THE STORY BEHIND MONSTRO VENTURES
“Maybe you should start a venture fund based on this. You might be one of only about five people in the world qualified to do it”.
These words came out of a close investor friend’s mouth as I sat down to speak with him last year at his office, somewhere inside of the WeWork facility at the intersection of Jones and Market Street in San Francisco. They would be pivotal. Last year I, along with two of my closest conspirators, realized that our combined experience as early adopters, as tech vets, and as storytellers gave us the unique opportunity to start something new. This is my story about how Monstro the creative agency and Monstro Ventures the venture capital firm came to be.
A decade and a half earlier, I was just beginning my career as a television producer working for ZDTV which soon became TechTV after Microsoft co-founder Paul Allen purchased it. I had had a love affair with both broadcast journalism along with computers and technology, so working for a traditional cable television network focused on computers and technology was my dream job.
During the course of that job, one of the segments TechTV did was an interview of the CTO and co-founder of a data center company called Equinix, mostly about how data centers work. The segment was hosted by my friend and former colleague, Kevin Rose. Jay Adelson was the name of that CTO and we quickly became friends.
When Paul Allen sold TechTV the culture of my dream job evaporated along with the essence of what TechTV was. In the meantime, Kevin had been dabbling with a custom underground hacker-type video show called ‘thebroken’ with quite an impressive audience and an even more impressive demographic — all before YouTube or the word “podcast” existed.
Jay identified the opportunity to harness the power of this audience with its targeted, authentic and engaging programming distributed exclusively via the Internet (quite the novelty at the time, as with many startups that begin to upend an industry). He essentially said, “I’ll give you $150,000 if you quit your jobs and focus on building this full time”.
That was my introduction to entrepreneurship and a paradigm shift in my understanding of the business world that would permanently change my life. My existing passion of storytelling in the video medium combined with my intense interest in computers and technology suddenly collided at full speed with a new gleam in my eyes for business, entrepreneurship and disrupting markets and industries.
As we built this online television network called Revision3, I ended up forging a partnership with a new friend, GigaOm founder Om Malik. We built, and I played the executive producer role for, a show all about the business side of the tech industry called ‘The GigaOm Show’. Through this show, I had the opportunity to both learn about and meet a myriad of impressive founders along with incredibly insightful investors, helping them actualize the potential of their companies. The good, the bad, and the ugly of all things startups came out in The GigaOm Show. I also learned that there are few genuinely good people who exhibit the business mind, entrepreneurial mind, and journalistic excellence of Om Malik. He’s still a curmudgeon.
Eventually, my own startup story achieved its own exit milestone 7 years after we founded the company. Discovery Communications purchased Revision3 in late 2012. We trail-blazed the online video landscape of audience metrics, defining ad units, deploying the best back-end video technology that existed at the time, all the while navigating through a massive recession. We had a down round and came out on the other side, providing a good return to our investors in the process.
While taking some time off after the sale, some of my future (and past) colleagues and I would get approached now and then by friends, or friends of friends, looking for a lead on how to create a good video to promote their product or service in a crowdfunding campaign. The dawn of Kickstarter and Indiegogo was upon us. It quickly became evident that outside of the product or service itself, the most important element of a crowdfunding campaign is the video and that video should tell a great story.
Those future colleagues were also former colleagues: Dalton G Crosthwait and Mauricio Balvanera. Mauricio started at USC Film school, went straight to Hollywood, and eventually landed at Revision3 as a producer. In addition to being an incredible friend, his insight as an engaging storyteller, curiosity as an early-adopter geek, combined with common sense know-how, light-heartedness and sharp sense of humor is an ideal complement to my own skill set.
I met Dalton Crosthwait because, while he was still in school for digital arts, he formed a motion graphics, visual effects, and animation firm called Monstro Design that Revision3 contracted with to create a significant number of its show graphics. His work ethic, creativity, and incredibly high standards both professionally and morally continue to inspire me.
Together we formed a small company and somewhat cleverly called it Pitchstarter in order to undertake product videos. We did this as not much more than a hobby side project, but as client work increased, Pitchstarter absorbed Dalton’s company and our new agency assumed its current name, Monstro.
Athos, one of our early clients, came to us through a connection to Chamath Palihapitiya of Social Capital. Athos is smart clothing that monitors your body’s biosignals, translating them into simple, actionable advice. My team and I were so impressed by the product, its potential, and the team behind it that we asked if they would be willing to provide a part of their payment for our services in the form of equity. They were happy we believed in them so much that we’d be willing to put some skin in the game and worked closely with us as they developed everything from what they would launch with to what the final product name would be.
And so a seed was planted. As I sought affirmation from mentors, contacts, colleagues, friends and confidants (just as valuable as anything on a resume), I found myself sitting at a table with the investor I referenced at the beginning of this article. He just happened to utter that quote at the right time and place. It was the proverbial straw the broke the camel’s back, ultimately leading to one of the clearest decisions we’ve made as a team.
That decision is simply that we would prefer to work with the clients whose teams and products we believe in so much that we would like to be a part of them — to take a calculated investor’s risk with equity. To be able to invest more robustly and not just with margins, we decided to raise a modest fund under $5M and as of late January 2016, Monstro Ventures was born.
What we as video storytellers — tellers of true stories — have the power to do for our portfolio companies is unique. We can help inspire all their potential users, consumers, customers, clients, and partners with the same inspiration that the founders have. The emotion that can be conveyed and transferred, along with the feeling of being empowered with the knowledge of the impact a product can have, we see as invaluable. The use of masterfully crafted and produced video achieves that goal better than ever before. Video conveys emotion, the feeling of being empowered by a product. And we at Monstro also have a deep rooted understanding of the product, consumer behavior, and media consumption habits. We want to engage our audiences and ultimately have them digest, remember and share, be it through laughter or goosebumps.
Monstro Ventures seeks to invest in early stage startups with a thought out market and actionable product roadmap, as well as later stage companies with increasing traction or a well calculated momentum-driven pivot. We’re excited about the access we enjoy to this broad swath of startups, all through our unique offering, which we combine with strong partnerships with other established investors looking to add to their portfolio the companies that reach toward their total available markets. While we are primarily an early stage investor, our position and partnerships give us access to incredible later-stage companies who need our services as well.
We’re formally announcing Monstro today, with myself, Mauricio and Dalton as the first partners. We’re honored by the support of many exemplary backers and LPs including Jonathan Abrams, Chris Sacca, Randi Zuckerberg, Dave McClure, Kevin Rose, Tucker Max, Richard Yoo and more. We, and our LPs, ultimately seek to invest in companies that can change the world for the better. We can’t wait to get started.