Proudly Investing in Businesses that *Get Better* as People Actually Use Them, Not Worse

Classpass is nothing short of phenomenon--and it's particularly noticeable to me because I passed on its seed round.

In my defense, I passed when it was Classtivity, a completely different model focused searching for classes.  Obviously, the pivot worked out for them.

Still, it's a bit frustrating to see them end their "Unlimited" option to the chagrin of many of their users--just a few months after raising their prices.  

The types of businesses I like investing in are ones whose economics *get better* at scale, not worse.  Remember how much AOL sucked at peak times back in the day?  How much does your local gym suck when everyone else is there?

You should be building something where the more people that use and absolutely love the product, the better your economics get--and the better the offering becomes.  This may even sacrifice top line in the short term, but I think these companies will build better, more sustainable businesses.

Now if we can only get all the VCs to think this way.

Here are a bunch of examples of Brooklyn Bridge Ventures companies getting better at scale:

Canary's explosive growth has enabled it to process more video every second than Youtube, learning patterns in order to make its alert algorithms better.  The more people who buy and use it, the smarter it gets. Check out its new indoor/outdoor product Flex.

Tinybop's revenues have enabled it to build more and more apps--meaning that when you discover them, there are so many more titles to choose from for your kids. Now, you can buy their apps in bundles at better pricing than just one at a time. 

Ringly has expanded its product line to include a bracelet and more and more apps for notifications everyday, enabling lots more use cases.

goTenna's new Mesh product enables off-grid communications in a network that improves as more people have it.  Whether the power is out or you're in a remote place, the more users it has, the better it keeps you connected.

Orchard Platform gathers lots of data about the P2P market over time, because they've been integrating with more and more lenders.  In turn, they've created more product offerings and enable institutions to get better insight into their investments in this asset class.

Logcheck turns maintenance rounds into actionable data.  The more items you track with it and the more buildings you get on the platform, the more insight you can get into your real estate portfolio's health and upkeep. 

Plum Print digitizes kids art and turns it into keepsakes and gifts.  The more you scan, the less macaroni necklaces and hand turkeys you have cluttering up your house, and the more memorable the coffee table books become as they track your child's creative progression through the years.

The more your product and engineering team uses Clubhouse as its product management software, the more organized and efficient your company gets.  Over time, Clubhouse will use that data to make predictions about estimations, deadlines, and bottlenecks that will enable better team planning. 

You can't go anywhere in Manhattan these days without seeing Homer Logistics riders in their neon shirts and black box backpacks.  The more businesses they sign up, the more efficient their network gets, cutting delivery times, improving service levels, and most important for me as an investor, improving their bottom line.  Instead of hemorrhaging more cash at scale like many other last mile delivery businesses, Homer's economics have only improved with its growth.  That also means better economics for riders, too--because they make more tips as the network delivers more per rider per hour.

Tinkergarten is now available across 13 states with over 200 leaders for their classes.  The more classes there are, the closer you are to a terrific educational and fun experience for your kids.  Scale also makes it easier for leaders to fill classes as the brand gets out there more and there are more parents providing great recommendations to friends.

The Wing is only in one location right now, with a *huge* backlog of membership applications.  When they open up more locations, the experience of being in this place-based network of inspiring women will only get better and better.  Members will cross pollinate across locations and find whatever location is most convenient to them throughout their day.

Agrilyst helps controlled environment (indoor) farms track their data and improve yields.  More users and more data makes the platform smarter for each customer.

Bizly is the easiest way to book a conference room in a nearby hotel.  The more hotels sign on in more cities, the better the experience is for every user.

Ample Hills is building an ice cream factory.  At scale, they'll have better economics and will be able to roll out to more locations and never ever run out of your favorite flavors.

Something interesting happened when Hungryroot got more popular and started to scale.  They got more data about what customers liked and didn't like very quickly, enabling them to change recipes and offerings, and expand to categories like breakfast, snacks, and sweets.  Cart sizes grew as the variability and selection offering got better over time--and now most of their customers love it so much, they're on subscription.  

The lesson here?  Build your companies from day assuming wild success as your plan--and don't let usage get in the way of improvement and customer satisfaction.