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As recently as six months ago, it was easy to disregard the Internet of Things (IoT) as just a theoretical market that Cisco measured in the trillions, but whose potential never seemed to materialize. That’s all changing.

The past year ushered in a new era for the Internet of Things for three reasons. First, venture capitalists invested nearly $1B of capital in the IoT in 2013, more than 3% of all VC investments by dollars. Second, the sector witnessed its first IPO, Control4. And third, Nest’s sale to Google last week set the high water mark for IoT acquisitions, measured at more than $3B, firmly establishing the category as a strategic imperative for the world’s largest technology companies.

Each year the National Venture Capital Association and Thomson Reuters release data characterizing the state of the startup market. I’ve analyzed the 2013 data and there are three important trends I observed. All in all, the startup exit market is quite healthy.

1. Startup exit values are increasing more than 7% per year, on average.
2. The number of exits is flat-to-down during the ten year period I studied.
3. The public markets have opened to startups again, doubling their share of exits.

On the heels of last week’s post about the Health of the Public Technology Market, Felix Salmon asked the thought-provoking question above. Despite the 68x growth in the value of technology market caps since 1980, are newer average technology companies worth less?

Surprisingly, yes.

The average public tech company value has falled by more than 2/3rds from $4.3B in the early 80s to $1.4B today, as measured in 2014 dollars.

Churn is one of the most important metrics for businesses. Churn dictates customer lifetime, lifetime value (CLV), customer acquisition spend and customer success spending. In short, churn is pivotal number to evaluate a startup’s business, both for founders/management teams and investors.

Unfortunately, accurately measuring churn rates/lifetime value is more complex than I initially thought. I was researching the topic after Ryan Shank asked me how best to calculate an average customer’s lifetime value. The more I dug into the math, the deeper the rabbit hole went.

In “Why Winning Streaks End”, Rosabeth Kantar, a professor at HBS, explains the key to maintaining momentum in any company is maintaining the discipline of every day processes. Similarly, Atul Gawande’s book Better echoes this idea. For surgeons, the best way to keep patients safe and healthy is ticking through a checklist before each surgery.

As I’ve watched a handful of startups grow, the pattern I see emerging from most of them is their ability to persistently transform chaos into process. And then continuously improve the way they do things.

I’ll never forget the first time I was assigned a sales quota. I was six months into a sales role at Google in which I on-boarded and managed the accounts of social networks running AdSense ads. Our key metric was customer satisfaction and retention. After a few months, I was starting to get into a groove. And then, our team was assigned a new manager who put the team on a quota, sending me into a tailspin.

For Google, seasonality is an important factor in forecasting quarterly revenue growth. In the advertising business, Q4 is always the strongest, followed by Q1. Q2 is the weakest. In Google’s latest financial year, the difference between the weakest and strongest quarters was 22%: $14.4B in Q4 and $11.8B in Q2.

I wondered if the same were true for SaaS companies. Should SaaS startup forecasts account for differences in underlying customer purchasing habits? While not subject to the consumer buying holiday cycle like advertising based companies, SaaS salespeople might be impacted by the vacation schedules of their customers or some other factors I couldn’t anticipate.

Yesterday, I walked the sprawling floor of the Consumer Electronics Show. These are the six key themes/trends I noted.

The Coming of Era of Drones - I saw barrel-rolling quad-copters and parkouring wheeled robots dancing in synchrony to hiphop music. It was awe-inspiring and terrifying at the same time. If you watch the video, I think you’ll agree the mechanisms to control drones are rapidly becoming more sophisticated. Setting aside regulatory questions, there seem to be fewer and fewer barriers to large scale drone deployments in the very near future.

Tien is the founder and CEO of Zuora [1], and was formerly CMO and CSO at Salesforce. He is a brilliant marketer and created the notion of the three doors to SaaS success. He spoke about this innovation at a recent CMO summit; the video is here.

If you visit Zuora’s website, you’ll see Zuora’s three doors along the top of the page: Subscription Economy, Why Zuora & How It Works. Those are the three most important navigation links on the page.

In the last 35 years, the tech industry has exploded in size from $62B in total market cap to more than $9.7T today, as the chart above shows. In that time, the tech industry has birthed some behemoths. In 2013, Apple became the largest publicly traded company, the first time a technology company held that distinction.

Despite the number of massive companies built over the past three decades, these tech giants represent an increasingly small amount of the total value in the technology sector. In 1981, the top ten technology companies represented 95% of the global IT market cap. Today, that share has fallen to 26% and the ratio continues to fall, a very positive trend. This fragmentation is an indicator of how much opportunity exists for startups to seize. If the tech industry were consolidating it would indicate the very largest tech companies were leveraging their market power to win share.