New post up today on TechCrunch where I provide a bit of an insider’s look at the success of BlueKai. It’s a story I think will resonate with many entrepreneurs, and is titled “Success, Reality and the Myth of “Up and to the Right.”
Just finished reading Brad Stone’s excellent book “The Everything Store: Jeff Bezos and the Age of Amazon.” I’ve recommended it to every entrepreneur I’ve met for the past few weeks. So many great nuggets to take away about entrepreneurship, product development, innovation and execution. I highlighted many sections throughout the book, and here is one of my favorites from Rick Dalzell, Amazon’s CIO from ’97-’07:
“Jeff does a couple of things better than anyone I’ve ever worked for. He embraces the truth. A lot of people talk about the truth, but they don’t engage their decision-making around the best truth at the time. The second is that he is not tethered by conventional thinking. What is amazing to me is that he is only bound by the laws of physics. He can’t change those. Everything else he views as open for discussion.”
A great read for anyone who is an entrepreneur or who cares about the inside story of development of industry game-changers like AWS or the Kindle.
As an entrepreneur and CEO, I was always amazed at the impact one key addition to our management team could make. Now, having been a VC for 5 years, it’s something we see regularly in our portfolio. A company brings in a rockstar to fill a key role on the management team and boom! – he or she makes an immediate impact, bringing new ideas, new insights and generally disrupting the status quo (in a good way). We think we’re going to see the same with Hans, and that’s great for entrepreneurs, our Limited Partners, and our firm.
We’ve had the benefit of knowing Hans for more than 8 years – often competing or collaborating to work with the best entrepreneurs in China. Hans is well-known for leading investments in several of China’s top companies, including mobile device leader Xiaomi (the fastest company ever to go from $0 to $1 billion in revenue), mobile game company Forgame (which recently completed its IPO at a valuation of over $1 billion) and e-commerce innovator Vancl (one of China’s emerging e-commerce leaders).
Over the next 5-10 years, the most significant companies in the mobile and Internet sectors will find ways to succeed across the US and China like never before, with US companies expanding to China and Chinese companies coming to the US (see our recent co-investment with Alibaba Group in Quixey). As a firm, we are laser-focused on being the #1 choice for entrepreneurs seeking to expand across these two markets. When we had a chance to add Hans to the team to further that mission, we jumped at the opportunity.
I first met Tomer and the team at Quixey in 2011, and have been amazed at what they’ve accomplished since then. We’ve had a longstanding relationship with Alibaba since investing in the company in 2002 and jumped at the chance to work together with Quixey.
Why are we so excited about Quixey? For starters: 102 BILLION.
That’s the number of apps Gartner projects consumers will download on their mobile phones this year worldwide, generating more than $26 billion in revenue. For a market that by all respects didn’t even exist 6 years ago.
The team at Quixey has a very, very big vision in which consumers are able to leverage the apps, data and capabilities of their smart mobile devices to the max. It’s also a vision that is decidedly “open” (i.e. not controlled by Google, Apple, or…) and focused on enabling consumers and app providers to deliver the best possible experiences to consumers.
Perhaps both GGV and Alibaba are colored by our experiences in China, but we see the market accelerating at warp speed to a mobile environment. Industry segments we don’t even recognize yet will be created overnight by companies we are just starting to hear about today. Uber and Instagram are perhaps the best examples to date, but there will be others.
Alibaba is one of the strongest technology and consumer companies on the planet, with an e-commerce business that is larger than Amazon and eBay combined. The company has an enormous strategic focus on mobile (see the announcement earlier this year that Jack Ma joined the board of UCWeb, a GGV portfolio company with more than 400 million users worldwide).
It’s going to be awesome to watch the Quixey team execute on its vision, now with plenty of capital and the support of Alibaba Group.
A massive industry shift is underway: the $400 billion online travel industry (roughly 40% of the $1 trillion total travel market) is moving from desktop to mobile. Travel industry research firm analyst PhocusWright expects mobile travel sales to triple from 2012-2014 (reaching $25.8 billion) and research firm eMarketer projects will reach $48 billion in 2017 (see chart below).
Leading the charge in the $300 billion hotel industry is HotelTonight. Launched in 2010 by travel industry veterans Sam Shank , Jared Simon and Chris Bailey, HotelTonight has grown to become the #2 hotel travel app on the iOS app store and support millions of travelers in over 120 cities in 12 countries.
To continue its global expansion, the company today announced its $45 million Series D round of financing from Coatue Capital and GGV Capital, along with existing investors Accel Partners, Battery Ventures, USVP and First Round Capital.
As tech media readers are probably tired of hearing, the global shift to mobile is massive, and is happening rapidly across many, many industries. Notable examples where new entrants have entered large existing industries, rapidly captured significant share and created billions in market value include (desktop leader on left, mobile innovator on right):
Consumers and the media are probably tiring of VC’s talking about this massive shift, but it’s hard to overstate. In almost every industry, analysts and CEOs are talking about the shift happening “faster than anticipated.” This is especially true when taking a global view (as we do), and take into consideration markets like China and India, where more than a billion consumers will experience the Internet for the first time on a mobile device over the next few years.
Mobile users want a mobile experience, not a web experience on a mobile device (for more on this, read Sara Lacy’s Pando article today). HotelTonight nails it with a great experience for both end users (I happen to be one – my favorites in SF via HotelTonight are the The Westin, Hotel Vitale and the Clift) and more than 3,000 hotel partner properties around the world.
With this new financing, HotelTonight will continue to expand on a global basis, an effort we are thrilled to help support. We’ve had a terrific window in the travel market in Asia via Qunar, China’s leading online travel site, and Tujia, the leading platform for home vacation rentals in China.
In short – great team, great product, huge market, massive disruptive shift underway. Very excited for Sam, Jared, Chris and the team at HotelTonight!
Edit @ 11:00 am PST: Here are are a few links to media coverage of HotelTonight’s announcement today:
Financial Times: “HotelTonight finds room for $45M”
PandoDaily: “Will HotelTonight be the next big travel IPO?”
BusinessInsider: “HotelTonight raises $45M round”
A few months ago I wrote a post titled Content, Community and Commerce: Why Verticals Win. It’s been a frequent topic of conversation over the past few months, and today PandoDaily wrote an article on Houzz that brilliantly dissects a number of factors leading to the company’s rapid rise in the home improvement vertical.
In a nutshell, it highlights the self-reinforcing benefits of a highly engaged, growing user base with common interests and passions – and the magic that combination can generate, particularly with respect to content. From the Pando article:
But it’s not the sheer number of people using Houzz, be it as a daily obsession or an integral part of their business, that’s so impressive. It’s the level of content that this audience outputs and the rate at which it’s accelerating. Today, Houzz announced that it has surpassed 2 million HD design and remodeling images available on its platform. It took the company more than three years to see the first 1 million images uploaded, and yet it doubled that amount in just the eight months since the beginning of the year.
While Adi, Alon and team are leading the charge in many ways, we are seeing this happen across many market segments as users migrate from horizontal platforms to vertical ones (see my original post for other examples). And yes (disclosure), my firm GGV Capital is an investor in Houzz.
Really excited to post this article today on Fortune.com: The Quiet Successes That Drive Silicon Valley. So many great entrepreneurs doing so many great things every day – but you don’t read about them on Twitter or TechCrunch. Sorry Vijay and Ryan for shining the spotlight on you 🙂
I read an article by Nick Bilton this week in the New York Times entitled “Disruptions: The Echo Chamber of Silicon Valley.” I think he makes some solid points, and it reminded me of my first meeting with Mauria Finley, founder and CEO of Citrus Lane.
One of the first things Mauria told me when we met was “Citrus Lane has to be about products and a community that is not just for the ‘Menlo Mom.’ We have to reach the Nebraska Mom, the Tennessee Mom – the broader audience of moms around the country and eventually the world.”
Mauria and her team had spent a ton of time talking to moms around the country as well as the brands behind the products they buy. They learned a ton, and applied it towards their business strategy and business model. There are 10,000 babies born every day in the US, and the average first time mom spends more than $12,000 on her child in the first year (think diapers, baby food, strollers, etc.). If Citrus Lane had started out with a product mix focused on moms from Silicon Valley (or the “Menlo Mom”), chances are the company would end up reaching a very small percentage of those 10,000.
Everything the company does reflects this thinking. I won’t give away all the secrets, but the company’s $25 price point, the product mix, the content and engagement models (heavy on mobile and Facebook, for example, given that many moms spend their days out and about – not sitting in front of a desk) are all designed in the context of how the majority of moms throughout the US think, not just those based in Silicon Valley.
The results speak for themselves. The company has grown more than 10X from when we invested a year ago, and has sold out 6 months in a row. Click here to view a recent presentation from Mauria on how she’s building Citrus Lane and why “Social is the Very Essence of our Brand.”
In contrast to the data points in Nick’s article, Mauria and her team launched with a product offering that appeals to the market at large, avoided getting overly focused on the early adopter crowd in Silicon Valley, and they nailed it. Maybe a good topic for Nick’s next article :).
It’s always a lot of fun for us when an entrepreneur who has worked for many years to build an awesome company finally starts to receive well-deserved recognition. The latest example is Sam Lin at Reebonz, which announced its new $40 million financing round yesterday (read the article in TechCrunch).
Sam founded Reebonz in 2009 with a clear focus on the $200 billion+ market for luxury goods, about 30% of which is in Asia – Reebonz’ core market focus. A two-time entrepreneur, Sam has an intuitive understanding of the Asian consumer and her shopping preferences. GGV Capital was fortunate to invest in Reebonz in 2010 along with Vertex and Matrix China, and we’ve since watched Sam build Reebonz into one of the fastest growing e-commerce businesses on the planet.
I won’t go into too much detail because there are some elements of Sam’s business that we haven’t seen anywhere else, but will highlight a few things we see Sam doing that have been critical to Reebonz’ success:
1) Maniacal focus on customers and the customer experience. Packaging, design, product, delight. Every detail has Sam’s touch (see my photo above with Sam in front of a packaging display).
2) Extreme focus on quality. The best brands, the best products – backed by Reebonz and its world-class level of customer service.
3) The element of surprise. There is always something unique, something hard to find, something amazing about a limited offering from Reebonz – and customers love it.
4) Get local. Sam has country managers in each core market who have a tremendous amount of autonomy and are able to cater to local preferences.
Very fired up for Sam and his team. Well deserved recognition for a category leader like Reebonz and a terrific entrepreneur like Sam.
This past weekend, 10 kids gave up their Saturday and Sunday mornings (8:00 – 1:00 each day) to learn the basics of building apps(“coding”) for mobile devices. I am so proud of these kids – as well as our instructor, Jateen Bhakta. More information and thoughts below, but this is just the beginning for our new organization, Tri Valley YEAH! and our partnership with the Menlo App Academy. Click here for more photos from this past weekend’s class.
The broader story:
In early 2011, my friend Jason LaBarbera and I started discussing the topic of kids, education, and technology. We both a) have kids and b) are in careers focused on Silicon Valley and the technology industry (myself as an entrepreneur and venture capitalist and Jason as owner and CEO of a successful recruiting firm focused on the tech industry).
Over the past 24 months, we met many times for breakfast, coffee, etc. and kept focusing on a basic question: Why aren’t our schools teaching kids the basics of computer science (CS) at an early age?
The background for our conversation is simple. Many of the best-paying jobs in America are in Engineering in Silicon Valley. Companies have hundreds of thousands of open positions for Engineers (not just in SV). Many kids graduating from college today do not have the CS skills to apply for these jobs. Many of the wealthiest entrepreneurs in the world started as Engineers (see: Mark Zuckerberg, Bill Gates and many more).
So why aren’t our schools starting to teach CS at an early age – just like they teach English, Math, History, Science and other subjects?
We did some research on the subject and found a host of reasons, but the primary ones center around a) state requirements & testing on existing curriculum, b) lack of teachers to teach the courses and c) inertia. Our sincere hope is that the rising press coverage on this subject, support from leaders like Michael Bloomberg and President Obama, new platforms like CodeAcademy and Code.org, and growing awareness among parents of the value of Computer Science will move the ball forward.
Until that time comes…
We’re moving forward with a grass-roots solution.
Jason, his colleague Mitch Eason and I were fortunate to connect last year with the founders of the Menlo App Academy (an amazing group of parents and kids – read more about them in Forbes), who have developed an awesome, basic curriculum to teach kids to build mobile apps using the Corona SDK. Via the MAA team, we met up with Jateen Bhakta, a passionate part-time teacher and game developer. After a few months of work and collaboration with the Menlo App Academy team, this past weekend we officially launched the local program for kids in the Tri Valley (East Bay, CA) area – Tri Valley YEAH! (Youth Empowered Apps Happening!).
Our goal is not to turn 10 year-olds into Ruby engineers. Rather, it is to introduce kids to the concepts of coding, quickly get them to a point of “instant gratification” (building an app), and provide ongoing resources and encouragement to learn more. Ideally over time we’ll partner with educational institutions to try to scale this throughout the Tri Valley area (300,000 residents). If some percentage of the kids in our programs go on to learn more about CS and eventually become Engineers, we’ve succeeded.
For now, as I said above, I’m just really proud of our team and the kids. We had a ton of fun this weekend, and it was awesome to see the kids faces light up as they made modifications to their apps. And thankful to Max Colbert, Matt Dillabough and their parents who pioneered this model and came up with the core curriculum.