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Think Big. Move Fast.

What does “big data” mean to you? When most of us hear the term, we immediately think about mainstream use cases that leverage smarter data sets to assist companies in making better decisions that optimize business operations, improve enterprise application performance, and even create apps for children to foster more engaged and successful learning. At Lightspeed, we are working with a number of companies that are disrupting their target markets by harnessing the power of big data such as EdgeSpring, Bloomreach, Origami Logic, Click Security, Boundary Networks, Datastax, MapR and Qubole, and we believe that big data will continue to evolve in the coming years to solve an even broader array of market challenges – including problems associated with human health.

One such company, Natera, is a good example of a startup that has brought together doctors, geneticists, statisticians, data scientists and software engineers to leverage both big data and genetics for the improvement pre-natal health.

By combining the power of big data computation and algorithms with world-class genomic science, Natera provides expectant mothers and doctors with information that can improve their chances of having a healthy child.

Natera announced today that it closed $54.6 million in financing to support expansion and continued global rollout of its non-invasive pre-natal test, Panorama™. This new test leverages the power of science and big data to discover chromosomal abnormalities through analysis of a drop of blood from the mother-to-be, eliminating the risk associated with older techniques like amniocentesis and ionic villus sampling, which can lead to complications such as miscarriage. Panorama holds the possibility of reducing and ultimately obviating the need for many of today’s high-risk pre-natal procedures.

From the very beginning of our partnership with Natera, we’ve recognized that they’re poised to completely disrupt the pre-natal genetic testing market while positively benefitting expectant mothers and doctors. The opportunity for Natera to improve lives through cutting edge computer science and big data is a bold proposition, and one that touches many of us personally. In the past, doctors have had to wait until the second or third trimester to conduct many pre-natal tests. By this time, the risk is much higher and the options are far more limited. Natera is completely changing that model by enabling physicians to uncover highly accurate clinical information and data through a simple blood draw as early as six weeks into a pregnancy.

Lightspeed would like to congratulate the entire Natera team on their bold vision and tremendous success to date. We look forward to our ongoing shared journey as Natera continues to transform the way the world conducts pre-natal genetic testing with the combined power of science and big data.

Follow Ravi on Twitter @RMTacct

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For there to be a deep and liquid exchange marketplace in Bitcoin, the primary Bitcoin exchange needs to be robust and performant, with millisecond trade execution timeframes under heavy volume. Right now, Mt. Gox, the primary place where people can exchange dollars for Bitcoin, is neither. It has suffered under repeated DDOS attacks and has seen protracted outages and trade execution times that stretch into minutes and even hours when it has stayed up. Trade capacity is reputed to be in the 10s per second, several orders of magnitudes short of what is needed for a future proofed exchange. This is not an acceptable long term situation if the Bitcoin ecosystem is to grow.

Mt. Gox understands this. In an FAQ in response to the DDOS attacks on April 24th, the company said:

_________

“Mt. Gox has been working overtime since February to build a new trading engine which

will be implemented by the end of June. Additionally, since early March we have been

building a new IT infrastructure which will be completed by the end of May.”

_________

This is pretty exciting news. Here we are at the end of April, so a new trading platform that could potentially support much higher volumes and more robust to hackers attacks may be only weeks away.

But there are many disgruntled Bitcoin traders who are approaching the limits of their patience with Gox’s poor performance, poor service and restrictive limitations on transfer of funds. Will they wait a few weeks for a fix, especially if we see continued outages? It not, the window is short before they look for a new alternative.

One possible future holds that in the next couple of weeks, Gox suffers another  major attack and goes dowm for a protracted period of time. Some group of traders grows impatient and moves en mass to another exchange, creating a new nexus for liquidity. Although there are a number of startup Bitcoin exchanges, the only ones that could reasonable handle the volume in the next few weeks are likely the ones already up and running, btc-e and BitStamp.

Another potential vulnerability might be if Gox comes under investigation by FinCEN or some other regulatory body. In a recent interview on Let’s Talk Bitcoin, Bradley Jansen of Freebanking.org (start listening at 17,14) says:

_________

“Jensen: “I have heard through the grapevine that FinCEN has prosecutions in the works for Bitcoin broadly speaking.  My guess, based on the timing of the guidance, and what I had heard previously from the rumor mill about the prosecutions, is that FinCEN put out the guidance sort of ex post facto to justify the prosecutions that they’re about to launch.”

Interviewer: “So you expect this to happen within in the next couple of months…”
Jensen:  “Again, I’ve heard different rumors, it’s difficult to predict, but yeah.  We knew that the prosecutions were in the works, and then later the guidance came out, it seems like a sort of CYA approach to how they’re doing it.””
_________

I don’t know Jansen, but from his writing he does not come off as someone who is completely impartial; he is an ex regulatory aide to Ron Paul and can definitely be described as “anti governmental control”. But if what he reports is right, then it is reasonable to assume that FinCEN might target Gox. Just due to its market share and longevity, there is a pretty good chance that if any financial crimes have been committed with Bitcoin (and there have been many), that Gox has touched that tainted Bitcoin in some way.

If Gox gets targeted by FinCEN, then this would open the door for a new exchange to capture share. In fact a new exchange with no prior trading history, and hence no risk of prior financial crimes, may be advantaged as it can start from scratch with squeaky clean AML and KYC practices, money transmittal licenses and so on.

But if Gox keeps its liquidity through the period of instability before it can ship a new trading platform, and it is not targeted by FinCEN, then life gets a lot harder for new exchanges. They would need to extract liquidity from a well functioning Gox, a much harder proposition than taking on Gox today. This is not an impossible task as Gox is essentially a “single item” exchange, which is much more vulnerable to loss of market share than an exchange that trades in many different items. But a new exchange will require a well thought through strategy to take liquidity away from Gox. It can’t just rely on a better product.

I’d love to hear what readers think about these scenarios, other scenarios, and possible strategies to extract liquidity from Gox.

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Supercell raised $130M at a $770M valuation and got a lot of press for it recently. It is well on its way to being a billion dollar game company. Also on that track are companies like Kixeye (a Lightspeed portfolio company), Kabam, and many others in the social, mobile and tablet space, joining Zynga, Riot Games, Wargaming and others who already have a valuation north of a billion dollars.

The last 5 years have seen more Western gaming startups create this much value than in the previous couple of decades. Why is that?

It’s because the last five years have seen three new gaming platforms grow from nothing. I’m not talking about a new console launch, where the incumbents from the last generation of game makers have been the winners in the new generation. I’m talking about Facebook, mobile and tablet. Each of these started as tiny markets. The incumbent game makers didn’t pay attention to the new playtforms until they were significant, the classic innovators dilemma. The early talk about games on these new platforms was very dismissive, “barely games at all”. This opened the door for startups, and in each case, startups seized the opportunity.

Today though, it is much harder for a startup to break through on any of these platforms. Development costs, and the “discovery problem”, make it very hard for a new games startup to get reliable, meaningful traction on any of these platforms. (Casino games are a notable exception in the last couple of years.)

None of these gaming platforms started out as gaming platforms. They all had other uses that initially propelled their adoption. But games are and have always been a key consumer use case, and whenever someone can play games on a device, she will.

Many of todays game startups that already exist may continue to grow to become billion dollar companies. But I do not believe that a new games startup will get to that level until we see a new mass market consumer platform get launched.

Today there are two candidates for such a mass market consumer platform. The first is Google Glass. The second is an Apple watch. Of the two, I’m much more optimistic about Glass as a gaming platform. I worry that the screen real estate isn’t big enough on a watch for games. It could end up being about utility, not entertainment. But Glass clearly has the capacity for entertainment.

What will games on Glass look like? Who knows? Certainly different from anything we’ve seen before. Incumbents will eventually port their existing hits across, but it will be startups once again who pioneer innovation in game control, game dynamics, game play, all optimized for the platform. Since Glass likely won’t be readily available until 2014, and won’t be popular for a few years after that, the incumbents won’t dedicate their best teams to building games for the platform. They will always put their A team on their biggest money spinner, whatever they grew up on.

That will be the opportunity for the next billion dollar games startup. You need to wait until Glass is readily available. You’ll build games that the industry experts laugh at when you first launch. But you’ll have mid single digit percentage of all Glass users playing, maybe more. That may only be a few hundred thousand players at first. But you’ll grow with the platform and you’ll learn faster than anyone else because you’ll have real users. And when you’re ready, I’ll be waiting, because I believe in that future.

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This week, the price of Bitcoin hit an all-time high of $266 and then a “flash crash” brought the price tumbling down to $105.  What happened?  The largest exchange Mt. Gox reported that it had seen dramatic increases in new …

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I’ve been fascinated by the potential disruption that Bitcoin represents. Disruptions like this could create both massive value destruction for incumbents and massive value creation for startups, which is exactly where entrepreneurs and VCs should be playing.

I recently did …

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Over the past several years, MuleSoft has quietly emerged as one of the leaders in providing platforms for powering the New Enterprise. Lightspeed was an early investor in MuleSoft, and we’re excited to be partnered with a company that has …

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Courtesy of visual.ly. Click through to see a bigger version.

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Hyperink is an interesting startup focused on reinventing publishing in an e-book world. (We are not investors). They have published a number of great “blogs to books”, including ones from Jeff Atwood (co-founder of Stack Overflow), Sean Ellis (growth hacker …

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Last week, Lightspeed Venture Partners and the Amazon Web Services team brought together top technologists, startups, students, former Lightspeed Summer Fellows and venture capitalists to discuss how big data trends are impacting companies today. Companies like Boundary, DataStax, …

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PernixData introduces a software-defined “Flash Virtualization Platform” that aggregates and virtualizes flash storage distributed across servers into a scale-out data tier for enterprise data centers to provide low cost, deterministic high performance to any out-of-box application.

 

PernixData_FVP

 

The enterprise …

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