Posts from June 2015

Last month the Gotham Gal gave a keynote at the Columbia University’s #StartupColumbia Festival. Here it is.

It’s also our 28th wedding anniversary today. We are celebrating it in Istanbul. Off to the Grand Bazaar to work on our negotiating skills.

Our portfolio company Coinbase launched a new feature this week, that when combined with their local currency wallets, basically creates a global Venmo or Mpesa.

It is called Instant Exchange and here is how it works:

Coinbase offers  US Dollar, Euro, or Pound accounts. You can keep your funds in your local currency on Coinbase. They have had this feature for some time.

So let’s say that I owe a friend in Berlin money for dinner last night.

I could go to my US Dollar Coinbase account, do an Instant Exchange Send which takes dollars out of my account and sends bitcoins to my friend, he does an Instant Exchange Receive in his Coinbase account which instantly converts them to euros and then keeps those funds in his Coinbase Euro account or transfers them out to his bank account. Coinbase will apply its standard exchange fees to the Instant Exchange transactions.

I believe this kind of thing will be incredibly useful, especially in the Coinbase mobile app. Sending money to and receiving money from friends around the world using Bitcoin as the “rails” for money transfer no longer needs to expose either side to exchange rate risk.

As Coinbase expands its business around the world, and offers Instant Exchange and local currency accounts in every part of the world, it can build a global Venmo or Mpesa using Bitcoin as the underlying money transfer protocol.

I was at dinner last night with some entrepreneurs and VCs in Berlin and we got talking about my ritual of blogging every day. I told them that many days I stare at the blank screen and think “ugh, what am I going to write about today.”

They asked if there was any correlation to knowing what I am going to write about and the quality of the post. I told them that I don’t think so. The best posts come out in real time and often they start with me staring at the blank screen. Same with the worst posts.

Posting every day isn’t easy for a host of reasons but for me the hardest is that much of what I work on every day is off limits. I wake up thinking about a drama unfolding in one of our portfolio companies and I can’t blog about that. I wake up thinking about a new product one of our portfolio companies is going to launch and I can’t blog about that. I wake up thinking about a neat company we just met and I mostly can’t blog about that.

So on a typical morning, I run through four or five ideas, tossing each out for a variety of reasons, before settling on something, and then I start writing and I go from there. I enjoy the real time nature of this approach to writing. I often don’t know what the gist of the post is going to be until I write that last line and hit publish.

Sometimes this process produces great insights for me and possibly others. Sometimes it produces garbage. But I’ve come to realize that the daily post, and its quality or lack thereof, is not really the thing. It is the ritual, the practice, the frequency, the habit, and the discipline that matters most to me. And, I would suspect, the same is true of the readers and commenters who frequent this blog.

A few years ago, my friend Jonathan Klein asked me to come speak to a strategy offsite for his company Getty Images. A few days later, I got a thank you note and he asked me to pick any image from their website for a thank you gift.

I picked this one and he was shocked. He asked me, “of all the famous and important images on our website, why would you pick that one?” I told him this story.

On March 23, 2008, our beloved Georgetown was playing in the NCAA regional finals against Davidson. My son Josh and I were certain this was going to be Georgetown’s year. We had big Roy Hibbert in the paint and a bunch of scoring guards and a tenacious defense. We sat down for the big game expecting a win and a trip to the final four.

Instead we got our first glimpse of Steph Curry. He pretty much singlehandedly beat Georgetown that game and by the second half Josh and I were rooting for him. He was that good and that fun to watch. We knew then that he was going to be something special.

Then in 2009, we watched with horror as the Warriors picked Steph with the 7th pick when we were sure our Knicks were going to get him with the 8th pick. MSG would be a different place with Steph on the floor every night in a Knicks uniform.

I missed last night’s game. We are in Berlin and I had to be up early for a board meeting. So when I got up and checked my phone and saw that Steph and his Warriors teammates had won game six and the NBA title, I was pleased.

LeBron may be the best player in the game right now, and he showed why in this series, but Steph and KD are my favorites. They play the game with an elegance and beauty that I appreciate.

I am really happy that Steph got his ring last night. Josh and I saw it coming 7 years ago when we first saw him in action.

La Ruche qui dit Oui! (the hive that says yes) is a marketplace that connects farmers to people who want farm fresh food in their kitchens and on their tables. We got to know the company last winter when my friends Simon and Toby from Mosaic introduced me to Marc-David Choukroun, one of the two founders of La Ruche. The Gotham Gal and I were in Paris and we met up with Marc-David at a Ruche on a saturday morning. We sipped coffee and talked to the farmers and customers who were stopping by to pick up their weekly supply of meat, cheese, milk, eggs, vegetables, fruit, and bread. We were smitten.

For years, USV has been on the hunt for a way to invest in the “farm to table” market sector. As you all know very well, we believe in the power of networks to solve the challenging problems of our time. And making high quality farm fresh quality food available at a reasonable price to everyone is certainly one of those challenging problems. The most affordable food is also the most mass produced and, generally, the most unhealthy food. How can we get back to a time when the food we eat is produced nearby, is high quality, and is healthy?

One way is to use the power of the network to connect farmers and consumers. And many entrepreneurs have been working on this problem over the past twenty years. We have met with most of them. Unfortunately, not many of them, until recently, met our test of a lightweight, peer to peer, capital efficient, people powered network. We call these “thin networks” and we are drawn to them as investors and as consumers.

La Ruche has been operating in France and Belgium for the past four years. Their marketplace connects farmers, consumers, and, most importantly, hosts together to form communities (Ruches or Assemblies) that come together once a week to exchange products, feedback, and friendships. These are communities in the truest sense of the word. My colleague Nick went to a Ruche in Paris last month and there was live music playing and people were hanging out enjoying the lovely spring day. A community is the thing that La Ruche’s marketplace software helps people create.

The business model is simple. Consumers order the food they want to pick up in advance and pay for it. The farmer comes to the community at the designated time, sets up next to the other farmers, and delivers his or her products in person. The farmer keeps most of the money, but the host and La Ruche split a small take rate for facilitating the transaction. It is a win/win/win. Farmers make more money selling directly, consumers get high quality products at reasonable prices, and the hosts make money for their effort to create the community, recruit the consumers, and curate the farmers. For many hosts, the income they get from creating and running these communities helps pay the bills, in the same way that selling on Etsy can help a family make a little extra money each month to make ends meet.

La Ruche has expanded to the UK, Germany, Spain, and Italy recently. The communities are known as La Ruche qui dit Oui! in France and Belgium; The Food Assembly in the UK and Germany, ¡La Colmena que dice Si! in Spain, L’alveare che dice Si! in Italy and Boeren & Buren in flemish Belgium. With its recent expansion in Europe, the network now has 100,000 active customers, 4,500 local producers, 700 communities. The company has 70 employees operating in six countries.

Over the past six months, USV has worked with Marc-David and his partner Guilhem Cheron to put together the right investor group to help La Ruche with their european expansion. La Ruche is a socially conscious mission driven organization that values farmers and communities and the needs of both as much as (or more than) the pure profit motive. In the US, they would be a B Corporation. And so they needed an investor group that was aligned on that. I am pleased and proud to say that they have succeeded in finding that investor group and USV is part of it. Our partners in this adventure are Frederic Court of Felix Capital, existing investor Rodolphe Menegaux and Xange, Eric Archambeau and Aymeric Jung of the social venture capital fund Quadia, and a few angel investors who are aligned with the company and its mission.

If you find yourself in France, Belgium, Germany, Spain, Italy, or the UK in the coming months, go to La Ruche and find a Ruche or Assembly and stop by and check it out. It’s something to see. Here’s a map that will help you find one near you.

The biggest new trend I am seeing in bitcoin/blockchain is the emergence of a number of companies building systems on the blockchain (including the NASDAQ) to handle the backoffice issues that banks and brokerage firms have to manage. The blockchain is an ideal platform to build these sorts of applications (clearing, settlement, etc) on.

One concern I hear, though, is that banks like to know who is managing their infrastructure and they are uncomfortable with miners they don’t know, located in parts of the world that make them nervous, providing the transaction processing infrastructure for these applications being built on the blockchain.

To me, that is the perfect reason for banks and brokerage firms to take a bit of their data processing infrastructure and point it to the blockchain and start mining it. They could even create a mining pool among the large money center banks. And it is relatively simple for a blockchain application to route its transactions to certain miners to process.

If you think of the blockchain as an open source, peer to peer, massively distributed database, then it makes sense for the transaction processing infrastructure for it to evolve from individuals to large global corporations. Some of these miners will be dedicated for profit miners and some of them will be corporations who are mining to insure the integrity of the network and the systems they rely on that are running on it. Banks and brokerage firms are the obvious first movers in the second category.

I wonder if the CIOs of the large money center banks are already doing this. If I was in their jobs, I would be all over this.

I’ve been assisting with a project that is attempting to document the history of tech in NYC since Samuel Morse helped to bring the telegraph to market in the 1830s. I can’t help much with what went down in the 19th and early 20th century. But I can help with what happened at the very end of the 20th century. And in the course of doing that, I came across this video of Pseudo Entertainment’s offerings in the late 90s.

What is interesting is the similarity in many respects to the services that our portfolio company YouNow and Meerkat and Periscope have in the market today. The broadcast and consumption devices have changed (from PC to mobile) but the user experience is remarkably pretty much the same.

There’s something important in that realization.

Along the same lines, this conversation between Mark Suster and Ryan Hoover, starting at 8mins, is quite relevant. I love how they take it back to the early days of Howard Stern.

My colleague Nick Grossman went to the OuiShare Fest this year and delivered a talk he called “Venture Capital vs Community Capital”

Here it is:

Yesterday our portfolio company OB1 announced a seed round led by USV, Andreessen Horowitz and William Mougayar.

From the OB1 blog post:

OpenBazaar will always be open source and MIT licensed. As a global software community, we’ve intentionally created OpenBazaar so that there are no fees required to use the network, and there is no central authority controlling trade, taking a cut, or monitoring data.

So OpenBazaar is a decentralized open source marketplace protocol that allows trade to happen between parties without a central marketplace operator and without a take rate.

There is a real question about how one can make money doing something like this. And there is a real question about how you avoid bad people doing bad things in a marketplace like this.

My partner Brad, who led this investment for USV, addressed both in this blog post on usv.com yesterday. I can’t recall an investment we wrestled with more in recent years. We love the team, we love marketplaces, we believe in emergent decentralized innovation, and we are big fans of bitcoin and the blockchain. So in the end we went with all of that and are accepting the obvious risks of supporting something like this. We are very excited to see how this all plays out.