Posts from Web/Tech

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.

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.

DuckDuckGo Moves Beyond Search

Our portfolio company DuckDuckGo which offers a search engine that doesn’t store your search history or track you announced some new offerings this week.
Here’s a quote from the announcement:

Over the years, DuckDuckGo has offered millions of people a private alternative to Google, serving over 16 billion anonymous searches. Today we’re excited to launch fully revamped versions of our browser extension and mobile app, extending DuckDuckGo’s protection beyond the search box to wherever the Internet takes you.

As I understand it, you can get this browsing protection via the DuckDuckGo mobile app and from their browser extensions.
You can get them here:

FirefoxSafariChromeiOS, and Android

DuckDuckGo is moving beyond search into a broader suite of privacy offerings. They have built up the trust of users over the years and can now apply that to a wider set of problems.

Along the way DuckDuckGo has built a great business too. As founder/CEO Gabe Weinberg explains in this interview with Techcrunch, DuckDuckGo has been profitable since 2014.

It’s very satisfying to me to know that in an era where billions are being made walking all over our privacy, a great business can be built protecting it.

Owning Yourself

I saw the news today that HuffPo is shutting down their “contributor network.”

we are ending the HuffPost contributor platform. The platform, which launched in May 2005, was a revolutionary idea at the time: give a megaphone to lots of people ― some famous, some completely unknown ― to tell their stories. At that time, social networks barely existed. Facebook was a nascent dating site for college students. Twitter had not been invented. The platforms where so many people now share their views, like LinkedIn, Medium and others, were far in the future.

While that is sad news, it is not the least bit surprising.

I said this on Twitter about this news:

I would never outsource my content to some third party. I blog on my own domain using open source software (WordPress) that I run on a shared server that I can move if I want to. It is a bit of work to set this up but the benefits you get are enormous.

I have been asked to blog at Medium, LinkedIn, HuffPo, and many other places. I always tell them that I am not going to do that. If they want to repost something I have written here on their platform, that is cool with me. The content here at AVC is creative commons licensed and freely available for reposting with a few reasonably constraints.

But this is part of a much larger and more important narrative. We are in the “Internet Two” phase as Steven Johnson called in it his piece that I blogged about yesterday. Internet One was an open network, open protocols, open systems. Internet Two is closed platforms that increasingly dominate the market and own and control our content and us. We need to get to Internet Three where we take back control of ourselves. It is high time for that to happen. The HuffPo news is a small example of what that is so important.

I’m Having A Meltdown

So the chips we use in our personal computers and cloud computers have some newly discovered security holes. One is called Meltdown. The other is called Spectre.

My first reaction upon hearing the news yesterday was “so what do we do about this?”

The answer is you can’t do much on your own.

For Meltdown, we need the operating system and hardware manufacturers to issue patches and firmware upgrades. I am sure they are furiously working on them.

The Verge has a good piece on what we can and should be doing about this.

Here’s the key part of that post:

  • Update to the latest version of Chrome (on January 23rd) or Firefox 57 if you use either browser
  • Check Windows Update and ensure KB4056892 is installed for Windows 10
  • Check your PC OEM website for support information and firmware updates and apply any immediately

I expect Apple will be issuing an update shortly for their OS.

Apparently Microsoft, Google, and Amazon’s cloud services are already patched for Meltdown.

As for Spectre, apparently there are no fixes for it as of now, but it is also a lot harder to implement hacks using that one.

Finally, my partner Albert has some optimism about all of this. We should expect some good to come of this mess.

What Happened In 2017

As has become my practice, I celebrate the end of a year and the start of a new one here at AVC with back to back posts focusing on what happened and then thinking about what might happen.

Today, we focus on what happened in 2017.

Crypto:

I went back and looked at my predictions for 2017 and I completely whiffed on the breakout year for crypto. I did not even mention it in my post on New Year’s Day 2017.

Maybe I got tired of predicting a breakout year for crypto as I had mentioned it in my 2015 and 2016 predictions, but whatever the cause, I completely missed the biggest story of the year in tech.

If you look at the Carlota Perez technology surge cycle chart, which is a framework I like to use when thinking about new technologies, you will see that a frenzy develops when a new technology enters the material phase of the installation period. The frenzy funds the installation of the technology.

2017 is the year when crypto/blockchain entered the frenzy phase. Over $3.7bn was raised by various crypto teams/projects to build out the infrastructure of Internet 3.0 (the decentralized Internet). To put that number into context, that is about equal to the total seed/angel investment in the US in 2017. Clearly, not all of that money will be used well, maybe very little of it will be used well. But, like the late 90s frenzy in Internet 1.0 (the dialup Internet) provided the capital to build out the broadband infrastructure that was necessary for Internet 2.0 (the broadband/mobile Internet), the frenzy in the crypto/blockchain sector will provide the capital to build out the infrastructure for the decentralized Internet.

And we need that infrastructure badly. Transaction clearing times on public, open, scaled blockchains (BTC and ETH, for example) remind me of the 14.4 dialup period of the Internet. You can get a taste of what things will be like, but you can’t really use the technology yet. It just doesn’t work at scale. But it will and the money that is getting invested via the frenzy we are in is going to make that happen.

This is the biggest story in tech in 2017 because transitions from Internet 1.0 to Internet 2.0 to Internet 3.0 cause tremendous opportunity and tremendous disruption. Not all of the big companies of the dialup phase (Yahoo, AOL, Amazon, eBay) made a healthy transition into the mobile/broadband phase. And not all of the big companies of the broadband/mobile phase (Apple, Google, Facebook, Amazon) will make a healthy transition into the decentralized phase. Some will, some won’t.

In the venture business, you wait for these moments to come because they are where the big opportunities are. And the next big one is coming. That is incredibly exciting and is why we have these ridiculous valuations on technologies that barely/don’t work.

The Beginning Of The End Of White Male Dominance:

The big story of 2017 in the US was the beginning of the end of white male dominance. This is not a tech story, per se, but the tech sector was impacted by it. We saw numerous top VCs and tech CEOs leave their firms and companies over behavior that was finally outed and deemed unacceptable.

I think the trigger for this was the election of Donald Trump as President of the US in late 2016. He is the epitome of white male dominance. An unapologetic (actually braggart) groper in chief. I think it took something as horrible as the election of such an awful human being to shock the US into deciding that we could not allow this behavior any more. Courageous women such as Susan Fowler, Ellen Pao, and many others came forward and talked publicly about their struggles with behavior that we now deem unacceptable. I am not suggesting that Trump’s election caused Fowler, Pao, or any other woman to come forward, they did so out of their own courage and outrage. But I am suggesting that Trump’s election was the turning point on this issue from which there is no going back. It took Nixon to go to China and it took Trump to end white male dominance.

The big change in the US is that women now feel empowered, maybe even obligated, to come forward and tell their stories. And they are telling them. And bad behavior is being outed and long overdue changes are happening.

Women and minorities are also signing up in droves to do public service, to run for office, to start companies, to start VC firms, to lead our society. And they will.

Like the frenzy in crypto, this frenzy in outing bad behavior, is seeding fundamental changes in our society. I am certain that we will see more equity in positions of power for all women and minorities in the coming years.

The Tech Backlash:

Although I did not get much right in my 2017 predictions, I got this one right. It was easy. You could see it coming from miles away. Tech is the new Wall Street, full of ultra rich out of touch people who have too much power and not enough empathy. Erin Griffith nailed it in her Wired piece from a few weeks ago.

Add to that context the fact that the big tech platforms, Facebook, Google, and Twitter, were used to hack the 2016 election, and you get the backlash. I think we are seeing the start of something that has a lot of legs. Human beings don’t want to be controlled by machines. And we are increasingly being controlled by machines. We are addicted to our phones, fed information by algorithms we don’t understand, at risk of losing our jobs to robots. This is likely to be the narrative of the next thirty years.

How do we cope with this? My platform would be:

  1. Computer literacy for everyone. That means making sure that everyone is able to go into GitHub and read the code that increasingly controls our lives and understand what it does and how it works.
  2. Open source vs closed source software so we can see how the algorithms that control our lives work.
  3. Personal data sovereignty so that we control our data and provision it via API keys, etc to the digital services we use.
  4. A social safety net that includes health care for everyone that allows for a peaceful radical transformation of what work is in the 21st century.

2017 brought us many other interesting things, but these three stories dominated the macro environment in tech this year. And they are related to each other in the sense that each is a reaction to power structures that are increasingly unsustainable.

I will talk tomorrow about the future, a future that is equally fraught with fear and hope. We are in the midst of massive societal change and how we manage this change will determine how easily and safely we make this transition into an information driven existence.

Feature Friday: Quote Retweet

One of my favorite features on Twitter is the ability to retweet something with added context.

Like this:

I do this a lot:

You get my point.

There are a lot things Twitter can do to make Twitter better but getting rid of the Quote Retweet is not one of them.

Longer Tweets

I’ve got mixed feelings about Twitter’s experiment with allowing longer tweets (280 characters vs 140).

Like many users expressed on Twitter (of course) yesterday, I’m quite fond of the 140 character limit.

I don’t like the constraint when I compose tweets, but I love it when I consume them.

There are few things that make Twitter unique, defensible, and essential (contrary to many Twitter haters, it is all of those things).

At or near the top of the list is the sort bursty stream of information Twitter presents to the consumer.

There is no other place where I can consume a firehose of information across so many topics as quickly as I can on Twitter.

Just looking at these tweets from Jack and Biz, I am not sure 280 characters is going to be a good thing for the consumption experience.

On the other hand, I think running experiments like this is the right thing for Twitter and every app out there to do.

And they can’t run an experiment like this without telling the world about it. I’m seeing longer tweets in my timeline. They can’t keep that a secret.

The one piece of advice I would give the Twitter product team (who explained themselves in this blog post) is that they should test 160, 180, 200, 220, 240, 260, and 280.

I suspect they will get the biggest impact with slightly longer tweets but not all the way to 280.

I frequently run out of characters in my tweets. But generally not by a lot. If I had another 20 or 40 characters, that would reduce my character limit frustration significantly.

It’s also easier to introduce gradual change to a user experience than radical change.

And doubling the tweet size is a pretty radical change.

So I’m glad everything is on the table at Twitter in an effort to improve the user experience. That’s how it should be. But I’d be careful about this experiment and test a wider range of tweet sizes if I were them.

Monetizing A Free App

A number of our portfolio companies that have free web/mobile apps that are monetized by advertising have offered a low-priced subscription offering that removes the ads and, often, offers offline sync on the mobile apps.

Here are some examples:

I am sure there are other examples in our portfolio but those are the ones I am most familiar with.

I like this model a lot. As Duolingo said in their Duolingo Plus launch communications, it allows a free service to remain free for those who can’t pay for it.

It also allows those who don’t want the ads to remove them. And other value added features, like offline sync, make the subscription offering compelling for power users.

Pandora’s Plus offering is a good example of this approach and, because it is a public company, we can take a look at the numbers.

In Q4 2016, Pandora had roughly 4.4mm paying subscribers out of roughly 80mm total users, only about 5% of its user base.

But if all of those 4.4mm subscribers are to the low priced ($5) plan, then they would generate $265mm on an annualized basis. I assume that the subs revenue number is a bit larger because there is also a $10/month plan. So let’s say subs revenue is $300mm.

Pandora’s total revenue is about $1.4bn a year so subs represents over 20% of the revenue even though only 5% of the users take the subs offering.

So if you have a free ad supported service with a lot of regular power users, you should really consider adding a low priced subscription offering.

It will diversify your revenue mix and gives your users the ability to opt out of the ads if they want to.