I’ll always remember how excited I was every time Mary Meeker’s report came out — especially when I was still a banker at Barclays. It not only contained tons of useful market data (a gold mine for analysts), but it also marked the steady passage of time. You could always count on a new Meeker presentation every 6 months, or so, and the topics she discussed often had a nice continuity. Today, these reports are a pleasant reminder of how lucky and excited I am to work with companies that will shape our future.
Some of my initials thoughts:
I’m an investor, and since most of Meeker’s analysis is backward looking (historical trends and “re-imagined” use cases), I try synthesize some of her forward-looking takeaways. Most prominently, Meeker’s presentation sheds light on three major markets: Online Video, Healthcare, and Education. Some of our most recent IVP investments tie directly to these themes, such as ZEFR and General Assembly, and I’m excited to discover other great startups in these verticals.
Both the Internet and my own circle of friends have debated this issue to death (so price. much social.) And as Fred Wilson puts it,
It isn’t clear if the next thing is virtual reality, the internet of things, drones, machine learning, or something else. Larry doesn’t know. Zuck doesn’t know. I don’t know. But the race is on to figure it out.
What we can expect, however, is increased VC interest in companies that could potentially bring us a new future. This is true for companies who are both competitive and complimentary to products by Nest or Oculus. Competitive companies stand to gain from these acquisitions because VC’s know that it’s rarely a one-horse race. Complimentary companies stand to gain even more as many tech incumbents have already signaled that this is where the future is going.
I’m bullish on VR, and FB/Oculus’ upcoming challenges will prove whether the Oculus Rift is more of a Segway or an iPhone. The best step that the iPhone took was to create an ecosystem that was both open and controlled — any third party could build on top of the iPhone, but the quality of the apps were held to a high bar.
There are startups that are already building technologies that would be a great fit for the Oculus Rift. Thalmic Labs, based in Canada, has created the Myo armband for accurate and granular gesture control. Nymi and InteraXon are two bio-sensing startups — they measure heartbeat and brain activity, respectively, to control a connected device. And the quantified fitness space continues to grow with startups like Push and Hexoskin.
As I look at the new crop of hardware startups that will help create the next platform, it’s easy to see two things:
From where I stand, the future is both fun (toy!) and friendly (Canada!). I, for one, cannot wait.
When I evaluate product, either at the early or late stage of a startup, I’m always looking to see if the product has the potential to permanently modify user behavior outside of the product itself.
A few examples of this:
The best products eventually change user behavior because they simplify those existing user behaviors; making it so natural that users have incorporated the habits into their regular lives.
YC’s FFC was one of the more enjoyable conferences I’ve been to in a while. The attendees were great, the format was brisk, and the content shared was by and large very helpful.
At one point, there was a panel of founders discussing the topic of fundraising. Two things hit me:
With PG in the spotlight, many people forget that Jessica Livingston was also a co-founder. She shared her story her responsibilities as the sole nontechnical co-founder (delivering AC units to YC companies!) and juggling being a founder and a mom. She also highlighted that YC has been trying to fund more female founders over the years.
TaskRabbit is getting disrupted, in the same way craigslist was just a few years ago. Andrew Parker at Spark Capital once posted this graphic showing how craiglist is being replaced by a host of startups, a single vertical at a time.
The market of low-skill services is also being displaced by a crop of new entrants:
It has always been surprising to me that TaskRabbit never caught on as much as it should have. There are tons of daily tasks everyone goes through that nobody necessarily enjoys: picking up dry cleaning, mowing the lawn, putting together IKEA furniture… When I propose TaskRabbit to my friends, however, there is always a lukewarm reception even though I believe the monetary trade-off is a no-brainer for them. A couple of reasons why I think folks are slightly fuzzy on the whole concept:
A suggestion for TaskRabbit is to perhaps go the Uber route and do some fun, single use case promotions for holidays like Valentine’s Day — something like a flat $20 delivery fee for a box of chocolates.
In today’s world, the cost of switching from one service to another is almost frictionless for the consumer. It makes very little difference to me to switch between something like Postmates and Homejoy instead of using a generalist application like TaskRabbit.
When the HTC First was released in early 2013, critics scoffed at the idea of a so-called “Facebook Phone”. It didn’t help that the product appeared half-baked — and many considered it to be Facebook’s first flop. AT&T quietly dropped the phone from its offerings mere months after launch.
Today’s announcement of Facebook’s $19B acquisition of Whatsapp reveals that Facebook hasn’t given up on taking over our phones — but taking a much more hacker-like approach. It went from a standalone, all-encompassing app to a network of apps, including Instagram, Messenger, Paper, and now Whatsapp. That’s not including other mobile assets that Facebook attempted to buy (Snapchat, Waze, etc.) On Messenger, one of the coolest, least-known features is the Talking Heads. It allows you to include a contact on your Android home screen, to quickly launch a conversation with him/her.
The platform wars are over — iOS and Android have emerged as the winners. But true to its hacker DNA, Facebook still wants to take over the mobile experience, one product/feature/use case at a time.
For me as an investor, the much more interesting question is, what’s next?
10% of Facebook’s market cap is a lot to pay for an acquisition (of only 32 engineers!) But when I start thinking about paying 10% for a messaging platform that is so core to our mobile experience — it starts looking like a steal.
There’s been tons of emotional outrage and blog posts on the repercussions and implications of Uber’s price surges. Uber’s been addressing this criticism with the protest that price surging is just a result of free market forces. As an Economist by training, I can’t help but add my two cents, because as an Economist by training, I also know that free market mechanisms rarely work as perfectly as they do in textbooks.
Uber also insists that price surging assures rides to those who need the rides the most, but it’s difficult to take that statement at face value. For one, Uber’s price surging is done as a multiple of the base fare, but a more accurate way of pricing according to demand would be as a % of income. The latter is an obviously more difficult methodology, but wouldn’t automatically out-price lower-income customers who may just “need” that ride more than someone with more purchasing power. At its core, Uber’s price surging is essential to its mission of guaranteeing rides when you need it, only because it out-prices the majority of the market.
I’m disappointed by Travis Kalanick’s comparison of Uber’s price surging to the high cost of air travel during the holidays. Sure, the supply/demand mechanics work in a similar way, but airlines are faced with constrained supply in a way Uber insists it’s not. Moreover, airlines probably have one of the lowest customer satisfaction ratings and probably isn’t and shouldn’t be what Uber aspires to be.
I’m an avid Uber user in San Francisco and will continue to be. I have, however, been surprised by some friends (mostly in NYC) who have decided to no longer use Uber due to the politics of price surging.