About the talk
Connie Chan is a general partner at Andreessen Horowitz, a Silicon Valley based technology venture capital firm with over $7B under management. Since joining Andreessen Horowitz in 2011, Connie has worked on the investment team sourcing deals and working closely with startups across the portfolio. She also spearheaded the firm’s Asia network to bridge the gap between Silicon Valley companies looking to navigate Asia opportunities and companies in Asia seeking to better understand Silicon Valley. Before joining Andreessen Horowitz, Connie worked at HP leading its webOS efforts in China. She started her career as a private equity investor at Elevation Partners, investing in media and entertainment. She has been named a LinkedIn NextWave Top Professional 35 and Under, Wired's Next 20 Tech Visionary, Fast Company's Most Creative People 2017, and won a Sydney award for her writing on WeChat, and is a Young Global Leader at the World Economic Forum. Connie received her B.A. in Economics and M.S. in Management Science and Engineering from Stanford University.View the profile
Marshall Van Alstyne is coauthor of the international bestseller Platform Revolution. He is one of the world's experts on network business models and is a Questrom Chair Professor at Boston University. He is a frequent speaker, board level advisor, and consultant to startups and global firms. His research has received half a dozen academic awards and appeared in journals such as Science, Nature and Harvard Business Review. Interviews appear regularly across Bloomberg, The Economist, The New York Times, The Wall Street Journal and National Public Radio. He studied computer science at Yale and information technology at MIT. He holds multiple patents; was among the first to measure the dollar value of social networks, and his theories of network businesses are taught worldwide. He is a husband and dad, who loves dogs, exercise, travel, and questions of governance.View the profile
We've had the number for playing us about the operational platform is about the new settings medicine, Industrial Products and platforms. Liggett. Coaches has the winners and losers in successive Capital firms. In Silicon Valley has been a general partner at for a little while. She joined. In 2011. I believe you have a focus on social media learning but the doc is a platform players, really interesting questions. They're asking for a run the world on how to run a better conference so you can tell her that it's on what
we're doing wrong here and how that act. I need an integral in Chinese technology landscape for a while, but it's actually one of the Sydney Award for best writing on WeChat interprofessional for those 3500 on a wired technology before that. She was at Julie Packard working on the web operating systems and show them private Equity investing with elevation partners,. He has a ba in economics. Yay, or a 30, some bushings to engineering and management science at Stanford. One thing you may not know
is that Connie is also good at acapella singing. So I think she can probably run harmony with dr. Bush. Who was offered? You sing for us this morning. So quite an accomplished musical group at the sun with this year and also Connie help Chance the Rapper and Turing break into the Chinese market. So there's some interesting developments there. So, Let me introduce honey. If you have any opening remarks and I have a bunch of questions for you and we'll take those questions in the audience as well, please. It's a pleasure to be here. Today
as just mentioned. I am a big fan of looking at platforms and how consumers are spending their time and how they're spending their money. And also because I study so much and I had worked in China previously, a lot of my inspirational earnings come from studying, what's happening in developing markets and using that as a lens, an additional information to help me predict. What's going to happen in the Western Market as I've been using that strategy for the last couple of years and through that. I've developed a lot of my CiCi's around top forms on the mobile front, specifically a concept
that I coffee perhaps. Alexa is one of those things I want to talk to you about. What is a super app. What's happening there? Space center out. To me, is basically an application that gives users access to a different kinds of products and services that aren't necessarily the primary reason why you want to go down on that and the best example that I give is WeChat, which is a messaging app. So started out as just an app that you use with your friends and your family that involve to become an application that you use to
interact with business local coffee shops Street vendors so far, and now you can use it to interact with celebrities loggers news companies and so forth. And it's basically evolve from an application to an operating system. Almost like a browser. You can live your entire day inside of this one application and seven. Super Apple. Take something that's high frequency used case. Our long-term use case like messaging and it will use that to Legion for something that's lower frequencies and come a business model perspective. Why is really exciting is because you can
China and Asia isn't necessarily a cultural difference. I believe it's at Trend that will eventually make its way to the US. There's just a typical time lag. I'd say three to five years and I do think you already are starting to see Western companies like an Instagram or like a Uber or starting to introduce other kinds of future. Some products that are not core to A product offering and why it started taking off person China. I actually believe the main reason is because China is more of a mobile-first society. And it's become it's shifted from a computer, very quickly to a
mobile-first. And now it's a actually, it's more of a mobile-only society to the point where you get started. So new developers that are created for mobile specifically and might not even have a website. And as much as we think that the Western world is mobile first or mobile only, we're not a lot of developers are creating PC and mobile equivalent. When you live your entire world on on your smartphone, then the Supra concept becomes much more obvious Technologies are enabling more and more of this includes things like these app.
What is this technology? And how is this going to actually expand the platform opportunity? Yes, I have something really exciting. The Apple announce very recently and the most basic understanding of it. I would say is I think of it as these physical bookmarks, that can be dropped all over the offline world and their there's visual of, like, something that looks like a QR code such that. You as a user, could go to one of these codes, use your phone camera, scan it. And then be taken to a nap clip which is basically a small many portion of an app like
experience without having to download the app. Imagine you're in a restaurant and rather than downloading an app to order food or pay, you can just scan the little code on your table and then use that to order food and also pay for your food. And it's basically allowing you to have apps like functionality without going through the friction in the hassle of going to the App Store and having to download an application sign up and so forth. So the seems like an ingenious idea so that small firms won't have to develop your own app, so I can give you no sense for an individual
restaurants and it was a staff. Download their app, actually control the absence and actually give them increase controls on where the Apple controls the App Store and I think as long as they create a platform where any developer that followed, the developer guidelines is allowed to participate. Then that's how you create true platform, right? Where everyone will have to abide by the same rule that as long as you qualify with those rolls, you can participate. That's great.
Jessica to say hi for a moment. I'm going to go kill a landscaper. Who's mowing outside. I'll be back. Hi, Connie. It's part of this new reality that we're all they were all acting with. Maybe I'll just ask her if I kind of a big landscape question which is as you surveyed investment scene and you're sort of sifting through the opportunities. A lot of what we saw happen in the early growth platforms was around the BBC world and I'm kind of Social and presumably. There's still a lot of innovation there.
But of course, there are giants in convents. What's a thesis for how you approach finding opportunities in sectors? And and what sorts of things are you really going to stay away from at least until there's some sort of significant change in the Landscaping trumpets. There are very large income is already. However, what? I do is I look at areas where the accumbens might not necessarily be extremely strong. So for example and convents and social, I don't think are particularly strong and bastila trading stranger to stranger relationship. And they're great for capturing that social
network, that social graph of your real-life friends of your real-life family. I'm, in many ways. I actually, like, I message, I think it's the biggest social network of them all. However, none of these platforms are particularly strong and helping, identify to you, who are friends that you would really get along with it. You just haven't met and in the online world for this kind of stranger to stranger interaction. You're left with things like Twitter, which is often times much more of consumption experience as opposed to a true interaction or dating apps and there's nothing
wrong with dating app, but they're supposed to just want to look for friends and like-minded individuals have similar interests and ruins that are going to conferences to meet those people. So I think those are great opportunities for social to really anime. Alyssa able to create an online sense of community that says effective is one offline about going back to college in the fall because you're investing using. What's the difference? Is so much of the online experience today, doesn't fully capture the side conversations, right? Even when
you have a conference, it's the hallway conversation. It's the conversation with the person sitting next to you at the happy hour, after the sessions and that you make the relationship that you go to the conferences. Because unless you're there talking to the speakers backstage at the VIP pass a lot of reasons why you go to these conferences, it's because it's a natural filter accurate. It's that of people that are like-minded. That so, I completely agree that a lot of the magic of these, these conferences has been in these offline conversations with the
company that you're alluding to run. The world is trying to tackle just that problem actually. So the founders came from Facebook, they came from Instagram. So they have this kind of social DNA already built in our mindset and their goal is not to create this kind of weather are one 201. Mm, kind of experience that something that also allows for the side conversation, something that can actually take the online concept and turn that into a strike. So, imagine going to a conference and now, Rather than just choosing a random person that looks friendly to go up and talk to instead.
You could almost basically see like the LinkedIn profile of everyone there and then decide who is the right person that you want to engage with or better yet. Let the conference smartly using an algorithm recommend who you should meet up with and even give you tips on topics and things that you guys share in common so that the Icebreaker is more natural, right? That allows people who are introverts like myself not have to feel as Brave when engaging with other people and imagine where the conference allows you to do the Imagine doing it through video or
audio if you're shy or even texting. So you can continue this conversation in a really Natural Way days or weeks after the conference. I think there's actually a lot of digital social interaction that happens on social networks today, that we can carry. What conference has the option of that process and get a better match? Although, I must question. I still don't see the sex drugs and rock and roll part, really being as much of a part to get the Rock and Roll Party. House, you can
get Italian. You better be online to offline. What are you doing? The Foster that what's what's happening? I'm going to offline and is really this idea that retail Innovation and physical worlds can be infused with technology. I'm in it's a concept though. It was also very popular across Asia several years ago, where everything from your convenience store to your gym to your grocery store was decked out with technology. Like if it if you went to and Ali, Baba, grocery store or Walmart grocery store in China, USC QR codes on
packages or on the price labels, and you would be able to figure out recipe combinations, or understand the origins of the fruit. I kid you not. There's also places where there's a shopping cart, or you literally just put on a wristband and then the shopping car automatically follows you around. So, you don't even have to push and navigate the cart around the aisles. I want that. It's supposed to be a lot of innovation in the offline world and so much of it is he's saying things like
QR codes using things like the smartphone and using platforms that naturally have payments built into them. So that is all about decreasing the friction for someone to purchase something in the physical world or do something they can potentially even icing, whatever they want and kind of give different kinds of promotions and Target you as a specific customer as you mention four platforms. It's all about the matches all about personalization. Write, an online 2 offline is the personalization of the physical world, where your online profile and who you
are and your shopping history, or whatever, kind of history and now be applicable. And seeing through folks in the offline world has the least amount of data here is going to be interesting because that's how you can get to the recommendation. Right? And then I agree, there is a lot of power and a lot of data that can be concentrated as a result. I think it's all I'm saying, if the Western world is going to adopt that kind of behavior. However, I have to say that I seen convenience went out
over privacy. When you look at the actual consumer. We are in the Western World despite what we say we want our behaviors are often quite different. So I think it's the Super Spot. That's clear. The people are acting differently than they say. So revealed preferences is pretty strong there. I got a question when you work with teams and you you see quite a number of them. You see a lot of proposals. I want to talk about the team. So what, what are some consistent things
that you find really strong? That sort of the, the culture is doing well. The education system is doing well. And then the flip side is where do you feel like as sort of a funding firm in a Matchmaker of your own? You end up having to backfill or teach in ways. I can't believe it's time. I've had to do this. I'm sure what are consistent gaps? That you find yourself having to step in to fill. Yeah, so a lot of the founders that we back are first-time Founders and therefore, there's a lot of nuances around the company building aspect not necessarily
the product of division, and that actually do require significant amount of hand-holding, or or rather. If you do have that helps, save you a lot of times break. So we have actually build a firm. It is concentrated around helping these founders of a company building part of their business. So we had teams that focus on introducing folks to great talent. Helping them think through talented Bunch as we have focused. Focused on people, practice has on HR guidelines compliance and so forth. They have a very large markets development team. Just think of it as
business development and access to global 1000 type of large companies, the great great great Partnerships. We have all of these different teams that basically work with the portfolio companies full-time for free to help them. I get introduced to new networks for the imagine. You know, if you are an engineer who just created a great product. You likely don't know that many reporters and you're going to need help on the marketing front, right? You most likely, you've never had to hire a head of sales before, so why not talk to someone who can give you guidance
on what to look for? What's the difference between a candidate? Who's good and great? And how do I interview for that? So we spend a lot of time thinking through what are issues that companies will have, but we take a platform approach to. So we're looking at creating these networks that most likely largely almost all of our portfolio companies are going to need, which means we're not going to go in and help with specific product or engineering issues and stuff. We're going to create a platform herself and we're going to say, okay, you're going to
need access to this network of reporters. All of our portfolio companies are going to need access to these damn reporters. So let's instead take that link and let's nurture those kinds of relationships so that we can help facilitate those kinds of introductions when appropriate. Let me jump in with the question. So if they're struggling, I would not have expected such interesting and informative for this audience. You're investing in adventure that does wouldn't necessarily have thought of that
kind of a heavy industry. What is the name non-traditional? And you find us a problem. That is very software-driven that really has Network effect. That surely has a theory of defensibility. You can attract fantastic Tech Talent. I'm to that where the other incumbents aren't going to have access to those. Same MIT engineers. And our investment in mining is again. It's a tech software play. So the company is called cobalt metal done or not doing the actual mining
themselves, but there are creating a Google Maps for the Earth's crust envelope. And there are gathering all kinds of data from all over the world from government resources or proprietary data sources and they're using machine learning algorithms, to have a much more smarter. Frankly using physics chemistry, all kinds of science on what kind of mineral might be below the surface and the main role that the first looking for is Cobalt and Cobalt is a very important element for batteries, and they're in your
phone and your laptop, but most importantly, there's a lot of cobalt and your electric vehicle around $1,500 work. It's because electric vehicles are now becoming increasingly more engine as not just here. But globally, you have countries mandating that within, you know, within two decades, actually must order. You won't even be able to get a license plate in a lot of cities. Unless it's an electric vehicle with the new demand for electric vehicles and new demand for electric vehicle batteries. There's a shortage of cobalt around the world of all known supplies, but yet it's it's not a
rare, but the reason why this is the popcorn play again is you're taking data that's already available and also new data sources, and then you're using technology to have a defensible algorithm and basically a machine Prospectors what we call it to help the tax and get smarter every single time you drill on where these minerals might be. I'm looking for particular different reason than on traditional Industries. Would you think? I was a heaviness value-adding
information, traditional physical process, coming more efficient? Because it really interesting, proposal Engage The Audience, a bit. And see you see what your take on a couple of different things is so early. In the day. We had a discussion. Inmate Juan versus Groupon doctors that have made makes one such a success in China started with the same business model. And what I say is it's like Nate when yes, they have group buying but they have so much more Beyond just Groupon right.
As an example. You can book hotel nights through this application where you're not just using this to order food, but you might be using this to book your business travel and they added this functionality a small icon on the app to book hotels. Just a couple of years ago. And they already are booking more Hotel nights. Now, then see trip, which was the leading incumbent online provider. And so, if you take something that's high frequency used case, like food ordering, you can basically have the entire screen to promote all other
kinds of features and services. And yes, ordering food and delivering food can be a low-margin business, but booking hotels has a very high margin business and so icky superwrap is something that takes that low-frequency his case. That might be low margin. White even with my honestly and then you use that to Legion for all of these high-margin businesses that are lower frequency because rather than Go download an application just to go book travel. Now I can just do it on the application that I'm opening every day. Anyway. Let me jump in. That is incredibly deep, an important inside of a
double down for this audience. How important. Inside is kind of just said, is something to all the firms. In this audience need to be aware of a few years ago, Johnson Johnson sold it. Diabetes because the region was it was low margin, but guess what is extremely high-frequency? What you could do them both on other services, that would be high-margin incredibly important. You have to think differently when you're running product and I think it's especially important on mobile because people are
downloading few are apps now than they were years ago, the bar for what it takes to download. An app has has grown and that's why the apple apple X next X right. Because that bar is now. So high people don't necessarily want to go download an app to do something. That's a very low. Look up to another question from the audience is definitely interested in your skills as Venture capitalists when you're investing in adventure, none financials. What it, what are you looking at? So, I
tell you, I'll tell you, I have backed companies off of PowerPoint. Nothing has been coded whatsoever. I have no neck whatsoever. I have back to companies where I'm going to ask him multiple times, but where there's really no magic. Sometimes, there is metrics that you can look at and what I'm looking for is sign of long-term, use case. So signs of attention, I'm too many high frequency. Used case is great because it does indicate super a potential, but long-term
frequency is also important. And then the other thing that I look for it for super a potential is another key ingredients of the browser payment. If you are payment and I will have a credit card linked to you are now One Tap Away From Any purchase and that's why I even know who bura is a transportation app as their increasingly adding all these different services on and mix it. Solo fiction to check out. They actually it can become Supra, right? The payment is another big piece and then the other one is, does this application know something unique about that particular
individual? Do they just know that this person is a teenager, not very helpful. But do they also know that this person might be a student. This person has these particular interest in this person has these particular friends. Having additional data on the user. Again allows you to have that recommendation out personalized experience. I'm not very helpful, right? I'm not have to go rebalance my portfolio. Thank you very, very useful tips. And I'm pretty sure would like to know, how is it the bike dance of
chosen to offer different versions of the same app in different locations to make it different for different places. I think that behavior is actually not just for a bite dance, but is actually a true for all kinds of global companies. I mean, if you are using an access in Google services in India, it looks different than if you're accessing it in the US even ever know before if you were in China. Absolutely never know. It had some teachers there that were not accessible in other parts of the world. And I think this
kind of New Concept that each country doesn't have to have the exact same experience is actually a positive because what it means is global companies. Can now use specific geographies as experiment areas where they can test them kind of new feature. That might be taking off in developing countries, places that might be more mobile first mobile-only and then use that kind of perfect with the service. They look like and eventually poured it over. So, Global functionality for all of its users.
Better match. When you get that patient, I think that's a good thing to give you the last word. In case there's any final thoughts that you want to share the audience before we Before We Say Goodbye. Yeah. I mean, I love that you guys are talking about platforms and again, so the reason why I think Super ass can be the next big platform is, think about them as single, sign-on for the entire web. And I don't know about you guys, but on my computer, I have multiple browsers each with easily 10-15 times. I'm terrible actually at time management for my browser
on my phone Tabs are so painful to you. They're very very difficult. And I don't like having multiple web pages open on my apps on my browser's on my phone. And I don't like having to download all these different. But it's precisely because you can't replicate that tub experience on the small screen. And you don't want to go download a bunch of apps. For every time, you would just naturally have opened a tab on your web browser. That is why that pain that you're feeling as a user? As I described that that is why super apps will work because even if you offer
something that's 80% 90% of the functionality, but prevents you from having to go down on a completely separate up and re sign up for it, that will be enough for users to want to do everything. I really appreciate. Thank you. Just really even bridging cultures, Silicon Valley and China also human form for that. Thank you.
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