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Musings of a VC in NYC
Updated: 1 hour 29 min ago

Video Of The Week: Ethereum 2.0

November 3, 2018 - 3:47am

I just watched Vitalik Buterin’s keynote at Devcon 4 in Prague last week, on Halloween and on the tenth anniversary of Satoshi’s whitepaper.

In this keynote, Vitalik explains what has taken so long in getting from Ethereum 1.0 to Ethereum 2.0, what Ethereum 2.0 will include, and how we are going to get there.

It is a bit geeky, I can’t say that I understood everything, but if you own Ethereum, or if you believe that a scaled decentralized smart contract platform is important, and I can say yes to both of those emphatically, then this is worth watching. It is 30 mins long.


USV TEAM POSTS:

Bethany Crystal — November 13, 2018
Noise-cancelling headphones

Albert Wenger — November 12, 2018
World After Capital: UBI and the Labor Market

Bethany Crystal — November 12, 2018
Everybody’s doing it: A short treatise on social “tugs”

Categories: Blog articles

Funding Friday: Misen Non Stick Pan

November 2, 2018 - 2:58am

Earlier this week, I talked about the D2C consumer products sector and how it has exploded over the last decade. Another contributor to that explosion are crowdfunding services like our portfolio company Kickstarter that allow entrepreneurs to launch their products and quickly get feedback and funding for them.

The Gotham Gal has made a number of these D2C investments and one of my favorite of hers is Misen, a D2C manufacturer of cooking products.

They launch their products on Kickstarter and then take them to market direct to consumer over the Internet, thereby taking out the cost of the retail channel which allows them to sell high end products at mid-level prices.

They have a product launch on Kickstarter right now called the Misen Non-Stick Pan. I backed it earlier this week and the project funding ends this weekend.


USV TEAM POSTS:

Bethany Crystal — November 10, 2018
Making time for what you want

Bethany Crystal — November 9, 2018
Want a mentor? Stop asking for one.

Categories: Blog articles

Dapper

November 1, 2018 - 4:44am

Back in March of this year, I wrote a post on the USV blog announcing our investment in Cryptokitties

A lot has happened since then. The company that made Cryptokitties is now called Dapper and it has raised a couple rounds of financing which will allow it to do a number of things:

  • Continue to invest in Cryptokitties, which remains a vibrant game experience and is the world’s most used consumer blockchain application outside of exchanges, with 3.2-million transactions and tens of millions of dollars transacted on the platform
  • Work with the world’s top entertainment brands to bring compelling brands, communities, and intellectual property to the blockchain. This means more game experiences, often in partnership with existing brands and game developers.
  • Build out the infrastructure to make blockchain games, including cryptogoods (ie NFTs), accessible to a mainstream audience.

It has been exciting to watch a small team that built Cryptokitties at a hackathon turn into a large and growing blockchain gaming company with global ambitions and a number of important launches on the horizon.

As I wrote in the USV post in March, we believe that “digital collectibles and all of the games they enable will be one of the first, if not the first, big consumer use cases for blockchain technologies.”

A lot is happening behind the scenes at Dapper, and at a number of other blockchain gaming companies, and increasingly in the legacy gaming sector, to give me confidence that 2019 will be a breakout year for blockchain gaming and I believe that our portfolio company Dapper will be leading the way.


USV TEAM POSTS:

Bethany Crystal — November 10, 2018
Making time for what you want

Bethany Crystal — November 9, 2018
Want a mentor? Stop asking for one.

Categories: Blog articles

D2CX

October 31, 2018 - 4:25am

One of the big trends in startup land over the last decade is consumer brands getting built direct to consumer (D2C) on highly efficient advertising channels like Google, Facebook, Instagram, Twitter, and YouTube. In these online channels, brands can test, measure, test, measure, test, measure, and then figure out what works and scale.

But these channels are getting more challenging as they have been optimized and scaled by thousands of brands over the last decade and the marketers in D2C land are increasingly looking around to see if there is anywhere else they can go.

Enter our portfolio company Simulmedia, which we invested in almost ten years ago to bring the transparency and efficiency of online advertising to television.

Simulmedia has launched an offering for these D2C companies to help them add television to their marketing mix. Television is hard for small companies. The initial buys are large and it is challenging to “test, measure, test, measure, test, measure” to optimize before you scale.

So Simulmedia has brought D2CX market. 

D2Cx is a marketplace featuring over 135 national TV networks, making it easy for direct-to-consumer brands to test TV advertising at low entry prices, learn what’s working, and scale.

You can start for as little as $50k and 100% of the cost of the media will go towards the purchase of media.

If you want to try out D2CX for your company/product, you can learn more here and sign up to try it out.


USV TEAM POSTS:

Bethany Crystal — November 9, 2018
Want a mentor? Stop asking for one.

Bethany Crystal — November 9, 2018
Protecting your tribe

Categories: Blog articles

Vertical Accelerators In NYC

October 30, 2018 - 3:43am

The Partnership For New York City operates some excellent “vertical” accelerators for companies that are getting started and are focused on serving industries with big footprints here in NYC.

Financial Services – FinTech Innovation Lab

Health Care – Digital Health Innovation Lab

Fashion – Fashion Tech Lab

Biotech – The BioAccelerate Prize

Transit – Transit Tech Lab

Both the Transit Tech Lab and the FinTech Innovation Lab are accepting applications right now for their next programs.

You can apply here:

Fintech Innovation Lab

Transit Tech Lab


USV TEAM POSTS:

Bethany Crystal — November 9, 2018
Protecting your tribe

Bethany Crystal — November 8, 2018
A big lesson from a little moment

Nick Grossman — November 7, 2018
The Dangers of Unstoppable Code

Categories: Blog articles

Creating Surplus

October 29, 2018 - 3:37am

Consumer surplus is the delta between what consumers expect to pay or are willing to pay for an item and what they actually have to pay given market dynamics. A good example of where we are generating a lot of consumer surplus is technology. I would be happy to pay for my email (and do) but I can get it for free from Gmail. A 49″ smart TV sells for about $300 on Amazon. A Samsung Chromebook is $200 on Amazon.

I like to think of all of this “found money” that consumers are getting from technology as the dividend we are getting from the technology revolution. It is also true that technology takes jobs out of the market, and adds them too, and that it may be a zero sum game or worse.

But the truth is many things have gotten a LOT less expensive over the last twenty years and that has made managing the household budget a fair bit easier.

My colleague Nick sent me this chart yesterday. I don’t know where he got it so I can’t identify the source.

What you see from the chart is that wages have increased about 70% over the last twenty years and many things, including housing, food, clothing, and most dramatically technology, have increased less, or have actually gone down in price, creating room/surplus in the household budget.

But not everything has gone down. Health care and education, most notably have increased dramatically.

So it is time to take aim at those sectors. We can do the same with education that we have done with other services. And we will. I feel that healthcare will be a harder lift, but I do think it can be tackled too.

In fact, our current thesis at USV compels us to go after these sectors. So we will.

I am excited about the potential to bring consumer surplus to these sectors and make more room in the household budget in doing so.


USV TEAM POSTS:

Bethany Crystal — November 8, 2018
A big lesson from a little moment

Nick Grossman — November 7, 2018
The Dangers of Unstoppable Code

Albert Wenger — November 7, 2018
World After Capital: UBI is Affordable

Categories: Blog articles

Women Rising

October 28, 2018 - 6:03am

This video is an advertisement in support of a group of women running for national office in these midterms.

I am compelled by this advertisement and these women. I am very hopeful that women like these will increasingly lead our congress and our country.


USV TEAM POSTS:

Nick Grossman — November 6, 2018
Internet Centrism

Nick Grossman — November 6, 2018
Making NYC Awesome

Nick Grossman — November 6, 2018
Backing into your network

Categories: Blog articles

Video Of The Week: The USDC Stablecoin

October 27, 2018 - 6:02am

Our portfolio company Coinbase announced this week that they will be adding the USDC Stablecoin to their various services in the coming weeks. 

This video below explains what the USDC stablecoin is and why it is important.


USV TEAM POSTS:

Bethany Crystal — November 5, 2018
Cheering on Marathon runners

Bethany Crystal — November 4, 2018
What we can learn from theatre’s performance reports

Categories: Blog articles

Funding Friday: Cryptopia

October 26, 2018 - 2:13am

Four years ago, filmmaker Torsten Hoffmann raised $AUS 17,000 on Kickstarter to make a documentary about Bitcoin called The End Of Money As We Know It. The film was released in July 2015 and I watched it and thought it was very good.

Torsten is back with a follow-up film project called Cryptopia and I backed it today. 


USV TEAM POSTS:

Bethany Crystal — November 4, 2018
What we can learn from theatre’s performance reports

Bethany Crystal — November 3, 2018
Befriending your neighbors

Categories: Blog articles

Engaging In Cryptonetworks

October 25, 2018 - 4:22am

Ever since the first cryptonetwork, Bitcoin, was created, investors have had the opportunity to earn returns by engaging in the network. In Bitcoin’s case, that was done by mining the network, effectively powering it.

As the sector has grown, investors have largely turned their attention to buying and holding cryptoassets, and not that many of us are actively engaging in them.

But that is likely going to change for several reasons.

First, in proof of stake networks, asset holders will want to stake their tokens and earn the rewards of doing that, or risk being diluted/inflated. Conversely, those who do stake will earn rewards that will feel a bit like collecting interest or dividends on a bond or stock.

This technique of turning an idle asset into an incoming producing asset by engaging in the network is part of the design of many cryptonetworks and investors are going to increasingly want to do these things (staking, validating, governing, etc) to earn the rewards of that engagement.

There is another aspect to this, outlined by Tushar Jain of Multicoin earlier this week on their blog.

Tushar points out that asset holders can act with their capital to help bootstrap the network by providing storage on the Filecoin network or transcoding on the LivePeer network or creating DAIs on the Maker network.

The good news for investors is that there are a whole bunch of entrepreneurs setting up shop right now to help us do these things without each and every one of us becoming super technical about the ins and outs of each of these cryptonetworks. We will see (and are seeing) staking as a service, nodes as a service, and the like. These third parties will be like the proxy companies are in the stock markets.

I expect the custodians, like our portfolio company Coinbase, to offer many of these services, either as the provider themselves or the gateway to the third party provider, thereby making it even easier for us to engage in these networks.

It’s an exciting time to be a cryptoinvestor. A host of new cryptonetworks are starting to go live. The next 18 months will see many dreams come to fruition and with those dreams will come demands on the investors to engage instead of just hold. I am looking forward to doing that.


USV TEAM POSTS:

Bethany Crystal — November 3, 2018
Befriending your neighbors

Bethany Crystal — November 2, 2018
Listening vs. sharing

Categories: Blog articles

Jet Lag

October 24, 2018 - 4:52am

Jet lag is such a challenge for me.

We got back from Japan four days ago and I was doing great.

I figured that I had it beat this time.

Then last night at 2am, I woke up and I was wide awake.

We’ve got a series of meetings today that I need to be coherent in.

So I took a half a pill and got back to sleep by 3am and slept until almost 8am.

The good news is I am rested.

The bad news is I don’t have this thing beat like I thought I did.

I have tried a bunch of things to manage jet lag over the years, many of them recommended by folks here at AVC in reaction to a post about this I did a few years ago.

And they have all worked, to a degree.

But, I think the truth is, at least for me, that it takes me about a week to get truly back to normal after a long trip to Asia.

And as much as I thought I could shorten that timetable, I don’t think I can.


USV TEAM POSTS:

Bethany Crystal — November 2, 2018
Listening vs. sharing

Albert Wenger — November 1, 2018
Uncertainty Wednesday: Thinking about Ruin

Bethany Crystal — November 1, 2018
31 days of blogging

Categories: Blog articles

Business Model Innovation in Healthcare

October 23, 2018 - 3:08am

Naomi posted some thoughts on changing business models in health care on the USV blog yesterday.

The one that I am personally most excited about is what Naomi calls “change of venue” and within that I like the “virtual primary care” model.

A pure virtual primary model eliminates fixed costs associated with brick and mortar expansion and is able to focus resources on reaching more patients, recruiting more doctors to their platform, and improving the experience for current patients. Payments on a subscription basis allow doctors to get paid more consistently rather than waiting for insurance companies to process claims and paying overhead costs to negotiate reimbursements with their billing offices.

We have portfolio companies executing this model like Nurx and Modern Fertility and we hope to add more.

I value the doctor/patient relationship, but I think there is a lot technology can do to make that relationship less expensive, more engaging, and more convenient (for both parties). And generational changes in doctors and patients are catalyzing and facilitating this transition.


USV TEAM POSTS:

Albert Wenger — November 1, 2018
Uncertainty Wednesday: Thinking about Ruin

Bethany Crystal — November 1, 2018
31 days of blogging

Bethany Crystal — November 1, 2018
The myth of notoriety

Categories: Blog articles

Navigating Blogging Across Time Zones

October 22, 2018 - 3:40am

I like this blog to come out in the morning east coast time. 

I am a big fan of a routine, a ritual, a cadence.

That is partly why I blog every day, and that is why I like the blog to come out at roughly the same time every day.

It is also true that I have the most free time right after I wake up and then things get busy. So if I don’t blog right away, it is possible that I won’t find time to write that day.

When we go west for the winter, I do the same thing, writing as soon as I wake up, but 5am PT is 8am ET so readers will notice, and have noticed, that AVC comes out later in the winter months.

Traveling poses a bigger challenge. The last two Octobers, we have spent considerable parts of the month in Asia, twelve to fourteen hours ahead of NYC and even further ahead of the west coast of the US.

If I wrote my daily posts when I woke up in Asia, as I was tempted to do, they would have posted the night before in the US. And I didn’t want that.

So I waited until late afternoon, in the lull before heading out to dinner, and wrote then. That resulted in them posting early morning east coast time and the middle of the night on the west coast.

Honestly, that was not ideal for me. I found writing late in the day much harder with a full day of activity in my head. It was very challenging for me and I think the blogging suffered from that.

I’m back in the US now and yesterday’s post, which got a lot of pickup, was my first back in my regular ritual. 

I am glad to be back and I think this blog is too.


USV TEAM POSTS:

Bethany Crystal — November 1, 2018
The myth of notoriety

Bethany Crystal — October 31, 2018
The Crown Meets the First Lady

Categories: Blog articles

Who Are My Investors?

October 21, 2018 - 7:58am

I got an email from the CEO of one of our portfolio companies last week.

It asked a very basic question, but one that I don’t recall being asked before:

I need to know if any of your LPs include  ……….  entities/interests. 

The CEO asked his VCs because questions were coming up internally and he wanted to answer honestly and accurately.

I expect to get more emails like this in the coming weeks as the startup and venture community comes to grip with the flood of money from bad actors that has found its way into the startup/tech sector over the last decade.

“Bad actors” doesn’t simply mean money from rulers in the gulf who turn out to be cold blooded killers. It also means money from regions where dictators rule viciously and restrict freedom. It could also mean money from business interests which profit by poisoning us with opioid addiction or warm our planet with fossil fuels.

I don’t claim to have entirely clean hands in this regard. When we sold our Twitter stock before the IPO many years ago, it turned out the buyer was fronting for gulf interests. I found that out after the fact but that doesn’t absolve me of anything. I could have asked the questions before executing the sale.

That said, I believe the investors in the USV funds we have raised over the years are ones we can be proud of. They include large pension funds for public employees like teachers, firemen, police, and the like. They include the family offices of some of the great entrepreneurs of the 20th century. They include endowments of some of the best research and educational institutions in the US. And they include the founders and leaders of some of the best companies that USV has invested in over our 15 years. And we manage funds for a few charitable foundations too.

It is time for all of us in the startup and VC sector to do a deep dive on our investor base and ask the question that the CEO asked me. Who are our investors and can we be proud of them? And do we want to work for them?

Sadly, the answer for many will be no and it will not be easy to unwind those relationships.

Those who can be proud of their investor base stand to gain from this emerging situation as our portfolio companies can recruit and retain talent better and we can compete with others in the market for deals with one more arrow in our quiver.

Not all money is the same. The people that come with it and who are behind it matter. That has always been the case and remains the case and we are reminded of it from time to time. Like right now.


USV TEAM POSTS:

Bethany Crystal — October 31, 2018
The Crown Meets the First Lady

Bethany Crystal — October 29, 2018
Thanks for sharing your story, too!

Albert Wenger — October 29, 2018
Voting in the Midterms:  Rebuking Trump’s Tribalism and Hate

Categories: Blog articles

Video Of The Week: Coinbase’s Vision

October 20, 2018 - 11:00am

Fortune recently did a big profile on Brian Armstrong, founder and CEO of our portfolio company Coinbase and in concert with that, they made this video featuring Brian and Emilie Choi, who leads corp dev, M&A, and a few other strategic efforts at Coinbase.

It’s a short video, less than five mins, and does a nice job of explaining the company’s mission and strategy.


USV TEAM POSTS:

Bethany Crystal — October 29, 2018
Thanks for sharing your story, too!

Albert Wenger — October 29, 2018
Voting in the Midterms:  Rebuking Trump’s Tribalism and Hate

Nick Grossman — October 29, 2018
Suffering, Self, and Service

Categories: Blog articles

Funding Friday: Tortoise

October 19, 2018 - 12:18am

I backed this “new journalism” project today.

I like the idea that journalists are experimenting with new models and I like the idea of using crowdfunding to support that.


USV TEAM POSTS:

Bethany Crystal — October 29, 2018
Meeting the parents

Bethany Crystal — October 28, 2018
The identity behind your bra size

Categories: Blog articles

Winternships

October 18, 2018 - 1:27am

I heard about a cool program that helps NYC tech companies build more diverse teams. It is called Winternships.

The program is run by a group called WiTNY (Women in Tech and Entrepreneurship in NY) which is a three year-old collaboration between Cornell Tech and CUNY to drive more female students into tech majors or minors, and into the NYC tech ecosystem.

It works like this:

A Winternship is a paid, three-week internship experience during the January academic recess for freshman and sophomore women in tech. Participating companies design an ‘immersion’ experience in their business – students sit in on meetings, meet executives, go on site visits — and they work together on a challenge project that they pitch on the last day. WiTNY identifies students based on a match between your needs and their skills. Their team will even help you craft the Wintern experience if you want.

Here are some stats on the program:

Last January, 46 companies raised their hand and welcomed 177 CUNY women into their companies. Amazingly, 54% of these young women were able to parlay that experience into a paid summer tech internship somewhere in the city.

And here is the demographic of the CUNY student body:

CUNY is among the largest and most diverse universities in the country, with 250,000 undergrads and approximately 85% students of color.

If your team is trying to figure out how to diversify your internship and entry level hires, or just want to open your doors to transform the lives of young New Yorkers, considering hiring a Wintern team this January. And if you’re a small startup or a non-profit, WiTNY will even pay the student stipends for you.

Sounds great, right? If you want to host a Winternship at your company this January, you can get started here.


USV TEAM POSTS:

Bethany Crystal — October 28, 2018
The identity behind your bra size

Bethany Crystal — October 26, 2018
Bringing a +1 to a networking event

Categories: Blog articles

Motion Photos

October 17, 2018 - 1:17am

Motion Photos is a feature available on Google’s Pixel Phones. It captures a bit of video as you are taking a photo.

I’ve always wondered how to share those photos with the motion in them, which you can’t do when you send them as jpeg files.

It turns out you can export them from your phone as gif files. For some reason, the Google Photos app on the web, which does allow you to see the Motion Photos on the web, does not support the export to gif feature.

So this is how you do it:

To convert your motion photo into a video or GIF, follow these steps:

Step 1: Open the Google Photos app on your device.

Step 2: Open the motion photo that you want to share. Then tap the three-dot icon at the top-right corner. From the menu, select Export.

Google Photos Motion Pictures 4 Google Photos Motion Pictures 5

Step 3: You will get three options: Video, GIF, and Still photo. Choose the one that you like from the first two to initiate the conversion process.

Google Photos Motion Pictures 6

Step 4: Once the motion photo conversion completes, you will get a notification regarding the same. You can find the converted media in the same folder. Tap on it to open it and hit the share button to share it.

I took this Motion Photo below at a really cool music/art exhibition at the 21_21 Design Sight museum in Tokyo last week. After doing all of those steps, I can share it with all of you here.


USV TEAM POSTS:

Bethany Crystal — October 26, 2018
Bringing a +1 to a networking event

Bethany Crystal — October 25, 2018
Going off script

andy@usv.com — October 25, 2018
Scroll

Categories: Blog articles

When Software Just Gets Smarter

October 16, 2018 - 2:13am

The last time we were in Japan, six years ago, using Google Maps was pretty frustrating. We didn’t understand the Japanese language and addresses made no sense to us. We got lost multiple times a day and often had to find a person on the street who spoke english to help us out.

It is a pretty stark difference this trip. Google Maps seems to understand much of what it did not the last time around. The directions are great and we have yet to get lost.

Last night, I directed a cab driver in Kyoto who did not speak english using Google Maps on my phone and pointing right or left or straight each time we got to an intersection. We got to dinner on time and everyone, including our cab driver, was relieved.

I think this is a great example of the power of machine learning and other technologies that software makers are using to make their apps smarter and smarter. And that leads to better user experiences and delivers more value.

Much of this happens behind the scenes and is never announced as a new feature. The software just works better. And we come to expect this of our software and we take it for granted.

But it is pretty magical when you have the opportunity, like we are having in Japan with Google Maps, to compare an app to its younger version and see how much it has improved. You can see the software getting smarter over time and that’s kind of amazing.


USV TEAM POSTS:

Bethany Crystal — October 25, 2018
Going off script

andy@usv.com — October 25, 2018
Scroll

Bethany Crystal — October 24, 2018
Introducing the USV Talent Network

Categories: Blog articles

Kills Zones And Venture Funding

October 15, 2018 - 1:53am

There is a debate going on about the impact of Facebook, Google, and Amazon’s growing dominance on the consumer internet on the supply of venture capital to entrepreneurs.

Facebook funded this report that was published back in July and concluded that “big tech” was not impacting the supply of venture capital to entrepreneurs.

Ian Hathaway, a researcher who studies venture capital formation, recently published this blog post that challenges that assertion with some data obtained from PitchBook.

I have skimmed the Facebook funded report and read the Hathaway blog post and come away believing, as Hathaway himself does, that we don’t really know because the analyses done to date are not conclusive.

But as a market participant, I can certainly say that we shy away from funding startups that are going up directly against the large tech incumbents.

But we also are attracted to startups that are competing against the big incumbents with a fundamentally different model, like DuckDuckGo in search, or ShopShops in commerce.

So, anecdotally, based on our activity and other venture capital activity that I have observed, I would say that the big tech incumbents have most definitely shaped where venture capital is going and where it is not going. 

That does not mean it has decreased the overall supply of venture capital. It most certainly has not. 

And, I would venture, that big tech is increasingly vulnerable to a number of attack vectors, many of them self-induced, which should be attracting entrepreneurs to more directly go after the core franchises of big tech.

Whether those courageous entrepreneurs will attract the capital they need to launch those attacks is an open question. But I have a fundamental belief in capital markets to do the right thing over the long term and I also have a fundamental belief that entrepreneurs, software engineers, and new innovations will undo these increasingly dominant franchises in ways that regulators will never be able to.


USV TEAM POSTS:

Bethany Crystal — October 24, 2018
Introducing the USV Talent Network

bethany@usv.com — October 24, 2018
Introducing the USV Talent Network

Bethany Crystal — October 23, 2018
Drinking at work dinners

Categories: Blog articles