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588 Kleiner Perkins iFund Applications Accidentally Published To Web
New Name, Still Same Game for Devicescape
Devicescape, a San Bruno, Calif.-company that launched at DEMO 2007 to mixed reviews, is rebranding itself and its Wi-Fi access software for mobile devices, including cell phones, as Easy Wi-Fi. The software makes it easier to log onto hotspots that normally require a sign-in using a web-based authentication system. In conjunction with its name change, Devicescape says mobile-phone maker HTC will bundle the software in all its Windows Mobile phones.
The six-year-old company is backed by August Capital, Kleiner Perkins Caufield & Byers, Enterprise Partners and JAFCO and has raised a total of $26 million dollars in Series A and B rounds, according to VP of Corporate Marketing Kathleen Shanahan. It currently makes most of its revenue from licensing its software to device OEMS. Simon Wynn, VP of products at Devicescape, was tightlipped about the pace of growth at the firm and wouldn’t give details about how much money it’s making.
While Devicescape has increased the number of devices it supports to 90 including every WiFi-enabled BlackBerry and Apple’s iPhone, it is hard to see how it will turn this software offering into a big business. The company needs to get its software embedded into tens of millions of devices to bring in meaningful revenue.
F|R: The 9 Signs of a One-hit Wonder
Many entrepreneurs fear being a flash-in-the-pan success — achieving an exit once, but never again. (Some might call this being lucky rather than good.) But while the allure of success inspires us to do great things, achieving it can have an ugly aftereffect: complacency. Vigilance, my friends, is the only path to serial-founder bliss. Here, in descending order, I offer nine leading indicators that you’re headed for one-hit wonderdom.
9. You went and got all tricked out.
I mean with your next business, not your fashion sense. But remember how you got your first hit — with a kindergarten-level UI that any neophyte could comprehend. Sure your friends called you Forrest Gump and sneered that you were lucky; that’s their problem. Trying to prove to your friends that you’re really, truly smart isn’t good business. Delivering a simple, usable concept that solves problems and makes money is.
8. VC meetings go a little too well.
During your first run, half the VCs shooed you out of their offices, while the other half spent as much time looking at their BlackBerrys as they did you during your presentation. But now VCs call you and when you do take a meeting, all you hear is praise. No matter that a VC doesn’t understand your pitch, you get a term sheet anyway. (And who can fault you for co-investing with OATV-Sequoia-KPCB?)
7. You have hobbies that require special outfits.
Your hobby used to be promoting your company six days a week. Now when anyone asks you what’s new, you talk toys, not shop. You’re proud that you “only paid” $1.4 million for that catamaran parked on Catalina Island, but there are hidden costs — like the time you spent shopping for it, and the clothes you doff while sitting on it (you can’t sail it, remember?). You know what they say about big boats: Every extra foot of length equates to another diminishing asset — your shareholders’ value.
6. Every weekend is a 3-day affair.
Your workweek used to be six days. Now you work four days because Mondays you have jetlag and Thursday nights you host pool parties. Cut your three-day weekends down to one per month.
5. You have an entirely new “crew.”
When your star was just starting to rise, hanging with other nerd founders and bloggers was your idea of a good time. Now you have a contact list filled with party hangers-on. Nothing says one-hit wonder like a circle of friends you don’t really know.
4. You sign the dinner bill without reading it.
At your first hit company you never even expensed airport parking, so concerned were you with impressing your investors by coming in under budget. Today you have a private car service and don’t even see the dinner bill. If you’re eating at Evvia’s table 50 twice a week, you’re hurtling toward one-hit wonderdom.
3. You confuse junkets with networking opportunities.
Experienced people know the difference between an authentic business-building event and just another excuse for a corporate-sponsored party. I can say this, because I go every year: The Super Bowl is not a networking event. Figure out which events are which. And if you can’t seem to do that, go find a cave where you can build your next arc reactor.
2. You’ve uttered any three of the following five lies:
That wasn’t my first startup.
Well, money’s not that important to me.
I have no regrets selling to [Google, Microsoft, Yahoo, IDG or that PE firm].
I would never consider buying it back.
I’m going into venture capital to share my experience.
And the No. 1 indicator you’re at risk of becoming a one-hit wonder…
1. You’ve lost your stomach for mistakes.
Business in Startupville is defined by ebbs and flows — one step forward, two steps back. Now you’re so concerned with preserving your new success, you’ve lost the ability to tolerate the ebb of a negative blog post, a business model rehash, or the need to issue pink slips. Business success is the result of being able to adapt to and tolerate temporary failures.
Larry Chiang is the founder of duck9.com, which helps college students improve their credit ratings. He is a frequent contributor to Found|READ.
Austin Cleantech Guru to Be Kleiner EIR
Earth2Tech has learned that Kleiner Perkins Caufield & Beyers has chosen Joel Serface, the director of the Austin Clean Energy Incubator, to be an entrepreneur-in-residence. Serface will pull technology out of the National Renewable Energy Laboratory under a Department of Energy-sponsored program aimed at commercializing federal clean energy research. Prior to his job in Austin, Serface worked at several venture firms, including as a partner at Eastman Ventures, the venture arm of the Eastman Kodak company; as a director at Sierra Ventures; and as a principal at Alliant Partners. To read the full story, go here.
Kleiner Perkins Goes Green With $1.2 Billion In Two New Funds
Silicon Valley’s most venerable venture capital firm has raised $1.2 billion in two new funds. Kleiner Perkins announced the formation of its thirteenth fund, KPCB XIII, which will invest $700 million in “greentech, information technology and life sciences ventures.” It raised $600 million for its twelfth fund just two years ago, and $100 million of that was earmarked for green technology. Kleiner currently lists 11 companies in its green portfolio, including Altra Biofuels, Ausra, Bloom Energy, and Lilliputian Systems.
Today, Kleiner is also announcing the formation of a standalone $500 million Green Growth Fund, which will work closely with new Kleiner partner Al Gore and his other investment vehicle, London-based Generation Investment Management. Wow, did Kleiner Perkins just hand Al Gore $500 million to go fight global warming?
VentureBeat has more details.
Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware.
Does iPhone Need The iFund?
So those rumors about the iPhone SDK delay were right after all: it won’t be until June 2008 till you get to put new apps on your iPhones. But that’s enough time for John Doerr & the venture firm he leads, Kleiner Perkins Caufield & Byers to set up a $100 million iFund. (Does anyone know about the performance of KPCB’s Java Fund?) Is KPCB compensating and desperately trying to get ahead of what it thinks is a hot trend? After all they failed to board the Web 2.0 train and of course missing out on Facebook.
“A revolutionary new platform is a rare and prized opportunity for entrepreneurs, and that’s exactly what Apple has created with iPhone and iPod touch,” said John Doerr, Partner at Kleiner Perkins Caufield & Byers. “We think several significant new companies will emerge as this new platform evolves, and the iFund will empower them to realize their full potential.”
The hot selling iPhone — over 5 million units sold so far — on paper it seems like a good idea that they want to invest in companies and developers that are going to create apps for iPhone and iPod Touch platform. I am not convinced that that an iFund is necessarily a good idea. Why do I say that?
First of all, Apple will need to sell a lot more than 10 million phones it projected in first 12-months. And even if it exceeds expectations, there are many challenges that make the iFund a high risk proposition. A question that instantly comes to mind is: why isn’t Apple putting its own vast cash reserves to work and encouraging app development. Say what you may, Google didn’t need a third party fund to get attention for its Android platform. Now lets look at the kind of companies iFund will invest in.
The iFund is agnostic to stage and size of investment (from seed stage to established products with revenue), but targets companies with long-term standalone potential. Focus areas include location-based services, social networking, mCommerce (including advertising and payments), communication, and entertainment.
Much of the iPhone-iPod Touch platform activity is going to involve apps cooked up by individual developers, small operations that won’t need to funding to grow their business. If Apple’s event reports are to be believed then it seems like the development of these apps is going to be fairly easy, smooth and inexpensive, making it easy for one-to-two developer teams to unleash their creativity.
In exchange for 30% of their application revenues, Apple is going to provide hosting, perhaps some promotion, and other sundry services. The free apps will be offered up for free, or so it seems from various reports that we have heard. Not that there is any chance they can sell outside of the AppStore, since iPhone will continue to remain a close commerce platform. (The iPhone platform is actually more draconian than the iTunes Store where Apple added DRM to keep competition out but consumers had a choice to rip the CDs and playback their own MP3 files.)
In other words any start-up or developer will have its destiny controlled by Apple. As shown by Microsoft, Facebook or Apple itself, a successful App (or an iPod accessory) can be replicated and introduced by the platform owner. I am just trying to understand how a big standalone company will emerge when Apple is going to be gatekeeper.
There are some who have thrown caution to the winds, proclaiming that iPhone and iPod Touch are going to be this humongous sellers and will crush everything over next two decades. Pour souls with little understanding of mobile ecosystem. Does anyone believe that rest of the mobile industry and yes that includes the carriers is going to curl up and get ready for a beat down by Apple.
Carriers are going to want a piece of the action from this application business or Apple will find itself facing some tough times. Unlike the showdown with the record labels, the carriers know their spectrum makes them king, especially in the US. From that perspective, it seems iFund is fraught with risk. But then betting on trends is always a risky.
… it’s particularly touching to be here today with the supreme commander of the rebels, Steve Jobs …Steve started the whole personal computer industry — when he left Apple it went downhill fast. He return and resurrected Apple, and even ran Pixar — please join me in a salute for the World’s Greatest Entrepreneur, Steve Jobs. John Doerr speaking at iPhone SDK event via Macworld
Lifelock gets $6 million from Kleiner Perkins
Lifelock, an online identity management and identity theft prevention company based in Phoenix has raised $6 million in Series B funding from Kleiner Perkins Caufield & Byers, according to sources familiar with the company. Lifelock is currently being valued in excess of $40 million.
The company, which has about 100,000 paying customers, received $2 million in seed funding, and another $5 million from Bessemer Ventures prior to this round of funding. The start-up, which is said to be profitable is a competitor to TrustedID, Truston and Intersections.
And in other VC news…
- TechForward raised an undisclosed amount in Series A financing led by First Round Capital. The LA-based start-up basically allows consumers to recoup the value of their consumer electronic devices via trade-ins. Not bad in these days of short life cycles for devices.
- Wiral Internet Group’s Stockholm-based shopping service has raised a $2.8 million investment from Northzone Ventures for its new product, TestFreaks, which will “extract, analyze and process information from different areas such as expert reviews, user reviews, video reviews, blogs, news sites and forums.”
- Podbridge has raised $8.5 Million in series B funding led by Sutter Hill Ventures, along with Mayfield Fund and Worldview Technology Partners.
Doerr, Barksdale on the Frontline
The upcoming land grab over analog TV spectrum is getting more high profile investors. The New York Times says that John Doerr, James Barksdale and Vanu Bose have joined the investment group behind Frontline Wireless, a wireless venture focusing on public safety and open access led by former FCC Chairman Reed Hundt.
Frontline plans to bid on the soon-to-be-available 700 MHZ spectrum (our handy cheat sheet here) with 12 MHz of public safety spectrum, and 10 MHz of commercial spectrum. The company has already announced that Ram Shriram of Sherpalo Ventures and an early Google investor, is also an investor.
With the incumbent U.S. carriers holding much of the valuable spectrum and thus the wireless subscription revenues, its no surprise that any fresh spectrum is being greeted with a wave of investment. Doerr, a partner at Kleiner Perkins Caufield & Byers, also invested in wireless venture M2Z, and told the NYT: “I think we’re starved for spectrum for digital applications in this country.”
Doerr and Barksdale both invested in @Home, the famous failed Internet, cable network, and Netscape. Like their investment in @Home, placing bets on wireless spectrum and an alternative national wireless network involves a lot of money and significant risks. According to some estimates, the cost of building a nationwide wireless network over the 700 MHz spectrum could be as high as $2 billion.
A mysterious CEO change at Stoke
A few months ago we had heard some rumblings that Stoke CEO Randall Kruep was on his way out of the company. Kruep, whom we got to know well when he was running Procket Networks, assured us himself that he was going nowhere.
A couple of weeks later the networking start-up announced a big round of funding, taking the total to about $50 million from investors like Kleiner Perkins and Sequoia Capital.
A surprise awaited us when we check the Stoke management page, following an anonymous tip. Kruep is listed as a founder, but not as the CEO. Instead, the management page points out that Dennis Barsema, a director is now the acting CEO. We wonder what changed between the time when Kruep gave us his assurance and now. Curious, don’t you think.
Just in case you were wondering what does Stoke make, an excerpt from an old post:
The carrier-closet box, which Stoke says is already in trials, is designed to help service providers better manage subscribers from multiple types of emerging access technologies, including WiMAX and dual-mode Wi-Fi/cellular handsets.
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