Women 2.0 asks Esther Dyson, angel investor in companies like Flickr and 23andMe, about opportunities for entrepreneurs and the women entrepreneurs in her portfolio.Esther Dyson: The opportunities for women are basically the same as opportunities in general. They are not currently in video sharing or yet another social network (ie. "if we get 10 million people we'd be wildly successful"). People forget that to get the wide audience you need, you need to spend a lot on marketing or have something unique.
In general, the opportunities aren’t so much strategic, but specific to an individual. What do you know? What do you want to do and then how do you make it happen? It sounds glib but if doesn't work out in a big way, at least you're still doing something you love.
If it's not something you're personally passionate about, you're unlikely to be persistent when things go wrong… and things inevitably go wrong. I've always personally done what I thought was interesting, and it wasn't what other people thought was interesting. From artificial intelligence to Flickr to Powerset, I did stuff I thought was interesting but not mainstream. Sometimes I got lucky and sometimes I didn't get lucky, but in the meantime I was having fun.
Women 2.0: How did you become an angel investor?
Esther Dyson: I was writing my newsletter and being a good journalist and not investing because it would have been a conflict of interest. I started going to Russia and Eastern Europe in 1989 and writing about the IT markets there. I was always telling people that they should be investing there. Finally I closed down my East European newsletter and became an angel investor in Eastern Europe where 100k goes a lot further than in the US. I discovered I really liked it. So I started getting vigorous on the disclosure side and investing in the US as well It's so much fun and deeply satisfying when it works, and humbling when it doesn't.
There are a lot of angel investors now. In fact, I think right now there is a bubble in parts of the startup market -- too many startups and entrepreneurs and not enough people willing to work for the entrepreneurs! Hiring is the biggest challenge.
Women 2.0: Why are you an angel investor and not a VC or entrepreneur?
Esther Dyson: Because it's my own money… so I don’t need to apologize to anyone when my decisions don’t work out. I don't have obligations, and take my own little pile of money to do what I think is interesting. I think people don't focus on that enough -- the tradeoffs you take when you take money from investors, whether you’re a startup or a VC investing other people’s money. VC-funded startups have to run the business for the investors -- it's no longer the entrepreneur’s company.
Women 2.0: What are the differences and trade-offs between angel and venture capital investment?
Esther Dyson: Aside from whose money it is and the scale, not much. The models are changing and morphing... There are always tradeoffs in life, but they are usually specific. You need to look at the people, the expertise, the terms of the deal: Do they want you to move to San Francisco?
Women 2.0: Tell us about the women founders in your portfolio.
Esther Dyson: Airship Ventures is a great example; It’s completely different from almost anything else. It owns and operates a Zeppelin airship with a business model of tourist rides, research/science missions for NASA and also advertising. It’s currently flying around with the Farmers Insurance logo. Airship is a lot of fun and something I believe in.
Alex Hall is the founder of Airship Ventures; she knows the aerospace community well because she used to run Chabot Space Center in Oakland. Airship is one of those companies where it’s really fun to use the product, but it’s also a capital-intensive business subject to a lot of regulation. I love to go on rides where Alex serves as chief flight attendant because of her great enthusiasm, but she’s just as likely to be negotiating a helium-storage contract on any given day.
Ellie Cachette of ConsumerBell passionately believes in what she is doing, as someone close to her died because of a bad product. The mission of ConsumerBell is to help companies on a broad scale to reach people who are using their products with updates, warnings or recalls. For example, if you sell a car, you can go to your dealer network which has records of each purchase. But what if you have a less trackable product, how do you reach your consumers? ConsumerBell is designed to help companies reach millions of people. Most of them tend to be women because they are the ones who take care of the children and buy the items, etc. Ellie has been getting interest from a variety of consumer product companies.
Women 2.0: Ellie blogged for us about how following your gut leads to a product. Any other interesting women founders or startups you like?
Esther Dyson: One of my favorite founders is Elizabeth Charnock of Cataphora, a company I was writing about a while ago. It started out as a legal service bureau for customers who needed to analyze large batches of e-mail, mostly for lawsuits. Running Cataphora on a corpus of e-mail is fascinating because you can see the structure of communications and relationships within a group emerge: who delegates to whom, who doesn't respond, who CCs whom, who wants and who gives... Now she has a new consumer product called Digital Mirror which uses the same techniques to let you see your relations with the people you e-mail regularly. Not only can you analyze how others communicate; you can also see your own patterns -– good and uncomfortably bad! I am not an investor -- she didn't need any money! But I would have gladly participated.
And there is Maria Sipka who runs Linqia, a really cool company based in Barcelona but operating worldwide. Maria worked for Xing in Europe, which is a social network platform. She realized that brands need a better way to reach all these online communities, many of them focused and extremely valuable to particular vendors, from Xing and Facebook groups to Meetups and professional networks. Linqia offers them access and metrics, for everything from sponsorships and sample distribution to PR and market research.
Jen McCabe is another female entrepreneur I have invested in. Her company started as Contagion Health (Y Combinator Summer 2010), and has now morphed into Habit Labs, which is a great name for a company devoted to helping people build healthy habits. She's working with a new partner Buster Benson, who founded 43Things, 750Words, and Healthmonth.com, and they're making great progress. Among other things, their new service creates a habit map for you based on social, location and behavioral patterning, and repeatedly asks if you're ready to make a change. It calibrates to the way you like to receive messages, and how quickly you complete actions. Then the system delivers smart suggestions to you, or lets your friends decide how to nudge you towards the habits they want you to adopt.
Arlyn Davich started PayPerks, a for-profit companies with a social mission. It provides sponsored payroll bank cards for people who may not have a bank account or are unable to get credit -- The user gets a branded card that you can use it the way you use a credit card. It allows unbanked people to be treated with respect and to have the convenience of a payment card, and it brings more people into the modern payments system. Employers love it because it's much cheaper than paychecks or cash, and it’s a nice employee perk. I love to fund stuff that has a purpose without being boring or pompous about it.
Women 2.0: What's the next big opportunity for entrepreneurs?
Esther Dyson: Fundamentally I think the most exciting way to use all this new information technology is to help people stay healthier by focusing on themselves. Not so much by fixing healthcare as by helping people stay healthy, like Habit Labs. it's hard because unfortunately knowledge is not enough -- you also need motivation. You can have the best intentions in the world but then you go to a stupid conference and all they're serving is donuts and you're travelling and you're taking care of your kids.... You see a lot of women who get kids and get busy and they stop taking care of themselves.
A lot of what I'm doing, from 23andMe to Habit Labs, is to figure out how to take information and make it more meaningful and actionable, how to give people support groups to remind them and motivate them to exercise and get enough sleep. In the world of today, with all the advertising and promotion of bad habits, it's easy to eat badly and not exercise enough. Starting at the beginning of this trend to user-generated habit modification is both a huge commercial opportunity and a huge social opportunity.
Women 2.0 thanks Esther Dyson for supporting us over the years, including serving as our prized investor meeting for the winner of 2010's Women 2.0 Startup Competition. Esther Dyson, chairman of EDventure, is actively involved in improving the world’s health, both as an investor and as the publisher on the Internet of her own genome and health records, as part of George Church’s Personal Genome Project. She believes fiercely in the power of information to improve the quality of health care, and the power of friends and social cues to influence people’s behavior and improve their health. Follow her on Twitter at @edyson.
As an investor/advisor, Esther puts her money where her mouth is. She was an early board member of Medscape, now part of WebMD. She was also an investor in Medstory, now part of Microsoft. Currently, Esther is an investor in and sits on the boards of 23andMe (consumer genomes) and Voxiva (Text4Baby, mHealth). She is also an angel investor in Contagion Health, Epernicus, Genomera, GreenGoose, HealthEngage, HealthMonth, HealthTap, HealthVillage, Keas, Medicalgorithmics, Medivo, Organized Wisdom, PatientsLikeMe, PatientsKnowBest, Resilient and Tocagen. She sits on the board of the Personal Genome Project and is active in Quantified Self activities and the Health 2.0 community.
Esther has written two monographs on electronic records and health information liquidity, and ran the 2005 Personal Health Information workshop co-sponsored by New York’s New School University. Her most recent commentaries on health can be found here: The Transparent Consumer, Healthcare's Frequent Fliers, Life By The Numbers, Heal Thyself Online and The Language of Genomics.