Posts from Web/Tech

Start, Grow, Mature, Consolidate

The life cycle of tech companies is pretty straightforward. They start, they grow, they mature, and they consolidate.

The news that Yahoo is finally selling to Verizon and joining forces with AOL is a not in the least bit surprising and probably long overdue.

Yahoo has not been a growth business in quite a while.

Putting AOL and Yahoo together allows Verizon to cut costs and rationalize the two businesses and add scale to Verizon’s growing base of Internet assets.

But this is yesterday’s news in many ways. It is the denouement of the web 1.0 era when AOL and Yahoo were the Internet to many. They operated the training wheels that got so many of us online.

I am not saying these businesses do not matter anymore. Together they serve hundreds of millions of Internet users around the world, they produce a lot of revenue, and when structured properly, a lot of profit.

But these are not growth businesses, they are mature businesses. So it is time to extract profits, not revenue growth, and run them appropriately for what they are.

And that is what is happening with this merger that will be announced this morning.

In twenty years, the same thing will likely happen to thousands of businesses that are starting up this year.

That is the life cycle of tech businesses, shorter than many sectors, but a wild ride while it lasts. As was Yahoo.

Stack Documentation

Our portfolio company Stack Overflow (or Stack as I prefer to call them) has launched something new and interesting today.

It is called Stack Overflow Documentation.

This is what Stack co-founder and CEO Joel Spolsky told me about Documentation a few weeks ago:

The current state of developer documentation is pretty abysmal. It’s spread all over the place, in a million different formats. It’s never complete and rarely includes good example code. Even the best developer documentation is usually on a static website with no community or crowd sourcing features, so it stagnates.
After months of beta testing, we are launching a global, crowdsourced developer documentation section on Stack Overflow that covers everything from programming languages to APIs and frameworks. It will be completely community generated, with all the reputation stuff that made Stack Overflow successful (voting, reputation, tags, community moderation, etc).
When you poke around at the state of developer documentation on the web in 2016, it feels a lot like… developer Q&A before Stack Overflow. It’s fragmented, half of it is out of date, it’s very very uneven in quality, and when you find a bug there’s no way to fix it. We think that applying the mechanics of Stack Overflow Q&A to crowdsourced documentation will make as big a difference in developers’ lives as the original Stack Overflow.

The secret sauce behind Stack’s success is the fact that crowdsourcing information is way better than the top down approach when it is combined with a specific set of tools that make the crowdsourced data super high quality. The latter is what Joel calls the “reputation stuff” (voting, reputation, tags, community moderation, etc).

It makes all the sense in the world that Stack would focus their secret sauce at Developer Documentation in addition to Developer Q&A. So if you are working in Javascript and want to find some documentation or contribute some documentation, go here. If its Docker that’s giving you fits, go here. And for Android devs, this is for you. The entire Documentation section is here.

Developer Documentation is in Beta right now and though it is pretty good already, I expect it will get a lot more complete and a lot more thorough in the coming months. And if you are so inclined, please help make that so.

Trashing Tumblr

So Scott Galloway thinks Tumblr was nothing more than a “porn site.”

I think that is a ridiculous comment coming from someone who says ridiculous things.

Tumblr was, and still is, a vibrant social media platform. Just talk to the tens of million of people who have had Tumblr blogs and have gotten tremendous value out of them.

I am one of them.

I just hate jerks who want attention by saying crazy shit, like the current Republican nominee for President.

So I am calling bullshit on Scott Galloway and standing up for Tumblr, which I love and have always loved.

Phew. Now I feel better.

Some Thoughts On Steem

About a year ago, in the middle of the Reddit soap opera that played out last summer, I wrote a post about how someone could (and would) build something like Reddit on the blockchain.

A number of developers and entrepreneurs have done that and the one that has garnered the most interest is called Steem.

The community is still small and the links are still a bit all over the place. But things are happening at Steem and I think its worth paying attention to.

At the heart of Steem is a tipping system, called Steem Power, based on a crypto-currency called Steem. All of this runs on the Steem Blockchain.

Readers can buy Steem Power with Bitcoin and then they can tip posters who receive Steem Power. Steem Power can be converted into Steem through a mechanism I don’t really understand to be honest.

So unlike Reddit, where posters receive no compensation other than upvotes, on Steem upvotes are done with money.

Steem is traded like other crypto-currencies, and currently has a market cap of $287mm. That feels a little bit ahead of itself (Reddit was valued at $500mm a couple years ago), but markets go up and they go down. We will see where the Steem market cap goes from here.

Another thing that is interesting about this whole model is that Steem can finance itself, the cost of its team, an office, bandwidth, servers, etc by selling Steem vs selling equity.

This is the Decentralized Autonomous Organization model that many blockchain entrepreneurs are following today.

So if you like the idea of Steem, and want to back this company, all you have to do is buy some Steem, some of which you might be buying from the Company. And if you change your mind, you can sell your Steem and move on.

I think Steem is a really interesting experiment that may turn into a really nice business. The Steem founders are experimenting in multiple dimensions at the same time. They are trying a “paid” model vs a “free” model for curating a content discovery engine. That’s interesting. They are using blockchain technology vs some centralized system to build all of this. That’s interesting. They could finance this business via their users vs VC or something else. That’s interesting. And their users can participate in the value creation, if this turns out to be valuable. And that is interesting.

I am rooting for Steem. They have some things to get right and watch out for (including the rapid rise in the value of Steem which is concerning) and I hope they take steps to avoid the “dollar/hype cycle” I talked about in this post. That is one of the great challenges with this whole DAO model of starting and building a company. But someone is going to figure this out. The Steem founders have already figured out a few things which I am sure others will now emulate. And that is what is great about experiments, even if they fail. We learn something. And when they are done in public more of us learn something.

Flashback: The Lycos NYC Office in 1995

I was taking the subway uptown yesterday afternoon and as I stepped out of the train I thought I saw the word Lycos on the advertisement on the station wall. Upon closer observation, it was not an advertisement for Lycos, but by then I was already thinking about my visit to the Lycos NYC office in 1995 when I first met Jerry Colonna. It was in the building that sits on the north end of Union Square in a dumpy office with the name Point Communications on the door. Point was a web directory (ie at Yahoo competitor) that Lycos had bought in 1995. Jerry told me that Point was driving a lot of the traffic on the Lycos network and I asked him where they hosted it. He pointed to a closet with a PC sitting on the floor with the back opened and a bunch of wires sticking out. “It runs on that thing”, he said. I thought to myself that one of the top trafficked websites on the entire Internet was running in a closet. That was a different time.

Lycos was a web search engine created at Carnegie Mellon that was turned into a business by the Internet holding company CMGI in 1994/1995. Jerry was working for CMGI at the time I met him and CMGI was quickly assembling a portfolio of Internet assets around the Lycos brand to rival Yahoo. CMGI took Lycos public in 1996 and, according to Wikipedia, in 1999 Lycos was the most visited Internet destination.

But easy come, easy go and Lycos was sold to Terra Networks in May 2000, the first in a series of sales to international owners that led to slow and steady decline of the brand.

But back in 1995, Lycos was in the thick of it. It was the east coast rival to Yahoo, which was the leading Internet brand. If you were selling your website (that’s what you did back then), you shopped it to Yahoo and Lycos. And Jerry was right in the middle of all of that. I was thinking of leaving and starting a VC firm to invest exclusively in Internet businesses (ie websites). At that first meeting, I thought Jerry would be a great partner to do that with. And, after a series of meetings, that’s exactly what we did. But that’s another story, longer, and even more interesting.

We’ve come a long way in 20 years. Google eclipsed all of these “web 1.0” properties as search became the dominant way users accessed the web. Facebook showed that the web was going to be a social experience a few years later. And Apple showed that it was going to be a mobile thing a few years after that. And everything has moved off servers in closets to the cloud. Things look a lot differently now. But it helps to go back and think about how it was back then. It gives some perspective.

The “Yes And” Slack Bot

I wrote a blog post a while back about collaborating on a list in Google Sheets. At USV, we do a lot of list making in Google Sheets. But Sheets doesn’t have a great conversational interface for coming up with new entries for the list. So we use email to do that but the process is clunky. In that post, I suggested that we might write a slack bot that takes a conversation in a slack channel and turns it into a list in Google Sheets.

A few days later, I got an email from Alex Godin who had built exactly that bot. We tried it out at USV, made a bunch of suggestions on how to make it better, and the result is the “Yes And” Slack Bot. It was approved yesterday by Slack and is now in their app store.

If you and/or your company uses Slack and Google Sheets a lot, you should give it a try. Details on how to do that are here.

I love it when a blog post at AVC turns into something. It happens a lot actually.

Trends

I like to look at Google Trends from time to time to see what it can tell me about things. I realize that search keyword activity is only one data point in a complex system and that with the move to mobile, it is less important than it was in the web only era. And people search for things when they want them. Once they have them, the search volume goes down. But I still think Google Trends can reveal some interesting things.

Here are some queries I ran today:

Facebook and Google are battling it out for video supremacy, but this query really doesn’t tell us very much about where that battle is going and how it will end. It is interesting to note that YouTube has been a mature but stable business for a long time now.

Twitter and the smartphone seem to have risen with a similar curve and are now in decline, with Twitter falling a bit faster than smartphones.

We see a similar shaped curve with Facebook, but the order of magnitude is quite different which is why I did not combine it with the previous chart.

December 2013 sure seems like the high water mark for the mobile social sector.

But not all boats go out with the receding tide.

Here is Snapchat and Instagram, with Twitter thrown in for scale comparison

It will be interesting to see when Instagram and Snapchat start flattening off. My gut tells me Instagram may already be there but we just don’t see it in the data yet.

Moving on from the past to the future, here are some of the sectors that entrepreneurs and VCs are betting on as the next big thing:

If you take out the VR term and look at the other three, you see something that looks like the NCAA football rankings over the course of a season. Each team/term has had a moment at the top but it remains unclear who is going to prevail.

If we look at one of the most interesting coming battles in tech, the voice interface race, the data is less clear.

I think we haven’t really gotten going on this one. But it is an important one as Chris Dixon explained in a really good blog post last week.

My semi regular Google Trends session today confirms what I’ve known for a while and have written here before. We are largely moving on from mobile and social in terms of big megatrends, video is being played out now, and its not yet clear what is going to emerge as the next big thing. Google is betting on AI and I tend to agree with them on that. Voice interfaces may be a good proxy for that trend.

Community Moderation

The Verge has an incredible post up about “content moderation.”

I have always felt that the hardest part of running an Internet business was insuring the trust and safety of the users and I am thrilled to see some light being shone on this part of the business.

There is always so much talk about the product and engineering parts of the business and so little about the extremely difficult work that goes into policing the product. And yet when you look at churn, so much of it in a scale Internet business is a result of users running out of patience with spam, trolling, and worse. This comment by Dick Costolo from the piece is telling:

“We lose core user after core user by not addressing simple trolling issues that they face every day, We’re going to start kicking these people off right and left and making sure that when they issue their ridiculous attacks, nobody hears them.” 

Well as the post points out, that is not so simple. And, of course, there are free speech issues too. I constantly hear people criticizing Twitter for blocking users.

But trolling, as bad as it is, is not the worst part of this work.

A trust and safety team has to deal with the most awful kinds of people and actions imaginable. I often suggest that everyone should sit in a trust and safety organization for a week. Then a lot of the conversations we have about free speech, privacy, and the like would get a lot more nuanced. There are bad people out there doing bad stuff.

Sadly, as I have seen again and again, startups don’t understand how challenging these problems are going to be until some sort of situation forces them to react. Then they throw people at the problem but never their precious “engineering resources.” When trust and safety, fraud, compliance, and moderation teams start getting their own engineering resources, something that often takes years to happen, then you know the company is finally acknowledging the importance and seriousness of the work.

The people profiled in this Verge story are heroes in my book. They do hard work, are not paid as much as they should be, and they are working in incredibly difficult and dangerous (for their mental health) situations. It is high time we start acknowledging them and their work and investing in it.