Unlocking the Millennial Market

>> Anything that, you know, companies need to think about differently if they're focusing on targeting this particular market segment's generation, why the millennial generation?

>> Well I think one thing I'd say is interesting is there's the tools to be an entrepreneur have become so democratized and it's so easy to start businesses that you see a lot of people who are part of this generation have the resources to start and address this generation on a worldwide basis which is great for them because they understand it. It's funny for me because I'm just at that age where I'm actually, I'm 38, I'm actually old but I still feel like I'm part -- like I could relate to that generation, and it's an incredibly dangerous instinct as an investor 'cause you can over value your ability to relate. You know, I think the classic thing people talk about is people like us will sit around and think Twitter's this great phenomenon of the youth and then you'll talk to young people and they say, oh, Twitter that's for old people, you know? And you're like wait hold on a second I thought that was a young people's medium. So, I think the fact that we can back entrepreneurs who are of this age and understand what these people want is pivotal. And a lot of those things that you've list out are just the characteristics of youth. You know a lot of those are people who are in that age range and have been over time this, you know, keeping it real has always been an element of that the desire for entertainment, the incredible adoption of technology and the multitasking I think that's new and can be addressed.

>> I think that's a great point, you know, it's so much cheaper to start a company now than -- we don't have to rely on our instincts as to whether or not something will be adopted by whether it's millennials or anybody else you can just wait and see and you don't have to rely on your instincts you can see that the usage is there and it's growing. That's one of the things that I think is really exciting about investing now is you get a lot more data that allows you to see that behavior is of this particular sort or that particular sort. So you see social gaming, for instance, that's, you know, really exploded over the last call it 18 months, 12 months. Not necessarily something that people would have predicted although there've been investments in gaming before and in social before. You know, I think, you know, Twitter's a good example where, you know, the growth has been driven up not by millennials, not by youth but in any event you didn't have to decide whether or not that was gonna be something that was gonna happen you could see it happening. And, you know, I think, as you say, we are starting to get outside of the band where our intuition is necessarily good. I would say that, you know, we're approaching a bit of a time poor phase in our lives. I think that's probably true of a lot of people in this room. And so the behavior of the time poor alters the behavior of the time rich could be very, very different and the millennials are very much in this time rich phase of their lives where they're not necessarily looking for utility or efficiency or things that are gonna save time they're actually looking for things that are gonna fill time. It's about entertainment, it's about gaming, it's about, you know, communicating with your friends and keeping up with people and that's a very different use case that, again, you could just see the behavior.

>> I see 4 characteristics in terms of unlocking the millennial market that you have to understand and the core psychology. This generation is the digital needed; they grew up with these different formats where as we are more the immigrant generation we're learning these as opposed to being exposed to them from an early age. The first characteristic is that they are Cloud ready so everything is multiplatform, multiformat and usually through a browser from day one, so it's important to be frictionless when going towards them. I think they're generally resistant to downloads and heavy clients. The second is that they're weaned on free to play mechanics and micro transactions through gaming and we'll see those business models applied to other areas in the media industry. Third is everything comes with a social graph so social graph will be an overlay; a fabric of functionality weaved into all aspects of everything they do and consume. And the last piece is they do not consume content they self express with it. So unless content is sort of a service for them that they use, reinterpret, share, retweet, whatever, it will have no value to them. They don't believe in purchasing content as a packaged media anymore it has to have a two way channel back.

>> The other dynamic related to this is not just how it impacts the consumer businesses but also the enterprise and I've seen a wave of really interesting companies that are enterprise models but that have more of a consumer kind of DNA or a consumer twist to them. So I think the trends that you talked about in terms of how to market to this generation applies as much on that side as on the consumer side so. And there are models that have consumer characteristics in the design of the product and the usability of the product sort of seeping into the enterprise. And also in the distribution model where components of the product are put out for free to businesses and it's either a self service model for sales or an up-sell as opposed to a classic kind of enterprise model. So in our portfolio it's companies like LinkedIn or Constant Contact or, you know, it's for the panel it's companies like HubSpot that you were just talking about inaudible or SurveyMonkey that raised a bunch of money recently. There are just a lot of interesting examples of companies that are at the intersection of consumer and enterprise what I would call kind of an enterprise consumer DNA.

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