Just finished the first month back in the VC saddle at Greylock. After three and a half years away from the VC scene, I feel like I finally understand the description of “drinking from the firehose”. It’s amazing how much has changed in this short time.
To help get my footing, one of the first things I did when I got started was go through the top 100 US rankings in AppAnnie to see what I’d “missed” while I’d been heads down at Pinterest. I defined “missed” as independent companies that had their Series A from Jan 2012 to the present.
I counted seven companies that have managed to break through the top 100: Snapchat, Seriously, Ibotta, Draftkings, Dubsmash, Wish, and OfferUp.
To compare, I did the same analysis for when I joined Pinterest 3.5 years ago, and looked at companies that had raised a Series A since July 2008.
This turned out to be a longer list: Viddy, Instagram, Pinterest, Spotify, PopCap Games, Pocket (Readitlater), Shazam, Kik, TangoMe, Tumblr, Dropbox, and I think Voxer (the date of their Series A isn’t 100% clear).
Seven companies now vs 12 in 2012. Small sample size, so perhaps what’s more useful is the difference in the make-up. To do this, I broke the list into two groups: those going after minutes (often by converting offline minutes into online minutes), and those going after dollars:
No wonder things feel so different. Back in 2012, there were a lot more winners amongst the companies going after minutes. Now, there have been more recent successes focused on going after consumer dollars than minutes. Indeed, I’d be remiss if I didn’t mention that the two biggest winners of the past five years have both gone after consumer dollars: Uber and Airbnb.
A few hypotheses on why —
- FB/Google/Twitter/Apple are much stronger and more in control of their platforms. It’s not surprising that Viddy, Instagram, Pinterest, and Spotify were all beneficiaries of early FB Open Graph implementations.
- Because of #1, it’s useful if your unit economics means you can afford to pay for downloads.
- Hunter Walk reminded me that in a zero-sum world of only so many minutes in a day, blank spaces to absorb those minutes must come from cannibalizing other minutes, either from online or offline. When the smartphone was new, it was a lot easier to steal offline minutes and bring them online. Now, these opportunities are harder to find. Of course, there is a constant flow minutes from one app to the next, but FBs/YouTubes continue to increase their share of the ever expanding pool of smartphone minutes.
It’s exciting to see how this evolves — what experiences will break through to capture a large share of consumer minutes, and what new companies will figure out how to capture a large share of consumer dollars? Obviously, I’ll be keeping my eye out for both (and please contact me if you’re making it happen!).