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Smart Thermostats

A VC - July 22, 2019 - 4:49am

My colleague Dani sent me this chart last week:

I believe this is more or less a proxy for smart wifi-enabled thermostats in the US.

Those would be Nest, Honeywell Lyric, Hive thermostats and a lot of others too.

Those are pretty big jumps from 6.5% to 8.9% to 11.4% given that people don’t generally swap out thermostats unless they are doing a renovation or building a new home. Maybe there is more thermostat swapping going on outside of those “construction” moments than I would expect.

In a few years, more than 20% of homes will have heating and cooling systems that can be “managed” by software, either on-premises or, more likely, in the cloud.

That is pretty exciting.

I wonder what level of adoption is “critical mass” or “escape velocity” ?

Certainly 50% would be, maybe 25% will be.

I really like the area of networks, platforms, and protocols that will allow us to efficiently manage our energy consumption. It has been hindered to date by a closed “last mile”, but that is changing and I think the opportunity is approaching.

Categories: Blog articles

Parenting

A VC - July 21, 2019 - 5:08am

Parenting is the hardest and greatest job that I have had.

It presents the thorniest problems and generates the greatest rewards.

We had the pleasure of spending most of yesterday with our three kids and their significant others.

The occasion was our oldest daughter’s masters thesis presentation at her MFA program.

She is an artist who works with computer generated imagery and animation.

The work she made for her thesis was a five to seven minute animation loop and I probably watched it five or six times yesterday afternoon.

It was the first time I had seen it and I was amazed at its beauty, its quality, and the emotions it conveyed.

Needless to say, I am proud of her and also all of the other artists that showed their work alongside her.

We then spent the rest of the afternoon with our other kids hanging out and having fun with them.

Then we all got together for a late (for me) dinner that was celebratory and fun.

As the dinner ended, I sided up next to The Gotham Gal, put my arm around her, and said “that was a good parenting day.”

She looked at me and smiled.

I have loved all of parenting; rocking them to bed, the late feedings, changing the diapers, teaching them things, family vacations, the teenage years, leaving home, the college years, and the early adult years.

As I write those things, I also recall the challenges of each of them and the moments where we did not know what to do in certain situations.

But we figured it out and got through it and moved on to the next stage.

We certainly got better at it over time but we have never felt that we have parenting figured out.

Now we are in the phase where our kids are adults and accomplishing things that amaze and impress us.

They understand things we don’t understand, they do things we can’t do, and they are having successes that we have little part in.

That makes me feel so good.

I don’t believe our work is done. I believe we will be parenting for as long as we live.

But I do believe that the work is easier and the gains are richer.

But most of all I am reminded that our best work is done at home and the fruits of it are measured in joy.

Categories: Blog articles

Video Of The Week: CEO AMA

A VC - July 20, 2019 - 4:29am

AMA stands for “Ask Me Anything.” I have noticed a trend of CEOs doing these AMAs for their customers and broader stakeholder communities.

A good example of a CEO who is doing this is Brian Armstrong, CEO of our portfolio company Coinbase.

Brian has been doing this for several months. You can see all of them on their YouTube channel.

Here is the one he did with LJ Brock, Coinbase’s Chief People Officer, yesterday.

Categories: Blog articles

Funding Friday: Medicine Of Time Travel

A VC - July 19, 2019 - 4:04am

A few weeks ago, I got an email from a reader. She asked if he could subscribe to this blog without the funding friday posts. He thought they were “spammy.” I replied to him “think about them as the ads” and politely told him that wasn’t possible.

I love funding things. And I love sharing the things I fund with all of you.

I saw this project this morning and backed it instantly. A musical art project. Awesome.

Categories: Blog articles

Climate Adaptation?

A VC - July 18, 2019 - 4:37am

While society debates how to deal with climate change, there are some scientists who are now saying that that time has passed and we now need to start planning society’s adaptation to the climate tragedy we have created on planet earth.

This scientific paper from roughly one year ago is super depressing. I am linking to it because I read it this week and it certainly made me consider how our way of life may change dramatically in my lifetime.

I am not yet ready to throw in the towel on our ability to react to the mounting evidence of a rapidly warming planet and dramatically slow it down with actions like the Paris Accords, recent laws in New York City and New York State, and everyone’s personal actions in what we do and how we do it.

And there is no benefit in getting depressed or defeatist about the climate change threat.

I think the opposite is true. It is time to stop debating whether the planet is warming. It is even time to stop debating about who is going to pay for the massive investments we need to make immediately to slow that warming. It is time to start making them.

Categories: Blog articles

Abridge

A VC - July 17, 2019 - 5:01am

We seed funded a company late last year called Abridge and the company went public yesterday with their iOS and Android apps. Naomi wrote about the investment on the USV blog.

I want to focus on the product because I think it is a game changer for all of us that access the health care system regularly.

The Abridge mobile app (get it here) allows anyone to record a medical visit with a doctor, a nurse, or any other health care professional.

It works like this:

You open the app to see your visit history:

You tell the doctor, nurse, etc that you are going to record the session and hit the record button:

Then you record the session.

When you are done Abridge saves the audio recording of the session and also immediately (in way less than a minute) provides a transcript of the session with the key medical terms called out in bold.

That is me making stuff up this morning. I sure hope I don’t need a knee replacement any time soon.

This is one of those ideas that is so simple and so obvious that you wonder why nobody has done it before.

The team is a combination of physicians and machine learning people from University of Pittsburgh and Carnegie Mellon. It’s a combination of domain experts and technologists who are extremely well suited to make this work and work simply and elegantly.

I would encourage everyone who sees doctors regularly or has a loved one that does to get Abridge on your phones and their phones.

I think it’s a game changer for how we access and understand the medicine in our lives.

Categories: Blog articles

Dronebase Insights

A VC - July 16, 2019 - 12:12pm

I was sitting in my backyard this weekend looking up at the roof on my house, which I can’t see because of a parapet, and wondering how all of the solar panels we put up there a few years ago are doing. I was also wondering how the roof itself is doing.

Then it hit me that USV has a portfolio company that can help. I went to my Dronebase account and ordered a drone mission that will do an aerial inspection of my roof and also a thermal inspection of our solar panels.

Yes, one drone pilot with an off the shelf drone can do all of that for me in less than an hour.

I scheduled the flight for next week and should have a full report with aerial imagery and video and thermal scans of the solar panels within a few days after that.

And I am going to get all of that for a less than it costs me to keep my pool serviced!!

But it gets better. Today, Dronebase is announcing that it has acquired the Drone Reports business from Betterview and will turn that into a new product line called Dronebase Insights.

From that blog post:

DroneBase Insights aims to help insurers and property managers assess damage and mitigate risk for commercial properties, and we’ll expand our offering over time

So now you can get a full blown report from Dronebase in addition to aerial imagery and video and thermal scans.

I didn’t order that myself this weekend but maybe I should have. I probably will next time.

Categories: Blog articles

Immigration Makes Us Stronger

A VC - July 15, 2019 - 4:59am

It is ironic and upsetting that a nation built on immigration is increasingly unwelcoming to immigrants and that the words ” go back” are becoming a political rallying cry.

I am for immigration full stop.

I think opening our arms and borders to people who want to come here, work, build their lives and businesses and futures makes our country stronger.

It always has. Nothing that is great about the United States was accomplished without immigrants.

Immigrants built our docks, they built our railroads, they built our automotive industry, and they built our technology industry.

If we were to close our borders completely, I believe we would be a second rate country within a couple of generations.

Immigration is new blood, new ideas, a work ethic, a belief in a better future, a willingness to take enormous risk, burn the boats, and get it done.

We need that in our society. We will die without it.

Categories: Blog articles

Whales Not Unicorns

A VC - July 14, 2019 - 3:35pm

I have been vocal here that I do not like the term Unicorn to describe highly valued venture-backed startups. Unicorns are mythical creatures that don’t really exist and highly valued venture-backed startups do exist. They might be rare, but they are not fictional.

A better word would be Whales. And it turns out that the Whaling industry in the United States in the 18th and 19th centuries looked remarkably similar to today’s venture capital business.

Some of my friends and colleagues have been texting and tweeting about a book called VC: An American History by Tom Nicholas. So I got it on my Kindle and the first chapter is all about the Whaling industry and its similarities to the VC business.

Here are some photos I took of the first chapter on my phone.

This is a chart that plots the distribution of returns by whaling voyage vs venture capital fund.

This is a diagram that compares the structure of the whaling industry to the venture capital industry.

And this is a chart that shows the performance of the top 29 whaling agents. This is very similar to charts I have seen that compares the performance of the top venture capital firms.

So while Unicorns are made up creatures, Whales are not. And given the similarities between a highly successful venture capital investment and a highly successful whaling voyage, I am going to start calling the big winners in the venture industry Whales. I hope it catches on.

Categories: Blog articles

Video Of The Week: Fireside Chat With Brian Armstrong

A VC - July 13, 2019 - 7:34am

Back in May, during Blockchain Week in NYC, I had the pleasure of interviewing the CEO of our portfolio company Coinbase, Brian Armstrong.

We started off talking about their rapidly growing institutional business, but quickly got to talking about everything Coinbase.

Brian also gets a question in for me about 17mins into the talk.

It’s about 10 minutes of me asking Brian questions and then another 20 minutes of Q&A from the audience.

Categories: Blog articles

Funding Friday: Bowling The American Dream

A VC - July 12, 2019 - 10:06am

“Like many suburban kids growing up in the 70s, I was no stranger to the local bowling alley.”

So starts the video below for this Kickstarter project to make a photo book about the classic American bowling alley.

That line got me as I grew up a suburban kid in the 70s and spent many an afternoon and evening at the local bowling alley.

I backed this project and maybe you will too. It has three days to go and only needs $1200 to get across the finish line.

Categories: Blog articles

Summer Newsletter-2019

Beyond Money - July 12, 2019 - 8:55am
Greek mountain village

Monetary alchemy: how to turn bad money into good

In my latest article, just published on Open Democracy, I describe how fiat money can be transmuted into a truly effective and scalable community currency, while at the same time providing a way to finance community improvement projects like affordable housing. Key features that distinguish my design from other “fiat backed” currencies that have been tried before are (1) the limitations placed on cash redemption, and (2) the requirement that the community currency be issued as loans to businesses based on the amount of needed and desired goods and services they have available for immediate sale. You can read the full article here.

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Libre Not Libra: Facebook’s Blockchain Project

Facebook’s Libra crypto-currency project has caused a major uproar. In this talk, delivered on June 19th 2019 in Edinburgh, Scotland, respected technologist, entrepreneur, and crypto-currency guru Andreas Antonopoulos provides an interesting interpretation of the nature of Libra and its implications for the future of payments, privacy, and freedom, all of which is both exciting and terrifying. Antonopoulos couches his comments in the framework of what he sees as the emerging “currency wars,” distinguishing among government currencies, corporate currencies, and people’s currencies on the basis of the principles that underlie them. You can view the video here.

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Europe and the UK

I spent most of May and half of June on the other side of the Atlantic conferring with colleagues in the UK and Italy, and living in community at the Kalikalos Holistic Center in Kissos, Greece, where I’ve stayed many times before. My work in the UK has been ongoing for almost a year during which time I’ve been advising a group that has now formed the Open Credit Network.  

“The Open Credit Network is a cooperative of businesses who have come together, under a simple shared agreement, in order to trade with each other without the need for hard cash.”

This project is still in the formative stages but is making good progress. UK cooperatives and small businesses are invited to get involved.

During my trip I managed  to mix in a bit of R&R, enjoyed spending time with friends old and new, and toward the end of the trip had some fun with friends Yannis and Catherine rafting on the Voidomatis river in the Vikos gorge in northern Greece. This experience is one of many being offered through Yannis’ new travel platform, https://www.gofreedly.com/.

_____________________
How to Legally Not Pay Taxes by Tom Wheelwright

I discovered this video by accident while randomly browsing YouTube. Whether your goal is to play the system and become rich, or to change the system to make it fairer, you need to pay attention to this presentation. Tom Wheelwright, is a high powered CPA and tax advisor who describes here how entrepreneurs and investors legally avoid paying taxes. In this video, he points out that on average, those who are classified as employees pay a tax rate of about 40%, and professionals like doctors and lawyers get hit even harder with an average rate of 60%, while entrepreneurs pay only around 20% and big investors pay virtually zero. It’s all a matter of knowing the tax laws and how they favor capital over labor.

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Dr. Laurence Victor, R.I.P.

I was greatly disturbed by the content and tone of Larry’s last message to me on Friday July 5, so I dropped by his place to see him on Saturday morning, but when his wife greeted me at the door she asked, “are you psychic?” and told me that Larry had just died a few hours earlier. I’m sorry I did not have the opportunity to bid him farewell. His health had been in decline for several months, and he had reported suffering severe pain from a massive tumor at the back of his tongue that his doctors said was inoperable.

With PhDs in both physics and psychology Larry had a long career in academia. He was a brilliant and innovative thinker whose unique perspectives on life, civilization, “uplift,” and human “emergence” fascinated many. Larry was a good and respected friend of thirty years. He will be greatly missed.

_____________________
Movie reviews

I’d like to recommend two movies I’ve seen recently.

Pavarotti is the story of opera tenor Luciano Pavarotti (1935–2007) who had perhaps the greatest operatic voice of the past 100 years. Director Ron Howard does a masterful job of telling the story of a man whose life impacted the world of music well beyond the narrow confines of opera, and whose generosity touched the lives of many. The story and the music will move you deeply, .…if you let it.

The Biggest Little Farm. Exquisite in every aspect, this film tells the inspiring story of a professional couple who take a leap of faith into small-scale, diversified farming in southern California. Tracing their trials and tribulations over several years, it shows what can be achieved when working with nature to find balance.
_____________________
Wishing you a pleasant summer,

Thomas

P.S. Rep. Tulsi Gabbard wants the U.S. to stop its endless wars and do what it takes to REALLY make America great again. Let’s keep her in the Presidential debates by making a small contribution to her campaign.

Categories: Blog articles

A Doctor For Sensitive Issues

A VC - July 11, 2019 - 7:23am

Our portfolio company Nurx started out offering birth control prescriptions on a mobile phone delivered to you in the mail. This has been a game changer for many women who live far from a doctor or a pharmacy or live in places where it is not easy to get a birth control prescription.

But they have not stopped there. They added HIV Prep for people who are at risk for HIV and want to protect themselves. And then they added emergency contraception (the morning after pill).

And this week, Nurx added at home testing for sexually transmitted diseases. From that blog post:

The tests offerings include: The Full Control Kit, which tests for gonorrhea and chlamydia (throat, rectal, urine swabs), syphilis, hepatitis C, and HIV (blood sample), and is $75 with insurance or $220 without; The Healthy Woman’s Kit, which tests for gonorrhea and chlamydia (throat and vaginal swabs), trichomoniasis (vaginal swabs), syphilis and HIV (blood samples) and is $75 with insurance or $190 without; The Covered With the Basics Kit, which tests for gonorrhea and chlamydia (urine sample), syphilis and HIV (blood sample) and is $75 with health insurance or $150 without. The goal is to make STI testing easier, more affordable, and with fewer awkward face-to-face interactions with a potentially judgmental lab tech or doctor. The tests are available in 24 states and the District of Columbia.

The idea behind Nurx is that too many people put off going to see the doctor because they are ashamed, it is awkward, or it is inconvenient. And this is particularly true for sensitive issues.

Nurx believes that technology (the mobile phone, telemedicine, logistics, etc) can and will change this for most people and that we can all become healthier as a result. Preventive medicine is the most efficient and affordable kind of medicine and we need more of that in society.

Nurx has grown like a weed over the last two years which tells me that there is a large unmet need for this kind of health care and I am excited to see the Company continue to add more and more services as they grow.

Categories: Blog articles

Otis

A VC - July 10, 2019 - 4:04am

One of USV’s newest portfolio companies, Otis, had a coming out party yesterday.

The idea behind Otis is that cultural assets like fine art, rare books and comic books, jewelry and watches, sneakers and skateboards, etc are appreciated by everyone but are only collectible/affordable by wealthy people.

Otis intends to change that by securitizing these cultural assets and selling them off in shares for as little as $25 per share. These fractionalized cultural assets will be shown publicly while they are owned collectively.

You can see how this all works by downloading the Otis mobile apps here.

I did that yesterday and I have already set myself up to try to buy a share of Kehinde Wiley’s Saint Jerome Hearing The Trumpet Of Last Judgement on August 13th.

I’ve also opted to be notified when these assets “drop” so I can purchase a share of them too.

I am not a sneakerhead but for those of you who are this might be of interest to you:

This is just the start of what will hopefully be a highly liquid secondary market for the trading and collecting of shares of cultural assets. The market is starting out highly curated by Otis but that may change over time as things develop.

USV’s focus right now is on backing trusted brands that can open up access to captial, knowledge, and well-being and Otis fits in all three of those categories. We are very excited to be involved in this ambitious effort.

Categories: Blog articles

The Heretic

A VC - July 9, 2019 - 5:06am

I am reading a friend’s book which is still in proofs and so I’m not going to talk about it yet.

But there is one part of the book that really rang true for me and that is when he talks about certain kinds of problematic employees, particularly one he calls The Heretic.

This kind of employee, and we have all seen this up close, is negative about the Company and disses the management, coworkers, the board, the strategy, the workplace, and everything else under the sun. But for some reason the heretic prefers to stay and be miserable than to move on and find another place to work that is more to their liking.

My friend states in his book that you have to part ways with heretics in your company, regardless of how talented they are, how connected they are, and even if they are protected in some way. You have to find a way out of the heretic mess.

I agree with this advice and I have seen this play out in many ways. The worst way is to let this behavior go on unchecked. As painful as parting can be, and it can be incredibly painful depending on the circumstances, letting this behavior stand is worse.

Categories: Blog articles

Business Model Innovation

A VC - July 8, 2019 - 5:27am

I’ve shared my views on this before here at AVC. I believe business model innovation is more disruptive than technical innovation.

A good example of this was moving from web apps to mobile apps, which was largely a technical innovation. While the move to mobile certainly created some new companies, it largely strengthened the market position of the big Internet companies because there was little to no business model innovation.

Compare that to the move from desktop computing to the web. We saw massive disruption as we went from a licensed software business model to an advertising supported business model, which has evolved into an advertising/subscription freemium business model.

I am excited about the move to crypto based business models supporting decentralized apps for this very reason. I think it opens up the possibility that some very large new companies will be created that innovate largely on entirely new business models.

An area that is particularly ripe for this kind of innovation is user generated content or, more broadly user generated products and services.

If you think about something like Instagram, the software is great but could fairly easily be replicated. But the network of users and the content they create is impossible to replicate. That is where the value is created. Or think about Reddit where the community creates the content. Or think about Waze where the users generate the data about which way has the least traffic.

In these sorts of businesses, the ideal model would remunerate the users for creating the content and allow them to take their content elsewhere if a better deal were to emerge.

That is precisely what a decentralized application built on an open data protocol would do from a technology perspective. And the remuneration of the user is what a token incentive model would offer in terms of a new business model.

So why have we not seen this emerge yet? Bitcoin has been around for over ten years. People have been mining Bitcoin and earning tokens for doing so for more than a decade. This new business model is sitting there in plain sight.

Well first of all, quite a few entrepreneurs have tried. Steem is a decentralized Reddit with a token incentive model and it has been around for a while now. There are over 150 decentralized apps in the Blockstack app store (Blockstack is a USV portfolio company).

So it is not for lack of trying.

I believe the primary inhibitor to this business model innovation is that it requires users to own crypto-assets and store them in a wallet somewhere and be comfortable using them to access decentralized apps. That has not gone mainstream and we need a killer app to make that happen. That is why USV has gotten behind Libra. We think it could be the thing to get mainstream users there.

But if not Libra, I am confident it will be something that gets billions of users holding and using tokens on our phones. And when that happens, a wave of business model innovation will be upon us. I’m super excited for that.

Categories: Blog articles

Price Stability

A VC - July 7, 2019 - 3:30pm

One of the use cases that has eluded cryptocurrencies to date is “means of exchange” (something you would spend).

I wrote about this a couple years ago and showed this transaction in that blog post:

That was a payment I made to a caddie named Kris after he carried my bags one morning six years ago.

We played today and he was carrying a friend’s bag and I asked him if he still had that Bitcoin and he smiled and said “absolutely.”.

That made me feel good but the truth is nobody should be paying for anything, including caddying services, with something that can appreciate 123x. That’s just not rationale behavior.

Which is why stablecoins, cryptocurrencies which have price stability built in to them, are one of the important sectors in crypto right now.

There is the “dollar pegged” approach, like Tether (which may not actually be dollar pegged) and USDC (which is actually dollar pegged). One of the issuers of USDC is Coinbase, a USV portfolio company.

There is the Libra cryptocurrency, which USV is involved with as a Founding Member of the Libra Association. Libra will not be pegged to a specific fiat currency, but will have a reserve made up of many fiat currencies so it will have price stability.

And then there are stablecoins that are asset backed but not fiat backed like Dai.

Finally there are stablecoins that attempt to deliver price stability programmatically. I am not confident that approach will work.

I am confident that one way or another consumers will adopt cryptocurrencies that are price stabilized and when they do they will start transacting in them. And that will unlock a lot of utility that has so far been elusive.

Categories: Blog articles

Video Of The Week: Angela Duckworth – Grit

A VC - July 6, 2019 - 6:32am

A few years ago, we invited Angela Duckworth to speak to our portfolio company CEOs at our annual get together. It was a terrific talk that absolutely impacted the way these CEOs thought about hiring and managing their teams. Angela’s theory of “Grit” as a predictor of success in education, careers, and life is powerful. If you have not read her book on the topic, you should. You can get it here.

Categories: Blog articles

Practice

A VC - July 5, 2019 - 9:02am

When I started writing this blog in 2003, I was not a strong writer. Sixteen years later, I am a better writer. Doing something every day is the best way to improve at something.

I’ve been doing yoga for roughly the same number of years as I’ve been writing this blog. But I am not as religious about yoga as I am about writing.

For the last two weeks, I’ve been doing the exact same yoga practice (the Mysore style) three mornings a week and today I noticed that I was able to do some things I could not do before.

I have a long way to go before I can do yoga the way that most of the people in the yoga studio with me can do it, but the mere fact that I am noticeably improving gives me great satisfaction.

Practice means doing something again and again in an effort to improve. But it also means a way of doing something (a law practice). The two are really the same thing. A lawyer who has been practicing law for thirty years is likely a better lawyer than someone who is right out of law school.

It is easy to watch a basketball player like Steph Curry hit three pointer after three pointer and think “that is raw talent” and surely that is true. But it is also true that he has probably practiced those shots for endless hours in the gym perfecting the shot and stroke.

I think everyone can improve at things they are not good at and become competent, even excellent, at them. I am not going to win a Pulitzer Prize, but I can write well and have become a strong communicator by practicing it routinely. Practice really works.

Categories: Blog articles

The American Dream

A VC - July 4, 2019 - 5:23am

It has been 243 years since our founding fathers signed the Declaration Of Independence and the great American experiment began.

These words form the moral backbone of our country and represent our core values:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness

We have not always lived up to these values. Slavery and the treatment of the Native American Indians are glaring examples. And there certainly have been other moments where America has not lived up to these values.

However, it has been my experience, over fifty-seven years living in the US, that we try to live to these values and that the notions of freedom and equality are deeply rooted in the culture of America.

Which leads me to the American Dream, the notion that there is economic opportunity for all, regardless of who you are and where you come from.

That has been my experience personally. I worked my way through college, arrived in NYC at the age of 21 with not a penny to my name, but with a job waiting for me, and I made the best of that.

It is also my experience in the venture capital business. I have seen people without a college education pursue their dream and come out a winner. I have seen people with broken English make it with hustle and ingenuity.

But again, there are gaps in this record of opportunity. It is not as easy for a young black woman growing up in Brownsville to find economic opportunity as it is a young white man growing up in Palo Alto. There are many parts of America where life has gotten harder for the current generation relative to their parent’s generation.

But what makes America special is that we believe that isn’t right and it should be addressed. And I see it being addressed in my work on the education sector and beyond. I am hopeful that we will see a meaningful dent in many of these opportunity gaps in my lifetime.

It is fashionable these days to bemoan what is wrong with America and there is much that is wrong. But I prefer to stare at what remains right about America and celebrate it, particularly on our birthday.

Categories: Blog articles
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