Last week, a Forbes article made the news covering Ericsson’s prediction that within five years, there will be 5.9 billion smartphones. That is a truly incredible number, considering there were zero smartphones, to speak of, 8 years ago. But it got me thinking that there is an extraordinary opportunity for the next six billion, and the more I start to think about it, the more excited I am to be an investor. The information economy […]
This is becoming something of a trend for me, which I take to be a good sign for $TWTR: I posted a provocation that I had discussed with someone offline — I don’t remember where — and waited to see what conversation it would spark. I said: Posit: there’s an odd tension whereby networks succeed at scale, but communities break at scale. — Kanyi Maqubela (@km) April 29, 2014 The thinking behind this provocation came […]
“Divestment” campaigns are not new. As a South African, born during the heat of Apartheid, that word has been in my vocabulary for a long time. But for those who are unfamiliar: divestment is, most simply, the opposite of investment. But used colloquially, it refers to political campaigns that encourage financial backers to pull out investments in a certain type of business, because of said business’ ties to political, moral, or social issues. From the […]
It’s a buzzword that every venture capitalist and many entrepreneurs use. But what, really, does it mean? When it was first described to me, my understanding of the network effect was simply that it was like the telephone — the more people have phones, the more utility of any single telephone in the system. This is a self-reinforcing mechanism that makes for great defensibility in businesses. As I wrote about a while back, there is […]
Over the weekend I had an interesting debate with some friends that played out over Twitter, regarding a provocation I threw out there (with this goal in mind!) It’s true: we will probably look back on ‘the firm’ as a weird artifact of the 20th C.; a temporary result of the 2nd Industrial Revolution. — Kanyi Maqubela (@km) April 25, 2014 //platform.twitter.com/widgets.js The conversation this spurred was fascinating. In my view, hat tip R.H. Coase*, […]
I’ve heard of a lot of venture firms who do European distribution waterfalls instead of American-distribution waterfalls. I’m not sure where the naming convention came from, but for a quick primer on the difference between the two: – In a European distribution waterfall, the General Partnership (GP) has to pay back all of the principal drawn down from the Limited Partners (LPs) first, and then they earn carried interest on the subsequent profits, usually of around […]
If, as my fellow investor and friend Albert suggests, speculative investing becomes more common in time, as the “money is top-heavy” edict becomes more pronounced, there should then be more high-risk capital available to fund startups, and as a result, the startup funnel will widen. And in addition, of course, it’s easier than ever to start a company and start to grow it, and the opportunity is attractive to an increasingly global audience of hackers […]
As the war for who can do faster ACH, who can hold more money in escrow, and who can transact internationally with less fee rages on, I’m struck that it feels a bit like the wearables (and IoT) sensor race of a few years back. The sensors themselves, from COGS to who had what features, always felt like a race to the bottom, with margin pressure from both the manufacturers and the competitors pushing the […]
I read this Business Insider piece over the weekend titled: “Here’s Why It’s Ridiculous To Say The Fed Is Blowing A Tech Bubble” In the piece, the author points to PriceWaterhouseCooper’s report tracking VC funding, by sector, over the last 10 years. He points out that while software has seen a precipitous spike in the last few years, healthcare, financial services, biotech have all stayed relatively steady in terms of attracting funding. His greater point, […]
When I read Fred Wilson’s very interesting blog post “The Bubble Question“ the conclusion I immediately drew was so this is what inequality looks like. Why did I think that? As Fred indicated in his post, after the crash of 2008, financial policy makers dropped interest rates and made cash cheap, in hopes of stimulating the economy through investment and small business growth. As he describes, the results of that approach were somewhat mixed. I […]
Musings 