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Musings of a VC in NYC
Updated: 1 hour 35 min ago

Down Time

December 13, 2018 - 4:25am

Yesterday I upgraded to a higher tier of hosting service from my hosting provider (Bluehost). AVC is now running on a “virtual private server” vs a “shared server” in the past.

That upgrade was processed in the middle of the night last night and after it completed, AVC went down.

Anyone who tried to access AVC in the last six hours was served this error message:

Account Suspended

Which is mildly embarrassing, as it appeared as though I have not been paying my bills

Categories: Blog articles

Pixel Slate

December 12, 2018 - 6:09am

My Chromebook journey has led me to the Pixel Slate.

As I wrote here a few months ago, I have wanted to move to a Chromebook for a while and I finally decided to do it.

I started with the Pixelbook, and I have been using it for about three months as my only machine at work. I wrote a bit about what I like about it and what I don’t like about it.

The lack of a biometric login (face or finger recognition) is a real limitation for me with the PixelBook because you have to use your Google login to unlock the device and I’ve got a very strong password on my Google account.

So when the Pixel Slate came out and offered fingerprint login, I bought one. I got it this week and have set it up and started to use it at work.

It’s a really interesting device. I bought it as a Pixelbook replacement as it has a keyboard that turns it into a laptop (sort of). It works a lot like the Microsoft Surface in that regard, although I have never used a Surface so I can’t really compare them.

But the thing that really kind of turned me upside down on the Slate is when I started installing Android apps on it. Once I had the native Gmail, Calendar, and other Android apps on it, the Slate started to feel like a massive phone to me.

So now I am really trying to understand this device and how best to use it.

I am intrigued by the hybrid nature of it, part laptop, part tablet, part phone.

I may very well start taking it with me when I travel, instead of my MacBook Air. 

In any case, I am now in full discovery mode with this device. And very excited to see all that it can do for me.

The one thing that took me some time to figure out is the biometric login. If you login to the device with your work Google login, the fingerprint login may not be available to you (that’s what happened to me).

With the help of my colleague Nick, I figured out that I could install the device with my personal Google login, then add my work Google account to it, and then I was able to use the fingerprint login.

I don’t really understand why Google deprecates the fingerprint login for work accounts as they allow that on the Pixel phone. 

But in any case, I got all of this working and I am now going to see how far this Pixel Slate can go with me. I am pretty optimistic that I am really going to like it.

Categories: Blog articles

When Markets Overcorrect

December 11, 2018 - 4:28am

When capital markets change direction, to the upside or to the downside, they often go too far before finding the right balance. When they overshoot to the downside, you can find some real values.

Back in the financial crisis of 2008, I was blogging about that as it related to the big tech stocks (Apple, Amazon, Google). The market hated everything and you could buy the big three tech franchises at crazy low prices as it related to their fundamentals (revenues, profits, cash flow, etc). And so I did and a lot of other people did too. And when the market came back in 2009 and beyond, those who bought at those bargain prices were rewarded.

So, it may be time to start thinking this way in crypto land. The reason I say “may” instead of “is” has to do with the fact that really bad bear markets take a while to find their footing and start moving up again. I worry that it will take crypto a while before it can make a move upward again. I wrote about that in this post a few weeks ago.

But nevertheless, I think it is time to at least start looking for fundamental value in crypto land. Ethereum is trading below $10bn. There are some traditional businesses in the crypto sector that are valued at almost that level. And if you believe in the fat protocols thesis, as I do, that gets my attention.

But there are more rigorous ways to think about fundamental value in crypto and one of the best known fundamental value thinkers in crypto is Chris Burniske, a partner in Placeholder, a crypto venture firm that USV is an investor in and I am an investor in too.

Chris posted a bunch of charts and analysis yesterday comparing Bitcoin and Ethereum to a bunch of measures of the fundamental value of their networks.

This chart from that post is the most telling in my view:

The green line is the use of gas to pay for smart contract execution on the Ethereum network. The blue line is the market cap of Ethereum. The growing gap between the green and blue lines represents, to me, the sign of market overshooting itself.

There remain some important fundamental questions about Ethereum so it is not like Apple, Google, and Amazon back in 2008. There is still existential risk in Ethereum. It could fail as a protocol and go to zero. So there are many reasons not to go all in on Ethereum right now.

But if you view Ethereum as a call option on the possibility that it will retain its role as the leading decentralized smart contract execution platform, then I think it is starting to look pretty compelling. And analysis like the work that Chris is doing is really helpful in determining things like that.

Categories: Blog articles

Leadership and Self Care

December 10, 2018 - 4:57am

I saw this tweetstorm by Jack Dorsey on Saturday evening and thought “Good, Jack is taking care of himself.”

For my birthday this year, I did a 10-day silent vipassana meditation, this time in Pyin Oo Lwin, Myanmar

Categories: Blog articles

Thinking Ahead To 2019

December 9, 2018 - 5:46am

In the last week, we have learned that Uber, Lyft, and Slack plan 2019 IPOs. I am sure that a few more highly valued private companies are also planning to go public in 2019.

It is something that I have been expecting and predicting for a few years now. Eventually these companies that have raised a ton of capital in the private markets will choose to go public and generate liquidity for the shareholders who plowed all of that capital into them.

And yet storm clouds are on the horizon for the capital markets in 2019. Rates have risen significantly in the last eighteen months, pulling capital out of the equity markets and into the fixed income markets. There are some leading indicators that suggest a business slowdown is on the horizon, which would be the first one in the US in a decade. And, of course, the situation in DC is getting dicey and that will weigh on markets as well.

Good companies can go public in bad markets so I am not saying that the long delayed IPO plans of juggernauts like Uber will be squashed by a bear market in 2019. 

But what I am saying is that 2019 is shaping up to be a very interesting year for the capital markets that power the startup economy.

There is a big difference between the private markets and the public markets. They do not move in lockstep. For years now, the late stage private markets have been trading at valuations that are well in excess of their public market comps. That is true for a number of reasons. First, private market investors have longer time horizons and are looking for a three to five year return, not an immediate one. Second, private market investors get a liquidation preference which in theory protects them from losses. Finally, deals in the private markets clear in an auction like environment where the highest bidder wins the deal. All of these factors mean that a hot company can raise capital in the private markets at valuations well in excess of where they can raise capital (and trade) in the public markets.

But the public and private markets are connected to each other. If the Nasdaq falls significantly, and it is down roughly 15% from its highs in the late summer/early fall, then it will eventually weigh on the private markets.

And, if Uber, Lyft, and Slack do go public in 2019, where they price and where they trade will impact startup valuations, both late stage, and ultimately early stage too.

These markets, public, late stage private, and early stage private, feed off each other and the participants in one look to the others for supply of deals and liquidity. So while they may appear to be disconnected, and often are, they do ultimately sync up.

And so I’m wondering if 2019 is the year they start to sync up again, after quite some time being out of sync. And if that comes to pass, what it means for our portfolio companies and their financing and liquidity options.

Fortunately for most of our portfolio companies, and most companies in the startup sector, we have had a number of years of very flush capital markets and many companies have strong balance sheets and a lot of staying power. The same is true of most venture capital firms as the past few years have been a great time to raise capital.

So if things slow down in 2019 and I am not predicting they will, but I think they might, the startup sector is in good shape to weather it. But at some level, the startup capital markets are a game of musical chairs and you don’t want to be the one who can’t find the chair when the music stops. 

Categories: Blog articles

Video Of The Week: The Shifting Funding Landscape

December 8, 2018 - 6:46am

Our friend and USV Limited Partner Beezer Clarkson hosted a panel at the recent Slush Conference in Helsinki talking about the shifting landscape for startup funding. My partner Rebecca participated on the panel along with several others.

It’s a roughly 30min conversation and covers the big topics in startup finance.

Categories: Blog articles

Funding Friday: Signal Problems

December 7, 2018 - 5:43am

One of the most vexing issues facing NYC right now is our transportation mess and at the heart of it is the subway system.

My favorite chronicler of the subway mess is Aaron Gordon and his Signal Problems blog/newsletter.

If you want an example of the quality and clarity of Aaron’s analysis and writing, I would point you all to his post on Amazon HQ2 and the transportation issues it presents.

So what does all of this have to do with Funding Friday? Well, I am glad you asked. 

Aaron is offering regular readers the opportunity to subscribe for $50/year and help support his efforts to shine a bright light on the MTA and all of its issues. 

I think we need more journalism like the kind that Aaron is providing and so I signed up for the $50 today. 

If you are a NYC resident and ride the subways regularly and want to stay on top of what’s going on, I strongly suggest subscribing to Signal Problems and while you are at it, you might consider helping to fund this effort with an annual (or monthly subscription). You can do that here.

Categories: Blog articles

Google Photos Feature Request

December 6, 2018 - 11:17am

I think Google Photos is awesome. It is one of my favorite Google products. The photo search is amazing. And the sync from my Pixel phone to Photos works beautifully.

But there is one thing that bugs me about Google Photos that I would love to see the Photos team address.

When I post a video to YouTube, and then want to share it, one of the options I have is to embed the video with an embed code.

I would love to have the same option in Google Photos. If this feature exists, I can’t for the life of me find it. If it doesn’t, I would love to see them add it.

I can assure you that if this feature existed, I would be sharing a lot more photos here at AVC.

Update: A reader shared with me this third party solution to the embed issue.

Categories: Blog articles

Quizlet Premium Content

December 5, 2018 - 5:13am

Our portfolio company Quizlet is one of the top mobile apps out there with over 50 million people a month using it to learn something.

Quizlet has existed for over a decade as a wikipedia style learning community with its users creating and sharing study sets on pretty much everything and anything. There are over 300 million of these study sets on Quizlet and that number grows larger every day as more people join Quizlet and create and share their study sets.

This week Quizlet announced that premium content creators are now joining the Quizlet community to share, and sell, study sets that they have created. Premium content creators include publishers like Kaplan and Pearson, digital learning platforms like Babbel and Kenhub, and individual experts like Rob Swatski and Miriam Gutierrez.  

If you want to become a Quizlet Verified Creator and publish your premium learning content as a Quizlet Study Set, you can go here and do that.

None of this changes the basic Quizlet experience that 50 million people experience every month.  As Quizlet wrote in the blog post announcing Premium Content:

You can continue to create study sets and study user generated content to practice and master what you’re learning for free — just like you always have. Quizlet Premium Content doesn’t replace the parts of Quizlet you know and love; it’s adding to it, giving you new ways to use the games and activities on Quizlet to study content you don’t have to create yourself (or rely on other users to create!).

I am excited to see Quizlet add premium content to its massive library of learning material. It allows learners to find new content that may meet their learning needs better than the content they or others have created. It allows teachers and other professional learning content creators to get compensated for their premium content on Quizlet. And, of course, it creates a third revenue stream, in addition to advertising and subscriptions, to diversify Quizlet’s business model.

Quizlet is an amazing learning community. Now professionals can join it and add value while getting compensated for that. I am confident that this new premium content will make Quizlet even better.

Categories: Blog articles

La Hora del Código

December 4, 2018 - 4:53am

It is Computer Science Education Week. This is a worldwide movement to get schools everywhere doing an hour of code. It started in 2009 and nine years later it is one of the largest learning events in the world.

I celebrated CS Ed Week yesterday morning by visiting PS24 with NYC Schools Chancellor Richard Carranza and Brooklyn Borough President Eric Adams.

PS 24 is a dual language (English and Spanish) PreK-5 elementary school in Sunset Park Brooklyn.  The school is led by Jacqueline Nikovic and the student population is 88% Hispanic and 45% are English Language Learners.

We started in a kindergarten that was a dual language integrated co-teaching classroom. That means these students are being supported in their effort to acquire a second language (English).

The students were using cards with Spanish words on them like Empieza (start), Brinca (jump), and others to create an instruction set. They then followed the instructions. Here’s a photo of one of these instruction sets (those are my shoes on the lower left).

This is a student showing the Chancellor and Borough President her instruction set.

By the time they get to fifth grade at this school, the students are doing Scratch programming in the computer lab.

In this photo below, the Chancellor was pair programming with a young man and a young woman (who unfortunately is blocked in this photo). Let’s just say the kids were doing the teaching and the Chancellor was doing the learning.

PS 24 adopted NYC’s CS4All program this year so it is the first year that teachers in the school are getting professional development in computer science education. Everybody I met at the school, the Principal, the teachers, and the students, seem incredibly excited about getting computer science in their school.

I was particularly impressed how PS 24 has made CS accessible to english language learners. The whole idea of CS4All is that we need to make these skills accessible to all learners, regardless of gender, race, age, neighborhood, language, etc.

Though the teachers and students made it look easy yesterday, none of this is easy. The NYC Department of Education, and the private sector supporters of CS4All, are doing something very hard, introducing an entirely new subject into a curriculum that has largely been stale for the last fifty years. 

Sometimes I struggle with how hard this work is. But when I go out to the schools, which I have done twice in the last month, I get totally energized. Seeing the excitement on the student’s faces makes it all worth it.

Categories: Blog articles

Litigation

December 3, 2018 - 4:41am

Litigation is something I try to avoid. It is way better to work out differences by sitting down and negotiating a reasonable deal for both parties.

But litigation is a fact of life in business. You cannot avoid it all of the time. Companies and people will sue you even when you have done nothing wrong. So you need to have a framework for thinking about litigation.

Here are some of the things I have learned over the years:

1/ Litigation is expensive and can go on for a very long time. There is no sense of urgency in litigation. You can easily spend more money litigating than settling. If you can settle for less than the likely litigation expense, even if you have done nothing wrong, it is usually better to hold your nose and do that.

There are some people who argue that regularly settling for less than litigation costs will give you a reputation as someone who does that and it will make you a target for lawsuits, often baseless ones. I understand that argument, but I still think settling for less than likely litigation costs is generally the right approach. 

2/ You can lose in litigation even when you have done nothing wrong. I have a friend who is a litigator and he advised me a long time ago that “assume you have a 50/50 chance of losing, no matter how strong your case is, and then you will tend to make the right business decisions.” His point is that you should not fall back on the comfort of a “strong case.” Life is not fair. You can lose when you should win. Plan for that.

3/ Litigation expense is leverage in litigation. Early on at USV, we ended up in some minor litigation. We spent a lot of money on discovery and the other side figured out how to spend very little. We got very far over our skis on the case and we ended up settling on very favorable terms for the other side. We let the other side use expense to their favor. I promised myself I would never do that again. But I see companies we work with do that all the time. It is very easy to want to “lawyer up and fight” and often that is not the best strategy. It can be better to do the rope-a-dope and let the other side spend all of their money and get over their skis.

4/ There are times when you have to fight even if you can settle. If settling a case would materially harm your business, to the point that you would have a hard time operating it, then you must fight. These are existential cases. They are very rare, but they do come along once or twice in a career. When one like this comes along, “lawyer up and fight” is the right strategy and you should amass the best legal team money can buy and you must do everything you can to win. Figuring out when something is existential is the key. Often things feel existential when they are not. That is where the mistakes are often made.

5/ There are lawyers who are great business advisors. I like the term consigliere for them. And there are lawyers who are great litigators. Make sure you have both of them working for you in a litigation. If you can get a consigliere in your company as your General Counsel, you will be way better off in litigation. If you can’t afford that, have one on your board or in your life. The consigliere will help you manage the business side of the litigation and the litigator will manage the legal side of the litigation. It is hard for a business person to manage a litigation without a lawyer at your side.

Those are few of the things I have learned over the years. But my first rule of thumb is to avoid litigation if you can. It really sucks.

PS – I realized after re-reading this post that I left out something very important. Arbitration is an excellent replacement for litigation. Think of it as “litigation light.” It is very important to have arbitration clauses in your everyday contracts (employment, construction, sale of software, provision of service, etc). Arbitration clauses require arbitration in lieu of full blown litigation in the event that there is a dispute over the contract. Arbitration is like litigation in that you can lose even though you did nothing wrong, but it will cost you a lot less time and money to reach a resolution and if you lose, the damages are often a lot more reasonable.


USV TEAM POSTS:

Albert Wenger — December 12, 2018
Uncertainty Wednesday: Leadership under Uncertainty

Bethany Crystal — December 11, 2018
Candidates, don’t forget: You’re interviewing the company, too

Dani Grant — December 11, 2018
Holo Kitty

Categories: Blog articles

Centralization vs Decentralization

December 2, 2018 - 7:05am

Decentralization is one of, if not the most, discussed features of the crypto tech stack. In a decentralized system, no single body controls the system. We have most certainly not reached the era fully decentralized systems, but that is what most of the world-class technologists working in the crypto sector are focused on getting us to and I believe we will get there in the not too distant future.

If you are a student of tech history, you will not be surprised that decentralization is also the right technology arriving at the right time to solve some of the most challenging policy problems facing the tech sector right now.

Before I elaborate on that, I want to show you a slide from my colleague Nick‘s deck on crypto that he uses to talk to policymakers and elected officials. I believe he borrowed it from our friends at Placeholder and they are credited at the bottom of this slide.

Here is my quick explanation of that slide.

IBM had a near monopoly on computing by virtue of their domination of the mainframe, mini-computer, and, it seemed, the PC computing platforms.

But the open PC hardware standard allowed Microsoft to develop an operating system that could run on any computer built to the PC hardware spec and they eventually unseated IBM, only to become a near monopoly themselves.

But just as we were wringing our hands about what to do about Microsoft’s monopoly, an open source operating system (Linux), the internet protocols, and the free distribution of the world wide web undid that monopoly and we got Google, Facebook, Amazon, and other big tech platforms.

And now we are wringing our hands about these near monopolies and their market power and the ability of bad actors to manipulate them. And around the same time, the technology to architect and scale a completely decentralized system emerges.

The other thing that is true of these moments of hand wringing is that just as the technology is emerging to unseat the near monopolies, regulators and elected officials try to put the genie back in the bottle using traditional regulatory techniques that often end up more deeply entrenching these near monopolies.

To give you an example of how this might happen, I am going to suggest you all go read my partner Albert’s post from yesterday on Twitter and how one might approach addressing some of the vexing problems that platform is dealing with right now.

Albert points out that:

On the minus side the calls to treat Twitter as a traditional publisher are growing.

That is how elected officials and regulators often think. They look backwards to find a model of regulation that has worked in the past and try to apply it to a new thing. But as Albert explains:

The idea that there could or should be a single central institution, let alone a commercial company, which as a benevolent dictator resolves all of these issues to everyone’s satisfaction is a complete non-starter.

Instead he proposes a few ideas that are steeped in decentralization:

my preferred go to answer is to shift more power to the network participants by requiring Twitter (and other scaled services) to have an API. That would allow endusers to programmatically create the best version of Twitter and would also make it easier to simultaneously use Twitter and new decentralized alternatives.

And

Twitter should significantly expand the features that let individuals and groups manage the visibility for tweets for themselves. There are already useful features such as muting a conversation or blocking an individual. These could be expanded in ways that allow for delegation. For instance, users should be able to say that they want to subscribe to mute and block lists from other individuals, groups or organizations they trust. One example of this might be that I could choose to automatically block anyone who is blocked by more than x% of the people I follow (where I can choose x). Ideally these features could be implemented at the tweet/conversation level and not just the account level.

So you can see that by decentralizing the power to the edges of the network INSTEAD of further concentrating it by requiring the network owner to further centralize power is the right answer, both from a technology perspective and a regulatory/policy perspective.

Sadly, I think we are in a race with ourselves in this centralization vs decentralization debate. We need the decentralized tech stack to evolve more quickly and show the world how decentralized technology works in a mainstream way at scale before policy makers and regulators force the tech sector to go the wrong way.

And, most disturbingly, the regulators and elected officials are taking actions, well intended of course, to slow the decentralized sector down, not speed it up.

Which is why we at USV have been spending a lot of time with public servants of all kinds, educating them, imploring them, and desperately trying to get them to understand where we are, why it is an important moment, and why we need to this new technology to succeed.


USV TEAM POSTS:

Bethany Crystal — December 11, 2018
Candidates, don’t forget: You’re interviewing the company, too

Dani Grant — December 11, 2018
Holo Kitty

Albert Wenger — December 10, 2018
World After Capital: Bots for All of Us (Informational Freedom)

Categories: Blog articles

Video Of The Week: The Sorkin-Clayton Interview

December 1, 2018 - 4:43am

One of the big issues facing the crypto sector is the regulatory question, both in the US, where it looms largest, and elsewhere around the world. In the last few weeks we have seen the SEC reach settlements with several crypto projects and decentralized exchanges, all of which were the subject of enforcement actions or threatened enforcement actions. As I alluded to in this post last week, I fully expect to see the SEC continue to look hard at the crypto sector in an effort to rein in what it sees as violations of its rules on the offering and sale and trading of securities.

In the wake of all that, The New York Times hosted an event last week in which Andrew Ross Sorkin interviewed SEC Chairman Jay Clayton. 

This is a recording of that interview. The conversation is about an hour long. You can/should fast forward to 11 1/2 minutes in to bypass all the introductions.


USV TEAM POSTS:

Dani Grant — December 11, 2018
Holo Kitty

Albert Wenger — December 10, 2018
World After Capital: Bots for All of Us (Informational Freedom)

Nick Grossman — December 10, 2018
Google Pixel Slate: First Impressions

Categories: Blog articles

Funding Friday: Who Is She?

November 30, 2018 - 4:13am

This Kickstarter project has been popping up in my various notification channels this past week and I finally got around to backing it. It seems like the perfect gift for a girl who you want to inspire to be everything she can be. Sadly all of the Christmas 2018 rewards are sold out.

You can back it here.


USV TEAM POSTS:

Albert Wenger — December 7, 2018
Regulation for Facial Recognition Technology

Bethany Crystal — December 6, 2018
Having a hobby with your partner

Dani Grant — December 5, 2018
A New Tab For Spaced Repetition

Categories: Blog articles

The Pitch Meeting Setup

November 29, 2018 - 5:48am

We’ve known for a long time that one of the most stressful things for entrepreneurs when they pitch us and other VCs is the initial setup of the meeting when they need to be meeting and greeting the folks in the room and, at the same time, figuring out how to connect their laptop to present their deck.

That combo is a real challenge. Some entrepreneurs navigate it with grace and some really struggle with it. But it is a pain for everyone.

We used to have a cable that the entrepreneur could connect their laptop with but that had its own set of problems as not every laptop would work with the cable.

We use Zoom now and we ask the entrepreneur to get on our guest wifi (no password) and then fire up zoom, join our room, and share their screen.

That works better, particularly when we let the entrepreneur know in advance that is the way we do it so they can download zoom onto their laptop before the meeting.

But even with all of that, we still have this awkward few minutes where the meeting is getting set up.

I am curious to hear from all of you about the best meeting setup situations you have run into in your careers. We do not subscribe to the theory that making it hard on the entrepreneur shows us something. We do subscribe to the theory that making it easy on the entrepreneur is in everyone’s interests.


USV TEAM POSTS:

Albert Wenger — December 7, 2018
Regulation for Facial Recognition Technology

Bethany Crystal — December 6, 2018
Having a hobby with your partner

Dani Grant — December 5, 2018
A New Tab For Spaced Repetition

Categories: Blog articles

Track Record

November 28, 2018 - 11:17am

I’ve had a few conversations in the last few days about a VC’s track record, which is a schedule of investments over the years with the wins, losses, and everything else.

I was seeing an old friend who has been in the VC business as long as I have yesterday. We got to talking about the notion of a track record. I told him that what is most valuable in a track record to me is not the gross returns, IRRs, or even big winners. What is most interesting and valuable to me is the cumulative experience you can see by looking at the track record. You can see how long someone or some firm has been at it, their mistakes, their successes, how they have evolved as investors, style changes, risk appetite, and a lot more.

Then this morning, I was talking with one of my partners about USV’s track record and we both were cringing at some of our big mistakes. Neither of us were focused on the winners. We were just stung by the mistakes. 

And I think that’s important. We should not stare too much at our big winners. We don’t learn that much from them. We should stare at our big mistakes, because we do learn a lot from them.

I am proud of USV’s track record. We have produced fund after fund of strong performance, something that is not easy to do. But I don’t think that is what differentiates us in the market. And we rarely talk about it with entrepreneurs. We do talk about the difficult lessons we have learned over the years and how those lessons may allow us to help them avoid a similar fate. And, ironically, maybe that is what allows to produce the track record we have.


USV TEAM POSTS:

Albert Wenger — December 7, 2018
Regulation for Facial Recognition Technology

Bethany Crystal — December 6, 2018
Having a hobby with your partner

Dani Grant — December 5, 2018
A New Tab For Spaced Repetition

Categories: Blog articles

Giving Tuesday

November 27, 2018 - 4:07am

I don’t care about or participate in Black Friday or Cyber Monday.

But Giving Tuesday is awesome and I never miss the opportunity to participate in a day of collective giving. I love it.

This morning I went on to DonorsChoose and fully funded a project that is near and dear to my heart, teaching early elementary school kids how to write code on tablets with visual programming languages. And in this case, the kids are from a high need neighborhood in the Bronx.

I would encourage everyone to take a few minutes today and give what you can to a cause that is near and dear to your heart. I promise you that it will make you feel great. It really isn’t about how much you give. It is about finding something that matters to you and supporting it with whatever you can afford.

Here are some great resources to find something to support today:

DonorsChoose – Find A Classroom To Support

GoFundMe – Support Holiday Gift and Food Drives Across the US

Twitter – the #givingtuesday hashtag has some excellent giving opportunities on it

I hope you take a few minutes today to give. 


USV TEAM POSTS:

Albert Wenger — December 5, 2018
Uncertainty Wednesday: Investing, Perception Risk and Crypto

Bethany Crystal — December 5, 2018
How to prepare for your first job (in tech)

Dani Grant — December 5, 2018
A New Tab For Spaced Repetition

Categories: Blog articles

My Amicus Brief

November 26, 2018 - 6:21am

The Supreme Court is going to start hearing arguments today in a case where consumers are challenging Apple’s distribution monopoly on iPhone apps. These consumers are represented by the attorney generals of 30 states including California, Texas, Florida and New York.

I just heard about this case today and it is too late to file an amicus brief, so I am simply going to share my thoughts on this case here.

1/ Apple argues that consumers cannot bring suit against them as it is the app developers who are the harmed party if there is one at all. I don’t agree with that for two reasons. First, developers pass the increased costs on to the consumer. Second, the developers are not going to attack Apple because they are their only way to get to market.

2/ Apple argues that a decision against them will harm the broader e-commerce market. I don’t agree with that either. If anything, opening up the distribution system for mobile applications would massively increase the e-commerce market which is artificially constrained by Apple and Google’s mobile app store monopolies. I wrote a bit about that earlier this year.

3/ The US Chamber of Commerce did write a brief in support of Apple in which they argued that “The increased risk and cost of litigation will chill innovation, discourage commerce, and hurt developers, retailers and consumers alike.” I cannot disagree with that statement more. Innovation flourishes when there is an open market where no one party can control what can be sold. Apple routinely prevents innovative new apps from being sold in their app stores. A good example of that right now are crypto-based games and other applications that threaten Apple’s 30% take rate on digital goods business model.

Apple and Google have constrained the distribution system for mobile apps in many parts of the world and the result is higher costs for consumers, less choice, and ultimately less innovation. None of this is good for the economy. It is high time for the courts to weigh in here and open up the opportunity for third party app stores to exist on Apple and Google phones. I encourage the Supreme Court to rule in favor of the consumers in this case in hopes that it will lead to that.


USV TEAM POSTS:

Albert Wenger — December 5, 2018
Uncertainty Wednesday: Investing, Perception Risk and Crypto

Bethany Crystal — December 5, 2018
How to prepare for your first job (in tech)

Dani Grant — December 5, 2018
A New Tab For Spaced Repetition

Categories: Blog articles

What Bear Markets Look Like

November 25, 2018 - 6:17am

It’s hard to look at the price charts of the big crypto assets and not cringe. 

But it helps to look back to an earlier time, when a new sector was emerging, and understand what can happen.

Amazon peaked in the Internet bubble in late 1999 at around $90/share.

Almost two years later, at the trough, you could briefly buy Amazon at $6/share.

And then it took until late 2007 for Amazon to trade above the highs it reached in 1999.

But of course, all of this is ancient history and if you look at Amazon’s chart today, all of that turbulence is hardly even visible.

But for those of us who were investing in tech and tech startups back in 1999-2002, that time will forever be etched in our minds. It was a brutal period during which our belief in the Internet and its potential was sorely tested. Many friends and colleagues left the sector and never returned.

So while crypto asset prices are down 80-95% in USD terms over the last year, they could and probably will go lower. Amazon was down 80% a year into the post-bubble bear market and it got cut in half again before it made a bottom almost two years after it peaked.

What we have yet to see in crypto land is when they kick you when you are down. And that is certainly coming. Regulators came after the Internet sector in a big way post the bubble and that seems likely to happen in the crypto sector too.

And most everyone in big companies wrote the Internet sector off, cancelling their Internet efforts as a fool’s errand. That seems likely to happen in crypto too.

And many talented people left the sector. That seems likely to happen in crypto as well.

But those who stayed were rewarded, although it took a long time for that to happen. We didn’t see meaningful paydays in the Internet sector until the 2007-2008 period and the big paydays didn’t start coming until 2010 and beyond.

The thing to look for in the downturn is signs of life. There were little projects that turned into big ones. Blogger was started in late 1999, almost shut down many times in the next few years, and was picked up by Google in 2003. Myspace, LinkedIn, and Facebook all emerged in the 2002-2004 period, as the Internet was finally coming to life again.

So that is my framework for thinking about where we are with crypto and where we are going.

I think some crypto asset (and possibly a number of crypto assets) will have a price chart like Amazon’s current one in 18 years. But we will have to do what Amazon did, hunker down and build value and survive, for quite a while to get there. And I think things will get worse before they get better.


USV TEAM POSTS:

Albert Wenger — December 3, 2018
World After Capital: Access to the Internet (Informational Freedom)

Bethany Crystal — December 2, 2018
Analysis: Two Years of Blogging

Nick Grossman — November 28, 2018
A Visual Guide to the Howey Test

Categories: Blog articles

Video Of The Week: The End Of The Beginning

November 24, 2018 - 6:38am

This is a talk that Benedict Evans gave at the A16Z Summit earlier this month. If it were possible to watch YouTube in 2/3 speed, I would love to do that with this video. Otherwise, I think it is terrific in it’s ability to capture where we are in “tech” and where we are going. It is about 25mins long.


USV TEAM POSTS:

Albert Wenger — December 3, 2018
World After Capital: Access to the Internet (Informational Freedom)

Bethany Crystal — December 2, 2018
Analysis: Two Years of Blogging

Nick Grossman — November 28, 2018
A Visual Guide to the Howey Test

Categories: Blog articles