John Powell and I attended Accel’s CEO Day at the St. Francis Yacht Club in San Francisco Tuesday last week. This is an event put on by our investors, Accel Partners, and usually has a pretty impressive line up of speakers. This year the speakers included Expedia and IAC Chairman Barry Diller, IBM EVP of Innovation and Technology Nick D’Onofrio, Qualcomm CEO Paul Jacobs, Lotus Founder and Mozilla Board Director Mitch Kapor, Cisco Chief Development Officer Charlie Giancarlo, and a crew of China experts including Vice Chair of China Netcom Ed Tian, IDG Chairman Patrick McGovern, IDGVC General Partners Quan Zhou and Young Guo.
Barry Diller is a fascinating man to watch who has such an enormous impact on conventional media having run Paramount, Fox Broadcasting, QVC and Expedia. In a fireside chat, Barry discussed the future of media as we are witnessing the breakdown of conventional media. With the barriers to distribution crumbling, the traditional media better wake up and he feels that one of the few that actually get it is Rupert Murdoch. He felt that Google has a great business model as essentially an advertising agency, but that YouTube as a phenomenon is temporary, but still a no brainer for Google to purchase. He felt that Yahoo has a very loyal base, but has been unable to monetize that loyalty. He spoke very passionately about the need for Net Neutrality, the ability to freely and equally access and publish on the internet despite what the telcos want, which he likened to the break up of the railroad monopolies in the 19th century.
Nick D’Onofrio discussed the notion of innovation at IBM, particularly after having survived the near death experience of collapsing IBM from 420,000 employees to 250,000, thus killing founder Thomas Watson’s legacy of lifetime employment. Having said that, Nick is a 40+ year veteran of IBM. He credits Lou Gerstner’s efforts to saving IBM and avoiding what seemed like the inevitable break-up of IBM. Nick was instrumental in IBM adopting Linux and allowing IBM to concentrate on what is core. It also help standardize infrastructure and allow the industry to move to the mix and match of Service Oriented Architecture, which he feels is now starting to pay off for IBM’s customer base. He commented on the lamentable state of patenting where frivolous patents are being issued and longed for the early days of IBM when they patented a mouse trap only when they could prove it actually caught mice. He feels that the only solution is to make the patent process transparent and declare the invention when the patent is filed. Nick is a big believer in open source and the standards process and has encouraged IBM to follow these wherever possible.
Charlie Giancarlo presented the future of Cisco that surprisingly had very little about routers. According to Charlie, Cisco will be making big investments in the devices and network appliances that deal with huge data transfer, particularly around video and video conferencing. They have a virtual meeting room, whose price is undisclosed, but which he said would only cost about $5k/month to operate. The experience is like actually being the room and can include multiple participants. Several Fortune 1000 companies have reacted very enthusiastically. In addition, Cisco will be working on home products that deal with video, music and other high data devices, where Cisco will provide transfer, search and aggregation products. When asked about Net Neutrality, Charlie said that Cisco has made its position clear - that investment in networking is capital intensive and that those who invest in this infrastructure must have the right to recoup their investment.
I didn’t get to see first hand the discussion on China, but John Powell did. The discussion centered on the idea that the Chinese government was very supportive of the entrepreneurial community. Instead of building a big bureaucracy for telco coverage in a new area of China, they would be willing to hand it over to an entrepreneur. The panellists discussed how they had access to the Chinese government with personal mobile numbers of officials to help speed access to decisions. The government is obviously very involved in the new start-ups, but in a very supportive way. John compared this to the discussion at the Accel event two years ago where the discussion was China is out for our jobs to now China is a big opportunity.
Mitch Kapor discussed open source and how communities are created through trust. He also said that most communities are composed of people who are disenfranchised in some way.
Paul Jacobs discussed the role that mobile will play with new media and Web 2.0. His sense was that video is a big opportunity for mobile which contradicted Barry Diller’s assessment that it will play no part at all. Paul felt that new mobile devices that are about to appear will have such high resolution and a relative field of vision that will provide a compelling viewing device. He also predicted that advertising opportunities on mobile are huge with end user buy in due to the contextual serving of the ads. Paul felt that Net Neutrality would not work at all in the mobile world. Scarcity of bandwidth meant that it could not be wasted and must be parcelled out.
I don’t remember who offered it up, but with 40 CEOs in the audience there were some interesting insights. Someone predicted that the next wave after all this internet, web 2.0, biotech, etc. would be robotics. The audience was surveyed as well about whether we are in a Web 2.0 bubble, bubblette or no bubble. The traditionally conservative audience of CEOs said we were in a bubblette, with long-time veteran Arthur Patterson of Accel saying we weren’t in a bubble at all. Fascinating day!