FiftyThree: Reimagining the Blank Slate

FiftyThree, developer of the inspirational Paper app, Pencil stylus, and a thriving interactive community for creators called Mix, today announced a Series B round of funding led by NEA. Although the company is new to our portfolio, co-founder Georg Petschnigg and his team are well known to NEA—and I’m thrilled to partner with them as the company grows their base of millions of users and tackles new verticals with their fresh take on productivity.

In 2013, we launched the NEA Design Studio, which nurtures entrepreneurial designers as they start new companies. I invited Georg Petschnigg of FiftyThree to speak to this group of founders and share his company’s story. Georg paid several visits to the NEA Design Studio and inspired the participants with the energy his company was pouring into every detail of their products’ design and utility. During this time, I watched FiftyThree nimbly grow into a suite of mobile, tactile products that allows every day creators to develop, document and share ideas in a modality as simple as using hand written notes and drawings (but much more elegantly).

Even with our increasing reliance upon technology, the pen and paper continue to thrive as mediums for capturing wellsprings of ideas. Why? Because existing software options, primarily relics of the client-server world, lack the interactivity, mobility, and intuitiveness to keep pace with our imagination. NEA has historically sought out companies that design technology to mirror existing human behavior rather than modify behavior to accommodate technology limitations. Tableau Software, for example, made data both accessible and visual with the same ease that one could sketch out a chart and graph. In doing so, the company created a tectonic shift in the data analysis market, increasing it tenfold. The enterprise market is in dire need of new software solutions for supporting innovation, and the team at FiftyThree recognizes that creative consumers and business professionals alike have similar needs for creating new ideas together.

Building on their success serving the consumer market for the past three years, the team at FiftyThree will release deeper collaboration features for the enterprise market and a host of new tools that enable users to diagram on screen as fast as they would on a whiteboard. It’s increasingly common for technologies to debut in the consumer space before finding their way into enterprise products—technologies such as social networking and file sharing were initially consumer focused, yet have now redefined enterprise productivity, much in the same way that Tableau improved data analysis. Companies like Yammer, BoxEvernote and Slack have all successfully leveraged this approach.

The founders of FiftyThree—Georg, Andrew, Julian and Jon—have built one of most exacting technology teams I’ve seen, and they lead the company with the same precision and synergy that define FiftyThree’s various products. The founding premise of the NEA Design Studio was that design cannot be an afterthought—it must be rooted in a company’s DNA. To me, FiftyThree exemplifies that philosophy, demonstrating what a company can create when it starts with impeccable product design. We are truly thrilled to be working with this talented team as they reimagine the “blank slate” for a mobile-first world.

The Age of Service for Connected Devices

Ten years ago, the notion of on-demand services like fresh milk and food delivery, doctors making house calls, or hitching a ride in a stranger’s car would have been ludicrous—relics of decades past, unimaginable in our modern world. Even three decades ago they were a distant memory, eroded by a culture of process innovation relentlessly focused on delivering more—making it better, faster, safer, cheaper. Consumption of everything from milk to news had become part of a global economic engine, long before the Internet.

Since the Internet began gaining usage in the late 1990s, the holy grail of web entrepreneurs has been to take any common offline process, move it online, and watch usage grow. We could, it seemed, deliver services much like the “good old days” without sacrificing scale and efficiency. But as any number of spectacular flops from the dot-com boom demonstrate, the online services economy didn’t evolve as expected—if anything, the Internet’s maturation seemed to cement the increasingly location-agnostic nature of our existence. Despite the promise, the technology simply couldn’t deliver.

Today—finally—with the proliferation of smartphones and the application environment that came along with it, the online world is reshaping our offline world. The list of on-demand services emerging from enhanced modern technology covers almost every vertical:  Uber for transportation, Instacart for grocery delivery, BetterDoctor for on-demand healthcare, and Handy for house cleaning, to name a few. Smartphones ushered in this Age of Service by turning humans into nodes of personal information, cues to location, and databases of physical behaviors. In so doing, they unlocked huge value in new service-based business models.

As we look beyond smartphones to the future of connected devices—smart products that do not require human direction but instead form a network of intelligent yet inanimate nodes—it’s critical that we remember the lessons of the past. To realize the promise of connected devices and unlock creative human services, there must be a platform upon which these services can be easily delivered. There are several key elements that I believe should be central to such a platform:  intelligent image processing (computer vision), hyper-accurate location tracking, and low-powered sensors.

Intelligent Image Processing
Computer vision converts, processes, and understands images in a way that allows algorithms and decisions to be constructed around them. Not surprisingly, the computer vision engineer has rapidly become the most sought-after talent for connected devices startups. The ability to quickly process image or video data without large storage requirements or the need to capture minute detail (such as facial recognition, which is controversial given privacy concerns), would be an inherent component of a platform that delivers services. Companies like Placemeter, a computer vision technology that processes large amounts of video and turns it into structured data about the world around it, andCanary, another NYC-based startup, are perfecting computer vision technology. Companies like these could play an integral role in developing a common, basic set of features for a services platform.

Location Tracking
Location tracking can be achieved via GPS, wi-fi pinging, and cell tower triangulation, but it is still not refined, especially in tight city blocks or in vertical spaces (such as multi-floor buildings). In addition, device locations are rarely networked together, which is a significant barrier to effective delivery of services. For example, it would be great if my home systems could know whether I’m outside or at my neighbor’s house and the moment I start heading home. Ideally a platform would stitch these various location technologies together and allow shared location information between my various devices. There are a few companies working on this, including a DC-based company called SocialRadar.

Low-Powered Sensors
Finally, ultra-low-powered, programmable sensors with big chunks of memory are a must-have requirement for a platform that facilitates services being easily delivered. Psikick develops sensors that operate from 1/100th to 1/1000th of the power budget of other low power sensor platforms and they are equipped with energy efficient on-chip technology and are completely untethered to batteries. This means a low probability of losing data (or awareness) while a device is offline, and a high probability of receiving good service when a consumer is relying on service triggered by the device. 

Just as it was impossible to predict exactly how the on-demand sharing economy would be unlocked, there remains plenty of uncertainty when it comes to artificially intelligent applications. Yet we can also look to the on-demand sharing economy as a useful model for identifying key challenges and core platform components in this new age of services—for starters, we know that these elements cannot simply be repurposed from a mobile platform. Today, developers have to rebuild these common requirements in each new device and in doing so, devote more time to the infrastructure than to the creativity around the differentiated service.

Without that creativity and differentiation, the era of connected devices could be relegated to a collection of “smart home” applications—temperature-controlled and perhaps well-secured with quick and simple video surveillance. That and a smart speaker system can’t be all there is—the Internet of Things is not about a few home appliances being the smart hub of communication and service. Connected devices and their potential are about a network of personal low-powered devices that will prompt consumer services—outside the home as much as inside the home—to be naturally and implicitly integrated into our daily needs.

NOTE: NEA is an investor in BetterDoctor, PlaceMeter, SocialRadar and PsiKick.

Unlocking Human Potential: NEA's New Design Studio Format

In a mobile-first world, design is not only key to developing products consumers love, but needs to be a core part of a company’s DNA from the earliest days. Brand differentiation and consumer behavior now hinge on a product’s design, and we see a growing number of talented designers making the leap to entrepreneurship.

In 2013, NEA created the Design Studio, a summer-long mentorship program for designers interested in founding companies. One year later, we kicked off our second installment of the Design Studio and we experimented with a new format: Instead of hosting a summer-long program, we held a two-week intensive program for six teams of designers. During those two weeks, each team would work toward developing a product vision and prototype. We organized the program around a theme, “Unlocking Human Potential,” reflecting the concept that online products and services can initiate loyalty by making users feel more powerful and productive. 

We kept the elements that worked best about the first iteration, including partnering with two talented leaders of the design community in NYC who provided superb mentorship to the designers. Albert Leeof the product studio AllTomorrows and Liz Danzico, the head of the Interaction Design program at the School of Visual Arts, helped craft the Design Studio’s theme, program and schedule. Albert spent countless hours reviewing the teams’ product designs and pushing them to think more about how their individual products worked to satisfy a basic human need, and Liz was instrumental in bringing new designer entrepreneurs to the program.

The results of this two-week intensive program blew us away. We were amazed at how each team came in with a blank slate and drew on the energy of the larger group to churn out stories and prototypes that conveyed months, rather than weeks, worth of work—ultimately creating polished concepts that we’re all very proud of.

So without further ado, here is a list of the projects:

• Shortwave allows customers to easily exchange files and conversations with those within 100 feet.
• Scouted is a mobile app that helps get people to places through simple, organized lists.
• Specimen is an anatomically inspired sunglasses company that makes one-of-a-kind 3-D printed eyewear, customized for individual facial features and tastes.
• Sesame provides smart access to spaces with a Bluetooth enabled lock.
• Tacit is a platform that is re-thinking science education.
• Factory is a mobile application that allows you to discover, share, and have your mind blown by fascinating facts.

After the intensive two-week program, these teams are now fleshing out the implementation and growth of their products and they are making great strides in product development and company formation. This underscores the most unusual—and important—element in the evolution of NEA’s Design Studio: rather than working with an accelerator that lasted months, these teams have been sent off into the wild to do the hardest part of entrepreneurship—to boil down all the advice and ideas for future development into what they think will satisfy user demand and to think through what they can realistically achieve in a short period of time. This format aligns with the true reality of being an entrepreneur: long stretches of internal work and persistence to iterate and adjust an idea often follow intense periods of outside feedback and advice.

We thought the timing was right to offer up a next installment of the NEA Design Studio, In the Studio Part II, which will tackle a lot of the “what comes next” after creating a prototype and business plan. We are excited to begin accepting applications from talented designers and entrepreneurs starting TODAY. In the Studio Part II will be held from November 10-21, 2014 and will focus on mentoring designers who are interested in entrepreneurship in the areas of go-to-market strategy, team building, and fundraising. The program is open to all participants of the first installment of the NEA Design Studio, but it is open to new applicants, as well. In order to be considered for this installment of the program, applicants will be expected to have a first version of their product in the market and should be prepared to ramp up usage of the product during the course of the program.  

The NEA Design Studio: Startups by Design

For the past year or so, I’ve noticed a pattern among new founders. The most inspiring entrepreneurs--with the most beautiful and engaging initial products--all had something in common. They were designers turned entrepreneurs; some were UI designers, some were physical product designers. All had an intense passion for making the user experience addictive and valuable. Many were thinking about transitioning their project to a full-time effort, but they were looking for a path, a way to make the leap to entrepreneurship.  Today we announced the creation of the NEA Studio to help these entrepreneurs grow their side projects into full-fledged new ventures.

As a past product designer, I have to admit I’m biased to pay special attention to designers. I believe it’s the perspective of these entrepreneurs that leads to real changes in consumer behavior; the type of change that introduces the groundwork for new web, mobile or interactive platforms to be built in the consumer (and increasingly, the enterprise) spaces. We’re interested in encouraging these designer founders to start companies that can change the world, and we want to help as they start thinking about putting their plans in place.

The NEA Studio is a place where designer founders can take their prototype to product and more importantly, their nascent idea to a grand vision. The exact format and details can be found here. Each week, we’ll have various advisors meet with the entrepreneurs. They will also receive dedicated weekly attention of investors at NEA who are willing to open their networks and to devote expertise and attention to the designers’ projects.

This is a new effort for NEA. This is the first time we’ve created a program to work with entrepreneurs in a formal way before they raised seed or series A capital, and we’re excited to start the NEA Studio for this reason. We’re starting this in NYC because this is where we heard the most from designer founders, but we’re open to considering other cities in the future. We’re experimenting and having a great time doing so thus far.

Joining NEA

Over the past ten years there has been a debate about whether venture is an asset class or a cottage industry. My decision to join NEA started with a core belief that it’s both. I personally love venture capital investing because there is no other industry where working on a grassroots level by supporting 1-2 great people at the start can have macro effects on both the asset class and the overall economy. NEA has a unique strategy that is not only focused on Silicon Valley, the hub of entrepreneurship by many measures, but also on the broader entrepreneurial communities in Asia, in unsuspecting places such as Chicago or DC, as well as, in New York  and Boston. I’ve spent several years circling Boston and traveling the well-worn path from Boston to NYC and Boston to the West Coast. I’m excited to expand that route to meet new entrepreneurs.

As I meet with great founders in various geographies, I’m struck by how unique yet similar their approaches are. Some say East Coast entrepreneurs are more focused on revenue or the Midwesterners are more likely to want to bootstrap, but the remarkable ones are all undaunted by physical boundaries, competition or technological limitations. Their drive is immediately evident and inspirational. They are patient yet tireless, creative yet grounded. The ones who I am drawn to in the consumer space are also eternally focused on detail, user experience and customers. And, of course, they have to be seeking a venture investor who appreciates the same things as they do. This is why venture capital is also a cottage industry. Compatibility drives investments first and foremost. An investment may start with a serendipitous meeting. A relationship develops over a period of time (sometimes years), and ultimately (maybe less than 1 out of 10 times), a macro event emerges.

NEA has had several of these macro events over the past couple of years. As I’ve been planning my move (physically to the DC area) and my next few trips (which will continue to involve frequent trips to NYC and Boston as well as many new places), I’ve been reevaluating and appreciating entrepreneurship and venture investing from a new perspective: great ideas are born from great innovators and great innovators are born anywhere. I hope to contribute to the type of success at NEA that affects the asset class, using the only approach that I believe works: building individual relationships with great entrepreneurs wherever they may be found.