I sent this out last night. In case you missed it, I thought I’d share it with all of you this morning.
Posts from Web/Tech
The New York Times has a piece today about how bay area tech companies are giving the Phoenix Arizona economy a boost.
I think this is a trend we are just seeing the start of.
A big theme of board meetings I’ve been in over the past year is the crazy high cost of talent in the big tech centers (SF, NYC, LA, Boston, Seattle) and the need to grow headcount in lower cost locations.
This could mean outside of the US in places like Eastern Europe, Asia, India, but for the most part the discussions I have been in have centered on cities in the US where there is a good well educated work force, an increasing number of technically skilled workers, and a much lower cost of living. That could be Phoenix, or it could be Indianapolis, Pittsburgh, Atlanta, and a host of other really good places to live in the US.
Just like we are seeing tech seep into the strategic plans of big Fortune 1000 companies, we are seeing tech seep into the economic development plans of cities around the US (and around the world). Tech is where the growth opportunities are right now.
A good example of how this works is Google’s decision to build a big office in NYC in the early part of the last decade and build (and buy) engineering teams in that office. Google is now a major employer in NYC and the massive organization they have built has now spilled over into the broader tech sector in NYC. My partner Albert calls Google’s NYC office “the gift that Google gave NYC.”
We will see that story play out across many cities in the US (and outside of the US) in the next five to ten years. It is simply too expensive for most companies to house all of their employees in the bay area or NYC. And so they will stop doing that and go elsewhere for talent. That’s a very healthy and positive dynamic for everyone, including the big tech centers that are increasingly getting too expensive to live in for many tech employees.
I asked my kids this question last week. And I got three different answers.
One of my kids said “Absolutely. I do pay for several news apps and I like them a lot.”
One of my kids said “It depends on the user interface. I really like Pocket and do most of my news reading in that app.”
And one of my kids said “No way. News should be free. I get all of the news I need online for free.”
I have asked a number of other millennials this question this past week and got a similar set of responses.
The “no way” answer was stronger with the men. The “absolutely” answer was stronger with the women.
The answer that interests me the most is the user interface issue. I like to read in a mobile browser on my phone. I can follow links most easily that way. And I can share links most easily that way. And reading news is, for me, an interactive and social experience. I really like sharing links and getting shared links. So I want a least common denominator user experience that most easily facilitates that.
But I know a lot of people who use “read later” apps like Pocket and Instapaper. Clearly the user experience question looms large in the news business.
And there is also the question of what is news. Almost everyone told me that they value “long form news content” but not “headlines.” And so it is not surprising that we see news organizations like The New York Times and Washington Post investing more in long form content.
I am curious how the AVC community thinks about paying for news.
Nine months ago, I wrote a post saying that opening up Twitter’s Moments would make it a way better product.
The news came out yesterday that Twitter has now opened up Moments to certain users and plans to open up to all users in the coming months.
I am not sure why it took Twitter so long to do this. Maybe the curation tools were not that good and they needed to improve them before opening it up.
Maybe they hadn’t figured out how to keep spam, porn, abusive content, etc out of Moments.
Maybe they hadn’t figured out the discovery issues once there are hundreds of thousands of Moments being created every day.
Whatever the reasons for it, I think this is great news for Twitter and Twitter users.
Moments are a super easy way to get a quick glimpse of something that is happening right now. I use it every day, many times a day. Opening it up will make it deeper, richer, and better.
One of my favorite childhood stories is Aesop’s The Tortoise And The Hare.
I just love the idea that slow and steady ultimately wins the race.
I thought about that story when I read that Pokemon Go had set a record with 75mm downloads in its first few weeks in the app stores.
Mobile games have these explosive take up rates but don’t last forever.
Contrast that with something like Minecraft which emerged slowly but seems to chug along getting more and more popular each year.
And, outside of the games sector, I can’t really think of any super popular technology product (app or device) that blasted off and sustained itself over a decade or more.
When I ran this question by my brother in law last night, he mentioned the iPhone and the iPad, but both of those were relatively slow builds, certainly compared to these mobile game launches.
We could not think of a huge product, in tech or outside of tech, that blasted off and was a sustainably popular product for a decade or more.
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.
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).
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.
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.
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.
It was an easy and obvious call this weekend. I’m going to spend some time this morning watching my friend and coinvestor (on a few things) Mary Meeker do her thing. You should too.