This week I visited my friends at K5 Ventures, an accelerator out here in Southern California.
I'm a mentor in the program, and have had the pleasure of interacting with some incredible entrepreneurial minds who are building the great companies of tomorrow. Some of these folks are quite young -- people who have worked at successful companies or have had early exits -- and some are seasoned pros with an already impressive track record. To boot, the accelerator network attracts knowledge domain experts to help shape the development process; this week, Sizhao Yang (creator of Farmville) spoke to the group about making social products and how virality operates in different contexts.
The best part about acceleration, at least in what I've found with the K5 model, is that it is a reciprocal learning experience: Nothing is normative in the way platforms are built, or how they go to market. This is critical in a day and age where knowledge and skills-building must adapt to radical shifts in the marketplace.
The idea of acceleration is also nothing new; accelerators in various forms have been around for the better part of 15 years (maybe longer). However, the way in which acceleration has evolved and spread is quite different -- at the core, it is essentially the seeding of a cultural idea that takes the form of a business, and then grows into a marketplace in which it will align with other businesses.
To that end, it is incumbent upon investors, entrepreneurs and market stakeholders (such as corporations) to engage in a constructive dialogue about the needs of the market (ultimately, the needs of people), and what culturally drives people to consume, share and make purchase decisions. These are also the levers from which all great 21st century brands operate.
[image courtesy of @lacma]
Here's a really good (and controversial) example: Pinterest.
Pinterest has grown into quite the phenomenon due to its quick adoption and ease of use, as "pinners" all over the globe share content with the aspirations of becoming the most popular curators within their social graphs. What most people don't know about Pinterest is that it is a derivative idea which didn't strike gold until it made some key discoveries about the marketplace. In fact, the founders of Pinterest unsuccessfully pitched five different ideas (business models) to investors before they made these discoveries.
One of these key discoveries was that users would limit their sharing within Facebook Timeline and within their newsfeeds. Pinterest also realized that brand marketers would have an easier time empowering people to share on their behalf if they had an outlet that didn't invade their personal space on Facebook, or, if they weren't "forced" to share on branded pages (which, before the new Timeline product came out, were losing their value with users). To add, a good number of progressive brands had been looking for ways to scale their curation practices more seamlessly across social platforms.
So, Pinterest decided to create an "extended feature", a feature that would serve as a curation platform catering to both users and brands, and the results have been, well, pretty impressive.
We can also look at an example that is sort of the "inverse" of the Pinterest model -- the start-up brand.
One example is a venture I've consulted through the K5 program that has developed an incredible brand ecosystem around a lifestyle product, one that helps women get fit and feel good about themselves (for obvious reasons, the entrepreneur and the company will remain anonymous).
The founder -- a woman who previously built a very successful medical product business -- took her learnings from retail and eCommerce and decided that she would build out all of her brand assets first (a system for use, aspirational rewards, wellness programs, etc.) before even thinking about the technology piece. And the idea will most likely work because she's identified a very specific need that will evolve the resulting technology... Not the other way around.
Now if you can imagine what this could mean for a major corporation, a major brand, wanting to scale one of its categories, you quickly see the opportunity. Many companies with large brand portfolios (Kraft, Pepsi, P&G, Unilever, etc.) can jump on something like this at the very early stages, and can invest "proactively". This means that they can vet the marketplace through the start-up, and at worst, they can use the learnings they find as a form of R&D, and at best, they can acquire the company outright.
Venture arms have been created within many of these companies to serve similar purposes, but what we are looking at here is actually quite different because it removes the need for the corporation to own the brand or the idea from the getgo. This is a win-win at a time in which entrepreneurs need room to grow, and a time in which corporations need room to learn more about emerging markets.
And so we find an interesting intersection at work here: Brands playing a key role (directly or indirectly) in the formation and scalability of start-ups, and start-ups quickly adopting the attributes of adaptable brands.
In terms of overall scale, this has tremendous implications on market and category growth because it means that brands -- whether built as grassroots vehicles or as extensions of legacy products and services -- can evolve at the pace of culture, not mass industry, which I believe is better for everybody in the long run.
What are some of the experiences you've had that could shape the brand-startup relationship?
How do you think think this could spawn a new kind of entrepreneurialism inside of major corporations?
