The Silicon Valley Association of Startup Entrepreneurs (SVASE) kicked off ’07 by asking a panel of distinguished venture capitalists to project “what’s hot, what’s not” for the new year. I’ll preface the post by saying that most of the panelists play their cards close to the vest. They may wring their hands about whether or not they are investing too early or too late but they are not going to hand out their playbooks.
Moderator Matt Marshall was introduced by Chris Gill, the President of SVASE. Matt’s abandoned a career at the San Jose Mercury News for a stint as the founder and guiding light for VentureBeat. The panel was notable:
- Erik Straser, Mohr Davidow Ventures. Focus: Clean technology, alternative energy, materials, biotechnology. Portfolio example: Nanosolar
- Ken Elefant, Opus Capital. Focus on seed, series A for companies that solve enterprise problems. Portfolio examples: Riverbed Technology, Versa Systems
- John Steuart, Claremont Creek Ventures – Positioned as a different drummer. Focus: Payment software, IT/Healthcare, security, mobile apps, web based commerce.
- Ann Winblad, Hummer Winblad. Focus: exclusively software, enterprise software sector Web and Enterprise X.0. Portfolio example: RealSource, Widgetbox
- Rob Rueckert, Intel Capital – Enterprise software, Enterprise 2.0, some consumer 2.0. Portfolio example: Suite 2.0 bundle (wikis, blogs, and collaboration for the enterprise)
Rob from Intel started the discussion by saying that 70% of IT spending goes to the elephants in the room, the big operators like Microsoft, SAP and Oracle. The remaining 30% falls into the hands of the innovators. Ann Winblad pointed out that IT spending trends are allocating more spend to the innovators and less to the elephants. She called the split at 60% for the elephants and 40% for the innovators and continuing to trend away from the incumbents. Good news for the Enterprise 2.0 crowd. As Warren Buffet said “The market laughs last.”
Everyone on the panel was cut from more or less the same cloth with one bright exception. Erik Straser of Mohr Davidow stood out with his clear articulation of large immutable trends. I’d call them unavoidable trends. His focus on clean technology and alternative energy is going to surf a 30 year wave. The fact that the US is a significant global laggard in this regard is only good news for entrepreneurs. It provides a strong tailwind.
The evening’s best moment came when a software entrepreneur asked if he should stop talking about his product as a “web 2.0” application. He wanted to know if Web 2.0 was dead. Matt the moderator was the first to offer an opinion. “Web 2.0 is dead.” he uttered.
Ann Winblad had the best interpretation. She pointed out that it’s typical of a “hype cycle” for a buzzword to become entrenched. Rather than spewing buzzwords, she asked a simple question… “How do your customers describe it? Do they say Web 2.0? Use the words that your customers use.” Brilliant.