KPCB Internet Trends Meeker *updated* 12.2012

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KPCB Internet Trends Meeker *updated* 12.2012

  1. 1. INTERNET TRENDS@ STANFORD – BASES12/3/2012Mary Meeker
  2. 2. Outline1) Basic Stats – Internet Growth Remains Robust,Rapid Mobile Adoption Still in Early Stages2) Re-Imagination – of Nearly Everything3) Asset-Light Generation – From Hand to Cloud &Back…Rise of the Sharing Economy4) ‘USA, Inc.’ – A Lot to be Excited About in Tech, a Lot tobe Worried about in Other Areas2
  3. 3. BASIC STATS – INTERNET GROWTHREMAINS ROBUST, RAPID MOBILEADOPTION STILL IN EARLY STAGES3
  4. 4. INTERNET USERS4
  5. 5. Rank Country2008-2012Internet UserAdds (MMs)2012 InternetUsers (MMs) Y/Y GrowthPopulationPenetration1 China 282 538 10% 40%2 India 88 137 26 113 Indonesia 39 55 58 234 Iran 35 42 205 555 Russia 33 70 6 496 Nigeria 31 48 15 307 Philippines 28 34 32 358 Brazil 27 88 6 459 Mexico 19 42 9 3710 USA 18 244 3 7811 Argentina 17 28 57 6812 Egypt 17 30 11 3813 Colombia 14 25 39 5414 Turkey 13 35 17 4715 Vietnam 12 31 7 35Top 15 673 1,447 15% 34%World 902 2,406 8% 34%Note: *Data as of 6/12, 2.4B global Internet users and 8% Y/Y growth rate based on the latest available data.Source: United Nations / International Telecommunications Union, internetworldstats.com.2.4B Global Internet Users in 2012* –8% Y/Y Growth*, Driven by Emerging Markets5
  6. 6. MOBILE USERS6
  7. 7. Note: *Japan data per Morgan Stanley Research estimate. Source: Informa.Global Smartphone Stats: Subscribers = 1,142MM Penetration = 17% Growth = 42%1.1B Global Smartphone Subscribers, 42% Growth, Q4:12 –@ Only 17% of Mobile Subscribers7Rank CountryQ4:12SmartphoneSubs (MM)Smartphoneas % ofTotal SubsSmartphoneSub Y/YGrowth Rank CountryQ4:12SmartphoneSubs (MM)Smartphoneas % ofTotal SubsSmartphoneSub Y/YGrowth1 China 270 24% 50% 16 Saudi Arabia 15 31% 38%2 USA 172 48 50 17 Philippines 15 14 383 Japan* 78 65 11 18 Mexico 15 14 554 Brazil 55 20 35 19 Thailand 14 17 435 India 44 4 52 20 Turkey 13 19 526 UK 35 45 31 21 Malaysia 12 32 237 Korea 32 59 35 22 South Africa 11 18 268 Indonesia 27 9 36 23 Argentina 11 19 559 France 26 38 33 24 Netherlands 9 47 3710 Germany 25 23 19 25 Poland 9 16 3011 Russia 22 9 44 26 Sweden 8 54 2412 Spain 18 30 14 27 Egypt 7 8 4013 Italy 16 19 28 28 Iran 7 8 5314 Australia 16 50 44 29 Taiwan 7 24 8015 Canada 15 55 38 30 Hong Kong 6 48 48
  8. 8. MODERN MOBILE DEVICE EVOLUTION8
  9. 9. 05001,0001,5002,0002,5003,0003,5004,0000 1 2 3 4 5 6 7 8 9 10GlobalUnitShipments(000)Quarters After LaunchiPad iPhone iPod05,00010,00015,00020,00025,00030,00035,00040,0000 1 2 3 4 5 6 7 8 9 10GlobalUnitShipments(000)Quarters After LaunchiPad iPhone iPod020,00040,00060,00080,000100,0000 1 2 3 4 5 6 7 8 9 10GlobalUnitShipments(000)Quarters After LaunchiPad iPhone iPodFirst 10 Quarters Cumulative Unit Shipments, iPod vs. iPhone vs. iPadSource: Apple, as of CQ3:12 (10 quarters post iPad launch).iPods Changed Media Industry…iPhones Ramped EvenFaster…iPad Growth (3x iPhone) Leaves “Siblings” in Dust9
  10. 10. 01002003004005006007000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16GlobalCumulativeUnitShipments(MM)Quarters After LaunchAndroid iPhone01002003004005006007000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16GlobalCumulativeUnitShipments(MM)Quarters After LaunchAndroid iPhoneAndroid ‘Phone’ Adoption Has Ramped Even Faster –Nearly 6x iPhoneFirst 16 Quarters Cumulative Global Android & iPhone Unit ShipmentsSource: Gartner, Morgan Stanley Research, as of Q3:12. 10
  11. 11. Despite Tremendous Ramp So Far,Smartphone User Adoption Has Huge Upside01,0002,0003,0004,0005,0006,000Smartphone Mobile PhoneGlobalUsers(MM)Global Smartphone vs. Mobile Phone Users, 2012ESource: Morgan Stanley Research estimates.Note: One user may have multiple devices. Therefore the number of actual smartphone and mobile phone devices in use is likely higher thanthe user data shown here.1BSmartphoneUsers5B MobilePhone Users11
  12. 12. Impressive 29%+ of USA Adults Own Tablet / eReader,Up from 2% Less Than Three Years Ago% of USA Adults Who Own Tablet Computers or eReaders, 4/09 – 1/12Source: Pew Research Center, 1/12.0%5%10%15%20%25%30%35%4/09 9/09 5/10 9/10 11/10 5/11 8/11 12/11 1/12USAAdultsthatowntabletcomputersoreReaders(%)29%2%12
  13. 13. iPad = 48% of American Kids Want One for ChristmasWhile 36% Want a Mini…Source: Nielsen, 11/12 13Interest in Buying in Next 6 Months Among USA Kids Ages 6-124%6%8%9%14%14%16%18%19%19%20%20%21%25%26%28%29%29%31%31%33%36%36%39%48%0% 10% 20% 30% 40% 50% 60%Apple TVMicrosoft SurfaceOther Mobile PhoneSamsung Galaxy (Note or Tab)PlayStation MovePlayStation VitaAndroid SmartphonePlayStation PortableSmart TVKindle FireSmartphone other than iPhoneNintendo WiiE-ReaderMicrosoft Xbox 360Sony Playstation 3Nintendo DS / DS Lite / DSi / DSi XLTablet Computer other than iPadNintendo 3DS / 3DS XLComputerKinect for Xbox 360iPhoneiPod TouchiPad MiniNintendo Wii UiPad
  14. 14. MOBILE MOJO14
  15. 15. Global Mobile Traffic Growing Rapidly to 13% of Internet Traffic0%5%10%15%12/08 6/09 12/09 6/10 12/10 6/11 12/11 6/12%ofInternetTrafficGlobal Mobile Traffic as % of Total Internet Traffic, 12/08 – 11/121% in 12/094% in 12/1013% in 11/12Source: StatCounter Global Stats, 11/12 15
  16. 16. In India, Mobile Internet Traffic Surpassed Desktop Internet Usage inMay, 2012 - Other Countries to Follow…0%20%40%60%80%100%12/08 6/09 12/09 6/10 12/10 6/11 12/11 6/12%ofInternetTrafficDesktop InternetMobile InternetIndia Internet Traffic by Type, Desktop vs. Mobile, 12/08 – 11/12Source: StatCounter Global Stats, 11/12 16
  17. 17. Source: Gartner, eMarketer, Strategy Analytics. CAGR is compound annual growth rate.Note: Apple has paid $6.5B+ to developers as of 9/12, implying gross app market revenue of $9B+ in 4 years; Google indicated during Q3:12earnings call that its mobile revenue (from advertising and apps / content) run rate is $8B+, up from $2.5B mobile ad revenue run rate in Q3:11.$0$5$10$15$20$252008 2009 2010 2011 2012EMobileAd+AppsSpending($B)Mobile AppsMobile AdvertisingGlobal Mobile App + Advertising Revenue, 2008 vs. 2012E$19B$0.7BMobile Monetization Growing Rapidly (67% Apps, 33% Ads)17
  18. 18. Mobiles + Tablets = 24% of Online Shopping on Black Friday in 2012(vs. 6% Two Years Ago), iOS 4x > than Android2010 2011 20120%5%10%15%20%25%%ShareofAllInternetShoppingTrafficiPhone iPad Android Kindle and Nook Galaxy Tab Other% of USA Black Friday Internet Shopping Traffic FromMobile + Tablet Devices, 2010 – 2012Note: Black Friday (11/23/12) is the day following Thanksgiving Day in USA, traditionally the beginning of theChristmas shopping season. On this day, most major retailers open early and offer promotional sales to kick off theholiday shopping season. Source: IBM Digital Analytics Benchmark186%14%24%
  19. 19. 7%15%43%26%10%25%11%42%22%1%0%10%20%30%40%50%Print Radio TV Internet Mobile%ofTotalMediaConsumptionTimeorAdvertisingSpendingTime Spent Ad Spend% of Time Spent in Media vs. % of Advertising Spending, USA 2011~$20B+Opportunityin USAMaterial Upside for Mobile Ad Spend vs. Mobile UsageNote: *Internet (excl. mobile) advertising reached $30B in USA in 2011 per IAB, Mobile advertising reached $1.6B per IAB. Print includesnewspaper and magazine. $20B opportunity calculated assuming Internet and Mobile ad spend share equal their respective time spentshare. Source: Time spent and ad spend share data eMarketer, 12/11, Internet and mobile ad dollar spent amount per IAB.Internet Ad= $30B*Mobile Ad= $1.6B*19
  20. 20. RE-IMAGINATION OF NEARLYEVERYTHING –POWERED BY NEW DEVICES +CONNECTIVITY + UI + BEAUTY –WHERE WE ARE NOW…20
  21. 21. We hope to rewire the way people spread and consumeinformation…We think a more open and connected worldwill help create a stronger economy with more authenticbusinesses that build better products and services.- Mark Zuckerberg, Founder / CEO, FacebookLetter to Potential Shareholders, May 2012Re-Imagination of a Big Idea…21
  22. 22. Re-Imagination of Computing Devices…THEN…(Desktops / Notebooks)NOW…(Tablets / Smartphones)22
  23. 23. Re-Imagination of User Interfaces…THEN…(Keyboard + Mice =Graphical User Interface)NOW…(Touch + Voice + Gesture =Natural User Interface)23
  24. 24. 24Global Market Share of Personal Computing Platforms by Operating System Shipments, 1975 – 2012EOtherTRS-80AndroidCommodoreAtariAmigaAppleWinTel0%10%20%30%40%50%60%70%80%90%100%1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011MarketShareofPersonalComputingPlatformsbyOperatingSystems(%)Source: Asymco.com (as of 2011), Public Filings, Morgan Stanley Research, Gartner for 2012E data. 2012E data as of Q3:12.Re-Imagination of Computing Operating Systems -iOS + Android = 45% Share vs. 35% for Windows1983Wintel - 25%1998 – 2005Wintel – 96%2012EWintel – 35%
  25. 25. Global Smartphone + Tablet Shipments Exceeded PCs in Q4:10Global Unit Shipments of Desktop PCs + Notebook PCs vs. Smartphones + Tablets,2005-2015ENote: Notebook PCs include Netbooks. Source: Katy Huberty, Ehud Gelblum, Morgan Stanley Research.Data and Estimates as of 9/12.02004006008001,0001,2001,4001,6001,8002005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015EGlobalUnitShipments(MMs)Desktop PCs Notebook PCs SmartphonesQ4:10: Inflection PointSmartphones + Tablets > Total PCsTablets25
  26. 26. Global Smartphone + Tablet Installed Base Should ExceedPC Installed Base in Q2:13EGlobal Installed Base of Desktop PCs + Notebook PCs vs. Smartphones + Tablets,2009-2015ENote: Notebook PCs include Netbooks. Assumes the following lifecycles: Desktop PCs – 5 years; Notebooks PCs – 4 years; Smartphones– 2 years; Tablets – 2.5 years. Source: Katy Huberty, Ehud Gelblum, Morgan Stanley Research. Data and Estimates as of 9/12.05001,0001,5002,0002,5003,0002009 2010 2011 2012E 2013E 2014E 2015EGlobalInstalledBase(MMs)Desktop PCs Notebook PCs SmartphonesQ2:13E: Projected Inflection PointSmartphones + Tablet Installed Base >Total PCs Installed BaseTablets26
  27. 27. Re-Imagination of Connectivity…THEN… NOW…27
  28. 28. 125 Years In, Landlines Were Surpassed by Mobiles in 200201,0002,0003,0004,0005,0001994 1996 1998 2000 2002 2004 2006 2008GlobalInstalledBase(MMs)Fixed Telephone LinesMobile SubscriptionsGlobal Fixed Telephone Lines vs. Mobile Subscriptions, 1994 - 2009Source: International Telecommunications Union.2002 –Mobiles > Landlines2006LandlinesPeaked at1.3B28
  29. 29. Re-Imagination of Knowledge…THEN…(Print Copies / UpdatedAnnually)NOW…(Accessible Everywhere / UpdatedReal-Time / Everyone CanContribute)29
  30. 30. 244 Years In, Encyclopedia Britannica Went Out of Print in 20121101001,0001101001,0001990 1993 1996 1999 2002 2005 2008 2011WikipediaMonthlyActiveUsers(LogScale–MM)BritannicaAnnualHardCopySales(LogScale-000)Encyclopedia Britannica Hard Copy Sales vs. Wikipedia MonthlyActive Users (Different Scale), 1990 – 2012Encyclopaedia Britannica Hard Copy Sales (000s) Wikipedia Monthly Active Users (MMs)1990 – Britannica SalesPeaked at 120K/year1993 – Microsoft Introduced EncartaEncyclopedia for PC @ $992001 – Wikipedia Founded, Today*Wikipedia Has 485MM MonthlyUnique Users2008 – Microsoft ShutDown Encarta2012 – EncyclopediaBritannica Announced Endof Print EditionsNote: *as of 9/12, per comScore global data.Source: Kellog School of Management, Shane Greenstein and Michelle Devereux, “The Crisis at Encyclopedia Britannica.” 30
  31. 31. Re-Imagination of Photography…THEN…Dedicated Camera / ManuallyTransfer Digital Files / Develop FilmsNOW…(Instagr.am / Camera+ / Hipstamatic…)Always With You Camera (Smartphone) /Instant Digital Effects / Share / Sync / Discover31
  32. 32. 01002003004005006007002001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012UnitsShipped(MMs)Smartphone Shipments (MM)Total Compact Camera Shipments (Digital + Film) (MM)Worldwide Smartphone vs. Standalone Compact Camera Shipments2001 – 2012ESource: Digital Camera: 2001-2002 data per Photo Marketing Association; 2003-2012E data per IDC. Film Cameras:2001-2005 data per Photo Marketing Association; 2006-2012E data per KPCB estimates. Smartphone units data perMorgan Stanley Research2008More smartphone unitsshipped than compactcameras169 Years In, Standalone Compact Camera Shipments WereSurpassed By Smartphone (with Camera) Shipments in 2008322007Standalonecompact camerashipments peak @149MM
  33. 33. Re-Imagination of Navigation + Live Traffic Info…THEN…Physical Copies of Map in Car /TV, Radio Reporting of Traffic InfoNOW…(Waze)User-Generated Digital Map /Live Crowd-Sourced Traffic Data33
  34. 34. 20+ Years In, Portable Navigation Device Unit Shipments WereSurpassed by Waze User Additions in Q1:1202468101214Q1:07 Q3:07 Q1:08 Q3:08 Q1:09 Q3:09 Q1:10 Q3:10 Q1:11 Q3:11 Q1:12 Q3:12UnitsShipped/RegisteredUsersAdded(MMs)PND Unit Shipments (North America + Europe) Waze Registered User AddsQuarterly N. America + Europe Unit Shipments of Portable Navigation Devices (PNDs) vs.Waze Registered User Adds, Q1:07 – Q4:12ESource: TomTom, Morgan Stanley Research, Waze. PND data include units shipped in North America and Europe andexclude in-dash navigation systems pre-installed on motor vehicles.Q1:12 – Inflection PointWaze Added More Users vs. PNDs SoldQ4:09PND shipments peak@ 13MM units34
  35. 35. Re-Imagination of News + Information Flow…THEN…Delayed / Dedicated Reporters + Cameramen /Regional or National ReachNOW…(Twitter)Real-Time / Citizen Reporting viaMobile Devices / Global Reach35
  36. 36. Re-Imagination of Note Taking…THEN…Pencil + NotepadNOW…(Evernote)Always Synced / Multi-Device /Picture + Audio Enabled / Searchable36
  37. 37. Re-Imagination of Files & Folders…THEN…Print Copies / Storage Cabinets / Color TabsNOW…(Dropbox / Box.net / Google Drive / Apple iCloud/ Microsoft SkyDrive / Amazon Cloud Drive)Always Synced / Always Accessible / Multi-DeviceSearchable Digital Files37
  38. 38. Re-Imagination of Content Organization / Aspiration…THEN…Paper / Scissors / GlueNOW…(Pinterest)One-Click to Pin / Share /Follow / Always Accessible38
  39. 39. Re-Imagination of Magazines…THEN…Piles of Print CopiesNOW…(Flipboard)More Content / Always Up-To-Date /Personalized / Access Everywhere /Interactive (Video + Audio) / Share39
  40. 40. Re-Imagination of Cash Registers…THEN…Big + Odd Looking Machines /Receipt Printers Cash DrawersNOW…(Square)Simple + Elegant Tablet + Square Reader /Email Receipts / Touch Signing40
  41. 41. Re-Imagination of Borrowing / Lending Money…THEN…Brick ‘n Mortar Bank Branch / PaperApplications / Lengthy Approval ProcessNOW…(Lending Club…)Online Interface / Apply & Get Funded in Days /Lower Interest Rates For Borrowers / BetterDiversification / Returns For Investors41
  42. 42. Re-Imagination of Idea Building / Funding…THEN…Flyers / Loudspeakers / Dinners / ChecksNOW…(KickStarter)Online / Social Distribution /Real-Time Progress42
  43. 43. Re-Imagination of Recruiting / Hiring…THEN…Job Fairs / Campus Recruiting Events /Paper ResumesNOW…(LinkedIn)Online Resumes / Social Relevancy ForRecruiters / Searchable Skill Sets /Endorsements / Recommendations43
  44. 44. Re-Imagination of Product Design…THEN…Secretive / In-House R&DNOW…(Quirky)Open / Crowd-Sourced / Collaborative Design / LiveOnline Broadcast of Product Evaluation / 3D PrintedPrototypes44
  45. 45. Re-Imagination of Selling Digital Goods…THEN…Dedicated Shopping Site / FulfillmentInfrastructureNOW…(Gumroad)Democratization of Commerce / Leverage DistributionPlatforms such as Twitter / Facebook45
  46. 46. Re-Imagination of Signatures…THEN…Scan / Fax / Mail to ReturnSignature PageNOW…(DocuSign)Electronic Documents / Secure AuditTrail / Instant E-Signature46
  47. 47. Re-Imagination of Health Awareness…THEN…Awareness Campaigns /Physician VisitsNOW…(Nike+ / Jawbone UP)Always-On Tracking + Syncing + Analytics /Quantified Self47
  48. 48. Re-Imagination of Door Locks…THEN…Keys & LatchesNOW…(Lockitron)Lock / Unlock From Your Smartphone Anywhere inthe World / Keyless Entry with Bluetooth Auto-Sensing / Wi-Fi Enabled48
  49. 49. Re-Imagination of Thermostats…THEN…On/Off Switch +Temperature SettingNOW…(Nest)Wi-Fi Enabled / Auto-Learning / Auto-Sensing /Remote Control / Energy Efficient49
  50. 50. Re-Imagination of Education…THEN…Classrooms / Lectures / Reading MaterialsNOW…(Codecademy / Coursera / Khan Academy…)Interactive / Online / Accessible byAnyone Anywhere Anytime50
  51. 51. Re-Imagination of Learning…From learning by listening to learning by doing…Education and learning will become as much fun asvideogames. We call it ‘full body learning.’- Bing Gordon, Interactive Arts Hall-of-Famer, KPCB PartnerTHEN… NOW…51
  52. 52. Re-Imagination of The Rose Bowl…Games are even more engaging for fans with thesports screen trifecta - mobile / tablet / TV.Megan Quinn, Stanford Fan, KPCB Partner52
  53. 53. In less than ten years, Facebook garnered massive volunteered (andshared) big data from its 1B+ users – to tune of 300MM+ imagesuploaded everyday / 125B+ friend connections / $3B+ in capex.Re-Imagination of Data –Big to Bigger to Bigger & It’s Still “The Wild West”…THEN… NOW…53Data as of 10/12, per Facebook.
  54. 54. 02,0004,0006,0008,0002005 2007 2009 2011 2013E 2015EDigitalInformationCreated&Shared(zettabytes)…Re-Imagination of Data –Big to Bigger to Bigger and It’s Still “The Wild West”…Amount of global digital information created & shared – fromdocuments to pictures to tweets - grew 9x in five years to nearly 2zettabytes* in 2011, per IDC.54Note: * 1 zettabyte = 1 trillion gigabytes. Source: IDC IVIEW report “Extracting Value from Chaos” 6/11.Global Digital Information Created & Shared, 2005 – 2015E
  55. 55. If Facebook can create a ‘front-end’ to massive amounts of largely new & personal “bigdata,” in spite of huge initial resistance to “sharing” – think what can come to pass with“front-ends” + connections to most types of data over the next ten years.55…Re-Imagination of Data –Big to Bigger to Bigger and It’s Still “The Wild West”Facebook Global Monthly Active Users, 2004 – 2012E02004006008001,0001,2002004 2005 2006 2007 2008 2009 2010 2011 2012EFacebookGlobalMAUs(MMs)Headlines From The New York Times• “Facebook Retreats on Online Tracking” – 11/2007 @ 50MM Users• “Facebooks Users Ask Who Owns Information” – 2/2009 @ 200MM Users• “Facebook Privacy: A Bewildering Tangle of Options” – 5/2010 @ 500MM UsersSource: Facebook, 2012E MAUs are KPCB estimates.
  56. 56. Re-Imagination of Data –Help Me, Help You, Help Others…56Waze• 30MM Users, +3x Y/Y• 600MM+ Miles Drivenper Month with WazeOpenJawbone UP• Initial Launch of ~70KUsers (11/11) =• 7B+ Steps• 800 Years of Sleep• Re-launched 11/12Yelp• 84MM Users, +37% Y/Y• 33MM User-GeneratedReviews, +49% Y/YSource: Company data.
  57. 57. Re-Imagination of Always On…Bluetooth Wi-Fi57~2B Bluetooth-Enabled Devices ShippedGlobally in 2012E, Up 87x in 10 Years~1.5B Wi-Fi Enabled Devices Shipped Globallyin 2012E, Up 5x in 4 YearsSource: Bluetooth Data: IC Insights, iSuppli. Wi-Fi Data: In-Stat, Wi-Fi Alliance, ABI ResearchPersonal Server in Your Pocket + Sensors / Signals Uber AllesHow Many of You are Wearing a “Wearable” Now?How Many of You will be Wearing a “Wearable” in 5 Years?
  58. 58. • Nearly Ubiquitous High-Speed Wireless Access in Developed Countries• Unprecedented Global Technology Innovation• Ultra Competitive Markets for Mobile Operating Systems + Devices• Broadly Accepted Social + Interest Graphs / Information Transparency• Fearless (& Connected) Entrepreneurs• Difficult ‘What Do I Have to Lose’ Economic Environment for Many• Available (& Experienced) Capital• Fearless (& Connected) Consumers• Inexpensive Devices / Access / Services (Apps)• Ability to Reach Millions of New Users in Record (& Accelerating) Time• ‘Social Emerging as Starting Distribution Point for Content,’ (Brian Norgard, Chill)• Aggressive (and Informed) ‘On My Watch’ Executives at ‘Traditional’ Companies• Unprecedented Combo of Focus on Technology AND Design• Nearly ‘Plug & Play’ Environment For Entrepreneurs – Marketplaces / Web Services /Distributed Work / Innovative Productivity Tools / Low ‘Start Up’ Cost• Beautiful / Relevant / Personalized / Curated Content for ConsumersMagnitude of Upcoming Change Will be Stunning -We are Still in Spring Training58
  59. 59. ASSET-LIGHT GENERATION –FROM HAND TO CLOUD & BACK…RISE OF THE SHARING ECONOMY59
  60. 60. You Can Walk Out Your Door…With the Clothes on Your Back, a Charged Mobile Device…Cash in the ‘Bank’ & Happily Go a Very Long Way…Who Ya Gonna Text? to tune of ‘Ghostbusters’60Photo: SVLuma/Shutterstock.com
  61. 61. Mobile Internet Re-Imagining Asset-Heavy Lifestyle61Asset–Heavy Lifestyle Consumes:Space Time Money
  62. 62. Asset-Light Lifestyle Frees: Space…62Asset–Heavy… Asset–Light…
  63. 63. …Frees: Time…63Asset–Heavy… Asset–Light…
  64. 64. …And Frees: Money64Asset–Heavy… Asset–Light…
  65. 65. Be a 25 Year Old…65
  66. 66. From Hand to Cloud & Back…Cherry Car Wash…213Set Location Choose ServiceConfirm / PayPull Out Your SmartphoneReceive ServiceReview / FeedbackRinse &Repeat…66
  67. 67. Asset-Heavy…Pay for Ownership / Buy Albums + CDs inStores / Playback via Dedicated PlayersAsset-Light…(Spotify, Pandora, iTunes…)Pay for Access / Instant On-Demand Streaming onInternet-Enabled Devices / Discovery of MusicThrough Friends + Experts /Asset-Light Generation –Music…67
  68. 68. Asset-Light Generation –Video…Asset-Heavy…Pay for Ownership / Space ConsumingAsset-Light…(YouTube / Netflix…)On-Demand / Instant Access Anywhere / Paid for byAdvertising or Subscription68
  69. 69. Asset-Heavy…Dedicated Hotel Buildings / Uniform-LookingRooms / 60-80% UtilizationAsset-Light…(Airbnb / Onefinestay / CouchSurfing…)Turns Any Privately-Owned House / Apartment / RoomInto a Unique / Local / Adventurous Hotel Experience69Asset-Light Generation –Housing…
  70. 70. Asset-Light Generation –Getting Around / Riding…Asset-Heavy…One Car per Person / Inefficient Use ofResources Leading to Traffic Congestion /PollutionAsset-Light…(Zipcar / Uber / Hailo…)On-Demand Car / Ride-Sharing via Mobile Apps /With Reviews / Location-Aware70
  71. 71. Asset-Light Generation –Services…Asset-Heavy…Do-It-Yourself / Time (Virtual Asset) ConsumingAsset-Light…(Zaarly / TaskRabbit…)Getting Grocery Shopping / Laundry / Other ThingsDone, all via Smartphone71
  72. 72. Asset-Light Generation –Textbooks…Asset-Heavy…Pay for Ownership / Expensive / InefficientUtilization (Rarely Used After CourseCompletion)Asset-Light…(Chegg / Amazon Textbook Rental…)Pay For Usage Rights During the Semester / Up to3x Cheaper vs. Buying72
  73. 73. Asset-Heavy…Wallet with Cash / Coins / Credit Cards /Reward CardsAsset-Light…(Square / PayPal / Google / Apple …)Smartphone is the New Wallet w/ Payment Capability /Reward Cards / Boarding Passes / eTickets73Asset-Light Generation –Wallet…
  74. 74. Asset-Heavy…Full Time / Fixed CostAsset-Light…(oDesk, Freelancer, OnForce…)Workforce as a Service (WaaS) / On-Demand /Global / 24x7 / Variable Cost74Asset-Light Generation –Employment…
  75. 75. Re-Imagination of Flexibility…Easier for Consumers to Get WhatThey Want When They Want it…Easier for Crafty & Flexible People toMake Money…
  76. 76. NET, LOTS OF STUFF BEING RE-IMAGINED AND THERE’S A LOT MORETO BE RE-IMAGINED…76
  77. 77. 1) Ear (+ Body) - owing to better devices (wirelessBluetooth) / services (Siri / Spotify /Soundcloud...) / products (Jambox / UP…)2) Car – 52 minutes per day by 144MM Americans(76% alone)* spent in cars – largely untapped3) TV – 3+ hours per day spent in front of TVs** –way better devices / interfaces / interfacescoming rapidly...Apple & Google footstepsraising bar…50MM+ American households haveInternet-enabled TVsConsumer Internet ‘White Space’To Be Re-Imagined…Source: *US Census Bureau, **BLS, Morgan Stanley Research estimates. 77
  78. 78. 4) Back Pocket – 600MM+ credit cards in use in USA,average American carries 3-4 credit cards inaddition to check cards / loyalty cards / coupons /cash in wallet. 17% average credit card borrowingrate vs. 1.7% 10-Year US Treasury bond yield*.5) Education – $1.1T+ annual spending on educationin USA, $460B+ = post-secondary, cost of going tocollege up +2x (inflation adjusted) over 30 years,$914B** student loans outstanding ($25K pergraduating student), bigger than credit card ($672B)& auto loans ($750B). Student loans up 8x over tenyears.6) Healthcare – $2.6T+ annual spend on healthcare inUSA, 18% of GDP in 2010, up from 5% 50 yearsago, and 2x OECD average, 32% of Americansconsidered obese in 2008, up from 15% in 1990.***…Consumer Internet ‘White Space’To Be Re-ImaginedSource: *Credit Card #s per Federal Reserve Bank of Boston, Credit Card interest rate per Indexcreditcards, 10-year Treasury yieldare 11/12 averages, per Dept. of Treasury, **Federal Reserve Bank of New York, *** Center for Medicare & Medicaid Services,OECD, Center for Disease Control.78
  79. 79. USA Student Loans Outstanding = $914B, Up 8x vs. 10 YearsAgo, Higher Than Auto Loan & Credit Card Debt79$0$1$2$3$4Q4:2001 Q2:2012HouseholdDebt(Ex.Mortgage)Outstanding($T)OtherHome EquityCredit CardAuto LoanStudent LoanUSA Household Debt (Ex. Mortgage) Outstanding by Type, Q4:2001 vs. Q2:201210-YrChange-29%+390%+16%+60%+814%*$914B$100BNote: *Federal Reserve Bank of New York improved measurement for student loans in 2011 and believes that student loan data prior to2011 may be under reported. ‘Other’ cateogry includes personal loans, retail (clothing, grocery, department stores, home furnishing, gas,etc) loans. There’re 36MM+ people with outstanding student loans in USA, average outstanding student loan amount was $23,300, perFRB NY analysis of 241MM people with Equifax credit reports in 2/12. Source: Federal Reserve Bank of New York.$750B$672B$589B
  80. 80. USA, INC. – A LOT TO BE EXCITEDABOUT IN TECH, A LOT TO BEWORRIED ABOUT IN OTHER AREAS80
  81. 81. ‘Made in USA’ Smartphone Operating Systems =88% Share from 5% Six Years Ago2005 2012E0%20%40%60%80%100%MarketShareofSmartphoneOSOther OSiOSAndroidWindows MobileBlackBerry OSLinuxNokia SymbianGlobal Smartphone Operating System Market Share(by Units Shipped), 2005 vs. 2012ESource: 2005 data per Gartner, 2012E data per IDC. 81
  82. 82. $0$2$4$6$8$10$12$14$160%10%20%30%40%50%1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011RealGDP(inTrillionsof2005Dollars)Revenue&Expensesas%ofGDPRevenue as % of GDP(Left Axis)Expenses as % of GDP(Left Axis)Real GDP (Right Axis)USA Inc. Revenue & Expenses as % of GDP, 1901 – 2011Source: 1910 – 1930 per Census Bureau, 1940-2011 per White House OMB. Real GDP adjusted for inflation, in 2005 dollars.Biggest Gap BetweenRevenue & Expenses inUSA History Outside ofWorld War I & II82USA, Inc. – Biggest Gap Between Revenue &Expenses in USA History Outside of World War I & II
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  84. 84. Copyright 2012. All rights reserved.84
  85. 85. America’s Debt Level Relative to Other Countries –You Do the Math…Note: Ranking excludes countries with gross government debt less than $10B in 2010. Gross government debt includes intragovernmentobligations (such as Treasuries held by the Social Security Trust Fund in US’ case). Source: The International Monetary Fund (IMF).Rank Country2010 GrossGovernment Debt($B) % of GDP Rank Country2010 GrossGovernment Debt($B) % of GDP1 Japan $12,009 220% 16 Hungary $105 80%2 Jamaica 19 143 17 Israel 168 773 Greece 436 143 18 UK 1,699 764 Lebanon 53 134 19 Egypt 161 745 Iraq 97 120 20 Austria 272 726 Italy 2,445 119 21 Sudan 47 727 Belgium 452 97 22 Brazil 1,397 678 Singapore 214 96 23 Jordan 18 679 Ireland 196 95 24 Côte dIvoire 15 6710 USA 13,707 94 25 India 1,046 6411 Portugal 213 93 26 Netherlands 497 6412 Iceland 12 92 27 Cyprus 14 6113 Germany 2,759 84 28 Spain 848 6014 Canada 1,324 84 29 Uruguay 23 5715 France 2,110 82 30 Pakistan 100 5785
  86. 86. USA Inc. @ kpcb.com / youtube.com / amazon.com186K+ Total Views32K+ YouTube Views86
  87. 87. 87THIS CYCLE OF TECH DISRUPTION ISMATERIALLY FASTER & BROADER THANPRIOR CYCLES…
  88. 88. 88The information offered in this presentation speaks to industry trends in general,and should not be construed as providing any particular recommendations oranalysis for any specific company that is mentioned in this presentation. KPCB isa venture capital firm that owns significant equity positions in certain of thecompanies referenced in this presentation.Disclosure

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