Open-Sourcing My Investment Theses Re: Mobile Computing
This week, I’ve been writing about my interest in “Mobile Computing.” Today, I want to briefly get more specific about what excites me from an investment perspective, going forward. Again, as with all of these posts, the goal isn’t to tell you what I think as if it’s 100% right, but rather to share my frameworks and ways of thinking with you, inviting feedback, disagreement, and everything in between. As this is all developing, I’d like to specifically share the layers of the mobile stack that I excite me from an investment perspective:
- Carriers & Networks, specifically how disruptive projects like Google Loon, or small startups like Karma, can help extend WiFi and data coverage for both the under-networked as well as those who wish to leave the telcos altogether.
- Servers, Databases, and Other Infrastructure, specifically thinking through new stacks for web-first and mobile-first companies to serve complex information to many fragmented and distributed devices and platforms.
- Platforms, specifically the fight between iOS and Android, maybe Windows+Nokia, and newer entrants like Firefox OS, Tizen, and more, as well as those platforms which fork Android (like we heard about Amazon potentially doing today).
- Proliferation of Devices, which go beyond new handsets, but include tablets, probably televisions, maybe wristwatches soon, and other wearables (this trend is already underway, of course), and even so far as “implantables,” which someone mentioned to me the other day. Wow, I don’t even know what to say about that, but I’m not surprised.
- Social, SMS, Device, and Other Graphs, specifically the layer between the platforms and the apps which help them spread through friends, interoperate, and what I’m most excited about, help build new graphs of devices that are tied to people.
- The Application Layer, which is where all the consumer excitement is over the last few years, and while I’d argue it makes sense, I’m mostly interested in specific types of applications, which I’ll explain more below…
When I’m evaluating a mobile-first opportunity, here’s what running through my head these days:
- Is the team bringing technologies to mobile? I believe in competitive moats and defensibility in a time when the app economy could be overheating relative to demand. This is the most important investing dimension for me right now.
- Is the team focused on product, distribution, or both? Either one is OK, but it matters to know which one and why.
- Could the app and product be conceivable on the web? If yes, I have to think twice. I fundamentally believe mobile-first companies can continue to disrupt
- Is the idea uniquely positioned to take advantage of future hardware advancements, controls, or even peripherals like wearables?
- The camera is the most important sensor today. Is the team leverage future advancements in camera hardware, such as different types of imaging, depth-sensing, motion controls, and beyond?
- Beyond the camera, I’m very interested in location, but worry about “always on” GPS because the batteries need a fundamental step-change, which I sense is at least a few years away. There are three types of apps that leverage GPS: (1) Those that are always on, like maps (huge battery drain); (2) those that capture location periodically, or on opening of app (like Foursquare or Instagram); or (3) those that grab location and pair that information with an offline service (such as Instacart, or Uber, etc.).
- The audio-jack is owned by headphones, which tie into music and other media, but I wonder if there are more opportunities along the lines of Square’s brilliance to turn the magnetic information on a credit card into an audio signal. Every time I think about what Square did, like right now, I just sit in awe and admiration.
- The proximity sensors are going to get much more interesting, especially on iOS with iBeacon, allowing more interesting private sharing throughly Bluetooth LE, bypassing the carriers or WiFi.
- And, there are a whole bunch of opportunities to simply use a mobile form factor to make things easier for everyone, things like payments, or logins, and so much more. Too many to list here.
A big reason I’d focused a lot of my work and writing around distribution of mobile apps is because I believe that apps which are not messaging or have network effects, which do not leverage the camera, which are not games (they dominate iOS), and which don’t have a legacy web brand to propel them, are very hard to distribute. Sometimes, impossible. I do think this will change over time, but all of the advances that we should expect up the entire stack — and there will be many — often come down to distribution, and as harsh as it is, it matters a great deal. Now, it’s time to put this thought into action, and talk about some of my investments in the space, and the ones that are coming down the pike. It’s an exciting time to be investing in mobile. I feel very lucky to do so. Thanks for reading and I really look forward to your comments and reactions.
* A special thanks to some friends who specifically motivated me to focus more and more on mobile. First, the guys at Javelin Venture Partners who generously employed me to come up with theories around my own interests; Hiten Shah who, months ago, suggested every post I write should be about mobile — he was right, I just wasn’t ready then; GD Ramkumar and the entire Concept.io team, which have sparked a deeper interest in mobile technologies and been supportive of my curiosities around all devices and platforms; and Rohit Sharma, from True Ventures, who lately has been a passionate advocate and supporter of both me and these ideas. I want to make a special note about Rohit and encourage you to follow him on Twitter (he’s unfiltered, thoughtful about entrepreneurship and venture), to look over his great blog (tell him to write more). In the coming weeks and months, Rohit and I have some more ideas around mobile and investing that we’d like to share with you. I don’t know what shape it will all take, but that’s the beauty of mobile and the beauty of being a small investor. The future is unwritten.