One of the more animated presentations was delivered by Roger McNamee. Roger is the managing director and co-founder of Elevation Partners. Roger's expertise is around technology investments and he brought a very refreshing perspective on the sector. He did not simply espouse a macro view of the tech sector. He was very specific and insightful about what made technology companies successful and what defined tech success in the future.
His initial point was that technology is about consumer products so much so that business are adopting consumer products in the name of ease of use and maintenance. The examples he gave were smartphones and tablets. Business has clearly embraced these devices. In his opinion the dominant tech players are Google for the web and Apple for applications. For Google, however, he sees some degree of disintermediation of their core business, index searches. Tech companies like Facebook, Twitter, and Yelp provide great search capabilities that are even more targeted. It's not as if we default to Google for searching.
He took particular interest in Apple and contrasted that to Google in terms of development. The following are the contrasts:
Google - Open Source Apple - IOS
Google - Long tail Apple - Branded
Google - Free Apple - Free and paid
Google - Commoditized Apple - Differentiated
He suggested that Apple is currently plagued with a case of "Innovator's Dilemma". This term is a reference to Clayton Christensen's book which delves into why stellar companies with great technology and customer service falter. According to Christensen, successful companies often overemphasize customer's current needs and fail to anticipate their future needs. When this occurs, smaller competitors nibble at the low end of the marketplace to eventually displace higher end competitors and their dominant technologies. McNamee believes Apple has a vision problem since they are failing to enhance their IOS through iCloud.
His vision of the tech future sees greater success for content owners over the middle men. The seminal example of this is the battle between content providers of programming and the middle men (the transporters like cable TV). Given this future he sees a larger number of successful smaller companies ($300M - $1B) as opposed to a smaller number of larger companies.
McNamee's vision also includes:
- HTML 5 - embedded flash capabilities will help web pages load faster, lower development cost
- Context - the next big thing in mobility
- Smart home subsystems - he gave the example of Sonos wireless speakers
- Distributed cloud - home clouds will be the most valuable
- Disruption of cable, satellite and Netflix - content owners going direct over the web (MLB, HBO Go, Showtime Anytime)
- Sharing economy - home sharing, bicycles, cars
His last vision about economy sharing has profound implications. McNamee indicated that 31% of recent college freshmen had no driver's license. Combine that with vehicle sharing and you have just lowered capital expenditures for young consumers. That will be another wake up call for the auto industry.
By the way, if you don't want to talk about tech investments with Roger, he would be more than happy to talk about his band, Moonalice.