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IT Investing “It’s the end of the world as we know it and I feel fine” Fred Wilson Managing...
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IT Investing “It’s the end of the world as we know it and I feel fine” Fred Wilson Managing Partner Union Square Ventures 915 Broadway, New York, NY 212-994-7880 [email protected]
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Transcript of IT Investing “It’s the end of the world as we know it and I feel fine” Fred Wilson Managing...
IT Investing“It’s the end of the world as we know it
and I feel fine”
Fred WilsonManaging Partner
Union Square Ventures915 Broadway, New York, NY
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De
gre
e o
f D
iffu
sio
n
NextBig-bang
Deployment PeriodInstallation Period
CrashBig-bangTime
IRRUPTION
Institutionalre-composition
FRENZY
SYNERGY
MATURITY
Source: Carlota Perez, Technological Revolutions and Financial Capital
What’s Happening?
WeAre
Here
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The Stack
Management
Infrastructure
Applications
Services
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What’s Changed?
Fund Sizes $250mm to $1bn $100mm to $400mm
Markets Large Horizontal Smaller Vertical
Product Focus Technical Problem Business Problem
Technology Critical Success Factor Enabler
Data By-product Core Value
Differentiation Technical Approach Suitability, Effectiveness, Efficiency
Defensibility Intellectual Property Switching Costs, Network Effects
Management Team Engineering Driven Sales, Marketing, Operations Driven
Capital Requirements $30-50M $5-15M
Typical Exit Values $250-500M $50-150M
Valuation Metric Technology Position Revenue/Earnings Multiple
Then Now
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Technology Enabled Services
Web Services Data Services Both delivered together are even
better
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What do we look for?
Technology leverage. Can the service scale without incremental headcount and capex?
Service definition. Does the management team understand the problem/solution at a deep level?
Capital efficiency. Can the company be built for a small amount of capital?
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What do we look for?(continued)
Disruption – Markets that are being turned upside down because of technology
Examples: Marketing & Media Financial Services Telecomm
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It’s The Data Stupid!
Code is commodity - Data is proprietary
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Our Investments
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How We Do Business
Partner driven firm Small is better than big Early is better than late We want to be the first investor If you don’t want our advice, don’t
take our money
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Or Read My Blog
