Ten
Hypotheses
for
Tech
Inves1ng
Presenta(on
to
SDVG
Venture
Summit
Roger
McNamee
Eleva(on
Partners

Hypothesis
#1
Investors
and
entrepreneurs
risk
missing
a
huge
business
opportunity
because
they
are
using
the
wrong
vocabulary

1998-­‐2006:
Internet
+
Web
World
Wide
Web
–
HTML
4
Internet

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

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

Hypothesis
#2
Businesses
are
adop(ng
consumer
technology
because
it
is
cheaper
to
buy,
cheaper
to
support,
and
works
beOer.

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

Hypothesis
#3
“Index
search”
s(ll
controls
wired
web;
in
mobile,
use
cases
and
behaviors
are
different,
resul(ng
in
different
winners

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

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

Hypothesis
#4
Apple
succeeded
by
hiding
technology
wherever
possible
.
.
.
and
subs(tu(ng
style.

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

Hypothesis
#5
Next
genera(on
web
technology
will
favor
publishers/consumers
over
middle
men

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

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

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

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

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

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

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

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

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

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

Hypothesis
#6
Children
under
the
age
of
8
may
never
use
a
PC
the
way
you
do.

An
Eight-­‐Year
Old’s
Idea
of
a
Computer
5/4/12
”How
to
Revive
the
Web"
by
Roger
McNamee
26

Hypothesis
#7
Android
has
a
broken
economic
model;
cannot
compete
with
Apple
in
the
long
term

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

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

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

Hypothesis
#8
“Social”
and
“Mobile”
are
now
a
cost,
not
a
compe((ve
advantage

Hypothesis
#9
The
Cloud
will
be
highly
distributed.
Home
clouds
may
prove
to
be
the
most
valuable.

Compe11on
in
the
Cloud
Google
Apple
Amazon
• Content
SAP
Microsoh
factor
• Cool
Neilix
v
v
Private
and
Home
Clouds
v
vv
v
33

Hypothesis
#10
Disrup(on
of
cable,
satellite,
and
even
NetFlix
is
beginning.

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

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