VCs on Web Technology: Judy Gibbons from Accel

This is the start of a new interview series on Read/WriteWeb, about venture
capitalists (VCs) and their thoughts on ‘next generation web’. The aim is to find out
what Web technology trends and products VCs are tracking – and at the same time provide
some expert tips and advice for Web developers and entrepreneurs. 

In this first installment,
we talk with Judy Gibbons of Accel. Accel is a
Silicon Valley and London-based VC firm and is an investor in Web companies such as
Facebook, Brightcove, Kosmix, Netvibes, Zimbra – and many others. Judy
is part of Accel’s Venture Development team, in their London office. She has 25 years
experience in the computer industry, including working for Microsoft, HP and Apple.
Before joining Accel, Judy was Corporate Vice President of MSN Global Sales and Marketing
at Microsoft. Thanks Judy for participating in this interview!

R/WW: What web or new media companies have you invested in over the past 12-18
months?

Judy: In the London office we’ve invested in:

R/WW: Looking at upcoming web technologies, which trends are you interested in
currently – and which trends do you see becoming increasingly important over the next
12-18 months?

Judy: It’s often referred to as web 2.0, but could more accurately be described
as ‘second generation internet’ – and I think there are some recurring themes. For
example:

  • narrowband –> broadband –> pervasiveness
  • transactional –> socialisation and entertainment
  • single applications –> mashups
  • generic search –> vertical search
  • pc only –> pc + mobile
  • emerging revenue models –> proven models
  • heavy start up costs –> low start up costs
  • overcapitalisation –> bootstrapping, high capital efficiency
  • Valley dominated –> innovation happening more broadly
  • tentative advertising models –> established ROI models

These translate into a number of interesting business areas, some established but
moving to second generation; some new. For example:

  • Vertical search – e.g. Kayak & Trulia (US) 
  • Social Networking – e.g. WeeWorld (the more time you spend online the more important
    your virtual identity will become) & Facebook (US) 
  • IP TV – e.g. Brightcove (US) 
  • Advertising across new platforms – e.g. Amobee for mobile, Refresh Mobile for
    Gaming 
  • Mobile content/apps – e.g. Refresh Mobile 
  • Next generation ecommerce – e.g. Autoquake – auctions/make offline channel more
    efficient, Spreadshirt – user generate content 
  • Connection pervasiveness e.g. The Cloud public wi-fi

R/WW: In the blogosphere a certain type of ‘web 2.0’ company is endlessly hyped –
e.g. Flickr, del.icio.us, YouTube – while other deserving companies struggle to get
attention from bloggers. What are a few examples of companies that are under-hyped, in
your opinion?

Judy: Personal home pages like PageFlakes & Netvibes. These represent the third
generation of Internet usage: first portals because there was little content and it was
hard to find; second search because there was an ever increasing amount of content if you
could only track it down; now personalized ‘pull’ home pages, because most
sophisticated users know what content and apps they want to check into every day – and
they want these brought to them to improve productivity.

Also Vertical Search like Kosmix and Kayak and Trulia – we are so far away from this
problem being solved. There is massive consumer demand and compelling business models.
Google was just the beginning…

R/WW: What are the main differences in the Web industry in Europe versus Silicon
Valley, other parts of the US, or Asia? Obviously easier access to VC funds in the Valley
is one key difference, but are there others – for example the types of products being
produced?

Judy: Vs The Valley in previous decades;

  • Innovation is happening everywhere; in the midwest, in NY, in Paris, in London
  • Barriers to entry are lower; cheap to build a service, can grow virally and get user
    adoption
  • Strong embrace of open source ethos – especially in Europe; people freely
    collaborating e.g. Netvibes eco system

R/WW: For a Next Generation Web startup, which is more important – building the
technology with defensible IP, or just putting your beta product out there and growing
your customer base?

Judy: They’re related; it’s about building something that is compelling to
end users, that keeps them coming back and gets them recommending it to friends; that
creates feedback and new ideas, that results in new features and functionality that
spawns compelling business models. The IP is often in the customer and market knowledge –
as much as in the software. It’s about the knowhow; pure IP on its own is often not
enough. Equally companies with good ideas who attract early users, but fail to build on
this through innovation, usually fade away..

R/WW: In your view what is the #1 problem that web startup CEOs commonly
have:

a. Funding

b. Team

c. Competition

d. Revenue

e. Growth

Judy: All of the above, to be frank. The order varies for a given start up and depends
on what phase they are in. That’s the challenge; they have to execute well across
all of these dimensions.

R/WW: This is a question a lot of our readers will be interested in – how does an
entrepreneur get on Accel’s radar?

Judy: The best way is to find someone to make an introduction, as this inherently
qualifies the company; it’s not that hard – six degrees of separation and all
that. They can look at the existing portfolio for example.

Failing that, a direct approach to the right VC with the right pitch. Preparation
helps; the entrepreneur needs to know enough about how venture works to know it’s
right for them and their business, know which VC at which firm is likely to be most
interested (read bios on web sites) and be able to explain the business well.

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