I’ve invested in over 75 companies, but I consider myself mainly an investor.
Started my first Internet company in 1998. it took $20m to get to product ship.
2000: 2nd internet company. Took $2m to get to product ship.
We most recently invested in Pond5, which does user-generated stock footage. When we invested, it had a management team, had launched, had revenues. They had only spent $20K.
It’s dramatically cheaper now to get to launch.
No one knows where it’s going.
4 major seminal ideas you must know if you want to be able to function going forward.
1) The long tail.
2) Web 2.0
4) The singularity (Ray Kurzweil)
THE LONG TAIL
Typical record store has 40,000 tracks in inventory. Rhapsody has 400,000 unique songs streamed monthly.
Barnes & Noble has about 130,000 titles in a store.
Majority of Amazon’s books are sold outside the top 130,000.
Supply side drivers:
– delivery on demand
Demand side drivers
– recommendation software
– Sampling tools
Web 0: brochureware
Web 1.0: transactional sites
Web 2.0: transactional sites
Uses example of Shakeshack in his neighborhood, which has a daily Flashmob (organized via Twitter)
The Web as platform
You access everything through your browser
The architecture of participation: you are part of something else.
You (and they) own your data
Software as a Service
About 1.5 years ago we changed Angelsoft to a pure SaaS model. We upgrade every 5 weeks.
– no physical delivery costs
– no version issues
– continual upgrades
– perpetual revenue stream (retainer)
Collective intelligence: wikis
Blogs. 6 mos. ago I just launched my personal blog.
Cross-device mobility: computers, smart phones, cell phones, digital signage
– most efficient, most effective or cheapest option
– production of things, services, ideas
– Can outsource to companies, teams or individuals
– One-off or long term
Recommends CrowdSpring.comyou post the price you want to pay, and people do the work on spec. Had a portfolio company who used this to design a logo.
Can offshore to contract manufacturers, wholly-owned subs, or teams for hire.
Use a service like Panjiva to evaluate a range of suppliers.
Open sourcing: now being used for applications, tools, information (Wikipedia), and operating systems? Vast majority of websites run on Apache, an open-source toool.
Self-service: slowly pervading our entire world. It includes technical support. You see this with ATMs, gas stations, airline checkin. Retail check-out (including Home Depot).
Communications: wireless, VOIP. Every Mac comes with software to allow 4-way visual chat.
Ray Kurzweil argues that the rate of change of technology is accelerating at a constant rate. In other words, it’s exponential growth not linear growth.
In medical technology: there’s accretive benefit from explosive growth in computing power and increasing miniaturization. There’s also reverse-engineering of the human brain. Put that together: you can download your brain into a box. He predicts this will happen by 2045.