Chris Dixon, one of my favorite investors, entrepreneurs, and bloggers, stopped by BloomReach’s office in Mountain View last week to talk to the company about VC, consumer, and general internet trends. Some of the highlights I took away are below:
Mobile/Tablet: Chris observed that as we all know, mobile is a paradigm shift and represents the emergence of a new platform. But he observed that it’s still early days and in particular on tablet. He noted that he can only think of a handful of startups that are focused specifically on “tablet-first”, suggesting an opportunity there.
He also pointed out (as we all know as well of course) that tablets are replacing PCs. But interestingly he noted that data seems to show that people are now using tablets as a replacement for PCs for casual use (e.g. lying on the couch at night and surfing / writing email, etc), but that PCs are likely to stay relevant for “longer-term” or “professional” projects (e.g., you’ll drag out your big PC for a term paper, or for design work, etc).
Employees “50-500”: I asked Chris a question about what it will take to get the NYC tech community to reach a tipping point, and whether the key missing ingredient might be the emergence of a startup that grows into a full-blown public company (as opposed to one that sells via M&A, as MakerBot and Tumblr both recently did).
Chris pointed out that recruiting engineers is no harder or easier in NYC vs. Silicon Valley, arguing that basically young developers just want to live in fun places like NYC or SF. But he noted that part of what makes Silicon Valley unique is the ability for growth-stage startups to go out and find and recruit people that have done X before (BD, product, engineering, finance, etc), instead of the more common experience in NYC of hoping people can scale up and “learn on the job”. He suggested that this is one stumbling block in NYC — the ability to recruit experienced growth-stage operators. But he also noted that this is changing as more large-scale exits happen (e.g. MakerBot for $400mm, Tumblr for $1.1 billion, etc).
Is the “golden age” of internet startups over? Chris pointed out that the move to mobile and apps has made customer acquisition particularly difficult, noting how you basically need to try to game the App Store to get noticed. He contrasted this with the mid-2000s, during which it was very reasonable to pitch VCs that your differentiation strategy would be on the customer acquisition side given the relatively meritocratic nature of Google’s organic search (i.e., “we’ll do SEO better than everyone else”). He pointed to sites like Yelp and TripAdvisor as winners at this during that time frame.
This isn’t a new observation of course, but it just reiterates how this is a growing problem to be solved in the mobile era, and how mobile marketing itself is still in early days.
Bitcoin - “store of value” vs. “means of payment”: Chris noted that he’s active in the Bitcoin space, but took care to point out that there are a couple ways to think about Bitcoin. One is as a “store of value”, which he doesn’t think is where its value lies (i.e. this is the argument that “gold bugs” or people that think the Fed is going to trigger runaway inflation rely on).
Instead, Chris argued that what actually does make Bitcoin valuable is as a “means of payment”. He noted that people actually in the trenches in the payments space see this value, because the nature of Bitcoin (as I understand it) is that it’s 100% secure from a fraud perspective (i.e. there’s zero doubt as to whether the person you’re transacting with actually has the ability to pay). He observed that even aside from the general things we don’t like about credit card payments (namely fees), it’s sort of strange that we’re so comfortable putting our credit card information online when we buy things, and Bitcoin provides a means to avoid any risk of theft or loss of data in that regard.
Drones are just bigger smartphones: Chris noted that he’s an investor in the commercial drone space, and pointed out that effectively drones are just larger versions of smartphones — GPS, accelerometer, camera, sensor, IP address, etc.
He noted that two areas of particularly interesting application in the drone space are agriculture and building / infrastructure inspection.
I agree that these are two super-interesting areas in which drones can be valuable — I’m particularly interested in all the ways in which drones and similar “internet of things” products can make agriculture better. I’ve seen a few other startups attacking the ag space and think it’s so ripe for disruption/improvement from a hardware/internet perspective.
Don’t sell through the channel too early. Chris observed that one mistake he sometimes sees is teams trying to sell via partnerships/channel sales too soon — important to focus on successfully closing direct sales first before you try to scale via the channel.
Lots of other good stuff as well, including a discussion of Andreessen Horowitz’s unique structure as an “agency” model. But these were some of the highlights. Hope to see him speak again soon!