How	
  to	
  Revive	
  the	
  Web	
  
Presenta(on	
  to	
  Mashable	
  Connect	
  
Roger	
  McNamee	
  
Eleva(on	...
Hypothesis	
  #1	
  

Investors	
  and	
  entrepreneurs	
  risk	
  missing	
  
a	
  huge	
  business	
  opportunity	
  bec...
1998-­‐2006:	
  Internet	
  +	
  Web	
  
World	
  Wide	
  Web	
  –	
  HTML	
  4	
  

Internet	
  
2007-­‐Present:	
  Two	
  Separate	
  Markets	
  
World	
  Wide	
  
Web	
  	
  
HTML	
  4	
  

Internet	
  

5/4/12	
  

A...
2007-­‐Present:	
  Hypernet	
  +	
  Hyperweb	
  
World	
  Wide	
  
Web	
  	
  
HTML	
  4	
  

App	
  Model	
  
	
  

ßHyp...
Hypothesis	
  #2	
  

Businesses	
  are	
  adop(ng	
  consumer	
  
technology	
  because	
  it	
  is	
  cheaper	
  to	
  b...
Web	
  =	
  Only	
  Half	
  of	
  Addressable	
  Market	
  
Units/$	
  ===>	
  

	
  HTML	
  4	
  
Windows/IE	
  
Mac/Safa...
Hypothesis	
  #3	
  

“Index	
  search”	
  s(ll	
  controls	
  wired	
  web;	
  in	
  
mobile,	
  use	
  cases	
  and	
  b...
Apps	
  Replace	
  Google	
  for	
  Mobile	
  Search	
  
Units/$	
  ===>	
  

	
  HTML	
  4	
  
100	
  searches	
  
	
  

...
Web	
  Winners	
  Have	
  Failed	
  to	
  Profit	
  From	
  Mobile	
  
Google	
  
MicrosoW	
  
Facebook	
  
Cisco	
  
Oracl...
Hypothesis	
  #4	
  

Apple	
  succeeded	
  by	
  hiding	
  technology	
  
wherever	
  possible	
  .	
  .	
  .	
  and	
  s...
Customers	
  Don’t	
  Love	
  the	
  Web	
  
Units/$	
  ===>	
  

	
  HTML	
  4	
  
Open	
  source	
  
Long	
  tail	
  
Fr...
Hypothesis	
  #5	
  

Next	
  genera(on	
  web	
  technology	
  will	
  
favor	
  publishers/consumers	
  over	
  middle	
...
Tech	
  Pendulum	
  Enabling	
  More	
  Content	
  Differengagon	
  

Commodity	
  
Content	
  

Differen(ated	
  
Content	
...
Engagement:	
  Metric	
  of	
  Value	
  for	
  Content	
  

HTML	
  4	
  Web	
  

iOS	
  

HTML	
  5	
  Web	
  

2-­‐5	
  ...
$

Value	
  to	
  Publisher	
  
HTML	
  4	
  zone	
   	
  	
  	
  	
  iOS	
  zone	
  

Content	
  =	
  
Commodity	
  

HTM...
HTML	
  5	
  =	
  Higher	
  Producgon	
  Values,	
  Lower	
  Cost	
  

HTML	
  4	
  

Flash	
  

Flash	
  
HTML	
  4	
  
H...
HTML	
  5	
  =	
  Engagement	
  and	
  Monegzagon	
  

STORY	
  	
  	
  
	
  
Product	
  1	
  	
  
Product	
  2	
  
Produc...
HTML	
  5	
  “Apps”	
  May	
  Have	
  Mulgple	
  Forms	
  

4	
  

3	
  
2	
  

1	
  

STORY	
  	
  	
  	
  
	
  
Product	...
Mulgple	
  Forms	
  of	
  High	
  Value	
  Monegzagon	
  

4	
  

3	
  
2	
  

1	
  
5/4/12	
  

STORY	
  	
  	
  	
  
	
 ...
HTML	
  5	
  =	
  Wide	
  Open	
  Opportunity	
  
Units/$	
  ===>	
  

World	
  
Wide	
  
Web	
  	
  
HTML	
  4	
  

App	
...
HTML	
  5	
  vs	
  Nagve	
  Apps	
  
Advantage	
  
	
  
Scale	
  
	
  
Open	
  Source	
  
	
  
Cost	
  
	
  
Control	
  
	...
HTML	
  5	
  =	
  Wide	
  Open	
  Opportunity	
  
Units/$	
  ===>	
  

World	
  
Wide	
  
Web	
  	
  
HTML	
  4	
  

App	
...
Hypothesis	
  #6	
  

Children	
  under	
  the	
  age	
  of	
  8	
  may	
  never	
  
use	
  a	
  PC	
  the	
  way	
  you	
...
An	
  Eight-­‐Year	
  Old’s	
  Idea	
  of	
  a	
  Computer	
  

5/4/12	
  

”How	
  to	
  Revive	
  the	
  Web"	
  by	
  R...
Hypothesis	
  #7	
  

Android	
  has	
  a	
  broken	
  economic	
  model;	
  
cannot	
  compete	
  with	
  Apple	
  in	
  ...
Brand	
  is	
  a	
  HUGE	
  Advantage	
  

COGS	
  

Apple’s	
  gross	
  margin	
  is	
  roughly	
  equal	
  to	
  gross	
...
Android	
  =	
  Entropy	
  at	
  High	
  Velocity	
  

Amazon	
  

Verizon	
  
Original	
  Android	
  
Standard	
  

5/4/1...
Smart	
  Phone	
  Purchase	
  Drivers	
  

Android	
  

Apple	
  
•  Content	
  
•  Cool	
  factor	
  

5/4/12	
  

•  Tec...
Hypothesis	
  #8	
  

“Social”	
  and	
  “Mobile”	
  are	
  now	
  a	
  cost,	
  not	
  
a	
  compe((ve	
  advantage	
  
Hypothesis	
  #9	
  

U.S.	
  economic	
  compe((veness	
  at	
  risk	
  
unless	
  we	
  invest	
  far	
  more	
  in	
  p...
Hypothesis	
  #10	
  

Disrup(on	
  of	
  cable,	
  satellite,	
  and	
  even	
  
NetFlix	
  is	
  beginning.	
  
Economic	
  &	
  Market	
  Environment	
  
•  US	
  economy	
  is	
  beginning	
  to	
  improve,	
  despite	
  efforts	
  i...
Onward!!	
  

•  Tech	
  heat	
  
•  Content	
  
seeker	
  
hLp://www.moonalice.com	
  
•  Cool	
  factor	
  
•  Inexpensi...
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Roger McNamee - How To Revive The Web. 10 Hypotheses For Tech. Investing

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Roger McNamee is a co-founder of Elevation Partners. He began his career in 1982 at T. Rowe Price Associates, where he managed the top-ranked Science & Technology Fund and co-managed the New Horizons Fund. In 1991, he launched Integral Capital Partners, the first crossover fund (combining later stage venture capital with public market investments), in partnership with Kleiner Perkins Caufield & Byers. In 1999, Roger co-founded Silver Lake Partners, the first private equity fund focused on technology businesses. In 2004, Roger and his partners launched Elevation Partners, an investment partnership focused on the intersection of media and entertainment content and consumer technology.

Roger performs 100 shows a year in the band Moonalice, where he plays bass and guitar. Moonalice pioneered the use of social media in music, inventing such applications as Twittercast concerts, Moonalice radio on Twitter, live MoonTune video-streamed concerts, and the Couch Tour. The band’s website (Moonalice.com) enables fans to listen to any song or show and to watch every concert on a smartphone without an app. Moonalice is renowned for the quality of poster art associated with the band. Moonalice’s single, “It’s 4:20 Somewhere” has been downloaded more than 960,000 times.

Roger is the author of The New Normal, published in 2004 by the Portfolio imprint of Penguin Books, and The Moonalice Legend: Posters and Words, Volumes 1 & 2, published in 2008 and 2010, respectively.

Roger serves on board of directors of Wordnik. In philanthropy, he serves on the boards of the Rock ‘n’ Roll Hall of Fame Museum, and the Rex Foundation.

Roger holds a B.A. from Yale University and an M.B.A. from the Amos Tuck School of Business at Dartmouth College.

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Roger McNamee - How To Revive The Web. 10 Hypotheses For Tech. Investing

  1. 1.      How  to  Revive  the  Web   Presenta(on  to  Mashable  Connect   Roger  McNamee   Eleva(on  Partners    
  2. 2. Hypothesis  #1   Investors  and  entrepreneurs  risk  missing   a  huge  business  opportunity  because   they  are  using  the  wrong  vocabulary  
  3. 3. 1998-­‐2006:  Internet  +  Web   World  Wide  Web  –  HTML  4   Internet  
  4. 4. 2007-­‐Present:  Two  Separate  Markets   World  Wide   Web     HTML  4   Internet   5/4/12   App  Model      Carriers  +  WiFi   ”How  to  Revive  the  Web"  by  Roger  McNamee   5  
  5. 5. 2007-­‐Present:  Hypernet  +  Hyperweb   World  Wide   Web     HTML  4   App  Model     ßHyperwebà Internet    Carriers  +  WiFi   ßHypernetà 5/4/2012   ”How  to  Revive  the  Web"  by  Roger  McNamee   6  
  6. 6. Hypothesis  #2   Businesses  are  adop(ng  consumer   technology  because  it  is  cheaper  to  buy,   cheaper  to  support,  and  works  beLer.  
  7. 7. Web  =  Only  Half  of  Addressable  Market   Units/$  ===>    HTML  4   Windows/IE   Mac/Safari   Search:  Google     App  Model   +  Carriers   iOS   Android   Search:  Apps   Hypernet   5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   8  
  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. 9. Apps  Replace  Google  for  Mobile  Search   Units/$  ===>    HTML  4   100  searches     App  Model   +  Carriers   iPad:  10     iPhone:  1   Hypernet   5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   10  
  10. 10. Web  Winners  Have  Failed  to  Profit  From  Mobile   Google   MicrosoW   Facebook   Cisco   Oracle/Sun   SAP   Apple   Verizon   ATT   “Publishers”   Amazon   B&N     Hypernet   5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   11  
  11. 11. Hypothesis  #4   Apple  succeeded  by  hiding  technology   wherever  possible  .  .  .  and  subs(tu(ng   style.  
  12. 12. Customers  Don’t  Love  the  Web   Units/$  ===>    HTML  4   Open  source   Long  tail   Free   Commodi(zed   Wild  West   App  Model   +  Carriers   iOS   Branded   Free  +  Paid   Differen(ated   Secure   $400-­‐1,000   Hypernet   5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee  
  13. 13. Hypothesis  #5   Next  genera(on  web  technology  will   favor  publishers/consumers  over  middle   men  
  14. 14. Tech  Pendulum  Enabling  More  Content  Differengagon   Commodity   Content   Differen(ated   Content   HTML  4  Web   5/4/2012   App  Model   Future:  HTML  5  à     ”How  to  Revive  the  Web"  by  Roger  McNamee   15  
  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. 16. $ Value  to  Publisher   HTML  4  zone          iOS  zone   Content  =   Commodity   HTML  5  zone   Content  =   Differen(ated   You  are  here!   Engagement   Commodi(zed  content  favors  middle   men;  differen(ated  content  favors   publishers  and  consumers  
  17. 17. HTML  5  =  Higher  Producgon  Values,  Lower  Cost   HTML  4   Flash   Flash   HTML  4   HTML  4   HTML  4   HTML  4   HTML  4  -­‐  Today   5/4/12   HTML  5   Flash   Flash   HTML  5  -­‐  2014   ”How  to  Revive  the  Web"  by  Roger  McNamee   18  
  18. 18. HTML  5  =  Engagement  and  Monegzagon   STORY         Product  1     Product  2   Product  3   Adver(sement   5/4/12   Product  1  *     Product  2  *   Product  3  *   HTML  5  enables   everything  to  be  an   app,  including  ads     Ads  can  be  @ed   directly  to  content     It  may  be  2-­‐3  years   before  HTML  5  tools   will  enable  this   ”How  to  Revive  the  Web"  by  Roger  McNamee   19  
  19. 19. HTML  5  “Apps”  May  Have  Mulgple  Forms   4   3   2   1   STORY           Product  1     Product  2   Product  3   INFOGRAPHIC         Stock  Trading   App   Ticker  1  *     Ticker  2  *   Ticker  3  *   1.  App:  func@ons   like  a  na@ve  app   2.  eBook:  something   to  read  later     3.  Bookmark+:   content  available   for  later   reference   4.  Layers   5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   20  
  20. 20. Mulgple  Forms  of  High  Value  Monegzagon   4   3   2   1   5/4/12   STORY           Product  1     Product  2   Product  3   Stock  Trading   App   INFOGRAPHIC         Ticker  1  *     Ticker  2  *   Ticker  3  *   1.  App  delivery   2.  eBook:  atomiza@on   of  content  enables   incremental  revenue     3.  Content  available  for   later  reference  can   include  mone@za@on     4.  Layers  can  include   mone@za@on   ”How  to  Revive  the  Web"  by  Roger  McNamee   21  
  21. 21. HTML  5  =  Wide  Open  Opportunity   Units/$  ===>   World   Wide   Web     HTML  4   App  Model   Google   Apple   HTML  5   ???   Content  =   Commodity   Content  =   Unlimited   Differengagon   Desktops   5/4/12   Content  =   Limited   Differengagon   Smart  Phones   Future     ”How  to  Revive  the  Web"  by  Roger  McNamee   22  
  22. 22. HTML  5  vs  Nagve  Apps   Advantage     Scale     Open  Source     Cost     Control     Economics     Funcgonality   5/4/12   iOS     √                     ???   ”How  to  Revive  the  Web"  by  Roger  McNamee   HTML  5         √     √     √     √     ???           23  
  23. 23. HTML  5  =  Wide  Open  Opportunity   Units/$  ===>   World   Wide   Web     HTML  4   App  Model   Google   Apple   HTML  5   ???   Content  =   Commodity   Content  =   Unlimited   Differengagon   Desktops   5/4/12   Content  =   Limited   Differengagon   Smart  Phones   Future     ”How  to  Revive  the  Web"  by  Roger  McNamee   24  
  24. 24. Hypothesis  #6   Children  under  the  age  of  8  may  never   use  a  PC  the  way  you  do.  
  25. 25. An  Eight-­‐Year  Old’s  Idea  of  a  Computer   5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   26  
  26. 26. Hypothesis  #7   Android  has  a  broken  economic  model;   cannot  compete  with  Apple  in  the  long   term  
  27. 27. Brand  is  a  HUGE  Advantage   COGS   Apple’s  gross  margin  is  roughly  equal  to  gross   revenues  for  a  comparable  Android   COGS   Apple   5/4/12   Android   ”How  to  Revive  the  Web"  by  Roger  McNamee   28  
  28. 28. Android  =  Entropy  at  High  Velocity   Amazon   Verizon   Original  Android   Standard   5/4/12   Samsung   Barnes  &  Noble   ”How  to  Revive  the  Web"  by  Roger  McNamee   29  
  29. 29. Smart  Phone  Purchase  Drivers   Android   Apple   •  Content   •  Cool  factor   5/4/12   •  Tech  heat   seeker   •  Inexpensive   ”How  to  Revive  the  Web"  by  Roger  McNamee   30  
  30. 30. Hypothesis  #8   “Social”  and  “Mobile”  are  now  a  cost,  not   a  compe((ve  advantage  
  31. 31. Hypothesis  #9   U.S.  economic  compe((veness  at  risk   unless  we  invest  far  more  in  post-­‐cellular   wireless  technology  
  32. 32. Hypothesis  #10   Disrup(on  of  cable,  satellite,  and  even   NetFlix  is  beginning.  
  33. 33. 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   34  
  34. 34. Onward!!   •  Tech  heat   •  Content   seeker   hLp://www.moonalice.com   •  Cool  factor   •  Inexpensive   hLp://www.eleva(on.com   5/4/12   ”How  to  Revive  the  Web"  by  Roger  McNamee   35  

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