Duo Security: Making Advanced Security Available to All

Today we are excited to announce that Redpoint is leading a growth investment in Duo Security, an emerging leader in the two-factor authentication market. Dug Song and his team have architected an enterprise security solution that is elegant, highly effective, and easy-to-use and deploy. We’re proud to back such a renowned security team expanding the two-factor authentication and access security market to all enterprises.

It is no secret that security breaches are the frequent subject of newspaper headlines. Hackers are becoming more and more sophisticated, and the cost of each breach continues to rise. One of the most common causes for these high-profile security breaches is employee credential theft. With more employees logging in remotely to a variety of corporate data and cloud services, hackers with stolen credentials can access large amounts of sensitive corporate data. While virtually all enterprises have advanced perimeter security defenses, these defenses are not optimized to stop a hacker logging in to a corporate server or cloud service with stolen, yet valid, employee credentials. Two-factor authentication solutions emerged to solve this problem initially through hardware-based token products that proved to be very expensive and cumbersome to use and (not immune from being hacked, as RSA found out a few years back). As a result, until recently, only the largest enterprises embraced two-factor authentication, leaving thousands of other enterprises vulnerable to security breaches based on credential theft.

Recognizing this opportunity, Dug Song and Jon Oberheide (both previously of Arbor Networks), set out to solve the problem by creating a flexible, easy-to-use, two-factor authentication solution for all enterprises leveraging the ubiquity of the smartphone. With Duo Push, users simply type in their credentials and with one-tap on their smartphones they can log into their corporate VPNs, SaaS platforms and on-premise applications. Entire enterprises can be deployed in a matter of hours through a fast self-enrollment process, removing the need for complicated provisioning of hard tokens or clunky mobile apps and SMS codes. Additionally, Duo Security provides easy integration with dozens of cloud apps and allows enterprises to create many custom security features and policies.

Sometimes the most interesting opportunities happen when the right technology meets the market at just the right time. In the case of Duo Security, enterprises of all sizes are realizing the perils of credential theft and the need for two-factor authentication for their employees. By providing the most secure, least invasive, most usable solution to this problem, it is no wonder that Duo Security has managed to quickly grow and land over 5,000 customers including: Facebook, NASA, Box, Paramount, Toyota, and WhatsApp. Dug and his team are committed to providing their customers advanced security solutions beyond two-factor authentication, and just today announced Duo Platform which allows IT teams to define policies for access, automate enforcement of controls based on risk, gain visibility into access-related security threats and get insight into the security profile of end user devices.

Redpoint’s growth fund looks to partner with emerging market leaders and founders who want to build large independent companies. We are very excited to be working with Dug and his team, which now includes Zack Urlocker as COO. Zack previously held that role at Redpoint portfolio company Zendesk and no doubt plans to bring the successful Zendesk growth playbook to Duo Security.

Congratulations Dug and team on the tremendous progress so far. We are looking forward to working with you on the journey ahead!



Andy Rubin Joins Redpoint

Most people know Andy Rubin as the creator of Android. I know Andy as a twenty-something engineer at WebTV who had built a sleeping loft above his cubicle so he didn’t have to leave the office. 20 years, 3 successful startups, and 2 billion Android devices later, Andy is joining Redpoint as a Venture Partner.

WebTV was one of the first companies I ever backed as a venture investor. It had one of the most impressive groups of technical founders with whom I have ever worked, and Andy was one of the first engineers they hired. I noticed Andy was exceptional right away, not only because of his loft, but because he possessed an uncommon combination of technical skill and vision. He developed the first platform that connected the web to people’s televisions. WebTV grew rapidly and ultimately sold to Microsoft for $500 million.

When Andy left Microsoft and co-founded the smartphone pioneer Danger, Redpoint was early to invest. As CEO, Andy built Danger from nothing into the must-have tech gadget of its time with over 2 million devices, and fans like Paris Hilton and Snoop Dogg. Danger invented and deployed many of the core smartphone services we use today. Among Danger’s technical firsts were integrated messaging, mobile video, over-the-air OS updating, and the app store. Soon after Danger achieved scale, Andy left and joined Redpoint as an Entrepreneur in Residence. He was a colleague to Satish Dharmaraj who was incubating Zimbra in our offices and later, also joined us a Partner.

It was in Redpoint’s offices that Andy first conceived Android. Ten years later, Android has become one of the most widely adopted technologies in the world, an operating system powering billions of devices. Andy’s expansive vision isn’t just limited to technology. Android’s success depended on discovering the right go-to-market model and pursuing the key business relationships that were required to make it the enormous success it is today. Andy sees what’s possible well before most people.

Whenever I visit Andy, he always has the newest thing, the yet-to-be available gadget.  Years ago, he smuggled from Japan the smallest flip phone in production. He kept robotic dogs as pets. Andy bought one of the first Segways and immediately drove it up a half-pipe, just to see how the gyroscopic systems would react. At Google, he modified a huge auto manufacturing robotic arm to make a cappuccino and stamp the Android logo on it in chocolate. Later, he had a near life-size humanoid robot that followed you around. It’s this wonder and passion for technology that enabled Andy to change the world three times over.

We started talking in earnest about Andy joining Redpoint twelve months ago over a cup of coffee at his wife’s bakery in Los Altos. Andy had some big ideas about the evolution of hardware and software, but he wasn’t sure whether he would pursue them through his own hardware-focused incubator, Playground, or as a partner at Redpoint. Ultimately, we decided he should do both, and so we partnered a fourth time. Andy has become a Venture Partner at Redpoint, and Redpoint is the first investor in Playground.

Andy is a perfect complement to our team at Redpoint helping founders of mobile, marketplace, SaaS and infrastructure companies achieve their ambitions. There isn’t a founder out there that won’t benefit from Andy’s ideas, experience and industry connections.

Andy is already evaluating and backing companies with us, and we’re excited to see how he can help Redpoint founders moving forward. We’re thrilled that he’ll be a part of our team identifying the next great startups and working with teams to realize their full potential.


LinkedIn Buys Refresh

Today LinkedIn announced that it is buying Refresh, the mobile app that helps you discover common ground and build stronger relationships by serving up dossiers on the people you meet, just as you need them.  We’re proud to have backed founders Bhavin Shah and Paul Tyma from the company’s early stages and we’re excited to see Refresh join forces with LinkedIn.

I’ve spent a lot of time thinking about what it takes to be a successful founding CEO over the years. Some founders spend years speculating on the next hot trend with sizable market potential, then convince themselves they’re in love with the idea. Occasionally, it works. But most great founders are driven by something else — an experience or insight they’ve gleaned from the real world that they believe can lead to something much bigger. This was the case with Refresh.

Twelve years ago, Refresh founder and CEO Bhavin Shah was head of business development at LeapFrog when he received a call from the US Department of Health and Human Services. The Federal Government was in the middle of in rebuilding of war-torn Afghanistan and seeking ways to improve the nation’s infant and maternal mortality rates. Many of the population were illiterate and lacked basic education on health fundamentals like immunizations and sanitation. The answer, they hoped, was the LeapPad: a book that could read itself aloud.

Two years later, Shah found himself en route to Afghanistan to help distribute the devices when he received a copy of a briefing book addressed to Tommy Thompson, the US Secretary of Health and Human Services. The thick binder was full of reports related to the trip: weather forecasts, itineraries, and personnel dossiers. The first meeting on the docket after landing was with Dr. Sohaila Seddiq, Afghanistan’s Minister of Public Health and head of the women’s health initiative. Shah noticed that Secretary Thompson was studying his Briefing Book; Shah could follow along too, since he had a copy. This was Thompson’s fourth meeting with Dr. Seddiq, it told him. It knew where they’d first met, the promises he’d made, and a smattering of other details that had been meticulously recorded by Thompson’s aides.

The meeting proceeded seamlessly, Secretary Thompson conversing with Dr. Seddiq as if she were an old friend. As Shah watched on, he began to see that the binder wasn’t merely for streamlining logistics and keeping up appearancesit changed the dynamic entirely.

It quickly became a trend. In the minutes before pulling up to the Royal Palace to unveil the LeapPad project alongside Afghan President Harmid Karzai, Shah watched as Secretary Thompson once again pored over the binder, periodically checking key points with aides. An hour later, Thompson was congratulating President Karzai on his recent election success, referencing long-ago conversations that quickly rekindled their rapport. The tablet’s debut was a marked success.

After arriving home, Shah found himself wishing for a binder personalized for his own life. The idea faded, but it never disappeared. Six years later, as Shah looked at the growing amount of information people were sharing publically, as themselves, he found himself thinking back to the binder, to how powerful the right information at the right time can be — and Refresh was born.

We’re happy for Refresh to team up with LinkedIn on this next phase of its journey.  We remain intrigued by the next wave of applications coming out of advances in ambient intelligence.  And although they may not all contain stories with Afghan presidents, we’ll continue to look closely at founders with those aha moments.


Building a Strong Talent Community

Redpoint‘s reputation for supporting founding teams was the main reason I joined the firm last fall to head up Talent. My role is to work with our companies and help them build the right sized recruiting and talent programs.  I love working with our founders and finding ways both big and small to help our companies grow and succeed. Now that I’ve been here six months and worked closely with Redpoint’s partners, I have an even greater appreciation for the issues our companies are facing at both the early and growth stages.

Recently we brought together a group of talent leaders from our companies, including Beepi, Vurb, Homejoy, Coin, and others, to have them meet one another and share their experiences building talent programs. Turns out this group is so passionate about talent there wasn’t enough time to cover everything, so we focused on three main themes. Below is a summary along with some practical advice from Redpoint talent leaders on what helped them be successful their roles.

Branding: What’s Your Talent Brand?

In this highly competitive market, your company’s reputation and brand are key factors in being able to hire the right talent. How you showcase who you are as an employer greatly impacts your ability to attract – and retain – great talent. Every company should be thinking about their Talent Brand and even small, early stage companies have easy opportunities to focus in this area. Highlighting your culture and employees on your company career site through things like videos, pictures, and testimonials from employees is the best place to start, but there are so many other areas to think about. Many of our companies work with LinkedIn career pages, Glassdoor, The Muse, and Stack Overflow, to tell their story where the candidates are looking for jobs. A great piece of advice from the VP of People & Brand at Pocket Gems, Carrie Simonds, is that developing the content to show off your Talent Brand shouldn’t be only recruiting’s responsibility. Partnering with Marketing and PR is a great way to develop your company’s narrative and ensure there is a consistent and compelling message across all channels. Most importantly, make sure your narrative describes an accurate picture of what it’s really like to work at your company because candidates and employees will know when it’s not authentic.

Engagement: Turning Employees into Recruiters

Everyone who is working at a high growth company needs to make recruiting a top priority. That’s right, I said everyone; growing your company shouldn’t be solely on recruiting’s plate.  The best ambassadors for your company are your employees and when employees are engaged with recruiting, it helps your brand and has the ability to attract talented stars that are already in your employees’ networks. Most companies will say that hiring and recruiting are priorities, but do their calendars reflect that? That is a question that Coin’s Head of Talent, Jack Shahin, calls critical. Actions speak louder than words. If employees aren’t spending time interviewing, attending meet ups and events to help find talent, taking time to help with outreach to candidates, then recruiting isn’t a priority.

To help employees get out there to network and meet potential candidates, pair employees up to attend events together or, even better, host an event at your own company – a great way to show off your office space and an easy way for employees to talk with many people about what it’s like to work at your company. Schedule time for an entire team to get together and have a sourcing session and don’t let them leave until they each give you 5 names of potential leads (bring food)! And since people love talking about what they do, get them to write it for a company blog – a great way for candidates to get insight on who their potential teammates will be and for these employees to feel valued.

Another great way to help employees think like recruiters is to get them involved with creating the job descriptions – ask them if they would be interested in the job the way it’s written and if not, have them help write a better version. Use interview debriefs (yes, you should be having them for every candidate) as opportunities for employees to really think about how to add the right talent to the team. Prabha Krishna, who is leading recruiting efforts at Jaunt, says when they review candidates, the interview team asks “will this candidate help us hire the next person?” By trying new ways of engaging your employees and having them be the voice of your brand, it’ll be like you have a whole company of recruiters and your recruiting efforts should be much more successful.

Success: Measuring the Value of Talent Acquisition

So your company is trying all these different recruiting methods and hiring people across the board, but how do you really know which methods are working? How do you measure the success of your efforts? There are many different types of metrics you can use .  Our group of talent leaders relied on these:  time to fill the position, cost of recruiting per hire, sources of hires, the percentage of hires that come through employee referrals, quality of hires, how long candidates are in each stage of the pipeline, offer acceptance rate, and reasons for any declines. There is also tremendous value in a satisfaction rating, by asking new hires (and candidates that ended up not getting hired) how the recruiting process went so you can get real feedback on what people are experiencing as they go through your recruiting process. By telling the right story to your business leaders, they begin to understand how valuable the talent acquisition programs truly are.

We all know how tough it is to attract and hire a rock star team, and having a strong talent leader in place to partner with the business is critical. The dialog with Redpoint’s Talent Leaders during this event let me see first hand how strong and creative this group is; I know we’ll continue to learn from one another for quite some time. It’s exciting to see all the great employees they on board at their companies. I can’t wait to meet up with them again and hear how they did it.

Drop me a line if you want to connect about any of these topics or if you’re interested in becoming a talent leader at one of our companies.



Backing Collective Health

I don’t like my existing health plan.  I have good coverage and access to great doctors, but I still find the overall experience to be really frustrating.  Every time a member of my family sees a medical professional, an onslaught of mail follows providing a lot of data, but very little insight.  “THIS IS NOT A BILL” is stamped over the countless statements I receive, but in the barrage of numbers there is no clear explanation of benefits or a summary of where I stand relative to my deductibles.  Deciphering the communications takes way too much time and I have an uneasy feeling that somehow I am getting screwed.   The web experience for customer service and support is equally baffling, so much so that I most often opt to calling customer service and sitting on hold for a while to get basic questions answered.

What’s worse is that as an employer, I have very little control of building the health care plan I want for my employees.  Outside of very large companies, businesses are stuck choosing from a limited set of plans that aren’t customized or differentiated in any meaningful way.  Aside from payroll, healthcare is the single most employee benefit a company provides and, by and large, their employees aren’t really satisfied.

Now imagine a health plan that provides great coverage and access to the best doctors, while also providing an incredibly easy to use web and mobile interface to access coverage data, deductible information, and even anticipated costs of pending procedures, etc.  As an employer, imagine having the ability to build your own plans optimized to your employee base and offering truly differentiated benefits.

In an effort to make this a reality, we are pleased to announce our investment in Collective Health.  Collective Health is a technology company that has built a powerful software platform and partnered with leading healthcare networks to provide a breakthrough healthcare experience for employees and employers. It is the healthcare plan I want and I believe you will too.

While we were drawn to the product and market, as always, our primary motivation is the people.  Founders, Ali Diab and Rajaie Batniji, have built a remarkable team bringing to together data scientists, designers, software architects, healthcare experts, and actuaries uniquely suited to take on the task of building a better health plan.  It is a bold idea and we love partnering with teams with huge ambitions ready to face whatever challenges may come.  We are thrilled to partner with them on their journey and look forward to helping discover how good a health plan can be.


Why Every Tech Company—Large and Small—Needs a China Strategy

Everyone knows that China is a complex place for U.S. companies to do business. From the obvious cultural and language differences to the regulatory landscape to the sometimes unpredictable political climate, it can be a country where even the most experienced entrepreneurs and executives stumble. Nonetheless, it is an increasingly vital component of any company’s long-term strategic plan, particularly when it comes to tech.

That is why Redpoint recently hosted a gathering of our founders and CEOs to talk all things China. Our firm has been active there for more than a decade, investing in excess of 30 China-based startups, including such standouts as Qihoo 360, iDreamSky, and APUS. With offices in Beijing and Shanghai, Redpoint is an established, well-networked presence on the native tech scene. More than that, we have friends who know what it takes to be a winner in China. We invited two of them—Tao Li, a former Qihoo 360 executive who is now CEO of APUS, and Jim Wilkinson, Alibaba’s Head of International Corporate Affairs–to share their perspectives.

Most global tech companies already understand the importance of China. But startups often misunderstand that many of the same economic drivers apply to them as well. They believe that because they are small or just getting to market, they don’t yet need to consider the China question. This kind of thinking is short-sighted. Why? It comes down to the three Cs: Cash, Customers, and Competition.


China is awash in cash and anxious to invest it. Tech giants like Alibaba, Baidu, Tencent and others are investing in homegrown and international startups like never before. In fact, the number of venture-backed technology companies coming out of China has increased six-fold in just four years. “Every U.S. company needs to have a strategy to get money from China,” explains David Yuan, the partner heading up Redpoint China. “It is increasingly a funding source. This is a way for Chinese companies to learn and penetrate the market.”

This spending spree is in part due to a maturing local venture capital community as well as the emergence of big global brands and platforms like Alibaba in China. One-third of the top 20 Internet companies as measured by market cap are China-based. They are looking to deploy capital in ways that can increase their reach both domestically and internationally. Wilkinson says Alibaba, for instance, “will look at anything to attract more people to its platform or improve the user experience.” That, he says, translates into opportunities for innovators with disruptive technologies as well as companies selling goods and services that China’s massive population wants. That’s why Alibaba in 2014 alone pumped cash into a wide array of startups, from Lyft to FirstDibs to Tango. This investing trend is likely to accelerate and include outright acquisitions, some of which will be very high profile companies.


Whether on the consumer or enterprise side, China represents an endless stream of possible customers. The numbers tell the story—700 million internet users, more than 300 million online shoppers, 520 million smart phone users—just to name a few. It is virtually impossible to ignore such a gargantuan market, which is why companies of all shapes and sizes are teaming up with China’s behemoths to bring American goods to Chinese consumers. Even giants like Amazon, which just announced the opening of a storefront on Alibaba’s Tmall.com, understand the importance of partnership. “Companies can go through Alibaba to get to the China market,” explains Wilkinson.

In fact, going through Alibaba or other native platforms may be the only way for U.S. consumer companies to reach China’s population. While seemingly more open than it was even five years ago, China remains a country governed by a strong nationalist interest, which often shows itself through protectionist policies. The Chinese government is actively discouraging local companies from buying American products and services due to security concerns as well as a basic philosophy that all key markets should be dominated by homegrown companies.

Both Wilkinson and APUS’ Li caution anyone looking to do business in China or with Chinese companies to first understand the rules of the game. Wilkinson says most people’s notions about China are outdated. He advises companies to visit multiple times to educate themselves before doing deals. That means not just understanding the business climate but also the political and regulatory climates as well. Even better, says Wilkinson, is finding a Chinese entity to guide you. “It’s very hard to go it alone,” cautions Wilkinson. “You need a partner.”

Putting in the effort is more than worth it, says Li. Significant opportunities are still available in China, particularly for those focused on the enterprise space. That market, says Li, is only now developing as China looks to the U.S. and elsewhere for the next waves of innovation. Smart young companies can and should take advantage while China’s tech and business community still welcomes their ingenuity and next-generation insights. “At the entrepreneurial level, you can do well in China,” explains Li, noting that won’t always be the case as China continues to move up the learning curve.


While China can be a potent partner, it is also a ferocious competitor. The local tech scene, once content to copy successful U.S. business models, is now able to innovate and develop in ways that rival the U.S. like no other country can. Indeed, China has the talent, resources, and ambition to match and in some cases outdo Silicon Valley on the global stage. Look no further than Li’s APUS for proof. In just six months, the company, known as a launcher for Android, has more than 100 million users—almost all of whom are outside of China.

To some, China’s broadening influence may seem threatening. But smart entrepreneurs should instead view it as an opportunity, particularly in the U.S., a market that is coveted by Chinese tech companies. “Chinese companies want legitimacy on the global stage,” explains Wilkinson. “They crave it from the financial centers in the U.S. So working with U.S. companies is like they’ve made it.” Adds Li: “Most Chinese companies want to be in the U.S. but they are not ready.”

That is because just as Americans struggle to understand the ins and outs of the Chinese market, the Chinese have the same problems when it comes to entering the U.S. They need—and are actively looking for– American partners to help pave the way. Li says it’s important to take advantage of this educational period now. China will only need our help for so long, he says.

Beyond the U.S., China’s interest in other countries, from Brazil to Indonesia to Russia, can yield more possibilities for startups. Li says Chinese companies are globally focused and looking to build products and provide services for U.S. startups with breakthrough technologies. “China will be a bridge into other big markets,” says Li.

This is all good news for Silicon Valley and U.S. tech companies in general. Done smartly, companies in the U.S. and China, both large and small, can find ways to help one another. Redpoint is seeing that every day and remains committed to working with the only other country in the world with a self-sufficient ecosystem devoted to finding and bringing to market the next great innovations.


Why Most High Stakes Cyber-Attacks Are Detectable

Cyberattacks are eroding trust in all things connected — from websites to apps to ATMs. But it doesn’t have to be this way. The crooks have gotten smart, so companies and enterprise security providers have got to get smarter. Unfortunately, most are struggling to catch up to the sea change in cyber-crime. All of the increased efficiency, productivity, interconnectedness and innovation of the digital era has been deeply undercut by a rash of security breaches. The worst part: many of the high profile cyber-attacks making headlines in recent months were entirely preventable.

In February, Kaspersky Labs reported that the Carbanak family of malware had robbed banks of as much as $1 billion since 2013. It’s no surprise that the banking industry has typically adopted and deployed the cutting edge of security technology. This is because financial institutions are obvious and perennial targets for thieves that have deep enough pockets to invest heavily in cyber-security. What is surprising is that a few spear-phishing emails opened back doors for criminals that slipped in and out of bank accounts and ATMs unnoticed for months or even years. How is this possible?

To better understand how the malware used in these attacks evaded detection by traditional security technology for so long, we dissected dozens of Carbanak malware samples using the Lastline Breach Detection Platform. In a matter of minutes, we discovered that the malware was written to bypass traditional signature-based security tools and to use stealthy and evasive maneuvers to avoid detection by first-generation sandboxing technology.

Simple malware is like a bad poker player — it often has “tells” that give away its maliciousness right off the bat: executables that blatantly set out to extract and transfer personal data, keystroke loggers, and so forth. Advanced malware has a better poker face. It hides its intent — going on loop, stalling or otherwise cloaking itself — while it is being analyzed by security tools at network perimeters. Once these stealthy and evasive programs slip into target systems, they are able to do their dirty work and take home the jackpot without raising suspicion. But, as in poker, there are often subtle and sophisticated signs of bluffing malware that make it detectable. In fact, 93% of the Carbanak family of malware we studied exhibited 10 or more malicious or suspicious behaviors. This malware family was arguably made up of bad poker players that managed to bluff their way into a cool billion dollars.

Unfortunately, the security infrastructure in banks, retailers, even governments, is aging and overly reliant on three things: signatures, deterrents and people. Cyber-criminals know this and the most sophisticated among them are getting away with an incredible number of attacks that exploit these vulnerabilities. Signature-based security systems like anti-virus scanners that aim to blacklist certain code from entering a network or device based on a database of known threats cannot keep up. The automation of malware distribution, the availability of affordable and highly effective malware for sale and the increasing payouts for criminals who are robbing organizations and individuals means that simple deterrents are useless. And when your security is reliant on hundreds or thousands of people following protocols, remembering training from years ago or intuitively flagging a phishing email when they see one, you’re in trouble.

One advanced security tool that uses behavior-based, rather than signature-based, approaches to detecting advanced threats is called sandboxing. According to Gartner, sandboxing is the fastest growing category of advanced threat defense. (This is excellent news for my company Lastline, since sandboxing is a cornerstone of our breach detection platform.) The rapid growth of sandboxing is due in part to the fact that signature-based technologies like traditional firewalls and antivirus scanners are missing malware that sandboxes can detect. But as companies wake up to these threats and implement basic sandboxes, malware authors are studying sandboxes and actually targeting them by creating environmentally-aware malware that can sense it is being analyzed.

Thus it is crucial that, in order to coax the “real” behavior out of malware, a sandbox be stealthy itself and act as if it were a target machine. If the banks robbed by the Carbanak family of malware had a stealth sandbox in place they more than likely would have detected the malware as it entered their systems and again as it attempted to proliferate. And many of the hacked retailers, Internet services, restaurants and even government agencies can take a page from this.

Cyber-attacks are inevitable, but very, very few are undetectable using available security technology combined with a strong security team and/or managed security service. For financial institutions to go months or even years without detecting these breaches is unacceptable. And I’m afraid these publicly disclosed breaches are just the tip of the iceberg.

The good news is that it’s not too late. If most past high profile cyber-attacks were preventable, most future attacks are as well. The security community has to step up its game because the crooks are all in and playing with a loaded deck.


Data Warehousing for All

At Redpoint, we’re always proud to support our portfolio companies and it’s gratifying when one receives industry recognition for its accomplishments.

In case you missed it, last week the O’Reily Strata + Hadoop Conference held its fourth annual Startup Showcase where a panel of judges picked the best data-driven startups.  The first place winner was Snowflake Computing, a company we are honored to back for its veteran team, timely vision,and killer technology.  A good recap of the conference with insights on the evolution of big data technologies can be found on Snowflake’s blog here.

More broadly, we’re excited about Snowflake because they are disrupting the status quo of the old and complicated premise-based SQL data warehousing systems and re-imagining a better way to turn data into insights. The experienced team at Snowflake, which includes data scientists from companies like Oracle, Microsoft, Cloudera and Google, observed that there hadn’t been a major advance in database technology in more than a decade. They knew that global enterprise customers needed a better way to turn their data into insights, instead of worrying about managing infrastructure.

By building a database entirely based on the cloud and bringing together all the users, data and workloads into a single place, Snowflake lets customers access their company’s data as a service so that they can better run their business. Snowflake is making data warehousing accessible to everyone by building this new model from scratch, and using low cost, but highly available cloud resources.

Technically, this is a company that’s solving hard problems with real innovation.  Personally, we know how hard they work, and we’re thrilled to see the judges at Strata take notice. Congrats to Bob Muglia and the entire team!


Tapping the mobile monetization Button!


Today I am excited to announce that Redpoint is leading a Series A investment in Button, the commerce enablement platform built for the mobile app economy. We are proud to support Mike Jaconi and an outstanding founding team. With their deep knowledge of the mobile commerce space and their combined engineering and operational talents, this team has a unique competitive advantage.

The emerging market for mobile app commerce is evolving rapidly and Button sits at the center of some of the most interesting challenges in tech right now.   As I wrote about previously, Facebook is on a $6.5B run rate on mobile and Apple and Google app stores are each on $10B+ run rates. Uber, the mobile commerce icon and early Button partner, is rumored to have done $1.5-2B in revenue last year.

Yet this is just the tip of the iceberg.  The smartphone has the potential to become the remote control for getting anything done with just a swipe or a tap, and unleash a tidal wave of commerce in the process.  But there are still many challenges left to address to make this a reality.  The market opportunity for players who can solve these problems and accelerate mobile app commerce is significant.

App discovery, and increasingly re-engagement, remain the largest friction points constraining mobile commerce.  There are over two million apps available to download on iOS and Android, yet only about a quarter of US mobile users download more than 1 app per month. It is increasingly difficult for app developers to rise above the noise and acquire users, and then re-engage these users over time.

Even in its early days Button’s product has proven incredibly useful to helping solve that challenge with partners like Uber and Resy.  Button is building out an in-app distribution network for mobile on-demand commerce apps to enable DeepLink commerce.  Put more simply, Button helps app developers drive traffic, engagement and transactions within other apps. They do this by leveraging native button-like placements and a combination of deep commerce integrations and cross-app loyalty. In doing so, Button converts app functionality into monetization, and introduces a new, native mobile “ad” format that we’ve been waiting for.

Button’s initial integration is with the startup reservation service Resy. After a consumer books a table, a prompt allows the user to set up a reminder to book an Uber right before the time of the reservation. If the user does not have the Uber app, it is downloaded seamlessly in the background.  This integration is a great channel for Uber to acquire new users and reengage existing ones, while also enabling Resy to provide a richer user experience and monetize its existing audience. Uber + Resy is just one of the many integrations that Button will enable.

Within mobile, we think most of the purchase intent for these commerce apps will be generated within other apps, but this intent is not being adequately captured today. Button is enabling a new channel for user acquisition and engagement, one that will allow apps to more closely connect together and provide the most seamless user experiences on mobile.

Most importantly, here at Redpoint, we make bets on people and we are proud to back Mike as he builds Button into a company that matters to our mobile first economy.  It also just happens that Mike meets the criteria of a successful founding CEO that I previously wrote about here. He saw the market opportunity for Button when he was working at Rakuten where he gained up close, first-hand knowledge and understanding of the opportunity.  He has the gift of passion and persuasion.  And he is relentless in his focus on execution.

Welcome to the Redpoint family Mike and the Button team!


The Case for EiR

This post originally appeared on Medium.

For the past couple decades I’ve been focused non-stop on founding and running start-ups back to back, punctuated by intense immersions at some of the more culturally influential companies of our times from SEGA to Twitter. So it was new territory when I found myself with breathing room trying to figure out my next move. The central question as I saw it: was my obsession with electronics and hardware just a hobby, or a pivot to a new industry segment?

In thinking about how to sort out my next adventure, I spent time talking with a number of my friends at both startups and venture. A common thread to these conversations surprised me: the suggestion to pursue an entrepreneur in residence position as a way to help me answer my question and identify my path.

I had never considered being an EiR. I had previously only thought of the role as a way to build relationships for fundraising, or a place to have an office to work through ideas with a co-founder. Things I was not worried about in the immediate term. As I spent time considering the pros and cons of EiRing I didn’t find much posted on it from this angle. I thought it might be helpful to write about my journey in the hopes it helps others in the future.

A little more background on my conundrum:

With the maker movement in full swing, there are tons of accessible entry points on designing and building hardware prototypes, but far fewer sources of information on the challenges of building a scalable business involving hardware.

To be sure, people have been building successful scalable hardware businesses for a long time. Recently however, the democratization of product design and prototyping tools has gotten to the point where it’s possible to create rough prototypes of ideas in mere hours and production like prototypes in a week or two. Arduino and Ultimaker are extremely accessible platforms for quickly realizing the germ of an idea. High fidelity prototypes are in easy reach of small scrappy teams and individuals with software tools like Eagle CAD, cloud offerings from Autodesk and on-demand manufacturing services like Oshpark and Shapeways.

On the business side, it’s less clear. Crowdsourcing platforms like Kickstarter provide practical rungs up the customer validation ladder, but the ramp is far less smooth than scaling a software only business. Rapid prototyping and advances in low production volume runs certainly help accelerate the build, measure learn loop on a small scale, but the challenges ramp steeply as the business grows.

As I started to investigate the EiR role, I quickly realized that it’s the ultimate “choose your own adventure” with huge variation across, and even inside VC firms.

For some firms, the EiR role is the chance for a partner to realize an existing hypothesis working with a founder. For others, it’s the opportunity for yet more perspective on pitches and teams. For most, it’s early access to a new company in the formative stages.

As the benefits to VC firms started to become more clear, the real question for me was: “what was I looking to get out of an EiR experience?”

I knew that a fundamental criteria was wanting to spend my time with smart, experienced folks that I really like as people. In my case, I specifically wanted to learn more about scalable businesses involving hardware, both at the seed stage as well as growing businesses. I also didn’t want to miss out on learning from folks starting and scaling their consumer and enterprise software businesses.

Before joining SEGA, as an independent developer I knew how the game publishing business worked from an intellectual standpoint, but it was no substitute for seeing how the sausage was made. Similarly, another key goal for my EiR experience is to gain insights into the process that only come from first hand experience.

Finally, a big part of what drives me as a person and an entrepreneur is solving problems and being helpful. I knew I wanted to be somewhere that I could use my experience to be helpful to other entrepreneurs and the firm.

I was lucky to be talking with a few of the best firms in venture. Narrowing it down to those who were actively investing in both hardware and software, consumer and enterprise, still left me with a tough decision.

Ultimately, I decided that Redpoint was the right home base for me. I still get to spend quality time with my friends at other firms, but where you spend the bulk of your time during the experience is important.

Here were some key things that helped me make the decision that I would definitely advise anyone in a similar position to consider:

  • Talk to folks that have had successful EiR experiences at the firms you are considering. For me this was conversations with Javier Soltero and Arthur van Hoff, both amazing guys with unique stories and perspectives on the EiR role and Redpoint.
  • Spend time with multiple partners at the firm. I knew Ryan Sarver well and he was a big part of the attraction for me, but getting quality time alone with Chris and Satish really cemented my interest in the firm.
  • Understand the process of the firms in question. How open is the partner communication? What does their deal decision making process look like and how much access will you have to it? Redpoint is an incredibly open and collaborative environment which is important to me given that I’m still thinking broadly and trying to figure out what space my next adventure will be in.

Gestating a new venture is an exciting time. I couldn’t be happier learning with such a great group of people!