Wednesday 12 November 2008

My Halloween Treat: OpenCandy

Despite rumors to the contrary, venture investors are still funding innovative and disruptive startups. My latest Series A investment, announced today, is OpenCandy, which I co-funded with Tim O'Reilly and Reid Hoffman.

Not every (any?) great software application comes from Redmond. Today more than ever individuals and small teams of programmers in every country of the world develop great applications that wither on the vine for lack of visibility and a business model. OpenCandy's technology promises revenue, cheap distribution and free analytics to programmers who may not have their own big marketing departments.

OpenCandy's first product is a recommendations engine that operates in the install wizard of downloaded software. While working for their prior employer DivX, the OpenCandy team discovered that users are far more likely to consider downloading new software while they're in the middle of downloading something else. This observation led them to embed software offers in DivX downloads that now generate $20 million annually for their former employer.

"OpenCandy is taking a proven Web 2.0 model--the ad network--and applying it to software installation. It's very clever. And it will probably work." -- CNET

OpenCandy's recommendations include a mix of free and paid recommendations, depending upon the preferences of the publisher. They do not interfere with the original download, commencing only after the current installation has completed. Here's an example of OpenCandy at work for Miro (a BitTorrent player for RSS video) and Audacity (by far the the best sound recording/mixing tool I've ever used):


Software developers who wish to participate as either a recommender or recommendee should contact co-founder Chester Ng at OpenCandy. He and OpenCandy CEO Darrius Thompson started the company earlier this year. They run a talented but scrappy team in the true tradition of Get Big Cheap. And I'm betting they'll prove that great software is like Halloween candy: you can't eat just one!

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