Google Ventures – StrictlyVC, LLC

Quick Chat with Scalus Founder and CEO Kristen Koh Goldstein

By Semil Shah

Scalus, a five-year-old, San Francisco-based maker of workflow and collaboration software, was born out of necessity, says founder and CEO, Kristen Koh Goldstein, a former investment analyst turned entrepreneur. We recently caught up with her to learn more.

With Scalus and a company you founded previously, BackOps, you seem to have developed a passion and expertise around building software and networks for remote workers — how did that all come to be?

It’s fueled from a place of personal experience. After 9/11, I left Wall Street to learn operational finance and accounting at startups. Then life happened. I became a mom. And I learned firsthand the challenges of being a mom and a professional. So I started BackOps, a back office service employing skilled moms who work from home between school dropoff and pickup. The business grew quickly, doubling revenue every year for four years, so we ended up needing to develop software to clear the hurdles to scaling our business and Scalus was born.

Our corporate mission is to prove that the future of work includes workplace flexibility for all. Our social mission is to get a million parents back to work by empowering them to be productive at work and engaged at home.

Speaking of remote workers, some of them are likely to be on contract. Have you been following the contractor versus full-employee debate as it relates to the on-demand sector? Any reactions?

The labor laws haven’t caught up with the changing face of the workforce. The Millennial generation approaches employment differently than its predecessors. Companies look more like Hollywood productions or real estate development projects. The line between “internal” and “external” becomes much more blurred in this environment, where contractors can often have the same longevity and close working relationships as internal employees, especially across departments.

Philosophically, I believe it’s important to make a commitment to people who commit to you. At BackOps, where I’m the chairwoman, my perspective has always been that unless you have an active income source elsewhere (you’re working for others), you are an employee of the company, even if just part-time on a temporary basis.

What’s your point of view on the increased attention paid to having more women in VC and investing roles in the Valley? Are there more women quietly doing this than we know about, or is it still pretty dismal? If so, what can change it quickly?

In angel investing, there have always been a lot of women funding and supporting early-stage companies. Shawn Byers, a prolific investor in female-led companies, is probably the only member of her family [which includes her husband, Brook Byers of Kleiner Perkins and their sons Blake Byers of Google Ventures and Chad Byers of Susa Ventures] who you haven’t heard about. I think it’s quite possible that Shawn may end up backing just as many startups as Brook, Blake, and Chad. Full disclosure: Blake Byers is our biggest champion at Google Ventures, so we’re a big fan of the whole Byers clan.

I am thrilled that trailblazers, including Helena Morrissey and Sukhinder Singh Cassidy, are pushing forward the discussion about getting more women in the boardroom, which is a positive change toward getting more women in VC. I am also so grateful to the countless women quietly working behind the scenes, including Aileen Lee. Hopefully, more companies, especially startups where like-think reigns, will start diversifying their boards, which will increase the demand for female VCs, who will in turn invest in a broader range of founders who will seek diverse boards.

You’re an active angel and seed investor but keep a relatively low profile. Is that on purpose or all part of the plan?

It’s on purpose. I have been listening, learning, and waiting for the remote worker movement to come center stage. When the time is right to talk about what it means to empower everyone across an organization to determine the way that they work, you’ll hear a lot more from me.

Connie

July 28, 2015

Entrepreneurs

BackOps, Crunchfund, DCVC, e.ventures, Google Ventures, Promus Ventures, Scalus, SherpaVentures
Bill Maris on Rising Valuations, Biggest Misses, and More

At Fortune’s Brainstorm Tech conference yesterday, senior editor Dan Primack hosted a panel of investors who were asked to share their thoughts on the current – and future – state of the venture market.

The VCs covered a lot of ground. We happened to focus in on what Bill Maris of Google Ventures had to say. You can find some notes from the discussion here.

Image courtesy of Vanity Fair

Connie

July 17, 2015

Firm Dynamics, Investment Opportunities

Google Ventures
Bill Maris Addresses Sensational Headlines at Disrupt

Bill Maris of Google Ventures gave a thoughtful performance yesterday at the TechCrunch Disrupt conference in New York. Interviewed by the outlet’s co-editor, Alexia Tsotsis, the two covered a range of high-profile stories that have been published in the last year and relate either to Google Ventures’s portfolio companies or to controversial – even seemingly strange — statements that Maris has made to reporters.

Earlier this year, for example, in a Bloomberg profile, Maris was quoted as saying: “If you ask me today, is it possible to live to be 500? The answer is yes.”

The Bloomberg piece actually provides readers with a fairly rich picture of what Maris is trying to achieve at Google Ventures. But Maris’s very specific prediction has stuck to him like chewed gum and Tsotsis gave him the chance to address it yesterday — an opportunity he seized, suggesting the “science fiction headline” belies the truth.

The reality, he said is that “for generations, physicians and researchers have worked really hard to diagnose, treat and prevent disease. And so I’m interested in the people that are doing that. And if that adds five years to people’s lifespans, if it adds 10 years . . . I think it’s a worthy pursuit.”

At the beginning of the last century, he noted, the lifespan in the U.S. “was about 40 years; now it’s about 77.” There’s “a ton of work that has to be done” to address the question of whether humans can live 500 years, Maris continued. But he said he thinks things are moving in the right direction. “I think it’s possible within a generation or two, at the most, to cure cancer.” Maris also noted that the “first human genome was sequenced in 2004. It took about 15 years and $2.7 billion, and now you can sequence a genome on a machine that can sit [on a small side table] for under $1,000 in a couple of hours.”

Maris was also asked about the reputation of Uber — heralded as Google Ventures’s largest deal ever when Google backed it in 2013 — as “ethically challenged.” Calling Uber the “fastest-growing company we’ve ever seen,” he offered that any outfit growing so fast is invariably going to “bump into challenges.” Maris also shared some color about one of his first meetings with Uber CEO Travis Kalanick about a potential tie-up.

“When we invested in the first round of Uber, my partner, David Krane, and I went to see Travis and talk about the round,” said Maris. “I told Travis the same thing I told Matt Rogers and Tony Fadell when we invested in Nest [Labs] . . . which was: ‘What does it take to take it off the table? We don’t want to get into an auction. We’re not looking to save money on valuation, and hopefully you’re not looking to crank it as much as possible.’ And Travis said, ‘Here’s what it’s going to take. Here’s the price and what I want the round to look like. Are you on board with that?’”

After Maris said Google Ventures was, and they “shook on it,” that’s “exactly the deal that we did, and Travis was as good as his word,” said Maris, offering that Kalanick could “easily” have asked for “15 to 20 percent more.”

Tsotsis next moved on to Google Glass — which Maris says is alive and well, despite reports suggesting otherwise. We’d hoped she might ask Maris about another, Uber-related headline this year: the news that Google plans to develop its own Uber competitor.

As you may recall, Bloomberg had reported back in February that Google was “preparing to offer its own ride-hailing service, most likely in conjunction with its long-in-development driverless car project.” At the time, Bloomberg said that David Drummond, Google’s chief legal officer and senior vice president of corporate development (as well as an Uber board member), had “informed Uber’s board of this possibility, according to a person close to the Uber board.” Bloomberg further reported that “Uber executives have seen screenshots of what appears to be a Google ride-sharing app that is currently being used by Google employees.”

Shortly after the piece was published, a “person familiar with the matter” told the Wall Street Journal that the “news that Google is developing an app to rival Uber has been blown out of proportion.” Reported the Journal: “The person said a Google engineer has been testing an internal app that helps Google employees carpool to work, and the app isn’t associated with the company’s driverless cars program.”

That seemed to settle the matter. Given the size of the opportunity Uber is chasing — and Google’s slowing growth — we’re not certain why.

(By the way, in case you’re curious: Unlike Maris’s colleague Ray Kurzweil – who reportedly takes 150 supplements each day to extend his life — Maris doesn’t take any, he said yesterday.)

Connie

May 6, 2015

Entrepreneurs, Firm Dynamics

Bill Maris, Google Ventures, Ray Kurzweil, TechCrunch Disrupt, Travis Kalanick, Uber

Duo Security Raises $30 Million More, Led by Redpoint

Duo Security, a five-year-old, 100-person company that sells its cloud-based two-factor authentication software to thousands of organizations, including Facebook, Twitter, NASA and Uber, has just raised $30 million in Series C funding led by Redpoint Ventures, with participation from Benchmark, Google Ventures, Radar Partners and True Ventures. (The Ann Arbor, Mi.-based startup has now raised around $50 million altogether.)

Last week, we chatted the Duo Security’s cofounder and CTO, Jon Oberheide, about how his company is using mobile devices as a second form of authentication, and what comes next.

Some major company’s information is breached every week it seems, yet there are also other two-factor authentication services out there tackling the problem. What makes yours different?

First, we think the existing security is broken. Underlying information technology has shifted out underneath existing security technologies and they aren’t relevant anymore. In the past few decades, your security model was built within the physical walls of your organization, then people began accessing the same device but they weren’t necessarily in the building, which made phishing for those employees’ names and passwords easy. Poor hygiene across multiple sites was the problem we were trying to solve, and we succeeded in ensuring that your identification couldn’t be stolen.

Then mobile devices came along and now everyone uses their own favorite products.

Yes, and those mobile devices aren’t under the control of an IT administrator. You have these cloud services that are being controlled by third parties. IT departments have gone from saying “no,” to partnering with [various parties] to ensure their [devices’] secure enablement.

And you have a new edition that you say works even better than what your customers have been using. How so?

Our new platform edition allows companies to establish what security policies are acceptable and customize protection at the point of entry. It can stop break-ins regardless of whether hackers have a user’s name or password by analyzing a company’s policies for each log-in attempt, including the location of the user, the reputation of the IP address, and what level of device health they want to admit into their enterprises. It addresses, for example, the employee who might forget his phone at the bar. A company can require that a full encryption and screen lock [are activated] to prevent someone else rom picking it up and trying to access corporate information. Or, if you’re a domestic company whose employees primarily log-in from Starbucks, you might want to block access to China or Russia, where a lot of hackers come from. You just click a box and it’s done.

How much more will this new edition cost customers?

On a per user, per month basis, we currently charge $3; our platform edition wil cost $6 per user per month because we’re providing a lot more value to companies that we think justifies [the price hike]

CircleUp Carves Out a Niche, as the AngelList of Private Equity

CircleUp isn’t a household name. But the three-year-old, San Francisco-based crowdfunding site has become well-known to consumer and retail companies that are too small to interest private equity firms yet growing too fast for a bank loan. So far, 70 businesses with yearly revenue of between $1 million and $10 million have raised an average of $1 million from CircleUp investors, all of whom are “accredited,” and who, on average, write checks in the neighborhood of $30,000.

Many of those backers — and there are more than 10,000 of them — are high-net-worth entrepreneurs or executives who’ve been in or around the consumer space, says CircleUp cofounder Rory Eakin. But the next largest group isn’t wealthy dentists looking to play venture capitalist, he says. It’s financial services pros. “We’re seeing hedge fund [investors], VCs, and other investment professionals who like making direct investments without the typical fund structure,” he says. “More family offices and [registered investment advisors] are coming on to the platform, too.”

It’s a little like AngelList — though less risky, suggests Eakin, citing Kauffman Foundation findings that smaller consumer and retail product companies return 3.5x within four-and-a-half years on average. Eakin, whose company now employs 40 people, told us more last week in a conversation that’s been edited for length.

You work with companies with at least $1 million in revenue. Why is that threshold meaningful?

It means these companies have an established product in the market, with suppliers, distribution and customers — data [that] can help put CircleUp’s investors in a position to succeed.

The companies offer investors equity in return for their capital. How much, typically?

A company typically sells 10 to 30 percent in a round on CircleUp. Investors can own all or a portion of that amount based on how much they invest.

How do you assess the companies that are applying for funding on your platform?

We [pore over] proprietary data about the more than 6,000 companies that have applied, as well as look at third party data, to score a company on how it has performed relative to its category. For example, if your natural shampoo is growing at 100 percent a year, that’s interesting, but if the category is growing at 200 percent per year, you’re losing market share.

If more than 6,000 companies have applied for funding on the platform, yet 70 have completed a round, you must be turning away most applicants. Why?

We’ll pass for two or three reasons. The first is valuation. Consumer goods tend to be valued off revenue multiples, so it’s a cleaner metric than you see in tech, and it gives us [information] to pass on to companies that aren’t priced appropriately based on risk. We also look at the experience and background of the management team, as well as the brand itself. Assessing the latter is more art than science, but we’re doing things with data now that helps us screen for it more efficiently.

Are you actively seeking out companies or is your deal flow mostly inbound?

A lot of great companies apply, but we’ve also done a lot of work to expand our partnerships. We get a lot of companies from PE firms with nowhere to send smaller companies. We’re also networking actively with bankers, brokers, and lawyers to ensure that we have quality companies.

We’ve also announced partnerships with General Mills, Proctor & Gamble, and Johnson & Johnson that are designed to help companies thrive after they raise money.

How so?

Largely, they meet with founders in an informal mentorship program where they talk about distribution and key functions of helping companies scale. It’s a win-win, because these strategics get to see what’s happening in the early stage of the market and they get exposure to these new products, while the [smaller] companies form relationships with [these potential investors, who might also acquire them].

CircleUp is a broker-dealer, meaning you accept a commission for facilitating the transactions on your platform. Do you share publicly what that percentage is?

It’s a small amount that’s competitively priced.

What about fundraising? CircleUp announced its last round nearly a year ago. Are you talking with investors again?

A [new round] isn’t on the roadmap. Our focus right now is on continuing to see opportunities and to reduce friction in the market. We knew the market wasn’t functioning as well as it could, but we didn’t appreciate just how painful things had been for these companies and investors.

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DataFox Aims to Disrupt Company Intelligence, Upset Michael Bloomberg

Bloomberg and Thomson Reuters had better watch their backs – or else get out their checkbooks. The financial information giants suddenly face a spate of startups ready to take a big bite of their businesses, with DataFox, a year-old, nine-person team in Palo Alto, Ca., among the newest.

So far the company, run by Stanford alums, has raised $1.78 million in seed funding from Google Ventures Ventures, Sherpalo Ventures, and Green Visor Capital, among others, for its subscription-based deal intelligence platform. The idea: replace expensive and sometimes far-flung analysts with algorithms that can turn structured and unstructured data into real-time, competitive insights about companies.

DataFox, which has three subscription tiers — $49 per month, $399 per month, and “call us,” essentially — says it isn’t ready for another round of funding just yet. At the moment, at least, it’s more focused on launching its beta product, having tested out its service over the past year with more than 2,000 trial users. Still, cofounder and CEO Bastiaan Janmaat says paying customers, including Box, Twitter and Bloomberg Beta, think the company is on the right path. In fact, he says of his company (only half-kiddingly): “This probably isn’t what ex-Mayor Bloomberg is looking for upon his return as CEO.” He shared more with us yesterday.

DataFox mines all kinds of public information to do its job. Does it create new data, too, or might it?

We do create new data, but we do it automatically. One example is competitors lists. Other databases suck at this. Human analysts at [the business data and analytics company] Dun & Bradstreet update their list just once a year. Our algorithms look at things such as co-mentions in news articles and similar press releases to automatically generate a list of similar companies, updated in real-time. The same is true of sector classifications. We invented our own sector taxonomy of more than 70,000 keywords . . . so now a company like Box is classified as “file sharing, web hosting, cloud computing, ftp replacement” plus 20 other terms, instead of just “file storage.”

You “push” out information that you deem relevant to your customers, like a headcount mention deep in a news article. How is that information delivered?

People get one weekly email. We’ll soon allow for opt-in daily alerts. Meanwhile, people login to DataFox for the real-time feed.

A lot of your customers are interested primarily in private company information, but you also track public companies, correct?

Yes, which is why our business is such a radical departure from the status quo, meaning CapIQ, Thomson Reuters, Bloomberg, and so forth. We’re building entity-agnostic algorithms that, over time, we can apply to any company, person or theme. We have around 7,000 public companies in our database currently. Whenever a customer requests that a company to be added, all we need is the URL, and we’ll auto-generate a one-pager in a matter of hours.

What’s on your roadmap? What else will DataFox offer customers next year?

Collaborative and team features. Expanded company coverage. We’re currently at 450,000, but I expect to cover more sectors within a year and more international companies. We’ll also be tracking more types of events. We have the pipes and parsers built, so we’ll continue to write more rules to identify more structured data points beyond the headcount, revenue, and valuation data we currently collect — like new major customers and new offices.

You say you aren’t raising money again until some time next year. What milestones do you plan to reach before talking again with investors?

We’re a subscription business, so we’re looking to continue growing revenues, but the one metric we care about most is engagement, meaning the frequency of logins and alert email opens, as well as the number of companies that [customers currently] follow, which is 35 per user. If we can continue to get daily engagement from analysts at Intuit, Bloomberg Beta, Google, Goldman Sachs, and the like, we’ll bolster our prognosis that we’re disrupting the large incumbents, and that data can’t be “pull” anymore. It needs to be predictive.

Why are you so convinced that “push” is the way to go?

The volume of communication and data is exploding, there are too many streams to pull from, so mathematically it’s necessarily becoming less likely that you are able to pull the right data point at the right time. Specifically for our customers, companies’ online footprints are expanding, so there’s more information out there, but they don’t have time to monitor a company’s employees on LinkedIn, their Twitter account, their Delaware filings, and the regional papers that cover them. Hence the need for push. I train my delivery pipe to understand my interests, schedule, and priorities. The pipe decides what’s important and surfaces that for me.

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Upstart Takes a Turn Into a Bigger Market

Two years ago, Upstart, a two-year-old, Palo Alto-based company debuted a newfangled funding platform that pairs accredited investors with students or recent graduates who are looking to finance their ideas. The idea, essentially: investors lend their own capital against the future earnings of the borrower, capital that is expected to repaid with interest within 10 years.

Though the peer-to-peer lending aspect isn’t novel, the way that Upstart assesses risk, which is tied directly to a borrower’s academic credentials, seemed to be.

Now, says Upstart, it’s using similar analysis to roll out a new and surprisingly old-fashioned product: three-year, $25,000 loans which will be assigned to people based not on their future earnings potential but their basic employability.

It’s a natural fit for the company. Not only is Upstart planning to target people without much work or credit history (a demographic it knows well), but it will be again be assessing those individuals’ risk profiles based on where they went to school and what they studied while there.

A Harvard graduate who majored in business, for example, might be assigned an annual percentage rate, or APR, of 6.5 percent, while someone who studied education at Bowling Green State University might be assigned an APR as high as 20 percent. (Those are lowest and highest ends of the loans’ range, respectively.)

The move isn’t a pivot, says CEO Dave Girouard, who says the business of funding future earnings is strong, with 30 percent more “Upstarts” on and backers on the company’s lending platform as last year.

Still, Girouard sounds even more enthusiastic in describing the market opportunity for traditional loans. By his account, most banks won’t touch anyone without a credit or employment background and neither will alternatives like LendingClub and Prosper, which creates an opening for Upstart.

Its window is limited. Girouard notes that once people drift into their 30s and 40s and gain employment histories that can be assessed by a broader spectrum of lenders, Upstart loses its advantages as an underwriter.

But that still leaves 20 million potential borrowers in the U.S. alone, and “there are a lot of places we could take this over time in terms of underwriting,” he adds.

Upstart has raised $7.6 million from Kleiner Perkins Caufield & Byers, NEA, First Round Capital, and Google Ventures, among others. It hasn’t raised any capital in the last year, though. Girouard says he expects to raise another round in the “second half of this year.”

For Nest Investor Shasta Ventures, Persistence Pays

Google’s plans to acquire the smart home appliance maker Nest Labs for $3.2 billion in cash should translate into a tidy return for the half dozen firms that invested $80 million in the three-year-old company. Kleiner Perkins may have the most reason to kick up its heels, having led Nest’s Series A round in early 2011. (The deal, rumored to give Kleiner a 20x gross return, might well convince its limited partners that Kleiner has recovered its mojo.)

But the deal is also a personal victory for venture capitalist Rob Coneybeer of 10-year-old Shasta Ventures, who was introduced to Nest founder Tony Fadell eight years ago by fellow VC Stewart Alsop. (“He thought we’d like each other,” explains Coneybeer, who is a mechanical engineer by training and shares Fadell’s love of gadgets.)

Once acquainted with Fadell, Coneybeer spent as much time with him as he could in the hope that one day they could work together. Last night, I talked with a clearly elated Coneybeer about his relationship with Fadell and his subsequent investment in Nest; what follows is a lightly edited transcript.

Where does your story with Fadell start?

I’ve been interested in mobile and hardware and investing in the Internet of things for a while, and when Tony left Apple, I kept in touch with him as he was investigating different ideas, including devices that use batteries to get recharged and what happens to those devices if you connect them to the Internet. So he’d been thinking about things, and we’d get together every two to four weeks to talk.

When did it turn into more than that?

Tony had gotten to know myself and some of my partners, and he’d developed relationships with a couple of different firms … When Tony became difficult to reach, I realized he might be starting something, and I basically pursued him and said, “I’d love to find out what you’re up to,” and I offered to sign an NDA. And he said, “You’d do that?” And I said, “Yeah, I never sign NDAs, but to learn what you’re up to, I would, absolutely.” A week or two later, he walked me through what he was up to, and I met the core team he’d pulled together.

He went with us and with Kleiner [for Nest’s A round]. He’d known [Kleiner partner] Randy [Komisar] for a long time, and Randy has great experience in bringing consumer electronics to market [including as a founding director at Tivo].

What was Shasta’s value-add to the company?

It was a good personal fit. And having built [Shasta] around consumer and expertise around hardware companies, we were able to make great introductions, including to Best Buy and Lowe’s and other channel partners. We also helped with recruiting, in closing key candidates. Beyond that, it’s hard to provide a laundry list; Nest has such an accomplished team.

Kleiner led the Series A round, but you say Shasta was a “significant participant.” Can you talk about what kind of return you’ll see from Nest’s sale? TechCrunch sources say it will return “almost all” of your second, $250 million fund, closed in 2008.

I can only tell you that [the return will be] very, very, significant. I’m sorry I can’t be more specific, but you can write “very” three times.

Is Nest your biggest exit personally? I recall that before Shasta, as a partner at New Enterprise Associates, you led an investment in the fiber optic switching company Xros, acquired by Nortel.

That was $3.25 billion, so this is my second three-billion-dollar outcome. It does feel really good to build something from scratch [Shasta] and work really hard for 10 years to build a brand and to [be a part of] a product and outcome that people are really excited about. It feels like things are finally coming together.

Are you even a teeny bit disappointed? I know you thought Nest could become a formidable standalone hardware business.

I’ll just say that Google is acquiring the best hardware team on the planet. In terms of designing high-quality, durable, consumer hardware, you can’t name a better team.

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Don Dodge on Indoor Marketing: VCs Missing a “Huge” Opportunity

Don Dodge – a Google Ventures advisor who helps developers build new applications on Google platforms and technologies – says VCs are still outsiders when it comes to indoor mobile location services. He likens the moment to the earliest days of maps and GPS, which are now integrated into just about every application on the Web, but that few investors knew what to do with initially.

Here’s an excerpt from a conversation we had last week:

You’re very focused on indoor marketing. Why?

At a very high level, we spend 90 percent of our time indoors, and indoors is where commerce happens.

What’s one of the most interesting things you’re seeing?

There are a bunch of companies that can create [digital] floor plans of stores like Toys”R”Us, Office Depot and Walgreens. Stores then give them SKU [stock keeping unit] maps that tell them where products are located on the shelves for inventory purposes and so forth, then [the apps] use indoor location technology to recognize in what aisle a consumer is standing, and by what products. It isn’t too far of a leap to imagine that as you’re looking at the Gucci bags at a department store, you receive a coupon from Coach.

What strikes you promising beyond retail applications?

Think about mobile games that could take of advantage of location, like Risk or Monopoly or Capture the Flag, and how they might incorporate the store that you’re in or the university dorm that you’re in.

There are social aspects, too. Say you’re at a concert and know that five friends are there amid 50,000 other people. Indoor location technologies can tell you exactly where those five friends are. And there are probably 400 more examples of market applications that no one has thought about yet.

There are numerous technical approaches to all of these things. How different are they?

One is Wi-Fi, where you phone accepts signals and triangulates where you are. WifiSLAM, an indoor GPS company that Apple recently acquired, was one example, but there are about 15 other companies that are doing things with Wi-Fi triangulation.

Another area is Bluetooth beacons. Every smartphone has Bluetooth to connect to other devices. Well, the same Bluetooth channel can be used to bounce off known locations to determine where you are.

Other companies are using sound waves, while others still, like Bytelight, are using LED lights in the ceiling. They pulse at a rate of a hundred times a second, which is faster than the human eye can see, but the front-facing camera of a phone can pick up the pulse and know by which light you’re standing.

Apple reportedly paid $20 million for WiFiSLAM. A number of other companies, including Cisco, Ruckus Wireless, and Aruba Networks, have recently acquired indoor technologies for undisclosed amounts. Is there going to be a big breakout story here?

It won’t be like social, where there are one or two leaders and everyone else is an also-ran. Instead, there will be hundreds of winners because there are so many different market applications and vertical applications.

And you think VCs are missing all the action. Why?

There have been at least three major acquisitions over the past four months, so now they’re saying, “Hey, there’s something going here.” But by and large, it’s a new, emerging area, with probably 50 small, unknown startups with angel investment or a little VC money that [other] VCs aren’t paying attention to.

When you see more stories about companies being acquired by big companies, then there will be a land grab.

Photo courtesy of Google Ventures.

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