Andreessen: ‘Every Single Idea From The Dotcom Era Was Correct’

An interesting debate is brewing in the VC community.

Marc Andreessen made a statement recently that could be a goldmine for idea hunters –

“One of my working theories right now is basically every single idea from the dotcom era was correct.”
Link: Marc Andreessen on Dotcom Era Ideas
His basic theory is that all ideas then were right, but the timing was off in many cases. For example, his own startup, LoudCloud.

And Fred Wilson responds: “That is nonsense. I can name five I funded that were outright ridiculous”

Source: Comments on Fred’s Post – here and here.

Is Marc Andreessen right? Is it possible that every single idea from the dotcom era would succeed some day? Well, if we think of Instacart, Bitcoins, Tumblr … we would have to agree with Marc Andreessen.

Or, do you think Fred has a point – in which case, do we have examples from the Dotcom era that would not succeed today, and would not succeed in the years to come?

If pmarca is right, we would add another heuristic to PG’s ‘Startup Ideas’ (we had spotted one missing heuristic earlier): Pick up a copy of Kaplan’s F’ed Companies Book.

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Should Apple Just Break Itself Into Two Companies?

We’ll keep this argument very simple. AAPL is down some 24 percent since September. That is a loss of hundreds of billions of dollars in market value (some 130 billion dollars or so). The best explanation for this drop so far comes from PandoDaily.

“And that gets to the real reason behind Apple’s stock blues. Its market cap had gotten just too freaking big. Fund managers don’t like having too high a percentage of their holdings in a single company, even if that company is Apple. They diversify to limit the risk of one company tumbling. Because, should Apple’s stock start to drop, it has a disproportionately large effect on their fund’s performance. And Apple’s stock is dropping.”

Source: PandoDaily

Is Apple a company with two parts each worth half-a-trillion dollars, trading overall at half-a-trillion dollars? You can split it in multiple ways – but have we reached a point where the valuation drops due to operational limitations of investors far exceed the benefits of remaining as one big company?

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The Time And Money Spent on Apps – Where Do They Come From?

In the Q&A after Mary Meeker’s D10 interview, there was one question on which activity is taking a financial hit to give us that extra cash to spend on Apps – we can actually extend that question into two separate questions:

1. We know that a significant amount of money is spent on Apps every year – personally, when you spend money on an App, where do you think that money is coming from? Or, is it just the fact that the amount is less (1.99 for example) you do not think in those lines? (for example, we have compared App store revenues to Starbucks revenues in the past)

2. We now know that we spend a significant amount of time on Apps as well. Where does that time come from? Personally, which activity has taken a hit?

Mary Meeker pointed out that “we are all going out less and are spending more time indoors” or something to that effect – now that can explain both our questions, but that might not be it. What do you think?

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100 Years Housing Returns Less Than One Year Return From Stocks

This is from Nate Silver’s book ‘The Signal and the Noise’ – 10,000 dollars invested in an American Home in 1896 would be worth 10,600 dollars in 1996 after adjusting for inflation. In other words, the rate of return had been less in a century, than the stock market typically returns in a single year (numbers are based on an index developed by Robert Schiller and Karl Case)

If people had taken note of this fact, the bubble in the early 2000s could have been avoided. Okay, if (your favorite reason) the bubble could have been avoided. But this data point on home investment returns definitely came as a surprise to us.

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Facebook’s 2012 YTD Revenue: What Taobao.com Sold In One Day

Agreed, comparing apples and oranges is stupid. But since Facebook is also selling stuff these days, and we have all heard the funnel stuff, here it is: “Two days ago the Chinese website taobao.com held a discount promotion to celebrate what’s known as ‘double sticks day’ in China. In a single 24hr period, they conducted 19bn RMB (US$3.06bn) of business.” (Source) – By comparison, Facebook has cheered investors with the following revenue figures in 2012 so far:

1.06 Billion Q1
1.18 Billion Q2
1.26 Billion Q3

(Source)

How do we digest these numbers? Should we even try? Yes, Facebook is blocked in China. They are not into discount commerce. This is an outlier data point. FB is trying to monetize mobile. Anything else?

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Google’s Ad Revenue Higher Than All of US Print Media

Online advertising is a mature industry now. That makes this comparison all the more worthwhile, even if one could argue that one is a sunset industry and the other is a growth industry. We spotted this stat today that Google’s ad revenue in the first six months of 2012, is more than the reported revenue of the entire US print media (Source)

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Curiosity: Should We Poke The Cube?

We had tried writing this in a slightly different tone, but that did not appeal to many. So here is another attempt.

Understanding the relative scale of things is always important. When it is about time, it is critical. There is a new game in town. Well some of us are old timers there already. But the world is catching up. And it is named right as well – ‘Curiosity – what’s inside the cube’ – “In fact, half a million players so far have registered to help destroy the 64 billion tiny blocks that compose that one gigantic cube, all working in tandem toward a singular goal: discovering the secret that Curiosity‘s creator says awaits one lucky player inside. That’s right: After millions of man-hours of work, only one player will ever see the center of the cube.” (Source: Wired).

As you prepare to destroy your thousands of blocks – here is something for you to think about.

We had spotted some interesting (actually disturbing) stats on Angry Birds before – the summary is this –

“If everyone playing Angry Bird starts working on putting together some knowledge about the world, they can create a complete wikipedia in 30 days. Yes, thats right. The COMPLETE WIKIPEDIA in 30 days.”

Please stop, and think about that for a minute. The ENTIRE WIKIPEDIA, in 30 days! (Here is the rough logic we used: The total number of hours consumed by Angry Birds players world-wide is roughly 200 million minutes a DAY, which translates into 1.2 billion hours a year. To compare, all person-hours spent creating and updating Wikipedia totals about 100 million hours over the entire life span of Wikipedia (Neiman Journalism Lab).)

The bigger point, of course, is that these ‘millions of minutes’ add up pretty fast. Yes, you are doing it when you are waiting in a queue. But a minute is a minute.

And now, back to poking the cube. Let us do some back of the envelope math:

Half a million folks have downloaded it so far (it is yet to hit mainstream) – with a reasonable assumption (of the kind that VCs do not like) – that this game becomes even one-tenth as popular as Angry Birds – we are talking about a total of 100 million downloads (Angry Bird crossed the 1 billion download mark ages ago). Huge numbers!

Let us also assume an involvement that is 50 percent of Angry Birds (10 minutes per user per day on an average) – that would be 5 minutes – and a daily active user base of 10 million (one in ten downloads assumed as active daily) – we are upto an estimated 50 million minutes a day – so the 100 million hours required for creating wikipedia – that would be 120 days!

Should we poke the cube?

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Money Spent On 2012 Elections = 1 Year Unemployment Benefits For 100,000 Americans

Well, we know about a couple of billion dollars were spent on this election by the two candidates put together. Using actual numbers, the total comes to 1.605 billion USDs (Source). We also know that the average American collected 295 USDs in weekly unemployment benefits in 2010 (Source). Back of the envelope math shows that with the amount spent on this elections, the government could have funded the unemployment benefits for ONE YEAR, for about 104641 Americans.

No big revelation here, of course – just an understanding of the relative scale of things. 100,000 is not a small number!

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Mobile-Connected Devices To Exceed Earth’s Population

We spotted this today:

“By the end of 2012, the number of mobile-connected devices will exceed the number of people on earth, and by 2016 there will be 1.4 mobile devices per capita. There will be over 10 billion mobile-connected devices in 2016, including machine-to-machine (M2M) modules-exceeding the world’s population at that time (7.3 billion).”

Statistics Source: Cisco

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Apple’s Market Cap Now More Than Microsoft Plus Google

We had spotted some Apple stats before, we spotted this today:

“First on AI: Apple’s stock soared to new heights on Thursday, pushing the company’s market capitalization to $456 billion, a number that is greater than the values of rivals Google and Microsoft combined.

As of Thursday morning, Microsoft’s market cap was around $256.7 billion, while Google was valued at around $198.9 billion. With Apple’s stock up more than 3 percent in morning trading, the company surpassed the combined totals of both Google and Microsoft.”

Statistics Source: Apple Insider

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