Author: Audrey Watters

Internet analyst Mary Meeker from Morgan Stanley presented a report on Internet trends at Events@Google yesterday. Echoing those trends identified in her 2009 presentation, the report focuses on the rapid and continued growth of the mobile internet and social networking. Claiming that the world has entered the fifth major technology cycle, Meeker predicts that this cycle will be marked by the adoption of mobile Internet technologies, as the trends of “3G + Social Networking + Video + VoIP + Impressive Mobile Devices” converge. Meeker predicts the mobile Internet will be bigger than desktop in five years, noting that by comparing iPhone and iPod touch versus AOL and Netscape users, that mobile Internet is ramping up at a rate far faster than desktop did. Furthermore, she argues that 3G coverage has reached a global inflection point, meaning it is available to at least 20% of the world’s cellphone users.

Sponsor

While the trends Meeker identifies in her report will be familiar to ReadWriteWeb readers, it is worth considering how some of what she observes might impact startups, providing opportunities for new business ventures.

Mobile E-Commerce: Not only is mobile increasingly the method by which users are accessing the Internet, Meeker contends that mobile will revolutionize e-commerce, forcing both innovations for both online and brick-and-mortar companies. She identifies location-based services, push notifications, transparent pricing, and instant mobile delivery as four potential areas this will occur.

Virtual Goods: The success of Tencent, with over $2 billion in sales of virtual goods in China, demonstrates the potential for this area, Meeker argues

Applications: Noting the success of both Facebook and Apple in the app market, what Meeker labels as “vibrant developer / application platform ecosystems, ” she suggests that companies will continue to leverage social networks for fans and for revenue.

Video: Meeker’s research points to video as outpacing VoIP and other resources people seek to access with their mobile devices.

Look to Japan: Meeker points to the Japanese social networking site Mixi, who has seen its mobile page views increase from 17% of total views three years ago to 72% today.

It is clear that social networks and mobile Internet will continue to play a huge role in shaping the future of technology and business development.

The full version of Meeker’s presentation is available on Scribd, thanks to Mathew Ingram from GigaOm.

Don’t miss the ReadWriteWeb Mobile Summit on May 7th in Mountain View, California! We’re at a key point in the history of mobile computing right now – we hope you’ll join us, and a group of the most innovative leaders in the mobile industry, to discuss it. Register now »

Discuss

Although the median age of CEOs is 54, one of the fasted growing demographics of entrepreneurs is young people. According to a survey by JA Worldwide almost three-quarters of high school students indicate an interest in becoming entrepreneurs. Although there are a few college programs dedicated to entrepreneurship, even with the preparation from a college degree program many young entrepreneurs can flounder.

To help remedy this, Under30CEO.com has collected advice from its users and offers “Young Entrepreneur Advice: 100 Things You Must Know!”

Sponsor

Many of the tips echo the idea that it’s a cold, hard world out there, and that young entrepreneurs would do well to hire great people, to delegate administrative tasks to others, and to develop strong professional and personal networks, not just of potential customers but of others more established in their field.

Some of the notable themes:

Know Your Market: “I wish I’d know how much easier it is to build a business around an established market that’s already looking for a solution to its problems rather than trying to build the market around the business I wanted to start.” – John Crickett

Money Matters: “Finding the right Accounting / Financial Manager right up front was our biggest learning and biggest mistake. Completely changed our financial performance and caused us to hit a wall we should have avoided.” – Mike Cleary

Don’t Worry too Much about Education: “It is OK to trust your instincts – even when they are not necessarily backed up by years of finance/accounting or business school credentials” – Jenn Benz

Learn to Manage People: “I wish I would have known that the hardest part of owning and operating my own business would NOT have been how to create revenue on a monthly basis. I wish I would have hired a full time IT guy and a shrink to manage with my sales force!” – Bradley W. Smith

Have a Business Plan that Includes an Exit Strategy: “Have a serious exit strategy & plan prior to opening doors. As an entrepreneur I was ready and willing to take the plunge to open my own company, but didn’t realize I had to structure my company around the exit strategy (i.e. make it sellable and transferable, and self sustaining without my everyday presence).” – Christopher N. Okada

Cultivate Strong Support Networks: “I wish that early on I had sought out more business leaders in my field. It wasn’t until I was a bit older that I realized the value of the knowledge to be learned from veteran industry players and how it could help me grow my business.” – Jim Janosik

Take Care of Yourself: “You can’t put your life on hold while waiting for your venture to hit. I have tremendous regret around all of the family events, vacations, and time with friends that I missed because I was working on getting my film/company off the ground.” – Pamela Peacock

You can read the full post here. What advice would you add to this list?

Discuss

The popular location-based services Foursquare and Gowalla were launched at the 2009 SXSW, and one year later, many proclaimed the 2010 SXSW to be the year of “location, location, location”. With almost 350,000 Foursquare check-ins during one day of the event, and with numerous location-based services launching before, during, and after SXSW, the buzz among early adopters surrounding location-based social networking seems to show no signs of abating.

Sponsor

In a provocative (and NSFW) blog post this weekend, entrepreneur and developer Dave McClure takes both location-based social networks and their early adopters to task, arguing that “the current method of check-ins is a classic case of early-adopter lust for shiny objects, & has not a damn thing to do with long-term sustainable mainstream consumer behavior.” Dismissing the lure of the game-mechanics that many of these platforms utilize – the idea of collecting badges, points, and/or mayorships – McClure contends that until LBS start offering some sort of simple monetary incentive, mainstream users will not be compelled to check-in. Whether or not you agree with McClure’s pronouncements and predictions about location-based social networks, his comments about “early-adopter lust for shiny objects” are worth considering.

Although conventional wisdom posits that early adopters provide a solid target market for startups, there are some drawbacks in responding focusing solely on those who “lust for shiny objects.”

Early adopters’ enthusiasm may not always be a good indication of future growth and sustainability. Although early adopters are often willing to provide feedback on a product’s development, that feedback might not be the information necessary to woo a larger market. Early adopters’ feedback on existing features and push for new features might not necessarily be the feedback necessary for features that mainstream users would want or need. The push for special stamps and badges from Gowalla and Foursquare might excite early adopters, for example, but mainstream users may not find this a compelling reason to adopt a service. The lure of other social networks, such as Facebook, is in part that “everyone is there.” The question remains how to make the move from just the early adopters to “everyone” being there.

Nevertheless, early adopters can be terrific champions of a product, actively promoting it to their friends. Early adopters are a small, but vocal group. Ignore them at your peril. And focus exclusively on them at your peril.

Discuss

Last week brought two major announcements from Twitter. On Thursday, the company announced an official application for BlackBerry. On Friday, Twitter announced that it had purchased Atebits, the makers of the iPhone app Tweetie. Over the weekend, there was substantial discussion and a fair amount of hand-wringing by third-party developers, many expressing their frustrations about the company’s direction. Attempting to reassure developers in advance of next week’s Chirp conference, Twitter API lead Ryan Sarver responded by email to some of these concerns.

Sponsor

Certainly Twitter isn’t the only company at the center of debates about control of a platform (Apple, Google, and Microsoft come to mind), but in light of the flurry of responses to Twitter’s moves, it is worth considering some of the (perhaps contradictory) lessons for startups that can be gleaned from the past week’s events.

Find your niche: Much of the third-party development on Twitter has served to address gaps in the original product: mobile clients, URL shorteners, photo sharing, and search for example. As VC and Twitter investor Fred Wilson argued in a blog post early last week that tipped the hand, perhaps, to where Twitter was headed, there is still room for the development of “killer apps” in social gaming, enterprise, and analytics.

Innovate and adapt: Find your niche, but then be prepared to innovate and adapt. Some have suggested that Twitter’s acquisition of Tweetie might not bode well for other Twitter clients like Seesmic and Tweetdeck, unless the two can continue to innovate. By adding new features unavailable via the Twitter website, and by linking streams from Facebook and LinkedIn, they have established themselves as more than just a Twitter client – but the pressure is certainly on for these to continue to distinguish themselves from the official Twitter applications. “Of course we’re hole fillers,” Seesmic founder Loic Le Meur admits, explaining that while that’s a good place to start, it isn’t the right place to end.

Look beyond the platform: As Mark Suster writes of both Twitter and the iPhone, it is important to think beyond the platform, contending that startups should not think of Twitter “as a business but rather as a channel.” In other words, a platform like Twitter should be a used as a way to reach customers but, unless you’re Twitter, should not be the vehicle itself.

If this is the “inflection point” for Twitter, the tasks for startups will be to learn the lessons from this critical juncture in the platform’s history, balancing the sometimes contradictory needs for specificity and flexibility and innovation and stability.

Discuss

Most of the initial buzz surrounding Apple’s announcement on Thursday of its new operating system, iPhone OS 4, centered on the support for multitasking. While this feature has been long anticipated by users and developers alike, another important but less discussed aspect of the update involves Apple’s Game Center – a social gaming network to be launched for iPhone and iPod Touch later this summer. Similar to the networks already prevalent in console gaming, Apple’s Game Center will allow friend invitations and multiplayer game-play and will include matchmaking and high-score tracking.

Sponsor

The Game Center may be Apple’s attempt to compete with Facebook’s dominance over the hugely popular and incredibly lucrative area of social gaming. A report released this week suggested that the gaming company Zynga, maker of six of the seven most popular social games, is worth over $5 billion.

Unlike Facebook, Apple does not currently have a social network upon which to automatically connect players and friends, although implementation of the Game Center may well bring this about. Details about the Game Center were not explicit in Thursday’s announcement, although the beta release of the operating system will include a developer preview of Game Center and contain a set of APIs so that mobile game developers can build apps that take advantage of the social gaming network capabilities.

Echoing the popularity of gaming on the iPhone, initial analytics since the iPad release point to the continued domination of the App Store by gaming and entertainment applications. The updates to the iPhone OS could provide an opportunity for mobile and social game developers and for entrepreneurs in the gaming industry.

Discuss

It is widely accepted that social media has transformed the landscape of marketing radically, and no longer can businesses – no matter their size or stage of development – afford to avoid social media. While the importance of developing one’s brand online remains paramount – most obviously through the registration of a domain name – the proliferation of social media platforms can be overwhelming, and startups might feel compelled to register and interact with every service in order to quicken the spread of their name.

Sponsor

The multitude of social media platforms allow new businesses to establish their online presence, develop a brand and a message, and grow fans and followers – and of course customers – all without extensive investment in elaborate or costly marketing campaigns. The danger, however, lays in the proverbial “spreading oneself too thin” by attempting to make sure one’s startup has a presence in every social media network.

While new businesses should certainly take advantage of social networking, here are a few tips to help avoid social media overload:

• Avoid social-media-for-social-media’s sake: Social media endeavors should always be in service of clear business goals, not merely an abstract notion of “user engagement.” Develop a social media plan that supports your business plan.
• Use the services which which you’re most comfortable: Take advantage of social media networks to which you already belong and in which you are already active. It is preferable to develop a robust presence on one or two platforms than to create profiles on every possible site, particularly if these are in danger of becoming unused and out-of-date.
• Engage: Despite the far-reaching power of social media networks, these services are not bullhorns. Use them to engage in dialogue with potential investors and customers, not merely to push information out to them. While social media can be a great place to share information, promote a service, and so on, it is important to be responsive – listen, engage.
• Track, evaluate, and adapt: Many services offer analytics tools in order to ascertain traffic levels and engagement. Be sure to check these regularly to evaluate the ROI of a platform. And as the field of social media is ever changing, be prepared to adapt. For example, just because a service like Foursquare is popular now does not mean that you should be forever wedded to location-based marketing.

Although it is tempting to register for every social media site and to try to adopt every new tool, the drawback may be that in an attempt to network everywhere, your startup fails to network anywhere.

Discuss

Two important legal decisions were made this week that could have significant impact on technology startups.

On Tuesday, a U.S. Federal Appeals Court determined that the FCC had overstepped its regulatory authority in demanding that Comcast cease its “throttling” of peer-to-peer service users. And on Wednesday, the U.K. House of Commons approved the “Digital Economy Bill“, which grants sweeping regulatory power to the British government, including the ability to block websites and punish consumers and companies who are found to violate copyright law.

Sponsor

The Federal Appeals Court decision calls into question the reach of the FCC, and raises questions about the future of a number of policy plans for the Obama Administration, including the National Broadband Plan. Austin Schlick writes on the broadband plan’s official blog that several recommendations from the plan may be impacted, including “supporting robust use of broadband by small businesses to drive productivity, growth and ongoing innovation; lowering barriers that hinder broadband deployment; strengthening public safety communications; cybersecurity; consumer protection, including transparency and disclosure; and consumer privacy.”

The British bill has seen widespread opposition from numerous sectors, including Facebook, Google, and Yahoo, and some are contending that it will have a chilling effect on startups in the UK.

Both of these decisions point to the high stakes involved with securing “net neutrality” – both for consumers and businesses alike. Although there is by no means unanimity on what, if any, role governments should have in regulating technology ideas and infrastructure, few would disagree that startups benefit from a climate that fosters technological and business innovation. Furthermore, all businesses, not merely ones in the technology sector, are becoming dependent on quick access to the Internet for their ability to develop, deliver and distribute their services to customers.

Fred Wilson argues in a post on his blog today that perhaps it is time to reframe the terms of the debate, moving away from the phrase “net neutrality” and instead to argue on behalf of “internet freedom.” He writes “Internet Freedom is about sustaining the era of permissionless innovation that has characterized the first fifteen years of the commercial Internet in this country and brought us thousands of new big profitable companies, millions of jobs, and a vast array of new services and devices that have changed our lives and made them better.”

As courts, legislatures, and agencies try to create policies around digital technologies, how will new startups be effected?

Discuss

As the season turns to spring in the U.S., many soon-to-be college graduates and their soon-to-be employers turn their focus to the job market. In answer to the questions that graduates inevitably face from friends and family – “What will you do with your degree?” – one response should certainly be, “Find work with an exciting startup.”

While some colleges are developing solid entrepreneurial programs, many graduates are still prone to believe that their best post-college employment prospects are to be found with more established companies. To change that perception, the Columbia Venture Company and the NYU Venture Company are hosting the first annual NYC Startup Job Fair.

Sponsor

Since there remains much that higher education can do to nurture startups and to prepare and encourage students to seek opportunities there, the class of 2010 college graduates can and should look to startups as opportunities to launch their careers. Likewise, the class of 2010 and their search for post-college employment can and should provide startups with an opportunity to recruit the best and the brightest to join their ranks.

Just as there are many myths surrounding the risks associated with launching a startup as an entrepreneur, there are many myths associated with joining a startup as an employee – whether as a recent college graduate or as someone with more substantial work experience. However, as Chris Dixon notes, this career move may actually be less risky than one might believe. He cites the following reasons that college graduates should consider joining a startup: