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Oatv presentation(1 14-06)edit

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Bryce Roberts

The document discusses OATV's investment opportunity in reviewing their investment thesis of watching "Alpha Geeks" to identify emerging technology trends. It provides examples of past trends identified, related investment opportunities, and companies that benefited from those trends. The document concludes with requesting feedback and discussing next steps.

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Oatv presentation(1 14-06)edit
Proposed Agenda ? Review OATV investment opportunity ? Update on fundraising and ?rst close ? Explore OATV¡¯s investment thesis: ¡°Watching the Alpha Geeks¡± ? Feedback/Next Steps 2 2
Investment Opportunity Review ? Seed investments in the $500K +/- range ? Participate in Series A round with top-tier venture funds (an additional $1-3M) or sell to strategic buyer ? Total investment: $1-4M ? Maintain a board seat ? Leverage O¡¯Reilly to validate and promote start- up technologies through books, blogs, online sites, and conferences ? Historical performance: 41% annualized IRR 3 3
Investment Thesis: ¡°Watching the Alpha Geeks¡± ? O¡¯Reilly identi?es emerging technology trends by watching the cutting edge individuals ? An accepted marketing discipline, known in other industries as ¡°Coolhunting¡± ¨C Fashion, Sports, Toys, Video Games ¨C ¡°Who is the coolest kid you know?¡± ? Essence of Alpha Geek watching or Coolhunting is pattern recognition 5 5
Pattern Recognition ? Some obvious patterns: Moore¡¯s Law; The Dot Com Boom and Bust; The World is Flat ? Other patterns are the product of fragile intuition that seemingly unrelated items are deeply connected ? OATV pattern recognition methodology: ¨C Identify the Alpha Geeks and watch what they¡¯re doing ¨C Integrate seemingly unrelated signals that indicate broader technology trends 6 6
Identifying the Alpha Geeks ? Ask network of O¡¯Reilly authors, advisors and entrepreneurs: ¡°Who¡¯s doing the most interesting work in your ?eld?¡± ¨C FOO Camp ¨C Conferences ¨C Books ? Triangulation as a ?lter: when someone shows up in 2-3 di!erent contexts, pay attention ¨C Joshua Schachter: blogging, mapping and social software ? Find where they collaborate ¨C P2P in 2001: decentralization@yahoo.com 7 7
How We Find Signals Showing a New Technology Trend ? Non-Standard Data Sources ¨C If you want accurate non-consensus forecasts, it helps to have data sources not used by everyone else ? Examples: ¨C BookScan- measure book sales (Amarank Tool) ¨C Netscan¨C ask the computers rather than the users ¨C Google AdWord Technology- measure cost per click ¨C Simply Hired- millions of technology job postings ¨C Del.icio.us- tag volume ¨C Yahoo Search Terms- popular tech terms 8 8
Use Alpha Geeks and Signals to Identity Long Term Trends & Investment Opportunities ? If a trend takes hold, what primary and secondary companies bene?t? Past examples: ¨C The Internet ? eBay, Sun, Cisco, Oracle ¨C Open Source ? Red Hat, MySQL, Google, Yahoo! ¨C Screen scraping ? IBM, Microsoft, Amazon, Flickr 9 9
Examples of Trends We¡¯ve Identi?ed and Related Investment Opportunities 10
Data is the Next ¡°Intel Inside¡± ? Technology trend: Applications are increasingly data driven; the technology or even look and feel of the application is easily copied ? Investment thesis: Companies that own unique, hard to recreate sources of data may lead to an Intel-like single source of competitive advantage ? Example: Navteq 11 11
Data is the Next ¡°Intel Inside¡± 12 12
Designed for Participation ? Technology trend: Successful software projects are architected to be used easily as a component of a larger system ? Investment thesis: Software companies that keep their product modular, well documented and under a license that doesn¡¯t hinder recombination will attract more users ? Example: Amazon.com 13 13
Designed for Participation 14 14
Participation by Default ? Technology trend: Only a small percentage of Internet users will go to the trouble of adding value to a web site ? Investment thesis: Companies that have services which make participation the default choice will grow faster ? Example: Flickr 15 15
Participation by Default 16 16
Software as a Service (the perpetual beta) ? Technology trend: When devices and programs are connected to the Internet, applications are no longer software artifacts: they¡¯re ongoing services ? Investment thesis: Companies that don¡¯t package up new features into monolithic releases but rather engage users as real-time testers satisfy their customers¡¯ needs and requirements ? Example: Google 17 17
Software as a Service 18 18
The Long Tail ? Technology trend: Many of the limiting factors from the physical world are absent on the Internet. ? Investment thesis: Companies can use the power of the computer to monetize niches formerly too small to be commercial. ? Example: MySpace 19 19
The Long Tail 20 20
Software Above the Level of a Single Device ? Technology trend: The PC is no longer the only access point for networked applications ? Investment thesis: Companies should design their applications to integrate services and share data across bound and mobile devices, Internet servers and services ? Example: Apple 21 21
Software Above the Level of a Single Device 22 22
Remixing of Existing Apps and Technologies ? Technology trend: When content is digital, it lends itself to being broken down and remixed ? Investment thesis: Companies that build their business model from the smallest atomic units will be more competitive ? Example: Salesforce.com 23 23
Remixing of Existing Apps and Technologies 24 24
OATV Investment Thesis Watch Alpha Geeks Identify Signals Indicating New Trend Invest in Companies Leveraging Trend 25 25
Feedback and Next Steps 26

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Oatv presentation(1 14-06)edit

  • 2. Proposed Agenda ? Review OATV investment opportunity ? Update on fundraising and ?rst close ? Explore OATV¡¯s investment thesis: ¡°Watching the Alpha Geeks¡± ? Feedback/Next Steps 2 2
  • 3. Investment Opportunity Review ? Seed investments in the $500K +/- range ? Participate in Series A round with top-tier venture funds (an additional $1-3M) or sell to strategic buyer ? Total investment: $1-4M ? Maintain a board seat ? Leverage O¡¯Reilly to validate and promote start- up technologies through books, blogs, online sites, and conferences ? Historical performance: 41% annualized IRR 3 3
  • 4. Investment Thesis: ¡°Watching the Alpha Geeks¡± ? O¡¯Reilly identi?es emerging technology trends by watching the cutting edge individuals ? An accepted marketing discipline, known in other industries as ¡°Coolhunting¡± ¨C Fashion, Sports, Toys, Video Games ¨C ¡°Who is the coolest kid you know?¡± ? Essence of Alpha Geek watching or Coolhunting is pattern recognition 5 5
  • 5. Pattern Recognition ? Some obvious patterns: Moore¡¯s Law; The Dot Com Boom and Bust; The World is Flat ? Other patterns are the product of fragile intuition that seemingly unrelated items are deeply connected ? OATV pattern recognition methodology: ¨C Identify the Alpha Geeks and watch what they¡¯re doing ¨C Integrate seemingly unrelated signals that indicate broader technology trends 6 6
  • 6. Identifying the Alpha Geeks ? Ask network of O¡¯Reilly authors, advisors and entrepreneurs: ¡°Who¡¯s doing the most interesting work in your ?eld?¡± ¨C FOO Camp ¨C Conferences ¨C Books ? Triangulation as a ?lter: when someone shows up in 2-3 di!erent contexts, pay attention ¨C Joshua Schachter: blogging, mapping and social software ? Find where they collaborate ¨C P2P in 2001: decentralization@yahoo.com 7 7
  • 7. How We Find Signals Showing a New Technology Trend ? Non-Standard Data Sources ¨C If you want accurate non-consensus forecasts, it helps to have data sources not used by everyone else ? Examples: ¨C BookScan- measure book sales (Amarank Tool) ¨C Netscan¨C ask the computers rather than the users ¨C Google AdWord Technology- measure cost per click ¨C Simply Hired- millions of technology job postings ¨C Del.icio.us- tag volume ¨C Yahoo Search Terms- popular tech terms 8 8
  • 8. Use Alpha Geeks and Signals to Identity Long Term Trends & Investment Opportunities ? If a trend takes hold, what primary and secondary companies bene?t? Past examples: ¨C The Internet ? eBay, Sun, Cisco, Oracle ¨C Open Source ? Red Hat, MySQL, Google, Yahoo! ¨C Screen scraping ? IBM, Microsoft, Amazon, Flickr 9 9
  • 9. Examples of Trends We¡¯ve Identi?ed and Related Investment Opportunities 10
  • 10. Data is the Next ¡°Intel Inside¡± ? Technology trend: Applications are increasingly data driven; the technology or even look and feel of the application is easily copied ? Investment thesis: Companies that own unique, hard to recreate sources of data may lead to an Intel-like single source of competitive advantage ? Example: Navteq 11 11
  • 11. Data is the Next ¡°Intel Inside¡± 12 12
  • 12. Designed for Participation ? Technology trend: Successful software projects are architected to be used easily as a component of a larger system ? Investment thesis: Software companies that keep their product modular, well documented and under a license that doesn¡¯t hinder recombination will attract more users ? Example: Amazon.com 13 13
  • 14. Participation by Default ? Technology trend: Only a small percentage of Internet users will go to the trouble of adding value to a web site ? Investment thesis: Companies that have services which make participation the default choice will grow faster ? Example: Flickr 15 15
  • 16. Software as a Service (the perpetual beta) ? Technology trend: When devices and programs are connected to the Internet, applications are no longer software artifacts: they¡¯re ongoing services ? Investment thesis: Companies that don¡¯t package up new features into monolithic releases but rather engage users as real-time testers satisfy their customers¡¯ needs and requirements ? Example: Google 17 17
  • 17. Software as a Service 18 18
  • 18. The Long Tail ? Technology trend: Many of the limiting factors from the physical world are absent on the Internet. ? Investment thesis: Companies can use the power of the computer to monetize niches formerly too small to be commercial. ? Example: MySpace 19 19
  • 19. The Long Tail 20 20
  • 20. Software Above the Level of a Single Device ? Technology trend: The PC is no longer the only access point for networked applications ? Investment thesis: Companies should design their applications to integrate services and share data across bound and mobile devices, Internet servers and services ? Example: Apple 21 21
  • 21. Software Above the Level of a Single Device 22 22
  • 22. Remixing of Existing Apps and Technologies ? Technology trend: When content is digital, it lends itself to being broken down and remixed ? Investment thesis: Companies that build their business model from the smallest atomic units will be more competitive ? Example: Salesforce.com 23 23
  • 23. Remixing of Existing Apps and Technologies 24 24
  • 24. OATV Investment Thesis Watch Alpha Geeks Identify Signals Indicating New Trend Invest in Companies Leveraging Trend 25 25
  • 25. Feedback and Next Steps 26