Pocket Watch - Latest Comments

Re: Early Stage Venture Investing — A New Kind of Philanthropy?

everploeg — Mon, 12 Nov 2012 17:29:37 -0000

After publishing this post, I spoke with Herb Fockler and Eric Little, who produce some of the WSGR Entrepreneur Report articles and data.

Herb and Eric identified what is probably the weakest part of my argument: there may not have been enough time elapsed to see the increased value of these capital efficient companies reflected in Series B prices. It may take longer than used to be the case for venture backed companies to need to raise that Series B financing, because of capital efficiency itself. I agree there is a chance that this is going on. It will be very interesting to see what happens with Series B Pre-Money valuations in the coming quarters.

Re: Entrepreneurs Now Can Build What Customers Want (Rather than What VCs Want)

everploeg — Tue, 06 Mar 2012 16:26:45 -0000

Tom, you are wise to be jaded. A few thoughts.

First, it's been over 20 months since I wrote this post, and the blessings of Capital Efficiency increasingly allow venture folks to wait for the risk-reducer/price-increaser of waiting real world traction before putting their money at risk.

Second, it depends on the sector and stage the venture investor is operating in. A super angel/micro VC operating in the mobile/web sector may indeed be willing to take that "on-paper" risk if the price is low enough. Unfortunately, they see some adverse selection in that process -- the more credible teams/ideas are the ones most likely able to cobble together the resources to show at least some real world traction before seeking outside money. Without a good strategy for addressing this, that investor is much safer staying with the herd, waiting for real traction before investing, and writing blog posts extolling the virtues of waiting for traction.

And, of course, if you're talking about building a solar array in the desert, or electric cars, or any other big capital sector, some venture investor is going to have to take that "on paper" risk.

Good luck, and remember the famously short Winston Churchill commencement speech: "Never give in. Never give in. Never, never, never, never--in nothing, great or small, large or petty--never give in, except to convictions of honor and good sense. Never yield to force. Never yield to the apparently overwhelming might of the enemy."

Re: Entrepreneurs Now Can Build What Customers Want (Rather than What VCs Want)

Tom Gabriel — Tue, 06 Mar 2012 15:48:46 -0000

Hi Eric,

You wrote "Pragmatic Entrepreneurs want to know what the VCs want to fund, because it is much easier to sell a VC on an idea/category/business model that they have already decided they like".

Really? Are there still VCs out there that actually consider the idea/business model? I've been reading VC blogs for a while now and most of what I hear is "traction", which means VC don't take risks anymore on "on-paper" ventures; they go for ventures that are already functioning.

Thanks for your comments
Tom

Re: Apple’s New Goliath Status

devis mutuelle — Tue, 21 Jun 2011 12:46:06 -0000

Thanks for this post

Re: What Choice did Nokia Have?

everploeg — Thu, 24 Feb 2011 09:25:26 -0000

Peter, excellent question. I thought about including RIM as sort of a fourth option for Nokia, but it seemed like a bit of a stretch. What Nokia needed was a legitimate mobile OS, with an app ecosystem around it. I'm a huge fan of RIM, but their strength lies in end-to-end support for the key professional mobile applications: email, calendar, & contacts. So, RIM brings a mobile OS that is only OK, and an app store that is focused on those apps and users who are in that professional community. RIM's professional focused strengths doesn't seem to line up with Nokia's consumer-centric brand and strategy to-date.

On an ongoing basis, I think RIM should focus on it's very strong position in the professional segment. Despite almost complete neglect on RIM's part, BlackBerry App World is the number two dollar revenue producing app store in the world. It would be great if the guys in Waterloo could shift a bit of their attention away from yesterday's model of controlled releases of packaged software sold on a perpetual license basis, and focus a bit more on tomorrow's model of enabling third-parties reasonably unfettered access to test what things the end-customers really want. RIM should really be lining up support for those few apps that make it to the top of the key App World categories.

Re: What Choice did Nokia Have?

Peter Sankauskas — Wed, 23 Feb 2011 20:02:23 -0000

Hi Eric,

This is a fantastic post, and I totally agree that Nokia & Microsoft will not be able to make this a 3 horse race given that HTC, LG and Samsung have a huge head start. Nokia cannot move fast enough, and I am yet to see anything change that.

I would like to know how RIM are going to compete as well - are they the 4th horse?

Re: What Choice did Nokia Have?

everploeg — Mon, 21 Feb 2011 17:51:49 -0000

I completely agree that operators prefer diversity. And, in certain geographies, the operators exert a lot more influence over the consumer's handset "selection" process than we see here in the US. I also agree that Nokia has better relationships with operators than does Google, but I don't think I'd say that the operators prefer Microsoft to Google.

In the fullness of time, the end consumer demand will pull through the operators, and people will eventually get what they want. In markets where the operators exert the most influence, like most of the European countries, this means iPhone and Android adoption will lag the US by several years. We might even see islands of Nokia WP7 popularity that extend for years -- like the way the Amiga computer was popular in Germany in the 1990s.

Re: What Choice did Nokia Have?

Anonymous — Mon, 21 Feb 2011 16:54:40 -0000

"...why take such a huge gamble, when Android is already the leading horse, and one could argue that Nokia’s ability to make money per handset is at least as good with Android?"

From the operator perspective, I believe there are a number of reasons to support WP7. Operators strongly prefer diversity in platforms and are concerned about any single platform such as Android crowding out alternatives. In contrast to Google, Nokia enjoys better relations with operators and would likely consider their objectives, perhaps in return for co-marketing and distribution incentives for Nokia WP7 devices.

Regardless of the choices available, I agree that Nokia is now on an almost-impossible-to-win path, however.

Re: Apple’s New Goliath Status

mutuelle fonctionnaire — Mon, 24 Jan 2011 14:01:05 -0000

Seriously awesome, thanks!

Re: Android Advances on iPhone

everploeg — Sat, 09 Oct 2010 17:57:51 -0000

Android and iPhone each have their pluses and minuses. But, the two key drivers for Android's likely long-run domination of iPhone are:
(1) the fact that Apple can only release a very few (one, so far) new device per year, whereas there are multiple handset vendors releasing handfuls of new Android devices, so there is more SKUs on the Android side; and
(2) unlike the Computer industry, the handset industry has the mobile operators as an important part of the distribution equation. In most geographies, the standard practice is for the mobile operators to buy the handsets, and then re-sell them at a loss, in conjunction with a profitable one or two year long service contract. Due to the mobile operators' general desire to differentiate themselves from one another, they'd prefer not to all sell the same phone, so all the different Android form factors are much more appealing to them than single (or, limited range) iPhone.

Re: Android Advances on iPhone

Rita_morais — Sat, 09 Oct 2010 15:07:38 -0000

Why is this happening? What are the advantages of Android over iPhone?

Re: A Word of Advice for Stephen Elop: “Android”

everploeg — Tue, 14 Sep 2010 11:00:17 -0000

In re-reading your comment, the only point I didn't explicitly address was your point about "large volumes required to sustain a company the size of Nokia". I can't really see any virtue in large volumes. Apple's iPhone business is more profitable than Nokia's handset business, despite much lower volumes.

Maybe I mis-understood a point you were making.

Re: A Word of Advice for Stephen Elop: “Android”

andref1989 — Tue, 14 Sep 2010 09:13:09 -0000

Obviously missing my point

Re: A Word of Advice for Stephen Elop: “Android”

Eric Ver Ploeg — Tue, 14 Sep 2010 02:02:17 -0000

Today's "high end" is tomorrow's "mid-range", and soon after that "entry priced". Even today, Android runs on some mid-range hardware platforms.

Your counter-argument is the one that senior Nokia execs have been using for the last few years. It is rational in that Brand has been the basis by which Nokia has maintained phenomenally good margins in the past. While the Android path may not allow Nokia to maintain their historically high gross margins, it could give them a shot at maintaining their position as the number one player. After all, Nokia still has tremendous competitive advantage in industrial design, and low cost manufacturing.

I completely agree that people don't pick a Samsung because it is a Samsung (nor any other Brand, including Nokia). That is exactly my point about the basis of competition having changed. HTC has thrived by recognizing that fact; Nokia is struggling because they appear to be clinging to the hope that they can somehow hold back the tide back and have people buy a Nokia primarily because it is a Nokia.

Re: A Word of Advice for Stephen Elop: “Android”

andref1989 — Tue, 14 Sep 2010 01:24:53 -0000

Android only really works well in the high end. High end prevents large enough volumes to sustain a company the size of Nokia and will leave a lot of consumers unhappy.

If you want to alienate and upset your userbase in addition to practically becoming an also-ran as opposed to a competitor then sure, go ahead and pick up Android.

How many people would pick up a Samsung for being a Samsung ? Or a motorola for it being a Motorola. Brand identity is important and given the recent comments by Google et al about reducing the customization that OEM's will be doing to their platform it makes it VERY hard to differentiate.

But seeing as how your idea is the best, that's what Nokia should do.
/s

Re: A Word of Advice for Stephen Elop: “Android”

Eric Ver Ploeg — Tue, 14 Sep 2010 01:20:47 -0000

The whole point of the original post is that the basis of competition has changed. Android and iPhone are winning based on a delivering what customers want, not what us engineering wonks want to build, or think are "better". The sooner the folks at Nokia can get their heads wrapped around that fact, the better.

I would genuinely be interested in hearing you your articulation of Nokia's better "current strategy".

Re: A Word of Advice for Stephen Elop: “Android”

andref1989 — Tue, 14 Sep 2010 00:52:11 -0000

You really shud be up for that EVP of Mobile Solutions job.

Re: A Word of Advice for Stephen Elop: “Android”

andref1989 — Tue, 14 Sep 2010 00:46:11 -0000

And you think picking up a half assed, basterdized linux/java amalgamation out of the bloody blue with no infrastructure in place to support this project in addition to the time and energy it would take to retool their entire software engineering segment to support their project is a better one?

This of course ignoring the money they've already poured into making their offerings open source?

Yea bloody great idea

Re: A Word of Advice for Stephen Elop: “Android”

Eric Ver Ploeg — Tue, 14 Sep 2010 00:39:43 -0000

When you say that moving to Android is "no way shape or form a better option than their current strategy." What strategy would that current strategy be? Continuing to flog Symbian, which is essentially a Nokia-only OS that is fine for low end devices, but not smartphones? Linking their embryonic Maemo OS with Intel's embryonic OS effort to produce a Frankenstein OS that is woefully late to market? Am I missing something here?

I feel like I am not the only one missing out on understanding how dandy the "current strategy" is, since the Nokia Board of Directors felt they had to fire their CEO and head of smartphones in the last week. Maybe you could share your analysis, and enlighten us all.

Re: A Word of Advice for Stephen Elop: “Android”

andref1989 — Mon, 13 Sep 2010 23:48:39 -0000

Lol, laughable analysis really. I'm so tired of hearing the same washed-up terrible argument that I can't even be bothered to retort.

The idea in and of itself is stupid, a cop-out and in no way shape or form a better option than their current strategy. Now run along.

Re: A Word of Advice for Stephen Elop: “Android”

Mike — Sun, 12 Sep 2010 02:51:53 -0000

So true, Nokia has needed to make this move in handsets for a while, else we'll hear the last of the infamous Nokia ring tone echoing from pockets and purses....

Re: Android Catching iPhone, April 2010

everploeg — Mon, 31 May 2010 09:45:05 -0000

@raduprisacaru. Thanks for your kind words. Apologies if the subscription functionality isn't working--I just moved the site to a new (better, faster) hosting provider.

You should be able to mouse over the "RSS feed" icon near the upper right of each page to see all the subscription options. I just tested it, and it seems to work.

Re: AT&T’s “G” Definition Woes

raduprisacaru — Mon, 31 May 2010 05:31:22 -0000

Super-Duper site! I am loving it!! Will come back again – taking you feeds also, Thanks.

Re: Android Catching iPhone, April 2010

raduprisacaru — Mon, 31 May 2010 05:30:56 -0000

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Re: Apple’s New Goliath Status

Eric Ver Ploeg — Thu, 29 Apr 2010 17:52:45 -0000

Awesome Jon Stewart bit! That is hilarious.

For the record, I'd like to point out that my blog post pre-dates Jon's awesome bit by a handful of hours. I'm not saying that JON STEWART GOT THE IDEA FOR THE BIT FROM MY BLOG POST.