1Mby1M Virtual Accelerator Investor Forum: With Nnamdi Okike of 645 Ventures (Part 4)

Nnamdi Okike: A second one in a different category is a business called Overtime. Overtime is headquartered in New York. I describe Overtime as ESPN meets Snapchat. It’s very viral content. It’s user-generated.

It focuses on the millennial generation that consumes content in a very different way. They’re looking at highlights. They are sharing things on social media. Oftentimes, they’re not watching the full game. They really want to get inside the game and understand the players and players’ lives.

When we first came upon Overtime, they were pre-revenue. What we were seeing was really rapid growth in views, shares, and frequency of use. They were starting to develop a real following in their target demographic.

Our belief was that the behavior that we were seeing that Overtime was showing could really translate into revenue over time. It has done that through a combination of commerce and advertising. In an area like that, it’s much more about the behavior of users rather than a specific revenue goal.

Sramana Mitra: What business models are you comfortable with when it comes to media? Media has really gotten slaughtered in the last few decades.

Nnamdi Okike: We don’t do a lot of media but in the case of Overtime, what we like to see there are a couple of different things. We like to see businesses that have evidence of a differentiated voice, a differentiated content strategy, typically, a low-cost content strategy.

In the case of Overtime, most of the content is user-generated. They have much lower cost of content creation. We also like to see the multi-tiered revenue model. They sell apparel. It complements the traditional advertising-driven revenue model. It provides a more balanced approach.

We don’t do a lot of digital media, but where we do it is a combination of a very large market opportunity, good business model, and a belief that this can be really disruptive to a larger incumbent. It’s few and far between.

As you described, there haven’t been a lot of examples of media companies that have had those billion-dollar exits.

Sramana Mitra: In terms of your outbound sourcing, does it include international companies? Perhaps companies that are building elsewhere and coming into the US, or maybe working on different markets.

Nnamdi Okike: I did a lot of international investing. I was investing in Europe and Latin America and had several exits in those markets. I have good experience investing in the international markets. There’re a lot of opportunities in many different parts of the world.

We wanted to make sure that we can work closely with our companies. We just have one office in New York. We began focusing on the US, but we started to broaden that over time. We’ve done two investments in companies that began in the UK. We’ve been active there.

Over time, we will broaden out. We will eventually look at LatAm. We’ll probably look at Asia. The nature of outbound sourcing model is one where although you can identify the company, you need to be able to add value. One thing we think about is, can we build a value-add team to help companies with the challenges that they have?

One thing we do look for when doing deals outside of the US is a local partner – a firm that has local domain expertise and can add value in areas where we may not have the expertise. As we grow and expand, we think a lot about having local relationships with great partners. 

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Nnamdi Okike of 645 Ventures
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