VC Declares this the Golden Age of the Internet

Mark Kvamme of Sequoia Capital gave the Keynote speech this morning at Ad:Tech SF. His presentation was named rather boldly “He has the Dough: Can You Make a Go?” It appears that those brave VCs are back in the game. In fact, Powered has just received a new round from Austin Ventures. Here are some of Mark’s gems: This is a “Golden Age” of the Internet

• He believes the Internet started on 8/16/95 when Netscape when public


• 10 of the 25 top media companies didn’t exist in 1990. #1 Google didn’t exist 7 years ago.


• Users spend 32% of their time on the Internet, but advertisers are only spending 5% of their ad dollars there. In contrast, consumers spend 9% of their time with news, and advertisers spend 17% of their dollars there.


• YouTube (a Sequoia investment) has a Nielsen rating of 4.0, higher than MTV.


• The Money is Coming!


• Mark believes that in 2008 online advertising will be $30b to $35b (not the $18b predicted)


• If the US did 20% of its purchasing online (like Korea) that would be $1.2 Trillion.

Mark’s 3 rules of investing.

1. The company must have a clear and focused customer benefit


2. The company must be investing after launch, and must be listening to users


3. The company must have been discovered by the user community. For example, Sequoia invested in YouTube after they were up to 50,000 downloads.


4. Rules for Media Model Companies:Must have viral or very low-cost customer acquisition


5. Must generate several page views per visit


6. Users must come back on a regular basis. The average user will visit only 7 sites regularly. Are you one of the 7?

The ideal business model:

• Large market opportunity


• Good technology


• Simple, direct mission


• Missionary, not mercenary


• Tech Magnets


• Insane customer focus


• High gross margins (allows you room to fail)


• Low-cost infrastructure

Finally, Mark was very pleased with an investment he made in an undisclosed company in which people are spending over an hour on the site. This bodes well for Powered, with average site visit times of 45 to 90 minutes.