Felicis Ventures Blog

When To Raise Money

This was one of the key questions we had to address in a panel during last week's Red Herring 100 Conference in San Jose. While it's not an easy question to answer, the reply simply isn't just "when you need money". In fact, being contrarian is a good strategy when it comes to fund-raising. For example, Fund-raising in emergency mode only exacerbates the negotiation position.

While there are numerous variables that come into play in answering this question, such as if the markets are on the rise or not, certain factors play an important role regardless of market conditions. If possible, raising money from a position of strong momentum  significantly helps achieve a better outcome. For instance:

1. Coordinating the fund-raising effort to coincide with a major technical break-through, closing a key business deal or distribution partnership, making or identifying a major hire, where the positive momentum you're creating could clearly benefit from the newly raised funds.
2. To use Seth Godin's popular Passion-Pop chart, the cusp of either the passion or the pop curve, when traffic starts getting really viral, would be an ideal time as well.

Asian Internet Users Poised for Strong Growth

With 530 million users, Asia has the world's largest internet user population according to Internet World Stats. The penetration of internet users compared to the total population however is lowest in the world with 14%, except for Africa. Given internet penetration rates in North America and Europe of 73% and 48% respectively, that bodes well for strong growth in the number of internet users in Asia for years to come, making the region important to watch in the coming years.

While China has more than double the internet users of Japan with 210 million, it has less than one fourth of Japan's internet penetration at 16%. India has third largest internet user base in Asia, almost twice as much as in South Korea, but its internet penetration is 1/13th the rate of South Korea. More details of the specific Asian countries and their internet user statistics can be found here.

Facebook + Craigslist = Worked Like a Charm

My wife and I have just sold our two year old designer sofa in less than 24 hours. First step was taking a picture and posting it on Craigslist. What really closed the deal, however, was inserting that Craigslist link to our listing, into our Facebook status message (we did it with Gtalk status as well). It was my wife's brilliant idea and it worked like a charm. It's too early to say if this implies a new market or business model, but the experience was so positive - it makes me wonder. Most of us would rather buy from or sell goods to people we know and trust. More importantly, when that transaction is time sensitive, that connection might be even more crucial. Food for thought...

The iPhone Effect

eMarketer's recently published market research on Mobile Social Networks has surprising insights on the convergence of mobile market with social networks, highlighting key trends. The chart comparing the behavior of iPhone, Smartphone and regular phone users isn't an exception. While the differences are somewhat expected, the contract is pretty stark: an iPhone user is more than 10 times more likely to do a search, watch an on-demand video or access a social networking site compared to a regular phone user. While the differences between iPhone and Smartphone users are not as large, they're still significant. The chart below tells the story pretty clearly. It's one of the first interesting comparison stats I saw on the topic. (check out the report mentioned above for more details)

Google Leads in European Search, But Yandex Ahead of Yahoo

Google dominates the European Search Market with 80% share of all searches according to comScore's newly released European Search Rankings for March 2008. What's most interesting about the rankings is that the countries with highest searches per user happen to be places where Google dominates searches like Finland where it has about 92% market share.

It's surprising to see Yandex ahead of Yahoo with 2.2% market share of all searches in Europe. Especially considering Russia was at the bottom of the list in terms of searches per user, where each Russian user does a little more than half the searches compared to their Finnish counterparts, this number is even more intriguing. If Yandex could improve that searches per user number, it has a chance to solidify its position as being one of the top 3 search engines in Europe. It's interesting to hear many new upcoming search engines strive for that elusive "just 1% of the search market goal" and actually see the Russian search engine Yandex achieve that goal with over 2% market share in Europe.