Projected annual “big data” growth is 37% through 2017

0

10

20

30

40

$50B

Global "big data" revenue

2011 2012 2013 2014 2015 2016 2017

26%

25%

33%28%

22%

26%

40%

(13-17)CAGR

Infrastructure & Networking

XaaSDatabase

Applications

Storage

Compute

Professional services

There is a large opportunity to reinvent industries using data

Costs have come down… …Resulting in significant data and revenue growth

0

100

200

$300K

Cost of storage / GB

1981 1990 2000 2010

Source: Wikibon

2010: $0.102000: $1

1990: $10

Significant venture capital dollars have been invested in “big data” in recent years

Source: Orrick

0.0

0.5

1.0

1.5

$2.0B

Venture capital investments in "big data"

2008

0.5

2009

0.6

2010

0.7

2011

1.5

2012

1.4

55 65 96 132 164Deals

>30% annual growth in deal volume and

investment size from 2008-2012

Much of data analytics today is focused on serving incumbents

Opportunity to rebuild approach to serving customers from the ground up

Feedback loops with data are a powerful mechanism for product improvement

New business models use data to provide a higher level of service to customers

Companies must be reinvented from the ground up to fully leverage the potential of data

Starting with a clean slate can lead to radically new models, products, and services, and startups are best poised to do this

Gaming

Venture Capital

Taxi

• Studio model with large sunk development cost with limited pre-launch testing

• Dispatch systems expensive dedicated equipment, no driver or passenger feedback

• Very manual process with limited optimization or use of data

Incumbent model New model

Early stage investors look for data opportunities with specific criteria

1) Large, valuable markets that haven’t innovated… yet Capital requirements in line with market opportunity

2) Opportunity to transform status quo with data Cost savings, personalization, or a better customer experience

3) Team that blends industry skills and a strong engineering mindset

4) Product development emphasizing rapid iteration and optimization of product and processes; lean startup approach

5) Sustainable competitive advantage Networks effects, proprietary data, high switching costs, etc.

Many industries are being transformed

Data infrastructure

Data analytics

Finance Media Security & gov’t

Health Education Travel & transport

Retail Other

Case studies

SignalFire

ClassDojo

Metromile

1

2

3

Entrepreneurs have lower Capex requirements and more funding options than ever before…

… VCs must be more proactive

Large VC

Crowdfund

Incubator

MicroVC

Midsize VC

Low barriers have increased the noise; now it’s possible to process signal

Organized Channels Digital Channels Unstructured Channels

FEEDBACK LOOPS w/MACHINE LEARNING

FILTERING

Data integration, cleansing, and structuring

Filtering

Machine learning

Investment team

Feedback loop from team, fundings, and company performance

Platform informs seed-stage investments with full information and low cost structure

Incubator program

Boutique VCs

Large investments

Small investments

Full resource VCs

Sweet spot for early stage investor / startup alignment

SignalFire is reinventing venture capital with a new business model, new architecture, and data analytics

• Competitive advisory and VC firm built on top of a data analytics platform

• Rethought venture business from the ground up using large amounts of data

• Tracking key company characteristics based on venture capital best practices

• Machine learning algorithms process and highlight emerging opportunities

• Building a networked partnership structure with feedback loops

• Platform will help identify opportunities for investment, partnership, and acquisition, and provide general competitive intelligence

ClassDojo: Behavior management software for the classroom

Customer pain point

Competitive advantage

ClassDojo data solution

• Teachers spend significant time in the classroom focused on student behavioral issues, which detracts from teaching

• Existing process of logging behavioral issues is time-consuming and memory-based

• Parents only receive feedback from teachers ~2 times per year, so feedback between the classroom and the home is discontinuous

• Smartphone app that enables teachers to immediately reward good behavior and call out bad behavior

• The teacher can track students over time

• Gives parents real-time feedback on how their kids are doing behaviorally, tightening the feedback loop

• Incumbent players in education are slow to innovate and execute

• Have established first mover advantage with 17M teachers and students in 120 countries

• Ability to scale virally since it is curriculum agnostic (applicable across countries)

MetroMile: Pay-as-you go car insurance

Customer pain point

Competitive advantage

MetroMile data solution

• Drivers that drive less pay disproportionately higher rates

• Car insurance companies do not take distance driven into consideration when setting premiums, though accidents occur less often with infrequent drivers

• Targeted car insurance product for those who drive less than 10,000 miles per year

• Product plugs into existing car diagnostic ports (OBD-II) and collects data on key vehicle usage metrics

• Pricing is in line with distance driven

• Opportunity to add unique services based on data insights

• Incumbent insurance companies run the risk of cannibalization; lower premiums for infrequent drivers would increase premiums for frequent drivers and customer churn

• MetroMile is focused on disrupting car insurance through innovation and has an engineering culture; incumbents lack engineering culture and tend to outsource

• Rapid scalability even in highly regulated markets through strategic partnerships; will be available to 40% of the US within 6 months

As VCs, we are excited about opportunities both in data analytics as well as vertical solutions with data at their core

Data infrastructure

Data analytics

Finance Media Security & gov’t

Health Education Travel & transport

Retail Other

What’s the next industry to be transformed by data?