Posts from February 2013

The Sequester

This won't be a long post because I'm still not feeling 100%. But I thought I'd share some quick thoughts on the sequester:

1) it is not the most elegant way to make cuts and does feel a bit like taking a sledgehammer to government instead of a knife

2) but cut we must and i'd rather see any cuts than no cuts

3) the defense budget in this country is way too large and full of pork. it is about time we started to cut defense spending. let's hope the pentagon does it intelligently. i think they will.

4) the cuts don't touch entitlements which are our biggest problem. until we tackle them, we won't get anywhere near a balanced budget.

5) i really like the GOP's standing tough here. it earns them a lot of points with me.

6) Obama is acting like chicken little running around the country claiming the sky is falling. he doesn't need to earn points with me or anyone anymore. he's done running for office. it is time to start leading instead of stirring up fear.

In summary, I very much like that we are raising revenues and cutting spending. We have to. Sure it will impact the economy. It's going to at some point. Might as well start taking our medicine now.

Video: Avner Ronen on The Future Of TV

I am under the weather today. Not feeling too well. So instead of posting, I am embedding. I watched this video yesterday and thought it was a really good discussion of where TV is headed. Avner has had a front row seat in his role as founder and CEO of our portfolio company Boxee and his views on the broader TV industry are interesting and very insightful.

Guest Post: HOW TO SOCIAL

ME GET START WHEN FRED TAKE BIG CHANCE ON CRAZY PERSON TYPE LIKE DINOSAUR. MINIMUM VIABLE PERSONALITY TURN INTO MORE, WHICH LEAD TO DRAW REAL BOOKS LIKE LEAN ENTREPRENEUR. AND BEYOND.

THIS A CHAPTER FROM NEW BOOK. IT DEDICATED TO FRED, AND TO COMMUNITY AT AVC.COM. NONE OF THIS HAPPEN WITHOUT YOU.

FGTWEETING02

HOW TO SOCIAL

ME, FAKEGRIMLOCK, GO FROM JOKE TO FAMOUS ON INTERNET IN JUST FEW YEARS. NOT BECAUSE LUCK. BECAUSE ME SOCIAL RIGHT.

NOW ME TELL YOU HOW TO SOCIAL LIKE ROBOT DINOSAUR. HOW FIND AUDIENCE. FIND VOICE. FIND MORE.

HOW BUILD COMMUNITY. AND SELF.

WHOWHATWHERE

START WITH MINIMAL VIABLE ENGAGEMENT ENGINE

NEED THREE THINGS TO ENGAGE AUDIENCE.

1. AUDIENCE – THE WHO

2. SOMETHING TO DO – THE WHAT

3. PLACE TO DO IT – THE WHERE

HOW FIND AUDIENCE? SOMEWHERE ON INTERNET, THERE A CONVERSATION FOR YOU. FIND IT. PARTICIPATE UNTIL VALUABLE.

NOW YOU HAVE WHO.

PAY FEW BUCKS FOR URL, BLOG, EMAIL. GET TEMPLATE FOR SITE SO IT NOT LOOK TERRIBLE. MAKE FACEBOOK OR TWITTER ACCOUNT.

NOW YOU HAVE WHERE.

LINK TO WHERE IN CONVERSATION. HAVE  CONTENT WAITING ON OTHER SIDE OF LINK. HAVE COMMENT SYSTEM ALSO WAITING.

NOW YOU HAVE WHAT.

YOUR WHO GO TO YOUR WHERE AND DO WHAT.

NOW YOU HAVE COMMUNITY.

AUDIENCELOOP

LET THEM FIND YOUR VOICE

THERE WORD FOR ONE-WAY COMMUNITY. PRISON. NO ONE WANT TO STAY THERE.

TWO WAY COMMUNITY IS BE AWESOME FOR THEM. LET THEM TELL YOU WHAT AWESOME TO BE.

EXPERIMENT. MEASURE. STOP DOING WHAT FAILS. DO MORE WHAT WORKS.

ITERATE VOICE LIKE A PRODUCT. BECAUSE THAT WHAT IT IS.

AWESOMESAUCE

WHO LEADS TO YOU LEADS TO MORE

FIRST YOU FIND AUDIENCE. THEN LISTEN UNTIL FIND YOU. NEXT YOU FIND MORE.

GIVE AUDIENCE GIFTS TO SHARE. BE USEFUL. INTERESTING. AWESOME.

LEAVE TRAILS.

EVERY GIFT MUST HAVE TRAIL. TRAIL BACK TO YOUR WHERE. EVERY GIFT IS INVITATION.

“WE ARE AWESOME, JOIN US.”

THIS WHY COMMUNITY ABOUT THEM, NOT YOU. THEM ONES THAT CARRY YOUR GIFTS.

THEM THE ONES MAKE MORE THEM.

ROLLYOURCOMMUNITY

TIME TO ROLL

WHY NEED COMMUNITY? JUST TO SELL PRODUCT?

MAYBE. IF YOU A PRISON.

TWO-WAY COMMUNITY MORE THAN LISTEN. MORE THAN DO THINGS FOR THEM.

THEM CAN DO THINGS TOO.

EVERY MEMBER OF COMMUNITY IS DIE WITH MANY SIDES. WANT TO MAKE THINGS HAPPEN?

ROLL YOUR COMMUNITY.

EACH ONE IS CHANCE TO GET RIGHT NUMBER. EACH ONE IS POTENTIAL SURPRISE. EACH ONE IS DOOR WAITING TO OPEN.

BUILD COMMUNITY RIGHT, IT ROLL ITSELF. ALL THE TIME.

HURRICANEFUEL

LOVE THE SOCIAL

SOCIAL HARD WORK. LOVE DOING IT. OR FIND PARTNER THAT DO.

IF NOT DOING IT FOR THEM? YOU FAIL.

IF NOT LIKE DOING IT? YOU FAIL.

IF NOT WANT TO LISTEN, NOT WANT THEM DO THINGS, NOT WANT LET COMMUNITY GROW ON OWN?

YOU FAIL.

BUILD STARTUP IS JUMP OUT WINDOW, INVENT WINGS ON WAY DOWN.

BUILD COMMUNITY IS JUMP INTO WHIRLWIND, MAKE IT A HURRICANE.

JUMP NOW.

Teach Computer Science To Kids On Your Way To Work

A few months ago, I read about this amazing program called TEALS that allows software engineers to stop by a local school on their way to work and teach computer science to high school students. I thought "what an amazing idea".

Fast forward and I am happy to tell you that TEALS is coming to NYC this fall. About a dozen public high schools in NYC have expressed interest and the final group of participating schools will be nailed down in the next few weeks.

The way this works is a software engineer literally stops by the school on his or her way to work, teaches the class in partnership with one of the existing teachers in the school, and is out the door on the way to work before any of his or her colleagues is out of bed. The TEALS program teaches two classes, an Intro To CS class based on the Berkeley curriculum, and an AP CS class based on the University of Washington curriculum. Software engineers who choose to participate get trained during the summer to teach one or both, and then they teach up to a few days a week on the way to work.

THE ASK: We need to recruit up to 50 software engineers here in NYC to make this a reality. The first info session is next Monday, March 4th, at 6pm. It will be held at the Microsoft office in midtown. If you would like to attend, let us know, and we will put you on the RSVP list.

There will be a second info session at USV on March 20th at 6pm and Kevin Wang, founder of TEALS, will be talking at the NY Tech Meetup on the evening of March 19th as well. So if you can't make next monday evening, there will be a few more chances to learn about this amazing program.

In other "CS in NYC schools" news, the the Dept of Education is rolling out a CS curriculum in 20 middle schools and high schools this fall. The Mayor will announce the 20 schools that are getting this CS curriculum today. There will be participating schools in all 5 boroughs. Approximately 50 students per school will participate, so this program will reach around 1,000 students, starting this fall. 

And there are a number of other interesting programs bubbling up all around the city which I can't or shouldn't talk about yet. All of this happening in addition to the dedicated school model (AFSE) that I have written about a few times here at AVC. This is all a reflection of the dedication of folks in City Hall and the DOE to bring more CS opportunities to our kids here in NYC. It's a fantastic thing and I am very excited by all of this.

NOTE: MBA Mondays is taking a break, probably for just this monday, but it could be a bit longer. I need to figure out where to go next.

House Of Cards

The Gotham Gal and I have been watching House Of Cards on Netflix. I haven't enjoyed a TV show so much since The Sopranos.

It all starts with Kevin Spacey. He is terrific in general and particularly in this show. But that's not the only thing we like about the show. It's about power and intrique in the nation's capital which makes for entertaining plotlines. The characters are strong, the writing is good, the direction is inspired, and the acting is great.

House of cards

The other thing that is great about the show is you can watch all thirteen episodes one after another. We got through two episodes in our first spin. We got through two more a week later. We got through three when we were in Utah and then two more last night. We've seen nine of the thirteen episodes in less than a month. We will probably finish the first season this weekend or next weekend.

This is how many of us consume TV these days, but we have to hack the system to do it this way. We have to wait for a season to be over and then watch it on demand. Netflix has taken the "hack" out of the system and just gives viewers the flexibility to watch the series when and how they want. I think that's a big improvement to the delivery model and I am loving it.

If you like quality TV entertainment and are looking for something new to watch, check out House Of Cards.

Video Of The Week: Going To The Blackboard To Talk About Online Higher Education

A few weeks ago, I went down to Wharton, where I got an MBA in the mid 80s, to talk about "being contrarian". My experience with MBAs tells me that they need to be encouraged to think outside of the box and that's what I went down there to evangelize.

During the Q&A, which was excellent, way better than the talk itself, I got a question about higher education. Specifically, I was asked what I would do about the "threat" of online education if I ran Wharton. 

I went to the blackboard, got some chalk, and laid out something that has been rattling around in my mind for the better part of the past few years. I think it is the first time I have laid out this vision in its entirety. The whole thing lasted less than five minutes and it was videotaped so I am making the "chalk talk" my video of the week.

Sadly, the camera was fixed on a tripod so the blackboard itself is not caught in the video. The folks who ran the event and filmed it managed to embed a still of the blackboard in its final incarnation in the upper left of this video so you can get a feel for what I was drawing as I was talking.

I think all institutions of higher education need to adopt the trifecta model which is MOOC, blended, traditional, if they want to remain vital in the coming years.

Fun Friday: Favorite Brands

Yesterday's rant in the comments on HBO vs Netflix and Apple vs Google gave me the idea of a fun friday on brands we love (or hate). Since Kirk tells me I hate too much, I will keep my comments to brands I love. But I am not opposed to hating in the comments. In fact, I think it is fun if it is done respectfully. Sometimes our comment threads here are too nice. And too nice is too boring.

Here are a few brands that I love.

Blue Bottle Coffee

Blue bottle coffee

 

Twitter

Twitter logo

 

Doyle Mueser

Doyle mueser

 

Tell us about the brands you love in the comments.

 

Venture Capital Returns

This post is for everyone who thinks venture capital is an easy business. I'd like to dispel that notion.

Here are short term and long term returns for the venture capital business over the past ten years compared to the public equity markets in the US.

Venture capital returns

These numbers don't include the internet bubble of the late 90s, so they are just for the past ten years.

What jumps out at me is there are no venture capital returns in this set of numbers that break double digits. When I got into the business in the mid 80s, I was schooled that you needed to produce at least 20% annual returns net to the limited partners to stay in business.

The ten year comparisons to the public markets are also challenging. The NASDAQ Composite beats later and expansion stage funds and all the public indexes beat early and multi-stage funds.

The performance of early stage funds is particularly disappointing. You would expect early stage funds to underperform in the early years. But ten years out, you would expect to see early stage outperform multi and late stage. More risk should produce more return.

This is Cambridge Associates data so it is based on many of the leading venture capital firms and it spans tech, biotech, cleantech and other areas. I believe this is a good representation of the overall performance of the VC business in the US.

Early stage investing is hard. You lose more than you win. And when you win, you need to win big. Later stage investing is a bit easier. You can pick winners in that business more easily. But so can everyone else. Each deal is an auction and the winner pays the highest price.

So the next time you are bidding one VC against another, maybe you can feel just a bit of empathy for us. We are in a tough business, trying to make a buck to live to fight another day. Just like everyone else.

Simplicity, The Emerging UI, and Machine Learning

Long title. Short post.

Daring Fireball says:

The utter simplicity of the iOS home screen is Apple’s innovation. It’s the simplest, most obvious “system” ever designed. It is a false and foolish but widespread misconception that “innovation” goes only in the direction of additional complexity.

"Designed" being the important word in that quote. Because we aren't done designing user interfaces. I think we are just getting started.

This piece in Wired got my head nodding because I am experiencing it every day on my Android phone. I find myself typing less and less on Android because the voice recognition is so damn good. And the type ahead prompts are like reading my mind. Instead of typing, I find myself selecting the next word more often than not.

Machine learning is the key innovation here. And in that area Google is so far ahead of every big company (and most small companies) that it is hard to imagine how they are not going to out innovate on the emerging user interfaces of our mobile future (glasses, watches, etc, etc).

The US Needs A New Spectrum Policy

I have written before about open spectrum and the need for a new spectrum policy in the US. Spectrum policy is back in the news because the federal government is soon going to make a bunch of decisions about spectrum that is coming back from the broadcast TV operators.

Our policy for the past thirty years has been to sell the spectrum to the highest bidder and let the goverment pocket the money. This is short term thinking of the worst kind. The incumbent duopolist carriers are always the ones who can afford to pay the most money for the spectrum and they have no incentive to innovate on what they do with the spectrum. So it goes mostly underutilized while the demand for wireless broadband increases exponentially.

All you have to do is look at the massive innovation and performance curves in the rare unlicensed bands (wifi and bluetooth) to see that an open spectrum approach with captialist style competition will create the fastest performance improvements over time.

The President appointed an advisory committee to study our spectrum policy and make some recommendations. That committee reported last year that making more spectrum unlicensed would be the best policy.

The report's authors cited a European study:

freeing 400 megahertz of radio spectrum to be shared using new technologies would be equivalent to an economic financial stimulus of 800 billion euros

This points out the most pernicious aspect of our current spectrum policy. And that is that the spectrum being auctioned off is being priced based on its current value not its potential value that can only be unlocked by the kind of permissionless innovation we see in the unlicensed spectrum. So we not only are we giving the incumbent duopolist carriers more control over our spectrum but we are also selling it at a fraction of what it could be and should be worth.

We need a new spectrum policy in this country and we need it now.