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CODE CONFERENCE
Mary Meeker
May 28, 2014
kpcb.com/InternetTrends
Outline
1) Key Internet Trends
2) Status Update Tech Stocks / Education / Healthcare
3) Re-Imagining Continues
4) Screen + Video Growth = Still Early Innings
5) Chinas Epic Share Gains
6) Public Company Trends
7) One More Thing(s)...
8) Ran Outta Time Thoughts / Appendix
2
400
40%
315
291
300
266
244
203
200
170
100
35 42 43
64
54 55
83
102
104 113
159
172
30%
233
20%
134
10%
0%
Source: Smartphone shipments per Morgan Stanley Research. User base per KPCB estimates based on Morgan Stanley Research and ITU data. Smartphone
users & mobile phone users represent unique individuals owning mobile devices, as noted on slide 8; Mobile Subscribers based on number of connections & may
therefore overstate number of mobile users.
80
60
40
20
0
Q1:95
Q1:97
Q1:99
Q1:01
Desktop PCs
Q1:03
Q1:05
Q1:07
Notebook PCs
Q1:09
Q1:11
Q1:13
Tablets
7
TV
Mobile Phone
5.2B
Smartphone
Population
Penetration
78%
73%
1.6B
22%
Laptop PC
789MM
11%
Desktop PC
743MM
10%
Tablet
439MM
0
1,000
6%
2,000
3,000
4,000
5,000
6,000
50%
40%
38%
37%
30%
25%
23%
20%
19%
17%
18%
16%
12%
11%
10%
17%
6%
14%
8%
0%
North
America
South
America
Europe
May-13
Asia
Africa
Oceania
Global
May-14
100%
80%
Other OS
iOS
60%
Android
Windows Phone
40%
BlackBerry OS
Linux
Nokia Symbian
20%
0%
2005
2010
Source: 2005 & 2010 data per Gartner, 2013 data per IDC.
2013
10
11
Advertising / Monetization =
Mobile Especially Compelling
12
$100
25%
20%
$86
$76
$75
$62
15%
$64
$50
10%
$25
5%
$0
0%
2008
2009
2010
Desktop Advertising
Source: PWC Global Entertainment & Media Outlook, 2013.
2011
2012
Mobile Advertising
Y/Y Growth
$125
2013
Y/Y Growth
13
Google ($)
$37
Y/Y Growth
9%
Q2:12
Q3:12
Q4:12
Q1:13
Q2:13
Q3:13
Q4:13
Q1:14
$37
$38
$43
$42
$41
$41
$46
$45
6%
6%
14%
14%
11%
10%
8%
8%
Facebook ($)
Y/Y Growth
Mobile % of MAU
Twitter ($)
$1.29
Y/Y Growth
Mobile % of MAU
$1.50
$1.64
$2.15
$1.97
$2.22
$2.65
$3.65
$3.55
90%
134%
108%
93%
52%
48%
61%
69%
80%
--
--
--
--
--
75%
76%
76%
78%
Source: SEC Filings & Comscore. ARPU = Average Revenue per User, defined as annualized revenue per Monthly Active User (MAU). Google ARPU is
calculated using Googles gross revenue & Comscore unique visitors.
14
Time Spent
Ad Spend
50%
45%
40%
38%
Internet Ad
Mobile Ad
= $43B
= $7.1B
30%
20%
22%
19%
10%
0%
~$30B+
25%
12%
20%
10%
5%
Print
Opportunity
in USA
4%
Radio
TV
Internet
Mobile
Source: Advertising spend based on IAB data for full year 2013. Print includes newspaper and magazine. $30B+ opportunity calculated assuming Internet and
Mobile ad spend share equal their respective time spent share. Time spent share data based on eMarketer 7/13 (adjusted to exclude outdoors / classified media
spend). Arrows denote Y/Y shift in percent share.
15
$40
Mobile Apps
Mobile Advertising
$30
$24
$20
$14
$10
$6
$2
$3
$0
2008
2009
2010
2011
2012
2013
Source: Global Mobile App revenue per Strategy Analytics; comprises virtual goods, in-app advertising, subscription, & download revenue. Global Mobile
Advertising revenue per PWC; comprises browser, search & classified advertising revenue.
16
17
18
STATUS UPDATE
TECH STOCKS / EDUCATION / HEALTHCARE
19
Technology Company
Valuation Excess?
Some? Yes...
But, Lets Look @ Patterns...
20
400
310
300
200
134
93
100
22
44
51
87% Below
221
193
126
86
76
20
16
19
50
38
39
65
6
15
48
44
43
41
25
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$40
$31 $31
$30
73% Below
$21
$18
$20
$9
$10
$1
$2
$4
$5
$7
$12
$12
$10
$7
$6
$3
$2
$8
$7
$2
$1
$11
$4
$8
$5
$0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013 2014
United States
North America
Asia
Europe
South America
NASDAQ
21
50% Below
4,500
3,668
3,182
3,000
1,500
2,354
1,462
765
636
589
679
586
655
2,141
1,782
2,587
2,349 2,505
1,918
2,230
985
0
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Funding per
Financing ($MM)
5,476
$3
$3
$2
$5
$4
$4
$5
$5
$6
$8
$14
$18
$11
$8
$8
$9
$8
$9
$8
$9
$7
$7
$10
$8
$9
$125
$101
$100
77% Below
$75
$50
$50
$35
$25
$2
$0
$2
$1
$3
$2
$3
$5
$8
$11
$19
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Thomson ONE. Funding per Financing ($MM) calculated as total venture financing per year divided by number of deals.
22
40%
30%
20%
10%
0%
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
23
Education =
May Be @ Inflection Point
24
Public Schools Rank 27th globally in math / 20th in science / 17th in reading
College Job Prep 1/3 of four-year college graduates feel their education
did not prepare them well for employment
*USA ranks behind Luxembourg / Switzerland / Norway. Source: OECD Programme for International Student Assessment, 2011 & 2012. The Institute for
College Access & Success, 2014. Consumer Financial Protection Bureau. Voice of the Graduate, McKinsey / Chegg.
25
26
27
5%
11%
6%
25%
25%
35%
29%
30%
11%
23%
North America
Europe
North America
Europe
Latin America
Asia
Latin America
Asia
Africa / Oceana
Source: Duolingo, Coursera.
Africa / Oceana
28
Healthcare =
May Be @ Inflection Point
29
Waste = 27% of Spend $765B of healthcare spend estimated from excess costs: $210B =
unnecessary services; $190B = excess administrative; $55B = missed prevention opportunities;
$310B = inefficient delivery of care / fraud / inflated prices (2009)
Employers Carry Big Burden $620B spend by employers for 150MM Americans
(2014E)...costs up 28% vs. 5 years ago...67% CFOs indicate healthcare costs = leading economic
concern
Individual Costs Rising >25% of family income likely to go to healthcare spending in 2015E
vs. 18% in 2005...top 5% healthcare consumers (most with multiple chronic illnesses) spent 50%
of healthcare dollars (2009)...>50% of personal bankruptcies driven by healthcare costs
Chronic Conditions = +75% of Spend Most costly = cancer / diabetes / heart disease /
hypertension / stroke...1 in 2 Americans has at least 1 chronic condition, 1 in 4 has 2+...32% of
Americans obese in 2008, up from 15% in 1990
Behavior = Root Cause of Many Health Problems Health risk behaviors cause chronic
diseases. 52% of adults did not meet recommendations of physical activity (2011)...50% of those
with chronic conditions not complaint with taking medicine to manage disease = $100B on
avoidable hospitalizations (2010)
Source: Beth Seidenberg, KPCB General Partner; Lynne Chou, KPCB Partner. Sources: Healthcare costs per Center for Medicaid and Medicare Services
(CMS). Healthcare waste data per Institute of Medicine. Employers healthcare costs per CMS, Kaiser Family Foundation, BAML CFO Outlook Report, Towers
Watson. Individual healthcare costs per ChartPack, Leerink & Kaiser. Chronic conditions data per CMS, The New England Journal of Medicine. Behavior data
per Centers for Disease Control & New England Journal of Medicine.
30
Source: Beth Seidenberg, KPCB General Partner; Lynne Chou, KPCB Partner. Sources: ACA data per CBO office. HITECH Act data per HIMSS Report Frost
and Sullivan & HealthIT. Consumerization of healthcare data from Deloitte, 2012.
31
Redbrick Health employer engagement platform = 4:1 ROI savings per participant
Teladoc employer focused telemedicine platform = $798 savings per consultation vs.
office visit & ER over 30 days
Mango Health adherence app = 84% Statin adherence vs. 52% market average
WellDoc chronic disease platform = diabetes app prescription with reimbursement
Source: Beth Seidenberg, KPCB General Partner; Lynne Chou, KPCB Partner. Sources: Digitization data per Black Book, Deloitte, & Rock Health. Incentives
data per Leerink. Employers lowering costs data per Towers Watson. Company data.
32
RE-IMAGINING CONTINUES
33
Re-Imagining
Messaging / Communications
34
35
Source: Publicly disclosed company data for 2013. Note: Snapchat messages / day comprises number of snaps sent per day and number of stories viewed per
day.
36
Evolution of Messaging
New Social Graphs...
Edges = Potentially More Value than Nodes...
High
Broadcasting Fewer
Messages to Large
Audiences
Nodes =
# of
Contacts
Low
Frequent Interactions
with Smaller Group of
Close Contacts
Edge Weights =
Frequency of
Communication
Source: Anjney Midha, KPCB Associate; Jared Morgenstern, KPCB Entrepreneur Partner.
High
37
Evolution of Communications
Image + Video Sharing Rising Rapidly
Visual Web Social Networks: Unique Visitors Trend, USA, 3/11 2/14
80
60
40
Desktop Only
Multi-Platform
20
0
3/11
8/11
Tumblr
1/12
Pinterest
6/12
11/12
4/13
Vine
9/13
2/14
Snapchat
38
Re-Imagining
Apps
39
Evolution of Apps
Internet Unbundling...
Cindy Cheng
40
Evolution of Apps
Internet Unbundling =
Rise Of Invisible App
...now some apps are disappearing altogether...
Foursquare Swarm
Runkeeper Breeze
Dark Sky
WUT
41
Re-Imagining
Distribution Channels
& Content
42
Source: Shareaholic, 3/14. SimpleReach, 5/14. Note: Traffic referral % is percentage of total traffic referrals across Shareholic network.
43
# of Interactions (MM)
BuzzFeed
39
Huffington Post
Mashable
19
Fox News
28
ABC News
BBC
ABC News
15
NBC
12
CNN
IJReview
12
Time
The Guardian
The Guardian
Facebook Shares
Facebook Likes
Forbes
BuzzFeed
Fox News
The Blaze
Daily Mail
0
10
Facebook Comments
20
30
40
4
44
17MM+ views
40MM+ views
1.5MM+ views
45
Re-Imagining
Day-to-Day Activities
46
Tinder
800MM Swipes per day, +21x Y/Y
11MM Matches per day, +21x Y/Y
47
29x Ratio
$31K / Year Avg to Alibabas China
Retail Marketplace Sellers
1,367x Ratio
$35K / Year Avg to Restaurants
All data for 2013. Sources: Company data, SEC filings. Airbnb Listings is total number at year-end. In 2013, Alibabas China retail marketplaces comprised of
Taobao, Tmall, and Juhuasuan, which generated Gross Merchandise Volume of $248B from 8MM active sellers. GrubHubs average annual $ to restaurants
calculated using 2013 Gross Food Sales totaling $1B+ across 29K restaurants on platform.
48
Amazon Fresh
Source: Comscore. Images: Indiana Public Media, Film North Florida; Kearny Hub, Wall Street Journal.
49
60%
2013 Units
80
Y/Y Growth
40%
32%
20%
40
1.3B
172MM
Y/Y Growth
120
0%
-6%
-13%
Music Streams
-20%
Source: Nielsen & Billboard 2013 US Music Report, 1/14. Note that absolute consumption comparisons are apples-and-oranges as tracks / physical sales are
likely played multiple times but data is illustrative as growth rate is key indicator.
50
Re-Imagining
Money
51
Re-Imagining Money
52
5
Android Bitcoin Wallet
4
Coinbase
Multibit
Blockchain
11/11
3/12
7/12
11/12
3/13
7/13
11/13
3/14
Source: CoinDesk. Largest wallet providers (Blockchain / MultiBit / Coinbase / Bitcoin Wallet) at ~4.9MM wallets account for majority of Bitcoin wallets created.
53
Re-Imagining
an
Industry Vertical
54
Internet Trifecta =
Critical Mass of Content + Community + Commerce...
1) Content =
Provided by Consumers + Pros
2) Community =
Context & Connectivity Created by & for Users
3) Commerce =
Products Tagged & Ingested for Seamless Purchase
55
...Internet Trifecta =
Critical Mass of Content + Community + Commerce...
Houzz Content (Photos) / Community (Professionals +
Consumers) / Commerce (Products), 4/12 4/14
23MM
5.5MM
3.2MM
2.5MM
400K
400K
120K
70K
4/12
7/12
10/12
Consumers
1/13
Content
(Photos)
4/13
7/13
10/13
Commerce
(Products)
1/14
4/14
Active
Professionals
Source: Houzz, Consumer defined as unique monthly users, Active Professional defined as active users of Houzz with a business profile.
56
Community
Commerce
Inspiration Photos
Services
Professionals
Discussions
Products
10K (+143%)
Wikipedia of home
design
400K (+198%)
Portfolios &
reviews
800K (+225%)
Pro & homeowner
support / advice
2.5MM (+590%)
Discover &
purchase
57
Biggest
Re-Imagination of All =
People Enabled With
Mobile Devices + Sensors
Uploading Troves of
Findable & Sharable Data
58
60
61
1,800
1,500
Flickr
Snapchat
1,200
Instagram
Facebook
900
600
300
0
2005
2006
2007
2008
2009
2010
2011
Source: KPCB estimates based on publicly disclosed company data, 2014 YTD data per latest as of 5/14.
2012
2013 2014YTD
62
IMGUR
130MM MAUs (3/14)
3B page views per month
1.5MM images uploaded &
1.3B images viewed per day
Fitbit
47B
2.4T steps (2011
2013)... Distance = Earth to
Saturn
MyFitnessPal
Eventbrite
Github
63
Snapchat
Tinder
64
13ZB
(+40% Y/Y)
Zetabytes (ZB)
12
9
>4ZB
(+50% Y/Y)
6
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
65
Sensor Use
Rising Rapidly
66
iPhone 5s (2013)
5 Sensors
Samsung
Galaxy S (2010)
3 Sensors
Galaxy S5 (2014)
10 Sensors
Note: Sensor count for illustrative purposes only Apple & Samsung sensor count methodology may differ.
Source: Publicly available data from Apple & Samsung, and third party reviews.
67
Other
Gaming
8,000
7,961
Cameras
Wearables
Laptops
6,000
6,039
Headsets
775
Media Tablets
Mobile Phones
4,174
549
4,000
2,765
727
802
6,060
4,362
1,726
2,000
313
1,202
2,919
523
525
788
1,190
2006
2007
2008
2009
1,914
2010
2011
2012
2013
Source: IHS Consumer & Mobile MEMS Market Tracker, April 2014.
MEMS = microelectromechanical systems. Includes sensors + actuators (a type of motor that is responsible for moving or controlling a mechanism or system,
such as an autofocus system in a camera).
68
69
$ per 1 MM transistors
$1,000.00
$527
$100.00
$10.00
$1.00
$0.10
$0.05
$0.01
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
70
$569
$ per Gigabyte
$100.00
$10.00
$1.00
$0.10
$0.02
$0.01
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
71
$10,000
$1,245
$1,000
$100
$16
$10
$1
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Note: Y-axis on graph is logarithmic scale.
Source: John Hagel, Deloitte, 5/14.
72
$400
$350
$335
$300
2008
2009
2010
2011
2012
2013
73
2,000
1,500
1,000
500
0
Q4
2006
Q4
2007
Q4
2008
Q4
2009
Q4
2010
*Note: S3 is AWS storage product and used as proxy for AWS scale / growth .
Source: Company data.
Q4
2011
Q1
2012
Q3
2012
Q2
2013
74
75
...Challenging
Non-Cloud Business Models
Startups Often Helped by Crowdsourcing
Often Dont Have Same Challenges with
Error-Prone Legacy Data
New Companies
With New Data from New Device Types
Doing Old Things in New Ways &
Growing Super Fast
76
Image: wordwatch.com.
Yelp
77
Image: iTunes.
Airbnb
78
Uber
32 min
79
Waze
80
Images: Spotify.
Spotify
81
Amazon Fire TV
82
83
84
85
Dropcam
Netflix
Health Wearable
Home Monitoring
AppDynamics
SnapLogic
Ayasdi
86
Early Emergence of
Data / Pattern-Driven
Problem Solving
87
Nest
Zephyr Health
Voice Recognition
Energy
OpenGov
Automatic
Wealthfront
Government Financials
Connected Car
Investment Management
*Based on Nest comparison of actual schedules and set points to a hypothetical (holding constant temperature). **Includes fees + underperformance; client
savings of $5MM+ assumes $8 per trade retail.
Source: Company data.
88
*UK Department of Health. ** American Clinical Laboratory Association / BattelleTechnology Partnership Practice. Image: Illumina.
Note: Genome sequencing data per Eric Schaldt. $1,000 cost is price of sequencing a genome at 30x coverage in the Mount Sinai Genome Core, 5/14.
89
Biggest
Re-Imagination of All =
People Enabled With
Mobile Devices + Sensors
Uploading Troves of
Findable & Sharable Data =
Still Early & Evolving Rapidly
90
91
92
Screens Proliferating
93
Screens Today =
You Screen...I Screen...We All Screen
Image: Telegraph.
94
TV
1,200
PC (Desktop + Notebook)
Mobile (Smartphone + Tablet)
900
Smartphones
Tablets
600
300
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sources: TV unit shipments per NPD DisplaySearch (2004-2013 data) and Philips (1999-2003 data). PC (laptop + desktop) and smartphone + tablet unit
shipments per Morgan Stanley Research.
95
Smartphones =
Most Viewed / Used Medium in Many Countries, 2014
Daily Distribution of Screen Minutes Across Countries (Mins)
Indonesia
Phillipines
China
Brazil
Vietnam
USA
Nigeria
Colombia
Thailand
Saudi
South Africa
Czech
Russia
Argentina
UK
Kenya
Australia
Spain
Turkey
Mexico
India
Poland
South Korea
Germany
Canada
Slovakia
Hungary
Japan
France
Italy
Screen Minutes 0
181
174
170
149
168
151
193
165
117
143
161
146
132
99
89
113
69
147
131
114
78
102
115
111
98
104
148
132
125
124
111
93
96
98
127
129
104
95
98
125
134
89
160
103
80
123
59
66
69
43
39
35
167
96
99
126
122
158
114
97
65
102
97
109
103
95
132
94
77
97
106
112
68
83
85
100
110
115
200
95
189
43
127
63
119
70
98
66
166
30
111
55
174
33
132
37
122
53
132
39
163
32
31
162
61
90
14
144
36
137
51
124
52
98
48
90
15
135
30
79
34
109
300
400
TV
Laptop + PC
Smartphone
Tablet
500
600
96
Shopping
44%
27%
29%
29%
29%
23%
66%
41%
12%
18%
7%
14%
9%
12%
10%
0%
Smartphone
17%
20%
40%
60%
80%
Tablet
97
TV
500
400
PC (Desktop + Notebook)
47
40
Phone
Tablet
51
59
300
50
200
100
55
367
259
268
TV Only
TV + PC
300
0
TV + PC + Phone
Source: ComScore Single Source Multi-Platform Study, London Olympics Lab for NBC, 7/12.
Note: Data based on total day time spent. N = 720 panelists that use multiple devices and are Olympic fans.
TV + PC + Phone +
Tablet
98
5 Hours of
Multiple Screen Media
5 Hours of
TV Screen Media
=
4 Hours of Content +
1 Hour of Commercials
vs.
=
>5 Hours of Content?
Sources: Millward Brown AdReaction, 2014. Nielsen TV Advertising Audiences Report, 5/14.
Note: Average global daily screen media time = 417 minutes, of which 147 are on smartphones, 113 on TV, 108 on PC (desktop + notebook), 50 on Tablets.
In 2013, an average of 14 minutes of commercials were shown for each hour of Network TV Programming.
99
100
...Now
101
As Smartphones Eclipsed
Feature Phones...
Smart TV Adapters + Smart TVs =
Game Changers for
Internet-Enablement of
Screens (Big & Small)
102
New
Old
Launch Date
Amazon Fire TV
4/14
Google Chromecast
7/13
Roku
5/08
Apple TV
1/07
Nintendo Wii
Nintendo Wii U
12/06
Sony PlayStation 3
Sony PlayStation 4
11/06
11/05
103
40%
200
32%
150
24%
100
87
16%
72
50
50
7
14
8%
27
0%
0
2008
2009
2010
2011
2012
2013
104
105
BBC
HBO
106
107
Theres a Bevy of
New Channels on
Premier Distribution Network
YouTube...
Of Which 40% (& Rising)
# of Users Are Mobile
108
Music
85
166%
Gaming
79
165%
Sports
78
164%
News
35
213%
Popular
28
133%
Spotlight
22
342%
Movies
18
195%
TV Shows
12
106%
Education
10
--
Source: YouTube.
Note: Y/Y growth rates as of 5/14.
Music
Gaming
Sports
News
Popular
Spotlight
Movies
TV Shows
Education
109
110
Comedy Duo
Smosh
17MM+ subscribers,
+81% Y/Y
Spanish Comedian
HolaSoyGerman
17MM+ subscribers,
+157% Y/Y
Comedian
nigahiga
12MM+ subscribers,
+50% Y/Y
Make-Up Artist
Michelle Phan
6MM+ subscribers,
+70% Y/Y
111
#2 = Dove: Patches
@ 20MM+ Views
#4 = Castrol Footkhana
@ 14MM+ Views
.
Source: YouTube
112
Source: YouTube.
113
114
115
Rank
Site
Volume (%)
Twitch
44%
WWE
18%
Ustream
11%
MLB.com
7%
ESPN
6%
116
Social TV =
Can Provide Advertiser Lift
117
Ad Recall
60%
45%
Brand Favorability
(% Lift)
Purchase Intent
(% Lift)
53%
40%
30%
30%
18%
15%
16%
7%
0%
TV Only
Viewers
TV x Twitter
Viewers
TV Only
Viewers vs.
No Recent
TV
TV x Twitter
Viewers
(Tweeters) vs.
No Recent TV
TV Only
TV x Twitter
Viewers vs. No
Viewers
Recent TV
(Tweeters) vs.
No Recent TV
118
119
Netflix = Personalization...
A Father of Two
A Female Millennial
120
Younger Consumers
Voting for On-Demand Video
121
80%
41%
59%
Live TV
60%
15%
On-Demand
40%
10%
17%
20%
DVR Viewing
12%
Online
34%
12%
0%
Non-Millennials
Millennials
122
123
Circa 1950
TV Set (Live) =
100% of viewing
23%
TV Set (Live)
DVR / VOD / DVD
57%
10%
6%
Connected TV
Computer
Mobile Device
4%
Source: Horowitz Associates, State of Cable and Digital Media Report, 4/14.
Note: Study based on 1,200 interviews in 1/14 among heads of households (18+) who watch any kind of TV.
Live TV defined as watching linear programming that is not time-shifted from original programming time intended.
TV Content defined as any type of video content. Computer includes desktop + notebook. Mobile includes smartphone + tablet.
124
25%
20%
15%
10%
5%
0%
08/11
11/11
02/12
05/12
08/12
11/12
02/13
05/13
08/13
11/13
125
126
127
33%
% of Global GDP
30%
27%
20%
19%
16%
16%
16%
9%
10%
2%
6%
2%
0%
USA
Europe
China
India
Latin America
Source: Angus Maddison, University of Groningen, OECD, data post 1980 based on IMF data (GDP adjusted for purchasing power parity).
128
500
80%
400
60%
300
40%
200
20%
100
600
0%
2007
Source: CNNIC.
2008
2009
2010
2011
2012
2013
129
USA Users
International Users
Glam Media
Apple
Tencent
0
200
400
600
800
1,000
Monthly Unique Visitors (MMs)
1,200
1,400
130
USA Users
International Users
Tencent
Sohu
Amazon.com
0
200
400
600
800
1,000
Monthly Unique Visitors (MMs)
1,200
1,400
131
China =
Mobile Commerce
Innovation Leader
Source: Liang Wu, Hillhouse Capital*
*Disclaimer The information provided in the following slides is for informational and illustrative purposes only. No representation or warranty, express or
implied, is given and no responsibility or liability is accepted by any person with respect to the accuracy, reliability, correctness or completeness of this
Information or its contents or any oral or written communication in connection with it. A business relationship, arrangement, or contract by or among any of
the businesses described herein may not exist at all and should not be implied or assumed from the information provided. The information provided herein
by Hillhouse Capital does not constitute an offer to sell or a solicitation of an offer to buy, and may not be relied upon in connection with the purchase or
sale of, any security or interest offered, sponsored, or managed by Hillhouse Capital or its affiliates.
132
Find restaurants /
daily group buy deals
- powered by Dianping pay via WeChat Payment
133
Shopping Assistant
Private Chef
Grocery Getter
Xiaonongnv (a grocery delivery
startup) prepares fresh groceries
& delivers to your address via
WeChat
134
100
80
3MM
3,000
60
2MM
2,000
40
1,000
5,000
120
20
350K
0
Jan-10
Feb-9
Feb-24
Note: * Subsidy ranges from $1-3 per ride. Estimated total subsidy during this period was ~$233MM.
Source: Didi, Liang Wu (Hillhouse Captial).
Mar-27
135
$0
$89B asset under
management in 10 months
Top 3 global money market fund by
assets under management (AUM)
Alipay YuE Bao Assets Under
Management, 5/13 to C1:14
$100
Asset Under Management ($B)
$89B
$80
$60
$40
$31B
$20
$0
$9B
$1B
Launch
(5/29/13)
3Q13
*Note: AUM is asset under management, Fidelity and Vanguard manage more assets than Alipays YuE Bao.
Source: Alipay, Liang Wu (Hillhouse Capital).
4Q13
1Q14
136
137
Apple
Google
Facebook
Amazon
Tencent
eBay
Priceline
Baidu
Yahoo!
Salesforce.com
JD.com
Yahoo! Japan
Netflix
Naver
LinkedIn
Twitter
Rakuten
Liberty Interactive
TripAdvisor
Qihoo 360
Region
USA
USA
USA
USA
China
USA
USA
China
USA
USA
China
Japan
USA
Korea
USA
USA
Japan
USA
USA
China
$529
377
157
144
132
66
63
59
35
33
29
25
24
23
19
18
16
14
13
11
$173,992
59,825
7,872
74,452
9,983
16,047
6,793
5,276
4,680
4,071
11,454
3,641
4,375
2,190
1,529
665
4,932
11,252
945
671
$1,787
$404,644
138
Google
$377B
$6B
(M&A)
DeepMind $400MM
(1/14)
$3B*
(Investments)
Cloudera $160MM*
(3/14)
Facebook
$157B
$24B
(M&A)
Oculus
Tencent
$132B
$7B*
(Investments)
JD.com
Alibaba
TBD
$5B
(M&A)
$5B*
(Investments)
$2B
(3/14)
$3B
(3/14)
ChinaVision $800MM
(3/14)
Youku
Tudou
$1B
(4/14)
Nest
$3B
(1/14)
DocuSign $100MM*
(3/14)
Waze
Uber
$1B
(6/13)
$258MM
(8/13)
WhatsApp $19B+
(2/14)
CJ Games $500MM
(3/14)
Activision $429MM
(7/13)
Blizzard
AutoNavi
$1B
(4/12)
$1B+
(2/14)
$1B
(4/13)
Source: Morgan Stanley IBD & public filings. CapIQ, 2014 market value data as of 5/23/2014.
Note: Includes investments that corporations and their subsidiaries/affiliates have made in companies. Googles Docusign investment represents the latest
round; however, the Company had been a previous investor.
*Some data may include entire funding round, of which a portion may be attributable to investors other than the Company listed here.
139
140
141
Image: Mashable.
142
Source: Hola.
143
Thanks...
KPCB Partners
Especially Alex Tran / Cindy Cheng / Alex Kurland who helped
take spurts of ideas and turn them into something we hope is
presentable / understandable...
Participants in Evolution of Internet Connectivity
From creators to consumers who keep us on our toes 24x7...
Walt & Kara
For continuing to do what you do so well...
144
145
IMMIGRATION UPDATE
REPORT: http://www.kpcb.com/file/kpcb-immigration-in-america-the-shortage-of-high-skilled-workers
146
25%
20%
15%
10%
5%
0%
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
Source: Trade data per World Trade Organization (WTO), GDP data per United Nations (UN).
Note: World trade calculated as the sum of all countries imports (or exports). The biggest trading partners of USA includes EU nations, Canada, China, Mexico,
Japan and South Korea.
147
Rank Company
Employees
Generation
Apple
$529,000
$176,035
80,300
Steve Jobs
2nd-Gen, Syria
376,536
62,294
47,756
Sergey Brin
1st-Gen, Russia
Microsoft
331,408
83,347
99,000
--
--
IBM
188,205
98,827
431,212
Herman Hollerith
2nd-Gen, Germany
Oracle
187,942
37,902
120,000
157,448
8,916
6,337
Eduardo Saverin
1st-Gen, Brazil
Amazon.com
143,683
78,123
117,300
Jeff Bezos
2nd-Gen, Cuba
Qualcomm
134,827
25,712
31,000
Andrew Viterbi
1st-Gen, Italy
Intel
130,867
52,892
107,600
-- *
--
10
Cisco
125,608
47,202
75,049
--
--
11
eBay
65,927
16,561
33,500
Pierre Omidyar
1st-Gen, France
12
Hewlett-Packard
63,903
111,820
317,500
William Hewlett
--
13
Priceline
62,767
7,133
9,500
Jay Walker
--
14
EMC
54,458
23,314
63,900
Roger Marino
2nd-Gen, Italy
15
Texas Instruments
49,920
12,303
32,209
16
VMware
41,549
5,376
14,300
Edouard Bugnion
1st-Gen, Switzerland
17
38,014
11,958
60,000
Henry Taub
2nd-Gen, Poland
18
Yahoo!
35,258
4,673
12,200
Jerry Yang
1st-Gen, Taiwan
19
salesforce.com
32,783
4,405
13,300
--
--
20
Adobe Systems
32,004
4,047
11,847
--
21
Cognizant Technology
29,583
9,245
22
Micron
29,253
13,310
30,900
--
23
24
Netflix
Intuit
24,120
22,595
4,621
4,426
2,327
8,000
---
---
25
Sandisk
21,325
$2,053,676
6,341
$577,580
5,459
1,226,873
Eli Harari
1st-Gen, Israel
Source: CapIQ, Factset as of 5/14. The New American Fortune 500, a report by the Partnership for a New American Economy; American Made, The Impact
of Immigrant Founders & Professionals on U.S. Corporations.
*Note: while Andy Grove (from Hungary) is not a co-founder of Intel, he joined as COO on the day it was incorporated. **Francisco Dsouza is a person of Indian
origin born in Kenya.
148
600
F1 Student Visa Issued
500
400
~380K
Difference
300
200
~100K Difference
85K
H-1B Visas
Subject to
Cap
100
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
149
150
Other
F2003
F2008
F2013
Comments
$1,722
9%
$1,783
-4%
$2,524
-2%
$2,775
13%
$829
$794
$1,146
$1,316
48%
$572
33%
$189
11%
$133
% of Revenue
Expense ($B)
Y/Y Growth
Entitlement / Mandatory
% of Expense
Non-Defense Discretionary
% of Expense
"One-Time" Items
% of Expense
Defense
% of Expense
45%
$713
40%
$132
7%
$144
45%
$900
36%
$304
12%
$174
47%
$948
34%
$274
10%
$237
8%
8%
7%
9%
$1,652
3%
$2,160
7%
$2,983
9%
$3,455
-2%
$870
$1,168
$1,582
$2,049
53%
$273
54%
$434
17%
20%
--
--
--
--
$268
$405
16%
$241
19%
$153
53%
$518
17%
$14
0%
$616
21%
$253
59%
$551
16%
---
$633
18%
$221
15%
7%
8%
6%
$69
4%
-$377
-21%
-$459
-18%
-$680
-24%
151
9%
0%
14%
24%
16%
18%
Medicaid
Medicare
Income Security
Defense
Other
Interest
20%
40%
60%
12% 6%
Social Security
80%
100%
152
153
3.0
2.6
2.4
100%
2.2
1.9
2.0
1.7
1.4
1.5
1.0
0.5
0.2
0.1 0.1
0.3
0.4
0.5
0.7
0.8
0.9
1.0
1.5
80%
60%
1.1
40%
Y/Y Growth
2.5
20%
0%
0.0
Internet Users
Source: United Nations / International Telecommunications Union, US Census Bureau, Euromonitor International.
154
2012 Internet
User Growth
10%
2
1
12
14
1
3
4
19
0
9
6
3
4
4
7%
11%
Population
Total
Penetration Population (MMs)
46%
1,350
83
316
79
127
50
201
53
143
84
81
87
63
83
66
56
80
84
49
45
81
58
61
72
47
87
35
65
38
58%
2,739
37%
7,098
155
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Country
India
Indonesia
Nigeria
Mexico
Philippines
Egypt
Vietnam
South Africa
Pakistan
Thailand
Ukraine
Kenya
Venezuela
Peru
Uzbekistan
Top 15
World
2012 Internet
User Growth
36%
15
21
14
18
29
16
41
14
6
22
105
9
5
52
24%
11%
Population
Total
Penetration Population (MMs)
13%
1,221
28
251
33
173
38
119
36
106
44
85
39
92
41
49
10
193
27
67
34
45
32
44
44
28
38
30
37
29
22%
2,532
37%
7,098
156
Country
USA
Japan
UK
Germany
Korea
France
Saudi Arabia
Poland
Australia
Canada
Malaysia
Netherlands
Taiwan
Sweden
UAE
Top 15
World
Population
Total
2014E Smartphone
Sub Growth
Penetration Population (MMs)
59%
316
12%
78
127
5
68
63
12
49
81
31
79
49
5
50
66
21
110
27
15
57
38
24
85
22
12
53
35
15
54
30
21
69
17
13
49
23
27
94
10
4
160
5
14
65%
910
13%
25%
7,098
24%
Source: Informa. Note: Japan data per Gartner, Morgan Stanley Research, and KPCB estimates.
157
Country
China
India
Brazil
Indonesia
Russia
Mexico
Egypt
Italy
Spain
Philippines
Nigeria
South Africa
Thailand
Turkey
Argentina
Top 15
World
Source: Informa.
Population
Total
2014E Smartphone
Penetration Population (MMs)
Sub Growth
31%
1,350
19%
10
1,221
45
36
201
30
19
251
36
33
143
27
19
119
39
25
85
36
34
61
41
44
47
17
19
106
36
12
173
39
41
49
27
27
67
24
22
81
28
41
43
34
23%
3,996
28%
25%
7,098
24%
158
Trendline
25%
in 5/14
% of Internet Traffic
30%
15%
in 5/13
25%
20%
15%
10% 0.9%
in 5/09
5%
0%
12/08
2.4%
in 5/10
12/09
6%
in 5/11
12/10
10%
in 5/12
12/11
12/12
Source: StatCounter Global Stats, 5/14. Note that PC-based Internet data bolstered by streaming.
12/13
12/14 E
159
160
161
Tech Companies =
Top 1 or 2 Sector by Market Cap in S&P500 for Nearly 2 Decades
20 Years Ago:
Dec 1994 S&P500 = $3.2T
Peak of NASDAQ:
Mar 2000 S&P500 = $11.7T
Today:
May 2014 S&P500 = $17.4T
Sector
Weight
Largest Companies
Sector
Weight
Largest Companies
Sector
Weight
Largest Companies
CONS.
STAPLES
14%
COCA-COLA
ALTRIA
TECHNOLOGY
35%
MICROSOFT
CISCO
TECHNOLOGY
19%
APPLE
GOOGLE
CONS. DISC.
13%
MOTORS LIQUIDATION
FORD
FINANCIALS
13%
CITIGROUP
AIG
FINANCIALS
16%
WELLS FARGO
JPMORGAN CHASE
INDUSTRIALS
13%
GENERAL ELECTRIC
3M
CONS. DISC.
10%
TIME WARNER
HOME DEPOT
HEALTHCARE
13%
FINANCIALS
11%
AIG
FANNIE MAE
HEALTHCARE
10%
MERCK
PFIZER
CONS. DISC.
12%
AMAZON.COM
WALT DISNEY
TECHNOLOGY
11%
IBM
MICROSOFT
INDUSTRIALS
8%
GENERAL ELECTRIC
TYCO
INDUSTRIALS
11%
GENERAL ELECTRIC
UNITED TECHNOLOGIES
HEALTHCARE
10%
MERCK
JOHNSON & JOHNSON
TELECOM
7%
SOUTHWESTERN BELL
AT&T
CONS.
STAPLES
11%
WAL-MART
PROCTOR & GAMBLE
ENERGY
9%
EXXON
MOBIL
CONS. STAPLES
7%
WAL-MART
COCA-COLA
ENERGY
10%
EXXON MOBIL
CHEVRON
TELECOM
8%
SOUTHWESTERN BELL
GTE
ENERGY
5%
EXXON MOBIL
CHEVRON
MATERIALS
3%
DUPONT
MONSANTO
MATERIALS
7%
DUPONT
DOW CHEMICAL
MATERIALS
2%
DUPONT
ALCOA
UTILITIES
3%
DUKE ENERGY
NEXTERA ENERGY
UTILITIES
4%
SOUTHERN COMPANY
DUKE ENERGY
UTILITIES
2%
DUKE ENERGY
AES
TELECOM
2%
VERIZON
AT&T
162
Disclosure
This presentation has been compiled for informational purposes only and
should not be construed as a solicitation or an offer to buy or sell securities
in any entity.
The presentation relies on data and insights from a wide range of sources,
including public and private companies, market research firms and
government agencies. We cite specific sources where data are public; the
presentation is also informed by non-public information and insights.
We publish the Internet Trends report on an annual basis, but on occasion
will highlight new insights. We will post any updates, revisions, or
clarifications on the KPCB website.
KPCB is a venture capital firm that owns significant equity positions in
certain of the companies referenced in this presentation, including those at
www.kpcb.com/companies.
163
164