Tag: Madrona News

Madrona at 25, Reflections and Looking Ahead

Wow, this was not the 25th year we had envisioned. What this year has done is bring us together and has brought to the forefront how important community is for all of us – individually and as a venture firm. The essay below is an excerpt from a book we produced about the history of the firm and Seattle’s growth – it is from the entire Madrona team to the amazing community of innovators around us.

And if you want some history – check out How do You Start a Venture Firm? Here’s Our Story – a Founded & Funded podcast with early Madrona founders and team members telling the story in their own words.

We all have dreams and the power to imagine what might be possible. If you focus on a real need and a real opportunity that appears to be timed right, you might just turn the improbable into the inevitable. Amazon, Isilon, Redfin, Smartsheet, Snowflake, Apptio and many more of our companies did just that.

Anything that is truly aspirational needs grounding in some core principles and beliefs. Words and actions you can live by on a daily basis like curiosity, humility and integrity guide you in both good times and hard times. And, with a little good fortune, you might learn your way into a winning core strategy that can persist for decades and potentially change the world.

At Madrona, our core focus is helping exceptional entrepreneurs and their teams create successful technology companies primarily based in the Pacific Northwest. We roll up our sleeves from Day One and bring a long-term perspective to the company building journey.

At Madrona, our core focus is helping exceptional entrepreneurs and their teams create successful technology companies primarily based in the Pacific Northwest. We roll up our sleeves from Day One and bring a long-term perspective to the company building journey. We also have a mindset that there are immense opportunities to innovate that will persist for decades to come. So, as we help build the next generation of lasting companies, we are trying to build a bigger pie of economic success and opportunity across our entire community.

One of Madrona’s founders, Bill Ruckelshaus, liked to remind us that things never change as much in one year as you expect they will, but they change more in a decade than you could possibly imagine. And, things have changed more since 1995 than we could have imagined. We have moved from hardware to the cloud, from client-server to intelligent software-as-a-service and from PC’s to “always on” smartphones. The changes are immense across many different aspects of technology, business models and societal expectations – but what remains the same is the human element.

We start with extraordinarily talented entrepreneurs – believing in them, supporting them, opening doors for them. And that effort involves the whole Madrona family, inside and outside the firm, to help those entrepreneurs and their companies succeed. Employees at our companies, researchers at the University of Washington and beyond, investors who believe in us, and countless partners in the broader ecosystem; together we are working to build world changing technologies, businesses and communities. After all, in the innovation ecosystem it is still Day One and we believe that will be true for the long run.

The next 25 years…

At Madrona, we have been committed to a consistent strategy for 25 years. We have also foreseen and embraced changes in customers, technologies and society that produced countless breakthrough products and companies. This combination of anticipating change and sticking to core principles is at the heart and soul of Madrona’s plans for the next 25 years.

That means, we will continue to be founder-driven as the next generation comes up with new ideas we can’t even imagine today. For the future founders in our midst, it is your grit, optimism and insatiable curiosity to solve problems better than they have ever been solved before that inspires us. And, that too will never change.

There’s no reliable way to forecast what’s going to happen over the next 25 years. We know from experience we will get some things wrong, but there are a few major trends we can envision. Technology will increasingly be involved with every interaction we have in the physical world, from home to store to vehicles. Devices and sensors will become more ubiquitous and less observable enabling humans and “things” to be constantly connected. Software will be infused with data and machine learning to become “dataware” and augment human intelligence in almost every vocation. Combining DNA, the code of life, with human-generated code will unlock intersections of innovation in the biological and computer sciences previously unimaginable.

One thing is for sure. Nothing can shake our belief in this region’s entrepreneurs to see around corners and build technology that will change the world.

One thing is for sure. Nothing can shake our belief in this region’s entrepreneurs to see around corners and build technology that will change the world. Seattle and the entire Pacific Northwest will be a global powerhouse in technology innovation for decades to come, at a pace faster and more innovative than elsewhere.

So many people including entrepreneurs, investors, community, team and family members have supported us throughout Madrona’s journey. Thank you for your partnership and friendship. We are excited about pioneering, discovering and innovating together for many years to come.

Investing in Intelligent Applications – 2020 and beyond

We have been writing about the Intelligent App Application Stack for over five years – which means we’ve been investing it in for even longer. And that has not changed in 2020. We continue to believe that applications will be intelligent. What has changed over that time is both the rate of adoption and the availability of underlying infrastructure and technology to support these applications. In this post we detail four areas that we are continuing to see innovation around intelligent applications.

We define application intelligence as the process of using machine learning to create apps that use historical and real-time data to build a continuous learning system and make predictions and deliver rich, adaptive, personalized experiences for users. Intelligent applications typically have a modern user experience; a cloud-native, microservices architecture, and integrations to other systems and cloud services. We believe that every successful new application built today and, in the future, will be an intelligent application.

What benefits do intelligent applications deliver? We believe that next generation intelligent apps will allow us to:

  • Create custom workflows to automate any process
  • Process data in real-time across multiple systems of records to deliver insights and predictive capabilities
  • Build digital-first go to market and customer service models
  • Provide better services with lower delivery and customer service costs
  • Become the new systems of intelligence on top of legacy transactional systems

What are the types of intelligent applications that we are seeking to invest in at Madrona? Here are four broad categories where we see immense opportunities:

1. Automation

Many of the most impactful “intelligent apps” today focus on identifying repetitive, time-consuming processes and creating new ways to handle these workflows in a way that allows customers to focus more of their time on high-value synthesis and cognitive work. This is a cornerstone of the digital transformation that every enterprise around the world is currently going through.

The largest companies in this space today are the robotic process automation (RPA) vendors, such as Madrona portfolio company, UiPath. These companies have built horizontal platforms that allows companies to automate individual steps of a workflow, such as opening up a PDF document, extracting key data, entering that data into another system, and combining these steps into an automated workflow.

Despite the success of RPA, it is only scratching the surface of what is possible with AI and automation. With innovations in computer vision, natural language understanding, and other machine learning techniques, we are also seeing more and more companies build “RPA”-like automation into new products to create end-to-end workflows for specific use cases in industries such as legal services, financial services, healthcare, and real estate.

Some of the most interesting companies in this space go beyond automating one workflow to automating multiple workflows and creating a new integrated workflow. For example, a company like Zeitworks uses machine learning to map out a customer’s workflows in order to help understand which processes can be automated and to track how they perform over time. Madrona funded Zeitworks’ seed round in June of 2020 recognizing both the need for discovery of workflows prior to applying automation and the fact that automation for small to medium sized firms is particularly needed as the workforce and resources they need are not co-located any longer.

2. Next Generation Business Applications

Many of today’s key business systems for finance, HR, sales, and customer support were built decades ago, with software architectures that have not changed for the last twenty years. While these companies have built large businesses around certain types of customer behavior, they are often unable to innovate at the same pace that modern companies need.

We believe the most successful next-gen business applications will compete with their legacy alternatives by attacking a small portion of what their legacy competitors offer today or completely reimagining a business process that can only be enabled with modern software architectures.

For example, in the travel and expense space, Concur was founded in 1993 and built a massive business digitizing a manual process where paper receipts and expenses were passed from employees, to managers, to FP&A teams. Modern startups are transforming this process by reorienting around purchase data instead of receipts and forms. Rather than waiting for a month after a purchase is made, modern tools like Center deeply integrate credit cards with enterprise grade software to process expenses as they occur to give managers real-time insights into employee purchasing behavior and budgets.

HighSpot, a Madrona portfolio company, is another example of an intelligent application that uses integrations and data from multiple systems to help sales teams find the right content and relevant guidance for each conversation. By using data from CRM systems, email, and other workflow tools, their system is able to score content and understand what engages customers and drives revenue.

These types of workflows and systems are possible today because of modern microservices architectures that can process data in real-time, stream data to and from other systems, and convert data and insights into immediate actions. While many of these modern platforms start with a small feature like better insights, better UI, or better data, we believe they have the potential to eventually replace legacy systems.

3. “Avant Garde” Applications

Photo of an Amazon Go cashierless store.

“Avant garde” applications create completely new experiences and products by using machine learning – services that just weren’t possible before the combination of low-cost cloud computing, massive amounts of data, and new machine learning algorithms.

ML breakthroughs in fields like robotics and computer vision have created self-driving automobiles, which enable completely new vehicle form factors, business models, and services. Alexa, Siri, and Google Home’s voice assistants enable new interaction models that would not have been possible without advancements in natural language processing.

Many of the companies in this category are pioneers in bringing important new technologies such as computer vision, deep learning, robotics, and NLP to market, so it is a very dynamic space to watch because it sits at the intersection of massive markets, cutting-edge technologies, and novel business models.

For example, Amazon Go has created a completely new shopping experience by using computer vision technology to reimagine the shopping workflow. This allows for the construction of stores with new layouts that don’t require cash registers at the exit and may one day allow for retail stores to adopt new business models as well.

4. Intersection of Innovation spanning Life Science and Data Science

This is a vertical specific intelligent application category. However, given the potential opportunity size and impact, we have called it out seperately.

Whether it is in the field of diagnostics, therapeutics, or healthcare operational efficiencies, the availability of massive data sets combined with applied ML/AI is revolutionizing what is possible in the fields of life science and healthcare. For example, a company such as Adaptive Biotechnologies leverages decades of research on the immune system, next generation sequencing, and machine learning in order to detect changes in the immune system to diagnose disease.

While these companies can become massive winners, they may also be harder to measure and monetize in the short term. However, as early stage investors, we are excited to continue exploring investments in this category.

Over the next decade, we believe that every successful new application will be an intelligent application, and this will lead to many opportunities to build enduring software companies. If you are working on building an intelligent app in one of these categories, we would love to meet you and learn more! Our contact info is linked in our byline!

Welcome Anu!

We are thrilled to welcome Anu Sharma to the investment team at Madrona. Anu brings to our firm the rare combination of leading cutting-edge products and scaling new services at Amazon Web Services, co-founding her own startup, working as a venture capitalist, and writing code for enterprise products as a developer.

I had the pleasure of meeting Anu at AWS’ re:Invent conference several years ago. We stayed in touch, along with a number of others at Madrona, like Soma Somasegar, comparing notes on technology trends and new company opportunities. Even more important than her rare combination of experiences, we were struck from the outset by Anu’s insightful thinking and strong culture fit with our approach at Madrona. Specifically, her team and people focus, customer orientation, collaborative and warm interactions, long-term thinking, passion for products and technology, and curious mind. So, fast forward several years, and we could not be more excited to have Anu joining our team.

Most recently, Anu led product management for AWS Outposts, a fully managed service that extends AWS infrastructure, AWS services, APIs, and tools to virtually any datacenter, co-location space, or customer premises. This experience squarely in the center of enterprise customers embracing the cloud computing model and hybrid clouds gave her incredible purview into many of the broader trends around the next generation of enterprise software infrastructure. Over the course of her 8 years at AWS, Anu also had the opportunity to work on a variety of other products, including EC2 accelerated instances and Firecracker, enabling many related technologies — such as machine learning and serverless — that underpin many of our most exciting investment themes.

Beyond this deep understanding of enterprise customers and cloud technologies, Anu previously was herself a co-founder of a company, LifeLemon, in the consumer apparel e-commerce space. This appreciation of what it is like to walk in the founder’s shoes is an invaluable asset as she now turns to helping entrepreneurs with their journeys. Further, in addition to stints leading marketing at Flipkart (their 40th employee) and a developer at Oracle, Anu also spent two years as an Associate at Softbank Venture Capital in India. This broad experience building products, founding and operating a company, and helping founders scale their businesses, in both enterprise and consumer segments, will allow her to bring a wealth of empathy, assistance and insights to companies in our portfolio and founders across the Pacific NW.

“Working with world class teams can be a once-in-a-lifetime opportunity, and Madrona has stood out as one such remarkable team for me. Involved from day one in building and scaling businesses, Madrona has been a genuine partner for young companies in the Pacific NW. I’m excited to be part of the team that has seen what growth at successful businesses looks like and is committed to partnering with founders focused on solving problems for their customers,” said Anu.

Anu has hit the ground running in her first week. She looks forward to meeting and engaging all of you in the Pacific NW innovation economy. Anu will work with our current portfolio and also work with founders who are in the early stages and are looking for a partner and funding to help grow their company. Look her up! Anu is particularly interested in next generation infrastructure services, intelligent applications, and financial services.

You can follow Anu on Twitter here: @anusharma.

Madrona Welcomes Katie Drucker and Mark Britton to the Team

Today, Madrona announced the hiring of technology entrepreneur, investor, and advisor, Katie Drucker, to head the industry and business development relationships and partnerships for Madrona and its portfolio of companies. Relationships, whether they be customer or partner, are crucial for companies at all stages. Recognizing this Madrona has built programs such as an annual CIO summit, CIO briefing days and regular tech meetups that bring enterprises and startups together. Katie will operationalize Madrona’s ability to create strategic relationships that move the needle for portfolio companies as they drive revenue, customer growth, and build market fit.

As the Head of Business Development and Partnerships, Katie brings a global and Seattle-based approach and network to building meaningful relationships with both corporate and governmental organizations looking to be on the cutting edge of technology innovation. Her role will include deepening and expanding of Madrona’s network of senior execs, advising companies on partnership strategies, and building deep customer relationships – all designed to enhance customer and partner engagement programs for Madrona’s portfolio.

Katie brings a career of building partnerships and creating networks at the highest levels as a founder, CEO and COO of technology-based startups in SaaS and cyber security and six years as an investor at Trilogy Equity where she sourced deals, served on boards, and developed strategic relationships. Within this role Katie led deals focused on the mobile industry, helped source and recruit talent, and led investments and follow on rounds for early stage companies. Most recently she was the Managing Partner at Cascade Target Group, a business development and consulting company focused on elevating technology startups to government agencies. Prior to Cascade, Katie was co-founder and CEO at Sigby/Protemo and COO of PolyVerse, where she led fundraising, shipped products, and drove business development and ecosystem creation. She is excited to focus in developing the tech ecosystem that surrounds Madrona and its portfolio companies, driving new opportunities and value for all stakeholders.

Mark Britton joined Madrona in early 2019 as a Strategic Director. As a long-time fixture in the Seattle technology scene for his perseverance and leadership of Avvo, Mark brings a point of view to Madrona built over a career of company building one of the landmark Seattle companies. Starting life as an SEC lawyer, Mark quickly discovered the entrepreneurial bug and founded Avvo in 2006, a marketplace to provide regular people with information and access to legal counsel. The company raised $132 million and was acquired by Internet Brands in January of 2018. Mark left Avvo in April to explore his next steps and we are excited that part of that step is working with Madrona and our portfolio companies.

Strategic Directors are established operators who work with the Madrona team as we evaluate investment thesis and specific companies, while also sharing their incredible wealth of knowledge with Madrona’s portfolio companies. Other recently appointed Strategic Directors at Madrona are Steve Singh, Betsy Sutter, Sujal Patel and John McAdam.

“As Madrona builds our team to support Seattle entrepreneurs we couldn’t be more excited to have Katie and Mark on board. We are excited to have Katie bring her drive and network to play an integral role with all of our companies as they work with us leading up to and after funding. We spend intense time with our companies, focused on adding value to them and their team from day one to the long run through their entire journey and go-to-market know-how and partnerships are incredibly valuable to companies of all sizes,” commented S. Somasegar. “Mark is an insightful leader and we are excited to have him on board to share his knowledge and experience of company building through economic ups and downs with us and with our portfolio companies. Having these two leaders on board illustrates our strong passion and capability to continue to deliver for our founders and companies. Welcome to both of them to the Madrona family.”

New Positions and Faces at Madrona

From left to right: Troy Cichos, Jennifer Chambers, Tasha Tieu, Ted Kummert. January 2019.

Recognizing the achievements of employees and the expanding footprint of the firm, Madrona today announced a set of changes to the core team that administers and operates the day to day business of the firm. Additionally, the firm expanded Venture Partner Ted Kummert’s role to include Chief Product Officer in Residence.

Also announced today that Hope Cochran became Managing Director.

In the administrative team, Troy Cichos was promoted to COO and Partner, and Jennifer Chambers was promoted to Administrative Partner. The firm also welcomes a new Controller, Tasha Tieu.

Running a venture firm with nearly $1.6 billion under management is no small feat. With five active funds, a staff of 35 including a value-add team and a full administrative assistant cohort, Madrona’s administrative team has taken on bigger and bigger roles over the past several years.

Troy Cichos joined Madrona in 1999 and was most recently Administrative Partner and CFO. Over the past twenty years, Troy has provided the firm with exemplary guidance as the firm has consistently raised funds, invested in companies, expanded in staff, facilities and founded new entities such as Madrona Venture Labs and Create33. As COO, Troy manages all legal, HR, IR, Tax/Audit for the firm and for Madrona’s venture funds. He manages the team of value-add staff and back office administrators and advises Madrona’s companies on financial management, tax, and legal issues. His role encompasses all operations of the firm.

“Troy brings a unique mix of subject-matter expertise, operational excellence, great people skills, and a love for Madrona and all our constituents. His leadership and counsel is indispensable to our firm and portfolio companies in areas from structuring deal documents, advising on tax strategy, consulting on leases and real estate questions, working with our investors, and providing leadership for all our firm’s operations. Troy always brings his A game and is a constant positive presence in the office and with all the important partners we work with to help our companies and support the Seattle ecosystem,” Tim Porter, Managing Director.

Jennifer Chambers joined Madrona in 1997 and as Administrative Partner works on both fund and Madrona office management. During her time at Madrona, she built and scaled the back office to accommodate the growth of Madrona’s funds, portfolio, team and facilities. As part of the value-add team she assists Madrona portfolio companies with the decisions and vendors they need to successfully set up their own back office – everything from choosing a benefits provider to finding office space. She works with Madrona’s investors as part of the fund management, both distributing and calling capital as needed in the life of a fund and planning and managing the content of our quarterly and annual meetings. Additionally, she manages a team of administrative assistants and Madrona facilities. Jennifer’s prior title was Fund Administrator.

“Jennifer has been a crucial piece to the success of Madrona. There are very few if any aspects of Madrona that Jennifer does not regularly influence and she sets the tone for Madrona’s culture with her contagious positive attitude,” Paul Goodrich, Managing Director.

Tasha Tieu joined Madrona in late 2018 as a controller focused on accounting, tax and audit functions for both Madrona and Madrona’s venture funds. She comes to Madrona from four years working in audit with technology and retail clients at EY. Tasha holds a Bachelor of Arts in Business Administration and Master’s in Professional Accounting from the University of Washington Michael G. Foster Business School. Tasha is also a Certified Public Accountant in the state of Washington.

Venture Partner Ted Kummert is excited to expand his role to Chief Product Officer in Residence. In this role, he works deeply with Madrona’s growing startups who are facing product, business or engineering challenges that require some hands on, in the trenches work.

Building on his over two decades at Microsoft leading the development of several of that company’s core enterprise products, Ted also spent four years at then Madrona portfolio company, Apptio, leading the transformation and creation of SaaS solutions for enterprise and federal CIOs and CFOs based on the company’s core platform. Apptio went public during his tenure and was recently acquired by Vista Equity Partners for ~$2billion.

Ted applies this and his years of management experience to work closely and, for extended periods of time, with engineering and management teams of Madrona portfolio companies in the early and growth stages to help navigate some of the difficult decisions they face as their business, product offerings and organizations grow and scale. Continuing to serve as a Venture Partner as well, Ted will also work on identifying, vetting and making new investments.

Kristina Bergman, Founder and CEO of Integris Software commented, “Ted has been an invaluable partner for our management and engineering team as we help companies comply with new data privacy laws, such as GDPR and CCPA – map data, apply policies, and automate remediation. Building for enterprises, especially in a heavily regulated area is a complex task and Ted’s years of experience helped us execute and build a highly scalable distributed solution for Data Privacy Automation that is being adopted by global brands to protect their most important assets.”

My Next Role – Managing Director at Madrona

Hope Cochran and Amy Nelson, Founder and CEO of The Riveter. March 2018.

I am so honored and excited to be expanding my role with the Madrona team. I have long admired Madrona, not only for their sustained excellence in investing in local NW companies, but for their well-earned reputation for doing so with intellectual rigor, hard-work and integrity. And when I joined the firm as a Venture Partner two years ago, I found that the Madrona reputation is built through careful attention to the needs of entrepreneurs. That is why I am proud to be deepening my relationship with Madrona as a Managing Director. It marks the beginning of a new professional adventure, one in which I plan to lean heavily upon my own experiences as an entrepreneur and CFO as I work directly with our companies.

People, first and foremost, will continue to be my overriding focus. Having been a founder and executive in both small and large companies, I understand what it’s like to create business plans, navigate tricky financings and launch new products and services; but as I reflect upon my own successes and failures in business, what is most impactful is the quality of the people within each venture. I understand the importance of surrounding yourself with talented and driven personalities who are comfortable in periods of tumultuous change, who keep calm and focused in times of crisis or extreme growth. The stresses and strains of being an entrepreneur can be very challenging day-to-day, but the rewards are worth the challenges. The most important of which has been the life-long relationships I have with the people from my previous companies, relationships that have been forged from periods of intense joy, frustration, success and failure. I’m looking forward to investing in NW entrepreneurs who are eager and ready for a similar ride. So as I develop my investment thesis while at Madrona, it will always start, and stop, with identifying great people and teams regardless of industry or technology. In my opinion, successful teams and leaders are the most important factor in any venture.

So what am I looking for in new ventures besides great entrepreneurs? I will obviously rely heavily on my past experiences. I have worked in several technology-based industries during my career as an entrepreneur and executive—ERP, B2B software (PeopleSoft/Oracle), telecom and wireless (Clearwire/Sprint) and most recently, video games (King Digital/Activision). In addition, I am on the Board and Audit committees for a diverse set of public companies – MongoDB, Hasbro and New Relic. All these experiences and roles will inform my analysis as I add to the Madrona portfolio with new investments. As I have led companies through period of rapid change, there have been several areas that always seem to need attention and improvement.

When a company grows quickly, processes often break under the strain. Having been an executive at companies that experience very rapid growth, I understand and appreciate that the systems and processes required to build a sustainable company must be flexible, scalable and easy to roll-out. Therefore, I am interested in cloud-based B2B systems and software that enable companies to be more nimble as they manage their internal and external processes. Legacy solutions that are inflexible and hard-to-upgrade just don’t work anymore. Furthermore, there is a great need for ML/AI and robotic automation processing to improve various internal processes within organizations. Every department within an organization, from tasks as varied as financial forecasting to determining efficient locations for holding inventory, can be improved with thoughtful application of technology.

In the role of CFO, you often realize that your best forecast, or most consistently produced dashboard is only as good as the data that sits below it (customer, inventory, financial, sales, etc.). How many times was I proud of my finance team’s ability to produce metrics, only to realize that the data behind it wasn’t being stored or sorted accurately?! Today, a company needs to be able to make instant decisions, based on trends and patterns they read in real time. The ease and speed of access, the cleanliness, consistency, analysis and protection of underlying corporate data is crucial.

Finally, CFOs ultimately deal with the money, so this is an area where I have my own bumps and bruises from first-hand experience. Banks come to you with promises of ease of use, the ability to quickly move money, invest it wisely, low fees, etc. But all CFOs know, this is an area of great frustration. It often comes with multiple fees, low yields and difficulty in managing across multiple institutions and regions. On a consumer level the problem is only magnified and often misunderstood by the individual user. There are a lot of burgeoning Fintech companies out there tackling many of these problems, but there is much to be done. As you watch the flow of funds from the point of a consumer or a business, it is astonishing how much margin is taken at each juncture – whether it be fees, the days lost in the movement, currency exchanges, credit card processing, etc. I love the innovation that is happening in this space – both at the level of large scale corporate clients to the individual consumer and look forward to finding and supporting companies that are diving into this challenge

It can’t be ignored that I am a woman executive and investor in a largely male world. I have loved my career but at times I have had to fight for it. It is a joy and passion of mine to support women to thrive in all ranks of a corporation. It is not an issue of not enough female talent in the workforce. I hear that counter-argument all the time and I am amazed that some believe this to be true – have they met the women I know?!

Businesses today can and are starting the journey to recognize the untapped talent they have in their diverse workforce. It needs intentionality. In my experience, it is not going to happen by being passive. I applaud companies and other organizations that are taking intentional steps to address equality in all areas of a company. And, I am a staunch believer that businesses today should be active in addressing equality of opportunity throughout their organizations, from boardroom and C suite and at every level and department.

Madrona has been a leader in working for greater equality at our companies. Over the past two years, I have led Madrona’s participation and support of OnBoarding Women, with our partners at Deloitte, Perkins Coie and Spencer Stuart. OnBoarding Women is focused on creating more opportunities for women to serve on corporate boards in the Pacific Northwest. At Madrona, we recognize that the disparity in the public company boardroom often starts when the company is private and the board is primarily investors – often not a very diverse group. By opening up independent seats early in a company’s journey, the company has the opportunity to diversify the perspective at a crucial point in the company lifecycle, ideally with a woman or otherwise diverse candidate. One of my fellow managing directors has had 5 of the last 6 independent director appointments on his portfolio company boards be women.

As I embark on the next phase of my career, I am so honored to be part of the Madrona team. My most important asset as a professional is my reputation. A reputation is shaped by the people with whom you surround yourself. I couldn’t ask to be surrounded by a more fantastic group than the entire Madrona team.

5 Things I Learned from Studying Facebook Benchmark Data

Through my role at Madrona Venture Group advising startups on growth, I meet a lot of marketers using Facebook to acquire and engage with customers. It’s a powerful platform. Unfortunately, many companies are falling short of their goals and are left frustrated with what they see as unrealized potential.

Recently I began a Facebook benchmarking project with the goal of providing marketers in our portfolio with aggregate performance data on different stages of the funnel. This project used 2015 and 2016 data from companies who were targeting consumers. B2B companies were not included in this study, though many have successfully marketed on Facebook and many of the same trends likely apply.

Through this process, I came up with 5 recommendations that companies should consider as they try to get the most out of this large and increasingly competitive channel.

1. Know where you are on the calendar — don’t ignore seasonality

Prior to my role at Madrona, I led a growth team investing millions on Facebook each month. Even with this budget, we were often surprised at how volatile the channel could be. A common explanation for this unpredictability was an increase in demand for ad impressions — supply stays the same, demand goes up, and your scale falls drastically. Our data show that there are three big bumps throughout the year when prices rise — April, September and December. It’s likely the tax advertisers in April, apparel companies in September (back to school and fall fashion shows), and general retail in December that are driving up prices. From our study, January and February featured the lowest prices of the year, so now could be a good time to scale up. Alternatively, April is the highest month in H1 so you may want to hold back spending there in favor of before and afterwards. Just be careful in November and December as prices during those periods that were 2x January.

2. Use in-month pricing cycles to your advantage

Different pricing within a month is another trend that appeared in the data. Prices were 20% higher in the last 10 days of the month compared with the first 10 and they increased throughout the month. Exceptions did apply in a few months with holidays like July and February, but this trend appeared in the majority of months. If you have a set amount you are spending per month, allocate a greater share of spend earlier in the month when prices are lower and your dollars go further. Doing so could lead to a meaningful increase in the efficiency of your ad spend.

3. Make sure visitors have great experience on mobile

This user visited a landing page not optimized for mobile.

Among our companies, 82% of newsfeed impressions occurred on mobile devices. That percentage will only grow. Mobile newsfeed impressions used to come at a large discount relative to their desktop counterparts and they remain cheaper, but the gap is shrinking. Because much of the discount has disappeared and because of how large mobile is, it is crucial for any prospective advertiser to make sure their mobile experience is solid before being aggressive on Facebook. This means limited text, clear calls to action, and extensive testing on different devices and screen sizes. Promoting app downloads and sending visitors to a mobile browser can both be effective depending on the situation, but in each case make sure your customer onboarding gives people a fast and clear understanding of your key value proposition(s) so you’re not wasting money.

4. Understand costs of reaching your audience

While it was once made up of exclusively college students, these days the Facebook audience is much more diverse. Nearly every customer segment is reachable on Facebook which is one reason why so many companies turn to it to reach prospective customers. The breadth of the Facebook audience does not mean, though, that all audiences are reachable for the same price. In our study, impressions served at females were 33% more expensive compared to males. Differences can also be found among different ages, geographies and other demographic qualities. Companies would be wise to understand their audience and what that means from a cost-to-reach standpoint before getting too far along in their Facebook marketing journey. Suggested Bids in Ads Manager has not been reliable when I’ve used it, so the best way I’ve found to learn prices of different audiences is through live testing. Also keep in mind that the more relevant your creative is for the audience you are trying to reach, the more cost effectively you can reach them.

5. Treat alternative placements differently — Instagram does not equal Facebook

Over the last few years Facebook has increased its impressions in places beyond the newsfeed. Instagram and the Audience Network are the two that were used most often by our companies and performance data from those placements made for an interesting comparison to native Facebook ads. Instagram was used most often and, while prices were in the ballpark relative to mobile newsfeed, the clickthrough rate was much lower. This takes us back to social media 101. Think through what consumers are doing on each platform and have that in mind when building creative. It’s different by platform. Don’t waste money running ads that have been optimized for Facebook on Instagram. Alternate placements available through Facebook will increase in the future, so keep this in mind when extending your brand to other platforms.

Facebook can be a great place to reach customers, but it can also be unpredictable and frustrating for many. I hope some of the data that came out of this study can shed some light on what’s happening and leave you with ideas on how to exceed your goals.