notes: Chi-Hua Chien (Kleiner Perkins Caufiled & Byers) Keynote @ iphonedevcamp ’09

Chi-Hua Chien (Kleiner Perkins Caufiled & Byers) Keynote @ iphonedevcamp ‘09
Chi-Hua Chien (Kleiner Perkins Caufiled & Byers) Keynote @ iphonedevcamp ‘09

iphonedevcamp 09 friday keynote intro
– BT is the music guest
— did the Monster soundtrack.
— He’s a legend in the electronic scene.
— He has an app (“sonify”) in the appstore.  It performs a stutter edit when shaken

Chi-Hua Chien (Kleiner Perkins Caufiled & Byers) Keynote
– $100M ifund
– KPCB runs it
– # users of mobile internet is 4x desktop users, so it’s a huge opportunity
– how did the iphone change things?
— high speed internest
— consumer-oriented biz behind it
— appstore
— unified platform
– how is the fund doing?
— iphone sales dwarf ipod sales
— news, games, music usage on iphone far exceeds that on desktops
— 1.5B downloads from appstore in 165 days
— 4000 proposals reviewed
— 250 companies met
— actively engaged w/ 5 companes
— $45M deployed; will probably exceed $100M cap
— ifund companies: pelago, gogii, icontrol, ngmoco, booyah, mobshop, +1 unannounced
– ideas to consider
— intro
— #1 app in appstore (100k downloads/day): “do not push the red button”.  Does nothing!
— current top apps are a bit disappointing, non-innovative
— general thoughts
— innovation is key
— small, hacky apps are not long-term
— $0.06 ecp currently for ad space on apps
— categories
— mobile commerce
—- hypothesis: will be 3-4x size of commerce on internet ($100B), ie close to $1T
—- not too long ago, we were willing to pay $1 for info on 411
—- phones are great for spontaneous purchases
—- what will be the amazon, google of the mobile world
— realtime everywhere & anywhere
—- the internet was a really good newspaper; after you walk away from the computer, the internet is over.
—- the mobile internet knows a lot more about you
—- the mobile internet is always on
— local search
—- local search is completely different from desktop search, ie social, geo are bigger factors
— healthcare
—- mobile device can transmit monitoring data from embedded device
—- m. device can also analyze data
—- us gov is going to spend a lot to digitize med. data
— augmented reality
—- mobile device overlays data on top of real world
— real-world gaming
—- online games have spent a lot to build massive virtual worlds.  what if the planet was the world you played in?  what would ou play?
— QA
— size of funding & size of teams?
—- pelago $18M, 3 ppl
—- gogii $25M(?), 3
—- ngmoco $15M, 3 ppl
—- booyah $5M, 3 ppl
—- mobshop $5M, 1 guy, worked out of KPCB
—- icontrol 25-30 ppl
— min size of team?
—- 1 person
— can u form a company w/ 1 person?
—- yes, the laywers can work that out
— how can a vc firm, fund these companies, given the “capriciousness” of the apple review process?
—- KPCB has a very good relationship w/ apple
—- don’t try to launch a mobile operating sys.
— eductaional apps?
—- mobie is a componenet of ed
—- huge market
— top 5 things that matter when selecting a company to fund?
—- market, team (do you know what you’re doing), tech (is it defensible), prod (compelling?), biz. model (how are you going to make money)
— 4k proposals, $100M avail, are we on track?
—- ballpark, this is a really fast pace
—- KP has 3 ractices: life, info, green
—- 10k biz plans fund 15 comapnies/year
— signal to noise?
—- comperable to other biz areas
—- 300 in 1st 24/hrs
—- former web host has published early proposals
— level of detail in projections?
—- google’s orig. biz plan didn’t account for $1B in first years
—- no way to get it right
—- most important is how you think about it
— do you encourage fin. projections? yes
— preferred method of receiving proposals? email
— do you need a full biz plan?
—- 35 pages used to be the norm
—- now a deck that covers the 5 main areas is sufficient
— given current apps are disapponting, how could apple improve this?
—- apple selects apps that push the platform
—- fb app store was a freeforall
—- all the great apps we could have built around fb never happened because fb had no editorial
—- we’re going thru a market education process
—- the media hasn’t given enough notice to apps that are changing the world
— are these slides avail somewhere?
—- they’ll be on the ipdc website
— how important are barriers to entry?  how many have patents?
—- very imp., and almost all have patents
—- very difficult tech. is more imp. than patents
— hardware, software, accessories?
—- hardware takes a lot of capital, so it’s noty a vc-backed
//who’s bored?  ok, i’ll take 2 more
— to what extent has the pace of dev. in the iphone space affected KP biz. practice?
—- they impl. salesforce behind the site to hadnle the scale of submissions
—- this is still a very personal, high-touch biz
— I have been awarded a project (online sales to iphone), can we get funding?
—- no, KP is not investing in services
—- KP is looking for ppl developing IP
— what’s the dominant revenue model?
—- user-purchase, either virtual goods or real
—- thru apple’s payments platform
— are there tools deleopers can use to promote beyond the appstore, ie how to promote?
—- mobclix, adworld, tapjoy, etc run ad campaigns outside appstore
—- apple has sold 45M iphones/ipod touch, vs billions of handhelds sold overall
— make a lot from a few users, or a little from a lot?
—- depends on market: medical apps cost a lot; tons of free apps that are ad supported.
— would it help or hinder to have multiple disparate projects?
—- focus is best
—- pick the best one
— any segmentation among the funded projects?
—- not at the outset, but now we can see some in the data
—- gogii is loved by teens because their parents won’t get them a texting plan
— iterative dev?
—- yes, the app store looks more like internet dev, than packaged goods
— size of exit from 5M invested?
—- material, pub. companies, are coming.  this is the goal of KP