You might be wondering why we're making investments at such a blistering pace at the moment, when many funds are slowing down and waiting for the markets to stabilise. Part of the answer lies in our deal sourcing strategy. Because we like profitable, founder-owned businesses in particular, we often build relationships with entrepreneurs over years before making an investment.
So as it happens, a number of those relationships came to fruition in the past 4 months, independently of the economic turmoil. And so we closed investments in Schoolwires, Go Internet Media, Spreadshirt and GoViral (with another one to be announced next week) -- many of them companies we had known and courted for some time.
As promised in last week's post on Web cinema, here's an aside on commercial viral video. My partner Michael Elias closed an investment this week in GoViral, an ad network for branded viral video. GoViral is a Kennet 'sweet spot' deal -- bootstrapped, with an experienced management team (ex-Trade Doubler, Leo Burnett, Rawflow), strong commercial traction and growth, and a global market opportunity.
So what the heck is branded viral video? You've all seen the funny, quirky videos that have made the rounds like wildfire, like Cadbury's gorilla advert and Levi's Moonwalker. Well, there is some structure and strategy behind getting those videos to 'go viral'. Brands have cottoned on to the fact that if their video is good enough, funny or edgy enough, it can get a lot of 'free' distribution by getting on to blogs, into emails, and onto social networks. But to get that level of distribution, the videos need a solid kickstart. That's where services like GoViral's come in.
GoViral built a global network of web publishers in 80 countries, where it can 'seed' its clients' videos to get the viral ball rolling. GoViral's videos play in a YouTube-like player, directly within the content of the site. Once consumers see the video, they can easily share it, blog it, rate it, etc. The best videos get the most distribution and the most views. GoViral tracks the video's voyage across the Web and delivers detailed performance reports back to the brand that originated it.
The key is to work closely with brands to make sure only the best videos with viral potential make it onto the network. That effort has produced gems like this one, a jam session of extreme street football in Mexico:
But this approach can also be applied to traditional high-quality commercials like this one for Nissan Qashqai:
Or they can be low-budget guerrilla projects like the dynamite surfers from Quicksilver:
When it works, the results can be astounding. As reported by GigaOm, the Quicksilver video above got 20 million views and generated £68 in sales revenue for every £1 spent on the campaign.
Viral video seeding is in its infancy, but big brands are jumping on board (and not only with video, but also games and widgets). Check out one of my favourite campaigns, Virgin Media's Right Music Wrongs.