Blog articles


A VC - 16 hours 43 min ago

I read this story about how hackers got into Colin Powell and John Podesta’s emails.

It is somewhat shocking to me that Google’s algorithms allowed fake emails from Google to get into a Gmail user’s inbox.

One of the many reasons I use Gmail over any other email service is its algorithms that keep spam and malicious emails out of my inbox. They have done a remarkably good job of that for me over the ten(ish) years I’ve been on Gmail.

This is not only a black eye for the Clinton campaign and Colin Powell. It’s a black eye for Google and Gmail.

I hope they take this as a challenge to improve their anti-phishing algorithms.

Categories: Blog articles

Some Thoughts On Airbnb’s Struggles In New York State

A VC - October 23, 2016 - 9:22am

As many readers likely know, this week New York State Governor Andrew Cuomo signed a bill called S6340A/A8704C, which will levy heavy fines on individuals who advertise short-term rentals of residential multiple dwelling units in New York. This ends an effort that lasted several months to convince the Governor to veto this bill which was passed by both legislative bodies in Albany earlier this year.

Airbnb promptly filed a federal lawsuit as the New York Times reported. The Times piece states that:

In its lawsuit, filed Friday afternoon in Federal District Court in the Southern District of New York, the company contends that the law violates the company’s constitutional rights to free speech and due process, as well as the protection it is afforded under the Communications Decency Act, a federal law that says websites cannot be held accountable for content published by their users.

It is possible that this matter will be settled by the courts.

But it is my hope that, instead, calmer heads will prevail and New York State will pass sensible legislation that allows short term rentals when the tenant or owner is not present.

Airbnb has proposed a five point plan that attempts to address many of the issues that New Yorkers have with short term rentals.

This proposal is similar to legislation that has been adopted in large urban cities like Chicago.

There are many reasons why the current situation is not ideal for anyone. Most people living in apartment buildings don’t like the idea of an Airbnb in their building. It is also problematic when landlords to take apartments off the rental market and create illegal hotels. And landlords need a way to enforce the rules outlined in their leases.

On the other hand, many New Yorkers use income from short term rentals to allow them to afford an apartment in NYC when they have jobs that require them to travel extensively. There are also many New Yorkers who rent their homes during busy periods to make some extra income.

An outright ban on short term rentals is a bad thing for many New Yorkers.

I am certain there is middle ground to find a compromise that addresses the legitimate issues while allowing short term rentals to continue. And I am hopeful that will eventually happen.

Both sides are to blame for where we are right now. Airbnb allowed the NY short term rental market to emerge over the past seven years without sufficient concern over the negative impacts of unregulated short term rentals. It took way too long to engage in a real and substantive discussion with legislators and regulators and when it did, there was a lot of bad blood between both sides.

On the other hand, the hotel unions and the real estate industry have used their significant clout in Albany to push for a law that is overly restrictive and hurts many New Yorkers. And they got the legislature and the Governor to support it. It shines a bright light on the kind of back room dealing that voters are sick and tired of, in Albany and all around the US.

I would urge the Governor to provide some leadership here now that he has satisfied the legislature by signing their deeply flawed bill. There is a proposal on the table from Airbnb to regulate short term rentals sensibly. The Governor and the legislature should engage with that proposal. And the real estate industry should engage as well. Short term rentals can be a good thing for them too.

I am confident that we have not seen the end of Airbnb and short term rentals in NY State. If calmer heads prevail we can get short term rentals that make sense for NY State and NY City. And that is what we should do.

Categories: Blog articles

Audio Of The Week: Michael Moritz on Studio 1.0

A VC - October 22, 2016 - 6:37am

This is almost a year old, but most of it is still very relevant.

Categories: Blog articles

Fun Friday: Cubs Fever

A VC - October 21, 2016 - 5:02am

My friend Dave sent me this hat a few days ago:


I hope to be wearing it for the next week and a half.

The Cubs have not won the World Series in 108 years.

Unless you are a Dodgers or Indians fan, I think you have to get on this bandwagon.

Do you all agree?

Categories: Blog articles

Reality and the mainstream media

Beyond Money - October 21, 2016 - 5:01am

“There are no conspiracies only conspiracy theories and nuts who believe them. Elections in America are not rigged, but there are many nuts who think they are. The United States is the champion of democracy and its interventions in countries around the world are conducted only for the purpose of deposing dictators and freeing the people to choose their leaders.”

These are some of the myths that the mainstream media have long been trying to sell to the public but as evidence to the contrary mounts up and the chorus of truth-tellers becomes ever larger their job has become more difficult. Add to the mix a Presidential candidate who dares to cast doubt upon any of part of the official version of reality and the pundits in the MSM go ballistic. It is almost laughable to see them so obviously reveal their biases.

While I consider Donald Trump to be a narcissistic nincompoop and cannot bring myself to vote in favor of his presidency, I do admire his willingness to speak the unspeakable and to give the American people at least the appearance of an alternative to the elite agenda. I further credit him for refusing to fall into line against Russian president Vladimir Putin who is understandably just trying to prevent threats from the west from camping out in Russia’s front yard.

More authoritative sources than I have thoroughly articulated the current domestic and geopolitical reality for anyone who cares to know. Here are just a few of them:

  • Gerald Celente
  • F. William Engdahl
  • Michael Hudson
  • John Perkins
  • Charles Hugh Smith
  • Noam Chomsky
  • Thom Hartman
  • Chris Martinson
  • Jim Rickards
  • David Stockman
  • Wesley Clark
  • Chris Hedges
  • Michael Parenti
  • Paul Craig Roberts
  • Oliver Stone

And you might want to check out Rob Kall’s take on election integrity over on Op-Ed News.

[EDIT] I just viewed this video of Alex Jones that reveals how desperate the global elite are to impose their “New World Order” by removing obstacles like Russia that refuse to go along, by starting a hot war if necessary. So who is the worse choice, Hillary, the hawk who is the chosen agent of the elite, or Trump? Is there any chance at this late date of electing one of the third party candidates? What  can we do to stop this madness? The hour is late and the stakes could not be any higher.

#     #     #

Categories: Blog articles

A New UI For Coinbase

A VC - October 20, 2016 - 4:45am

For those of you who buy and sell and hold Bitcoin and Ethereum at our portfolio company Coinbase, there is an entirely new redesigned UI for you at It will be rolled out to all of the users in the next couple weeks.

Here’s screenshot of what the new dashboard looks like:

The redesign was driven by the move from a Bitcoin only service to one that supports multiple digital assets. Today that means Bitcoin and Ethereum but over time it will likely mean many more digital assets. Literally a coin base.

Fortune did a nice writeup on the new UI (which is where I got that screenshot) and also talked about the evolution and growth at Coinbase in the past year.

It is nice to see an awakening in the media to the changes afoot in the blockchain sector. Coinbase has been riding those changes and has seen strong revenue and customer growth over the last year as a result. As more and more people buy and hold digital assets, they are going to need a trusted, safe, and compliant place to buy them, sell them, and hold them. Coinbase continues to be the best place to do all three of those things.

Categories: Blog articles


A VC - October 19, 2016 - 3:39am

I like what Larry Lessig wrote here about leaks, particularly this part:

Neera has only ever served in the public (and public interest) sector. Her work has always and only been devoted to advancing her vision of the public good. It is not right that she should bear the burden of this sort of breach.

If we needed to add more reasons why someone would choose to avoid public service, we now have one more – wikileaks will out your emails and embarrass the hell out of you.

There was some stuff about me in the Clinton leaks. There was some stuff about me in the Sony leaks. I’m with Larry. I don’t care to have that stuff outed. And I understand how people talk about others privately. That’s how it is. I am not upset at anyone at Sony or the Clinton team for what was leaked. That’s life.

But I do think wikileaks has gone overboard here. There is, as Larry says, a difference between leaks of substance and leaks of embarrassment. Let’s try to keep the leaks to stuff that matters and avoid the petty stuff please.

Categories: Blog articles

Enjoying The Struggle

A VC - October 18, 2016 - 6:38am

The NY Times has a great longish piece on David Letterman today.

This quote got my attention:

Maybe life is the hard way, I don’t know. When the show was great, it was never as enjoyable as the misery of the show being bad. Is that human nature?

Building companies includes a lot of “misery of the show being bad” as David Letterman puts it.

And I really love the idea that you can enjoy that struggle.

Obviously you want the “show” to be great, but his point is that greatness is fleeting and you have to go through a lot of bad shows to get to some good ones and you’d better figure out how to enjoy that struggle, as he and his team did.

Good advice for all of us who hang out in startup land.

Categories: Blog articles


A VC - October 17, 2016 - 7:15am

I think selling is the hardest part of investing. Buying is, of course, critical to generating strong investment performance. Figuring out what to buy and when to buy it is what most people think of when they think of investing. But your returns will have as much to do with selling as buying. And buying is a fairly rational decision. Selling tends to be emotional. And that is why selling is the hardest part of investing.

In venture capital, thankfully, VCs don’t drive a lot of the sell decisions. I wrote about that back in 2009. Most sell decisions that really matter in a venture portfolio will be made by the founders and management of the portfolio company, including the timing of the public offering if that is where a company is headed.

But even so, I have struggled with the sell decisions, both personally and professionally, over the course of my career. I have held on way too long and watched a publicly traded stock literally go all the way to zero without selling it (ouch). And I have made the even worse decision of selling too soon and watching a stock go up three, four, five times from where I sold it.

So where I have landed on selling is to make it formulaic.

If we (USV) have to make a sell decision, we like to have a policy and stick to  it. We like to distribute our public positions as soon as we can, for example. That’s a policy and we stick to it. If you look at the SEC forms we have filed as a firm over the years, you can see that is what we do. It is a formula. It doesn’t mean that it is the right decision in each instance, but it does mean that, if we stick to it, we will do the same thing every time and the law of averages will work things out. We also let the people we work with know that is our policy so they are not surprised by it. What is worse is to make each decision emotionally and get them all or most of them wrong.

Personally, I like to dollar cost average out of a stock (sell a position over time instead of all at once) and I also like to hold onto some of the position for the very long term (schmuck insurance). I have a formula for the disposition of public stocks I get via distribution from USV and the other VC funds we are invested in. We execute the formula time and time again. It takes the emotion out of the decision and it works better for us.

The thing I have learned about selling is that it is almost impossible to optimize the sell point. You need a crystal ball and you need to know something that others don’t know. That is either impossible or criminal. So I don’t try to optimize it. I try to make it formulaic and systematic. It works better for me and I think it may work better for you too.

Categories: Blog articles

Care and Feeding

A VC - October 16, 2016 - 7:41am

Young companies are a bit like children. They require care and feeding.

The feeding part comes naturally to investors. Because that is what we do. We invest capital into young companies in hope of generating large returns on those investments.

The caring part comes harder to investors. At least it did to this investor.

But as I enter my fourth decade in venture investing, it is the caring that keeps me going.

Caring is exactly what it sounds like. Giving a shit. Actually caring about the company, the team, and the business.

The thing about caring, when done right, is that it means everything to the founders, the managers, and the team.

They feel it, more than you think possible.

And that allows you to encourage them to adjust their thinking, their plans, their team.

I have found that feeding doesn’t change behavior very much. It works well in the short run (do this and we will invest more money). But it doesn’t work very well in the long run.

Caring, on the other hand, has immense power to bring positive change.

I see this every day. And it encourages me to care even more.

Categories: Blog articles

Video Of The Week: Private vs Public Blockchains

A VC - October 15, 2016 - 6:49am

This is episode 6 of Trust Disrupted, which I blogged about earlier this week. It features many of my arguments in favor of public blockchains and also plenty of the counter arguments.

I have no idea why I am holding my head at such a crazy angle in much of this. It hurts just to watch it

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Funding Friday: The Voyager Golden Record

A VC - October 14, 2016 - 6:24am

Categories: Blog articles

Trading R&D

A VC - October 13, 2016 - 5:18am

I read this post this morning on why this fintech analyst and investor is “short ethereum”.

The pro-bitcoin and anti-ethereum arguments are interesting and worth digesting if you are into the blockchain sector as I am.

But more interesting to me is that we are talking about some fairly cutting edge computer science here. Ethereum is still very much a work in progress. A computer science experiment. And a very ambitious one too.

And yet they are tradeable, like stocks, bonds, currencies, etc. You can short them or put on a hedged trade (long BTC/short ETH).

Biotech has long been like this. There are publicly traded biotech companies that are doing cutting edge science and you can place bets on wether these experimental projects will succeed in developing some new medical miracle, or not.

But “tech” has not really been like that. You had to be an angel or early stage investor to make these sorts of bets in the software sector.

Not any more. You can buy and sell alt-coins, token, ICOs, or whatever else you want to call these digital assets.

It is fascinating to see this happening and think about where it might go.

Categories: Blog articles


A VC - October 12, 2016 - 4:50am

All I have to say this morning is go Cubs.

Man I loved how they came back last night.

Well done.

I’m rooting for the Cubs to go all the way this year.

Categories: Blog articles

Trust Disrupted

A VC - October 11, 2016 - 4:16am

Techcrunch has created a six part mini series about bitcoin and the blockchain called Trust Disrupted. They will release one episode each day this week.

Here is the first episode:

Categories: Blog articles

How About A City Instead Of A Wall?

A VC - October 10, 2016 - 7:39am

Sometimes the best answer to a challenging issue is the exact opposite of what the conventional wisdom is.

We just spent a week in Mexico City and, as I always do when we travel to Mexico, I came away impressed with the character and work ethic of the Mexican people. They are entrepreneurial and hard working and always have a smile on their face. I have great respect for the people and culture of Mexico.

So when I read this piece on a proposal to build a “binational border city” instead of a wall between the US and Mexico, it got my attention.

Mexican architect Fernando Romero has proposed a new city be built between New Mexico and Texas in the U.S. and Chihuahua in Mexico. It would look like this from the sky.


I like the contrarian thinking. Instead of restricting trade and cross border economy between the US and Mexico, expand it.

It is my strong belief that globalization is a reality and we can’t put the genie back in the bottle. We should accept it and figure out how to work with it to everyone’s advantage.

Categories: Blog articles

The Hard Raise

A VC - October 9, 2016 - 7:53am

In the summer of 2003, Brad Burnham and I set out to raise a $100mm early stage venture capital fund. We had both been successful VCs in other firms and we had a thesis that the second wave of the Internet was upon us and that large networks were going to get built in this phase. The term “web 2.0” had not yet been coined and Facebook had not yet been started (LinkedIn was being built around this time).

It took us a year and a half to raise that fund. We traveled all around the country (and to the UK too which was a total waste of our time and money). We spent our own capital raising that fund. We believed in ourselves and our thesis, but it was very hard to get others to understand it. Sometime in the spring of 2004, someone got it. And then a few others did. And by the summer, we had a group together and we were able to build to a first close in November of 2004. We had our final close in February 2005, eighteen months after we started. That was a hard raise.

But that fund, USV 2004, has been one of the very best venture capital funds ever put together. The numbers are public because many (most) of our investors are public pension funds who have freedom of information act (FOIA) obligations to report the performance of the funds they invest in. At that time (early 2000s), the big VCs in the bay area were kicking out FOIA obligated limited partners out of their funds. That was a huge win for us and we got a bunch of those FOIA obligated LPs into our fund. Without FOIA, I am not sure we would have gotten USV 2004 done. But we did.

There is a correlation between hard raises and strong performing investments. It is not a perfect correlation by any means. Some great investments are obvious (Facebook in 2010, Airbnb in 2014) and get done easily by the company and perform very well. And many hard raises are hard because they aren’t good investments.

But there are some investments that are very hard to get done that turn into incredibly strong performers. We have had a few of these in our portfolio over the past year as the expansion capital stage (Series C and D) of the venture capital market has contracted. We have seen companies need as much as six to nine months to get a financing done and we have seen founders and CEOs get rejected by more than fifty investors during that process.

I like to tell them the story of USV 2004. I believe Brad and I got over 100 rejections during that process. Rejection hurts but it is part of the game, particularly when you have a hard raise.

One of the reasons hard raises can turn into great performers is that they often mean you are doing something others aren’t doing, you are early to an opportunity and others don’t see it. That certainly was the case with USV 2004. That’s the contrarian bet in action.

Another reason hard raises can turn into great performers is that you learn something from all of that rejection. Brad and I learned that we weren’t explaining the opportunity clearly and crisply enough. We went and read Carlota Perez on a friend’s suggestion and she helped us frame the “second wave” argument in a much cleaner and clearer way. And once we started investing the capital, we had a framework, influenced by Carlota’s work, that we could execute against. The fundraising process, and all of that rejection, helped harden our investment thesis to great effect.

It is this second reason that I am seeing in action in our portfolio. As these expansion stage companies struggle to raise capital, they are forced into a cathartic (and at times painful) process of self reflection. What is their sales process? Is it efficient? What is their unique value proposition? Is it really unique? What kind of company are they building? Will it be large enough to justify all of this investment?

And as a result, these companies are coming out of these hard raises with better businesses, better operating models (lower burn rates!!), and bigger visions to go execute against.

And I suspect that many of these rounds that have taken six to nine months to get done are going to turn into really strong performers for the investors who have ultimately decided to get behind them. We are using these opportunities to “lean into” these investments with our funds. We are always deeply reserved for our portfolio and believe in doubling down on investments when we have conviction. And, as an investor, you should always be open to having conviction around an investment that is having a hard time getting done. Because they can, at times, be among the strongest performing investments out there.

Categories: Blog articles

Audio Of The Week: Alt VC

A VC - October 8, 2016 - 7:51am

There is more than one way to do VC investing. In this podcast, Jerry Colonna talks to two VCs who are taking different approaches to venture investing.

Categories: Blog articles

Fun Friday: October Baseball

A VC - October 7, 2016 - 5:10am

I wrote in early September that I thought the Mets could make it into October. Well I was sort of right. The Mets were a shambles for most of the year but in September they called up their Triple A Las Vegas team and those scrappy kids got them into the wild card game in which our last standing young arm, Thor, went head to head with arguably the best post season pitcher in the game right now and held his own for seven innings. We all know that the Mets’ season ended with a three run homer in the top of the ninth. I am thankful to the Mets for giving us more of a season than we thought was possible at the all star break:

I'd like to thank the @Mets for a fun season, with lots of ups and downs, and Thor for throwing a gem of a game last night in crunchtime.

— Fred Wilson (@fredwilson) October 6, 2016

But now that the Mets are out, I have thrown myself 100% behind the Cubs. As I explained on Twitter yesterday, I can relate to them:

@m_francis hell no. Cubs all the way. SF and Boston sports fans have it too good. I appreciate the agony of fandom that is a Cubs fan.

— Fred Wilson (@fredwilson) October 6, 2016

So as we do on Fun Friday, let’s get into the comments and talk. Who are you rooting for in the postseason?

Categories: Blog articles

Chromebooks in K12

A VC - October 6, 2016 - 6:29am

I started working actively on K12 education about five years ago when a few of us helped start The Academy For Software Engineering. Early on in that process, I made it a point to visit about a dozen high schools around NYC and talk to the Principals and teachers in those schools. I was curious about a lot of things, mostly how you make a good school (answer is hire a great Principal), but also what kind of tech infrastructure was in the schools.

On the latter point, I learned that most schools had broadband and wifi, but the implementation was often poor and in need of significant upgrade. The good news is that many K12 schools have seen significant investments in broadband and wifi in the past five years through a number of federal, state, and local programs. But there is more to do on this point.

In terms of computers, I saw a range of approaches. There were computer labs where an entire room was outfitted with desktops. Windows machines were quite common but so were desktop Macs. But most schools were using laptop carts. They look like this:


The ones I saw in use in the NYC public schools generally hold thirty laptops and power cords.

Teachers would wheel one of these carts into their classroom and students would grab a laptop and use it for the entire class and then put it back.

Five years ago, most of the laptop carts I saw were filled with MacBooks. I was aghast when I saw that. I did the math and assumed that a laptop cart filled with Macs was costing these schools something on the order of $30k or more. And someone had to manage all of the downloaded software on these devices. It seemed like an expensive and painful solution.

It was around this time that Google launched its first Chromebook. I told everyone who would listen to me that putting inexpensive Chromebooks in these carts was going to be a better solution. An added benefit of using browser based software on these devices is that the student can grab any device in the cart, log in using their email address, and immediately be provisioned with their work and applications in the cloud. It seemed to me that this was going to be the way to go.

I read today that Chromebooks are now being used by 20mm students.  I have no idea what percent of those are in the US, but if we guess 50%, then that would be 10mm students in the US. There are somewhere around 50mm K12 students in the US, so that suggests that Chromebooks may have penetrated 20% of classrooms in the US. That is encouraging to me.

More and more software is coming to market that makes learning more fun in the classroom. A good example of this is our portfolio company’s Quizlet’s Live tool that allows teachers to create real time learning challenges in their classrooms. Much of this software is free to use with premium upgrades (freemium model!) and can drive down the cost of curriculum for the schools and teachers.

But you need computers in the classroom to make this stuff work and the Chromebook is a much more affordable and manageable solution than a laptop. I am thrilled to see the K12 system adopting them.

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