Redeye VC

Josh Kopelman

Managing Director of First Round Capital.

espite being coastally challenged (currently living in Philadelphia), Josh has been an active entrepreneur and investor in the Internet industry since its commercialization. In 1992, while he was a student at the Wharton School of the University of Pennsylvania, Josh co-founded Infonautics Corporation – an Internet information company. In 1996, Infonautics went public on the NASDAQ stock exchange.

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Monthly Archives for 2010

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Location in the Cloud

I just read the news about Google's upgrades to Google Latitude -- and boy is it a bold move with major implications.  If done right, I think it could ultimately be as transformative as when Facebook opened up the social graph. 

Before Facebook opened up their social graph, if a web site wanted to know your relationships/friends it had to ask you.  Each and every time.  Then came Facebook Connect.  What Facebook did with Facebook Connect is to build out (1) a utility/infrastructure that enables third-party sites to gain access to your social graph, and (2) a permissioning model that gives users control of what third-party sites can access your data.  While there are a number of privacy issues that Facebook is working out in public, I believe that they will be ultimately resolved -- and that Facebook's social graph will become integrated throughout the net.  

And today, Google announced a similar model for location data.  Previously, whenever an application or website wanted to know where you were it had to ask you for permission to obtain your location from your phone.  Each and every time.  With Google Latitude's new API they are changing the game.  Rather than have dozens of applications that each ask for your location, Google's Latitude application will keep track of your location -- and put it in the cloud.  And then users can authorize third-party applications/sites to access their data.  Three million users already use Google Latitude, making it one of the largest location-based services around. 

Assuming Google can work out the privacy implications (which are non-trivial), there could be hundreds of potential applications, like:

  • Imagine linking your ATM or Credit card with Google Latitude. If you want to make a large ATM withdrawal or charge more than $1,000 -- your bank can check with Google Latitude.  If your phone is more than 500 feet from the transaction point, they might be alerted to fraud.
  • What if you could link your online photos with Google Latitude.  Your photos could be automatically tagged with your location -- just by looking up where your phone was at the time.
  • When you visit a website (like OpenTable or Fandango) on your desktop computer, it can look up your phone's location via Google Latitude and deliver a personalized experience.
  • I could be automatically notified when out-of-town friends come to town -- or my meetings could be notified when I'm running late.
  • Companies can use Google Latitude for expense report creation -- or even to replace time cards.

How often does someone go more than 200 feet from their cell phone?  In my experience, not often.  In today's world, your cell phone is now a personal location beacon.  And by making it programatically accessible in the cloud, Google could enable an entirely new class of applications. 

Combine this new ability to obtain location from the cloud with the types of tools and data overlays that SimpleGeo (a First Round Capital portfolio company) offers -- and developers now have an amazingly robust set of tools to build upon.    I can't wait to see what they build...

Size Matters (at least for venture funds)

 I've previously written several blog posts about venture capital fund size -- and how it impacts fund performance.  I just came across a report that Silicon Valley Bank wrote last month which had some amazing data on fund-size and performance. 

While I would recommend that you download and read the entire report, I think that the chart below tells a powerful story.  Specifically: 

If you were to look at the performance of large funds (those greater than or equal to the vintage year median size) for venture funds between 1983 and 2003, just 2% of the large funds returned more than 2x contributed capital.  And 92% of the funds returned less than 1.5x capital.  But if you were 24-logo-1to look at the performance of the small funds (those less than the vintage year median size) for those same years, the performance is much better.  Indeed, 48% of those funds returned 2x -- or, put another way, small funds were 24 times more likely to produce returns above 2x than large funds.  And just 36% of small funds returned less than 1.5x capital.  Wow.  And this is not some small sample -- the SVB study included the returns of more than 850 venture firms...

 Svb