This document provides a summary of Marvin Liao's 2016 investment outlook. It discusses 7 trends that early stage tech investors should pay attention to: 1. Virtual and augmented reality being the next major engagement platform, as AR/VR startups raised $658M in 2015. 2. The internet of everything (IoT), as IoT startups raised over $1.9B in 2015. 3. FinTech as a major growth area, with Asian FinTech startups raising $3.5B in 2015 and US startups raising $3B in Q1 2015. 4. Millennials now being the largest demographic group and redefining smartphone usage and preferences.

1. 2016
Investment Outlook
Marvin Liao | @marvinliao | April 28, 2016

2. Growing Mobile Startups is Tough
• Mobile marketing is tough. ASO vs SEO.
• Mobile engagement is tough. MAU, DAU, Churn
• Mobile monetization is tough. Mobile CPM is still relative
low.
• Mobile payment is still not 100% ready. iOS users still
worth more than Android users.
• Device fragmentation. iOS or Android first?
• Big guys are all eating your lunch. Tough to find
opportunities that Facebook, Apple, Google, Amazon, Baidu,
Alibaba and Tencent are not working on.

3. Investors should run away from…

4. Investors should stay away from…
• Social network or platform. Be careful with any startups calling
themselves platforms.
• Utility Apps. Mail & Carousel (acquired Dropbox) were both shut
down.
• Browser. The world is dominated by big browser players.
• Delivery & Transportation. Get ready to compete with Uber –
service delivery as a platform will come soon.
• Gaming. Small studios will need to raise substantial capital to
acquire users.
• Consumer Messaging. Whatsapp, WeChat, Facebook
Messenger, Viber, Snapchat – is there room for another messaging
app?

5. Funding future is bright for …

6. 7 Trends Every Early Stage Tech
Investors Should Pay Attention To

7. Trend 1 – Virtual & Augmented Reality Is the
Next Engagement Platform

8. 126 AR/VR Startups Raised $658M in 2015
Source: CBInsights- https://www.cbinsights.com/blog/vr-funding-2015/

9. Trend 2 – Internet of Everything
The Internet of Things (IoT) is the
network of physical objects or
"things" embedded with
electronics, software, sensors,
and network connectivity, which
enables these objects to collect
and exchange data.
Source: Chris McCann
https://medium.com/@mccannatron/esports-market-ecosystem-map-c6ae5bc6a7d0

10. IoT Startups Raised Over $1.9B In 2015
Source: CBInsights- https://www.cbinsights.com/blog/internet-of-things-startup-funding/

11. Trend 3 – FinTech. 122 Startups in Asia Raised
$3.5B in 2015. In US $3B in Q1, 2015
Source: Accenture - https://newsroom.accenture.com/news/fintech-investment-in-asia-pacific-set-to-at-least-quadruple-in-2015-
according-to-report-by-accenture.htm
• Payment – 40%
• Lending – 25%
• Others – 35%

12. Trend 4 – Millenials Now Represent the
Biggest Voice of the US Population
Source: Goldman Millennial Insights http://www.goldmansachs.com/our-thinking/pages/millennials//

13. With Over 85% Penetration, Millennial Are
Redefining Smartphone Usage
New startups that are counting
on the Millennial:
• Dating
• Shopping
• Content consumption
• Fitness
• Access vs. Ownership
(sharing economy) for cars,
housing, luxury goods
Source: Nielsen - http://www.nielsen.com/us/en/insights/news/2014/mobile-millennials-over-85-percent-of-
generation-y-owns-smartphones.html

14. Trend 5 – The Future of Learning
Mobile technology enables new
way to educate, learn and
measure:
• Learning technology (VR, AR,
mobile)
• Teaching technology
• Education enterprise software
• Education assessment
• Education device and network
management
Source: Department of Education - http://tech.ed.gov/files/2015/12/NETP16.pdf

15. Trend 6 – Messaging Is Eating the World
Business models that can be built
on messaging platforms:
• Shopping
• Transportation
• Customer Services
• Finance
• Fundraising
• Hiring
• Gaming
• Enterprise internal
communications

16. Trend 7 – Rise of Cyber Security

17. VCs Poured $3.3B into Cyber Security in
2015

18. Questions?