One of the factors that has shaped the connected world over the last two decades has been the transition of browser marketshare from Netscape (the inventor), Internet Explorer (the monopolist), and then Chrome (the innovator). The importance of the browser was essentially its impact on where address bar searches terminated. This was one of the strong tailwinds behind Google’s ultimate search dominance.

In the last five years, internet businesses has been facing a new challenge in navigating the mobile universe, as the importance of search has been decreased in getting to your customers.  There are a new set of rules for mobile players.

Then yesterday, I saw Google announce that Chrome for Android and iOS has grown 100% YoY to reach 800m users.  They don’t disclose how much of that is iOS, but it’s showing strong momentum. This makes me think about how there may be a new search paradigm on mobile devices.

I suspect most general mobile searches happen within the browser, within the address bar.  The termination point is usually a website, but sometimes an app that is already in your device.

People searches probably take place in your Facebook and Linkedin apps. Local searches are perhaps in your map apps, or in dedicated apps like Yelp or Foursquare. There are more use cases where you go to a specific app for a specific type of search.

The most interesting development here is Apple’s Spotlight search.  It’s really an attempt to tie the search back to the OS.  If spotlight gets more intelligent, to understand the context of my search, it can perhaps be the start of all my searches.

I am keenly watching how mobile searches will evolve.

We see about 1000 pitches every year.  That's about 20 per week.  With the majority of these, we know that it's not for us within the first 15 minutes.  We do engage further with about 400 startups every year.

The first engagement is either an in-person meeting or a call.  This is the step where we start to demand metrics and data from these startups, and frequently, it's a painful process.

What we typically like to see is three sets of information:

1. Historic financials

Here, I don't necessarily mean the  statutory income statment, but sometimes, they work as well, as long as they reflect the management's view of the company's operations.  What we look to see is a summary of the monthly economic activity or the business, and perhaps, the unit economics.  Typical items we looks for are:

• The Top-Line Figures (GMV, Gross Revenues, etc.)
• Cost of Goods Sold
• Gross Margins
• Operating Expenses (Salaries by function, Marketing Expenses, G&A, etc.)
• EBITDA

We prefer seeing these in your local currency, monthly, and broken down to its natural components, that tell the story of your business.

2. Forecasts

In your forecasts spreadsheets, we like to see both a top down and a bottom up approach, to make sure they support each other.  By top down, I mean starting with the total addressable market data, and narrowing to get a sense of what size a slice you'll ultimately have of that market.  By bottom up, I mean checking your growth projections agains the historic patterns. Ideally these numbers are broken down monthly.  If you are foreseeing any jumps, we like to discuss why.

 3. Other Key Metrics

The third spreadsheet we like to see is your non-income statement metrics.  These give us the best sense of how you see your business.  Essentially, this is theKPI dashboard you look at to manage your business.  It may include data on your traffic, level of engagement, the number of suppliers, salesperson productivity or hours of content, etc.

One set of metrics we find useful in almost all types of businesses is customer data.  Whether you are an enterprise or a consumer business, the most valuable assets of most startups are their customers.  Therefore, demonstrating to us how your customers behave once you acquire them, using data, is critical.  Tools like cohort analysis allow us to have productive discussions with you about your business.

I'd urge any startup talking to VCs in iterating and refining these three sets of information before proceeding too far in their conversations.  Not only will it keep the process with VCs more efficient, it will improve your understanding of your business.

As a VC you get pitched many hockey stick stories, but infrequently see an actual one.  This week, I came across one in the case of Airbnb (on TC).

This is the graph of summer bookings by travelers on Airbnb.  I assume there are several drivers to this growth:

• A new market: Airbnb enables a behavior that was difficult to execute before it.  Similar to Uber, its growth benefited from the fact that it created its own market, rather than merely stealing market share from incumbents.
• Mobile growth: As one of the earliest mobile-first companies, it was always one of the top apps in the travel category in each market it operates in.
• Social graph: The business model requires a high-level of trust.  Airbnb used the social graph very effectively to provide this trust, and thus benefited from the  virality that social networks open up.
• Global network effect: Travel is inherently a global market, so in each local market, the global network effect trumps the local one.

As a result, you get the beautiful shape we see above.

It's a bit cliche but I love the "best of the year" lists that mushroom at the end of the year.  Here are two:

Auren's book recommendations don't disappoint.  He's updated his favorites list with entries from 2014.

And, here's Seth Godin's.  Includes audio.

Finally, I should mention that my favorite non-fiction book this year was Ben Horowitz's "The Hard Thing About hard Things", and on the fiction side, "Sweet Tooth" by Ian McEwan, even though it was published in 2013.

On Saturday, I presented an introduction to venture capital at Etohum's Entrpreneurship Camp.  It was fun for me and I hope the attendees found it useful.  I was a bit concerned that I did not answer all the questions to the satisfaction of the crowd, due to time limitations.  I was also a bit disappointed in my ability to answer the questions using proper Turkish – something I strived for – and I think largely accomplished – in the main presentation.  It's difficult for me to deal with industry jargon in Turkish, because it feels a bit artificial and also because I don't necessarily use it in my day to day dealings.  It's easier to fall back on English.

The presentation was streamed live, and I understand Etohum will make it available as a video online soon.

Following the presentation, I came across an article in Entrepreneur magazine titled "4 Common VC Myths".  Even though I might not agree with all the points, especially the attempt at generalizing in the first point, I think it's a good intro for those who may have had their questions go unanswered on Staurday.