I find that my best venture investing tends to happen when I structure my thinking around investment themes or theses. One current thesis I hold is that HTML5 will usher in a democratizing force comparable to the advent of web itself.
It almost sounds like I’m overstating the obvious when I think about it like that (and remember, this is the basic crawl-before-you-can-walk VC mind speaking). After all, the very set of standards that laid the foundation for the world wide web see their reincarnation in HTML5, in other words: HTML. Yet in a strange (and immensely pleasurable) sort of way, the iPhone kind of distracted us, playing the role of Pied Piper leading us back inside the walled gardens from which we had escaped.
Before you pigeonhole me as an app hater, let me gush a little: I love apps (especially of the Android variety), I spend time with apps everyday, and some of my best friends are apps. From the consumer point of view, apps are working fantastically (look at all the free stuff we’re getting), and I hope this continues.
But if we look at the state of affairs today: native apps are no longer working so well for developers. 80% of native app developers do not generate enough revenue to sustain a business. The long tail is not able to survive in the native app stores.
The beauty of HTML5 is its ability to level the playing field for developers. Its fundamental tenet as a web standard means that “applications” developed in HTML5 will be interoperable across devices and OS’s. Furthermore, with HTML5, developing an application does not require an expertise in Objective C, C#, etc. but rather only a basic understanding of markup language to create content. Kind of like how the original HTML let anyone publish a web page, and WordPress made anyone a blogger.
These democratizing tendencies of HTML5 are interesting from the standpoint of venture investing for several reasons. First, they will spur a whole range of new fields of innovation, and hence fertile ground for startups, such as in search, discovery, analytics, promotion, monetization, etc.
Secondly, a slew of wealthy vested interests are desperately seeking an escape from the clutches of the native app stores. For mobile operators, the future of customer engagement is on-device. The proliferation of multi-screen devices is just beginning. Solutions that provide a consistent and enjoyable user experience across all screens while helping the carriers stop being bypassed will look mighty tasty. For a startup, sitting in the path of progress of cash-rich global leaders facing transformation can be a pretty interesting place to be.
Additionally, the new worldview that is brought about by the openness and democratizing force of HTML5 will in and of itself represent a step function. The sky’s the limit on where the next insight will bring us (imagine if everyone were a mobile game developer…).
I’m writing this on the eve of the Mobile World Congress 2013. Scanning the program, I do not see HTML5 figuring prominently among any conference discussions, so I’m curious to see the extent to which this topic vibrates at this year’s congress.