Blog articles

What Happened In The 2010s

A VC - December 31, 2019 - 7:00am

My friend Steve Kane suggested I take a longer view in my pair of year end posts this year:

What, no decade end/decade ahead posts? 😕

— Steven Kane (@stevenkane) December 26, 2019

And so I will.

Here are the big things that happened in tech, startups, business, and more in the decade that is ending today, in no particular order of importance.

1/ The emergence of the big four web/mobile monopolies; Apple, Google, Amazon, and Facebook. A decade ago, Google dominated search, Apple had a mega hit on their hand with the iPhone, Amazon was way ahead of everyone in e-commerce, and Facebook was emerging as the dominant social media platform. Today, these four companies own monopolies or duopolies in their core markets and are using the power of those market positions to extend their reach into tangential markets and beyond. Google continues to own a monopoly position in search in many parts of the world, has a duopoly position in mobile operating systems, and controls a number of other market leading assets (email, video, etc). Apple owns the other duopoly position in mobile operating systems. Amazon has amassed a dominant position in e-commerce in many parts of the world and has used that position to extend its reach into private label products, logistics, and cloud infrastructure. Facebook built and acquired its way into owning four of the most strategic social media properties in the world; Facebook, Instagram, Messenger, and WhatsApp. Most importantly, outside of China, these four companies own more data about what we do online and also control many of the important channels to reach us in the digital world. What society does about this situation stands as the most important issue in tech at the start of the 2020s.

2/ The massive experiment in using capital as a moat to build startups into sustainable businesses has now played out and we can call it a failure for the most part. Uber popularized this strategy and got very far with it, but sitting here at the end of the 2010s, Uber has not yet proven that it can build a profitable business, is struggling as a public company, and will need something more than capital to sustain its business. WeWork was a fast follower with this strategy and failed to get to the public markets and is undergoing a massive restructuring that will determine the fate of that business. Many other experiments with this model have failed or are failing right now. When I look back at the 2010s, I see a decade during which massive capital flowed into startups and much of it was wasted chasing the “capital as a moat” model.

3/ Machine learning finally came of age in the 2010s and is now table stakes for every tech company, large and small. Accumulating a data asset around your product and service and using sophisticated machine learning models to personalize and improve your product is not a nice to have. It is a must have. This ultimately benefits the three large cloud providers (Amazon, Google, Microsoft) who are providing much of the infrastructure to the tech industry to do this work at scale, which is how you must do it if you want to be competitive.

4/ Subscriptions became the second scaled business model for web and mobile businesses, following advertising which emerged at scale in the previous decade. Startups that developed the skills to execute a subscription business model with positive unit economics delivered fantastic returns to investors and capital flowed into this sector as a result. This was a very positive development as subscriptions better align the interests of the users and the developers of mobile and web applications and avoid many of the negative aspects of the free/ad supported business model. However, as we end the decade, a subscription overload backlash is emerging as many consumers have signed up for more subscriptions than they need and in some cases can afford.

5/ Silicon Valley’s position as mecca for tech and startups started to show signs of weakening in the 2010s, largely because of its massive successes this decade. It is incredibly expensive to live and work in the bay area and the quality of life/cost of life equation is not moving in the right direction. The physical infrastructure (transit, housing, etc) has not kept up with the needs of the region and there is no sign that it will change any time soon. This does not mean “Silicon Valley is over” but it does mean that other tech sectors will find an easier time recruiting talent to their regions and away from Silicon Valley. And talent is really the only thing that matters these days.

6/ Cryptography emerged in the 2010s as a powerful technology that can solve some of the web and mobile’s most vexing issues. Cryptography and encryption have been around for a very long time, well before the computer. Modern computer cryptography came of age in the 1970s. But the emergence of the internet, web, and mobile computing largely did not integrate many of the central ideas of cryptography natively into the protocols that these platforms were built on. The emergence of Bitcoin and decentralized money this decade has shown the way and set the stage for cryptography to be built natively into web and mobile applications and deliver control back to users. Credit to Muneeb Ali for framing this issue for me in a way that makes a lot of sense.

7/ Technology inserted itself right in the middle of society this decade. Our President wakes up and fires off dozens of tweets, possibly while still in bed. We are all hostage to our phones and the services that we rely on. Our elections are conducted using machine learning technology to segment and micro-target important voting groups. And bad actors can and do use the same technologies to interfere in our elections and our public discourse. There is no putting the genie back in the bottle in this regard, but the fact that the tech sector has such a powerful role means that it will be highly regulated by society. And there is no putting the genie back in the bottle in that regard either.

8/ The rich got richer this decade. Axios wrote in a recent email that:

“The rich in already rich countries plus an increasing number of superrich in the developing world … captured an astounding 27% of global growth.”

But the very poor also had a great decade as Axios also reported:

The rate of extreme poverty around the world was cut in half over the past decade (15.7% in 2010 to 7.7% now), and all but eradicated in China.

The losers in the 2010s were lower middle class and middle class people in the developed world whose incomes stagnated or fell.

Technology played a role in all of this. Many of the superrich obtained their wealth through technology business interests. Some of the eradication of extreme poverty is the result of technology as well. And the stagnation of earning power in the lower and middle class is absolutely the result of technology automation, a trend that will only accelerate in coming years.

9/ This a post publish addition. A huge miss in my original post is the emergence of China as a tech superpower and a global superpower. There are many areas (digital money for example) where China is light years ahead of the western world in technology and that will likely accelerate in the coming years. Being a tech superpower is a necessary condition to being a global superpower and China is already that and getting more powerful by the day.

I will end there. These are the big mega-trends I think about when I think about the 2010s. There is no doubt that I left out many important ones. You can and will add them in the comments (wordpress for now), emails to me, and on Twitter and beyond. And that is what I hope you will do.


USV TEAM POSTS:

John Buttrick — Jan 7, 2020
Juro

Nick Grossman — Jan 6, 2020
Automated Personal Finance

Bethany Crystal — Jan 5, 2020
My 2020 Mantra: Lead with Compassion

Albert Wenger — Jan 1, 2020
An Agenda for the 2020s: Inventing the Knowledge Age

Categories: Blog articles

Adversarial Interoperability

A VC - December 30, 2019 - 8:43am

As I’m gearing up for two big posts tomorrow and wednesday, I will simply give you a link (courtesy of Nick) to read.

Cory Doctorow’s EFF post on Adversarial Interoperability explains the move we need to make to fix what’s wrong with big tech, monopolies, duopolies, etc, etc. Basically everything that is wrong with the Internet, mobile, and web.

If I was able to issue required reading to everyone who is regulating tech or running for offices that are in a position to regulate tech, this would be it.


USV TEAM POSTS:

John Buttrick — Jan 7, 2020
Juro

Nick Grossman — Jan 6, 2020
Automated Personal Finance

Bethany Crystal — Jan 5, 2020
My 2020 Mantra: Lead with Compassion

Albert Wenger — Jan 1, 2020
An Agenda for the 2020s: Inventing the Knowledge Age

Categories: Blog articles

What’s Going On With AVC?

A VC - December 29, 2019 - 7:37am

As Jason Wright said in the comments to yesterday’s post:

This blog is rendering like it’s 1998 in Safari and Chrome at the moment.

The theme that renders AVC in WordPress got messed up somehow and we are having a hard time getting it back to normal.

I am planning on relaunching AVC with a entirely new theme and design in the New Year and so I’m not particularly motivated to address this issue right now.

I’m open to feedback on why I should or should not bother, but my feeling is we can live with this bare bones design for the next ten days.

Categories: Blog articles

Video Of The Week: The Game Changers

A VC - December 28, 2019 - 6:33am

Our daughter suggested that The Gotham Gal and I watch this documentary on Netflix. We did that this week.

My New Year’s Resolution this time last year was to reduce the number of meals where I ate meat to less than half. It turns out that was not a particularly hard resolution to meet as I quickly realized I was already mostly there. But I did reduce my meat consumption in 2019.

After watching this film, I am going to keep on that trajectory. Hard lines don’t work well for me so I am not adopting a vegan, vegetarian, or any other diet. But I believe that I can reduce my meat consumption significantly without impacting my quality of life and I am on my way to doing so.

There are plenty of good reasons to reduce my consumption of meat but for me the environmental footprint of the meat production industry is the one that really moves to me to make this change.

Categories: Blog articles

Funding Friday: Flash Forest

A VC - December 27, 2019 - 6:25am

This project seeks to use drones to plant 1bn trees.

Reforestation is an important part of climate mitigation and reforestation projects are behind many carbon offset programs. So technology like this could make all of that a lot more efficient.

Categories: Blog articles

Annual Year End Predictions

A VC - December 26, 2019 - 10:43am

As I prepare to write my annual year end posts (what happened and what will happen), I have been reading similar posts by others.

This part one of two posts by Alex Danco is good. I am waiting for the second one to drop now.

The “what happened” post is easier to write but still very helpful to me. It helps me close the door on the year and understand it at a macro level.

The “what will happen” post is harder to write, I get it wrong more than right, and it is embarrassing to look back and see how off I was.

So it is tempting to stop doing it. But I think that would be a mistake.

It is useful to me to try and look into the crystal ball and see the future. It pushes me to get out of my comfort zone and imagine new and different things.

So I keep doing it, largely for myself, and I publish it to keep me honest. Your mileage may vary with it and so take it with a big grain of salt.

I am glad that others engage in this practice as well. It helps me engage in my practice. It is one of the many benefits of people powered publishing.

Categories: Blog articles

What Christmas Means To Me

A VC - December 25, 2019 - 7:39am

I really like Stevie Wonder’s song from the late 60s written by Anna Gordy Gaye, George “Horgay” Gordy and Allen Story. The song lays out what Christmas means; candles burning low, mistletoe, snow and ice, carols right outside my door.

I grew up celebrating Christmas and it was always a special time for me and my family. Decorating the tree, midnight mass, Christmas dinner, and gifts. I remember it fondly.

When the Gotham Gal and I decided to raise our family Jewish, I negotiated for and got Christmas. And for the many years, our family celebrated Christmas mostly the way I celebrated it as a child.

In recent years, with adult children and travel and many other things, celebrating Christmas has become optional. Some years we do it. Many years we don’t.

But Christmas retains a special place in my soul.

Christmas means family, it means winter (we got six inches of snow last night), and it means birth. A feeling of hope and optimism going into the new year.

As Stevie sings in that wonderful song:

I wish you merry Christmas baby

Oh and such happiness in the coming year, oh baby

That is what I wish for all of you and your families on this wonderful day.

Merry Christmas.

Categories: Blog articles

Happy Birthday Ollie

A VC - December 24, 2019 - 8:45am

Our dog Ollie is eleven today.

Here is a photo of him on the beach with a tennis ball, pretty much his favorite place to be and thing to do.

Categories: Blog articles

Uncut Gems

A VC - December 23, 2019 - 8:45am

As is my tradition, I made a playlist of songs that stayed with me in 2019.

This year, I focused on songs that mostly flew below the radar and aren’t likely to be heard on everyone else’s top tracks playlists.

I’ve named it Uncut Gems and I hope you like it.

Categories: Blog articles

Subscription Tracking

A VC - December 22, 2019 - 8:11am

My brother in law Jerry is working on a project to collect all of his family’s digital subscriptions; subscriptions to streaming video services, music services, subscriptions to online news and other publications, subscriptions to software services, subscriptions to education services, etc, etc. He is planning a dinner in which he will review all of them with his family and understand which ones they are using and which ones they are not using. Then he can prune the list.

I am sure this isn’t something only Jerry wants. With the explosion of online subscription services, we all have been collecting a plethora of subscriptions and many of us are wondering how much we are spending on them and if we are using all of them.

I asked a few of my partners if they have seen companies working on this problem. What I got back is there are a few financial management packages like Truebill and Trim that offer this feature. And there is a service called Bobby that focused on managing subscriptions.

I am curious about a few things about this category of services:

  • Do we want this subscription tracking functionality bundled in our financial management software or do we want it broken out as an independent app that can integrate into our financial management software? I suspect the answer is the latter.
  • Do we want to use different subscription trackers for the various categories or do we want to use one for all of them? I can imagine a video subscription tracker being an app on our AppleTV that allows us to measure usage. It could be that you can improve utility by making trackers by application sector.
  • How do the developers of these subscription trackers make sure they get all of the subscriptions? Some of our family’s subscriptions are direct debit, some are on one or more credit cards, some are via Apple, some are via Amazon, etc, etc.

As digital services have evolved from free and advertising supported to subscription-supported over the last decade, we are collectively spending billions on digital subscriptions and we need tools to properly manage that spend.

The tools that find their way into this space between us and our subscriptions can become quite strategic over time.

I am curious to hear if the AVC community has experience with products and services in this category and thoughts about the questions I posed about it.

Categories: Blog articles

Video Of The Week: Targeting Tech: Is Antitrust the Answer?

A VC - December 21, 2019 - 10:42am

USV’s portfolio company Recount Media produces excellent short (5 mins or less) videos about political news and related topics. They also produce the Shift series of events.

In November, Recount did a Shift event about Antitrust policy and my partner Brad Burnham was on the panel.

This is a Recount style 5min summary of that conversation.

Categories: Blog articles

Funding Friday: The Ifs

A VC - December 20, 2019 - 7:10am

You all know that I have a huge soft spot for anything that helps kids learn to program computers and other things and this project does exactly that. I backed it today and am sharing it with all of you.

Categories: Blog articles

Smart Home Standards

A VC - December 19, 2019 - 9:50am

Yesterday, Apple, Google, and Amazon annonuced that they are teaming up with Zigbee and creating a working group called Project Connected Home Over IP. The Verge has a good post on what is going on here and why. And in that post they show this great xkcd comic:

I am hopeful that something good and useful will come of this new partnership between Zigbee and the largest tech companies in the world.

Over the last two weeks, the Gotham Gal and I have been moving into a new home we built and we have had moments of joy (like when we easily programmed our cars to open and close the garage doors) and pain (when we could not use a Nest thermostat in our office because “that HVAC unit doesn’t talk to Nest”).

When I sit back and compare this move-in experience to one we had twenty years ago, when smart home technologies were new and we were early adopters, I can see how far we have come. You can make a new home “smart” so much less expensively and easily now.

But we are still very far from where things should be and will be.

I am hopeful that some new open industry standards can and will help.

There is nothing wrong with going from 14 standards to 15 standards if the 15th standard is actually useful. And it may well be that the other 14 are too.

Categories: Blog articles

Meet Cute

A VC - December 18, 2019 - 11:56am

An interesting project came out of USV this year.

My partner Andy had a hunch about short form content, audio entertainment, and romantic comedy and he launched a company to explore these ideas called Meet Cute.

Meet Cute produces short (15 minute) romantic comedies that are consumed in five chapters of three minutes each and are available on your favorite audio/podcasting service.

You can check them out here:

Apple

Google

Spotify

Stitcher

SoundCloud

iHeart

Meet Cute is about delivering a little bit of heart warming entertainment in the middle of our busy lives via a medium we all have in our cars and phones. I listened to the most recent story last night on the LA Metro on my way downtown to a basketball game.

The Meet Cute team is very small but they are already producing content at a rapid pace. Three fifteen minute stories will drop this week and that pace will quicken in the new year.

The leader of the Meet Cute team is Naomi Shah who worked as an analyst at USV and helped Andy develop this idea and plan. And brand and marketing is led by my daughter Emily Wilson. These two women are very talented as is the Meet Cute entire team.

A great way to stay engaged with Meet Cute is to subscribe to the weekly Meet Cute newsletter to stay up-to-date on all things Meet Cute, including new story drops. It never fails to give me a smile when I need it the most.

Categories: Blog articles

Bluesky

A VC - December 17, 2019 - 6:42am

Twitter announced their Bluesky project last week.

This is what I had to say about it, on Twitter naturally.

I wrote about these feelings 3 1/2 years ago in this post https://t.co/yC2JOmOFqu

— Fred Wilson (@fredwilson) December 11, 2019

/fin

— Fred Wilson (@fredwilson) December 11, 2019
Categories: Blog articles

Gateways

A VC - December 16, 2019 - 9:08am

Most big technology changes don’t come out of nowhere. There are predecessor technologies that predate and portend what is to come. I like to call these predecessor technologies “gateways.”

In the case of the web, there were two important gateways. The first was CD ROMs. There was a moment in NYC in the early 90s when we all thought CD ROMs were going to be the future of media. That is when the NY New Media Association was formed and there was a ton of excitement in the air about new digital.media services that would be delivered to our computers via CD ROMs.

Around the same time we saw the rise of online services like AOL, CompuServe, and Prodigy. These services allowed users to connect via dialup modem and do things like chat and email.

The CD ROM wave taught users to browse and explore rich media on their computers.

The online services wave taught users to dialup and chat and email.

So by the time the web browser showed up in the mid 90s, users were primed for the combination of the two – dialing up to chat, email, and browse rich media. It was a killer combination of the two and so much more.

As we think about crypto, we look for these gateways. One is certainly the financial speculation and trading of crypto assets. That has brought millions to the crypto sector and is the primary reason that people own or have owned crypto assets.

Another might be stablecoins that operate on closed or semi-closed networks. These stablecoins may not support the broadest set of applications envisioned by projects like Ethereum and others, but they may get hundreds of millions of people around the world owning and transacting with crypto assets.

It is tempting to get caught up in the big vision of what is possible with a powerful technology.like crypto and dismiss the gateways. But that would be a mistake as they are often necessary to set the stage for what is to come.

Categories: Blog articles

Having Kids

A VC - December 15, 2019 - 8:39am

Paul Graham wrote a blog post this week about having kids. I read it with interest because I have long noticed that having kids has had a profound and positive effect on Paul. So I was interested in what he had to say on the topic. I am not going to summarize what he said, you can read it here, but suffice it to say that he has found it to be an very positive experience.

The Gotham Gal and I had children fairly early in our marriage and we had three children before I started Flatiron Partners in 1996. That was mostly driven by Joanne as she pushed for having kids early and I went along with that plan.

When founders and other executives ask the Gotham Gal when is the right time to have kids, she always says “now” and explains that there will never be a good time to have kids so you might as well get on with it.

In my experience, that is good advice for a lot of reasons. Having young children is demanding and the younger you are, the easier it is to manage all of those demands.

I also believe that having children teaches you things you can’t learn any other way and that those lessons are incredibly valuable in other parts of your life, including your work life.

In my line of work, I have to work with hard charging willful entrepreneurs who won’t take orders from anyone (nor should they). Having children and learning how to work with them when we are not on the same page has helped me a lot with entrepreneurs.

Children have taught me to be patient, to care, and be present (something that has been a challenge for me over the years). Those are things that are extremely valuable in all walks of life.

But certainly the best thing of all about having kids is the children themselves. I have a lot of relationships in my life, but the relationships I have with my wife and children are the very best ones. Just getting a text from one of my kids is often the highlight of my day.

So if you are struggling with the question of when to have kids, I side with the Gotham Gal on this. Do it now. It will be the greatest thing you do and it will change your life. Like it did for Paul.

Categories: Blog articles

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

Beyond Money - December 13, 2019 - 8:40am

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

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

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

 

Categories: Blog articles

Funding Friday: Current Events Crossword Puzzles

A VC - December 13, 2019 - 7:15am

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

Categories: Blog articles

The Filecoin Testnet Is Live

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

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

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

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

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

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

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

Categories: Blog articles
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