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Video Of The Week: The Berlin Conversation

Last month, my partner Brad and I found ourselves in Berlin at the same time. We decided to do an event for entrepreneurs in Berlin with the help of the folks from Tech Open Air Berlin. We rented a space, brought in some entertainment and food, and then had an hour long conversation about technology, startups, trends, and a little bit about Germany and Berlin.

Brad and I started USV together in 2003 and we’ve worked closely together for over a decade now. We rarely (if ever) do public appearances together so this was a pretty special event for us. I think this video does a good job of showing how each of us comes at the issues from a different place but get to the same answers most of the time. It’s been a very successful partnership and I think this video shows some of why that is.

Feature Friday: The Dashboard

Our portfolio company Duolingo did something interesting this week. They launched a new product by adding a dashboard to the existing product.

For those that don’t know, Duolingo is the most popular language learning app on mobile phones (and the web) around the world.

They saw many students and teachers around the world adopting the Duolingo app as learning tool in the classroom even though Duolingo was built as a horizontal product without any specific use cases in mind. So they thought that building a version specifically designed for schools would be a good idea. And the big new feature that allowed them to do that was a dashboard for teachers. The students use the same app they’ve always used and the teachers get a tool to help them understand, manage, and react to each student’s individual progress.

This is a great example of the consumerization of vertical applications and markets. There are plenty of companies that try to sell technology into schools and school systems top down. They build all the features to support schools day one and then attempt to get schools and school systems to purchase their product.

Duolingo was shipped as a free mobile and web app that anyone can use to learn a language. Teachers and students adopted it. And then Duolingo shipped a single feature, the dashboard, that makes the service way more useful and impactful in the classroom.

Duolingo is entirely free to use, including the new Duolingo for Schools. Duolingo monetizes its business by providing certification services like Duolingo Test Center. I wrote a bit about this freemium model in education last summer. I think its a powerful model when combined with a bottoms up (consumer) go to market approach.

The State Of Bitcoin – January 2015

This is a slideshare from Coindesk:

I think this slidedeck shows that 2014 was a tough year for bitcoin, something I mentioned in look back and look forward posts. This year has started off poorly with problems at Bitstamp and the price breaking below $300, probably in relation to the Bitstamp issues.

It’s tough times for the bitcoin sector but venture capitalists continue to make investments and transaction volumes continue to rise. I believe we are witnessing a transition from one phase (monetary and speculation driven) to another phase (new applications and bitcoin as a platform) and there will be a shakeout as the transition happens. I think we are well into that shakeout.

Finding ROI In Higher Education

The news is full of stories where students paid hundreds of thousands of dollars to go to college (and beyond) only to find themselves stuck in dead end jobs and unable to pay off the cost of student loans. We have a crisis in the US in higher education. The costs have risen and the benefits have declined.

It has gotten to the point where I believe if you have to personally shoulder the cost of your higher education, you should think twice about the traditional model. If you can get scholarships or if your parents are willing to pay the tuition bills, I still think its a valuable experience, but sadly it is not one that makes sense if you have to make the investment personally.

So what are we going to do about that? We need to find new models. And one new model that is working in NYC is The Flatiron School. The Flatiron School started two years ago and teaches students, both high school grads and college grads, how to become software engineers in a twelve week course that costs $15,000. Scholarships are available for students who cannot afford that investment.

Today The Flatiron School has published an audited report that validates the notion that their model produces graduates who can find high paying jobs. Here is a summary of the report and this is the “money slide” from it:

cost and benefit of flatiron

So for a high school graduate, the tuition at Flatiron can be paid back with six months of after tax income. For a college graduate, you can increase your pay by ~$30k by spending $15k. You get that payback in one year of after tax income.

For the average college grad, it takes roughly three years of all of your after tax income to pay off your college costs. If you go on and do Flatiron, you can pay off everything with two years of after tax income.

Anyway you cut the numbers, The Flatiron School is a great investment. Part of it is that the students learn a valuable skill – software development. Part of it is that the cost of delivering that education are very reasonable. And it isn’t that they do this on the cheap. Here is the work required from a student at The Flatiron School:

educational activity at Flatiron

There’s been a lot of talk that online education is the answer to lowering the costs of higher education. The huge investment in MOOCS that happened a few years ago was based on that notion. The reality is that online education is a part of the answer but not the silver bullet that some thought it would be. I gave a talk at Wharton a couple years ago about this.

The answer to lowering the cost and increasing the benefits of higher education requires a multitude of changes to the current model. And one of them is teaching students skills that are directly related to job requirements. Doing that makes students more employable and more valuable.

This is not a criticism of the liberal arts model, per se. As Steve Jobs said in this interview, learning to code is a liberal art. This is a criticism of administrations and faculties that are rigid in their interpretation of what liberal arts and education should mean. This is a criticism of not evolving and changing with the times. This is a criticism of thinking what worked yesterday will work tomorrow.

And mostly this is a criticism of not making hard choices. Schools that are happy to add courses, faculty, and buildings are not willing to eliminate courses, faculty, and buildings. When you always add and never subtract, you get cost structures that are not sustainable.

The Flatiron School is an example of what can be done with a blank slate. They have figured out how to give students highly relevant and valuable skills at a cost that is both affordable and recoupable very quickly. Adam, Avi, Sara and the entire team has created a model that should be an inspiration for others.

Video Of The Week: A History Lesson On Why We Need Neutral Networks

My partner Brad went down to Chattanooga where they have a gigabit fiber network around the city and attended an event about connectivity and what it does for society.

In this short (~10mins) talk he gives a history lesson on how we got permissionless innovation on the Internet and why we could lose it.

Hashtags As Social Networks

Our portfolio company Kik launched hashtags yesterday. Kik is a mobile messenger so in Kik’s model hashtags are private or public group chats.

If I send a hashtag to a friend in Kik that says let’s chat about tonight’s knicks game at #knickskik, then that becomes a private group between me and that friend (and any others who we invite). I’ve done that so the #knickskik hashtag is now private on Kik.

But hashtags can also be public. If you have the latest version of Kik on your phone (came out yesterday), type #avckikgroup into a chat and then click on that link. Up to 50 of us can be in that group.

The cool thing about Kik is that it doesn’t use phone numbers like other messengers. It uses usernames and is not tied to your phone number or Facebook username. And so Kik, unlike other messengers, is used for both chatting with people you know (like other messengers) and people you don’t know.

That makes Kik an ideal platform for these public (and searchable) group chats. You can meet people in these public chatrooms and then take your conversations private in a one to one chat in Kik.

Ted Livingston, Kik’s founder and CEO, called this “hashtags as social networks” in a blog post yesterday.  I agree with Ted that Facebook’s model of the one network to rule them all has not really worked and that many of us are using messengers as defacto social networks. My friend Kirk told me that his wife’s family uses a group in WhatsApp like their personal family facebook feed. I think that’s the phase of social networking we are now into and so Kik’s hashtag as social network model makes a ton of sense to me.

Feature Friday: Embedding Spreadsheets In WordPress

So yesterday morning was a bit nuts. I decided to flush out some thoughts on valuations that I had talked about on stage at LeWeb. I started writing a post that would become this. I started building a spreadsheet that would become this.

I had an 8:30am breakfast and as it got closer and closer to 8am, I realized I was screwed. I had cut and pasted certain rows from the google sheet into my post and they were not fitting properly on the screen. As I played around with the underlying code, it just got worse. I was digging myself into a hole.

So at 8:10am, I made a decision. I wrote a note to everyone that the post was messed up, jumped into the shower, and got to my breakfast about 5mins late.

When I got to the office after my breakfast, I learned that a meeting I had in my calendar was not happening. Oh happy day. I love when that happens.

So I googled for a wordpress plugin that allows the embedding of google sheets and found this one.

It is called Inline Google Spreadsheet Viewer and it gives you a wordpress shortcode that looks like this:

gdoc key

If you want to embed a google sheet in a blog post, you install the plugin, you insert that shortcode, and you put the URL of the public/open google sheet into the ” ” and that’s it.

What I could not figure out how to do was to embed different tabs from the same sheet, so I ended up creating four different sheets and embedding each one separately.

But it all worked out fine. Within ten minutes I had cleaned up my post and put that to bed. Had I known about this plugin when I started the post around 7:30am, I could have easily polished the whole thing off and even had time to shave in the shower. Fortunately, it takes days for my beard to show up :)

LeWeb Breakfast Chat

I just boarded a plane back to NYC and sadly we won’t have wifi on this flight so I’ll share some quick thoughts from my “breakfast chat” with Loic at LeWeb this morning and you can all discuss them as I fly home.

Six or seven years ago Loic and I had a very nice breakfast outside at a French bakery in San Francisco. So Loic decided to recreate that vibe on stage today and we sat at a table with coffee, croissants, and juice while we talked about where we are right now in the world of tech.

IMG_0412.PNG

We covered a lot of ground but I thought the most interesting themes were

– the maturing/mainstreaming of the sharing economy and the likely IPOs of these companies in the next year or two which will cause them to become even more mainstream.

– whether wearables means watches (I don’t think so) or a whole ecosystem of devices/our personal mesh (I think so).

– the downturn in bitcoin which Loic thought means it’s over and I think means it’s a good time to invest

– European discomfort with tech innovation. Loic mentioned the Uber Paris issues and I mentioned Merkel’s wrongheaded stance on net neutrality

I’m fairly certain the video of our breakfast chat will be online soon and I will post it then. See you on the other side of the pond.

The Grind vs The Pivot

Everyone knows what a pivot is. You launch something, it fails to get product market fit, so you change direction and launch something different. There are many examples of successful pivots. Flickr, Twitter, Slack, and Kik all came out of pivots.

But there is another approach to finding product market fit and I call it the “Grind.” The Grind is when you launch something, it fails to get product market fit, and you grind on it, week after week, month after month, year after year, until it does. Usually the entrepreneur who chooses The Grind is obsessed with the problem they are trying to solve and can’t let it go. This tenacity is often rewarded if everyone is patient enough.

A good example of a USV portfolio company that has executed The Grind is Brewster.

Brewster is a service that aims to do for contacts what Dropbox has done for files – keep them in sync and make them easily available on every device you use.

Brewster launched in July 2012 and I wrote about it here. While Brewster’s mission has not changed one bit, the way they have attacked it has changed a lot.

In the initial version, Brewster was a mobile app that could coexist or replace your native contacts app. It connected with all of your social networks and attempted to keep your address book up to date and also provide intelligence about your contacts. It turned out that most people didn’t really need or want a new address book, but they did want their contacts kept up to date and sync’d to whatever device they were on.

So slowly but surely Brewster evolved. But there was never a pivot. The service has evolved into a one that, today, largely works behind the scenes in the cloud to make sure the contacts you have on your phone and your desktop and tablet are the same, that they are in sync, and when another Brewster user you are connected to changes their contact information, your contacts are automatically updated. This evolution required the company to solve some difficult technical problems.

Brewster works in the background to power your contacts, providing auto-fill when writing emails in Gmail and access to all contacts from the dialer, text messaging, and email. It’ll also make finding your friends on social messaging apps, including Kik, WhatsApp, Snapchat, a more fun and easy experience.

Over this thanksgiving weekend, The Gotham Gal joined me in trying out the iPhone again. She got an iPhone 6+ and I helped her move all of her apps and activity from her Nexus 5 to her iPhone 6+. Moving her contacts was trivial with Brewster. Here’s how I did it:

1. login at brewster.com, add google via accounts and sync contacts sections (you need to both add google and then sync with it).

2. on iphone, add google account (settings app > mail, contacts, calendar > add account > google) and make to turn on contacts sync

3. that’s it. brewster will use the google connection with iphone to send updated contacts to the iphone

The Gotham Gal has >10,000 contacts. I have almost 30,000. For anyone with large contact databases, Brewster is a valuable tool. It will alert you to when you have missing email addresses, phone numbers, and faces for your contacts. I use those features a lot to continuously improve my address book.

The Grind is about continuously improving your product using market feedback and gradual but sustained product evolution. In order to execute The Grind, you need to keep your burn rate low. Brewster has been at it for almost four years now and has always kept its headcount and expense structure under control so it had runway to evolve and improve their product.

If you tried out Brewster when it initially launched and it didn’t do it for you, I’d suggest you give it another try. It’s changed a lot but still is trying to achieve the same goals. And the overall goal of a service that keeps your contacts up to date and sync’d on all of your devices is more valuable today than ever.

Audio Storytelling

There’s something happening, at least I’m noticing it. And I’m paid to be a noticer. Audiobooks have been a thing for a long time, even though I just recently got into them.

But audio short stories and audio serialized storytelling seem like new things to me.

This Etgar Keret short story showed up in my SoundCloud feed this past week and the Gotham Gal and I listened to it yesterday afternoon in our home via SoundCloud on Sonos.

As an aside, I really like following The New Yorker on SoundCloud. They have some great audio content, stories, interviews, etc.

At Thanksgiving dinner, our friend Sarah said she and her daughter were going to listen to The Serial Podcast on their drive the next day up to Vermont. So yesterday the Gotham Gal and I put this on in our car yesterday while we were running some errands.

Now we are hooked and we will probably start listening to the series in our apartment on SoundCloud on Sonos.

What’s behind all of this explosion of short audio content? Well for one, our phones have apps (like SoundCloud) which easily stream audio via bluetooth into our cars. We’ve talked a lot about this whole bluetooth streaming thing here at AVC. But it is also true that we have audio devices in our home, everything from a Jambox to a Sonos, that allow us to do the same thing while we are at home.

And audio is easier to consume when you are driving the car, washing the dishes, running on the treadmill, and many many other activities.

For a multi-media publisher, the business model is additional monetizeable audience for content they already are publishing in other mediums. I hope The New Yorker is OnSoundCloud. If not, they should be.

For a new publisher, like The Serial Pocast, it’s a bit trickier. They should be OnSoundCloud as well and I hope they are. But the revenue share they can get from SoundCloud may not pay all the bills for a while. In the interim, The Serial Podcast is soliciting listener donations here and recently announced that they have gotten enough support that they will be doing a second season. I donated $100 this morning.

Another megatrend supporting this new media, then, is crowdfunding. New content can be funded through a combination of ad revenue share from platforms like SoundCloud and listener support raised on the Internet from the crowd. And I’m sure there are many other ways to monetize that either exist today or will come together in time for storytellers who want to leverage the audio medium.

All I know is that the innovation in this sector is exciting and encouraging. If you are looking for something to drink your coffee with this morning, I’d highly recommend both of those audio shorts I posted. Enjoy.