The Tortoise And The Hare

One of my favorite childhood stories is Aesop’s The Tortoise And The Hare.

I just love the idea that slow and steady ultimately wins the race.

I thought about that story when I read that Pokemon Go had set a record with 75mm downloads in its first few weeks in the app stores.

Mobile games have these explosive take up rates but don’t last forever.

Contrast that with something like Minecraft which emerged slowly but seems to chug along getting more and more popular each year.

And, outside of the games sector, I can’t really think of any super popular technology product (app or device) that blasted off and sustained itself over a decade or more.

When I ran this question by my brother in law last night, he mentioned the iPhone and the iPad, but both of those were relatively slow builds, certainly compared to these mobile game launches.

We could not think of a huge product, in tech or outside of tech, that blasted off and was a sustainably popular product for a decade or more.

Can you?

Hailo and MyTaxi

The news broke this morning that our portfolio company Hailo is combining forces with MyTaxi.

The combined company, which will operate under the MyTaxi brand, will be the dominant taxi hailing app in Western Europe.

Hailo is huge in the UK and Ireland and has a strong position in Spain. MyTaxi operates in Germany, Australia, Italy, Poland, Portugal, Spain, and Sweden. So this combination is a great strategic fit and the new company will benefit from a lot of synergies.

Andrew Pinnington, the current CEO of Hailo, will become the CEO of MyTaxi and the company will consolidate its operations in Hamburg Germany. The combined company will be majority owned by Daimler.

Unlike the US, the regulated taxi business in Europe got on the ridesharing bandwagon early and it is as simple and easy to hail at taxi in Europe as it is to use Uber. If you travel to Berlin frequently, you will know that ridesharing in Berlin is all about taxis.

I can’t reveal numbers, but the combined MyTaxi/Hailo business will operate at a scale that puts it in the big leagues along with Uber and a number of other emerging winners in the ridesharing business.

This is a great outcome for Hailo and I would be remiss if I didn’t thank Andrew Pinnington for his incredible leadership at Hailo over the past 18 months. Without that, none of this would have been possible.

Start, Grow, Mature, Consolidate

The life cycle of tech companies is pretty straightforward. They start, they grow, they mature, and they consolidate.

The news that Yahoo is finally selling to Verizon and joining forces with AOL is a not in the least bit surprising and probably long overdue.

Yahoo has not been a growth business in quite a while.

Putting AOL and Yahoo together allows Verizon to cut costs and rationalize the two businesses and add scale to Verizon’s growing base of Internet assets.

But this is yesterday’s news in many ways. It is the denouement of the web 1.0 era when AOL and Yahoo were the Internet to many. They operated the training wheels that got so many of us online.

I am not saying these businesses do not matter anymore. Together they serve hundreds of millions of Internet users around the world, they produce a lot of revenue, and when structured properly, a lot of profit.

But these are not growth businesses, they are mature businesses. So it is time to extract profits, not revenue growth, and run them appropriately for what they are.

And that is what is happening with this merger that will be announced this morning.

In twenty years, the same thing will likely happen to thousands of businesses that are starting up this year.

That is the life cycle of tech businesses, shorter than many sectors, but a wild ride while it lasts. As was Yahoo.

On The Beach

I’m taking the weekend off to spend it with my entire family (parents, brothers, wives, children) on the beach.

Here are a couple podcasts that Harry Stebbings did with my partners Albert and Brad in case you want to spend some time going deep on USV this weekend

Podcast w/ Brad

Podcast w/ Albert:

Hard Forks

The crypto-currency Ethereum completed a hard fork on Wednesday. The Ethereum core developers, after getting a vote of support from the Ethereum community, hard forked Ethereum to “get back” the roughly $40mm of Ethereum that was taken in the hack of The DAO.

Hard forks are a bit of a lightning rod issue in the blockchain sector. The Bitcoin community has been debating the idea of doing a hard fork to increase the block size for well over a year. It seems that most of the Bitcoin core developers are against a hard fork and see it as risky. Bitcoin did have an accidental hard fork back in 2013, but that was dealt with quickly and confidence in the Bitcoin blockchain was restored.

I believe that hard forks are an inevitable occurrence in the blockchain sector. There have been, and will continue to be, issues that crop up that are best solved with hard forks. I do not think they will be common and I do not think they should be common. But they are an important tool in the toolset that core developers have to move these protocols forward. And so I see the successful Ethereum hard fork this week as an important milestone for public blockchains.

I like what Cornell CS Professor Emin Gün Sirer said about the Ethereum hard fork:

It’s a point of strength to be able to adapt to that change, to be able to respond to it, to be able to do it in an orderly fashion. Ethereum just demonstrated this. I think this is a rite of passage for ethereum.

In my mind, adaptability is more important than immutability.

And to some extent, that is what is now at the center of the Bitcoin vs Ethereum competition for the hearts and mind of developers. I believe the Bitcoin core developers have more or less landed on immutability and Ethereum core developers are very much into adaptability. It may be that it is useful to have two significant, liquid, and highly capitalized public blockchains, one that is immutable (think of gold) and one that is adatpable (think of the dollar).

There was a time when I was a Bitcoin absolutist. That changed a while ago and I now believe that we are going to have multiple blockchains, multiple currencies, and a ton of app tokens, some with their own blockchains, some built on top of Bitcoin or Ethereum.

It’s a very interesting time in the public blockchain sector right now. Stuff is happening. Lot’s of stuff.

Stack Documentation

Our portfolio company Stack Overflow (or Stack as I prefer to call them) has launched something new and interesting today.

It is called Stack Overflow Documentation.

This is what Stack co-founder and CEO Joel Spolsky told me about Documentation a few weeks ago:

The current state of developer documentation is pretty abysmal. It’s spread all over the place, in a million different formats. It’s never complete and rarely includes good example code. Even the best developer documentation is usually on a static website with no community or crowd sourcing features, so it stagnates.
After months of beta testing, we are launching a global, crowdsourced developer documentation section on Stack Overflow that covers everything from programming languages to APIs and frameworks. It will be completely community generated, with all the reputation stuff that made Stack Overflow successful (voting, reputation, tags, community moderation, etc).
When you poke around at the state of developer documentation on the web in 2016, it feels a lot like… developer Q&A before Stack Overflow. It’s fragmented, half of it is out of date, it’s very very uneven in quality, and when you find a bug there’s no way to fix it. We think that applying the mechanics of Stack Overflow Q&A to crowdsourced documentation will make as big a difference in developers’ lives as the original Stack Overflow.

The secret sauce behind Stack’s success is the fact that crowdsourcing information is way better than the top down approach when it is combined with a specific set of tools that make the crowdsourced data super high quality. The latter is what Joel calls the “reputation stuff” (voting, reputation, tags, community moderation, etc).

It makes all the sense in the world that Stack would focus their secret sauce at Developer Documentation in addition to Developer Q&A. So if you are working in Javascript and want to find some documentation or contribute some documentation, go here. If its Docker that’s giving you fits, go here. And for Android devs, this is for you. The entire Documentation section is here.

Developer Documentation is in Beta right now and though it is pretty good already, I expect it will get a lot more complete and a lot more thorough in the coming months. And if you are so inclined, please help make that so.

Trashing Tumblr

So Scott Galloway thinks Tumblr was nothing more than a “porn site.”

I think that is a ridiculous comment coming from someone who says ridiculous things.

Tumblr was, and still is, a vibrant social media platform. Just talk to the tens of million of people who have had Tumblr blogs and have gotten tremendous value out of them.

I am one of them.

I just hate jerks who want attention by saying crazy shit, like the current Republican nominee for President.

So I am calling bullshit on Scott Galloway and standing up for Tumblr, which I love and have always loved.

Phew. Now I feel better.

Dear Fred

I get so many emails from people who are thinking of starting a company and they share their idea with me and ask me if they should do it. They want my feedback on their idea. These are, for the most part, people I have never met and have no context for. I came across five of them this morning in my inbox. It reminded me of this tweetstorm from last year.

tweetstorm

I understand the need for validation. And part of me wants to tell them “go for it.” I would like to see more people get up the nerve to chase their dreams. But I don’t want to be complicit in that. So most of the time, I just delete the email and move on. Sad, but true.

Some Thoughts On Steem

About a year ago, in the middle of the Reddit soap opera that played out last summer, I wrote a post about how someone could (and would) build something like Reddit on the blockchain.

A number of developers and entrepreneurs have done that and the one that has garnered the most interest is called Steem.

The community is still small and the links are still a bit all over the place. But things are happening at Steem and I think its worth paying attention to.

At the heart of Steem is a tipping system, called Steem Power, based on a crypto-currency called Steem. All of this runs on the Steem Blockchain.

Readers can buy Steem Power with Bitcoin and then they can tip posters who receive Steem Power. Steem Power can be converted into Steem through a mechanism I don’t really understand to be honest.

So unlike Reddit, where posters receive no compensation other than upvotes, on Steem upvotes are done with money.

Steem is traded like other crypto-currencies, and currently has a market cap of $287mm. That feels a little bit ahead of itself (Reddit was valued at $500mm a couple years ago), but markets go up and they go down. We will see where the Steem market cap goes from here.

Another thing that is interesting about this whole model is that Steem can finance itself, the cost of its team, an office, bandwidth, servers, etc by selling Steem vs selling equity.

This is the Decentralized Autonomous Organization model that many blockchain entrepreneurs are following today.

So if you like the idea of Steem, and want to back this company, all you have to do is buy some Steem, some of which you might be buying from the Company. And if you change your mind, you can sell your Steem and move on.

I think Steem is a really interesting experiment that may turn into a really nice business. The Steem founders are experimenting in multiple dimensions at the same time. They are trying a “paid” model vs a “free” model for curating a content discovery engine. That’s interesting. They are using blockchain technology vs some centralized system to build all of this. That’s interesting. They could finance this business via their users vs VC or something else. That’s interesting. And their users can participate in the value creation, if this turns out to be valuable. And that is interesting.

I am rooting for Steem. They have some things to get right and watch out for (including the rapid rise in the value of Steem which is concerning) and I hope they take steps to avoid the “dollar/hype cycle” I talked about in this post. That is one of the great challenges with this whole DAO model of starting and building a company. But someone is going to figure this out. The Steem founders have already figured out a few things which I am sure others will now emulate. And that is what is great about experiments, even if they fail. We learn something. And when they are done in public more of us learn something.