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Acg ny presentation 3-30-11

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Acg ny presentation 3-30-11

  1. 1. ACG – NYThe Future of Digital Media<br />Jeff Bussgang<br />General Partner<br />Flybridge Capital Partners<br />March 30, 2011<br />
  2. 2. Summary View<br />We are in the middle of an unprecedented boom in technology and innovation <br />A true “Golden Age” for innovation<br />Growth opportunity ahead of us is more rapid and global than ever before<br />US is well positioned for the future<br />During an innovation age, we have an innovation economy that is the envy of the world<br />
  3. 3. Context for My Perspective<br />General Partner at Flybridge Capital Partners, early-stage VC firm based in Boston, $560M under management<br /><ul><li>40+ active portfolio companies, investing out of Fund 3 ($280M)</li></ul>Entrepreneur-in-Residence at Harvard Business School<br />Former entrepreneur<br /><ul><li>Cofounder/President Upromise (acq’d by SallieMae)
  4. 4. VP at Open Market (IPO ‘96)</li></ul>Author: Mastering the VC Game<br />
  5. 5. Today Are Glory Days for Technology<br />We have made unprecedented advances in technology over the last 10 years…<br />…and we ain’t seen nothing yet!<br /><ul><li>Social media and networking
  6. 6. The “i” generation, training “Net Natives – iPod, iPhone, iPad
  7. 7. ‘Cloud computing’
  8. 8. Broadband penetration
  9. 9. Nanotechnology
  10. 10. Synthetic Biology
  11. 11. Completion of the Human Genome Mapping project
  12. 12. Green consumer
  13. 13. Renewable energy</li></ul>An explosion in computing power, connectivity and entrepreneurship with an outlook for accelerated growth over the next 10 years<br />
  14. 14. Why Is This Happening Now?<br />Ingredients for a Vibrant<br />Start-Up Ecosystem<br /><ul><li>Intellectual Capital – academia, innovation, diverse industries and ideas
  15. 15. Venture Capital
  16. 16. Advisors, Angels, Accelerators
  17. 17. Successful Companies – to partner, poach and/or sell to</li></li></ul><li>Example: MIT – Factory of Innovation<br />33,600 companies (300 each year) employ 3.3 million people, generate sales of $2 trillion. 282 patents in 2008 <br />
  18. 18. Venture Capital: Regional Comparison<br />Total VC Investment 2010<br />Boston: $2.4B<br />New York: $1.3B<br />California: $11.1B<br />Source: NVCA 2011 Yearbook<br />
  19. 19. Why Now? Contextual Forces<br />Lean Start-Ups<br />Cloud Computing<br />Moore’s Law<br />Reduced Cost To Experiment<br />Opportunity for Angels & VCs<br />
  20. 20. Technology startup incubator programs are multiplying<br />
  21. 21. More business plan competitions….….with more resources and record submissions<br />$20k<br />$30k<br />$200k<br />$225k<br />$50K<br />$200k<br />Source: Robert W. Fairlie using Current Population Survey<br />
  22. 22. Large tech company market caps have grown 63% in last 2 years<br />Market Cap ($B)<br />Dow<br />$1.4 T<br />Dow grew 11%<br />63%<br />$ 0.85 T<br />
  23. 23. Mid-size tech company market caps have grown 117% in last 2 years<br />Market Cap ($B)<br />Dow<br />$268 B<br />Dow grew 11%<br />117%<br />$ 123 B<br />
  24. 24. Tech company balance sheets are strong with tons of cash<br />Source: Bloomberg BusinessWeek.<br />
  25. 25. Next Wave of Valuable Internet Properties Emerging<br />
  26. 26. Bubble-Driven orFundamentals-Driven?<br />$8-10B valuation<br />IPO Filed<br />$10B valuation<br />IPO Filed<br />$65B valuation<br />$15-25B valuation<br />
  27. 27. Still huge opportunities for innovation and growthInternet & Mobile consume many eyeballs, little advertising $’s<br />Source: Morgan Stanley<br />
  28. 28. Mobile internet technology<br />Source: Morgan Stanley <br />
  29. 29. The “i” generation has arrived<br />Source: Top Mobile Internet Trends, Matt Murphy/Mary Meeker – 2/10/11; Apple<br />
  30. 30. Ridiculous growth in data traffic….<br />Source: Morgan Stanley <br />
  31. 31. US now home to less than 40% of the top 50 Most innovative companies<br />Global broadband access is growing exponentially<br />The middle class is exploding<br />No of companies<br />Global opportunity: The world is truly flat <br />The Expanding World Middle Class<br />Million, year-end<br />2006<br />2010<br />+42%<br />Personal/mobile<br />Shared/premise<br />Non-US<br />Source: Goldman Sachs: Innovation 2010 BusinessWeek / BCG Survey Results; Telco 2.0 Mobile and Fixed Future Broadband Business Models<br />
  32. 32. Cloud computing and the data explosion<br />Cloud computing enabling massive growth in volume of digital data<br />Worldwide Cloud Services Revenue<br />Data Volume (ZB)<br />Revenue ($B)<br />CAGR<br />43%<br />CAGR<br />28%<br />According to Gartner Research:“Cloud Computing will be as influential as E-business”<br />Source: Gartner; Morgan Stanley; IDC<br />
  33. 33. All The New Jobs Are Created By Startups<br />Excluding jobs from new firms, US net employment growth rate is negative<br />Without startups, net job creation for the American economy would be negative in all but a handful of years<br />
  34. 34. Conclusion<br />Unique and special time for entrepreneurship<br />Unique and special time for technology and innovation<br />Digital Media is being transformed by a host of global contextual forces<br />For the foreseeable future, US has huge edge in generating these innovations, which will be the engine that will drive our economy<br />

Editor's Notes

  • Voiceovers:Over the next decade, the evolution of computing and the Internet will produce faster, increasingly intelligent devices. More of our possessions will contain sensors and computers that log our activities, building digital dossiers that augment our memories, help us make decisions and tame information overload.In the next decade as conjured by Forrester Research analyst James McQuivey, all that information will be available instantaneously, anywhere. He also thinks we&apos;ll all use this technology just to keep up with everyone else.Craig Mundie, Microsoft Corp.&apos;s chief research and strategy officer, believes we are near a long-wished-for era of computers that respond to speech, gestures and handwriting.The 2000s saw Google become one of the world&apos;s most powerful companies because it helped us get a grip on the sprawling content of the Web. What we will need next, however, is a company that doesn&apos;t just organize data. Google, or the next Google, will have to synthesize all that information and help us understand what it all means.It used to be we investors focused on how to innvoate in the context of the $50B software industry. Now we are focused on innovating in the $15T GDP economy and
  • MIT, in particular, has been a start-up company factory33,600 companies founded by MIT affiliates; 25,800 are currently activeEmploy 3.3M people and generate $2T in sales250-300 new companies started each year by students and alumniEnduring giants: Campbell Soup, Gillette, Bose, HP, Intel, TI, Genentech, Raytheon, Qualcomm, iRobot, AkamaiMIT Technology Licensing Office (TLO) 2008:282 patents filed, 122 issued20 companies started with VC or $50k of other funding$89.1M in revenues from royalties and equity
  • VC Investments are very, very concetrated in the US. 70% of all VC $ flows into 3 states.Massachusetts has always been a strong #2 to California. But when you look at the numbers on a per capita basis (which is what entrepreneurs care more about – after all, it’s not very relevant how much capital is invested in China, what’s relevant is how concentrated that capital is)…
  • New Business creation rate is highest ever in last 14 yearsIdeaWins is Microsofts new competition. $100K + NYC storefront (100K value)
  • Voiceover – Mobile user estimated to overtake desktop users in 2014 (at 1.6 B users)
  • Voiceover: enabled by growth in wireless options (GPS, 3G, Wi-Fi, Bluetooth)