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I interviewed Tim Chang, Managing Director Mayfield Fund @Gamesbeat 2013. Â He grew up as a gamer so its a core part of who he is. Â Its something he does passionately but he also believes that the future of games is to take all these game design principles & go beyond games & entertainment & actually affect & help other industries evolve from health, fitness, nutrition, financial services even enterprise software. Â Things that make games fun can make the rest of life fun or at least more engaging for people. Â Games are a system at heart & it is the learning from designing those systems that we can use to improve all other systems whether they’re games or not. Â He said that new social distribution channels opened up that really changed the games investment area. Â He invested in Playdom which Disney acquired & Ouya. Â He says its fun playing games & writing checks for companies is easy but trying to grow the companies after to be successful & navigate the rapidly changing market is hard! Â The upside is that games historically make money from day 1, you know what the business model is, you know how to make money, you know the metrics & you know what kind of leadership & trends to look for early on for what could make a good games company. Â The downside is also historically exits meaning IPOs have not always been easy. “Wall Street doesn’t always understand content & games companies!” “There is a debate right now should venture capitalists be backing games companies? Is the right format for investment of games companies perhaps more of a dividend or profit sharing model as opposed to the classic investing for equity & hoping for a giant acquisition or IPO.” Â He spoke about his perspective on the changes in the venture industry. “The good news is that entrepreneurs have more means to raise funding than ever before which democratizes entrepreneurship & allows more people to create & start companies whether through angel funding, micro angels, crowdfunding, Angellist as well as traditional vcs. Its also gotten cheaper to start most kinds of companies especially consumer companies. Â In some ways that makes his job easier because they might be able to raise seed funding & prove that market demand first so then he can look at helping them grow & scale. Â But there’s thousands of companies now & much more to keep track of. Â In some ways its gotten harder to grow these companies or take them to the end point for a couple of factors (1) acquiring users at mass scale is still very expensive once you’re outside of early adopters & the technorati (2) once companies get traction they tend to attract huge giant fund raise rounds because of the land grab nature of the market. Â So its almost in the later stages if you can’t get that war chest you may fall behind in the land grab versus competitors. (3) Wall Street has higher & higher expectations before they go IPO & what that means is that the time that you get to exit gets pushed out further & further & the requirements are higher & higher. Â So you need to keep raising more & more money to be able to last that long to get to IPO.” The venture capital industry is evolving & emerging in new directions as it should. Â In the old days venture capital was more of a cottage industry based on inefficient information flow, proprietary relationships, proprietary deals. Â These days information relationships are very efficient, everyone has access to every deal. Â So its much more about where do you specialize & where do you focus. Â So we’re seeing more & more specialization of firms, by stage, region, sector, business model. Â In many ways its very like the evolution of the mutual fund industry or hedge fund industry. In the future everyone will have to have a really clear playbook & a really clear focus to find their spot in the ecosystem! Evolve or Die!”