Mary Meeker's Internet Trends

I consider Mary Meeker's Internet Trends a must-follow report everytime she puts out an update. How smart it was for KPCB to hire her. She is world-class at research, and every technology entrepreneur and executive would be wise to religiously follow her reports.

Before she left Morgan Stanley for KPCB, I had the pleasure of having dinner with her and Morgan Stanley's CEO, James Gorman, a little over a year before our IPO at Bazaarvoice. It was an evening to remember - a live MBA case study, with James giving the insider's report of the financial crisis. Mary's perspective was fascinating too, not surprisingly.

Here is her latest update, presented on Dec. 3 at Stanford. There is too much to comment on here, and I recommend you study every slide. There are a thousand good business ideas in here for aspiring entrepreneurs that want to change the world.

Capital for your business = fuel for job growth

This is a cool study from Pepperdine on job growth for private-capital-backed companies vs. those that do not receive funding. Jobs and revenue grow much faster. I believe this is primarily due to a selection bias in the entrepreneur. Like I discussed in my post on Bootstrap or VC? before I started Bazaarvoice, the hat trick for entrepreneurs is to be capital efficient but also not starve their business of growth because they are trying to protect themselves from being diluted as a primary driver versus building their business for the benefit of all. In other words, the type of entrepreneur - and their ambition - makes a huge difference in the ultimate revenue and job growth that their business will experience. VCs obviously look for entrepreneurs that want to hit a home-run and in this way everyone's interests are aligned - as long as the entrepreneur can stomach some dilution for the greater good.

The results were even more dramatic for the 1,854 recipients of venture capital. During the five years after their financing event, these establishments:

  1. Generated an increase in revenue that was $24.7 million higher (846 percent more) than non-backed counterparts. This translated into a 36.4 percent compound annual growth rate versus a 6.9 percent rate for non-funded establishments.
  2. Created 127 more new jobs (608 percent higher) than non-backed establishments —a 22.4 percent compound annual growth rate versus a 4.5 percent rate for the control group.

Here is the full study.

A very bad trend for Microsoft

This just cannot be good for Microsoft. I don't see how this turns around. Windows 8 and the Surface are just not getting the traction expected to maintain their monopoly. For entrepreneurs, though, this creates a lot of opportunity. It also does for Apple, Amazon, and Google, of course.

One of my favorite books is The Innovator's Dilemma and here it is in action again. I consider this a must read for entrepreneurs. It will give you the confidence to go from a perspective of "that's already been done before" to "that's already been done before and can be disrupted because of the dependency on the old order" (Who Moved My Cheese?).

Here is the full article.