Mary Meeker Delivery of Internet Trends 2013 at D11
Mary Meeker, Partner at Kleiner Perkins Caufield Byers, never disappoints in the delivery of her thoughtful Internet trends insights and how those Internet trends are shaping the world around us in profound ways.
The Internet Trends 2013 report published May 2013 by Mary Meeker and Liang Wu and delivered at the D11 Conference on May 29, 2013 was no exception and certainly left the audience with much to think about and digest.
The following video is Mary Meeker presenting key insights from the 2013 Internet trends report.
Internet Trends 2013 Presentation Outline
- Key Internet Trends — Growth Continues
- Re-Imagination — Being Re-Imagined & Uploaded
- Mobile — Aggressive Momentum
- Computing — Yet Another Platform Change
- Lots to Learn from China — Volume + Innovation
- Most Enabled Entrepreneurs Ever?
- So, You Want to Be a Public Company?
- High Skilled Immigration — Perspective
- Re-imagination is Alive & Well
- Traditional Industries Being Re-Imagined – USA, Inc
Internet Trends 2013 – Slides
Insights covered in Internet trends 2013
Key Internet Trends, Growth Continues
- 2.4B Global Internet Users in 2012 – 8% YoY (Year over Year) growth, driven by emerging markets lead by China and India
- Material upside for mobile advertising based on difference in 2012 ad spend versus mobile usage. Print currently benefactor of status quo. This represents a $20 billion opportunity for mobile and Internet advertising in the US
- 80% of top 10 global Internet sites are ‘Made in USA’ including Google, Microsoft, Facebook, while 81%o of users from outside America
- Global smartphone operating systems ‘Made in USA’ – 88% share in 2012 from only 5% share 6 years ago with Apple (iOS), Google (Android) and Microsoft (Windows) the biggest winners
Re-Imagination – Being Re-imagined &Uploaded at an Accelerating Page
- World’s content creation velocity is accelerating while that content is increasingly indexed, discoverable through sharing and tagging.
- Digital information created and shared is up 9x in the last five years
- Media and data uploading and sharing from mobile devices is accelerating and still in the early stages
- Media sharing on mobiles has evolved from photos, to video with sound and data emerging as the next wave
- 500M+ photos uploaded and shared per day. Growth accelerating, driven initially by Facebook and more recently, by Instagram and Snapchat
- Short-term sharing is exploding – Snapchat growth from content that disappears, up more than 2x in the past 2 months.
- Video – 100 hours of video per minute is uploaded to YouTube which is up from virtually zero just 6 short years ago.
- Video (short-form + persistent) is ramping fast driven in large part by Twitter Vine with 6 second videos showing 2x month over moth growth and Dropcam with more video uploaded per minute than YouTube.
- Sound is emerging ad voice comes back to phones – Sound cloud with 11 hours of sound uploaded per minute and Tencent WeChat with 400MM+ users and 4x YoY growth.
- Data Sharing – new breed of Win-Win-Win applications growing rapidly in popularity built on the philosophy that you help me, I help you and we all help others. Applications driving the data sharing growth include Waze, Jawbone Up and Yelp.
- Waze currently has 48MM users with 2x YoY growth. Waze has more than one billion miles per month with w/Waze open and tracking miles driven.
- Jawbone Up currently tracks billions of steps, over 700k+ hours of sleep and 5x app interactions per user each day!
- Yelp with 102 MM users with 43% YoY growth and 39MM user generated reviews which is up 42% YoY
- Fitness Data on Mobile + Wearable Devices = ~2x month on month growth based on MyFitnessPal – # of API (Application Programming Interface) calls, Mar – April 2013.
- Social Media – Facebook Leads, YouTube, Twitter, Google+, Pinterest, Instagram, Tumblr rising fast – Interestingly enough, Facebook is the only social network of those listed here that saw a percentage decline from 2011 vs 2012 (slide 27).
- Americans are Sharing Underachievers – 14% of Americans indicated that they share ‘everything’ or ‘most things’ online vs the World average of 24%. Saudi Arabia, India and Indonesia lead as the top 3 in that order, each with over 50%.
- Unprecedented Transparency in Time of Tremendous Global Uncertainty. Ramping Always-On Connected Global Citizens. These points are particularly relevant to the public debate in the US about government access to personal data.
- 1.1B+ global active Facebook users with 68% on mobiles, 60% log in daily with average 200+ friends each
- 350MM photos uploaded daily
- Its hard to hide when the ‘truth’ can be a photo or video / click—send away.
- Clean, well-lighted place to do business?
- People are basically good?
- Perhaps the world is on cusp of being safer than ever?
- There are lots of sacrifices.
- This is new terrain.
- Only time will tell how all this plays out.
Mobile Shows Aggressive Momentum
- When US smartphone users asked how social and communications activities on a smartphone made you feel, the top answers where connected, excited, curious/interested, productive were the top 4 answers.
- Global mobile traffic as a percentage of global Internet traffic is growing at 1.5x per year and likely to maintain that trajectory or accelerate. As of 13 May 2013, 15% of global Internet traffic was mobile.
- To highlight this, in China, mobile Internet access surpassed Internet access via PC in Q2 2012.
- This applies to mobile search as well. In South Korea, mobile search queries surpassed search queries initiated from a PC in Q4 2012. Similar mobile search trends exist in the US and the rest of the world.
- 45% of online transactions are from mobile, up from 14% 2 years ago according to Groupon
- For Facebook, mobile users adoption (68% up from 54% YoY) growth has helped drive revenue growth (43%) and ARPU (Average Revenue Per User) growth of 15% YoY. For Facebook, the increase mobile ARPU has help offset declining APRU of Facebook desktop users.
Computing – Yet Another Platform Change
- We just started to figure out smartphones, then tablets came along
- Global smartphone subscriber growth remains strong at 1.5 billion subscribers, 31% YoY growth and an estimated 21% penetration rate for 2013. China and US are #1 and #2 for number of smartphone subscribers at 354M and 219M respectively
- Smart phone still at an early stage with huge upside potential estimated to be over 5 billion smartphone users according to research from Morgan Stanley
- For smartphone manufacturers, Apple is growing market share with 1.4x gain; Samsung share up 7x in the last 2 years.
- Tablet growth more rapid than smartphone growth; iPad growth 3x iPhone growth
- Global tablet shipments surpassed Desktop PC and Notebook shipments in Q4 2012, less than 3 years of tablet introduction into the computing market (see slide 45 for some remarkable visualization of this data)
- Demand for large-screen computing devices is robust, but mix favors tablets and not notebooks and desktops which is creating some surprising new leaders in the computing market
- Wearables, the third component in the evolving computing cycle 1) smartphones > 2) tablets > 3) wearables
- Technology cycles are contracting as evidenced by the fact that wearables are coming on strong while smartphones and tablets are relatively new. This technology cycle is faster than the more typical 10-year technology cycle.
- New technology cycles often support 10x more users and devices driven by lower price and improved functionality
- The new technology cycle includes: wearables, driveables, flyables, scannables
Lots to Learn From China – Volume + Innovation
- China iOS and Android users surpassed users in the US in Q1 2013 (great example of success for US exports)
- China leads USA in Mobile and Internet Time Spent vs. TV = China @55% vs. 38% in USA
- Alibaba – gross merchandise volume surpassed Amazon.com + eBay, Q4 2012
- JD.com (360buy) – same day delivery with real-time item tracking on map/mobile, often on a bicycle! – (how cool is that!)
- Taxi Apps – China push to talk to driver used to solicit bids from drivers to increase the odds of getting car service on your terms!
- Sina Weibo – 530MM+ Users with 2x YoY growth, helps push for social change, has a $100MM revenue run rate, up from $0 a year ago
- GDP – China and India on steady ramp where US, Europe and Latin America on steady decline (see slide 73 … should be very sobering for USA policy makers)
Most Enabled Entrepreneurs Ever – Going from 0 to 1 Million Users in Record Time
- Is this generation and it’s environment different? Selective formative events of past 20 years:
- September, 2001 USA terrorist attacks — destabilized sense of security
- Rise of China as global super power — altered global competition
- Global financial crisis, 2008+ — destabilized financial security
- High unemployment levels — destabilized career optimism
- Potential fiscal debt challenges — rise in need to depend on selves
- Rise of cheap / available computing — 24×7 global access to loads of stuff including shared goods
- Rise of new “Geek” entrepreneur heroes — Jobs + Sergey / Larry + Zuck
- Rise in social connectivity — ability to find / create / share / provide + get feedback
- Rise in value of social / virtual vs. financial + physical currency
- Examples of successful entrepreneurs include:
- Sports – David Finocchio – the Bleacher Report
- Books – Otis Chandler – Good Reads
- Music – Daniel Ek – Spotify
- Art/Creativity – Georg Petschnigg – Fiftythree
- Design/Inspiration – Dan Sibermann, Pinterest
- Sound Alex Ljung/Eric Wahlforss, SoundCloud
- News and Politics – Chris Altchek/Jake Horowitz –PolicyMic
- Product Design – Ben Kaufman, Quirky
- Home Decoration – Adi Tatarko/Al0n Cohen – Houzz
So, You Want to be a Public Company?
- LinkedIn is the Internet IPO standout with 218MM registered users in Q1 2013, 35% YoY growth in subscribers and 87% margin. Not bad for an Internet IPO. Perhaps THE model Internet IPO.
- LinkedIn averaged 7% revenue, 83% EBIDTA upside since IPO with shares up +305%
- Top 4 largest technology companies in the word by market capitalization are Apple, Google, Amazon, eBay valued at $416B, $327B, $127B, $76B respectively (data as of 20 May 2013).
High Skilled Immigration Perspective
- New Research Report: Immigration in America and the Growing Shortage of High Skilled Workers.
- America is the global leader in the technology industry.
- Immigrants (often with STEM degrees) have been (and are) especially important to the vibrancy of tech companies.
- America has a shortage of high-skilled STEM workers and our tech leaders believe it’s constraining their ability to compete and grow jobs in America.
- Government policy helps send many qualified foreign high-skilled workers home and constrains those that can come to America.
- Global environment for recruiting high-skilled STEM workers is likely to get much more competitive.
- Potential for immigration reform in America is very real and the future direction will likely be determined this year.
- This is a big issue for the US technology industry
- 99% of Americans arei immigrants or descendants of immigrants
- High-skilled immigrants are only 1% of the total U.S population
- 60% of the top 25 tech companies founded by 1st & 2nd generation Americans supporting 1.2MM jobs in 2012
- Computer science job opening forecast is 2.4x the number of Computer Science graduates
- USA sending more qualified foreign students home post graduation. This has created a 3.5x rise in student and employment visa issuance gap over the last decade. The current gap is 350k qualified foreign students.
- Street View from Silicon Valley – five high-tech companies alone, IBM, Intel, Microsoft and Qualcomm have combined 10,000 current openings in the United States.