Posts from September 2013

Lessons Learned

Sometimes I think we all are forced to learn the hard lessons first hand and that there is no other way.

And then I come across a post like this and am reminded that the Internet/Blogging/Generosity of Others can change that dynamic and is changing that dynamic.

Ryan Sarver had one of the most challenging jobs at Twitter during some of the most challenging years for Twitter. He joined the product team in 2009 and found himself managing the API and "platform" aspects of Twitter. Back then the API had been widely adopted but the business model and terms of use were not well defined. Ryan stepped right into that s**t.

And so he's writing a series of blog posts about what he learned in the four years he was in that role. His first post is What Is A Platform?  Next up is Trust and Predictability. That should be a good one.

If there is a platform aspect to the business you are building, I believe these posts are must reads. I learned so much watching Twitter wrestle with and figure out the platform challenges and it informs a lot of the advice I give entrepreneurs on this matter. I can't think of anyone better to lay all of this out in black and white and let us all learn from his experiences. Thanks Ryan.

Leading vs Following

Hunter Walk has a good post up on the coming competition among angels with syndicates to get into deals. Hunter observes:

My guess is there are also some angels who were popular when they represented a $25k check but won’t be as sought after if they try to push $300k into a round.

What Hunter is getting at is the difference between leading and following. A lead investor sets the price and terms of the investment, takes a large part of the round, and usually agrees to represent the entire round on the board. Then everyone else gets to pile in behind them and piggyback on all of that work. And the entrepreneur and lead investor allow the followers to do that because either they are likely to help the company in some way or because the company needs more capital than the lead is prepared to invest at this time.

USV is a lead investor. Benchmark is a lead investor. Gotham Gal is a lead investor. I suspect Hunter's Homebrew is a lead investor.

Angel List Syndicates are turning angels who have traditionally been followers into leads. That's a good thing in many ways. The more folks who can lead a round, the better, at least for the entrepreneurs. But, as Hunter points out, it will mean that less of these angels will get into rounds than before because they will all be showing up with a lot more money than before. 

It also means that they will have to learn to lead and lead well. They will have to step up before anyone else does. They will have to negotiate price and terms. They will have to sit on boards. They will have to help get the next round done. Essentially they will have to work. That's why they are getting carry from the syndicate, after all.

And over time we will get to see who is actually good at this and who is not. And I can tell you this. Not everyone is good at this. In fact, very few are. It's hard to be a great lead investor and a completely different thing than being a well sought after angel investor who can get into someone else's deals. Some will turn out to be great at this. Many won't. And only time will tell who is and who isn't.

Fun Friday: A Debt Ceiling Default?

The Congress and the President have to agree on a deal to lift the debt ceiling by Oct 17th in order to avoid a default on the US’ obligations. The House Republicans seem hell bent to extract some big concessions from the President in order to agree to lift the debt ceiling. And the President is refusing to negotiate over the debt ceiling. Seems like yet another deadline driven drama in Washington.

So let’s have some fun today and guess whether this thing is going to get resolved or not. I am voting that they will figure it out once again and avoid a default.


Larry Lessig, Corruption, Tumblr, and The Supreme Court

Professor Larry Lessig has submitted a brief to the Supreme Court in a case arguing that limiting large political contributions is Constitutional and exactly what the Framers had in mind when they used the word corruption.

As part of the evidence he has submitted in his brief, Larry created a Tumblr with 325 citations from the Framers themselves showing that they had a very broad understanding of the word corruption. This will be the first time that a Tumblr has been submitted as evidence in a Supreme Court case.

Today at noon eastern, Larry and Senator Elizabeth Warren will have a livestreamed discussion about the Supreme Court case. The stream is on YouTube and the live chat will be held at the Constitutional Accountability Center. Please tune into the stream at noon eastern if you are interested in limiting the effect of money (ie corruption) on our elected officials. I certainly am.

The AVC Funnel

I did some digging on Monday as I was thinking about ten years of AVC. Here are some of the more interesting numbers I came across:

- The AVC community has donated $203,939 to DonorsChoose campaigns over the years. 1,322 folks from the AVC community have supported campaigns reaching 53,486 students.

- There were 6,232 posts on AVC in the first ten years. You will notice that is well north of 1 post per day. In the early days, AVC was like a tumblog, with short posts from me multiple times a day. That changed when Tumblr came along and I moved those kinds of posts to fredwilson.vc

- There have been 154,490 comments on AVC. 22,490 of them were on the TypePad comment system in the first four years (~5,500 per year) and 132,000 of them have been on disqus in the following six years (~22,000 per year).

- 8,916 people have left a comment on AVC via Disqus

- AVC has been visited 22,392,487 times in its first ten years according to TypePad.

- I put Google Analytics on AVC on or about Nov 10, 2005. In almost eight years that GA has been on AVC, there have been 16,965,651 visits by 9,481,697 unique visitors.

So here is the AVC funnel:

10mm people have stopped by, 10,000 leave a comment, and 1,300 contribute to DonorsChoose

That works for me. Thanks for stopping by everyone.

The Bronx Academy Of Software Engineering (BASE)

Last Thursday morning, I took the Lexington line (4 train) up to Fordham Road in the Bronx, then transferred to the Bx12 bus for a few stops and got off at the corner of Fordham Road and Crotona Ave. I walked a half a block south on Crotona Road and arrived at Grace Dodge Vocational High School, the home of the Bronx Academy Of Software Engineering. [foursquare, google maps]

(I originally wrote Grace Hopper Vocational High School – a freudian slip)

Grace hopper

The Brox Academy Of Software Engineering (BASE) is the sister school of The Academy Of Software Engineering (AFSE) which opened in Union Square last fall. This is the second of hopefully a handful of small NYC high schools (~500 students) that focus on computer science.

I was part a small group of tech community folks who spoke with the 9th graders in the school auditorium. We talked a bit about why we got into building software when we were young and how it has helped us in our careers and lives. We took questions from the students and then broke up into smaller groups for more discussion.

The students who go to BASE are almost entirely from the Bronx. They are bright and curious. One wanted to start a videogames company. Another wanted to study computer security. Another wanted my job. I told him that it will be available by the time he's ready for it. The one thing that these students aren't is white, wealthy, and entitled. They understand that they need to learn the important skills of the future and they selected BASE as their high school for that reason.

Like AFSE, BASE is a four year high school that teaches a college prep curriculum but adds four years of computer science education alongside. These students will be well prepared to go to two year and four year colleges after BASE, but it is also possible that some of these students will go right into the workforce after high school. The idea behind BASE is to give them the skills so that they can get a good job when its time for them to stop studying and start working.

If you need a dose of hopefulness and optimism for our future, go visit AFSE or BASE. I have visited both schools in the past two weeks and nothing puts a smile on my face more than young curious kids who are excited to learn something new and confident in their abilities to do so. When the students exhibiting that behavior are from communities in NYC that generally lack these kinds of opportunities, it is even more exciting to me.

If you would like to help BASE, the best way to do that is to sign up for the iMentor program and mentor a BASE student in the iMentor program. The committment is one weeknight a month for a couple hours (6-8pm) plus occasional emails with the student. I have attended these iMentor sessions and they are action packed well organized affairs that facilitate the mentoring process. If you live in Westchester, Connecticut, The Bronx, or the eastide of Manhattan, you are well situated to mentor at BASE. You do not have to be a software engineer to mentor at BASE. You just need to be a caring adult with something to offer a BASE student.

If you would like to mentor at BASE, go here and complete the application and mention BASE in your application. If you want to mentor at another school, such as AFSE, then mention that one in your application.

Obviously engaging with a school like BASE is extremely helpful to the school and the students, but I can tell you that it is also very helpful for you as well. I know how much joy I get from these schools and these students and I bet you will too.

Turning Ten

Ten years ago today I set up a TypePad account and started writing online. That first post was not much, other than the start of a habit that has transformed my life and my career.

The early years were all over the place. I would write about the music I was listening to, the places I was visiting, my family, and increasingly my work. Some of you were there at the start and when I see you show up in the comments now it brings a smile to my face. You know who you are and I am most appreciative of your commitment. Regular readers are the lifeblood of a blog and a blogger.

Early on I learned about trolls and haters. They stung and it hurt. But fortunately I had my brother Ted, who went by the name Jackson, and our friend Pat, who went by the name of TonyAlva. They defended me so I didn't have to defend myself. And Ted became the first bouncer at AVC, kicking off the bar motif that has colored this community ever since.

By the third year of AVC, I had decided to focus my posts around the three topics of technology, startups, and venture capital investing. I still occasionally post about music and politics but most everything else gone by the wayside.

As the years went on the audience grew which has been incredibly satisfying. I became obsessed with my stats. I had every free visitor tracking tag I knew of on AVC. And then I got into widgets and put all sorts of crap on the right rail. The page got so heavy that it would take a minute or more to fully load. Matt at Feedburner helped me build fastavc.com which still exists.

But that period of experimentation, blog as petri dish, taught me that I should try everything that was new on the web and AVC became the place we tried that stuff out. I was learning so much at that time. Playing with new stuff on AVC became my primary approach to investing and led to investments like FeedBurner, Twitter, Tumblr, Disqus, Zemanta, Outside.in and SoundCloud.

The addition of Disqus to AVC during Y Combinator Demo Day in August 2007 took us to a new phase. After seeing Daniel demo Disqus on AVC on stage I asked him for the one feature I had been asking TypePad for – the ability to reply directly to a comment notification email and have that reply posted in real time in the comment thread. Daniel and his cofounder Jason said they could do that and before the weekend was over it was working at AVC. I never went back to TypePad comments and we became a full fledged community. The average post at AVC now gets 150-200 comments and we push 1,000 every once in a while. You are now as much a part of AVC as I am. If you aren't wading into the contents here from time to time you are missing out on a lot of great stuff.

I met Nathan through AVC and he became our designer. We did a redesign four years ago (I think) that greatly simplified the look and feel, got rid of the widgets, and sped up the page loads. It is the same design we use today and I still think it looks great. Thanks Nathan.

Over the past few years we've added some regular themed posts, MBA Mondays, Video of the Week, and Feature/Fun Fridays. I think all of these ideas came from you originally. These regular themed posts give a pace and routine to the week which helps me a lot. I suspect it works for you too.

Donna noticed that I've gotten a bit sentimental in my recent posts. It wasn't conscious to me until she mentioned it but she is right. AVC is ten years old and Brad and I formed USV and went out onto the road for a year raising our first fund around the same time in 2003. Bill Gates says people overestimate what can be done in a year but underestimate what can be done in a decade. And we have done a lot in the ten years of AVC.

The past ten years have been the most productive of my career (so far). Brad and I have built USV into one of the top VC firms in the world. We have been joined by three incredible partners; Albert, John, and Andy. We have been fortunate to be able to work with some of the most talented entrepreneurs in tech and we have been involved at the formative stages of some of the most iconic companies of today's Internet. I don't think any of that would have happened without AVC.

I will close this already longer than usual post with a shoutout to the Gotham Gal, who opened her TypePad account about ten days after I did. Blogging has been as transformative for her as it has been for me. As I said in that opening post, I love my work but I love my family more than my work. It would take a superhero to put up with me and put me in my place. She does both and is the reason that all of this has been possible.

So happy tenth anniversary AVC. Its been a great run.

How Would An Entrepreneur Attack Your Business?

This is a question I like to ask our more developed portfolio companies who have built large markets/networks/user bases. I ask them "if you were a startup and you wanted to compete with our company, how would you go about it?"

I think it is very important to understand your weakest flanks/vulnerabilities and then shore them up. If someone will compete with you by coming at the market "mobile only" while you struggle with maintaining a large web and mobile presence, then you should know that. And it probably means you need to rethink your mobile strategy so you can close off that open flank. If someone will compete with you by offering a free version of what you charge $10,000 a month for, then maybe you need to think about a freemium offering to close off that open flank.

This question is a particularly good one to ask at a senior management offsite or board offsite/strategy session. It often leads to changes in priorities and/or strategy. I have engaged in many excellent strategic discussions that came out of asking this very simple question.

I thought of this today when reading Benedict Evans' post on how one might do this to LinkedIn. I would suggest the folks at LinkedIn read it as well as anyone else who likes to think this way.

Video of the Week: LeWeb 2008

I am in Paris this weekend and I always love being here. I am reminded of attending LeWeb back in 2008 and having dinner with Jeff Clavier and Reid Hoffman and our wives.

And I remember meeting with Alex and Eric from SoundCloud at LeWeb that year. We didn't invest then, nor the first time Alex pitched me, but a little more than a year later Alex sold me on the third pitch and we are very happy that he did. I mention an entrepreneur pitching me about 22 minutes into this video. That was Alex (and Eric).

I've been going back and forth with Loic about coming back to Le Web this year. I would very much like to do that, schedule permitting, and hope that it happens.

So in the spirit of all that, here's a video of a panel I sat on at LeWeb 2008, moderated by AVC community member, Ouriel Ohayon.