Queen Mary’s Always Insightful Views
A few weeks ago, Mary Meeker from Kleiner Perkins published her annual “Internet Trends” slide deck. It’s been a must read for all tech investors for years. However it is 164 slides long this year. So we picked the top 10 sets of slides that resonated most with what we are doing at Difference. If you want the full monty you can find it at: http://www.kpcb.com/internet-trends
Let’s start with some fundamental growth. The next three charts show the three pillars of tech growth (i.e. computing, storage and bandwidth) remain deflationary commodities. Note that these are logarithmic charts! This means that new applications that seemed too expensive or slow are soon cheap and fast. We like ‘em cheap and fast! (Apps that is). For example, years ago Netflix would have been viewed as too much of a bandwidth and storage hog. Now it has over 40 million users.
And when you combine cheap computing, storage and bandwidth you get this thing called cloud computing: This is one of the drivers behind our many of our SaaS based investments.
But all of this geeky tech excitement is reflected in the market, right? While we don’t like comparing anything to 2000 (especially our compensation), the following chart suggests that Tech at 19% of the S&P500 is well within normal historical levels especially given that technology has consumed pieces of the publishing, advertising and media worlds.
Meanwhile the consumer device world continues to be rocked with smartphones and tablets.
And even when consumers are using old devices they still can’t stop looking at their new devices. This is why we have invested in iPowow and Quickplay among others.
Recall we recently wrote an In-depth note on the changes in media – see it at https://www.differencecapital.com/its-time-to-change-the-channel/. And these two slides echo what we said about how the Internet and new devices are upsetting the apple cart of traditional media and broadcast players.
Also highlighted in our media report was the growth of streaming and in particular eSports streaming. We are watching this closely as we see opportunity for one of our investees, World Gaming (formerly Virgin Gaming).
If you don’t think TV viewing is changing, you are old and you better talk to a millennial!
We note that Canada doesn’t get a name on the top 20 Internet list. But we are working on it, eh!
And finally, for any of you who think that Blackberry (as a smartphone company) will return to glory days you may want to look at these two slides… maybe as an “Internet of Things” company??
Tom Astle, CFA, P.Eng, Head of Investment Strategy, Difference Capital