About 4 years ago, in Feb 2009, we were having breakfast with one of my neighbors when she mentioned that she had just bought a “groupon” to a local restaurant. At the time, I was thinking generally about the concept of aggregating demand for products and local services, and just hearing the word “Groupon” piqued my interest.
I went to Groupon to find the daily deal site has just launched a couple weeks prior in Boston, after running a few deals in CHicago in late 2008. This was when Groupon was very much still in experiment mode for its parent company “thePoint”, but right before the craze exploded.
To make a long story short, I cold called Andrew Mason and fought like crazy to try to invest in what was ultimately a huge round at a $250M valuation led by Accel in the fall of that year. I think Andrew would still say that I was the first VC to ever call him about Groupon (NEA was already an investor in thePoint through a longstanding relationship with Eric Lefkofsky and Brad Keywell). I was unable to invest, but built a nice rapport with some of the leadership of the company that continues today with our really nice collaboration with Lightbank on a number of investments.
It’s funny to think that it all started with a conversation I happened to overhear with our neighbor who is a high-school science teacher in a nearby town.
Similarly, about 2 years ago, a friend of mine who works in marketing and publications for a local prep school mentioned a site called Lynda.com that he used exclusively to teach himself how to use publishing software. I had never heard of it before, but checked it out and was pretty blown away by what they were doing. Remember, this was way in the pretty early days for Kahn Academy and way before online education was considered “hot”. At that point, I was focused on seed stage investing, so never pursued the company. Today, it was reported that Lynda raised $103M after bootstrapping itself to over $100M in revenue. Really impressive.
In a business where I’m always thinking about what’s next, and inundated with flashy headlines about the sexiest companies, I kind of enjoy thinking that two of the most interesting companies I’ve heard about in the past several years was mentioned to me by “normal” people who are way outside of the tech sphere. It’s kind of cool too that both were very simple, straightforward businesses that were simply predicated on giving customers what they wanted in an excellent way, and charging for it (BTW, many early Groupon merchants were very happy with the company, as were consumers).
We do like stuff that is really whacky and controversial, but have also had a lot of success investing in the least sexy sectors or in services that resonate with “normals”. We invested in ThredUp before the whole consignment craze heated up, and I love telling people that what attracted us most to Fred Shilmover and his team at InsightSquared was that NOBODY was trying to start a SMB SaaS Analytics business out of business school in 2010.
Sometimes, the best companies or the best business ideas can be found in the most normal of places.