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Updated: 4 hours 34 min ago

Digital Money

December 3, 2019 - 7:22am

I was listening to this podcast on the treadmill this morning. It is a conversation between Peter McCormack and Andreas Antonopoulos about Bitcoin, Privacy, Freedom, and a lot more.

At one point Andreas says that we have digital money already, but it is largely debits and credits on ledgers in banks and other financial services companies. He also says that cash is currently only about 8% of global money and that number has been going down steadily over the last fifty years as digital money has taken over.

His point, and it is a good one, is that cash is decentralized money. But money that is registered on a ledger maintained by a corporation that is highly regulated by the government is an entirely different thing.

After listening to the podcast, I bought some more Bitcoin this morning.

Categories: Blog articles

Practicing Patience

December 2, 2019 - 4:44am

We went to the Knicks Celtics game last night.

For three and a half quarters the Knicks and Celtics played a tight game and the game was tied at 95 with six minutes left when Coach Fizdale called a time out.

The Knicks came out of that time out befuddled and turned the ball over on three straight possessions which ultimately led to 12-0 run by the Celtics and the game was over.

As we walked out of MSG, I was depressed. More losing.

But my son Josh had a different take. Dennis Smith Jr is finally coming out of his early-season slump. Kevin Knox had a good game after taking a beating in the press recently.

Losing is hard. The Knicks are 4-16 so far this season. There is not much joy in the Garden right now.

But I appreciate Josh’s optimism. By the time we had gotten to dinner, some of it had rubbed off on me.

Patience is hard. Being a Knick fan is great practice.

Categories: Blog articles

Grinding

December 1, 2019 - 4:07am

It is tempting to search for the one magic move that will make everything better. A new VP of Sales. A new database layer in your tech stack. A new brand for your company. Moving everything to the cloud. More capital in the business.

But it is rarely one thing that a business needs to succeed. It is often a little bit of everything.

Back in the early days of Twitter, we could not keep the website and API up. We would hire advisors and they would recommend something new and we would try it and we would still go down. It was terribly frustrating and threatened the business.

During this period of instability, Twitter purchased a search engine called Summize. Summize was a small team of engineers, most of whom had come out of AOL.

After we cut the deal to acquire Summize, I asked Jack Dorsey, who was running Twitter at the time, how we planned to integrate the Summize team. He looked at me and said “we are not going to integrate them, they are going to integrate us.” And Jack made Greg Pass, Summize’s engineering leader, Twitter’s engineering leader.

It was interesting to watch Greg and the Summize team tackle the “fail whale.” Instead of searching for a magic solution, they instrumented the entire system and just started rebuilding every part that was about to break.

It was a slow and steady approach. It took time. But within six months (or thereabouts), we had a much more stable system. And after about a year of this approach, we had mostly said goodbye to the fail whale.

Grinding isn’t very satisfying. It is hard to stand up in front of everyone and say “we are going to fix things around here bit by bit with a lot of hard work.” Big flashy moves are an easier sell most of the time. But they don’t work nearly as well and are prone to complete and abject failure.

If given a choice between a flashy operator or a grinder, I will take a grinder every time. It is a much higher percentage bet. It requires faith and patience and the results are sometimes hard to see. But if you look at the results from grinding it out over a long enough time frame, you can see the power of that approach.

Categories: Blog articles

Video Of The Week: Crypto Singularity

November 30, 2019 - 6:53am

This is a talk that Muneeb Ali, co-founder and CEO of our portfolio company Blockstack, gave at their “Can’t Be Evil” summit last month in the bay area.

Categories: Blog articles

Funding Friday: ENEMY Magazine

November 29, 2019 - 5:45am

A regular reader sent me this project last week and I backed it today and am sharing it with all of you.

Categories: Blog articles

Thankfully, ….

November 28, 2019 - 7:11am

there is this thing called the Internet which allows anyone like me to connect a server to it and host content like this blog post.

Thankfully there is open source software like WordPress that allows me to do all of this without using a proprietary service.

Thankfully there is a range of operating systems (some open source) that we can choose from and a range of browsers (many open source) that we can choose from to access this content.

It is this permissionless environment, designed fifty years ago, and developed over the next thirty years, that has done so much for society.

Of course, there are many things about this permissionless environment that are problematic and we are faced now with the need to address them intelligently without undoing all that is good about it.

I am thankful that my lifetime has roughly lined up against this incredible invention and development and that I have been able to play a small role in it and that I can also play a small role in addressing the challenges we now face.

I am also very thankful for my family, friends, colleagues, supporters, and readers.

Happy Thanksgiving Everyone.

Categories: Blog articles

Cash Management In Startups

November 27, 2019 - 6:05am

When I was in my mid-20s and had just gotten a job in venture capital, I read a piece on Alan Shugart, the larger than life founder of Seagate, one of the most successful disk drive companies. Alan was quoted as saying that “cash is more important than your mother.” That got my attention because mothers are really important.

Over the years, I have learned what Alan meant. Cash is everything in a startup. It is the fuel that keeps the car running. And startups fail largely because they run out of cash.

I was working with one of our portfolio companies yesterday on a cash forecasting model, a practice that I strongly recommend and appreciate greatly.

Forecasting cash is more art than science, particularly in a growing company where there are all sorts of unpredictable things (revenue, infrastructure costs, hiring pace, receivables, etc).

But like all practices, it is about the practice. You have to engage in cash forecasting, you have to engage in it regularly, you have to adapt to changing conditions on the ground, and you have to internalize the puts and takes and their impact on operations.

When a company gets mature in their business operations, has repeatable revenues, and has a strong balance sheet, you can run the business based on an annual plan or a semi-annual plan.

But early on in a company’s life, you are going to have to operate on an ever changing plan. If the revenues are coming in more slowly, you hire more slowly. If you want to wait another six months to raise more capital, you have to buy that time with changes to the operating model.

That is the back and forth between cash management/forecasting and operating. They go hand in hand.

It all starts with a cash forecasting model. It looks like a forward-looking profit and loss statement. But you do it on a cash basis. And you include balance sheet items like security deposits, equipment purchases, etc in it. Think of it as forecasting your checking account over the next year.

Once you have that, you need to engage in updating the model regularly and it is ideal to do that as a team, or at least with parts of the team, in the room. That makes it abundantly clear to everyone how operational decisions impact cash and runway.

I like a weekly cadence to this process and I like it to happen with the key senior leaders in the room. That may feel like wasting people’s time. But cash is more important than your mother in a startup, so managing it is never a waste of time.

Categories: Blog articles

USV Two Year Analyst Program

November 26, 2019 - 4:06am

At USV, we have had a two-year analyst program since the very early days. The alumni of our analyst program are an impressive group of people. Some have their own venture capital firms, some are founders of companies that are doing great, some are working in large companies.

We are starting the process of hiring a new group of analysts and, as always, we kicked off the process with a blog post on USV.com.

If you are interested or know someone who might be, check out this post.

Categories: Blog articles

The AVC Helium Hotspot Discount Code

November 25, 2019 - 3:36am

Last Thursday I wrote about the Helium launch in NYC and suggested that readers might want to purchase a Helium hotspot.

Well, I have good news. AVC readers can buy a Helium hotspot with a discount.

Here is how you do it.

1/ Go to the Helium Store and hit the Order Now button

2/ Put AVC100 into the field called “Referral or Promo Code”

3/ Complete your order

I enjoy earning Helium tokens every day with my hotspot. I hope they will turn into something someday.

Categories: Blog articles

History Doesn’t Repeat Itself, But It Does Rhyme

November 24, 2019 - 7:26am

So goes the famous Mark Twain quote.

I thought of this in reading a few blockchain sector reports this morning.

David Kelnar‘s “blockchain primer” is a very good summary of what is promising about the crypto sector and what is challenging.

In his summary at the end, he writes:

Tim Berners-Lee developed the protocol for the web in 1989. 10 year later, in 1999, its potential was glimpsed — but technological, commercial and economic challenges brought expectations back to earth with a crash. 15 years later, Tim’s vision for globalised information, e-commerce, and communication was realised. The Bitcoin white paper was published in 2008. 10 years later its potential was glimpsed — but technological, commercial and economic limitations brought expectations down to earth with a crash.

https://medium.com/@dkelnar/fa610002b999

I take that as a suggestion that the crypto sector is following essentially the same timeline as the web sector. Facebook launched in Feb 2004, four years after the start of the internet crash. So using David’s timeline, the killer app for crypto might launch at the end of 2021 or early 2022.

But then there is this chart from Morgan Stanley’s recent report on BTC and Libra:

As you can see in that chart, Morgan Stanley’s timeline for Bitcoin is much faster than for the Nasdaq. It seems that their implicit argument is that the crypto sector will move much more quickly through its ups and downs than the web did back in the 90s and 00s.

I am more in David’s camp than Morgan Stanley’s camp. I think the crypto sector is progressing, but slower than I would like. I remain long term bullish but short term frustrated with the crypto sector. As I have been for quite a while now.

Categories: Blog articles

Video Of The Week: The Recount Recap

November 23, 2019 - 6:30am

I wrote a bit about our investment in Recount Media last month.

I have found their daily videos that give me what I need to know in five minutes or less a godsend.

This past week was a blur for me as I was on the go all week and could not catch up on anything.

So to be able to get a sense of Wednesday night’s debate on my phone on the subway between meetings was so great.

Here is that video:

If you want to get more videos like this, 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

Funding Friday: El Reino de Los Muertos

November 22, 2019 - 4:09am

I almost never take a reward when I back a Kickstarter project but I did that this morning with these playing cards. I can’t wait to get them.

Categories: Blog articles

The NYC Helium Network

November 21, 2019 - 5:26am

On Tuesday night, our portfolio company Helium launched the Helium Network in NYC.

As many of you know, Helium is a peer to peer low bandwidth wireless network that anyone can run a hotspot for. I wrote about our hotspot in our apartment in NYC a few months ago.

When you operate a Helium hotspot, you earn Helium tokens. We earned about 7 Helium tokens yesterday with our hotspot.

The Helium network in NYC is already 133 hotspots strong and the map of lower Manhattan looks like this:

If you would like to buy a Helium hotspot and start earning Helium tokens you can do that here.

The cost of Helium hotspots are $495 right now but early adopters earn Helium tokens at a higher rate. As the cost of Helium hotspots come down to what you are accustomed to with wireless networking equipment, the competition for earning tokens will go up and the rate at which you earn tokens will come down too.

This is token incentive economics at work in building out wireless infrastructure and I am excited to watch this happen.

Categories: Blog articles

Preventative Medicine

November 19, 2019 - 5:58am

When I was a young associate in a VC firm in my mid 20s, one of the partners told me I should get an annual physical every year and if I did it in the fall, I should get a flu shot while I was having my physical.

I have done that every year since and this afternoon I will spend an hour with my doctor getting poked and prodded and a needle in my upper arm with whatever mixture of flu vaccine they are giving out this year.

Around the same time, my mother advised me that since I have her fair skin I should find a good dermatologist and have a full body scan twice a year. I have been doing that too ever since.

I have seen the statistics on the relative spending between preventative care and critical care but I don’t remember exactly what they are. I do recall that the vast majority of medical spending in the US is on critical care and a small amount is on preventative care.

That seems wrong to me. We should do more to make sure that we all make the effort and take the time to have regular check-ups, do the required scans (mammograms, prostate exams, etc), and get things that will prevent disease like vaccines.

I suspect that beyond good practice, there are startup and investment opportunities in preventative medicine. It is the kind of thing that personal mobile computing can make a big difference in.

Categories: Blog articles

The Education Transformation

November 18, 2019 - 7:03am

Back in March 2009, USV hosted an event called Hacking Education. It was the beginning of our effort to invest in the transformation of the education sector.

A few weeks ago, USV held its annual meeting, roughly 15 years after we closed our first fund. And our partner Rebecca gave a presentation on our education portfolio, which is now one of the strongest parts of our entire portfolio.

As Rebecca was developing her presentation, I wrote an email to her that said:

when did we do Hacking Education? Was that ten years ago now? That may also be a useful reference, maybe at the start of the presentation

And so she went and pulled some photos of that event to start her presentation.

Today she wrote a blog post on USV.com featuring the big themes of her annual meeting presentation. And she posted a few of those photos, in which we are all looking quite a bit younger.

Rebecca concludes her post with these optimistic words:

Our education portfolio has become a core value driver in our funds. In part, we think this is because we have hit the tipping point in consumers’ interest in self-driven, direct-to-learner education because technology has enabled higher quality education to be delivered at a lower price point, a counter-balance to the inflationary trends we’ve seen to date. Appetite for products and services that reframe what it means to learn – and how to learn – is high, and quickly accelerating.

As Bill Gates famously observed, we overestimate what can be done in a year and underestimate what can be done in a decade. A decade after hacking education, we are working with a bunch of high growth companies that are helping to transform what it means to learn and be educated and we are very proud of that.

Categories: Blog articles

Airpods vs Airpods Pro

November 17, 2019 - 9:39am

Although I am an avid Android fan/user, I am equally fond of Apple’s Airpods. I have used the original and V2 Airpods with great success over the last few years and can’t imagine using anything else to pair with my phone for audio.

I purchased the AirPod Pro a few weeks ago and have been using them exclusively and I am not quite sure if I want to stay with them or go back to the V2 Airpods.

I have never liked headphones with silicone tips. They create an odd feeling of pressure in the inner ear that feels strange to me. And I also don’t love noise cancellation when I am out and about, which is where I use the Airpods.

On planes and in the office, where noise cancellation is something I quite like, I use over-ear Bose headphones with noise cancellation instead of the AirPods.

I also don’t love the larger charging case, which I typically have on me while I am out and about.

And, I don’t think the Bluetooth pairing (which is how they connect to Android phones) works as reliably as the Bluetooth pairing on the V2 Airpods.

I am going to give the Airpods Pro a few more weeks before I make a final call, but I am leaning towards going back to the V2 Airpods right now.

I am curious to hear what others think about these two Airpod products. I wonder if I’m in the minority or the majority on this.

Categories: Blog articles

Video Of The Week: Duolingo On SNL

November 16, 2019 - 9:14am

Our portfolio company Duolingo was the subject of a funny skit on SNL a few weeks ago.

Categories: Blog articles

Funding Friday: The Home Roasting Kit

November 15, 2019 - 4:20am

Here’s a Kickstarter for all of you coffee lovers:

Categories: Blog articles

Shadowstalker

November 14, 2019 - 6:39am

Often art can expose issues more clearly than other mediums.

A show opened at The Shed this week called Manual Override. It is about the increasing power of technology in our lives and our inability to control it.

There is a piece in the show by the artist Lynn Hershman Leeson (whose Electronic Diaries form the spine of the show) called Shadowstalker.

In Shadowstalker, you enter your email address

And the work showcases your “digital shadow”:

Here is what my digital shadow contains:

Of course, none of this will surprise most people. We all know the Internet knows an awful lot about us.

But Lynn has managed to express it vividly in art and that has a powerful effect.

If you are in NYC, stop by The Shed and see Manual Override. The entire show is great. And try to see the Agnes Denes show too. It is also terrific.

Categories: Blog articles

Philanthropy

November 13, 2019 - 4:27am

This is a week full of philanthropy for The Gotham Gal and me. We are attending two fundraisers for organizations we support and throwing one for an organization we started.

I woke up thinking about giving back and how important it has become to us. Neither of us grew up in environments that were deep in philanthropy but somehow we were drawn to it in our thirties.

The Gotham Gal got involved in MOUSE when it was formed and became the Board Chair a few years later. That was where we learned that we could bring others into things that mattered to us and help make a difference on those things.

We also learned that we could create our own family foundation and contribute stock to it. We have been doing that for almost twenty years now.

That foundation has allowed us to support causes that speak to us and to start philanthropic organizations where we thought there was a need and nobody was filling it.

A big part of doing philanthropy is engaging others in it. Philanthropic organizations need financial support and that need is never-ending. And no matter how generous one can be, it is never enough. So finding ways to introduce causes you care about to others and then convincing them to support them becomes the thing.

At first, I didn’t like making the ask. Then I tolerated it. Only recently have I learned to enjoy it.

I ask readers to support things on AVC all the time. If there is a business model for AVC, that is it. And I appreciate all the generosity that this community has shown over the years.

I hope all of you appreciate and enjoy giving back as much as we do. It is an amazing thing to be able to help others.

Categories: Blog articles