Feeds:
Posts
Comments

Posts Tagged ‘Gerbsman Partners’

Serendipity, not Search, Finds Top Apps

Posted in Board Of Intellectual Capital, Business models, Economy, Gerbsman Partners, internet, Market research, Strategy, Technology, tagged , , , , , , , , , , , , , , , , , on March 14, 2012| Leave a Comment »

Article by John Backus, Partner New Atlantic Ventures

“Much has been written about the explosive growth of smartphones and tablets, but apps are what make them useful and are driving their adoption. IDC estimates mobile app downloads will reach nearly 182.7 billion in 2015. There are now nearly one million apps, mostly for Apple and Android devices, and Gartner projected app revenue from app stores alone will reach $58 billion by 2014. Apps are big business.

But this sheer volume of apps creates real complexities for app developers and consumers alike. As a developer, how does your app stand apart from the pack? As a consumer, finding the right app is like looking for a needle in a haystack.

Conventional wisdom suggests that search is the answer. Chomp, Quixey and even Yahoo! let you discover apps through search. Others are trying to help you search for apps with various algorithms, through social networks and games.

I disagree with this this entire approach.

Search is not the answer for app discovery – finding the top apps is serendipitous.

We find our best apps today by talking to our friends at a restaurant, by reading about them in a blog or an article, or by stumbling upon them on a recommended or top ten list.

Not a month goes by when an entrepreneur I meet, developing a smartphone app, can’t quite answer a simple question: How will you market your app to your customers? All too often the answer lies somewhere between “Apple is going to feature my app,” and “I’m going to advertise it in other apps.” Neither is a compelling answer, nor likely to help developers build a big business.

We’re placing a big bet, alongside VC media giant, Syncom, that serendipity will drive the app discovery process. That’s why we invested in Apptap. Similar to what an ad network does today, serving you ads based on the content of the web page you are viewing, AppTap serves you apps to consider, based on that same content.

A USA Today online reader, browsing an article in the sports section, is likely interested in seeing sports-related apps. A visitor to TUAW (The Unofficial Apple Weblog) is likely to be intrigued by cutting edge Apple iPhone or iPad apps, but not by an advertisement on basket weaving. A Pandora iPhone listener, on the other hand, is likely not interested in clicking out of Pandora to check out a flashing app advertisement.

So if you are a developer, quit trying to trick customers into downloading your app via incented downloads. Don’t run random app ads, it is too reminiscent of early run-of-site banner ads. And don’t think that hoping to be featured in someone else’s app store is a good strategy.

Instead, put your app where your customers are likely to discover it, and you will be well on your way to growing your audience with users actually interested in your app.

Originally published on the Huffington Post, January 13, 2012. Follow John on Twitter @jcbackus”

Read original post here.

Read Full Post »

Valley clean energy innovation can prosper, it just takes awhile

Posted in Board Of Intellectual Capital, Business models, cleantech, Economy, Gerbsman Partners, Intellectual capital, Investments, Market research, Strategy, Technology, tagged , , , , , , , , , , , , , on March 12, 2012| Leave a Comment »

Article from GigaOm.

“Two Silicon Valley-backed Bay Area companies appear to be the tech vendors behind Apple’s new sizable and pioneering clean power push at its massive data center in North Carolina. Last week it was revealed that solar panel maker SunPower will provide Apple with panels for a 20 MW solar farm, while I reported earlier this month that fuel cell maker Bloom Energy looks to be the vendor behind Apple’s 5 MW fuel cell farm. The significance of Apple opting to partner with two Valley-born clean power firms illustrates that the greentech venture ecosystem can work — it just takes quite a long time.

San Jose, Calif.-based solar panel maker SunPower was founded way back in the mid-80′s by Stanford electrical engineering professor Richard Swanson, and received early funds from the Department of Energy, the Electric Power Research Institute, two venture capital firms and chip firm Cypress Semiconductor. The company went public in the Spring of 2005, bought venture-backed Berkeley, Calif.-based solar installer Powerlight in late 2006, and more recently was bought by oil giant Total.

Sunnyvale, Calif-based fuel cell maker Bloom Energy was founded a decade ago, though only came out of stealth two years ago, and was venture capital firm Kleiner Perkin’s first foray into greentech. Bloom also counts venture firm NEA as an investor, and Bloom raised its latest $150 million round of funding in late 2011.

Both companies have taken years to develop into firms that can mass produce their respective clean power technologies at scale and at a low enough cost to meet the needs of a large customer like Apple. And both companies have likely taken longer to mature than their investors had originally hoped. Kleiner Partner John Doerr said a couple years ago that he thought Bloom Energy would take nine years to go public (which, if true, would mean Bloom would have gone public last year). SunPower’s execs reportedly said back in the early(ish) days of the company that developing SunPower into a solar manufacturer took a lot longer than they anticipated.

But Apple apparently chose these two Bay Area clean power leaders for its first-of-its-kind, huge solar and clean power farms, suggesting these firms are delivering industry-leading products at the right economics for Apple. Apple is spending $1 billion on the data center, and likely between $70 million to $100 million on the solar farm. Each 100 kW Bloom fuel cell costs between $700,000 to $800,000 (before subsidies), so Apple’s fuel cell farm could cost around $35 million.

Yes, both SunPower and Bloom Energy, have had their fare share of struggles in recent years. 2011 was a particularly difficult year for SunPower, with a glut of solar panels causing prices to fall around 50 percent globally and Total’s CEO said recently that SunPower would have gone bankrupt last year without Total’s backing. Bloom Energy is a private company and doesn’t disclose its financials, but likely if Bloom was in shape to go public in 2011, it would have done so.

However, it’s no secret that greentech has been a particularly hard area for venture capitalists to invest in. The long time tables, the large capital needed, the hardcore science for the innovations, and the low cost focused energy markets, have created a difficult ecosystem for the traditional VC to make money off of. But after a long slog — which is still ongoing for SunPower and Bloom Energy in 2012 — these clean power technologies have actually broken into the mainstream. Valley, backed cleantech firms can make it — you’ve just got to sit back and wait.”

Read original article here.

Read Full Post »

What’s Next For Google Play? Audiobooks And Magazines

Posted in Board Of Intellectual Capital, tagged , , , , on March 7, 2012| Leave a Comment »

Article from TechCrunch.

“Yesterday, Google announced the launch of Google Play, a rebranded Android Market which consolidates all of Google’s media offerings, including apps, music, movies and e-books, into one portal. But it appears that Google’s ambitions to create its own iTunes-like experience won’t stop there. In the Help Center for the new Google Play, empty pages titled “Audio Books” as well as “Magazines and journals” have appeared, hinting at Google’s plans into its future content offerings.

The Audio Books page was first spotted by unofficial Google news site Google Operating System, which also discovered two genres for audiobooks listed on the site (“audio books” and “audiobooks”). However, because of the duplicated spellings, this last bit is not as telling as the placeholder page in the Google Help Center. It could be that the genres are automatically generated, the blog speculates.

It wouldn’t be surprising for Google to move into audiobooks, though, an obvious complement to their current offerings, as well as into magazines, newspapers, catalogs, educational content, TV shows, and everything else that Apple is doing now within its iTunes universe. If anything, the rebranding effort with the Android Market (as much as we may hate it), seems to speak to a desire for it to be seen as a more robust, richer offering than “just” an app store.

To that end, Google even registered several domains that suggest its ambitions. These unused domains include googleplaymagazines.com, googleplaynewspapers.com, googleplaynewsstand.com, googleplaytv.com, and many other variations on those themes.

Google is also developing a consumer-facing experience for organizing purchased e-books at the home of its former online ebookstore, an Amazon-like shopping portal found at books.google.com/books. To be clear, that’s a separate storefront from its books search engine books.google.com (which also now points to Google Play). The stalled effort at creating a home for users’ purchased ebooks now has a second chance, complete with a library of books on Google Play, including a few pre-loaded classics like Great Expectations and Pride and Prejudice. Audiobooks would fit in well here, if Google moved in that direction.

Also of note, there are magazines available in this ebooks portal too, but not in the Google Play store. It’s clearly only a matter of time before the two sites (Play and Books) are even further merged making those magazines easy to find and purchase using the revamped Android Market…err…Google Play service. After all, if you have ‘em, promote ‘em.

Not surprisingly, there’s a placeholder help page for that, too, dubbed “magazines and journals.” Newspapers and TV placeholder help pages don’t yet exist, however.”

Read the whole article here.

Read Full Post »

Why Dropbox Is A Major Disruption

Posted in Board Of Intellectual Capital, internet, Investments, Market research, Strategy, tagged , , , , , , , , , , on March 3, 2012| Leave a Comment »

Article from AboveTheCrowd by Bill Gurley.

“Back in October, Techcrunch announced that Dropbox had raised $250mmat a seemingly absurd valuation. Many firms, including my firm Benchmark Capital, participated. When this happened, many people asked us why this was a special company that would cause us to break our standard investment paradigm. They didn’t quite understand why this was a company that deserved once-in-a-generation special attention.

The first answer to this question is rather straightforward, but not earth shattering. Drew Houston and his team had taken a hard problem — file synchronization — and made it brain dead simple. Anyone that had used previous file synchronization programs, including Apple’s own iDisk, constantly encountered state problems. Modifications in one location would get out of synch with those in another, ruining the  entire premise of seamless synchronization. It wasn’t that these other companies did not understand the problem, it was just that they could not execute on the solution. The Dropbox team solved this, which was a critical innovation.

Although this was critical, nailing technical synchronization would not necessarily warrant outsized valuations. In order to be worth $40B one day (which is 10X the $4B reported round, the objective return of a VC investment), the company would need to hold a place in the ecosystem that is far more strategic than that of a simple high-tech problem solver. So what is it Dropbox does that is so special?

This evening, TechCrunch reported that Dropbox would automatically synch your Android photos. Once again, someone could suggest “so what, how hard is it to do that?, and why is that worth billions?”

Here is why. Once you begin using Dropbox, you become more and more indifferent to the hardware you are using, as well as the operating system on that device. Dropbox commoditizes your devices and their OS, by being your “state” system in the sky. Storing credentials and configurations of devices, and even applications are natural next steps for this company. And the further they take it, the less dependent any user becomes of the physical machine (HW and SW) that is accessing that data (and state). Imagine the number of companies, as well as the previous paradigms, this threatens.

That is a major, major deal. And it comes at a time where there are many competing platforms on both desktop and mobile. This “unsure” market backdrop ensures the need for a cross-platform solution and plays right into Dropbox’s hand. You can lose your desktop computer, you can lose your smartphone. It doesn’t matter, because all you really care about is in the Dropbox cloud.”

To read the blog, and reach Bill Gurley, please click here.

 

Read Full Post »

Trends in Terms of Venture Financings in Silicon Valley — Fourth Quarter 2011

Posted in Uncategorized, tagged , , on February 28, 2012| Leave a Comment »

Article by Fenwick and West. For more information, please contact Barry Kramer and Michael Patrick (bkramer@fenwick.com).

“We analyzed the terms of venture financings for 117 companies headquartered in Silicon Valley that reported raising money in the fourth quarter of 2011.

Overview of Fenwick & West Results

  • Up rounds exceeded down rounds in 4Q11, 70% to 16%, with 14% of rounds flat. This showed continued strong valuations in the venture environment, consistent with 3Q11, and was the tenth quarter in a row in which up rounds exceeded down rounds.
  • The Fenwick & West Venture Capital BarometerTM showed an average price increase of 85% in 4Q11, an increase from 69% in 3Q11. Series B rounds were exceptionally strong, with an average increase of 164% since the last round.

Anecdotally, we attribute the Series B results in part to the increased number of smaller, relatively low valuation, Series A financings undertaken by micro VC firms. When the investee companies in these financings make good progress, it can result in a significant percentage increase in valuation in the Series B round – and if these companies do not make good progress, and do not raise a Series B financing, they will not appear in the Barometer statistics because there is no transaction to report, as described under “Methodology” below.

If Series B financings were excluded from the Barometer calculation (which we believe would be over compensating for this anomaly) the Barometer would have been 50%. Along these lines we note that Dow Jones VentureSource (“VentureSource”) reported that the three most prolific venture investors in 4Q11 were 500 Startups, SV Angel and First Round Capital, all early stage investors, with a combined 77 investments in 4Q11.

The results by industry are set forth below. In general, consistent with recent quarters, the internet/ digital media and software (which includes many of the “big data” and “cloud” companies) industries were the valuation leaders, and cleantech and life science lagged.

Overview of Third Party Data

In 2011 we saw a generally improving venture environment, with venture investment, fundraising, valuations, M&A and IPOs all up compared to 2010. But there were some anomalies:

  • Fundraising by venture funds was up in dollar terms, but the number of funds raising money declined.
  • Venture capitalists invested healthy amounts at healthy valuations, and showed gains in their portfolios, but venture capitalist confidence has been down three quarters in a row.
  • Some industries are concerned about a bubble (internet/digital media and software), while others are having a tough time (cleantech and life science).
  • Venture capitalists again raised significantly less money than was invested in venture-backed companies.
  • Although 2011 was strong, the fourth quarter showed some weakness with venture investment and M&A down in 4Q11 compared to 3Q11.
  • The number of venture funds is decreasing, while the number and importance of angel investors is increasing, and secondary market activity is expanding.

Venture Capital Investment. Highlights:

  • Venture investment was moderately lower in 4Q11 than 3Q11.
  • Venture investment was significantly higher in 2011 than 2010.
  • Average deal size increased in 2011.
  • Internet and software industries lead in 2011, although both saw declines in investment in 4Q11.
  • Silicon Valley received 41% of all U.S. venture investment in 2011, and 46% in 4Q11.

Data:

Venture capitalists (including corporation-affiliated venture groups) invested $7.4 billion in 803 deals in the U.S. in 4Q11, a 12% decrease in dollars from the $8.4 billion invested in 765 deals in 3Q11 (as reported in October 2011), according to VentureSource. For all of 2011 venture capitalists invested $32.6 billion in 3209 deals, a 25% increase in dollars from 2010, when $26.2 billion was invested in 2799 deals (as reported in January 2011).

The PwC/NVCA MoneyTreeTM Report based on data from Thomson Reuters (the “MoneyTree Report”) reported similar results. Venture investment in 4Q11 declined 6% in dollars compared to the 3Q11 results (as reported in October 2011), with investment of $6.6 billion in 844 deals in 4Q11, compared to $7.0 billion in 876 deals in 3Q11. For all of 2011 venture capitalists invested $28.4 billion in 3673 deals, a 30% increase from 2010 when $21.8 billion was invested in 3277 deals (as reported in January 2011).

The MoneyTree Report also noted that the internet and software industries saw the largest increase in investment in 2011, increasing 68% and 38% respectively over 2010, although both saw declines in investment from 3Q11 to 4Q11. Silicon Valley received 41% of all venture funding in 2011, followed by New England and New York at 11% and 9.5% respectively.

Merger and Acquisition Activity. Highlights:

  • M&A activity declined significantly in dollar terms in 4Q11 compared to 3Q11.
  • M&A activity increased significantly in dollar terms in 2011 compared to 2010.
  • Average deal size was up significantly in 2011, as the number of deals was flat to down.

Data:

Acquisitions (including buyouts) of U.S. venture-backed companies in 4Q11 totaled $9.4 billion in 107 transactions, compared to $13 billion in 122 transactions in 3Q11 (as reported in October 2011), a 28% decline in dollars, according to Dow Jones. For all of 2011, 477 venture-backed companies were acquired for $47.8 billion, compared to 468 acquisitions for $35.8 billion in 2010 (as reported in January 2011), an increase of 34% in dollar terms.
Thomson Reuters and the NVCA (“Thomson/NVCA”) reported 92 acquisitions in 4Q11 compared to 101 in 3Q11 (as reported in October 2011), and 429 in all of 2011, compared to 420 in 2010 (as reported in January 2011).

IPO Activity. Highlights:

  • IPOs increased in both 4Q11 and 2011 overall. o    63% of IPOs were in the IT industry. o    Groupon and Zynga accounted for 31% of IPO money raised in 2011. Data:

Dow Jones reported 10 U.S venture-backed company IPOs raising $2.4 billion in 4Q11, close to 5x higher in dollars from the 10 IPOs that raised $0.5 billion in 3Q11. In all of 2011, 45 venture-backed companies went public raising $5.4 billion, compared to 46 IPOs in 2010 raising $3.3 billion, a 64% increase in dollar terms.
Similarly Thomson/NVCA reported a 5x increase in IPO dollars raised from 3Q11 to 4Q11, and a 41% increase in dollars raised from 2010 to 2011. Thomson/NVCA also reported that approximately 63% of the companies going public in both 4Q11 and 2011 overall were IT companies, and that 75% of the companies going public in 2011 were based in the U.S., with 54% of the U.S. companies based in California.

To read the complete report, please visit Fenwick & West website here.

Read Full Post »

« Newer Posts - Older Posts »