Monthly Archives

May 2012

Three slides from Mary Meeker show why mobile advertising is so hot right now

By | Advertising, Mobile | No Comments

Mobile advertising is a hot market right now. Evidenced most recently by the IPO of mobile advertising network Millennial and Singtel’s $321m acquisition of Amobee. Mary Meeker just released her annual 100+ page slide deck of internet trends, and three of those show why everyone is so excited about mobile advertising.

1. Mobile traffic is growing fast, now up to 10% of all internet traffic.


2. An increasing percentage of that traffic has purchase intent – m-commerce now up 8% of e-commerce in the US


3. Mobile ad spend is lagging way behind mobile media consumption, and the desktop internet proved that over time Ad$ follow eyeballs


On the desktop web ad spend started catching up with time spent in media when the ad formats started working – key drivers were broadband penetration (life was too short to click on ads over dial-up), emergence of search advertising, and then better targeting and more creative display ads. I have every confidence that similar drivers will see the mobile ad spend start to catch up with mobile media consumption over the next 3-5 years.

Smartphone screens will continue to get bigger

By | Apple, Mobile | One Comment

When I bought my Samsung Galaxy Nexus phone before Christmas my biggest worry was that it was much bigger than my iPhone and it wouldn’t fit comfortably in my pocket. That hasn’t turned out to be a problem and the larger screen size has turned out to be the main reason why I love this phone. I read a lot of books and I can now do exclusively via the Kindle app on my phone. Even when I’m at home and my actual Kindle is nearby I still read on my phone. The reading experience is fine and it is easier to make notes and highlights. In contrast I found reading on my iPhone a little annoying because the screen wasn’t big enough.

I’m not the only one who likes big screens and this morning GigaOM published a piece suggesting we’ll all want a big screen phone soon. In their mind the main driver is mobile video.

Device manufacturers are stepping up to provide big screen devices too. LG announced a 5-inch full HD device last week and Samsung’s new flagship smartphone, the Galaxy SIII also has a 4.8inch screen.

All of this makes me wonder how big the screen will be on the next iPhone. As GigaOM points out a larger screen improves the content consumption experience, and as we know, user experience is everything to Apple. Big phones aren’t for everyone however which will leave Apple with a dilemma. Maybe they will break with tradition and ship two versions of the iPhone with different screen sizes. I would strongly consider switching back to Apple if they offer me a big screen device. Otherwise I will stay with Android.

Six dimensions of personality–a framework for understanding people and for recruitment

By | Startup general interest | No Comments

One of the books I am reading at the moment is Spent by Geoffrey Miller the main purpose of which is to explore why we buy things and what that means for marketing. His main point is that we are driven by our evolutionary impulses to demonstrate our attractiveness as mates and as members of family and society that are worth looking after. It is an interesting book and he goes well beyond the obvious ideas of buying things which enhance our sexuality and/or demonstrate wealth and power to look at the mechanisms of how these purchases work, how they vary internationally and some of the less obvious drivers – like making purchases that demonstrate kindness (which maybe why Paris Hilton has a dog…).

The point of my post today, however, is the six element personality framework Miller postulates. Regular readers will know that I love a good framework, and I think this is a great one. Intuitively it makes sense to me and it has a reasonable scientific basis too. I’m posting it here because startups can use it as a building block for their recruitment strategy and company culture.

The framework goes by the acronym GOCASE, and the six elements are:

G – General intelligence
O – Openness to experience: curiosity, novelty seeking, broad-mindedness, interest in culture. Predictive of emotional sensitivity and social tolerance
C – Conscientiousness: self-control, willpower, reliability, consistency, dependability, trustworthiness. Conscientious people pursue long term goals
A – Agreeableness: warmth, kindness, sympathy, empathy, compliance, benevolence, peacefulness. Agreeable people avoid conflict, non-agreeable people (often called aggressiveness) will walk over others to achieve their goals.
S – Stability: emotional stability, adaptability, equanimity, maturity, stress resistance. People high in stability are resilient. People low in stability are quick to anger.
E – Extraversion: friendly, gregarious, funny, socially self-confident. Extraverts are social, introverts are loners.

These personality dimensions are independent of one another – i.e. there is little correlation. From a startup hiring perspective general intelligence, conscientiousness, and stability are going to be desirable in the majority of cases whereas others are more or less important depending on the role you are hiring for and the culture you are trying to create. For example, openness will be important if you value diversity and plan on hiring people from a variety of backgrounds and agreeableness may not be what you are looking for in a sales person.

Note that this framework is value free. It doesn’t make any statements as to what is good or bad. Any feelings you have about the desirability of scoring high or low on any of these dimensions are a result of your own perspectives, and most likely how you see yourself. I bring this point up because corporate cultures are value based. They typically combine positions on the desirability of high scores on some of these traits with concepts tied more closely to the specifics of the business at hand.

Two examples:

  • Fred Wilson blogged recently about Twilio’s culture statement, their ‘Nine things’ – they clearly value people who score highly on conscientiousness and agreeableness as five of their nine talk directly to working hard, being thorough, and getting on with people
  • Brad Feld has written a couple of times recently about the TAGFEE culture that SEOMoz are building – they clearly place a very high premium on openness

Strong corporate cultures inspire people to work harder and do greater things, and they succeed in part because they create an environment in which everybody gets on with each other, which means they score similarly to each other on the dimensions of GOCASE.

Britain’s growing entrepreneurial culture

By | Innovation | No Comments

I was pleased to read about the the following two initiatives in the press this morning:

A strong entrepreneurial culture is key to having a successful startup ecosystem (along with innovation and finance/support infrastructure) and as the years go by ours is getting stronger here in the UK. There are a number of contributing factors, not least the growing number of success stories, but support from the government and media will really help the nation understand that entrepreneurship is important for UK plc and a valid and exciting career choice.

Great credit is due to the Cameron administration for being the first UK government to being the first in this company to really champion entrepreneurship. The evidence I have seen points to startups and innovation being only real option for sustainable growth, but startups don’t have the ear of government in the way that other larger institutions and companies do and previous governments have found them easy to leave off the agenda.

Autonomy is lost to the UK

By | Exits | One Comment

When I wrote “we lost Autonomy to HP” at the end of my post on Wednesday I was a little worried that the statement might be too strong. Since then we have heard that Mike Lynch is now leaving Autonomy/HP, that most of his senior management have already departed since the HP acquired the business a year ago, and that revenues at Autonomy have been below expectations for the last couple of quarters.

There was hope that the HP deal might not make too much difference and that Autonomy would continue to contribute strongly to the UK tech scene by maintaining a significant technology and management presence here. That hasn’t happened, and perhaps predictably Autonomy is now most definitely lost to the UK.

This is a shame because large indigenous tech firms are an important part of the startup ecosystem. Their employees make great founders, they create wealth that flows back into the startup ecosystem, they have a greater propensity to acquire local companies, they keep the City interested in tech, and perhaps most importantly, they give everyone hope.

This is in no way a criticism of Autonomy. HP’s offer of $11bn was a 64% premium to the share price at the time and I imagine Autonomy’s shareholders felt they had little choice but to accept. After all many of them are fund managers who look after our pensions and there job is to make money, not build national champions.

I think we can be optimistic though, because there are a bunch of younger companies coming through the London and European scenes that have the potential to step into the gap left by Autonomy. One of those his Huddle, who this morning announced another big fundraising round.

People get used to new technologies

By | Innovation | No Comments

This is from Mastery and Mimicry by Sep Kamvar

When the mechanical clock was invented, one of its early uses was to set the arrival and departure times of factory workers during the industrial revolution. At the time, people hated the idea of getting to work at a certain time; it felt like the ultimate victory of machine over man. Now, it’s seen as responsible behavior.

We see this pattern time and time again, with the latest being discomfort with social media. I never tire of reading and sharing examples of how new technologies are first feared before being assimilated into daily life and becoming normal.

Thanks to Fred Wilson for the pointer. Sep has written a whole series of mini-essays which are worth reading. It won’t take you long.

Seven of the top ten global brands are tech companies

By | Exits | One Comment

When I saw this post on Vatornews this morning I had three thoughts:

First: ‘wow, technology really has taken over the world’

Second: ‘given this level of dominance it is time to stop thinking about tech as a collection of industries rather than a single category, some are growing, some are not’

Third: ‘this makes it even more depressing that we have relatively few tech giants here in Europe’

The last point is the most significant. As I’ve blogged many times before, large indigenous tech companies are a critical part of any startup ecosystem, and we need more of them here. I used to talk about $1bn as the significant value threshold, but I’m now thinking it should be much higher, maybe $20-50bn – i.e. big enough that the company is unlikely to be acquired. We lost Autonomy to HP earlier this year in a deal valued at $12bn, and $1bn acquistions are regular occurrences – Oracle alone has made three in the last eight months (Endeca, Taleo and Rightnow).



Pinterest – a case study in capital efficiency

By | Social networks, Startup general interest | 6 Comments

Pinterest is an awe inspiring example of how much can be achieved with minimal investment in tech and people these days. As most of you will know, the enablers are cloud computing and open source software. What is interesting in this case is the power of those enablers.

I just read the following numbers on the High Scalability blog. Pinterest now supports 18m users with growth running at 50% per month with the following:

  • Amazon costs are around $39k for S3 and $30k for EC2 (I assume per month)
  • Traffic costs them $52 an hour during peak times, down to $15 during the night
  • They have 31 employees, up from 12 in December.

The geeks amongst you will be interested in the following details:

  • Pinterest has 80 million objects stored in S3 with 410 terabytes of data
  • They have 275 EC2 instances
  • 70 master databases
  • Written in Python and Django

This is an amazing story, but it isn’t unique. Instagram had similar efficiencies, and we will see more and more startups aspire to and beat these benchmarks and try to emulate Instagram’s $1bn exit or Pinterest’s $1.5bn valuation.

Google’s ‘Knowledge Graph’ is changing the landscape of the web

By | Amazon, Apple, Facebook, Google | 7 Comments

Search on different devices

Google is currently rolling out a new feature called ‘Knowledge Graph’ which will enhance our search experience by intelligently guessing what information we are looking for and putting it at the top of the results page. In other words they will be serving information not links. The picture above was released by Google to show how this will look on multiple different devices.

Many of you will have seen vertically focused instantiations of this strategy in your search results already, and if you are like me you will think they are pretty cool. This weekend I was in Munich and when the discussion turned to the relative sizes of different German cities I was able to activate voice search on my Android phone and ask ‘what is the population of [insert city name here]?’ and get a number straight in the results page without having to do any more clicking. Similarly, I like being able to search on ‘weather xx’ and flight numbers and get the results straight on the page.

The Knowledge Graph initiative is an attempt to build publicity around this strategy and broaden it to more areas.

That’s great for the searcher, and it’s great for Google, but it isn’t so good for the owners of other internet sites. Wikipedia is the obvious sufferer from the population examples I mentioned and I bet weather sites are seeing a drop off in their natural search.

There are numerous examples of other initiatives by Google which arguably improve the experience for searchers but disadvantage other sites on the web, particularly if Google is biased in it’s search results. Google+, Google Places, and their acquisitions of Zagat and BeatThatQuote spring to mind.

I think what we are witnessing here is Google acting more and more like a media company rather than a search company. The distinction is important for anyone who wants to build a business that relies on natural search. In recent years many businesses have achieved success with this strategy, but going forward there is an increasing risk that Google will effectively decide to compete with your business. (Note that this risk is in addition to, although not entirely independent of, the way that Google is increasingly demoting the position of thin affiliate sites in search results pages.)

This is another example of the way the internet economy is moving away from an open collection of sites services with tools that allow us to find the best ones for our purposes at any given point to a world where partnerships and playing nice inside someone else’s empire is the best route to success. Today the most important empire owners are Google, Facebook, Apple, and Amazon, with companies like Twitter, Quora, and Pinterest as challengers.

Hats off to Facebook

By | Facebook | 3 Comments

Facebook is picking up a lot of criticism as it heads into its IPO. In particular there are questions over its continued growth and the effectiveness of its advertising formats, largely on the back of General Motors saying its Facebook ads haven’t been paying off. And to top that an increasing number of insiders are deciding to vote with their feet and cash in on the IPO.

I think all this criticism is a function of the valuation rather than a reflection of the quality of the company. As you may have seen Facebook just raised its IPO price and will be worth over $100bn if it goes out at the top of the range. Meanwhile the FT is warning that retail demand risks inflating the IPO.

I think that if I the valuation was considered to be low everyone would instead be focused on what a great business Zuckerberg and his team have built over the last eight years.

Venturebeat gave us a reminder what they have achieved this morning when they wrote that Facebook is breaking three records with its IPO:

  • Facebook will be the largest venture backed IPO of all time (c4x what Google did in 2004)
  • Facebook has raised $2.2bn in venture capital – more than any other VC backed company in the US and nearly 2x Clearwire, the second placed company (Twitter has raised $1.1bn)
  • Facebook has acquired 13 companies, more than any other company in the run up to its IPO. Twitter is second with 11.

Most companies would be happy reaching a value of $2.2bn, let alone raising that much money.

I say hats off to Facebook.