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Yubikeys

A VC - 9 hours 58 min ago

I saw my friend Chris tweet this question yesterday and had to respond:

Yubikeys are awesome. Not supported everywhere. I use them where I can

— Fred Wilson (@fredwilson) January 15, 2018

Nick helped me get Yubikeys set up on all of the services I use that support them in the past few weeks. If I had a new year’s resolution, which I don’t, it would have been to start to use Yubikeys.

So what are Yubikeys?

They are a brand of “security keys” that are supported in the two factor authentication offerings at Google and many other Internet services.

They look like this:

You can buy Yubikeys here.

The idea is you keep one with you and one in a safe place in your office or home or a bank safe deposit box.

If you lose your phone, you have a Yubikey to get you back into the service.

But I don’t only use Yubikeys as “backup codes”, which I also keep stored safely.

I have started using my Yubikeys instead of a Google Authenticator code. It can be easier if you have the Yubikey handy.

But whatever you do, don’t use SMS for two-factor codes.

I was hacked this summer and the attacker tried (unsuccessfully thankfully) to port my phone number.

My partner Albert recently experienced a similar attack. He wrote about it here.

So here is the best practice as I see it:

  1. Always use two-factor authentication if it is offered. And it is almost always offered on popular services.
  2. Don’t use text messaging to deliver two-factor codes. It is not safe. You can have your number ported way too easily.
  3. Use Google Authenticator to deliver two-factor codes onto your phone.
  4. Use a Yubikey as a backup in case your phone is lost, stolen, or dropped in a swimming pool or toilet.
  5. Print out the backup codes to the two-factor services and put them in a safe place.

Personal data security is a big deal. Trust me on this. Don’t let yourself get hacked to understand why.

And Yubikeys are a nice addition to the personal security mix. I like them a lot.


USV TEAM POSTS:

Albert Wenger — January 15, 2018
Martin Luther King Jr Supported Basic Income

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

Light And Love

A VC - January 15, 2018 - 4:07am

Today we celebrate the life and teachings of the great Martin Luther King Jr.

He had a way with words and among my favorites is this quote, which seems very apropos right now:

Darkness cannot drive out darkness: only light can do that. Hate cannot drive out hate: only love can do that.


USV TEAM POSTS:

Albert Wenger — January 15, 2018
Martin Luther King Jr Supported Basic Income

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

Some Thoughts On Equity Compensation

A VC - January 14, 2018 - 9:18am

A hallmark of startup companies, the tech sector more broadly, and certainly our portfolio companies, is that they include equity in their compensation packages for their employees, often all employees.

If you work for a tech company, chances are good that you will get options as part of your compensation package.

I have written extensively on this topic over the years and even published a framework for issuing equity to employees on this blog.

That framework is now out of date as the market has moved (up in case you were wondering) and I need to update it. It’s a project and we are working on it at USV but I can’t promise it any time soon.

A few years ago I met with a very successful entrepreneur who built his company outside of the tech sector. When I asked him about equity compensation he said to me “You people in tech are crazy. I pay my employees handsomely in cash and I keep all of the equity for myself.”

I’ve thought about that comment a lot in the years since. I grew up in the business doing things a certain way and never questioned it until that moment.

The truth is that equity comp has its disadvantages. You can’t pay your rent or take a vacation with your options. They might be worthless if the company fails or is sold in a fire sale. You have to pay taxes when you exercise and if you can’t sell the underlying stock that can be painful. If you leave and can’t exercise, you could lose the equity.

And it is hard to compare two competing equity packages if you have two (or more) competing offers. Companies often purposely make it hard to understand the equity they are offering you. But even if they give you everything you need to know to value the equity, you still need to make assumptions about the future value of the equity to value it and nobody has a crystal ball.

For all of these reasons, many employees don’t really value the equity and they often don’t understand it either. But they understand the cash part of their compensation and know how to value that.

For companies, the equity they grant their employees is costly. Annual dilution can be as high as 5% per year just for employee compensation. We work hard with our portfolio companies to keep this dilution as reasonable as possible but I have never seen it, regardless of stage, much lower than 2% per year. Compound that over ten years and you can see what happens.

And companies have to expense the cost of issuing equity to their employees on their income/loss statements and the amounts can be massive when the companies get to be large publicly traded companies.

This recorded cost on the income statement is not theoretical. If you bought back as much stock as you issue to employees every year, something I strongly recommend to companies that have the cash flow to do it, the expense in terms of cash is very real.

So this issue of employee equity, whether to include it in your comp packages, for whom, and how employees should value it, if at all, is a big fucking deal for our industry.

And yet we treat it like something that is non negotiable, like it is part of the ten commandments of tech companies handed down by God to the Hewlett Packard founders eighty years ago when they were starting their company.

I don’t have any specific recommendations to make on this topic except that Boards should be thinking way more deeply and creatively about this issue than we are. We should be confronting the true cost of this practice and asking ourselves if it is best for our employees, and if so, which ones, and if it is best for our companies and our shareholders.

The answers to those questions is not definitively yes for all employees and all companies. As the unnamed entrepreneur who got me thinking about this proves.


USV TEAM POSTS:

Albert Wenger — January 15, 2018
Martin Luther King Jr Supported Basic Income

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

Audio Of The Week: Empowering Women with Tech – Fereshteh Forough

A VC - January 13, 2018 - 9:48am

A few weeks ago on the Gotham Gal’s podcast, she had Fereshteh Forough, founder of Code to Inspire, an organization that teaches women in Afghanistan to code.

There is so much to like about what Fereshteh is doing. It’s a great podcast to listen to this weekend:


USV TEAM POSTS:

Albert Wenger — January 15, 2018
Martin Luther King Jr Supported Basic Income

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

Funding Friday: Make 100

A VC - January 12, 2018 - 4:16am

Like last year, our portfolio company Kickstarter is starting the new year off with a Make 100 campaign.

The idea is simple. Make 100 of something and fund it on Kickstarter.

Here are a bunch of live Make 100 campaigns

And if you want to do a Make 100 campaign, you can start here.

Make 100 campaigns are fun because they are typically low budget affairs.

I backed a bunch of them today and look forward to seeing them come to life.


USV TEAM POSTS:

Albert Wenger — January 15, 2018
Martin Luther King Jr Supported Basic Income

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

Losing In Double Overtime

A VC - January 11, 2018 - 5:00am

Longtime readers know that I am a Knicks fan. Or as the Signal group I have with a couple of my kids is called, a “Frustrated Knicks Fan.”

Last night we lost at home in double overtime to the Bulls. That is the third time this season we have lost to the Bulls. Twenty percent of the Bulls wins this year have been against the Knicks.

Last night’s loss was a microcosm of the season and this team for me.

We played hard, we made a couple big buckets to take the game to OT and double OT.

But in the end, a boneheaded play by the player who was keeping us in the game lost it for us.

Fandom is such an interesting emotion.

It is self-torture and yet we enjoy it.

Ugh.


USV TEAM POSTS:

Albert Wenger — January 15, 2018
Martin Luther King Jr Supported Basic Income

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

Timing

A VC - January 10, 2018 - 7:50am

There is a big difference between being right about something and being right about when something will happen.

Sadly, to profit from being right you either have to get the timing right or you have to hang in there until the timing is right. The latter can be incredibly painful and most investors don’t have the stomach for it.

This is particularly true of short positions. It is not enough to know that something is going to blow up. You have to know how, why, and when.

On long positions, like venture capital investments, you do have the ability to buy time but it requires a lot of conviction and patience and the carrying costs can negatively impact the returns.

Which is why the best venture capital investments are always the right idea at the right time by the right team.

I remember watching streaming video over a 14.4 modem in 1997. Ten years later YouTube nailed that opportunity. Right place. Right time.

A lot of venture capital investors ask “what can go right” instead of “what can go wrong” and that is exactly the right mindset in VC investing. But you also have to ask “when will it happen and why?”


USV TEAM POSTS:

Albert Wenger — January 15, 2018
Martin Luther King Jr Supported Basic Income

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

Being Direct

A VC - January 9, 2018 - 5:51am

I saw The Gotham Gal’s reply to an email this morning that we were both copied on. I can’t remember exactly what she said but it was something like “I understand, but no.”

No beating around the bush, no letting down softly, just complete and total honesty about where our heads are at on something.

She has taught me this lesson consistently over our almost forty year relationship. I have a tendency to be too nice and leave people with an unclear view of where I am at.

I’ve gotten much better at this over the years as the pain of leaving things hanging has taught me this very important point.

Being clear and direct with people, even if it means upsetting them, is better than being nice and leaving them confused.

Seeing that email reminded me of that and the next hundred emails I replied to got a very direct answer this morning.


USV TEAM POSTS:

Albert Wenger — January 15, 2018
Martin Luther King Jr Supported Basic Income

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

Meditation And Distraction

A VC - January 8, 2018 - 4:31am

I’ve been meditating for ten to fifteen minutes every day for the past two months. I have not missed a day since I started. I find it to be a wonderful practice which I enjoy and look forward to very much every day.

I am experiencing a number of benefits but the one I am most cognizant of is an increased ability to avoid distraction in a conversation or some other situation where I need to be focused.

I’ve always been good at being focused, sometimes to a fault. But I also find my mind wandering in situations where I am losing interest and that’s obviously very bad.

At the core of my meditation practice, as it was taught to me, is bringing my mind back in focus and back to the breathing. It is that thing “snapping back into focus” that I do regularly in my meditation practice that has helped me so much with staying present throughout the day.

Meditation is like repetitive exercise of the focus muscle in the brain.

So if you are having trouble being present in situations you want to be but can’t, I would strongly recommend trying meditation. It’s helped me with this and I imagine it will help you too.


USV TEAM POSTS:

Albert Wenger — January 15, 2018
Martin Luther King Jr Supported Basic Income

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

Taking Money “Off The Table”

A VC - January 7, 2018 - 8:47am

One of the hardest things in managing a venture capital portfolio is managing your big winners. A big winner can dwarf the rest of the entire portfolio and you end up sitting on enormous paper profits that you can’t get liquid on. I realize that this seems like a great problem to have, and it is, but it is still a challenging situation.

We faced it in Twitter in 2010/2011/2012, in the years before Twitter went public (which happened in the fall of 2013). We had bought 15% of Twitter for $3.75mm in the first VC round in 2007 and though we had been diluted down a bit in subsequent rounds, we had a very large position that was worth in the neighborhood of $1bn by 2011. Our entire fund was $125mm and so we were sitting on a position that was worth 8x the entire fund. It was a wonderful situation in many ways but I was nervous that macro events or a setback at Twitter could go against us and the position would go down in value, possibly significantly.

The way we managed this issue is we sold a portion of our position in two secondary transactions and in connection with those sales, I stepped off the board, making room for an independent director who would be helpful as the Company scaled and got ready to go public. We sold about 30% of our position in those two secondary transactions for about $250mm and returned 2x the entire fund to our investors.

That allowed us to “chill out” and hold the balance until the IPO, which had a customary 180 day post IPO lockup. After the lockup came off, we distributed the balance of the position, returning another ~$700mm to our investors.

Though we sold stock in the secondary transactions at lower values than the eventual IPO, I have never regretted doing that and believe that it was the right thing for us to do for many reasons.

We have done similar things in many other situations including Zynga, Lending Club, MongoDB, and a number of other investments. We typically seek to liquidate somewhere between 10% and 30% of our position in these pre-IPO liquidity transactions. Doing so allows us to hold onto the balance while de-risking the entire investment.

I was reminded of this topic when I saw the news that Benchmark, First Round, and Menlo sold between 15% and 50% of their positions in Uber to SOFTBANK. I think they all acted rationally and responsibly in doing that. It does not mean that SOFTBANK is making a mistake purchasing the shares. There are many reasons to believe that SOFTBANK made a good deal. But if you look at First Round, for example, they have a position worth $2bn or more at the $50bn valuation of the SOFTBANK tender. I don’t know the exact details, but I believe First Round’s fund that holds Uber is less than $100mm. So they returned something like 8x the entire fund and still hold the majority of their position. That was “well played” in my book. Same with Benchmark. Same with Menlo.

Taking money off the table is smart portfolio management. It is very different from selling your entire position, which could be brilliant but is equally likely to be a mistake. Selling a portion of your position, returning a multiple or two (or eight) of the fund, and holding on to the balance works out for you no matter which way the position goes in the future. If the position blows up, you got a lot out and booked a huge gain. If the position goes up significantly, you make even more money on the part of the investment you retained. If it goes sideway, you got a little bit out early. It is a win/win/win pretty much every way you look at it.

Which takes me to crypto (naturally). If you are sitting on 20x, 50x, 100x your money on a crypto investment, it would not be a mistake to sell 10%, 20% or even 30% of your position. Selling 25% of your position on an investment that is up 50x is booking a 12.5x on the entire investment, while allowing you to keep 75% of it going. I know that many crypto holders think that selling anything is a mistake. And it might be. Or it might not be. You just don’t know.


USV TEAM POSTS:

Albert Wenger — January 15, 2018
Martin Luther King Jr Supported Basic Income

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

Video Of The Week: Vitalik Buterin

A VC - January 6, 2018 - 4:43am

In honor of Ethereum trading (briefly) at north of $1000USD this week, I thought we’d hear this weekend from Ethereum’s founder Vitalik Buterin.

This is an interview that he sat for in October at the ETH Waterloo event (where, among other things, CryptoKitties was born).


USV TEAM POSTS:

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

Funding Friday: Shantell Martin

A VC - January 5, 2018 - 5:07am

I support a bunch of artists on Kickstarter’s new Drip service.

One of my favorites is Shantell Martin.

She draws her dreams and makes music and shares her work regularly with her backers.

It’s great to get a little bit from her on a regular basis.

Check out her page and maybe back her and see what that is like.

UPDATE: AVC regular Kevin Marshall just joined Drip today. Good timing. I backed him too. If you want to do the same, you can do that here.


USV TEAM POSTS:

Nick Grossman — January 14, 2018
You need a budget

Categories: Blog articles

I’m Having A Meltdown

A VC - January 4, 2018 - 7:36am

So the chips we use in our personal computers and cloud computers have some newly discovered security holes. One is called Meltdown. The other is called Spectre.

My first reaction upon hearing the news yesterday was “so what do we do about this?”

The answer is you can’t do much on your own.

For Meltdown, we need the operating system and hardware manufacturers to issue patches and firmware upgrades. I am sure they are furiously working on them.

The Verge has a good piece on what we can and should be doing about this.

Here’s the key part of that post:

  • Update to the latest version of Chrome (on January 23rd) or Firefox 57 if you use either browser
  • Check Windows Update and ensure KB4056892 is installed for Windows 10
  • Check your PC OEM website for support information and firmware updates and apply any immediately

I expect Apple will be issuing an update shortly for their OS.

Apparently Microsoft, Google, and Amazon’s cloud services are already patched for Meltdown.

As for Spectre, apparently there are no fixes for it as of now, but it is also a lot harder to implement hacks using that one.

Finally, my partner Albert has some optimism about all of this. We should expect some good to come of this mess.


USV TEAM POSTS:

Albert Wenger — January 12, 2018
A SIM Switch Account Takeover (Mine)

Categories: Blog articles

Some Thoughts On Checking References

A VC - January 3, 2018 - 8:03am

We do a lot of referencing in our business. We certainly ask around about a team before investing in them. But we do even more referencing post investment when we help the founders and management of our portfolio companies build a team. Investors often have access to references that founders and management don’t. So we can add a lot of value to the hiring process by reaching out to our network and asking about people.

The thing I have learned in thirty plus years of making reference calls is to pay attention to how things are said more than what is said. And pay particular attention to what is not said.

I have also learned to call people instead of sending emails. Most people don’t want to put negative things in writing, but will do so on the phone, particularly with someone they trust.

It is also helpful to talk to people with knowledge of a situation but not handcuffed by it. For example, a CEO may not feel comfortable saying something negative about someone they transitioned out of their company, but a co-worker might be. Or a close friend of a co-worker might be.

I don’t mean to suggest that references are all about finding out the negatives. You should also seek to hear what someone’s strengths are. Most people are good at some things and not so good at other things. Getting a sense of strengths and weaknesses and making sure the person is a good fit for the role is what referencing a person is all about.

But I do believe strongly in hearing the negatives when hiring someone. If you can’t find anything negative about someone, that is a red flag to me. Often negatives in one situation can be positives in another.

If someone says to me, “they were great when the company was small but got lost as the company scaled” that means that person is great at the very early stages of a company’s development. And that is often the most valuable time in a company’s life. Finding people who can operate in that environment is not easy. So I like hearing that about people. I know where to orient them.

I am not a fan of calling the references on someone’s list unless I know those people well. What I do instead is figure out who I know well that knows the person or knows someone who does. And then I reach out and call them. It’s more work but it yields much better results.

I am also a believer in having a group of people do the referencing. Getting multiple angles of attack on a situation is valuable and multiple people will have a much bigger network of close relationships to leverage.

I am not a fan of referencing by checklist questions. I have been on the other end of calls where the person is reading from a list of questions. That strikes me as an odd way to do a reference check. I think a conversation where you can dig into the meat of the issue in a natural way works a lot better. At least it does for me.

Finally, I think you should wait until you have a good sense of the person and are seriously considering them for the role before doing the references. The more information you have about the person and their potential fit for the role, the better your calls can be. But you don’t want to wait too long. If there is a big red flag on a candidate, you want to know that before you spend too much of your time and their time on the hiring process.

Referencing is an art more than a science. Getting people on your team and around you (on your board, your advisors, your investor group) who are good at it can be super helpful. And don’t forget to reach out and use them in your hiring process. It can make a huge difference.


USV TEAM POSTS:

Albert Wenger — January 12, 2018
A SIM Switch Account Takeover (Mine)

Nick Grossman — January 11, 2018
The weakest link

Categories: Blog articles

Email Bankruptcy

A VC - January 2, 2018 - 5:19am

I saw this tweet in my timeline yesterday and thought “what a great way to start the new year.”

1st day of the year has to be inbox 0

I’ve declared email bankruptcy.

If I owe you an email, please send again no vex. Blame @fredwilson na im teach me the beauty of email bankruptcy. pic.twitter.com/d4XaKEDh1p

— Oo Nwoye (@OoTheNigerian) January 1, 2018

I had 1,625 unread emails in my inbox this morning.

I have archived all of them that came in during 2017.

If you sent me an email in 2017 and did not get a reply, you won’t.

I am starting the year fresh. It feels good. Thanks for the suggestion OoTheNigerian.


USV TEAM POSTS:

Nick Grossman — January 11, 2018
The weakest link

Nick Grossman — January 10, 2018
From a labor mindset to a capital mindset

Categories: Blog articles

What Is Going To Happen In 2018

A VC - January 1, 2018 - 7:49am

This is a post that I am struggling to write. I really have no idea what is going to happen in 2018.

  • Will the crypto markets continue in their bull cycle? I have no clue. I was showing my daughter’s friend an app that helps people save and invest and he said to me “I don’t need that, I just buy some ETH every week.” I said “that’s a good plan until it isn’t.” I just don’t know when buying crypto will stop being a good idea. It was a great idea in 2017.
  • Will the economy extend its eight year expansion? I have no clue. The longest post WWII economic expansion was 10 years from 1991 to 2001. Can this one beat that one? Maybe. Will this one also burst over the collapse of another tech bubble? Maybe. But again, I have no idea when that might come.
  • Will the corporate tax cuts that are coming from Trump’s tax bill lead to increased hiring and investments, or will companies simply hoard that cash or pay it out in dividends? Likely a bit of both. But I think Wall Street has largely priced in the increased earnings so I’m not sure the tax bill will be a boon for the stock market in 2018.
  • Will the current Internet oligopoly (Amazon, Apple, Facebook, Google) continue to take share from the rest of the sector, or will one or more start to falter? I’d like to see the latter, but I suspect it will be more of the former.
  • Will the rise of massive growth funds (SOFTBANK, Sequoia, etc) lead to the best and brightest tech companies delaying IPOs even longer? The logical answer is yes, but I think the answer may be no. We see an increasing desire of founders in our portfolio to take their companies public.
  • Will the tech backlash that I wrote about yesterday continue to escalate? Yes.
  • Will we see more gender and racial diversity in tech? Yes.
  • Will Trump be President at the end of 2018. Yes.
  • Will the GOP lose control of Congress in the midterm elections. Yes.
  • Will we avoid war with North Korea? I sure hope so.

So there you have it. Ten questions. A few predictions. A lot of unknowns. That is how I am going into 2018.

Happy New Year Everyone.


USV TEAM POSTS:

Nick Grossman — January 10, 2018
From a labor mindset to a capital mindset

Categories: Blog articles

What Happened In 2017

A VC - December 31, 2017 - 8:30am

As has become my practice, I celebrate the end of a year and the start of a new one here at AVC with back to back posts focusing on what happened and then thinking about what might happen.

Today, we focus on what happened in 2017.

Crypto:

I went back and looked at my predictions for 2017 and I completely whiffed on the breakout year for crypto. I did not even mention it in my post on New Year’s Day 2017.

Maybe I got tired of predicting a breakout year for crypto as I had mentioned it in my 2015 and 2016 predictions, but whatever the cause, I completely missed the biggest story of the year in tech.

If you look at the Carlota Perez technology surge cycle chart, which is a framework I like to use when thinking about new technologies, you will see that a frenzy develops when a new technology enters the material phase of the installation period. The frenzy funds the installation of the technology.

2017 is the year when crypto/blockchain entered the frenzy phase. Over $3.7bn was raised by various crypto teams/projects to build out the infrastructure of Internet 3.0 (the decentralized Internet). To put that number into context, that is about equal to the total seed/angel investment in the US in 2017. Clearly, not all of that money will be used well, maybe very little of it will be used well. But, like the late 90s frenzy in Internet 1.0 (the dialup Internet) provided the capital to build out the broadband infrastructure that was necessary for Internet 2.0 (the broadband/mobile Internet), the frenzy in the crypto/blockchain sector will provide the capital to build out the infrastructure for the decentralized Internet.

And we need that infrastructure badly. Transaction clearing times on public, open, scaled blockchains (BTC and ETH, for example) remind me of the 14.4 dialup period of the Internet. You can get a taste of what things will be like, but you can’t really use the technology yet. It just doesn’t work at scale. But it will and the money that is getting invested via the frenzy we are in is going to make that happen.

This is the biggest story in tech in 2017 because transitions from Internet 1.0 to Internet 2.0 to Internet 3.0 cause tremendous opportunity and tremendous disruption. Not all of the big companies of the dialup phase (Yahoo, AOL, Amazon, eBay) made a healthy transition into the mobile/broadband phase. And not all of the big companies of the broadband/mobile phase (Apple, Google, Facebook, Amazon) will make a healthy transition into the decentralized phase. Some will, some won’t.

In the venture business, you wait for these moments to come because they are where the big opportunities are. And the next big one is coming. That is incredibly exciting and is why we have these ridiculous valuations on technologies that barely/don’t work.

The Beginning Of The End Of White Male Dominance:

The big story of 2017 in the US was the beginning of the end of white male dominance. This is not a tech story, per se, but the tech sector was impacted by it. We saw numerous top VCs and tech CEOs leave their firms and companies over behavior that was finally outed and deemed unacceptable.

I think the trigger for this was the election of Donald Trump as President of the US in late 2016. He is the epitome of white male dominance. An unapologetic (actually braggart) groper in chief. I think it took something as horrible as the election of such an awful human being to shock the US into deciding that we could not allow this behavior any more. Courageous women such as Susan Fowler, Ellen Pao, and many others came forward and talked publicly about their struggles with behavior that we now deem unacceptable. I am not suggesting that Trump’s election caused Fowler, Pao, or any other woman to come forward, they did so out of their own courage and outrage. But I am suggesting that Trump’s election was the turning point on this issue from which there is no going back. It took Nixon to go to China and it took Trump to end white male dominance.

The big change in the US is that women now feel empowered, maybe even obligated, to come forward and tell their stories. And they are telling them. And bad behavior is being outed and long overdue changes are happening.

Women and minorities are also signing up in droves to do public service, to run for office, to start companies, to start VC firms, to lead our society. And they will.

Like the frenzy in crypto, this frenzy in outing bad behavior, is seeding fundamental changes in our society. I am certain that we will see more equity in positions of power for all women and minorities in the coming years.

The Tech Backlash:

Although I did not get much right in my 2017 predictions, I got this one right. It was easy. You could see it coming from miles away. Tech is the new Wall Street, full of ultra rich out of touch people who have too much power and not enough empathy. Erin Griffith nailed it in her Wired piece from a few weeks ago.

Add to that context the fact that the big tech platforms, Facebook, Google, and Twitter, were used to hack the 2016 election, and you get the backlash. I think we are seeing the start of something that has a lot of legs. Human beings don’t want to be controlled by machines. And we are increasingly being controlled by machines. We are addicted to our phones, fed information by algorithms we don’t understand, at risk of losing our jobs to robots. This is likely to be the narrative of the next thirty years.

How do we cope with this? My platform would be:

  1. Computer literacy for everyone. That means making sure that everyone is able to go into GitHub and read the code that increasingly controls our lives and understand what it does and how it works.
  2. Open source vs closed source software so we can see how the algorithms that control our lives work.
  3. Personal data sovereignty so that we control our data and provision it via API keys, etc to the digital services we use.
  4. A social safety net that includes health care for everyone that allows for a peaceful radical transformation of what work is in the 21st century.

2017 brought us many other interesting things, but these three stories dominated the macro environment in tech this year. And they are related to each other in the sense that each is a reaction to power structures that are increasingly unsustainable.

I will talk tomorrow about the future, a future that is equally fraught with fear and hope. We are in the midst of massive societal change and how we manage this change will determine how easily and safely we make this transition into an information driven existence.


USV TEAM POSTS:

Bethany Marz Crystal — January 9, 2018
Thank you for sharing this!

Categories: Blog articles

Video Of The Week: Token 1.0 vs Token 2.0

A VC - December 30, 2017 - 5:55am

AVC community member William Mougayar sent me a video of a talk he recently gave in Moscow.

I really like the framework he articulates about half way through the talk regarding token 1.0 (where we are now) and token 2.0 (where we need to be before we will see real sustainable disruptive value creation with blockchain technologies).

Here is that bit:

If you’d like to watch the entire talk, you can do so here.


USV TEAM POSTS:

Bethany Marz Crystal — January 7, 2018
Spending New Year’s (Alone) in Paris

Categories: Blog articles

Funding Friday: The Merry Merkle Tree

A VC - December 29, 2017 - 9:36am

Our friends at TrueBit are trying to raise $250k to support Covenant House Toronto.

They have built a virtual Christmas tree and are accepting donations in Ethereum here.

The Gotham Gal and I have donated 5.5 ETH. Our donation may take a few days to show up on the leaderboard.

I am hoping those of you out there who are holding a lot of ETH might part with a little bit of it to help a great cause.

You can do that here.


USV TEAM POSTS:

Bethany Marz Crystal — January 7, 2018
Spending New Year’s (Alone) in Paris

Categories: Blog articles

The Digital Advertising Duopoly

A VC - December 28, 2017 - 7:57am

This chart from eMarketer really brings it home.

We have a digital advertising duopoly.

The difference between second and third place is massive.

I don’t want nor do I expect any governmental response to this market failure.

I want to see the technology industry adopt new approaches to monetization, ideally not attention based models, to combat this.

I don’t think subscriptions are the only answer here, as many do.

We need models that support free consumption of media for many reasons.

I think the crypto sector has some answers for us but I am also looking elsewhere.

We need new approaches and we need them now.

Categories: Blog articles
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