Brad Feld and Mike Brown Discuss What’s Getting Funded within the Social Data Industry and Why
We know the major players in the social industry, but the ways they receive funding and come into development is less established. Discussing the current state of social and where they see future funding going are Brian Feld of the Foundry Group and Mike Brown of Bowery Capital. Both lead venture capital firms that have helped some of today’s major players develop.
Discussing the status of the social space today Feld and Brown both focus on the mass of social data that is flooding the ecosystem. More and more data is being created, stemming from a growing number of places all of which is pressuring marketers and vendors alike to respond and manage. Brad expanded the definition of social data to include data from devices such as Fitbit, Nest, and other internet connected devices that generate data. Brown calls out the shift in thinking marketer’s are beginning to undertake around social, responding to the growing space and thinking beyond one or two social channels and embracing the massive spread with which they can distribute communications. Feld continues the discussion on the expanding space, explaining that his focus is not in growing the amount data, but rather on middle layers which can ingest the raw data and export it in ways that marketing organizations, hungry for new opportunities, can use.Feld explains The Foundry Group’s focus, as investors, is on finding solutions for what to do with the mass of data, how to deal with it, how to manage it across numerous systems and the accompanying privacy concerns.
— Dfuzr Industries (@dfuzrindustries) June 16, 2015
VCs ability to fund and push forward technologies and vendors greatly impacts the advancement of the industry. Examining their past investments, Brown calls out one regret in passing on funding Pinterest, while Feld takes a more optimistic view claiming he has no regrets on passing any current social successes (Twitter included). He explains that the current state of a VC often has the greatest impact on investment decisions, and while Foundry Group may have passed on opportunities to partner with future successes, it meant investment in others. Looking to the future of social, Brown and Feld center on the union of social data with other sources and the technological developments this will spur. Brown predicts a shift in marketers using social data as less as an input to budget and moving towards data becoming an output from increased automation across the spectrum. He also identifies the ability of social data to open up spaces in selling products, influencing the top of the funnel for lead identification as a future impact point. Feld builds upon this, highlighting the importance of machine analysis in growing analysis opportunities and in dealing with privacy grey areas. One area of social data combination that both discuss is the current industry focus of joining CRM and social data. Evident in the acquisitions massive CRM vendors have undertaken, the emergence of the “marketing cloud” illustrates this consolidation. Feld encourages innovators to look for gaps within these systems to understand where they can address problems not being answered by current solutions.
Newsflash: the amount of money you raise and how useful you are, are not correlated. Focus on your product. #BigBoulder
— Elizabeth Winkler (@lizwinks) June 16, 2015
Brown and Feld shared their tips for entrepreneurs seeking funding and ideas for development. Feld encourages those in a start up to not focus on funding but rather focus on the problem you are trying to solve, the customer you are addressing and how your product fits there. He calls out an industry trend to get carried away with “what’s hot” rather than what provides value and warns entrepreneurs against his. Feld builds on this, instructing those seeking funding to focus on why their product matters, identifying their core vision and mission and testing this with markets and buyers before going to funding. He recommends focus on identifying why it matters to people, and knowing that value before even seeking funding. All in all, the industry is changing and there’s an opportunity in providing customers unique value in the emerging gaps.