Author Archives: cemsertoglu

Turkey’s Bright Internet Future

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Bridge

Last week Sina Afra had a good post on why Turkey has turned into a hot internet market, as a follow on to Robin Wauters's post on Trendyol's new round in Techcrunch.

All of this attention is obviously triggered by the tremendous year Turkish internet industry has had.  We have enjoyed a landmark period where we've seen two large exits in the $200m range to global strategic buyrs (GittiGidiyor-eBay and Markafoni-Naspers), and numerous investment rounds from top VCs like Tiger Global, Kleiner Perkins, Intel Capital, ePlanet, Earlybird and Hummingbird.

The interest is certainly not limited to the names mentioned above.  I have probably had more conversations with global VCs about Turkey in the last 6 months than the last 6 years combined.

Sina does a good job going through some of the reasons why Turkey is so hot.  He focuses on:

  • Large internet population: estimated at 35m, 5th in Europe
  • High growth e-commerce penetration, with huge upside remaining
  • High engagement, evidenced by the huge Turkish population on Facebook
  • Favorable demographics – 70% of online population <34 years of age
  • Strong payments and logistics infrastructure, critical for e-commerce

I fully agree with all of Sina's points, and I won't spend more time on these.  Turkey's getting all kinds of investor attention in every asset class and I think the country's merits on the macro level are evident to most.

However, I do want to point out some additional key actors who have contributed to the growth of the internet sector in Turkey.

First is talent.  There is an increasing number of young, smart, well-educated entrepreneurs launching technology ventures in Turkey.  For the best and the brightest,with plenty options in traditional careers, launching or joining a startup is much more of a viable career path today.  SocialWire (aka Iletken), Peak Games, Gezlong, and KonutKredisi.com.tr are a few examples that quickly come to mind.

Second is the growing diaspora of Turkish entrepreneurs, investors and professionals around the world, interested in and supporting the Turkish internet sector.  They understand the dynamics and the promise of theTurkish market and their influence, experiences and conections have been helpful to many Turkish ventures.

Third is the Turkish interent user. When you observe the meteoric growth of Turkish ventures like Grupanya, Markafoni, Trendyol, YemekSepeti and Nokta, you realize that the Turkish internet user is hungry for high-quality offerings, both in media and services. If a venture is able to offer first rate service, the uptake is extremely fast.  Sometimes the recipients of this attention are global players, but local ventures almost always get a first shot at attention.

I continue to believe we are in the early chapters of the Turkish internet story.  I look forward to helping build the next generation of Turkish internet winners.

UPDATE: With this post, I realized I'd missed Ari's post on the same topic last week.

Ignore the Noise – Keep the Focus

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Collapse The financial world seems to be in shambles again.

Pictures of 2008 are flashing back in my mind.  I spent the bulk of 2008 to execute a fairly hairy deal in an effort to raise $50m to invest in my vision of Turkish internet back then.  Had it not fallen apart at the nth hour in December 2008, it now looks like it would have created monumental returns.

So forgive me if I get a bit upset when the headlines are screaming apocalypse again.  I get upset because barely 2 years after the apocalypse cries, and RIP: Good Times memos, we were watching our trading screens looking at LNKD’s $10b market cap and 2,400 PE ratio.  And then, apocalypse again.  

If I have learned anything in the last two years it’s that it is mostly noise.  As humans, we are in constant need of narrating the world around us.  The explosive growth of media and the proliferation of channels that deliver us that narrative has exponentially grown the amount of noise.

To an entrepreneur, the noise can be paralyzing. Best entrepreneurs I know have taught themselves to tune it out, except maybe a few trusted sources to keep an eye on macro factors, while maintaining an intense focus on the work at hand: the KPIs, strategic imperatives and the general landscape in which their venture operates.

I just thought it may be the right time to remind my readers (myself?) of this.

BTW, regarding the current financial mess we are seeing around the world, Umair Haque has been calling this out forever.  

Google+: The Anti-Twitter

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We have all seen Google Wave and Google Buzz, and probably have concluded that Google won't be able to leverage its email-driven social graph through features.  They need to come up with thicker value and attempt to solve a problem, which neither Wave nor Buzz really did.

Enter Google+. At first glance, it looks like Google decided that the soft belly of Facebook is its rapidly diminishing context: bundling your college buddies, collagues, family and acquaintances together.  Add to that the very different usage of the platform in non-US geographies (read: primarily dating and mating), it seems very sensible to build a publishing platform to let you narrowcast content and online social interaction to carefully crafted buckets of relationships.  That's my read on Google+.

To me, this decision is very distinctive by the fact that it is exactly the opposite path of Twitter.  There must have been countless meetings at the Google Corporate Development group about Twitter.  For a while, Twitter looked like a fairly low-price ticket for Google to bolster its own social graph. However, Twitter's one-way, follow model must have not fit Google's strategy, seeing they are going in the opposite direction. Deep vs. broad.

I have not had a chance to use Google+.  I think the premise it holds out is interesting and valuable.  I do think there will be big pressure on the user experience for it to deliver its promise.  The smart grouping of relationships and the implicit extraction of context will ve critical.  I noticed that Gmail rolled out a people feature next to email messages that seems to work very well.  This is a technology challenge and that is not an area Google is weak in.

I am keen to see if Google will be able to turn its deep UX assets and talent into a seamlessly usable social sharing tool with Google+, or if it will join the list in the first sentece of this post.

UPDATE: Liz Gannes's post today is not too promising on Google's initial UX attempt.  Now I am more curious.

The Filter Bubble

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I have been thinking about personalization for the last few months as it has become a common theme among all of my investments.  On the one hand it is the idea to jump at you when you start thinking of the disruption possibilities when you have powerful computers ubiquitously available and constantly connected.  The holy grail of the implicit web put personalization as a convenient first step immediately ahead of any product team at any internet venture.

On the other hand, you have the danger what my friend Eli Pariser is talking about at this great TED talk.  Too much personalization definitely carries the price tag of losing context, getting trapped echo-chambers and missing the greater perspective.  Our worlds are not entirely personalized and the danger of over-personalization is a bit difficult to define.  Eli looks at it from the content side and defines his "filter bubble" very well, taking into consideration ethics, tact, civic responsibility and missions.

Eli warns us against a "web of one". I agree with his call and continue to have faith in the connected world's ability to design around the danger he points out. Product design is both an art and a science.  Decisions around personalization will differentiate the best artists and the scientists.

eBay Takes Majority at GittiGidiyor

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Gittigidiyor_logo
eBay announced today that it has increased its stake in GittiGidiyor, Turkey's leading ecommerce company to 93%.  This is a landmark transaction for Turkish internet.  Congratulations to Serkan, Burak, Tolga, Aydonat, and the team at iLab!  This is the fruit of a lot of hard work.

The real winner in the deal is the Turkish internet, ecommerce and VC industries.  This is the first  internet exit of a magnitude that creates real wealth for the entrepreneurs.  That means the case for internet entrepreneurship as a viable career path for the best and the brightest coming out of the best schools in Turkey has gotten stronger.  The bottleneck of high quality talent for web startups might just get a bit eased.

I bet there are tens of LP presentation decks being updated today, as this transaction gets added to the top of the page dealing with the tough question of internet exits in Turkey.  A similar update will take place in corporate development departments of any global internet companies, as Turkey becomes more and more visible on the international M&A roadmap.

Finally, this is also a personal landmark for me and my career as an entrepreneur and investor in Turkey.  I'd met the GG team back in 2005 and had the chance to work on the deal alongside the iLab team in 2006.  Back then, I had felt that this was the greatest Turkish internet company to invest in. It's nice to see that after 6 years, eBay agreed.

+1 May Be Google’s Way In

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The internets are abuzz this morning wıih +1, Google's Like button to counter Facebook's.  I continue to believe that Google sits on top of a very valuable social graph with Gmail, but has not had the chance to make it usable yet.  Unlike Buzz or Wave, this feels like it's the most on target attempt.  With the main difference being that it originates from search.

If Google can get its users to start +1ing their search results, the next step may very conceivably be the (successful) atomization of the +1 button throughout the internet.  Right now, Fb's Like button feels a bit frivolous.  You really don't quite understand what it will exactly do.  The same may be true for Google as well.  However, with Google, we're used to the secret sauce; to the fact that Google has this black box that makes sense of large, disassociated facts to rank pages for us.  We don't need to understand how it does it.  Just that it works for us.

Is Google finally cracking social?

How Defensible is the Social Graph?

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Facebook-Places-vs-Google-Places-300x225 I was about to retweet Chris Dixon's blog post on social network interoperability (@cdixon is one of the clearest thinkers at the abstract level on the connected economy), but then I decided it's probably worth a blog post.

If you read my blog, you'll know that I am a very big believer in the value of the social graph, or the identity layer of the internet.  As Chris points out, Metcalf's Law suggests that Facebook's lead here is so big that it's insurmountable by any of the aspiring players.  However, I think there's a subtle and very complex factor also in effect here.  And Chris Dixon identifies it as a potential cause to push FB into interoperability.

I think that's a very interesting idea.  However, if I were to bet, Facebook would continue to be extremely protective of its social graph data.  Why?  Because it's in its DNA.

Today, I got access to a web-based CRM-type application.  The app made me walk through a very simple wizard, and quickly got a strong sense of my social graph.  Gmail can probably do the same, just by looking at the emails Facebook has sent to me.  When you operate as a platform, even if you're trying to be protective, you are more open than you think.

So, I would like to reverse my position on Facebook's lock on the identity layer.  A truly open player (and I am not sure if Google Me is going to be that open), can strip the identity layer from Facebook (or vkontakte, QQ, etc.)  This will be a tough race, similar to the iPhone vs. Android battle we have coming up.  But in this case, open will have an even stronger advantage, thanks to Metcalfe.

Twitter Killed My Blog

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"Rewritten by machine and new technology,
and now I understand the problems you can see."

The Buggles – Video Killed the Radio Star

I realized today, with amazement, that it has almost been 3 months since my last blog post, and that this is just my 7th post since May.  This is by far the slowest blogging I have ever logged and I am a bit embarassed.

In parallel, I have probably been tweeting on average twice a day for the same period.

In short, Twitter has killed by blogging.  And I suspect I am not alone.

I also realized that I am not as good a blogger as I fancied myself to be.  When I analyze the 500+ blog entries I have written over the 5 year life span of this blog, I find that most of them are reflections on content that has been created elsewhere – mostly links and comments to others' blog posts,  videos, articles, etc.

In other words, they have been glorified ReTweets.  And the same act now takes me a few seconds (to retweet), as opposed to the 15-minute blocks of time that a blog post typically requires.

From now on, I'll stop fighting the natural flow and try to RT when that is all that's called for.  So this blog will probably see fewer entries but hopefully more original thinking.

If you enjoy hearing from me, you can follow me at http://twitter.com/csertoglu.

 

 

The Future of Media: The Flipboard Edition

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In 2005, Fred Wilson authored a blog post titled "The Future of Media".  It remains extremely relevant and insightful, 5 years after its publishing, and has been proven right throughout a few major waves of innovation, such as Facebook and the iPhone. In Fred's words, the future of media has 4 major components:

1 – Microchunk it – Reduce the content to its simplest
form. Thanks Umair.
2 –
Free it – Put it out there without walls around it or
strings on it. Thanks
Stewart.
3 – Syndicate it – Let anyone take it
and run with it.  Thanks Dave.
4
– Monetize it – Put the monetization and tracking
systems into the microchunk. Thanks Feedburner.

Today, I saw a new innovation that is feeding on the above points, but is also extremely good at the interface level:  The Flipboard.  And, yes, please add me to the fanboy list.  And please see the video below for Mike McCue's demo of the Flipboard.  It's really difficult to describe.

App Inventor

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Google recently announced App Inventor for Android, which allows non-programmers to easily build applications for Android phones. The idea is not a new one, and as Google explains, it's been built on the efforts of many other initiatives.

However, it is critical that this is a development framework for a mass-market platform.  Imagine what kind of creativity we would have seen if the iPhone has a similar consumer-oriented app builder.  I think this is very cool.