The document provides observations on trends in Silicon Valley from Chris Burry, a consultant with experience founding multiple companies. Some key trends discussed include: - Activity and investment levels rebounding after the dot-com crash - Mobile technologies, social media, healthcare, and big data among the hottest areas - Companies scaling very quickly, within a few years or less, to achieve global impact - Startups founded or led by individuals not born in the US are increasingly common - The Lean Startup methodology is gaining prominence, emphasizing customer validation

1. Trends and Patterns:
Observations for Silicon Valley
Chris Burry, SVP Strategy
US Market Access Center

2. Trends and Patterns: Observations from SV
One Person’s View….
• One of the great things about working in Silicon Valley…
 Ask five people for their opinion on something
 You get 7 different answers
 All of which are right.
I have a front-row seat… but also know that
if I could predict the future….
I would be on Wall Street

3. A quick introduction: Who is Chris Burry?
Serial Entrepreneur
 1st Company founded when I was 13 years old. Sold when I
was 18 for $1,000 USD (which seemed like a lot…)
 2nd Company founded in 1982 – Application development
for the Apple IIe and IBM PC. Sold in 1984
 3rd Company co-founded in 1991 – Early CRM company.
Sold in 1993 to EDS
 4th Company co-founded in 1999 – Today has 10,000+
people; $1B+ in annual revenue
 5th Company co-founded in 2010 – Stay tuned….

4. A quick introduction: Who is Chris Burry?
A Consultant
 10 years in national politics working for Al Gore and others
 5 years at EDS
 4 years at Andersen Consulting (now Accenture)
 9 years at Avanade (1st on the ground in multiple countries)
 2 years with the US Market Access Center
Global Citizen
 Lived in the US, UK, France and Finland
Not a marketing guy….

5. A quick introduction: What is the USMAC?
The US Market Access Center
 Founded in 1995 by San Jose State University
 Non-profit that helps non-US companies expand globally
with a focus on Silicon Valley
 800+ companies helped in the last 17 years
 60+ current resident entrepreneurs
 40+ non-resident clients
 90+ mentors in ICT/Web/Cleantech
 Active programs in Asia, Europe and Latin America

6. Trends and Patterns : Level of Activity
After the Internet Bubble
 The over-all energy and activity level was way down
 Angel and venture funding was almost zero
 Many people lost their jobs
Today
 Everywhere you go from San Francisco to San Jose there is
an incredible amount of energy and activity
 Competition for the best talent has returned
 Investing is back… but still uneven

7. Trends and Patterns : SV is still “It” in the US
From Startup Data Trends

8. Trends and Patterns : SV is still “It” in the US
From Startup Data Trends

9. Trends and Patterns : What’s Hot
The obvious
 All things mobile (including NFC)
 Social media
 Gaming
Not so obvious
 Healthcare (software and devices)
 Education (gamification of education is interesting)
 Big data
 Consumerization of the enterprise

10. Trends and Patterns : Scaling Fast
Companies are “Getting Big Fast”
 HP Decades
 Google 10 years
 Twitter 4 years
 Groupon 1 year
Scale or die?
 For many companies, almost no barrier to entry for
competitors (how many Groupon clones are there?)
 Scale / adoption key factor in funding

11. Trends and Patterns : Globalization
In Silicon Valley today
 54% of startups are founded by individuals who were not
born in the US
 Almost every startup has at least 1 non-US citizen
Born-global companies
 University connections are key enabler
 They blend and blur the distinction between the developed
and developing world
 Social media plays a role here

12. Trends and Patterns : Globalization
Investing
 More US venture funds are seeking opportunities to fund
outside of the US
 More non-US venture funds are being created (but Silicon
Valley is still the center)
 These non-US venture funds appear are seeking
opportunities in the US and outside the US
 Greater willingness to fund “remotely”
 BRIC’s having an increasing impact

13. Trends and Patterns : Globalization
Investing
 More US venture funds are seeking opportunities to fund
outside of the US
 More non-US venture funds are being created (but Silicon
Valley is still the center)
 These non-US venture funds appear are seeking
opportunities in the US and outside the US
 Greater willingness to fund “remotely”
 BRIC’s having an increasing impact

14. Trends and Patterns : Lean Startups
Lean Startup Model Changing Business Creation
 Agile Development meets Customer Development
 Truly understanding the customer is key
 Assume you know
nothing
 Fast iteration
 Constant testing
and validation
 Let the customer
decide
 Always learn

15. Trends and Patterns : Lean Startups
• Entrepreneurs have a unique
ability to create their own
reality
• I like to call this a “Reality
Distortion Field” (RDF)
• There is a real risk that
your personal RDF makes
you believe that your
customers value what you
are selling more than they do

16. Trends and Patterns : Lean Startups
• We have all seen the Reality Distortion Field in Action
 We are going to be bigger than Google in 2 years
 The size of the market is HUGE… we will only capture .05%
of the market and make $1B
 And my all time favorite…. We are losing $.02 on every
transaction but we will make it up on volume
Your Business Model, won’t work if it is not
grounded in reality
Lean Startup Methods keep you in reality

17. Trends and Patterns : Lean Startups
• Applying the principles
of the Lean Startup, you
can bring the voice of
the customer into the
process
• The “Measure” and
“Learn” phases of the
cycle create natural
points for inclusion of
input from the customer
But be careful you don’t bring in your own RDF

18. Trends and Patterns : Lean Startups
• How do you know if people will buy what you are selling?
 Are there are real people who want to buy from you?
 Do they have money to spend
 Do they have a real problem (need, or want)?
 Are they are willing to pay you to make their problem go
away?
If customers won’t pay
to make their problem go away,
you don’t have a business

19. Lean Startups: A Great Example
• Mobile Gaming Company Business Model
 Attract very larger number of users
 Relatively low Average Revenue per User and lower lifetime
value of user
 Requires them to capture and hold the user’s attention to
keep them in the app
• What was needed
 Needed to find a way to limit investment in games that
won’t hold attention
 Focus resources on the ones that will

20. Lean Startups: A Great Example
• Finding a new way of thinking about mobile gaming
 Pattern analysis shows that games go viral in the first 14
days, or they don’t go viral at all
 “Fast to Die” – if a game doesn’t show signs that it is going
viral during the beta… pull the plug. Don’t waste any more
time on the product.
 The customer is telling you that they don’t like it
• Does it work?
 $5m+ raised
 50m+ downloads since in less than 3 years

21. Trends and Patterns : Required Reading
In 2011, researchers at Stanford and UC Berkeley released the
Startup Genome Report to understand why startups succeed or fail.
Four types of companies identified.
• The Automizer: Self-service, consumer-focused offerings that often
automate a process. Examples of Automizers include
Google, Dropbox, Mint, Groupon and Zynga.
• The Social Transformer: The Automizers, these startups offer self-
service and consumer-focused products but operate in ‘winner
takes all’ markets and typically offer products that give customers a
new way to interact with others. Examples include
Facebook, Twitter, eBay, Skype, Airbnb, Flickr, LinkedIn and
Foursquare.

22. Trends and Patterns : Required Reading
Types of Companies (continued)
• Integrator: These enterprise-focused startups target the SME
market and look for early monetization, often transferring
innovations from consumer products into the enterprise market.
Integrators include PBworks, Uservoice, Kissmetrics, Zendesk and
GetSatisfaction.
• The Challenger: Challengers operate in the enterprise market with
high customer dependency and a repeatable sales process. Look to
Salesforce, Oracle, MySQL, Redhat and Yammer for examples of this
type of startup.

23. Trends and Patterns : Required Reading
One of the key factors examined in the
Startup Genome Report’s research was
the role of mentors.
• Data from 650+ startups was analyzed,
including 160 funded companies
• Fundraising across the four stages of
development in their model was
examined
• The role of mentors was one factor examined and the message is
clear…
No mentors = no money raised when needed to scale

24. Trends and Patterns : In closing
• Questions?
(To answer in advance, I don’t have an opinion on the
Facebook IPO.
• Comments?
• Care to share your own experiences? (Good and bad)
• Happy to talk one-on-one with anyone

25. San Francisco
Palo Alto
Let’s Connect
San Jose
Our Headquarters
US Market Access Center
facebook.com/usmarketaccess 10 South Third Street, 3rd Floor
San Jose, CA 95113
@usmarketaccess Contact for the Nordic Region
Adiba Cremonini
linkedin.com Vice President International Relations
Groups – US Market Access Center Phone
+1 (917) 767 0077
www.usmarketaccess.com
Email
adiba@usmarketaccess.com