Mary Meeker's Internet Trends Report was released earlier this week. It's a 175 slides and I've condensed them down into a five minute read. To view the original report, you can get a PDF here. Otherwise, read my TL;DR version.
- There mobile web is already here and if you didn't know that, you're probably behind. Growth is driven by smart-phone users in developing countries like India, Brazil, and China
- ~40% of the global population is on the Internet (2.8bn people) and ~73% of them are on a mobile phone. There is an obvious disconnect between the two but mobile Internet will come to those corners of the Earth.
- Desktop advertising has matured but there are tremendous mobile opportunities.
- Law and regulation is dangerously behind, especially for modern marketplaces. Airbnb, Uber, Lyft and others are battling 20th century laws (p.140-145)
- Ecommerce is makes up 9% of all retail sales or ~$300 billion (note: it was ~1% in the year 2000) (p. 120). Opportunity remains: What off-line purchasing experiences haven't translated over to the web? Which of these experiences can be improved upon the most?
- Fun fact: Apple's Market Capitalization is 200x what it was in 1995. Wish I would have bought stock then.
- The Nasdaq peaked in 2000 at 5,049 and only a ago it broke that mark at 5,092. However, IPOs and private financings remain significantly below the Dotcom bubble peak. VC funding per company is approaching $14MM, where it peaked in 2000/2001 at $14 and $18. Are we in a bubble? (p.174)
Many bubble naysayers will point out that IPO and private financing dollars are still significantly below the 2000/2001 peak. True. However, cloud computing, open source and dozen other developments have made it cheaper than ever to start a company. Companies are waiting much longer to go public and many don't want to go public. This 'new normal' means we need significantly less money to build companies yet the amount we are investing into them is near Dotcom Bubble levels. We also can't forget that most markets are in weird places at the moment: S&P 500 P/E ratios are at all time highs, the Fed continues to keep interest rates near zero, etc. I'm not advocating either way, just keep an eye on these developments.
- If you didn't know it already, everyone has a smart-phone. Average mobile usage per day overtook average desktop usage in 2013. (p.10-14)
- Mobile growth is slowing and is saturated in first and some second world companies. Most growth is coming from India (+55% ), Brazil (+28%) and China (21%). (p. 10-12)
- People are always on their their smart-phones. The average person uses their mobile device for 3 hours per day. (p.14)
- Data usage continues to grow tremendously and video drives a large amount of that. Video data usage continues to grow significantly. (p.13)
Mark Andreesen seemed prophetic when he originally stated that software is eating the world. It has and will continue to do so. Mobile is following a similar path. If you're a business and you don't have a good mobile experience for your users or a strategy to implement one, you're going to be beaten by someone who does.
Advertising is Maturing, but Mobile Remains a Big Opportunity
- Relative media consumption leads to the assumption that print advertising spend will reverse dramatically. (p.16-18)
- Desktop Internet Advertising has matured and growth is slowing. Mobile is growing strongly. (p.18)
- Social Networks (Twitter/Facebook) include buy buttons to increase conversion rates. Others will likely follow suit. (p.21)
- Snapchat is reporting that video vertical video ad completion rates are 9x the horizontal. Wut... (p.25)
Messaging is strong
- The most popular mobile applications continue to be messaging applications (Facebook, Facebook Messenger, WhatsApp, etc.).
- WhatsApp sends 30 billion (yes with a b) messages a day and has 800 million monthly users. Huge user base. (p.49)
- People use various apps for different reasons. For example, in Asia, Line dominates Japan, Kakao chat dominates Korea and WeChat dominates China.(p.50)
There will be many more consolidation opportunities even after Facebook acquired WhatsApp and Rautken acquired Viber. Path announced that their chat application would be sold to Daum Kako earlier today.
User Generated Content Continues to Grow Like Crazy
- Snapchat's curated, user-generated videos are generating tremendous number of views. Videos of Cochella generated 40 million views over a weekend. NYE 2014 generated 37 million view in 24 hours. Crazy levels of engagement. (p.59)
- Facebook video views are up 4x in a half year. (p.60)
- Twitch is huge. They have 100 million average monthly users and growth on every front is strong. (p. 61)
- Dataminr looks to be a real winner but has channel choke potential. It also recently raised $130 million.
- While Facebook's video view growth is impressive, I believe this increase can largely be attributed to forcing auto-play on all videos in a users' news feed. I would be interested in comparing the number of video views to shares and posts over the same time period.
- The amount of data users create is also generating tremendous opportunities in the world of big data. I was a little disappointed not to see anything here.
On-Demand Services Are Everywhere
- On-demand services are popping up everywhere and in every industry. Most are in areas where we already spend lots of money (Housing, Transportation, Food) (p. 74-78)
The Drones are Coming
- Drone industry production has grown 5x in only two years. Hockey stick inflection is coming.
Security = Super Important. And not being talked about enough.
- There is already high demand for security specialists and they are going to be paid well. Demand is only going to grow. (p. 89)
- I was a little shocked that there were only a couple slides on security. Privacy concerns are on every American's mind in light of the Edward Snowden revelations.
- Regulation is behind (this is a consistent theme) and there are many open questions as to when a company needs to disclose security breaches, especially when that company is a public company (JPMorgan Chase, Target, Sony etc.).
- CB Insights reports strong VC investment in security startups over the past year and I think this will only continue to grow.
- Finally, most people don't have security strategies in place and take it for granted. Your business needs one.
Other Marco Trends
- Service jobs have been the majority since WWII and are now 86% of all jobs in the USA. The demand for highly skilled jobs (engineering) continues to grow. (p. 97)
- Unions have been dying and are close to death. (p.100)
- 50% of US Population receives some form of government benefit. (p.103)
- People are getting married much later (after 30) and are having less kids (only 1 or 2). (p.108)