News Article

Neon Labs Raises $4.1M to Figure Out the Subconscious Appeal of Images
Author: Deborah Gage
Source: Wall Street Journal ( click here to go to the source)

Featured firm in this article: Neon Labs Inc of San Francisco, CA

Humans are constantly evaluating visual images, and we find some to be more attractive without really being able to explain why.

Neon Labs Inc. is building a business on this disconnect and has raised another $4.1 million to go forward, Venture Capital Dispatch has learned.

Co-founded two years ago by Sophie Lebrecht, who has a Ph.D. in cognitive neuroscience, and based on more than a decade of research backed by the National Science Foundation, Neon Labs has technology that automatically extracts images from a video, ranks them and immediately begins testing them to see which ones are best at attracting online clicks.

If Neon’s selection is not doing at least 5% better than an image selected by a customer, the software will automatically replace the image with its next-ranked one. Neon claims its customers make 5% to 30% more revenue from their videos. It’s working with retail, hospitality, marketing and media companies, including IGN Entertainment Inc.

Publishers of video have about a 12-hour window when a video is hot online, according to Dr. Lebrecht, but human editors generally don’t do as well as Neon in selecting pictures. They pick or try to design images that look composed and finished, while viewers are more attracted by missing information—a face looking off to the side, a mysterious glow, a player about to shoot a ball.

Also, when viewers are distracted—scrolling on their iPads while they watch TV, for instance—they’re even more subject to their unconscious preferences when they see an image.

“[Now] we’re trying to solve problems at a massive scale,” said Dr. Lebrecht. “When I was in the lab we would run experiments on 10 to 20 people per week.”

The new money will be used to expand the company and the product. Neon’s biggest challenge is not its technology, Dr. Lebrecht said. The company already has what she calls “an intimate understanding” of how people see and feel about images and is using computers to put those ideas to work.

The challenge is building a business—persuading customers, for instance, that it’s OK to let a computer model pick their images, and selecting which markets to go after first.

“As a scientist I always wanted to do high-risk projects, and venture capital has provided an amazing outlet for a junior scientist to take risks and build teams of people and build crazy stuff,” said Dr. Lebrecht, whose team includes a co-founder from the online gaming company Zynga Inc. and a former software engineer at Google Inc. “Silicon Valley is a fantastic place for that.”

Neon’s Series A round was led by Mohr Davidow Ventures (with MDV General Partner Bill Ericson on the board) and includes current investors True Ventures and serial entrepreneur and academic Steve Blank. The company has now raised about $5 million. Valuation is not disclosed.