Coinbase Vault

If you want to buy some Bitcoin and store it online and have it on your Android phone or your iPhone, then our portfolio company Coinbase has the product for you.

But what if you own a couple thousand Bitcoin? That’s $1.3mm of Bitcoin at today’s price. Well then you might want something more secure.

Yesterday Coinbase announced Vault, a more secure offering designed for people who own a lot of Bitcoin and want to protect it and are willing to put up with more security as a result.

Like the core Coinbase wallet offering, Vault is free. It is being rolled out now and about 5% of Coinbase’s customers have it already. Coinbase told Coindesk that all Coinbase users will have access to Vault by mid July.

I like to think of Coinbase as the bank and brokerage firm for Bitcoin. They have checking accounts (wallet), CD/savings (vault), brokerage (buy/sell), and merchant services.

And more is coming. Stay tuned. I will keep you posted.

Songza

So yesterday it was announced that Google has purchased Songza. Congratulations to Elias Roman and his colleagues. They build a great product and sold it to a great company.

But I’d like to take a second to tell the story of Songza as I know it. I am sure there are lot’s of parts of this story that I don’t know but the parts I do know make for a great story and now is a good time to tell it.

A few Brown University students had a great idea in 2006. They felt that mp3s should be priced based on demand not on a fixed price. So they started a company called Amie Street and built that service.

I first met them at some point after they had graduated from Brown and moved to NYC. I liked the idea a lot but was hesitant to invest. Others were not and they raised some money and chased that dream.

At some point Amazon got involved, I think as an investor. The Amie Street model ultimately did not pan out and in 2010 it was sold to Amazon. I don’t know the terms of that transaction but it did allow the team to stay together and work on a something else.

Long before the sale to Amazon, in October of 2008, Amie Street acquired Songza, a music app that was built by Aza Raskin and Scott Robbin.

After the sale of Amie Stree to Amazon, the team focused on Songza and iterated on it for a few years until they landed on the concierge user interface that helped popularize Songza.

I started using Songza in early 2012 and have been actively using it ever since.

I have three modes for listening to music and a primary services for each.

Passive – Songza, Intent Based – Rdio, Discovery/Social – SoundCloud. I use Songza the way most people use Pandora. And I use it mostly on my various Sonos systems.

But back to the story of Songza. Over time Songza built a popular music service and they raised some more capital in the fall of last year. We spent some time with them during that process but we were already knee deep in online music with Turntable (RIP) and SoundCloud.

Every interaction I’ve had with the Songza team has been fantastic. They are great people. And every interaction I’ve had with the Songza service has been equally good. Which furthers my view that great people build great products.

I wasn’t surprised to see that they sold to Google. The streaming music business is hard. And the big platforms understand that music is a great audience builder and retainer. And Google has been a great home to great products (YouTube, Android, Nest, etc).

So that’s the end of my story. It has a happy ending.

If there is a moral to this story it is that tenacity pays off. The Songza team graduated from college eight years ago and worked on two separate services over that time with a fair bit of success and failure. They hung together and built something that is very good. And they got a good exit. As JLM would say “well played.”

Reading Rainbow

If you were a child growing up in the 80s and 90s, you probably remember Reading Rainbow, a PBS television show that encouraged kids to read.

Well Reading Rainbow is back as a tablet app and is headed into homes and classrooms. The actor and now entrepreneur LeVar Burton is behind the resurgence of Reading Rainbow.

And LeVar is financing this new version of Reading Rainbow with a Kickstarter campaign that is its final stage (32 hours to go).

The initial goal of the campaign was $1mm and when they hit that in the first few days, LeVar raised it to $5mm and as of right now, they are about $300k short.

I backed this project a while ago and I think it is fantastic. I encourage everyone from AVC to check it out and back it if you are so inclined.

The Law Of Unintended Consequences

One of the great things about getting older is you see things over and over again and you start to understand. That’s called wisdom I guess. One thing I have seen over and over is that the best of intentions often lead to unintended consequences that are exactly the opposite of what the good intentioned people wanted to happen. I like to call that the “law of unintended consequences” and it goes like this:

Whatever it is that you intend to do, you will likely do the exact opposite

I was reminded of that when I read Marc Andreessen’s comments on Sarbanes Oxley (and IPOs in general) in this interview in Vox. Marc said:

The irony of Sarbanes-Oxley was that it was intended to prevent more Enrons and Worldcoms but it ended up being a gigantic tax on small companies.

Sarbanes Oxley and Regulation FD were an attempt to make the stock market safer for the average investor. What it did is make the stock market less attractive for the average investor by removing the best investment opportunities from the market.

Marc lists investments like Netscape, Microsoft, Oracle, HP, and IBM as companies that went public at relatively small valuations and grew their valuations in the public markets. I would add Apple, eBay, Yahoo!, Cisco, and a host of other silicon valley success stories to that list.

The Vox piece points out that:

Twitter waited until it was worth about $25 billion before it went public last year. Facebook was worth more than $100 billion when it had its IPO in 2012.

Dropbox did a private financing recently at $10bn, Uber did a private financing recently at $17bn, Airbnb recently did a private financing recently at $10bn. All three of those deals could have and would have been an IPO in the 1980s or 1990s.

The public markets are not as attractive to emerging high growth companies as they used to be. The private markets have accumulated enough capital to support the growth needs of high potential companies and IPOs are no longer being used to finance growth. They have now been relegated to liquidity paths for the most part. And Marc explains why in this part of the interview:

But for young companies, everything is connected: stock price, employee morale, ability to recruit new employees, ability to retain employees, ability to sign customer contracts,  ability to raise debt financing, ability to deal with regulators. Every single part of your business ends up being connected and it ends up being tied back to your stock price.

I have lived through this (being public while you are still building the company) and it is not easy. You really want to wait until you’ve got everything very buttoned up before you run the gauntlet that is the public markets.

Of course the important question is can we go back to the way it was before the federal government messed things up with all of their good intentions. I think the answer is no. We are not going to put that genie back in the bottle.

But I do think there is another way to fix this mess and it is already happening. As my partner Albert likes to say “the line between the public markets and the private markets are blurring”.  Platforms like AngelList and our portfolio company CircleUp are allowing individual investors the opportunity to invest in startups and the amount of capital that is being invested on these platforms is growing very quickly.

If the regulators keep their hands off these new emerging markets and let them develop naturally, we will eventually fix this problem. Let’s hope they have learned their lesson from the fuckup that was Sarbanes Oxley and Reg FD and don’t try to help us out again.

Tweetstorming

Yesterday, I tried Tweetstorming for the first time. It was a Tweetstorm about Tweetstorming. You can see the entire storm here.

You might think “that’s a strange way to communicate publicly when there are all these awesome blogging tools out there like WordPress, Tumblr, Medium, etc” and you would be partially right.

What you might miss, and I missed until recently, is that Tweetstorming has some unique characteristics, which I outlined in my storm, that make it different and possibly better in some respects.

But what is certainly true, and I demonstrated by missing Tweet 8/ in my storm, is that Twitter doesn’t make it easy to storm properly and Twitter doesn’t make it easy to consume storms properly. As a result many Twitter users feel that storming is spamming and they also feel like its very hard to consume and engage with storms. At the end of my storm, I encouraged Daniel Graf, Twitter’s new VP Product, to fix all of that.

There are already some good tools out there for Tweetstorming, like Dave Winer‘s Little Pork Chop.

After my storm and the engaging discussion on Twitter, Dave reached out to me and encouraged me to use Little Pork Chop.

I wrote back to him and said that I would try it, but that I would prefer to have Tweetstorming functionality built natively into Twitter and that I had been encouraging the folks at Twitter to do that.

Dave then asked why I would want Twitter to build this when the functionality already exists and that would have negative consequences for the developers who had already been building and iterating on tools to solve this problem.

I wrote back and said that I use Twitter’s Android app for almost all my tweeting and consumption and I really want everything to be right in that app and not have to mess around with third party tools to get what I want out of Twitter.

Which begs an age old question about platforms and the developers who hack around them. And, of course, this age old question has been front and center in the discussion about Twitter since it first emerged back in 2006.

So as I sit here in front of the computer using a traditional blogging platform to compose my thoughts, I see a few interesting questions and I’d love to get everyone’s thoughts on them.

1/ Do you agree that Tweetstorming has some unique characteristics that make it different and possibly better in some ways than traditional blogging?

2/ Do you agree that Twitter should productize Tweetstorming, like they have done with @replies, #hashtags, and RTs, which also emerged organically from the user base?

3/ Do you think that third party tools such as Little Pork Chop should be allowed to satisfy this use case in lieu of Twitter building it natively into their apps?

Please let me know what you think in the comments, and as always, if there are other interesting topics about Tweetstorming to discuss, please introduce them too.

Feature Friday: Trust

I went back and looked at the Ten Golden Principals For Web Apps presentation I did four and a half years ago.

Nowhere on this list is Trust. Maybe that was an oversight. Or maybe times have changed.

Take auto photo backup from my Android phone to the cloud. I have two great options on my phone, Dropbox and Google+.

I don’t use Google+ for this and I do use Dropbox for this.

It is not that I don’t trust Google to host my photos. And it is not that I don’t trust Google in general. It is that I don’t trust Google to change the privacy rules on Google+ and instantly expose all of these photos to their crawlers and the web at large.

It’s really Facebook’s fault that I don’t trust Google with this. Anyone in the social networking game who isn’t already default public is trying to figure out how to get there. That’s the nice thing about Twitter. It has always been default public and so you know what to expect when you post something there.

I trust Dropbox to keep the photos I backup to the cloud private. It’s not that Dropbox is more trustworthy than Google in my mind. But it is that privacy is part of the brand promise that Dropbox makes and their business of hosting all of our data in their cloud depends on them being very careful with our privacy expectations.

Going back to why in early 2010 I didn’t put Trust in my top ten – it may be that Facebook’s assault on our privacy and the loss of trust that ensued was just developing in our collective consciousness at that time. And now we live in a more paranoid state about this stuff.

The rise of Snapchat, I believe, is largely in response to this exact thing. With Snapchat, you have explicit control over who sees your photos and where they go from there. That was a feature we did not know we needed four years ago. And it is a feature that built an entire company. And probably many more. Trust is a very important feature these days.

Some Quick Thoughts on I/O

I am in SF but sadly was not able to make it to I/O. So I’ve been reading up on the news coming out of I/O.

Here, in no particular order, are the things that I am most excited about or thinking the most about:

1) Smart notifications. Many times the top of my screen gets filled with Twitter notifications (I get notifications whenever my daughters and my partners and my wife tweet), and so I don’t see my Kik notifications unless I swipe down to see all my notifications. I would like a mobile OS that looks at what notifications generate the most reliable and immediate reactions from me and put those front and center for me. The notification channel is becoming more and more like email and Google is well positioned to bring some of the smarts it has brought to email to mobile notifications.

2) Android mirroring on Chromecast. I have been so jealous of entrepreneurs walking into USV with only an iPhone, mirroring it to our conference room displays via Airplay, and doing their pitch on their phone. As an Android user, I have not been able to do that. We have both Chromecast and Airplay in our conference rooms at USV. Now Android users will not be second citizens. Yesssss.

3) In app data available in web search. This is a big one. When I search on mobile web for a restaurant, I’d sure like to see a Foursquare result come up if I’ve got the Foursquare app on my phone. Same with Tweets, Songs on SoundCloud, Movies on Fandango, etc, etc.

4) Wear, Car, TV. Google is trying to get Android everywhere. Just like Apple is trying to be everywhere. Regular readers know that I’m a bigger fan of “casting” your phone onto your car, watch, TV, than running apps and such on the devices. We will see how far Google is going in terms of putting smarts on these devices vs making Android phones control these devices. I prefer the latter approach myself.

But, as I said, I was not there. Benedict Evans was and here’s a 30 min podcast where he shares his impressions.

The Aereo Ruling

The Supreme Court just issued its opinion in the case between the TV broadcasters and Aereo over the legality of the Aereo service. It was not particularly close. Six Justices felt that Aereo was infringing broadcaster copyrights. Three dissented.

I just read Justice Breyer’s majority opinion (available on the link above). As I read it (recognizing that I am a layman), the majority went with “if it walks like a duck and quacks like a duck, it must be a duck” argument. They felt that, as delivered, the Aereo service is essentially equivalent to a cable TV service and the rules should be applied similarly.

Justice Scalia’s dissenting opinion rejects the “it must be a duck” argument and goes further to suggest that it ignores widely recognized “service provider liability protections” and will cause confusion for years to come:

The service provider liability protections are near and dear to Internet startups. Many of the companies we have backed over the years have relied on these protections to avoid getting sued out of business the way that Aereo may have just experienced. These are important protections and it is very unfortunate to see a majority of the Supreme Court set a precedent here that goes against those protections.

It seems to me that the majority opinion creates an incentive for engineers to build hardware that would be operated by individuals to create a similar benefit but that doesn’t look and act sufficiently like cable to be infringing. Our former portfolio company Boxee, which was sold to Samsung last year, built something similar to Aereo but instead of provisioning it as a full blown cloud service, required each user to buy a BoxeeTV to get similar functionality. Boxee was not sued by the broadcasters and is now part of Samsung which may not push forward with that part of Boxee’s business (I have no idea), so it’s not clear if that approach will be legally tested any time soon.

But I do believe that customers want to be able to DVR and stream HD content that they can get for free over the air from the broadcasters and I imagine that engineers are already working on other approaches to give the users what they want.

There’s a discussion of this issue brewing over at USV.com as well if you want to check that out.

Why The GOP Should Embrace Net Neutrality

The politics of Net Neutrality (ie preventing the creation of fast lanes and slow lanes on the Internet) in Washington is pretty simple. Democrats are largely for Net Neutrality. Republicans are against it. The reason is simple. Net Neutrality has been sold to Washington by the telecommunications lobby as a regulatory overreach. And in that context, the politics are simple.

But if one thinks of the way the commercial Internet has operated for roughly 20 years, it has operated as a level playing field where everyone’s bits are treated the same. So Net Neutrality is just embracing the way it has always been.

Another way to look at this debate is that big corporate interests (Verizon, ATT, Comcast, etc) have been lobbying for the right to build fast lanes on the commercial Internet for almost as long as the Internet has been around and that investment is finally paying off. They have effectively bought their way into the halls of government and are now looking for their payday.

And the GOP, particularly its Tea Party wing, should find that abhorrent. As Dave Brat, who beat Eric Cantor, said:

I’m an economist. I’m pro-business. I’m pro-big business making profits. But what I’m absolutely against is big business in bed with big government. And that’s the problem.

I am headed to DC today to meet a few people and make this point. Wish me luck.