Posts from 2017

Playing Your Role

Investing in many different companies, with different founders, different cultures, and different missions requires the ability to adapt to each and every one. I like to think about it as playing a role in a play.

Even though I am the same person, with the same fundamental beliefs, I end up playing very different roles in the companies I invest in and work with. The Fred Wilson that works with Coinbase is different than the Fred Wilson that works with Kickstarter and the Fred Wilson that works with Etsy and the Fred Wilson that works with SoundCloud and the Fred Wilson that worked with Twitter.

It starts with the founders and the mission. They set the course for the company. As an investor, you show up and something is already underway. You have to take the time to understand where the company is headed, why it was formed in the first place, where it is going and why. You have to figure out how to insert yourself into that journey in a way that is constructive and value adding. And you have to do that work before you invest because if you can’t figure out how to play a role that is constructive and value adding, you should not make that investment and join that Board.

Some founders start companies to make money first and foremost. It is important to understand that. They will be “coin operated” and transactional.

Some founders start companies to solve a very specific problem, often one that they themselves have. They will be very product and market focused.

Some founders start companies to chart a course that is different from others. They will be iconoclasts who like to zig when others zag.

Some founders build companies to sell.

Some founders build companies to go public.

Some founders build companies to outlive them.

What I have learned is that there is no right way to build a business, no right way to exit a business, no right way to operate a business. There are many different ways to do the startup thing. And I have learned that getting everyone on the same page about the specific way you are going to do it is critical. If everyone on the management team, investor group, and Board are bought into the long term vision and wanting to go to the same place, on that specific opportunity, then great things can happen.

If, on the other hand, there is tension between the founders about the direction, or between the Board and founders about the direction, or between the management team and the founders about the direction, or between members of the management team about the direction, then it makes it very hard to move things forward.

I know that people who read AVC, who follow the investments we make at USV, who work in USV-funded portfolio companies often scratch their head trying to figure out why what is right for one company is not right for another.

Why is it that its a great idea for one of our portfolio companies to move to a token based business model and do an ICO when it is not a great idea for another one of our portfolio companies to do that?

Why is it that it is a great idea for one of our portfolio companies to accept an M&A offer before they have reached their potential when it is not a great idea for another one of our portfolio companies to do that?

Why is it that it is a great idea for one of our portfolio companies to go public when it is a bad idea for another one of our portfolio companies to do that?

To understand these conflicting choices that companies we work with make, it is important to understand how these companies were funded, what the vision was, what they founders wanted out of the effort, what the investors signed up for, how they were capitalized, how they were managed, and how all of that changed over the years. And it is hard to understand those things from afar.

To understand it better, you need to think about each company as a different journey, to a different place, and all of us – the employees, the management, the founders, the investors, the board members – as role players in that journey. And when you choose to join a company as an employee or an investor or as the CEO, you really need to take the time to understand that journey before you step into that role. Because you will be playing it, possibly for a long time.

Funding Friday: Save Gawker.com

I backed this project when it launched last week.

Here’s the pitch:
Gawker isn’t gone, it’s up for auction. The person who drove the site into bankruptcy wants to buy it.
We’re a group of former Gawker Media employees across editorial, tech, and business, and we want to put in our own bid to buy it back.
We believe the site can thrive in an entirely membership funded model.
The Gawker Foundation is a non-profit with a dual mission:
1.) Preserve the Gawker.com archives and make them accessible.
2.) Relaunch the site under the stewardship of former editors, new writers, and an entirely membership-funded model.

Here’s the video:

Click here to back this project.

SoundCloud Home

Our portfolio company SoundCloud, which makes one of the most popular apps in the world, is launching a new Home experience in it’s mobile apps today.

SoundCloud is the first place musicians post their music and it is the first place listeners discover new artists.

In the past, listeners had to use a feed experience (like Twitter) to discover new artists and new music. This experience works well for power users who take the time to curate a following list. But it doesn’t work great for most users.

So SoundCloud is launching a new Home experience today which moves the feed to a second tab and replaces with a curated and personalized experience for users.

Here is what the new Home looks like:

 

If you have the mobile app, you should get pushed an update today or tomorrow with the new Home experience

It is also available on the web at https://soundcloud.com/discover.

If you want to stay current on the latest in up and coming new artists, SoundCloud is the place to do that and it just got a lot better at doing that for you.

Return On Hard Decisions

I spent much of yesterday going through board decks and other year-end reports.

It was an incredibly gratifying experience after a hard year.

I spearheaded quite a few restructurings this year. A lot of people lost their jobs as a result of those efforts.

It was a year of hard decisions and hard conversations.

But as I sat in my office and read through the reports and decks, what came across loud and clear was that we had made a bunch of right decisions.

A lot of companies that were wandering in the wilderness are now headed in clear and exciting directions.

I continue to feel badly for the people who lost their jobs or quit their jobs in the wake of these restructurings. I realize that many of them had a hard year too and I am sorry for that.

But I feel great for the companies who have been revitalized and for the people who are working in them with a jump in their step and a feeling of optimism and purpose.

This time last year I had a bad feeling in my gut and was having trouble sleeping. I knew what I had to do and dreaded doing it.

Right now, I have a good feeling in my gut and am sleeping like a baby.

That is a nice return on hard decisions.

Break The Internet Tomorrow

Tomorrow, I am going to take AVC offline to show the FCC what the Internet will look like if they repeal the Net Neutrality rules.

It is part of a collective action called Break The Internet.

If you want to join me in this protest, you can get what you need here.

Hopefully, the Verizon shill who runs the FCC will get the message.

Proceed With Caution

The CEO of Coinbase, a company that I am on the Board of, wrote a note to all of their customers on Friday. That note, which he also posted to his blog,  urged caution in the trading of crypto assets such as Bitcoin and Ethereum.

This is a quote from that note:

Over the course of this year we have invested significant resources to increase trading capacity on our platform and maintain availability of our service. We have increased the size of our support team by 640% and launched phone support in September. We have also invested heavily in our infrastructure and have increased the number of transactions we are processing during peak hours by over 40x.

There may be downtime which can impact your ability to trade

Despite the sizable and ongoing increases in our technical infrastructure and engineering staff, we wanted to remind customers that access to Coinbase services may become degraded or unavailable during times of significant volatility or volume. This could result in the inability to buy or sell for periods of time. Despite ongoing increases in our support capacity, our customer support response times may be delayed, especially for requests that do not involve immediate risks to customer account security. 

The reality is that much of the infrastructure that has been built up over the past seven years to support the trading of crypto assets is struggling to handle the load that the recent excitement over Bitcoin and crypto in general has put on their systems. It reminds me of the days in the mid 90s when all of a sudden everyone wanted to get online and AOL could not handle the massive increase in dial-up customers who wanted to log onto the Internet.

Of course eventually everything got sorted out and we have highly scaled systems that can support the roughly 3 billion people who “go online” every day. But that took some time to happen.

I think we are going through a similar phase of growing pains with crypto/blockchain. And things will be messy for a while. So proceed with caution, don’t get too far out over your skis, don’t invest more than you can afford to lose, and be prudent.

Video Of The Week: Samir Desai at Slush

One of the most impressive startup executions I have witnessed in the past ten years is what the team at Funding Circle has pulled off. They have gone from a team of friends with an idea to the largest non bank lender in the western world.

In this interview at the Slush Conference, CEO Samir Desai explains how they pulled that off.