1Mby1M Virtual Accelerator Investor Forum: With Ashu Garg of Foundation Capital (Part 4)

Sramana Mitra: In some cases, the newsroom analogy is probably not the right analogy. Think about a toothbrush brand. That’s now news-oriented. If you think about how to do content marketing for those kinds of brands, it’s a very difficult problem.

Ashu Garg: In the newsroom analogy, I’m using the word very loosely. It’s the idea that you have to have a focused team thinking about content creation in the context of what users want. Take a toothpaste brand. Talking about your toothpaste, the color and the flavor is probably not that interesting for the audience.

Maybe stories about how the brand is engaging with changing the lives of poor people in third world countries would be interesting. I think we have to find ways to connect. If a brand cannot connect to the audience, the question is, “Do you deserve to be a brand, or are you just a commodity?”

Sramana Mitra: Your newsroom analogy actually works very well in our context. We essentially run a part of our business as a media company. We publish really great content. We don’t even think of it as publishing content for the sake for marketing.

We just publish great content because we believe in the propagation of messages, which is our way of delivering on the value proposition. For us, content marketing has been a tremendous blessing. The world is connecting with content in a way that it hasn’t before. It has been tremendously interesting as a journey.

Ashu Garg: Absolutely.

Sramana Mitra: Let’s finish the conversation on the topic of unicorns. I peg this unicorn bubble is in the process of bursting. What happens next?

Ashu Garg: Someone I know well said this to me. Five years from now, the aggregate value of the unicorns will be at least as high as it is today. I agree with him. What is going to change is that a lot of companies that we thought of as unicorns will just go away.

Let me explain that. A lot of companies got hyped to the point where their valuations were far ahead of the reality of those businesses. When that happens, bad things do happen. Some of those companies which deserve to exist will die. You’re going to see a lot of mortality. At the same time, the trends in technology are real. In aggregate, these companies will be worth at least as much as unicorns if not more over the next five years.

Sramana Mitra: The way I differentiate between the two categories is the real unicorns and the pseudo-unicorns, which are going to turn into unicorpses. Then the ones that are good are going to continue to scale because these are great companies. They have great business models that people are executing on. They are going to continue to grow into very large robust companies.

The industry is fine. It’s just the correction that needed to happen will happen. What about in the very early stage businesses? What trends are you seeing that are early trends that are interesting that can turn into legitimate unicorns?

Ashu Garg: The beauty of technology is that we’re seeing an explosion of innovation across the board. Every traditional industry is under threat. We see it in financial businesses. We see it in a variety of other offline industries with marketplaces models coming in to disrupt offline models. We’re seeing a very exciting innovation in drones and in virtual reality.

I’ve been personally spending a lot of time looking at innovations and virtual reality. That’s very early days. Imagine what can happen when you can change the code of aerial imaging by two or three orders of magnitude. The use cases are hard to imagine today. If you look at video gaming and what consumers are doing, VR will be bigger than video gaming is today.

Sramana Mitra: But there’s the infusion of the two as well.

Ashu Garg: Absolutely. VR will influence much more than just video gaming. If you think of all entertainment, they will all be transformed. Why will you go to a soccer match in a stadium and sit in a back seat where you can barely see anything when you can sit in your own home and have the same experience as a person sitting in the owner’s box?

Sramana Mitra: I think medicine will also change with virtual reality.

Ashu Garg: Absolutely.

Sramana Mitra: Thank you for coming.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Ashu Garg of Foundation Capital
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