The Prize

A few weeks ago, the Gotham Gal said to me “considering how much time and money you are investing in K-12 education efforts, you should read this book.” The book she recommended is called The Prize by Dale Russakoff and it tells the story of the Newark, NJ public school system reform effort over the past five years.

I’m almost done with the book and I’m very glad she suggested it to me. I’ve long been a fan of the education reform movement, in particular the rise of charter schools, but I’ve also been troubled by the knowledge that charters don’t solve all the problems and some students are beyond the reach of even the best teachers.

The Prize tells two stories at the same time. It tells the story of the “top down” Newark reform effort driven by Cory Booker and Chris Christie and funded with Mark Zuckerberg’s incredibly generous $100mm gift. It also tells the story of real teachers and real students and the challenges they face every day in a few of the charter and district schools in Newark. By telling the story this way, Russakoff gets to the fundamental challenges facing the education reform movement and the entire K-12 system, at least the K-12 system in inner city schools.

In Newark, and in the New York City school system where I’ve spent time the past five years, you have both charters and “district” schools. The charters benefit from flexibility due to having non-union teachers, they benefit from not having the overhead burden of the “district bureaucracy”, they benefit from often having wealthy donors (like us) who cover startup costs and other needs, and they benefit from the self selection that comes from parents who care enough to get their kids into a charter school. The results that the best charter operators have produced with this formula in Newark and New York City is undeniable. They have created some amazing schools that are getting fantastic results. I know many of the leaders of these charter schools and I continue to be impressed by the quality of their work, their schools, and their commitment to the students and we have supported them financially and in other ways.

But not every child gets into a charter and there is a growing number of people, in and out of the education reform movement, who understand that district schools aren’t going away and we need answers for these schools and the children that attend them. And it is also important to understand that, by their nature, charters tend to siphon the best families in a community out of the district school and those that are left in the district schools need more social and remedial support than they are getting and that the district schools have resources to provide.

A few years ago a friend of mine said to me “if you are interested in K-12 inner city education you need to go see this person. The person he sent me to meet with has been providing mental health services to children who are struggling in inner city schools. She explained to me that you can’t teach a student who is in trauma. It doesn’t work. So she has taken on the effort to try to provide mental health resources to the most challenged schools and the most challenged students. That is an example of the “social and remedial support” that district schools need more of.

If there is any lesson that I took away from The Prize it is that we can talk until we are blue in the face about bureaucracies, and unions, and bad teachers, and fraud, and corruption, and the need to reform all of that. And we do. But where the rubber meets the road is the student and its the inner city students who are failing in kindergarten, first grade, and second grade who we need to focus on. Because once they fail at that level, it is so hard to get them back on track and most don’t make it.

I sat next to NYC Schools Chancellor Carmen Farina at Mayor de Blasio’s recent speech on his education efforts. When the Mayor mentioned the big investment they are making in second grade reading performance, Carmen turned to me and said “this is critical. these kids need to read in second grade”. She’s right.

If you are interested in this stuff, as I am, I would strongly recommend reading The Prize. It didn’t tell me anything I didn’t already know. But I helped me think about this stuff and that’s super helpful.

Bring Telstar Back To NYC

Next month the New York Historical Society is launching Silicon City, a historical retrospective about NYC’s contribution to the electronic/digital era. I’m super excited to see the show and have been involved a bit on the research effort that the society has been doing on it.

As part of this exhibition, they want to bring Telstar, the first commercial satellite, back to NYC where it was exhibited at the 1964 World’s Fair.

So as part of the Silicon City effort, the New York Historical Society has launched a Kickstarter campaign to bring Telstar back to NYC. The cost to do it is roughly $10,000 and that’s what they are raising in this project. There are all sorts of fun rewards including admission to the exhibition or an invitation to attend the VIP opening party.

Here’s the project video.

I hope all you New Yorkers out there join me in backing this project and attending the show when it launches next month.

Twitter’s Moment

Ben Thompson has penned the bull case for Twitter the product, Twitter the company, and Twitter the stock in a blog post carrying the same title as this post.

Those who have been reading this blog over the past few weeks will know that I share Ben’s views and have articulated similar ideas on this page. It should also be stated that I am long Twitter the stock and subject to whatever emotions, conflicts, and other bad behaviors that generates.

Ben ends with something I have not articulated on this blog before but have felt since the day I sent my first tweet, and that is the notion that there is something special about Twitter:

There’s just something different about Apple, a company that seems so full of contradictions yet one that has continued to lead the industry both financially and in key innovations. I’d argue the same about Twitter: it doesn’t make sense, hasn’t really ever made sense, and perhaps that’s the reason it, and the irreplaceable ideas it contains, are so important.

I realize that I am horribly biased on this topic and that others may not see what I see. But I have always felt that Twitter is a special company, full of conflicts and contradictions, that, maybe because of them, had the potential to deliver something unique, different, and compelling. And I continue to believe that.

Feature Friday: 3D Touch

When we get back from Europe later this month, I’m going to get a new phone. I’ve been on Android since getting back from LA last winter and I think it’s time to try out the latest stuff on iOS, but I’m not 100% there. I do love the tight integration of the google apps into android and miss that on iPhone. So I’m still a bit on the fence.

One thing that might get me there is 3D Touch. I’ve read a number of people saying this additional UI capability is a game changer for them.

So let’s talk about 3D touch today. For those of you who have the new iPhones, how big of a deal is 3D Touch? Game changer or nice feature?


TPP stands for Trans Pacific Partnership, a far reaching free trade deal that US and our Asian trading partners have been working on for years. The TPP was in the news yesterday because Hillary Clinton came out and said that, in its current form, she cannot support TPP. You can read her reasons for taking this stance.

You would think as a free trade loving, free market loving venture capitalist I would be a huge proponent of TPP. But I am not.

I am very concerned about the copyright provisions in TPP which feel very much in the old world model of intellectual property protection and which would make it hard for the US government to evolve copyright laws in an era of digital content, more open innovation, and remix culture.

The EFF has a great discussion of these issues on its website so instead of reciting them here, you can read a detailed discussion of the copyright issues in TPP here.

One of the problems with these big multi-national trade negotiations is that it is super hard to get everyone to agree on everything in them. That is why they are negotiated in secret and the end result is then voted yes or no in each country without any amendments.

I realize that perfect is the enemy of the good and you need to have a comprehensive view of a trade bill like this and not focus on one issue. But copyright law is a big deal for the innovation economy and if I were in Congress, I would be seriously thinking about voting no on TPP.

Twitter Moments

So the thing I blogged about last week launched yesterday. Twitter is calling it Moments.

I think this is a big deal for first time and casual users of Twitter. It’s an easier way to consume the content in Twitter for people who don’t have the time or inclination to customize Twitter to work for them the way many of us have.

Since the AVC community was fairly negative on this in concept, I’m wondering how all of you are thinking about it now that it is out. Let the conversation commence.

Aid Refugees

Kickstarter and the UN Refugee Agency are launching something important this morning. It is called Aid Refugees and its an attempt to leverage the power of the leading crowdfunding community to raise funds to deal with the global refugee crisis.

As many of you know Kickstarter is a USV portfolio company and it has traditionally avoided getting involved in charitable efforts, choosing to stay focused on helping creative projects come to life. But like other big Internet companies, it gets asked from time to time to leverage the scope of its reach and community to tackle big problems. Until now, Kickstarter has chosen to decline those invitations but the scope of the global refugee crisis is so large and the mission is also consistent with Kickstarter’s recently filed public benefit corporation charter in which they committed to fight inequality. So this time they said yes. This doesn’t mean Kickstarter will start allowing charitable projects on its platform. It does mean it will do this sort of thing when the company feels like it can help make a difference.

Here’s how Kickstarter explains this effort on their blog post this morning:

Two weeks ago, the White House reached out to us with an idea: what if you could use Kickstarter to help the millions of refugees seeking safety in the Middle East and Europe?

We immediately told them yes — and at the White House’s invitation, Kickstarter is working with the UN Refugee Agency to raise money and deliver aid to those in need of it. We’ve all seen the images of people fleeing for safety, on foot and in boats, with nowhere to go and precious few resources. It’s not a crisis that can be solved overnight, but the White House, the United Nations, and Kickstarter all believe that a strong outpouring of support can provide crucial assistance for people fleeing their homes and risking their lives to find a safer future.

To learn more about how we can provide that support, just visit this campaign. It’s not a typical Kickstarter project. There’s no all-or-nothing funding goal. The rewards are all about giving, not getting. And we’ll be donating 100% of our usual fee to support these aid efforts. Most days, this site is a home for people working together to create new things, but this campaign is about something else: working together to bring the most basic of necessities to people who need them dearly. Even a little support can give a family dry clothes, fresh water, or a place to sleep — those “small” things that become everything as soon as you’ve lost them. We’d love your help.

Thank you,


If you have been looking for a way to engage in the global refugee crisis, check out Aid Refugees. I plan to “back this project” and I hope you will too.

The NYU Tandon School Of Engineering

I’ve written about NYU and Poly here on AVC a few times, most recently when I gave a commencement speech earlier this year. Poly is one of the great successes in NYC over the past ten years. In 2005, it was a struggling engineering school in downtown Brooklyn and NYU hadn’t had an engineering school since the mid 1970s.

In 2008 NYU and Poly agreed to affiliate and put themselves on a path to eventually merge the schools. In 2012/2013 NYU and Poly officially merged and Poly became the NYU Poly School Of Engineering.

Over those ten years, Poly has risen from a middling engineering school to one of the top 50 engineering schools in the US. Applications have risen, as have test scores, and graduation rates. The faculty has stepped up and has been joined by a bunch of new dynamic educators and researchers. It has been a joy to watch this transformation which happened because a “jewel of a school” joined a juggernaut called NYU which brought it brand, capital, and leadership. I’ve had a front row seat to this transformation because I’ve been a Trustee of Poly and NYU and joined both boards because of the affiliation and planned merger.

But it gets better. Today, NYU and Poly are announcing that the school will now be called The NYU Tandon School Of Engineering because Chandrika and Ranjan Tandon have bestowed a $100mm gift on the school, to be matched by a $50mm capital campaign. These funds will be directed at faculty and academic programs which are the essence of a university.

For me, this feels like a company I seed funded just did a growth round. And that always feels good because it means that the plan worked.

Besides the phenomenal generosity of Chandrika and Ranjan Tandon, I think I would be remiss not to mention some of the other folks who made this happen; Jerry Hultin, who led Poly during the merger, Sreeni who leads the school now, Dave McLaughlin the Provost of NYU who championed the idea of the merger, and John Sexton and Marty Lipton, whose leadership of NYU over the past twenty years has transformed not just NYU, but also Poly and many other things. Of course there were many others who made this happen, but these people deserve mention for the courage of their leadership. Turnarounds don’t happen without courageous leadership.

The biggest winner in all of this is New York City. I got involved with Poly and NYU because I was acutely aware that the shortage of strong engineering schools in NYC was having a negative impact on the local tech sector. Poly’s engineering school has always been quite large, with almost 2,500 graduate students. But it was not thriving and it needed to. Now NYU Tandon, Columbia, and Cornell Technion are a “golden triangle” of high quality engineering schools in NYC. So much has changed on this front in the past ten years. Now we have the fertile ground for technology to match the entrepreneurial spirit and capital that NYC has always had. This is a big deal.

The European Startup Market

At USV, we’ve been investing in European startups since 2008. Currently 22% of our active portfolio is in Europe. Since 2010, we’ve invested in 47 companies (roughly 8 per year) and 11 of them have been in Europe (roughly 2 per year). So over the past six years, roughly 25% of our investments have been in Europe. In 2015, we have made nine investments to date (a few have not yet been announced) and four of them have been in Europe (45%).

So what’s happening here?

Well first, we have developed an investment presence in Europe. While we don’t have an office in Europe we do have fourteen portfolio companies and every USV partner has at least two European portfolio companies. So we all travel to Europe regularly and we look at new investments when we are over here.

Second, we have developed a number of strong relationships with European venture capital firms. Serving on boards with other VCs is the number one way you build relationships in the VC business and we’ve done a lot of that with European VCs.

Third, European entrepreneurs have, for the most part, abandoned the approach of building domestic businesses in their home markets and are now targeting global customer bases from day one. That means the potential scale of European startups is as large as US startups.

Fourth, there has been a wave of new European VC firms started in the past couple years. Most of these VCs got their start in older legacy VC firms and they are now opening up shop on their own and operating in a more entrepreneurial “silicon valley” style. This reminds me very much of the period ten years ago in the US when USV, Emergence, Foundry, Spark, First Round, and a number of other high quality VC firms opened their doors in the US. This post by a leading venture fund investor in the US talking about the new European VC funds is right on the mark.

Fifth, European entrepreneurs have made money for VCs. There have been 24 billion dollar plus exits in Europe in the last five years.

When you take all of that and combine the fact that there is probably a hundredth of the VC dollars at work in Europe vs the US, you get a great market to invest in.

The Gotham Gal and I are here for the next few weeks of mostly vacation but we will get to see a few of our portfolio companies. Yet another reason to invest in Europe!