Sitting here in limbo

We recently found a use for an old XP laptop. I took it out of the closet and began updating the OS, Browser(s),applications and utilities (AV). All went well till I looked for OS updates. 'Naturally' you can not install XP updates via Firefox or Chrome, so I dutifully went to the IE download site. At the site, I was exposed to MSFT's strong Silverlight push as it took a few minutes to find the link to only download IE8.

While IE8 was (is) downloading, I have updated:

Firefox
Chrome (new install)
AVG (new install)
Adobe reader update
Quicktime update

No wonder analysts are so deeply concerned that Yahoo has just 'sold' their most important infrastructure component, for zero cash upfront.

Note to MSFT....in a world where switching costs have dramatically been reduced, please be very careful about the migration path to Windows 7. I've been to the Apple store for purchases now three times in the past 6 months. You will note that entry level 15" Macbook is sold out....purely a reflection of the great Apple experience, coupled with a cavalier disregard for newly empowered users.

Please do better.

Steroids and Yahoo/MSFT

After nearly a full year of wrangling, Yahoo and MSFT have completed their search deal. With massive investments in R&D and marketing, and now the Yahoo deal secure, I was thinking about whether, after 7 frustrating years, MSFT is ready to really compete in the largest, and most pivotal Internet space.

Let me start with a bias...I think that the 'best' product, offering the most value, usually wins. Best, of course is an ambiguous definition. Nonetheless, as both services are 'free', cost is measured via opportunity cost. All things being equal, however, an incumbent market share leader usually beats competitors who offer only similar value. As in war, an invading force requires an overwhelming advantage to dislodge an opponent.

A common expression when trying to position a new product vs an entrenched competitor is to say 'gee, our product is like theirs, but on steroids'. Obviously, this is now a dated expression, taken from the days when steroids had a connotation of bringing speed, strength, virility, and other good stuff with no downside. But, the expression masks something, a lack of sustainable differentiation. If anything, merely an incremental advancement that does not stand the scrutiny of the market. I have a hard time recalling products 'on steroids' dislodging market leaders. It takes much more innovation, or fundamentally changing the value curve to do so. Google did it to Yahoo, and Yahoo did it to AOL. Curious, I wanted to do a quick test to see if Bing is bookmark worthy.

Let me share a totally random and singular (unscientific)comparison; here's the top five results, with the top 3 irrelevant for me, when searching 'Bing is Google on steroids' in Bing:

Mexican Steroids - Web - CyberDefender
www.4-men.org/ steroids / mexican-steroids.html [Found on Google, Bing, Ask.com]
ws.infospace.com/cyberdefender_EDC/ws/redir/qcat=Web/qcoll=relevance/qkw=Mexican%​20... ·

Steroids - definition of Steroids in the Medical dictionary - by the ...
... Google Bing? ... Steroids. A group of drugs that includes the corticosteroids, similar to hormones produced ...

medical-dictionary.thefreedictionary.com/​Steroids · Cached page
steroids definition of steroids in the Free Online Encyclopedia.
... Google Bing? ... steroids, class of lipids lipids, a broad class of organic products found in living systems encyclopedia2.thefreedictionary.com/​steroids · Cached page

Search Wars: Forget Bing, Google Has More to Worry About from Twitter
Stealing any thunder Microsoft might have managed to generate for Bing , day 2 of the Google I/O ... Google Wave, Email on Steroids! — Inventor Spot - Inventions, Innovations, and ...
techblips.dailyradar.com/article/search_wars_forget_​bing_​google_has_more_to_worry_​about ·

Five Reasons Why Microsoft’s BING Outshines Google – Geeks.com
Five Reasons Why Microsoft’s BING Outshines Google . By Bryan Lambert - Sunday, June 14, 2009 ... With Bing you get image and video results on steroids. For instance, with the image ...
www.geeks.com/techtips/2009/​Five-Reasons-Why-Microsofts-BING-Outshines-Google.htm · Cached page


And from Google, using the identical 'Bing is Google on steroids:

Five Reasons Why Microsoft's BING Outshines Google – Geeks.com
Bing is what Google was 10 years ago, fresh, innovative, and (dare I say it) cool. ... With Bing you get image and video results on steroids. ...
www.geeks.com/.../five-reasons-why-microsofts-bing-outshines-google.htm - Cached - Similar -

19 Comments - User Centric Releases Results of Eye Tracking Study ...
usercentric google versus bing eye tracking study .... It would be very earlier to compare Bing with Google however no doubt Bing seems ...
www.billhartzer.com/.../user-centric-results-of-eye-tracking-study-google-versus-bing/ - Cached - Similar -

Bing Launch Has Google Scared | Internet Marketing News
It is very unlikely that Bing will be able to knock Google from the top of the ... Yotify- Google Alerts on Steroids - 1995 views; Find High Pagerank Blogs ...
www.emarketing-newsletter.com/bing-launch-google-scared.html - Cached - Similar -

Google Wave, Email on Steroids!
Google Wave is what email would be like if it were on steroids! ... "Bing" on the other hand is another story! So there you have it. Google once again leads ...
inventorspot.com/articles/google_wave_28263 - Cached - Similar -

What the Bing is this? Live Search Makeover Review | FlipCurve - 9:24am
Jun 4, 2009 ... Bing honestly feels a little like Google on steroids, which I feel will lead to either a love it or hate it response. ...
flipcurve.com/.../what-the-bing-is-this-live-search-makeover-review/ - Cached -


In this random example, the Bing juice just didn't go far enough. Google on steroids, hardly. A homerun? Hardly.

The structured debate

Over the past two weeks my household has been a microcosm of the Bberry vs iPhone raging debate. It's about settled now, with my wife's phone now adopted as 'our' phone and the Bberry, still a best in class for inputting alphanumeric characters, relegated for my inputting duty for long mails. The Bberry remains a wonderful device for structured tasks such as mail or texting. The iPhone, optimized for unstructured tasks, is foremost a web gateway, and now adequate

Thinking about an analogy from the software business, the Bberry is a best of breed device that's optimized for the critical task of mail and texting. The iPhone is an integrated device, whose 3Gs' text inputting has just crossed the 'good enough' bar and it's optimized for bringing the mobile web AND myriad of affordable applications now makes it compelling.

Previously, I posted about the commoditization of pricing, in part due to the integration of multiple features (phone, music player, game player, compass, etc) that makes the iPhone a price LEADER. But, I neglected to highlight, as I should, the tens of thousands of affordable (many free) quality applications that enable the iPhone to morph to so many single use devices that are only limited by your imagination (e.g. flashlight, ebook reader, fingerprint scanner etc). These reinforce the iPhone's price/performance leadership to heights beyond the 66% discount previously noted.

In the software business, early stage markets are most often dominated by fast moving best of breed vendors who optimize for one application. As markets mature, they tend to pull in other features and leaders emerge as integrated vendors that combine many capabilities. This integration, usually demanded and greatly appreciated by customers, relegate best of breed vendors, who do not expand their scope, to second tier status. MSFT was (note the tense) the paradigm of commoditization and integration of the desktop. Goog, with Chrome(s), search and the application suites have taken this approach to the web.

Web based applications, such as eBay, Facebook, LinkedIn, Amazon,etc. are greatly expanding their focus, as they must. Amazon, as they repeatedly show (now with the Zappos acquisition) are doing the same for commerce. In my view, this is the key challenge today for Twitter (as opposed to monetization) as their best of breed status can easily be subsumed by any of the above vendors (especially as Goog makes progress with Wave).

RIP John 'Marmaduke' Dawson of the New Riders

Looking for the trickle down

Apple announced great results yesterday highlighted by some interesting iphone statistics:

5.2 million phones sold in the last quarter
1.5B apps downloaded in the first year of the App Store

Here is a replay of the earnings webcast.

Now that billions of applications have been downloaded by tens of millions of people, I am wondering why we have not seen a robust next generation of mobile-centric software app companies, centered on this platform, achieve critical mass. If not, while many were bemoaning the lack of paradigm shifts, it seems as if we have seen the market pendulum swing away from downloaded applications and towards platform independent web based applications.

Thinking of market shifts, here's a post from David Winer, that reflects on the rise of the internet and its implication to MSFT, and a warning to entrepreneurs who may seek 'account' control based on a platform (the internet) that's by definition, open and near frictionless.

With but a whimper

On Friday, Sun Microsystems disappeared into Oracle. In the 'old' days it was the hardware companies, flush with cash and customers, who were buying software companies. How the mighty have fallen, and the torch has passed.

It seems to me that the 'big iron' and big software days are long gone; out with the big upfront 'vig', customer 'control' and proprietary lock-in. Hurray for enpowerment, pay as you go, and open API's.

We are an industry that consumes its babies and stimulus dollars be damned, nothing is going to stop the flow of jobs, capital and intellect away from stagnant and towards opportunities. As it should be.

Another place for tax dollarrs to visit?

A recent post in TechCrunch called for Government scrutiny of the Search business. The argument is that, since the commerce around Search, as run by Goog, is a black box with no transparency it's subject to abuse by a company that has achieved monopoly power.

I tend to think that market interference tends to often bring worse outcomes than the status-quo, but nonetheless, the post makes for an interesting read.

Q2 Venture capital fundraising

Per the National Venture Capital Association, the numbers are not pretty:

25 Funds raised $1.7B, the lowest level since 1996 when 21 Funds raised $938mm.

Eight first time funds raised capital led by Domain Associated Management ($371mm and Andreessen Horwitz $300mm).

Here is the text of the release

If this is a sustained trend, no doubt it will affect the capital available for entrepreneurial companies and exacerbate the 'husbanding' of capital to support existing investments. Time will tell if the lowering of available capital creates a more holistic balance between a generation of capital efficient companies and the resources available to support them, or if we are destined to live in a feast n famine environment.

Ten exciting Israeli start-ups

The influential Israeli business daily, The Globes and the blog site the.co.ils, paneled a jury to sift through 700 applicants to reach the final 10 to present live (streamed too) at the annual Internet, Media and Communications conference.

Congratulations to Reimage and here is the list of the finalists:

Ten Years After

It's been ten years since a student in Boston, Shawn Fenning, led a computing revolution that nearly destroyed a multi-billion dollar industry, is profoundly affecting nearly all forms of digital content, spurred Congress to enact new laws, and was influential in promoting Free as a business model.

His Napster long ago was swallowed by turbulent seas, but peer to peer applications live on in more than 200 million computers and is now a respectable noun to be uttered in polite company.

The Pew Internet & American Life Project recently published a research report looking at the Music Industry 10 years after Napster. It's a good read, especially if you broaden your interpretation to include all digital content.

Mice move elepants

Dave Winer, often called the 'father of RSS' recently posted about a new Google service PubSubHubbub, that provides near real-time updates of RSS/Atom feeds. Per David it:


makes it possible to build a distributed Twitter-like system with components that are not made by a single company, and with servers not run by a single company. It makes it possible to build a Twitter without the limitations of Twitter. (For example, no 140-character limit, the ability to handle enclosures, categories without #hashtags.)

The protocol is free; anyone can run a hub or subscribe.

Swimming with the tide

Amazon jumped into a new niche today with the announcement of a beta version of an online cellphone store,AmazonWireless. As someone who recently went through cellphone purchasing hell, I welcome their entrance into a market where the sales effort contains too much unnecessary friction, and too often have unhelpful people, with best intent, just not helping.

It's about time

All that shines is not Chrome

I've been doing some more thinking about the Chrome OS and its implications/next steps.

1. Google's ecosystem today is concentrated on breaking its service (SEO) vs supporting its infrastructure. There will have to be a huge amount of work to switch the DNA of this relationship to create the primordial muck for a new OS to be successful.

2. The OS will have a Linux kernel and much Javascript. The later is known for not being a speed demon and performance will be the first measure for its competitiveness (similar to the Chrome browser).

3. Despite the OS being 'fast, lightweight and optimized for the cloud' it will need to run/support some local applications. Such applications need to be readily available, perhaps via a GOOG iTunes like application store.

4. With Android and Chrome OS I would not be surprised if Eric Schmidt resigned from the Apple board as the more he takes on MSFT, the more Apple is exposed to 'friendly fire'

5. The PC era is now rapidly being commoditized from two fronts. The iPhone, which is now a computer, phone, camera, video camera, GPS, music player and game platform represents fantastic value and a classic example of exporting deflation for the benefit of customers. Let's do the math* (courtesy of Amazon):

Netbook PC $375
Phone (Nokia) $ 90
Camera (p&s) $125
Flip video $129
GPS $ 90
iPod $224
Nintendo DS $130

Total $1163

iPhone $399

Savings $764
% savings 66%

The other commoditizing force is the cloud which moves storage and computations away from the personal computer. Hence the move to low cost netbooks that, despite being low(er) power, represent the fastest growing segment of the PC market.

It's easy to look at Apple as a purveyor of premium priced products that gets away with it due to design and brand. I think this is a misplaced perspective that competitors will ignore at their peril.


*I know it's not totally 'apples to apples' due to quality of comparisons (e.g. camera pixels)


MOGUAI - Sittin On Chrome - The best home videos are here

Shifting sands

MSFT has done a historic job of utilizing the combination of applications (Office) and its Windows brand to build an industry defining company over the past 30 years. It's competitors were primarily in the applications camp (e.g. Lotus), the infrastructure business (Novell...once led by Eric Schmidt), or the hardware space (IBM). Its business strategy of utilizing the interplay between the two to defend its flanks, while commoditizing the overall price users paid for computing was brilliant and added value for its 'users' while maiming its competitors.

For the first time in many years there are now real storm clouds on the horizon for MSFT. Not anemic growth due to a customer saturation, or self-infliced mediocre products. But a real core competitive challenge.

GOOG's unrelated, but coincident announcements of removing the Beta from its mail client and the same day announcing it's entering the OS business via an 'open source (Linux based), free, lightweight' code base which will be initially targeted towards buyers of netbooks, represents an attempt to trap MSFT in a competitive pincer movement which combines the attributes of a technology shift to the cloud, a platform change to lighter computing (netbooks), and a differentiated business model (freemium).

I am sure there will be some initial confusion about where Android begins and this OS, named Chrome OS ends. GOOG says the following (in essence we are throwing both into the market and will let it decide which will do better:

"Google Chrome OS is a new project, separate from Android. Android was designed from the beginning to work across a variety of devices from phones to set-top boxes to netbooks. Google Chrome OS is being created for people who spend most of their time on the web, and is being designed to power computers ranging from small netbooks to full-size desktop systems. While there are areas where Google Chrome OS and Android overlap, we believe choice will drive innovation for the benefit of everyone, including Google."

In the past, MSFT was at its best when its core was challenged. Time for a Mojo test.

Marc Andreessen on his new fund, mega-franchise opportunities, and

Marc Andresseen, probably best known for starting Netscape and Opsware (now part of HP) and Ning. has just closed on raising $300mm for a new Venture Fund. He's on the board of Facebook and an angel investor in Twitter and is using the foundation of those experiences to look at 'franchise creating opportunities'. The following interview displays both is passion and irreverent sides. If you don't have time to read the whole interview from VCJnews, here's an annotated version of the discussion:


Q: What is a franchise company?

A: Andy Rachleff, who is a VC [formerly at Benchmark Capital] who now teaches venture capital at Stanford, did an analysis. Basically between roughly the mid-80s and the mid-2000s—a good cross section of time across a couple of different cycles—what he found is that basically there are about 15 companies a year that are founded in the tech industry that will eventually get to $100 million in annual revenue. Those companies in total represent a very large percentage of the returns to venture capital. His data show that they were 97% of all public returns, which is a good proxy for all returns. So those are the companies that matter. Those are the companies that have a big impact on the world. Those are the companies building foundational technology. Those are the companies that generate all the venture returns.

So, we’re going after those 15 companies and we’ll enter them at any point where we find them. Ideally, we’ll find them at the seed stage and we will help develop them and put in more and more capital as they grow. Failing that, if we screw that up, we will then, as we say, ‘correct our mistakes,’ and we would go into a later round.

Q: What’s your optimal deal size?

A: First of all, you’ll notice that there are two GPs. That’s a large ratio of dollars to GP, probably three or four times what you’ll find in a lot of funds. The deal-size range—this is an area where we’ve relaxed the focus—the deal size range is $50,000 to $50 million.

Here’s why. First of all, we think that it’s not a stage-specific exercise, at least the way that we do it. It’s a company-specific enterprise. We’re on the hunt for new franchise companies in the category I described. Our view is when you find one of those franchises—or a company that you think can be one of those franchises—you want to invest as much as you can both in time and effort across as many rounds as you can.

Q: How will that affect the number of investments you make?

A: The majority of the investments will be in seed stage. We may do as many as 60 to 80 seed stage investments in the first fund. Typically, in the seed stage, we wouldn’t go on the board. In fact, at the seed stage, we often advocate that the companies not even have boards. At the seed stage these days you’re talking about a company with like four or five people, so if you try to put a board together the board can end up with more people than the company. And a seed stage company’s mission in life, in our view, is to find product/market fit. Until it does that, all the rest of the company-building stuff doesn’t make any sense. That’s one side of things.

From our standpoint, a majority of our dollars will go into a much smaller number of deals at the venture stage than at the late stage. And so, hypothetically, 10 to 15 venture deals and two to three late stage deals or something like that. One twist is that we’re broadening the early to late side. We’re more multistage than most. Another twist is we’re narrowing the domain, which we discussed, pretty tightly.

Q: You seem to be a firm believer in the if-we-can-scale-this-thing, the money will come model. You’ve said as much about Facebook and Ning and Qik. But that doesn’t always work. It costs Pandora a lot of money every time it attracts a new user for example, but those users still prefer not to be fed ads. As an investor, how do you know when that’s a viable approach?

A: No. 1, the details really, really matter. The cost structure really matters. I don’t know enough about Pandora. When people get in trouble with this sort of thing, it’s usually for one of two reasons. Either the market wasn’t going to be that large—in which case deferring revenue to get to the market wasn’t worthwhile—or the costs are just too high. So, I don’t want to talk about Pandora specifically.

But, in contrast, here’s how I think about the economics of Twitter, for example. The economics of Twitter are that they’ve spent about $15 million. They have created already a global brand name. Ben likes to point out that the Bing ad campaign [by Microsoft] is $300 million of advertising. Would you rather own the Bing brand or the Twitter brand? So, what’s that worth? Two, they have a user base of about 30 million users now, growing very fast. And, three, they have that growth rate, so they have all the future acquisition.

But even just looking at the current user base, they’ve spent maybe 50 cents per acquired user. Total. For everything. All development, all marketing, everything. And so on the revenue side, you say: ‘Suppose they want to monetize that? Can they get 50 cents per user per year in terms of ads?’ Yeah, probably they could do that. So to go get that $15 million back seems really easy, and it seems like there’s a lot more upside beyond that.

Finally, here's a link to his blog (now on hiatus).

Palm Pre...or Post?

I headed to the local Sprint store over the weekend to check out the Palm Pre and was deeply disappointed in the device. Coming from a BBerry, I was hoping its slide-out keyboard would give me a tactile typing experience, mated with an internet browsing experience that meets, or even exceeds (yea, multi-tasking) the iPhone.

Unfortunately, I could not get by an instant dislike for the keyboard, which reminded me of the ill-fated IBM PC Jr's chicklet keyboard.

It's no wonder that sales seem to be abating from the release hype.

Chris Anderson's reply to Malcolm Gladwell's review

Enjoyable to see such thoughtful writers 'duke' it out:

http://www.longtail.com/the_long_tail/2009/06/dear-malcolm-why-so-threatened.html

If you have time, also read the thoughtful comment section.

What's a professional?

A decade or so ago the firm I was in was experiencing hypergrowth and we retained a consultant to assist us in thinking through our organization structure. Being a good consultant, he began his session with us by asking a series of questions and one of the first was for us to define 'what's a professional'. We struggled with a number of weak answers and he gave a pithy definition that made (and still does) so much sense. He opined that a professional is someone who really cares about what they do. I often think about this in my interactions with all sorts of folk.

Earlier today, in response to my previous post, I was contacted by one of the marketing professionals at MyHeritage, who shared wtih me his perspective on the Company's view of the issues that lead to my frustration with their service. As a follow-up, the CEO wrote to elaborate:

"The locking out of your site due to exceeded tree size was a bug, that we fixed tonight after being alerted to it in your blog article.
This lockup was intended for expired sites (people who received a paid service and decided to stop paying for it) and was incorrectly applied to another scenario of an exceeded tree size, for old sites. This is now fixed, and I thank you for bringing it to our attention".

It was a professional response from a busy CEO, and much appreciated by this community member. Hope it also helps the other people affected by the issue.

Struggling with 'freemium'

Courtesy of iTunes, Google, Twitter et al, I've become accustomed to having access to wonderful internet based services at low/no cash cost. As an investor in technology companies, I've also been exposed to the constant struggle between creating, and maintaining, a wonderful community experience, while garnering sufficient revenue to support ongoing investments and reward stakeholders for their efforts/capital. Sometimes companies deliciously achieve a balance between low barriers for customer acquisition, and building a service that members will happily pay to use.

Unfortunately, it does not always work so smoothly. Let me share a recent example with you.

Over the past year, I have built a family tree on MyHeritage.com. The Company offers an easy to use free service that crosses into paid land when the members on your tree or the storage used for photos and documents crosses a proscribed threshold. Till recently the service has been a nice usher down memory lane.

I was recently exposed to the system's ability to automatically discover 'smart' matches of relatives who are displayed on other MyHeritage family trees. With permission, you can link trees and expand your family's horizon. Recently, a distant relative, by marriage, requested a link to me. When accepted, my little family bush became an oak tree and I blew through the 500 person (more on this later) free ceiling and into 'freemium' territory.

Now for the struggle.

Crossing the threshold had the side effect of denying me access to any family profile or data. Instead, here's the message that now heads the home page:

Your family tree has 549 people. This exceeds the Basic subscription plan of your family site. In order for your family tree to display all people, you need to upgrade the site plan. We have a special offer: 35% discount on our Premium plan! But hurry up, this offer expires very soon.

Click here to upgrade now Need help? Chat with us live (English)

The message is a bit misleading as ANY site access is now denied, without the premium subscription. Here's what I see now. Too bad, I can't delink the distant cousin, or selectively delink 'non-blood' relatives, as the data on the site is hostage to a paid subscription. Thinking about what has gotten my ire is that, rather than having the patience for me to 'grow' into being a premium member, an innocent link, causing a site black-out with no remediation, coupled with a policy change (see below), makes me feel like I've been drafted, rather than volunteered to be a paid member of this community.

Too bad that my struggle will now be shared by many others as the Company just announced a retroactive change in their pricing plan:

As of August 1 2009, Basic family sites will have a higher storage quota of 250 MB (instead of 100MB today) and a lower family tree capacity of 250 people (instead of 500 today).

I know investors and some management in this Company and have always been impressed with their passion and sensitivity towards their community. They also have an obligation to shareholders to build a proper business. It will be interesting to see if the implementation of the premium service in such a heavy handed manner affects the community's trust in them. Looking at their site, I can't find any mention of them communicating this change http://www.myheritage.com/blogs/companyblog/ for existing, or potential members to evaluate.

Free for all in a free for all world

Chris Anderson, author of the provocative book "Long Tail; Why the Future of Business is Selling Less of More" has recently published a new book "Free: The Future of a Radical Price". Malcolm Gladwell, a noted author recently wrote an excoriating review in The New Yorker. It seems as if these notable thinkers are arguing about how close to totally free will information (and more broadly IP) become. It's an entertaining review, but frankly, I think Mr. Gladwell is arguing about how many angels can dance on the head of a pin.

If not already evident to most, it soon will be, that we are in an environment where the free fall of technology prices are right now creating myriad hundred million dollar markets on the shoulders of once proud billion dollar opportunities. Most often, new vendors, not burdened with protecting the status quo, will emerge as new leaders by embracing, and continuing to export commoditization (or deflation). Ignore this trend at your business peril.

Here's a summary of the debate published in the Times Online.

Much has been already written about the stunning decline of expenses required to start, and maintain an IP based company in the internet era. The marriage of lower bandwidth and storage costs, leveraged distribution, and open source (free) development tools has sped the time, lowered the development risk, has created a perfect deflationary storm that is at the root of the how close to free are we going debate.

There is another side to this coin that bears watching. The enhanced capital efficiency has evinced a spectacular explosion in the number of companies creating and offering (sometimes even charging money) their wares to customers or community members (thank goodness we have moved beyond calling customers 'users', or demeaning them with objectives such as 'account control'). With so many companies birthing from the primordial muck of capital efficiency, creative business propositions will surely follow and serve to fragment the number of customers adopting any one solution. An exception to this trend is that the closer a company is to the infrastructure layer (e.g. Twitter or payments), or the ubiquity of the network effect(LinkedIn or Facebook) will always have the potential to create a mega-winner that makes a Fund (e.g. Ebay and Benchmark).

But make no mistake, we are in the midst of a competitive free for all, call it Darwinism on steroids, that is unleashing creativity that will accelerate the pace of innovation.

Fortunately, due to the aforementioned capital efficiency, it's still quite possible for investors to show meaningful returns at exit multiples much lower than previously experienced. Nevertheless, I think we have to recognize that many investor portfolios are sadly saddled with the dual curse of having raised capital at valuations no longer sustainable and having value propositions predicated on assumptions that did not adequately factor in the ravages of capital efficient deflation. You have but to look at the ASP's, sought by tens of thousands of developers in the Apple store as a microcosm of the environment we've created in the consumer and prosumer worlds.