INTERNET TRENDS 2016 –

CODE CONFERENCE
Mary Meeker
June 1, 2016

kpcb.com/InternetTrends

Outline
1) Global Internet Trends

2) Global Macro Trends

3) Advertising / Commerce + Brand Trends

4) Re-Imagining Communication – Video / Image / Messaging

5) Re-Imagining Human-Computer Interfaces – Voice / Transportation

6) China = Internet Leader on Many Metrics
(Provided by Hillhouse Capital)

7) Public / Private Company Data

8) Data as a Platform / Data Privacy

KPCB INTERNET TRENDS 2016 | PAGE 2

Thanks...

KPCB Partners
Especially Alex Tran / Dino Becirovic / Alexander Krey / Cindy Cheng
who helped develop the ideas / presentation we hope you find useful...

Hillhouse Capital
Especially Liang Wu...his / their contribution of the China section of
Internet Trends provides an especially thoughtful overview of the
largest market of Internet users in the world...

Participants in Evolution of Internet Connectivity
From creators to consumers who keep us on our toes 24x7...and the
people who directly help us prepare this presentation...

Kara & Walt
For continuing to do what you do so well...
KPCB INTERNET TRENDS 2016 | PAGE 3

GLOBAL INTERNET TRENDS

US Census Bureau. +7% Y/Y (Excluding India) Source: United Nations / International Telecommunications Union. +9% Y/Y. Internet user data for: China from CNNIC. Iran from Islamic Republic News Agency. Global Internet Users @ 3B Growth Flat = +9% vs.. citing data released by the National Internet Development Center. KPCB INTERNET TRENDS 2016 | PAGE 5 . Indonesia from APJII / eMarketer. Internet user data is as of mid-year.. India from IAMAI.

Global Internet Users = 3B @ 42% Penetration...
+9% vs. +9% Y/Y...+7% (Excluding India)

Global Internet Users, 2008 – 2015

3,500 35%

3,000 30%
Global Internet Users (MM)

2,500 25%

Y/Y % Growth
2,000 20%

1,500 15%

1,000 10%

500 5%

0 0%
2008 2009 2010 2011 2012 2013 2014 2015

Global Internet Users Y/Y Growth (%)

Source: United Nations / International Telecommunications Union, US Census Bureau. Internet user data is as of mid-year. Internet user data for: China from CNNIC, Iran from Islamic Republic News
Agency, citing data released by the National Internet Development Center, India from IAMAI, Indonesia from APJII / eMarketer. KPCB INTERNET TRENDS 2016 | PAGE 6

India Internet User
Growth Accelerating =
+40% vs. +33% Y/Y...

@ 277MM Users...
India Passed USA to Become
#2 Global User Market
Behind China
Source: United Nations / International Telecommunications Union, US Census Bureau. Internet user data is as of mid-year. Internet user data for: China from CNNIC, India from IAMAI. India users as of
10/2015 was 317MM per IAMAI; USA total population at 12/2015 (inclusive of all ages) was 323MM per US Census. KPCB INTERNET TRENDS 2016 | PAGE 7

India Internet Users = 277MM @ 22% Penetration...
+40% vs. +33% Y/Y

India Internet Users, 2008 – 2015

300 60%

250 50%
India Internet Users (MM)

200 40%

Y/Y % Growth
150 30%

100 20%

50 10%

0 0%
2008 2009 2010 2011 2012 2013 2014 2015

India Internet Users Y/Y Growth (%)

Source: IAMAI. Uses mid-year figures.
KPCB INTERNET TRENDS 2016 | PAGE 8

Global Smartphone
Users Slowing =
+21% vs. +31% Y/Y

Global Smartphone
Unit Shipments Slowing
Dramatically =
+10% vs. +28% Y/Y
Source: Nakono Research (2/16), Morgan Stanley Research (5/16).
“Smartphone Users” represented by installed base. KPCB INTERNET TRENDS 2016 | PAGE 9

Largest Market (Asia-Pacific) = +23% vs.000 1.Global Smartphone User Growth Slowing. 2005 – 2015 3. +35% Y/Y Smartphone Users.000 2008: Asia- Pacific = 34% 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 North America Western Europe Eastern Europe Asia-Pacific Latin America MEA Source: Nakono Research (2/16).500 1.000 2015: Asia- Pacific = 52% 2.. * “Smartphone Users” represented by installed base. KPCB INTERNET TRENDS 2016 | PAGE 10 . Global..500 Global Smartphone Users (MM) 2.

500 100% Global Smartphone Unit Shipments (MM) 1. 5/16..200 80% Y/Y Growth (%) 900 60% 600 40% 300 20% 0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 Android iOS Other Y/Y Growth Source: Morgan Stanley Research. KPCB INTERNET TRENDS 2016 | PAGE 11 .. After 5 Years of High Growth @ +10% vs. +28% Y/Y Smartphone Unit Shipments by Operating System.Global Smartphone Units Slowing Dramatically. 2007 – 2015 1. Global.

iOS vs.Android Smartphone Share Gains Continue vs. iOS. Android. Android ASP Declines Continue.. KPCB INTERNET TRENDS 2016 | PAGE 12 ..200 iOS = 16% Android = 81% iOS Android Unit Shipments (MM) 800 400 2009 Share: -11% Y/Y iOS = 14% Android = 4% 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E iOS ASP ($) $594 $621 $623 $703 $712 $686 $669 $680 $717 $651 Y/Y Growth – 4% 0% 13% 1% -4% -2% 2% 5% -9% Android ASP – $403 $435 $441 $380 $318 $272 $237 $216 $208 Y/Y Growth – – 8% 1% -14% -16% -15% -13% -8% -4% Source: Morgan Stanley Research.Delta to iOS @ ~3x Smartphone Unit Shipments... 5/16. 2007 – 2016E +7% Y/Y 2015 Share: 1. Global.

New Internet Users = Continue to be Harder to Garner Owing to High Penetration in Developed Markets KPCB INTERNET TRENDS 2016 | PAGE 13 .

Ethiopia. 2014: 82% Source: World Bank. 2014: 1. offline populations that are highly literate and disproportionately low income and female User capability Countries: Germany. South Africa. Colombia. rural and 40 literate offline populations 20 Countries: China. Indonesia. 2014: 548 million Internet penetration. Philippines. USA 3 Offline population. Countries fall into one of 5 groups based on rural. and have low literacy barriers they face to Internet adoption Countries: Bangladesh.0 Countries: Egypt. India. Thailand Maximum -100 Group 4 Offline population. mixed demographics Average score 100 Group 3 Minimum .. Sri Lanka. New Users in Less Developed / Affluent Countries Harder to Garner. 2014: 244 million Internet penetration. With Already High Mobile Penetration in More Developed / Affluent Countries. 2014: 147 million Internet penetration. Tanzania Offline population. 2014: 52% Group 5: Low barriers across the board. offline populations that are young. Japan. offline populations predominantly urban / literate / low income Low incomes Countries: Brazil. Italy. Vietnam Offline population. Korea. Turkey and affordability Offline population. per McKinsey Group 1: High barriers across the board.438 million 80 Group 5 Internet penetration. 2014: 20% 60 Group 3: Medium barriers with greatest challenge in incentives. 2014: 753 million 0 Internet penetration. Russia. Pakistan.. Nigeria. 2014: 18% Performance on Internet Group 1 Group 2: Medium to high barriers with larger challenges in incentives and Barriers Index Incentives Group 2 infrastructure. 2014: 49% Infrastructure Group 4: Medium barriers with greatest challenge in low incomes and affordability. McKinsey analysis from Internet Barriers Index KPCB INTERNET TRENDS 2016 | PAGE 14 . Mexico.

.4 x% of GNI per capita.c.9 South Korea $216 0.8 China $243 3.0 Italy $327 0.9 Spain $269 0. $USD.6 Tanzania $198 21.8 Japan $232 0. Atlas method) Note: Reflects true prices as paid by the consumer at point-of-sale.1 Indonesia $212 5.7 Thailand $273 4.7 Colombia $291 3.1 Nigeria $307 10. Euromonitor.7 Russia $232 1.7 South Africa $256 3.8 Brazil $319 2. 15% (Vietnam) / 10% (Nigeria) / 10% (India) / 6% (Indonesia).8 Philippines $163 4.5 Bangladesh $123 Cost of smartphone as a % 11. Excludes data plan costs. includes taxes and subsidies. estimates (GNI p.8 Mexico $244 2.8 India $158 Developing Developed 10.. KPCB INTERNET TRENDS 2016 | PAGE 15 .. (smartphone prices). 2014 Vietnam $279 14.3 Turkey $522 4.6 Source: McKinsey. per McKinsey Average retail price of a smart phone.3 Egypt $195 6. World Bank.5 Germany $486 1. 2014 Ethiopia $262 47.Smartphone Cost in Many Developing Markets = Material % of Per Capita Income.

GLOBAL MACRO TRENDS .

Global Economic Growth = Slowing KPCB INTERNET TRENDS 2016 | PAGE 17 .

“A World Turned Inside Out.Global GDP Growth Slowing = Growth in 6 of Last 8 Years @ Below 20-Year Average Global Real GDP Growth (%). Note: GDP growth based on constant prices (real GDP growth).8% 4% 35-Year Avg = 3. 4/16. 5/16.” Yale Jackson Institute for Global Affairs.5% 3% 2% 1% 0% (1%) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: IMF WEO. 1980 – 2015 6% 5% Global Real GDP Growth (%) 20-Year Avg = 3. KPCB INTERNET TRENDS 2016 | PAGE 18 . Stephen Roach.

Commodity Price Trends = In Part. Tell Tale of Slowing Global Growth KPCB INTERNET TRENDS 2016 | PAGE 19 .

7% Softs (Sugar. Bloomberg Commodity Index (Indexed to 0 @ 1/00). Coffee. . -8% Annual Average (5/11-4/14) & +6% (1/00-4/11) Global Commodity Prices. 16% Precious Metals. weighted as: 31% Energy. and KPCB INTERNET TRENDS 2016 | PAGE 20 6% Livestock. Bloomberg as of 5/25/16 Note: Bloomberg Commodity Index represents 22 globally traded commodities. 2000 – 2016YTD 200% 150% Bloomberg Commodity Index (Indexed to 0 @ 1/00) 100% 50% 0% (50%) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Morgan Stanley.Commodity Prices Down = -39% Since 5/14 vs. 17% Industrial Metals. 23% Grains. Cotton).

Global Growth Engines = Evolve Over Time KPCB INTERNET TRENDS 2016 | PAGE 21 .

India.. Nepal. Africa.. 1985 / 2015 (Based on Purchasing Power Parity) 1985 2015 $19T = World GDP $114T = World GDP +4% Y/Y +3% Y/Y 0% N. Emerging Asia includes Bangladesh. America + 9% 15% Europe + Japan = 29% of Total 9% 22% China + 9% 13% Emerging Asia = 7% 26% N. GDP PPP = GDP adjusted by PPP rate. Lao. Myanmar. America + 18% of Total 11% Europe + Japan = 63% of Total 28% 1% 13% 37% China + Emerging Asia = 63% of Total Europe N. Malaysia. GDP growth based on constant prices (real GDP growth). PPP = Purchasing Power Parity exchange rate. Other Source: IMF WEO. KPCB INTERNET TRENDS 2016 | PAGE 22 GDP growth contribution based on annual snapshots stated above and not necessarily reflective of secular trends. America Japan China Emerging Asia (ex-China) Lat Am Middle East. America + Europe + Japan 2015 = China + Emerging Asia Real GDP Growth Contribution by Region. 4/16. Cambodia. Thailand. . Vietnam and others and excludes China.Global Growth Engines @ ~2/3 of Global GDP Growth. Philippines. Mongolia. Sri Lanka. 1985 = N. national currency per international dollar. Indonesia.

.) Past 6 Years > Previous 30 Years KPCB INTERNET TRENDS 2016 | PAGE 23 . China’s Gross Capital Formation (Capital Equipment / Roads / Buildings..

500 $3. drains. private residential dwellings.500 $2.5.. Assumes constant FX rate RMB/USD @ 6.000 $1.China Gross Capital Formation = Slowing. and commercial and industrial buildings.000 $2. 1980 – 2015 (In 2010 Dollars) $4. Gross fixed capital formation includes land improvements (fences. Sum of Past 6 Years > Previous 30 Years China Gross Capital Formation. breeding stock and animals for milk. offices. ditches.500 $1. and equipment purchases. hospitals. KPCB INTERNET TRENDS 2016 | PAGE 24 Gross capital formation = gross fixed capital formation (majority) + changes in inventory. machinery. plant. and the construction of roads. and the like. railways. It also includes the value of draught animals.. Amounts are inflation adjusted to 2010 dollars based on IMF data on inflation rates (yearly average). . and so on).500 $20T+ $21T+ $4. for wool and for recreational purposes.000 China Gross Capital Formation ($B) $3. including schools. 5/16. and newly increased forest with economic value.000 $500 $0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 China Gross Capital Formation ($B) Source: China National Bureau of Statistics.

KPCB INTERNET TRENDS 2016 | PAGE 25 . Carlos Barria. Pudong District 1987 2016 Source: Reuters/Stringer. China. Yichen Guo.Shanghai Area Over Past 2+ Decades = Illustrates Magnitude of China (& Emerging Asia) Growth Shanghai.

Re-Imagination of China Over Past 3+ Decades – World’s Population Leader + #3 in Land Mass – Helped Drive Incremental Global Growth of Likes Which is Difficult to Repeat KPCB INTERNET TRENDS 2016 | PAGE 26 .

Interest Rates Have Fallen to Historically Low Levels = Interest Rate Trends = Can be Indicative of Perception for Growth Outlook KPCB INTERNET TRENDS 2016 | PAGE 27 .

Bloomberg. Nominal and Real. 5/16 Note: Real rates based on USGGT10Y Index on Bloomberg. 1962 – 2016YTD 20% 15% 10-Year Yield (%) 10% 5% 0% (5%) 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 Nominal Yield (%) Real Yield (%) Source: Morgan Stanley. which measures yield to maturity (pre-tax) on Generic 10-Year USA government inflation-index bonds.USA 10-Year Treasury Yield = Low by Historical Standards USA 10-Year Treasury Yields. KPCB INTERNET TRENDS 2016 | PAGE 28 .

2001 – 2016YTD 8% 10-Year Real Sovereign Bond Yields (%) 6% 4% 2% 0% (2%) 2001 2003 2005 2007 2009 2011 2013 2015 USA Canada UK Japan France Germany Italy Source: Morgan Stanley. Note: Real rates based on yield to maturity on 10-year inflation-indexed treasury security for each country. KPCB INTERNET TRENDS 2016 | PAGE 29 . Bloomberg. Various Countries. 5/16.Global 10-Year Bond Yields = Have Trended Down 10-Year Real Sovereign Bond Yields (%).

Total Global Debt Loads Over 2 Decades = High & Rising Faster Than GDP KPCB INTERNET TRENDS 2016 | PAGE 30 .

Global Government Debt @ 66% Average Debt / GDP (2015) & Up. IMF.5 3. Constant 2014 FX). *GDP growth rate based on constant prices and calculated as average of average growth rates across 50 countries from 2000-2007 and 2008-2015.4 $33 $84 $37 $19 $59 Government 5.7 6.7 $20 Q4:00 Q4:07 Q2:15 Total debt as GDP 250 274 299 4.2 % of GDP Growth*: Source: McKinsey Global Institute (3/16).9 8. KPCB INTERNET TRENDS 2016 | PAGE 31 .1 2.. +9% Annually Over 8 Years vs. Q4:00 – Q2:15 Compound annual growth rate (%) 2000–2007 2007–Q2:15 $208 +70T $41 Household 8.0 $138 $59 Corporate 5.6 3.7 $25 $32 $21 $37 $49 Financial 9.. +2% GDP Growth* for 50 Major Countries Global Debt By Type ($T.

147% (2000)* Change in Real Economy Debt / GDP (%). non-financial corporates. @ 202% Average vs. excludes financial sector debt).. and governments (i. 2007 – Q2:15 140 Leveraging Developed Emerging Increasing leverage Ireland 130 120 Singapore Hong Kong Change in Real Economy Debt / GDP (%) 90 China Portugal Greece 80 Belgium France 70 Finland 60 Australia Canada Spain Slovakia Colombia Malaysia Netherlands Japan 50 Italy Sweden Turkey Thailand Russia Korea 40 Brazil Chile United Kingdom Mexico Poland Switzerland Denmark 30 Czech Republic Austria Morocco Norway 20 Peru Hungary United States Indonesia Philippines South Africa Vietnam 10 Saudi Arabia Romania Germany 0 Nigeria India -10 Argentina Egypt Deleveraging -20 Deleveraging 0 30 60 90 120 150 180 210 240 270 300 330 360 390 420 Q2:15 Real Economy Debt / GDP (%) Source: McKinsey Global Institute (3/16). Debt includes that owed by households. *Country inclusion per McKinsey. includes top developed countries by GDP and representative geographic selection of emerging countries..Total Debt-to-GDP Ratios = High & Up in Most Major Countries. KPCB INTERNET TRENDS 2016 | PAGE 32 .e.

Slowing Birthrates + Rising Lifespans KPCB INTERNET TRENDS 2016 | PAGE 33 . Demographic Trends = Slowing Population Growth...

5% 8 2.World Population Growth Rate Slowing = +1.0% (1975) Global Population and Y/Y % Growth.N.2% vs.5% 4 1.0% 2 0. 1950 – 2050E 10 2.0% Global Population (B) Y/Y Growth Rate (%) 6 1.0% Global Population (B) Y/Y Growth (%) Source: U. Population Division Note: Growth Rates based on CAGRs over 5 Year Periods. +2. KPCB INTERNET TRENDS 2016 | PAGE 34 .5% 0 0.

per Year 40 30 20 10 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2014 World USA China India Europe / Central Asia East Asia / Pacific Middle East / North Africa Sub-Saharan Africa Source: World Bank World Development Indicators Note: Represents birth rates per 1. 1960 – 2014 50 Birth Rate per 1.000 People. By Region.000 people per year.000 People per Year. KPCB INTERNET TRENDS 2016 | PAGE 35 .Global Birth Rates = Down 39% Since 1960 (1% Annual Average Decline) Birth Rates per 1.

6% Annual Average Increase) Life Expectancy (Years. Both Genders).Global Life Expectancy @ 72 Years = Up 36% Since 1960 (0. 1960 – 2014 80 70 Life Expectancy (Years) 60 50 40 30 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2014 World USA China India Europe / Central Asia East Asia / Pacific Middle East / North Africa Sub-Saharan Africa Source: World Bank World Development Indicators KPCB INTERNET TRENDS 2016 | PAGE 36 . By Region.

Net. Economic Growth Slowing + Margins for Error Declining = Easy Growth Behind Us KPCB INTERNET TRENDS 2016 | PAGE 37 . Net.

McKinsey.Government debt-to-GDP rose to 66% from 51% (2000) for 50 major economies 4) Interest Rates Have Declined – Helped fuel borrowing – USA 10-Year Nominal Treasury Yield fell to 1..2% from 1.6% (1995) Source: US Census. UN Population Division KPCB INTERNET TRENDS 2016 | PAGE 38 . 3) Government Debt Rising (& High) – Spending rose to help support growth..6% (1995) 5) Population Growth Rate Slowing & Population Aging – Higher birth rates helped drive labor force growth – population growth rate continued to fall – to 1. ITU.. Bloomberg.9% (2016) from 6. US Bureau of Labor Statistics..5 Epic Growth Drivers Over Past 2 Decades = Losing Mojo 1) Connectivity Growth Slowing – Internet Users rose to 3B from 35MM (1995) 2) Emerging Country Growth Slowing – Underdeveloped regions developed – including China / Emerging Asia / Middle East which rose to 69% of global GDP growth from 43%. IMF. Stephen Roach.

.0 (2000). Note: All values are indexed to 1 (100%) on Jan 1.. 1/93 – 5/16 800% 700% 600% Index Value (1/1/1993 = 100%) 500% 400% 300% 200% 100% 0% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 S&P 500 NASDAQ China Shanghai Composite MSCI Europe Source: Capital IQ.Several Up / Down Cycles in Past 2 Decades = Internet 1. Data as of 5/2716. Stock / Commodity Markets Performance (% Change From 1/93).Property / Credit (2008). KPCB INTERNET TRENDS 2016 | PAGE 39 ... 1993.

KPCB INTERNET TRENDS 2016 | PAGE 40 . Creates Opportunities for Businesses that Innovate / Increase Efficiency / Lower Prices / Create Jobs – Internet Can Be @ Core of This..... Adjusting to Slower Growth + Higher Debt + Aging Population Creates Rising Risks.

ADVERTISING / COMMERCE + BRAND TRENDS .

Online Advertising = Mobile + Majors + Newcomers Continue to Crank Away KPCB INTERNET TRENDS 2016 | PAGE 42 .

2009 – 2015 $70 35% $60 $60 30% USA Internet Advertising ($B) $50 $50 25% $43 Y/Y Growth (%) $40 $37 20% $32 $30 $26 15% $23 $20 10% $10 5% $0 0% 2009 2010 2011 2012 2013 2014 2015 Desktop Advertising Mobile Advertising Y/Y Growth Source: 2015 IAB / PWC Internet Advertising Report. Owing to Mobile (+66%) vs. +16% Y/Y.. +20% vs. Desktop (+5%) USA Internet Advertising..USA Internet Advertising Growth = Accelerating. KPCB INTERNET TRENDS 2016 | PAGE 43 .

.000 $5 $0 $ 2014 2015 2014 2015 2014 2015 Google Facebook Others Source: IAB / PWC 2015 Advertising Report.000 $15 +59% Y/Y 10.000 $35 +18% Y/Y 30. 2014 – 2015 35.000 $25 +13% Y/Y 20. Google + Facebook = 76% (& Rising) Share of Internet Advertising Growth.000 $20 15. “Others” includes all other USA KPCB INTERNET TRENDS 2016 | PAGE 44 internet (mobile + desktop) advertising revenue ex-Google / Facebook. Morgan Stanley Research Note: Facebook revenue include Canada. Google USA ad revenue per Morgan Stanley estimates as company only discloses total ad revenue and total USA revenue. Facebook.000 $10 $5. Other.000 $30 Others USA Advertising Revenue ($B) 25. USA. USA Advertising Revenue and Growth Rates (%) of Google vs. Facebook vs.

video game. Print includes newspaper and magazine. and cinema advertising. Internet includes desktop + laptop + other connected devices. ~$22B opportunity calculated assuming Mobile ad spend share equal its respective time spent share. USA. % of Advertising Spending. Advertisers Remain Over-Indexed to Legacy Media % of Time Spent in Media vs. KPCB INTERNET TRENDS 2016 | PAGE 45 Excludes out-of-home..@ Margin.. Arrows denote Y/Y shift in percent share. 2015 Time Spent Ad Spend 50% % of Total Media Consumption Time or Advertising Spending Total Of Which 40% Internet Ad Mobile Ad 39% = $60B = $21B 36% 30% 25% 20% 22% 23% ~$22B Opportunity 16% in USA 10% 13% 12% 10% 4% 0% Print Radio TV Internet Mobile Source: Advertising spend based on IAB data for full year 2015. Time spent share data based on eMarketer 4/16. .

200 internet users surveyed from the US. +14% Y/Y / $510B Market Value (5/31/16) . N = 3. per Unruly... Indonesia and Japan. 81% = Mute Video Ads 62% = Annoyed with / Put Off by Brand Forcing Pre-Roll Viewing 93% = Consider Using Ad Blocking Software .But There are Ways Video Ads Can Work.Online Advertising Efficacy = Still Has Long Way to Go Google Has Proven Effective Online Advertising Works.. France. UK. Google = $75B Revenue (2015). Germany.. July 2015. Australia. per Unruly 1) Authentic 2) Entertaining 3) Evoke Emotion 4) Personal / Relatable 5) Useful 6) Viewer Control 7) Work with Sound Off 8) Non-Interruptive Ad Format Source: CapitalIQ as of 5/31/16..... Sweden.But Many Online (Video) Ads are Ineffective. KPCB INTERNET TRENDS 2016 | PAGE 46 . Unruly Future Video Survey.

including the number of Digicel subscribers in the Caribbean (added 10/15). The number of desktop adblockers after 6/15 are estimates based on the observed trend in desktop adblocking and provided by PageFair.. Mobile adblocking KPCB INTERNET TRENDS 2016 | PAGE 47 estimates are for global monthly active users of mobile browsers that block ads by default between 9/14 – 3/16..~420MM+ Mobile (+94%)... 5/16. These two data sets have not been de-duplicated. Note that mobile adblocking refers to web / browser-based adblocking and not in-app adblocking. as calculated in the PageFair & Adobe 2015 Adblocking Report. Desktop adblocking estimates are for global monthly active users of desktop adblocking software between 4/09 – 6/15. . as calculated in the PageFair & Priori Data 2016 Adblocking Report. Dotted line represents estimated data. 4/09 – 3/16 500 400 Global Adblocking Users (MM) 300 200 100 0 2009 2010 2011 2012 2013 2014 2015 Desktop Adblocking Software Users Mobile Adblocking Browser Users Source: PageFair. per PageFair Global Adblocking Users on Web (Mobile + Desktop). Majority in China / India / Indonesia = Call-to-Arms to Create Better Ads.Adblocking @ ~220MM Desktop Users (+16% Y/Y).

Video Ads that Work =
Authentic / Entertaining / In-Context / Often Brief
Snapchat’s 3V Advertising
Vertical (Made for Mobiles) / Video (Great Way to Tell Story) / Viewing (Always Full Screen)

Spotify (10-Second Ad) in... Furious 7 (10-Second Ad) in...
Snapchat Live Stories + Discover Ultra Music Festival Miami Live Story

26MM+ Views, 12/15 14MM+ Views, 3/15

+30% Lift in Subscription Intent, +3x Attendance Among Target Demo for
2x More Effective Than Snapchatters vs. Non-Snapchatters
Typical Mobile Channels = Opening Weekend Box Office

Source: Snapchat
KPCB INTERNET TRENDS 2016 | PAGE 48

Commerce + Brands =
Evolving Rapidly By / For
This Generation

KPCB INTERNET TRENDS 2016 | PAGE 49

Each Generation Has
Slightly Different Core Values +
Expectations...

Shaped by Events that
Occur in Their Lifetimes

KPCB INTERNET TRENDS 2016 | PAGE 50

Consumer Preference / Value Evolution by Generation, USA...
Millennials = More Global / Optimistic / Tolerant..., per Acosta

Silent Baby Boomers Gen X Millennials
Birth Years 1928 – 1945 1946 – 1964 1965 – 1980 1981 – 1996

Year Most of Generation
18-33 Years Old 1963 1980 1998 2014

Summary • Grew up during Great • Grew up during time of idealism • Grew up during time of change • Grew up during digital era with
Depression with TV + car for every suburban politically, socially + economically internet, mobile computing, social
• Fought 2nd “war to end all home • Experienced end of the Cold War, media + streaming media on
wars” • Apollo, Civil Rights, Women’s Reaganomics, shift from iPhones
• Went to college on G.I. Bill Liberation manufacturing to services • Experiencing time of rising
• Raised “nuclear” families in time • Disillusionment set in with economy, + AIDS epidemic globalization, diversity in race +
of great prosperity + Cold War assassination of JFK, Vietnam • Rise of cable TV + PCs lifestyle, 9/11, war on terror, mass
War, Watergate + increase in murder in schools + the Great
divorce rates Recession

Core Values • Discipline • Anything is possible • Independent • Globally minded
• Dedication • Equal opportunity • Pragmatic • Optimistic
• Family focus • Question authority • Entrepreneurial • Tolerant
• Patriotism • Personal gratification • Self reliance

Work / Life Balance • Work hard for job security • Climb corporate ladder • Work / life balance important • Expanded view on work / life
• Family time not first on list • Don’t want to repeat Boomer balance including time for
parents’ workaholic lifestyles community service + self-
development

Technology • Have assimilated in order to • Use technology as needed for • Technology assimilated • Technology is integral
keep in touch and stay informed work + increasingly to stay in seamlessly into day-to-day life • Early adopters who move
touch through social media such technology forward
as Facebook

Financial Approach • Save, save, save • Buy now, pay later • Cautious, conservative • Earn to spend

Source: Acosta Inc., Pew Research
Image: Doomsteaddiner.net, Billboard.com, Metro.co.uk
Note: Data from Acosta as of 7/13. Pew Research Center tabulations of the March Current Population Surveys (1963, 1980, 1998, and 2014). Pew Research defines each generation and may differ from KPCB INTERNET TRENDS 2016 | PAGE 51
other sources as there are varying opinions on what years each generation begin and end.

Billboard.co.uk Note: *Only shows those that were civilian employed (i. Pew Research KPCB INTERNET TRENDS 2016 | PAGE 52 Center tabulations of the March Current Population Surveys (1963. Pew Research defines each generation and may differ from other sources as there are varying opinions on what years each generation begin and end. Millennials = More Urban / Diverse / Single..115 $64.net.469 $62. Metro.. **Median household income shown in 2015 dollars. and those not in labor force). unemployed civilians.Characteristic Evolution by Generation @ Peak Adult Years (18-33)... excludes armed forces. and 2014). USA.com. .066 When Ages 18-33 Population of Generation 35MM 61MM 60MM 68MM When Ages 18-33 Source: Pew Research Image: Doomsteaddiner. 1998. Silent Baby Boomers Gen X Millennials Birth Years 1928 – 1945 1946 – 1964 1965 – 1980 1981 – 1996 Year Most of Generation 1963 1980 1998 2014 18-33 Years Old Location When Ages 18-33 64% 68% 83% 86% Metropolitan as % Total Diversity When Ages 18-33 84% 77% 66% 57% White as % Total Marital Status When Ages 18-33 64% 49% 38% 28% Married as % Total Education by Gender When Ages 18-33 12% Male / 7% Female 17% Male / 14% Female 18% Male / 20% Female 21% Male / 27% Female % with Bachelor’s Degree Employment Status by Gender 78% Male / 38% Female 78% Male / 60% Female 78% Male / 69% Female 68% Male / 63% Female When Ages 18-33 Employed as % Total* Median Household Income ** N/A $61.e. 1980.

. Shaped by Evolution of Technology + Media KPCB INTERNET TRENDS 2016 | PAGE 53 .. Marketing Channels Evolve With Time.

IAB. Magna. Morgan Stanley Research. national spot.S. Radio consists of network. local spot. PIB (1980-2015) Note: Data adjusted for inflation and shown in 2015 U. dollars. OAAA. 1926 – 2015 (In 2015 Dollars) $70 Internet $60 Advertising Expenditures ($B) Television $50 Radio $40 $30 $20 $10 $0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Years Source: McCann Erickson (1926-1979).Each New Marketing Channel = Grew Faster. Internet > TV > Radio Advertising Expenditure Ramp by Channel. Television consists of cable and broadcast television advertising.. and streaming audio KPCB INTERNET TRENDS 2016 | PAGE 54 advertising. USA. Internet consists of mobile and desktop advertising.. NAA. . First 20 Years. RAB.

Shaped by Evolution of Technology + Distribution KPCB INTERNET TRENDS 2016 | PAGE 55 .. Retailing Channels Evolve With Time..

org. USA = Stores  More Stores  Malls  E-Commerce Corner / General Stores Supermarkets Discount Chains Wholesale Clubs 1800s 1930s 1950-60s 1970-80s Illustrative Generational Overlap Millennials Generation X Baby Boomers Silent Generation Department Stores Shopping Malls Superstores E-Commerce Mid-1800s 1950s 1960-80s 1990s Source: McKinsey Image: Wikipedia. Silents defined as those born between 1925 – 1945. Boomers defined as those born between 1946-1964.com. Dwell. In 2015. they are ages 51-70.com.com. Freep.org. In 2015. Gen X defined as those born between 1965 and 1979. In 2015. they are ages 15-35. Zdnet.com KPCB INTERNET TRENDS 2016 | PAGE 56 Note: Millennials defined as those born between 1980 and 2000.walmart. they are ages 36-50. Barnumlanding. Note there are varying opinions on what years each generation begin and end.com. In 2015.Evolution of Commerce Over Past ~2 Centuries. Corporate. they are ages 71 – 90. Rediff. Cbsd. .com.

they are age 91 – 115. USA. Internet Retailer “2016 Top 500 Guide” (2000s – 2010s) Note: Companies shown above in chronological order by founding year by decade. Gen X KPCB INTERNET TRENDS 2016 | PAGE 57 defined as those born between 1965 and 1979. they are ages 15-35. they are ages 36-50. GI Generation defined as those born between 1900 – 1924. Penney  Meijer  Walmart  Costco  Amazon  Casper Retail Companies Founded by Decade (Illustrative Example).C. In 2015. they are ages 71 – 90. Boomers defined as those born between 1946-1964. 1900 – 2015 Generational Overlap Generation Z Millennials Generation X Baby Boomers Silent Generation GI Generation 1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s ` Source: KPCB. In 2015.New / Emerging Retailers Optimize for Generational Change = J. In 2015. In 2015. Ranker (1990s). Retailindustry. . In 2015.” Gen Z defined as those born after 2000. In 2015. Millennials defined as those born between 1980 and 2000. they are ages 0-15.com (1900s – 1980s).about. Note there are varying opinions on what years each generation begin and end. they are ages 51-70. Silents defined as those born between 1925 – 1945. Companies from 2000s onwards selected as diverse set of fast-growing companies based on web sales data from the Internet Retailer “2016 Top 500 Guide.

. KPCB INTERNET TRENDS 2016 | PAGE 58 .. Millennials = Impacting + Evolving Retail.

Millennials @ 27% of Population = Largest Generation.S. USA. Spending Power Should Rise Significantly in Next 10-20 Years Population by Age Range. There are varying opinions on what years each generation begin and end. 2014 70 $70 60 $60 Annual Expenditure ($K) Millennials 50 $50 USA Population (MM) 40 $40 30 $30 20 $20 10 $10 0 $0 <15 >75 >75 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 <25 Source: U. by Age of Reference Person. USA. KPCB INTERNET TRENDS 2016 | PAGE 59 . 2014 Household Expenditure. Census Bureau “2010-2014 American Community Survey 5-Year Estimates”.. Annual Average. Bureau of Labor Statistics “Consumer Expenditure Survey 2014” Note: Millennials defined as persons born between 1980 – 2000.. USA.

Louis (5/16) Note: E-commerce and retail sales data are seasonally adjusted.Internet Continues to Ramp as Retail Distribution Channel = 10% of Retail Sales vs. retail trade from gasoline stations. and retail trade from automobiles and other motor vehicles. Census Bureau.S. Retail sales exclude food services. Federal Reserve Bank of St. <2% in 2000 E-Commerce as % of Total Retail Sales. KPCB INTERNET TRENDS 2016 | PAGE 60 . 2000 – 2015 12% $340B+ of E-Commerce Spend E-Commerce as % of Retail Sales (%) 10% 8% 6% 4% 2% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: U. USA.

Retail = Technology + Media + Distribution Increasingly Intertwined KPCB INTERNET TRENDS 2016 | PAGE 61 .

.500). Cowen & Company Internet Retail Tracker Image: Amazon. Milled. Lark & Ro. Amazon – Private Label Brand Launches. Franklin Tailored.com. James & Erin.com.Retail – The New Normal = Drive Transaction Volume  Collect / Use Data  Launch New Products / Private Labels. Bizjournals.com KPCB INTERNET TRENDS 2016 | PAGE 62 Note: Purchaser data based on Cowen & Company consumer tracking survey (n= ~2. Data shown is percentage of Amazon purchasers who purchased items from a specific category. as of 3/16. Society 2004 2008 2009 New York 2015 % Total Amazon Purchasers % Total Amazon Purchasers % Total Amazon Purchasers % Total Amazon Purchasers Which Purchased Home & Which Purchased Household Which Purchased Which Purchased: Garden Products: Products: Electronics (<$50) Products: 11% 10% 21% Men’s Apparel – 12% Women’s Clothing – 9% Source: Internet Retailer. Strathwood Pinzon AmazonBasics North Eleven.. 2004 – 2015 Outdoor Home Electronic Fashion Brands Furniture Goods Accessories Franklin & Freeman.. Scout + Ro.

. Thedustyrosestyle.New distribution models emerging enabling direct-to-consumer commerce in the home.com.... CNBC..com..Retailers Come Into Homes.com KPCB INTERNET TRENDS 2016 | PAGE 63 .Brands Become Retailers.Products Become Brands. Stitchfix. Insidebusinessnyc.ru. Products  Brands  Retailers  New DTC Brands Retailers Products / Brands Distribution Models (Casper) (Warby Parker) (Thrive Market) (Stitch Fix) Image: Myjane..com. Less differentiation between products / brands / retailers as single products evolve into brands + consumers shop directly from brands + retailers leverage insights to develop own vertically-integrated brands... Thrivemarket.. Funandfit..... Retailers Become Products / Brands.com..org.com.tumblr. Vanityfair.

Warbyparker.com... Digiday. Warby Parker figures as of February 2015. Ft.. Based on sales figures from trailing 12 months..com KPCB INTERNET TRENDS 2016 | PAGE 64 Note: *Excludes gas stations.000 Tiffany & Co.Warby Parker @ $3K Annual Sales per Square Foot = One of Top Grossing Physical Retailers per Square Foot in USA Offline  Online Online  Offline (Neiman Marcus) (Warby Parker) 26% of F2015 Sales on Internet.. eMarketer Image: Pursuitist. $2.. Fast Company.Physical Retailers Become Digital Retailers.560 Athletica Michael Kors $1. .951 Lululemon $1. +24% Y/Y 31 locations (5/16).466 Source: Company filings. Digital Retailers Become Data-Optimized Physical Retailers..546 Warby Parker $3..New Products / Brands / Retailers Launching Physical Stores / Showrooms / Retail Channels..com... up from 10 locations (12/14) Top 5 Physical Retailers by Sales / Sq. Physical Retailers Evolving & Increasing E-Commerce Presence.Omni-Channel is Key... 2015* Apple $5. Time. USA..

Serving Broader Communities April 2015 December 2015 May 2016 Source: Ring.Connected Product Users Easily Notified When to Buy / Upgrade. Nextdoor.com.. Whas11. WLKY News Image: Ring.. Can Benefit from Viral Sharing Ring Connected Devices with Sharing of Events Captured on Ring Proliferation of Ring Connected Devices Sharable Content on Neighborhood Level – Nextdoor...... TV.com KPCB INTERNET TRENDS 2016 | PAGE 65 .

Internet-Enabled Retailers / Products / Brands On Rise = Bolstered by Always-On Connectivity + Hyper-Targeted Marketing + Images + Personalization KPCB INTERNET TRENDS 2016 | PAGE 66 .

Combatant Gentlemen Source: One Million by One Million Blog. What we do is we Stance targeted the ads to adults whose interests include the put these guys into cohorts and we say. we have a lot of guys in real estate who are climbing up the ladder..’ placemen & build upon Instagram’s unique visual nature and strong targeting capabilities. For us.Hyper-Targeted Marketing = Driving Growth for Retailers / Products / Brands Internet = Driving Force for New Product Introductions with Hypertargeting / Intent-Based Marketing via Facebook / Twitter / Instagram / Google.Vishaal Melwani CEO and Founder. ‘These are our real estate Star Wars movies.For example...000 in sales.com. but excluded those interested only in specific guys.. it was a simple math decided to create a dedicated ad set to maximize its ad spend against this equation. Combatant Gentlemen Stance ‘Our customer acquisition strategy was Facebook. ‘We target based on [Facebook] likes. Stance Facebook was worth $1. . Instagram Business Image: Pinterest.. Our [target customer] After noticing that its Instagram placements were outperforming all other typically spends a lot of time on Facebook.Every $100 we spent on placement types in its Star Wars collection launch campaign. Instagram Business KPCB INTERNET TRENDS 2016 | PAGE 67 .. The ‘Sock Wars’ campaign generated an impressive 36% boost to return on ad spend.’ Star Wars characters.

Stitch Fix User Experience = Micro Data-Driven Engagement & Satisfaction.. Stylists use Pinterest boards + access to algorithms to help improve product selection Source: Stitch Fix Image: Forbes.com KPCB INTERNET TRENDS 2016 | PAGE 68 ...99.. Each Customer = Differentiated Experience. 46% of active clients provide in comfort of home / return items they don’t like drive future product selection Pinterest profiles.... Stitch Fix = Applying Netflix / Spotify-Like Content Discovery to Fashion.99% of Fixes Shipped = Unique Data-Driven Onboarding Process Ship ‘Fixes’ with Curated Items Customer Preferences & = Mix of Art + Science Based on Preferences / Style Feedback Collect data points on customer preferences / Allows clients to try products selected by stylists Collect information on customer experience to style / activities.. Data Collection + Personalization / Curation + Feedback.

. item will be correlation between probability of purchase per from ~30% of clients a year ago purchased) for specific demographics.100% of Purchases from Recommendations Data Collection on Data Networking Effect.Stitch Fix Back-End Experience = 39% of Clients Purchase Majority of Clothing from Stitch Fix vs. Strong Consumer Engagement / Item-by-Item Basis Coupled with Helps Stylist Predict Success of Anticipation.com KPCB INTERNET TRENDS 2016 | PAGE 69 ..Increased Wallet User Insights Items with Specific Client Share...... ~30% of Clients Y/Y Stitch Fix = Data On Users + Data on Items + Constantly Improving Algorithms = Drive High Customer Satisfaction.. up probability of success (i. uses algorithms + feedback to determine probability of success... Stitch Fix captures 50-150 attributes on each The more information collected.. the better the 39% of Stitch Fix clients get majority of item.e. Stitch Fix showing 1:1 clothing from Stitch Fix. allows item and observed purchase rate over time stylists to better select items for clients Example of Product Success Probability by Age Actual Proportion Purchased 100% 80% 60% 40% Example of Product Success Probability by Sizing 20% 0% 0% 20% 40% 60% 80%100% Probability of Purchase Source: Stitch Fix Image: Cheapmamachick.

StellaService and ROI Revolution to collect and verify information. Harry’s. ForeSee. Touch of Modern. Compuware APM.) + On-Demand Purchasing Options via Mobile / Web + Access to Growth Capital + Millennial Appeal = Enabling Rapid Growth for New Products / Brands / Retailers Sales Growth For Select Internet Retailers*. Blue Apron. First 5 Years Since Inception $100 $80 Annual Sales ($MM) $60 $40 $20 Average $0 0 1 2 3 4 5 Year Since Inception Source: Internet Retailer “2016 Top 500 Guide”. Companies shown include Birchbox. Nasty Gal. The Top 500 Guide uses a combination of internal research staff and well-known e-commerce market measurement firms such as Compete.. comScore. Dollar Shave Club. . Boxed. Rent the Runway. Everlane. Ipsy. Casper. Took Nike = 14 Years / Lululemon = 9 / Under Armour = 8** Viral Marketing / Sharing Mechanisms (Facebook / Instagram / Snapchat / Twitter.. Experian Marketing Services. Bonobos. Honest Company.Many Internet Retailers / Brands @ $100MM in Annual Sales* in <5 Years. Chart includes pure-play e-commerce retailers and evolved pure-play retailers. FitBit.. **Years to reach $100MM in annual revenue in 2015 dollars. USA.. KPCB INTERNET TRENDS 2016 | PAGE 70 TheRealReal. and Warby Parker. company filings Note: *Data only for e-commerce sales and shown in 2015 dollars. GoPro.

RE-IMAGINING COMMUNICATION VIA SOCIAL PLATFORMS – – VIDEO – IMAGE – MESSAGING .

Visual (Video + Image) Usage Continues to Rise KPCB INTERNET TRENDS 2016 | PAGE 72 .

Engagement of Leading Social Networks.. USA. 12/15 1.. KPCB INTERNET TRENDS 2016 | PAGE 73 . Facebook / Snapchat / Instagram.. Age 18-34 Digital Audience Penetration vs.000 800 600 Snapchat 400 Instagram 200 Twitter 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % Reach Among Age 18-34 Source: ComScore Media Metrix Multi-Platform. 12/15..Millennial Social Network Engagement Leaders = Visual.200 Average Monthly Minutes per Visitor 1.

Gen Z Millennials Gen Z vs Tech Savvy: 2 screens at once Tech Innate: 5 screens at once Communicate with text Communicate with images Curators and Sharers Creators and Collaborators Now-focused Future-focused Optimists Realists Want to be discovered Want to work for success Source: “Engaging and Cultivating Millennials and Gen Z. KPCB INTERNET TRENDS 2016 | PAGE 74 . 12/14. Note: Gen Z defined in this report as those born after 1995.” Denison University and Ologie.Generation Z (Ages 1-20) = Communicates with Images Attributes – Millennials vs. In 2016 they are ages 1-20. Note that there may be different opinions on which years each generation begins and ends.

Video Viewing Evolution Over Past Century = Live  On-Demand  Semi-Live  Real-Live KPCB INTERNET TRENDS 2016 | PAGE 75 .

1999 . Snapchat.com 1926 . Twitter.Video Evolution = Accelerating Live (Linear)  On-Demand  Semi-Live  Real-Live Live (Linear) On-Demand Semi-Live Real-Live Traditional TV DVR / Streaming Snapchat Stories Periscope + Facebook Live 1926 1999 2013 2015 / 2016 Tune-In or Watch on Tune-In Within 24 Tune-In / Watch Miss Out Own Terms Hours or Miss Out on Own Terms Mass Concurrent Mass Disparate Mostly Personal Mass Audience. Audience Audience Audience yet Personal Real-Time Buzz Anytime Buzz Anytime Buzz Real Time + Anytime Buzz Images: Facebook.First television introduced by John Baird to members of the Royal Institution. KPCB INTERNET TRENDS 2016 | PAGE 76 .First DVR released by Tivo. 2013 – Snapchat Stories launched. BT. Netflix. TiVopedia.

Video Usage / Sophistication / Relevance Continues to Grow Rapidly KPCB INTERNET TRENDS 2016 | PAGE 77 .

Global. KPCB INTERNET TRENDS 2016 | PAGE 78 . Facebook video views represent any video shown onscreen for >3 seconds (including autoplay). Q2:15 Facebook video views data based on KPCB estimate. Snapchat video views counted instantaneously on load.User-Shared Video Views on Snapchat & Facebook = Growing Fast Facebook Daily Video Views. Snapchat. Snapchat Daily Video Views. Q3:14 – Q3:15 Global. Q4:14 – Q1:16 10 10 Video Views per Day (B) Video Views per Day (B) 8 8 6 6 4 4 2 2 0 0 Q3:14 Q4:14 Q1:15 Q2:15* Q3:15 Q4:14 Q1:15 Q2:15 Q3:15 Q4:15 Q1:16 Source: Facebook.

Smartphone Usage Increasingly = Camera + Storytelling + Creativity + Messaging / Sharing KPCB INTERNET TRENDS 2016 | PAGE 79 .

Stories (Personal)  Live (Personal + Pro Curation)  Discover (Pro) Stories (Personal) Live (Personal + Pro Curation) Discover (Professional) 10/13 Launch 6/14 1/15 Alex Jessica Alexander Our EDC Story   Dino Cindy Aaron Anjney Alexia Arielle Aviv Allison Andrew 10–20MM Snapchatters View 70MM+ Snapchatters View Live Stories Each Day Discover Each Month More Users Watched College Top Performing Channels Average Football and MTV Music Awards on 6 – 7 minutes per Snapchatter per Snapchat than Watched the Events Day on TV Source: Snapchat KPCB INTERNET TRENDS 2016 | PAGE 80 ..Snapchat Trifecta = Communications + Video + Platform..

Advertisers / Brands = Finding Ways Into.. Camera-Based Storytelling + Creativity + Messaging / Sharing KPCB INTERNET TRENDS 2016 | PAGE 81 ..

Brand Filters Integrated into Snapchat Snaps by Users.. Bill & Melinda Gates in UK and applied 200K+ times. Foundation donated $3 to (RED)’s fight against AIDS 12/15 – 2/16 12/15 +23% Visitation Lift Within 7 Days +90% Higher Likelihood of Donating to (RED) of Seeing Friend’s Geofilter Among Those Who Saw Geofilter Source: Snapchat KPCB INTERNET TRENDS 2016 | PAGE 82 .. in Venue ‘Love at First Bite’ ‘World AIDS Day – Join the Fight’ by KFC by (RED) 9MM+ Views 76MM+ Views Geofilter offered @ 900+ KFCs Each time a geofilter was sent. Often Geo-Fenced.

Branded Snapchat Lenses & Facebook Filters. Facebook Time on sponsored lens excludes time taking and uploading image / video... KPCB INTERNET TRENDS 2016 | PAGE 83 . Increasingly Applied by Users Taco Bell Cinco de Mayo Lens Gatorade Super Bowl Lens Iron Man Filter from MSQRD 224MM Views on Snapchat 165MM Views on Snapchat 8MM+ Views on Facebook 5/5/16 2/7/16 3/9/16 Average Snapchatter Plays With Sponsored Lens for 20 Seconds Source: Snapchat.

. Real-Live = Facebook Live.. New Paradigm for Live Broadcasting KPCB INTERNET TRENDS 2016 | PAGE 84 .

. 5/16 Kohl’s = Mentioned 2 Times in Video Kohl’s = Became Leading App in USA iOS App Store Chewbacca Mask Demand Rose Dramatically Source: Facebook KPCB INTERNET TRENDS 2016 | PAGE 85 .UGC (User Generated Content) @ New Orders of Viewing Magnitude. Facebook Live = Raw / Authentic / Accessible for Creators & Consumers Candace Payne in Chewbacca Mask on Facebook Live Most Viewed Live Video @ 153MM+ Views..

. It’s Just Getting Started KPCB INTERNET TRENDS 2016 | PAGE 86 ... Live Sports Viewing = Has Always Been Social But.

.How Often are You Able to Watch a Game (on Sidelines or TV) with All Your Friends Who Share Your Team Love? Live Streaming – Wrapped with Social Media Tools – Helps Make that More of a Reality. KPCB INTERNET TRENDS 2016 | PAGE 87 ..

NFL Live Broadcast TV of Thursday Night Football on Twitter (Fall 2016) Hypothetical Mock-Up Complete Sports Viewing Platform = Live Broadcast + Analysis + Scores + Replays + Notifications + Social Media Tools Vertical View = Horizontal View = Tune-In Notifications. Design provided by Brian Tran (KPCB Edge) KPCB INTERNET TRENDS 2016 | PAGE 88 . Full- Game Reminders. Live Broadcast + Tweets Unencumbered. Scoreboard Allows Fans to Screen.2016E = Milestone Year for ‘Traditional’ Live Streaming on Social Networks.. TV-like Viewing Follow Play-by-Play Dashboard for Social Breaking Actions Media Engagement Experience Tweets Engage Fans in Professional Commentary and Toggle Between Tweets Real-Time Conversation Analysis from Stadium / Nearby / All Source: KPCB Hypothetical Mock-Up..

Image Usage / Sophistication / Relevance Continues to Grow Rapidly KPCB INTERNET TRENDS 2016 | PAGE 89 .

Image Growth Remains Strong Daily Number of Photos Shared on Select Platforms. Messenger data per Facebook (~9. Facebook shares ~2B photos per day across Facebook. WhatsApp data estimated based on average of photos shared disclosed in Q1:15 and Q1:16. KPCB estimates Note: Snapchat data includes images and video.500 Facebook Messenger (2015 only) Instagram 2.000 # of Photos Shared per Day (MM) Snapchat 2. and WhatsApp KPCB INTERNET TRENDS 2016 | PAGE 90 (2015).500 3.500 Facebook- 1. Global.5B photos per month).000 WhatsApp (2013 onward only) Facebook 1. Snapchat stories are a compilation of images and video. . Company disclosed information. 2005 – 2015 3. Instagram. Messenger.000 owned properties 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Snapchat. Instagram data per Instagram press release.

Images = Monetization Options Rising KPCB INTERNET TRENDS 2016 | PAGE 91 .

Image-Based Platforms Like Pinterest = Often Used for Finding Products / Shopping. USA..500 US consumers. USA. 4/16 (% of Respondents). KPCB INTERNET TRENDS 2016 | PAGE 92 . 30% of which where Pinterest MAUs as of 4/16. 4/16 60% 55% Viewing photos 60% 50% Finding / shopping for products 55% 40% Sharing photos / videos/ personal messages 24% 30% Watching videos 15% 20% 12% 12% News 10% 9% 10% 5% 3% Networking / promotion 10% 0% Pinterest Facebook Instagram Twitter LinkedIn Snapchat Source: Cowen & Company ”ShopTalk Conference Takeaways: A Glimpse Into The Future of Retail & eCommerce” (05/16) Note: Based on Cowen & Company proprietary Consumer Internet Survey from April / May 2016 of 2. % of Users on Each Platform Who Utilize to ‘What Do You Use Pinterest For?’ Find / Shop for Products..

000 US persons aged 18+ KPCB INTERNET TRENDS 2016 | PAGE 93 .0: What’s changed?” Note: Based on SurveyMonkey survey conducted in June 2015 on 2.. Average Daily Time Spent per User..Image-Based Platforms Like OfferUp = High (& Rising) Engagement Levels & Used for Commerce.. USA. Cowen & Company “Twitter/Social User Survey 2.. 11/14 & 6/15 50 42 11/14 41 40 6/15 Minutes per Day 30 25 25 25 21 21 21 21 20 17 17 13 10 0 Facebook Instagram OfferUp Snapchat Pinterest Twitter Source: OfferUp..

First 8 Years Since Inception $16 $12 eBay OfferUp GMV ($B) $8 $4 $0 0 1 2 3 4 5 6 7 8 Year Since Inception Source: OfferUp. eBay was launched in 1995 and OfferUp in 2011. Note: Shown on a calendar year basis and in nominal dollars. eBay GMV Growth... OfferUp vs. company filings... and KPCB estimates.. KPCB INTERNET TRENDS 2016 | PAGE 94 .Image-Based Peer-to-Peer (P2P) Marketplace OfferUp = Ramping Faster than eBay @ Same Stage.

5MM products are available on Houzz for purchase directly within the app and on Houzz. Houzz – Content (Photos) / Community (Professionals + Consumers) / Commerce (Products)..2MM 120K 400K 70K Source: Houzz 5..5M 1. 4/12 – 4/16 40MM Consumers 5. .5M Products Available for Purchase on Houzz Content (Photos) 13MM Houzz Marketplace Commerce (All Launched 10/14 Products) 10MM Active Professionals 5. KPCB INTERNET TRENDS 2016 | PAGE 95 There are 13MM total products available on Houzz Marketplace + linked to merchant sites..Image-Based Platform Houzz = Content + Community + Commerce Continue to Ramp.com (Houzz Marketplace)...

.5x Higher Purchase Conversion View In My Room (2/16 Launch) Sketch (12/15) Pick a Product & Preview What It Looks Like Add Products from Houzz Marketplace to In Any Room Through Camera Any Photo on Houzz or Your Own Sketch 50% of Users Who Made a Purchase in Latest Version of Houzz App (Since 2/17/16) Over 500K Sketches Saved Since Launch Used View In My Room Users = 97% More Likely to Use Houzz Next Time Sketch Users = 5x More Likely to Purchase.5...... Spend 4x More Time in App Spend 3x More Time in App Source: Houzz KPCB INTERNET TRENDS 2016 | PAGE 96 ..Houzz Personalized Planning with Images = 3-4x Higher Engagement.5x More Likely to Purchase..... They Shop.

Messaging = Evolving Rapidly KPCB INTERNET TRENDS 2016 | PAGE 97 .

Messaging Leaders = Strong User (+ Use) Growth KPCB INTERNET TRENDS 2016 | PAGE 98 .

Instagram. Global. Twitter users excludes SMS fast followers. 2011 – 2015 1..Messaging Continues to Grow Rapidly. WhatsApp.200 WhatsApp Launched 2010 Monthly Active Users (MM) 1. Leaders = WhatsApp / Facebook Messenger / WeChat Monthly Active Users on Select Social Networks and Messengers. Morgan Stanley Research Note: 2013 data for Instagram and Facebook Messenger are approximated from statements made in early 2014.. KPCB INTERNET TRENDS 2016 | PAGE 99 . LinkedIn. Twitter.000 Facebook Messenger (2011) 800 WeChat (2011) 600 Instagram (2010) 400 Twitter (2006) 200 LinkedIn (2003) 0 2011 2012 2013 2014 2015 LinkedIn Twitter Instagram WhatsApp WeChat Facebook Messenger Source: Facebook. Tencent.

Messaging = Evolving from Simple Social Conversations to More Expressive Communication... KPCB INTERNET TRENDS 2016 | PAGE 100 .

Messaging Platform Evolution =
More Tools for Simple Self-Expression
Global Electronic Messaging Platforms –
Evolution of Simple Self-Expression

Japanese Cell Phones – Type- AOL Instant Messenger – NTT DoCoMo- Apple iOS 5 –
Based Emoji Convert Text Emoticon to Emoji Native Emoji
1990s Graphical Smiley 1999 2011
1997

Line – Bitstrips – Bitmoji Facebook Messenger – Snapchat –
Stickers Personalized Emoji GIF Keyboard Lenses
2011 2014 2015 2015

Source: Wired, Company Statements, Press Releases.
KPCB INTERNET TRENDS 2016 | PAGE
101

...Messaging =

Evolving from
Simple Social Conversations to
Business-Related Conversations

KPCB INTERNET TRENDS 2016 | PAGE
102

Asia-Based Messaging Leaders =
Continue to Expand Uses / Services Beyond Social Messaging

Name KakaoTalk WeChat LINE
Launch March 2010 January 2011 June 2011
Primary Country Korea China Japan

Banking / Financial Services Kakao Bank (11/15) WeBank (1/15) Debit Card (2016)

Enterprise  Enterprise WeChat (3/16) 
Kakao Hairshop (1H:16E)
Online-To-Offline (O2O)  Grocery Delivery (2015)
Kakao Driver (1H:16E)
New Services
Added 2015 -16* TV Kakao TV (6/15)  Line Live & Line TV (2015)

Video Calls / Chat (6/15)  

Kakao Taxi
Taxi Services  
(3/15)

Messaging   

Group Messaging   

WeChat Phonebook
Voice Calls Free VoIP calls (2012) 
(2014)

Payments KakaoPay (2014) (2013) Line Pay (2014)
Previous Existing
Services Sticker shop
Stickers (2012) (2011)
(2013)

Games Game Center (2012) (2014) (2011)

Delivery support
Commerce Kakao Page (2013) Line Mall (2013)
w / Yixun (2013)

Media Kakao Topic (2014)  

QR code
QR Codes  
identity (2012)

User Stories / Moments Kakao Story (2012) WeChat Moments Line Home (2012)

Developer Platform KakaoDevelopers WeChat API Line Partner (2012)

Source: Company websites, press releases, Morgan Stanley Research.
*Blue shading denotes that at least one of the platforms listed has added new features since 2015. Some features for other platforms may have been added in prior years KPCB INTERNET TRENDS 2016 | PAGE
Note: Enterprise denotes product made specifically for messaging or social networking within the enterprise, which is distinct from B2C messaging where businesses engage with current or potential
customers. 103

Messaging Secret Sauce = Magic of the Thread = Conversational...
Remembers Identity / Time / Specifics / Preferences / Context

Hyatt Rogers Communications
Check Availability / Reservations / Order Room Service Ask Questions / Update Account / Set Up New Plan

Started Offering Customer Service on Started Offering Customer Service on
Facebook Messenger in 11/15 Facebook Messenger in 12/15
+20x Increase in Messages Received 65% Increase in Customer Satisfaction
by Hyatt Within ~1 Month 65% Decrease in Customer Complaints

Source: “Digital Transformation for Telecom Operators,” by Deloitte, 2016. Wired.
The Commissioner for Complaints for Telecommunications Services (CCTS) reported a 65 per cent decrease in customer complaints between 8/15 and 1/16 compared to the previous six months KPCB INTERNET TRENDS 2016 | PAGE
104

Business / Advertising Partnerships / B2C Chat for Official Engagement Payments (Within Other SMEs Accounts Messengers) Services ~80% Official Official 10MM+ WeChat Pay Weidian Users Follow Official Accounts Accounts Official Accounts (2013) (2014) Accounts (2012) (2012) 1B+ Facebook Messages / Month Messaging via Shopify & 50MM+ Between Businesses and Pages (2011) Sponsored Payments Zendesk Small Business Users. “WeChat’s Impact: A Report on WeChat Platform Data. various press releases. +2x Y/Y Messages (2015) Partnership Pages 80% Chatbots (2016) (2015 / 2016) Businesses Active on Platform (2016) Mobile Official Accounts & 2MM+ Line @ Official Commerce / Line Pay Line@ + Official -.Messaging Platforms = Millions of Business Accounts Helping Facilitate Customer Service & Commerce. (2012 / 2015) Accounts Stores on (2014) Accounts (2012) Line@ (2016) Chatbots Platform (2016) Source: WeChat.” by Grata (2/15) KPCB INTERNET TRENDS 2016 | PAGE 105 . Line... Facebook Messenger.

. 7/15..Conversation / Payment / Confirmation Ends on Line Visit Instagram Browse Inquire Get Confirm Ship & Shop Products About Payment Payment Track Order Product via Details Line Source: Commerce + Mobile: Evolution of New Business Models in SEA....Messaging Platforms = Conversational Commerce Ramping Shopper in Thailand on Instagram Browsing Begins on Instagram. KPCB INTERNET TRENDS 2016 | PAGE 106 .

Global.Best Ways for Businesses to Contact Millennials = Social Media & Chat. Worst Way = Telephone Popularity of Business Contact Channels. Percentage may not add up to 100 owing to rounding. N = 717 Contact Centers.. email.g.” Dimension Data.. 2015. KPCB INTERNET TRENDS 2016 | PAGE Generation Y is typically referred to as “Millennials” 107 . SMS) Generation Y 24% 24% 21% 19% 12% (born 1981-1999) (1st choice) (1st choice) (3rd choice) (4th choice) (5th choice) Generation X 21% 12% 28% 11% 29% (born 1961-1980) (3rd choice) (4th choice) (2nd choice) (5th choice) (1st choice) Baby Boomers 7% 2% 24% 3% 64% (born 1945-1960) (3rd choice) (5th choice) (2nd choice) (4th choice) (1st choice) Silent 2% 1% 6% 1% 90% Generation (3rd choice) (4th choice) (2nd choice) (5th choice) (1st choice) (born before 1944) Source: “Global Contact Center Benchmarking Report. by Age Which channels are most popular with your age-profiled customers? (% of contact centers) % of Centers Reporting Most Popular Contact Channels by Generation Internet / Electronic Smartphone Social Media Messaging Telephone Web Chat Application (e. Results are shown based on contact centers that actually tracked channel popularity.

Messaging Leaders = Want to Change That KPCB INTERNET TRENDS 2016 | PAGE 108 . Android / iOS Home Screens (Like Portals in Internet 1...0) = Mobile Power Alleys (~2008-2016).

Most commonly used apps includes preloads.. 80% of Time Spent in 3 Apps Day in Life of a Mobile User.12 Apps Used Daily.Average Global Mobile User = ~33 Apps. KPCB INTERNET TRENDS 2016 | PAGE 109 .. 5/16.. *Apps installed does not include pre-installed apps.. 2016 Average # Apps Average Number Average Number of Time Spent on Most Commonly Installed on of Apps Used Apps Accounting for Phone (per Day) Used Apps Device* Daily 80%+ of App Usage Facebook USA 37 12 3 5 Hours Chrome YouTube Facebook Worldwide 33 12 3 4 Hours WhatsApp Chrome Source: SimilarWeb.

iOS Facebook Messenger Home Screen Inbox KPCB INTERNET TRENDS 2016 | PAGE 110 ...Messaging Apps = Increasingly Becoming Second Home Screen.

RE-IMAGINING HUMAN / COMPUTER INTERFACES – – VOICE – TRANSPORTATION .

Re-Imagining Voice = A New Paradigm in Human-Computer Interaction KPCB INTERNET TRENDS 2016 | PAGE 112 .

Evolution of Basic Human-Computer Interaction Over ~2 Centuries = Innovations Every Decade Over Past 75 Years KPCB INTERNET TRENDS 2016 | PAGE 113 .

“History of Computer Interfaces” (Saul Greenberg) KPCB INTERNET TRENDS 2016 | PAGE 114 . Human-Computer Interaction (1830s – 2015).0  Touch 3.0  Voice Punch Cards for QWERTY Electromechanical Electronic Computer Paper Tape Reader Informatics Keyboard Computer (Z3) (ENIAC) (Harvard Mark I) 1832 1872 1941 1943 1944 Mainframe Computers Trackball Joystick Microcomputers Portable Computer (IBM SSEC) 1952 1967 (IBM Mark-8) (IBM 5100) 1948 1974 1975 Commercial Use of Commercial Use Commercial Use Touch + Camera . USA = Touch 1.0  Touch 2. Voice on Mobile Voice on Connected / Window-Based GUI of Mouse of Mobile based Mobile (Siri) Ambient Devices (Xerox Star) (Apple Lisa) Computing Computing 2011 (Amazon Echo) 1981 1983 (PalmPilot) (iPhone 2G) 2014 1996 2007 Source: University of Calgary.

Voice as Computing Interface = Why Now? KPCB INTERNET TRENDS 2016 | PAGE 115 .

.. Humans can speak 150 vs. hands-free.Voice = Should Be Most Efficient Form of Computing Input Voice Interfaces – Voice Interfaces – Consumer Benefits Unique Qualities 1) Fast 1) Random Access vs. processor / connectivity – great for Driven / Keyboard Free Internet of Things.com. Steve Cheng.. Ability to understand wide context of questions based on prior questions / 3) Requires Natural Language interactions / location / other semantics Recognition & Processing Source: Learn2Type.. on average. 2) Low Cost + Small Footprint Requires microphone / speaker / 3) Personalized + Context. Global Product Lead for Voice Search. 2) Easy Convenient. National Center for Voice and Speech. Yahoo! Directory. instant. type 40 Hierarchical GUI words per minute. Google KPCB INTERNET TRENDS 2016 | PAGE 116 .... Think Google Search vs..

Most people underestimate the difference between 95% and 99% accuracy – 99% is a game changer. No one wants to wait 10 seconds for a response.. CHIEF SCIENTIST AT BAIDU Source: Andrew Ng.. Chief Scientist. are the two key metrics for a production speech system. followed by latency. Baidu Note: P2M = person to machine.. KPCB INTERNET TRENDS 2016 | PAGE 117 . Accuracy.Person to Machine (P2M) Voice Interaction Adoption Keys = 99% Accuracy in Understanding & Meaning + Low Latency As speech recognition accuracy goes from say 95% to 99%. ANDREW NG.. all of us in the room will go from barely using it today to using it all the time.

000...000 accuracy @ ~70% 10.000 Words Recognized by Machine @ ~90% 100. per Google Next Frontier = Recognition in heavy background noise in far-field & across diverse speaker characteristics (accents. Google Note: For the English language.) Words Recognized by Machine (per Google). Voice Search in Low Noise Environment.000 accuracy 1.000...Machine Speech Recognition @ Human Level Recognition for.000 1. KPCB INTERNET TRENDS 2016 | PAGE 118 . pitch. Voice Technology and Research Lead.000 100 10 1 1970 1980 1990 2000 2010 2016 Source: Johan Schalkwyk. 1970 – 2016 10.

. (1) Data shown is word accuracy rate on Mandarin speech recognition on one of Baidu's speech tasks. (3) Data as of 1/16 and refers to recognition accuracy for English language. +90% Accuracy for Major Platforms Word Accuracy Rates by Platform*. Word accuracy rate based on data collected from thousands of speakers and real world queries with noise and accents...2015) & Assistant App (2012 .2016) Source: Baidu.5% WER is better than what most native speakers can accomplish on this task. Google. 119 . 2012 – 2016 *Word accuracy rate definitions are unique to each company. WER across different datasets and languages are generally not comparable. A 3. (2) Data as of 5/15 and refers to recognition accuracy for English language.. VentureBeat.see footnotes for more details 100% 90% 80% Word Accuracy Rate (%) 70% 60% 50% 40% 30% 20% 10% 0% 3 Baidu 1 Google 2 Hound Voice Search (2012 . SoundHound Note: *Word Error Rate (WER) definitions are specific to each company.Voice Word Accuracy Rates Improving Rapidly. Real world mobile phone speech data is very noisy and hard for humans to transcribe. Word error rate is evaluated using real world search data which is KPCB INTERNET TRENDS 2016 | PAGE extremely diverse and more error prone than typical human dialogue.WER. Word accuracy rate = 1 .2016) (2013 .

Evolving from Keyboards to Microphones & Keyboards = Still Early Innings KPCB INTERNET TRENDS 2016 | PAGE 120 .. Computing Interface..

and 2.. USA. USA. These surveys were conducted via an online panel with representative sample sizes for the national KPCB INTERNET TRENDS 2016 | PAGE population in the US.125 US smartphone owners that completed the surveys in 2013. 2014 and 2015 respectively. and/or 2015 Local Search surveys.Mobile Voice Assistant Usage = Rising Quickly. 2014. 2014 – 2015 80% Software / technology has 32% improved 35% 65% More aware of products via 32% 60% 56% advertising / friends / family / other ways 30% % of Total Respondents Need to use more because of 23% lifestyle / schedule 20% 40% 30% More relevant services to meet 9% needs 9% 20% 3% Don't know why 4% 2015 1% Other (Please Specify) 2014 0% 2% 2013 2014 2015 Source: Thrive Analytics. “Local Search Reports” 2013-2015 Note: Results highlighted in these charts are from the 2013.102..058. 121 . 2013 – 2015 Change. There were 1. 2. Primarily Driven By Technology Improvements % of Smartphone Owners Using Voice Assistants Voice Assistant Usage – Primary Reason for Annually. % of Respondents.

per Google Trends Google Trends imply queries associated with voice-related commands have risen >35x since 2008 after launch of iPhone & Google Voice Search Google Trends.Google Voice Search Queries = Up >35x Since 2008 & >7x Since 2010. Worldwide. 122 . 2008 – 2016 Navigate Home Call Mom Call Dad 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Google Trends Note: Assume command-based queries are voice searches given lack of relevance for keyword-based search. Aggregate growth values determined using growth in Google Trends for three queries listed KPCB INTERNET TRENDS 2016 | PAGE above.

Since Q2:14 Usage across all Baidu products growing rapidly.typing Chinese on small cellphone keyboard even more difficult than typing English.. from multiple products.Baidu Voice = Input Growth >4x. 2014 – 20161 Global... 123 . Most of KPCB INTERNET TRENDS 2016 | PAGE these API calls were for Mandarin TTS. (2) Data shown is growth of TTS (text to speech) at Baidu. Most of these API calls were for Mandarin speech recognition.. in terms of the total number of API calls to Baidu's TTS system across time.Output >26x. Baidu Text to Speech (TTS) Daily Usage by API Calls. as measured by the number of API calls to Baidu's speech recognition system across time..Text-to-Speech supplements speech recognition & key component of man-machine communications using voice Baidu Speech Recognition Daily Usage by API Calls.. from multiple products. 2014 – 20162 API Calls API Calls Q2:14 Q3:14 Q4:14 Q1:15 Q2:15 Q3:15 Q4:15 Q1:16 Q2:14 Q3:14 Q4:14 Q1:15 Q2:15 Q3:15 Q4:15 Q1:16 Source: Baidu Note: (1) Data shown is growth of speech recognition at Baidu. Global.

Local information refers to queries about weather. flight status. Uber KPCB INTERNET TRENDS 2016 | PAGE and transportation. movies.. mortgages. 124 . maps and navigation. Voice Query Breakdown – Observed Data on Hound App... games. calendars. USA. etc. etc. stocks. dictionary. alarms. Users most care about speed / accuracy / ability to follow up / ability to understand complex queries. timers. hotels. General information refers to queries about facts. etc.. 2016 Local Fun & Information Entertainment 22% 21% Personal General Assistant Information 27% 30% Source: SoundHound Note: Based on most recent 30-days of user activity. sports. restaurants.Hound Voice Search & Assistant App = 6-8 Queries Across 4 Categories per User per Day Seeing 6-8 queries per active user per day among 100+ domains across 4 categories. Fun & entertainment refers to queries about music. nutrition. Personal assistant refers to queries and commands about phone / communications.

. searches & share is per 1010data. are voice searches per Microsoft reps. 1010data. Baidu (9/14) June 2015 2015 May 2016 Siri – handles more Amazon Echo – Android – 1 in 5 than 1 billion requests fastest-selling speaker searches on mobile per week in 2015.. Fast Company KPCB INTERNET TRENDS 2016 | PAGE 125 . Andrew Ng Chief Scientist.Bing Taskbar @ 25% September 2014 May 2016 2020 Baidu – 1 in 10 queries Bing – 25% of In five years time at least 50% come through speech. Source: Baidu World 2014.Voice = Gaining Search Share. growing. searches performed on of all searches are going to be either through images or Windows 10 taskbar speech.. ComScore. MediaPost. Gadgets 360. @ for ~25% of app in USA are voice through speech.Baidu @ 10%. USA speaker market. Gigaom.. SearchEngineLand... Recode. USA Android @ 20%. Google I/O 2016.

.. Hands & Vision-Free = Expands Concept of ‘Always On’ KPCB INTERNET TRENDS 2016 | PAGE 126 . Voice as Computing Interface.

800 respondents who were smartphone users over the age of 18. 20161 USA. Primary Setting for Voice Usage.@ Home / In Car / On Go Primary Reasons for Using Voice. (1) In response to the survey KPCB INTERNET TRENDS 2016 | PAGE question stating “Why do you use voice/search commands? Check all that apply. 20162 Useful when hands / vision 61% occupied Home 43% Faster results 30% Difficulty typing Car 36% on certain 24% devices They're fun / cool 22% On the go 19% To avoid confusing 12% menus Work 3% Other 1% 0% 20% 40% 60% 80% 0% 10% 20% 30% 40% 50% Source: MindMeld “Intelligent Voice Assistants Research Report – Q1 2016” Note: Based on survey of n = 1. half female half male. geographically distributed across the United States.” (2) In response to the survey question stating “Where do you use voice features the most?” 127 ...Hands & Vision-Free Interaction = Top Reason to Use Voice. USA.

.... Platforms Being Built. Third Party Developers Moving Quickly KPCB INTERNET TRENDS 2016 | PAGE 128 . Voice as Computing Interface.

Amazon Alexa Voice Platform Goal = Voice-Enable Devices = Mics for Home / Car / Mobiles.. AFTVnews Image: Geekwire... Amazon Alexa. Alexa Voice Service – OEM / Developer Integrations (10+ integrations.com. Heylexi.) Home Car On Go (Various OEMs) (Ford Sync) (Lexi app) Ring Invoxia Philips Hue Ecobee Scout Security ToyMail Luma Alexa ‘Skills’ Kit Developers = ~950 Skills (5/16) vs.com KPCB INTERNET TRENDS 2016 | PAGE Note: Amazon launched the Alexa Skills Kit for third-party developers in 6/15. 129 .. 14 Skills (9/15) Source: TechCrunch.

Tomaltman. “show me men’s black Adidas shoes for under $75” – takes ~7 seconds using voice compared to ~3x longer navigating menus in an app..com.. 3x faster to shop using microphone than to navigate menus in mobile apps*..com... Order new items – assuming you are fine with Amazon selecting exact item (2015) Source: Cowen & Company Internet Retail Tracker (3/16). Recode.com KPCB INTERNET TRENDS 2016 | PAGE Note: *Per MindMeld study comparing voice-enabled commerce to mobile commerce for the following task. 130 . Reorder past purchases by voice (2015) 3.com.Amazon Alexa Voice Platform Goal = Faster / Easier Shopping on Amazon Leveraging proliferation of microphones throughout house to reduce friction for making purchases. Amazon Prime Amazon Echo (~44MM USA Subscribers) Evolution of Shopping with Echo Amazon Amazon Echo Dot Echo Tap 1. Techtimes.. Gadgets-and-tech.. MindMeld Image: Amazon.com. Shopping Lists (2014) 2. Venturebeat.

~4MM Units Sold Since Launch (11/14). 2% Y/Y.. per CIRP ~4MM Amazon Echo devices have been sold in USA as of 3/16. Q1:16 70% 60% 61% 51% 60% 50% 50% 47% % of Customer Base % of Customer Base 40% 40% 34% 40% 30% 30% 26% 30% 22% 20% 20% 20% 10% 10% 6% 5% 0% 0% Q1:15 Q2:15 Q3:15 Q4:15 Q1:16 Prime Kindle Kindle Fire Echo None Fire Reader TV Source: Consumer Intelligence Research Partners (CIRP) Note: Amazon Echo limited launch occurred in 11/14 and wide-release occurred in 6/15. Q1:15 – Q1:16 Devices. KPCB INTERNET TRENDS 2016 | PAGE 131 . with ~1MM sold in Q1:16. USA. per CIRP estimates Amazon Customer Awareness of Amazon Amazon Customer Ownership of Amazon Echo..~5% of Amazon USA Customers Own an Echo vs. USA.

Computing Industry Inflection Points = Typically Only Obvious With Hindsight KPCB INTERNET TRENDS 2016 | PAGE 132 .

2007 – 2016E USA. Q2:15 – Q1:16 250 200 ~1MM Unit Shipments (MM) Unit Shipments (MM) 150 100 50 0 2016E 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q2:15 Q3:15 Q4:15 Q1:16 Source: Morgan Stanley Research (5/16). Consumer Intelligence Research Partners (CIRP). Amazon Echo limited launch occurred in 11/14 and wide-release launch occurred in 6/15. KPCB estimates Note: Apple unit shipments shown on a calendar-year basis... Estimated Amazon Echo Unit Shipments. KPCB INTERNET TRENDS 2016 | PAGE 133 .iPhone Sales May Have Peaked in 2015. While Amazon Echo Device Sales Beginning to Take Off? iOS Smartphone Unit Shipments. Global.

Cars KPCB INTERNET TRENDS 2016 | PAGE 134 .. Re-Imagining Transportation = Another New Paradigm in Human-Computer Interaction..

.Is it a Computer?..... Tesla KPCB INTERNET TRENDS 2016 | PAGE 135 .Is it a Camera? Is it a Car. Is it a Phone.Is it a Computer? Source: Apple....Is it a Car.

Lock / Monitor / Summon One’s Tesla from One’s Wrist Source: Tesla.....One Can. The Verge. Redmond Pie KPCB INTERNET TRENDS 2016 | PAGE 136 ..

Car Industry Evolution = Computerization Accelerating KPCB INTERNET TRENDS 2016 | PAGE 137 .

Big Tech = New Tier 1 auto 1990s (to Present) supplier OBD (On-Board (CarPlay / Android Auto).. Jason Aldag and Jhaan Elker / Washington KPCB INTERNET TRENDS 2016 | PAGE Post. Security software.. 1990s-2010s Central hub / decentralized systems? Feature-Built Computing LIDAR.. Multiple bus networks per car (CAN / LIN / FlexRay / MOST). Garmin.. Elec-Intro... Shareable 138 . Renesas. Source: KPCB Green Investing Team. Diagnostics) II Monitor / report engine performance. James Brooks / Richard Bone... Drive by Wire. hence central Connected Cars computer Embedded / tethered connectivity.. + Early Connectivity Vehicle-to-Vehicle (V2V) / Automatic cruise control. Darren Liccardo (DJI). “Automobile Electrical and Electronics Systems.. Vehicle-to-Infrastructure (V2I) / Infotainment. Tom Denton.... 2004. Autoweb.... Reilly Brennan (Stanford)..Telematics.. / Mapping.Car Computing Evolution Since Pre-1980s = Mechanical / Electrical  Simple Processors  Computers Pre-1980s Today = Complex Analog / Mechanical Computing Used switches / wiring to route Up to 100 Electronic Control feature controls to driver Units / car.. Techmor. Required in all “The Box” USA cars post-1996 Tomorrow = Computers (Brooks & Bone) Go Mobile?.... 3rd Edition. Popular Mechanics.. Digi-Key Electronics.” Oxford..com. GPS 5G. General Motors. Evaluation Engineering. 1980s (to Present) CAN Bus (Integrated Network) New regulatory standards drove need to monitor emissions in Today = Smart / real time. Samuel DaCosta. US EPA. UK: Tom Denton...

safety-critical driving Description vehicle controls (brake. control. Tesla. Google.g. media reports KPCB INTERNET TRENDS 2016 | PAGE 139 .. Combined Limited Full No Specific Function Self-Driving Self-Driving Automation Automation Automation Automation Automation • Driver in complete and • Automation of one or • Automation of at least • Driver able to cede full • Vehicle can perform all sole control of primary more primary vehicle two primary vehicle control of all safety. but with forward collision sufficiently comfortable warning) do not imply transition time automation • N/A • ABS • Tesla Autopilot • Google Car (manned • Google Car Example • Cruise Control • GM Super Cruise prototype) • Electronic Stability (2017) Control • Park Assist • Since cars invented • 1990s – Today • 2010s • 2010s • ? Frame Time (1760s) Source: National Highway Traffic Safety Administration. Early Innings of Level 2 / Level 3 NHTSA – Automated Driving System Classifications L0 L1 L2 L3 L4 Function. working in unison Driver is expected to be entire trip Systems with warning available for occasional technology (e.. control functions. General Motors. “Policy on Automated Vehicle Deployment” (5/2013). throttle. functions during an power) at all times. motive combination of systems working in unison certain conditions. but no control systems critical functions under and monitoring steering.Car Automation Accuracy / Safety Improvements = Accelerating.

The Verge KPCB INTERNET TRENDS 2016 | PAGE 140 . EmTech Conference.Early Autonomous / ADAS Features Continue to Improve = Miles Driven Continue to Rise Google (Level 3 / 4 Autonomy) Tesla (Level 2 Autonomy) Source: Google. Steve Jurvetson. Tesla.

in-field updates & (individual city testing) improvements (Tesla over-the-air software updates). Tesla.Primary Approaches to Autonomous Vehicle Rollouts = All New or Assimilation.real-world learnings • Solves potentially dangerous middle layer of semi-autonomy • Semi-autonomous stages require potentially dangerous resumption of • Need very specific environments and driver control regulation to guide integration with current system • OEM production cycles sometimes long. Morgan Stanley Research. Reilly Brennan (Stanford) KPCB INTERNET TRENDS 2016 | PAGE 141 .... which could cause innovation to remain • Potentially difficult to scale slow • Key Example: • Key Example: Source: Google.Traditional OEMs Taking Combined Approach All New = Assimilation = Top-Down. Fully Gradual Rollout / Autonomous Vehicles Mixed-Fleet Environments • Design & build vehicles from day one with • Roll out / upgrade autonomous features goal of full autonomy in current automotive context • Craft architectures / systems for end • Solves issue of integrating autonomy into product needs and with full fleet in mind existing asset base • Adapt testing environments to needs • Real-time..

USA Fell KPCB INTERNET TRENDS 2016 | PAGE 142 .... USA Led..Car Industry Evolution = Driven by Innovation.

Chris Urmson / Carnegie Mellon.About. Piero Scaruffi. NY Times. France) Assembly Line (Ford) Auto Safety 2007. Federal Highway Administration. Energy Transition... Popular Science.com. Interstate Highway Act (1956). Toyota Motor Corporation.. Kia Motors. Germany) Late 2000s = Recession / ? Bankruptcies / Auto Bailouts Source: KPCB Green Investing Team. DARPA. Franz Haag. in Cars or Oil (1960) Asia Rising.. Harry Shipler / Utah State Historical Society. 1886 = First gas-powered. Inventors. 143 . Germany) 1920s-1930s = Car as Status Symbol. 2005. 1888 = First four-wheeled USA Hybrid Fail (Prius Rise) + electric car (Flocken. Vehicle (Cugnot. Germany) + 1950s = Golden Age. texasescapes. Hyundai Motor Company. SAIC Motor Corporation. 2013) = Autonomy Inflection Point? 1970s = Oil Crisis / 1876 = First 4-stroke cycle engine Emissions Focus (Otto..Car Industry Evolution. Forbes.. 2012. ‘production’ vehicle (Benz. Today = Roaring ‘20s / First Motels \ 1980s = Japanese Auto Takeover Begins. UVA Miller Center for Public Affairs. 1990s – 2000s = 8 of Top 10 in Fortune 500 Industry Consolidation. 1760s – Today = Driven by Innovation + Globalization Early Innovation Streamlining Modernization Re-Imagining Cars (1760s-1900s) = (1910s-1970s) = (1970s-2010s) = (Today) = European Inventions American Leadership Going Global / Mass Market USA Rising Again? 1768 = First Self-Propelled Road 1910s = Model T / 1960s = Ralph Nader / DARPA Challenge (2004. KPCB INTERNET TRENDS 2016 | PAGE The Detroit Bureau.. International Energy Agency. National Archives. Reilly Brennan (Stanford). Joe DeSousa..com. Grossman Publishers. Matthew Brown.

Morgan Stanley Research Note: Production measure represents all light vehicles manufactured within the given region (regardless of OEM home country). sport utility vehicles and light trucks KPCB INTERNET TRENDS 2016 | PAGE (e. India and Mexico.. Annual Light Vehicle Production. By Region. Light vehicles include passenger cars.g. 76% (1950). 144 .. Largest “Other” constituents are South Korea. Cars Produced in USA = 13% vs.. 1950 – 2014 100 90 Light Vehicle Production (MM) 80 70 60 50 40 30 20 10 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 USA China Japan Western Europe Other Source: Wards Automotive.. pickups). Data from 1950-1985 only available every 5 years.Global Car Production Share = Rise & Decline of USA.

2 0.8MM Detroit Population.Detroit Population Tells Tale of USA Car Production = Down 65% from 1950 Peak @ 1.2 1.6 Detroit Population (MM) 1.4 0.6 0.0 1. 1900 – 2015 2.0 0.0 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2015 Source: Southeast Michigan Council of Governments Note: Represents mid-year population.8 1.4 1.8 0. KPCB INTERNET TRENDS 2016 | PAGE 145 .

Car Industry = Innovation Accelerating in USA KPCB INTERNET TRENDS 2016 | PAGE 146 .

Leading (2 of Top 10 Global) Auto Manufacturers 2) Attackers – Tesla...)....).....Operating Systems (Google / Apple).).). USA Has Many Key Components of Ecosystem 1) Incumbents – GM / Ford..Mapping (Google / Waze / Uber...Sensors / LIDAR / Radar (Velodyne / Quanergy / Google..Leadership in STEM & Computer Science Education / Computer Vision / Robotics / Deep Learning / Automotive Engineering Source: KPCB Green Investing Team. #1 Electric Vehicle Manufacturer 3) Systems / Components – Processors / GPUs (Nvidia.....USA = Potential to be Global Hub of Auto Industry Again?..) 4) Autonomous Vehicles – Google / Tesla / Uber.Leadership in Ride Sharing Solutions / Infrastructure / Fleet Knowledge (Distribution via Mobile Devices / Recommended Traffic Flows) 6) Education / University Innovation – Stanford / Carnegie Mellon / Michigan / MIT / UC Berkeley.........Other (Drivetrain / Power Electronics / Aerodynamics / Lightweighting / Etc.. Reilly Brennan (Stanford) KPCB INTERNET TRENDS 2016 | PAGE 147 ..Leadership in Development of Autonomous Vehicle Solutions 5) Mobility & Fleet Innovation – Uber / Lyft / Zendrive.Connectivity (AT&T / Telogis / INRIX.....

. Reilly Brennan (Stanford). Google Note: EU Block Exemption details per European Commission.... WA / Metro Phoenix........ regulation should not impede any single innovation approach..USA = Potential to be Global Hub of Auto Industry Again? USA Could Benefit from Creating Space in the Automotive Regulatory Framework to Foster Innovation 1) Federally Provided Guidance to States to Embrace Autonomy – Multiple legislative frameworks from individual states could impede autonomous innovation. 7) Next-Generation Franchise Laws – Semi-autonomous & autonomous cars are likely to change process of buying / servicing given ‘over the air’ nature of software downloads. 2) Flexibility of Regulation – Numerous approaches to solving autonomy challenge are likely to evolve simultaneously. 5) Leaning Forward on Sharing (Car & Ride) – Regulators should work with rather than against sharing companies to craft policy as consumer demand illustrates need / interest in sharing. 6) Auto Cybersecurity – Connected cars face increased risk of cyber attacks... AZ. KPCB INTERNET TRENDS 2016 | PAGE 148 .manufacturers & suppliers should keep consumer security / privacy as a key priority. CA / Austin... TX / Kirkland. Testing locations represent Google autonomous car testing cities.... 4) Comprehensive Safety Frameworks – Gov’t should have power to allow autonomous systems that demonstrate quantifiable safety improvements over current driver-vehicle combination.USA could consider the EU ‘Block Exemption’ as model & allow consumers to service vehicles at either manufacturer-affiliated or independent locations Source: KPCB Green Investing Team. 3) Individual Cities / States Championing Autonomy – More testing locations / forward-leaning cities like Mountain View...

150K Jitney Rides / Day (1915) in LA.” Columbus. Friedricks. dailybritain. Preceded By Someone with Red Flag For Safety Purposes 157K Uber Rides / Day (2016) in LA.. Source: Encyclopaedia Brittanica.. Law Enacted in UK..wordpress.. Travis Kalanick (Uber) TED Talk (3/16). yet Horseless Carriages (Cars) Had to be Regulated Out of Existence by 1919. Locomotive Act of 1865 – Jitneys (1914) Red Flag Act Ride-Sharing. William B... Huntington and the Creation of Southern California.Regulators = Typically Slow to Adapt to New Technologies Back in the Day When Horseless Carriage (Car) Came Along. 1992 KPCB INTERNET TRENDS 2016 | PAGE 149 .... ~100 Years Ago. “Henry E. OH: Ohio State University Press. Michigan State University Library.com..

0. Current market structure is likely to change as shared mobility gains dominance. though adoption remains in its infancy. led by Adam Jonas KPCB INTERNET TRENDS 2016 | PAGE 150 . Europe – Lack of homegrown tech champions coupled with power of OEMs (particularly Germans) and quality of European public transit may make adoption more difficult. early political support and sharing-focused younger demographic leaves Korea relatively well positioned for move to shared mobility. America – Some home field advantage on tech innovation & early application of shared mobility. China – Government focus on technology / environment. Competing investment in public transit and impact of car ownership on social standing may impede full-scale adoption. Didi). High fuel costs and strong emissions standards may drive movement forward. large millennial population. but culture of private ownership and litigious USA judicial system may slow progress.Global Perspective on Auto Industry Future – By Region. Source: ‘Global Investment Implication of Auto 2. India – Offers all key ingredients (rapid urbanization. so future remains unclear. 4/19/16. and R&D investment in tech arena lags somewhat behind other geographies. Japan – Social implications of an aging population and policy support (given importance of a strong automotive industry) represent key advantages. internet inflection point) for shared mobility leadership. per Morgan Stanley Auto & Shared Mobility Research N. limited public infrastructure. as well as quality of ride-sharing companies (esp. Korea – Strong technological culture. but OEM buy-in to new paradigm is crucial.’ Morgan Stanley Research. have driven strong early sharing adoption.

Re-Imagining Transportation – Mobility also Being Re-Imagined KPCB INTERNET TRENDS 2016 | PAGE 151 .

. Mark Fields (Ford).. but we’re changing our business model to look at this as vehicle miles traveled.We’re going to see more change in the next five to ten years than we’ve seen in the last 50. MARY BARRA. Wall Street Journal KPCB INTERNET TRENDS 2016 | PAGE 152 . 10/25/15 You could say there would be less vehicles sold.. 4/12/16 Source: Mary Barra (General Motors). FORD CEO.Re-Imagining Automotive Industry = From Cars Produced to Miles Driven? We do believe the traditional ownership model is being disrupted. MARK FIELDS.. the actual mileage on those vehicles will accumulate a lot more than a personally owned vehicle. GM CEO.I could argue that with autonomous vehicles.

012). 153 . taxes and registration. Average USA work week per OECD Employment Outlook (7/15). Urban auto commuting delays per Texas A&M Transportation Institute / INRIX 2015 Mobility Scorecard (8/15). Millennial expectations per AutoTrader 2016 Cartech Impact Study (9/15.2 Extra Work Weeks / Year Millennials = Driving Differently Drivers License Usage Declining (Age 16-44) = @ 77% vs. Equivalent to ~1. USA) Millennial Willingness to Car Share = @ ~50% (Asia-Pacific) / @ ~20% (North America) 46% of Millennials Expect Vehicle Technology to do Everything a Smartphone Can. USA = Depreciation @ 44% / Fuel @ 15% / Finance + Fees @ 14% / Insurance @ 14% / Maintenance + Repair @ 9% Commuting Time = Significant 4. 92% (1982. Commuting times per U. Average (13% of Work Week. Driver’s license rates per University of Michigan KPCB INTERNET TRENDS 2016 | PAGE Transportation Research Institute / Federal Highway Administration (1/16). USA) Urban Auto Commuting Delays = Rising 42 Hours / Year / Urban Worker. n=1.558 / Year. Census Bureau (2013) and include all transport options apart from walking and biking.Car Ownership Costs (Money + Time) = High Car Ownership Costs = High $8. delays defined as extra time spent during the year traveling at congested rather than free-flow speeds by private vehicle drivers / passengers for 471 US urban areas..S.. Car sharing statistics per Goldman Sachs Research (5/15).3 Hours per Week per Worker. USA (+2x in 30 Years). Vehicle fees include license. Source: Ownership costs per AAA (4/16).

154 . parking spots / person per Stefan Heck / Stanford Precourt Institute of Energy. Cars Used ~4% of Time Vehicle Miles Traveled (VMT) = High Per Capita USA VMT Per Capita = 9K / +11x China (~850) / +48x India (~200) Parking Infrastructure = Lots of It ~19MM Parking Spaces in Los Angeles County (2010).Efficiency Gain Potential from Ride & Car Sharing = High Cars = Underutilized Assets USA = 2.0”. 268-286. Los Angeles parking data per Mikhail Chester. Juan Matute. Source: Car utilization / penetration. Carolyn Flower and Ram Pendyala (2015) Parking Infrastructure: A Constraint on or Opportunity for Urban Redevelopment? A Study of Los Angeles Parking Supply and KPCB INTERNET TRENDS 2016 | PAGE Growth.2 Cars / Household.. VMT and energy consumption per “”Global Investment Implications of Auto 2. 81:4. Global (2014). Andrew Fraser. Morgan Stanley Research (4/16).. +12MM since 1950 14% of Incorporated Land in Los Angeles County Allocated to Parking ~4 Estimated Parking Spots / Person in USA Energy Consumption by Light Vehicles = Significant ~500B Gallons of Fuel. Journal of the American Planning Association. ~20% of Households Have 3+ Cars.

Uber Note: Survey conducted in 11/15 across 801 riders who had taken at least one trip in the past 3 months in 24 USA Uber markets. KPCB INTERNET TRENDS 2016 | PAGE 155 .Uber Platform / Network = Why Millions of Riders Have Taken >1B Rides Since 2009 Top Reasons Riders Choose Uber • 93% = Get to Destination Quickly • 87% = Safety • 84% = Too Much Alcohol to Drive • 83% = Save Money • 77% = Avoid Dealing with a Car • 65% = Option During Public Transit ‘Off' Hours Source: Berenson Strategy Group.

Shared Private Rides Becoming Urban Mainstream = uberPOOL @ 20% of Global Uber Rides in <2 Years • 36 = Global UberPool Cities. UberX* Source: Uber. KPCB INTERNET TRENDS 2016 | PAGE 156 .8MM = Gallons of Gas Saved vs. UberPool announced in August 2014. UberX* • 1. +7x Y/Y • 100MM = UberPool Trips Since Launch (8/14) • 40% = UberPool as % of Total SF Rides • 30MM = China Rides / Month (in <1 Year) • >100K = Riders / Week in 11 Global Cities • 90MM = Vehicle Miles Traveled saved vs. * Represents first 3 months of 2016.

except for Spotify (per Company). assumed to be 5 days per week in both commute directions and 4. Images per RREC / SWNS. Again? Mercedes-Benz F 015 Rolls Royce 10hp (1904) = ‘Luxury in Motion’ Concept (2015) = Designed for Rider Déjà Vu? Commute Time = Significant Engagement / Entertainment Opportunity? 25 Hours / User / Month. Commute data per US Census Bureau as of 2013.com KPCB INTERNET TRENDS 2016 | PAGE 157 . includes all modes of transportation apart from walking / biking. Research + SurveyMonkey (n = 2. 6/15. Assumes 25. minutes / day spent across all cohorts and extrapolated to hours / month).com.35 average weeks / month.9 minute one-way commute.Re-Imagining Most Important Seat in Car = Back Seat.059. Various 21 21 20 19 15 13 13 Platforms 11 11 10 10 6 5 0 Facebook Spotify Commute Instagram Snapchat Pinterest Twitter Tinder LinkedIn Time Source: Time Spent data per Cowen & Co. carbodydesign. Mercedes-Benz.

Transportation Industry = Strap In for Next Few Decades KPCB INTERNET TRENDS 2016 | PAGE 158 .

is an on-demand cash generator. Take Two? What if a Car: • Is part of a network that provides a commuting service that comes to you? • Is the most advanced computing device you use? • In effect. due to automation / reduced human error? • Drives itself? Parks itself? • Makes you want to commute? • Makes you more productive? KPCB INTERNET TRENDS 2016 | PAGE 159 .Automotive Industry Golden Age. boosted by car / ride sharing? • Gives you safe driving pay-backs from your insurer? • Is safer.

and may not be relied upon in connection with the purchase or sale of. or managed by Hillhouse Capital or its affiliates. arrangement. correctness or completeness of this Information or its contents or any oral or written communication in connection with it. No representation or warranty. The information provided herein by Hillhouse Capital does not constitute an offer to sell or a solicitation of an offer to buy. is given and no responsibility or liability is accepted by any person with respect to the accuracy. . sponsored. reliability. A business relationship. or contract by or among any of the businesses described herein may not exist at all and should not be implied or assumed from the information provided.CHINA = INTERNET LEADER ON MANY METRICS Hillhouse Capital* Provided China Section of Internet Trends. any security or interest offered. express or implied. 2016 *Disclaimer – The information provided in the following slides is for informational and illustrative purposes only.

.. China Macro = Robust Service-Driven Job & Income Growth. Despite Investment Slowdown Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 161 .

Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 162 . 1995 – 2015 Source: National Bureau of Statistics of China. Goldman Sachs Global Investment Research. CEIC.China Services Industries = 50%+ (& Rising) of China’s GDP & ~87% of GDP Growth China’s GDP by Sector.

real estate and other services. accommodation. Wind Information. storage. *Note: Services include wholesale... Offsetting Job Losses from Construction / Manufacturing / Agriculture China Annual Employment Change by Sector. transportation. Mining & Manufacturing Annual Employment Change (MM) 20 Services* Net Overall Employment Gain 10 0 -10 -20 Source: National Bureau of Statistics of China. education. catering. communication. retail. 1995 – 2015 30 Agriculture Construction. Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 163 .China Services* Industries Job Growth = Accelerating. finance.

Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 164 .000 25% Urban Disposable Income per Urban Disposable Income per Capita ($) Capita $4.China Urban Disposable Income Per Capita = Continues to Grow @ Solid Rates China Urban Disposable Income per Capita & Y/Y % Growth.5RMB. assume constant FX 1USD=6.000 Y/Y Growth 20% Y/Y Growth $3.000 5% $0 0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: CEIC.000 10% $1. 1995 – 2015 $5.000 15% $2.

+7% Y/Y Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 165 .China Internet @ 668MM Users = +6% vs.

.China Internet Users = 668MM. 2008 – 2015 800 40% 700 35% China Internet Users (MM) 600 30% Y/Y % Growth 500 25% 400 20% 300 15% 200 10% 100 5% 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 China Internet Users Y/Y Growth (%) Source: CNNIC.. +6% vs.@ 49% Penetration China Internet Users. Internet user data is as of mid-year. Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 166 . 7% Y/Y.

Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 167 . Only apps in top 50 by time spent share are called out. April 2016 WeChat Daily Mobile Time Spent = ~200 Minutes per User.. Tencent + Alibaba + Baidu = 71% of Mobile Time Spent Share of Mobile Time Spent.China Mobile Internet Usage Leaders.. Trustdata. and Hillhouse estimates. Average QQ QQ Browser Tencent Video Tencent Tencent News Tencent Games QQ Music JD. Alibaba and Baidu. Source: QuestMobile.com All Others QQ Reading 29% UCWeb Browser WeChat Taobao 35% Weibo Alibaba YouKu Video Momo Shuqi Novel AliPay QQ AutoNavi 10% Mobile Baidu iQiyi / PPS Video Baidu Baidu Browser Baidu Tieba 91 Desktop Baidu Maps All Other Note: Grouping of apps include strategic investments made by Tencent.

China Internet Traction = Advertising / Commerce / Travel / Financial Services Trends Often Compare Favorably to USA Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 168 .

. Assume constant FX 1USD = 6.5RMB. USA advertising share data excludes out-of-home. 2007 – 2016E $50 50% China Annual Advertising Spend ($B) Internet % of Total Ad Spend $40 40% $30 30% $20 20% $10 10% $0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E Internet TV Outdoor Print Radio Internet % of Total Source: GroupM China. Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 169 . video game.. 39% in USA China Annual Advertising Spend by Medium. Online > 42% Total Ad Spend vs.China Online Advertising > TV (2015). April 2016 Forecast. and cinema.

and others. hence may differ from company disclosed total revenue or gross merchandise value figures. returns. delivery foodservice.. 2015 by Revenue*. travel bookings.China E-Commerce Companies = Dominate Top Retailer Rankings vs. Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 170 . motor vehicles & auto parts. 2015 Alibaba Wal-Mart JD.com CVS China Kroger Resources Suning Walgreens GOME Amazon Pure-Play E-Commerce Wal-Mart Target Auchan Costco Group $B $50B $100B $150B $B $100B $200B $300B $400B Source: Euromonitor. USA Peers.. tickets. and excluding certain transaction categories such as consumer-to-consumer. China Top 7 Retailers USA Top 7 Retailers by Revenue*. Note: *Revenue defined as retail value of goods excluding tax.

com 4% 4% JD. delivery foodservice. 2010 – 2015 Revenue*. returns. motor vehicles & auto parts... Share of China Total Retail Share of USA Total Retail Revenue*. travel bookings.China E-Commerce Companies = Gaining Retail Share Faster than USA Peers. hence may differ from company disclosed total revenue or gross merchandise value figures. 2010 – 2015 7% 7% 6% 6% % of USA Retail Sales 5% 5% % of China Retail Sales Alibaba Amazon. tickets. and excluding certain transaction categories such as consumer-to-consumer. and others.. Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 171 .com eBay 3% 3% 2% 2% 1% 1% 0% 0% 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Source: Euromonitor. Note: *Revenue defined as retail value of goods excluding tax...

..China E-Commerce = Becoming More Social.. 31% of WeChat Users Purchase via WeChat.. +2x Y/Y % of WeChat Users Making Channels Through Which Users Made E-Commerce Purchase Through E-Commerce Purchase WeChat 40% % of Surveyed WeChat Users 31% Links to 30% Other Apps JD Mall 22% featured within WeChat 32% 20% 15% Group Chats or 10% Friends Circle WeChat 23% Public Accounts 23% 0% 2015 2016 Source: McKinsey’s 2016 China Digital Consumer Survey Report. Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 172 ..

Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 173 . Hostel Hotel Train / Bus / Ferry Transport Ticket Destination Tour Guide Attraction Portable Wi-Fi for Roaming Restaurant Travel Visa / Insurance Shopping / Currency Conversion 24/7 Customer Service Source: Priceline...Ctrip = Expansive One-Stop-Shop for Travelers.. Priceline App (USA) Ctrip App (China) B&B.China Travel.. Ctrip.

China Outbound Travel Penetration @ Inflection Point = Already World’s Biggest Outbound Tourism Spender Outbound Departures as % of Top 10 Outbound Tourism Population.... 1970 – 2015 Spending Country. 2014 35% China $165B China Outbound Departure as % of Population 30% USA $146B Japan 25% Germany $107B S. World Bank. Korea UK $80B 20% France $59B 15% Russia $55B 10% Canada $34B 5% Australia $32B 0% Brazil $30B 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 Italy $29B Source: CLSA. Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 174 .

Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 175 . AliPay / WeChat Pay stats per Hillhouse estimates.China Smartphone-Based Payment Solutions = High Engagement Estimated Monthly Payment Transactions per User WeChat Payment USA Debit Card AliPay USA Credit Card 0 10 20 30 40 50 60 Source: US debit and credit card data defined as number of payments (including online and offline) a month per active general-purpose card. Data per 2013 Federal Reserve Payments Study. Active cards are those used to make at least one purchase or bill payment in a month. WeChat data includes peer-to-peer payments such as virtual Red Envelopes.

Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 176 .WeChat Chinese New Year Payments = 8B Virtual Red Envelopes Sent.. + 8x Y/Y. WeChat Virtual Red Envelopes Sent – Chinese New Years Eve.. 2014 – 2016 8B 8 # of Virtual Red Envelopes Sent (B) 6 4 2 1B 20MM 0 2014 2015 2016 Source: Tencent.

.. Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 177 ..WeChat Payments = Can Drive Merchant Loyalty & CRM Source: 86 Research.

.Ant Financial (~$60B Valuation*) = Leveraging Alibaba AliPay Scale.. *Financing in 4/16 Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 178 . Ant Financial.. Consumer Loan Users Source: Media reports. Building China Financial Services One-Stop-Shop Savings / MoneyMarket SMB Lending Funds $100B+ 260MM+ Users Cumulative Loans $150B+ AUM Payment 450MM+ AliPay Users $1+ Trillion Payment Volume in 2015 Consumer Loan / Instant Credit Credit Bureau / 50MM+ Online Insurance Cumulative / P2P Lending..

China Internet Emerging Momentum = On-Demand Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 179 .

private for-hire vehicles. 4B+ Annualized Trips (+4x Y/Y. Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 180 .7B ~6. include on-demand taxi.. as well as on-demand for-hire motorbike trips booked through smartphone apps. Q1:13 – Q1:16 ~25MM ~750MM ~1. America EMEA India SE Asia ROW Q1:13 Q1:14 Q1:15 Q1:16 Source: Hillhouse Capital estimates..3x Y/Y 3..~70% Global Share) Annualized Global On-Demand Transportation Trip Volume by Region..7x Y/Y Trip Volume China N.China On-Demand Transportation = Global Leader.3B Annualized 30x Y/Y 2.

Uber China vs. Hillhouse Capital KPCB INTERNET TRENDS 2016 | PAGE 181 . Rest of World Source: Uber China chart per leaked CEO letter to investors in China in June 2015. third-party press releases.China On-Demand Transportation.. China Cities = Fastest Global Growers Monthly Trips Since Inception..

PUBLIC / PRIVATE COMPANY DATA .

It’s Just Beginning KPCB INTERNET TRENDS 2016 | PAGE 183 .. in Many Ways. Impact of Internet = Extraordinary & Broad But..

..com $400MM $341B Revenue 2006 2015* Revenue 1997 2015* $11B $13B $118B $482B Viacom Wal-Mart (+19% Y/Y) (-6% Y/Y) (+12% Y/Y) (-1% Y/Y) $1B $7B $148MM $107B Netflix Amazon.Internet-Related Dislocations = Long-Time in Making. Public Filings * 2015 revenue for all companies reflects CY2015.4B $44B Amazon.com (+46% Y/Y) (+23% Y/Y) (+9. 184 ... E-Commerce Impacts Revenue Growth for Traditional Retailers Media Retail Market Cap 2006 2016* Market Cap 1997 2016* Viacom $33B $18B Wal-Mart $69B $222B Netflix $1.4x Y/Y) (+20% Y/Y) Source: CapIQ. Historical market caps for KPCB INTERNET TRENDS 2016 | PAGE Viacom / Netflix shown as of date of CBS spinoff from Viacom (1/3/2006). Current market caps as of 5/31/16. Historical market caps for Wal-Mart / Amazon shown as of date of Amazon IPO (5/15/1997).Still Early Stage Cord-Cutting Impacts Earnings for Traditional Media Companies.

eBay vs. Time Shifted Salesforce vs. Amazon founded in 1995.com founded in 1999 as B2B portal connecting Chinese manufacturers and overseas buyers. Time Shifted Gross Merchandise Value (GMV).com $15 $150 GMV ($B) GMV ($B) eBay Amazon.com $10 Airbnb $100 Uber $5 $50 $0 $0 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Years Since Launch (T+) Years Since Launch (T+) Enterprise Est. Uber Amazon.com $20 $200 Alibaba / Taobao JD. Slack Salesforce Revenue ($MM) Slack 1 2 3 4 5 6 7 8 9 10 11 12 13 Marketplaces Source: Company data. gave first ride in 2010. Amazon founded in 1995..Current Generation of Internet Leaders = Growing Faster than Previous Generation Marketplaces Commerce Gross Merchandise Value (GMV).com vs. Airbnb vs. Enterprise Source: Slack. Alibaba. Salesforce quarterly revenue approximated from publicly disclosed annual GAAP revenues. eBay founded in 1995.com launched B2C shipments in 2004. Morgan Stanley Research. Quarterly Revenue ($MM). JD. JD. Time Shifted Alibaba vs. KPCB INTERNET TRENDS 2016 | PAGE Commerce Source: Publicly available company data. Morgan Stanley Research. Airbnb founded in 2008. Graph starting point based on similar est. 185 . founded 1998 as an online magneto-optical store. revenue figures. Uber launched 2009.

Internet Leaders = Getting Bigger..Staying Aggressive KPCB INTERNET TRENDS 2016 | PAGE 186 ..

CB Insights. Red = lower.752 $447* $554* Source: CapIQ. Purple = newly public within last 12 months (applied here to both eBay and Paypal given Paypal spinoff on 7/20/15).Global Internet Market Leaders = Apple / Google / Amazon / Facebook / Tencent / Alibaba. Ant Financial and Didi Kuaidi valuation per latest media reports as of KPCB INTERNET TRENDS 2016 | PAGE 5/2016. Market value data as of 5/31/16. -- 11 Salesforce.. -- 19 Yahoo! Japan Japan 26 5 5 20 Didi Kuaidi China 25 -. Cash includes cash and equivalents and short-term marketable securities plus long-term marketable securities where deemed liquid. -- 9 Baidu China 62 11 10 10 Ant Financial China 60 -. -- 13 Paypal USA 46 6 9 14 Netflix USA 44 2 7 15 Yahoo! USA 36 10 5 16 JD. Note: For public companies. Ant Financial treated separately from Alibaba as Alibaba retains no control of Ant and will receive a capped lump sum payment in the event of an Ant liquidity event. media reports.Flush with Cash. * Includes only public companies. 187 . Wall Street Journal..com USA 57 4 7 12 Xiaomi China 46 -.. -- Total $2.com China 34 5 28 17 eBay USA 28 11 9 18 Airbnb USA 26 -. Green = higher.Private Companies Well Represented Current Market Q1:16 2015 Rank Company Region Value ($B) Cash ($B) Revenue ($B) 1 Apple USA $547 $233 $235 2 Google / Alphabet USA 510 79 75 3 Amazon USA 341 16 107 4 Facebook USA 340 21 18 5 Tencent China 206 14 16 6 Alibaba China 205 18 15 7 Priceline USA 63 11 9 8 Uber USA 63 -.. Yellow = private companies. where market value represents latest publicly announced valuation. colors denote current market value relative to Y/Y market value.

Traditional Industry Incumbents = Active in Acquisitions / Investments KPCB INTERNET TRENDS 2016 | PAGE 188 .

Mytheresa.com • General Motors / Cruise • Under Armour / Automation MapMyFitness.P. Thomson Reuters Note: Includes technology targets >$100MM in value. Betterment • NBCUniversal / BuzzFeed. • Coca-Cola / OneWeb Vox Media • Ford / Pivotal • Nikkei / Evernote • Fox Sports / DraftKings • Turner Sports / FanDuel • General Motors / Lyft • USAA / TRUECar 2012 2013 2014 2015 • Goldman Sachs / Dataminr.com Volume ($B) Playdom • Nordstrom / HauteLook • Disney + Fox + • Northwestern Mutual / NBCUniversal / Hulu Learnvest • First Data / Perka. CapitalIQ.. KPCB INTERNET TRENDS 2016 | PAGE 189 . Morgan / Prosper Marketplace Source: Morgan Stanley.. Non-Tech Acquisitions of Tech Companies +2. MyFitnessPal $21 • Hudson Bay / Gilt Groupe • Walmart / Kosmix $19 Select Investments by Non-Tech Incumbents $11 • American Express / Concur • Lowes / Porch • Citi / Ayasdi. Symphony • Whole Foods / Instacart • J.6x Since 2012 Select Acquisitions by Non-Tech Incumbents • Auto Consortia / Nokia Here • Liberty Interactive / Zulily • Avis / Zipcar • Monsanto / Climate • AxelSpringer / Business Corporation Tech Acquisitions by Non-Tech Corporate Buyers Insider • Neiman Marcus / • Disney / Maker Studios. • Visa / Square Kensho. Clover • Staples / Runa $28 • Ford / Livio • Target / DermStore.Incumbents = Increasingly Betting on Technology Companies to Fuel Growth.

Thomson Reuters Note: YTD Tech IPOs include SecureWorks and Acacia Communications. Only 2 Tech IPOs 2016YTD Source: Morgan Stanley.Global Technology Financings = Solid Trends in Private Financings... KPCB INTERNET TRENDS 2016 | PAGE 190 .

Source: Thomson ONE.219 Technology IPO Volume ($B) $157 Annual Technology IPO and Technology Private $150 Financing Volume ($B) NASDAQ $107 $100 $96 $89 $58 $48 $50 $44 $48 $50 $42 $36 $40 $36 $34 $33 $26 $28 $28 $25 $19 $22 $14 $8 $7 $5 $3 $3 $0 VC Funding per Company ($MM) $3 $3 $2 $5 $4 $4 $5 $5 $6 $8 $14 $18 $11 $8 $8 $9 $8 $9 $8 $9 $7 $7 $10 $8 $9 $13 $15 $16 *Facebook ($16B IPO) = 75% of 2012 IPO $ value. 1990 – 2016YTD $200 March 10. 2016YTD as of 5/26/16. 2016YTD as of 5/26/16.S. & Capital IQ. 2015 = NASDAQ @ 5. KPCB INTERNET TRENDS 2016 | PAGE Morgan Stanley Equity Capital Markets. Bloomberg. All global U. data per Dealogic. 2000 = July 20. 191 . Global Technology Public + Private Financing Volume = Solid Relative to History Global US-Listed Technology IPO Issuance and Global Technology Venture Capital Financing. VC Funding per Company ($MM) calculated as total venture financing per year divided by number of companies receiving venture financing. **Alibaba ($25B IPO) = 69% of 2014 IPO $ value. NASDAQ @ 5.049 Technology Private Financing Volume ($B) Technology Market Peak.-listed technology IPOs over $30MM.

. Very few companies will win – those that do – can win big... Over time. KPCB INTERNET TRENDS 2016 | PAGE 192 . best rule of thumb for valuing companies = value is present value of future cash flows. There are pockets of Internet company overvaluation but there are also pockets of undervaluation..

DATA AS A PLATFORM / DATA PRIVACY CREATED BY KPCB PARTNERS TED SCHLEIN / ALEX KURLAND .

Data as a Platform KPCB INTERNET TRENDS 2016 | PAGE 194 .

.05 2010 2011 2012 2013 2014 2015 Data in Digital Universe (Petabytes) Storage Costs ($/GB) Source: IDC. 2010 – 2015 10B $0.20 8B Cost per GB of Storage $0. Data Storage Costs.. Data Infrastructure Costs Falling Fast = -20% CAGR Data in Digital Universe vs.15 Petabytes of Data 6B 4B $0.Global Data Growth Rising Fast = +50% CAGR since 2010. May 2016. KPCB INTERNET TRENDS 2016 | PAGE 195 .10 2B 0B $0.

Data Generators = Increasing Rapidly Source: Apple. KPCB INTERNET TRENDS 2016 | PAGE 196 . Microsoft. DJI. Ring. B & H Foto & Electronics. Tesla. Fitbit. Waze.

.Data = A New Growth Platform. KPCB. Ionic Security.. KPCB INTERNET TRENDS 2016 | PAGE 197 ..ultimately resulting in Software the creation of pervasive networks (siloed data centers  AWS)..& then pervasive software (Siebel  Salesforce) Emergence of pervasive software created the need to optimize The the performance of the network & store extraordinary amounts Infrastructure of data at extremely low prices Next Big Wave = Leveraging this unlimited connectivity & The storage to collect / aggregate / correlate / interpret all of this data Data to improve people’s lives & enable enterprises to operate more efficiently Source: Adam Ghetti. Ted Schlein.. Powering New Services / Systems / Apps The Large investments in fiber optic & last-mile cables created Sources of Leverage for Global Internet Growth Network connectivity that facilitated the early Internet growth Optimizing the network with software became far more capital The efficient than additional capex buildouts..

Netezza. Decentralized Systems. MicroStrategy InsideSales CACHING ORGANIZATION-WIDE DATA INTEGRATION PREP / WRANGLING ANALYTICS PLATFORMS Informatica Evolution ETL Revolution Looker. Expensive Storage. 1990 – 2016 FIRST WAVE SECOND WAVE THIRD WAVE Constrained Data. Teradata. Redshift. CLOUD BI Gainsight. Domo.Evolution of the Data Platform. Pervasive Systems. Presto Greenplum Source: Looker.. Mass Data Intelligence. Oracle Palo Alto Networks. KPCB. Sybase Hadoop..... Data for Targeted Use Cases Big Data Everywhere Data Instruments the Business BUSINESS VISUALIZATION DEPARTMENTAL INTELLIGENCE (BI) APPLICATIONS Business Objects.. into Everything DATA-CENTRIC Security CENTRIC SECURITY & DATA INTEGRITY SECURITY & MANAGEMENT MANAGEMENT Microsoft. Ionic Security. EMC. Spark. Datadog. Monolithic Systems. Software Cognos. Cheap Storage. Big/Fast Storage. NetApp. Tanium FireEye Infrastructure Age of Big Data Age of Big/Fast Age of Oracle. Data Explosion / Chaos. BigQuery. Ionic Security. Anaplan Breaking Apart Data Integrated Data Bottleneck INFRASTRCUTURE. KPCB INTERNET TRENDS 2016 | PAGE 198 .

Data is moving from something you use outside the workstream to becoming a part of the business app itself. CEO OF LOOKER. 2016 KPCB INTERNET TRENDS 2016 | PAGE 199 . It’s how the new knowledge worker is actually performing their job. FRANK BIEN.

Data as a Platform – A Few Companies Utilizing Analytics to Improve Business Efficiency... KPCB INTERNET TRENDS 2016 | PAGE 200 .

Looker Chaos of Data Silos Across the Company Data analytics platform built for both data analysts & non-technical business users that can scale throughout organizations Source: Looker.Data Analytics as a Platform = Looker THEN NOW Complex Tools Operated by Data Analysts. KPCB INTERNET TRENDS 2016 | PAGE 201 .

Salesforce. KPCB INTERNET TRENDS 2016 | PAGE 202 . Source: Bomgar Corporation.Customer Data & Relationship Intelligence as a Platform = SalesforceIQ THEN NOW Difficult to Customize. Lack of SalesforceIQ Automated Customer Insights CRM solution that helps businesses build stronger customer relationships by analyzing data & patterns to identify opportunities.

KPCB INTERNET TRENDS 2016 | PAGE 203 . Mapbox.. Technical.. Philadelphia Police Department. Mapbox Limited In-App Digital Map Usage Worldwide maps crowdsourced by a community of smartphone users whose mobile navigation data facilitates real-time updates to the platform Source: Forbes.ly.Data Mapping as a Platform = Mapbox THEN NOW Difficult & Expensive to Collect Data.

Datadog Lengthy Implementation Cycles. Datadog. Only Used by System Administrators Cloud monitoring platform for both System Administrators & Developers that automatically integrates 100+ sources in real-time to represent hundreds of thousands of cloud instances Source: IBM. KPCB INTERNET TRENDS 2016 | PAGE 204 .Cloud Data Monitoring as a Platform = Datadog THEN NOW Expensive & Clunky Point Solutions.

Data Security & Management as a Platform = Ionic Security THEN NOW Securing Infrastructure to Ionic Security Keep Data Safe Distributed data protection & management platform that has processed tens of billions of API requests to enable customers to secure & control their data Source: www.com.teach-ict. Ionic Security. KPCB INTERNET TRENDS 2016 | PAGE 205 .

.. Data Security Concerns Explode KPCB INTERNET TRENDS 2016 | PAGE 206 . As Data Explodes.

Source: NY Times. FBI (Feb-16) Microsoft Lawsuit (Apr 16) FBI claimed it needed Apple to provide access to an iPhone Files lawsuit for right to be able to tell customers when law owned by a man who committed a mass shooting in San enforcement officials request their emails & other data. KPCB INTERNET TRENDS 2016 | PAGE 207 . when he designed an encryption system to protect data stored on a Macintosh computer). Time. Silent Circle and setting to protect communications of their 1B monthly active Blackphone. . and again between 2009 and 2011. Apple vs. CNBC. who co-founded several well-respected secure WhatsApp implements end-to-end encryption as default communications companies including PGP Corp. Reuters. Request was denied by a federal judge in New York. manufacturers to decrypt customer data at a court’s request. 2013 – 2016 Edward Snowden (Jun-13) Burr-Feinstein Anti-Encryption Bill (Apr-16) Former CIA contractor leaked classified information to media Proposed law that would require technology companies & phone about internet & phone surveillance by USA intelligence. WhatsApp’s Default End-to-End Encryption Apple Hires Data Security Expert (Apr-16) (May-16) Jon Callas. Bernardino. so that the agency could recover information for its investigation.Data Privacy Debate – Major Events. WhatsApp. rejoins Apple (he was also an employee in the 1990s users worldwide. CA. Washington Post.

2B unique records breached by a Russian CyberGang called CyberVor. IBM. 1B 0B 2013 2014* 2015 Source: Breach Level Index. KPCB INTERNET TRENDS 2016 | PAGE 208 . Govtech Note: *Includes 1.Cybercrime = Widespread Borderless Threat… ~4 Billion Data Records Breached Globally Since 2013 Records Breached. Global. Billions of Individual Records. 2013 – 2015 3B # of Breaches (B) 2B Includes 1.2B unique records breached by a Russian CyberGang called CyberVor.

Consumer Data Privacy Concerns Rising Rapidly How Concerned are You About Data Privacy & How Companies Use Customer Data? 4% 45% Are more worried about their 46% 50% Online privacy than one year ago 74% Have limited their online activity in the last year due to privacy Very Concerned concerns Somewhat Concerned Not Concerned Source: Gigya “The 2015 State of Consumer Privacy & Personalization” report. n = 2. KPCB INTERNET TRENDS 2016 | PAGE 209 . TRUSTe / National Cyber Security Alliance Consumer Privacy Survey – US. US respondents.000. 2016.

.Consumers’ Top Privacy Concerns = Data Selling / Storage / Access / Being Identified Individually. n = 2. Rate Level of Privacy Concerns Across Each of the Following Ways Companies Interact with Personal Data. “Consumer Perceptions in the Internet of Things”. etc. KPCB INTERNET TRENDS 2016 | PAGE 210 ..062 (These percentages reflect all respondents who rated their privacy concerns on a 1-5 scale. with 5 = Extremely Concerned.) If / Where they sell my data 78% Where they keep my data 73% How they identify me as an individual 68% How long they have my data 67% Who sees and analyzes the data 67% How a company gets my data 66% When and how I opted into sharing 61% How they use data to personalize marketing 59% How they use data to provide customer support 54% How they use data to improve or innovate 53% How they identify me as a group 52% Source: Altimeter Group.062 respondents. 4 = Very Concerned. n = 2. 2015.

. data sent to Google is limited to search queries for processing. Google.. 211 .Do People Care About Privacy.. Or Do They Care About Who Has Their Data? Amazon Echo Google Gboard The Echo’s Alexa Voice Service listens to all Integrated keyboard for iOS devices that had speech in default mode an estimated 500K+ downloads within the first week of launch Source: Amazon.. Today.. anonymous statistics to help diagnose problems when the app crashes and data about the most often used features. App Annie. Privacy policies KPCB INTERNET TRENDS 2016 | PAGE can change over time and it is possible Google may decide to track additional data with a user’s consent.

In the tangible world. 2016 KPCB INTERNET TRENDS 2016 | PAGE 212 ... FOUNDER & CEO OF IONIC SECURITY. Should the same laws automatically apply to the digital world where a few lines of code can unlock someone’s entire life? ADAM GHETTI. physical limitations prevent the broad abuse of the law.

Disclosure This presentation has been compiled for informational purposes only and should not be construed as a solicitation or an offer to buy or sell securities in any entity. but on occasion will highlight new insights. KPCB is a venture capital firm that owns significant equity positions in certain of the companies referenced in this presentation. including those at www.kpcb. We will post any updates. We publish the Internet Trends report on an annual basis. revisions. the presentation is also informed by non-public information and insights. including public and private companies. KPCB INTERNET TRENDS 2016 | PAGE 213 . The presentation relies on data and insights from a wide range of sources.com/companies. We cite specific sources where data are public. market research firms and government agencies. or clarifications on the KPCB website.