Why we invested in Dopamine Labs to make apps smarter
Everyone always asks what we (the royal we) invest in and why. Sometimes you can tell from our portfolio, maybe spot some trends or interests but I thought it would be easier just to tell you. And every investment is different; so this is just how it worked out for this particular one.
- We were introduced to Dopamine Labs a few months back thanks to an introduction from Howard Morgan and Amit Sharma. So right from the beginning a warm introduction from fellow investors that we respect, so we’d be happy to meet with them and learn more.
- Fell in like with the two founders right away. They’re LA (Venice) based and were coming into NYC to meet with other investors and some other business meetings. I was very intrigued so we found time to meet one-on-one (Coffee Shop in Union Sq is great) and ran through everything. I was impressed by what they’ve built, accomplished so far and that they had insatiable appetites to learn more about the funding process. Apparently they also make great tacos, which was verified by a 3rd party.
- I believe in the product and share their vision. Yes this is AI, neural networks, machines learning jargon etc. but they were applying it to a problem I’ve experienced. Having built my own and invested in a few apps, engagement (various metrics) is very hard to increase and is a very manual process. It’s hard to truly validate it technologically but they had case studies and beta users that we spoke to and were very happy.
- The terms were right. They raised $1M at a priced valuation we agreed with, along with pro-rata and information rights.
- This can be a big business. They are solving a problem with impressive technology that a large addressable market needs.
This is just a simplified version of what transpired but the take away is that everything just clicked so we enthusiastically committed to the round.
The actual product itself
There’s literally a million apps out there all fighting for your attention on your phone, not to mention the million other things distracting you too. Each app is its own business and generally the more and/or longer consumers use it, the more successful they can be (assuming they figure out how to monetize you). Unfortunately you only use the same apps, barely download new ones and let the others you do have just take up space on your phone. So they really only have maybe one shot at best, hopefully a few to make a good impression and hope you come back. And yes even the bigger, more well known and very successful apps worry about this too.
The majority of your time is probably spent on Facebook, Instagram, Snapchat, Pinterest, Spotify, email, news and a few mindless games. Every so often you’ll open a different app because you remembered it or were bored scrolling through your screen and it caught your attention. This is part of the problem that Dopamine Labs is trying to solve.
Yes the idea that they want to make you more “addicted” to apps has a negative connotation but that’s what every company is trying to do. There are currently thousands of engineers at Facebook/Instagram working non-stop figuring out how to get you to like more posts and photos. ‘They do it so it’s ok’ isn’t a great argument but we’re trying to give the same capabilities to smaller companies with less resources, while also doing good!
Facebooks new AI research Lab to hire 100 people to do this and more https://www.fastcompany.com/40465968/facebooks-new-lab-bolsters-montreals-bragging-rights-as-an-ai-hub
I’ve built my own app, we’ve invested in a few, I’ve met with countless others and this is a huge problem that takes a lot of manual work. Push notifications aren’t that effective and communication in-app usually puts users in buckets, so while not tailor it uniquely to each individual person?
How we can use it for good
Beyond the low-hanging fruit of games and some consumer facing apps, we see the real opportunity for long-term success and doing well through medical and financial apps. Everyone trying to get into these industries know that there is regulation and longer sales cycles that make it very difficult to start out targeting focusing on them. The long-term vision is to integrate into as many as possible and increase their efficacy and use that will hopefully benefit the user.
Medical/fitness - Dopamine already has case studies with a medical and fitness app that has increased desired engagement metrics. Imagine that you’re a runner and I’m not, we both run 5 miles — for me that’s a lot but for you, it’s pretty normal. So when I run 5 miles, Dopamine will send me some type of congratulations (shot of dopamine!) but only send you one when you run 10miles because it knows you’re more advanced. Basically tailoring to your habits and learning as you use it, so it’s more personalized. A better experience will hopefully lead to you using it more.
On the medical side, they worked with Movn to help increase engagement by at least 60%. That means patients who had major surgery and are highly recommended to walk, used the app that had the Dopamine SDK installed, received praise and encouragement when they achieved their goals, which led to an increase in more minutes walked, more consistently. Obviously we can’t prove (yet) that this is a life saver at the early stages but I think we can all agree that this is a good thing.
You can see their case studies here https://usedopamine.com/assets/pdf/Dopamine Labs Case Studies.pdf
There are obviously countless other opportunities but these are the markets that will evolve overtime, adapt and improve as they grow. We believe that the team, along with our co-investors, the market opportunity and timing is right to give Dopamine the needed opportunity to succeed.
Check them out at usedopamine.com
