2011 – Year in Review
There is no denying that 2011 has been a pretty exciting year for everyone within the startup/tech scene. Paying tribute to the fact that, even with the tumultuous global macroeconomic backdrop, industry leaders are getting read for, filing for or already have gone public; leaders such as: Groupon, LinkedIn, Pandora, Zillow, Zynga, Facebook, and many more. Investor sentiment within the industry is strong – even with the performances of Groupon ($GRPN) and more recently Zynga ($ZNGA) on the Nasdaq being lackluster. Seeding platforms, VCs and Angel investors continue to back innovative startups at a record pace which should see some pretty cool projects launching in 2012.
In my eyes 2011 further illustrated and solidified the potential of social and mobile – social as it continues to evolve and be as sticky as ever in successfully attracting traffic, advertising and expanding into previously untapped features and markets. Mobile as it continues to engulf and disrupt businesses, bringing together features such as NFC (Google Wallet et al.), daily deals (Groupon et al.), locational based services (Path et al.) – I’ve already written a separate post on how I think Google is best placed to capitalise upon this.
Most Overvalued Tech Company of 2011?
I’m going to put my neck out there and say twitter, estimated value – $8.4bn. I should say that I really enjoy twitter; the simple intuitive idea, design and it’s huge following. All of these are big plus points for it which rightly should increase it’s intrinsic value; however, until I see a wholehearted business model behind it in terms of generating cash I can’t get behind it from a business standpoint. Whether this is another iteration of sponsored tweets that is more effective than the current one, or something else, I’m looking forward to seeing what they come up with.
Most Undervalued Tech Company of 2011?
I’m going to say that I think Google was overlooked in 2011; probably owing to what many saw as a ‘botched’ attempt to launch their own social network. Their stock ($GOOG) did finish up +4.78% for the year – however, as repeat readers will know, I think Google are in a great place for consolidating a bunch of industries and the potential from being the leader in that field is huge.
Best Growth of 2011?
Mobile payment company Square gets my vote for this – currently processing $2bn worth of payments per year from 800,000 merchants who have activated their service. With regard to how they make money – they take 2.75% on each transaction processed. Square was founded by Twitter Co-Founder Jack Dorsey, and is poised for even more staggering growth in 2012 – currently it accounts for 10% of all Visa and Mastercard purchases, Doing some quick rough back of the envelope calculations Square is pulling in around $55m per annum (2.75% on $2bn) – pretty impressive for a company that’s only 2 years old. More info over on Crunchbase…
Coolest Company of 2011?
Lightsquared – this is a company that plans to develop a wholesale 4G LTE (Long Term Evolution) wireless broadband communications network integrated with satellite coverage across the United States.
Airbnb – a product of the seeding platform Y Combinator and it has raised$120m in 3 years. ”Airbnb is an online service that matches people seeking vacation rentals and other short-term accommodations with those with rooms to rent, generally private parties that are not professional hoteliers. The site was founded in August 2008 by Brian Chesky and Joe Gebbia. In July 2011, the company had over 100,000 listings in 16,000 cities and 186 countries” (Wikipedia). Although it isn’t really a new startup (being over 3 years old now) but I feel this site really gained traction this year and became known to people who are not online a lot. I love their business model and the simple idea behind it – yes, they have hit some stumbling blocks when a user’s house was trashed but they have now put in place some more backstops to hopefully mitigate the risk. As previously stated they have received $120m in funding with prominent investors such as Sequoia Capital, Andreessen Horowitz & Digital Sky Technologies getting in on the action.
Biggest Flop of 2011?
Color – the app that was poised for stardom – “a social app for photos.. you take photos and then the photos appear on the fly with other photos in your vicinity”, it had all the funding it would ever need – over $41 million from Sequoia Capital, Bain Capital Ventures and Silicon Valley Bank. However soon after its much anticipated launch users complained of confusing usability (to this day I still don’t know how to use it) and also the fact that they didn’t want to share photos with strangers in the first place. Color was quick to pull its app from the iTunes store, going back to the drawing board – perhaps in the future we will see a better iteration of the app. At the minute it is living as a Facebook app.
Lets hear your suggestions in the comments…
