In early October, FreshTracks attended the Village Ventures Fund Managers Meeting at the Intercontinental Boston.  This annual conference is an opportunity for the Village Ventures network to gather for 2 days of great relevant content about growth companies and venture financing, intertwined with a healthy amount of networking.  Below are some highlights from event:

Consumer focused Interactive Media Panel: Bo Peabody from Village Ventures, Dan Nova from Highland Capital and Bijan Sabet from Spark Capital

This segment focused on the current digital media advertising market.  Metrics bounced around included the CPM (cost per 1000) display rates on Facebook or MySpace hovering around $1, but content sites with traffic focused around specific verticals commanding a $15 CPM.   That being said, there is a need for scale, because advertisers want both content and scale, often looking for at least 5 million unique visitors per month.  The panel discussed the next big wave for digital advertising, with one member positing that targeted ads, delivered to set top boxes (DVRs & TiVos) in viewers’ homes would likely be the next digital ad innovation.   

There was also some talk about whether or not Facebook could design a healthy and profitable ad model for its site, since most users are there to connect to each other, rather than to a product or service.  This discussion led to Twitter, which is just beginning to work out its revenue model, even while its traffic continues to scale impressively.  There were some ideas surfaced about the search traffic on the site and how it could be monetized effectively, beyond Google’s AdSense-type of approach, since Twitter is real-time, focusing on what users are talking about now.  While there are many ad agencies approaching Twitter to try to get their clients in the door and advertising on the site, Twitter is largely refocusing those efforts, and recommending these advertisers launch their own Twitter sites so they can connect with their own customer-base and begin to gain traction on the platform that way to start. 

 

Gridpoint: Making the Smart Grid A Reality with CEO Peter Corsell

Gridpoint offers software, network operations and optimization to utilities to make the energy grid a smarter and more efficient network.  The premise of the customer pain is that the United States has an inefficient but ubiquitous grid, and that the Cap & Trade system on carbon that is expected to come to the US in 2009 will raise the price of carbon, and slam the power producing industry if they aren’t smarter about balancing load, storing energy and producing power. 

The theory is that household energy customers will become more complicated in the next few years, with more distributed energy production and storage occurring at households through PV panels, wind turbines, advanced storage technologies, plug-in electric vehicles, as well as better information and controls around HVAC systems, pool heating, and smart appliances will translate to a demand for the SmartGrid software.  Customers will need more visibility and control, and with GridPoint software, customers can respond to pricing and environmental signals, self-optimize, and act on their preferences.

One example is the highly anticipated Chevy Volt, a plug-in hybrid expected to hit the market in 2010.  When customers arrive home, park in their garage, and plug their car into the socket, they will want the option to pay $1.20 per gallon equivalent to charge the car during the day, or $.35 per gallon to charge the car overnight when the grid has more capacity, and rates are lower.  GridPoint plans to increase that visibility and help consumers make that choice around value-based differentiated pricing. 

 

Content & Company: Stuart McLean

Content & Company is working to turn the classic advertising model on its head.  Instead of having writers & producers came up with ideas, then sold the ideas to the networks as content portals, which then sold ads against the content to monetize the property.  Content & Company is working to create content for the advertisers.  This new model is to approach the advertisers to ask them how they want to present their brands, then connect them with writers & producers who design content tied closely into that product, then bring the property to the network & portals as fully baked ideas to distribute.  This model means that Brands can now be creators, financers and distributors of content.  He asked the provocative question: CSI New York, which is a piece of content, and Dominos which is a brand, both serve about 10 MM people a week.   Why couldn’t Dominos manage their own distribution?

The case study he provided was around a brand called Sunsilk, which is made by Unilever.  They wanted to target 25 year old women, and came up with the premise that “their life is a dramedy”.  Content & Company then took this premise and struck out to find the right people to create content with this in mind.  They designed a short-format sitcom that included 80 episodes at 3 minutes each.  Instead of trying to insert product placements into the content, there was a 5 second website promo at the end that pointed viewers to a custom website.  The brand then distributed the content through mobile (VCast), traditional media, PR (Variety Magazine) and online.  They also used viral channels (youtube & google), as well as blasting this to Sunsilk’s email base of women, posted content on their website, and landing a broadcast deal with TBS, who paid for the content and aired it as “Lovebites” during primetime.   Lastly, Sunsilk also placed the content in Walmart stores, so shoppers would have something to view while waiting in line, which fared so well that WalMart offered endcap placement in stores around the country.

 

Financial Services Panel: Jim Hale from  FT Ventures and Robert Hedges from Mercatus

On the financial services panel, there was discussion about the need for innovation in the sector, given the financial markets crisis, and the inability of major players to focus on innovation since their efforts must be focused on rebuilding their balance sheets.  That will mean more opportunities for young companies to design and launch new products in this space, and sell them to the big players.  There was also a shared sentiment that online capabilities are driving new account growth at top 10 banks in nation, such as Bank of America and Wells Fargo.  The panel noted that the other 8,000 banks will need to innovate online,  or will suffer the loss of market share over the next 10 years.  This dynamic should also present a big opportunity for startups to help these banks come up to speed online. 

 

Networking

In addition to all the content throughout the day, we also had a chance to unwind and network.  This included a trip to F1 Boston, where we strapped on red jumpsuits, climbed into gas fueled go-karts, and got to see just how competitive venture capitalists really are.  We competed in a series of heats that whittled the field down to the top 10 racers in our group.  Below are pictures of Village Ventures partners Matt Harris and Tom Davidson getting excited on the track, and FreshTracks partner Tim Davis congratulating bronze medal winner Dan Meyer from Point Judith Capital on his strong showing.