Mark asked me to come on his TV show before leaving LA and I did that last week. It is an hour long broad ranging conversation about the venture capital and startup business.
I wrote about the live broadcasting craze earlier this week. There are three significant players in this market, YouNow, Twitter/Periscope, and Meerkat. I’m a shareholder in two of them (YouNow is a USV portfolio company and we own a lot of Twitter stock personally). So I’ve been quite interested to see how this market is shaping up and I’ve been using all three apps this week.
I should say that I don’t see myself as a broadcaster. That may change. But I honestly don’t know what parts of my day are interesting enough to broadcast and would be appropriate to broadcast. I’m sure the USV monday meeting would be interesting to broadcast but it would not be fair to all the companies we talk about in that meeting confidentially to broadcast that. I’m sure the SoundCloud board meeting would be interesting to broadcast but I’m equally sure the company would be mortified that I would even dare to think of such a thing. I know that I will get some suggestions in the comments and if any are good, I will reconsider the “I’m not a broadcaster” attitude I have right now.
I did accidentally broadcast two seconds on Meerkat this morning.
@fredwilson sorry about that folks. Just looking around for something and hit the wrong button
— Fred Wilson (@fredwilson) March 27, 2015
That happened because I accidentally pushed a button and went live without realizing it (and tweet spammed almost 400,000 followers) to my great annoyance. That’s a UX fail as far as I’m concerned and I’m not sure I’m going to open that app again.
But I do see myself as a consumer of these broadcasts. We’ve been an investor in YouNow for something like three years and I’ve spent time watching broadcasts on YouNow. It’s a classic Internet content marketplace. There’s brilliance right next to silliness. But when you catch something brilliant on YouNow, it’s kind of magical. Tyler Oakley did a YouNow last night that had 120,000 viewers and he raised $20,000 for his Prizeo challenge during his live broadcast. You can watch Tyler’s broadcast via YouNow’s archive mode.
Which leads me to my feature friday topic – archives of live broadcasts. I’m getting real time mobile notifications on my phone from Periscope and YouNow and Meerkat and I’m also seeing invitations to join these live broadcasts in my Twitter feed. But I’m pretty busy during the day when all of these broadcasts are happening. I realize there’s value in watching live (the chat, the engagement, the favoriting, etc) but honestly I can’t tune in live very often.
What I’d like to be able to do, ideally right from my mobile notifications or the tweet, is to favorite or mark to watch later (I use the favorite button on many platforms as my “read later” button).
Twitter’s Periscope also has archives. I snapped this screenshot today from my Periscope app.
I watched my friend Howard”s broadcasts via this archive screen this morning, further confirming that I (and Howard too) are not interesting enough to be broadcasters
But regardless of whether or not that particular archived broadcast was any good, I think ironically archives are an important part of the livestreaming experience and I think the leading apps should support this functionality if they want to reach the broadest user base.
Insite is a great program that connects graduate students at leading universities to the startup community around them. It started in NYC and has been connecting graduate students at NYU and Columbia to the NYC startup community for well over a decade. It is now active in other startup communities around the US.
They raise money each year for their NYC programs with a bowling event called Kingpins. Startup companies and VC firms buy lanes and half lanes and the result is a fun night of eating, drinking, and bowling. The startups and VCs mingle with the Insite fellows and all sorts of good things happen.
This year’s event is Monday, April 13th, from 6pm to 9pm, at Chelsea Piers. Half lanes are $1000 and full lanes are $1800. If you are a VC firm and want to support the local community, Insite, and meet startups, you should buy a full lane. If you are a startup and want to drink beer with VCs, think about a half lane. If you are just a regular community member and want to joint the fun, you can buy a single ticket for $150.
The details and tickets are here.
There’s an interesting discussion on usv.com this week called Where Protocols Come From. Here’s the anchor to the discussion:
Protocols play a vital role in computing, as well as a vast array of our online interactions. The device you’re reading on now has a USB connection; without it, your device couldn’t interoperate with other devices. You’ve probably sent an email to someone in the past hour; without the standard IMAP/SMTP protocol, you wouldn’t be able to send email to people who aren’t on Gmail.
While protocols make interoperability possible, and in fact many are governed by standards bodies, history shows that standards are often imposed by one dominant player. For example, Apple may have quietly invented the new standard for USB. JVC played a large role in the invention of the VHS.
On the software side, the history is a little murkier. Among file formats, Adobe invented the PDF and Apple is largely responsible for the proliferation of MP4. HTTP was invented by a computer scientist and widely adopted without the domineering of any one industry player. Attempts to establish social networking protocols, such as Tent.io, have largely failed. We are, however, beginning to see an uptick in protocols proffered by companies, such as our portfolio company Onename.
This week we’re asking:
Why have hardware protocols been driven by dominant players but not software?
What might it take for a software company to establish a protocol?
What conditions must be met to establish to establish an internet protocol?
Over the past year, the New York State Department of Financial Services (DFS), led by Superintendent Benjamin Lawsky, has been attempting to create a set of regulations for virtual currency services. They called this set of regulations the “Bitlicense.”
I have been following this issue closely and participated in public testimony before the DFS back in January 2014 that was a precursor to creating these new regulations.
While these regulations will only apply to businesses operating in New York State, they will naturally be a precedent for many other states who seek to regulate virtual currency services and as such, we should consider them a potential framework for all state regulation of virtual currency.
The initial proposed Bitlicense regulations were published last year and were subject to a comment period which produced more than 3,700 total comments. The DFS did an excellent job of working through those comments and came back with a revised Bitlicense draft early this year. The comment period for the revised Bitlicense started in late February and will end this friday, March 27th.
This blog post is being submitted as a public comment on the revised Bitlicense regulations and should be read as such.
While the DFS has taken great care to simplify the Bitlicense regulations and reduce the scope of them, there remain two fundamental and important problems with them, both relating to duplication of existing regulatory requirements.
Before I get into the specific issues around unnecessary duplication in the proposed Bitlicense regulations, I would like to speak about the issue of regulation and startups and high growth companies in general.
I believe startups and high growth companies are important to the US economy and US citizens for many reasons, but primarily because they bring important new technologies into our lives and improve them, and because they are engines of economic growth and jobs.
Startups and high growth companies should be required to comply with all existing laws and regulations. They should not be excluded from the laws that apply to all other businesses. However the arrival of new technologies should always be seen as an opportunity to review and update our laws and regulations in accordance with the benefits and challenges brought by these new technologies.
It is also true that startups and high growth businesses often start with a very small base of employees and capital and they cannot afford the compliance and regulatory affairs teams of much larger companies. Because of this, startups and high growth companies are more heavily “taxed” in their efforts to comply with regulations and we should be mindful of this “tax on innovation” that regulations place on the startup sector and high growth companies in general.
Duplicative regulatory requirements are a particularly harmful form of this regulatory burden. If one regulatory body is responsible for making sure that businesses comply with the rules, we should not force companies to comply with a redundant and duplicative set of rules and compliance requirements. This is particularly true of state regulations as duplicative compliance requirements could, at the extreme, require companies to do the same thing 50 times (once for every state). And small high growth companies are the ones who will feel the pain of this duplicative and redundant regulatory burden the most.
So, it is with that backdrop that I wish to highlight two such duplicative and redundant regulatory requirements in the Bitlicense. The first are the anti money laundering (AML) requirements in the Bitlicense regulations. Virtual currency exchangers and administrators are already required to comply with federal AML regulations. In many ways this is a good thing. FinCEN (the federal money laundering regulator) set a clear federal standard for all bitcoin companies in March 2013. New York State and all other states should require these virtual currency businesses operating in their jurisdiction to comply with the federal AML regulations but they should not require duplicative and redundant AML compliance on a state by state basis.
The second duplicative and redundant provision in the Bitlicense is related to state money transmission regulations, which are already in place and are applicable to all virtual currency businesses. The Bitlicense requires similar provisions to what is already in place for money transmitters under state regulations, thus creating duplicative and redundant compliance obligations, which, again, could end up being replicated in all fifty states around the country. A better construct would be to exempt licensed money transmitters authorized by the DFS to engage in virtual currency business activity, just as the BitLicense has done for entities chartered under NY Banking Law.
The New York State Department of Financial Services has made a commendable effort to understand the risks posed by virtual currency and to construct regulations to protect society from them. There has been a lot of great work done in this effort. And it is particularly helpful to the startups and high growth companies operating in the virtual currency sector to know what is expected of them to operate legally and safely. I believe if the DFS addresses these two duplicative and redundant provisions, we will have a much better and more efficient regulatory structure for virtual currency providers and that will be a very good thing for all involved.
I’ve written about Josh Harris here before. He envisioned all of the stuff that has happened on the Internet in the early 1990s, roughly ten to twenty years before it happened. And he tried to bring much of it to market in the mid to late 90s, but the technology and the market weren’t ready for it. I talked a fair bit about Josh in my “history of the NYC Internet community” talk that I gave at Web 2.0 in 2008. Josh was one of the seminal figures of the NYC Internet community and we owe him a lot for what he imagined and what he made.
Josh’s ultimate project was We Live In Public, which is also the name of the movie about Josh that was released in 2009. In the We Live In Public project, Josh put cameras all over his loft apartment in NYC and livestreamed his and his girlfriend’s everyday life, which ultimately led to their breakup. It’s always been unclear to me how unscripted or scripted that project was, but it hardly matters. It was entertaining in a voyeuristic way. It predated reality TV and all that has come since.
I got to thinking about We Live In Public after reading The Verge’s post about our portfolio company YouNow. YouNow is the living breathing realization of Josh’s imagined world where everyone is broadcasting their lives in real time on the Internet. There’s been plenty of media attention to Twitter’s Periscope and also Meerkat, but YouNow has been at this since 2012 and has amassed a huge audience who tip the live broadcasters enabling them to make a business out of livestreaming their lives. If you want to take a look at how all of that works and what goes on on YouNow, give this a read.
I have been watching the livestreaming category emerge for years and it’s been fits and starts for sure. Most of the stuff that is getting livestreamed is hardly entertaining and many of us have more important things to do with our time than watch other people hangingat work or at home. But it sure seems like the category is alive and well and maybe even here to stay. Just as Josh imagined it would be twenty years ago.
The Gotham Gal and I have spent the winter in LA and are heading back east at the end of this coming week.
This morning I took a walk on the beach and thought about the past three months and how it has impacted the way I’m thinking about life and work. It’s hard to do anything other than grind on what’s in front of you when you are in it. And I’m always “in it” when I’m in NYC and spending the week in the office with back to back to back to back meetings every day. It’s even worse when I fly to the Bay Area for a few days of non-stop meetings.
So getting on the beach this winter has allowed me to clear my head and think a bit about where the VC and mobile/internet business is heading and where and how I want to engage with it.
It’s not like we took the winter off. I was in the bay area every week for at least a day and sometimes two days. But the ability to go in and out quickly provided some context for me that was helpful.
And I worked every day, often starting at 6am or 7am because the west coast starts the day later than Europe and the east coast. I was often done by 4pm and took the opportunity to do a ton of late afternoon yoga, which I highly recommend and will try to continue when I get back east.
But the thing that shifted for me as a result of being out of the office was I read and wrote and thought more (I’ve written more private google docs and google sheets this winter than the entire past year).
I’ve also focused more energy on our existing portfolio companies and less energy on making investments. That has been a thing for me for a while now (I’ve gone from four new deals a year to one or two a year and feeling much better as a result).
I can’t say that I’ve had any big “aha moments” but I do have even more conviction than ever that I want to be investing in what may happen in five to ten years and not commit a lot more time, energy, and money to what is happening now.
I believe the VC business has gotten hyper efficient at spotting what is happening now and it’s really hard to get outsized returns doing that. Plus there is a lot of headfake risk in doing that and when the antes are so big, headfakes cost you dearly.
I’d rather spend the next few years at the bleeding edge and see if we can get a few things right. I think that will cost us less when we are wrong and reward us more when we are right.
The great thing about early stage technology investing and beaches is that there’s always another wave coming and when you catch one right, it’s a thing of beauty.
PS – I wrote this post on my phone sitting on the beach. It’s a great place to write.
At roughly 10mins in, Kickstarter CEO Yancey Strickler, starts a short one minute comment that ends with the statement that “this is where culture is moving”. If you don’t have 50 mins to watch the whole interview with Jason, click on this link and watch for one minute.
But if you do have 50mins this weekend, I strongly encourage you to watch this great interview from Jason’s Launch Festival.
One of my favorite user experiences is the SoundCloud mobile music player. I’ve been driving a lot this winter in LA and when I get into my car, I bluetooth my phone to it and put my phone next to my seat. I can go forward and back from song to song with the buttons on the steering wheel but I find myself swiping the phone instead because the experience is so delightful.
Here’s a video I took just now of the experience of swiping through music;
At the Morgan Stanley Internet Conference a few weeks ago in SF, I was asked to sit on stage with Bill Gurley and Alfred Lin and take questions from the moderator and audience. It was fun. Bill and Alfred are two of the best VCs in the business and it was a treat to be on stage with them.
One question we got from the audience was what company was going to get most disrupted by the Internet. Bill answered Hertz and Avis, for obvious reasons. I think he’s got a great point. I answered Walmart. Here’s why.
Until now, if you want something right away, you have to go a store. If you are willing to wait, you can order it online. But it sure feels like same day/same hour delivery is coming and coming fast now. And when you can order something from Amazon, or Instacart, or Starbucks and get it right away, there are going to be a lot less reasons to go to a store.
We’ve got a horse in this race with Sidecar and I am seeing it happening right in front of my face. These real time driver networks that Sidecar, Postmates, Lyft, Uber and a handful of other companies have built can do a lot more than move people around. They can and are moving packages around. And more and more ecommerce companies (including bricks and mortar retailers!) are doing deals with these driver networks to get their stuff to their customers on the same day and even in the same hour.
This is going to put even more pressure on companies with lots of stores, lots of in store inventory and labor, and processes, systems, and procedures optimized for the in-store experience. That’s why I answered Walmart.
All that said, I am not advising you short Walmart. Please don’t take public stock market investing advice from me. I don’t know anything about that. I’m a VC.