In a town of gamblers, Mattermark is counting cards

http://venturebeat.com/2013/08/22/in-a-town-of-gamblers-mattermark-is-counting-cards/

by dmor • 13 years ago

24 16 13 years ago

venturebeat.com

ukd1• 13 years ago

I really think I’m building a multibillion dollar company

AWESOME! :-D

norswap• 13 years ago

Can someone explain the relevance of Mattermark to me - no businessy bullshit?

To me it just sounds like another meaningless score, much like technorati was back in the day or klout (albeit more business minded than both). Is it an attempt to use big data to determine winners in the startup game? That also sounds like a terrible idea.

(The above is my initial reaction - I haven't researched this and I might be woefully wrong; which I why I ask for some explanations.)

usujason2• 13 years ago

At this point, I agree with you. Right now it's a score based on a combination of publicly accessible metrics. With that said, I think they are still very early stage and their vision to provide robust growth metrics to the investor community is much needed.

Now, if they can pull it off or not is yet to be seen.

mynameisme4• 13 years ago

If you could provide information useful enough to provide a competitive advantage in investing, why provide it at all? Just invest in the companies yourself and put the millions in your own pocket.

To me, what it looks like (not saying it's true) is that it's a ycombinator shill company the backers of ycombinator are using to pump up other companies. After all, a lot of these companies are successful/bought out because of self fulfilling prophecies: they're successful because people think that they're successful.

7Figures2Commas• 13 years ago

   On the enterprise or business to business side, signals are weaker, and signs of traction are harder to identify. However, Mattermark has found that tracking sales support materials (videos, whitepapers, and other documentation) is a signal and makes it easier to view traffic as an exhaust of the sales process.

   Through this method, Mattermark listed cloud hosting startup Digital Ocean as its top pick for a pre-Series A company. The company raised a healthy round a few months later, mainly because of its success with developers.

This post seems to imply that Mattermark identified Digital Ocean as a promising pre-Series A company before anyone else. This isn't the case. Mattermark's Digital Ocean "call" was published on June 22, 2013. At the time, Digital Ocean's rise was being noted by others based on more meaningful criteria than "sales support materials" (see http://news.netcraft.com/archives/2013/06/13/the-meteoric-ri... for example), and as a 2012 TechStars participant, the company was almost certainly on the radar of investors for over a year.

   For new investors, Mattermark and Dashboard.io aim to be a check on a startup’s performance. Both companies are also experimenting with their notifications system. Based on an investors’ specifications, they may be able to alert customers to a hot opportunity.

   One of Morrill’s favorite examples is Instagram, a startup that was acquired by Facebook for a cool $1 billion, making its investors extremely rich. Back in Instagram’s early days in 2010-11, before the founders raised any significant funding, the photo-sharing app was growing its Twitter following at a double-digit percentage each month.

   “It would have been a great signal that consumers were hooked, [and] the reality is that we could have identified it,” says Morrill.

This is a horrible example. Instagram's co-founder, Kevin Systrom, was a former Google employee who raised $500,000 from Baseline Ventures and Andreessen Horowitz in 2010 for a location-based service called Burbn. Instagram grew out of that, and when Instagram raised its Series A about a year later, the roster of investors was a who's who of Silicon Valley (Benchmark, Jack Dorsey, Adam D'Angelo, etc.).

The idea that Mattermark or a similar service could have identified Systrom and company before they were tapped into top-tier funding sources, enabling a less-than-well-connected angel or second or third-tier venture firm to get in on Instagram's Series A, is utterly unrealistic.

The serious angels and firms are actively engaged in the market and talking to founders on a daily basis, and serious founders looking for funding are making the rounds on Sand Hill Road, volunteering the most salient data that is almost never shared publicly (think revenue, revenue growth, etc.).

Mattermark's proposition seems to be "There are a couple of young guys who are wet behind the ears in a garage somewhere with a hot app, and if you call them up, you might be able to convince them to take your money before [insert prominent angel or firm] discovers them." That is a flawed proposition because this is simply not how the game works.

auggierose• 13 years ago

Love the multibillion dollar remark by Morrill. That's confidence.

Now, when I say that what I am building will be in multibillion territory, people just look at me funny, although I even got my PhD just to be able to build this thing :-)

malandrew• 13 years ago

What I don't get it how relevant this info is for companies at such an early stage. For the few home runs each year, oftentimes a bunch of the success can be attributed to aid provided by some of the VCs. They may provide value between seed and an A round since the investors often matter less there, but one there is a provable business model after A or after B, the investor, if chosen correctly, can be a big multiplier of value, especially for first time entrepreneurs.

Good VCs like A16Z, help with hiring, provide great signaling to potential partners, potential hires and future investors, and well as helping refine the business model.

Seems like any score they ascribe to a company would have to incorporate the value of each of their clients. e.g. the scores given to A16Z would look different from VenRock, since the compatibilities between the startup and the VC matter. VenRock is likely to multiply the value of a health-related startup in a way that most other VCs can't and this changes things.

I'd even go as far as saying that for some VCs the partner you get should be factored into the scores as well.

In a town of gamblers, Mattermark is counting cards

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