Building an investment thesis around Google Glass.

1. Google Glass
1
OPPORTUNITIES & CHALLENGES FOR VENTURE INVESTORS
ALLEN MILLER
COLUMBIA BUSINESS SCHOOL
MBA INTERN, GOTHAM VENTURES

2. On the Brink of the Next Wave of Innovation
Pattern Recognition: Hardware Platforms Produce Software Innovation
2
Hardware Platform Software Innovation
?

3. Agenda
Deck Overview
1) Trends in Wearable Technology
2) An Overview of Glass
• Glass Products & Features
• User Feedback & Adoption
3) Investment Opportunities
• High-level Use Cases
• Industries
• Example Companies
4) A Case for Mass Adoption
5) Sources & References
3
Wearable
technology
Google
Glass
Industries
& Use
Cases
Companies

4. Historical Evolution of Wearables
WEARABLE TECHNOLOGY
4
Single Function,
Unconnected
Multi-function,
Unconnected
Multi-function,
Sometimes
Connected
Multi-function,
Always
Connected
1970s 1990s 2000s Today
Ex: digital or
analog
watches
Ex: digital watches
with enhanced
features like the G-
Shock watch
Ex: iPod
Applications
and the
Nike+
Sensor
Ex: Nike fuel band,
Google Glass

5. Wearable Technology Landscape Today
WEARABLE TECHNOLOGY
5
Wristbands Smart Watches Smart Glasses Smart Clothes
…and much, much more.

6. Growth Forecasts
Wearable Technology
6
$-
$2,000.00
$4,000.00
$6,000.00
$8,000.00
$10,000.00
$12,000.00
$14,000.00
2010 2011 2012 2013 2014 2015 2016 2017 2018
MarketValue(inmillionsof$)
Year (2010-2018)
Wearable Device Market Value
Source: Business Insider
$2.5B market, expected to grow to $12.2B by 2018.

7. 2013 VC investing in Wearable Tech
Wearable Technology
7
In 2013, investors put $458M into wearable companies across 49 deals.
Source: CB Insights

8. Agenda
Deck Overview
1) Trends in Wearable Technology
2) An Overview of Glass
• Glass Products & Features
• User Feedback & Adoption
3) Investment Opportunities
• High-level Use Cases
• Industries
• Example Companies
4) A Case for Mass Adoption
5) Sources & References
8
Wearable
technology
Google
Glass
Industries
& Use
Cases
Companies

9. Hardware Overview
Glass Products and Features
9
Source: Techlife
Display:
• The main function is based on a mini projector, which projects onto a prism.
• The prism then reflects a layer over “reality” directly onto the retina.
• Equivalent of a 25 inch high definition screen from 8 feet away
Audio: Bone conduction transducer.
Storage: 12 GB of usable memory, synced with Google cloud storage.
Mobile Compatibility: MyGlass for Android and iOS.

10. Product Selection
Glass Products and Features
10
ThinBold
CurvedSplit
Frames Twist on Shades
Earbuds
Source: Google

11. Glass Growth Forecasts
User Feedback and Adoption
11
*The forecast for 2014 starts in the second quarter.
Source: Business Insider
22 million represents ~7% of the U.S. Population.
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2014* 2015 2016 2017 2018
UnitSales
Year
Forecast: Annual Sales from 2014-2018

12. Demographics of “Glass Gravitators”
User Feedback and Adoption
12
Base: 657 US online adults (18+) who replied that they would be willing to wear Glass
*Base: 4,657 US online adults (18+)
Source: North American Technographics Consumer Technology Survey, 2013
Glass Gravitators US Online Adults*
Female 44% 51%
Gen Z (18-24) 23% 13%
Gen Y (25-33) 26% 18%
Gen X (34-48) 22% 25%
Young Boomers (48-57) 13% 18%
Household Income (mean) $83,300 $78,700
Technology Optimist 66% 48%
Own iPhone 32% 24%
Own Android phone 35% 27%

13. Some Challenges: Survey Data
User Feedback and Adoption
13
Source: YouGov, May 2013
The majority (59%) weren’t interested a year ago.
Yes (28%)
No (59%)
Not Sure
(16%)
Would you consider buying and wearing Google Glasses?
Yes
No
Not Sure

14. Some Challenges: Survey Data
User Feedback and Adoption
14
Source: Surveycrest, 2013
Yes, 24%
No, 30%
Maybe,
46%
Would Google Glass Invade Privacy?
Poor,
53%Average,
24%
Excellent,
23%
How comfortable can you be viewing
things on google glass?
Source: Surveycrest, 2013

15. Agenda
Deck Overview
1) Trends in Wearable Technology
2) An Overview of Glass
• Glass Products & Features
• User Feedback & Adoption
3) Investment Opportunities
• High-level Use Cases
• Industries
• Example Companies
4) A Case for Mass Adoption
5) Sources & References
15
Wearable
technology
Google
Glass
Industries
& Use
Cases
Companies

16. Investment Opportunities
Industry Overview
16
Investment Timeline
Short
Run
Healthcare
Fitness
Platforms
Gaming
Long
Run
Consumer Digital Media
Advertising
Payments
News
Recruiting
Travel
Sports &
Entertainment
Transportation
Education
Commerce
Will begin with a few very
specific use cases—mostly
“enterprise” in nature.
Once mass adoption occurs, continued
permeated diffusion of mobile
connectivity.

17. Investment Opportunities
Industry Overview (Current Landscape)
17
Source: Compiled from Google
Of the 110 current apps, these 4 spaces are
the most promising in the short run.
0
5
10
15
20
25
30
35
40
Healthcare Fitness Gaming Platform &
Infrastructure
Development
Photo &
Video
Financial
Services &
Commerce
News
Aggregation
Food &
Beverage
Number of Google Approved Apps by Industry (as of April 2014)

18. Investment Opportunities
Example Companies
18
Healthcare Sample Company: Prisine.io
CEO: Kyle Samani
Location: Austin, Texas (pristine.io)
Currently Funded: No (angel financed)
Emergency responders are using Pristine to
beam in specialists in 1st person into the
field and the ambulance.
Surgeons are using Pristine to livestream cases
in 1st person to residents, fellows, and
surgeons at medical centers across the world.

19. Investment Opportunities
Example Companies
19
Fitness Sample Company: LynxFit (Byte an Atom)
CEO: Noble Ackerson
Location: Washington D.C. (http://www.lynxfit.com)
Currently Funded: No (angel financed)
1) Subscribe: Choose from
carefully curated categories
of workout routines.
2) Schedule: Users can
securely schedule routines
by location or by time.
3) Share: View, aggregate
and share data gathered
from exercise activities.

20. Investment Opportunities
Example Companies
20
Gaming Sample Company: Mind Pirate
CEO: Shawn Hardin
Location: Silicon Valley (http://mindpirate.com/)
Currently Funded: Seed (Bessemer Venture Partners, Signia Venture Partners)
Developed games include: Little Bandits, Shard & Singularity.

21. Investment Opportunities
Industry Overview
21
Platform & Infrastructure Sample Company: OnTheGo Platforms
CEO: Ryan Fink
Location: Portland, Oregon (https://www.otgplatforms.com/)
Currently Funded: Seed (Rogue Venture Partners, Foundry Group)
OnTheGo is developing gesture recognition technology to build a platform layer
that sits in between the glass hardware and Glass apps.

22. Agenda
Deck Overview
1) Trends in Wearable Technology
2) An Overview of Glass
• Glass Products & Features
• User Feedback & Adoption
3) Investment Opportunities
• High-level Use Cases
• Industries
• Example Companies
4) A Case for Mass Adoption
5) Sources & References
22
Wearable
technology
Google
Glass
Industries
& Use
Cases
Companies

23. A Case for Mass Adoption
Three Possible Challenges to Adoption
23
Product Functionality Price Point Social Norms
• Clunky, awkward feel
• Weak Visual display
• Wifi antena is spotty
• Battery Life is too low
Missing several critical
pieces of core
functionality.
At $1,500, Price
Point is too high
for the average
would-be
consumer
Glass also violates a number of current
social & cultural norms that could
prevent broad adoption including:
• Threats to privacy
• “Glasshole” perception
• No established etiquette for
obtaining the consent of those
being recorded.
As with most new products, successive
iterations will become more
aesthetically pleasing and higher in
quality. As the cost of production
lowers, so too will the price point.
The bigger challenge to adoption
centers around social norms. I will
make the case that social norms will
continue changing to make Glass
usage more socially acceptable.

24. A Case for Mass Adoption
In the Short Run: Product & Price (Not an Issue)
24
Historical Example: The Mobile Phone
Source: ASYMCO
Price Evolution Product Evolution

25. A Case for Mass Adoption
In the Short Run: Core Functionality (Possibly an Issue)
25
Historical Example: The Palm Pilot
Palm Had Functional Challenges The iPhone added Critical Functionality
• Inability to seamlessly sync all
existing contacts, music, etc., into
the device w/o manually entering
• Primitive Operating System
• Poor web browsing capability
• Ability to sync iPhone contacts,
songs, etc., to Mac computer with
the click of a mouse
• Best-in-class OS (iOS)
• Apps greatly enhance web
experience

26. A Case for Mass Adoption
In the Long Run: Social Norms (The Bigger Issue)
26
The more important question is whether Glass will overcome key challenges from a social
perspective. Many products in the recent past have failed the “social test.”
Segway Sony Aibo Facebook Home

27. A Case for Mass Adoption
Social Norms – Historical Parallels: The Mobile Phone
27
Back then…
• In 2000, only 28% of U.S. respondents owned a cell phone
• In 2007, 82% of cell phone users expressed concerns over location tracking
• Concerns over: privacy violations, waning attention spans, location tracking, etc.,
Source: American Association for Public Opinion Research,
Journal for Interactive Advertising
But now…

28. A Case for Mass Adoption
Social Norms—Historical Parallels: Facebook News Feed
Back then...
When News Feed launched in 2006, there was a
tremendous backlash among users:
• Users petition for FB to remove News Feed due to
privacy concerns
• CEO Mark Zuckerberg issued a public apology and
increases pricacy controls
28
Share of Time Spent on FB, 2011
But now…
Source:WebWashed

29. A Case for Mass Adoption
Social Norms: A 3-pronged Argument
29
1) Social Norms are already changing. We are moving away from privacy and towards
open information and continued mobility. Anyone on the Internet can already
information through a number of avenues:
2) Google is poised to focus on the 2 social norms that matter most:
• Control: Provide users with complete control over their personal information
• Privacy: Protect privacy through an “op-in” fully secured operating system
3) Historical Parallels (Phone & Newsfeed) lean very strongly in Google’s Favor
Google is already taking steps to avoid a major flop by taking feedback from users
(Explorer Program), expanding aesthetics & functionality (frames, prescription
lenses, ear buds, etc.,) , opening its platform to developers (MyGlass) and
investing heavily in quality supply chain partners (like Himax).

30. Agenda
Deck Overview
1) Trends in Wearable Technology
2) An Overview of Glass
• Glass Products & Features
• User Feedback & Adoption
3) Investment Opportunities
• High-level Use Cases
• Industries
• Example Companies
4) A Case for Mass Adoption
5) Sources & References
30
Wearable
technology
Google
Glass
Industries
& Use
Cases
Companies

31. Sources & References
Works Cited
31
Sources
AngelList
Business Insider
CB Insights
CrunchBase
Forbes
Fortune
Google
LynxFit
Mind Pirate
NY Times
OnTheGo Platforms
Pristine
SurveyCrest
TechLife
VentureBeat
YouGov
Interviews
Glass Explorers/Entrepreneurs
Dave Cho: COO, Soko Glam
Katy Kasmai: CEO, Xocracy (Founder of Glass NYC Meetup)
Ryan Fink: CEO, OnTheGo Platforms
Tom Emrich: Co-Founder, Wearable App Review & Glass Eats
Kyle Samani: CEO, Pristine
Lindsay Macvean: COO, Facial Network
Venture Capitalists
John Burke: Founder and Partner, True Ventures
Micah Rosenblum: Partner, Founder Collective
Amit Mukherjee: Associate, New Enterprise Associates
Zak Schwarzman: Associate, Gotham Ventures
Lucas Nelson: Principal, Gotham Ventures
Special thanks to Lucas Nelson and Professor
R.A. Farrokhnia (Columbia Business School).