Transcript: Venture Capital and Social Media Marketing Perspective

This transcript is from a PodTech.net podcast at:
http://www.podtech.net/home/technology/1388/venture-capital-and-social-media-marketing-perspective

Guest: Keith Benjamin - Levensohn Venture Partners
Host: Jennifer Jones - PodTech

Announcer 1
So, what that means you are marketers as I have to accept that I may not have many Nast (ph) Market Media choices left and be much more comfortable advertising in scattered sites and on (ph) scattered social networking services.

Announcer 2
This is Podtech.net, welcome to Marketing Voices featuring the fresh perspectives of innovative marketing leaders and examining how social media is changing marketing throughout the world. Here is your host Jennifer Jones.

Jennifer Jones - PodTech
Hi, this is Jennifer Jones and with me today on Marketing Voices is Keith Benjamin who's Managing Director of a very well know venture firm called Levensohn Venture Partners and he will be talking to me today about his thoughts on investing in the social media space, what's hot, what's not? But, additionally really trying to educate all of the listeners on the show about why people should care about what venture capitalists think as a relate to social media. So, Keith with that introduction welcome to Marking Voices.

Keith Benjamin - Levensohn Venture Partners
Thank you, Jennifer.

Jennifer Jones - PodTech
You're welcome. So, the first question being, so what are you looking at in terms of companies that you are investing in the social media space and why?

Keith Benjamin - Levensohn Venture Partners
Well, I'd start with saying the things that I have been paying a lot of attention to for many years is pretty dramatic change in behavior from the marketer stand point it's just gotten tougher and tougher to get to people. So, I've tried to find companies that provide tools to marketer to help them reach people who by enlarge over the last 15 years have become more and more difficult to reach.

Jennifer Jones - PodTech
So, give me an example.

Keith Benjamin - Levensohn Venture Partners
Well, the best way to start is realization that I am getting old, I am 47 and I have a whole different view on social networking versus the current teenage and college student generations. My idea of social networking is to have people over for a cocktail party. The marketing application of that is I've also managed to stop exposing myself to a lot of mass media I can TVO through commercials, I can skip the ads in newspapers by reading them online, I've become a very hard person to reach in terms of establishing a new brand.

Jennifer Jones - PodTech
Right.

Keith Benjamin - Levensohn Venture Partners
The stuff I personally buy is stuff that I search out information for, or a friend recommends to me. So, in my generation it's become much more difficult to establish a new brand, the new brands that I buy or ones where I have either researched it, or a friend of mine has shown that he or she likes it, whether that's a pair of sneakers, or wine, or almost anything. So, that's the behavior pattern that's pretty stark. So, in my generation we've tried to look at an investment firm into companies that can help figure out how to get part of that recommendation cycle I mention a couple.

Jennifer Jones - PodTech
Yeah, go on. Mention a few.

Keith Benjamin - Levensohn Venture Partners
The one that we've invested in -- well the first company I invested in as venture capitalist I know the company called Core Matrix that looked at websites to track when I was having problem as a consumer going through the websites and did a lot of analytics to make web shopping a lot easier. You know the second component that has been in the big investment theme is okay if I am doing research online let's get to me with an Ad that has been the success of Google. Now, we need to go a step further which is okay, so how can I learn about it as a brand, what the consumer is thinking? The simplest method, that is surveys so invested in a company called Informative that (Inaudible) automated basis has a product till they (ph) achieve very easily survey large numbers of people about what they are really thinking about a product and also try to delve into what's makes them recommend it to others. With that knowledge you can cross better messages and actually effectively reach large groups of people by catering first and foremost to those influential customers. So, we've made two investments in that space again, one of my private venture from Core Matrix and recently Informative.

Jennifer Jones - PodTech
So, in terms of these companies and you've said it's really important to think about kind of how they are been used as tools. What other tools do you think are out there that marketers need to know about as it relates to then obviously social media?

Keith Benjamin - Levensohn Venture Partners
Well, that gets to the younger generation. And I think the part of it is probably (ph) I must admit I still been trying to figure out, how to find a great investment is, how do you deal with the new social behavior which I'll describe its chronic multi tasking.

Jennifer Jones - PodTech
Wait, what's that “Chronic Multi Tasking”?

Keith Benjamin - Levensohn Venture Partners
Chronic.

Jennifer Jones - PodTech
Chronic, yeah.

Keith Benjamin - Levensohn Venture Partners
My wife would describe, my touching, my (Inaudible) at the dinner table is cause for divorce, or death, or at least a bad example to set for my children. At a table involving teenagers or college students, it's abnormal not to have some combination of a cell phone, a Blackberry like device, a laptop, an iPod and whatever else I am missing. Multitasking which also means having may be five, ten screens up online at once and being very comfortable bouncing back and forth between different sites. Say fundamentals -- fundamentally different media using behavior then my behavior, which had been hey could you aggregate all this for me and edit it a little bit and make it easier for me to get to. So, from a marketer stand point we've seen what one could call again, you are a student of behavior wondering what's going to happen to children. So, much multitasking it can't be good for you; or it has a very direct implication on media it's become incredibly fragmented. So, what that mean for a marketer as I have to accept that I may not have many (Inaudible) Market Media choices left and be much more comfortable advertising in scattered sites in on scattered (ph) social networking services. And we've tried to look and have not found yet companies that we'll particularly good job of reaching this fragmented audiences but it's a theme that I pay attention to.

Jennifer Jones - PodTech
So, what are some companies obviously you are talking to, somebody who is at PodTech and we were funded by (Inaudible) an US VP but what are other companies that you really think are kind of hot today that ultimately are hitting the mark?

Keith Benjamin - Levensohn Venture Partners
You know I haven't…

Jennifer Jones - PodTech
Social meeting companies.

Keith Benjamin - Levensohn Venture Partners
…I haven't (ph) that many the one company that has been able to allow marketers to reach fragmented audiences (Inaudible) leaves through commerce has been Google, if I searching for information on a product, it's likely I am going to Google, it's likely they can serve me up as a lead to a potential brand that sell me something. In the emerging world of blog searching where if I want to -- go pass just searching on different stores they are going to sell me something but want to get information. There a company called Spear, which is one of the newer blog search companies that I think had this interaction (ph) it's harder -- it appears harder to do a good job searching blogs versus the web (Inaudible) much more research. Account (ph) investment like that is a Spear I would expect more likely get swallowed by one of the larger companies. So, the tough thing about investing in this space is try to find something that could be a stand alone company as oppose (Inaudible) immediate sale I've seen lots of interesting companies that I think likely get sold to the bigger entities, I mean we try to find companies that can stand on there alone as (Inaudible).

Jennifer Jones - PodTech
Okay, so what about back to this multitasking thing. In terms of looking at the younger kids and the fact that they are actually working the way they are working? Are there specific things as you look as you are a venture investor where you really say look this are the criteria for the multitasking that ultimately ensure that we invest in a certain space?

Keith Benjamin - Levensohn Venture Partners
Well, I've just been trying to not sight it. The challenge with multitasking is it means you have to invest in multiply things and you have to be pretty careful about not staying to long in the old things.

Jennifer Jones - PodTech
Right.

Keith Benjamin - Levensohn Venture Partners
So, if I was in Facebook, which is not investment of ours, then its pretty interesting that you could -- that you have a tough decision which is, I better quickly sell it before it's no longer cool. So, I think the toughest investment consideration is going to be timing to get in and out, out being the hard part. I have been trying to figure out are there are ways to tease that a younger generation now getting older back into more aggregated services I think the more natural way that's going to occur is Google, Yahoo, Microsoft just buy some. But, I do think there is probably room for other aggregation services. So, my investments (Inaudible), which tends to be a little bit contrarian, it tends to be how you make more money? As to say, “Okay what happens when kids get a little tired of multitasking?” So, from an investment perspective that's what I have been thinking about.

Jennifer Jones - PodTech
So, what about mobile? I mean you see a lot of this stuff that these kids want to on their cell phones and all that. How are you looking at mobile, specially as it relates to marketing as well back to your point about various channels fragmentation is necessary to consider, like I said how are your viewing mobile?

Keith Benjamin - Levensohn Venture Partners
That's a great question and we continue to look at a lot of mobile deals. We've looked more at mobile infrastructure deals but that kind of the plumbing underneath new applications. The biggest challenge in the mobile space is that, you have a limited number of buyers and they are very difficult to deal with. Particularly of the handset manufacturers, not to mention the carriers. I haven't see, I think there is a natural increase in the number of applications you are going to see on devices, I think a lot of that money from an investment perspective has been made. There is a lot of company going after games, companies go and try provide games for phones. Now, we've been paying a little more attention to figuring out, how to use the phone a little more effectively for commerce? Use it to, to pay for things anywhere but quite frankly I think this space is a little bit mature from a venture investment stand point.

Jennifer Jones - PodTech
Okay, well great you have been very helpful so I have been talking to Keith Benjamin, who is a Managing Director at a firm called Levensohn Venture Partners. I didn't going to keys background in the beginning but he has been into digital media space for 15 years as he is very much know as somebody who a lot of people listen to. He was the key internet analyst all during the boom for Robertson and then went to Highland. So, the point being here that, what he is seeing and what he is viewing is really very key to what we all should be looking as we think about what's important from marketers. So, Keith again thank you for being on Marketing Voices.

Keith Benjamin - Levensohn Venture Partners
My pleasure, Jennifer thanks for having me.

Jennifer Jones - PodTech
You're welcome. And so the website for Levensohn is www.levep.com, correct?

Keith Benjamin - Levensohn Venture Partners
That is correct.

Jennifer Jones - PodTech
Okay, and to all my listeners may all the voices you hear be marketing voices.