Thursday, December 30, 2010
What Mattered in 2010: Jim Andelman, Rincon Ventures
All this week, we are sharing the opinions of some of the top influencers in Southern California's high tech community. We asked the same five questions of a variety of top technology entrepreneurs, investors, and others, to hear what they're thinking about, and are sharing it here over the next two weeks.
Earlier today, we talked with Greg Martin at Archer Venture Capital. Below, we collect the thoughts of Jim Andelman, a venture capitalist at Rincon Venture Partners.
1. What was the biggest news for you/your firm this year?
2010 was very good to us. A number of companies in the portfolio delivered very strong operating results in 2010, which is exciting. Campus Explorer, Burstly, RingRevenue, Cocodot, ElephantDrive and DataPop are good examples. Also, we had an investment in a company that went public this year, BroadSoft, which is one of 2010's best-performing IPOs.
2. In your opinion, what events, companies, or people made the biggest impact on the technology world in 2010?
I'll list three, not necessarily in order.
(1) Mobile web. Mobile app downloads went from 300mm in 2009 to 5 billion in 2010, Android ad impressions up over 2,000% as two examples. The current incarnation of the mobile web changes what the Internet IS to users, and the manner in which it is incorporated into their lives.
(2) Advertising in the Facebook ecosystem. Facebook now accounts for a staggering 25% of all display impressions (up from 9% last year), and Facebook and its advertisers are finally beginning to understand how to leverage the platform's unique capabilities. I've seen numerous startups revamp their entire business based on the performance of Facebook advertising vs. more traditional online marketing approaches.
(3) Cloud computing offerings as an enabler to lean startups. This incredible wave of capital-efficient web-based businesses launches is due in no small part to the lower cost of entry provided by cloud-based offerings. This changes the landscape in a lot of ways: accumulating capital becomes less critical, while accumulating talent becomes more critical. For a startup, surviving gets easier (lower break-even), but achieving scale perhaps harder (more competitors in each market).
Groupon is obviously a phenomenon (fastest-growing business in history according to Forbes), but not sure it "impacts the technology world" in the same way as the three above.
3. What was the biggest lesson you learned over the past year (good or bad)?
Living by "The Golden Rule (do unto others...)" pays off. Most of the new investments we made this year -- and the ones in the pipeline we're most excited about -- were referred to us by founders with whom we've already invested. Because we've treated entrepreneurs respectfully and actively help them and their businesses succeed, they've encouraged their peers to engage with us. It's been really gratifying.
4. Who are the people here you think will most influence the technology world in the coming year?
There are lots. If Legalzoom goes public and Shoedazzle continues on its impressive trajectory, Brian Lee certainly deserves a nod. Mark Suster at GRP Partners is doing an incredible job helping foster the ecosystem, as a great investor, primary force behind LaunchpadLA, acclaimed blogger and strong SoCal advocate. Also, I'm excited to see very talented entrepreneur Kevin O'Connor (founder/CEO of Doubleclick) back in the saddle with FindTheBest.com (with funding from Kleiner Perkins). Finally, (were I to take your question very literally), the tech team at Rightscale truly provides worldwide thought leadership on cloud computing, and will significantly influence the technology world through their offerings.
5. What are the technologies, companies, or things you think the community ought to pay the most attention to in 2011?
In addition to those already listed, others to watch include: (1) widespread adoption of online display ads as performance marketing; (2) hard-to-predict evolution of the early-stage financing environment, as angels perhaps get deal fatigue and as more large funds move "down-market"; and (3) some monster VC-backed exits could make everyone forget (rightly or wrongly) that they questioned the VC asset class in the first place.