Fred Wilson's Passion Play

Group messaging—which, for all intents and purposes, amounts to texting with multiple people at once—has been the big story of this year’s South by Southwest Interactive Festival.Hoping to witness some sort of victory on the scale of Twitter’s 2007 triumph, or Foursquare’s big coming out in 2009, eager SXSW attendees hyped the horse race between applications like GroupMe, Beluga, Yobongo and Fast Society. Then the New York Times ran its obligatory coverage, and the race was really on; by day four, Foursquare co-founder Dennis Crowley was all but endorsing GroupMe as the winner. GroupMe gained significant traction in Austin, Texas, not least because of old-school political tactics like giving away free grilled-cheese sandwiches. So did Yobongo. Beluga, meanwhile, was acquired by Facebook on March 1, so it was out of the race, tucked safely under Mark Zuckerberg’s wing. Most others have seemingly been forgotten, if they were ever discussed at all. Then there’s Kik. One didn’t hear a great deal about Kik on the streets of Austin, but it has one thing that all the other messaging apps don’t: The endorsement of—and funding from—New York City’s most beloved and influential venture capitalist, Fred Wilson of Union Square Ventures. On March 7, four days before the festival, Wilson announced on his blog that USV would join firms RRE and Spark in an $8 million round of Series-A funding for Kik. In addition, Wilson and RRE’s Adam Ludwin would join Kik’s board. Funding from USV, which was an early investor in both Twitter and Foursquare, has come to be seen as one of the highest stamps of approval in the tech startup world. So why did Wilson choose Kik over competitors like GroupMe? In Austin, Kik founder Ted Livingston told Adweek that it was a matter of passion.“After we closed the deal, Fred actually sent me a blog post called ‘The Passion Gap,’” Livingston said. (Wilson tweeted a link to the post, by angel investor Jonathan Betz, two days later.) “The post was one reason why Foursquare beat [Facebook Places], why this beat that, and it’s basically because of passion.” In his post, actually titled “Foursquare, Facebook, Founders and Passion,” Betz attributes Foursquare’s success to the fact that it was “built by someone”—Crowley—“who is deeply invested in the underlying product idea, as compared to a product built by someone who is just trying to check off a set of feature boxes.” “Fred said, ‘We are going to win, because you guys have this,’” Livingston said. Given the noise surrounding GroupMe and Beluga, Wilson’s bid was unexpected. On his blog, he said that USV chose Kik because it believes “that less is more and that message delivery speed is paramount.” But for now, delivery speed is actually Kik’s biggest drawback. Users receive push notifications as soon as a message is sent, but then have to wait as long as 10 seconds for the message to download once the application is open. Livingston explains that as a limitation of the iPhone. “It’s a painful experience,” he said. Going forward, Livingston plans on removing the delay, and also says he plans to add audio and video to Kik, though he was reluctant to provide even the roughest estimate of when that will be. Meanwhile, Austin’s early adopters are recovering from—and texting about—Monday night’s GroupMe party.

Performance Marketing

Fred Wilson's Passion Play

Dylan Byers

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Dylan Byers