The South By Southwest Interactive festival draws so many entrepreneurs, it naturally also draws venture capital investors hoping to find the next big thing.
"This is such a nexus of energy and smart people and cool stuff," said Kleiner Perkins partner Bing Gordon, who co-founded Electronic Arts and sits on the board. "Anytime technology can hang out with entertainment it's always worth showing up. This is like the Coachella of tech."
Gordon said he's excited about the potential of "the maker movement"—new products that came about thanks to the growing availability of 3-D printers like MakerBot. He pointed to Ouya, a new video game console that gained traction on Kickstarter, Leap Motion and Memoto's life-blogging camera.
"Atoms are a good way to go," Gordon said of the rise of gadgets instead of prior years' obsession with apps.
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Gordon's colleague, Chi-hua Chien, another general partner at KPCB, said he thinks the big trend to watch is "the rise of the local web."
Pointing to AirBnB, Uber, Zaarly, Lyft, Cheery, he said, "All these companies are building for the local web, which didn't exist in the overall natural web because of the rise of mobile devices." He said all these tools are great for small businesses and great for the economy. Mobile devices are "enabling a great way for people to make a living now," Chien added.
Scott Weiss, a partner at Andreessen Horowitz, said this is the year of the gadget at SXSW.
"I'm looking for ideas that transcend this petri dish here," Weiss said, referring to the fact that one of the hottest companies at the festival last year, Highlight, never took off in the mainstream.
"The spaces we are looking at [are] all types of global mobile commerce and I think that one of our companies, Shoptiques kind of embodies what I would call, 'the OpenTable of blah.' You know every business that you walk into today, whether it be a boutique or car repair shop ... All those '90s blue screen TVs [in those businesses] will be replaced by a mobile device and a cloud service, and they're just happening vertical by vertical."
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"Companies are focusing on how the Internet can transform other parts of the economy, like health care of education ... Half the economy hasn't been disrupted by the Internet," he said.
As for the challenges LivingSocial has faced, Case said he's confident about the potential in the daily deals business, and though "it's rarely a straight line, there are some bumps in the road."
Looking ahead, he wouldn't point to specific businesses he wants to invest in, but said he's taking a lot of meetings. Last year his firm, Revolution LLC, led a $3.5 million round of financing in Homesnap, so we'll see if anything piques his interest this year.