It was announced yesterday that SocialFlow raised $10MM in Series B funding and our kbs+ Ventures participated along with Fairhaven Capital (lead), Softbank, RRE, AOL Ventures, Betaworks, and Rand Capital. We blogged about our perspective on why we participated on our corporate blog but I wanted to add a few notes here.
I have been tracking SocialFlow ever since I was introduced to Frank Speiser at an event at Nihal Mehta‘s apartment in January 2010. After learning about what he was building and why, I quickly saw the opportunity to leverage the technology for marketers. Later that year, Frank give a talk at The Media Kitchen‘s Digital Media Venture Capital Conference and I’ve stayed in touch since.
When we found out that SocialFlow was raising money and was looking for a strategic or two to participate, it was a no brainer for us because of the trends that we are seeing in the space. I will explain those below.
1. Evolution of Communications Architecture: Way back when, the communications architecture generally consisted of Public Relations, Investor Relations and Paid Media. While those three still exist today and are still going strong, we’ve now re-arranged the construct to be Paid/Owned/Earned media. What you [as a brand] do and say in paid media can be made exponentially greater when you leverage owned and earned.
2. Communications Velocity: The speed in which communications hits the marketplace has increased rapidly. I don’t know of a “law” such as what we have with transistors (Moore’s Law), but I have to imagine that the speed in which we communicate has increased so significantly that old media cannot keep up. Within 15 seconds, I can put out 140 characters to my entire follower-base on Twitter, Facebook, Pinterest, Instagram, Vine, or whatever other communications tool. When it was just print ads, television ads, or even radio, it took months… sometimes a year (inclusive of production)!
3. Big Big Data: Almost every digital platform we use exhausts some form of data trail. This data trail can be collected, mined, and optimized into an opportunity or insight for a marketer (or any company for that matter). With the explosion of digital communications, there is a ton of data that’s available to optimize from. Making sense of this data thru frameworks, architectures, and algorithms, will allow marketers a leg up in the communication “wars” for customers. Note: It’s not about the size of the data set, it’s about the insight that’s gleaned.
4. The Shift of Dollars: We have all seen the charts that show time spent with a media channel vs. advertising dollars and the gap that exists in digital is still large. But it’s getting smaller, which means that ad dollars continue to flow into the digital landscape.
SocialFlow capitalizes on the four points above. They are smack in the middle of all of this. Many of the kbs+ Ventures portfolio companies also exhibit these traits (and others).
With our relationship with Frank, the evolved management team, and the market traction the company has, we were super excited to green light this investment.