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.

Spotlight

Last week our portfolio company Kickstarter quietly launched something called Spotlight that is quite interesting. A project’s Spotlight is its permanent post-funding page on Kickstarter. Here are a couple Spotlights to look at:

Obvious Child

Electric Objects

When you google a project, the Kickstarter page is often a top result, like this:

electric objects serp electric objects serp

But, until now, behind that link was the project funding page which is not particularly useful once a project has been funded.

Now project creators can turn their Kickstarter pages into showcases for the project that can live on and celebrate the project and much more.

There are two aspects to a Spotlight page that I’d like to talk about.

The Timeline – The timeline shows the chronology of a project, particularly what has happened post funding. Here’s a small slice of Electric Objects timeline:

electric objects timeline

What you can see is the evolution of the project as it moves from funding to delivery and beyond. This is a critical part of the Kickstarter experience for backers and creators and yet, until now, it had no place to live on Kickstarter. For me, this is a great first step into more accountability and transparency for the creators to the community which will lead to a better experience for all.

The Creation – Kickstarter is all about helping to bring creative projects to life. The end result is the creation. In the case of Obvious Child, that is the film. And until now, it was not simple to figure out how to watch the film if you wanted to do that.  Spotlight fixes that too. Here’s a screen grab from Obvious Child’s spotlight:

obvious child spotlight

If you click on that blue button, you will be taken to the iTunes page where you can rent or buy the film.

That blue button is Kickstarter’s entry into helping the community and everyone else appreciate all the creations that have been funded on Kickstarter. It’s not too hard to see where this is going.

Spotlight is Kickstarter’s entry into the world of what happens after a project is funded. That’s very fertile and important territory and I am really excited to watch where they go with this now that they’ve stepped into that place.

Feature Friday: Archives of Live Broadcasts

I wrote about the live broadcasting craze earlier this week. There are three significant players in this market, YouNow, Twitter/Periscope, and Meerkat. I’m a shareholder in two of them (YouNow is a USV portfolio company and we own a lot of Twitter stock personally). So I’ve been quite interested to see how this market is shaping up and I’ve been using all three apps this week.

I should say that I don’t see myself as a broadcaster. That may change. But I honestly don’t know what parts of my day are interesting enough to broadcast and would be appropriate to broadcast. I’m sure the USV monday meeting would be interesting to broadcast but it would not be fair to all the companies we talk about in that meeting confidentially to broadcast that. I’m sure the SoundCloud board meeting would be interesting to broadcast but I’m equally sure the company would be mortified that I would even dare to think of such a thing. I know that I will get some suggestions in the comments and if any are good, I will reconsider the “I’m not a broadcaster” attitude I have right now.

I did accidentally broadcast two seconds on Meerkat this morning.


That happened because I accidentally pushed a button and went live without realizing it (and tweet spammed almost 400,000 followers) to my great annoyance. That’s a UX fail as far as I’m concerned and I’m not sure I’m going to open that app again.

But I do see myself as a consumer of these broadcasts. We’ve been an investor in YouNow for something like three years and I’ve spent time watching broadcasts on YouNow. It’s a classic Internet content marketplace. There’s brilliance right next to silliness. But when you catch something brilliant on YouNow, it’s kind of magical. Tyler Oakley did a YouNow last night that had 120,000 viewers and he raised $20,000 for his Prizeo challenge during his live broadcast. You can watch Tyler’s broadcast via YouNow’s archive mode.

Which leads me to my feature friday topic – archives of live broadcasts. I’m getting real time mobile notifications on my phone from Periscope and YouNow and Meerkat and I’m also seeing invitations to join these live broadcasts in my Twitter feed. But I’m pretty busy during the day when all of these broadcasts are happening. I realize there’s value in watching live (the chat, the engagement, the favoriting, etc) but honestly I can’t tune in live very often.

What I’d like to be able to do, ideally right from my mobile notifications or the tweet, is to favorite or mark to watch later (I use the favorite button on many platforms as my “read later” button).

Twitter’s Periscope also has archives. I snapped this screenshot today from my Periscope app.

periscopoe

I watched my friend Howard”s broadcasts via this archive screen this morning, further confirming that I (and Howard too) are not interesting enough to be broadcasters :)

But regardless of whether or not that particular archived broadcast was any good, I think ironically archives are an important part of the livestreaming experience and I think the leading apps should support this functionality if they want to reach the broadest user base.

Kingpins 2015

Insite is a great program that connects graduate students at leading universities to the startup community around them. It started in NYC and has been connecting graduate students at NYU and Columbia to the NYC startup community for well over a decade. It is now active in other startup communities around the US.

They raise money each year for their NYC programs with a bowling event called Kingpins. Startup companies and VC firms buy lanes and half lanes and the result is a fun night of eating, drinking, and bowling. The startups and VCs mingle with the Insite fellows and all sorts of good things happen.

This year’s event is Monday, April 13th, from 6pm to 9pm, at Chelsea Piers. Half lanes are $1000 and full lanes are $1800. If you are a VC firm and want to support the local community, Insite, and meet startups, you should buy a full lane. If you are a startup and want to drink beer with VCs, think about a half lane. If you are just a regular community member and want to joint the fun, you can buy a single ticket for $150.

The details and tickets are here.

Where Protocols Come From

There’s an interesting discussion on usv.com this week called Where Protocols Come From. Here’s the anchor to the discussion:

Protocols play a vital role in computing, as well as a vast array of our online interactions. The device you’re reading on now has a USB connection; without it, your device couldn’t interoperate with other devices. You’ve probably sent an email to someone in the past hour; without the standard IMAP/SMTP protocol, you wouldn’t be able to send email to people who aren’t on Gmail.

While protocols make interoperability possible, and in fact many are governed by standards bodies, history shows that standards are often imposed by one dominant player. For example, Apple may have quietly invented the new standard for USB. JVC played a large role in the invention of the VHS.

On the software side, the history is a little murkier. Among file formats, Adobe invented the PDF and Apple is largely responsible for the proliferation of MP4HTTP was invented by a computer scientist and widely adopted without the domineering of any one industry player. Attempts to establish social networking protocols, such as Tent.io, have largely failed. We are, however, beginning to see an uptick in protocols proffered by companies, such as our portfolio company Onename.

This week we’re asking:

  • Why have hardware protocols been driven by dominant players but not software?

  • What might it take for a software company to establish a protocol?

  • What conditions must be met to establish to establish an internet protocol?

The discussion is here. We are collecting both comments and posts in the discussion, which is how we do every topic of the week at usv.com.

Comments On The Proposed Bitlicense Regulations

Over the past year, the New York State Department of Financial Services (DFS), led by Superintendent Benjamin Lawsky, has been attempting to create a set of regulations for virtual currency services. They called this set of regulations the “Bitlicense.”

I have been following this issue closely and participated in public testimony before the DFS back in January 2014 that was a precursor to creating these new regulations.

While these regulations will only apply to businesses operating in New York State, they will naturally be a precedent for many other states who seek to regulate virtual currency services and as such, we should consider them a potential framework for all state regulation of virtual currency.

The initial proposed Bitlicense regulations were published last year and were subject to a comment period which produced more than 3,700 total comments. The DFS did an excellent job of working through those comments and came back with a revised Bitlicense draft early this year. The comment period for the revised Bitlicense started in late February and will end this friday, March 27th.

This blog post is being submitted as a public comment on the revised Bitlicense regulations and should be read as such.

While the DFS has taken great care to simplify the Bitlicense regulations and reduce the scope of them, there remain two fundamental and important problems with them, both relating to duplication of existing regulatory requirements.

Before I get into the specific issues around unnecessary duplication in the proposed Bitlicense regulations, I would like to speak about the issue of regulation and startups and high growth companies in general.

I believe startups and high growth companies are important to the US economy and US citizens for many reasons, but primarily because they bring important new technologies into our lives and improve them, and because they are engines of economic growth and jobs.

Startups and high growth companies should be required to comply with all existing laws and regulations. They should not be excluded from the laws that apply to all other businesses. However the arrival of new technologies should always be seen as an opportunity to review and update our laws and regulations in accordance with the benefits and challenges brought by these new technologies.

It is also true that startups and high growth businesses often start with a very small base of employees and capital and they cannot afford the compliance and regulatory affairs teams of much larger companies. Because of this, startups and high growth companies are more heavily “taxed” in their efforts to comply with regulations and we should be mindful of this “tax on innovation” that regulations place on the startup sector and high growth companies in general.

Duplicative regulatory requirements are a particularly harmful form of this regulatory burden. If one regulatory body is responsible for making sure that businesses comply with the rules, we should not force companies to comply with a redundant and duplicative set of rules and compliance requirements. This is particularly true of state regulations as duplicative compliance requirements could, at the extreme, require companies to do the same thing 50 times (once for every state). And small high growth companies are the ones who will feel the pain of this duplicative and redundant regulatory burden the most.

So, it is with that backdrop that I wish to highlight two such duplicative and redundant regulatory requirements in the Bitlicense. The first are the anti money laundering (AML) requirements in the Bitlicense regulations. Virtual currency exchangers and administrators  are already required to comply with federal AML regulations.  In many ways this is a good thing. FinCEN (the federal money laundering regulator) set a clear federal standard for all bitcoin companies in March 2013. New York State and all other states should require these virtual currency businesses  operating in their jurisdiction to comply with the federal AML regulations but they should not require duplicative and redundant AML compliance on a state by state basis.

The second duplicative and redundant provision in the Bitlicense is related to state money transmission regulations, which are already in place and are applicable to all virtual currency businesses. The Bitlicense requires similar provisions to what is already in place for money transmitters under state regulations, thus creating duplicative and redundant compliance obligations, which, again, could end up being replicated in all fifty states around the country. A better construct would be to exempt licensed money transmitters authorized by the DFS to engage in virtual currency business activity, just as the BitLicense has done for entities chartered under NY Banking Law.

The New York State Department of Financial Services has made a commendable effort to understand the risks posed by virtual currency and to construct regulations to protect society from them. There has been a lot of great work done in this effort. And it is particularly helpful to the startups and high growth companies operating in the virtual currency sector to know what is expected of them to operate legally and safely. I believe if the DFS addresses these two duplicative and redundant provisions, we will have a much better and more efficient regulatory structure for virtual currency providers and that will be a very good thing for all involved.

We Live In Public

I’ve written about Josh Harris here before. He envisioned all of the stuff that has happened on the Internet in the early 1990s, roughly ten to twenty years before it happened.  And he tried to bring much of it to market in the mid to late 90s, but the technology and the market weren’t ready for it. I talked a fair bit about Josh in my “history of the NYC Internet community” talk that I gave at Web 2.0 in 2008. Josh was one of the seminal figures of the NYC Internet community and we owe him a lot for what he imagined and what he made.

Josh’s ultimate project was We Live In Public, which is also the name of the movie about Josh that was released in 2009. In the We Live In Public project, Josh put cameras all over his loft apartment in NYC and livestreamed his and his girlfriend’s everyday life, which ultimately led to their breakup. It’s always been unclear to me how unscripted or scripted that project was, but it hardly matters. It was entertaining in a voyeuristic way. It predated reality TV and all that has come since.

I got to thinking about We Live In Public after reading The Verge’s post about our portfolio company YouNow. YouNow is the living breathing realization of Josh’s imagined world where everyone is broadcasting their lives in real time on the Internet. There’s been plenty of media attention to Twitter’s Periscope and also Meerkat, but YouNow has been at this since 2012 and has amassed a huge audience who tip the live broadcasters enabling them to make a business out of livestreaming their lives. If you want to take a look at how all of that works and what goes on on YouNow, give this a read.

I have been watching the livestreaming category emerge for years and it’s been fits and starts for sure. Most of the stuff that is getting livestreamed is hardly entertaining and many of us have more important things to do with our time than watch other people hangingat work or at home. But it sure seems like the category is alive and well and maybe even here to stay. Just as Josh imagined it would be twenty years ago.

On The Beach

The Gotham Gal and I have spent the winter in LA and are heading back east at the end of this coming week.

This morning I took a walk on the beach and thought about the past three months and how it has impacted the way I’m thinking about life and work.  It’s hard to do anything other than grind on what’s in front of you when you are in it. And I’m always “in it” when I’m in NYC and spending the week in the office with back to back to back to back meetings every day. It’s even worse when I fly to the Bay Area for a few days of non-stop meetings. 

So getting on the beach this winter has allowed me to clear my head and think a bit about where the VC and mobile/internet business is heading and where and how I want to engage with it.

It’s not like we took the winter off. I was in the bay area every week for at least a day and sometimes two days. But the ability to go in and out quickly provided some context for me that was helpful. 

And I worked every day, often starting at 6am or 7am because the west coast starts the day later than Europe and the east coast. I was often done by 4pm and took the opportunity to do a ton of late afternoon yoga, which I highly recommend and will try to continue when I get back east. 

But the thing that shifted for me as a result of being out of the office was I read and wrote and thought more (I’ve written more private google docs and google sheets this winter than the entire past year).

I’ve also focused more energy on our existing portfolio companies and less energy on making investments. That has been a thing for me for a while now (I’ve gone from four new deals a year to one or two a year and feeling much better as a result).

I can’t say that I’ve had any big “aha moments” but I do have even more conviction than ever that I want to be investing in what may happen in five to ten years and not commit a lot more time, energy, and money to what is happening now. 

I believe the VC business has gotten hyper efficient at spotting what is happening now and it’s really hard to get outsized returns doing that. Plus there is a lot of headfake risk in doing that and when the antes are so big, headfakes cost you dearly.

I’d rather spend the next few years at the bleeding edge and see if we can get a few things right. I think that will cost us less when we are wrong and reward us more when we are right.  

The great thing about early stage technology investing and beaches is that there’s always another wave coming and when you catch one right, it’s a thing of beauty.

PS – I wrote this post on my phone sitting on the beach. It’s a great place to write.