4. 2017: Whatâs New in Tech?
⢠Startups: Cheaper, Faster, Bigger, Better
⢠VCs: Lots of Little Funds, Lots of Little Bets
⢠Corp: âHow do we become VCs?â
⢠Govt: âHow do we create Silicon Valley?â
⢠Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
⢠New Tech: AI, AR, VR, Blockchain, etc
5. Dinosaurs vs. Cockroachesâ¨
LEAN Startup: Simpler, Faster, Cheaper, Smarter
1990-2000
âBig, Fat, Dinosaur Startupâ
⢠Sun Servers
⢠Oracle DB
⢠Exodus Hosting
⢠12-24mo dev cycle
⢠6-18mo sales cycle
⢠<100M people online
⢠$5-10M Series A/B
⢠Sand Hill Road crawl
2017
âLean, Little, Cockroach Startupâ
⢠AWS, Google, PayPal, FB, TW
⢠Cloud + Open Source SW
⢠Lean Startup; 3-90d dev cycle
⢠SaaS / online sales
⢠>3B people online
⢠<$100K incub + <$1M seed
⢠$1-3M Seed / Series A
⢠Angel List global visibility
8. 2017: Whatâs New in Tech?
⢠Startups: Cheaper, Faster, Bigger, Better
⢠VCs: Lots of Little Funds, Lots of Little Bets
⢠Corp: âHow do we become VCs?â
⢠Govt: âHow do we create Silicon Valley?â
⢠Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
⢠New Tech: AI, AR, VR, Blockchain, etc
10. Q: How Many Series A Startups
Turn Into Unicorns? (~1%)
11. Data from ~600 companies from 500 Startups Funds I + II (2010 - 2013 cohorts)
$1-10M
Q: How Many Startups to Get 1 Unicorn?
Unicorns 50:1 | Centaurs 20:1
12. The Lean Investor
Make lots of little bets:
⢠Start with many small âexperimentsâ
⢠Filter out failures + small wins
⢠Double-down on stuff that looks like itâs working
⢠Incubation: $0-100K (âBuild & Validate Productâ)
⢠Seed: $100K-$1M (âTest & Grow Marketing Channelsââ)
⢠Venture: $1M-$10M (âMaximize Growth & Revenueâ)
13. Investment Stage #1: â¨
Product Validation + Customer Usage
⢠Structure
â 1-3 founders
â $0-$100K investment
â Incubator environment: multiple peers, mentors/advisors
⢠Test Functional Prototype / âMinimum Viable Productâ (MVP):
â Prototype->Alpha, ~3-6 months
â Develop Minimal Critical Feature Set => Get to âIt Works! Someone Uses It.â
â Improve Design & Usability, Setup Conversion Metrics
â Test Small-Scale Customer Adoption (10-1000 users)
⢠Demonstrate Concept, Reduce Product Risk, Test Functional Use
⢠Develop Metrics & Filter for Possible Future Investment
14. Investment Stage #2: â¨
Market Validation + Revenue Testing
⢠Structure
â 2-10 person team
â $100K-$1M investment
â Syndicate of Angel Investors / Small VC Funds
⢠Improve Product, Expand Customers, Test Revenue:
â Alpha->Beta, ~6-12 months
â Scale Customer Adoption => âMany People Use It, & They Pay.â
â Test Marketing Campaigns, Customer Acquisition Channels + Cost
â Test Revenue Generation, Find Profitable Customer Segments
⢠Prove Solution/Benefit, Assess Market Size
⢠Test Channel Cost, Revenue Opportunity
⢠Determine Org Structure, Key Hires
15. Investment Stage #3: â¨
Revenue Validation + Growth
⢠Structure
â 5-25 person team
â $1M-$10M investment
â Seed & Venture Investors
⢠Make Money (or Go Big), Get to Sustainability:
â Beta->Production, 12-24 months
â Revenue / Growth => âWe Can Make (a lot of) Money!â
â Mktg Plan => Predictable Channels / Campaigns + Budget
â Scalability & Infrastructure, Customer Service & Operations
â Connect with Distribution Partners, Expand Growth
⢠Prove/Expand Market, Operationalize Business
⢠Future Milestones: Profitable/Sustainable, Exit Options
16. 2017: Whatâs New in Tech?
⢠Startups: Cheaper, Faster, Bigger, Better
⢠VCs: Lots of Little Funds, Lots of Little Bets
⢠Corp: âHow do we become VCs?â
⢠Govt: âHow do we create Silicon Valley?â
⢠Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
⢠New Tech: AI, AR, VR, Blockchain, etc
20. 2017: Whatâs New in Tech?
⢠Startups: Cheaper, Faster, Bigger, Better
⢠VCs: Lots of Little Funds, Lots of Little Bets
⢠Corp: âHow do we become VCs?â
⢠Govt: âHow do we create Silicon Valley?â
⢠Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
⢠New Tech: AI, AR, VR, Blockchain, etc
23. Q: How many VC funds needed
to build a startup ecosystem?
⢠USA: ~800 VC funds; 2.5 per 1M ppl
⢠China: ~700 VC funds; 0.5 per 1M ppl
⢠UK/EU: ~100 VC funds; 0.25 per 1M ppl
⢠Other: <10-50 funds; <0.1 per 1M ppl
24. A Brief History of
US Venture Capital
⢠first VC funds: ARDC, JH Whitney (1946)
⢠SBICs / Small Business Investment Act (US, 1958)
⢠Shockley -> âTraitorous Eightâ -> Fairchild (1958) -> Intel (1968)
⢠Sutter Hill (1964), Venrock (1969), Kleiner, Sequoia (1972)
⢠ERISA laws + âprudent man ruleâ (1974, 1978)
⢠Pension Funds in VCs: $39M (1977) -> $570M (1978) -> $4B (1989)
⢠Tech Explosion: 80âs, 90âs, 00âs
⢠Microsoft (1975), Apple (1976), Oracle (1977), Sun (1982), Cisco
(1984), Amazon (1994), eBay (1995), Yahoo (1995), Google (1998),
PayPal (1998), LinkedIn (2002), Facebook (2004), Twitter (2006)
25. 2017: Whatâs New in Tech?
⢠Startups: Cheaper, Faster, Bigger, Better
⢠VCs: Lots of Little Funds, Lots of Little Bets
⢠Corp: âHow do we become VCs?â
⢠Govt: âHow do we create Silicon Valley?â
⢠Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
⢠New Tech: AI, AR, VR, Blockchain, etc
26. 500 Investment Themes
Sectors
CONTENT/CREATION
DATA SCIENCE/AI
CLOUD/SAAS/B2B
E-COMMERCE
EDUCATION
ERP/PRODUCTIVITY
FINTECH
HEALTH
HR/RECRUITMENT
IoT/HARDWARE
MARKETING TECH/CRM
REAL ESTATE/RETAIL
SERVICES
SOCIAL/COMMUNICATION
TRAVEL
*
*
*
27. Fintech still going strong; 19 Fintech
Unicorns valued at $58.7B globally
Source: CBInsights-
28. Over 220 unique investors in fintech in 2010. Now, there are
over 900. Over 70 strategics and corporates invested in
blockchain startups.
Source: CBInsights
29. 2017: Whatâs New in Tech?
⢠Startups: Cheaper, Faster, Bigger, Better
⢠VCs: Lots of Little Funds, Lots of Little Bets
⢠Corp: âHow do we become VCs?â
⢠Govt: âHow do we create Silicon Valley?â
⢠Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
⢠New Tech: AI, AR, VR, Blockchain, etc
30. 500 Startups is one the most active early-stage
frontier technology Investors
IoT - SecurityIoT - ToysIoT - Health IoT - HomeIoT â Enterprise
3D PrintingRobotics / AutoVR / AR ConnectivityAI
IoT -Lifestyle
Drones / Aero
31. >$2.2B invested in 156 VR deals in 2016
Source: Digi-capital: http://www.digi-capital.com/news/2016/07/record-2-billion-arvr-investment-in-last-12-months/#.V9rRVD4rI9c
Popular Investment categories:
⢠VR/VR video
⢠Hardware
⢠Services and studios
⢠Gaming
⢠Apps
⢠Advertising/marketing
⢠Developer tools and distribution
Top 10 most funded VR/AR startups
1. Magic Leap ($1.39 billion)
2. Razer ($125M)
3. NextVR ($115.5M)
4. OTOY ($101M)
5. Jaunt ($100M)
6. MindMaze ($118M)
7. Blippar ($99M)
8. Oculus ($93.55M)
9. LensAR ($91.1M)
10. Meta ($73M)
32. Apple, Google, Facebook
acquiring VR/AR startups
Source: CBInsights https://www.cbinsights.com/blog/top-acquirers-ar-vr-ma-timeline/
Active VR/AR acquirers
⢠Apple (3 acquisitions)
⢠Google (2 acquisitions)
⢠Facebook
⢠Autodesk
⢠GoPro
Notable acquisitions
⢠Facebook acquires Oculus (VR headset) for $2B
⢠ALPHAEON acquires LensAR (laser cataract treatment) for $59M
⢠Google acquires Skill & Hackett ((design studio)
⢠Google acquires Thrive (VR Audio)
⢠Apple acquires Flyby Media (mobile AR app developer)
⢠Apple acquires PrimeSense (interactive device)
⢠Apple acquires Metaio (AR)
⢠Qualcomm acquires Kooaba (cloud base image recognition)
33. 2017 VR Investment Focus
Source: Goldman Sachs Global Investment Research
Development building blocks & tools
⢠VR input
⢠VR search
⢠VR Social
⢠VR payment
Industries
⢠Health
⢠Gaming
⢠Education
⢠Real Estate
⢠Retail
⢠Live Events
⢠Engineering
⢠Military
34. Apple, Google, Intel, Microsoft, Salesforce,
Amazon acquired 18 AI companies in 2016
Source: CBInsights
35. 2017 Investment Focus & Predictions
Artificial Intelligence for Verticals
Source: CBInsights
With the rise of big data & AI, startups
applying machine learning algorithms
to solve enterprise problems:
⢠Health
⢠Finance
⢠IoT
⢠Education
⢠Commerce
⢠Security
In area of sales, marketing, CRM,
customer service, legal, HR, etc.