Moving Ideas
Brad-Paisley
Feb 252013

Celebrity

     ‘Cause when you are a celebrity, it’s adios reality.
     You can act like a fool, people think you’re cool.
     Just cause you are on TV…
     —Brad Paisley

People love the movies and they worship their stars.  Over $10 billion was spent at movie theaters in the U.S. last year and an estimated 1 billion people will watch the 85th Oscars tonight.

Will Lincoln win Best Picture? Or will it be the sentimental favorite Argo? Maybe Silver Linings? (My movie crazy daughter Maggie is rooting hard for that one but I think her interest in Bradley Cooper may have colored her judgement).

The convergence between real life and fiction is blurring the World in confusing ways. Oscar host Seth MacFarlane’s character “Stewie” who seeks World domination could be mistaken for North Korea’s evil leader Kim Jong-un.

The Chinese Military hacking into Apple, Facebook, Twitter and the New York Times seems like a script from a James Bond movie.  SPECTRE is planning to sabotage the power grid of a major U.S. city and NATO has cyber-security as a major issue at its meeting this week… I made part of this up, but you have to actually think about it.

Jon Stewart’s Daily Show is how the younger generation get their news, and shows like Family Guy and South Park (both cartoons!) are tackling the hottest societal and political issues arguably better than human shows.

Oscar “winner” Pistorius set free on bail after shooting girlfriend but Nike pulls the “I’m the bullet in the chamber” ads.

     I’ll get to cry to Barbara Walters, when things don’t go my way
     I’ll get community service, no matter what law I break
     I’ll make the supermarket tabloids, they’ll write some awful stuff
     But the more they run my name down, the more my price goes up
     —Brad Paisley

Kim Kardashian has 17.4 million followers on Twitter and Paris Hilton has 9.9 million. In both cases, the only thing they are famous for is being famous. NFL players tweeting when they are on the sidelines, American Idol, The Bachelor, Project Runway, Shark Tank. Watching TV while surfing the Web.

We are so immersed as a culture, it’s hard to remember what’s “live” versus “Memorex.”  Shooting hundreds of virtual people to win a video game or shooting actual people becomes twisted in the minds of gamers who live through their avatar and vice-versa.

In the new cult TV drama House of Cards, politicians are shown doing every reprehensible thing under the Sun. It is not a coincidence that no matter how incredible Washington behaves, the rest of America watches it like professional wrestling or a reality show — this can’t really be happening, can it?!

     I can throw a major fit, when my latte isn’t just how I like it
     They say I’ve gone insane, I’ll blame it on the fame
     And the pressures that go with….Being a Celebrity
     —Brad Paisley

The “Always On” World is becoming even more so with an estimated 886 million smart phones to be sold this year — up 31% from 2012. There are now 2.5x more “computers in your pocket” sold than PCs. This is great for the “celebrities” being “followed” on native mobile applications such as Twitter and Pinterest (which just received a $200 million financing at a $2.5 billion valuation).

The “app economy” of both iOS and Android continue to experience hyper growth as users continue to convert more and more of their activity into the virtual.

Technology in general, and the Internet specifically, is all about a disproportionate gain to the leader in the category. This bodes well for companies we’ve focused on such as Facebook (leading next generation communication and collaboration platform), Google (leader in mobile operating systems), Apple (leader in mobile devices and apps), Twitter (leader in real-time search and news), Spotify (leader in social music), Dropbox (leader in virtual file storage and collaboration), Uber (leader in local transportation), ZocDoc (leader in booking with physicians and dentist) and Amazon (leader in eCommerce and cloud services).

———-

The S&P 500 had its first down week in 2013 and was off 0.3%, while NASDAQ was down 0.9% and the Dow was up 0.1%. The Federal Reserve’s meeting notes that indicated they might “remove the punch bowl from the party” earlier than expected was the main excuse for the negative action in stocks. The Chinese market fell especially hard. Additionally, commodities were weak with oil off 3% (despite gas prices being at new highs), copper down 5% and gold off 2%. The 10-year bond yield was 1.96%.

What’s classic about the Market is that before it was known that the “Quantitative Easing” program might be terminated earlier than previously indicated, investors feared “QE 4ever”. In other words, the reason named for stocks going down before was a perpetual Quantitative Easing, and the reason used for stocks going down last week was that Quantitative Easing wouldn’t be ongoing.

The Heinz mega-buyout by Berkshire Hathaway, the Dell going-private transaction, and the merger between American Airlines and U.S. Airways are encouraging that businesses want to play offense and also indicative of attractive valuations.

The positive pricing and the aftermarket for IPOs year-to-date are encouraging with 38% of IPOs pricing above the range and an average first day “pop” of +16%. Also encouraging were the $2.6 billion of cash inflows into equity mutual funds last week.

We continue to be BULLISH on equities as we believe the fundamentals are good and improving while valuations remain modest… especially compared to bonds.

———-

Bubblin…
From Luben

Mobile payments solutions have been high on our focus list, with companies like Square, Braintree, Jumio, iZettle and SumUp being the top spots.

Braintree, which provides an online payment solutions to mobile focused companies like Uber, Fab, HotelTonight, etc., uses a technique that encourages users to store their credit card information on Braintree’s system, so when the users receives the service, he can pay by one click (or no click in Uber’s case). Taking it to the next level, Braintree is trying to get all these services into a consortium, so that a Fab user will be automatically recognized on Uber, without re-entering his or her credit card information. This payment method, called Tokenization, is considered more secure compared to traditional e-commerce, because the provider (Braintree in this case) uses the fingerprint of your device, the location and the password.

I believe this model, and Braintree, has strong potential to see high adoption rates as it is 1) very user friendly and simple, and 2) safe!

Meanwhile, the European Square-like provider SumUp announced it’s adding support for American Express to accept payments with Amex in all of its major regions (GER, FRA, UK, IRL, ITA, NED, ESP and AUT). The per transaction fee to merchants for Amex payments is the same as with Visa and MasterCard, at 2.75%. SumUp also said that Amex will be integrated in its upcoming payment app, SumUp Pay, which will enable users to store their credit or debit card information, and pay by click when at the store.

Another very interesting development in mobile payment was the Twitter-Amex announcement two weeks ago. Amex is now allowing Twitter users to pay by Tweet for certain products by tweeting purchase hashtags and then re-tweeting a confirmation tweet from Amex within 15 minutes (see how it works). The product is then shipped to the cardholder billing address. So far, the available products range from Amex gift cards to products from Amazon, Sony, Urban Zen and Xbox 360.  Some of the product that can be purchased with the Pay by Tweet solution include the Amazon Kindle HD, Sony Action Cam, Urban Zen Bracelet designed by Donna Karan, the Xbox 360 4GB console, and the Xbox Controller. This is very interesting and could potentially be a large, new revenue channel for both, Twitter and American Express. (Disclosure: GSV owns Twitter, Visa and Amazon shares).

Moving into mobile data analytics, a Kleiner and Sequoia-backed startup hit our radar. San Mateo-based Drawbridge focuses on cross-platform, mobile advertising, allowing customers to effectively identify a user when he switches between smartphone, tablet, laptop and PC. Drawbridge has matched 450 million devices so far. Founder Kamakshi Sivaramakrishnan was previously scientists at AdMob, which was acquired by Google. Drawbridge just received a fresh $14 million round, valuing the company in the $60-100 million range. There is another interesting company in that space, Tapad, which also tries to identify a single user across different devices and aims to provide a better ad targeting solution.

Euclid, an analytics solution for physical retailers, announced a $17.3 million Series B investment led by Benchmark, with participation of existing investors NEA, Harrison Metal and Novel TMT Ventures. Benchmark’s Bruce Dunlevie is joining Euclid’s Board. Interestingly, Euclid’s COO Scott Crosby co-founded Urchin previously, sold it to Google, and that became the basis for Google Analytics. Euclid is now considered the Google Analytics for retailers. The system is designed to track different customer data points, ranging from store walk-ins, walk-bys, repeat visitors, visit durations, capture rates, specific product demand, etc. An in-store sensor can detect visitors’ smartphones via WiFi. It can also track individual users (allowing customer opt-out) and provide personalized user data to the shop. Customers include some larger national chains in places like SF, LA and NY. It’s an interesting company, with good fundamentals, large potential, a promising management team, and a strong investor group.


Source: Euclid

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