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The Access Act

October 22, 2019 - 10:58pm

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

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

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

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

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

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

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

— Mark Warner (@MarkWarner) October 22, 2019

And

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

1. Portability
2. Interoperability
3. Delegatability

Here’s what that means in plain English:

— Mark Warner (@MarkWarner) October 22, 2019

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

— Mark Warner (@MarkWarner) October 22, 2019

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

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

— Mark Warner (@MarkWarner) October 22, 2019

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

— Mark Warner (@MarkWarner) October 22, 2019

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

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

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

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

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

Categories: Blog articles

Franz Liszt

October 22, 2019 - 1:29am

We went to a piano recital last night in Budapest.

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

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

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

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

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

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

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

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

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

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

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

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

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

Categories: Blog articles

Being There

October 21, 2019 - 7:44am

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

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

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

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

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

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

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

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

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

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

Categories: Blog articles

The Fifth Estate

October 19, 2019 - 11:18pm

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

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

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

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

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

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

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

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

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

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

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

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

My vote is very little, if any.

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

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

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

This tweetstorm by my friend Balaji says it very well.

Particularly this one:

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

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

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

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

Video Of The Week: The Crypto Custody Business

October 19, 2019 - 8:20am

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

Categories: Blog articles

Sensible Regulations Versus No Regulations

October 17, 2019 - 2:56am

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

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

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

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

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

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

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

Categories: Blog articles

Bearing Witness

October 16, 2019 - 9:46am

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

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

We visited the Auschwitz concentration camps in southern Poland.

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

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

But being there in person is something else.

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

It is not a pleasurable experience in the least.

But it is a very moving one.

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

We did that today and I am glad we did.

Categories: Blog articles

The Libra Association

October 14, 2019 - 11:26pm

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

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

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

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

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

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

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

Categories: Blog articles

The USB Standard

October 13, 2019 - 10:34pm

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

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

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

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

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

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

Categories: Blog articles

The USV Blog Search Engine

October 13, 2019 - 2:56am

It has always been possible to search AVC. You click on the search icon in a desktop browser or you click on the menu button in a mobile browser.

But there is another way to search my blog posts, both here at AVC, and also the ones I have written on USV.com.

With our recently launched refresh of USV.com, there is now at tab at the top called “Writing.” It looks like this on a mobile phone:

You can search by type (USV blog only, team member blogs only, or all), topic, author, and date.

This search engine includes writing by many USV alums on the USV blog and all of the current USV team members who blog regularly. It is quite a library of content, mostly on tech, venture capital, startups, and that sort of thing. But naturally it veers into many other topics from time to time.

If you want to read what USV team members (current and past) have to say about something, there is now a resource to do that. And we hope to make it even better over time by improving the metadata and search functionality around this large library of content.

Categories: Blog articles

Video Of The Week: The Dangers Of A Centralized Internet

October 12, 2019 - 12:34am

Amir Haleem, founder and CEO of USV portfolio company Helium, gave this talk last year and it explains why he started Helium.

Categories: Blog articles

Funding Friday: Of Sight And Sound

October 11, 2019 - 5:01am

I backed this project this morning. I am a big fan of artistic collaboration and the amazing things that come from it

Categories: Blog articles

Heading East

October 10, 2019 - 4:04am

The Gotham Gal and I are heading to Europe for a couple of weeks of vacation.

I will not be working the next two weeks but do plan to blog about whatever is on my mind.

The Gotham Gal, as is her custom, will blog about the various fun things we are going to do on this trip.

I am looking forward to some down time, some good books, and seeing the sights and sounds of different places.

I am a big believer in vacations. We all work hard, get ground down, and taking some time with friends and family to unwind, clear the head, and refresh is always a wonderful thing. I am excited to do that myself.

Categories: Blog articles

Principles Over Profit

October 9, 2019 - 11:03am

I was pleased to see NBA Commissioner Adam Silver say this with respect to the controversy over Houston Rockets’ General Manager Daryl Morey’s tweet in support of the protest movement in Hong Kong:

The NBA will not put itself in a position of regulating what players, employees and team owners say or will not say. We simply could not operate that way.

The NBA faces the potential of a backlash in China that could impact the league’s business interests there.

That could reduce the profits of the league and players and owners.

But the NBA is putting principles over profits here and that is a good thing.

We have faced this issue a number of times over the years at USV and we have tried to do the same.

We have also been on boards of companies that have faced this issue over the years and we have advocated for this approach.

It is not an easy choice. Companies have employees to pay, families to feed, and customers to serve. And principles are not always shared by everyone and the lines are not always clear

But one thing is for sure. The search for profits can lead a founder, a CEO, a team, a Board, and a Company to forget their principles and that is never a good thing.

Categories: Blog articles

Cards

October 8, 2019 - 3:41pm

I played cards all through college and on and off since then. I don’t have a regular card game right now and I miss playing cards.

I was talking to a friend of mine recently and she complained that her son was more interested in playing poker than going to college. I told her that I thought he could learn more from poker than some schools and many majors.

I don’t think playing cards is a replacement for reading the great novels and I don’t think cards can replace the fundamentals of writing, math, and science.

But I do think that cards are a great compliment to all of that and I think there are things you can learn from playing cards that are hard to learn elsewhere.

Here are a few of the things I have learned from playing cards:

  • How to evaluate risk and return quickly
  • How to trust your instincts and comfortably act on them
  • How to read a room and size people up
  • How to bluff (a better word than lie which I used in a recent post)
  • How to keep large sets of numbers in your mind and available to you
  • The joys of a group of friends getting together frequently and regularly

There are many more but those are some of the ones that come to mind at this moment.

I think playing cards is a great way to learn many important life skills and I have found it to be very helpful in the venture capital business. So if your child seems obsessed with cards, I wouldn’t lose a lot of sleep over it. It might be a great learning experience for them.

Categories: Blog articles

Cross Laminated Timber

October 7, 2019 - 5:19am

Cross Laminated Timber (or CLT for short) is a structural building material that can replace concrete and steel in new building construction.

I wrote about CLT back in April and mentioned that the Gotham Gal and I are in the process of making two CLT buildings right now.

The paper version of the New York Times has an excellent op-ed today that explains why making buildings out of wood is much better for our climate than making them out of concrete and steel. What CLT does is make it possible to make tall and strong buildings out of wood.

This explanation from that NYT op-ed is particularly good:

Trees remove carbon dioxide from the atmosphere and store it in their wood. … This will allow us to pump carbon from the atmosphere and store it both in forests and in cities.

There are challenges to making buildings out of CLT. For example, CLT is not yet an approved building material in the five boroughs of NYC. That is changing however. It looks like the city will add CLT to the NYC building code soon.

I strongly encourage the NYC City Council to act quickly and approve the addition of CLT to the NYC building code.

Categories: Blog articles

Unclogging Manhattan

October 6, 2019 - 8:45am

A big thing happened this past week in my part of lower Manhattan where I live and work.

Fourteenth Street was closed to cars between 6am and 10pm except for “local traffic.” Basically if you are in a car during those hours, you can go for up to a block, but no more than that.

It is remarkable to see the transformation of Fourteenth Street, a street I walk down multiple times a day going to and from work.

I took that photo around 11am today. The street is empty. The only thing you notice is the buses going from the East River to the Hudson in something like ten minutes, a trip that used to take more than thirty minutes.

This only happened because the L train subway line, which goes under Fourteenth Street, was supposed to close for 18 months for tunnel repairs. They figured out how to keep the L train running but on a reduced schedule. But they went ahead with the Fourteenth Street closure anyway.

It is my hope that this will turn out to be a massive success and will lead to closure of other cross streets like 23rd, 34th, 42nd, 57th, 79th, 86th, and 96th.

It could be transformative for the cross town buses and a lot more too.

We need to find ways of getting around our city that don’t require cars. The closure of Fourteenth Street is a big step in that direction.

Categories: Blog articles

Audio Of The Week: Crypto In China

October 5, 2019 - 6:48am

A bunch of friends and colleagues were in China a few weeks ago for a big crypto conference and since then, I’ve had a number of fascinating conversations about the crypto sector in China.

Over the last few years, it has become apparent to me and others that China is innovating in the crypto sector in ways that the US and other western countries are not. This is happening for many reasons, including stronger user value propositions for crypto in China, a different regulatory environment, and a vibrant crypto trading sector.

This podcast explores many of these issues and is a good listen if you want to understand what is going on in the Chinese crypto sector better.

Categories: Blog articles

Funding Friday: Thirdwing

October 4, 2019 - 3:32am

We went to the theater last night. I think there is nothing like live performances. But theater is expensive and requires work to plan an evening in advance.

So many of us just end up staying at home and streaming something on our TVs.

Thirdwing is the merger of the two and I backed it this morning and am sharing it with all of you.

Categories: Blog articles

Smart Home Data Aggregator?

October 3, 2019 - 4:50am

The devices in our homes are getting smart. That is awesome. We can manage our energy consumption and much more with a lot more precision and intelligence now.

But I find myself logging into one app to get data on my thermostats, another to get data on my security system, another to get data on my solar panels, and another to get data on my electric vehicles. And then there is all of the billing data from the various utilities and other providers we have.

It’s a bit of a production each month when I want to see how we are doing. And I use a spreadsheet to collect and analyze all of this data.

It makes me wonder if there is a Yodlee or Plaid for smart home data and if there is a Mint-like application that pulls it all together for you.

Of course I could go do the homework to figure that on my own, but I assume I’m not the only person in the AVC community who has this need. So it’s better for me to blog this question here and we can all find the answer in the comments.

And if there is no good answer, well then that is a good startup opportunity.

Categories: Blog articles