The Blockchain Market Map

Four hours ago I left my house for the airport and was planning to blog on the flight to SF this morning. But things got in the way of that. First the pilot didn’t show. Then when he did the computer systems went down at LAX grounding all Delta flights to SF. We called an audible, booked a ticket on an American Eagle flight, and hustled to another terminal, through security, onto a shuttle bus, and finally just in time onto our flight. There’s no wifi on this plane and all the delays mean my day in SF has been compressed and will be crazy as soon as I land. 

So no time for a blog post today. 

In lieu of that, here’s a graphic from William’s excellent work to create a “market map” of the blockchain ecosystem:

Click here to read his post which goes on to list all the companies active in all of these sectors.

LTE in the WiFi Spectrum

Apparently T-Mobile is getting ready to launch an LTE service in the unlicensed WiFi spectrum.

I’ve written a fair bit here at AVC over the years about the fact that unlicensed spectrum provides a path for way more innovation than licensed spectrum. I am a big fan of unlicensed spectrum and I believe that the secret to more mobile bandwidth in the coming years is more unlicensed spectrum and less licensed spectrum. I believe that auctioning off the most valuable and useful spectrum to the highest bidders, who often warehouse and under utilize it, is bad policy.

This move by T-Mobile is very interesting to me in a number of dimensions:

1) Can LTE and WiFi (and everything else in the 5Ghz band) play nice with each other?

2) If this works, is this a model for going forward? Why not have the mobile carriers provide services in unlicensed bands versus licensing them valuable spectrum?

3) Does this provide T-Mobile a cost advantaged model for competing in mobile broadband (not having to spend billions to buy licensed spectrum)?

I suppose there are many more interesting questions that will be surfaced and maybe answered as a result of this move by T-Mobile. I’d be very curious to hear them in the comments.

I love that T-Mobile is playing the scrappy underdog role so well in the mobile carrier market and continuing to innovate and disrupt the established norms and business models. I’m a happy and proud T-Mobile customer and plan to remain so.

A Note On Anonymous, Pseudonymous, Guest, and Regular Commenters

One of the best things about AVC is the engaged and active community that envelopes this blog. It has been for many years a conversation among friends and the occasional stranger. I’ve called it a bar where I get to be the bartender. The people in the community come and go. There are regulars who come every day. There are regulars who come every few days. Some come once every week or two. Some have left never to return. Some return on occasion. That’s all as it should be and quite like what goes on in the real world.

I’ve always chosen to allow people to comment using a guest login. I’ve always allowed people to comment anonymously. And I’ve always allowed people to comment using a pseudonym. I believe that allowing people to comment the way they want makes a community richer. I do not think comment identities should always be mapped to a real name and a real identity. It’s great when it is. But there are many reason why that’s not a good option for some.

We’ve managed the trolling and spam by actively moderating the comments. I did that for many years myself and in recent years I’ve been aided by AVC regulars William and Shana who swing by every day even when I’m not active to make sure a thread isn’t filling up with spam or there isn’t some sort of other bad behavior going on. Our moderation policy has been heavy to clear the spam and light on everything else. We lean in favor of giving everyone a voice even when its a tough call.

There is one thing that has evolved into a community norm that is important and I’d like to highlight today. Regular commenters use Disqus Profiles to comment here at AVC. These profiles can be pseudonyms like Fake Grimlock, abbreviations like JLM, or real names, like fredwilson. That really doesn’t matter and I think its best to have a lively mix of all of that. But the frequency of seeing the avatar next to the name in the comments breeds trust, respect, and in many cases real friendship.

If you are a drop in commenter, none of this matters. But if you want to hang out here on a regular basis, I encourage you to build a Disqus Profile, invest some time and energy into it, and participate as everyone else does. It’s how we do it around here and it is one of the many reasons this community works so well.

Feature Friday: Undo Send in Gmail

Here’s a good reason to read the comments at AVC. You learn things.

On Monday I wrote a post about sending stuff to the wrong people and a number of folks in the comments explained that there is a Google labs feature called Undo Send that holds your “sent mail” for up to 30 seconds before it actually sends it.

I immediately added it to my gmail and feel safer now knowing I have it. I have not used it yet, but I am sure I will.

Here’s how to add it.

Go to gmail settings, then click on the Labs tab and find “Undo Send” and click enable:

undo send

Save that change.

Then in the general tab, you will see this:

Undo Send Two

You can set the cancellation period to anything between 5 seconds and 30 seconds. Save that change too.

I’m honestly not sure why this isn’t a standard feature in Gmail. It seems so useful.

Open Internet Rules

The FCC is expected to approve its Open Internet Rules today. This is a big deal and something we have been fighting for since former FCC Chair Michael Powell unfortunately and incorrectly ruled that Internet Access was an “information service.” We believe that last mile Internet Access is a natural monopoly/duopoly in most geographies and needs to be regulated as such.

My colleague Nick Grossman has a good quick read on usv.com about these rules, why we are strongly in support of them, and what this means.

As Nick says in his post,

We believe in markets. We believe that by recognizing that access to the Internet is an essential service, the FCC has moved to protect the free and open markets that depend on that access. Contrary to much FUD, this is NOT regulating the internet, it’s ensuring open access TO the Internet.

Building A Diverse Culture And Team

Brittany posted today about the first USV portfolio diversity summit. Last year we had forty-two portfolio summits all driven by topics that bubble up from our portfolio. Diversity has been rising as a topic that people want to talk about and we reacted to that by hosting a summit on it. We had 28 attendees from 13 different portfolio companies in attendance.

In Brittany’s post, she cites two important reasons to strive for diversity on your team:

  • Do you want your company to increase your company’s competitive advantage? Extensive research has proven that more diverse perspectives leads to more innovative ideas and better financial returns.
  • Do you want your company to one day serve millions of people? It helps if you know how different people in the population think. If companies want to last, they need to think about this early.

She goes on to outline how the portfolio companies are approaching diversity:

  • Getting Started: having the discussion, language, and online tools
  • Company Culture: embracing diversity, inclusive mission vision values, and performance
  • Recruiting: tactics, expectations, interviews, job postings, resources, and external organizations
  • Constant Evolution: Feedback, measuring success, training, and materials

If you are seeking to build a diverse culture and team in your company, I would encourage you to read Brittany’s post which she will follow with dedicated posts on all four topics in the outline.

Sending Stuff To The Wrong People

I got a bunch of emails yesterday that were clearly not meant for me. I replied to let the senders know and deleted them without reading beyond what I had read to know it wasn’t for me.

Then I saw this tweet by Chris Dixon:

Then it all jelled in my mind. Gmail was autosuggesting the wrong people to a large swath of its users over the weekend. I was struggling with the same problem but I hadn’t realized it was a service wide issue.

Sending emails to the wrong people is embarrassing and potentially much worse. The same is true of google docs, dropbox, and a host of other cloud based services where we create and store sensitive information. At least google docs pops up the warning “you are about to send this outside of your domain.” That has saved me many times from sending a google spreadsheet or doc with personal information to a woman with the same first name in Mellon’s Private Bank instead of my wife. You would think Google would know my wife is more important. But it does not, particularly on mobile.

The thing of it is that Google is so good at knowing who you might want to send something to that they should do more than they do right now. They could easily pop up a warning saying “you don’t normally send this kind of document to this person” or “you don’t normally include this person in the group you are sending this to.” These sorts of data driven protections/warnings would further cement the already airtight lock they have on me and many others who use gmail and google docs.

But try as we might, we are human and prone to error. It is almost certain that each of us will send something super confidential to someone who should not see it at some point in our life. My hope is when I do that, the person on the receiving end is decent enough to do what I did, inform and delete, not store and forward.

Building Enterprise Networks Top Down

Most people that are in the VC and startup sector know that USV likes to invest in networks. And most of the networks we invest in are consumer facing networks of people. Peer to peer services, if you will. The list is long and full of brand name consumer networks. So it would be understandable if people assumed that we do not invest in the enterprise sector. That, however, would be a wrong assumption.

We’ve been looking for enterprise networks to invest in since we got started and we are finding more and more in recent years. There is a particular type of enterprise network that we particularly like and I want to talk about that today.

Businesses, particularly large ones, build up large groups of suppliers. These suppliers can be other businesses or in some cases individuals. And these suppliers also supply other businesses. The totally of this ecosystem of businesses and their suppliers is a large network and there are many businesses that are built up around making these networks work more efficiently. And these businesses benefit from network effects.

I am going to talk about three of our portfolio companies that do this as a way to demonstrate how this model works.

C2FO is a network of businesses and their suppliers that solves a working capital problem for the suppliers and provides a better return on capital to large enterprises. Here is how it works: C2FO has a sales force that calls on large enterprises and shows them how they can use their capital to earn a better return while solving a working capital problem for their suppliers. They bring these large enterprises onto their platform and, using C2FO, they recruit their supplier base onto the platform. They also bring all the accounts payable for the large enterprise onto the platform. Once the network and the payables are on the platform, the suppliers can bid for accelerated payment of their receivables. When these bids are accepted by the large enterprise, the suppliers get their cash more quickly and the large enterprise earns a return on the form of a discount on their accounts payable. C2FO takes a small transaction fee for facilitating this market.

Work Market is a network of businesses and their freelance workforce. Work Market’s salesforce calls on these large enterprises and explains how they can manage their freelance workforce directly and more efficiently. These enterprises come onto the Work Market platform and then, using Work Market, invite all of their freelance workers onto the platform. They then issue all of their freelance work orders on the Work Market system, manage the work, and pay for the work, all on Work Market. Work Market takes a transaction fee for facilitating this and many of Work Market’s customers convert to a monthly SAAS subscription once they have all of their freelance work on the platform.

Crowdrise is a network of non-profits, the events they participate in, and the people who fundraise for them. Crowdrise’s salesforce calls on these events and the large non-profits who participate in them. When a large event, like the Boston Marathon, comes onto Crowdrise, they invite all the non-profits that participate in their event onto the platform. These non-profits then invite all the individuals who raise money for them onto the platform. These events and non-profits run campaigns on Crowdrise, often tied to the big events, and Crowdrise takes a small fee for facilitating this market.

I hope you all see the similarities between these three very different companies. There are several but the one I’d like to focus on is the “they invite all the ….. onto the platform”. This recruiting function is a very powerful way to build a network from the top down. And once these networks are built, they are hard to unwind.

We don’t see many consumer networks built top down, but we do see a lot of enterprise networks built top down. And we are seeing more and more of them. It is also possible to build enterprise networks bottoms up (Dropbox is a good example of that). That’s the interesting thing about enterprise networks. You can build them top down or bottoms up. And we invest in both kinds of enterprise networks.

The top down enterprise network is a growing part of the USV portfolio. We like this approach to building an enterprise software business and it does not suffer from the “dentist office software” problem. Which is a very good thing.