Oatv presentation(1 14-06)edit
-
Upload
bryce-roberts -
Category
Documents
-
view
748 -
download
0
Transcript of Oatv presentation(1 14-06)edit
2
Proposed Agenda
• Review OATV investment opportunity
• Update on fundraising and first close
• Explore OATV’s investment thesis: “Watching theAlpha Geeks”
• Feedback/Next Steps
2
3
Investment Opportunity Review
• Seed investments in the $500K +/- range
• Participate in Series A round with top-tierventure funds (an additional $1-3M) or sell tostrategic buyer
• Total investment: $1-4M
• Maintain a board seat
• Leverage O’Reilly to validate and promote start-up technologies through books, blogs, onlinesites, and conferences
• Historical performance: 41% annualized IRR
3
5
Investment Thesis: “Watching the Alpha Geeks”
• O’Reilly identifies emerging technology trends bywatching the cutting edge individuals
• An accepted marketing discipline, known in otherindustries as “Coolhunting”
– Fashion, Sports, Toys, Video Games
– “Who is the coolest kid you know?”
• Essence of Alpha Geek watching or Coolhunting ispattern recognition
5
6
Pattern Recognition
• Some obvious patterns: Moore’s Law; The DotCom Boom and Bust; The World is Flat
• Other patterns are the product of fragileintuition that seemingly unrelated items aredeeply connected
• OATV pattern recognition methodology:
– Identify the Alpha Geeks and watch whatthey’re doing
– Integrate seemingly unrelated signals thatindicate broader technology trends
6
7
Identifying the Alpha Geeks
• Ask network of O’Reilly authors, advisors andentrepreneurs: “Who’s doing the mostinteresting work in your field?”
– FOO Camp
– Conferences
– Books
• Triangulation as a filter: when someone showsup in 2-3 di!erent contexts, pay attention
– Joshua Schachter: blogging, mapping andsocial software
• Find where they collaborate
– P2P in 2001: [email protected]
7
8
How We Find Signals Showing a NewTechnology Trend
• Non-Standard Data Sources
– If you want accurate non-consensus forecasts, it helpsto have data sources not used by everyone else
• Examples:
– BookScan- measure book sales (Amarank Tool)
– Netscan– ask the computers rather than the users
– Google AdWord Technology- measure cost per click
– Simply Hired- millions of technology job postings
– Del.icio.us- tag volume
– Yahoo Search Terms- popular tech terms
8
9
Use Alpha Geeks and Signals toIdentity Long Term Trends &
Investment Opportunities
• If a trend takes hold, what primary andsecondary companies benefit? Past examples:
– The Internet
• eBay, Sun, Cisco, Oracle
– Open Source
• Red Hat, MySQL, Google, Yahoo!
– Screen scraping
• IBM, Microsoft, Amazon, Flickr
9
Examples of Trends We’ve Identifiedand Related Investment Opportunities
10
11
Data is the Next “Intel Inside”
• Technology trend: Applications are increasinglydata driven; the technology or even look andfeel of the application is easily copied
• Investment thesis: Companies that own unique,hard to recreate sources of data may lead to anIntel-like single source of competitive advantage
• Example: Navteq
11
12
Data is the Next “Intel Inside”
12
13
Designed for Participation
• Technology trend: Successful software projectsare architected to be used easily as a componentof a larger system
• Investment thesis: Software companies that keeptheir product modular, well documented andunder a license that doesn’t hinderrecombination will attract more users
• Example: Amazon.com
13
14
Designed for Participation
14
15
Participation by Default
• Technology trend: Only a small percentage ofInternet users will go to the trouble of addingvalue to a web site
• Investment thesis: Companies that haveservices which make participation the defaultchoice will grow faster
• Example: Flickr
15
16
Participation by Default
16
17
Software as a Service(the perpetual beta)
• Technology trend: When devices and programsare connected to the Internet, applications areno longer software artifacts: they’re ongoingservices
• Investment thesis: Companies that don’tpackage up new features into monolithicreleases but rather engage users as real-timetesters satisfy their customers’ needs andrequirements
• Example: Google
17
18
Software as a Service
18
19
The Long Tail
• Technology trend: Many of the limiting factorsfrom the physical world are absent on theInternet.
• Investment thesis: Companies can use thepower of the computer to monetize nichesformerly too small to be commercial.
• Example: MySpace
19
20
The Long Tail
20
21
Software Above the Level of a SingleDevice
• Technology trend: The PC is no longer the onlyaccess point for networked applications
• Investment thesis: Companies should designtheir applications to integrate services and sharedata across bound and mobile devices, Internetservers and services
• Example: Apple
21
22
Software Above the Level of a SingleDevice
22
23
Remixing of Existing Apps andTechnologies
• Technology trend: When content is digital, itlends itself to being broken down and remixed
• Investment thesis: Companies that build theirbusiness model from the smallest atomic unitswill be more competitive
• Example: Salesforce.com
23
24
Remixing of Existing Apps andTechnologies
24
25
OATV Investment Thesis
Watch Alpha Geeks
Identify Signals Indicating New Trend
Invest in Companies Leveraging Trend
25
Feedback and Next Steps
26