ILM East: Mayfield Fund’s Sean Moriarty — Froth Isn’t Always a Dirty Word
With several recent tech valuations raising eyebrows — Quora at $86 million, Twitter at nearly $8 billion to name just two — a word that’s been tossed around Silicon Valley a lot these days is “froth.” Sean Moriarty, entrepreneur in residence at Mayfield Fund, told the ILM East audience, however, that not all froth is bad froth.
Moriarty’s interpretation: Froth and rampant enthusiasm exist because there are “great companies being built … real companies getting to revenue and profitability very quickly.” That, in Moriarty’s mind, is what separates present tech fervor from bubblish late-1990s’ optimism.
BIA/Kelsey’s Matt Booth, moderating the session, noted that few truly local online business have reached $1 billion in annual revenues, and two of the most prominent — AutoTrader and Groupon — are verticals. Moriarty, who formerly ran Ticketmaster, sees plenty of promise around verticals, namely travel, but also sees a marketplace that is wide and deep enough for a variety of successful local entrants.
Speaking of Groupon, the evolution of group buying is at the top of many minds in Boston this week, including Moriarty’s. His viewpoint echoes what BIA/Kelsey also foresees — necessary consolidation and inevitable attrition in a noisy space. But the bigger idea of deal a day isn’t going anywhere. “The notion of interacting with large audience with increasingly targeted offers is here to stay.”
And what about the next billion-dollar idea for entrepreneurs in the audience? There are lots of customer acquisition channels out there (Groupon and its 400 clones), but loyalty/retention tools in the vein of what Evan Cohen and Foursquare are building could serve new value.
I think the largest pure play “local online business” is reachlocal with Sales of over $300M. AT&Ti has $1B but they are not pure play and I bet there is some funny accounting allocation as to how they allocate between digital vs. print revenue.
Matt,
You could be right. I’m paraphrasing my colleague Matt Booth, so I’ll need to cross-check with him. And, not to get too Clintonian here, but some of it may depend on your definition of “truly local.” Groupon, for instance, is pegged to do $1 billion in revenue in 2011, and for these purposes, we’re tagging it with a “local” definition.