Blog articles

AVC Downtime

A VC - April 12, 2018 - 5:05am

For much of yesterday if you came to AVC, you were greeted with this message:

Long time AVC readers have seen this before and it is a sign that something is awry on the shared server that I run WordPress on at Bluehost.

A number of regular readers reached out offering to help me move to a static platform and I will likely take them up on that.

Until then I can only apologize for the availability issues yesterday.


USV TEAM POSTS:

Albert Wenger — April 20, 2018
An Alternative to Mandatory APIs: Let Me “Hack Myself”

Zach Goldstein — April 20, 2018
Hello!

Categories: Blog articles

Dapps

A VC - April 11, 2018 - 5:29am

A friend asked me at breakfast this week “what gets you excited in crypto these days?”

I answered “Dapps.”

If the second half of 2016 and all of 2017 was about raising capital to fund development efforts (and speculating on all of that), then it sure feels like 2018 is the year we start getting decentralized applications (Dapps) we can use.

Our portfolio company Blockstack offers a decentralized platform that developers can build Dapps on.

I have Blockstack’s web client running in Safari on my home desktop and here is a screenshot of some of the Dapps I can run in that environment:

A cool thing about Blockstack is that identity is built into the platform so I am already a user and have a profile in every one of these Dapps because I have a Blockstack identity/profile.

Another ecosystem that is really taking off right now are Ethereum based Dapps.

I use our portfolio company Coinbase‘s Toshi Dapp Browser to access them. Toshi is available on both iOS and Android.

When you launch Toshi, you can put some ETH into it. Toshi has a user-controlled ETH wallet inside of the browser.

When I open the Toshi browser on my phone, I see a bunch of Dapps I can use:

I like the Twitter-like app called Peepeth, which looks like this inside of Toshi:

But there are hundreds of Ethereum Dapps you can discover and use inside of Toshi.

You do need some ETH to power these apps so if you want to play around with Ethereum Dapps, load up your Dapp browser with ETH before you go.

The bottom line for me is that we are finally seeing some useful decentralized applications being built for consumers on these blockchains.

Right as the market for capital raising and speculating on crypto cools off.

As it always is.


USV TEAM POSTS:

Albert Wenger — April 20, 2018
An Alternative to Mandatory APIs: Let Me “Hack Myself”

Zach Goldstein — April 20, 2018
Hello!

Albert Wenger — April 18, 2018
Shapeways Expands Services for Creators

Categories: Blog articles

Expectation and Disappointment

A VC - April 10, 2018 - 4:59am

I woke up this morning thinking about disappointment.

My daughter and I went to the final Knicks home game of the season last night, a loss to the Cavs. One of 53 we have endured this season.

The season had started off with expectations of better times. Melo was gone. KP was emerging as one of the best young players in the NBA.

And yet we end the season with less wins and more losses than last year. And it wasn’t because of letting Melo go.

But this post is not about the Knicks.

It is about disappointment.

Life is full of disappointment.

Many things don’t work out the way we hope or plan.

Investments don’t pan out.

People we are excited about don’t live up to our expectations.

A film we are excited to see turns out to be awful.

There are big and material disappointments that can set us back for years or longer.

And there are little ones, like the terrible Knicks, that we should be able to shake off in a good night of sleep.

I think this Knicks thing will take me a few nights to be honest.

It is often tempting to become cynical and lower our expectations to protect us from the pain of disappointment.

But I don’t think we should do that.

I think it is human to hope and expect.

And it is human to feel the pains of disappointment.

We just need to shake them off, get out of bed with a jump in our step, and move forward.

And find something new to get excited about.

And start the cycle all over again.


USV TEAM POSTS:

Albert Wenger — April 18, 2018
Shapeways Expands Services for Creators

Albert Wenger — April 18, 2018
Uncertainty Wednesday: The Problem with P-Values (Learning)

Categories: Blog articles

Pitch Deck Alternatives

A VC - April 9, 2018 - 6:31am

I was going through my email this morning and opening pitch decks, skimming them, and responding to indicate if they are a fit with our thesis and of interest to me and my colleagues at USV.

Everyone who works in VC or does angel investing does this daily. I probably open and skim 10-20 pitch decks a day and sometimes a lot more.

So on the way to yoga, after making a dent in my inbox, I was thinking if there was an alternative to pitch decks that would be as efficient at communicating the idea (pitch decks really are great at this) that would serve the entrepreneur as well.

I came up with three ideas in my seven minute walk to the gym:

1/ Record a short video (less than three minutes) in which you communicate who you are (or who the team is), what the idea is, and why you are doing it. Post it to Vimeo behind a password and share it via email. We use a technique like this in our analyst interview process and you can convey a lot of information this way but, importantly, you can also communicate who you are and why you are doing it.

2/ Have a friend or colleague interview you in podcast format. Keep it to three to five minutes max. Then post it to a streaming platform like SoundCloud behind a password and share it via email. I like the interview format a lot. It allows you to script the Q&A but provide a lot of personality in the answers.

3/ Write a letter, like the letters some founders and CEOs put at the start of their IPO filings, that explains your vision and why you are doing this. A well written letter can be an incredible sales tool.

The key is finding a format that suits you and that you are comfortable with. The pitch deck is efficient and powerful but everyone uses it and it does not allow you to stand out and be noticed in a sea of pitch decks.

Whatever you do, keep it short. If someone is going through 10-20 pitches every morning in their email routine, you have to get your story across simply and crisply or it won’t get the attention it deserves.

Finally, please don’t punish my good deed of sharing these ideas by flooding my inbox with videos, podcasts, and letters this week. I have a very busy week and am already behind before the week gets started.

And don’t take this blog post as a message to stop sending me pitch decks and replace with one of these alternatives. Pitch decks work fine for me. I like them.

I’m just staying that you can and should be creative and play to your strengths when pitching your company. You have to get noticed somehow.


USV TEAM POSTS:

Albert Wenger — April 18, 2018
Uncertainty Wednesday: The Problem with P-Values (Learning)

Categories: Blog articles

Voice Assistants Six+ Years In

A VC - April 8, 2018 - 7:33am

We have many voice assistants in our lives.

I have Google Assistant on my phone. It is great.

The Gotham Gal has Siri on her phone. It is OK.

We have Amazon Alexa and Google Home in our apartment.

We have Siri on our AppleTV/Siri Remote.

We can talk to our car.

But the honest truth is we rarely use any of them.

The one we use most is the Siri Remote when using AppleTV because it is by far the best way to control that device.

It is not an issue of the quality of the voice recognition on these services. It is great.

It is a question of the relatively weak utility of the experience relative to alternatives combined with not building the muscle memory to use voice assistants more.

I was walking home from the gym this morning and was wondering if we are typical.

So I just ran this Twitter poll:

Do you regularly use a voice assistant in your life?:

— Fred Wilson (@fredwilson) April 8, 2018

Twitter polls only allow for four options so this is far from scientific and also suffers from the bias inherent in my Twitter followership.

But almost 500 replies in, over 60% replied no.

About 20% say they use a voice assistant regularly in their home.

And about 10% say they use a voice assistant on their phone.

I’m happy to learn that we are not in the luddite category when it comes to voice assistants.

More like the mainstream.

But certainly not in the early adopter cohort which is not small.

It does make me wonder how many of those Alexas and Google Homes are sitting around collecting dust.


USV TEAM POSTS:

Bethany Marz Crystal — April 16, 2018
Venture Capitalists, circa 2032

Albert Wenger — April 16, 2018
World After Capital: Laying a Foundation (Scarcity)

Categories: Blog articles

Video Of The Week: Is Privacy A Value Or A Strategy?

A VC - April 7, 2018 - 6:37am

In this talk that he gave at the Blockstack Berlin conference last month, my partner Albert argues that privacy is a strategy and not a core value in the information age.

Categories: Blog articles

Funding Friday: NYC Says Enough Rally

A VC - April 6, 2018 - 8:13am

A group of high school students in NYC are doing a gun safety rally in Washington Square Park on April 20th and are funding the rally on our portfolio company, GoFundMe.

The campaign is called NYC Says Enough and you can back it here.

I don’t know these students, but one of them reached out to me via email and I asked him a bunch of questions which he answered to my satisfaction.

So I backed the project this morning and am now sharing it with all of you.

I am closing comments today because I don’t want this post to turn into an acrimonious gun safety debate.

Categories: Blog articles

ShopShops

A VC - April 5, 2018 - 3:44am

It’s been a busy week on the USV news front. On Tuesday we rolled out our new thesis and yesterday we announced our latest investment, ShopShops.

I was talking to a young woman this week who we are interviewing for our two-year analyst program. I asked her why she was interested in working at USV.

She told me she liked that we posted our investment memos on our blog so that everyone knows why we made the investment, how it fits with our thesis, and why we are excited about it.

That is something we have been doing since the early days and is core to how we approach investing at USV.

You can go back and look at what we were thinking when we invested in Twitter, Twilio, Cloudflare, Coinbase, and pretty much any USV investment.

We don’t write investment memos for the files at USV, something I used to do at earlier VC firms I worked at. We just write them to the world. It puts our thinking out there and it stays there in perpetuity.

So yesterday Rebecca did that for our newest investment, ShopShops.

I like to think of ShopShops as what QVC would be in a global decentralized world where everything is live streamed on our phones.

This graphic from their website explains how it works:

Basically, hosts go into stores and livestream shopping experiences to viewers all over the world who can buy from stores they aren’t able to shop in.

This is a screenshot of ShopShops founder Liyia Wu doing a shopping event for viewers in China.

Time will tell if our investment in ShopShops lives up to everything we are expecting from it.

But I am excited by this idea, this founder, and this investment and I am thrilled we made it and told the world why.


USV TEAM POSTS:

Albert Wenger — April 13, 2018
Whither Facebook Regulation?

Categories: Blog articles

AirPod Android Music Volume Issue

A VC - April 4, 2018 - 7:21am

I use Bose QuietComfort 35 headphones when I’m on my desktop and laptop but I prefer the Apple AirPods when I am on my phone. They are small, light, and fit well in my ear.

But I’ve had this nagging issue with the volume on my AirPods when I stream music on my phone (SoundCloud, AppleMusic, YouTube, etc).

The volume from all of those apps is super low when you use AirPods on Android.

I wasn’t walking much in LA, mostly driving with my phone bluetooth’d to my car, and this issue didn’t affect me much.

But since I’ve been back in NYC and walking a lot again, it came back with a vengeance.

So I finally figured out how to fix it, by simply googling and finding this Reddit post.

Here is how you fix it:

1/ Go to the settings app on your Android phone, scroll down to System, scroll down to the bottom and click on “Build Number” seven times. That makes you a developer on Android, always a good thing in my book.

2/ Now when you click on the Settings app, and select System, you will see “Developer Options”

3/ Scroll down to the Networking settings in the Developer Options and turn on “Disable Absolute Volume”

Now you can listen to music and video on your Android with your AirPods at whatever volume you want.

Problem fixed.

I love the Internet and geek stuff like this.


USV TEAM POSTS:

Albert Wenger — April 13, 2018
Whither Facebook Regulation?

Nick Grossman — April 12, 2018
Focus

Categories: Blog articles

USV Thesis 3.0

A VC - April 3, 2018 - 8:29am

At USV, we are thesis-driven investors. We state clearly and concisely what we want to invest in and, implicitly, decide not to invest in anything else. That is a good thing because, as our partner Rebecca wrote in this post:

The commitment to a thesis is part of the fiber of USV–a shared set of ideas creates a framework that allows us to operate with focus and work on what matters most

Today we are publishing, and committing ourselves to, version 3.0 of our thesis:

USV backs trusted brands that broaden access to knowledge, capital, and well-being by leveraging networks, platforms, and protocols.

But this is actually the fourth USV thesis.

When we started USV, Brad and I committed this to our investors (before this was tweetable):

At USV, we will invest in the applications layer of the Internet.

That was an acknowledgment that, in 2003, we had moved beyond what Carlota Perez calls the installation phase and had reached the deployment phase.

But we quickly realized that the applications layer thesis was too big and we needed to narrow our focus. So in 2006/2007, we started focusing exclusively on networks that were quickly amassing large users bases on the web. That was eventually articulated by our partner Brad in this tweet:

USV in 140 characters: invest in large networks of engaged users, differentiated by user experience, and defensible though network effects

— Brad Burnham (@BradUSV) June 8, 2011

By 2013, we knew that the network thesis was long in the tooth and had started adjusting to that fact. We had gotten interested in the blockchain sector in 2011 and had also started building large portfolios in fintech, education, and health care. Our partner Andy finally forced the issue and we went public with what he called “Thesis 2.0” but was actually the third revision.

As the market matures, we look for less obvious network effects,
infrastructure for the new economy, and enablers of open decentralized
data

— Andy Weissman (@aweissman) December 15, 2015

And now we find ourselves again iterating slightly on what we are focused on. And so we turned to the newest member of our partnership, Rebecca, to explain it to the world.

The @usv thesis in its new 3.0 version (but still less than 140 characters) to reflect our current focus: USV backs trusted brands that broaden access to knowledge, capital, and well-being by leveraging networks, platforms, and protocols. More on why here: https://t.co/ogKFH4DUNZ

— Rebecca Kaden (@rebeccak46) April 3, 2018

One of the things I like most about Thesis 3.0 is that is a modest adjustment to where we have been with our prior efforts, but we have tightened things up and added a few nuances. Like the prior iterations of our thesis, we have already been investing behind this thesis and you can see elements of it here and elsewhere in our recent investing activity. Notably, the words blockchain and crypto are nowhere to be found in thesis 3.0 but it leads us inexorably there.


USV TEAM POSTS:

Nick Grossman — April 12, 2018
Focus

Albert Wenger — April 11, 2018
Uncertainty Wednesday: The Problem with P-Values (Generating Hypotheses)

Categories: Blog articles

1.1.1.1

A VC - April 2, 2018 - 4:15am

Our portfolio company Cloudflare announced a consumer DNS service (a resolver) yesterday.

It was not an April Fools stunt.

If you want to use the Internet’s fastest, privacy-first consumer DNS service, then head over to 1.1.1.1 and click the install button.

What you will do is adjust your computer’s settings to change the DNS servers your computer uses to resolve DNS queries (what server address is google.com?).

Here are some mantras from the 1.1.1.1 web page:

Unfortunately, by default, DNS is usually slow and insecure. Your ISP, and anyone else listening in on the Internet, can see every site you visit and every app you use — even if their content is encrypted. Creepily, some DNS providers sell data about your Internet activity or use it target you with ads.

We think that’s gross. If you do too, now there’s an alternative: 1.1.1.1

and

We will never log your IP address (the way other companies identify you). And we’re not just saying that. We’ve retained KPMG to audit our systems annually to ensure that we’re doing what we say.

Frankly, we don’t want to know what you do on the Internet—it’s none of our business—and we’ve taken the technical steps to ensure we can’t.

and

We’ve built 1.1.1.1 to be the Internet’s fastest DNS directory. Don’t take our word for it. The independent DNS monitor DNSPerf ranks 1.1.1.1 the fastest DNS service in the world.

Since nearly everything you do on the Internet starts with a DNS request, choosing the fastest DNS directory across all your devices will accelerate almost everything you do online.

So if you want speed and privacy, install 1.1.1.1 and you will get both.


USV TEAM POSTS:

Albert Wenger — April 11, 2018
Uncertainty Wednesday: The Problem with P-Values (Generating Hypotheses)

Categories: Blog articles

Easter Eggs

A VC - April 1, 2018 - 6:21am

Happy Easter everyone.

I would also like to wish folks a happy Passover.

My topic today are Easter Eggs. Not the kind that kids find hidden in the back yard, but little features that developers hide in the software applications they build.

I love Easter Eggs in software apps and I encourage our portfolio companies to allow this practice in their engineering teams.

Easter Eggs bring whimsy and fun to software, something I feel that is badly needed and much appreciated by users.

And a good example of an Easter Egg, likely a result of today also being April Fool’s Day, is Waldo showing up in my Google Maps this morning. Well done Google.


USV TEAM POSTS:

Albert Wenger — April 9, 2018
World After Capital: Laying a Foundation (Humanism)

Categories: Blog articles

Video Of The Week: Computer Science Education For All

A VC - March 31, 2018 - 6:29am

I heard the news last night that the $6mm that Governor Cuomo was seeking for K12 CS Education was not included in the final NY State budget. I had blogged about this issue at the start of this week.

UPDATE: It appears I heard wrong and that the $6mm did make it into the budget. If that is the case, then it is great news.

In this short (50 sec) video, NYC Mayor de Blasio explains why this is so important. We need more leaders like him who will put themselves out there on this issue, make it a priority, and fight for it.


USV TEAM POSTS:

Albert Wenger — April 9, 2018
World After Capital: Laying a Foundation (Humanism)

Categories: Blog articles

Funding Friday: THE 2018 New York City Pothole Art Project!

A VC - March 30, 2018 - 7:39am

I backed this cool pothole art project this morning.

This is the very kind of thing that our portfolio company Kickstarter makes possible.


USV TEAM POSTS:

Albert Wenger — April 6, 2018
From Advertising to Subscriptions and the Evolution of the USV Investment Thesis

Categories: Blog articles

Tenacity

A VC - March 29, 2018 - 7:48am

I saw this tweet in my feed this morning and responded:

just keep going and don’t quit

— Fred Wilson (@fredwilson) March 29, 2018

If there was one word I would use to describe my secret to success it would be tenacity.

I just put my mind to something and grind on it.

I am not the smartest person in the room.

I am not the most organized person.

I don’t manage people well.

So I have a ton of weaknesses.

But my superpower is that I wake up with a ton of energy and apply it to everything I’m working on and keep doing that until I get an acceptable outcome.

It reminds me of the lesson of Angela Duckworth‘s book Grit that I wrote about last year.

the secret to outstanding achievement is not talent but a special blend of passion and persistence she calls “grit.”

It is powerful stuff.


USV TEAM POSTS:

Albert Wenger — April 6, 2018
From Advertising to Subscriptions and the Evolution of the USV Investment Thesis

Categories: Blog articles

The Jiu-Jitsu Move

A VC - March 28, 2018 - 8:00am

When a new technology or a new entrant or some new behavior comes into a market, the initial reaction is often to reject it.

But, as my partner Brad likes to say, the better move is to take that new energy coming at you and use it to your advantage. He calls it the “Jiu-Jitsu Move.”

A good example is the emergence of Wikipedia in schools about fifteen years ago. Most teachers freaked out and told their students not to use it for primary research, citing the “inaccuracy” of the service.

But a few clever teachers started assigning their students Wikipedia entries to fix. That is a Jiu-Jitsu move.

Another example is personal health information. Many in the health care industry see the increasing amount of our health care information in our own hands as a risk to them and their profession. But a couple years ago when I went in for my annual physical, when I was using an iPhone, my doctor asked to see my Health app. He said it was another data point for him to use in my care. That was a Jiu-Jitsu move.

I spent the day yesterday at a real estate industry event and talked to a lot of agents about the fact that their clients are often more informed than they are these days. I encouraged them to embrace that fact and use it to their advantage and not fear it. It is hard when you have grown up in an industry when your advantage was information and you no longer have that working for you.

But I honestly believe the only thing to do with progress is embrace it. Fighting it is futile.


USV TEAM POSTS:

Bethany Marz Crystal — April 5, 2018
Comp Sci High Admissions Day

Nick Grossman — April 4, 2018
Finding your discomfort zone

Categories: Blog articles

3D Printed Homes

A VC - March 27, 2018 - 7:29am

A few years ago I was up at the MIT Media Lab, where I have been on the advisory board, and met a bunch of faculty members. The one that blew me away was a woman who was building a 3D printer that could “print” office buildings. That really stuck with me.

So with that in the back of my mind, the Gotham Gal and I were in a bar in Palm Springs last night and we bumped into a couple people we kind of knew, one of them an AVC reader named Brett Hagler, and we heard the story of a house being 3D printed in Austin Texas during the recent SXSW conference.

Brett’s non-profit New Story (crowdfunding to finance and build homes in the developing world) and a robotics construction company called Icon collaborated to build an inhabitable 800 square foot home in Austin Texas in less than 24 hours.

These two companies think they can get the construction costs below $4,000 for a 3D printed home. That’s kind of amazing and disruptive in a whole bunch of ways.

It is exciting to see 3D printing technology continue to grow and scale into new and important sectors, like construction and real estate.


USV TEAM POSTS:

Bethany Marz Crystal — April 5, 2018
Comp Sci High Admissions Day

Nick Grossman — April 4, 2018
Finding your discomfort zone

Albert Wenger — April 4, 2018
Uncertainty Wednesday: The Problem with P-Values (Incentives)

Categories: Blog articles

K12 Computer Science Education In NY State

A VC - March 26, 2018 - 7:01am

While NYC is committed, and well on its way, to getting computer science teachers in every school in NYC by 2025, the situation across New York State is bleaker.

Many schools in New York State do not have computer science teachers and do not offer computer science courses to their students.

Governor Cuomo recognized this shortfall in his 2019 budget by proposing $6mm of funding for computer science education across New York State.

But neither the NYS Assembly nor the NYS Senate has followed through and included this $6mm (or a single dollar) in their proposed 2019 budgets for CS education.

The budget process is scheduled to close on April 1st, so this week is the week to get movement on this.

If you live in New York State, please reach out to your Assemblyperson and/or Senator and tell them how important computer science education is to you and why you want them to follow the Governor’s leadership on this issue and put $6mm in the 2019 budget for Computer Science education in New York State schools. If you don’t know how to reach your representatives in Albany, click on the two links in the opening paragraph in this post.

To put that $6mm in context, New York City is spending $8mm a year on training existing teachers (math, science, etc) to teach computer science. And they are doing this every year for ten years in order to get over 5,000 CS teachers in their ~1,700 public schools.

Surely New York State can do the same. Every kid needs the opportunity to learn new ways of learning, making, and earning. Computer Science is the first new subject that has been added to most public schools’ curriculum in the past fifty years. Most states and large urban centers have already committed themselves to this effort. But not New York State. It’s time that changed.


USV TEAM POSTS:

Albert Wenger — April 4, 2018
Uncertainty Wednesday: The Problem with P-Values (Incentives)

Bethany Marz Crystal — April 2, 2018
Dear New York…I think it might be love

Categories: Blog articles

Uncertainty and Risk

A VC - March 25, 2018 - 8:14am

This feels like a particularly risky time to me. The macro situation is not great; rising interest rates, trade tensions, saber rattling, etc. In tech we have dominant platforms extracting rents but also attracting scrutiny. Old line industries continue to struggle to adapt to new ways of doing business. And health care continues to eat up more and more of the GDP.

So what is an investor to do?

I think a barbell strategy is best in this environment. You want a healthy amount of low risk investments, like cash and low volatility cash producing assets (like real estate). And you want some risk too. I like venture capital and tech stocks, particularly ones that are not in the regulatory spotlight.

The thing about risk is that it is correlated with return over time. It is very hard to make money without taking risk. And those who tell you that they have a low risk/no risk way to make money are either lying to you or lying to themselves.

So you need to take risk. But you need to take risks you understand and avoid risks you don’t. I think there is a lot more risk in “the markets” than is priced in right now.

I don’t know if all the chickens I listed in the opening paragraph will come home to roost, or when. That is uncertainty. We have to live with the uncertainty. It’s always there.

So the stance you take is important. And I think the best stance in times like this, maybe all times, is one foot in and one foot out.


USV TEAM POSTS:

Albert Wenger — April 2, 2018
World After Capital: Laying a Foundation (Regulation & Self-Regulation)

Bethany Marz Crystal — April 2, 2018
Dear New York…I think it might be love

Categories: Blog articles

Audio Of The Week:

A VC - March 24, 2018 - 9:22am

If you are curious what the state of play is in the US regulatory stance towards crypto and blockchain, the best place to turn is Coin Center, the crypto industry’s voice in DC.

And in this podcast, Coin Center’s Director of Research Peter Van Valkenburgh gives a fairly clear and concise view of where things are and where they are going.


USV TEAM POSTS:

Albert Wenger — April 2, 2018
World After Capital: Laying a Foundation (Regulation & Self-Regulation)

Bethany Marz Crystal — April 2, 2018
Dear New York…I think it might be love

Categories: Blog articles
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