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A bi-weekly column with timely, relevant and possibly irreverent insight into the BC technology industry.

Something Ventured:
December 21st, 2007


By Brent Holliday
Greenstone Venture Partners

Year End Fluff Piece

“We didn't start the fire,
It was always burning,
Since the world's been turning.
We didn't start the fire,
No we didn't light it,
But we tried to fight it” – Billy Joel, We Didn’t Start The Fire

During the holiday break, newspapers make “fluff” pieces to fill the print while the news desks are vacant.  Most of them are looks back or looks forward.  Some of them are lists, such as a list of great quotes of the year.  I will save my 2008 prediction piece for, well, 2008.  I thought I’d have my fluff piece be random quotes, stories, blog posts and other Internet flotsam about technology that I found interesting.

Bill Gates says "The business computing market, which is way bigger than the consumer computing market, no one pays attention to it. Even in the Wall Street Journal, and you think, oh, this is the paper they're going to tell me about business computing; no, it's all about consumer computing." (from Don Dodge)

Sounds like Bill is about to have a little hissy fit about how the media likes Facebooks and not Quickbooks.  I tried to find out what “way bigger” actually was: it looks like enterprise software products and services is around $150B in the US alone… that’s revenue.  Cash paid.  Not valuations of companies.  If you assume that, Club Penguin notwithstanding, most of the consumer software revenue comes from advertising today, it is about a $35B market, WORLDWIDE.  Heck, toss in the video game market (software component) and you are still only at $42B worldwide. Not bad, but still ¼ to 1/5 of the business market.

Bill has a point.  Why does the media want to do a story on Flickr instead of a story on warehouse management software?  Well, meaning no disrespect to my hard-working journalist friends, mainstream media does not have the background knowledge, nor the broad enough audience to care about improving performance in the enterprise. 

We investors and entrepreneurs know where the money is and we’re with Bill. 

"RIM is creating large new markets which are expanding globally, with diminished competition from mainstream handset vendors and alternate email solutions."  (From Bear Stearns analyst, Andy Neff)

I can’t find the Jim Balsillie quote where he says, “Na na na na na na” or “Thbbbbbfft” when referring to those that doubted that RIM could jump from the nerdy financial sector enterprise market to the consumer market.  I bought RIM stock when my 62 year old mother got a Pearl and actually used it almost exclusively for her e-mail.  RIM is leaving Palm and other smartphones in its dust.  And its ability to create stylish designs with Curve and Pearl are winning customers and stunning competitors. 

If you want e-mail AND you want ring tones, cameras and sleek designs, you buy a Blackberry. Last year at this time, people believed that the AND was an OR and you only bought from RIM if you needed e-mail.  They absolutely blew out the numbers to the end of November… I was at a minor hockey executive meeting yesterday and 4 of the 8 people sitting at the table were shooting each other message on a Blackberry.  RIM might be the biggest success story in Canadian technology history…  and we are only at the beginning.

“I was skeptical about a derivatives market in the Wii actually existing, but now I have confirmation that one does exist, and it's happening at Best Buys and Toys 'R' Us stores and other retailers trafficking in Wiis nationwide.

Here's the m.o.: shoppers get wind of when a Wii shipment is due to arrive, either by greasing a store manager, or by watching ads carefully, and begin lining up hours before the store opens. A store employee will then come out, hand out tickets or numbered placeholders to keep things orderly, and then the buying and selling begins.” (Jim Goldman, CNBC)

So, you get a ticket to buy a Wii, and you sell the ticket to the highest bidder… with risk that the store may sell out, depending on your ticket number.  I love it!  Capitalism at its best!  If you don’t have a Wii for Christmas and there is someone in your house between 6 and 16, you are likely headed down to Best Buy this Sunday morning to try and buy an option to buy a Wii.

The video game market is going through its boom cycle now as all three console vendors are selling their new generation platforms hard.  In Vancouver, this translates into huge activity at Electronic Arts and Activision Blizzard (formerly Vivendi Universal, formerly Radical Entertainment locally) and at the start-up or smaller studios that dot Yaletown and Gastown.

Forget movies and TV, the future of big dollar media in this town should be the gamers…

There is a bubble in Web 2.0 companies.” (or some variant of that quote, which can be attributed to me, Paul Kedrosky and a hundred other pundits).

All you believers and non-believers: go watch this video Here Come Another Bubble, a hilarious spoof of Billy Joel’s We Didn’t Start The Fire… (thanks to David Raffa for sending me this on Facebook… irony intended).

http://www.youtube.com/watch?v=YuAJHaXKgFk&rel=1 is the link.

 

Love it!

See you in 2008!

What Do You Think? Talk Back To Brent Holliday



Something Ventured
is a bi-weekly column designed to supplement the T-Net British Columbia web site with some timely, relevant and possibly irreverent insight into the industry. I hope to share some of the perspective and trends that I see in my role as a VC. The column is always followed by feedback (if its positive or constructive. I'll keep the flames to myself, thanks).

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