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“Everything’s up to date in Kansas City,” including free public transit

Beyond Money - 7 hours 46 min ago

On December 5, the Kansas City council voted unanimously to make city bus routes fare-free. While the city’s light rail has been free for some time, fare-free service will now be extended to include all bus routes.

Well, it makes good sense, doesn’t it? At a time when income disparities are becoming ever more extreme, lower income people still need to get to work, and greater mobility has many benefits in terms of productivity and quality of life. Besides that, a shift toward mass transit has positive benefits for the environment. I, for one, hope that other cities will follow this example.

Read all about it at, Kansas City becomes first major American city with universal fare-free public transit.

 

Categories: Blog articles

Funding Friday: Current Events Crossword Puzzles

A VC - 9 hours 11 min ago

I backed this project for the Gotham Gal because she is a crossword fiend.

Categories: Blog articles

The Filecoin Testnet Is Live

A VC - December 12, 2019 - 6:05am

Our portfolio company Protocol Labs is the creator of the IPFS protocol and the Filecoin protocol. The idea behind both of these open source projects is to decentralize the storage of information on the web.

The Filecoin project is very ambitious. The idea is to create a decentralized storage network by allowing anyone to mine Filecoin by hosting files on the Filecoin network.

Yesterday the Filecoin project announced that the Filecoin Testnet is live. This means that an “alpha” version of the Filecoin network is up and running and anyone can connect to it and use it.

Filecoin has been 2 1/2 years in development since the project was funded in the summer of 2017. The launch of the testnet signals that the research and design phase is over and the protocol is now making it way towards going live next year.

This is a story that is playing out all across crypto. Many high profile projects were funded in 2017 and 2018 and have been heads down designing and building their protocols and networks since then.

Getting these projects out of development and into the market is a big step for the crypto sector and I believe that will be a big theme for crypto in 2020.

Categories: Blog articles

Butter

A VC - December 11, 2019 - 7:43am

I once asked a famous celebrity chef how he made his pasta taste so good.

He answered “Butter. Lots of it.”

When we land in Paris, jet lagged and cranky, we head right to our favorite street cafe and order strong coffee, baguettes and butter. And our systems are restored.

Butter is one of my life’s treasures. I love it.

Butter is also something we look for in the products and services we invest in at USV.

My partner Nick coined the term Butter, at least inside of USV, and he wrote about Butter on his blog recently, explaining what it is and why we look for it.

I particularly like this part of his post:

On the consumer side, Butter means end-user experiences that are frictionless and joyful.  For example, I recently went to China and was blown away by the QR Code experience — straight butter wherever you go, linking the real world to the online world.  Duolingo is Butter for Learning.  Nurx is Butter for Health.  Coinbase is Butter for Crypto.  Amazon Prime is Butter for e-Commerce.

https://www.nickgrossman.is/2019/the-butter-thesis/

Nick provides some good guidelines on how you can make your product or service buttery in his post.

We look for buttery products and services to invest in because customers look for buttery products and services to use. It is really that simple.

So when you design and build your product or service, make it buttery. That will lead to all sorts of good things.

Categories: Blog articles

CS Education Week

A VC - December 10, 2019 - 6:30am

This week is CS Education Week. There are CS Education week events all around the world, mostly in schools where students will do an hour of coding.

In NYC, where I do most of my CS Education work, there are CS Education week events in many/most of the public school buildings this week.

As I could not be in NYC this week, I went onto Twitter this morning to see what is going on and saw this:

Hopscotch Coding at PS 306 @techstrodinaire #CSForAllNYC, #CSEdWeek, @CSForAllNYC pic.twitter.com/icY0MvNNS6

— Lucy (@Lucy64747316) December 9, 2019

I love Hopscotch Coding. Young students deconstruct the game of Hopscotch into the various moves and then lay out the code next to the Hopscotch game to show how they played it. This teaches students so many important skills at a very young age and doesn’t even require a computer.

Students from 196WBMS had a great start to Computer Science for all Week! We had the opportunity to code with Spencer Dinwiddie from the Brooklyn Nets! @NYCSchools @DOEChancellor @CSforAllNYC @MicrosoftEDU @BKNorthNYCDOE @SDinwiddie_25 @SuptWinnickiD14 @ExecSuptKWatts pic.twitter.com/qTUTYEeUNd

— P.S. 196 K (@196WBMS) December 10, 2019

Spencer Dinwiddie, the point guard from the Brooklyn Nets, went to PS 196 in Williamsburg and did an Hour Of Code with the students.

We started off our CS Week with a bang ✨ Our computer scientists collaborated together in plugged and unplugged stations integrating ELA, Math, and Science. #csforallnyc #HourOfCode #csedweek @CSforAllNYC @PS94DavidPorter pic.twitter.com/H1Os8kDhd7

— Elizabeth Kyrou (@KyrouMrs) December 9, 2019

Students at this school in Little Neck Queens did coding exercises in English, Math, and Science. One of the great things about CS is that it integrates so well into many different disciplines.

Celebrating CS Education Week in your school or your child’s school is a great thing to do and I encourage everyone to celebrate CS Education week by doing that this week.

Categories: Blog articles

Algolia

A VC - December 9, 2019 - 7:57am

One of the things I am most focused on with the new AVC.com, which is coming soon, is a better search experience.

I have been impressed by how much we were able to improve the search on the new USV.com and the way we did that was by using a site search service called Algolia. So I am going to use Algolia here at AVC as well.

Algolia allows me to customize the search results to improve them. That means I can work on improving the search results here at AVC over time.

There are 8,470 posts here at AVC as of today. That’s a ton of content. And finding the post you remember reading and want to read again, or send to someone, has never been easy.

I hope and expect to fix that soon.

Categories: Blog articles

Getting Tech Into The Boroughs

A VC - December 8, 2019 - 7:52am

A number of elected officials tweeted “I told you so” when the news came out at the end of last week that Amazon had taken space in Hudson Yards and will move 1500 jobs there soon.

While the question of what kind of public funded incentives should be used to incentivize the behavior of the wealthiest corporations in the world is a conversation that we must have, the truth is we all lost something when Amazon decided not to build their second headquarters in Long Island City and bring 25,000 good paying jobs to Queens.

Where companies locate does matter. Sure you can take a subway from Jamaica Queens to Hudson Yards and some people will.

But NYC’s large and rapidly growing tech sector remains largely white and asian and centered in lower and midtown Manhattan.

I dream of a day when communities like the South Bronx, Jamaica Queens, Brownsville Brooklyn, and St George in Staten Island can have tech companies as residents and tech jobs will be readily available to the residents of those communities.

A good start is NYC’s groundbreaking CS4All program in which computer science teachers and classes are being made available in every public school building in NYC. Another good start is CUNY’s emphasis on making high quality computer science majors available at many of its twenty five campuses around NYC.

We are well on our way to training the tech workforce of tomorrow which can and should be as black and brown and female in the future as it is white and asian and male today.

But we also must connect the tech sector to the vast part of NYC that exists outside of lower and midtown Manhattan.

And the best way to do that is to create incentives of some sort for large and small tech companies to spread out into the outer boroughs.

There is a fantastic building in the Brooklyn Navy Yard called Dock 72. I have suggested to many of the tech companies that I work with that they move there. Some have taken a subway over there to take a look. But many have told me “I’m happy here in Manhattan.”

Locating in Manhattan is easy. You can recruit employees from New Jersey, Westchester and Connecticut. Moving to the boroughs is a harder decision.

So we need to encourage that behavior. If not tax incentives, then let’s try something else.

But if we leave this to the market to sort out, we will see the next 250,000 jobs created by the tech sector located in places like Hudson Yards and not Industry City.

And that will be a loss of all of us.

Categories: Blog articles

Funding Friday: Truth Or Consequences

A VC - December 6, 2019 - 8:30am

I backed this film project this morning and am sharing it with all of you.

Categories: Blog articles

Bigger Isn’t Necessarily Better

A VC - December 5, 2019 - 6:38am

Crunchbase has a story up today explaining that Series A and Series B rounds make up between 25% and 35% of all $100mm+ “supergiant” rounds every year.

That’s interesting but what would be more interesting is to compare the cohort of companies raising Series A and Series B supergiant rounds to the rest of the companies in a given year that raised Series A and Series B rounds.

What would interest me are success rates between the two cohorts. One could measure how many of each cohort are alive five years later. Or one could compare the stock price appreciation over the five year period between the two cohorts.

I have found, and written here, that performance of VC backed companies is inversely correlated to how much money they raise.

There are all sorts of reasons for that, but mostly it is that money is a burden, and anchor, it weighs you down and slows you down.

So I’d like to see the data on these supergiant A and B rounds. I suspect it will be pretty poor.

Categories: Blog articles

Fasten your seat belts…

Beyond Money - December 4, 2019 - 7:46pm

1/30/1981 President Reagan and David Stockman meeting on the economy in the Oval Office

In his current subscription pitch and announcement for his new book, PEAK TRUMP: The Undrainable Swamp And The Fantasy Of MAGA, David Stockman lays out some startling facts, provides a cogent analysis, and makes some dire predictions. As President Ronald Reagan’s Budget Director and long-time political insider, Stockman should be heeded. Here are some excerpts:

“We are in a whole new ball game. The Deep State, the House Dems, the Mueller hit squad and the mainstream media are all going in for the kill.

“They are determined to take the Donald down and preserve the rule of the bipartisan establishment in favor of Empire abroad and Big Government, massive debt and Fed-fueled Bubble Finance at home.

“At the same time, the Donald is now practically handing them his political head on a platter. That’s because he has bombastically embraced the “big, fat, ugly bubble” that he so accurately harpooned during the campaign.

“But that bubble has now reached a fatal triple-top and is fixing to implode, and to take the American economy and Trump’s presidency down with it.”

Stockman says, “We are heading for the double whammy of a political/constitutional crisis and a thundering financial breakdown at the same time.” He argues that it was the failure of “the Washington/Wall Street consensus” that led to Trump’s victory in 2016, and that actions of the Federal Reserve have caused a massive asset bubble along with huge disparities of incomes and wealth.

He goes on to say that “just because Donald Trump targeted the symptoms correctly [during his campaign] that doesn’t mean he had a plan to fix the American economy or the skills and know-how to move the turgid, essentially paralyzed machinery of the Federal government.” Stockman  characterizes Trump as “a political flyweight, megalomaniacal incompetent and bile-ridden bully who stumbled into the Oval Office against all odds.” He decries the massive growth of government debt over the past four decades and boldly asserts that recession will hit the US economy before November 2020, and that “Wall Street, the US economy and the Donald’s fantasy of MAGA will come tumbling down with it.” Whether or not his timing is correct, it is clear that a political and economic shipwreck is just ahead.

Stockman decries the “bipartisan ruling class” which is “in favor of permanent war, unchained entitlements, fiscal incontinence, unsustainable debt-fueled household spending, rampant corporate financial engineering and Keynesian monetary repression and “wealth effects” based central banking that lies at the roots of our current economic malaise,” and referring to the Mueller Russiagate investigation and subsequent impeachment hearings, Stockman says, “the Donald’s fluke elevation to the Oval Office has finally caused the Deep State to come out of hiding and bare its fangs against American democracy itself.”

Stockman criticizes the Fed for “dithering” and delaying “normalization,” by which he presumably means raising interest rates and ending Fed purchases of government bonds. He also calls for “fiscal rectitude” (balanced budgets) on the part of the government, something that even his beloved Ronald Reagan was unable to pull off.

But what Stockman (and everyone else) fails to realize is that, under the interest-based debt-money regime that has prevailed throughout the modern era, it is impossible for national governments to consistently balance their budgets. Here’s why. Since money is created when banks make loans, and since interest is charged on those loans, aggregate debt increases simply with the passage of time. If growth in the money supply does not keep up with debt growth, many debtors will default and the economy will sink into recession. Thus, the banking system must find ways to keep people and corporation borrowing ever greater amounts of money. Over my lifetime I’ve seen banks roll out a succession of creative schemes. Starting with the liberalization of consumer credit following World War II (“Buy now; pay later”), then the widespread issuance of credit cards, then the introduction of “student loans,” then the easing of requirements for people to buy real estate, banks have gotten people to borrow more and more.

Then, when the private sector is all “loaned up” and cannot take on additional debt, the government must step in as “borrower of last resort.” By deficit spending, financed through the issuance of bonds, the national government, with the help of banks that buy those bonds, the money supply is expanded. (When banks buy government bonds they are making a loan to the government). And when all available funds have been sucked up, the Fed must step in as “lender of last resort” to itself buy up additional government bonds while keeping interest rates at acceptable levels. That approach, called “quantitative easing,” is what saved the global system of money and banking from total collapse in 2008 after the housing bubble burst. Thus, the government and the banking establishment are locked together in a deadly embrace and “dance of death” that is spiraling out of control.

It may very well end with a major decline and long drawn out recovery, as Stockman is predicting, but unless a new interest-free money system is implemented after the wreckage is cleared, the ultimate outcome may simply be another round of ever more extreme boom-bust cycles and political chaos.

The good news is that there are credit money innovations waiting in the wings, and now emerging, that can be rolled out, replicated, and networked together to usher in a “Butterfly Economy” and new world order of peace, justice, and human unity. For details about what the Butterfly Economy might look like, and how we might get there, see my video, The Butterfly Economy: How Communities are Building a New World From the Bottom Up, and my article, Reclaiming the Credit Commons: Towards a Butterfly Society. — t.h.g.

Categories: Blog articles

AIVC

A VC - December 4, 2019 - 6:19am

My friend Fraser took a large number of AVC blog posts over the years and trained an AI model on them.

The result is a blog written by a machine.

You can see it here.

One one hand, it is kind of amazing that you can train a machine to write like someone.

On the other hand, I don’t think I will be out of a job anytime soon.

Categories: Blog articles

Digital Money

A VC - December 3, 2019 - 7:22am

I was listening to this podcast on the treadmill this morning. It is a conversation between Peter McCormack and Andreas Antonopoulos about Bitcoin, Privacy, Freedom, and a lot more.

At one point Andreas says that we have digital money already, but it is largely debits and credits on ledgers in banks and other financial services companies. He also says that cash is currently only about 8% of global money and that number has been going down steadily over the last fifty years as digital money has taken over.

His point, and it is a good one, is that cash is decentralized money. But money that is registered on a ledger maintained by a corporation that is highly regulated by the government is an entirely different thing.

After listening to the podcast, I bought some more Bitcoin this morning.

Categories: Blog articles

Practicing Patience

A VC - December 2, 2019 - 4:44am

We went to the Knicks Celtics game last night.

For three and a half quarters the Knicks and Celtics played a tight game and the game was tied at 95 with six minutes left when Coach Fizdale called a time out.

The Knicks came out of that time out befuddled and turned the ball over on three straight possessions which ultimately led to 12-0 run by the Celtics and the game was over.

As we walked out of MSG, I was depressed. More losing.

But my son Josh had a different take. Dennis Smith Jr is finally coming out of his early-season slump. Kevin Knox had a good game after taking a beating in the press recently.

Losing is hard. The Knicks are 4-16 so far this season. There is not much joy in the Garden right now.

But I appreciate Josh’s optimism. By the time we had gotten to dinner, some of it had rubbed off on me.

Patience is hard. Being a Knick fan is great practice.

Categories: Blog articles

Grinding

A VC - December 1, 2019 - 4:07am

It is tempting to search for the one magic move that will make everything better. A new VP of Sales. A new database layer in your tech stack. A new brand for your company. Moving everything to the cloud. More capital in the business.

But it is rarely one thing that a business needs to succeed. It is often a little bit of everything.

Back in the early days of Twitter, we could not keep the website and API up. We would hire advisors and they would recommend something new and we would try it and we would still go down. It was terribly frustrating and threatened the business.

During this period of instability, Twitter purchased a search engine called Summize. Summize was a small team of engineers, most of whom had come out of AOL.

After we cut the deal to acquire Summize, I asked Jack Dorsey, who was running Twitter at the time, how we planned to integrate the Summize team. He looked at me and said “we are not going to integrate them, they are going to integrate us.” And Jack made Greg Pass, Summize’s engineering leader, Twitter’s engineering leader.

It was interesting to watch Greg and the Summize team tackle the “fail whale.” Instead of searching for a magic solution, they instrumented the entire system and just started rebuilding every part that was about to break.

It was a slow and steady approach. It took time. But within six months (or thereabouts), we had a much more stable system. And after about a year of this approach, we had mostly said goodbye to the fail whale.

Grinding isn’t very satisfying. It is hard to stand up in front of everyone and say “we are going to fix things around here bit by bit with a lot of hard work.” Big flashy moves are an easier sell most of the time. But they don’t work nearly as well and are prone to complete and abject failure.

If given a choice between a flashy operator or a grinder, I will take a grinder every time. It is a much higher percentage bet. It requires faith and patience and the results are sometimes hard to see. But if you look at the results from grinding it out over a long enough time frame, you can see the power of that approach.

Categories: Blog articles

Video Of The Week: Crypto Singularity

A VC - November 30, 2019 - 6:53am

This is a talk that Muneeb Ali, co-founder and CEO of our portfolio company Blockstack, gave at their “Can’t Be Evil” summit last month in the bay area.

Categories: Blog articles

Funding Friday: ENEMY Magazine

A VC - November 29, 2019 - 5:45am

A regular reader sent me this project last week and I backed it today and am sharing it with all of you.

Categories: Blog articles

Thankfully, ….

A VC - November 28, 2019 - 7:11am

there is this thing called the Internet which allows anyone like me to connect a server to it and host content like this blog post.

Thankfully there is open source software like WordPress that allows me to do all of this without using a proprietary service.

Thankfully there is a range of operating systems (some open source) that we can choose from and a range of browsers (many open source) that we can choose from to access this content.

It is this permissionless environment, designed fifty years ago, and developed over the next thirty years, that has done so much for society.

Of course, there are many things about this permissionless environment that are problematic and we are faced now with the need to address them intelligently without undoing all that is good about it.

I am thankful that my lifetime has roughly lined up against this incredible invention and development and that I have been able to play a small role in it and that I can also play a small role in addressing the challenges we now face.

I am also very thankful for my family, friends, colleagues, supporters, and readers.

Happy Thanksgiving Everyone.

Categories: Blog articles

Latest news from Thomas Greco — November 2019

Beyond Money - November 27, 2019 - 11:13am
In this edition:

The End of Money and the Future of Civilization now published in Spanish
I’ve waited ten years for it to happen but I’m delighted to announce that, thanks to the efforts of translator Enric Montesa and editor Julio Fernández, my book, The End of Money and the Future of Civilization, is now available in Spanish. The Spanish language edition, titled El Fin del Dinero y el Futuro de la Civilización, can be ordered from the publisher, Ediciones Kaicron, at their website. Please help spread the word to your networks of Spanish speakers.

Continue reading the newsletter here…

Categories: Blog articles

Cash Management In Startups

A VC - November 27, 2019 - 6:05am

When I was in my mid-20s and had just gotten a job in venture capital, I read a piece on Alan Shugart, the larger than life founder of Seagate, one of the most successful disk drive companies. Alan was quoted as saying that “cash is more important than your mother.” That got my attention because mothers are really important.

Over the years, I have learned what Alan meant. Cash is everything in a startup. It is the fuel that keeps the car running. And startups fail largely because they run out of cash.

I was working with one of our portfolio companies yesterday on a cash forecasting model, a practice that I strongly recommend and appreciate greatly.

Forecasting cash is more art than science, particularly in a growing company where there are all sorts of unpredictable things (revenue, infrastructure costs, hiring pace, receivables, etc).

But like all practices, it is about the practice. You have to engage in cash forecasting, you have to engage in it regularly, you have to adapt to changing conditions on the ground, and you have to internalize the puts and takes and their impact on operations.

When a company gets mature in their business operations, has repeatable revenues, and has a strong balance sheet, you can run the business based on an annual plan or a semi-annual plan.

But early on in a company’s life, you are going to have to operate on an ever changing plan. If the revenues are coming in more slowly, you hire more slowly. If you want to wait another six months to raise more capital, you have to buy that time with changes to the operating model.

That is the back and forth between cash management/forecasting and operating. They go hand in hand.

It all starts with a cash forecasting model. It looks like a forward-looking profit and loss statement. But you do it on a cash basis. And you include balance sheet items like security deposits, equipment purchases, etc in it. Think of it as forecasting your checking account over the next year.

Once you have that, you need to engage in updating the model regularly and it is ideal to do that as a team, or at least with parts of the team, in the room. That makes it abundantly clear to everyone how operational decisions impact cash and runway.

I like a weekly cadence to this process and I like it to happen with the key senior leaders in the room. That may feel like wasting people’s time. But cash is more important than your mother in a startup, so managing it is never a waste of time.

Categories: Blog articles

USV Two Year Analyst Program

A VC - November 26, 2019 - 4:06am

At USV, we have had a two-year analyst program since the very early days. The alumni of our analyst program are an impressive group of people. Some have their own venture capital firms, some are founders of companies that are doing great, some are working in large companies.

We are starting the process of hiring a new group of analysts and, as always, we kicked off the process with a blog post on USV.com.

If you are interested or know someone who might be, check out this post.

Categories: Blog articles
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