Tag: white bull

How Google, Qualcomm, SAP decide to invest

How do money men in some of the world’s biggest technology companies decide where to invest their considerable treasure piles? Mike Magee found out at the White Bull conference, 2012, Barcelona.

There are different methods to the money. Speaking to the audience (ChannelBiz UK) Google’s Yves Cornaz pointed out that when it buys, the bought become Googlers overnight.

But the investment comes in mostly through product teams. According to Cornaz, the product teams get a clearer picture day-to-day of companies that are cropping up, which new companies are coming to light, and how. “We do some of our own analysis but it’s a bit harder for something to come out to stick,” Cornaz said. “In terms of process we spend quite a bit of time with the founders and our team inside”, to make sure they are excited about Doing No Evil at Google.

Though, he pointed out, the founders are “very much involved” with all M&A decisions.

Jason Ball, of Qualcomm Ventures, said that late stage companies, which are pulling in hefty revenues, tend to walk in through the front door, though this process can take six months to a year. “If we write a multimillion cheque, the top ranks of the company will be involved,” Ball said.

But, for the early stages, he admits he is on the hunt: making it known that Qualcomm is prepared to write a large cheque. “For normal seed programmes, two or three of us will decide and write a €200,000 cheque”.

At the moment, Qualcomm wants to sell more chipsets and is keeping both eyes open for businesses it can invest in to further that aim. Big on the agenda, as we wrote last year, is the internet of things, which the company believes will help it sell yet more chips. 

For SAP Ventures’, the company’s Jorg Seivert said there is a range of elements to pick from, including within the company at SAP Labs. “For the most part, we look for opportunities like this event [White Bull] or connecting to other VPs that we’re friends with,” Seivert said. As for the investment committee, there are six partners on it, and the vote goes to four out of six.

Venture Capitalism “mostly sucks”

James Sperans, an executive at Morgan Stanley, told the audience here at the White Bull conference in Barcelona that venture capitalism is not quite as dead as a dodo. He said that at the same conference in 2011.

Sperans is a serial entrepreneur with he and another four execs running a private equity division at Morgan Stanley.

He said that he found out that VC was “pretty damn dead”, deader than Lehman, deader than AIG and deader than Fanny and Freddy. VC was even deader than Osama bin Laden. 

VC in 2012 s still pretty dead – deader than Neil Armstrong, Gaddafi and Heidi Klum’s Marriage.  It’s not more dead than the Euro, and not as dead as Facebook.

Big sophisticated institutional investors like venture capital again, said Sperans. But CalPERS will never invest in venture capital again.  He said VC is neither dead nor alive, it’s undead, he said, as he showed a picture of two zombies.

Cambridge Associates claims venture capital is far from dead. The 10 year pooled return in 2011 was zero, but Cambridge claims in 2012 it was up by 4.41 percent. But 90 percent of this movement was an artefact of the 10 year numbers because it no longer included the bubble burst in the year 2000. 
He said investment people don’t need a stiff drink. “We have met the enemy… and he is us”.

In May 2012, the Kauffman Foundation did a deep analysis, and discovered that VC was the triumph of hope over experience.  Twenty percent of their 100 funds beat public market equivalent by over three percent per annum. And 10 of those were pre-1995 investments.

It is possible to make money investing in VC funds by concentrating on VCs that put entrepreneurs first. It’s also important to “avoid crowds”, and where the wall of capital are gathering together.  

Morgan Stanley likes to focus on themes, and doesn’t like to overdo it by investing too much in this tech sector.  

It’s great to chat about the Greek tragedy that is Mark Zuckerberg’s hubris. There are some reasonable things to draw from the Facebook IPO. First is that early investors made a lot of money. Business models still matter, it’s good to know that gravity isn’t completely suspended.  

It’s clear from the Facebook “debacle” that IPOs matter and it’s not the money, it’s the ambition. Mark Z doesn’t care about the money per se. IPOs matter because only public tech companies can make a specific gravity of their own.  And thinking small doesn’t protect people from making mistakes. “If you’re going to make mistakes, make big mistakes,” he said. And Mark doesn’t care about the rules that investors operate by.

Retail banks “will be dead in 15 years”

An analyst at the White Bull conference here in Barcelona said that in his view, retail banks will disappear over the next 15 years.

The reason for that is that quite a few of the top 100 multinationals have financial services arms where they can make value add on transactions.

Ralph Silva, of SRN, gave an example where he was going to buy a BMW car and before he knew where he was, BMW was selling him home insurance, car insurance and even pet insurance too.

BMW’s financial services arm knew the name of his dog, Jazz because he had visited the car showroom earlier with the mutt, and a salesman asked the name of his pet. That eliminated the need for him to go anywhere near a bank. Dozens of other companies are also plotting similar plans.

Silva also predicted that an IBM funded research programme was making headway with a CPU based not on CMOS, but on elements of DNA.  There are working chips already in the IBM labs, he said.

He also said that in future, every child will be fitted with two embedded chips which will contain healthcare information and other ID. The identity of the individual will be verified by a person putting her or his hand – with one chip in it, to his or her arm, with another chip fitted there.

Other future innovations include a single cable sending multiple signals, eliminating the need for miles and miles of cables in aircraft.

Sony notebook gets resurrected from the dead

Unfortunately my Sony VGN-Z11 VN decided to die at a very inappropriate moment, while I was still in San Francisco trying to cover the Intel Developer Forum.

As I had a fright going in an hour and a half, I couldn’t let the very excellent technician at  Central Computers – Rob – take the beast apart. I ended up having to buy another one. A techie at Intel reckoned I should buy a Mac. I didn’t.

I couldn’t get the machine repaired in Oxford because the following Monday I was frying out to the White Bull conference in Sitges, near Barcelona. My new machine was more than serviceable for the job, anyway.

So I get back to Oxford and I go on down to LinksCom Ltd, on the High Street in ye Olde Oxford Towne. What a charming chap. He opened up the baby and fixed it in a jiffy – loose connections. In my PC, not in my noddle.

Sony Viaos are extraordinarily difficult to take apart, both Rob at Computer Central and the nice guy at Linkscom Ltd agree. That, a cynical observer er observed is because Sony makes them that way so that it can charge extra for the repairs. Surely not….

I’d recommend the guys in San Francisco and the guys in Oxford any day of the week – they were both knowledgeable, helpful and went that extra kilometre or so in the process.

And yes, it really has been round the globe once and to Asia and the Americas several times since I bought it. I guess that makes for loose connections….