Internet Trends2014 - Kleiner Perkins

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Kleiner Perkins annual report

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<ul><li> 1. 1 INTERNET TRENDS 2014 CODE CONFERENCE Mary Meeker May 28, 2014 kpcb.com/InternetTrends </li></ul><p> 2. 2 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 3. 3 KEY INTERNET TRENDS 3 4. 4 Internet Users Installed Base than Previous Cycle Source: Morgan Stanley Mobile Internet Report (12/09) 12. 12 Advertising / Monetization = Mobile Especially Compelling 13. 13 $62 $64 $76 $86 $100 $116 0% 5% 10% 15% 20% 25% $0 $25 $50 $75 $100 $125 2008 2009 2010 2011 2012 2013 Y/YGrowth GlobalInternetAdvertising($B) Desktop Advertising Mobile Advertising Y/Y Growth Global Internet Advertising, 2008 2013 Internet Advertising = Remains Strong... +16%...Mobile +47% to 11% of Total Source: PWC Global Entertainment &amp; Media Outlook, 2013. 14. 14 Annualized Ad ARPU ($) Q1:12 Q2:12 Q3:12 Q4:12 Q1:13 Q2:13 Q3:13 Q4:13 Q1:14 Google ($) $37 $37 $38 $43 $42 $41 $41 $46 $45 Y/Y Growth 9% 6% 6% 14% 14% 11% 10% 8% 8% Facebook ($) $4.00 $4.28 $4.43 $5.15 $4.60 $5.65 $6.14 $7.76 $7.24 Y/Y Growth 1% (2%) 7% 12% 15% 32% 39% 51% 57% Mobile % of MAU 54% 57% 60% 64% 68% 71% 74% 77% 79% Twitter ($) $1.29 $1.50 $1.64 $2.15 $1.97 $2.22 $2.65 $3.65 $3.55 Y/Y Growth 90% 134% 108% 93% 52% 48% 61% 69% 80% Mobile % of MAU -- -- -- -- -- 75% 76% 76% 78% Annualized Ad ARPU ($) &amp; Mobile % of MAU ARPU Upside for Facebook + Twitter... Google ARPU = 6x Facebook...Facebook = 2x Twitter Source: SEC Filings &amp; Comscore. ARPU = Average Revenue per User, defined as annualized revenue per Monthly Active User (MAU). Google ARPU is calculated using Googles gross revenue &amp; Comscore unique visitors. 15. 15 5% 12% 38% 25% 20%19% 10% 45% 22% 4% 0% 10% 20% 30% 40% 50% Print Radio TV Internet Mobile %ofTotalMediaConsumptionTime orAdvertisingSpending Time Spent Ad Spend % of Time Spent in Media vs. % of Advertising Spending, USA 2013 ~$30B+ Opportunity in USA Internet Ad = $43B Mobile Ad = $7.1B Remain Optimistic About Mobile Ad Spend Growth... Print Remains Way Over-Indexed 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. 16. 16 $2 $3 $6 $14 $24 $38 $0 $10 $20 $30 $40 2008 2009 2010 2011 2012 2013 MobileAd+AppsSpending($B) Mobile Apps Mobile Advertising Global Mobile App + Advertising Revenue, 2008 2013 Mobile App Revenue = Still Trumps Mobile Ad Revenue... @ 68% of Mobile Monetization Source: Global Mobile App revenue per Strategy Analytics; comprises virtual goods, in-app advertising, subscription, &amp; download revenue. Global Mobile Advertising revenue per PWC; comprises browser, search &amp; classified advertising revenue. 17. 17 Cyber Threats Intensifying... 18. 18 1) # of Active Threat Groups Rising Rapidly = 300 (+4x since 2011) per Mandiant tracking 2) Increased Nation-State Activities* 3) Vulnerable Systems Placed on Internet Compromised in 2x Y/Y) enrolled in Coursera courses ...Education Realities = Green Shoots Data Source: National Center for Education Statistics, 2014. Company data. 28. 28 25% 30% 29% 11% 5% North America Europe Latin America Asia Africa / Oceana 35% 23% 11% 25% 6% North America Europe Latin America Asia Africa / Oceana Online Education = Its a Global Thing Source: Duolingo, Coursera. Duolingo (25MM Users) Traffic Distribution, 4/14 Coursera (7MM Users) Student Distribution, 3/14 29. 29 Healthcare = May Be @ Inflection Point 30. 30 Costs Up to 17% of GDP @ $2.8T in 2012, +2x as percent of GDP in 35 years 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 &gt;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)...&gt;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) Healthcare Realities = Facts USA... 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 &amp; Kaiser. Chronic conditions data per CMS, The New England Journal of Medicine. Behavior data per Centers for Disease Control &amp; New England Journal of Medicine. 31. 31 Digital Technology Enables Change Healthcare system has relied on antiquated systems Government Enabled Change Pushes Technology HITECH Act $35B administered by Office of the National Coordinator for Electronic Health Records (EHR) + health information technology in 2013...penalties exist for non-compliance Affordable Care Act Coverage expansion in works Consumerization of Healthcare Majority (52%) of consumers want to access tools / websites rankings for quality / satisfaction / patients reviews of doctors + hospitals ...Healthcare Realities = Reasons for Optimism... 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 &amp; HealthIT. Consumerization of healthcare data from Deloitte, 2012. 32. 32 Digitization of Healthcare Happening Providers Using Fully Functioning EHR 84% of Hospitals / Academic / Institutional practices...51% (&amp; rising) of office-based practices Consumers Happy to Communicate via Email 62% for healthcare concerns Digital Health Venture Investments Rising +39% Y/Y to $1.9B (2013, USA) Quality Over Quantity Incentives Being Implemented Payers Incentivized to Engage Patients / Improve Care / Outcomes / Reduce Costs Providers Shifting to Value-Based from Fee-for-Service Payments Employers Lowering Costs by Offering Services to Improve Engagement / Choices / Care 46% of employers will enact participatory / outcomes based incentives (like weight loss / cholesterol levels)... By 2015, 60% will offer price transparency tools from health plans Patient Engagement Rising &amp; Yielding Results Redbrick Health employer engagement platform = 4:1 ROI savings per participant Teladoc employer focused telemedicine platform = $798 savings per consultation vs. office visit &amp; ER over 30 days Mango Health adherence app = 84% Statin adherence vs. 52% market average WellDoc chronic disease platform = diabetes app prescription with reimbursement ...Healthcare Realities = Green Shoots Data Source: Beth Seidenberg, KPCB General Partner; Lynne Chou, KPCB Partner. Sources: Digitization data per Black Book, Deloitte, &amp; Rock Health. Incentives data per Leerink. Employers lowering costs data per Towers Watson. Company data. 33. 33 RE-IMAGINING CONTINUES 33 34. 34 Re-Imagining Messaging / Communications 35. 35 A Tweet David Sacks (Yammer CEO / Founder) 36. 36 Line (Japan), 2+ Years MAUs = 280MM Messages / Day = 10B Revenue = $388MM, +5x Y/Y (Q4:13) Snapchat (USA), 2+ Years Messages / Day = 1.2B Viber (Israel), 3+ Years MAUs = 100MM KakaoTalk (Korea), 3+ Years Messages / Day = 5.2B, +24% Y/Y Revenue = $203MM, +4xY/Y Tencent WeChat (China), 3+ Years MAUs = 355MM, +125% Y/Y Global Messaging Ecosystem Select Players, 2013 WhatsApp (USA), 4+ Years MAUs = 400MM, +100% Y/Y Messages / Day = 50B, +178% Y/Y Global OTT (Over-the-Top) Messaging Services = &gt;1B Users in 50% Mobile, &gt;75% Social, &gt;50% age 18-34 Re-Imagining Content + Content Delivery = BuzzFeed... Lists / Quizzes / Explainers / Breaking / Video / Mobile Source: Buzzfeed, 5/14. 15 Things You Didnt Know Your iPhone Could Do 17MM+ views Why I Bought A House In Detroit For $500 1.5MM+ views Photoshopping Real Women Into Cover Models 13MM+ video views What State Do You Actually Belong In? 40MM+ views 46. 46 Re-Imagining Day-to-Day Activities 47. 47 ~70K Bars / Nightclubs, USA Tinder 800MM Swipes per day, +21x Y/Y 11MM Matches per day, +21x Y/Y Re-Imagining How People Meet Source: IBIS World, 5/14. Company data. 48. 48 6MM Guest Stays 550K Listings, +83% Y/Y 11x Ratio Guest Stays / Listings 231MM Buyers, +44% Y/Y 8MM Sellers 29x Ratio $31K / Year Avg to Alibabas China Retail Marketplace Sellers 39MM Meal Orders, +74% Y/Y 29K Restaurants, +3X Y/Y 1,367x Ratio $35K / Year Avg to Restaurants Re-Imagining Local Services / Reputation = Leverage + Efficiency 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. 49. 49 &gt;47% of Online Transactions Use Free-Shipping, vs. 35% Five Years Ago... Same-Day Local Delivery = Next Big Thing... Instacart Amazon Fresh Re-Imagining Grocery Shopping Source: Comscore. Images: Indiana Public Media, Film North Florida; Kearny Hub, Wall Street Journal. 50. 50 USA Music Consumption, 2013 118B 1.3B 172MM 32% -6% -13% -20% 0% 20% 40% 60% 0 40 80 120 Music Streams Digital Track Sales Physical Music Sales Y/YGrowth USAMusicUnitsConsumed(B) 2013 Units Y/Y Growth (First Y/Y Decline) Re-Imagining Media (Music) Consumption = Streaming +32%, Digital Track Sales -6% Source: Nielsen &amp; 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. 51. 51 Re-Imagining Money 52. 52 Re-Imagining Money 53. 53 1 2 3 4 5 11/11 3/12 7/12 11/12 3/13 7/13 11/13 3/14 NumberofBitcoinWallets(MM) Android Bitcoin Wallet Coinbase Multibit Blockchain Number of Bitcoin Wallets by Wallet Provider, 4/14 Fact that ~5MM Bitcoin Wallets (+8x Y/Y) Exist Proves Extraordinary Interest in Cryptocurrencies Source: CoinDesk. Largest wallet providers (Blockchain / MultiBit / Coinbase / Bitcoin Wallet) at ~4.9MM wallets account for majority of Bitcoin wallets created. 54. 54 Re-Imagining an Industry Vertical 55. 55 1) Content = Provided by Consumers + Pros 2) Community = Context &amp; Connectivity Created by &amp; for Users 3) Commerce = Products Tagged &amp; Ingested for Seamless Purchase Internet Trifecta = Critical Mass of Content + Community + Commerce... 56. 56 Houzz Content (Photos) / Community (Professionals + Consumers) / Commerce (Products), 4/12 4/14 Consumers Content (Photos) Commerce (Products) Active Professionals 70K 120K 400K 5.5MM 23MM 3.2MM 2.5MM 400K 4/12 7/12 10/12 1/13 4/13 7/13 10/13 1/14 4/14 ...Internet Trifecta = Critical Mass of Content + Community + Commerce... Source: Houzz, Consumer defined as unique monthly users, Active Professional defined as active users of Houzz with a business profile. 57. 57 Inspiration - Photos ~3MM (+230% Y/Y) Worlds largest photo database Products 2.5MM (+590%) Discover &amp; purchase Services Professionals 400K (+198%) Portfolios &amp; reviews Discussions 800K (+225%) Pro &amp; homeowner support / advice Editorial - Guides / Articles 10K (+143%) Wikipedia of home design Content Community Commerce ...Houzz = Ecosystem for Home Renovation &amp; Design Source: Houzz, 4/14. 58. 58 Biggest Re-Imagination of All = People Enabled With Mobile Devices + Sensors Uploading Troves of Findable &amp; Sharable Data 59. 59 Transparency Instant sharing / communication of many things has potential to make world better / safer place but potential impact to personal privacy will remain on-going challenge... Patterns Mining rising volume of data has potential to yield patterns that help solve basic / previously unsolvable problems but create new challenges related to individual rights... More Data + More Transparency = More Patterns &amp; More Complexity 60. 60 1) Uploadable / Findable / Sharable / Real-Time Data Rising Rapidly 2) Sensor Use Rising Rapidly 3) Processing Costs Falling Rapidly...While The Cloud Rises 4) Beautiful New User Interfaces Aided by Data-Generating Consumers Helping Make Data Usable / Useful... 5) Data Mining / Analytics Tools Improving &amp; Helping Find Patterns 6) Early Emergence of Data / Pattern-Driven Problem Solving Big Data Trends 61. 61 Uploadable / Sharable / Findable Real-Time Data Rising Rapidly 62. 62 0 300 600 900 1,200 1,500 1,800 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014YTD #ofPhotosUploaded&amp;SharedperDay (MM) Flickr Snapchat Instagram Facebook WhatsApp Daily Number of Photos Uploaded &amp; Shared on Select Platforms, 2005 2014YTD (2013, 2014 only) Photos Alone = 1.8B+ Uploaded &amp; Shared Per Day... Growth Remains Robust as New Real-Time Platforms Emerge Source: KPCB estimates based on publicly disclosed company data, 2014 YTD data per latest as of 5/14. 63. 63 Pinterest 750MM+ cumulative Boards (4/14) 30B+ cumulative Pins +50% Pin growth vs. 10/13 Eventbrite $1B gross ticket sales in 2013 (+60% Y/Y) 58MM tickets sold (+61% Y/Y) 1MM events in 187 countries MyFitnessPal 65MM registered users (+50% Y/Y, 5/14) 100MM+ pounds lost by users since inception Github 13MM repositories in 2013 (+100% Y/Y) 10K users added per weekday IMGUR 130MM MAUs (3/14) 3B page views per month 1.5MM images uploaded &amp; 1.3B images viewed per day Fitbit 47B 2.4T steps (2011 2013)... Distance = Earth to Saturn Uploadable / Sharable / Findable Mojo Update Source: Company data. 64. 64 Tinder 800MM swipes per day (+21x Y/Y, 5/14) 11MM matches per day (+21x Y/Y) Snapchat 700MM+ snaps shared per day (4/14) 500MM stories viewed per day WhatsApp 50B messages sent per day (2/14) 700MM photos per day (4/14) 100MM videos per day Uploadable / Sharable / Not Findable* Mojo Update *Note: Not findable =...</p>

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