“One banker says to the other—wait, what other banker?” says Tom Huseby. The Seattle venture capitalist and wireless guru slipped in a joke about the thinning ranks of financiers during his keynote talk at today’s second annual Mobile Northwest Conference. I had a chance to stop by and see this morning’s session at the convention center in downtown Seattle. Just a quick recap here.
Huseby, the co-founder of SeaPoint Ventures and chairman of several local mobile-company boards, spoke about deals, markets, and what he likes to focus on in the wireless space. But first, he addressed the economy. “Who thought we’d end up where early-stage venture capital would look like one of the safer investments?” he said. “It’s better because nobody expects to get any money out of it for a long time, that’s it! Venture funds are supposed to last 8-10 years. It’s a long investment cycle.”
“So the venture community is pretty good,” he continued, pointing out there’s still a large number of investments being made in startups. “Compression of market cycles is enormous. The real economy is going to lag, the markets aren’t.” When it comes to startups, he said, “Hope is diminished, no question…Venture capitalists are marginally connecting the dots, and now they don’t even see the next dot. But one thing hasn’t stopped at all, and it’s the great American startup machine. Barring restaurants, America starts a huge percentage of companies in the world. The miracle is a totally undeserved sense of self-confidence. We revere new wealth, and people who’ve started companies…We compete on how humble our origins are.”
Huseby went on to describe the big trends he’s seeing in the mobile sector—“superphones” like the iPhone that are connected to the Internet all the time, and “Superusers” who “walk around doing things [on the devices] we never thought they’d do.” Then there are “all-you-can-eat” data plans. “Mobile this year became embedded in everything. Everything is wireless. We all of a sudden can get viral with it. It didn’t used to be that way—not enough users had the right phones,” he said. “That to me is the big sea change.”
So what does he look for in new deals and companies? “‘Winner-take-all Switzerland’ plays,” he says. This is where a small company comes in and solves a problem that the big guys (the Samsungs and Verizons, say) are in a standoff over. So a small company—like a Tegic or a SnapIn Software (both bought by Nuance)—can enter as a neutral party and own the space, providing a simple but necessary technology to handle things like text messaging or customer support.
Huseby took the time to answer several questions from the audience. One was about what he thinks of new business models like mobile advertising, in the context of the economy. “The downturn is not good for anything. I don’t think people will spend more on their phones, or buy more games. They’re going to do less,” he says. “The key to mobile advertising is to get out of the ‘new stuff’ budget…You have to turn it into media, and remove all obstacles.”
Someone else asked for Huseby’s thoughts on Google’s Android phone. He joked that because of its high weight-to-surface-area ratio, it could do well in the annual Swedish phone-throwing contest (apparently there have been at least nine of these “international” events so far). “They overkilled on
