Video Hackday

Some friends of mine are organizing a video hack day in NYC on Saturday May 9th. If you like to hack on video and have been looking for an excuse to spend some time on that thing you’ve been wanting to build, this is your opportunity.

Here are the details:

Video Hack Day is on May 9th, 2015. Sponsored by Google and organized by Ziggeo, it will take place at General Assembly in the Flatiron District of NYC.

Video Hack Day is a time to play with all things video. You’ll learn about new video APIs, develop fun video projects, and get feedback from judges at Google Ventures and Union Square Ventures.

Ziggeo is organizing the event, and it’s sponsored by: Google, Amazon Web Services, YouTube, Clarifai, Firebase, Dropbox, Oovoo and Vimeo. If you’re also interested in sponsoring Video Hack Day, please contact us here.

If you’d like to participate in Video Hack Day, please sign up here. You can also follow Video Hack Day on Twitter, #VideoHackDay.

Back To Android

Last September, after spending a month on sabbatical in Europe, I decided to try the iPhone after being on Android for many years. My plan was to start switching back and forth between iOS and Android every six months. So I got an iPhone 6 and used it as my only mobile device from early October 2014 until this past weekend. I continued to use a bunch of Nexus7s we have in our homes but the iPhone was the only thing I took with me when I left home each morning.

After a few days on iOS I wrote a post about what I liked and did not like about iOS. Reading it now after six months on iOS, it is still pretty accurate. But now that I am back on Android, the two things I really miss about he iPhone are TouchID and iMessage. If Android had both of those two things, I wouldn’t miss anything. I don’t totally understand why Apple doesn’t make an iMessage client for Android. They have the most popular messenger in the US (maybe the world) and they aren’t taking advantage of it. They are doing the same thing with iMessage that Blackberry did with BBM.

I will also miss the apps that are iOS only. I am keeping my iPhone6 and will use it on wifi in my home and office to stay connected to five or six apps that I use that are iOS only. Hopefully this will make it easier when I switch back to iOS in six months.

But now I’m back on Android and happy to be back. I am using a Nexus6. I am not sure I love the 6″ form factor but I’m getting use to it. The switchover is a pain in the butt. Getting the google apps working on the phone is a breeze. I just sign into the Android device with my Google login and they are all working. That part is really sweet and way better than what I have to do on iPhone. But getting the rest of the apps I want on my phone is a pain and then logging into all of them is a real chore. I use strong passwords and 2-factor wherever possible and so that process for close to 100 apps takes hours. I spent a fair bit of time this weekend getting the phone set up the way I want it.

So what are the things I missed about Android? Here’s my list:

1) gmail with offline sync. this is a huge one for me. i’m on the subway, planes, places with no public wifi and bad cell service a lot. gmail on iOS doesn’t do offline email very well. gmail on android does it beautifully

2) google calendar. there is no google calendar app for iOS. the google calendar app for Android works perfectly for me. i missed it.

3) notifications. i thought that iOS had caught up to Android in terms of the way notifications work. but it hasn’t. android still does notifications way better. and certain apps, like twitter, work way better with notifications on Android than iOS.

4) widgets and launcher – i didn’t realize how much I would miss the ability to customize my home screen with third party launchers and widgets. Android does this way better than iOS.

5) google maps and chrome as defaults – i never was able to figure out how to direct all my apps to use chrome and google maps as defaults. so i found myself using two browsers and two maps apps on iOS. on Android I only have one and all the android apps use them as defaults. this works way better for me.

But, as I said last October, these two mobile operating systems are pretty similar to each other. There are differences for sure, as I’ve outlined, but they are actually pretty minor in the grand scheme of things. Switching back and forth is pretty easy except for the part about downloading all the apps onto a new phone and logging into into them and customizing the screens. Once you do that, it’s more or less the same experience on both devices.

Lifestyle Businesses

Yesterday in the comments Elia said:

I sure wish we wouldn’t call non-VC fundable opportunities lifestyle businesses. It sounds like the person working on that business spends his days on a beach somewhere in the sun and collects the checks that come in. Just because it makes less money than a VC invested business doesn’t mean it isn’t still a business that takes lots of work.

We don’t have a good term for these types of businesses yet. Independent or indie is the best I’ve heard so far. Maybe, Fred, a post here and this community can come up with a great name we can all use?

I had never thought that the using the word “lifestyle” to describe a business that was too small to be interesting to an investor was derogatory. But I can see Elia’s point.

There is, however, a difference between what we’ve been calling “lifestyle” businesses, and “indie” businesses. My friend Bryce has launched an effort to fund “indie” businesses. As I’ve understood it, an “indie” business is one that might be large enough to support a significant investment but the founder wants to remain independent and therefore has no desire to exit and thus taking VC investment doesn’t work.

I touched on all of this is my ten ways to be an entrepreneur presentation (video, deck). Most of the entrepreneurial ventures I describe in that presentation are not backable by VCs. Only the last three (the startup, the breakout, and the company) are.

So I would define things this way:

Lifestyle – too small for VC, but will generate enough annual cashflow to be a great business to own and operate

Indie – might be large enough to justify and provide a return on a VC investment, but the desire to retain control and remain independent makes VC untenable for the entrepreneur

VC Fundable – large enough to justify and provide a return on a VC investment and the founder is willing to exit at some point and provide a capital gain to the investors

So with all of that in mind, I would like to ask a final question and then take this discussion into the comments. Is the term “lifestyle business” derogatory or dismissive in any way and do we need to find a better term for that kind of business? And if so, what should we call them instead?

Product Idea: Reverse Engineering VC Investment Strategies

The other day I found myself on a VC website. I went to the portfolio page, looked at all of their investments and from that inferred what that firm’s investment strategy was by sector, stage & geography.

This is not a simple thing to do, but it can be done. It helps that I’ve been working in the VC sector a long time and understand a fair bit about VC firms and how they invest. But honestly anyone can do this if they spend enough time distilling the key facts about each and every investment and then looking at these facts across the entire portfolio across time.

Venture capital firms don’t do a great job on their websites of explaining what they invest in and what they do not invest in. Some of that is most VC websites aren’t particularly great to begin with. Some of that is investment strategies change and evolve over time. Some of that is VC firms tell themselves they do one thing but actually do another.

This is frustrating for entrepreneurs. They send me an email thinking their investment is a perfect fit for USV and then they quickly get an email back from me saying “this is not a fit for USV”. It drives them crazy.

The very best way to know what VC firms invest in is to look at what they have invested in, particularly recently (the past few years).

So an automated tool that crawls VC websites, pulls the links to each and every portfolio company, categorizes these investments by stage, sector, geography, and ideally a host of other things, would be incredibly useful.

There are a few things that will be tricky about doing this. Figuring out when the VC made the initial investment is one of them. You look at Etsy on the USV portfolio page and you might think “USV invests in late stage marketplace businesses” but the fact is that we made that investment in early 2006 when Etsy was less than a year old. The correct determination would be “USV invests in seed stage marketplaces that have launched and are getting good traction.” A good way to solve this issue is to also crawl other websites, like Crunchbase, where you can triangulate to figure out when the initial investment was made.

It is also important to look at the data across time to see how the VC firm’s strategy is evolving. Starting in 2010, USV raised an Opportunity Fund and we will now occasionally make late stage/growth stage investments. We don’t do it very often, but we do it. Picking that up will be tricky unless you time sequence the data.

If such a tool existed, then an entrepreneur could point the tool at his/her website, generate some data about stage, geography, and sector, and then generate a list of VC firms that are good targets. The list could also generate a list of firms that have made competitive investments and should be avoided.

I honestly don’t think this would be that hard to build. And I think entrepreneurs who are going out to raise capital would find it incredibly valuable. There isn’t a huge market for such a product, but there is a market. The PWC Money Tree report says that 4,356 startup investments were made in 2014. So I imagine that somewhere between 5,000 and 10,000 entrepreneurs are going out to raise VC money on an annual basis right now. If we take the middle of that range (7,500) and assume that an entrepreneur would pay $100 for such a report (probably a lot more but I’m being conservative), then the total available annual market for a service like this would be $750,000 a year. If you could reach 20% of that market, then you have $150,000 a year of income. This is the perfect lifestyle business for someone. Hopefully they are reading this blog.

Video Of The Week: NYC’s Internet History

This is an oldie but goodie. I’ve posted it here before but not since I delivered this talk almost seven years ago. This is my history of the NYC Internet community from 1995 to 2008. It’s about 25mins long.

Dedication

For those who are on to the theme of my posts this week, Dedication will seem like an obvious choice to finish with.

I am dedicated to my family, my work, our portfolio, this blog, the Knicks, Mets, Jets, and a host of other things that require daily dedication. This week I was dedicated to the notion that all posts would start with D and end with tion. And I followed through and finished it off.

d ...

That’s what dedication is.

Dedication is also a testimony of affection or respect. At the start of many yoga classes, you are asked to dedicate your practice to something or someone. I mostly pick my kids, whichever I think needs the dedication that day, and sometimes the Gotham Gal too. I’m dedicating this blog post to my entire family on the eve of Passover.

Happy Pesach Everyone.

Distraction

I was just doing some work on a personal finance thing. I completed one part of the job and went to my email to finish it and saw another email at the top of my inbox about something else, I clicked on that email, started dealing with that, and almost forgot to finish off the personal finance thing. This happens all the time to me. I am so easily distracted.

I got rid of my desk phone in my USV office several years ago because I cannot sit in front of my computer when I am on a call in my office. I have to do my calls on my cell phone and walk around my office, look out the window, or something else or else I will get distracted.

I struggle with distraction big time. It’s not just the attention deficit kind of distraction I just talked about. Distraction crops up in other parts of my life. The Gotham Gal is constantly on me about being distracted in conversations with her. And she’s right to be on my case about that. If she was not, I would be even worse.

I’ve been working on this for much of my adult life. I’ve made progress but the distraction urge still is very much front and center in my psyche and my unconscious. I suspect this is something I will work on all my life.

Some things that have helped me are the aforementioned coaching by the Gotham Gal, yoga, meditation (which I have not yet made a staple in my life but I’m working on that), and a general self awareness of the problem and the need to take as many distractions away from me as possible when focus is required.

I know that I will get a lot of suggestions in the comments for software tools, workflow routines, and other self improvement techniques that have helped others deal with this problem. I will thank everyone in advance for those, but I will also say that I’ve tried all of that before. And tools and techniques haven’t really worked for me. I have found getting into the root causes and developing self awareness and more serenity in my life has worked a lot better.

But I’m still pretty bad. If you find yourself on the phone with me and I sound distracted, I probably am. And please feel free to call me out on it. I would appreciate that.

Deliberation

Wikipedia has this to say about Deliberation:

Deliberation is a process of thoughtfully weighing options… Deliberation emphasizes the use of logic and reason as opposed to power-struggle, creativity, or dialog. Group decisions are generally made after deliberation through a vote or consensus of those involved.

I’ve always liked the notion of deliberation and deliberate decision making. I particularly like the notion of using logic and reason as opposed to power-struggle.

Deliberation is the process we use to make decisions at USV. We use our weekly Monday Meetings (something many/most VC firms do) to facilitate the deliberate decision making process. Though it can be frustrating to me at times, the use of “power” or tenure in our firm is not particularly effective. A logical and reasoned argument works much better. Including when it is made against you.

We don’t vote at USV. We use consensus after deliberation to make decisions. The trick to making that work is forcing a decision. The market often forces that on us and, frankly, that is quite helpful. But even without the market forcing our hand, we have developed a sense of urgency in our decision making. Our culture doesn’t like to allow decisions to hang out there. So we discuss, deliberate, and decide.

Partnership driven decision making is not easy. Having a “decider”, as George W Bush liked to say, is a lot easier. But I’ve been working in partnerships for about thirty years now so it’s the way I’ve always worked. And when you get the process right, in our case discuss, deliberate, and decide, it works quite well.

Deflation

Last week my friend Tom Evslin left this comment here at AVC:

Trial investment thesis: deflation is here to stay, get used to it. Of course we’re used to that in high tech and communication because of Moore’s Law. we don’t model price increases in our business plans. But the rest of the modern economy and the goals of various central banks assume inflation is normal and desirable.

I’ll leave aside whether it’s desirable because I’m positing that deflation is going to happen (except in terms of certain debased currencies).

Energy prices are going relentlessly down. They drive costs, of course, through the economy. Moore’s law has had an effect on these prices both in the more efficient use of energy and more effective ways to extract or even generate it it and manage it in grids. But historically, if you measure by manhours required to generate a BTU, energy costs HAVE gone way down since the first fire was intentionally lit in dry sticks.

Moore’s law will eventually even drive the price of health care down (see Andy Kessler).

Food costs are arguable but energy has much effect here as does genetic engineering and computerized farming.

Currency devaluation as an instrument of national financing becomes more difficult with globalization and perhaps nation-independent currencies.

Obvious losers from deflation are the current banking system (built for inflation), debtors with non-productive assets, and governments both because they are debtors and because they lose the taxes on inflationary portion of interest is there is not interest.

The winners are? That’s the investment question I’m thinking about.

I did not reply to Tom’s comment but I’ve been thinking about it ever since. I had a long conversation last night at dinner with another friend about it. What if we have seen peak energy prices on our lifetime? What if we won’t see long term rates in the US of 10% again in our lifetime? What if deflation is what we are managing instead of inflation?

We’ve been in a low rate and deflationary cycle since the financial crisis of 2008, but the assumption has always been that we will someday come out of that and we will return to economic conditions that existed prior to that event. What if that is not the case and we are in the new normal and it is here to stay?

I am writing this post because I’m still trying to wrap my head around what this means. If the global economy is going to have a deflationary bias for the foreseeable future, what should we all be doing and what should we not be doing? That’s the question and I’m looking for a discussion and some answers. Which I hope we will all find in the comments.

Discrimination

I am very proud to see tech leaders like Mark Benioff and Tim Cook speak out on the rising tide of discriminatory legislation being proposed around the country.

I believe we must continue to work as hard as we can to make America a place where people are free to do as they wish. This was the goal of the founders of our country and we must continue to uphold it. If people want to believe certain things, we must allow them to do that. But we cannot allow people to use religious freedom as a license to withhold liberty and freedom from others.

There is a direct and discernible relation between tolerance and economic health. William Penn brought religious tolerance to Philadelphia which in turn led to an economic boon which was the envy of the other colonies. That led the other colonies to embrace religious tolerance to compete with Philadelphia. Paul Romer, an economist at NYU, explains this in his “charter cities” work.

America is the best example of the relationship between tolerance and growth in the world. It has been a place that welcomes others and allows them to live freely and pursue their dreams. There are many people in our country who would prefer we move away from that model. They want to lock down our borders and discriminate against others on the basis of religious beliefs.

We must oppose these desires with urgency and strength. They go against our founding beliefs and they are hurtful to our economic growth and progress. The tech industry has been a strident supporter of immigration reform and is now also standing up against discrimination on the basis of religious beliefs. I am proud to work in the tech industry and I stand with the leaders on both of these important issues.