Mobile Venture Forum at MWC Barcelona
This past week at the Mobile World Congress in Barcelona, I was fortunate to attend an exclusive forum for venture capital investors and entrepreneurs focused on the mobile ecosystem. Some of the questions and answers that came up may be of interest to my entrepreneur friends so I reproduce what I thought were the highlights of the discussion here. The GSMA host who moderated the event (his name I now forget) did a decent job of getting a conversation going.
[Note: These notes are heavily paraphrased, and quotes may not be attributed accurately. More pictures below.]
The panelists were:
- David Weiden of Khosla Ventures
- Matt Murphy of Kleiner Perkins Caufield & Byers (KPCB) where he manages the iFund, a joint initiative with Apple
- Martin Gibson of Accel Partners, and
- Roberto Bonanzinga of Balderton Capital (formerly Benchmark Capital in Europe)
Q. The world is moving towards apps and legions of developers are clamoring for our attention. How do apps get noticed?
Matt: Clearly Apple and Google do a good job promoting applications on their marketplaces, but operators can also help app developers get noticed. Getting promoted there is not easy but we also have ad networks now promoting apps, so there is always that option.
Q. How are location-based services working?
Roberto: Location based services have been spoken about for many years but we can now see them working at least in two dimensions. The “checking in” paradigm is working well for so many companies and they are now able to monetize location. Another that is beginning to look up is the tie-in to location that “augmented reality” applications offer.
Q. What is going on with mobile payments and mobile wallets?
David: Buying goods consumed on the phone is in place already. But as transactions move to being more off the phone, operators will likely get left out of this. It is already visible with folks like Visa demonstrating NFC payments here at the show which runs around the operator completely.
Matt: A fight over the secure element in NFC chips will likely stifle innovation. I prefer iPhone-like integration of payments into the phone; the iPhone app market gets 7x the conversion of Android from free to paid apps.
Others: Mobile payments are finally beginning to take root and more so in the developing markets where models like mPesa are working well.
Q. How do we entrepreneurs and start-ups work with operators?
Roberto: Operators need to make it easier for us to work with them. Yes, we need technical APIs into their systems, but we also need an “organizational API” which will allow us to work with them for mutual benefit.
Q. Is Machine-to-Machine (M2M) communication going to be big?
David: The idea of machine to machine communication sounds cool but there are still too many unknowns. Smartgrid is cool now (where machines communicate their power needs to the grid and the grid controls appliances and hence consumption directly) but how much value is it going to create is unknown. What I like to see is the use of M2M to augment our current systems. For example, mHealth could see more penetration of iPads for point of care applications. Similarly a device called Square makes iPads behave like Point of Sale machines. I do think there are M2M opportunities in payments and object tracking.
Martin: I agree with David that there are too many unknowns but for a startup “fail fast” is important (i.e. experiment with business models but abandon those that do not work very quickly). This will help us overcome the uncertainty. And yes Enterprises are buying into iPad in a big way and using it in all kinds of applications we could not have imagined when the device was launched.
Q. What about Google and Apple? These are two companies that are new to the mobile space and are now dominating it. Ho w can/will operators respond?
David: Operators can’t really compete except perhaps payments.
Roberto: The largest social network in the recent past was Vodafone but they lost control over the address book. And now others are building very cool applications centered on the address book.
Q. Is Mobile Advertising working?
Matt: eCPMs are still low but we are now getting much better at targeting for mobile ads which should improve yields
Roberto: Mobile ads need to use mobility features like context, location, history, etc. else they will not be effective.
David: Finally mobile advertising make sense now when video is possible. How much can you convey in text messages or display ads?
Q. How can operators be more than the bit pipe?
(I was surprised that we could not get any good answers from the panel on this one).
Q. How about Television?
Although everybody has been forecasting the death of TV for years now, TV is surprisingly still around, and we are watching many more hours of it than we did ten years ago. How we consume it has surely changed: in addition to broadcast, satellite and cable, services like Hulu and Netflix are a big part of our lives. So consumption of TV on mobile is a phenomenon likely to grow. We already see that cable TV is being delivered to iPads. It is important to remember that “Cable” is based on content and less on access. So the core business of Comcast and Time Warner may not change much regardless of where the content gets delivered.
The forum ended with a networking event that capped off a great day of discussions held under the impressive dome of the Palau Nacional de Montjuic.