Diversity and the Blockchain

Two of my favorite things are coming together at the MIT Media Lab (another favorite of mine).

The Media Lab is hosting a bootcamp on blockchain technologies for underrepresented minorities and women.

The blog post announcing this event is here.

I will reblog the top part of that post:

The MIT Digital Currency Initiative is excited to announce a week-long intensive bootcamp covering key cryptocurrency concepts for women and underrepresented minority (URM) students. The event will take place at the MIT Media Lab August 21–26, 2016. The Kapor Center for Social Impact and Xapo have generously donated $70,000 to cover each student’s flights, hotel and other expenses to cover the cost of the bootcamp.

To apply for the program, click here. NOTE: all applications are due by July 11th.

If you are in their target group and want to work in the blockchain sector, this has your name written all over it. Make sure to apply by July 11th.

The Candidates’ Tech Agenda

Hillary Clinton laid out her tech agenda yesterday. You can see it here. I like much of it, particularly the emphasis on getting our kids the skills they need to be competitive in the 21st century. I am so with her on that.

I googled Donald Trump tech agenda and found nothing substantive. I would encourage the Trump campaign to do something similar so the tech sector can see what these two candidates think the nation’s tech agenda should be for the next eight years.

We have so many important issues that are centered in technology that face our country:

  • cybersecurity
  • privacy
  • STEM education
  • broadband policy
  • wireless broadband policy
  • open internet
  • data rights
  • patent policy
  • copyright policy
  • immigration policy

Those are just some of the big ones in my view.

Hillary told us where she stands on most of them yesterday.

I would like to know where Trump stands on them too.

AFSE Commencement Speech

Four and a half years ago, in January 2012, I announced on this blog that New York City was opening a new high school called the Academy For Software Engineering (AFSE).

Yesterday, AFSE graduated its first class. 110 of the 120 students who enrolled four years ago made it to graduation. And each and every one of these students took four years of computer sciences classes on their way from enrollment to graduation. It was a proud day for me as it was for them and their families.

Seung Yu, AFSE’s founding and current school principal, asked me to give the commencement speech. That was an instant yes.

So I stood in front of the graduates yesterday and talked about three things that have helped me in my professional life.

Here is the draft I wrote. As I got into it, I ad libbed a fair bit, but this is certainly the gist of what I said to the graduates yesterday:

Now for some parting advice for all of you graduating seniors. Listen up, I am going to tell you my secrets of success in business. This speech isn’t really about your family life. I could go on and on about that too but I would just say that you need a balance between your work life and your family life. You need to focus on both and they support each other. A healthy home life makes for a healthy work life. You need both.

So with that, I am here to tell you that the secret to success in your career comes down to three things, take risks, work hard, and get lucky.

You are all risk takers. You chose AFSE as eighth graders when the school literally did not exist. I remember what it was like back then. Parents would tell me “I can’t send my child to a school that doesn’t exist”. Guidance counselors would say “I can’t recommend that school to my students” I would hear people say things like “girls can’t go to a school like that” or “you can’t teach coding skills to every student”. And I am sure you heard the same things. But you came anyway. And standing here today, I will tell you that you attended and graduated from one of the top 25 high schools in NYC. I don’t know if there are actual rankings, but it is my belief that if you measure high schools on things like attendance, graduation rate, regents scores, AP scores, SAT scores, colleges attended, and reputation, AFSE would be an elite high school. One of the very best. And you went there and graduated from there. You took a big risk and it paid off for you. Keep doing that.

I have taken a bunch of risks in my life. I grew up in an army family and I broke ranks and decided not to go to West Point where my dad and his dad went. Instead I went to MIT, even though my parents could not afford to send me there. I worked in a research lab and sold donuts and coffee every morning to pay my way through MIT. I followed my wife Joanne and moved to NYC after college when my dad told me it was too expensive to live here. I went to business school and paid my way by teaching computers to my classmates. I took at job in venture capital when nobody knew what that was instead of going to work on wall street with the rest of my classmates. When the Internet emerged in the mid 90s, I left my safe job and started a new venture capital firm after my wife Joanne had quit her job to raise our three kids. When the Internet blew up and we lost most of our money, I started another venture capital firm and spent almost two years flying around the country spending money we really didn’t have trying to convince people to give me money again to invest in the Internet. I invested in social media when people said you could never make money in it. I invested in crowdfunding when people said that nobody would do that. I invested in Etsy when people said you could not compete with eBay. All of those risks paid off. Every single one of them. Thankfully my wife Joanne backed me every single time when I wanted to take those risks. She believed in me and believed in those bets. She hung in there when times were tough and made it possible for me to take these chances. We are an example of what happens when you hang together and take risks together.

I am not suggesting you take silly risks. I am suggesting you take calculated risks. Each and every time I took a risk there were people telling me not to do it. I listened to them. I did not disregard their advice lightly. I thought about it. And many times I have decided not to take a risk. But when, after listening and carefully considering the risks, my gut tells me to take a risk, i do it.

And then once you do that you have to work your ass off. I get up every morning at 5am. I have worked half a day by the time I get to the office at 9am. I still do that at age 55 when I have no need to anymore. It is what I do. I work hard. Because if you are going to take these risks, you have to work hard to make them pay off. This is not the lottery. You don’t just buy a ticket and sit back and see what happens. You take a risk and you work every day to make sure it comes through for you.

You all have worked hard. You have studied for the regents, the AP exams, the SATs, you have learned hard things like writing software. You have seen that hard work pays off. Keep working hard. It’s the only way to get somewhere.

But taking risks and working hard is not enough. You have to get lucky too. Luck is not just catching a lucky break. You have to be able to recognize it as such. You have to prepare your mind to recognize the lucky break when it comes your way. The Internet emerging as a massive financial opportunity in the mid 90s was my biggest lucky break. But I had put myself in a position to take advantage of that lucky break by deciding to work in venture capital ten years before that, by working hard to get better at my craft, and by paying close attention to the emerging areas of technology. I saw the Internet for what it was long before most people did. That was my luckiest break but I also knew it and jumped on it.

Everyone gets lucky breaks in their life. I can’t tell you when your lucky breaks will come. But I can tell you that they will come. You must be able to see them for what they are, you must be in a position to act on them, and you must not miss them. Pay attention, look carefully, and be prepared for your lucky breaks.

So that’s it. That’s my secret for a happy and productive career. Take risks, work hard, and get lucky. You have already done all three. Keep doing it.

AVC Demographics

If I was going to start selling ads on AVC (I am not), here are the advertising categories I should target according to Google Analytics:

AVC demographics

Nothing too surprising in here but it is interesting that entertainment (Film and TV) scored so high. I guess you don’t spend all of your time reading AVC 🙂

Some Thoughts On Brexit

Clearly the UK’s decision to leave the EU is a big deal. The implications for the UK and Europe are large. And there is a feeling that similar politics will be adopted in other parts of the world. All of that is concerning. But my immediate reaction to the news when I woke to it on Friday morning was this:

I got some flack for being so “opportunist” and “financially minded” on a day when many people were dealing with the the reality that their world was going to change and maybe not for the better.

I realize that things like this are not all about money and financial opportunity. I realize that there will be a lot of pain for some in this transition.

But I am all for change. A static world is not a good world. And, as I said, with change comes opportunity.

Is it possible that the British Pound will be trading higher against the dollar and euro in a few years than it was before the vote? Absolutely. Is it possible that US stocks will recover from the losses they took on Friday and continue the eight year run they have been on? Absolutely. Is it possible that all the hand wringing over the potential for a global economic slowdown brought on by Brexit is overdone? Absolutely.

I am not saying all of these things will happen. But they could.

But more than that, going into a foxhole right now seems like the wrong idea. Some of the best companies have been created in times of great economic turmoil. And, because of that, some of the best venture capital investments have been made in times when everyone was risk averse. I am not for getting too excited when times are good and I am not for getting too conservative when times feel bad. I am all for looking for opportunity at every turn.

Video Of The Week: Made In America

The Gotham Gal and I are making our way through the OJ Simpson documentary, Made In America. It’s a fascinating tale that weaves OJ’s story with the story of race relations in LA from the 60s to the 90s. It is very well done.

Here’s a podcast where my friends John and Will discuss it at length and talk to the director, Ezra Edelman.

Feature Friday: iPhone Hearing Test

Last week in a blog post, I wrote:

My daughter’s iPhone can’t deliver a strep test to her, yet. But it can deliver an eye exam and a hearing test.

So I thought I would showcase one of these iPhone based medical tests on feature friday today.

If you download an app on your iPhone called “Mimi Hearing Test” and install it, you can test your hearing with your earbuds.

I did that this morning.

It is just like the hearing tests you do at the doctor’s office. As I suffer from mild hearing loss, I have done this test a bunch in doctors offices over the years.

You sit in a quiet spot and wait for beeps in your right or left ear and when you hear them you press the right or left button.

Mimi Test

The quick test lasts about three or four minutes and when you are done you get results like this:

mimi results

and

mimi results 2

You then store your profile in the system and are then offered additional services:

mimi extra stuff

And, once you’ve done an in-depth test and stored that, you can use the Mimi Music app to enhance the music listening on your iPhone.

I assume that is just the start of a suite of enhanced audio apps and products that Mimi intends to offer.

Full disclosure – The Gotham Gal is an investor in Mimi and therefore I have a financial interest in the company too.

Best Seed Pitch Ever

I read yesterday evening that our portfolio company Twilio, which priced its IPO last night, is going to live code from the NYSE this morning. That brought a powerful flashback to the first time I met Jeff Lawson, founder and CEO of Twilio.

It was 2008 in our old offices on the 14th floor of the building we still work in. My partner Albert, who led our investment in Twilio, had met Jeff and was impressed with him and his vision for Twilio. He asked me if I would meet with him and so I did.

Jeff came into the conference room, sat down, and said “we have taken the entire messy and complex world of telephony and reduced it to five API calls”.

I said “get out of here, that’s impossible.”

Jeff proceeded to reel them off and I said “wow”.

He then pulled out his laptop, fired up an editor, and started live coding an app. He asked me for my cell phone number and within 30 seconds my phone was ringing.

I said “you can stop there. that’s amazing”.

It was, and remains, the best seed pitch I’ve ever gotten. I’ve told him that many times and have told this story many times. I am not sure why it has never made it to this blog. But this morning is a great time for that to happen.

USV 2016

My partner John has a post up on USV this morning talking about our new fund, USV 2016, which we quietly raised earlier this year. We added our final portfolio company in USV 2014 last week and we are making our first investment in USV 2016 this week, led by John. In John’s post he addresses some changes we are making at USV, most notably the elevation of Albert and Andy to managing partners of our firm. This role has been held by Brad and me since we started USV in 2003.

This sounds like a big change and in some ways it is. Andy and Albert are the future of USV, at least the near term future. They have been providing this leadership role for a while now but it is time to formally acknowledge it. John, Brad, and I remain actively involved in making investments, managing investments, and driving our investment strategy. We all plan to make investments in the 2016 fund, as John is doing this week.

The VC business is a long term game and VC funds have a long time horizon, ten years in most cases, but generally they get extended for a few years more as it takes a long time to liquidate these funds. We are on our second extension on our 2004 fund and I doubt it will be totally wrapped up until the latter part of this decade. What this means for a venture capital firm is that you need to anticipate succession on a longer time horizon. At some point, Brad, John, and I will not want to sign up for investing a new fund. But well before that happens, we need to establish the new leadership at USV and start building the next generation. We have done the former and at some point in the next several years we will start thinking about the latter. Again, we are doing all of this over a long time horizon as is appropriate for our kind of business.

When Brad and I started USV, there were a bunch of things we did not want to do. One of them was stick around too long, taking too much carry, and holding on to too much control. We have seen so many VCs do this at the firms they started and we did not want that to happen at USV. With this change, we are showing ourselves, our partners, and our LPs that we were serious about that.

What we are not doing is retiring. I know there are rumors out there that I have retired, I am retiring, or I will soon retire. I don’t really care about them and have ignored them for the past year or so. But our portfolio companies hear them and it bothers them. And I understand that. So rest assured, I am not retiring. I am handing over the keys to the car and getting into the back seat. It feels good. And I am so excited to see where Albert and Andy drive the car. I know it will be to amazing places. It already is.

Some Thoughts On Ethereum and The DAO

As many (most, all?) of you know, last week The DAO, a large crowdfunding experiment based on the Ethereum blockchain, was hacked and something like $50mm of Ether was taken from The DAO. That Ether may end up being recovered due to a fork of Ethereum that was done in response to the hack. Much of this was covered in Nathaniel Popper’s post in the New York Times last friday.

I won’t say that I predicted this but I certainly saw something like it coming in my blog post on Experiment and Scandal that I wrote a month ago.

Ethereum is brand new technology. The smart contracts that can be built on Ethereum are an entirely new thing and we are just seeing what works and doesn’t work with this technology. It is safe to say that the contracts that The DAO wrote did not work. The DAO is a failed experiment that suffered from more than poorly written and ill conceived smart contracts. It also suffered from way too much money and hype being invested in it. I was thinking of The DAO when I wrote these words a month ago:

I find myself wishing we could keep the dollars invested and hype down when we do these massively public experiments

It is an open question about what impact the failure of The DAO will have the future of the Ethereum experiment. It certainly shows that pairing a public and open blockchain with a Turing complete programming language and a smart contracts system is a very ambitious and potentially very dangerous idea. The price of Ethereum in dollars has been halved as a result of The DAO failure and it is unclear if the bleeding is over on that price chart. There is a very well articulated debate on Hacker News right now about the future of the Ethereum experiment. If owning Bitcoin is like buying an IPO stock, owning Ethereum right now is like buying into a Series A round. Let’s just make sure we all understand that please.

My partner Albert who is way smarter about the technology here than I am wrote a post on his thoughts on this subject over the weekend. You will see that he and I see things pretty much the same way (shock!). He ends his post with this thought:

Blockchains and smart contracts are amazing new tools in our overall technological toolset. We have to learn how to deploy them to the best uses (many of which have yet to be invented). That will take failures. The DAO is not the first one (e.g., Mt. Gox) and won’t be the last one.

I could not have said it better.