Blog articles

I Paid $22.38 For This

A VC - 8 hours 28 min ago

This is a virtual good, called a Rare Pepe. I blogged about it a few weeks ago.

Hawkeye tweeted this at me a couple days ago:

@aweissman @fredwilson Add to your art collection with PEPEBASQUIAT. Who knows, maybe someday a Japanese Billionaire will buy it. https://t.co/BgPokE3C8y pic.twitter.com/m9E0KPHwep

— Hawkeye (@nathanhawkeye) May 22, 2017

And I liked it so I went into the Rare Pepe directory, found the card, and offered 1000 Pepe Cash for it.

1000 Pepe Cash goes for $22.38 right now in the cryptomarkets.

So I paid $22.38 for a virtual card that has no utility other than I can collect it (on my computer or phone), I can send it to someone else, I can sell it, and I can blog about it.

But the one thing I do know is that these are “rare”. There are only 391 issued right now. And that is verified on the blockchain.

Something to think about as it relates to digital media/digital art/digital music/etc which has been suffering from no scarcity value since the invention of the Internet.

Categories: Blog articles

Blockstack – A New Internet

A VC - May 23, 2017 - 8:55am

The founders of our portfolio company Blockstack are ambitious.

What they have built and are announcing today is effectively a new Internet, powered by the blockchain.

This is what the Blockstack team is after:

A new internet needs to have security and safety as a core of its DNA. Applications and services cannot be owned and controlled by remote third-parties. We can build a digital world of truly peer-to-peer internet utilities not maintained by corporations, but collectively, by the people. We can build a digital world that encodes property rights, where we can own our data, and where the people are powerful.

Here is their blog post announcing the Blockstack Browser.

And here is my partner Albert’s blog post on the USV blog explaining why this is important.

Categories: Blog articles

Writing and Speaking

A VC - May 22, 2017 - 4:24am

I got a lot of comments about the two videos I posted last week suggesting that I have nailed the art of public speaking.

I don’t know about that, I am my harshest critic.

But I do believe that writing regularly makes it so much easier to speak publicly in unscripted situations.

Writing forces you to work out your views and articulate them clearly and concisely.

Then when you are asked a question related to those views, you have already worked out the answer.

It is in the brain, waiting there to come out crisply and concisely.

I’ve been writing daily for going on fourteen years so that is a huge body of work, opinion, thought, and insight to be able to pull from.

My views have evolved over the years and so not all of that content is relevant at this point, but most of it is.

So if you have to speak publicly a lot, particularly in unscripted situations, I would suggest you write publicly regularly as well.

They work incredibly well together.

Categories: Blog articles

Can Do Vs Must Do

A VC - May 21, 2017 - 5:01am

Over the past few months, I’ve been reminded about the difference between “can do” and “must do” and how companies often confuse the two.

With the abundance of capital sloshing around the tech sector, our portfolio companies often have the resources to do more than they can and should do. They greenlight a bunch of projects that are “can do” projects but not “must do” projects. And a number of not so great things happen when they do this, including but not limited to:

  • Core resources (like infrastructure, security, payments, design, product management) get stretched supporting so many efforts.
  • The team loses sight of the mission and strategy as so many projects are being tackled at the same time
  • Senior leadership gets pulled in many directions and loses alignment as a result
  • Projects slip or don’t ship at all, leading to malaise and morale issues
  • Headcount grows quickly to support all of these efforts, creating more management issues

I saw a presentation recently with a “plan” that had ten “near term focus items” on it. I told the person presenting the plan to me that I don’t think a plan should have more than three things on it. I am a big fan of the rule of three. I am not sure where I heard it but it says that you should not tackle more than three big things at one time, no matter how large your organization is.

But regardless of whether you have two, three, or four big efforts this year, you should test all of your initiatives agains the “must do” vs “can do” test. Just because you can do something doesn’t mean you should.

I’ve written about the importance of strategy and saying no. Strategy isn’t saying no. It is figuring out what is the most important thing for your company and deciding to focus on it and say no to everything else.

In order to figure out what the most important thing is, you need to understand your products, your customers, your market position, where things are going, and where you want to be in three to five years. Once you have figured all of that out, you can figure out what are the most important things you need to do in order to get there.

It is also true that the “most important thing” changes. My partner Albert told me that he thinks doing a startup is like playing a video game. Each level requires you to master one thing and once you do that, you level up and then there is a new thing to master.

I like that metaphor a lot even though it trivializes the company building process a bit. It is a very clarifying view on how you must think about things and prioritize things.

So if you are frustrated by the pace of development (and not just engineering development) at your company, I would suggest you think about how many things you are trying to do at the same time. If it is a lot, then run them by the “can do” vs “must do” test and kill all the things that are not “must dos”. That might even mean parting ways with people you don’t need, which is painful but often helpful.

Executing well on all of the “must do” things is the hallmark of a well run company. And that usually means that there aren’t many “can do” things on the roadmap at the same time.

Categories: Blog articles

Video Of The Week: My Talk With David Kirkpatrick at Techonomy

A VC - May 20, 2017 - 7:34am

Last wednesday morning, I went to Techonomy NYC and talked with my friend David Kirkpatrick for about 30mins.

That conversation is below.

There is one gross misrepresentation in the talk. David and I were talking about my efforts to ignore Trump and I said that the Gotham Gal spends “two to three hours a day on that stuff” which is not anywhere close to accurate. She reads the NY Times religiously in paper form every day and does pay a lot more attention to Trump than I do, but it’s not anywhere near two to three hours. I apologize to her for suggesting such nonsense.

Categories: Blog articles

Funding Friday: Coinlist

A VC - May 19, 2017 - 3:56am

Some interesting developments that we have been working on came public yesterday.

  1. Protocol Labs, a company that builds blockchain-based protocols laid out its ambitious roadmap and finally got around to announcing the seed investment USV and others made in it last year. My partner Brad Burnham wrote a blog post on USV.com explaining why we are so excited about Protocol Labs.
  2. Protocol Labs will be launching a token offering soon for Filecoin which powers a blockchain based storage network on top of its IPFS protocol.
  3. The Filecoin offering will be managed on a new platform called Coinlist which was built by Protocol Labs and AngelList.
  4. Coinlist will utilize a new kind of security called a SAFT (Simple Agreement for Future Tokens) that has been constructed to comply with existing securities regulations.

While all of these are interesting developments, particularly the architecture and roadmap that Protocol Labs laid out, I thought I would talk a bit about Coinlist given that it is “Funding Friday.”

Token Offerings have been going on for quite a while now. There are over 800 tokens listed on Coin Market Cap.

But US domiciled companies have not had a good way to raise money in token pre-sales and comply with existing securities laws. This forced a number of promising blockchain projects to domicile outside of the US, often in Switzerland, and organize as Foundations for tax reasons. A US domiciled company can wait until the token is live and functioning and sell it then, because at that point it is not a security, it is a token. But if you want to raise funds in a pre-sale for a US domiciled company, there has not been a good way to do that.

Enter Juan Benet, founder of Protocol Labs, and Naval Ravikant, founder of AngelList. They collaborated on CoinList and, with the help of a number of venture law firms and their investors, including USV, came up with the SAFT structure.

Naval put it like this in a Forbes piece yesterday on all of this:

ICOs are obviously a new and interesting form of funding for blockchain-based protocols. But it’s not clear that all of them comply with U.S. securities laws or that all of them are companies that have good native use cases for new coins. So, we wanted to use a high-quality coin and team to trailblaze a legal and compliant ICO.

If you are an accredited investor and want to participate in token pre-sales, check out Coinlist.

Categories: Blog articles

Escape from prison and oppression

Beyond Money - May 18, 2017 - 12:07pm

In this video below, Professor Jem Bendell of Cumbria University (UK) interviews South African Tim Jenkin about his anti-apartheid work in the 1970s and his more recent alternative exchange activities. Jenkin briefly recounts how he assisted the African National Congress (ANC) in their struggle to end apartheid, work that resulted in his 1978 imprisonment and subsequent remarkable escape. The escape story is soon to be made into a major motion picture, “Escape From Pretoria,” that will star  Daniel Radcliffe in the role of Tim Jenkin. The film is scheduled to begin production on location in South Africa in early 2018, but you need not wait to get a detailed account of the escape, you can read Jenkin’s autobiography, Inside Out: Escape from Pretoria Central Prison, or view the existing documentary film, also titled, Escape from Pretoria.

Later in the interview, Jenkin describes his more recent efforts to demonstrate how people can make a similar escape from the bondage of political money and the global debt-money regime by means of a simple ledger system that records the value of what people give and receive from one another. His Community Exchange platform  currently hosts 921 local exchanges in 86 countries.


Categories: Blog articles

Bloomberg TV Appearance

A VC - May 18, 2017 - 4:22am

Yesterday, I did a fireside chat with my friend David Kirkpatrick at his Techonomy Conference in NYC. On my way out, a Bloomberg camera crew asked me if I would talk with Emily Chang and I did, for about ten minutes. It aired yesterday evening.

Here it is:

Categories: Blog articles

Big Bad Wolves

A VC - May 17, 2017 - 4:10am

Some good friends of ours are making a film called Big Bad Wolves.

It is about a group of girls who turn into a vigilante gang because of a sexual assault on one of them.

So it is a serious topic, but it also a fun film about young people growing up in NYC.

The team is starting with a short film that kicks off the story and will use that short film to introduce the four young women who are at the heart of this story and to build support and audience for the larger feature they plan to make over the next year or two.

When our friends approached us about helping them make this short film, we both said “Do A Kickstarter!” and so that is what they did.

Here’s the Kickstarter “trailer” for it:

If you would like to join us in supporting this film, you can back it on Kickstarter.

Categories: Blog articles

Using Your Data To Make Your Product Better

A VC - May 16, 2017 - 4:03am

One of my favorite uses of AI is to use the data in your product to make your product better. I am talking about making a better UI using AI on your data.

Our portfolio company Quizlet did just that and wrote about it here.

They used the ~150mm study sets that their users have put into Quizlet over the last ~12 years to predict suggested definitions during the create study set mode.

Here is what it looks like.

 

 

 

 

 

 

 

 

 

 

I think this is super cool and a great way to make your product better.

Categories: Blog articles

Grit

A VC - May 15, 2017 - 3:45am

Last week during our CEO Summit, we had the opportunity to hear my partner Albert interview Angela Duckworth, author of the book Grit.

Angela is a Professor of Psychology at University of Pennsylvania and founder and Scientific Director of The Character Lab.

Angela has the ability to make complex concepts simple and combines her expertise in human behavior with a wicked sense of humor.

She is a great public speaker and everyone enjoyed hearing her talk to our group.

Her book Grit is about the power of perseverance.

It explains why some people have grit and how you can recognize it in people.

She also explains why grit is more important than talent in many cases.

If you hire and manage people, if you run start and run companies, if you invest in people and their projects, then Grit is a book you should read.

Categories: Blog articles

Rare Pepe

A VC - May 14, 2017 - 6:41am

Over the last few weeks, I’ve been playing around with a digital asset collecting game called Rare Pepe. My partner Andy tipped me off to it a while back and it took me a while to wade into it.

Rare Pepe is based on an internet meme called Pepe The Frog that has been around since 2005 and became popular on 4chan.

Rarepepes are digital trading cards that are traded as counterparty (XCP) assets on the Bitcoin blockchain.

Andy and I were talking about this yesterday on Twitter and my friend Jason asked what we were “nerding out” over.

@Jason @aweissman about the coolest thing ever. what happens when you combine a crypto-asset with a meme and a trading card. https://t.co/6ZJLoeTZiQ

— Fred Wilson (@fredwilson) May 13, 2017

I responded that rarepepes are “about the coolest thing ever” which may be a bit of an overstatement but isn’t that what Twitter is for?

The truth is rarepepes are a bit complicated to buy and collect. First you need a Rare Pepe wallet which you can get here.  Then you need to transfer in some Bitcoin from somewhere like Coinbase. Then you need to buy some Pepe Cash (yet another crypto asset) which you can buy here, but only after transferring in some more Bitcoin. Then you transfer the Pepe Cash to your Rare Pepe wallet and then you can buy the digital trading cards. But you need to spend BTC to send these cards around because that is what powers the Counterparty system. You can also publish your Rare Pepe wallet address on Twitter and maybe someone will send you some. I did that yesterday and it worked.

Here are some of my cards:

So why do I think this is interesting?

Well for one, it shows the utility of a blockchain in action. You can buy, sell, hold, and transfer digital assets and they have value and are traded for other digital assets (like BTC) in an online global marketplace. Anyone can make one of these cards and if they are determined to be “rare” they become digital assets with value attached to them.

It also shows how a game can be built on a blockchain with virtual goods and characters and more.

And it shows how clunky this stuff is for the average person to use. Just playing around with this over the last few days showcases to me all of the technical challenges that blockchain technology still has to overcome before it can become mainstream. I would like to think that if this sort of game were built on Ethereum instead of Counterparty/Bitcoin, and if it ran inside something like the Token messenger that I blogged about a few weeks ago, it might be a lot simpler and easier for the average user to access. So there is real progress happening on this front right now.

Rare Pepe itself has a fair bit of baggage. It’s a meme popularized by the alt-right and attached to a lot of ideas that I personally find difficult to take.

But putting all of that aside, I find it encouraging that people are building things that are comprehensible to the average person on public blockchains. Rare Pepe may not be the killer app that public blockchains are waiting for, but something like it may well be.

And, of course, you can speculate on/invest in this, as my partner Andy showed me yesterday:

@fredwilson pic.twitter.com/u23HCIfFkF

— Andy Weissman (@aweissman) May 13, 2017

Categories: Blog articles

Video Of The Week: Rutger Bregman on Basic Income

A VC - May 13, 2017 - 8:55am

A lot of people were buzzing about Rutger Bregman‘s talk on Basic Income at this year’s TED. While that talk is not yet online, here is Rutger’s talk from a TEDx a couple years ago.

Categories: Blog articles

Fun Friday: Spurs Warriors

A VC - May 12, 2017 - 3:45am

The Cavs and the Warriors sure look like they are headed for yet another epic finals.

But I am wondering if we should not look past the semi-final series, in particular, the Spurs Warriors series that starts on Sunday.

Does anyone out there think that the Spurs can beat the Warriors in a seven game series?

And if not, how many games will the Spurs take from the Warriors?

Categories: Blog articles

Path Forward

A VC - May 11, 2017 - 5:22am

Path Forward is an organization that helps employers (large and small) run “returnship” programs in which people who have left the work force to care for a family or a parent have a structured and supported way to return to work.

In this podcast, the Gotham Gal talks about Path Forward with Tami Forman who is the Executive Director of Path Forward.

Categories: Blog articles

Learning From Others Vs Figuring Things Out By Yourself

A VC - May 10, 2017 - 4:41am

Today is the annual USV CEO Summit. Once a year we ask our portfolio CEOs to gather at our office in NYC and spend the day talking to each other about what they have learned and are learning about building and leading companies. This is not a novel idea. Many/most VC firms do this sort of thing. We have been doing it for something like ten years now. We will have about sixty CEOs in our offices today.

I often think about the founder/CEO who has five or six VC firms invested in their company. They get invited to attend five or six of these a year. And participate in five or six networks. That’s a lot of networking with other CEOs. I sometimes wonder if there is a point of marginal utility for them in all of this “learning from others.”

Don’t get me wrong. I think there is so much founders/CEOs can learn from their peers. I encourage the CEOs I work with to join CEO groups, talk frequently with their peers, get peer CEOs on their boards, and do whatever else they can to learn from the experiences of others. Our CEO Summit today will be yet another great opportunity to do this.

But at some point, you have to learn things yourself. You can talk to peers until you are blue in your face about how to hire a great VP Engineering or CFO. But making a bad hire or two in these roles will teach you a lot more about it than talking to others. At some point, you are going to have to figure things out by yourself. There is no substitute for direct personal and painful experience. That’s just how life works.

So I like to think of learning from others as a way to steepen the learning curve. You can get there faster if you talk to others and are open to lots of feedback and advice. But no amount of feedback and advice will make you an amazing leader on your first day as a newly minted CEO. That comes with time and the scars and pain that result from your bad decisions. I have many of them myself and wear them as a badge of honor.

Categories: Blog articles

Rebalancing

A VC - May 9, 2017 - 6:15am

Two of my favorite techniques in investing are dollar cost averaging (when buying and selling) and rebalancing.

The early stage venture capital business has dollar cost averaging built into its buying model. You build up a position over multiple rounds and years. That is a great thing. I also try to exit investments, particularly public stocks, via this technique. But when a company is sold in an M&A transaction, you generally have to sell everything at once.

In public stocks and other marketable assets, these techniques are particularly important. I believe you can spot a long term trend and ride it. But I do not believe you can spot a market bottom or top until it is in the rear view mirror. So that is why I like to average into and out of a position over time.

Rebalancing is even more important. If you have a position that has worked incredibly well and it starts to become a very large portion of your overall portfolio, it is wise to take some of that position off the table and reinvest it in other attractive assets. This gives you more diversification, which I believe is generally a good thing, and also de-risks your portfolio from a big selloff in the largest position.

The reason I mention this is that I have been rebalancing my crypto portfolio. I got into BTC early and have held a highly concentrated position in BTC for the past five years. As other crypto assets have developed enough liquidity and maturity that they become attractive holdings, I have been taking profits on my BTC portfolio and reinvesting, mostly in ETH for now. But I am also looking around at other crypto assets to start buying.

The macro thesis around crypto has been building for the last six years that I have been investing and following it. I think it is certainly time to have a diversified portfolio and start using best practices for investing in marketable assets in this sector.

Categories: Blog articles

Token Summit NYC May 25th

A VC - May 8, 2017 - 4:59am

AVC regulars William Mougayar and Nick Tomaino are putting on an exciting event in NYC on May 25th called Token Summit.

I blogged about it a while back but I thought an update was in order because:

1) I am going to do the wrap-up session with William at 5pm. That should be fun.

2) The agenda has been published and it looks great.

3) AVC wine geek Arnold Waldstein and William are doing a talk on natural wines at an event for attendees the night before.

This is the closest thing to an AVC meetup that I know of since the 10th anniversary party back in 2013.

It should be a fun couple of days in NYC.

Categories: Blog articles

Seeing Through The Fog

A VC - May 7, 2017 - 4:22am

I was talking to my friend Simon yesterday and he observed that the essential skill of entrepreneurs and early stage VCs is to “be able to see through the fog of an emerging market and pick out the winning idea.”

And of course, I agree with that. It is something that we have done pretty well at USV over the years.

But how do you do that? Is seeing through the fog a skill that can be learned?

I think seeing through the fog can be learned but it takes time and practice.

Some people are innately good at it and they seem to be able to do it naturally.

But I was not that person. It took me years to be able to do it well and I think there are a few things that helped me a lot.

  1. Focusing on a sector and dedicating yourself to it helps a lot. I have been investing almost exclusively in Internet-based businesses since 1993 and that has helped me understand the dynamics, economics, and unique characteristics of doing business on the Internet. That framework helps me see through the fog.
  2. Doing the upfront work to have a thesis before investing in a sector is important. My partner Brad taught me this trick back when we started USV in 2003. He insisted that we have a thesis before we raised our first fund and started investing. That thesis has evolved a lot over the years but we have always had one. When we wanted to start to invest in verticals, like financial services, healthcare, and education, almost ten years ago now, we took deep dives on those sectors and developed a thesis about how they would emerge, where the value was going to be, and  where we wanted to focus before making a single investment in these verticals. That has served us incredibly well as we have built/are building fantastic portfolios in all three verticals.
  3. Avoiding the noise is particularly important. This is hard to do unless you have a thesis. But even if you have a thesis, there is often a ton of noise around other things that you have to ignore. Otherwise, it will pull you in all sorts of directions, waste a ton of your time, and possibly lead to bad investments. I like to think of having blinders on when we are starting to invest in a new area. It is critically important to not let the hype and bluster and bullshit misdirect you.
  4. Using the technology of the emerging sector really helps. That is often not easy. I remember when I first started playing around with Bitcoin in 2011, it wasn’t simple to get a wallet, mine some Bitcoin, use an exchange. But I did it because I wanted to use the technology and understand how it worked. Getting your hands dirty by using the technology as early as you can will you help to see through the fog. I strongly recommend it.
  5. Reading everything that is written on an emerging sector is critical. I am not talking about books, they usually come too late. I am talking about academic/research/white papers and blog posts written (often poorly) by the leading technologists in the sector. There are sometimes early observers/pundits in these nascent sectors and some of them can be quite good. Find them and follow them.
  6. Meeting with as many people working in the emerging sector as you can will help a lot. I don’t just mean entrepreneurs but you should meet as many of them as you can. I mean everyone and anyone who is working in the sector, investing in the sector, writing about the sector, and engaging in the sector. It’s a lot of work (and travel if you don’t live in a place people come to a lot), but it is invaluable.

When something new comes along, like the Internet in 1993, Web 2/Social in 2003, Mobile in 2007, or Blockchain in 2011, initially it is opaque, like mist, as Simon said to me. But amazing business opportunities will emerge from that mist and those entrepreneurs and early stage investors who jump onto the right ones will be rewarded greatly. It takes a prepared mind to do that and you have to do the work before the opportunities start emerging from the mist. That is how you get the clarity to see the best ideas through the fog.

Categories: Blog articles

Video Of The Week: Ethereum In 25 Minutes

A VC - May 6, 2017 - 7:06am

Ethereum (ETH) has exploded in the first half of 2017, with its dollar exchange rate going from $8.29 to $93.65, resulting in a current market cap of $8.6bn.

We can (and do) argue all day long about whether these numbers are crazy or not.

But I always like to think that where there is smoke, there is fire.

So it might make sense to try to understand Ethereum a bit better.

And nobody is better to do that than Vitalik Buterin, the inventor/founder of Ethereum.

Here is his take from Ethereum DevCon2 last fall in Shanghai.

Categories: Blog articles
Syndicate content