Greg Kidd, seed investor of Twitter; Joe Wu, co-founder of 91 Mobile (acquired by Baidu for US$1.9 billion); Jay Sullivan, former CEO of Firefox; Yongzhi Yang, founder of Dolphin Browser – these are a few of the advisors and partners of a new mobile-focused fund from leading early stage investor 500 Startups. Managing the fund will be Edith Yeung, who ran business development for Dolphin Browser, and was herself a co-founder of angel investment firm RightVentures, where she made over 20 startup investments.
The collective mobile entrepreneurial experience of the people behind this fund gives it the street smarts to help startup founders negotiate those blind curves on the mobile business road – such as access to carriers and OEMs (original equipment manufacturers), distribution, and monetization. Hence the name ‘Mobile Collective’.
Dave McClure, founder of 500 Startups, which is already one of the most active investors in fledgling mobile-focused and mobile first businesses, tells Tech in Asia how the 500 Mobile Collective came about:
There is a need for people who have expertise in different sectors and also different regions… Edith is a friend I’ve known for quite some time. She has been involved in a lot of mobile companies in development and was thinking of doing her own fund. We were chatting one time and decided it would be great to have her in the 500 Startups network.
The 500 Mobile Collective will be a US$10 million microfund, which Yeung will manage, and the main 500 Startups fund will co-invest in most of the deals. They’re looking at investing in 30 to 50 companies around the world over the next two to three years.
Different keystrokes for different markets
Yeung, based in the US now, is originally from Hong Kong and has spent a lot of time in China, one of the most vibrant regions for mobile investments. She explains to Tech in Asia the importance of collaborating across borders, especially in the mobile domain.
One of our advisors in China is Joe Wu, who co-founded Chinese app store 91 Mobile, which got acquired by Baidu for US$1.9 billion. He doesn’t know much about the US market but he really understands China. The other way round is that I am very familiar with how to drive a business in the US. Personally, I have done a lot of partnerships with OEMs for Dolphin. Many of these conversations revolved around how you actually preload these apps on the phone itself. Those are some of the angles we will discuss with our portfolio startups and founders. That is very important in our line.
Yeung, who says she is just a few miles short of logging a million air miles, has become a great believer in different keystrokes for different markets. TrueCaller, for example – a Swedish mobile app which helps identify unknown callers – got a lukewarm response in the US, where users are squeamish about having their contact details on the cloud. But almost everyone Yeung met on a recent visit to India had it on their phone, probably because discovering caller identity is more of an issue there than privacy. Those are the sort of companies and apps, addressing pain points unique to specific markets, that she loves to discover.
She cites the example of menstruation and personal health tracking and sharing app Dayima, which has gained huge traction among women in China, but is hardly known in the US. The state of healthcare in China probably makes an app like Dayima more useful there than it would be in regions with better access to support systems. Mobile healthcare innovators therefore should be looking to solve the pain points in places like China, India, and Africa.
“The key is to figure out how to create a true mobile-only business in China and India that can be sustained with a high retention rate and active users and probably a slightly different business model compared to the US,” says Yeung.
From tech innovations to business innovations
There are bolder technological innovations happening in Silicon Valley than elsewhere in the world. As Yeung points out, most of the Android phones can’t even run half of the high-end apps made in the US. But when she goes into India and China, with their unique demographics, she sees business innovations that US developers would find hard to grasp.
This often calls for a mindset change among founders who may be amazing technologists, building great products, but not so good at understanding customer needs in different markets. “Especially with mobile, you really need to build an MVP (minimal viable product) and listen to your customers. You cannot just build it once and assume it would work for all your customers around the world. One big lesson I learned at Dolphin was that MVP for the US does not equal to MVP for India or China. We have to do customer development all over again. It sucks, but it’s necessary if you want to go after these big markets,” explains Yeung.
This is also what’s inspired the 500 Mobile Collective – not just the enormous growth of the mobile internet with over three billion global users, but also the four billion or more people on earth who still have no internet access. That represents a huge unmet need to be connected and informed, and it’s mobile technology which will make that possible. Already in India, 70 percent of internet pageviews originate from mobile devices.
Yeung believes India, Southeast Asia, the Middle East, and Africa have massive untapped potential in mobile business, even if it’s tough to monetize right now with relatively low ARPU (average revenue per user). “I would love to see more mobile commerce that generates micro transactions happening there. I also think that entrepreneurs in these countries can probably learn a lot more from China than America. Remember – China was a very low ARPU country a couple of years ago and this is no longer the case now.”
China to her is the benchmark for mobile business innovations, such as the integration of messenger app WeChat with taxi app Didi for user acquisition. She is waiting to see similar innovations in other areas that have a lot more room to grow.
Mobile security, for one, where “McAfee, AVG, and Symantec are struggling”; or mobile payment, which nobody has really nailed – “Even for Alibaba’s Alipay, mobile is an Achilles’ heel”; and video content, where “YouTube needs a challenger.”
Mobile commerce is another nascent area. “Not everything is happening on mobile yet, and it should be.”
Maybe the trick for entrepreneurs is to copy what Yeung likes to do a lot. On her travels, she loves to walk into a mom-and-pop store, purchase a phone, and talk to the local users about what they find interesting or useful on it.
This post 500 Startups just launched a new mobile-focused fund. Here’s what they’re looking for appeared first on Tech in Asia.
500 Startups just launched a new mobile-focused fund. Here’s what they’re looking for
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