Published in the San Diego Union-Tribune, June 17, 2019
Where do good ideas come from and how do we know one when we see it? That is always the challenge of investing. While the really good ones seem obvious (usually after the fact), the bad ones are clearly terrible immediately — or so we think.
The New York Times featured a story by Erin Griffith a few weeks ago. The headline says it all — “What’s Their Sign? The Dollar Sign, of Course.” Meet the hottest new area for investment — The Mystical Services Market — which is geek speak for welcome to the world of astrology startups. According to those who have a direct path to the cosmos, the size of the market for wishing upon a star is $2.1 billion. Beam me up, Scotty.
As Griffith says, “Astrology is having a cultural moment.” One of the first startup darlings of the great beyond is Sanctuary, a new app that launched earlier this year. It is described as “Uber for astrological readings.” For $19.99 per month you receive a one-on-one chat consultation with a certified astrologer. The company has raised $1.5 million, and they offer “cosmic reassurance to the un-moored seeker.” I don’t think any of us (the target audience is millennials) want to see ourselves as untethered to reality, but given a chance to see the future (and post it on Facebook), who would say no?
For those of you who are chuckling at this point, get up from your rocking chair. Three weeks after Sanctuary launched, another app, Co-Star launched with $5 million from Maveron and Aspect Ventures. This app lets you compare birth charts. When the Big Zodiac calls out your name and your horoscope comes up on your phone, you will know you have been touched by the cosmic hand. Show me your chart and I will show you mine.
I was trained to blame all my failures on my parents, but it seems that the true culprit is the moon and the stars. Stop the madness, you say. Well, the Co-Star app has been downloaded 3 million times and has 400,000 followers on Instagram. Anarghya Vardhana, the venture capitalist from Maveron, says, “It has the potential to be as big as Spotify or Tinder,” which are both worth multiple billions.
So, for all aspiring entrepreneurs who are seeking financing and can’t understand why their company is being spurned by the investment community, I have no answer and offer no relief — other than I am a Virgo, and I am going to use that excuse to rationalize everything. But wait, is there a bandwagon here? The next big thing could be palm reading recognition software, or perhaps Elijah Bond, the inventor and patent holder (May 1890) for the Ouija Board could be séanced back to the Valley and go public.
Maveron is a very smart venture firm, founded by Dan Levitan and Howard Schultz (yes, the Starbucks Schultz). They have had some unicorns for sure, including eBay and Zulily, so not so fast with an arrogant flip of the hand. Here is some of the thinking behind their investment in Co-Star.
Vardhana says the world is a bit unhinged since the advent of Trump. She says people want a sense of structure, organized religion is declining, social media is ascendant and community is weak. Each of us with our plugged-in earbuds is lonely in our own universe, and so instead of looking within, perhaps it is easier to get a telescope and look up. Co-Star “promotes its use of artificial intelligence and data from NASA.” (Houston, they have a problem).
Imagine the pitch. You go into the VC and you tell him you are democratizing the universe by peering into the black holes of space in an effort to bring spiritual comfort to the self-fulfilling prophecy of your customer’s life and help him to look both upward and backward simultaneously to discover his own “ancestral trauma.” You’ll know you have a deal if the term sheet includes fairy dust and time travel reimbursement for the board.
However, there is one nagging thought in my mind. I suspect my opinion is wrong and that the investors here are right. Spielberg’s movie “E.T. the Extra-Terrestrial” grossed $800 million, and we all know there is no such thing as alien life.
Rule No. 614
“The universe is a pretty big place.” — Carl Sagan