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When John Doerr Backs An Industry, He’s Not Playing Around

Or is he? By all accounts, the epic (and wildly profitable) growth of gaming powerhouse Zynga crystallized the concept of today’s newly announced sFund that’s being led by Kleiner Perkins Caufield & Byers, which legendary VC John Doerr is calling "a quarter-billion dollar party." And the sFund concept has its DNA in another KCPB innovation: the iFund, which began life in 2008 with $100M that was quickly deployed, and then doubled in March 2010 to drive continued growth. So like the last generation’s EF Hutton: when he speaks, people listen – including the biggest players on the planet. And in case you're keeping track: that's over half a billion dollars in just over two years on mobile and social ventures!

And who’s coming to party (and co-investing) is among the most interesting aspects of the new sFund. Following on the Apple pairing for iFund, the KPCB guys have convinced Facebook to bring their platform and 500M users to the party as the ultimate audience aggregation point. While Doerr is quick to point out it’s not all about Facebook (which is why it isn’t call ‘fbFund’), inside access to an enterprise like Facebook can only be a boon for funded companies. And Zuckerberg is smart enough to recognize that maintaining their position as the dominant social network will require way more ideation, development and products than their teams alone could ever bring to market.

Just as interesting, was the presence of Amazon’s Jeff Bezos on-stage. Their AWS platform has become the weapon of choice for companies trying to manage huge spikes in user growth and usage – which is an all-new hallmark of this new social experience. Think back to the old days of package software; the limitations were typically CD duplication and an iron-fisted distribution channel. Today, an iPad application like Flipboard (another KPCB portfolio company) can come to market one day, and be literally crushed by customer demand at the server level. I’ve not seen any reliable numbers (Robert Scoble hazarded a guess in the 65,000 range for Day One), but the stories of Flipboard begging not to be featured in the App Store the day after launch seem completely plausible. Amazon is hoping every sFund company takes them up on the free AWS offer and grows into the next behemoth customer. In fact, Bezos notes: “The top three companies that develop for Facebook all use AWS.” News flash: the cloud is here to stay.

But for me, the most interesting quote of the day came from John Doerr himself: “We’re just getting started. This is the early innings, if you will, of social and I can’t wait to see how far it goes over the next decade.” Going into TechCrunch Disrupt a couple weeks ago, I was already convinced his ‘Third Wave’ framework provided a great backdrop to view all the companies. It’s all about the collision of social, mobile and commerce – and how those three represent a new paradigm. At the show, Eric Schmidt spoke and shared a similar vision from Google’s perspective, and added a fourth element Doerr seems to have gravitated toward quickly: cloud.

And with those building blocks, it seems obvious there will be radical new products coming to market. Zynga’s Mark Pincus called one out today: a travel app that has full insight into bookings, cancellations, destination information, your own cloud, etc. You can also imagine the radical new approaches to entertainment (music and movies in particular) that can be powered by a smartphone, ubiquitous connectivity and 1TB of cloud storage. While Pincus points to Pandora as the odds-on winner in the music space, I have to disagree. I don’t want someone else creating my playlists the same way I don’t necessarily like curated blogs. I’ll put the effort in so I create the ultimate personalized experience.

But the mind can still run wild if you consider the current social tools the appetizer to the main meal. Facebook amassing 500M users (and pointed toward 1B) is interesting, but the real question is what will they do on Facebook 3-5 years from now? My bet is photo sharing will always be big, but think about event planning or voter registration or pandemic disease education. You can do a lot when all your friends and colleagues are aggregated in a small number of social networks, which leads to my final thought.

I fully believe we’ll see a harmonization of the social graph over the next 3-5 years, which we’ve already starting seeing with development tools like RPX. Using your Facebook credentials to login to a site like TechDrawl simplifies the experience for the user, and has solid benefits for the site owner (automated pictures, no expensive development of your own login tool, etc.). So how long do you think only your avatar will be shared among those sites? Who will lead the way in allowing users to customize their social graph across multiple mainstream and affinity sites? Why would I tweet something that was relevant to my dating life (apologies to my beautiful wife for the analogy) and not have it cross-pollinated to Match or eHarmony? Why wouldn’t my Blippy purchases be automatically posted to the rewards programs of each retailer without having to carry around another crappy key fob?

The questions abound, but KPCB seems sure of one thing: entrepreneurs will innovate on the platform of their choice, and those products will change the social world as we know it. I couldn’t agree more, and am confident the sFund will draw out entirely new sets of ideas and companies that will blow us all away. I can’t wait for the ride!

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