VentureBlog

Patience is a Virtue!

My grandmother used to tell me, my brother and sister that “patience is a virtue.” Of course, she used to say it while we were playing gin rummy and she was taking too long to drop a card. But her point was not lost on the Hornik siblings. My grandmother was not willing to rush something for the sake of moving on. She believed in being thoughtful and deliberate and making the best possible choices no matter how long it took. Thanks for the lesson, grandma! Duly noted.
 
Today we announced that Rakuten has entered into an agreement to purchase Ebates for a billion dollars. I have been extolling the virtues of Ebates for the last 14 years, since August first invested in the company and I began attending board meetings. Ebates is an amazing company built by amazing people and I could not be happier to have been along for this decade and a half long ride. It was worth every minute.
 
Ebates is a platform for retailers to acquire customers through cash rebates and for consumers to save money on purchases from some of their favorite online stores. Ebates is a win win. And, as a result, it has been growing steadily for the last 16 years. We first invested in Ebates in March of 2000 (along side Canaan Partners). By that time, Ebates’ two founders had already been hard at work building the company for a couple of years (Ebates was initially incubated at Foundation Capital). Ebates’ founders, Paul Wasserman and Alessandro Isolani, were attorneys who decided to leave the wonderful world of criminal law to start a dot com. There was a lot of that going on at the time. The only difference between most of those companies and Ebates is that when the bubble burst, Paul and Sandro had the good sense to hunker down and focus on not running out of money. Which is precisely what they did. They built a cash-positive business that continued to grow and provide real value to their customers.
 
Over the better part of the 2000’s, Ebates continued to grow its footprint. An increasingly large number of consumers were collecting cash back from an ever-larger range of online stores. What’s more, not only did Ebates hang onto the consumers it signed up in the early 2000’s, those consumers were spending more than ever before. With double digit millions in the bank and a decade of growth behind them, the founders decided to hand over the reigns of the company to an expert marketer.
 
We had the amazing good fortune to attract Kevin Johnson to the company in 2008. Having spent time as an executive at the likes of Netcentives, Digital Impact and Acxiom, Kevin was the perfect guy to take the reigns. He focused the company on providing real, measurable value for e-commerce partners, which in turn created greater value for consumers, which in turn created greater value for e-commerce partners, which in turn … you get the point. Kevin also put his marketing hat on and built an acquisition machine that has driven massive growth for the company. Along the way, Kevin attracted one of the best teams we’ve had the opportunity to work with at August Capital.
 
In 2012, we decided to double down on the Ebates team. Ebates had a number of great acquisition opportunities before them and they decided to raise some additional capital to take advantage of their strong position in the market. Spearheaded by my partners Eric Carlborg and Tripp Jones, we led a late stage financing for the company (along side Canaan and Foundation again) to enable those acquisitions and drive growth, and in the process August became Ebates' largest shareholder. We were honored to lead that charge and emerged the largest shareholders in the company. Kevin proceeded to put that capital to good use, purchasing fatwallet, Extrabux, Pushpins, OneReceipt, AnyCoupons and BFAds, and launching Ebates Canada, Ebates China and Ebates Korea. And with each purchase and each launch, Ebates has become larger and more valuable. It has been an amazing journey to be a part of.
 
Great entrepreneurs have the ability to choose with whom they want to work. And each entrepreneur applies a different set of criteria when making that decision. I have always told entrepreneurs to choose wisely because taking an investment is a little bit like a marriage. That has never been clearer than with Ebates. This summer I celebrated my 20th wedding anniversary and my 14th Ebates anniversary. While Rakuten has whisked Ebates away from me, I am incredibly grateful for the time I have spent with Paul, Sandro, Kevin and the entire Ebates team. I’ll miss you guys. Congratulations!

In Memory of Jody Sherman

I flew down to Santa Monica today to attend a memorial service in celebration of the life of Jody Sherman.  Along with a hundred and fifty of his closest friends, we shared stories of the Jody we remembered.  We celebrated his incredible spirit.  More than a few tears were shed, including a ton of my own.  And while many of us wondered aloud how such a positive force in all of our lives could possibly have taken his own, our speculation wasn't vulgar rumor mongering.  It was genuine astonishment.  The Jody we knew seemed like an unadulterated optimist.  The Jody we knew spent his every day bringing others joy.  The Jody we knew was a force for good.  But apparently the Jody we knew wasn't the whole Jody.  If only we had known.

Story after story today made clear why Jody was so special.  Jody was unendingly giving of himself to others.  And Jody was honest and direct, to a fault.  In combination these traits made him an amazing mentor.  Jody was the confidant of innumerable entrepreneurs.  They turned to him for help and could count on his un-judgmental but critical advice.  Jody didn't believe in complacency.  He was one of the hardest working guys you'd ever meet.  But there was no such thing as work for work's sake.  Jody lived his life with a purpose and taught entrepreneurs that same single-minded resolve.  Today's memorial service was full of recipients of Jody's tough love.  But no one focused on the toughness.  Everyone focused on the love.  That's what shined through. 

I will greatly miss Jody.  He was a wonderful friend to so many of us.  And all we could think today was "too soon. too soon."

Do VCs Find Mobile Interesting?

It has been a while since the last time I had a guest post on VentureBlog.  But it seems only natural for Howard Hartenbaum, my partner at August Capital, to be posting here.  Howard and I do a podcast together called VentureCast that is really fun (at least fun to do -- I'll let you be the judge of how much fun it is to listen to).  He is a consumer Web superstar (among other things, he was the first investor in Skype and played a major role in the emergence of Skype as a powerhouse).  In any event, Howard has been doing a lot of thinking about the mobile space, so he decided to share his thoughts on the "emerging" mobile space.  Without any further ado, some thoughts on the mobile space by Howard Hartenbaum:

 

“Do VCs find mobile interesting?”  I know that I do.  And so do the partners at August Capital.  Every VentureBlog reader must have a location aware smartphone in their pockets by now.  Mobile is a game changer. It enables new business models, new consumer and enterprise services, and a better life with more fun.  While mobile, I regularly pay bills, get caught up on Facebook and check on the status of my family without having to disturb them.  I find my smartphone to be the most useful consumer device I have ever owned and it is hard to conceive leaving the house without it.

Here are a few classes of “mobile” that VCs get excited about:

1. Companies that provide tools and services needed to make mobile applications and their business models work.  These include Flurry (mobile analytics), AdMob (mobile advertising) and Urban Airship (mobile push messaging) to name a few.  These are solutions for mobile application developers and these companies have straightforward business models that make sense for a venture investor.
2. Mobile applications that use your device’s location to enable new services.  Uber and Lyft/Sidecar (ordering a ride when you need it), HotelTonight and Airbnb (find a place to stay overnight). There’s also Wrapp (mobile gift card gifting with in-store redemption) and Gigwalk (provides a mobile workforce of more than 100,000 across the US that can perform paid tasks for enterprise customers).  These businesses take a percentage of a transaction, again a straightforward business.  Another interesting service based on device location is Life360 (enables you to track the location of your family/friends in real time without disturbing them with a text or call). 
3. Mobile applications that control non-mobile products and services such as Nest (mobile control of building thermostats) or eSecure (mobile control of building alarm systems).  The mobile application to control my Dish Network recording also falls into this camp.  These mobile applications make other services much more useful and are reason enough to convince me to buy those services, even if no money is generated directly from the mobile application. Turo, a peer-to-peer car rental service, has a mobile application that allows me to open a GM OnStar rental car’s door without a key.  These types of mobile applications make a solution more useful because they provide on-the-go access.
4. Mobile payments such as Square take a transaction fee, and they can also provide loyalty programs and couponing.  There are many mobile payments related companies with their own twist, but they all have a strong value proposition for all parties involved.
5. Mobile games – Angry Birds, Minecraft, most of the top applications in the app store are games.  Though it is a hit driven business, the winners generate hundreds of millions of dollars in sales. 
6. Photo applications include Instagram, Cinemagram and Snapchat.  Mobile messaging applications include WhatsApp, Voxer, Tango and Kik.  These companies typically don’t have early proven business models, but the winners at scale can figure it out.  These types of products are often the most useful and engaging on a smartphone.

The wildcard – As a venture investor, the most interesting part of mobile is what hasn’t been proposed yet.  Undoubtedly there are visionary entrepreneurs who are designing mobile products right now that don’t fit in any of the above categories.  The next big thing may be a service that comes across as a bit unusual at first, but these are the kind of “brave new world” business proposals that we want to see. The best part about being a venture investor is meeting these entrepreneurs and hearing these proposals. 

Note – August Capital is an investor in Gigwalk, Urban Airship and Turo.  Howard is an investor in Flurry.

Big Data 2.0 -- Data as a Platform

Ever since Splunk went public I have been inundated with "Big Data" requests. Splunk is now the poster child for Big Data. And Big Data is all the rage. I'm getting Big Data business plans. I'm being asked to speak at Big Data conferences. I'm being called by reporters to opine on Big Data. Despite the fact that when I funded Splunk there was no such thing as Big Data, I now get to opine broadly on Big Data. Given that, I might as well do so here on VentureBlog.

As far as I am concerned, Big Data is not a thing in and of itself. Big Data is an enabler. Big Data is the realization that our world is now full of lots of data that can not be ignored. Machines produce massive amounts of data (thus the utility of Splunk). Browsing the Web produces massive amounts of data (thus the utility of Gravity or StumbleUpon). Tracking ads on the Web produces massive amounts of data (thus the utility of Adchemy or Adara Media). Every car on the road produces massive amounts of data (thus the utility of Inrix). [1] Online shopping behavior produces massive amounts of data (thus the utility of Performance Marketing Brands). Offline shopping behavior in retail stores produces massive amounts of data (thus the utility of RetailNext). The financial services industry produces massive amounts of data (thus the utility of Nomis Solutions). Medical diagnostics produce massive amounts of data (we're looking -- let us know if you're building that company). And on and on.

Understanding and utilizing the underlying data of your business is no longer a strategy, it is a requirement. I wrote years ago that social was not a business in and of itself -- it was an enabler of all online business. In the same way, Big Data is not a business in and of itself -- it is an enabler of all business, online and offline. The current data explosion will only accelerate as technology does an increasingly good job of capturing a larger number of data points with greater and greater granularity. The result will be massive opportunities for technology to solve real problems using this plethora of data. And I look forward to funding many of those solutions for years to come. But they will not likely be "Big Data" solutions -- they'll be advertising or price optimization or travel or loyalty or genomic solutions….

I am thrilled to have invested in Splunk when Erik Swan, Rob Das and Michael Baum first hatched the brilliant idea. It is an unbelievably powerful data platform. And it enables companies to measure and manage their businesses in ways never before possible. But the real opportunity for investment these days is largely not in Big Data in and of itself. [2] The most interesting Big Data opportunities today will take advantage of Big Data as a platform. The next generation of billion dollar applications and services will necessarily be data aware and will be differentiated based upon their ability to extract insight and value from the massive amounts of data upon which they are built. By those standards I've been a Big Data investor for the last decade and I look forward to continuing to be a Big Data investor for decades to come.

[1] Inrix is a great example of a company that uses data as a platform. Inrix collects massive amounts of data to produce from hundreds of thousands of vehicles on the roads at any give time to produce a differentiated service. Using information about vehicle location, speed, temperature, wiper speed, etc., Inrix is able to provide traffic data that is more accurate, more predictive and more valuable. I recently spoke about Inrix's use of data at the Web 2.0 Summit. You can find a video of that talk here.

[2] There will likely be some interesting opportunities in enabling technologies -- tools that help companies collect, store, manage, de-dupe, etc. data across the enterprise.

The Wisdom of Jeff Bezos, Part 3

Two words: low margins. That's the secret to Amazon's success. Seems crazy when you put it that way. But Jeff Bezos views it as a competitive advantage. Amazon has spent a decade and a half making low margins profitable. And, as Bezos sees it, when you aren't addicted to high margins, there is a certain discipline inherent in how you operate. He doesn't quite come out and say that high margins are for the lazy. But you can tell it is a point of pride. Anyone can survive on high margins. It takes a real man to thrive on low margins. Jeff Bezos is that man.

Bezos is quite clear about the high margin/low margin dichotomy. In his Wired interview he says "There are two ways to build a successful company. One is to work very, very hard to convince customers to pay high margins. The other is to work very, very hard to be able to afford to offer customers low margins." He has chosen low margins. Why? Because he believes that offering the lowest possible price will allow you to attract the largest possible customer base. Putting on my consultant hat (OK, I never actually wore a consultant hat -- but I have met enough of them that I can channel consultant), here's the two by two matrix of margins:

      Low Margins               High Margins
      High Volume               High Volume


      Low Margins               High Margins
      Low Volume                Low Volume

Jeff has chosen to sit in the upper left corner of the matrix -- low margin, high volume. He has proven that there is a big business to be built there. It is certainly better than low margins, low volume; that's a recipe for extinction. He suggests that the tech world is focused on high margin, low volume businesses in which companies fight it out to win over customers and sell high margin software or hardware to a relatively smaller numbers of customers. His ability to show profitability with low margins allows him the opportunity to deliver rock bottom pricing and amass the greatest possible consumer base. [1] That capacity to execute on low margins has allowed Bezos the ability to broadly extend his product mix, attracting an ever larger customer base.

So what does it take to deliver low margins? Incredible efficiency. Bezos has been obsessed with efficiency from day one. And that efficiency extends throughout his entire enterprise. Bezos has built the state of the art distribution system that allows Amazon to deliver practically anything to practically anywhere (at least anywhere in the United States) in the shortest possible time for the smallest amount of money. That efficiency has made it possible for Amazon to offer Amazon Prime, providing free two day delivery while still making money (ok, Prime isn't completely free, but it's darn close when amortized over a customer's ever-increasing order volume). Amazon also maniacally focuses on driving down the cost of customer support. According to Jeff, "[e]very time a customer contacts us, we see it as a defect." That doesn't mean Amazon ignores the needs of customers. They simply work hard to satisfy customers with the smallest amount of human intervention possible. The system appears to be working -- Amazon has one of the highest net promoter scores on the planet.

Bezos' obsession with efficiency is perhaps best seen in Amazon Web Services (AWS). AWS is an extension of Amazon's own technical infrastructure (its development has dramatically driven down the cost of maintaining Amazon's own web presence). Bezos has always been determined to deliver AWS the same way that he has delivered books -- high volume, low margin. Moreover, Bezos was not willing to use "inferior products" to deliver the lowest possible price point. That dramatic pricing with quality components has made AWS the backbone of a stunningly large percentage of the Web today (from FourSquare to the New York Times). Jeff asserts that, "the most expensive thing you can do is make a mistake" and as a result, "[Amazon] can afford to focus on smaller and smaller defects and eliminate them at their root. That reduces cost, because things just work." It does seem to be working. AWS has become a big business, while simultaneously increasing the efficiency of Amazon's own infrastructure -- that's a win, win.

Low margins may not be for everyone. It is a tough business, and an unforgiving one at that. But Jeff Bezos deserves huge credit for knowing his business model from day one and executing perfectly on his strategy. By driving down costs and driving up quality through an obsession over efficiency, Amazon is able to deliver the best possible service at the lowest possible price. That makes it awfully hard for others to compete. And that is just how Jeff likes it.

[1] Of course if I am going to properly channel my inner consultant, I have to be honest and point out that the upper left quadrant is always the desired outcome. This matrix is no exception. The ability to deliver high margin and high volume is manna from heaven. There's a reason Apple is the most valuable company in the world and has $97 Billion dollars in the bank. They've cracked the code on high volume, high margin. As have Google ($44 Billion in the bank) and Microsoft ($50 Billion in the bank). But when it comes to high volume, low margin, Amazon is as good as it gets.

The Wisdom of Jeff Bezos, Part 2

As I mentioned here last week, I was truly taken by Jeff Bezos' thoughtfulness and wisdom in his recent Wired magazine interview. He touched on a number of interesting topics in the interview. I have decided to take up a few of them here at VentureBlog. Last week I talked about the power of taking a long term view of your business. This week's topic is related.

In the Wired interview, Bezos is asked about Eric Schmidt's observation that there are now only four tech companies that matter -- Google, Apple, Facebook and Amazon. Schmidt calls them the Four Horsemen of Technology. Bezos could have jumped at the opportunity and taken his place atop the tech pecking order along side the other three. But Jeff has seen two decades worth of ups and downs and knows better than to take the bait. To his mind, there are lots of great tech companies working hard to innovate, but the only way to stay on top is to work harder and smarter than everyone else.

Jeff has a great quote about the importance of being humble in the face of success -- he says, "A company shouldn't get addicted to being shiny, because shiny doesn't last. You really want something that's much deeper-keeled." Boy is he right on this one. Being the sweetheart of the tech press doesn't make your company successful. Love in the tech world is stunningly fickle. The shine will wear off. But if you do have something "deeper-keeled" -- differentiated technology, excellent execution, customer loyalty -- you will be able to continue to motivate your employees, engage your customers, satisfy Wall Street, and flourish as a business.

Jeff has one additional thought when it comes to the shine wearing off on great companies. He clearly believes that there is value in succeeding in the face of adversity. He points out that "there are companies that haven't gone through tough times, so they're not really tested." Jeff doesn't use this as an opportunity to point fingers. That's not the sort of guy he is. But his point of view is clear -- that which doesn't kill you, makes you stronger. Jeff experienced the Internet downturn at the end of the 1990's and lived to tell the tale. Many of the folks building Web businesses today weren't around then. They weren't around to experience the apocalypse. They weren't around to see the bottom fall out of virtually all Web businesses. They weren't around to see talent and money and hope abandon these sinking companies. But Jeff was. And he is smart enough to realize that the time will come again when the consumer Internet will face meaningful headwinds. Tested businesses and tested CEOs will survive and prosper. And clearly Jeff Bezos will be one of them.

The Wisdom of Jeff Bezos, Part 1

On a plane flight the other day I was catching up on an issue of Wired Magazine that had sat in my backpack for several weeks (as an aside, Wired continues to be my go-to airplane reading -- it is so well written, well designed, well researched, always entertaining -- I definitely qualify as a Wired fan boy). In December's issue there was a great article on Bitcoin. What an amazing story of markets run amuck (reminded me a bit of our current gold and oil markets). There were a dozen Steve Jobs tributes, as interesting for what they said about Mr. Jobs as what they said about those lionizing him (George Lucas, Penn Jillette, David Kelley…). But the article that really sucked me in was an interview with Jeff Bezos.

The cover of the December issue of Wired is adorned with the better part of Jeff Bezos' head (I think that 2/3rds of Jeff's head looks even more like Andre Agassi than his full head). The cover reads "Jeff Bezos started with books. Now his company dominates the web in more ways than you think." The cover may not be giving us the credit we deserve. I can think of lots of ways in which Amazon dominates the Web. Every book, DVD, CD, Lego set, remote control car, electric razor, electric toothbrush, obscure french soap, Kinder chocolate bar, etc. etc. that I buy online comes from Amazon. Every time I pay for a great project on Kickstarter (most recently this important documentary on William Kamkwamba), I do so using Amazon payment services. And practically every startup that pitches me is running some part of its infrastructure on Amazon Web Services. The world we live in would be a very different -- and much worse -- place without Amazon.

Given the incredible impact that Jeff Bezos has had on the digital landscape, it isn't surprising that his interview is filled with smart observations and valuable insights into company building. In particular, I was thrilled to read Bezos' articulation of the value of maintaining a longterm outlook. I have often warned would-be entrepreneurs that company building is a marathon, not a sprint. It seems to me that there has been a fair amount of near-term optimization going on in recent years at the expense of long-term thinking. Bezos takes the opposite tack. In his words, "If everything you do needs to work on a three-year time horizon, then you are competing against a lot of people. But if you're willing to invest on a seven-year time horizon, you're now competing against a fraction of those people, because very few companies are willing to do that." He's right. Very few companies take a long-term approach. At August Capital, our goal is to fund those entrepreneurs -- entrepreneurs who think big, or maybe more appropriately, who think long.

Great companies are built over decades, not years. And great CEO's think in decade long time horizons. If you look at the evolution of Facebook and Facebook Connect, it isn't happenstance that Facebook's tentacles are now so far-reaching. Those close to Mark Zuckerberg tell me that his vision of Facebook as the social graph to everything dates back to the early days of the company. Mark's goal has always been to build an important company, not just to make a bunch of money. And building important companies takes time. Mark could have learned that philosophy from Bill Gates (who's vision for Windows emerged and blossomed over decades) or Steve Jobs (who's understanding of the interrelatedness of software and hardware drove a product strategy that over two decades captured the worlds imagination) or Scott Cook (who's maniacal focus on the needs of small business owners -- who are always fighting for resources, visibility and time -- has changed how practically every mom and pop in America does business). But he would be just as well served to study at the side of Jeff Bezos. Jeff describes Amazon as "stubborn on vision and flexible on details." In the vein of "good things come to those who wait," Jeff tells Wired, "you don't know how long it might take, but you know it will happen if you are patient." That patience, combined with persistence, is a testimony to Jeff and is a big part of Amazon's recipe for success.

New entrepreneurs would be well served to learn by Jeff Bezos' example. Smart. Thoughtful. Patient. Jeff has demonstrated over two decades that he has the vision and leadership to create one of the most important companies in the world. And he has the stubborn genius and unworldly stamina to be a powerful force for decades to come. I missed the opportunity to fund Jeff when he came around Sand Hill Road (I handn't yet snuck my way into the venture business). But I sure hope I don't miss the next Jeff Bezos. It is the rare entrepreneur who has the capacity to build a great business day in and day out, while planning a decade ahead.

Welcome Oren Jacob, Our Fantastic New EIR

Before I get to Oren, some of you may well be wondering, "what is an EIR?" That's a perfectly reasonable question. The simplest answer is that an EIR is an Entrepreneur In Residence -- an entrepreneur who moves in with you. And that's pretty much it.

So you have an entrepreneur move in. Then what? Another reasonable question. Typically EIRs at venture funds are there to either start a new business or to look for a new business to run. And the way they go about that is to hang around the office, eat a lot of snacks, drink a lot of coffee, and meet as many people as possible. They participate in meetings with potential portfolio companies. They spend time catching up with their old friends. They take time to meet new friends. And, along the way, hopefully they happen upon something that excites and engages them and they're off to the races.

The number one criteria for picking an EIR is that he or she is someone with whom you want to spend time and with whom you would love to work. And that's where Oren Jacob comes in. I got introduced to Oren through a number of fantastic people, including Jennifer Aaker at Stanford's Graduate School of Business, Joshua Schachter of Delicious fame, and the folks at TechCrunch. After one frenetic lunch with Oren at Oliveto in Oakland, it was clear that working with him would be hugely entertaining and that his next big thing was certain to be something great.

Oren spent the last 20 years at Pixar. In fact, during a recent visit to Oren's house, he showed me his bronze Buzz Lightyear statue for ten years of service to Pixar and his matching bronze Woody statue for twenty years of service. During his tenure at Pixar, Oren had the opportunity to touch nearly every aspect of Pixar's technical operations. Oren was a CTO at Pixar and ran the Studio Tools group, which was responsible for the software that changed digital animation forever. He was a core technical contributor to Toy Story, Toy Story 2, and Finding Nemo (for which he was the supervising technical director). And he was the co-founder of Pixar University, which has trained some of the greatest living animators. It was a dream job and Oren made the most of it.

Along with his deep technical expertise (I think Oren is our third Mechanical Engineer (BS and MS from UC Berkeley) at August), Oren brings the sort of creativity and drive that distinguishes a great entrepreneur from a good one. That creativity is particularly evident in the work that Oren has done recently in connection with the documentary feature film he executive produced, called "Ready, Set, Bag!" Using social media as his primary marketing tools (Facebook, Groupon, Twitter, YouTube), Oren has been able to garner significant attention for "Ready, Set, Bag!" and sell out independent theaters across the country. Check out this great Auto-Tune The News video about one of the protagonists in "Ready, Set, Bag!" and this TechCrunch TV interview with Oren and his wife talking about the project and its support of local food banks. Not only is he a fantastic spokesman for the film, his understanding and use of the technology and tools has served as a model for the independent film community.

With Oren's breadth of interests and expertise, it will be exciting to see where he lands next. We're going to enjoy sharing the time with Oren as he sits in our office as an EIR. It will, no doubt, be an exciting journey. We are honored to have Oren as our colleague. And we look forward to helping him find the next great thing.

2011: Year of the Tech IPO!

I am not sure whether this is a prediction or wishful thinking but I am willing to to go out on a limb here -- 2011 will be the year tech IPOs came roaring back. There are too many great companies lying in waiting for the public markets. They are grossing tens, even hundreds, of millions of dollars. They are profitable. They are growing. They are everything that the failed dot coms of the late '90s were not. They are real businesses that deserve to be traded on the public markets. And so they will be in 2011.

If the rumors even vaguely resemble the truth, there could be a half dozen of the most exciting IPOs in decades. These IPOs would not only be driven by staggering fiscal results but, also, by public demand for shares in great consumer brands. Individuals will lead the charge in buying shares in the companies they love and trust with their time, money and attention.

Facebook is, of course, the one everyone is waiting for. Like Google before it, many pin their market hopes on the coattails of a Facebook offering. There can be little doubt that a Facebook IPO will be monumental. With more than half a billion users, and many tens of millions of truly fanatical Facebook groupies, demand for the shares will be daunting. And that demand will be backed up by equally daunting growth and revenue numbers.

But Facebook is not alone when it comes to the fanatical devotion of its end users. LinkedIn has tens of millions of customers, many of whom have transformed their businesses and their careers thanks to the service. How many LinkedIn users would want to spend a few of the extra dollars they are making thanks to LinkedIn on shares in the company?

And then there's Zynga. Untold millions expend countless hours playing Zynga games each day, while spending real dollars for virtual satisfaction. What if Zynga were to sell its end users the ultimate "virtual" good -- shares in the company itself. Better yet, why not buy Zynga shares with Facebook credits -- a one two punch for the consumer IPO market.

And what companies would be better suited to sell shares in their IPOs than the new ecommerce juggernauts. Its unlikely that Groupon turned down a $6 Billion acquisition offer in hopes of driving the price of a sale up even higher into the stratosphere. That leaves one alternative -- IPO. How many Groupons for IPO shares do you think the company could sell in one day? I'd venture to guess they could do even better selling Groupon Groupons than they did selling Gap coupons. And what if Gilt group made shares of its own stock available to the fashionista crowd on a first come first served basis? Both Groupon and Gilt are direct marketers extraordinaire. Why not let Groupon and Gilt use that same formidable marketing muscle to support the resurgence of the public markets.

That, of course, leaves Twitter. Unlike these other companies, Twitter lacks the massive revenue to support a public offering. But if ever there was to be another IPO built upon massive scale and the promise of revenue to come, Twitter is the right candidate. Seven percent of the American public is now on Twitter and growing (and an amazing 87% are aware of the Twitter phenomenon). What would happen to the Twitter IPO price when #twitterIPO became a trending topic? There's no question it would set StockTwits ($TWIT) on fire. My only fear is that a Twitter IPO, reported on StockTwits, and retweeted on Twitter, might create a recursive loop so powerful that Twitter's stock price would rise to infinity. But imagine what a great news story that would be for CNN to tweet about.

It is amazing to think that the 90's created four consumer Internet giants (Amazon, Ebay, Yahoo and AOL), the 2000's birthed only one incredible public consumer juggernaut (Google), and here we are at the dawn of the 2010's with six consumer tech powerhouses ready to break out and dominate the public markets. I personally can not wait for these fantastic companies to trade on the public markets. It will be great for entrepreneurs, investors and consumers alike.

Why the Time for Mobile is Now

I was at a party the other night to celebrate the first anniversary of Nokia's "Ideas Project." The "Ideas Project" is an effort to bring together a diverse group of smart folks to share their thoughts on the evolution of media. The site has a bunch of interesting videos in which the likes of Esther Dyson, Robert Scoble, Loic Le Meur, Jerry Michalski, etc. share their big ideas. It is a really nicely curated site.

When Nokia started the Ideas Project just a year ago, it was not as blindingly obvious as it is today that the evolution of media is all about mobile (ok, maybe it was to Nokia). But, truth be told, venture capitalists have been predicting the domination of mobile and mobile applications for more than a decade now. And those of us who bet on the emergence of mobile in 2000 or 2003 or 2006 lost a lot of money.

So what has changed? A few short years ago, if you were pitching me on a mobile business, the most important slide was the one describing your startup's relationship with the carriers. If you weren't "on deck" -- meaning, your application wasn't pre-approved and pre-installed in the phone by the carrier -- you were nowhere. So carrier relationships were everything. And carrier relationships were hard. They took a long time to make happen. They cost a ton (carriers took the lion's share of the economics). And they were a huge dependency over which startups had very little control (and VCs hate that).

A second challenge for mobile startups of old was contending with the incredible variety of form factors and functionality. Startups trying to create location-based services couldn't count on a phone having GPS or Wifi or even a decent processor. Each phone had something different in it. Mobile gaming startups couldn't count on a phone having a big screen or high resolution. So mobile startups of old weren't developing a single version of an application. They were developing dozens of versions to suit dozens of screen sizes and processors and resolutions and chip sets and operating systems.

Enter the iPhone. As Apple did with music before it, Apple broke down the walls that existed in mobile. They opened up the "deck" and let application providers write straight to the device.[1] That changed everything. A huge dependency was lifted and innovation really started to flourish. Sure, the devices also got a whole lot more powerful. There's a lot more that you can do with a smart phone than you could do with your standard device circa 2005. But processing power was never the problem. The problem was access to consumers. And that door has been swung wide open.

The operating system problem has also gotten a lot better. Developers can write to a small number of mobile operating systems and reach the vast majority of the market. Mobile application developers were almost giddy with the simplicity of writing only for iPhone. But we all knew that couldn't last. Now it is iPhone and Android. Tomorrow Windows Phone 7 Series and Symbian as well. But that is a far cry from the OS challenges of old. (Unfortunately, despite the greater simplicity on the OS side, I fear a recurrence of the form factor problem -- Android may be a little too democratic and is bringing back a thousand variations on a theme).

Given the power of the devices, the simplicity of developing for them, and the proliferation of amazing applications, it is not surprising that the mobile revolution is finally upon us. Up next is "write once, publish everywhere." It's great that you can now write a mobile app and get it distributed quickly and easily to a plethora of mobile commuting devices. But why do developers still need to write a version for Flash and Silverlight and FBML (Facebook) and Android and . . . ? Solve that problem, and we're really off to the races.

I was one of the first people Nokia interviewed for their "Ideas Project" website a year ago. And I didn't talk about mobile. I talked about social. Which is still clearly a huge piece of the future of the consumer Web. But it is hard (dare I say impossible) to build a social application these days without also including mobility. If a digital experience doesn't extend to your pocket, it isn't long for this world. As an extension of the "Ideas Project," Nokia has just launched a section on the "Big Questions" and I got a second bite at the apple. This time I think I got it right. This time my question is all about mobile -- specifically, what is the future of location based services (LBS) in mobile computing? Go check it out here and let me know what you think. You may even win a Nokia phone and you can test out your theories.

[1] Yes, I know that some of you out there are thinking that Apple's approval process is onerous enough that they have simply replaced one deck for the other -- now you need to get past Apple, not the carrier. Whatever you may think of Apple's approval process, there is no comparison. Just ask anyone who tried to get an application on a phone in the early 2000's.