Roger McNamee - How To Revive The Web. 10 Hypotheses For Tech. Investing
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Presenta(on to Mashable Connect Roger McNamee Eleva(on Partners How to Revive the Web
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Roger McNamee is a co-founder of Elevation Partners. He began his career in 1982 at T. Rowe Price Associates, where he managed the top-ranked Science & Technology Fund and co-managed the New Horizons Fund. In 1991, he launched Integral Capital Partners, the first crossover fund (combining later stage venture capital with public market investments), in partnership with Kleiner Perkins Caufield & Byers. In 1999, Roger co-founded Silver Lake Partners, the first private equity fund focused on technology businesses. In 2004, Roger and his partners launched Elevation Partners, an investment partnership focused on the intersection of media and entertainment content and consumer technology. Roger performs 100 shows a year in the band Moonalice, where he plays bass and guitar. Moonalice pioneered the use of social media in music, inventing such applications as Twittercast concerts, Moonalice radio on Twitter, live MoonTune video-streamed concerts, and the Couch Tour. The band’s website (Moonalice.com) enables fans to listen to any song or show and to watch every concert on a smartphone without an app. Moonalice is renowned for the quality of poster art associated with the band. Moonalice’s single, “It’s 4:20 Somewhere” has been downloaded more than 960,000 times. Roger is the author of The New Normal, published in 2004 by the Portfolio imprint of Penguin Books, and The Moonalice Legend: Posters and Words, Volumes 1 & 2, published in 2008 and 2010, respectively. Roger serves on board of directors of Wordnik. In philanthropy, he serves on the boards of the Rock ‘n’ Roll Hall of Fame Museum, and the Rex Foundation. Roger holds a B.A. from Yale University and an M.B.A. from the Amos Tuck School of Business at Dartmouth College.
Transcript of Roger McNamee - How To Revive The Web. 10 Hypotheses For Tech. Investing
Presenta(on to Mashable Connect Roger McNamee Eleva(on Partners
How to Revive the Web
Investors and entrepreneurs risk missing a huge business opportunity because they are using the wrong vocabulary
Hypothesis #1
Internet
World Wide Web – HTML 4
1998-‐2006: Internet + Web
Internet
World Wide Web
HTML 4
App Model
Carriers + WiFi
2007-‐Present: Two Separate Markets
5/4/12 ”How to Revive the Web" by Roger McNamee 5
World Wide Web
HTML 4
App Model
Internet Carriers + WiFi
2007-‐Present: Hypernet + Hyperweb
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ßHyperwebà
ßHypernetà
Businesses are adop(ng consumer technology because it is cheaper to buy, cheaper to support, and works beLer.
Hypothesis #2
Web = Only Half of Addressable Market
Hypernet
HTML 4 Windows/IE Mac/Safari
Search: Google
App Model + Carriers
Units/$ ===>
App Model iOS
Android Search: Apps
5/4/12 ”How to Revive the Web" by Roger McNamee 8
“Index search” s(ll controls wired web; in mobile, use cases and behaviors are different, resul(ng in different winners
Hypothesis #3
Apps Replace Google for Mobile Search
Hypernet
HTML 4 100 searches
App Model + Carriers
Units/$ ===>
App Model iPad: 10 iPhone: 1
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Hypernet
Google MicrosoW Facebook Cisco
Oracle/Sun SAP
Apple Verizon ATT
“Publishers” Amazon B&N
Web Winners Have Failed to Profit From Mobile
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Apple succeeded by hiding technology wherever possible . . . and subs(tu(ng style.
Hypothesis #4
13
Hypernet
HTML 4 Open source Long tail Free
Commodi(zed Wild West
App Model + Carriers
Units/$ ===>
App Model iOS
Branded Free + Paid
Differen(ated Secure
$400-‐1,000
Customers Don’t Love the Web
5/4/12 ”How to Revive the Web" by Roger McNamee
Next genera(on web technology will favor publishers/consumers over middle men
Hypothesis #5
Commodity Content
HTML 4 Web
App Model Future: HTML 5 à
Tech Pendulum Enabling More Content Differengagon
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Differen(ated Content
HTML 4 Web
Engagement: Metric of Value for Content
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iOS HTML 5 Web
15-‐20 secs/story
2-‐5 mins/ app ????
Commodi(zed content favors middle men; differen(ated content favors
publishers and consumers
Content = Differen(ated
Content = Commodity
Engagement
Value to Publisher $
You are here!
HTML 4 zone iOS zone HTML 5 zone
Flash
Flash
Flash
Flash
HTML 4 -‐ Today HTML 5 -‐ 2014
HTML 4
HTML 4 HTML 4 HTML 4 HTML 4
HTML 5
HTML 5 = Higher Producgon Values, Lower Cost
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HTML 5 enables everything to be an app, including ads Ads can be @ed directly to content It may be 2-‐3 years before HTML 5 tools will enable this
HTML 5 = Engagement and Monegzagon
STORY Product 1 Product 2 Product 3
Product 1 * Product 2 * Product 3 *
Adver(sement
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1. App: func@ons like a na@ve app
2. eBook: something to read later
3. Bookmark+:
content available for later reference
4. Layers
HTML 5 “Apps” May Have Mulgple Forms
STORY Product 1 Product 2 Product 3
Ticker 1 * Ticker 2 * Ticker 3 *
Stock Trading App
5/4/12 ”How to Revive the Web" by Roger McNamee 20
INFOGRAPHIC
2
1
3 4
1. App delivery
2. eBook: atomiza@on of content enables incremental revenue
3. Content available for
later reference can include mone@za@on
4. Layers can include
mone@za@on
Mulgple Forms of High Value Monegzagon
STORY Product 1 Product 2 Product 3
Ticker 1 * Ticker 2 * Ticker 3 *
Stock Trading App
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INFOGRAPHIC
2
1
3 4
World Wide Web
HTML 4
App Model
Units/$ ===>
HTML 5
Google Apple ???
Content = Commodity
Content = Limited Differengagon
Content = Unlimited Differengagon
Desktops Smart Phones Future
HTML 5 = Wide Open Opportunity
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Advantage Scale Open Source Cost Control Economics Funcgonality
iOS √ ???
HTML 5 √ √ √ √ ???
HTML 5 vs Nagve Apps
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World Wide Web
HTML 4
App Model
Units/$ ===>
HTML 5
Google Apple ???
Content = Commodity
Content = Limited Differengagon
Content = Unlimited Differengagon
Desktops Smart Phones Future
HTML 5 = Wide Open Opportunity
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Children under the age of 8 may never use a PC the way you do.
Hypothesis #6
An Eight-‐Year Old’s Idea of a Computer
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Android has a broken economic model; cannot compete with Apple in the long term
Hypothesis #7
COGS
COGS
Apple Android
Apple’s gross margin is roughly equal to gross revenues for a comparable Android
Brand is a HUGE Advantage
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5/4/12 ”How to Revive the Web" by Roger McNamee 29
Android = Entropy at High Velocity
Amazon
Barnes & Noble Samsung
Verizon
Original Android Standard
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• Content • Cool factor
• Tech heat seeker
• Inexpensive
Smart Phone Purchase Drivers
Apple Android
“Social” and “Mobile” are now a cost, not a compe((ve advantage
Hypothesis #8
U.S. economic compe((veness at risk unless we invest far more in post-‐cellular wireless technology
Hypothesis #9
Disrup(on of cable, satellite, and even NetFlix is beginning.
Hypothesis #10
• US economy is beginning to improve, despite efforts in Washington to reduce deficit – DJIA, S&P, Nasdaq reflect rising op(mism – Unemployment remains high; possibly structural
• Excessive consumer indebtedness acts as a drag on growth • Government deficits act as a drag on future growth
– Wars compete for resources with private economy – Is Iran next?
• Investor challenge: what is the happy ending?
Economic & Market Environment
3/19/12 "Ten Hypotheses" by Roger McNamee 34
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• Content • Cool factor
• Tech heat seeker
• Inexpensive
Onward!!
hLp://www.moonalice.com
hLp://www.eleva(on.com
