Angular Ventures
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Angular Ventures

Dror Shimoni, Naama Alon and Oz Alon, the founders of HoneyBook, an Israeli company which recently raised $250M at a $2B valuation.

Enterprise & Deep Tech Weekly

Issue #120: For the week ended November 9, 2021

The long road to creating a category
David Peterson

We spent a lot of time during the early years at Airtable pondering over how to describe Airtable to somebody who had never used the product before.

Is it a spreadsheet? A database? A spreadsheet-like database? Something else entirely?

What seemed like a simple task proved to be incredibly difficult. And my guess is a lot of people reading this newsletter, especially those in enterprise and deep tech who are developing technology on the margins of what is possible, are facing this exact challenge. Whenever you’re building something new, it’s difficult to figure out how to describe it in a way that’s meaningful to the average person.

This is the real goal of category creation, of course. Category creation isn’t about convincing a Gartner analyst to create a new Magic Quadrant with your company in the upper-right hand corner. It’s about creating the language to describe your solution and a broad understanding of how your solution is different from the status quo.

When we were banging our heads against the wall at Airtable trying to figure out how to describe a database in a way that wasn’t intimidating to the average non-technical user (uhh maybe an all-in-one collaboration platform? A super-powered spreadsheet?), we often sought inspiration (and solace) by looking at old Macintosh ads.

In particular, there’s a magazine spread from 1984 that should be required reading for anybody creating something so ground-breaking, so indescribable, that you don’t yet have the language to describe it. You can take a look at the spread here.

As you’re looking, remember, back in 1984, personal computers were still somewhat rare. The average person didn’t know what a computer could do. Why should they want one? What value could it possibly provide?

Knowing what we know now, those questions seem almost absurd. What can’t a personal computer do? But in 1984, these were valid questions that the Apple marketing team had to somehow answer.

Their strategy? List aspirational use cases. Make emotional appeals. Author lengthy (and stunningly visual) descriptions of features. A two-page spread showing off the mouse. A four-page spread demonstrating how you could cut, copy, paste and print an image!

Apple gave us marketing language like this:

“[The] Macintosh was designed for anyone who handles, collects, distributes, interprets, organizes, files, comprehends, generates, duplicates, or otherwise futzes with information. Any information. Whether it’s words, numbers or pictures.”

(So…it was designed for everyone?)

“For doing everything from problem sets in Astrophysics 538 to term papers in Art Appreciation 101.”

(But what does it do exactly?)

“If you own your own business, owning your own Macintosh Personal Computer could mean the difference between getting home before dark, and getting home before Christmas.”

(How??)

On the one hand, this seems like a bad approach. In product marketing, we’re told we should always focus our language on solutions, not features, generic use cases or platitudes.

But on the other hand, when few people know what your product does, perhaps your best option is to appeal to their emotions, stoke their ambitions and harness their imaginations.

It worked for Apple. For better or for worse, that’s what we did at Airtable, too.

So, if you’re creating something new and desperately trying to figure out how to describe it, try taking a page from Apple’s book. List some aspirational use cases. Employ some evocative language to try to capture the emotions your users might feel when they use your product for the first time. In the meantime, you’ll attract the early adopters who see the world as you see it. And sooner or later, once people start to broadly understand what is so revolutionary about what you’ve built, the category will be ready for you to create it.

EVENTS

Nov 10 / Product-Led Partnerships
Andrew Edelman, Head of Strategic & Platform Partnerships, Zapier

Nov 30 / David Peterson on Joining Angular and How the Future of Enterprise will be “Customer-Built”
David Peterson, Partner, Angular Ventures

Dec 8 / Fireside Chat with Leigh Moore, VP of Marketing at Snyk
Leigh Moore, VP of Marketing, Snyk

FROM THE BLOG

Three Methods of Venture Capital:
A guide to navigating a manic market as a venture capitalist (part 1).

Back to Basics — My VC Manifesto:
A guide to navigating a manic market as a venture capitalist (part 2).

How the “No Code” Design Paradigm is Revolutionizing Enterprise Software:
Companies like Figma, Airtable, Notion, and Zapier are doing much more than vanilla PLG.

Building Angular Ventures:
Announcing an $80M first-check Fund II for deep tech founders across Europe & Israel.

EUROPE & ISRAEL FUNDING NEWS

Sweden/Ecommerce. PriceRunner has been acquired for $1B by Klarna for its independent product and price comparison service.
Israel/SME Client Management. Honeybook raised $250M for client experience and financial management platform for independent service-based SME sized businesses, freelancers, and entrepreneurs.
UK/Flying Taxis. Vertical Aerospace raised $205M for its zero-emission eVTOL aircraft.
Germany/Investment Marketplace. Moonfare raised $125M for its investment platform which gives access to invest in private equity funds.
Israel/Self Driving. Autobrains raised $101M for its self-learning artificial intelligence technology for assisted and autonomous driving.
Germany/Ticketing Platform. Vivenu raised $48M for its ticketing platform which allows organizers of festivals, theater performances and conferences to create and manage their own ticket shop.
Sweden/Auto Monitoring. iMotions has been acquired for $46.6M by Smart Eye for its integrated analysis platform made to unpack human behavior.
Israel/APM. Lumigo raised $29M for its cloud-native application monitoring and debugging platform.
Israel/Legal Data Miner. Darrow raised $20M for its AI-powered legal claim mining software which discovers legal violations by some of the biggest corporations in the world.
UK/Digital Health. Closed Loop Medicine raised $17.5M for its personalised digital healthcare solutions to improve outcomes for patients and clinicians.
Germany/Pharma Supply. Qualifyze raised $14M for its online platform which conducts supplier audits to eliminate bottlenecks in the pharma industry.

WORTH READING

ENTERPRISE/TECH NEWS

Applied AI and Biology. Could biology, specifically drug discovery, be the latest, greatest application of AI? Demis Hassabis, founder of DeepMind, announced this past week the launch of a new Alphabet company called Isomorphic Labs. “Biology is likely far too complex and messy to ever be encapsulated as a simple set of neat mathematical equations. …as mathematics turned out to be the right description language for physics, biology may turn out to be the perfect type of regime for the application of AI.” Counterpoint from Jonathan Sheffi here.

Carbon Capture. Is carbon capture technology finally here? That’s the question posed in this deep dive from the New York Times on Climeworks (Switzerland) and Carbfix (Iceland), two companies taking different approaches to direct carbon capture.

HOW TO STARTUP
OpenCloud. Take a look at Battery Ventures’ latest “State of OpenCloud” report here. They propose a new “Rule of 20s” worth highlighting in full: it’s a “best practice [to try] to get 20% of your open source/community users to sign up for your product. Then, you should aim to turn 20% of those sign-ups into active users, and then convert 20% of THOSE active users to paid users. Once converted to paid usage, best-in-class companies benefit from 80%+ user retention, 130%+ net-dollar retention and 40%+ user engagement to fuel long-term sustainable growth at scale.”

HashiCorp!! Another big win for OSS. Check out HashiCorp’s S-1 here. Great breakdown from Ed Sim of Boldstart Ventures here. Particularly interesting insight into HashiCorp’s go-to-market strategy from the S-1 (and a good reminder that product-led growth companies could learn a lot from OSS): “The combination of our open-core, self-service, direct sales, and partner ecosystem components enables our powerful adopt, land, expand, and extend motion. Our open-source engagement and self-serve cloud model help us identify and accelerate initial product adoption and use cases. This broad footprint then allows our enterprise sales teams to target and sign these customers with subscription contracts for our software.”

HOW TO VENTURE
Future of VC from a Twitter Troll. Logan Bartlett of Redpoint Ventures talked about the future of venture capital with Eric Newcomer this past week. Read the interview here. We’re at the cusp of a new era, according to Bartlett, and investors drafting off their past successes and stuck in the old mode of working will be left behind. As Bartlett writes: “The VCs don’t want to evolve to the pace of play right now and what founders actually want. They look at their returns and the admiration from LPs and say, “Why don’t people want to work with me?” and founders are like “first off.. who are you? and second.. shut up grandpa” lol.”

Advice for Emerging Managers. Earlier this week, Hunter Walk of Homebrew published his advice for first time VCs. The whole piece is worth a read. One interesting, and potentially counterintuitive, piece of advice on risk-taking as a first-time GP: “If you do 100% of exactly what your deck said you’d do, I’m suspicious that you’re not being aggressive enough on responding to changes/opportunities in the market.”

PORTFOLIO NEWS

Zigi’s beta program has launched.

Planable has released their Holiday Marketing Kit.

Sisense’s VP of Analytics Solutions, Scott Castle, shares 5 common analytics mistakes and how to avoid them.

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Angular Ventures Weekly

Angular Ventures Weekly

Early stage. Enterprise Tech. Europe & Israel.