no major outcome in this space, with Twitter’s buy of Niche and Google’s acquisition of FameBit only ranging in the tens of millions. Our hypothesis is that there are several reasons why:
  • None of these platforms can monopolize on supply — influencers are incentivized to sign up with as many of them as possible. Defensibility is a key question.
  • Top influencers work with agencies, not platforms/marketplaces. These platforms typically capture a long tail of small to medium-sized influencers.
  • Influencers all have distinct personalities and are thus hard to manage — platforms are not equipped to do so.

Layer 3: Creators as Businesses

With the long tail of amateur influencers at 50 million and growing rapidly, there is a lot more competition for brand deals amongst influencers, which forces them to seek alternative ways of generating an income.

Patronage Platforms

We start by exploring the various donation platforms that allow fans to donate to their favorite creators. There are a few different ways this takes place:

• Ad Hoc Project-Based Funding. We’re all fairly familiar with the big crowdfunding platforms like Kickstarter, Indiegogo, and GoFundMe. Creators use these platforms to publish their one-off books, comics, documentaries, short films, albums, etc. These platforms typically charge a 5% take rate.
• Subscription-Based Funding. The concept of “subscribing $10/month to your favorite creator” was created by none other than Jack Conte and his startup Patreon, based on the need for consistent financial support for his band Pomplamoose and their music video production studio. More recently, media platforms like Twitch and Youtube Channel Membership have started to build infrastructure for their creators to charge a subscription fee directly on their channels. But some creators can be annoyed if platforms constantly try to cross-promote other content makers to their fans which could increase the first creator’s subscriber churn.

• Tip Jar Concept. Instead of setting up a recurring donation to your favorite creator, you can also make one-time donations, which is much lower friction for fans to get involved. Platforms like Ko-fi and Buy Me a Coffee gives creators the platform to ask fans for $5 here and there. These platforms can let creators reach their maximum audience by not requiring upfront payment, while still offering a way for fans to voluntarily support the creator financially. Some larger social networks also offer ways to tip creators, especially during livestreams, in exchange for shout-outs from their favorite streamers or special badges and added visibility to other fans. This “economy of recognition” can let creators focus on making niche content designed to get their biggest fans to pay, and is advantageous for platforms as they can earn a cut while attracting creators without much work.

COVID Impact? Net neutral. Supply has increased because COVID has encouraged many people to become creators in order to generate additional income streams. For example, Patreon added 30K new creators on their platform in the past 2 months. Patrons who are still financially stable are opening their hearts and wallets with bigger payments for creators. However, this is partially offset by a decrease in demand because as unemployment rises, more people will be cutting discretionary spending on things like a monthly donation to a creator.

Investment Opportunity Assessment

• Pros: Integrated platforms like Twitch or YouTube can charge a high 30-50% take rate because they can leverage the consumer engagement they already have to provide creators a ton of value on building an audience.
• Cons: In contrast, standalone companies have a low take rate of typically 5% because they don’t have additional value add and need to align themselves with the creators. Given that the largest platforms in this space have under 500K creators, a 5% take rate off an average of $10/month donation will be tough to build a large business.

What else can creators sell?

 

• Selling Fan Engagement. These are platforms that enable creators to sell some type of interaction with a fan. Cameo made flashy headlines in this space by creating a marketplace for fans to pay for personalized video shout-outs from celebrities. Cameo’s success can also be attributed to how easy it was for creators to get paid $50-100 for making a short 30-second video, which rapidly helped them grow their supply side. Starsona takes a slightly different approach by allowing creators to sell all kinds of interactions with fans — 1:1 direct messaging, Q&A, create a playlist for your party, critique a photograph, create a ringtone, etc. Camelot allows YouTube and Twitch audiences to pay for what they want to see (i.e fans can request that streamers “win with no armor”, “add a heartbeat monitor to the stream” or “play a cover of Hey Jude”).

• Selling Online Courses / Webinars. Platforms like, Kajabi, Teachable, Thinkific, and Podia are online course builders with a full suite of products that enables the creator to market, engage, and monetize their courses. Other companies like Monthly curate their own creator-led courses. Tools like Lu.ma, Airsubs, Stream.club, Via.live, Reach.live, and Mixly let creators sell access to webinars via video chat mediums like Zoom. These are very popular for creators who have a valuable skill to share, such as watercolor painting, cake making, or producing electronic music. These creators often build a large following on one of the social media platforms by sharing tidbits of their skills in ad hoc videos and then redirecting the most engaged learners to their separate online course page.
• Selling Newsletters / ebooks. Substack allows writers to monetize their newsletters. It allows journalists and others to build independent audiences and set a subscription fee for their newsletters. Top writers are able to make $50-100k/year with Substack. All you need is 400 subscribers paying $10/month or 800 subscribers paying $5/month. One such top writer is Luke O’Neil and his popular newsletter Hell World, where he reports the distressing day-to-day American life with a unique stream-of-consciousness style.

• Selling Merchandise. The largest players in this space are Fanjoy and Teespring, which help creators sell apparel and officially integrates with YouTube, Instagram, and Twitch. Others include DFTBA, Represent, and CrowdMade. There are many other companies in this space that do not integrate with the large platforms like MerchLabs and Instaco. While super-fans may buy merchandise from time to time, it is often not a reliable source of income for the creators because it is not something that fans will repeatedly purchase.

COVID Impact? Tailwinds. As the unemployment rate in the US rose, more creators are turning to these platforms to supplement their income.

Investment Opportunity Assessment

• Pros: Companies that can build a robust business model in the entire creator economy should be ones that help creators generate additional income.
• Cons: Will need to examine the business model on a case-by-case basis. For example, selling merchandise has become commoditized and really tough to scale as a business given that it is so operationally intensive.

Community Engagement Tools

Several startups believe that increasing the engagement within the fan community as a first step before targeting them for various sales is crucial to increasing conversion rates. Community helps creators collect fans’ personal phone numbers while DSM is able to message fans across different social media platforms via a single porta, and Zebra lets creators build a dedicated community space for their fans. These platforms aim to create a more direct or efficient mode of communication from the creator to his fans. Vibely allows creators to create regular “challenges” for her fanbase, thereby increasing engagement within the community. Fourthwall on the other hand, creates a dedicated Shopify-like ecommerce page for the creators and enables them to send a personalized video shout-out to fans who’ve made a purchase.

While all these tools have substantial adoption from creators to-date, the way they help creators ultimately monetize a more engaged community is via the selling of merchandise, which as discussed earlier, is not the most reliable source of income.

Finance Management Tools

As creators begin to diversify their income and become more like small-to-medium-sized businesses, they will need more tools to help them manage their finances. Creators also don’t plug well into the existing banking infrastructure because they are very difficult for banks to underwrite — they don’t have W2s and instead have many sources of income that are unpredictable. SignalFire recently invested in Karat, a banking solution for creators. Karat gives creators the ability to aggregate all sources of income onto a single platform, offers income smoothing for creators on a week-to-week basis and provides instant loans based on predictable future income.

Are you building something for creators?

At our early-stage venture capital fund SignalFire, we believe creators and the startups that support them are vital to the future of entertainment, advertising, education, and commerce. That why we’ve invested in startups like Karat’s credit card for influencers and HoloTech Studios’ FaceRig for livestreaming motion capture avatars.

Founding a creator-focused startup? We’d love to hear about it. You can reach out here or to any of our team members. SignalFire brings to the table our Beacon technology for predictive recruiting and market data analysis, our talent team that can ensure you score your dream hires, in-house experts on PR and go-to-market, and our network of 85+ invested-advisors including founders and executives from YouTube, Instagram, Twitter, Adobe, and many more that help support our portfolio companies. Those value-adds are why 85% of our portfolio founders rank us as their most helpful investor. SignalFire can help creator-led startups skill up as entrepreneurs with our programs to assist with fundraising and board construction, while assisting experience founders building creator tools to hire swiftly to seize these new opportunities.

Creators are the new founders

We’re at an inflection point in history where becoming a professionalized creator is one of the most desired jobs. Creators become creators because they love to create. As they grow their audience and expand their revenue channels, the burden of managing the day-to-day of their business grows heavier. Startups that will dominate the next stage of this evolution are ones that are centered around empowering creators to seamlessly monetize while staying focused on what they already love — creating content.

Being a creator today requires evolving from being an artist to being a founder. The job has come to encompass product management, design, community engagement, ecommerce, and data science along with being an entertainer. You have to build a team of experts and vendors to help you manage the tools to build a diversified business across platforms.

But with that diversification comes resilience. Creators become less vulnerable to shifts in priorities of the tech giants or their algorithms by owning the direct relationship with their fans. Each creator can assemble a different balance of revenue streams to match their style, no matter how niche. That’s a big win for everyone, because creators catering to each of our esoteric interests can build a sustainable career. Instead of just homogeneic, lowest-common-denominator primetime sit-coms, we get content tuned to every sub-culture in the rainbow. Now there are finally enough creators to support a whole ecosystem of startups helping them turn their passion into their profession.

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Remote Work Market Map

Gradually, then all of a sudden, the world has been forced to adapt to remote work. This is a market map and exploration of 200+ startups in 45+ categories amongst a larger sea of businesses that are changing how we get things done outside the office.

At SignalFire, we take a human + technology approach to evaluating new spaces and supporting exceptional founders building the future of evolving markets. We use data to find patterns & trends and layer human judgement & curation to predict market shifts and winners in different categories. Read on for an analysis of the rapidly developing remote work landscape and the implications on the broader future of work. If you’re building something special in the space, reach out to us!

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For those who prefer Airtable (which is definitely my preferred way to mentally map), you can access all 200+ companies here or see the embedded view below.

The Rise Of Remote Work

The trend towards remote work had been slowly inching up among the US and global knowledge workforce since the early 2000s. In recent years, successful companies such as Gitlab, Zapier, Automattic, Basecamp, and more have banged the “Remote Work” drum, normalizing the practice of having no office and allowing employees to work from wherever they choose. A slightly less dramatic trend towards hub-and-spoke distributed work with a HQ office and either small satellite offices or solo workers across the US and the globe has become extremely prevalent among technology companies and startups. Anecdotally, nearly all of SignalFire’s portfolio companies with more than 10 employees have remote teams or workers while also maintaining an office.

Due to Covid-19, we’ve seen essentially 100% of knowledge workers and 58% of the US workforce holistically forced to work from home for the last 3 months. Prior to March, approximately 29% of US white collar workers worked remotely either all or most of the time (a 44% increase over the last 5 years and 109% increase over the last 10 years).

At first it was unclear whether most employees could be productive at home and the assumption was that people would go back to their status quo the second the shelter-in-place orders were lifted. As time has gone on, sentiments have completely shifted with companies realizing productivity hasn’t gone down, and employees actually liking the flexibility and the lack of commute. Twitter announced “WFH forever” (if you choose) and a number of companies followed suit such as Square and Facebook. Extrapolating to the future, it is looking like this shift could be the single largest change to how we work since the birth of the internet.

As companies large and small make the shift from being centralized to being either distributed (hub & spoke or small satellite offices with no HQ) or fully remote, there are a number of things that must be addressed from hiring and payroll to collaboration and engagement. While analyzing companies that started as remote-first from day one can provide some useful insights as to what works and what tools companies adopt, there will likely be a wave of new tools and products that help propel previously co-located companies to adopt remote and distributed work in the long run.

In reading blog posts, listening to podcasts, and watching interviews with remote-first founders, it is clear that they’ve intentionally structured their companies differently than traditional startups and have put an over-emphasis on things like documentation, culture, employee well-being, and flexibility. Remote and distributed work shifts the focus from synchronous to asynchronous. Meetings in a conference room with a whiteboard are being replaced with collaboration within cloud applications, video conferences, and primarily communicating through email or messaging platforms.

When thinking through the remote work landscape, there is a clear order of operations in which needs must be met, from first hiring someone from afar to challenging them with ways to keep improving.

Hiring, Compliance, and Payroll

Companies must determine whether they hire full time employees or contractors, US-based or international, own and operate their own offices or leverage a PEO (Professional Employer Organization). There are benefits and tradeoffs of each but ultimately companies must make their decisions and numerous companies are equipped to assist in the process.

• Hiring & Payment: If you’re hiring your own FTEs globally or need to pay global contractors, Papaya Global, Remote.com, Pilot.co, and RemoteTeam offer great solutions
• Recruiting: If you’re looking for help recruiting, setting up, and running a fully remote team, companies like Terminal, Turing, and Arc help on the engineering side
• Management: If you want to manage your own team and open remote offices, BeyondHQ will help you figure out where and find you space, Certn will perform background checks in 200 countries, and Byteboard or Coderpad help with technical remote interviews
• Contractors: If you’re only dealing with contractors, Deel has you covered
• HR & IT: For distributed hiring (plus onboarding) for the US only, Rippling offers a comprehensive solution solving both HR and IT challenges
• Housing: If you’re looking for more of a co-living/co-working situation, Uplex and Outsite provide new-age and hybrid solutions

Onboarding

Onboarding can incorporate everything from getting your tech or office setup, going through any workplace-specific training, meeting your colleagues, and getting up to speed on all corporate policies, processes, and useful information.

• HR & Tech: For employees in the US, Rippling, doing the payroll and HR onboarding as well as hardware and software procurement and issuance from mobile phones and laptops to SaaS licenses
• Office Setup: Firstbase provides home-based employees with ergonomic office setups making them feel comfortable and getting them up and running
• Knowledge Management: Knowledge bases which can be as simple as Google Docs, Coda, Airtable and Notion or purpose-built tools like Guru, Slab, Almanac, and Slite become critical places to store information around company values, processes, and more
• Org Charts: Org chart tools like The Org and Charthop can keep your internal directory in order so remote employees can know who is who

Communication and Collaboration

Table stakes today includes a messaging tool, video conferencing solution, and some kind of collaborative documentation platform. New “virtual office”, “collaborative workspaces”, and business unit specific tools are providing compelling products.

• Messaging: Most startups will use an internal messaging tool such as Slack, Microsoft Teams, or Mattermost (open source version of Slack). New remote-first solutions have popped up such as Twist, Leverice, Involve, and Quill
• Video Conferencing: While Zoom and Meet remain the most popular solutions for video conferencing, competitors such as Jitsi (open source), Whereby, Jamm, and Around have gained passionate users
• Intelligent Transcription: On top of your video conferencing platform of choice, products like Grain, Fireflies, Otter, and Colibri provide transcription and smart meeting note capabilities
• Noise Reduction: To remove background noise across all apps (your colleagues may be getting sick of hearing your baby, puppy, or random toilet flush), many teams use Krisp for clear conversations
• Virtual Office: “Collaboration Workspaces” and “Virtual Office” solutions have sprung up providing hybrid video conferencing and Slack-like tools into one. Examples of this include Pragli, Tandem, Soccoco, Teemly, and Happeo which is targeted at larger enterprises
• Digital Whiteboard: Virtual whiteboard solutions such as Miro, MURAL, Ideaflow, and BeeCanvas have become critical for bringing teams together to brainstorm, mindmap, and plan together
• Team Specific Collaboration: Team specific tools have been purpose built for collaboration between specific business units. On the engineering side, CoScreen, Screen, Tuple, and Use Together enable engineers to share screens, pair program, and stay in sync. For Design teams, Figma, Invision, Framer, and Sketch have become extremely popular collaboration tools. For Marketers, Persado, Ditto, and Quordoba help keep writing and brand consistent and top notch
• Presentations: Other point solutions for collaboration are tackling things like dashboards (Graphy) and presentations (Pitch)
• Standups: To keep teams in sync via synchronous or asynchronous standups, companies such as Standups, Geekbot, Standuply, and Dailybot enable standups, check ins, retros, and more
• Calendar: With colleagues in multiple time zones, calendaring needs become more complex. A whole host of companies offer products to help take the burden off of scheduling time including Clockwise, Woven, Coco, Commanddot, Reclaim, and many others

Culture

Every successful remote team talks about culture above all else as the key to making distributed work and productive for their team. While many aspects of cultivating your own culture will be unique to each company, there are tools that help with some areas that are consistent across companies.

• Perks: Personalized perks offered by companies like Zestful and Cherry help employees feel appreciated and taken care of
• Water Cooler: To build camaraderie among employees, always-on water cooler chat rooms like Jackfruit, Remotion, and Hallway try to mimic the serendipitous nature of offices
• Team Bonding: To get to know colleagues, products like Donut and Welcome match employees one-to-one to build relationships
• Engagement: HR-focused solutions like CultureAmp and Bob help measure and drive employee engagement, sentiment, and overall wellbeing

Employee Learning & Development

Continuing to invest in people’s development, growth, and leadership has direct impacts on the business from employee engagement to increased retention to boosts in productivity. More and more teams, especially distributed teams, are leveraging tools to align employees on things like goals, performance, and learning opportunities.

• Goals: Goal setting and management is critical to getting teams rowing in the same direction and tools like Lattice, Ally, and Workboard provide OKR and goal-tracking solutions that put an emphasis on employee engagement
• Performance Management: For more generic performance management and tracking, 15Five, Reflektive, Betterworks, and Coachhub provide transparency and useful insights
• Coaching: Coaching solutions provide 1:1 learning opportunities for either leadership with companies like Torch, or for the entire organization through Sidekick, Betterup, GoCoach and more
• Learning & Development: Other interesting companies focused on employee L&D include PlusPlus which is a peer-learning tool to scale tribal knowledge, Matter which is focused on feedback, and Mento which is a career support system.

Analysis of 2nd & 3rd Order Effects of Remote Work

While remote work is a first order effect from this global pandemic, there are many identifiable second and third order effects that will result. Four second order effects that I believe will require massive shifts in tools and spending for companies are:

1. Work shifts from synchronous to asynchronous
2. Collaboration moves digital
3. Employees must be able to self-serve
4. Needs of workers shifts to focus on culture, wellness, and mental health

Let’s e into each one of these and discuss how these will change the work and enterprise tooling landscape and what third order effects will subsequently ensue.

1. Asynchronous

To move from a synchronous work environment to an asynchronous one, a few things will happen:

• Documentation becomes critical and building a culture of documentation at your company is the grease in the wheels to ensure productivity and ability to function as a team
• Communication and messaging needs change as more information is spread through email, messengers like Slack and Teams, and documentation and project management tools like G Suite, Microsoft Office, Asana, Trello, Notion, Coda, and many more proliferate in a bring-your-own-tools environment
• Employees will get email and message fatigue so new ways of prioritizing, triaging, and filtering will become necessary

2. Collaboration

Collaboration will now be done in digital tools instead of conference rooms:

Virtual whiteboarding, mindmapping, and design thinking moves from a physical whiteboard to a digital one with tools like Miro, MURAL, and Ideaflow. All team-based or project based work needs a digital home. Much of this work gets split up and done among a dozen or so apps creating information silos and the need to bring things together in a unified and searchable way.

• Tools such as Notion, Coda, Airtable, paired with project management tools like Trello, Monday, Asana, or new ones like Cycle, Linear, Productboard, Aha, Height, etc and brought together into knowledge bases like Guru, Slab, Almanac, or Slite with enterprise search capabilities enabled with companies like Command E, FYI, Slapdash, Keeper, and Seva help you keep track of everything

Feedback, coaching, training, learning, and goal setting will need digital tools to enable these functions to happen.

• Coaching platforms like Hone, Torch, Betterup, Strive, and Sidekick help democratize digital coaching while Betterworks, 15Five, and Reflektive help with inidual and management performance evaluation. Point solutions like Matter (feedback), Ethena (sexual harassment training), and Mento (career support) enable digital and asynchronous employee betterment

External party interactions with partners or customers that previously required work travel, lengthy meetings, dinners, conferences, etc. will shift towards collaborative tools that ensure the privacy and security of each party but enable cross-company work to get done.

• Teams that typically involve inter-company collaboration are sales, customer support, accounting, consulting, and management. Early examples of this are the document storage companies like Box and Dropbox or e-signature platforms Docusign or Hellosign. Some examples of modern platforms include Stampli (collaboration for accounts payable), and Accord (collaboration for complex enterprise sales)
• Conferences, team events, hackathons, and other forms of large-scale meetings will shift to digital platforms like Run The World, Hopin, Remo, Icebreaker, HeySummit, Airmeet, and more

3. Self-Serve Tools

When employees can no longer walk over to their colleagues and ask a quick question, they must be able to self-serve both to create workflow and find information or data:

Workflow creation moves to the edges of the enterprise, enabling non-technical business users to create automations and processes to serve their own needs.

• Zapier, Standard Library, Workato, Syncari, Clay, and Tray allow anyone to connect API endpoints to build rules-based automations
• Bubble, Webflow, Glide, Adalo, and other no-code tools remove the programming requirements to build websites or applications
• Retool, Flowdash, Pipefy, and Internal have made the process of building internal tools simple and took the burden off the engineering team to focus on core competencies of the business
• Airtable, Dashdash, Stacker, and Actiondesk have created “supercharged spreadsheets” to enable the power of a database in the hands of an Excel user
• Sisu, ObviouslyAI, Cascade, and Narrator are pushing data science capabilities to business users who need to analyze data and make decisions
• Vanta, Shujinko, WorkOS, and Very Good Security are automating the enterprise-readiness processes that used to be a huge pain and drain on engineering teams

Knowledge bases and information search/discovery become essential when work is both distributed and asynchronous.

• Startups such as Almanac, Slite, Guru, and Slab act as new age knowledge bases but still require a lot of human compliance and manual management
• On the information search and discovery side, a whole host of startups have emerged to wrangle your SaaS/information silos and enable search across applications. Companies like FYI, Keeper, Slapdash, Clew and Seva take a Chrome extension approach giving you quick search capabilities when you connect your apps. Another approach taken by companies like Station, Command E, Onna, Workona, or Shift requires a downloadable application that pulls your apps into a single space

4. Wellness

Needs of workers shift to focus on culture, wellness, and mental health

Organizations will increasingly prioritize culture and engagement among the employee base to foster a positive environment and improve employee retention and also productivity.

• Whether it’s spontaneous always-on water cooler video rooms like Jackfruit, Remotion, or Hallway, personalized perks from Zestful or Cherry, or team bonding culture tools like Donut and Culture Amp, distributed companies will make sure their people feel connected and appreciated and will measure engagement in tools like Bob, Lattice, or others

Mental health and wellness will no longer take a back seat or be stigmatized in a work context. Companies will slowly encourage employees to discuss these topics and will purchase solutions to help them feel and do their best.

• B2B2C companies like Modern Health, Ginger, and Spring Health (or even Calm and Headspace who are now selling into businesses) provide employees with mental health care in a modern, digital-first format

Productivity at an inidual, team, and company level will become more quantified and products will arise that take structured and unstructured data from text, voice, and video to measure and help improve productivity.

• Personal productivity tools like Centered, Serene, and Harvest try to enable focus and flow states
• Team-focused tools like Range, Kettle, Hive, and Focusmate help teams know when to collaborate together or when people are focusing and measures progress
• Many tools plug into video conferencing solutions to record, transcribe, summarize, and improve meetings such as Fireflies, Grain, Colibri, Notiv, Krisp and Otter

Conclusion

It’s not just the employee’s desk that has moved to the home but the whole office. Startups have a once-in-a-generation opportunity to redefine those functions. Instead of just “how does this happen from home?”, the best ones ask “how can this be done 10x better?”

SignalFire is seeking high-potential startups addressing new and historic pain points related to the future of work. We bring to the table our Beacon technology for predictive recruiting and market data analysis, our talent team that can ensure you score your dream hires, and our network of 85+ invested-advisors including founders from Slack and Coda, former and current executives at Adobe, Google, Netflix and many more that help support our portfolio companies. Email me at [email protected] or reach out on our website if you’re building something special . See you on Zoom!

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Why SignalFire led $13M for OrthoFX smart teeth straighteners

“DIY projects are great for your home, not for your mouth,” says leading New York dentist and OrthoFX provider Dr. Jonathan Levine. The direct-to-consumer model may work great for simple and benign products. But when it comes to teeth straightening, to prevent misaligned bites or unnecessary pain, you need a dentist in the loop, even if you can’t have one in the room.

Unfortunately, right now you largely can’t have one in the room. COVID-19 has hit dentistry and orthodontics hard. Many offices have closed, and it’s dangerous for practitioners and patients to spend time face to face in such close proximity. You can’t wear a mask while getting an impression of your teeth made to size you for a set of aligners. And when things do return to a semblance of normalcy, the backlog of patients needing urgent dental care will swamp the offices that survive.

Even with regular teledentistry checkups, though, it’s up to the patient to consistently wear their aligners. But it’s easy to forget…or willfully “forget” if the aligners put so much pressure on your teeth that they hurt. Soon you’re off schedule, and by the time a remote dentist realizes, you may have to start your year-long aligner regimen over.

At SignalFire, our market intelligence engine Beacon surfaced rapidly increased spend on at-home orthodontic equipment. People want the look and confidence straighter teeth can give them without a mouth full of metal braces, and relief from jaw strain and cavities caused by crowded teeth. But without a real dentist guiding the process, DIY aligners can turn your teeth too fast causing root breakage requiring full tooth replacement. That’s spurred class-action lawsuits against early entrants.

So we mapped the industry and sought out the people who understood the space better than anyone in the world: top talent from Invisalign and Sonicare who were building a better approach. They realized that to successfully straighten patients’ smiles, they needed a system that’s easy and affordable to start, overseen by a dentist, minimizes pain, and reminds customers to keep wearing their aligners.

That’s why SignalFire is leading a $13 million Series A funding round for OrthoFX -— a teledentistry startup here to straighten out the teeth straightening industry.

OrthoFX lets patients use an at-home impression kit and receive a six-month plan of custom 3D printed aligners each week. They put 40% less pressure on teeth and cause less pain than competing aligners that you only update every two weeks and take a year to show results. OrthoFX’s virtual smile tracker lets patients submit photos for review by AI and doctors to ensure they’re progressing towards the 3D simulation of their ideal look.

The bluetooth-connected OrthoFX case can remind patients to wear their aligners, and if they’re not, the company can ship them a Rescue Aligner to get back on track without having to start over. The OrthoFX reduces costly in-office visits by 60%, and since doctors oversee the whole process, most insurance covers OrthoFX so customers pay as little as $950.

We knew Ren Menon, Henry Chan, and Nichole Garcia were the perfect founders to lead OrthoFx. Menon headed product management for Invisalign where Chan was director of R&D, while Garcia was general manager of esthetic dentistry at Sonicare toothbrush maker Philips. They saw how other players cut corners, offering little after-sales support while nickel and diming customers for replacement aligners or retainers. Inadequate doctor oversight and poor dental habits left patients disappointed.

“Legacy players have hyper-focused on specialist doctors taking attention away from some basic, common-sense needs of the patients, says Menon. “On the other hand, observing some of the newer players who have emerged, I felt repelled by the thought that such profitable businesses could be created by short-changing the less educated consumers and tens of thousands of dentists who are all small business owners contributing productively to the local economies. We are here to rethink the industry and the care delivery model with the consumer’s best interest in mind.”

SignalFire is a big believer in this consumerization of healthcare, leading to our investments in ePharmacy Ro, diagnostic wearables veteran Jawbone Health, and telehealth pioneers like Bicycle Health for opioid addiction relief and Form Health for weight loss. OrthoFX’s focus on convenience like its no-hassle retainer replacements makes dentistry less scary. But the company also has defensible technology like the comfy but firm three-layer polymer used in its aligners, and the ecommerce platform it provides dentists so they can stay in touch and sell to patients year-round.

In the coming years, teledentistry must become the norm in the social distancing era that has accelerated this already-growing trend. SignalFire’s talent team worked with OrthoFX to revamp their strategy to sidestep closed dentist offices, hire up an inside sales team, and adopt best practices for work from home from our newly published Distributed Team Management Guide.

There’s a new normal for dentistry emerging. Clear aligners will replace metal braces as general dentists take over work that traditionally required specialist orthodontists. OrthoFX is built to make these shifts safe and successful for patients while becoming an ally for dentists weathering disruption. They’re the right team with a smart product attacking a huge problem through the lens of empathy. SignalFire is excited to support OrthoFX as they work to give everyone a smile they can be proud of.

Vibe Check: Social media impressionism

If Facebook and Insta’s auto-biographical realism was the first mainstream social media format, Twitter’s pithy thought leadership was the second, and TikTok’s storyboarded micro-entertainment ws the third, then the next is the “vibe check” — a non-narrative collage of personal content that conveys a vague emotion.

This Monet-inspired style of creation simulates a hazy memory. It’s gaining popularity as an antidote to the harsh facts of what’s going on in the world, led by an app called TRASH.

have you checked out @avalonlurks profile on https://t.co/QKt2hlbzo0 yet? get to know the musician and see what else she made with TRASH?‍♀️#trashed #trashangels pic.twitter.com/zqy0f93TQO

— Trash (@thetrashapp) September 24, 2019

A vibe check is like a video mood board. It combines haphazardly edited clips or photo slideshows with music and filters to make a montage more akin to art than utilitarian communication. If text clinically dissects a scene, and traditional imagery depicts it objectively, a vibe check offers a subjective interpretation of what it felt like to be there, or for a moment, be someone.

The vibe check evolved from “aesthetic Vine” that presented abstract shots of rainy windowsills or lush forest waterfalls to tranquilize their viewers. Another ancestor is the 1 Second Everday app for stitching together a video diary. More recently, vibe check-esque clips have emerged on TikTok as the artsiest cinematographers apply its many manual editing tools or resort to desktop software.

The term “vibe” has also come to generally mean a “good mood or positive disposition. Some creators have instituted “mandatory vibe checks” where they pass judgement on something’s level of chill, with TikToker Daniel Spencer declaring that white supremacists and those disobeying shelter-in-place have unequivocally failed their checks.

Until now, the artistic medium has been locked behind the prerequisites of patience and video editing skills. They take work and time to make. The iPhone’s Photo Memories and Google Photos’ Movies have tried to simplify video editing with themes that turn a bunch of media into a vacation recap or happy birthday sequence. Unfortunately, they often come across as saccharine or trying too hard. Corny music, exagerated transitions, and a 90s TV dad sensibility makes them ineligible for composing shorter, more subtle vibe checks.

But the first of what I expect to be a wave of tools to democratize this social media format has just arrived. Artificial intelligence video editing app TRASH is launching a tool purpose-built for creating vibe checks. You just select a couple short videos, and Trash’s AI does its best to collage them into something artful with zero directorial input. You can then massage the personality of your video by choosing from styles like “Hype”, “Laid Back”, “Artsy”, or “Classic”, as well applying controls for the music, filters, clip order, and how fast it jumps between them.

“TRASH isn’t about creating the perfect video or telling an exact story, which is traditionally what film and video had been about (having an idea, shooting the scenes for that concept and editing it together). TRASH turns your Stories into dreams” explains the startup’s co-founder Hannah Donovan. The cool comes from remaining aloof.

The Vibe Check feature officially launches on TRASH tomorrow but Donovan let me give an exclusive early look to my newsletter readers. It lets you share your TRASH compositions to Snapchat with a “Vibe Check” poll sticker friends can answer. It’s a savvy growth hack, as well as an attempt to spread awareness of this budding medium.

The TRASH name stems from making treasure out of the random stuff you’ve shot on your phone. AI opens the door to this artistic mindset. “For people who are intimidated by video or don’t think they know how, the magic moment of getting that first rough cut back from our AI is really special for them. People feel blocked by the blank canvas and the i’m-not-good-enough monster” says Donovan, who was the general manager at Vine before Twitter destroyed it.

“Vibe check” – for when there’s no strictly narrative way to convey your mood pic.twitter.com/0YJ74YpRdQ

— Josh Constine -SignalFire (@JoshConstine) June 28, 2020

I threw a few clips from a walk along the Bay followed by dinner at home into TRASH, and it came out surprisingly…vibey, with little editorial input required. Here’s a few more I enjoyed from the Venice boardwalk, aimless nights with friends, and a wedding proposal. While AI might not be able to truly understand beauty just yet, it can fake it well enough to assist with this video collage format when it would fall far short of making anything with a coherent story.

TRASH has a headstart on building this AI, but I’d bet on Instagram and TikTok trying their best to copy it. Offering an automatic video editor feels like a natural next step from TikTok’s themed photo slideshow templates and Instagram’s Superzoom gags.

Honestly, I’m fine with that if it gets more people creating. When asking someone “how are you doing?” just prompts exhaustion due to *motions at everything*, we need new ways to convey our feels. Like visual ASMR, vibe checks let us generate stimuli for others, without the need for or the energy to concoct an explicit message. Vibe checks could be the first step towards making us comfortable with self-expression from the heart, not just the head.

Exciting Tidbits

• Japanese politicians are using the social map app Zenly that Snapchat acquired to prove they’ve actually traversed the place they want to govern, via CEO Antoine Martin

• GoMeta’s app Koji lets you remix not only memes but games that you can then share to social media. I think mini-game development will be the next creator/influencer space after video.

• Magnet is my new favorite productivity tool. The $3 app lets you drag Mac windows to the sides or corners of your desktop to instantly resize them to half or a quarter of the screen. via Cherie Hu on YourStack

And some hotness from SignalFire portfolio companies:

• Karat launched its AmEx for influencers that gives them a credit score based on their followers and engagement, and helps them pay for content creation while waiting for sponsor money or ad revenue shares
• Candidate Labs launched its software-powered recruiting firm that helps take hiring off of founders’ plates rather than selling them a SAAS tool and making them do the work themselves
• Tempo’s ‘Peloton for weightlifting’ screen with personal training classes and a camera that tells you if you’re doing exercises wrong got a glowing review from Best Products

Intro To Startup PR

Finally, this week I taught a video masterclass at Collision about the risks and rewards of startup PR, how to pick which reporters and publications to pitch, and more. You can watch my Startup PR 101 video here. I’ll also be sharing more PR tips in the newsletter over time, and you’re always welcome to reply to this newsletter with questions or pitches for me! Thanks for reading!

Why influencers are replacing fans with cults

How did a ridiculous app called Stepchickens break into the top 100 apps on its first day? The power of cults.

If an internet celebrity or content creator doesn’t get paid per view, then “fans” aren’t worth so much. Revenue sharing platforms like YouTube and Twitch reward influencers for having legions of casual followers who rack up ad impression. But you need a different strategy on platforms like TikTok, Twitter, Instagram, and Snapchat that don’t share ad revenue, where calls to action are limited, and most people just want to like, maybe share, and keep on scrolling. If a creator wants to make sponsored content, they could monetize their reach, but that requires business savvy, brand safety, and creative compromise.

That’s why influencers don’t just want fans. They want a cult. They want loyalists willing to do as they command, withstanding the friction of leaving their favorite feed to take actions that benefit their glorious overlords. While the term ‘cult’ might be a bit insensitive, it appropriately describes the obsessive devotion that communities give to their charismatic leaders. In exchange, they dispense a sense of belonging. Yes, TikTok is keeping kids out of gangs by getting them to join cults.

THE RISE OF THE STEPCHICKENS

This month, a former Googler who left her job to become an influencer comedian suddenly became a cult leader. ChunkysDead aka Melissa had been making TikToks since November, scoring some hits with edgy life advise like “If you are not happy single then you will not be happy in a relationship because happiness does not come from relationships, it comes from drugs.” But her following really started to grow when she’d activate her early fans to ask other influencers to duet her, or play pranks like getting 7000 people to tag a specific person in the comments of a goat video.

That led ChunkysDead to invent the “TikTok cult” on May 8th, formalizing a community for her henchmen. She crowdsourced the Stepchickens name from her followers and asked them to change their profile pic to match hers — a distinctively blue-lit ugly selfie. Calling herself Mother Hen, she declared war and commanded the cult to overwhelm the comment sections of For You page videos.

The Stepchickens soon inspired competing TikTok cults, leading to “Battle Zones” where the leaders would choose a random video and see whose cult could drown the comment reel with their profile pics. The battles are even expanding to YouTube. Melissa tells me that her polarizing comedy attracted the breed of hardcore fans willing to join a cult. “I think the reason I have such a loyal following is because I’ve been creating a consistent and specific brand of humor over time. It doesn’t sit well with everyone, but those who do like it are very into it.”

That’s when Melissa upped the ante with the help of Sam Mueller, the developer of Blink, an app for building your own chat and meme sharing micro-community. They’d known each other from working together at Yahoo, so Sam reskinned Blink as Stepchickens and let Melissa relaunch it as her own app on May 18th. No other cult could match that.

110K active Stepchickens have since sent over 150K text and video messages in the app, with many buying cult merchandise from Melissa’s online store. The app crested to the #9 US social app and rose above Quibi in the overall charts, while helping Melissa add 1 million new TikTok followers in just two weeks.

Cults > Fans

“Melissa has tapped into the zeitgeist of bored teens in quarantine and given them purpose.” Mueller tells me. Craving community, the app let them “gather and have conversations with each other rather than exclusively interacting with the broadcasts on TikTok.”

We’re going to see more creators try to prod their followings along this path from fan to cultist:

1. Consuming – Serendipitously discovering a creator’s content
2. Following – Subscribing to a creator across channels
3. Sharing – Re-distributing a creator’s content consistently
4. Creating – Amplifying a creator via remixes and references
5. Affiliating – Joining communities of a creator’s allies
6. Buying – Spending to support a creator or prove allegiance
7. Transforming – Redefining one’s identity around a creator

Unlike with traditional celebrity fandoms, the blurrier line between influencers and their followers creates a sense of relatability and intimacy that drives a cult to go to war for them. The personalized, self-selected nature of social media engenders a deeper connection than old school stars can generate through mass media. The fast feedback loops of micro-entertainment apps like TikTok let leaders quickly turn community input into fresh content that makes their cults feel seen. And by fostering a sense of fellowship through peer-to-peer communities, influencers can keep their cults satiated even when they’re not churning out videos.

This drives the wholistic sense of alignment with an influencer that gets people to open their wallets to purchase merch or Patreon subscriptions. With so many of the possessions that used to represent us like record collections going digital, Gen Z is eager for new ways define themselves.

App Of The Week: Itsme

A dating app that instantly throws you into video chats with your matches would be pretty intense and potentially awkward. But not if your face is replaced with an auto-generated, customizable 3D avatar. Itsme makes those same video chats more comfortable and funny, and lets you connect on Snapchat if you hit it off. By replacing text pickup lines with more exciting live interaction, and thanks to the [[Quarantine Concurrent User Loan]] I wrote about last month, Itsme recently broke into the top 20 US social apps. Online dating is becoming less stigmatized and people are starved for human interaction while stuck at home, but our shyness persists. That’s why we’ll see more interest in apps that blur people’s pics at first like S’more and Blindlee, or replace them with avatars like Eternal and Itsme.

Deep Thoughts On: TikTok making search obsolete

Turner Novak of Gelt VC has written the must-read deeeeep dive into TikTok. It’s almost an eBook with tons of fascinating tidbits from parent company ByteDance’s inception to the app’s savvy engagement hacks. It also indexes all of ByteDance’s new product attempts as it strives to grow beyond TikTok into a Google-like empire of apps encompassing consumer finance, education, music, gaming, and enterprise software.

The most important passage is perhaps this one on how TikTok’s AI lets it rapidly learn what you like without explicit input:

Zhang, ByteDance’s founder and CEO, has stated his primary strategy is to eliminate the need for search – how Google and Amazon serve their very profitable advertising products – and immediately serve users exactly what they want.

Imagine this applied to commerce? With no search bar, an app could just track your swipes, hovers, taps, and buys to curate a shopping feed. An AI-powered standalone commerce product could bullseye your taste in clothing much faster than apps that mix shopping with friends’ posts or inspirational images like Pinterest. In fact, this is why Instagram is building a dedicated shopping feed, as announced by Mark Zuckerberg this week (though it was overshadowed in media coverage by other efforts to help small businesses). Luckily, Jane Manchun Wong had spotted a prototype of this feed inside the @Shop page on Instagram.

WTF Product: The Norimaki Flavor Synthesizer

What if you could build a vape-like device for simulating any food’s taste? The way screens make any image from red, blue, and green light, researcher Homei Miyashita has prototyped a device that’s uses chemical gels to recreate sweet, salty, acidic, bitter, and umami flavors. An electrical current in the device can retract the flavors in different quantities to create precise tastes like gummy candies.

I think the research could one day have implications for weight loss programs like [SignalFire-backed] FORM Health, perhaps by letting people get a simulated taste of chocolate to fulfill a craving without the calories. Disclaimer: The experiment and research weren’t rigorously repeated or peer reviewed, but it still feels like we’re one step closer to the Star Trek replicator. via Gizmodo’s Andrew Liszewski

Constine’s Corner

Thanks again to everyone reading this for helping me find my voice, post-TechCrunch. The newsletter hit new records for views and open rate last week, and I’m deeply grateful for your time. I’m already loving the endless learning of VC life at SignalFire. Next week I’ll be lending a hand moderating a talk for our portfolio company Commsor, a suite of tools for managing online communities. Register for their community leaders summit to catch my talk at 9am PT on June 4th with Y Combinator’s Kat Mañalac and more.

Meme of the week

Sorry I made this. But hey, if you learn from mistakes, maybe this is a winning strategy.

Moving Product #2: Unbundling The Accelerator

Could you build a Y Combinator with just the Demo Day? Or just the social network for founders? Or just the educational sessions? If you think of the startup accelerator as a product, it’s being unbundled right now. Steep equity price tags for long curricula like the standard 7% for YC’s $150K invest and 3-month regimen don’t fit every startup. So increasingly, we’ve seen new players with different business models focus on a particular piece of the springboard.

The latest which launched yesterday is “Fundraise From Home”, where seed and pre-seed stage founders apply via short video pitch and the best are selected to do a longer video presentation for a cadre of top seed investors. It’s like a weekly Demo Day for free without the rest of YC.

Fundraise From Home was started by some of the sharpest microfund leaders: Ryan Hoover (Product Hunt) and Vedika Jain (TrueLayer) of Weekend Fund, Alexia Bonatsos (TechCrunch) of Dream Machine, Niv Dror (Product Hunt) of Shrug Capital, Harry Stebbings (Twenty Minute VC), of Stride.VC, and Jeff Morris Jr. (Tinder) of Chapter One.

In their first interview about the project, Hoover tells me “Over the past few years I’ve seen an increased appetite among early stage investors to collaborate and experiment together, particularly among new entrants into VC. We’re seeing a rise in angel investors and small funds. As a result, there’s more competition in early stage investing and more opportunities for investors to collaborate, especially those that write smaller checks.”

Fundraise From Home is powered by TypeForm’s Video Ask feature, and each investor will vote on the top three applicants from whom they’d personally like to hear more. This ensures those invited to do a full pitch don’t face a chorus of “you seem great but you’re not in our wheelhouse”. For example, for the first of the three planned Demo Days, founders apply by May 8th, finalists present the week of May 11th, and hear back from interested investors within seven days. For now, Fundraise From Home isn’t bringing in more or bigger investors, but it may later for vertical-specific Demo Days.

The ability to pitch and get a quick response could be especially attractive to startups that need cash to finance their sudden scale after receiving the Quarantine User Loan I discussed last week:

Due to shelter-in-place orders, it’s an easier time than ever to get users on most synchronous apps (travel, IRL events etc excluded). But the opportunity is fleeting. These users aren’t a gift. They’re a temporary loan that will have to be repaid with a usage decline when social distancing orders relax. That means apps need to do everything they can to prove their worth and boost retention, knowing they won’t keep everyone once quarantines end. If they can stay above a sustainable concurrent user count after the loan is repaid, they’ll have a chance to snowball even bigger.

Fundraise From Home is a win-win for everyone involved, especially right now with the cancellation of all the IRL industry and social events where founders and investors might meet or pitch each other. Founders get a little of the Demo Day exposure to multiple investors at once without paying equity or having to perform back-to-back Zoom pitches all day. The investors get proprietary deal flow while attracting startups that might not have had the interest or access to pitch them one-on-one.

Other approaches to unbundling the accelerator include:

• On Deck, which centers around community and is basically the inverse of Fundraise From Home. On Deck charges $1,490 for its four-month program that fosters a peer network for founders and prospective founders of very early stage startups. It fuels company creation with co-founder dating and a speaker series, and while there’s no formal Demo Day, it acts as a scout for several venture funds that back it.
• Founders Embassy [Disclosure: My wife Andee Constine’s company], which concentrates on unbundling the educational aspects of an accelerator. It charges cash for its two-week IRL bootcamp for international post-seed startups. Founders Embassy is designed to get foreign companies connected in Silicon Valley with five hours per day of in-person expert instruction on every aspect of entrepreneurship, though it’s running a special week-long remote program this summer.

“As with most things, competition encourages differentiation” Hoover explains. “I believe Y Combinator will continue to thrive as the leading startup accelerator, but I don’t see this space as zero sum as founders seek additional support from other investors, advisors, and programs.” University and regional accelerators duplicating YC’s model with lower quality may fall out of favor, while there could be a fresh opportunity amidst the COVID recession for programs designed to rehab stalled mid-stage startups. You could see the emergence of these programs as the logical next step after the seed fund explosion that happened a few years back.

Charity as a product sandbox

Facebook’s first experiments with payments came through allowing donations back in 2013. It’s a shrewd approach since no one will complain the feature is interruptive, and it gets people comfortable with a new spending behavior. Now TikTok is launching its own donation stickers that let users pay without leaving the app. Turner Novak wisely suggests could be a pre-cursor to in-video commerce. That could let creators earn money so they focus on shooting content for TikTok, and meanwhile power direct response ads where spend hasn’t dried up like brand marketing has. Instagram just launched its own donation stickers, plus food order stickers to support restaurants during lock-down. Be on the lookout for more apps conveniently using philanthropy to test powerful expansions into commerce.

Snapchat, The Compass Company

Remember crowds? And trying to friends lost within them? Ahh, the sweet nostalgia. Well Snapchat has a fun though awfully timed new feature in the works called Friend Compass. It uses your phone’s gyroscope to light up green when you’re facing towards one of your buddies. Spotted by Nick Aguirre, Snapchat confirms to me that it’s looking to widely roll out Friend Compass soon. While dedicated social mobile location sharing apps like Foursquare were once all the rage, the need for messaging to arrange meeting up means these kinds of features are likely to instead end up integrated into chat apps like Snapchat, WhatsApp, and Messenger — though Snapchat’s acquisition Zenly has made progress as a standalone social map. It even built a shelter-in-place leaderboard to gamify safety.

Deep thoughts on: Suburbanization

“The features of cities have become bugs”, my friend & artist Ronen V told me. All the reasons people have been flocking to cities for decades — to live close to work, bars, restaurants, culture venues, and events — those are all liabilities in the coronavirus age. We may see a reversal of the trend and a rise of suburbanization if the crisis stretches on for years.

Why pay higher rents for less space crowded near more potentially infected people if you can work from home and the gathering places are closed anyway? It doesn’t matter if you live 1 or 1000 miles away from friends and concerts if you only interact with them over Zoom. You could pay less and get a private backyard for grabbing some air while most everything else stays the same. And thanks to the normalization of remote work, the worst parts of suburban life are less problematic. You don’t have to commute long distances by car and brave the danger of traffic accidents. As always, the drawbacks disproportionately impact the poor, as increased distance to health care and fewer public transit options in the suburbs hinder those without spare cars or time.

But what’s most exciting, if anything is allowed to be about this crisis, is what might happen to cities in the aftermath: they become affordable playgrounds for the young again. Suburban flight could finally stem the skyrocketing rents, allowing the young, underemployed, and creative to move back in. After a decade of impending tech monoculture, could we see artists from Oakland & the Outer Bay eventually creep back towards San Francisco? Less vulnerable to the virus, more inclined towards social interaction, and unconcerned with school districts or a freshly mowed lawn, cities might refill with the people they’re best suited for, or at least become less expensive for those that can’t leave.

“Steve Jobs famously fought for a singular bathroom at Pixar HQ so workers from different departments would mix, talk, and there would be emergent culture. I often used to tell this story explaining my love for my city, joking that New York is the Pixar Bathroom of the world” Ronen told me. “Unfortunately, the germy metaphor now applies much more literally than I’d hoped.”

What to consume: The Midnight Gospel

The Midnight Gospel from Netflix is brilliant because it reimagines podcasts as cartoons.

The show takes existing podcast conversations between comedian Duncan Trussell and a range of philosophers and authors, and then sees Adventure Time’s Pendleton Ward animate them as if the discussions were happening during different psychedelic visions of the apocalypse. Sometimes the cartoons recontextualize the chat in thought-provoking ways, while sometimes they just layer absurd technicolor comedy on top to make your brain work overtime. It’s reminiscent of Spotify’s lovely Drawn & Recorded videos (the backstory of ‘Smells Like Teen Spirit’ is hilarious). I think The Midnight Gospel will inspire many more experiments with visual accompaniments for podcasts, especially since the format could unlock new audiences and monetization for the spoken word.

Personal note

I’m starting my new job tomorrow as Principal and Head Of Content at VC fund SignalFire, and am honest thrilled to be starting this new learning adventure. Many of you have been incredibly kind offering your time and recommendations as I get up to speed. I just wanted to say thank you to you all, and to everyone reading this as I find my post-TechCrunch writing groove. Hit me up at joshsc [at] gmail.com with any feedback or ideas!

And your tech meme of the week

The ATMs knew…

via EmotionalClub

Moving Product newsletter #1 – The Quarantine User Loan

Oh hey there, it’s me, Josh Constine. Today I’m launching the Moving Product newsletter, a weekly look at the most interesting startup & tech product ideas. You signed up sometime in the past year, but if you check it out and aren’t into it, feel free to unsubscribe.

Today I announced I’m leaving TechCrunch to join VC fund SignalFire as a principal and head of content. There I’ll be learning to invest while writing about strategies that can help startups form, iterate, and grow. I chose SignalFire because it’s a different model for venture capital, offering portfolio companies an in-house predictive recruitment engine and a network of invested advisors who are incentivized to help our founders because they share in the rewards. You can read my bittersweet farewell post on TechCrunch here, and a deeper dive into what makes SignalFire special here.

On to what this newsletter will usually be about: inspiring product ideas.

Quarantine “loans” concurrent users to apps

COVID-19 quarantines are re-writing our behavior patterns. That creates plenty of opportunities for new startups and products. Fintech, biotech, and video conferencing are all seeing booms. But I think synchronous apps that require lots of users engaging at the same time are going to see outsized benefit due to what I call the “quarantine user loan”.

Synchronous services either snowball up to sustainable levels of concurrent users aka liquidity, or they fail to assemble users at the same time and dwindle into ghost towns. Even if a synchronous product has huge potential, it can’t deliver value to anyone unless there are enough other people there.

Due to shelter-in-place orders, it’s an easier time than ever to get users on most synchronous apps (travel, IRL events etc excluded). But the opportunity is fleeting. These users aren’t a gift. They’re a temporary loan that will have to be repaid with a usage decline when social distancing orders relax. That means apps need to do everything they can to prove their worth and boost retention, knowing they won’t keep everyone once quarantines end. If they can stay above a sustainable concurrent user count after the loan is repaid, they’ll have a chance to snowball even bigger.

You can already see the quarantine user loan reawakening old apps like Houseparty group video chat, which saw 50 million signups in a month, and fueling new apps like Clubhouse voice chat rooms, that’s become the hit of Silicon Valley’s elite. The opportunity has pushed Facebook to rush out its Houseparty-esque video chat feature Rooms, and Google to finally improve Meet. It will also be huge for work-from-home enterprise products, especially virtual offices like Pragli and Tandem that need bottoms-up adoption to prove to CIOs that they’re worth buying for their teams.

Some quarantine behavior changes will become permanent. But many apps will need a ‘second act’ new feature timed for when shelter-in-place subsides. For example, Clubhouse could let users create their own private Clubs within the app where only admitted members can access private chat rooms. That could maintain the intimacy that makes the app special today, and keep users interested so Clubhouse can avoid paying back the loan in full.

Celebrity Skin

The next form of celebrity and musician merchandise? Looking like them in video games. Beyond Travis Scott debuting his new song in Fortnite through a psychedelic, galaxy-exploring immersive concert 12 million people watched, the rapper and game company teamed up to sell Travis Scott skins for $15 to $20. While the revenue split is unclear, it’s a massive win-win regardless. The game becomes more appealing to a celeb’s fans while the star gets free viral promotion since each buyer literally becomes a walking, shooting billboard. Expect this to become part of the digital promotion blitz playbook and a bonus cash stream for games and avatar social networks.

Deep thoughts on fundraising

Hip City Reg aka Reggie James, founder of multiverse avatar social network Eternal described startup fundraising as a practice of bending without breaking:

I used to get spanked a lot as a kid. Mostly because I think the disrespect I showed to my parents was rooted in never yielding what I believed was true. Until the very last swat. In a way… this is what fundraising is. Getting smacked around while refining the details, yet unwilling to compromise on your vision of the world. How it is, how it ought to be.

Product Roundtable: Facebook Rooms

Facebook Mesenger Rooms is one of the new features that is relying on the quarantine user loan to prove its worth. It lets people create video chat rooms for up to 50 concurrent users, and then either invite friends, let Facebook promote their Room atop the News Feed to all their friends, or share a link to make it public.

My take is that this is one of Facebook’s smartest launches in years because its ubiquity, frequency of use, and social graph could let it promote each Room to the right people. That could bring spontaneous video chat to the mainstream, and let Facebook significantly boost usage time without relying on harmful and isolating endless feed scrolling.

I asked some of the smartest minds on social product for their thoughts. Here what they said:

Ben Rubin, ex-Houseparty CEO & founder of Slashtalk

Facebook is now full-on embracing the strategy of video *chat* as a platform. That’s the right strategy for the company now that a new generation is retreating to their bedrooms as the norm.  Intimacy was what Facebook lacked/ is still lacking; it’s what gave Snap life and what makes Houseparty important now. Regardless of COVID there’s a general trend “inwards” as a reaction to the millennial status seeking of the outward.

Josh Elman, Greylock/Robinhood/IRL

Rooms are important for Facebook to try to stay at the center of our social experiences. They are going to give it some of the most precious real estate – above your Facebook feed and are (probably?) willing to trade off views of the endless News Feed. They need to keep people within Facebook instead of spending hours in Zoom or Houseparty with friends. Feels like it might be just in time to keep people, like Stories was. Especially if it comes to Instagram quickly.

Esther Crawford, CEO of Squad

Video chats have grown exponentially during Coronavirus and it’s not slowing down anytime soon. 2020 is the year hanging out over video became normal, for everyone. For so long social platforms have asked us all to perform our lives for each other — so it’s refreshing to see a shift toward helping people authentically connect with friends and family.

What to consume

Beyond new synchronous apps, I’ve been loving Australian indie pop singer Mallrat, who feels like some cross between The Postal Service & Ariana Grande. She writes songs like “Charlie” about loyal friendship and longing for the sun: “I just want coffee for breakfast / I just want warm cups of tea / I just might love you forever / I hope you warm up to me.”

Thanks for being part of the Moving Product community!

What do you think of the newsletter? What should I write about next? I’m planning to explore the lack of a great dedicated meme sharing app, and explore the opportunities to unbundle Facebook like what happened to Craigslist. Reply or hit me up at joshsc [at] gmail.com with feedback or ideas!

Your tech meme of the week…