Brad Feld

Back to Blog

I’m Hot on Feedburner

Apr 05, 2005
Category Investments

Dick Costolo, the CEO of Feedburner, announced yesterday that we led their financing and that I have joined their board.

This shouldn’t be a surprise to anyone that read my original Why Did We Invest in NewsGator post or my What do my blog stats really mean post.  I first hooked up with Dick Costolo and the Feedburner crew on May 8, 2004 shortly after I started blogging (on May 4, 2004) due to a heads up from Fred Wilson that I should use Feedburner to publish my RSS feed.  I’ve been waiting patiently ever since to have the opportunity to invest in Feedburner.

When I dug in and started trying to understand RSS and blogging in the spring of 2004, I identified eight segments that I believed existed: Content Management Systems (CMS), Aggregators (Readers), Tools, Hosting, Content, Search, Analytics, and Advertising.  I used this as the framework for both exploring the impact of RSS and identifying companies that I might be interested in investing in.  My framework has evolved in the past year, especially once I realized that my technical analogy for how RSS evolved was going to be similar (but not equivalent) to how SMTP evolved.  I was a very successful investor in email-related technologies (and continue to enjoy being an investor in two successful email-related companies – Return Path and Postini), but also learned some “interesting” lessons about how quickly the dynamics could change as I had a huge financial win at one point in the “email direct marketing segment” with a company called MessageMedia that ultimately got slaughtered (more on that some other day).

Our investments in NewsGator and Technorati covered a lot of the interesting territory for us.  However, analytics was an important segment that neither NewsGator or Technorati touched (although both have huge amounts of interesting data – they just weren’t focused on the publisher-side for analytics).  While Technorati – as a search engine – has an advertising component to its revenue model, it didn’t address feed-oriented advertising, nor did it address any of the publisher-side complexity associated with feed management and distribution.  While publishers benefit from both NewsGator’s and Technorati’s services (and are customers of each company), we saw a wide open opportunity to help publishers with all of their syndication management, advertising, and analytics opportunities – hence Feedburner.

Dick is far more articulate about this then I am, so I recommend reading what he wrote about Feedburner’s Business Model in his post about the financing.  Dick – as a good entrepreneur – built a great syndicate around his financing.  DFJ (co-investors with us in Technorati) – are investors, as is Sutter Hill (our co-investors in Return Path – Greg Sands, who I’ve worked with closely at Return Path, will be a big help for us at Feedburner.)

While we’ve missed investing in a few of the segments, most notably CMS’s (and Six Apart is undoubtedly the best emerging company in this arena, especially as the free stuff is already owned by Google/Blogger, Microsoft/Spaces, and Yahoo/360), there are a few new problems (and possibly segments) that have emerged, especially as you start to think about the second-order effects of RSS (now that the first-order effects are over a year old and in our face every day).

If you blog but don’t currently use Feedburner to publish your feed, try it.  I promise you’ll like it. Oh – and try NewsGator and Technorati also (my homage to Warren Buffett, master of promoting his own companies – drink a Diet Coke while you are at it).