Tech Draft 2011: After Their IPO, Who Are the Real Deals?
With the recent NBA Draft, I thought I would create my own mock draft Silicon Valley style by listing the upcoming tech IPOs with a brief analysis a la Dick Vitale, baby!
1. Facebook. Without a doubt, a prime-time-player. How can you go wrong with selecting Facebook number one? Is this valued at $50 billion or $80 billion? Who cares. All we know it's easily worth tens of billions and is here to stay as the social networker juggernaut.
2. Groupon. Historically, the second player chosen in the NBA draft has a high probability of being a bust. Groupon's revenue and user numbers are too difficult to pass up at the second slot, but just remember history. If I were a smart GM that looks beyond the size, vertical leap and flash, I would pass on Groupon since I don't believe he has work on the fundamentals during school. No jump shot and poor free throw shooting. I just never believed their business model was defensible against various competitors across sectors.
3. Trulia. This is my sleeper out of Silicon Valley. From a lesser known conference, so he reminds me of Stephen Curry out of Davidson or Hall of Famer John Stockton out of Gonzaga. Will he be a bust like Adam Morrison, another Gonzaga alum, a solid contributor like Curry or a Hall of Famer like Stockton? They're profitable and strengthening their position in the online real estate space, but how will the landscape look 5 years from now? Who knows, but all I know is the kid can play!
4. Legalzoom. I have to go down to SoCal for a former baby dandy that's matured into a spectacular senior preparing to enter the center stage. The leader of online legal services, Legalzoom, is rumored to be making buckets of money with healthy margins, but I couldn't get the inside scoop on real numbers. He doesn't garner as much attention as his Silicon Valley counterparts, but I believe his numbers will hold up once he enters the big leagues and IPOs. Also Kleiner Perkins recent purchase of their shares is a good signal to the market along with long standing investor Polaris Venture Partners' involvement. They could be the steal of the draft like when Karl Malone was the 13th pick out of Louisiana Tech and went to become one of the greatest power forwards in NBA history.
5. Zynga. The juggernaut of social gaming has some analysts saying "game over" and conceding to his position as the dominant player in this new market. This reminds of how some people were saying Darko Milicic was going to be a "bona fide superstar". Also reminds me of the chatter that app makers Slide and RockYou were going to be billion dollar babies a few years back. If you know gaming, the tides can turn fast so $500 million in revenues can become $50 million in a few years. Supposedly Zynga is recently making "headcount" acquisitions of companies based on number of engineers, so I wonder if they are able to get the best talent and retain them in this manner? Well, I know John Doerr, the Coach K of Silicon Valley is big on him, but I'm 50/50 on this prospect. He could become a superstar or just a solid contributor like a Shane Battier.
6. Gilt Groupe. Gilt is the Ricky Rubio of this year's tech draft. Will he join a team if drafted this year or wait a couple to leave the comforts of playing in the private leagues? His numbers are awesome baby! But with inventory rightsizing and if the economy dramatically improves, how will they survive in a world with less excess inventory from the luxury brands? What will his margins be as a regular ecommerce play?
Regardless of my concerns for each of these draft prospects, this year's class looks outstanding. One of the best to come out in recent memory. They're going to be awesome baby!
Article first published on Technorati.