10.19.06

Top venture trends

Posted in Technology Ventures at 12:13 am by Ray Wu

• Media portal and ads
• Aging population: target at IT simplification
• Collective wisdom: Delicious, Digg, Furl, Yahoo MyWeb
• Digital entertainment: digital home, wireless entertainment, online gaming
• Youth destinations: Myspace, YouTube, Facebook
• Vertical search: job, travel, event, shopping, classified
• User generated content and enablers: Blogs, Wiki, Podcast, Video
• Device Convergence: camera/cell phone, dedicated home device, media player
• Voice portal and VoIP infrastructure
• SME enablement: marketing, sales, finance, office 2.0
• SaaS and Web 2.0: better economics and delivery mechanism
• Security
• Vertical applications and integration
• Wirless and sensory technology

Sitemap  | Subscribe to feed     Permalink Comments

10.18.06

Technology Import vs Export

Posted in Technology Ventures, Globalization at 12:41 am by Ray Wu

It seems that most of VCs are investing in China by “exporting” the successful US business model and technology innovation. I have not seen a lot of successes based on this strategy. Most of the US companies including major Internet heavyweight can not compete well with Chinese domestic vendors, ie. Google vs Baidu, or eBay vs Alibaba. Many failures are due to management and culture difference, others are because of scalability and business model required to win in the unique Chinese environment.

There is no doubt that China is a unique market and innovation is definitely there. One good example is mobility. China has the world’s largest number of mobile phone subscribers. The Wall Street Journal reported that China had 398.8 million wireless phone subscribers at the end of January 2006, more than the entire population of the United States. In fact, mobile users in China outnumber conventional “landline” users by about 38 million.

What that means is that if the mobile technology works in China, regardless if it is mobile gaming or mobile commerce, it probably has a solid scalable and reliable technology foundation. The same thing applies to online gaming such as MMOG technology. Even though Korea has the largest online gaming market (ie. cyworld), China is the fastest growing market according to IDC.

Why not take these technology, apply US business model and import it here? Some of the technologies such as ring tone or song recognition by humming have been utilized in China for a long time, yet, it is so “innovative” when it was introduced to the US market. I go back to China once and while and there are definitely a lot of opportunities there…

Sitemap  | Subscribe to feed     Permalink 1 Comment

10.17.06

Zune vs iPod

Posted in Technology Ventures at 2:28 am by Ray Wu

Now Google bought YouTube, more and more people would get exposed to user generated contents. So what is the best device for multimedia, here are two top contenders (at least one would be fighting harder the other other)

Sitemap  | Subscribe to feed     Permalink Comments

10.13.06

IT commoditization

Posted in Technology Ventures at 12:31 pm by Ray Wu

There are a set of software as service (SaaS) startups out there with mission to make it easier for business users. Some of these applications are pre-packaged software with well-defined functionality that users can use for a well-defined business needs, such as approver for document approval, echosign for document signing and tracking or joyent for team collaboration. Others are customizable to allow business users to develop their own applications on the fly.

These applications are more of a direct competition for traditional IT since users are now able to put together a simple and yet powerful applications directly by themselves without involving IT. The most notable ones are CogHead and Caspio. Teglo just announced its entry into the same market in the office 2.0 conference. The appeal for these tools is that they helps technology-savvy business users to develop custom applications that involve their own business process, data and knowledge, and then share the applications with their co-workers in real time.

This is very cool from a user perspective since now knowledge workers have a choice to either work with internal IT or deploy their budget somewhere, but this creates a nightmare for CIOs to enforce internal security policy and compliance. What it also means is that IT is now being commoditized from a different dimension. Developers in the US used to only worry about outsourcing. That worry has its foundation since it is pushing the developer hourly rate lower and lower (see the sample average hourly rate chat in oDesk). Now they have to compete in another dimension with these SaaS and customizable applications that again will take a slice of the low-to-medium end of the development pie.

Sitemap  | Subscribe to feed     Permalink 3 Comments

10.11.06

Office 2.0

Posted in Technology Ventures, Events at 11:51 am by Ray Wu

I am speaking tomorrow on the VC panel in the Office 2.0 conference. In case you are interested to view the companies, Ismael has put together a fancy list to group these vendors by feature.

I am very excited to see this momentum in the market place. In the mean time, it makes me realize that more and more of these online application require new infrastructure to guarantee scalability, reliability and security. It is funny to see “out of service” screens from Google mail and “loading…” bar in some of the real time demos in today’s sessions.

Unlike consumer apps where people can tolerate slow performance and less-than-ideal reliability, most of these office 2.0 apps are business and mission critical, and thus require high 24×7 availability and dependability. It is more than point solution optimization such as server, database, storage, network or application, it is about end-to-end system that tie everything together, manage together and optimized together as a whole.

Sitemap  | Subscribe to feed     Permalink Comments

10.10.06

Crossover Venture Model

Posted in Technology Ventures at 11:08 am by Ray Wu

I was in a VC/Startup event tonight and sit with some smart VCs. One of the discussion topics was about crossover investment model and why most VCs should consider the crossover investment strategy that combines hedge fund with traditional VC practice to enhance returns and reduce risks. If you are not familiar with the crossover model, read Peter Rip’s discussion on this. Peter did a great job of putting this clearly.

Even though a lot of “top tier” funds are staying with the traditional VC model, a few great funds such as Sequoia are quietly hiring PE guys into their fund. This may not represent a significant investment strategy shift, but it does raise potential that a combination of PE/VC strategy and talent through cross-stage business intelligence and connection points will help increase probability of investment successes in the right sector at the right time. In addition, this strategy could deploy hedging that can reduce volatility and big costly mistakes.

Entrepreneurs need to realize that VCs are one type of money managers and their primary responsibilities are towards LPs. It does not mean VC’s interest are not aligned with entrepreneurs, but when the hard decision need to be made, VCs tend to think like a money manager with a balanced portfolio vs entrepreneurs with only one company.

Sitemap  | Subscribe to feed     Permalink Comments