Sunday, November 25, 2012

Facebook's Sad IPO's Wide Toll

I think Facebook's sad IPO was a wakeup call to many. The mobile trend is unmistakable. But I don't think it is wise to write off the web. Mobile is hottest, true, but the best applications will be platform agnostic.

Fred Wilson: What Has Changed
VC funding of consumer web and mobile companies is down 42% in this first nine months of 2012 (vs the first nine months of 2011). ..... google, facebook/instagram, amazon, microsoft, apple, twitter, ebay, yahoo, AOL, craigslist, wordpress, linkedin together make up a huge amount of the time spent online, particularly in the english speaking world ..... tumblr and pinterest have risen a lot in the past couple years ..... the consumer is moving from desktop/web to mobile/app ..... most new consumer internet startups need to build for iOS, Android, and web at the same time ..... distribution is much harder on mobile than web and we see a lot of mobile first startups getting stuck in the transition from successful product to large user base. strong product market fit is no longer enough to get to a large user base. you need to master the "download app, use app, keep using app, put it on your home screen" flow and that is a hard one to master. ...... We are small on purpose ... We want to invest in a tiny slice of the early stage ecosystem where our thesis collides with great teams and unique and differentiated products. ...... we are seeing fundraising challenges everywhere, even in our very best portfolio companies .... it is a tougher time for early stage consumer internet companies than I have seen since the 2001-2004 time frame. And I think we are still in the early innings of this more challenging environment. ..... the wind that has been at our back for 7-8 years in consumer internet is no longer there
Wall Street Journal: VCs Still Chasing Web Companies, But With Less Cash
Overall the amount invested in consumer information services was off 42% in the first nine months as the difficulties of newly public Internet companies such as Facebook and Zynga cast doubt on the business models and valuations of social media companies.
Dave McClure: What Hasn’t Changed: The Internet Keeps Getting Bigger.
most VCs switching from consumer to enterprise are clueless about why they’re doing so ..... The number of recent internet services that have grown from nothing to hundreds of millions of users is frankly rather astonishing – Pinterest, Instagram, Groupon, Zynga – all of these took less than a few years to get to hundreds of millions of users and in some cases billions of revenue. ..... what we are seeing with the smarter funds – they’re waiting until Series A or B when companies have clear traction before they jump in, when they may require larger amounts of capital to finance growth. ...... many companies can get to break-even without raising big rounds of venture capital, and may simply choose to operate on their own cashflow, or perhaps debt-based financing. ..... monetization keeps getting better and better, and exits are getting earlier and more often. ..... as online payments and monetization improves, again we will see less need for venture capital to finance customer acquisition for successful internet businesses. ..... There will be thousands of small wins, but larger funds can’t handle the scale required to do so many small investments. Maybe we need something like the SBA small business loan equivalent, but on the the equity side
Om Malik: Who Says Startups Are Easy?
The economics of attention is much more ruthless and unforgiving than the real economic underpinning of a product. Just as it is hard for a movie to recover from a bad opening weekend, today’s “apps” lose if they don’t make a good first impression.
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