For Poncho, cool content is a breeze.
Associate Julian Moncada discusses LHV’s latest investment
In your own words, what is Poncho?
Poncho is this incredibly engaging weather app that came out of betaworks a few years ago. It sends targeted, funny, natural language weather reports through its signature weather cat, so unlike weather.com or your default iPhone app, you’re not going to get something sterile like, “78F and sunny.” Instead, it’ll populate info around a great gif, or tell you to wear layers, or let you know if it’s going to be a good hair day or if the pollen count is out of control. It’s also pretty exciting that Poncho was recently selected as a launch partner for Facebook’s messenger platform chat bot on Facebook messenger.
Why are you excited about Poncho?
A few reasons. One is their use of high-level tech to create a resonant brand. They’ve figured out how to take international weather data and cluster it meaningfully through big data analysis. They’re using all this information to build a voice — something that speaks to individual people in a relatable, scalable way.
Another reason is that right now, it’s almost impossible to find a category that doesn’t have a leading brand in the space. We all know ESPN for sports or CNN and MSNBC for news, but there is not a counterpart for weather, particularly delivered in a relevant way to millennials and Generation Z. Poncho is owning the weather space in a totally unique and dominant way.
Why is it so different?
In a word, content. Poncho has become a solid media company for “thin” content, and the tech ecosystem is really supporting short-form right now. We’re seeing SMS grow as a light content distribution platform, and messaging platforms are catching up. If you believe messaging apps are primed to compete as an information distribution layer, then one of the questions you have to ask yourself is, “What does a unit of content look like on these platforms?”
To answer the question, I looked at successful entrants in other spaces — Huffington Post for SEO, Buzzfeed for social, NowThis for video — and while there are evolutions there, no one’s really building content units for messaging platforms, because a lot of times, these paradigm shifts happen under the radar. Poncho is doing all the right things to position themselves in the messaging arena. They’re on to something that could extend more broadly and could define how we distribute information going forward. That’s the big vision, and it makes Poncho a very interesting proposition.
Poncho is focusing on thin output, but Facebook just overhauled their algorithm to promote robust content. Do you see these approaches reconciling or being part of the same ecosystem?
Facebook is promoting deeper content on its newsfeed at the same time it is launching bots on its Messenger service.
Short-form and long-from will always exist together — and likely on different platforms — because they have different purposes. Thin content is the discovery layer for longer-form content, because not everyone needs to dive 1,000 feet deep right away. Think of it as the difference between a morning show (short-form) and the evening news (long-form). The morning show goes for the light story, in some cases because it can exist on its on own, and in some cases because it’s the teaser for the long-form, in-depth stories the nightly news will cover.
Poncho is fueled by a writers’ room. How do the human element and the bot element work together?
It’s important to understand that with Poncho, we weren’t just making an investment in an algorithm or in AI. Something that’s true of a few of our other investments like CrowdTangle and NewsCred is that technology can empower media and content. In many ways, that’s why Poncho is so incredible. We saw competitors try to build a similar product, but because they didn’t have the tech on the back end, they couldn’t scale efficiently and provide the right content to users. For Poncho, bots enable the feedback loop that informs the technology platform, but they also show the writers what’s relevant, what resonates. In this case, bots and humans have a totally symbiotic relationship.
There’s been a lot of talk about 2016 being the year of the bot.
It’s very early, so I think there’s a lot of confusion around bots. Right now, some people think of “bots” as vehicles for the artificial intelligence (AI) revolution, and other people view them as distribution layers for efficient communication. In the next year or two, I think “bot” will be disaggregated into multiple words with specific meanings for each use case. But that’s a whole separate conversation. What is clear is that the bot landscape is going to fill up fast, and there will be a real first mover advantage for companies that can build a useful brand around their bot. That is why it is important that Poncho has been a launch partner for bots on Facebook and Slack, and remains at the forefront in this area.
Poncho is such a specific offering. Was that a hurdle or a benefit?
With investments, there’s not always a huge mass-market problem to be solved or a vertical in need of disruption. Truthfully, in the VC world, there’s a mix of business and opportunity behind every deal, but none of it matters if the audience doesn’t care. With Poncho, we followed what people wanted. The data proves this isn’t a one-and-done situation; people are coming back every day, and building Poncho into a “daily habit” company. Users are vocal about how much they love their forecasts. They’re advocating for the brand, and that kind of loyalty and support is the way all quirky things thrive and survive.