Notes from Potomac TechWire Venture Capital Outlook 2010

Today I attended the annual Potomac TechWire Venture Capital Outlook 2010, in Tysons Corner this morning. The speakers were:

Phil Bronner, General Partner, Novak Biddle Venture Partners Thanasis Delistathis, Managing Partner, New Atlantic Ventures Don Rainey, General Partner, Grotech Ventures Tige Savage, Managing Director & EVP, Revolution LLC Harry Weller, General Partner, NEA Moderator - Paul Sherman, Editor, Potomac Tech Wire

Here are my random notes, paraphrased from the speakers:

Trends:
- More transparency, you can't fool customers anymore. Too easy for customer to share with each other.
- More mobile, more social.
- Phil B is most excited about mobile. Shift from gaming and advertising to utility (similar to web shift from content to commerce in the 90s).
- 'Starbucks user testing & feedback' (grab potential customers in a Starbucks to get feedback on designs and ideas) is big, using iPads and gathering direct user feedback

VCs are hearing from entrepreneurs:
- "We're the 'GroupOn' for ..."
- "We're the 'Facebook' for ..."
- "We've added the ability to 'check-in'"

Interesting new media company:
- Stitcher: Pandora for news and talk radio

Commentary on the venture/entrepreneurial market:
- Generally upbeat about entrepreneurial opportunities. Customer acquisition costs are low, infrastructure startup costs are low, talent is available. Big shifts in customer habits are happening.
- Investors are putting more emphasis on people than idea. Entrepreneurs need the ability to pivot when initial idea may not work.
- VCs are looking for founders who see the world a little bit differently and are very passionate about their idea or target market.
- Still figuring out what works best in mobile given the use case: apps, text, and mobile web. Mobile space is still early stage.
- Big opportunities to leverage mobile devices on the go. Take advantage of ability to make decisions & take actions in real time. Take advantage of the mobile device capabilities: geo-location, camera, text alerts.
- Still opportunity in innovative eCommerce
- Health care sector is huge, huge changes, companies looking for new ways to keep costs down
- Cloud computing: significant new spending in this area. A big a shift as shift to client-server, 3-tier, and web architectures.
- Focus not on protecting your idea but on out-executing everybody. Get the best experts for your space.
- Silicon Valley is overheated. Too more focus on capturing 'eye balls'
- NY is real hub for social and media and ecommerce. Surprised at how quickly it has become a dominant hub.
- DC is a hub for ??? Seeing uptick in Internet and media. Expect to see more cloud stuff. Education. Homeland security and cyber. Large scale dbs and Analytics.
- In DC area, all startup activity is happening DC (city/urban). Young talent wants to be in DC, wants access to public transportation.
- In DC area, defense contractors suck up a lot of good entrepreneurial & technical talent.
- Local VCs are currently spending a lot of time elsewhere. DC due for a burst of entrepreneurial and venture activity.