When I was eating lunch in the school library to avoid the embarrassment of sitting at a cafeteria table by myself, the Internet was there for me.

When I was having a tough time at work, I turned to arbie38 and bipin for moral support in our private chat channel.

When I was ready to share my life with someone (and my parents kept dropping hints for grandkids), I met my sweet wife online and now we have a beautiful family with 3 boys and 2 golden retrievers.

When I had a bad day, or was feeling unsure of myself, the Internet made me feel better…

It made me feel less lonely.

It felt natural empathizing with others… great even.

And most importantly, I could be myself.

It was one part therapy, one part meeting people, and really just a lot of talking… but it worked for me, and for a lot of other people… it was a kind and vulnerable Internet… like talking to a friend in a coffee shop. Because of that, I fell in love with the premise of what the Internet could do for human connection.

However, as time passed, I found myself so focused on the day-to-day of leveraging platform changes for growth, revenue, etc. that I barely noticed the subtle, but drastic shift to a colder, meaner, popularity-based Internet... an Internet where each person is on a very public stage and needs to look perfect or be highly entertaining for attention. In fact, I may have unknowingly played a part in enabling that shift.

In my eyes, the 30-year shift that I’m referring to went kind of like this:

1. 1985+: The Internet starts going mainstream; access to people and information becomes much easier. [thinking: Hmm, this could be interesting, but what’s that DOS command again?]
2. 1990+: The people most in need of human connection and knowledge make products to make communication better and access to information easier. [Holy moly, this is so cool, I’m chatting with someone in Iceland!]
3. 1995–2000+: The Internet gets lots of eyeballs really really fast because of those products. [Yay, there are so many people just like me!]
4. 2000–2005+: Investor capital floods the space. [Wait, I can do what I love and make money? Even better.]
5. 2005–2010: Rudimentary ad/commerce models are put in place to generate revenue ASAP. [Oh crap, we took all this investor money, we need to show returns.]
6. 2010–2020: Existing and new products are optimized to generate ad impressions, etc.; instead of addressing the need for human connection, it is leveraged for growth [Grow now, we’ll think about that later.]

I’m not saying that all new products make the Internet worse. There are lots of amazing products that make our lives easier. It’s hard to imagine life without Spotify, Uber, Headspace, Amazon, Surfline, etc. Ad revenue has kept lots of valuable content free, writers paid, and has created a burgeoning field for individual content creators to make a living doing what they love. Even Facebook, which at this moment, everyone loves to hate, has at least kept us in touch with people we might have lost contact with.

However, the places where people could be themselves, talk about feelings and share kindness almost as if just talking one-on-one in a coffee shop…

… have transformed into popularity-based networks where you have to post an engaging video to get attention or have turned into troll farms filled with memes and disgusting content.

To optimize for viral growth, today’s social platforms are designed to feature entertainers and sensationalized content in a one-to-many fashion to generate more ad impressions… this is inducing divisiveness and reducing human interaction to just tapping on a like button.

This comes at a major human cost. Its destroying conversation and impairing human connection. As a result, people are suffering, it’s causing broad issues within our society and political systems, and on an individual level, people feel lonelier than ever.

So when Eli Pariser, the co-founder of Upworthy, asks “What obligation do social media platforms have to the greater good?”.

And when I see people like…Tom Scott create The Nantucket Project to help people find their truth and connect with others honestly, Brené Brown compelling people to understand the power of vulnerability, and Kevin Hines sharing the lowest point of his life to uplift others… it’s inspired me.

I’ve lost too many kind-hearted people that I care about and have seen too many people in pain, not able to connect with others, and not able to be themselves that I have to do something about it.

We made Friended to create a kinder Internet, to show the goodness in humankind and to help us all feel more connected with each other by sharing honestly and by being there for each other.

Friended was recently described by Forbes as being “a release from the confines of the brutal, less than safe battleground of Twitter and Facebook”, by Psychology Today as “honest one-on-one conversations” and TechCrunch as, “a chance to share how they really feel in a vulnerable, one-to-one setting”.

While the product has a way to go, people that use Friended are saying, “This app changed my life.”, and have even gone as far as saying, “I think this app saved my life.”.

The Internet has been good to me, but it can be a kinder place where we can be ourselves, connect more deeply with others, and be there for each other… a place where there is always someone to talk to and where everyone can experience friendship.

• Dan Kurani

A Kinder Internet was originally published in Startup Grind on Medium, where people are continuing the conversation by highlighting and responding to this story.

When I was a kid, we lived at the beach. I watched the sun rise over a vast ocean and caught grass shrimp along the docks to sell to local bait shops. It sounds magical, but I honestly never thought much of it until we hosted a few kids from the Fresh Air Fund. As soon as the van pulled up into my driveway, I bounded up and excitedly asked, “Wanna play tag?”, “How ‘bout manhunt?”… they were cool as cucumbers not batting an eye at my requests, nor much else for that matter. Then it was time to take them up to the beach, still no excitement, just totally cool as if they were getting ready to go to the beach for the millionth time. Then, as we walked up the stairway and began to break the sightline at the top of the dune where you can start to see the ocean, all of their eyes popped so wide I thought they’d fall out. Speechless, with their mouths hanging agape, they ran to the water at full speed. When they got to the edge, they looked back as if to get confirmation that the ocean wouldn’t eat them whole… pausing briefly as if to throw their souls to fate. They didn’t come out of the water until dark.

The experience of watching them discover not only something new, but something that was so utterly foreign to them, made me want to figure out what I had yet to discover.

Today’s discovery experiences are similar to being on the other side of that dune before you climb up the stairs… you can’t see very much, and you don’t know what you don’t know (before you do). The irony to all of this is that we’ve got a window to the world in the palm of our hands and yet a sea of new destinations, experiences, people, ideas, and products remain undiscovered. Unfortunately, the way that mobile experiences are structured, users are still just getting a static feed.

We have a vision to change this by creating discovery experiences that bring users great joy and help them discover new things everyday. We are designing better matching algorithms based on simple human logic (not the complicated-I’m-a-genius-black-box-stuff), making experiences more entertaining, creating marketplaces that are community-driven, and evolving transaction intent to create enduring discovery experiences with significant commercial potential.

With those theses in mind, we are putting products into market to get live feedback, recently releasing a prototype version of a movie discovery app and incubating an app where users discover new people to chat with based on common values. These releases are just the start of our effort to improve the discovery experience.

And, because we believe that we go further together, we’re interested in talking to partners that can leverage our evolving platform for other categories like travel, food, fashion, gaming and a number of others.

As usual, you can get me at dan@foundermark.com and www.foundermark.com.

No, not social games like Zynga’s FarmVille, where you can send friends seeds for their crops, or King’s Candy Crush, where you can send friends extra moves.

I’m talking about experiences where people and the content they produce are the action, where the content is always fresh. And, if done properly, intended network effects and/or marketplace dynamics take hold and create strong barriers to entry.

And while apps like Foursquare’s Swarm, where the utility of place discovery is highly gamified, are interesting and were ahead of their time, they aren’t entertaining enough. Whether you come from the utility, social or gaming side, we believe the industry can go way deeper. We can create more entertaining experiences, and more importantly, provide both obvious and unexpected value that is truly enduring… even addictive.

Aside from longer lifespans, a second reason this area is compelling… higher average revenue per user (ARPU). While it’s widely known that gross revenues in entertainment-based categories like gaming and social are growing fast, with IAC/Match’s Tinder and Miniclips’ Agar.io raking in cash, revenue per head in these categories still has a long way to go, even in the more mature gaming category.

“We’re not anywhere close to peak mobile.” — Neil Young, EA/DeNA

Watch the full video where Neil talks about how ARPU has plenty of upside in the gaming category.

However, this is just a drop in the blue ocean. When blending entertainment and utility value, we’ll be in a place where in-app purchases that are increasingly subscription-based, intent data and lead generation revenues dwarf ad network and native ad revenue. Plus, not only do IBM Watson and other artificial intelligence (AI) machines need to eat data to get smarter, but so do data management platforms (DMPs). The blended utility + entertainment consumer experiences not only have the highest data throughput as a result of high user engagement, but they add context which is increasingly critical for AI processing and ultimately increases the value of that data.

When we effectively blend entertainment and utility value in new mobile experiences, we’ll see in-app purchases that are increasingly subscription-based and increasing revenues from intent data sales, affiliate and lead generation.

A final trend that makes this developing opportunity interesting… native consumer apps and games are no longer hot with VCs. A major complaint from VCs is that native distribution is hard. Wait, isn’t that a bad thing!?!? Nope. This results in less money sloshing around inflating install costs. Plus, add in more supply with the new App Store search and the ability to market through influencers, and cost per installs (CPIs) decrease.

There may be a multi-year window to capitalize on audience development at low costs before the macro movement of brand budgets to more performant media. And when those dollars move to performant media, they will move to the places where consumer intent is the highest, can be measured and that have the strongest engagement mechanisms… aka “enduring entertainment” or “utilities that are highly entertaining”.

See how developers, brands and publishers talk about the macro marketing change coming:

From a developer’s angle, watch Machine Zone’s CEO freak out a room of media people as he talks about the inefficiencies in performance marketing — from an interview at Code/Media 2016

Stratechery’s Ben Thompson does a nice job explaining the evolving phenomenon in the advertising space from a publisher’s and brand’s perspective.

A ton of good stuff from him, but start with his video on aggregation theory:

And his podcast #84 on A New World Order (thanks for the recommendation Dave Knox):

Bottom line… from a financial perspective, this “enduring entertainment” category is relatively untapped with higher retention, higher ARPU and decreasing acquisition costs. From an altruistic perspective, it’s an opportunity to create meaningful value. It’s now beyond obvious that mobile is massive, but what is less obvious is that lighter-weight experiences are the way into the hearts of a global population, and the utility that comes from well-crafted experiences will yield significant financial value for the industry and immense meaning for consumers.

How can we start solving problems in both an entertaining and enduring way…

• Help people meet each other in real-time in both an authentic and lighthearted way while building an enduring value/belief graph?
• Help people earn some extra cash while becoming more financially literate by picking stocks in companies that produce products and services that they love (see Peter Lynch’s classic ‘One Up on Wall Street’)?
• Help people find new movies to watch by instigating some competition and a natural connection between people with similar tastes?

Most importantly, if you’ve got a better name than “enduring entertainment” or “entertaining utilities” for this category, we are all ears.

- Dan Kurani, dan@foundermark.com

P.S. We have a few things brewing in this “enduring entertainment” space. We’re experimenting with a few internally-built products, like Fliko, Photodrop and Friended, and partnering on products like Vestly with forward-thinking companies that have extremely deep vertical expertise in areas like finance. Please try them and stop by Foundermark to let us know how to make them better.

Enduring Entertainment — A Mobile Opportunity is Brewing was originally published in Startup Grind on Medium, where people are continuing the conversation by highlighting and responding to this story.

Purpose-driven Communities

Can we create communities that enable people to accomplish meaningful things like find love, discover a song that moves them, share their knowledge, help them sell their photos and locate a new fishing hole via the two-way marketplace (matching, exchanges or crowdsourcing) model? Can we do this in a sustainable, profitable and proliferating manner?

I think so…

I oversaw a purpose-driven community first-hand at Thumb (aka Opinionaided). As we grew from our very first opinion to our 3 billionth opinion, you could see the magic of people coming together under a common purpose. While we sold to a market research company (maybe a future post), there was definitely enough evidence that when provided with the right tools, people can move mountains.

Next, there is guarded chatter coming from leading product folks and venture capitalists about two-way marketplaces, the best of which are a function of mobile communities, because of three major reasons:

1. Early — It’s still really early, the multipliers exist here and lots of people don’t yet realize how big the opportunity is. Greylock makes a bet.
2. High-Margin with Defensibility — Marketplaces are extremely cheap to run with massive scalability, network effects and barriers to entry (if you’re in the lead). Post by Fred Wilson.
3. Lots of Remaining Opportunity in Mobile — There are lots of newly unsolved use cases because of mobile (think Uber) with massive liquidity available because people are now on demand. The ability to match artist/curator, buyer/seller, renter/owner, knowledge/seeker, etc. today is unparalleled because of mobile access. Always on, fully connected, and the realtime nature (essentially, on demand) that mobile facilitates makes this a massive opportunity.

If that’s not enough, there are proven successes in Web 1.0, Web 2.0 and some new ones in mobile. Think StubHub, eBay, Craigslist, Uber, Match.com. For examples and inspiration check out these maps from RRE and Trinity Ventures:

Lastly, it’s happening on the ground organically… talking to other entrepreneurs, I regularly see the semblance of community driving liquidity within two-way marketplaces in various forms and stages at a bunch of, primarily mobile, startups. While there is still much to be improved on in existing user experiences, hiccups in business models, ghost-towns, half-markets, etc. there are lots of matched markets that just need some routing tweaks.

So how does a VC place the right bets or an entrepreneur attack the marketplace space via a community-driven approach?

First, define a purpose that keeps the community and team going if the financial model shows cracks. What is your impact on humanity?

· Collective intelligence — passing down knowledge (Wikipedia)

· Solve societal problems

· Wealth creation—put tools for revenue in individual producers (CustomMade)

· Improving health

· Lessening waste or saving money

· Deeper connections between people—match people based on deeper meaning

· Discovering experiences and beauty

· Inspiration and personal growth

· Etc.

Second, know what you’re matching and facilitating the transfer of… Goods are hard, logistics are hard, digital goods, people and information are easier. Take advantage of lowest friction/infrastructure = highest margin paths first. There are opportunities to source and rank existing information, leverage user generated content, etc. for even higher margins.

Third, what use case are you solving for? Know your niche, persona and value prop to that audience. What is your core value? Can it be a high frequency use case that solves a persistent problem?

Fourth, stand behind a set of product principles that yield great products and communities. These are my principles for creating communities that drive liquid marketplaces, but they don’t need to be yours…

1. Community must have soul, a purpose and a brand promise that people can get behind. The brand should increase self-worth while being bigger than any one individual. The brand must have emotion and create aspiration.
2. Value must be greater for the user in the user experience than taken or found elsewhere. In other words, the experience must not be hard, it should be fun, entertaining, empowering, or other, and it must delight. Users should be able to extract value before you ask them to give it, 90% get everything (literally everything) else right, but fail on this single item. User value first, resulting data/behavior/transactions only meet business goals secondarily. If people don’t want to instantly tell other people about it, you’ve failed.
3. Win the liquidity game before you start. No user should ever have an unfulfilled match, request or be delayed. You’ve failed if you do this wrong. The whole value is the exchange. There are dozens of variables within this principle for your product to work and they are different for most niches, know what they are before you start.

Don’t know where to start? Here are a few niche areas worth exploring with some new entrants. I’ve purposely left out the entrenched players to get the creative juices flowing…

Stock Photography — Foap

Niche Jobs — Underdog

Designers & Projects — 99Designs

GiftCard Exchanges — Raise

Art Exchange — Society6

Sentiment/Opinions — 3Cents

Boating Charters —BoatBound

Fishing Spots & Catches — FishBrain

Blogger Matching Platforms—Sverve

Influencer/Download Matching —Instafluence

Home Services — Handybook

Expertise — Clarity.fm

Fashion — Threadless

Funding — Kickstarter

Mental Health

Fresh Drink Water Maps

Traffic — Waze

Surf Breaks

Ad Exchanges/DSP/RTB

Taste — Wanelo

Interior Design—Houzz

Tickets

Rental Network

Lesson Network

Translation—Blincken

Author Publishing & Reading Platform

Delivery Logistics/Messenger

Car Pooling

Need a Mate/Empty Spots

Coupons (Local Discovery)

Jobs by Vertical

Business Founders/Partners

Furniture—LoveSeat

Surfboards — The Quiver

Personal Dishes

Open Tables

3D Printing Capacity

Legal Advice

Hotels — Hotel Tonight

Reviews

Gambling one on one

Knowledge — Quora

Migrant Labor

Repeatable Tasks

Storage

Question Ad Network

Companies Exiting — ExitRound

Fitness Training/Trainers

Celeb demand for visit, talk, email

Micro-Advertising

Temp Equipment

Charity Matching

Capital diversification

Scooter and bike networks

Skill Matching — languages

Music Discovery — SoundCloud

Dating — Facefeed

Personality Matching

Doctors/Advice —First Opinion

Vet Advice

Casting/Modeling

Home Inspection

Marinas/Dock&Dine

Hotel Finder

App Curation & Discovery

Goal Setting —Everest

Temp space — Breather

Person to person games — Quiz Up

Niche content, communities — Inertia

Ideas — Betterific

Homework help — Brainly

Q&A — Jelly

Skate park locations

Stock market movement

Site discovery

Excess capacity collaboration by agencies

User Testing

Peer to peer lending — Prosper

I left a few out purposely for opportunistic reasons, but there are many more…

Personally, I have a goal to build equity in marketplaces that can be driven by communities that exchange digital goods, information, sentiment, excess capacity or human resources. Ideally, these properties provide sustainable enrichment to both sides and contribute to a collective whole with a representing community that has soul.

If you want to chat about this space, ping me.

Community-Driven Marketplaces was originally published in Startup Grind on Medium, where people are continuing the conversation by highlighting and responding to this story.

Wanelo is a good example of a company that meshes the utility value of trend discovery and building personal social equity to create monetizable behavior. Beyond Wanelo, a number of players have proven that a well-executed user experience can introduce use cases that pay for themselves via user generated content/curation, lightweight interactions that flip the producer/consumer ratios, or via value-creating functionality that effectively negate the ongoing investment costs of content production.

By taking a mobile tact to creating this delightful social or utility-driven experience there is also the opportunity to disrupt the commerce space at a root level. Despite the fact that the generic e-commerce space has been a race to the bottom with companies like Amazon and some of the bigger box retailers like Wal*Mart finding highly efficient ways to recommend, upsell, cross-sell, multivariate test, improve delivery/supply chain, offer alternatives, etc. root-level commerce use cases are far from solved in the mobile space. While a lot of folks may check Amazon on mobile when they are shopping to do price checks, this is just a small sliver of the purchase cycle, and more of an enabler than an activator. Inspiration, discovery, frictionless transaction, etc is still open game. A small handful of players or a single player is going to nail a use case that solves part or all of the discover, research, evaluate, socialize, motivate, transact cycle and breaks open the $100 billion mobile commerce opportunity.

This opportunity is lowest risk in niche targets because you can understand users well enough to deliver a digital property that provides a compelling value while potentially introducing a compelling proprietary product mix. Houzz is the perfect example, they solved an important, yet simple consumer problem: help consumers discover home ideas, be inspired by beautiful interior design, browse furniture, etc. The critical part that many media, commerce, etc. players miss is that it is the digital experience in its entirety that has created product-market fit and the $2 billion+ valuation, it’s the simple onboarding, full screen curated images, fast swiping, easy look book creation that yields an opportunity to intertwine professional advice and tagging of products for intent identification or commerce. Not only can you not just bolt bits of this functionality onto existing media or commerce properties, but you need to roll-out an experience like this in phases to achieve critical mass before stepping up to the next product milestone. Too much too soon may result in even worse results than bolt-on tactics.

If you’re looking for a more conservative “content + commerce” approach an example that is worth checking out is Thrillest. They’ve done a masterful job at more traditionally meshing content and commerce within a niche. The male-centric night-out/fashion discovery property posts/emails hot spots in NYC (and other locations) like unique rooftop lounges that require a special knock to get into and serve hamburgers rare-only, etc. They purchased Jack Threads a few years ago and have steadily moved up the fastest growing media company on the Inc. 500 list. The company is seeing significant lift on the media model in terms of eCPM rate and lower costs of acquisition and retention on the commerce end.

Why does this model work?… In short, when you create a delightful, valuable and purpose-driven user experience you have an opportunity to increase touch points, frequency of touches and amount of time spent beyond the mindshare spent on a typical transaction or in consuming a post. This will increase loyalty/retention, viral co-efficient and the likelihood that a user will be on your property when they are ready to transact or provide a monetizable signal that they are intending to transact at some point. If you’ve got a strong user experience design team that clearly understands ad tech, the business case and user psychology, they’ll make sure the use case not only gauges and captures intent, but also advances it.

While an initiative along these lines is likely an upfront capital expenditure, if you build the property with a value prop that instigates user curation, has mechanics for organic growth, etc. ongoing costs can be relatively well-contained yielding potential for increasing margins over time. The most scalable aspect of this opportunity is that revenue doesn’t necessarily need to be generated with physical goods or major infrastructure investments, it can grow by selling targetable intent data to ad networks, by reselling leads to direct suppliers, or a number of other paths. Combine a number of the elements successfully and you’ll improve your overall lifetime value over cost-per-acquisition formula. Combine all the elements successfully and you might have a breakout success.

Ping me if you’re interested in exploring the value drivers for the property, how to leverage company assets/positioning, what the ideal user experience may be and whether to build, buy or partner to make it happen.