LICK : une chaine de magasins dédiés aux objets connectés

http://connected-objects.fr/2014/01/lick-magasins-objets-connectes-innov8-phone-house/

Twitter Is Killing Itself In Order To Grow And Please Wall Street

http://www.forbes.com/sites/ericjackson/2014/03/29/twitter-is-killing-itself-in-order-to-grow-and-please-wall-street http://www.forbes.com/sites/ericjackson/2014/03/29/twitter-is-killing-itself-in-order-to-grow-and-please-wall-street

JPMorgan, Credit Suisse Ramp Up Startup Push for Deals

When SurveyMonkey Inc. Chief Executive Officer Dave Goldberg wanted to buy out investors from his Internet company and attract new ones who wouldn’t balk at his aim to stay private, he steered clear of traditional startup financiers in the venture-capital community.

Instead, Goldberg turned to an entirely different adviser: JPMorgan Chase & Co. (JPM)

Jimmy Lee, vice chairman of the investment bank who normally works on multibillion dollar deals, traveled from New York to SurveyMonkey’s headquarters in Palo Alto, California, to brainstorm Goldberg’s options. Goldberg later hired JPMorgan to lead a $350 million syndicated loan for the online survey provider as part of an $800 million recapitalization the closely held company completed last year.

“Considering what a small company we are, SurveyMonkey isn’t something Jimmy would usually spend time on,” Goldberg, who is married to Facebook Inc. (FB) Chief Operating Officer Sheryl Sandberg, said in an interview. The recapitalization, which also involved selling $444 million in equity to Goldberg, Tiger Global Management LLC and Google Inc. (GOOG), valued SurveyMonkey at $1.35 billion.

Wall Street investment banks -- from JPMorgan to Bank of America Corp. and Credit Suisse Group AG (CS) -- are increasingly catering to closely held technology startups, especially in Silicon Valley. While firms led by Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS) have long cultivated relationships with venture capitalists and entrepreneurs to later earn fees managing initial public offerings and advising on acquisitions, many banks have expanded the roster of services in recent years.

Photographer: David Paul Morris/Bloomberg

Dave Goldberg, chief executive officer of SurveyMonkey Inc.

Big Payoff

The push includes beefing up technology teams, organizing invitation-only conferences for entrepreneurs, starting coverage areas for venture capital and using balance sheets to finance startups or extend credit.

The efforts come as more startups stay private for longer and reach a bigger scale, raising the prospect of a larger payoff down the road for banks when the hottest companies ultimately go public or get sold.

“Technology is the fastest growing and most far reaching sector in the world,” Lee said in an interview. “It’s therefore a priority for any global investment banking business.”

More Firepower

In a sign of how seriously the banks are taking startups, JPMorgan in the past four years has relocated veteran bankers Mike Millman, Kurt Simon and Rod Reed to Silicon Valley. Jeremy Geller moved in February to head the firm’s private banking in Northern California, a business where headcount has since grown 30 percent.

Credit Suisse has since 2011 moved Anthony Armstrong, its co-head of Americas M&A, and David Wah, its global co-head of technology, media and telecom group, from New York to San Francisco. The bank also hired Chris Gaertner and Imran Khan after losing star George Boutros in 2010 to boutique adviser Qatalyst Group Ltd.

Goldman Sachs earlier this month named Dan Dees co-head of its global technology group alongside Anthony Noto, who had led Twitter Inc. (TWTR)’s IPO late last year. The securities firm moved current co-head George Lee to chairman of the group and made him chief information officer for the investment banking division.

Deals Pipeline

The potential rewards are vast. Heading into 2014, the pipeline of U.S. technology IPOs contained 590 venture capital and private equity-backed startups that have raised $55.35 billion, according to a Dec. 12 study from CB Insights. More than half of the companies are based in California and 25 were valued at more than $1 billion, the study found.

Last year, there were 131 deals in the U.S. in which a technology or Internet company sold equity on the public market or in a private placement for a total of $28.8 billion, compared with 80 equity deals worth $25.42 billion in 2012, according to data compiled by Bloomberg.

Silicon Valley entrepreneurs and venture capitalists say the increased attention from investment bankers is tangible. Goldberg said that it was far easier to recapitalize in 2013 than to line up a mere $37 million in debt financing from Bank of America in 2009.

Some of the challenge five years ago was that the recession made banks unwilling to lend. It also related to another, more fundamental obstacle: many banks didn’t get the way startups work, Goldberg said.

“After the financial crisis, the credit market was very tough,” Goldberg said. “Traditional banks also had a hard time understanding our subscribers-based business model.”

Wooing Wanelo

Wall Street firms have since made a bigger effort to woo technology entrepreneurs and serve their corporate and personal financial needs.

“Banks were quiet for a while in Silicon Valley,” Geoff Yang, general partner of Redpoint Ventures, a venture-capital firm based in Menlo Park, California, said in an interview. “They are now courting venture capitalists and entrepreneurs like in the old days.”

Investment banks are even reaching out to some of the youngest Internet startups. Deena Varshavskaya founded San Francisco-based social shopping startup Wanelo Inc. in 2010 and landed $14 million in venture funding over the last two years.

Even though her company was barely two years old, Varshavskaya said she was invited to speak at Goldman Sachs’s dotCommerce conference in New York last June. Goldman Sachs later named her one of the “100 most intriguing entrepreneurs” of 2013 at the firm’s Builders and Innovators Conference in Tucson, Arizona, where Hillary Clinton and Elon Musk were among the speakers.

Many Invitations

Varshavskaya, 33, also gave a presentation at Goldman Sachs’s Internet Private Company conference in Las Vegas in November and she will speak next month at its Technology and Internet conference in San Francisco.

“They bring together high-quality innovators and community building, which is an important foundation for our future growth,” said Varshavskaya, who adds that the relationship with Goldman Sachs’s bankers “will be useful in the future.”

Morgan Stanley and Goldman Sachs have long been the go-to investment banks in Silicon Valley. To be more competitive, Goldman Sachs started the private company conference in Las Vegas three years ago and its Builders and Innovators conference two years ago. It also ramped up direct investments in Web startups including Dropbox Inc. and Uber Technologies Inc.

Morgan, Goldman

Last year, Morgan Stanley topped the league table of underwriters of technology and Internet IPOs measured by dollar value, according to data compiled by Bloomberg. Goldman Sachs was first by number of technology and Internet IPOs underwritten and earned fees, according to the data.

Morgan Stanley’s technology team, led by Michael Grimes, Paul Chamberlain and Colin Stewart, the firm’s vice chairman of global capital markets, has had one of the longest-lasting footprints in Silicon Valley, opening an office in 1994 and staying through the aftermath of the dot-com bust last decade when numerous Internet startups flopped. To build relationships with startups, the firm has organized conferences, including a chief technology officer summit where it gathers hundreds of potential clients.

Other Wall Street firms have also beefed up their Silicon Valley presence. Bank of America organizes a Tech & OPS conference for venture capitalists in November and a Private Company conference in May. Last year, it hired Buz Walters from Goldman Sachs to head the bank’s venture-capital group.

“Many technology companies that go public tend to become well-known global brand names,” Walters said in an interview. “That’s why banks make an effort to work on their deals.”

Qatalyst, Allen

Smaller banks are also making a play for startups. Qatalyst, which former Credit Suisse bankerFrank Quattrone started in San Francisco in 2008, has become the go-to bank for technology companies seeking to sell themselves to large acquirers like Hewlett-Packard Co. It competes with Allen & Co., the New York-based boutique bank famous for its invitation-only Sun Valley, Idaho conference every July that attracts technology and media moguls including Goldberg and his wife.

At JPMorgan, the bank has gone beyond boosting its technology team by starting a digital growth fund in 2011 that invested in Twitter and wearable device maker Jawbone.

The efforts have resulted in deals, including JPMorgan leading Facebook’s secondary offering of $3.85 billion of shares last month. JPMorgan ranked third in the league table of technology IPO underwriters last year, according to data compiled by Bloomberg.

“We put leadership out here to connect the West Coast to the firm to serve clients’ corporate and personal financial needs,” said Noah Wintroub, head of JPMorgan’s Internet and digital media group in San Francisco. “The word spread.”

Source : Bloomberg

Death and startups: Most startups croak 20 months after their last funding round

Sam Howzit/Flickr

For most startups, death is not a question of if, but when.

While that conclusion may seem obvious, the data to support it is pretty hard to come by. Which makes sense: After all, no one — not founders, not venture capital firms — is going to go out of their way to tell the world when they’ve failed. But they will trumpet their victories. It’s the survivorship bias in full effect.

Still, research firm CBI Insights has managed to get some good data on startup death, which happens a lot more than all the funding news would lead you to believe. Here are some of the most interesting findings:

Most die young. Considering how vulnerable most early-stage companies are, it’s not surprising to learn that over half of them die before they raise $1 million, and 70 percent die before raising $5 million. Most dead companies raised $11.3 million on average, with a median of $1.3 million.

Cash doesn’t (always) buy longevity: But even raising cash won’t save most startups from death. CBI Insights says that, on average, startups will last 20 months after their last founding round (though many will keep lumbering on long after).

Most dead companies are Internet companies. By sector, most dead tech companies were focused on the Internet, which makes sense considering that that’s where all the money has been over the past few years. More Internet companies chasing VC cash means more dead Internet companies. That much is inevitable.

Social is bad news. If you’re trying to launch your own tech company, do yourself a favor and stay out of social, which most of the dead startups focused on. Same goes for marketplace companies (i.e., eBay wannabes) and those dabbling in advertising, sales, and marketing.

What’s especially funny about these numbers is that CB Insights is using them to sell its list of “dying tech companies,” which it’s selling for nearly $7,000. That list, the company says, would be valuable for anyone looking for potential employees or even just products or IP.

Maybe Yahoo will be interested?

Source : venturebeat.com

Here's The Evidence That The Tech Sector Is In A Massive Bubble

The stock market is at an all-time high. Tech startups with no revenue have billion-dollar valuations. And engineers are demanding Tesla sports cars just to show up at work.
Here's the evidence that we're in a new tech bubble, heading for a crash, just like the dot com bust of 1999.

Interest rates are effectively at 0%.

(Fred / Think Progress)

Before we get into specific evidence that the tech sector is inflated, it's worth restating the macro-economic context: Interest rates are basically at zero and have been for some time. When borrowers are paying close to zero interest on loans, that makes money cheap to get. This chart shows the Fed's target rate for interest since 1970.
People with money generally have a choice: save it in interest-paying, risk-free bank accounts or invest it in riskier assets that may pay more money over time. When interest is at zero, virtually any other kind of investment is likely to pay more because the risk-free alternative is so lousy. So investment asset bubbles get created. Stocks tend to go up.

The stock market is at a peak, which is exactly what you'd expect in a zero-interest environment.

(Yahoo Finance / Jim Edwards)

We've had five years of solid growth in stocks. People who have invested in stocks in the last five years now feel very, very rich. What could possibly go wrong?

The market moves up and down, in cycles, as this chart of the S&P 500 stocks shows.
We're due for a downturn.
(BlackRock CEO Laurence D. Fink, whose company manages $4.1 trillion in assets, agrees that the Federal Reserve is creating “bubble-like markets.”)

In the tech sector specifically, there has been a recent run-up in deal prices.

(Thomson Reuters / PricewaterhouseCoopers)

This chart was published by PriceWaterhouseCoopers, which tracks merger and acquisition activity in the tech sector.
It notes that "software deal volume tripled that of the second quarter."
The driving force?
High stock prices and corporate giants who are rich with cash and need to invest it, PwC says.

It's not just tech asset prices that are high. Salaries are high, too.

While unemployment generally may be high, in the tech sector it is very low.

(REUTERS/Edgar Su)

Tech companies, led by Mark Zuckerberg at Facebook, are lobbying Congress to relax immigration rules so they can hire more foreign talent because they believe domestic talent has gotten too scarce and too expensive. It's driving up wages bills like crazy. Matt Allen, a tech recruiter at Vertical Move, told me recently:

We're experiencing first hand greater insanity than the dot-com days when Interwoven Software was pulling out BMW Z3's for engineers who joined. Instead, we're seeing sign-on bonuses for individuals five-years out of school in the $60,000 range. Candidates queuing-up six, eight or more offers and haggling over a few thousand-dollar differences among the offers. Engineers accepting offers and then fifteen minutes before they're supposed to start on a Monday, emailing (not calling) to explain they found something better elsewhere.

That suggests that wages in tech are in a bubble.
Want an example?

Twitter svp/technology Chris Fry got a $10 million pay packet. He only joined the company last year.

(Twitter)

Twitter's Chris Fry comes with a high price.

Fry is paid more in annual compensation that Jack Dorsey, the chairman of Twitter's board and the founder of the company. That's how much the price of wages has risen in the tech world. Fry is not a one-off event. Facebook's vp/engineering, Mike Schroepfer, got $24.4 million in 2011, Reuters noted:

One start-up offered a coveted engineer a year's lease on a Tesla sedan, which costs in the neighborhood of $1,000 a month, said venture capitalist Venky Ganesan. He declined to identify the company, which his firm has invested in.

It's not just wages that are expensive. Company valuations are rising too. 

Supercell, the game company, just raised $1.5 billion in new funding at a valuation of $3 billion. Supercell has real revenue — $178 million in Q1 alone. But you've got to question the logic of the people doing the deal: Investor Masayoshi Son, the founder of Softbank, believes he has a "300-year vision" of the future.
Even the CEO of Supercell thought he was joking when he first heard about it.

Companies with broken business models are highly valued.

(Jason / Goldberg / Facebook) 

Fab CEO Jason Goldberg

Fab.com, the design retailer, recently raised $165 million in new investment this year, for a total of $336 million in all venture funding. It did so despite laying off 440 employees after deciding that the flash sales model — in which customers are asked to suddenly purchase a daily deal — doesn't work. It was Fab's second business model "pivot" — the company started life as a gay community site. We're not saying Fab is going out of business. We're saying that Fab's backers have been fabulously generous.

Companies without meaningful revenue are highly valued.

(Natasha Foote / Pinterest)

Pinterest just raised $225 million in new investment funding, a stake that values the company at $3.8 billion. That valuation is fictional, of course. It's based on the notion that the company could be sold or go public at that price. That price is 10 times what investors have actually plowed into the company. To be clear, Pinterest is showing every sign of turning into a great company. It has already solidified a role for itself as a key referrer of online retail and e-commerce traffic.
But still, this is a company that currently is rumored to make only between $9 million and $45 million in revenue.

Companies with no revenue at all are highly valued.

(Snapchat / Apple iTunes)

Snapchat is rumored to be raising a new round of funding that values the company at $3.6 billion on paper. This company has zero revenues.
Zero.
And it's not easy to see how it might make money: It's defining product deletes itself after just a few seconds.
The last time we saw companies with no revenue receiving high valuations from investors was right before the 1999/2000 dot com crash.

Yahoo is again paying top dollar for companies with no meaningful revenue, just like it did in 1999.

(Wikimedia, CC)

Tumblr's David Karp and Yahoo's Marissa Mayer

Yahoo recently paid $1.1 billion to acquire Tumblr, the social blog network. Tumblr's revenues are so small Yahoo isn't required to mention them in its financial statements — they just don't move the needle. Again, to be clear, Tumblr is actually an excellent product with 50 million users. But for Yahoo to make money on this deal Tumblr will have to generate profits after sales of greater than $1.1 billion.
My sources tell me that with the right adtech, Tumblr could generate several hundred million in ad sales revenue over the years. But they don't believe Yahoo will ever get its money back on the deal.
This is significant because Yahoo does not have a good track record when it comes to buying in a bubble. In 1999, right before the last tech crash, it bought Broadcast.com for $5.9 billion in stock and GeoCities for $3.57 billion. Neither business had meaningful revenue and both have since been shuttered.

Companies are making dumb decisions: This startup chose beef jerky over a 401 (k) plan.

(waitscm | Flickr)

The New Yorker recently wrote:

Hunter Walk, an entrepreneur who recently co-founded an early-phase venture firm called Homebrew, told me about a startup where he’d previously worked. The company had needed to figure out whether to spend its limited budget on beef jerky to keep around the office or 401k plans for the staff. “We put it to a vote: ‘Do you want a 401k or jerky?’ ” he explained. “The vote was unanimously for jerky. The thought was that well-fed developers could create value better than the stock market.”

Correction: Walk now tells me that the beef jerky incident happened in 2001. The New Yorker presents the anecdote as if it were current. Nonetheless, there are plenty of companies making dumb decisions. For instance ...

Companies are making dumb decisions (part 2): There are more Facebook ad agencies than regular ad agencies.

Facebook has about 300 so-called Preferred Marketing Developers. They all do one of just four things: Place ads on Facebook, manage Facebook pages for companies, provide social media analytics, and create marketing apps for Facebook. They are basically ad agencies, in the sense that advertising clients hire them to promote their brands via Facebook.
But there are more Facebook PMDs than there are major ad agencies in the U.S., even though the non-Facebook ad business is many times the size of Facebook. Not all of these companies will survive, and a few have recently realized that there is not enough money to support them all. Even Facebook has moved to cull the herd.

Serious investors are beginning to suspect a tech bubble has formed, and that a crash is coming.

(UBS, Art Cashin)

Art Cashin, the the director of floor operations for UBS Financial Services, has been around the block. He recently worried that he he was seeing things that reminded him of 1999:

"I do worry a little bit that we're beginning to hear things that are reminiscent of the 1999-2000 period—the number of hits, the number of eyeballs," said Cashin, ...

"I think if we hold to the old tried-and-true—how many dollars are coming in—then we might be better served," Cashin said. " But people are extrapolating, in some way, in a manner similar to the way they did in 1999-2000." 

"For an old fogy like me," the trend of extrapolating future earnings based on users and viewers "gets the warning flags flying," Cashin said.

Andreessen Horowitz is pulling up the ladder.

(Flickr / coltera)

Andreessen Horowitz is is the sine qua non of Silicon Valley investor groups. It had stakes in Facebook, Twitter, Pinterest, Groupon and Zynga. Now it is saying it will no longer invest in early stage consumer-oriented startups. They're done.
Andreessen is interested more in later stage and business-to-business-oriented companies. Companies with actual prospects of real revenue, in other words.
This, arguably, is the kind of "flight to quality" you often see when asset prices and stocks start falling. What does Andreessen know that we don't?

One of the most legendary tech investors, Tim Draper, thinks we're at the end of the curve.

(youtube/2millionminutes, Tim Draper)

Timothy Draper is the founder of  Draper Fisher Jurvetson, a venture capital outfit that has invested in dozens of tech startups. He's been around since the days when Hotmail was the big new thing. He recently told The New Yorker that he believed tech venture capital may have reached the top of its cycle:

“I’ll draw you the cycle,” he said, taking my notepad and pen. He scrawled a large zigzag across the page. “This is a weird shark’s tooth that I kind of came up with. We’ll call it the Emotional Market of Venture Capital, or the Draper Wave.” He labeled all the valleys of the zigzag with the approximate years of low markets and recessions: 1957, 1968, 1974, 1983, and on. The lower teeth he labeled alternately “PE,” for private equity, and “VC,” for venture capital. Draper’s theory is that venture booms always follow private-equity crashes. “After a recession, people lose their jobs, and start thinking, Well, I can do better than they did. Why don’t I start a company? So then they start companies, and interesting things start happening, and then there’s a boom.” Eventually, though, venture capitalists get “sloppy”—they assume that anything they touch will turn to gold—and the venture market crashes. Then private-equity people streamline the system, and the cycle starts again. Right now, Draper suggested, we’re on a venture-market upswing. He circled the last zigzag on his diagram: the line rose and then abruptly ended.

"Abruptly ended"?
Let's hope he's wrong.

Source : Business Insider 

‘Ghost’ road barrier tricks drivers into stopping

Laservision’s Softstop is a projection that aims to stop drivers from ignoring stop signs by giving the illusion of a physical barrier across the road.

  

While the majority of drivers obey road signs, there are some that will dangerously ignore a stop sign if they’re in a rush. Australia’s Laservision has now created the Softstop, a projected sign that gives the illusion of a physical barrier across the road.

Installed at the Sydney Harbour Tunnel in May this year, the Softstop was chosen as an alternative to traditional measures to stop traffic from entering the tunnel when it is unsafe to do so, or to let emergency services gain a more clear route. Instead of being relegated to the side of the road and the peripheral vision of drivers, Laservision’s solution consists of a sheet of water which drops down across the tunnel entrance. A projector then displays a large stop sign onto the water, giving the appearance that it is physically blocking the entrance. The water is collected and pumped back up to the top of the device to be recycled by the sign.

The Softstop tricks drivers into believing the tunnel is physically blocked, stopping them from dangerously entering and giving operators more time to install a real barrier if necessary. The sign was activated eight times over eight weeks during its trial run and had a 100 percent success rate, according to Bob Allen, General Manager at Tunnel Holdings which runs the tunnel. Could this kind of false barrier work in other locations or venues?

Website: www.laservision.com.au
Contact: info@laservision.com.au
Spotted by Murray Orange, written by Springwise

Source : Springwise

Is the Middle East the next new market for tech startups?

[This is an excerpt from the forthcoming book, "Startup Rising" by Christopher M. Schroeder. Copyright © 2013 by the author and reprinted by permission of Palgrave Macmillan, a division of Macmillan Publishers Ltd.]

The West tends to look at the world through the prism of its own successes, and believes that it has a monopoly on innovative ideas and entrepreneurship. Nothing amuses the entrepreneurs I meet around the world more than when some US politician who refers to entrepreneurship as a “leading American export,” as if other, thousands-of-years-old entrepreneurial cultures have only recently discovered it.
And one of the most common questions I hear from American entrepreneurs, investors, and policy makers as they consider looking at new growth markets is, what will be the “next Silicon Valley” of a certain region or country?

“Interesting businesses are and will be created outside of the Valley, in the States and around the world,” Ben Horowitz, the former CEO of the tech juggernaut Opsware and co-founder of one of the most successful venture capital funds in the world, readily concedes.

“But think of the movie business. Great films are made in many locations, but there is a reason that the vast majority of successful films — certainly in aggregate dollars — come from Hollywood. That’s where talent wants to be. There is Bollywood in India but it pales in comparison. In fact, how many technology startups outside of Silicon Valley or the US have built multi-billion dollar businesses?”

When I pushed venture capital investors who have opened up offices in emerging markets about why they do so, two consistent themes arise. First, they look for large market opportunities — one may lose money in a place like China, but for all its challenges, it’s too big to ignore. Second, emerging markets offer outstanding engineering and call-center talent, invariably much cheaper than in the United States.

As for opportunities for regional or even global innovation from the emerging worlds?
“It happens all the time, especially for services aimed at local or even regional needs, which explains Alibaba, Tencent, and Baidu in China,” notes Mike Moritz, chairman of the legendary Sequoia Capital — a pioneering venture capital firm responsible for backing the likes of Apple, Google, Cisco, PayPal and LinkedIn which are among the other most successful technology companies in the world.

“But Silicon Valley has always been a magnet for immigrants. It’s the place where raw technical abilities will always be embraced by successful companies and worldly leaders.”
But what happens when the vast majority of talented people don’t want to move — when they not only want to stay home, but are driven by almost patriotic passion to make change where they come from?

The real question going forward won’t be whether Silicon Valley is the only game in town or where the next one will crop up. Rather, it will be how rapid and inexpensive access to its innovations in software and devices will create new, multiple “hubs” of innovation in every corner of the globe.

This will also challenge the West’s definition of “innovation” as only the next shiny, new thing. The word has different ramifications in emerging markets that are gaining access to software and devices for the first time. These markets create innovative solutions for their own challenges and opportunities. From their unique experiences and circumstances, in fact, their solutions may one day be adopted globally.

What if information technology could make geographic proximity and network effects of talent less important? We know this is already happening in our day-to-day lives. Skype, group chat, social networks, collaborative software, and other, ever-advancing video connections are already mainstream and improving daily. They have had clear impact on the social and political dialogue in every country where they are embraced. They create hubs of action in many walks of life  unimagined even five years ago, and tweaked by individuals to better attune them to local and regional cultural needs and norms. These experiences may not yet be as ideal as face-to-face proximity, but for a new generation raised on them, and by breaking down barriers of distance, might they be plenty good enough?

There is precedent for how local need-solving becomes globally competitive innovation in the hardware business. Certainly no one in the early 1980s would have expected Japan or Korea to become a dominant player in mobile devices and consumer gaming. Who would have imagined that Finland, a country known mostly for wood products, would create Nokia — a company that first used mobile communication to facilitate connections between forestry and milling locations hard to reach with traditional telephony?

Look at mobile. Basic cell-phone penetration in Egypt, a land of 80 million people with annual per capita GDP under $6,500, is over 115 percent. The penetration numbers hold true throughout the Middle East.  Yet currently only 8 to 12 percent of these users have access to smartphones.  Can we fathom what kind of innovation may come from countries — those that never even knew landlines — that attain mobile smartphone computing access of 50 percent and more of their citizens? Mobile experts told me we could see sub-$50 smartphones within three years to help drive this adoption.
Moritz concedes, upon further reflection:

I’ve found in my travels that if you put great entrepreneurs from any corner of the world in the same room with each other, they are quite similar even if their mother tongues, religions, and colors are different. They look at the world, problems, and opportunities the same way. Their minds, their energies, and their desires to succeed are a lingua franca. They talk to each other as if they’ve known each other their whole lives.

Is any of this, however, truly possible and scalable in the Middle East?
In the face of brutal oppression in some nations and political uncertainty throughout the region, it’s hardly an idle question. Added to political instability, the gap between the mega-wealthy and the desperately poor throughout the region remains shocking; education and literacy offer profound challenges. Corruption, high unemployment, heavy reliance on government largesse, archaic and often indecipherable rules of law, and cultural resistance to investing beyond fixed assets are all daily realities.

For all the enthusiasm that came with the Arab uprisings, Arabs are still debating vehemently the kinds of societies and governments they will create, what role religion and women will play, and how business practices will be proscribed. One need only spend a few days in Amman or Cairo, going through metal detectors in every restaurant, hotel, and tourist destination, to sense how the political and social realities can keep risk capital — and, indeed, business itself — sidelined.

But while we must take these concerns seriously, they can also mask the three-fold hurricane-force wind these entrepreneurs have at their backs.

First, technology offers an irreversible level of transparency, connectivity, and inexpensive access to capital and markets unprecedented only five years ago. A new generation in the Middle East, as elsewhere, has never known a world before information technology, and they have a keen understanding of how others like them live and create opportunity for themselves.

Second, this generation benefits from regional and global capital now more comfortable with political risk. Twenty years of experience in other emerging markets, all but dismissed as economic engines less than a generation ago, has laid important groundwork. Nearly all of these countries were, and remain, equally marred by political uncertainty, opaque governments, corruption, and weak infrastructures.

Third, changing market dynamics, growth, and opportunity in the Middle East were in motion well before the uprisings. The Arab world alone has over 350 million people, nearly twice the size of Brazil — a GDP larger than Russia and India, and per capita GDP nearly twice China’s. Disposable income has grown 50 percent over the past three years, to over $1 trillion in 2012.  It’s a young market, with over 100 million people under the age of 15, who love their connectivity, mobile phones and rapid adoption of smart devices.

And this new generation is hungry. If there was one universal sentiment that connected every young entrepreneur I met it was this: Their revolution was not merely about overthrowing longstanding dictatorships, but challenging a generational premise and complacency of their parents that things could not change. “Why should we accept mediocre jobs in lumbering large companies or the government — assuming we can even find those?” one Jordanian founder told me. “In fact, I don’t understand why my parents accepted it! We can be better!”

These entrepreneurs come from every walk of Arab life. They are women and men, devoutly religious and culturally Islamic, college educated and self-taught, young and old and from literally every country in the region. They are above all realistic about the odds against them, yet unfazed by the political and infrastructural barriers.

They view the recent political change as an unprecedented opportunity and, in some cases, confirmation of their efforts over many years. They are unleashing social and economic forces that will create the foundations of a new Middle East. These forces will build and evolve over years, but will be accompanied with a speed and transparency through technology that will hold any leadership, and themselves, to instant accountability.

These entrepreneurs are not naïve. They expect setbacks. But they believe they are on the right side of history.

So to me, the most interesting question of all is why wouldn’t the Middle East be ripe to unleash a new era of tech-based entrepreneurship and innovation of the sort that has driven growth and job creation around the world?

[Image courtesy Shahrokh Dabiri]

Hyperloop : le projet de transport par tube à 1224 km/h

Elon Musk n’est pas un amateur. Après avoir co-fondé Paypal, SpaceX et Tesla, l’homme d’affaires d’origine sud-africaine, se lance dans le transport à haute vitesse.  Son dernier projet, l’Hyperloop est constitué de capsules de 2 mètres de diamètre pouvant accueillir 6 personnes et voyageant à la vitesse du son dans l’air (1224 km/h).
Objectif : rejoindre Los Angeles à San Francisco en 30 minutes.

Le long tube de 615 km serait placé à 6 mètres du sol. Le fonctionnement de l’hyperloop se ferait grâce à un système de tube à basse pression avec de l’air à haute pression tout autour des parois pour supprimer tout frottement. L’alimentation en énergie serait solaire.

Avec un coût d’environ 6 milliards, soit le dixième du prix d’une ligne de train à grande vitesse, l’hyperloop pourrait transporter 7,4 millions de voyageurs par an et le prix du billet aller ne serait que de 20 dollars.





Voyez l’interview du milliardaire Elon Musk à TED en mars 2013 :


Source : Vincent Abry

On why the biggest tech companies are built in Silicon Valley

On Friday, ContentDJ founder Jerry Tian published a blog post addressing the issue of “Why Canada Has No Big Tech Companies” – Nortel is dead and RIM is quite obviously dying, he points out. Tian, who was himself responding to an interview with Boris Wertz, founder of Vancouver’s Version One Ventures, offers a thought provoking theory and one that applies to a large degree to all up-and-coming startup ecosystems.

The founder questions the commitment and willingness of Canadian investors and entrepreneurs to devote the ten years or more that it may take to build an independent multi-billion dollar company with staying power, rather than flipping that company for an eight, nine, or even ten figure exit – typically to Silicon Valley acquirers – and exporting that future innovation and wealth building. It’s a charge that could be applied equally well to New York, Los Angeles, Chicago, Austin, Boulder, and dozens of would be international startup hubs.

“’Silicon Valley is not a place but a state of mind,” Tian writes, quoting KPCB General Partner John Doerr. “Some of these insights are collaboration, competition, openness to innovation, failures and experimentation. Probably the most important one is the long term commitment behind technology companies.”

Of course, Tian and Doerr are spot on. What emerging startup hubs often miss when trying to “become the next Silicon Valley” – a flawed mission in and of itself – is that the grandaddy startup ecosystem is more than its physical infrastructure of entrepreneurs, engineers, designers, investors, service providers, universities, and the like. Equally important are the systematic irrationality and a feedback loop around the willingness to turn down the quick buck and go for the massive once-in-a-generation success story.

This isn’t the case with every company, founder, or investor, but it exists in enough density in the San Francisco Bay Area, and based on results to a lesser extent in Seattle, that these are the only two areas areas in the country that have led to multiple ten billion dollar plus technology and internet companies – the true giants that transcend their local ecosystems and seep into the lives of average consumers.

It is these companies, with their ability to attract talent, make acquisitions, invest in long-term R&D, and create systemic wealth that make ecosystems. And with very rare exception, getting to this scale requires a decade or longer commitment and a willingness on the part of founders and investors to turn down near and mid-term paydays. Similarly, it requires a vision and an ambition  to build something that will be around forever.

Tian writes:

So, why is nobody talking about these acquisitions? I think it’s simply because investors are getting filthy rich off these deals.

And that’s exactly what not to do if you want to create the next Silicon Valley. You cannot sell the hen that lays the golden eggs for a few quick buck [sic]. Technology companies take 10 years to really manifest the value. To really build a billion dollar company, it takes tremendous multi-decade commitment. And that’s the biggest missing piece in Canada.

Like or hate Zynga founder and former CEO Mark Pincus, one has to respect him for saying that he wants to build a “digital skyscraper,” a company that would be around for 100 years. Pincus went further to say that he views serial entrepreneurship as failure and that he wants to run Zynga for the rest of his career. Ironically, he recently replaced himself as CEO, personally recruiting Don Mattrick for the role. But Pincus made the ego-busting move in an effort to return Zynga to its former glory and to get it back on that century-long track.

In his somewhat controversial on-the-ground reporting on the Chicago ecosystem last summer, Trevor Gilbert delved into “the Midwest Mentality” and the impact it has on the types of companies that are built there. Gilbert called Chicagoans “pragmatic.” Lightbank partner Paul Lee offered an example of this pragmatism, saying that Chicago startups typically focus on generating revenue from day one, rather than building a massive, but unprofitable user base, a la Facebook and Twitter pre-monetization. Profit is all well and good, and should be the ultimate goal of any business that wants to be around for the long term, but focus on it too intently early on and it can be impossible to invest in growth. It takes a special kind of vision and fortitude to look past the short term and make the big bets required to create massive companies.

This is not to pick on Chicago. A similar phenomenon seems to exist in LA where companies race out to a low nine-figure valuation and then either stall out in that vicinity or sell for sub-one billion dollars to a larger out of town acquirer. Call it the curse of the big-little deal – maybe everyone here just wants to see their name in lights. In a market that is desperate for success stories and validation, these medium-sized exits are hailed as “wins” – and they are, given the difficulty of building a hundred-million dollar company – but they often rob the ecosystem of potential multi-generational tentpole companies. This is a mentality that appears to have changed in recent years, but that change has not yet bore fruit in the form of LA’s answer to Google, Amazon, or Facebook.

New York has seen its own version of this phenomenon, with the ecosystem’s biggest success stories, DoubleClick and Tumblr, being exits to Google and Yahoo respectively. Local darling MakerBot followed suit, selling for $600 million in June. New York does have Fab, Gilt, and Foursquare all shooting for the moon but these companies and the ecosystem as a whole still must prove that they can sustain this ambition and parlay it into a giant company.

As Tian points out, part of the blame for these exits falls on investors. It’s not that investors aren’t interested in massive outcomes – they most certainly are. But not all non-Silicon Valley investors are equipped for the financial and time commitment it takes to create them. These investors, many of which operate out of first- or second-generation funds, often have smaller pools of capital to invest out of.

Write a $2 million check at a $10 million valuation out of a $100 million fund, and a 50x return looks pretty good, returning 98 percent of your fund. Make that same investment out of a $1 billion fund and the impact on fund economics is decidedly less interesting. This is one of the few arguments in favor of mega-VC funds. But it also benefits firms that are on their fourth, fifth or sixth fund and have less to gain reputation-wise with solid base hits.

Returning to Tian’s piece, he closes by writing, “If you are wondering why Canada doesn’t have the [sic] billion dollar company, it cannot be more obvious than this. Too many people are in it trying to get rich quickly off entrepreneurs. Not enough people have the gut [sic] and commitment to create or help create something truly meaningful.”

Tian paints with a broad brush, yes, which ignores many of the subtle nuances and external factors that contribute toward building massive technology companies. But there’s little arguing that people in Silicon Valley think differently. Armed by decades of case studies and social proof, the ecosystem has developed a healthy disregard for rationality.

Mark Zuckerberg famously did just that when Yahoo came calling. He was just 20 years old and Facebook, at less than two years old, was unprofitable with just $30 million in revenue. Yet Zuckerberg and Facebook’s board, which included Peter Thiel and Jim Breyer, turned down Yahoo’s $1 billion offer. When the elder advisors tried to convince the young founder that his 25 percent of that offer would be a big number he said, “I don’t know what I could do with the money. I’d just start another social networking site. I kind of like the one I already have.”

Israeli social mapping company Waze just made the opposite decision, selling to Google for slightly more than that mythical $1 billion. Sarah Lacy cautioned Israel-bulls to “reconsider too much high-fiving over Waze.” While legendary local angel investor Yossi Vardi likes to compare Israeli startups to tomato seeds which need more experienced farmers to grow properly, Lacy believes that the country has the potential to build and sustain globally dominant Web companies without selling, offering MyHeritage as an example.

None of this is to say Silicon Valley is immune from this syndrome. There are thousands of entrepreneurs in the Bay Area who would rather flip their company than do the long, hard work of building something sustainable. But the sheer density of the ecosystem means that a dozen or so each year choose the road less traveled. Also, given the scale of the Valley ecosystem, building a big company is the only way to move the needle and attract talent and capital. Everyone in line at Philz coffee is working on the next “billion dollar business.”

Finally, Silicon Valley is a magnet for those entrepreneurs around the globe who want to build great technology companies, and the ecosystem surely benefits from this imported talent. This was actually Wertz’s central point in the original interview and is one that Tian touches on briefly. It’s a difficult problem to solve, given the power of knowing someone (or several someones) who has summited the mountain before and who can show you that it can be done. In each of these other markets, someone will have to be the first.

In many cases, it is highly irrational to turn down a nine- or ten-figure acquisition offer. There are real benefits to gaining access to the financial and personnel resources of a larger acquirer, ones that can often make or break the success of a still fledgling company. But, if there’s anything in Silicon Valley that Canada, LA, New York, and other startup ecosystems should aspire to it’s this willingness to roll the dice. Sometimes the shooter rolls a “7.”

Source : Pandodaily, by Michael Carney

inShare47

Passion Capital Cracks Open Data On Investments, Deal-Flow, Founder Salaries, And More

It’s not every VC that publishes annual stats on things like deal-flow, average size of investment, average founder salary, number of exits and startups dead-pooled. But openness — within no doubt carefully crafted limits — is part of London-based Passion Capital‘s brand after it set the bar with its inaugural report last year. And while “openness” is probably the headline takeaway again with this year’s report, it does provide some interesting insight into the workings of an early-stage VC in Europe and what, if anything, has changed for the firm over the last 12 months.

To set some context and give you an idea of its size and how active Passion Capital is, let’s begin by drilling into the first two year’s numbers. Spanning April 2011 to June 2013, the venture capital firm founded by Stefan Glaenzer, Eileen Burbidge and Robert Dighero, and backed by a mixture of UK government funding and private investment, has invested in 34 portfolio companies, two of which have exited and three wound down.

The second-screen football betting app Picklive was sold to Sports Millions for an undisclosed amount, and academic research platform Mendeley was acquired by publisher Elsevier for an amount that TechCrunch pegged between $69-100 million.

The three startups shuttered were Twitter real-time chat service Bonfire, travel site Tripbirds, and wine portfolio app Vinetrade.

Digging deeper, noteworthy is that Passion has only added 13 new startups to its investment portfolio this year — OpenSignal, Memoto, Birdback, ShowMyHomework, CarThrottle, Thread, Future Ad Labs, Hasty, Toothpick, Duego, laZook, and Tray.io — though this doesn’t mean it has been any less active in terms of number of investments, but instead reflects that the fund is maturing when you factor in follow-on and bridge funding as well as Passion’s participation in 3 Series A rounds. In fact, in terms of total transactions (investments, follow-ons, exits, bridges, etc), 30 were made in year two compared to 31 in year one, so not much change there.

Passion has made a total of £5,695,000 in Seed investments, which in turn has gone on to attract a further £35,896,000 from more than 25 different VC funds, though this includes Passion’s own follow-on funding. Looking at the first year’s cohort only, 11 out of a possible 21 have gone on to raise follow-on financing at increased valuations, it says, while 6 are still operating from their seed round financing, and 2 of those are said to be profitable.

That’s perhaps telling, suggesting that Passion got its runway trajectory on the money, but I suspect the real story for many of the startups in its portfolio won’t come until year three. It is still early days after all — can we say Series A crunch?

Furthermore, in year two, its average seed round investment size was £183,717. That’s slightly down from £189,936 in year one. Meanwhile, the average equity stake its taken at the Seed stage is 15%.
In addition, Passion has bundled some interesting operational data mainly related to the way the VC firm attracts deal-flow, but also the average salary of the founders of its portfolio companies (£36,149 per annum), some of which I’ve included below.

Deal flow:
Year 2: 1,932 (up 26% from Year 1 number of 1,532)
533 from referrals (up 22% from Year 1)
779 from the website (up 19% from Year 1)
620 from events (up 40% from Year 1)

Sources of the investments made:
9 from referrals from our existing Passion founders
7 from within our network (founders were already known to us)
6 from other referrals (not from our founders directly)
3 we proactively sought out (after tracking for some time)
2 from our open office hours
1 from a team which was renting desks at White Bear Yard

Passion says that the average number of days between a prospective investment first meeting one of its 3 partners to a term sheet/investment offer is 6.41 business days — early-stage VCs are won’t to boast the speed at which they make any offer. It doesn’t say, however, how long it takes to get that first meeting.

It’s also — rightfully — highlighting the fact that it hasn’t charged any of its portfolio companies for legal expenses, closing fees, directors fees, or monitoring fees etc., noting in particular that it’s always paid for its own legal counsel, with little or no fuss (unlike others).

Of note, Passion says it doesn’t employ a PR firm to act on its behalf, which says something about the PR industry considering they do alright on the publicity front. Actually, Passion does more than alright and other European VCs could probably learn a thing or two from their openness, in every sense of the word.

And in a final boast, the VC firm says that the number of founder CEOs it’s replaced with “someone we’ve brought in” has been zero. That’s likely great news for the starry-eyed entrepreneurs it’s backed. However, like the difficult third album, Passion is now into the difficult year three for some of its portfolio companies, so let’s hope it’s not a case of famous last words.
All in all, though, good stuff.

Keep the openness comin’ — we look forward to next year’s update.

(For more data, see Passion Capital’s own blog post, which includes a rather nice infographic if you’re into those sort of things.)

Source : Techcrunch