KPCB

Internet & Mobile Usage

• 1995 saw global Internet penetration 35 million users, around 0.6% of the population. In 2015, 39% of us are online, around 2.8 billion.
• 51% of today’s Internet users are from Asia (with China at 23%), 19% from Europe, 10% from the USA, and 21% from the rest of the world.
• Vast growth in the mobile internet since 1995. In 1995, 1% of the world (80 million people) used mobile phones. Today, 73% (5.2 billion) of us do. And 40% of that number use smartphones.
• Internet User Growth +8%, Smartphones +23%, But Both Rates Slowing – India, Brazil, and China are leading the smartphone growth. Mobile-first content and apps built for these rapidly developing markets will likely become big businesses. Startups that work in the US may need to expand quickly to these markets when possible, or face entrenched local competition.
• Global internet usage, measured by data traffic, was up 22% last year. Mobile data traffic was up 69%, a deceleration from last year.

Internet Market

• The top 15 publicly traded internet companies totaled $17 billion in market capitalization in 1995; in 2014 they totaled $2.4 trillion.
• Of the top 15 publicly listed global public internet companies of 1995, only one is still on the list in 2015: Apple, which was #2 then and is #1 now – Microsoft seems to be missing but should have made the list

• The Top Internet Companies Are Platforms: 1. Apple. 2. Google. 3. Alibaba. 4. Facebook. 5. Amazon – The list of top Internet companies is dominated by platforms where third-party developers and merchants bolster value and network effect. Apple and Google’s mobile app stores, Alibaba and Amazon’s commerce marketplaces, and Facebook and Tencent’s socially connected app ecosystems adapt their flexible core platforms to a wide array of use cases.
• 11 of the top 20 are US companies. China has 6, Japan 2 and Korea 1.
• India Becomes A Mobile Business Target – Mobile traffic makes up 65% of total Internet usage in India. So it’s not surprising that large companies like Google and Xiaomi are making huge efforts to create cheaper smartphones that will attract buyers whose first experience on the Internet is on a smartphone.

Advertising

• Mobile advertising—just 14% of total digital advertising—still has room to grow, relative to how much time people spend on their devices. Print advertising in the USA is way over-indexed (18% of US ad spend, but only 4% of time spent in media. Radio and TV are about par spend vs time. Internet ad spend is 23%, but time spent is 24%. And mobile offers huge opportunity: just 8% of spend but 24% of time spent. Meeker sees this as a $25 billion opportunity.
• Things that both brands and consumers should be excited about: Ad formats and ‘buy’ buttons optimised for mobile. Notably, content spent on vertically-oriented screens as on mobiles, is now a healthy 29% of total time spent viewing screens of any kind.

User Behaviour

• Video Viewing Is Growing Fast, Especially In Vertical Portrait Mode – Vertical video ads like Snapchat’s are watched in their entirety 9X more than landscape video ads. That means video content and ad creators need to rethink how they shoot, including fewer long-distance establishing shots and more personal close-ups.
• The Average American Adults Spends 5.6 Hours A Day On The Internet – We now spend more time on mobile devices than desktops and laptops. The shift from using the Internet a few times a day for long sessions to many times a day for short sessions will have profound impact on what we consume. Bite-sized content and experiences are becoming favorable.
• Among US millennials, 87% say their smartphone “never leaves their side,” and 44% use their phone’s camera daily.

Drones

• The growth of drones is phenomenal and it is a global trend. Sales of drones are up 170% year over year, and usage spans everything from disaster response to infrastructure inspection. In the U.S., despite regulatory hurdles, more than 400 companies have been approved to operate drones commercially. Watch this space too, I say.
• Consumer Drones Are Selling, But Commercial Is The Big Opportunity – The 167% year-over-year increase in consumer drone sales shows lots of hobbyists, photographers, and videographers are getting into the flying gadgets. But top drone companies like DJI and Airware are building out drone systems that can save commercial businesses tons of money by replacing helicopters, planes, satellites, and dangerous human jobs.

Innovation spaces

• Rather than reimagining the enterprise, entrepreneurs are changing segments of business processes. For instance: communications (Slack), payments, both offline (Square) and online (Stripe), analytics, customer communication and service, HR processes, and so on.
• Just-in-time services enabled by mobiles with sensors — driving directions, breaking news, emergency services, etc — are big drivers of mobile usage.
• You Can Now Get Almost Anything In Under An Hour – Taxis, hot meals, cooking ingredients, groceries, courier delivery, and postage pickup are all available on-demand. Traditional brick-and-mortar businesses will be disrupted if they can’t find a way to compete with convenience.

Messaging

• Six of the top 10 most used apps around the world are messaging apps. Messaging has become a platform not just for communications, but for commerce and computing.
• Messaging Apps Are The Portal To Mobile – The top apps by usage and number of sessions per day are messaging apps. These apps are where people spend the most of their time on mobile, making them a potential jumping off point for additional services like ecommerce and media consumption.
• Messaging is seeing a lot of change, improvements and growth, with multiple platforms seeing rapid growth. Apps that cater to single geographies, like WeChat (China), Line (Japan) and Kakao Talk (Korea), are not just pulling in large user bases, they’re also earning revenue in the high nine-figure range. These earnings come from the apps offering paid services, as well as being hubs for services like taxis and food delivery. Global mobile messaging leaders are following this example now, and if the trend holds, Meeker sees some of these leaders evolving into central communications hubs.
• Network Effect Makes Messaging Apps Hard To Topple – Apps that break away to become 100 million user-plus networks can enjoy sustained success, as it becomes tougher to convince people to try a similar service their friends aren’t already on.
• Asia’s Messaging Apps Show US Companies What To Do Next – WeChat and Line pioneered many features now coming to apps like Facebook Messenger and Snapchat, including video calls, payments, stickers, and media. More opportunities they’ve proven out exist in commerce, food delivery, taxi services, and development platforms.
• The next chunk of new internet users are likely to be feature-phone users currently, and are likely to first get online via messaging platforms.

Content

• User Generated Content Creation Is Exploding – Year-over-year, Pinterest pin creation is up 75%, Twitch video broadcasts are up 83% to over 11 million per month, stories written on Wattpad are up 140%, and Airbnb reviews are up 140%. 65% of Snapchat’s 100 million daily users create content per day. Content platforms have a lot to gain from strong creation tools.
• Users are increasingly the first source for news.
• With young Americans (12 – 24), the use of Facebook, Twitter, Google+ is declining dramatically. What’s growing? Visual-oriented networking via Pinterest, Instagram, Snapchat and the like. Millenials love their smartphones and 44% use the camera or video functions daily.

Security

• Cyber attacks are growing in size, complexity, and risk.

Work

• Millennials Make Up 44% Of On-Demand Workers – The generation that grew up connected to the Internet has now reached the point that it is about ready to drive the economy. Among the things they value most, Meeker says, are flexible work hours, and cash bonuses, though they still value training and development highest. Those first two should sound a little familiar: most of the on-demand services in the world are popular among workers for that reason.