Monday, December 6, 2010

Making Money Opportunities

Bing Gordon, a partner with Kleiner Perkins Caufield & Byers, says that his venture capital firm has to gear up for the coming tech boom. That’s one reason that his company hired famous Morgan Stanley analyst Mary Meeker as a new partner on Monday.

Meeker’s investing focus at the firm will be on the Internet and how the shift to mobile will create huge new opportunities, Gordon said in an interview.

Gordon is sitting pretty himself as the backer of Kleiner’s investments in mobile gaming firm Ngmoco, which was bought by DeNA for $403 million, and Zynga, the hot social gaming company that is valued at $5.6 billion.

“She thinks big and thinks global,” Gordon (pictured right) said. “Among the analysts, she is my favorite personality. She makes fearless macro bets and is right most of the time.”

Gordon said he sees a big boom coming, not a bubble, much like Kleiner’s managing partner John Doerr, who said that we’re in the midst of yet another boom for internet investments at the recent Web 2.0 Summit. The reason is that he sees a lot of technologies that are changing the way we live.

“The world of digital media is being transformed,” Gordon said. “A bunch of new businesses can be reinvented, thanks to social graphs, the mobile internet, and the new shopping habits of the young. Those are going to create a whole generation of cool new companies. Mary has the right stuff to help people take advantage of the opportunities.”

As for his own focus, Gordon said he is fascinated how users are dealing with the information overload from the social internet and how users are building their own social capital. He is also interested in the “new algorithms, data structures and network topologies of the social web.” He is looking at the intersection of mobile operating systems, the social web, and entertainment. He is also interested in gamification, or making non-game applications more fun and engaging by making them more game-like.

Beyond spotting trends, Meeker will now have to pick the right companies and entrepreneurs that are riding those trends. Meeker will focus on Kleiner’s digital investments, which largely means the social and mobile Internet. But Gordon said that renewed emphasis on internet companies doesn’t mean that the company is backing off completely on big cleantech investments.

“If you look at our cleantech and life science press releases, you can see there are other partner recruitments happening there too,” he said.

Kleiner has a new fund, the sFund, to invest in social Internet companies. But Gordon said it isn’t easy to predict whether Kleiner will invest more money in 2011 than it will in 2010.

[photo credit: SF Business Journal]

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Autodesk believes Android has grown to become a viable opportunity, enough so that it is bringing a version of its popular drawing app, SketchBook Mobile, to the platform. Autodesk, which makes powerful 2-D and 3-D design software, has a hit with SketchBook Mobile for the iPhone and iPad, recording 2.2 million downloads since first launching in September of last year. The company was waiting to see if Android would attract a vibrant user community before pulling the trigger on its first Android app, something the company says it now sees. “We’ve been keeping an eye on all the smartphone platforms, but Android stuck out; we were getting a lot of customer feedback from people requesting that we support Android,” said Chris Cheung, project manager for SketchBook Mobile during an interview last week.

Autodesk will offer both free and paid versions ($2.99 for the Pro version) of SketchBook Mobile. The apps will only work on Android 2.1 or higher, which leaves out the small but significant number of users still clinging to older versions of Android. Cheung said SketchBook Mobile for Android took six months to build and will be familiar to iOS users, though with some different elements mapped to the buttons on Android devices. Cheung said the decision to support Android was driven not only by customer demand, but also by a distinct absence of top-notch sketching apps in the Android Market. He said Android offers less competition for a company like Autodesk than iOS.

This is another sign that the Android platform is becoming a target for big-name developers. I recently talked about how Zynga, Twitter, Facebook and StumbleUpon were focusing more efforts on Android, giving the platform the kind of support that iOS has long had. There’s still a way to go for Android to become the primary target for developers, but established companies are sensing now is the time to get on board with Android. The user base is there, thanks to some breakneck growth. In many cases, Android Market is still ripe for the picking for larger companies, who don’t face the same high-quality competition you see the App Store.

Given the popularity of free apps in the Android Market, it will be interesting to see Autodesk’s breakdown between paid and free downloads of its new app; Cheung said about a quarter of SketchBook Mobile’s downloads on iOS are paid. With Android users’ tendency to choose free over paid apps, I don’t expect Android to match the iOS paid figure right away, but it would be good to see Autodesk get a significant number of paid downloads, because it’s a quality app that deserves it.

That will be the test for Android. It’s not enough to just attract big-name developers to Android; they have to see good money-making opportunities to keep building Android apps. Mobile advertising and in-app purchases are becoming solid ways to make money, but for companies like Autodesk, which rely on getting users to buy the paid version, that’s still the model that matters the most right now.

Related research on GigaOM Pro (sub. req’d):

Why RIM’s Future (Unfortunately) Hinges on BlackBerry OS 6

Why Google Launched App Inventor

Is Amazon the New Self-Publish Kingpin?

Monday, December 6, 2010

Saturday, November 20, 2010

Friday, November 19, 2010

Conduct a Financial Fire Drill to Assess Financial Health

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