tag:,2009:/1/tag:72.47.210.69,2007://1.3740- 2009-10-30T14:52:53Z Comments for Amazon, VCs Woo Seattle-area Developers Movable Type 4.23-en tag:72.47.210.69,2007://1.3740 2007-04-27T22:34:44Z 2007-12-16T23:11:25Z Amazon, VCs Woo Seattle-area Developers Two days after wowing Wall Street with earnings handily beating all estimates, Amazon held an event wooing local (Seattle area) web developers and venture capital firms alike. Perhaps its just a coincidence after adding US$7 billion in market capitalization the last two days, but money definitely seems to be following Amazon's investment in Web... John Milan Two days after wowing Wall Street with earnings handily beating all estimates, Amazon held an event wooing local (Seattle area) web developers and venture capital firms alike. Perhaps its just a coincidence after adding US$7 billion in market capitalization the last two days, but money definitely seems to be following Amazon's investment in Web Services (AWS). Madrona Venture Group, a VC firm in Seattle, helped sponsor the event, with a long list of VCs working the room.

Regardless of whether you use Amazon services, if you are a Web 2.0 company, it makes sense to keep these firms to keep in mind for funding. And if you are using Amazon web services and are looking for money, you might want prepare your elevator pitch and contact one of the below:

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  • 3i
  • Arch Venture Partners
  • Atlas Accelerator
  • Bank of America
  • Clearstone Venture Partners
  • Divergent Ventures
  • El Dorado Ventures
  • First Round Capital
  • Foundation Capital
  • Frazier Technology Ventures
  • Granite Global Ventures
  • Hummer Winblad Venture Partners
  • Lehman Brothers Venture Partners
  • OVP Venture Partners
  • Paladin Partners
  • Partech International
  • Polaris Venture Partners
  • SeaPoint Ventures
  • Sierra Ventures
  • Sunriver Ventures
  • Voyager Capital
  • Vulcan

    • Of course, the competition for their attention may be strong, as a full room came to hear a presentation focused mainly on Amazon's developer offerings and what they can do for business owners. One claim repeated several times was that Amazon eliminates 70% of the non-differentiating work for web startups. That means, things like building server farms, maintenance, and any operation that doesn't distinguish you from your competition. 70% strikes me as a bit high, but then my company produces desktop applications so I may not be the best judge. The other 250 people in the room were generally nodding their heads in agreement.

    If you're already familiar with the Amazon web services pitch, there wasn't much new in the presentation. However, a question and answer session led by Andy Jassy, Senior VP of AWS, to clarify that Amazon is in fact building a distinct line of operation with its own investments and not using idle capacity sitting around until the next Christmas season, was interesting. True, they have not yet opened up Elastic Cloud Computing, but the servers currently running EC2 are dedicated for that purpose.

    Some Take-aways

    One participant wondered why Amazon hasn't started its own venture capital arm to make strategic investments in their AWS platform. Then we looked around the room and noticed all the engaged VC representatives and came to the conclusion they didn't need to.

    The question of 'What happens if <Big Company> moves in on this space?' is becoming more common, and the big company on everyone's mind in this part of the world (Seattle) is Microsoft. To this, the only thing the AWS folks could do was smile and claim first mover advantages. However Matt McIlwain of Madrona Venture Group mentioned that he had just returned from a Silicon Valley forum where people thought Microsoft simply can't ignore what's happening here much longer. I did hear a rumor that the first Microsoft data center has come online in the last month, and one can only speculate about Google and Akamai, so stay tuned...

    Speaking of data centers, there was a question among some attendees about whether Amazon actually owns or leases them. If someone from Amazon would like to clarify this in the comments, that would be appreciated.

    Finally, something to watch for. Up to now, most of Amazon's success stories are in the consumer market. Since Amazon runs one of the largest consumer web sites, this makes a certain amount of sense. However, they must have designs on the business market too. While they have the technology, and events like today's certainly show developer interest, it may take a bit more effort to convince corporations their platform is secure enough for enterprise data. Once corporate IT departments begin buying in to Amazon's vision, the other big technology houses will be forced to respond. Given the recent stock market activity on AMZN, that time may come sooner rather than later.

    ]]>     tag:72.47.210.69,2007://1.3740-comment:31934 Comment from eas on 2007-04-27 eas http://geekfun.com Regarding Amazon providing VC backing for startups that use their webservices. They'd get more leverage if they invested through existing, established VCs anyway. They can spread their a given investment budget over more startups without having to manage all those relationships.

    ]]>     2007-04-28T00:14:08Z     tag:72.47.210.69,2007://1.3740-comment:31935 Comment from eBusiness on 2007-04-28 eBusiness http://www.ebizmba.com Although, there has been a plethora of new incubators and established companies like Yahoo and Amazon getting into the VC game they all seem to be looking for potential investments among the same pool of canidates (primarily in the west coast of the U.S.). The outfit that finds a way to expand its reach to a broader group of canidates is going to be the most successful.

    ]]>     2007-04-29T06:05:06Z     tag:72.47.210.69,2007://1.3740-comment:31936 Comment from fo.unta.in on 2007-04-29 fo.unta.in http://fo.unta.in Its funny how the game has changed.
    Now, VCs are finding out avenues to reach potential investments.
    And the firms are trying to (kind of) eat the 10x return themselves.

    ]]>     2007-04-29T07:20:46Z     tag:72.47.210.69,2007://1.3740-comment:31937 Comment from John Milan on 2007-04-29 John Milan http://intelligantt.blogspot.com/ @eas - I agree. If Amazon knows one thing its how to scale, and having VCs manage investments scales much better than Amazon managing it all themselves.

    @eBusiness - I believe this was the kickoff for an Amazon road-show. Yes, the West coast is the obvious place to start because of the developer community and the physical location of Amazon itself. However, I wouldn't be surprised if this presentation came to a city near you.

    This presentation, especially the ties with VC, might be more difficult to do outside the US. But I do know that Jeff Barr travels a heck of a lot. You should see the bags under his eyes! :)

    @fo.unta.in - A firm only gets to enjoy that 10x return in investments if they provide useful infrastructure. Amazon has more or less made their case for economies of scale and is simply trying to scale it as rapidly as possible- kind of like their storefront which they scaled as rapidly as possible.

    The question I have this time around is how long until the web services investment is demonstrably profitable. If you recall, it took years for the Amazon consumer store to reach profitability, and Amazon still carries quite a bit of debt with it.

    This time around they may be able to scale faster because of the interest from the developer and VC communities. Then we will all see how much first mover advantage is worth as MS, Google, et al try to catch up.

    ]]>     2007-04-29T15:55:35Z     tag:72.47.210.69,2007://1.3740-comment:31938 Comment from Graeme Thickins on 2007-04-30 Graeme Thickins http://graemethickins.typepad.com Re: Amazon's road show, they'd do well to come to the Twin Cities, where we have a vibrant developer/Web 2.0 community ... largest Barcamp to date in the U.S. so far, just held: Minnebar ... and a well developed utility computing mindset.

    ]]>     2007-04-30T14:40:27Z