There is a large opportunity to reinvent industries using data …Resulting in significant data and revenue growth Costs have come down… Projected annual Global "big data" revenue “big data” growth is 37% through 2017 Cost of storage / GB $300K $50B CAGR (13-17) Infrastructure & Networking XaaS 40 200 28% 33% Database 25% Applications 40% 30 Storage 20 100 Source: Wikibon 22% 1990: $10 2000: $1 0 1981 Compute 26% 1990 2000 2010: $0.10 2010 10 Professional services 0 2011 2012 2013 2014 2015 2016 2017 26% Significant venture capital dollars have been invested in “big data” in recent years >30% annual growth in deal volume and investment size from 2008-2012 Venture capital investments in "big data" $2.0B 1.5 1.5 1.4 1.0 0.5 0.0 Deals Source: Orrick 0.5 0.6 0.7 2008 2009 2010 2011 2012 55 65 96 132 164 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 Incumbent model Gaming • Studio model with large sunk development cost with limited pre-launch testing Taxi • Dispatch systems expensive dedicated equipment, no driver or passenger feedback Venture Capital New model • Very manual process with limited optimization or use of data Starting with a clean slate can lead to radically new models, products, and services, and startups are best poised to do this 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 Finance Media Security & gov’t Health Education Data analytics Data infrastructure Travel & transport Retail Other Case studies 1 SignalFire 2 ClassDojo 3 Metromile Entrepreneurs have lower Capex requirements and more funding options than ever before… Large VC Incubator … VCs must be more proactive Low barriers have increased the noise; now it’s possible to process signal Organized Channels Digital Channels Unstructured Channels Data integration, cleansing, and structuring Filtering FILTERING FEEDBACK LOOPS w/ MACHINE LEARNING Machine learning Investment team Feedback loop from team, fundings, and company performance Platform informs seed-stage investments with full information and low cost structure Large investments Boutique VCs Full resource VCs Sweet spot for early stage investor / startup alignment Small investments Incubator program 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 ClassDojo data solution Competitive advantage • 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 MetroMile data solution Competitive advantage • 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 Finance Media Security & gov’t Health Education Travel & transport Retail What’s the next industry to be transformed by data? Data analytics Data infrastructure Other