Spring 2010 Newsletter | El Dorado Ventures website
Brands Get a Powerful New Listening Post on the Web
By Jeff Hinck, EDV General Partner
Companies that sell products and services have always had sophisticated ways to monitor consumer behavior and preferences, including focus groups, analytical tools and demographic information.
But each of those monitoring methods is expensive, and each relies on the proactive collection of data. Moreover, the data are often from limited sample sets and only answer pre-determined questions.
As it has with many other aspects of business, the web has changed all that.
Now, consumers offer their detailed, nuanced and passionate opinions every day, for free, on web sites, blogs, Facebook, Twitter and scores of other online platforms. All a consumer product or service company has to do is scoop it up and analyze it.
Therein, of course, lies the rub.
There are 50 million Twitter "tweets" per day. There are more than 126 million blogs on the Internet, and another 40,000 are created everyday. There are millions of other opinions being offered on message boards and in news articles. This is an almost unimaginable amount of data to sift through on a continuous basis.
Furthermore, the data is not structured. Terms that may have negative connotations in certain circumstances can have radically different meaning in others. For instance, the word "cool" could mean something positive (say, the music at a restaurant) or negative (say, the coffee at the same restaurant). So while the data is available, it's not easily gathered and analyzed in a real-time, user-friendly environment.
Some first-generation services have emerged that give marketers a raw snapshot of what's going on online, such as the number of mentions and simple analysis of whether it was a positive or negative mention. Needless to say, this leaves marketers hungry for more specific and actionable data.
El Dorado has invested in a company that addresses this challenge: Scout Labs. Scout provides brands with a collaborative web-based platform for listening to customers and engaging with them across the Internet. At the core of Scout Labs is cutting-edge technology from the fields of natural language processing and indexing that enables the company to parse through millions of data points to provide actionable insight.
It's very easy to use and is priced starting as low as $199 per month.
Scout Labs collects all that disparate data everyday, and uses sophisticated analytics to give marketers in-depth insight into what's being said about their brands, competitors, segment and industry.
Already, Scout Labs has signed up brand mainstays like Coca-Cola, Disney and McDonalds as well as newcomers such as Netflix, StubHub and Heelys. They use Scout to:
Heelys — maker of the roller skate / shoe hybrids – and their agency partner, 358 Communications, are using Scout Labs to get real-time insight into who's wearing Heelys and what product or communications issues might exist. For instance, they noticed a number of people asking whether the shoes come in adult sizes (which they do), so Heelys is now working on campaigns to get that message out.
"Brands are protected online by packs of people now," says Jennifer Zeszut, CEO of Scout Labs. "It's not just the job of one person anymore. Legal, engineering, sales, corporate communications, PR and other functions need to be involved. Scout Labs democratizes the information and makes it very accessible, so it's not all being funneled through one ‘social media expert.'"
It was inevitable that marketers would find a way to gather and analyze all the information now flowing over the Internet. Over the next few years it will be interesting to see how they respond to all this data, and how products and services change as a result.
For a free trial of Scout Labs brand monitoring service, contact Margaret Francis at firstname.lastname@example.org or (415) 508-4700.
> EDV News
EDV Strengthens Cleantech Team, Names Bob Chiste Executive-in-Residence
Robert M. Chiste joined El Dorado Ventures as an Executive-in-Residence (EIR). Chiste will seek out new investment opportunities related to alternative energy sources and the smart grid. Chiste was most recently the Chairman, President and CEO of Comverge (NASDAQ: COMV), where he led the company's successful 2007 IPO. Comverge serves the utility and commercial and industrial markets with energy efficiency and demand management solutions.
> About El Dorado Ventures
El Dorado Ventures (EDV) is a leading entrepreneur-focused, early-stage venture capital firm with over two decades of success. Entrepreneurs see EDV as a trusted investment partner who shares their vision and helps them succeed by providing ongoing strategic guidance and access to a wealth of industry contacts. With $750 million in capital under management, the firm invests in disruptive technologies and business models in emerging and high-growth markets, across a broad range of sectors including software, technology-enabled services, communications and emerging technology. El Dorado's early-stage investments have included Compellent Technologies, Cyras Systems, EarthLink, Efficient Networks, Novellus and NuSpeed Internet Systems. Numerous EDV portfolio companies have gone public or been acquired by major technology companies including AT&T, Ciena, Cisco Systems, nVidia, Siemens, Texas Instruments and Yahoo.
What We're Looking For:
El Dorado Ventures seeks to invest in a select number of companies pursuing opportunities in the following broad categories:
|Portfolio Company News|
Salesforce.com Agrees to Acquire Jigsaw
Salesforce.com has agreed to acquire Jigsaw, the world's largest database of up-to-date, downloadable and complete contact and company information. The one million-member Jigsaw community and more than 1,000 enterprises use the Jigsaw directory to access information for 21 million business contacts and 4 million companies. The acquisition will combine the power of salesforce.com's suite of CRM applications and leading enterprise cloud platform with Jigsaw's cloud-based model for the automation of acquiring, completing and cleansing business contact data. EDV provided the seed financing for San Mateo-based Jigsaw and participated in the two subsequent rounds of VC financing led by Norwest Venture Partners and Austin Ventures. EDV General Partner Tom Peterson serves on the Jigsaw board. www.jigsaw.com
Convio Raises $46 Million in IPO
Austin-based Convio completed an initial public offering on April 29 at $9 per share, raising $46.2 million. Convio (NASDAQ:CNVO) is the leading provider of on-demand constituent relationship management software and services that give nonprofit organizations a better way to inspire and mobilize people to support their organization. EDV co-led the first round of venture capital funding for GetActive Software, which was acquired by Convio in 2007. EDV General Partner Scott Irwin serves on the Convio board. www.convio.com
Bridgelux Raises $50 Million, Names New CEO
Sunnyvale-based Bridgelux, a leading developer and manufacturer of technologies and solutions that will transform the lighting industry, raised $50 million in Series D financing, led by VantagePoint Venture Partners. El Dorado Ventures and all other existing investors also participated. The company also announced the appointment of William D. Watkins as CEO and a member of the board of directors. Watkins joins Bridgelux from Seagate Technology, where he most recently served as chief executive officer. EDV co-led Bridgelux' first round of VC financing. www.bridgelux.com
Drugstore.com Acquires Skinstore.com
Bellevue, WA-based Drugstore.com (NasdaqGM: DSCM) has acquired Salu Inc., the operator of Skinstore.com, a leading online retailer of clinical skin care and beauty products, in a cash and stock transaction. EDV led Salu's first round of venture capital financing. www.skinstore.com