Upfront Ventures


If you’ve watched any industry in the last 20 years where technology has begun to transform how the industry works the results are always predictable driven by what Clay Christensen appropriately called “The Innovator’s Dilemma” (one of the most influential books that changed my thinking about markets).

Young startups claim they are going to change the world, large companies that dominate that sector scoff at how low quality these new entrants are, until like frogs boiling in water they come to the realization that “this shit is real.” The next step is the industry tries to fight back.

TrueCar is the first ever Internet service that tells you exactly how much other people in your area paid for the car you want to buy. You enter your make, model, trim & year and out pops a price curve of purchases in your area and in most states you will then be offered a fixed price to purchase that car. More Americans buy cars through TrueCar (Upfront is a large investor through my partner Steven Dietz) than any other place by a long shot. I can’t imagine buying a car any other way.

So what could be wrong with price transparency in the auto sector? Apparently everything. As soon as TrueCar started growing at a phenomenal pace and dealers who understood it was an amazing channel to acquire customers (they only pay a fee if TrueCar sells a the car) a few dealers in every area started sucking up all of the sales. Luddite dealers started petitioning state governments to make TrueCar illegal.

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I become a venture capitalist in September 2007 – exactly 6.5 years ago.

I spent my first year developing proprietary deal flow and learning the business and then the Sept 2008 / Lehman Bros collapse / financial meltdown happened.

As a result I didn’t write my first venture capital check until March 2009 – exactly 5 years ago. That company was Invoca, which just announced a $20 million fund raise led by Accel.

I remain a huge supporter and am very proud of our accomplishments and hugely optimistic about our future.

5 years ago. It turns out it actually takes time to build a high-growth business with differentiated intellectual property and roll out large, enterprise-class marketing solutions. I remember a few years ago people (LPs mostly) used to ask me why I didn’t have any realized returns to show.

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A few years ago I started calling the local tech ecosystem down here #LATech. I had an agenda. We graduate more engineers in our greater region than anywhere else in the US. We have top 25 engineering schools than anywhere else, too.

I never wanted to be a derivative of Silicon Valley. I have the utmost respect for the tech produced by our northern colleagues and acknowledge it is the tech capital of the world and that won’t change. In fact, many people know I grew up in NorCal and still have a 650 area code on my mobile phone.

But.

LA has a serious technology scene. #LATech. And I’m proud of that, too.

Last week displayed the best of LA last week for a gala event of all of Upfront’s portfolio companies + the CEOs of many of LA’s top technology companies + 75 VC firms from LA, SF, NY & Boston + 25 LP Funds + the Chairman of Yahoo! (Maynard Webb) and the Mayor of Los Angeles, Eric Garcetti. We also had many senior studio executives and leaders.

I’ll try to publish some video from the event when we get a chance to edit some of it.

#LATech

It is not your mom’s old LA. We know the perceptions you have of our market from our past.

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Mark. You disappeared? What the fork happened to you?

And what’s up with this crazy new blog design? Well … more on that next week. I will tell more.

But for now …

Every year we run a big VC, LP & Tech Summit in Los Angeles (this year downtown) to showcase the best of our community and invite others from around the country. Our event this year will feature many portfolio companies and also emerging LA tech companies such as Tinder & Whisper. It is a CEO & founder gathering.

The Mayor will come and talk about LA innovation. And every year it seems a celebrity or two sneaks in.

I look forward to being back to blogging next week. And maybe sleeping, too.

Have a quick view below for what is in store at our Upfront Summit – a little bit of LA startup energy and creativity. Whaddayathink? (not that I can take any credit for it, but I’ll pass along the credit when I talk about my new spiffy blog).

Link here if image not turning up.

If you like it, spread the word with that little Twitter button up there – go on – give it up. And either way, join me in the comments section down there.

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I’m super proud to announce that DataSift has just completed a $42 million financing round coming at the end of a year where its revenue grew several hundred percent year-over-year. Considering our revenue is SaaS revenue this achievement is even more remarkable.

The timing of the announcement of this investment couldn’t have been timed more perfectly if we tried. Yesterday it was announced that Apple had acquired one of our competitors, Topsy, for more than $200 million. As this astute journalist pointed out, DataSift “likely would have cost a lot more to acquire.”

What gives? Why all the fuss about the Twitter firehose?

I started announcing

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Nearly four months ago we rebranded at Upfront Ventures. You can watch the video below for a very brief overview of why we rebranded and where we see our place in the VC ecosystem along with what has changed in our industry.

Often I advise startup companies not to try and pin all of your brand equity into an announcement. A brand is a marathon, not a sprint. It’s something you must earn over time by living up to the name you define.
If you choose your name well and it represents what your customers value in you then it will be memorable, differentiated and meaningful.

We have a few portfolio companies going through brand changes. And as a result I thought it was a good time to reflect on how we were doing with our own brand relaunch. We are trying hard to live up to the guidelines we laid out for our investors, our portfolio companies and our community.

Relaunching our brand is part of our larger initiative to build a VC firm of the future. We don’t lay claim to being the only VC to change or think about the future or to having the only or best strategy.

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