Blog articles

Funding Friday: The Electronic Frontier Foundation

A VC - November 1, 2019 - 2:16am

The Electronic Frontier Foundation (EFF.org) has been fighting for and helping to protect our online rights for twenty-eight years. Their primary focus areas are online privacy and free speech.

They spend about $12mm a year on legal interventions and policy work. Most of their funding comes from small donations from people like us who value the work they do on our behalf.

I signed up for an annual membership this morning and will be contributing $2500 a year to this amazing organization. I also got this awesome EFF ski hat.

I would like to encourage all of you get to read what I think free of censorship to support their work as well. You can make a one-time payment of as little as $25 or as much as I did and you can also make that a recurring payment, as I did.

You can do all of that here.

Categories: Blog articles

The World Is Messy And There Are Ambiguities

A VC - October 31, 2019 - 2:56am

I’ve been wanting to say something like this here at AVC for several years and have held back for a host of reasons, mostly because it’s a sensitive topic and it would be misunderstood.

But after watching Obama say this, I had to repost it. I could not agree more.

Categories: Blog articles

Pacing

A VC - October 30, 2019 - 3:20am

Pacing in a VC fund context is how much capital the firm is investing in a given period and tracking that over time.

I don’t think a VC firm should manage to a pacing number. It should manage to the opportunity set that it sees.

But I think pacing is a great thing to track in the rearview mirror.

I like to look at investment pace by quarter and year. And by dollars and deals. And by new names and follow-ons.

If you keep track of that, chart it, and review it, you will be mindful of whether the firm is getting too far out over its skis or heels.

And that is a super useful thing to be aware of.

Categories: Blog articles

Recount Media

A VC - October 29, 2019 - 3:02am

This post is also live on USV.com as we announce all of our investments there with a blog post.

Eighteen months ago, I had breakfast with John Heilemann and he told me that his world, political media, was challenged in the shift from linear television (ie cable news) to real-time mobile (ie Twitter). He saw an opportunity to address that by filling the void in between them with news content that was made for real-time mobile consumption but had the journalistic integrity and production values of linear television.

I said to him “you should start a company to fill that void and you should get John Battelle to join you in starting that business.”

John did exactly that and six months later USV provided the seed capital along with True Ventures and a fantastic group of angel investors. 

Their company is called Recount Media and it has stayed largely under the radar for the last ten months as they built the team and started producing news content that promises “no bullshit, no bad faith, in five minutes or less.”

Having provided the initial funding for Twitter twelve years ago, we at USV are acutely aware that the disruption in media that it caused has been both positive and negative and that there is more work to do to make sure our society is well served by both the Fourth and Fifth estates.

We think that the work John, John and the dream team of journalists, producers, technologists, and business people are doing will make a material impact on filling the void and we are proud to be supportive investors in Recount Media.

If you want to see what Recount is all about you can download the Recount iOS app and/or sign up for their videos delivered via a daily email. You can also follow the Recount on TwitterInstagram, and YouTube.

Categories: Blog articles

Politics and the people

Beyond Money - October 28, 2019 - 11:12am

I’ve rarely had any enthusiasm for any candidate for federal political office, Democrat or Republican, because I know they have all be bought off by the power elite whose agenda is to dominate and exploit at any cost.

What I have been passionate about is a movement to promote social justice, economic equity, personal freedom, ecological restoration, community empowerment, peaceful relations with all, and human unity.

Surprisingly, in the current Presidential campaign, a candidate has emerged who seems to have the courage and ability to lead the political arm of such a movement. This recent message from Tulsi Gabbard speaks for itself:

This desperate coordinated campaign by the establishment elite and its backers in the corporate media can only mean one thing: They’re afraid of us. Afraid of the clear evidence that our movement is growing stronger every day, our message getting louder and harder to ignore:

The New York Times, CNN, the DNC, Hillary Clinton, her proxies; They’ve shown they’re afraid of our movement to dismantle the for-profit American war machine, to finally make Big Pharma pay for its predatory policies, to decriminalize marijuana and reform our broken criminal justice system, to make polluters pay for the devastation they’ve caused to our planet, our air, our water. 

They’re afraid of a Party reform agenda that will root out the corruption and rot, and re-establish the Democratic Party as the big tent party that looks out for the little guys. The Party that is truly of, by and for the people.

Are you up for it? 

Neither Tulsi nor anyone else can be our “savior.” It is still up to “we the people” to save ourselves, but part of that involves promoting a standard bearer who expresses our needs and desires and will work to implement policies that promote the common good.

Donald Trump promised to do a lot for the people, but has delivered very little. In fact, he has done much to damage us further. While he has made some moves to shift US foreign policy away from endless regime-change wars and covert interventions, his actions have been erratic and mutually-contradictory. His tax policies have increased income and wealth disparities, his energy policies have further damaged the environment and ecological balance, his immigration policies have done nothing to address the root cause of the refugee crisis, his trade policies, while seemingly well-intended, have damaged many American businesses, especially the small and medium sized enterprises he purports to champion.  

We can do better. We need a leader who can unify the people in common cause. I think Tulsi Gabbard is that leader.

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Categories: Blog articles

What You Do Is Who You Are

A VC - October 28, 2019 - 1:56am

This past summer I read a proof of Ben Horowitz’s new book, What You Do Is Who You Are, and I even blogged about it here without naming the book.

What You Do is about culture, how you make it, how you keep it, and how the big decisions you make and how you explain them set the culture in your organization.

To explain this Ben tells the story of four different cultures that were set by strong leaders:

– the leader of the only successful slave revolt, Haiti’s Toussaint Louverture

– the Samurai, who ruled Japan for seven hundred years and shaped modern Japanese culture

– Genghis Khan, who built the world’s largest empire

– Shaka Senghor, a man convicted of murder who ran the most formidable prison gang in the yard and ultimately transformed prison culture.

https://www.amazon.com/What-You-Do-Who-Are/dp/0062871331/

These stories really make it clear how you set and keep your culture. You will come away from this book with a clear understanding of how your actions will set the culture in your company.

I read Ben’s interview with Connie Loizos and I like what he said here about why he wrote the book:

First, it was the thing that I had the most difficult time with as a CEO. People would say, ‘Ben, pay attention to culture, it really is the key.’ But when you were like, ‘Okay, great, how do i do that?’ it was like, ‘Um, maybe you should have a meeting about it.’ Nobody could convey: what it was, how you dealt with it, how you designed it. So I felt like I was missing a piece of my own education.
Also, when I look at the work I do now, it’s the most important thing. What I say to people at the firm is that nobody 10 or 20 or 30 years from now is going to remember what deals we’ve won or lost or what the returns were on this or that. You’re going to remember what it felt like to work here and to do business with us and what kind of imprint we put on the world. And that’s our culture. That’s our behavior. We can’t have any drift from that. And I think that’s true for every company.

So if you leading your company and you are thinking “ok, great, how do I do that?”, then go get this book and read it. I think you will come away with a much better understanding of what culture is all about.

Categories: Blog articles

Bringing It All Back Together

A VC - October 27, 2019 - 5:08am

Early-stage companies are exercises in experimentation, iteration, and figuring things out. You try one thing, it sort of works, but you see a tangential opportunity and go after that. Sometimes that leads to a full-on pivot, other times it leads to an evolution of the opportunity.

This process can create multiple products, services, projects, and it can look messy. I love it when founders bring it all back together into one cohesive package. That doesn’t always happen, but when it does, it is a thing of beauty.

That happened this week with our portfolio company Numerai. I saw this tweet by Numerai founder Richard Craib:

Big: as of today the @numerai tournament is now running on Erasure.

— Richard Craib
Categories: Blog articles

Audio Of The Week: A Conversation With Andrew McAfee

A VC - October 26, 2019 - 8:12am

This is a good interview. I learned a lot.

Categories: Blog articles

Funding Friday: Shapeshift

A VC - October 25, 2019 - 1:50am

Our portfolio company Kickstarter is running a cool crowdfunding event called Shapeshift that is focused on “bold new products made from recycled materials.”

You can see them here and back the ones that are interesting to you.

I did that this morning.

Here is one of the Shapeshift projects I backed:

Categories: Blog articles

Carbon Offsets

A VC - October 24, 2019 - 1:22pm

Business and personal travel, which we’ve been doing a lot of the last two weeks, is a big producer of carbon in the atmosphere. I’m actually writing this on a cross Atlantic flight.

But you can offset those carbon emissions fairly inexpensively

There are a number of services on the Internet that will help you do it.

Over the last four years the Gotham Gal and I have racked up about 570 tons of carbon via air travel.

Depending on how much we spend per ton to offset it, the coast could be as low as $10,000 or as high as $60,000.

At $10,000, that is about a 3% increase to our air travel costs. At $60,000, that is about a 20% increase to our air travel costs.

There are a lot of debates about how much it should cost to offset a ton of carbon. Right now it is inexpensive because the supply of offset projects is higher than the demand for them.

But at market equilibrium, the price should be a lot higher and many people offset at the theoretical market equilibrium price not the current market price.

I don’t think there is a right or wrong answer to this question about how much per ton you should pay for offsets. It depends on how you think about it.

Our flight today could cost as little as $100 to offset for both of us. Or as much as $600.

Either way, we are paying to reduce our carbon footprint and that is a good thing in our view.

If everyone started doing this, it would transform the carbon offset markets and lead to a lot of great projects, like reforestation and other approaches that would have a meaningful contribution to reducing the amount of carbon in the atmosphere.

Categories: Blog articles

The Access Act

A VC - October 22, 2019 - 10:58pm

Yesterday three Senators, Democrats Mark Warner (VA) and Richard Blumenthal (CT) and Republican Sen. Josh Hawley (MO), put forward new legislation aimed at opening up the markets in web services. Their proposed legislation is called The Access Act and you can read it in its entirety here.

First let me say that this is exactly the kind of regulation we need to deal with the growing monopoly powers of companies like Apple, Google, Facebook, Amazon, etc, etc.

When Liz Warren came out with her idea to breakup these large monopolies, I wrote here that I thought that would turn out to be bad policy and ineffective. I came back to this issue when Liz starting breaking out of the pack and leading the race to run against the President next year.

As I said in both of those blog posts, it is my view that the monopoly powers that Google, Facebook, Apple, Amazon, etc have do not stem from their size and market reach, they stem from the data monopolies they own about us and our online activities. Breaking these companies up into smaller parts does not solve that problem. As my partner Albert observed in a blog post last week, spinning Instagram out of Facebook will do nothing to reduce Instagram’s market power, which is massive in its own right.

What we need to do is to allow any company, large or small, to compete on a level playing field with these large monopolies and they way to do that is to force them to open up their platforms and data so that competitors can provide similar services.

Senator Mark Warner put out a long tweetstorm yesterday laying out the ideas behind this bill and I would like to highlight a few of them here.

Back in 2001, the FCC recognized that interoperability was key to competition and required then-dominant AOL to make its instant messaging service compatible with its competitors. https://t.co/vYMj5ShW63

— Mark Warner (@MarkWarner) October 22, 2019

And

The ACCESS Act has three main components that would apply to the largest tech platforms:

1. Portability
2. Interoperability
3. Delegatability

Here’s what that means in plain English:

— Mark Warner (@MarkWarner) October 22, 2019

First, consumers ought to have the ability to switch social media platforms and other online services without having to start from scratch. This idea of data portability would allow you to take all your data ~ including your cat videos ~ and move it to a different service.

— Mark Warner (@MarkWarner) October 22, 2019

Second, for data portability to really make a difference, we need to break down the anti-competitive barriers that companies put up to limit their competitors from interacting with their platforms.

This is the idea behind interoperability, the open exchange of information.

— Mark Warner (@MarkWarner) October 22, 2019

Third, we need to preserve delegatability — the idea that consumers should be able to allow a third-party service to manage their privacy settings across multiple platforms.

— Mark Warner (@MarkWarner) October 22, 2019

I am excited about all three of these ideas and they work together. You can’t do just one of them. But I am most excited about the third, delegation. My partner Albert calls this “the right to be represented by a bot” and it is critical to making all of this work.

Just when you thought government was lost and useless, someone inside the walls of power in Washington steps up and puts forward a set of ideas like this and you think “well someone actually gets it.” I am deeply grateful to Senators Warner, Blumenthal, and Hawley (and their staffs where so much of this work gets done) for their leadership here.

Finally, one complaint. The bill defines a term “large communications platform” and that is the entity it seeks to regulate. As currently defined in the bill, a service would have to have 100mm monthly active users to be considered a large communications platform. That number is way to high in my view. We ought to regulate companies in this way at much smaller sizes. 10mm MAUs is where I would start requiring this sort of thing and maybe ratchet up the requirements as they scale to 50mm, 100mm, and beyond.

But all of that can get sorted out as this bill is discussed, debated, and hopefully eventually made into law.

I hope Liz and the other candidates out there who want to use old techniques on new markets will read their colleagues’ bill, understand its importance, and start changing their tune on this issue. It is too important to get wrong.

Categories: Blog articles

Franz Liszt

A VC - October 22, 2019 - 1:29am

We went to a piano recital last night in Budapest.

Gabor Farkas played a number of compositions by Chopin and Liszt.

I was particularly taken with the Liszt compositions. The one called “Les Jeux d’eaux de la Villa d’Este” was particularly lovely.

I shared another pianist’s rendition of it with some friends on Twitter this morning.

After the recital, we went to dinner and we spent much of dinner talking about Liszt and reading about his life and work. It’s nice when a phone connected to the Internet can be a catalyst for a conversation at dinner instead of a hindrance.

As many of you likely know, Liszt was a “rock star” in the world of classical music in the mid 19th Century.

He fell in and out of love with Countesses and Princesses and held court in some of the most important cities of the era, including Vienna and Weimar.

But possibly most interesting was the level of hysteria that he generated in his fans with his piano playing, a phenomena known as Lisztomania.

The kind of hysteria that the Beatles and other rock bands produced in their fan bases was not a new thing.

It had gone on a century before in the concert halls of Europe at the height of the Classical Music era.

Which leads me to speculate that Lisztomania itself was not a new phenomena and that great performers at the height of their powers have had the capacity to cause people to lose their composure for as long as humans have had the power to perform.

In any case, Franz Liszt is an interesting case in the study of celebrity. And his music is also wonderful. He has found two new fans, a century and a half after his departure from Planet Earth.

Which is the amazing thing about arts and culture. It survives and can be appreciated by generations to come leading us to become fanatical about someone who has not been alive for a very long time.

And yes, if you were wondering, I have Ken Russell’s Lisztomania downloaded into my Google Pixel Slate to watch on our flight back to the US later this week.

Categories: Blog articles

Being There

A VC - October 21, 2019 - 7:44am

We get feedback from the leaders of our portfolio companies on an annual basis. It helps me get better at what I do and I love it.

One area that I am constantly challenged to improve on is accessibility.

The common refrain is “I know you are busy and I hate to bother you.”

To which I reply “It is your job to bother me and my job to be responsive when you do.”

But even so, getting portfolio company leaders to feel that they can reach out, even on small things, is a challenge.

An approach that I have taken and many other VCs also take is to schedule weekly or bi-weekly catch ups with the portfolio leaders.

That works but sometimes what is needed can’t wait for that or is a “in the moment thing” like “today sucked.”

And sometimes helping someone deal with “today sucked” gets you to a level of comfort with a leader that allows you to help on many other things too.

My point is simple. Being there for portfolio leaders is job number one for venture capitalists. If we can’t do that, what can we do?

So working on that is a big part of my personal development and I work on it every day.

Categories: Blog articles

The Fifth Estate

A VC - October 19, 2019 - 11:18pm

Mark Zuckerberg, in his speech last week at Georgetown University, called social media “the Fifth Estate.”

The first three “estates” of society, classically, are the clergy, the nobility, and everyone else.

When the printing press arrived during the Renaissance/Enlightenment period and a mainstream press emerged, a fourth voice, The Fourth Estate, arrived on the scene and the mainstream press has had a long, strong, and lasting effect on society.

As far back as the counterculture years of the 60s, the term Fifth Estate emerged to describe underground newspapers. But it was the web, first with online communities, then blogging, and finally social media, that gave a voice to everyone.

And that is why Zuckerberg called social media “the Fifth Estate.”

As someone who has been blogging for most of the last two decades and who has enjoyed a voice that has been amplified by technology, I very much believe in the power of this Fifth Estate. I think it will have as strong and lasting effect on society as the Fourth Estate has had and will continue to have.

I also understand that the platforms that currently host the Fifth Estate have a tremendous amount of power to shape it, regulate it, and constrain it.

The reason this blog runs on open source software (WordPress) and is hosted on a server that I control is that I don’t want my voice hostage to one of these tech platforms.

I do use Twitter regularly and in doing so, I participate in a constrained platform. I don’t use Facebook regularly, partially because I don’t want to be exposed to or constrained by that platform.

But this post is not about Facebook vs Twitter. They are more similar than they are different. They are large and powerful tech platforms where the Fifth Estate materializes in our society.

They are not the only platforms that host the Fifth Estate. There are so many that matter. There is Reddit and the many other message boards like it. There are blogging platforms like Medium. And there are communities that exist to serve particular interests, including ones that cater to hateful and awful people.

The question that Zuckerberg posed for society last week is what power do we want to convey in these tech platforms to shape and constrain the Fifth Estate.

My vote is very little, if any.

I believe that the power that Facebook and Twitter and other platforms wield on society by virtue of their dominance is a fleeting power and that in time they will be replaced by something else that is better for society.

For now they have a lot of power and that is causing a lot of hand wringing in the halls of Washington and elsewhere.

But we should be careful not to hand them more power. Or worse require them to censor some voices and not others.

This tweetstorm by my friend Balaji says it very well.

Particularly this one:

If a plebiscite was held, few people would want to give up their own right to voice on social media.

They may want to silence someone else, but they would not want to give up their own right.

Nor should it be taken away without good reason and due process.

— Balaji S. Srinivasan (@balajis) October 19, 2019
Categories: Blog articles

Video Of The Week: The Crypto Custody Business

A VC - October 19, 2019 - 8:20am

A few weeks ago my partner Nick and Sam McIngvale, who runs our portfolio company Coinbase’s custody business, did a talk at the CoinAlts conference. In it they talk about the evolving role of custody in the crypto markets, and what they are excited about in crypto in the next few years.

Categories: Blog articles

My latest interview on Ellen Brown’s podcast, It’s Our Money

Beyond Money - October 18, 2019 - 1:14pm

In Ellen’s October 10 podcast, on which I was the featured guest, I argue that our best hope for escaping the tyranny of the global banking cartel lies in creating a decentralized network of exchange in which credit is locally controlled and allocated based on personal relationships and the productive capacity of community economies (starting at 27:25). This episode begins with a report by David Jette of the California Public Banking Alliance on the landmark public banking legislation that was recently passed into law in California. David describes what this act enables and the long and arduous process of getting it passed.

https://www.podbean.com/eu/pb-tuza2-c2cf19

Categories: Blog articles

Sensible Regulations Versus No Regulations

A VC - October 17, 2019 - 2:56am

I remember back in the early 2000s, the direct marketing industry and the tech sector worked with Congress to craft sensible regulations for email marketing. The result was called CAN-SPAM and it was passed into law in 2003. The law has been modified to clarify certain terms and rules. While it certainly was not perfect (what is perfect?), it paved the way for a lot of progress in making email a workable medium for consumers and businesses.

There are no such rules in the location data business. Any mobile app can collect data on where you are and do what they want with it. That is not good for anyone, including the companies who are collecting that data.

Today, the CEO of our portfolio company Foursquare, which is in the location data business, wrote an op-ed asking Congress to regulate the location data industry.

In the op-ed, Jeff (Foursquare’s CEO) outlines what he thinks would be reasonable regulation. Here are the highlights:

  • apps should not collect location data unless they are using it to provide value to the user
  • there should be transparency to the user around what they are signing up for and how the data will be used
  • there should be a “do no harm” requirement
  • location data should be protected with the appropriate security

The entire op-ed is a good read and Jeff goes into a lot more detail than I did on each of these points.

I hope this leads to action in Congress and we get the right legislation as a result.

Categories: Blog articles

Bearing Witness

A VC - October 16, 2019 - 9:46am

Normally when we travel, The Gotham Gal posts about the things we do. She is a way better travel blogger than I am.

But today we did something that I want to talk a bit about.

We visited the Auschwitz concentration camps in southern Poland.

This is the first time I have visited one of these camps.

I have been to the various Holocaust memorials and have seen the photographs and heard and read the stories.

But being there in person is something else.

Staring into the rubble of a gas chamber (one of four at Birkenau) where hundreds of thousands were murdered because of their ethnicity and faith takes your breath away and fills your heart with dread.

It is not a pleasurable experience in the least.

But it is a very moving one.

One of the things I have come to understand about life is that bearing witness is something we must all do. We cannot avoid the pain of humanity. We must stare it in the face and feel it.

We did that today and I am glad we did.

Categories: Blog articles

The Libra Association

A VC - October 14, 2019 - 11:26pm

I am sitting in the airport lounge in Geneva waiting to board an airplane. I am here because yesterday was the inaugural Libra Association member council meeting. The Libra Association is a Swiss organization which will operate the Libra blockchain network and the Libra reserve.

Yesterday was an important milestone for the Libra project. We adopted the initial charter for the Libra Association, we elected the initial five board members, and we set in motion a number of important initiatives. “We” are the twenty-one founding members of the Libra Association.

It is fashionable to be negative about the Libra project right now. And it is equally fashionable to call it “Facebook’s crypto-currency project.” Both are understandable under the circumstances.

But yesterday was the beginning of an independent effort, one that Facebook does not control, one where Facebook is one founding member among many, and one where Facebook has one board seat out of five.

But even more important is Libra’s mission to create a stable cryptocurrency that can operate at sufficient scale such that Facebook and others can use it as a means of exchange/payment system in their applications.

The most meaningful conversations I had yesterday were with the members from Kiva and Women’s World Banking who joined the Libra Association because the people they serve are under-banked and under-provided for by the legacy financial system. Like them, I believe a stable cryptocurrency that is broadly adopted around the world will bring new services to people who don’t have access to the financial system that many of us who read this blog do.

One of the powerful things about being in the venture capital business is that we can support projects that are necessary but unproven, unpopular, and/or misunderstood. Not everyone can do that and so it is even more important that we do.

Categories: Blog articles

The USB Standard

A VC - October 13, 2019 - 10:34pm

We are sitting in the gate at London City Airport waiting for an early morning flight. Next to every seat in the waiting area is a bank of power outlets that look like this:

You will notice that there is one UK standard outlet and four USB outlets.

And, no matter where in the world you are from, it is likely that you have a USB cable for your phone.

I am charging my phone while I write this and I don’t have a UK power adapter on me.

That’s the power of a standard like USB which is only getting better and better over time.

I wonder if someday we won’t even have to deal with all of this:

Categories: Blog articles
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