The State of the Web
1) the sex is not in the seed: market and media attention is moving away from seed phenomenon to late stage $1B rounds. Both the capital markets (public and private) and M&A markets for scaled late stage assets is extremely liquid. Founders who have built companies with $20M+ revenue can exit at least part of their position should they wish to.
2) Previously “disruptive” concepts such as “social” and “commerce 2.0” are no longer disruptive, but rather expected and moving toward commodity. Those that have moved first in applying social and subscription mechanics to successful 1.0 models have built valuable positions, those thinking that they are a “social” ______ going forward should note that the entire market is or will soon use the same mechanics and “social” will not be a form of differentiation.
3) Once the concept of social has penetrated every corner of the web, a new wave of applications will disrupt through the capture and application of data to 2.0 socially enabled models. This has begun already, but activity and innovation for the coming “data disruption” or “3.0” web exists at the infrastructure and business to business layer to date. Massive companies will be built in the development of plumbing for a “data enabled” consumer web.
4) Massive dollars have flown into the consumer application layer in the mobile ecosystem. Pressure to monetize those applications is going to get ugly, with a coming but not yet arrived mobile ad ecosystem. The “first wave” of mobile applications that have been created and fueled by an optimistic seed market are going to be in for a wake up call come Series B. Many will die, attention will flow toward building out a more sophisticated and liquid mobile ad ecosystem, mobile targeting and adtech will heat up, and only after will we see massive shift in ad dollars to support the mobile consumer application layer.
5) From that point forward, “mobile first” will be a derisked strategy for consumer facing entrepreneurs, while today it is brilliant but risky given the future expectations of the capital markets for follow-on financing.
6) At the nexus of the 3.0 data enabled web, mobile ad value chain, mobile first consumer application wave, and allocation of investment dollars over the next 36 months lies the location datapoint and if we don’t fuck it up, Hyperpublic. If you believe points 1-5, we’re hiring across the stack, technical and non-technical: Jordan.cooper@gmail.com
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June 17, 2011
Jordan,
Great post. Agree with most and I would like to add a few observations from my recent experience.
– Easy seed funding has now delayed the “product risk” phase of the startup. Competition for funding has now moved to competition for talent.
– Agree that the focus now is in the data enabled consumer web. I would take it a step further and say data analytics and data disruption companies have been around for a while now. I see the future moving towards data visualizations and data insights. More the McKinsey-esque approach to data. Companies that can provide “dynamic insights” from data will survive.. For example, there is a need for innovation in daily deals.. Someone needs to figure out if a daily deal is even good for a local business… Insight based data models will thrive…
– Everyone knows mobile is a winner. 4 billion mobile phones in the world with 6 billion people. There is a huge opportunity to develop solutions for green field applications aside from data driven models. Technology innovation for green field adoption across sectors is finally possible.
Vijay T
June 23, 2011