Posts from February 2018

From Simulscribe, To Edison Jr, To Doorbot, To Ring, To Amazon

Yesterday it was announced that Ring had sold to Amazon.

The Gotham Gal was an early seed investor in Ring’s predecessor Doorbot, which came out of an incubator called Edison Jr that she was also an investor in. So it was a nice win for her (and me since we are partners in everything).

But the story I want to tell is about Simulscribe.

Ring’s founder and CEO, Jamie Siminoff, started a company called Simulscribe (now called PhoneTag) back in the early 2000s. I met him around the time USV got started in 2003/2004 and the value proposition for Simulscribe was so compelling to me:

stop checking voice mails, get your voice mails translated and sent to you in email

I loved it and the Gotham Gal and I became early users. We still use the PhoneTag service!!

Jamie tried to get me and USV to invest in Simulscribe a bunch of times, but that never happened. I was worried about the lack of defensibility and other things.

Jamie eventually sold Simulscribe/PhoneTag and started an incubator called Edison Jr.

That’s when the Gotham Gal became a seed investor in Edison Jr in 2012.

Edison Jr launched several projects and one of them really took off. That was Doorbot.

So Jamie shut down Edison Jr and focused all of his energy on Doorbot, which eventually changed its name to Ring.

And now, with the sale of Ring to Amazon, Jamie has finally had his big win.

We kind of knew it was going to happen when we first met him fifteen years ago.

But it took quite a few twists and turns. As these things do.

Jamie has two things that make him an amazing entrepreneur.

He makes great products that solve real problems. Both Simulscribe and Ring are great products.

He has incredible infectious energy and optimism and salesmanship.

As inevitable as this outcome seemed fifteen years ago, it still took fifteen years, endless struggles, and a lot more.

That is the way of startups and always has been.

#entrepreneurship

The "VC Funnel"

I saw this image in my twitter feed this morning:

Which led me to this CB Insights post from last October.

You can scroll down to the bottom of that CB Insights post to see how they came up with this data.

There are two things about this chart that I would like to talk about:

1/ Getting VC/angel funding is hard, but even if you do secure it once (1st round), the probability that you will secure it again is only 50-70%, and the probability that you will secure it five more times is between 0-5%. That is what CB Insights calls the “VC Funnel.” Before you jump to conclusions, there are many reasons why a company would not raise a second round, a third round, etc. It could close down, which is probably the main reason companies don’t raise a 2nd round, but it could also sell or get profitable or ICO or go public, which is probably the main reason a company raises a 5th round but not a 6th round.

2/ The NY Metro area is the easiest place to raise capital that CB Insights surveyed. That may surprise people, but it does not surprise me. NYC is home to wall street and a lot of money. If raising money is what you want to do, there is no better place to do it apparently. I am not a fan of investing in companies that need a lot of money to be honest. But if that describes your company, you might want to do it in NYC.

#VC & Technology

Safe Harbors

I am not opposed to regulation. I think that industry needs to play by a set of rules that ensures things like public safety, fair dealing, etc.

But I do think that regulating an industry or a company too early in its life can be very damaging to innovation and the development of new technologies and new industries.

So I am a big fan of Safe Harbors.

A safe harbor is a stipulation in a given rule that certain entities or certain situations will not be deemed in violation of it.

In general, I like the idea that small companies or nascent industries are given safe harbors until they are at a size where compliance becomes affordable and/or possible.

My partner Albert wrote a post last week proposing some safe harbors for the crypto token sector.

Crypto tokens seem like an ideal technology/sector for safe harbors. Clearly this sector needs some rules and regulations. But subjecting projects and technologies to these rules too early in their life or subjecting projects and technologies to inappropriate rules and regulations would be devastating.

#blockchain#crypto

Driving Yourself vs Being Driven

Living in LA has always meant owning a car. I remember when the Gotham Gal was a senior in college and got a semester long internship in LA. Her first comment to me back then was “now I have to get a car.” She got one. It was a little Datsun two door. I can’t remember the make and model but she drove it back and forth to work and then sold it before coming back to the east coast to finish college.

I’m writing this in an Uber going from the west side of LA to downtown LA to see the Jasper Johns show at The Broad.

Last night we went out all over LA and took Ubers everywhere. The cars stayed home and we went out.

Ride-sharing has changed LA a lot. We have friends our age who live here, in Hollywood, and don’t own a car.

We went to dinner last night with friends who have a son who is a senior in high school and doesn’t drive and has no real interest in learning how. This young man grew up in LA!

We did the math and his parents save money because the cost of ride-sharing when he can’t take the bus to school is a lot less than the cost to lease and insure a car for him.

Right now, in LA, this is a fringe lifestyle. Most everyone out here owns a car and drives themselves.

But I can see and feel that things are changing. To start we take ride-sharing when we don’t want to drive or it’s more convenient to not drive. But over time, we are choosing to drive ourselves less and have someone drive us more.

The auto industry is right to be concerned about this. Change is afoot and it is going to impact our car purchasing behavior at some point.

#Blogging On The Road

Funding Friday: The L-Ternative Bridge

Every day 300,000 people take the L train to and from work. I am not sure if that is 300,000 people or 150,000 people going in and out, but either way, it’s a lot of people.

And the MTA is going to shut down the L train for 15 months, starting in April 2019.

So this is a big deal for NYC, and a big deal for NYC tech companies. In an informal and unscientific poll I took this week of NYC tech company CEOs, about 20-25% of the employees of NYC tech companies in Manhattan take the L train to work.

So how are these people going to commute for those 15 months (which is almost certainly going to take longer than 15 months)?

The best answer I have heard from the NYC government is “more buses going over the Williamsburg bridge.” Which is an option but not a fantastic option. The Williamsburg bridge is already a crowded transportation mode during the morning and evening rush hours and more buses means something is going to have to give.

So this week, I saw this cool project pop up on Kickstarter.

Take just one minute and watch this video:

Pretty cool, right?

My dad was an Army Corp of Engineers officer his entire career and retired a Brigadier General. He knows a lot about pontoon bridges. So I asked him if this idea is viable. He said:

Fred,
Having built several pontoon bridges, including some designed for 60-ton tanks, I know the idea is feasible.
(One of my bridges was across the Rhine River.  That was done for the first time by Julius Caesar.)
Drawbacks:  they are expensive, have low speed limits, and require constant maintenance.
Still, if the permanent solution in that location can’t handle traffic for some time, this could be a temporary replacement.
Interesting idea. Thanks for sharing it with me.
Love, Dad
That’s all I need to know that this will work. My dad knows his stuff when it comes to pontoon bridges.
So if you want to see this idea get some traction, go to Kickstarter and support this project like I did this week.
#hacking government#NYC

The Promise Of Parkland

This post is not about the tragedy that happened at Parkland or the gun safety debate that has been re-energized by it. Those are both worthy topics but I’m not opining on them today.

I do hope that this tragedy, among so many like it, will result in meaningful changes in our society in terms of how we protect our children in school and also how we allow responsible and healthy people to own and secure their weapons.

What I am going to opine on is how Parkland is re-shaping the debate about how social media and technology more broadly is impacting our culture, our collective conversations, and our politics.

In the beginning, the tech sector believed, and told everyone, that connecting the world via technology was going to be great, a technological utopia as it were.

That, of course, turned out not to be true and what we have are both vast improvements (truly global real time communications that everyone can tap into) and equally vast problems (you can’t believe and can’t trust anything you read on the Internet).

It is the classic good news/bad news situation.

In the past few years, but most notably last year, the discussion of this topic has focused on the bad side of these changes. Fake news, hacked systems, bots, ad systems gone haywire, and so on and so forth. We collectively lost trust in social media and technology and became angry about it.

Then comes Parkland. These amazing brave and vocal young adults, victims, with the same tools in their hands.

And we see, again, the good side.

The promise of Parkland, for me, is that this technology we have built and use every day can be an impactful tool for real people with real things to say to get their words out, and for the rest of us to see them, amplify them, discuss them, debate them, and understand them.

I feel the pendulum on this issue swinging back to center, where it belongs, and I am very encouraged by that.

#Current Affairs#policy#Politics#Web/Tech

The Square and the Tower: Networks and Power, from the Freemasons to Facebook

I listened to Sam Harris talk to Niall Ferguson yesterday on Sam’s Waking Up podcast.

Niall is a historian, an author, a journalist, and an academic.

He has just published a new book on a topic that is near and dear to me, USV, and many of you; networks and hierarchies, and how these two forms of information flow and management have impacted society over the last five hundred years (or so).

The book is called The Square and the Tower: Networks and Power, from the Freemasons to Facebook.

I bought it for our Kindles today and will get into it asap. But just hearing Niall talk about the ideas in the book tells me that this is going to be an important read for many of us.

We may think that the power of information networks to shape society is a new thing (Facebook, fake news, Trump, etc, etc) but Niall argues that there is nothing new here and these sorts of things have been going on in analog networks for hundreds of years. As Shakespeare said, “what’s past is prologue” and we should learn as much from the past as we can. That’s what historians are for, after all.

I plan on doing that and you may want to join me.

#Current Affairs#Politics#Web/Tech

Prioritizing Content Consumption

A reader recently wrote me this email:

I’d be very interested in a blog piece from you on how you prioritise what content to read/watch/listen to. There’s so much out there, and it doesn’t stop. You seem to balance a very busy job with significant content consumption and some healthy time off.

Curious as to how you do it without it becoming a major distraction.

The key word for me in that email is “prioritise” because it suggests a system in which I conciously decide what content is most important to consume.

The truth is pretty much the opposite. I don’t have much process, system, and organization in my life.

What I do have is routine and I use that routine to set and keep priorities.

This blog is a big piece of that routine. I post an audio or video piece every Saturday so I want to check out audio and video that I think the AVC readership would be interested during the week so I have something to post.

Similarly, I need things to write about and reading what other people think and write about is quite helpful to me in figuring out what to write about.

I have several dozen friends who are always sending me things to read or watch or listen to. Many/most of these people do not work in tech but are hyper-curious and have great breadth of interest. They are my most valuable source of content and inspiration and I have cultivated these relationships over my entire adult life. This was not calculated or planned. It is just happened.

Most importantly, I do not allow technology to drive what content I consume. I use Twitter but drop in and out of it occasionally to get a taste. I don’t drink from it’s fire hose. I let Google Now send me alerts but I understand they are filter bubbling me and mainly use it to make sure I see certain things. I have a Facebook account but have not actively used it since they went hostile on Twitter almost ten years ago.

Maybe some day technology will be able to do for me what humans can do, but today it is the exact opposite. Technology shows me things I already know about. Humans show me things I don’t know about.

I have a very strong bias to read/watch/listen to things that I know nothing about. I can go deep if I need to but I would prefer to be a mile wide and an inch deep in terms of what I know about.

I wish I read more books. I can’t read business books. I find them dull and boring. I love novels and read them when I can but I maybe read five to ten novels a year. Books are the biggest casualty of the current demands on my time.

We also don’t watch a lot of TV in our home. I like to watch live sports and often wind down with sports before going to bed. But we don’t binge on Netflix or anything like that. This provides us a lot of time for other things.

So that’s how I approach content consumption. It works for me. I don’t know if it will work for you. This is not a recommendation as much as an answer to an interesting question from a regular reader.

#life lessons

Why Decentralization Matters

As you can see, I am not writing this presidents day weekend. I explained why on friday.

Instead I’ve been posting things that I found worth sharing with all of you.

Today, I want to share a blog post written by my friend Chris Dixon about decentralization.

This is a portion of the post that I like very much.

Decentralization is a commonly misunderstood concept. For example, it is sometimes said that the reason cryptonetwork advocates favor decentralization is to resist government censorship, or because of libertarian political views. These are not the main reasons decentralization is important.

Let’s look at the problems with centralized platforms. Centralized platforms follow a predictable life cycle. When they start out, they do everything they can to recruit users and 3rd-party complements like developers, businesses, and media organizations. They do this to make their services more valuable, as platforms (by definition) are systems with multi-sided network effects. As platforms move up the adoption S-curve, their power over users and 3rd parties steadily grows.

 

When they hit the top of the S-curve, their relationships with network participants change from positive-sum to zero-sum. The easiest way to continue growing lies in extracting data from users and competing with complements over audiences and profits. Historical examples of this are Microsoft vs Netscape, Google vs Yelp, Facebook vs Zynga, and Twitter vs its 3rd-party clients. Operating systems like iOS and Android have behaved better, although still take a healthy 30% tax, reject apps for seemingly arbitrary reasons, and subsume the functionality of 3rd-party apps at will.

For 3rd parties, this transition from cooperation to competition feels like a bait-and-switch. Over time, the best entrepreneurs, developers, and investors have become wary of building on top of centralized platforms. We now have decades of evidence that doing so will end in disappointment. In addition, users give up privacy, control of their data, and become vulnerable to security breaches. These problems with centralized platforms will likely become even more pronounced in the future.

Click here to read the entire thing.

#blockchain#crypto