Chute fits squarely into our Glue theme. We continue to be enthusiastic about companies that provide on-demand application infrastructure for mobile and web developers. Multiple companies in our Protocol and Glue themes fit this description, including SendGrid, MongoLab, Urban Airship, and Pantheon.

We’ve long been intrigued by the massive explosion in the number of photos taken and shared every year, from 86 billion in 2000 up to 500 billion in 2012, driven over the last five years by the rise of the smartphone and social media. Images, and increasingly video, have become a hugely important component of the online conversation in both mainstream and user-generated social media.

A third thread of interest for us is the notion of the “hashtag economy” and the conversations that occur across the likes of Twitter, Facebook, Flickr, Instagram and others, which are united by the ad-hoc creations of hashtags by users in real-time that bind together discussions occurring about specific news events, areas of interest, conferences, random internet memes and more.

Chute brings together these three areas of interest for us by providing a cloud platform offered to publishers, brands and other web and mobile developers who wish to easily incorporate and scale the use of visual media in their applications.

Photos can be ingested into the Chute platform via upload directly from users’ mobile devices, uploaded via the web, or captured from images bearing specific hashtags that are flowing on Facebook, Instagram, Flickr, or Twitter. Post-ingestion, Chute enables manipulation and distribution of the images, workflow to power editorial curation and pre-publication rights-clearing, caching and CDN delivery, and integration with a publisher’s CMS and advertising systems.

In a nutshell, Chute helps power the visual revolution: enabling developers, brands, and publishers to easily integrate photo and video content that originates anywhere into their mobile apps, websites, CMS and advertising platforms.

We are excited to be working with Chute’s co-founders Ranvir Gujral and Gregarious Narain and our co-investors Freestyle and USVP to help build Chute into one of the fundamental online media infrastructure layers.

Update: there’s some good press coverage this morning at Pando Daily and The Next Web.

With this site redesign we also took the opportunity to take some new group and individual shots of the Foundry team. Some have been posted here, others we’ll roll out in a later update.

We’re particularly excited about our “Album Cover” series of photos of the four Foundry partners. We’ve adapted a few of iconic album covers for our use – they should be instantly recognizable to you, we’re sure. Of course this is all done in tongue and cheek and in the spirit of good fun. We’ve often said that the entrepreneurs we back are the real rock stars – we’re the groupies – and we hope you won’t take these photos as an indication otherwise. That being said, in the past we’ve had fun with our website photos and don’t intend to stop any time soon.

In that spirit we’re offering up a bit of a challenge to the entrepreneurial community. Our hope is that these album shots will inspire entrepreneurs to come up with their own take on iconic albums. Send them our way, and we’ll feature them on the site. It would be fun to start a little meme around the “company founders as famous album cover” idea!

Given our deep focus on human-computer interaction, it was easy for us to decide to get involved with Harmonix. We’ve learned an enormous amount about the intersection of human-computer interaction and video games over the past five years through our investments in Zynga, Sifteo, and Orbotix. We’ve continued to stretch the envelope of human-computer interaction with investments in Oblong, Occipital, and Organic Motion. We’ve seen, and experienced, first hand the power of using different HCI paradigms to capture human emotion and interaction in different contexts.

We’ve known the Harmonix founders, Alex Rigopulos and Eran Egozy, for 18 years. What they and their team have accomplished is the stuff of legends, and the new games they’ve showed us are all mind-blowing. We believe once again they are about to give us a window into the future. It’s an honor and a delight to get to work with them.

Rover.com fits in our new marketplace theme. In this theme, we are searching for situations that have an inherent suppressed supply as well as a demand – the market needs to work for both participants.  We’re particularly intrigued with markets where the goods or services in question exist already, where full demand has been difficult to obtain on an individual basis. Finally, we are concerned with time – we want assets that expire if not used. We think of this type of market as “remnant asset monetization.”

Rover.com is a perfect example of this type of a marketplace. The existing solution for dog sitting, which consists of kennels and private dog boarding, is a very large annual market ($10b+). However, less than 20% of all dog owners end up using one of these solutions as the vast majority of dog owners are not comfortable with these solutions. As a result, we estimate there is a $50b+ “shadow market” of either privately arranged dog sitters, friends and family, or unmet dog sitting capacity. In short, a perfect opportunity for remnant asset monetization.

If you, like us, view your dog as a member of your family, take a look at Rover.com the next time you leave home and need to find a sitter for your dog. Your dog will love you for it.

This is the third time we have backed a company Todd has founded.  Todd was previously  co-founder/CTO at Raindance Communications, which we backed at Mobius Venture Capital and went public in 2000.  Todd went on to be co-founder/CEO at Lijit Networks, which Foundry Group invested in in 2008 and was acquired in 2011 by Federated Media.

VictorOps is creating an enterprise communication and collaboration platform targeted at the Ops team, aka the Network Operations team, the Tech Ops team, the Dev Ops team, etc.  The team at VictorOps has years of experience living through the grind the Ops teams faces due to unplanned yet regularly occurring outages that any company running web infrastructure inevitably faces, and VictorOps is building a “situation room” environment that enables the Ops team to quickly resolve outages, which can have disastrous (and revenue-impacting) consequences.

VictorOps will be in heads-down development mode over the next couple quarters, with a goal of getting early versions of the system in customers hands by mid-year.  We are excited to be playing a part in the “getting the band back together” dynamic behind VictorOps and looking forward to working with Todd, Bryce, and Dan.

Check out the VictorOps blog for a rundown of more detailed coverage of their December 27th, 2012 launch announcement.

• Is in the rocky mountain region (i.e. Colorado, Utah, Montana, Wyoming, Arizona, Idaho, New Mexico and Nevada)
• Will be seeking capital in the next 12 months
• Did not present at either the winter or fall 2012 VCIR conferences
• Is in any sector except biopharma or real estate

If you would like to submit an application for consideration, please visit www.vcirwinter.com. We are looking for companies at all stages of development from seed/early, venture (A/B rounds) and growth companies. The committee will begin selecting presenting companies within the next few weeks.

(Model Brad (the “Dude”) is sporting Disco Pants, while the more demure model Jason is wearing the Executive Pinstripe Hoodie).

We’ve been thinking more often about how valuable companies are being built by creating new marketplaces.  We believe that we’ve found a great opportunity in Betabrand to help create a company that embodies many of these principals in the world of online fashion.

Currently, the company allows users to chose which new items will be offered by posting proposals on their website and having prospective customers vote on which ones will be brought to market.  The long-range plan, however, is to allow customers to actually design the clothing, crowd source input and modifications and designs, and then bring the product to life.   Already the company has brought out a few items with this process and predicts that 80% of their items will be generated from their customers and freelance designers.

The company has created a unique distribution model built upon social media.  Called the “Model Citizen” campaign, customers send photographs of themselves wearing Betabrand clothing to the company, which in turn sends them a link they can forward to friends that puts those photos front and center on what looks like the Betabrand home page. (In fact, it’s a personalized version made just for them.)  In the future, one will be able to shop by only viewing things that interest friends in their social circles.  In some cases, they may limit the purchase of a particular item to only one person in a social circle to ensure exclusivity.

The company was founded by Chris Lindland who previously invented Cordarounds.  We are excited to work with the team.  And if you happen to see us wearing some cool new clothes around town, it’s probably Betabrand gear!

Previously, we’ve unearthed themes after we’ve made several initial investments in an area and have spent enough time that we’ve been satisfied that we’ve found an area of opportunity that we can invest in over a ten to twenty year life span.  Prime examples of this were our February 2011 unveiling of our Distribution theme and our April 2011 post about our Adhesive theme, which itself emerged out of our Glue theme.

Recently, we’ve invested in a couple of companies that have caused us to examine whether or not we’ve found an investment area that qualifies as a new theme.  But instead of holding our thought process behind closed doors as we normally do, we’ve decided to try a new experiment:  we are going to unearth our current thinking and solicit your responses.  Consider this “Foundry Group Thinking Out Loud.”

What’s the potential new theme?  For now, let’s call it “Marketplace.”

We’ve been spending a lot of time thinking about marketplaces – particularly in the past year, but really dating back to investments we’ve made over the past decade in companies such as Service Magic (now HomeAdvisor) and Trada.  Specifically, with the success of companies like Airbnb, Uber, and Etsy it appears to us that interesting and valuable companies can continue to be built by bringing transactions that have yet to be thought of as ripe for online disruption, especially if there are some specific scale or operational challenges in doing so that we believe can be solved to create a sustainable competitive advantage.

Not any old marketplace will do, however.  We believe that there must be an inherent suppressed supply as well as a demand – the market needs to work for both participants.  We’re particularly intrigued with markets where the goods or services in question exist already, where full demand has been difficult to obtain on an individual basis. In the case of Airbnb, people had an unfulfilled demand for places to stay outside of the traditional hotel market while others had spare bedrooms and homes to rent.  In the case of Uber, there was a massive supply of unused car service operators while people sat frustrated in cities that did not have enough cabs.  The “inventory” previously existed, but it was nearly impossible to expose it efficiently before nearly ubiquitous connectivity and computation came along.

In both these cases there is also a factor of time – the Uber driver can sell minutes that he is not otherwise working and if they don’t the supply simply goes unfulfilled. Airbnb has the same dynamic. We think of this type of market as “remnant asset monetization.”   When real-time demand and location are important to the equation, mobile is the “killer app” while other types of friction may be best served via more traditional web applications.

One of our first investments in a remnant marketplace was PivotDesk, which is creating a end-to-end marketplace for remnant office space offering leaseholders the ability to connect with small businesses in a way that previous has not existed.

Not all of these marketplaces deal with remnant assets, however.  (Some people have coined this remnant asset monetization as “collaborative consumption”).  For example, as Uber continues to mature, we see many operators buying additional cars to fulfil the demand.  Our recent investment in Sidetour has allowed the company to create a marketplace for people to discover and book unique experiences offered by hosts with specific expertise in their trade.  While to some extent this is fulfilling unmet demand, like Uber, Sidetour is seeing hosts come up with new ideas for experience that leverage their expertise which is akin to buying new cars to fulfill demand.

What we are focused on are large markets, with known supply and demand dynamics, that have some sort of friction that previously disintermediated buyers and sellers.  Additionally, we are not focused on regulated markets.  For instance, there is much inefficiency in the medical space, but the spectre of regulations makes this marketplace uninteresting to us.

So is this a new theme for us?  We don’t know yet.  We know that we are very interested in the dynamics here and have looked at a lot more companies than we’ve funded, but there feels like there is something “more” here than just a few one off investments.

Let us know what you think.  Even better, if you are an entrepreneur building a business like this, reach out to us.  We would love to learn from you.

At Foundry we’ve made a number of investment in our Adhesive theme that are bringing technology to the online advertising ecosystem, including several that are focused on programmatic (meaning machine to machine) trading – specifically AdMeld (which was purchased by Google last December) and Triggit (the leading onramp to Facebook’s burgeoning exchange). Like most of the historic investment around programmatic, both AdMeld and Triggit are focused on that large swath of inventory that publishers don’t sell with their direct sales force, known in the industry as remnant or non-premium. With the large volumes and relatively low unit price points (not to mention the ability to target across huge audience segments), this was a logical place for this programmatic technology to enter the display ecosystem. But isocket is tackling the next frontier of programmatic buying and selling – building a platform that brings this same type of efficiency to the direct sold side of the business. To this day, direct sold inventory relies on email and faxes to transact – adding significant cost to the process of buying and selling house ads. It is this cost that isocket is attacking by building technology that helps both publishers and advertisers connect and transact more seamlessly.

We’ve had our eye on this space for some time and have evaluated a number of the emerging companies that are starting to focus on this problem. We believe that isocket Founder and CEO John Ramey has assembled the best team and has built the best product (and as a result the best customer base) to attack this problem. We’re thrilled to have isocket as part of the Foundry family! You can read more about this investment on Seth’s blog here.

Once installed, homeowners will be able to monitor and control lights, locks, thermostats, sensors and other devices in the home via smartphone and tablet applications that will make using these technologies simple and delightful. A great benefit to the consumer will be the comfort, convenience, and peace of mind they receive at an affordable price. At the same time, Mobiplug is opening up their API so that developers can innovate on their platform as well, which will enable all sorts of cool functionality by allowing web services with open APIs to interact and access the gateway to create truly automated actions with the connected devices, via simple API calls.

Most importantly, Mobiplug will make advanced home monitoring and control technologies accessible to a much broader market than has previously been possible because their system works with off-the-shelf electronics from major retailers, bypassing the typical high costs and difficulties inherent in deploying traditional high-end systems in the home.

Ryan was a mentor for Mobiplug throughout the summer TechStars program and was excited by the strength of the founding team and their vision of bringing home monitoring and control and the Internet-of-things to a broad market. They also have a clear strategy to leverage the large existing install base of home automation devices already in the market that have been historically been far too complex and expensive for the average homeowner to deploy.

Finally, fellow Mobiplug mentor Tim Enwall, previously the founder of Tendril Networks, became equally enthusiastic about Mobiplug’s vision and decided to join the company as CEO.

As these things came together in the final weeks of the TechStars program, we offered to lead Mobiplug’s Series A financing, and, thankfully, they accepted our offer.  We’re looking forward to helping Jeff, Lee, Mike and Tim build Mobiplug into a great company in the coming years.