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Leveling the Mobile Playing Field: Mobile Startups & Microsoft – Motorola – Verizon

November 27th, 2006 by Rocco

On Friday, November 17th, we were at the Microsoft campus in Mountain View, which is a nice and impressive complex of buildings. We were at building one, the Microsoft conference center (pic below). The event started pretty early with an extensive breakfast buffet and the usual networking.
What was different though was the crowd of attendees: more formal and not as “geeky” as what we had experienced in former events. It was also harder to get in touch with other people than before, probably because everybody seemed to be really keen on talking to the VCs and the representatives from the other big companies (cf. title).

The whole event was focussed on mobile entrepreneurs and “Accelerating Growth Through Partnership” (with the 3 big companies and VCs that is). So all the panels of the day were focusing on this, plus the expected self-praising and marketing pitches of the big players the panels consisted of.

INTRODUCTION:

After the introduction by Dan’l Lewin (Microsoft), where he pointed out that the Internet today is all about identity and the (mobile) edge: wherever you are, wherever there is web access, you can use applications made for the web, Rajeev Chand of Rutberg & Co. held the first keynote and told us two anecdotes. The first one was about working with content providers being about the same thing as going quill hunting with the vice president (big laughs). The second one was about his impression about the future of physical storage media: when he was in india he saw many CDs taped to bicycles as reflectors (no real future for physical media).

Rajeev pointed out the following trends in the mobile industry:

The following 2 slides were particularly interesting, they focussed on current and future trends in mobile applications.

Current trends:

Future hot trends:

PANEL 1: Accelerating Growth Through Partnership

Next up was the first panel, moderated by Rajeev Chand and featuring Paul Leeper (Motorola), Sanjiv Parikh (Microsoft) and Ray Taylor (Verizon).
All three speakers in this panel pitched their company’s developer support programs to the audience, all three see their role in the support of companies an especially in those that could help their business to grow as well. The goal is to keep up with technology, or as Paul Leeper of Motorola put it, they do not want to follow developments in technology, but they want to lead it.

Here are some interesting questions and answers from this panel:

Question:
What is your advice for entrepreneurs to approach big companies?

Answers:
Verizon: Think about what’s the value for the big company! How can it save money (to Verizon)? Do research on what we did before (read press releases etc.) to avoid offering “the 7th bowling game for cell phones”!
Microsoft: Think about if you are a strategic fit! Check out website to figure out how to fit to MS!
Motorola: Put your stuff on your website! Think global! Keep those points in mind: have patience, think ahead, think global!

Question (from audience):
Are Verizon and Motorola happy with user experience of the motorola Q? (big laughs)

Answers:
Sanjiv (Microsoft) lived on it for 2 weeks and was happy with it.
Paul (Motorola): There has to be a start, the “Q” is first generation, the price point is low, software upgrades will help to improve the situation.
Rajeev commented on the battery life, which is very short and asked: Do you think it was wrong to launch this? Answer: Of course not!

Question (from audience):
What about power usage in devices, this should be a key issue? (cf. our observations on this topic here)

Answer:
Manufacturers are working on it, but keep in mind that there are a lot more features there now than anytime before, with the same running time.

Question (from audience):
Development on a huge number on different handsets is a big obstacle – what to do about this?

Answers:
Motorola: Linux-Java will be available soon and help.
Verizon: Flash is part of the answer (or can be), there are still gaps. The trend out there is not a single OS (operation system), but it’s all growing together.
(Unfortunately nobody was going into detail about mobile web applications.)


PANEL 2: The Investment Outlook for Mobile Startups

After a short break the second panel featured 4 representatives from VC companies who were talking about “The Investment Outlook for Mobile Startups”: Tim Chang (Gabriel Venture Partners), Harshul Sanghi (Motorola Ventures), Sanjay Subhedar (Storm Ventures) and Fred Wang (Trinity Ventures).

The panel started with the question what startup companies should show to VCs in order to get their attention. Here are the combined answers:

The following questions were raised:

Question:
What tips do you (the VCs) have for entrepreneurs?

Answers:

Question:
What companies would you (the VCs) invest in?

Answers:

Question:
Do you do seed funding – meaning fundings of around 100k USD?

Answers:
Motorola: not < 1mio, typically 4-5 mio
Trinity: also not less than 1mio
Gabriel: open for seed funding
"Ad Infuse” and “BT Movio” both got 600k from Storm ventures, these were the lowest funding amounts.

Questions:
What are the preferred exit options?

Answer:
M&A (all agree)


SUMMARY:

Especially the VC panel was very interesting, because it provided more insights that what we had expected. In terms of support for mobile web application companies it really depends on the product that is produced, because all of the big companies are really focussed on applications, namely installable Java applications or other things, such as hardware (e.g. stereo bluetooth headsets). We thank Microsoft for this interesting event, the VC panel, the free lunch and the team of Renzoo for the nice chat during lunch!

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