Who doesn’t love to entertain venture capitalists? They have insight, they have an innovative eyes, they have lots of money… So we grabbed two of the best dressed (plaid blazers anyone?) to join us on stage at MobileBeat 2011 today to discuss why VC’s are going long on mobile.
Jim Goetz of Sequoia Capital and Matt Murphy of Kleiner Perkins have been investing in mobile companies for 5 years but say that the past year was the first where they saw meaningful momentum. Murphy explained that we finally have a market where distribution and acquisition of mobile applications is possible without spending a ton of money.
The industry is also seeing a shift in consumer behavior. 30 percent of people are spending more time on mobile than on the web. In fact, Online radio service Pandora saw the number of customers using its mobile app grow from 10 percent to 85 percent in three years. Makes sense since, according to the VC duo, 70 percent of phones sold this year will be smartphones.
But moving from the web to mobile is difficult and many companies who try, fail. According to Goetz, Groupon, Dropbox and Evernote got it right, but they are not the norm. One key to success, according to Murphy, is leveraging your web audience. Pandora did this well. It brought its web audience with it to its mobile application and now its mobile usage is through the roof.
Not everyone can be a mobile darling, though some do exist. Murphy mentioned AdMob, Spotify, Shazaam, Pandora and Square as poster-children for mobile success.
A mobile darling that could have been is, surprisingly, Blackberry. Goetz explained that if Blackberry had spread its Blackberry Messenger cross-platform, the company’s mobile presence could have been huge and it would not be in its current, dismal position.
Goetz and Murphy ended their talk with a hint at their next big investment. Behavioral targeting, which is used on the web to track user actions and provide ads based on those actions, has huge room to solidify its spot in mobile. They are working with a company working toward that end, but would not provide details.