Compelling Mobile Business Models January 12, 2008
present
Keynote: Jeff Glass - Bain Capital Ventures Ajay Agarwal - Bain Capital Ventures
Speakers:Bryan Barletta, Director of Marketing - AppVee Mihael Mikek, President and CEO – CeltraCasey Jones, VP of Business Development – MocoSpaceJorey Ramer, Founder and VP Corporate Development – Jumptap David Nowicki, VP Marketing and Product Management – AirvanaMark Lowenstein, Mobile Ecosystem
Boston Mobile Cluster Map
Boston Mobile Investment 2002 – 2008in millions
2002 2003 2004 2005 2006 2007 20080
100
200
300
400
500
600
Boston Mobile Investment by 2008 Quarter
Q1 Q2 Q3 Q40
20
40
60
80
100
120
140
160
180
200
Total Boston Mobile Companies Receiving Venture Funding in 2008
2001 2002 2003 2004 2005 2006 2007 20080
5
10
15
20
25
30
35
40
45
50
Mobile Startup Landscape
Ajay Agarwal & Jeff Glass, Managing Directors
Mobile Monday, Langham Hotel, BostonJanuary 12, 2009
Bain Capital Ventures
Bain Capital Ventures7Mobile Monday Deck
Mobile Startup Landscape Introduction
Source: Rutberg & Co. Wireless Industry Newsletter, Dec ‘08
$0B
$2B
$4B
$6B
$8B
2004
$4B
2005
$5B
2006
$6B
Global Venture Capital Mobile Financing
Bain Capital Ventures8Mobile Monday Deck
Mobile Startup Landscape Introduction
Lemming University
Bain Capital Ventures9Mobile Monday Deck
$0.0B
$1.0B
$2.0B
$3.0B
$4.0B
$5.0B
2007
$4.9B
2008
$3.6B
2009
Global Venture Capital Mobile Financing
Mobile Startup Landscape Introduction
Source: Rutberg & Co. Wireless Industry Newsletter, Dec ‘08
?
Bain Capital Ventures10Mobile Monday Deck
About Bain Capital Ventures
Mobile Startup Landscape Introduction
Since our founding in 1984, Bain Capital has been an extremely active early stage investor and has a deep track record in the mobile space
• First investment was a $600,000 seed investment in Staples
• Seed investors in Aspect Development, which was ultimately sold to I2 in 2000 for $9B
• Other early stage venture successes include DoubleClick, Shopping.com, eCredit, and Taleo (TLEO) and Staples
• Over the years, Bain Capital has made more than 60 early stage investments
• Today, we has over 25 active early stage companies in our portfolio
Our Early-Stage Focus
• Unparalleled Access to the Fortune 2000 and 350+ portfolio companies across Bain Capital, yielding valuable customers and partnerships
• People – our 30-person Venture team allows us to take an active, engaged role in partnering with entrepreneurs
• Analytical Approach – we offer deep strategic and operational experience
Our Value to the Entrepreneur
Our Mobile Portfolio
(acquired by VeriSign)
Bain Capital Ventures
11Mobile Monday Deck
Mobile Startup Landscape Market Overview
The mobile ecosystem is undergoing systemic change
The network is becoming commoditized, and voice ARPU is dropping rapidly. In fact, it has dropped 19% since Q1 2005.
Smartphone penetration is increasing and operating systems are becoming more open, lead by OS X, Android, Symbian and Blackberry. This is leading to the proliferation of mobile application development.
The balance of power is shifting from carriers to operating system providers as they become the gatekeeper to the phone and the consumer. Apple, Google, and RIM have now all launched app stores where they decide which applications can participate, not the carrier.
The market is expanding as Smartphones become a viable laptop replacement New form factors such as Mobile Internet Devices, navigation
devices, digital cameras, and e-readers are starting to include Wi-Fi capability.
Mobile phones are continuing to replace landlines, and new technology such as femtocells and Wi-Fi enabled mobile phones will only heighten this trend.
1
2
3
4
5
The net result will be an expanded market for mobile data services, and an opportunity for new startups.
Although the market for these services is projected to be large, it’s not clear how revenue will be shared amongst participants, which leaves room open for new and innovative business models.
Bain Capital Ventures
Historical Acquisition Activity
12Mobile Monday Deck
Mobile Startup Landscape Business Models
Source: CapitalIQ, Bernstein Research – Nokia, July ‘08Note: 1. Exits are for Wireless / Mobile / Cellular companies in US / Canada or Developed Europe backed by a financial sponsor acquired for > $100mm btwn. 1/1/00 and 1/1/07 as of 1/1/09. 2. Consumer Indirect Applications are applications purchased by Carriers / Handset manufacturers and preinstalled on phone while Consumer Direct applications are sold directly to the consumer.
0%
20%
40%
60%
80%
100%
Tra
nsac
tion
Val
ue
Carrier
TelecommProvider
Other
$99.8B
NetworkInfrastructure
Semiconductor
InfrastructureSoftware
Hardware
EnterpriseSoftware
Tower
$19.1B
Consumer IndirectApplication
Content
Consumer DirectApplication
Historically, the bulk of acquisition dollars have gone to service providers, infrastructure software developers and hardware designers…
Voice-C entric Ecosystem
• Historically, carriers controlled the mobileecosystem because they:
– Owned the relationship with the consumer
– Determined handset subsidies
– Controlled application availability
• Carriers competed with each other based on:– Network Coverage (Early to late
‘90’s)– Network Quality (Late ’90’s to mid
’00’s)– Price (Mid ’00’s to
current)
Therefore, companies that enabled increased coverage, increased quality, or lower pricing thrived…
This meant that their priorities were those that were rewarded…
Bain Capital Ventures
Recent Acquisition Activity
13Mobile Monday
Deck
0%
20%
40%
60%
80%
100%
Tra
nsac
tion
Val
ue
Carrier
TelecommProvider
Other
$38.5B
Consumer Platform
Enterprise Software
Semiconductor
DataProvider
Hardware
Network InfrastructureInfrastructure Software
Tower
$22.1B
Content
Consumer DirectApplication
Consumer IndirectApplication
Wireless/Mobile Exits (2007 – 2008)
Data-Centric Ecosystem
Mobile Startup Landscape Business Models
Source: CapitalIQNote: 1. Exits are for Wireless / Mobile / Cellular companies in US / Canada or Developed Europe backed by a financial sponsor acquired for > $100mm btwn. 1/1/07 and 1/1/09 as of 1/1/09. 2. Consumer Indirect Applications are applications purchased by Carriers / Handset manufacturers and preinstalled on phone while Consumer Direct applications are sold directly to the consumer.
However, as the landscape changes, priorities are shifting towards data services, and over the past two years companies that enabled such services have seen success…
• Mobile penetration in developing countries is reaching saturation
• Voice ARPU is declining
→ Carriers must increase Data ARPU to
grow
• Concurrently, as handset manufacturers try to maintain pricing, they are changing their focus from handset design to improving handset feature sets.
→ Therefore, the emphasis is shifting to
data-centric offerings including
navigation, music, video, internet,
and games.
Over the past two years, service providers represented only 43% of total acquisitions, with data oriented assets making up the bulk of the rest
Bain Capital Ventures
Recent Acquisitions
14Mobile Monday
Deck
Date Target Buyer Transaction Value (M)
2/11/2008 Danger, Inc. Microsoft Corporation $714.3
Developer of Sidekick mobile platform
6/24/2008 Symbian Limited Nokia Corp. $264.0
Developer of Symbian mobile operating system
1/2/2008 Apertio Limited Nokia Siemens Networks Oy $140.0
Developer of subscriber-centric mobile network platform
Total $1,118.3
8/28/2007 NAVTEQ Corp. Nokia Inc. $8,003.0
North American and European digital map database and associated technologies
7/23/2007 Tele Atlas NV TomTom NV $2,824.7
Global digital map database and associated technologies
4/22/2008 Gracenote, Inc. Sony Corporation of America $260.0
Music track database and associated technologies
Total $11,087.7
11/8/2007 Coding Technologies AB Dolby Laboratories Inc. $278.7
8/24/2007 Chipidea Microelectrónica S.A.MIPS Technologies Inc. $161.9
5/21/2007 Hantro Products Oy On2 Technologies Inc. $113.8
6/21/2007 Centrality Communications, Inc.SiRF Technology Holdings Inc. $286.8
6/12/2007 Global Locate, Inc. Broadcom Corp. $226.0
12/13/2007 u-NAV Microelectronics CorporationAtheros Communications Inc. $134.3
12/21/2007 GloNav, Inc. NXP B.V. $110.0
Total $1,311.5
10/23/2007 Navini Networks, Inc. Cisco Systems, Inc. $330.0
Broadband wireless access solutions
11/6/2008 Wayport, Inc. AT&T, Inc. $275.0
Public Wi-Fi access points
10/21/2007 LGC Wireless, Inc. ADC Telecommunications Inc. $246.1
In-building wireless / voice access
Total $851.1
Mobile Startup Landscape Business Models
Source: CapitalIQ
Over the past two years, successful exits in the mobile data space have included mobile platforms, data assets, enabling technologies, and access points…
Mobile Platforms
Data Assets
Enabling Technologies
Access Points
Navigation
Semiconductors
Audio / Video
Codecs
Bain Capital Ventures
Financing Activity
15Mobile Monday
Deck
Carrier
Semiconductor
Enterprise Infrastructure
Device
Carrier infrastructure
• The groundwork for mobile data services and applications is still being laid, and therefore the business models that have already been successful are those that:
– Provide the underlying technology for building mobile data services
– Help the mobile data market to inflect rather than depending on the underlying infrastructure being in place
• However, Venture Capital inflows into mobile application companies have increased over the past year
– Although overall investment in mobile was down, the percent being allocated to applications increased significantly.
– Investors are ready to help build the next layer of mobile businesses
0%
20%
40%
60%
80%
100%
2005
$5.4B
2006
$6.4B
2007
$5.1B
2008
$3.6B
Dol
lars
Inve
sted
12.1% 17.9% 16.3% 23.0%
2.6% 3.6% 7.9% 13.7%
Mobile Startup Landscape Business Models
Sources: Rutberg & Co. Wireless Industry Newsletter, Dec ‘08Notes: Carrier Applications are those sold through carrier decks, while Consumer Applications are those sold directly to consumers.
During 2008, investment in mobile applications has increased…
Global Venture Capital Mobile Financing Future Opportunities
1
2
Application as % of TotalConsumer Application as % of Total
Government ApplicationEnterprise ApplicationCarrier Application
Consumer Application
16 Mobile Monday Deck
Mobile Startup Landscape Conclusion
We believe that the opportunity to build a business in mobile is as strong as ever, and that there are a multitude of new opportunities for startups trying to be innovative…
What is AppVee?
• iPhone and Android application reviews• Exclusive focus on video• Filter gems from garbage for iPhone and
Android users• Based on merit, not price or downloads• Professionally reviewed and researched• We find what you should know about
Business Model
1) Advertising– On website
• AppVee.com– 700,000 pageviews/mo– 100,000 uniques
• AndroidApps.com– 250,000 pageviews/mo– 30,000 uniques
– Above the fold (5, rotating)– Featured App
– On App• iPhone
• Over 150,000 downloads• 1M+ Ad Impressions• ~10,000 Daily uniques
• Android• Coming Soon
• Top, sticky, rotating• High CTR (up to 1.8%)
Business Model
2) Affiliate Sales– 5% affiliate fee via LinkShare
– Sold tens of thousands of dollars of applications
– Much higher on the iPhone app than website
Business Model
3) Video Ad Share– YouTube
• YouTube Partner within 3 months
– 5min• 5min Partner from start
Mobile Challenges• Exposure, exposure, exposure
– Rising number of applications = lost in the crowd• AppVee is one solution focused strictly on solving this problem
• Gatekeeper restrictions– Where does Apple draw the line?– Does Google’s lack of gatekeeping hurt it?
• Rising development costs– More developers, more apps, higher consumer expectation
• Economic environment– Is technology affected? Yes and No
• Market saturation– When will consumers say enough is enough?
• Circle back to exposure
Where is mobile headed?
• Games that rival the Nintendo DS and Sony PSP
• Social gaming• Multi-user applications• Mobile ports of desktop apps• Deeper integration with other devices around
us• More cloud support and desktop syncing
Thanks!
www.AppVee.com
Thanks!
Miha MikekMoMo Boston, January 2009
Celtra is a mobile marketing enabler and a value-added aggregator•Started operations in 07, team of 5, self-funded
•We offer Software-as-a-Service mobile marketing platform (engagement marketing)
Development platform for marketers (ad-agencies, brands, service providers)
SMS, MMS & IVR based campaigns (pers. calls, SMS alerts, coupons, content, comments, trivia, voting, games)
Modular, customizable mobile features and content mgmt. offer creative freedom
It enables integrated marketing campaigns (online and mobile convergence)
•Beachhead: Movie industry
Our clients: 20th Century Fox, Warner Bros, New Line Cinema, Paramount Pictures
2.1. – Solution
Celtra enables integrated marketing campaigns that utilize mobile channel
“there's quite a bit of research out there that's shown existence of mobile in a campaign ... has improved both the response and the interaction rates of the online media.” Eric Bader, Brand in Hand
Multi-channel campaign distribution provides cost-efficiency and audience reach
•Development of campaigns without knowledge in technical aspect of mobile marketing•Turn-key solution for agencies and brands•Reduced costs and “time to market” for deployment of marketing campaigns•New, innovative mobile solutions for integrated marketing campaigns•Significantly better performance (conversion, click-through) compared to traditional promotional channels
Celtra enables fast and efficient campaign creation, deployment and distribution
Case: Notorious movie promotion
Online widget / Facebook app Showtimes widget / WHERE™ iPhone app
"Text and The City” campaign offered daily SMS tips form Carrie Bradshaw.
Widget was promoted from the official movie web site www.sexandthecitymovie.com
One out of three “Sex and The City” widget impressions generated a subscription to SMS tips from Carrie Bradshaw
Campaign results (conversion rate)
•Opt-in for SMS alerts: 33%
•Widget installs to personal profiles: 25%
5.2. – Inside the platform / Feature module
4.2. – Inside the platform / Feature module
MoMo January 12
Casey Jones
Company Snapshot
www.mocospace.com
The largest mobile social network in the US, with over 5.2 million registered users and over 2 billion pages per month
#1 Mobile Entertainment site (Hitwise) - # 4 mobile search on AOL- Top 3 mobile site in US (Opera)
founded in 2005 by mobile industry veterans and long-time best friends, Jamie Hall and Justin Siegel
24 Employees in Boston and Israel
+$7 million raised from General Catalyst, Comerica, Pilot Group, retired eBay exec Michael Dearing
-
These are the “Year of Mobile”
www.mocospace.com
Mobile Web has the momentum. . . growing 8X faster than Wired web – Nielsen (UK)
. . . With Mobile Social driving the mobile web
In U.S., 100 million mobile web users and 40 million mobile social users by 2012 - eMarketer
The First Screen for Trendsetters
www.mocospace.com
Highly Engaged Average sessions per day: 1.48
Average pages per session: 108
Average session time: 45 minutes
Average # of friends per user: 60
Average pages per user per month: 1529
Average Age: 21
52% Male 48 % Female
33% African American 33% Hispanic 33% Caucasian
92% US & Canada
Young and Diverse
What’s Working?• Ad Supported Model – mobile and web
– JumpTap, Quattro, Third Screen, Nokia
• Direct Deals – Kmart, Verizon Wireless, LionsGate
• Viral, WOM Growth – 5 million e-cards over Holidays
• Entertainment partnerships– Island Def Jam– SonyBMG– EMI– SRC
www.mocospace.com
Diversifying Revenue Streams
Display Advertising BannersSponsorshipsCPM/CPC/CPA
MessagingSMS
CommerceRingtonesGamesClassifieds
Premium ServicesVirtual Goods“Bonus” features
Keys to Growth • Great Product / Member Experience – authenticity
• Flat Rate Data Plans – keep activity affordable– MetroPCS, Cricket, Virgin Mobile
• Smartphones driving mobile web browsing
• Lower barriers for publishers help mobile web flourish• $100 for mobile web page vs. short code $$$$• Driving usage and mainstream appeal
www.mocospace.com
www.mocospace.com
© 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary© 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary
Compelling Mobile Business ModelsCompelling Mobile Business ModelsJorey RamerFounder & VP Corporate Development
Mobile MondayJanuary 12, 2009
Jorey RamerFounder & VP Corporate Development
Mobile MondayJanuary 12, 2009
© 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary
Who We Are
The global leader in mobile search and advertising solutions
Enable search and advertising for 16 operators in 9 countries and hundreds of mobile websites and applications
© 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary
Evolution since inception
44
© 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary
Impact of economic environment
Percentage Of Ad Budgets Expected To Change Over Next Six Months
Increase Maintain Decrease
Online 68% 25% 7%
Mobile 51% 37% 12%
Cable TV 27% 49% 24%
Magazines 18% 47% 35%
Outdoor 17% 54% 30%
Broadcast TV 16% 51% 33%
Radio 16% 49% 35%
Local Newspapers 11% 47% 42%
National Newspapers 9% 43% 48%Source: Advertiser Perceptions Inc. Fall 2008 report. Advertising executives surveyed in October and November 2008.
45
© 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary
Where mobile advertising is headed (or why mobile will be the Internet on steroids)
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Personal nature of mediumLocation basedInteractiveExchange real value with userTake phone everywhereTargetable
© 2008 JumpTap, Inc. All rights Reserved. Confidential and Proprietary
Thank you
For more information, contact:Jorey RamerVice President, Corporate Development
JumpTap: Ten Emerging Mobile Players to Watch in
2007
JumpTap: 2007 Mobility Award for Entrepreneurial Company
JumpTap: AO Media Top 100 Companies 2007
JumpTap: Best Advertising & Marketing Search Engine
2008
JumpTap: Top 15 Innovator 2007
AirvanaMobile Monday EventCompelling Mobile Business ModelsDavid NowickiVice President, Marketing and Product ManagementJanuary 12th 2009
Stay informed: www.femtohub.com
Airvana At a Glance• Company Facts
– Founded 2000: NASDAQ-AIRV
– HQ in Chelmsford, MA, USA with offices in EMEA, Asia Pacific and the Americas
– Over 500 employees
– 2007 Billings: $142M
• Market Focus– IP Wireless Networks (RAN)
– Fixed Mobile Convergence (FMC) pioneer
• HubBub™ Femtocell
• Universal Access Gateway
– Products deployed in 70 operators on six continents
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InternetInternetProtocolProtocol
MobileMobile BroadbandBroadband
Partnerships for the Transformed Mobile Ecosystem
50
CORE INFRASTRUCTURECORE INFRASTRUCTURE
RADIO ACCESS RADIO ACCESS INFRASTRUCTUREINFRASTRUCTURE
CONSUMER DEVICESCONSUMER DEVICES
STANDARDSSTANDARDS
First Business: CDMA 1xEV-DO IP-RAN
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IP-RAN SOLUTIONIP-RAN SOLUTION• IP-RN EV-DO Base Station
• IP-RNC Radio Network Controller
• AirVista Element Management System
AIRVANA ADVANTAGESAIRVANA ADVANTAGES• IP-RAN architecture optimized for mobile broadband
• Consistent fast delivery of EV-DO roadmap
• Rev A VoIP with QoS
• Non-disruptive upgrade path to EV-DO Rev B and beyond
IP-RAN SOLUTIONIP-RAN SOLUTION• IP-RN EV-DO Base Station
• IP-RNC Radio Network Controller
• AirVista Element Management System
AIRVANA ADVANTAGESAIRVANA ADVANTAGES• IP-RAN architecture optimized for mobile broadband
• Consistent fast delivery of EV-DO roadmap
• Rev A VoIP with QoS
• Non-disruptive upgrade path to EV-DO Rev B and beyond
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Today: Drivers and Barriers of Mobile Services
3G Services Device Innovation
Spotty Coverage Poor Data Performance High Costs & ARPU Challenges
Unrealized In-Home Market
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Emerging Business: Enter The Femtocell
Issue Femtocell Impact
Coverage Base station for the home
Data Performance
Dedicated capacity; all the bandwidth you need
CAPEX/OPEX Delivery of mobile services far less expensive via femtocells than over macrocell infrastructure
ARPU Potential for increased usage, reduction in churn & uplift from femtozone services
“Enter the femtocell: a little box with a whole lot of promise.”
Fox News, November 2007
“Enter the femtocell: a little box with a whole lot of promise.”
Fox News, November 2007
54
Femtocells Transform The Mobile Network
Mobile Core
Network
MACRO ACCESS
Femtocell andDual-Mode Access
HubBub™ Femtocell
Wi-Fi
InternetUniversal Access
Gateway (UAG)
HubBub™ Femtocell
Femtocells Drive The Digital Home Era
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PERSONALIZED APPLICATIONSPERSONALIZED APPLICATIONSHome Zone Plan3G phoneHome Zone menu
HOME CONTROLHOME CONTROLVideo Surveillance
Alarms
FAMILY COMMUNICATIONFAMILY COMMUNICATIONPresence-enabled applicationsIntercomVirtual home number
DIGITAL HOMEDIGITAL HOME& ENTERTAINMENT& ENTERTAINMENT
Music and videoGaming
Home Menu
Summary
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How • Infrastructure Software licensing
• Femtocell Devices and App Enablers
When • Existing: Mobile Broadband Infrastructure
• Emerging: Femtocells (FMC)
Who • Mobile OEM Channels & Operators
• Consumers
Why • Mobile Broadband. Everywhere.
• Transforming the User Experience
Where • Realizing the full potential of the mobile device
• Femtocell at the center of the digital home
Thank You
Stay informed: www.femtohub.com