Tag Archives: TechCrunch

Cha-ching! AngelList’s new round

TechCrunch is reporting that AngelList is raising a “big round of financing at a valuation that multiple sources say will top $150M.”  As a first round of outside financing, it’s a whopper.

I couldn’t be more excited for the team and for AngelList.  It’s been a great service, one which has inserted itself into the necessary workflow of any early stage company executive or investor, making it one of the great interest-based networks out there.  I look at AngelList  a bit like a look at Quora–a key new social property that is immensely useful in my everyday life.  Kudos and congratulations.

I am fascinated by what the opportunity this round holds and by the potential of what AngelList seeks to become.  It is riding several important waves, which the TechCrunch article points out–notably the recently passed JOBS act.  Always a good thing.

If you’re a startup, you’ll want to be working on your AL profile.  AngelList will gain an increasing importance for startups, if it hasn’t already.  It’s like keeping your LinkedIn profile up to date–make sure you’re keeping your AngelList profile up to date.

If you’re a professional investor, you’ll want to be working on your AL profile.  Basically the same type of thing.  If you’re not there or you don’t ‘get’ ANgelList, then spend the time to figure it out.

About the only word of caution I’d have is this.  If you’re a startup, then getting on AngelList <> getting investment.  There’s a lot that goes in to building a company and attracting investors.  AngelList postings aren’t going to do it on your own.  If you’re an investor, same type of message.  Early stage investing is risky business.  The JOBS act and other efforts are lowering the barriers to anyone investing in these early stage ventures.  The adage of fools and their money holds true here.


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Facebook’s Biggest Mistake

Yesterday, Mark Zuckerberg took the stage at TC Disrupt to make his first extended public comments since Facebook‘s troubled IPO earlier this year.  During his comments, “Zuckerberg revealed that Facebook’s mobile strategy relied too much on HTML5, rather than native applications.”

This perspective and openness showed a founder/CEO who was dialed in to the challenges the company has faced on mobile.  It also enabled him to contrast nicely the big improvement $FB has made in shifting to a heavier reliance on ‘going native’ as it pertains mobile platforms.  Shareholders were positive, pushing the stock up 3%–I’d expect both because they realize that Facebook has a mobile strategy and is executing on it, and because they are seeing evidence that Facebook’s leader is a serious, serious guy.  This is goodness–it’s great for Facebook, of course, because as I’ve expressed elsewhere, Facebook needs a great mobile strategy.  More broadly though, it’s good for the whole ecosystem–we should want Facebook to thrive and grow, as it’s continuing momentum has a gravitational pull that helps fuel and balance the broader tech ecosystem.

From a Facebook standpoint, this was really a no-brainer.  Mobile is the future, and  with mobile, the future is arriving a whole lot faster than anyone really thought.  As a result, Facebook really needed its mobile product to be a first class citizen.  That meant it had to, had to, go native.  Not even a choice.

The unfortunate thing, though, is that it probably exposes the lack of robustness in HTML5 and mobile web.  People will now predict that HTML5 was before its time, companies shouldn’t bet on it, etc., etc.

To an extent this is true.  For great mobile-first and mobile-centric experiences, HTML5 involves compromises.  As a developer, you get broad multi-platform distribution, with the cost of a degraded user experience.  This degraded user experience is a big big deal on mobile though.  The iOS and Android platforms in particular have trained users to expect responsive, highly functional apps.  They’ve gotten us used to instant gratification, smooth transitions between screens, etc., and when HTML5 can’t deliver that, the app suffers.  And given how intimate a smartphone app experience is, and given how many apps are competing for a user’s attention, delivering a weak user experience is an unacceptable risk for a developer to take.  Indeed, Facebook’s mobile HTML5 app showed clearly the challenge–users were held hostage to it, and they hated it.  With its new native app, Facebook is seeing better user retention, engagement and usage.  A better app, a better user.

Does this forecast the death of HTML5?  Absolutely not.  HTML5 is coming and its a big wave.  It is also a lot of work.  The  HTML5 evangelists predicting the  death of native apps, were I think over-optimistic.  Not because of their wrong on the technology.  Instead, its more about user training–users will continue to have high demands on mobile experiences, and this will force the transition to take time.

I think this will continue to provide opportunity for a wave of companies working to build the infrastructure, tools, and services that enable the HTML5 wave to become a first-class development platform.  In the gaming space for example, companies such as Game Closure, Artillery, and Spinpunch, are all focused on helping enable the next generation of games and game distribution via the mobile web.

So exciting times for the industry here.  Great to see Facebook getting on track for mobile.  While I’d love to see HTML5 delivering the goods now as a dev platform, I’m not at all surprised that it’s not yet there.  While a big mistake for FB, a recoverable one.  And not a death knell to the power and impact that HTML5 is going to have in the longer term.




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Why Tablets Won’t Be NetBooks 2.0

From TechCrunch today, “Tablets Join the Long Race to the Bottom,” writer John Biggs decries his fear that the tablet market is basically the NetBook 2.0 market.

In a way I share Biggs’ fears: it would be shameful if the bottom of the tablet market fall out, if tablets get renamed ‘craplets,’ But for the most part, I disagree with the thinking.  I’m more bullish on the Tablet market overall, for several reasons.

First, I think the dynamics of the tablet industry and market are completely different than the netbook/PC business.  In the PC business, basically the entire profit pool on the hardware side is with Apple and on the software OS side is with Microsoft.  The net book phenomenon was spawned by low-cost manufacturers trying to use their unit volume capacity with ever cheaper componentry to try and gain share in low-income, emerging markets, or as supplemental PCs in middle-income households.  OEMs like ASUS bet that they could build and hit ever cheaper price points, and that this would create demand.

For these low cost netbook manufacturers, there was always hope that there’d be cheap web-based services that the manufacturers could resell that would then help make additional margin.  This was generally an epic fail, as low-cost hardware manufacturers generally lack the skills needed to build a high-quality and well done ecommerce solution.

While netbooks do continue to ship, particularly in emerging markets, they certainly haven’t made a massive dent in the profitability of the industry, nor have they shifted the powerful holds that Microsoft holds on the OS, Apple on the hardware, Intel on the chipset.   (Though ARM has undeniably had some impact, particularly in the tablet space.)

In the current tablet industry, by contrast, several key factors are different.  First, two of the leading hardware manufacturers are Apple and Amazon.  Neither has a strategy of being the low cost leader in hardware manufacturing–that’s not their strategy at all.  Instead, both have very substantial and well-delivered services (books, movies, etc.) they distribute through the tablets to users.  So unlike the netbook that wanted to try and sell you an upgrade crapplets from their crappy netbook desktops, Amazon Kindle Fire users are buying and reading books, magazines, and movies.  So the total value proposition for these tablet makers is totally different.  PC makers are all about lower BOM cost, win the lowest ERP on the store shelf.  Amazon and Apple has a different approach, one that’s  about winning share of one’s digital basket: hardware device, software, services, media, etc.

Given these core differences between the Netbook and Tablet markets, I’m more optimistic that the Tablets will evolve in a different direction.  Now don’t get me wrong: I do agree with Biggs that we will see tons of crumby tablets.  It is the hardware industry after all, and we still have too many hardware suppliers that will look to deploy resources into a new hardware market.  Expect everyone in mobile computing–Samsung, ASUS of course, but also the Japanese OEMs, Toshiba, Sony, Fujitsu, etc–to enter the market.  Prices will drop at retail and for users.

And I think that in general this will be fine for the market, though again, you’ll have to wade through a fair amount of junky hardware.  The reason it will be fine is because the price point pressure that the low-cost netbook centric tablet guys will drive will have some impact on guys like Apple and Amazon.  But at the end of the day, there will be equilibrium.  Equilibrium will be achieved when Apple and Amazon find a price point where they have a nice quality Tablet that is priced relatively competitively with lower quality machiens.  And Apple and Amazon can both subsidize in effect the price point of their SKUs knowing that users are likely going to use that to consume all sorts of digital media through their stores.  Razors and razor blades.


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A Trend That’ll Continue

Comedian Louis C.K. performs for servicemember...TechCrunch reports this morning on some of the early success comedian Louis CK is having in going direct in selling tickets to his concerts.  The net result of Louis CK’s approach suggests that it’s a winning move for the comedian and his fans.  Those on the losing side appear to be the groups like TicketMaster (and its ilk, a la Live Nation) and scalpers.

This is great news.  For years, the concert promoters–Ticket Master, Live Nation, etc.–solidified their power into what was basically monopoly power over artists and fans.  If you wanted access to a big venue as an artist or if you wanted to spend money to see an artist, you basically had to deal with one of these promoters.  John Seabrook wrote a great article in the New Yorker that described the power these promoters have had.

I expect that as more artists watch Louis CK’s approach build momentum taht they’re going to follow suit.  As more and more of the profit pool of artists in comedy or music is found in touring as opposed to recording, you can bet that they’ll want to go direct to retain a higher percentage of the revenue and to build a better relationship with their fans.

The internet and software will absolutely disrupt the middlemen here, as they have elsewhere.  Kudos to the artists and great news for the fans.


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Geeks on a Plane Update — Tokyo


Image by whaleforset via Flickr

I’m writing this on the Narita Express from Tokyo station to Narita Airport early Saturday morning.  Geeks on a Plane is finishing up here in Tokyo, and we’re heading on to Beijing.  It was my first time back to Tokyo in about a year, and what a year the country has gone through.  In addition to being politically as gridlocked as ever and with a moribund economy, Japan has seen an unimaginably devastating earthquake and aftershocks and deadly typhoons.  It is more than any nation should have to bear, and my heart goes out to everyone here.

In my short time here, I have a few observations.

First, the sense of steadfast optimism from the teams and people I interacted with in Japan was inspiring.  Open Network Lab’s Hiro Maeda’s presentation encapsulated this.  To illustrate the earthquake’s impact, he showed both a photo of the tsunami coming ashore, as well as video shot by one of his colleagues during the earthquake of their office.  The office lamps were shaking back and forth very strongly, and we watched for about a minute, before he shut it off and remarked that it went on like that for at least 3 minutes.  Sobering stuff.

After this intro, he jumped right in to the optimism and enthusiasm that he sees in Japan.  His view is that all the negatives–the impact of the earthquake, the flat economy and job market–is actually catalyzing a new entrepreneurship in Japan.  He sees a a group of young technical talent here that is shaking off the traditionally risk averse cultural attributes and stepping up to creating a new startup future for Japan and the world.  This is totally needed and it is great to hear.

The second key observation I had was that the Japan teams I met were really starting to integrate learning and methodologies from the startup cultures and approaches commonly seen in tech centers like Silicon Valley.  I saw this in the descriptions and approaches companies are taking to building their companies.  Dave McClure and the whole GOAP effort I’m sure deserves at least a hat tip of acknowledgement for this.  Groups like Digital Garage based here, as well as the whole open sourcing of knowledge coming from US sources as broad-based as TechCrunch, Fred Wilson’s AVC, to Yokum Taku’s StartupCompanyLawyer all are adding information to the knowledge base here.

This knowledge integration is important, as one observation that I’ve sometimes had of Japan culture is that it can at times insist on building its own way of doing things.  At times this is terrific and lead to unique differentiation, but it can present challenges.   Broadly, what I saw was Japanese companies that looked as though they could by and large work out of the US just as easily as here.  That I think is a good thing, given the state of entrepreneurial activity here.

The other thing that really struck me was the level of English proficiency in Japan on this trip.  This seems to have really increased since I was last here, and is markedly up since I first moved here in 2004.  This is not to say that English is a be all end all type thing.  In the startup world though, if a company is going to look for Western VC finance, which si where most of it still is, English language skill is pretty important.  I was really impressed with what I saw, and I think its a great sign for the future.

I love Japan and the Japanese culture.  The country and the people treated me and my family extremely well when we lived here during 2004-2007.  I was very pleased with the momentum I saw in the startup community here in Tokyo, and I’m hopeful that this continues and that we continue to see great companies like MyGengo, and others continue to thrive and grow, setting examples for others to follow here.  I hope to be able to come back soon, and if there’s anything that I can do to help along the way, don’t hesitate to reach out.


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