Earlier this month I had the opportunity to spend some time in Silicon Valley – meeting companies and attending a few tech conferences. While spending time in that part of the world is personally always fun, professionally it’s motivating to get a glimpse of what the future might hold for us in India! Consider the staggering venture funding numbers – $26.5 billion invested in 3,698 companies in 2012. Moreover Silicon Valley seems to run at a different pace – everyone talks like a tech geek, 7.30 am breakfast meetings revolve around funding, wifi is always available (and free!) and the optimism in the air is truly infectious! Here are some things that I took away –
Enterprise is Sexy – coming off a year when many consumer companies bombed (Facebook, Groupon etc.) while enterprise companies saw gigantic exits (Workday, Splunk, Yammer and many more), everyone in the Valley seemed to be talking enterprise. With trends like big data, cloud and social becoming very real there seems to be a realization that the US enterprise IT market is facing a once-every-few-decades opportunity to overhaul old systems. Within cloud, unification of data seemed to be an interesting theme – as enterprises have created multiple silos online each holding critical data (CRM, ERP, social…) enterprises are focused on an integrated view of what’s relevant.
Mobile continues to accelerate: With 123 million smartphones in the market, the US market is churning through games, content and media at a dizzying pace. One app analytics company I met mentioned that 99% of users disappear from apps the next day after install – and hence stickiness has become next to impossible. On the other hand, users are becoming more addicted to their mobile devices – 25% of all US mobile users check their device every 30 minutes! Consequently developer focus has shifted from distribution to driving analytics and engagement – improve user experience and thus the odds that your users might come back. Another interesting tidbit – the app ecosystem has grown from $0 in 2008 to $16 BILLION in 2013. Remarkable stuff!
M&A groups ready to fire: While overall M&A deal activity was slightly down in 2012, I found M&A teams – both enterprise and consumer – actively looking to acquire in 2013. I attended an M&A conference with Corporate Development teams from 25+ tech companies paired with high-growth startups – truly an investors dream come true! With companies like Apple sitting on $137 billion in cash there is a lot of appetite and ability to acquire for growth and scale – which is great for the ecosystem. Slightly sadly India did not seem to be on the radar of many firms – in fact the few firms who have tried to acquire in India complained about the bureaucracy here.
Overall the US startup engine continues to produce innovative, valuable companies and I truly hope India will start seeing some of that success in 2013!