4. 2017: Whatโs New in Tech?
โข Startups: Cheaper, Faster, Bigger, Better
โข VCs: Lots of Little Funds, Lots of Little Bets
โข Corp: โHow do we become VCs?โ
โข Govt: โHow do we create Silicon Valley?โ
โข Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
โข New Tech: AI, AR, VR, Blockchain, etc
5. Dinosaurs vs. Cockroachesโจ
LEAN Startup: Simpler, Faster, Cheaper, Smarter
1990-2000
โBig, Fat, Dinosaur Startupโ
โข Sun Servers
โข Oracle DB
โข Exodus Hosting
โข 12-24mo dev cycle
โข 6-18mo sales cycle
โข <100M people online
โข $5-10M Series A/B
โข Sand Hill Road crawl
2017
โLean, Little, Cockroach Startupโ
โข AWS, Google, PayPal, FB, TW
โข Cloud + Open Source SW
โข Lean Startup; 3-90d dev cycle
โข SaaS / online sales
โข >3B people online
โข <$100K incub + <$1M seed
โข $1-3M Seed / Series A
โข Angel List global visibility
8. 2017: Whatโs New in Tech?
โข Startups: Cheaper, Faster, Bigger, Better
โข VCs: Lots of Little Funds, Lots of Little Bets
โข Corp: โHow do we become VCs?โ
โข Govt: โHow do we create Silicon Valley?โ
โข Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
โข 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:
โข Start with many small โexperimentsโ
โข Filter out failures + small wins
โข Double-down on stuff that looks like itโs working
โข Incubation: $0-100K (โBuild & Validate Productโ)
โข Seed: $100K-$1M (โTest & Grow Marketing Channelsโโ)
โข Venture: $1M-$10M (โMaximize Growth & Revenueโ)
13. Investment Stage #1: โจ
Product Validation + Customer Usage
โข Structure
โ 1-3 founders
โ $0-$100K investment
โ Incubator environment: multiple peers, mentors/advisors
โข Test Functional Prototype / โMinimum Viable Productโ (MVP):
โ Prototype->Alpha, ~3-6 months
โ Develop Minimal Critical Feature Set => Get to โIt Works! Someone Uses It.โ
โ Improve Design & Usability, Setup Conversion Metrics
โ Test Small-Scale Customer Adoption (10-1000 users)
โข Demonstrate Concept, Reduce Product Risk, Test Functional Use
โข Develop Metrics & Filter for Possible Future Investment
14. Investment Stage #2: โจ
Market Validation + Revenue Testing
โข Structure
โ 2-10 person team
โ $100K-$1M investment
โ Syndicate of Angel Investors / Small VC Funds
โข Improve Product, Expand Customers, Test Revenue:
โ Alpha->Beta, ~6-12 months
โ Scale Customer Adoption => โMany People Use It, & They Pay.โ
โ Test Marketing Campaigns, Customer Acquisition Channels + Cost
โ Test Revenue Generation, Find Profitable Customer Segments
โข Prove Solution/Benefit, Assess Market Size
โข Test Channel Cost, Revenue Opportunity
โข Determine Org Structure, Key Hires
15. Investment Stage #3: โจ
Revenue Validation + Growth
โข Structure
โ 5-25 person team
โ $1M-$10M investment
โ Seed & Venture Investors
โข Make Money (or Go Big), Get to Sustainability:
โ Beta->Production, 12-24 months
โ Revenue / Growth => โWe Can Make (a lot of) Money!โ
โ Mktg Plan => Predictable Channels / Campaigns + Budget
โ Scalability & Infrastructure, Customer Service & Operations
โ Connect with Distribution Partners, Expand Growth
โข Prove/Expand Market, Operationalize Business
โข Future Milestones: Profitable/Sustainable, Exit Options
16. 2017: Whatโs New in Tech?
โข Startups: Cheaper, Faster, Bigger, Better
โข VCs: Lots of Little Funds, Lots of Little Bets
โข Corp: โHow do we become VCs?โ
โข Govt: โHow do we create Silicon Valley?โ
โข Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
โข New Tech: AI, AR, VR, Blockchain, etc
20. 2017: Whatโs New in Tech?
โข Startups: Cheaper, Faster, Bigger, Better
โข VCs: Lots of Little Funds, Lots of Little Bets
โข Corp: โHow do we become VCs?โ
โข Govt: โHow do we create Silicon Valley?โ
โข Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
โข New Tech: AI, AR, VR, Blockchain, etc
23. Q: How many VC funds needed
to build a startup ecosystem?
โข USA: ~800 VC funds; 2.5 per 1M ppl
โข China: ~700 VC funds; 0.5 per 1M ppl
โข UK/EU: ~100 VC funds; 0.25 per 1M ppl
โข Other: <10-50 funds; <0.1 per 1M ppl
24. A Brief History of
US Venture Capital
โข first VC funds: ARDC, JH Whitney (1946)
โข SBICs / Small Business Investment Act (US, 1958)
โข Shockley -> โTraitorous Eightโ -> Fairchild (1958) -> Intel (1968)
โข Sutter Hill (1964), Venrock (1969), Kleiner, Sequoia (1972)
โข ERISA laws + โprudent man ruleโ (1974, 1978)
โข Pension Funds in VCs: $39M (1977) -> $570M (1978) -> $4B (1989)
โข Tech Explosion: 80โs, 90โs, 00โs
โข 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: Whatโs New in Tech?
โข Startups: Cheaper, Faster, Bigger, Better
โข VCs: Lots of Little Funds, Lots of Little Bets
โข Corp: โHow do we become VCs?โ
โข Govt: โHow do we create Silicon Valley?โ
โข Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
โข 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: Whatโs New in Tech?
โข Startups: Cheaper, Faster, Bigger, Better
โข VCs: Lots of Little Funds, Lots of Little Bets
โข Corp: โHow do we become VCs?โ
โข Govt: โHow do we create Silicon Valley?โ
โข Old Tech: E-Commerce, Marketplaces,
SaaS, Education, Healthcare, FinTech
โข 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 โ 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:
โข VR/VR video
โข Hardware
โข Services and studios
โข Gaming
โข Apps
โข Advertising/marketing
โข 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
โข Apple (3 acquisitions)
โข Google (2 acquisitions)
โข Facebook
โข Autodesk
โข GoPro
Notable acquisitions
โข Facebook acquires Oculus (VR headset) for $2B
โข ALPHAEON acquires LensAR (laser cataract treatment) for $59M
โข Google acquires Skill & Hackett ((design studio)
โข Google acquires Thrive (VR Audio)
โข Apple acquires Flyby Media (mobile AR app developer)
โข Apple acquires PrimeSense (interactive device)
โข Apple acquires Metaio (AR)
โข Qualcomm acquires Kooaba (cloud base image recognition)
33. 2017 VR Investment Focus
Source: Goldman Sachs Global Investment Research
Development building blocks & tools
โข VR input
โข VR search
โข VR Social
โข VR payment
Industries
โข Health
โข Gaming
โข Education
โข Real Estate
โข Retail
โข Live Events
โข Engineering
โข 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:
โข Health
โข Finance
โข IoT
โข Education
โข Commerce
โข Security
In area of sales, marketing, CRM,
customer service, legal, HR, etc.