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SDVG's Venture Summit 2012 - McNamee Presentation

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  • 1.      Ten  Hypotheses  for  Tech  Inves1ng   Presenta(on  to  SDVG  Venture  Summit   Roger  McNamee   Eleva(on  Partners    
  • 2. Hypothesis  #1   Investors  and  entrepreneurs  risk  missing   a  huge  business  opportunity  because   they  are  using  the  wrong  vocabulary  
  • 3. 1998-­‐2006:  Internet  +  Web  World  Wide  Web  –  HTML  4   Internet  
  • 4. 2007-­‐Present:  Two  Separate  Markets   World  Wide   App  Model   Web       HTML  4   Internet    Carriers  +  WiFi  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   5  
  • 5. 2007-­‐Present:  Hypernet  +  Hyperweb   World  Wide   App  Model   Web       HTML  4   ßHyperwebà Internet    Carriers  +  WiFi   ßHypernetà5/4/2012   ”How  to  Revive  the  Web"  by  Roger  McNamee   6  
  • 6. Hypothesis  #2   Businesses  are  adop(ng  consumer   technology  because  it  is  cheaper  to  buy,   cheaper  to  support,  and  works  beOer.  
  • 7. Web  =  Only  Half  of  Addressable  Market   Units/$  ===>    HTML  4   App  Model   Windows/IE   +  Carriers   iOS   Mac/Safari   Android   Search:  Google   Search:  Apps     Hypernet  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   8  
  • 8. Hypothesis  #3   “Index  search”  s(ll  controls  wired  web;  in   mobile,  use  cases  and  behaviors  are   different,  resul(ng  in  different  winners  
  • 9. Apps  Replace  Google  for  Mobile  Search   Units/$  ===>    HTML  4   App  Model   100  searches   +  Carriers   iPad:  10       iPhone:  1   Hypernet  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   10  
  • 10. Web  Winners  Have  Failed  to  Profit  From  Mobile   Google   Apple   MicrosoX   Verizon   Facebook   ATT   Cisco   “Publishers”   Oracle/Sun   Amazon   SAP   B&N   Intel     Hypernet  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   11  
  • 11. Hypothesis  #4   Apple  succeeded  by  hiding  technology   wherever  possible  .  .  .  and  subs(tu(ng   style.  
  • 12. Customers  Don’t  Love  the  Web   Units/$  ===>    HTML  4   App  Model   Open  source   +  Carriers   iOS   Long  tail   Branded   Free   Free  +  Paid   Commodi(zed   Differen(ated   Wild  West   Secure   $400-­‐1,000   Hypernet  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee  
  • 13. Hypothesis  #5   Next  genera(on  web  technology  will   favor  publishers/consumers  over  middle   men  
  • 14. Tech  Pendulum  Enabling  More  Content  Differen1a1on  Commodity   Differen(ated  Content   Content   HTML  4  Web   App  Model   Future:  HTML  5  à     5/4/2012   ”How  to  Revive  the  Web"  by  Roger  McNamee   15  
  • 15. Engagement:  Metric  of  Value  for  Content   HTML  4  Web   iOS   HTML  5  Web   ????   2-­‐5  mins/  app   15-­‐20  secs/story  4/4/2012   ”How  to  Revive  the  Web"  by  Roger  McNamee   16  
  • 16. Value  to  Publisher   $ HTML  4  zone          iOS  zone   HTML  5  zone  Content  =   Content  =  Commodity   Differen(ated   Engagement   You  are  here!   Commodi(zed  content  favors  middle   men;  differen(ated  content  favors   publishers  and  consumers  
  • 17. HTML  5  =  Higher  Produc1on  Values,  Lower  Cost   HTML  4   Flash   Flash   HTML  5   Flash   HTML  4   HTML  4   HTML  4   Flash   HTML  4   HTML  4  -­‐  Today   HTML  5  -­‐  2014  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   18  
  • 18. HTML  5  =  Engagement  and  Mone1za1on   HTML  5  enables   STORY       everything  to  be  an     app,  including  ads   Product  1     Product  2     Product  3   Ads  can  be  @ed   directly  to  content     It  may  be  2-­‐3  years   Product  1  *     Adver(sement   Product  2  *   before  HTML  5  tools   Product  3  *   will  enable  this  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   19  
  • 19. HTML  5  “Apps”  May  Have  Mul1ple  Forms   4   3   1.  App:  func@ons   like  a  na@ve  app   STORY         INFOGRAPHIC       2   Product  1         2.  eBook:  something   Product  2   to  read  later   Product  3     3.  Bookmark+:   content  available   Ticker  1  *     for  later   Stock  Trading   1   App   Ticker  2  *   reference   Ticker  3  *   4.  Layers  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   20  
  • 20. Mul1ple  Forms  of  High  Value  Mone1za1on   4   3   1.  App  delivery   STORY         INFOGRAPHIC       2.  eBook:  atomiza@on   2   Product  1         of  content  enables   Product  2   incremental  revenue   Product  3     3.  Content  available  for   later  reference  can   Ticker  1  *     include  mone@za@on   Stock  Trading   1   App   Ticker  2  *     Ticker  3  *   4.  Layers  can  include   mone@za@on  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   21  
  • 21. HTML  5  =  Wide  Open  Opportunity   Units/$  ===>   World   App  Model   HTML  5   Wide   Web     HTML  4   Google   Apple   ???   Content  =   Content  =   Content  =   Commodity   Limited   Unlimited   Differen1a1on   Differen1a1on   Desktops   Smart  Phones   Future    5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   22  
  • 22. HTML  5  vs  Na1ve  Apps   Advantage   iOS   HTML  5         Scale   √           Open  Source     √         Cost     √         Control     √         Economics     √         Func1onality   ???   ???        5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee     23  
  • 23. HTML  5  =  Wide  Open  Opportunity   Units/$  ===>   World   App  Model   HTML  5   Wide   Web     HTML  4   Google   Apple   ???   Content  =   Content  =   Content  =   Commodity   Limited   Unlimited   Differen1a1on   Differen1a1on   Desktops   Smart  Phones   Future    5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   24  
  • 24. Hypothesis  #6   Children  under  the  age  of  8  may  never   use  a  PC  the  way  you  do.  
  • 25. An  Eight-­‐Year  Old’s  Idea  of  a  Computer  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   26  
  • 26. Hypothesis  #7   Android  has  a  broken  economic  model;   cannot  compete  with  Apple  in  the  long   term  
  • 27. Brand  is  a  HUGE  Advantage   Apple’s  gross  margin  is  roughly  equal  to  gross   COGS   revenues  for  a  comparable  Android   COGS   Apple   Android  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   28  
  • 28. Android  =  Entropy  at  High  Velocity   Verizon   Amazon   Original  Android   Standard   Barnes  &  Noble  5/4/12   Samsung   29   ”How  to  Revive  the  Web"  by  Roger  McNamee  
  • 29. Smart  Phone  Purchase  Drivers   Apple   Android   •  Tech  heat   •  Content   seeker   •  Cool  factor   •  Inexpensive  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   30  
  • 30. Hypothesis  #8   “Social”  and  “Mobile”  are  now  a  cost,  not   a  compe((ve  advantage  
  • 31. Hypothesis  #9   The  Cloud  will  be  highly  distributed.     Home  clouds  may  prove  to  be  the  most   valuable.  
  • 32. Compe11on  in  the  Cloud   Google   Apple   Amazon   •  Content   SAP  Microsoh   factor   •  Cool   Neilix   v   v    Private  and  Home  Clouds   v   vv   v   33  
  • 33. Hypothesis  #10   Disrup(on  of  cable,  satellite,  and  even   NetFlix  is  beginning.  
  • 34. Economic  &  Market  Environment  •  US  economy  is  beginning  to  improve,  despite  efforts  in   Washington  to  reduce  deficit   –  DJIA,  S&P,  Nasdaq  reflect  rising  op(mism   –  Unemployment  remains  high;  possibly  structural  •  Excessive  consumer  indebtedness  acts  as  a  drag  on  growth  •  Government  deficits  act  as  a  drag  on  future  growth   –  Wars  compete  for  resources  with  private  economy   –  Is  Iran  next?  •  Investor  challenge:  what  is  the  happy  ending?  3/19/12   "Ten  Hypotheses"  by  Roger  McNamee   35  
  • 35. Onward!!   •  Tech  heat   •  Content   seeker   hOp://www.moonalice.com   •  Cool  factor   •  Inexpensive   hOp://www.eleva(on.com  5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   36