Video Of The Week: Something Thinking of You by Ian Cheng

This is an art project by Ian Cheng that is livestreaming on YouTube this month. My daughter Jessica helped Ian get this up and streaming. She works for Ian part-time.

What is cool about this art project is that it is machine made, meaning that the scenes are being created by a machine, and the project evolves over time. If you check in tomorrow, it will look different from what it looks like today because it has evolved over time.

We’ve been running this on the monitor in the USV lobby along with some other video art this month, so if you’ve been by our office you’ve probably seen this already.

Feature Friday: While You Were Away

I love the “while you were away” feature on Twitter. It’s full of great stuff every time they show it to me.

My sister in law said to me last weekend “I hope they never get rid of the classic timeline on Twitter.”

I replied “I wish they would have gotten rid of it years ago.”

Different strokes for different folks I guess.

I use gmail’s priority inbox because I don’t want to see every email that comes into my inbox.

I wish there was a curated version of my Twitter timeline so I would only see the best tweets that come in.

Of course, I’d like to be able to see all the tweets if for some reason I wanted to do that. I think Twitter should maintain that view for the hardcore users like my sister in law who want that.

But I doubt most people want to see everything. Facebook got rid of “see everything” as the default view many years ago and they massively improved the user experience in doing so.

So I’m eagerly awaiting a curated version of my timeline from Twitter.

Until then, I’ll have to be satisfied with “while you are away.” And I am.

Aiming Blog Posts

I got a note yesterday from a CEO I work with asking if a specific blog post was aimed at him.

I replied and told him that I try very hard not to aim blog posts at anyone or any company. 

Of course I have those temptations from time to time but I feel that using this blog as a way to send a message to someone or some company is not appropriate and I don’t do that.

I am certain that people will read stuff on this blog and think “that is about the company I work at” of “he is taking about our CEO.”

I would like to make it clear that while it’s easy to see why people would think that, that is not what is going on.

I work with a lot of companies and we see many more that we don’t end up investing in and working with. They share common traits and we see many patterns that emerge. I like to write about those patterns and when I do that I’m writing about something that I see in many companies. Your company may exhibit those characteristics but I am not writing about a specific company.

The Phablet Effect

I am seeing less and less user sessions happening on tablets across our portfolio. I heard someone call that the “Phablet Effect” yesterday.

The idea is that as more and more mobile users adopt “phablets”, like the iPhone 6 Plus or the Nexus 6 which I use, they get less value from a larger form factor like a 7″ or an 11″ tablet.

I went to look at the AVC statistics to see if we are seeing the “phablet effect” and the answer is yes.

Here are user sessions at AVC over the past five or six years by device (click on the image to see a larger version).

Blue is total. Green is desktop. Purple is smartphone. Yellow is tablet.

sessions by device

As you can see tablets came out strong and for a few months in mid/late 2012 were neck and neck with smartphones.

But since then tablets have been flat (and down significantly in 2015 but you can’t really detect that in this chart) while smartphones keep getting closer and closer to desktop sessions and will pass them at some point in the next year or two.

We have a bunch of tablets in our homes. They are occasionally used for reading or other applications, but they are mostly used as remotes for our TVs and music systems. They are great for that.

This begs the question if tablets are a failure as a product category. That’s a strong statement given that 45mm tablets were shipped worldwide last quarter. But when 350mm smartphones are shipped in a quarter vs 50mm tablets, you can see what I’m getting at.

Tablets are niche. Watches are niche. You could even argue that desktops are becoming niche.

Everything pales in comparison to the smartphone it seems.

Alphabet Soup

So yesterday, out of the blue with no leaks no speculation & no anticipation, Google goes and reinvents itself.

How does the most important company in the world (note I did not say most valuable), do that?

I have always had a tremendous amount of respect for Larry Page and Sergey Brin and the senior team they surround themselves with. When it really matters, they do things right and get things right.

The way I see it, Google is the cash cow that finances all the big bets Larry and Sergey are making inside Alphabet. The public markets get the transparency of seeing how the cash cow is performing and how the entire holding company is performing.

Think about it this way. For $445bn, you get $70bn of cash, Google, which does $70bn of revenue and produces $20bn of operating cash flow (probably more now that is it not going to burdened by all of these other investments), and all of these big bets, including Google Ventures and Google Capital, which are about the biggest investors in the VC sector right now.

That’s what you got when you bought Google last month, but now it is a lot clearer what you are getting.

You could easily make the argument that buying Google at $445bn gets you all of these big bets for free because the cash cow is almost certainly worth the $375mm of enterprise value that the market is putting on it.

Makes me think seriously about going out and buying our family some of that alphabet soup. I think its going to be good.

Been There Done That

I saw the TechCrunch blurb about Blockfeed this morning and my immediate reaction was “we tried that.” Almost a decade ago, we invested in Outside.in which was trying to do something very similar to Blockfeed.

Outside.in didn’t work but that doesn’t mean Blockfeed won’t work. The volume of hyperlocal content that is created today is likely an order of magnitude larger than what was available to serve up a decade ago. And geotagging capabilities have improved significantly in the past decade as well. And consuming hyperlocal content in a feed on a geolocated device is way easier and more common today than it was a decade ago.

So I wish Blockfeed well in their attempt to build a hyperlocal aggregated news service. The idea appeals to me as a user as much as it did ten years ago.

But it doesn’t appeal much to me as an investor. Because I’ve “been there done that.” And the emotions of trying something, working really hard on it, and coming up empty can get in the way of an investor’s willingness to try something again.

I know that I should get over this tendency to reject investment ideas that I’ve tried and whiffed on before. You could have tried streaming video in 1999, lost everything on it, and then passed on YouTube when it came around, and that would have been a mistake. You could have tried delivery services in 1999 (we did), lost everything on it (we did), and then passed on the latest batch of delivery services and that might be a mistake.

But even though I understand that rationally, it doesn’t help with the emotional aversion to trying something again that didn’t work last time. And venture capital investing is not a detached cold hyper-rational exercise. It is a deeply emotional and connected experience. And thus the reluctance to go there again.

The Follower Hockey Stick

A week or so ago, I happened to notice that my Twitter follower count had gone up by 75,000 in the span of several weeks. Since then, it’s gone up by another 15,000.

Here’s the chart from Twitter’s analytics service:

twitter follower count twitter follower count

I’ve learned over the years to be highly suspect of anything that looks like a hockey stick and so I looked at the list of recent followers to see if anything was awry.

I was expecting to see a bunch of spam accounts and maybe that’s what is going on. But a lot of the recent followers look reasonably legit.

It’s not clear to me what is going on. It’s like once I crossed 400k followers my “who to follow” score went way up.

In any case, I’m happy to have so many new followers. Sadly I’ve not been tweeting much lately since I stopped tweeting out the AVC posts every day.

Maybe this will be an impetus to tweet more often. We will see.

Fun Friday: Debate Recap

I don’t know how many AVC community members watched the first Republican debate(s) last night, but I did and I thought it might be fun to talk about them today.

I’ve never been taken by Trump or Bush and wasn’t last night either.

I thought Kasich and Rubio were the best of the bunch. Kasich because he’s real and substantive and Rubio because he’s impressive and articulate.

I’m curious what others thought. If you didn’t see the debate, you should still feel free to weigh in. It’s fun friday afterall.

Board Leadership

I’ve been sitting on private company boards since the early 90s. I have also sat on a few public company boards and a bunch of non-profit and civic boards. You could say that I am a professional board member.

Like all organizations, boards need leadership. It can come from a CEO, but often it comes from a Chairman or a board member who steps up and provides leadership without being named or titled as such.

The board is tasked with governance. The Board doesn’t run things, but it governs who runs things and how things are run. I’ve heard it said many times that a board does only one thing – hire and fire the CEO. While that is somewhat true, it simplifies the role of the board and trivializes it.

A board’s job is to make sure things are going in the right direction and when they are not to step in and make changes in an attempt to get things back on track. While that can and does include leadership changes, it also involves acting as a sounding board for management’s plans and a being a body that management is accountable to.

A good board can provide immense value to a CEO and his/her company.

If you are not getting what you want out of your board, or worse if your board is causing trouble for you and your company, consider addressing the board leadership question. There is nothing worse than a collection of strong minded people who don’t agree with each other all telling you what to do and pulling you in multiple and opposing directions. If that feels like what is going on with your board, you need to find someone on the board to step up and lead the group. It can be the CEO, but if you are the CEO and you aren’t getting what you want out of the board, it is very possible that you need someone else to provide board leadership. The easiest and best way to accomplish this is to find the strongest and most natural leader on the board, take them aside, tell them what you need from your board and what you aren’t getting, and ask them to step into the Chairman role and assist you in organizing, managing, and leading the board. You can do all of this without playing the Chairman card, but it makes it easier to name the role and put someone into it.

The leader of the Board should help you set the agenda of the board meetings. They should help you decide what is important to talk about at the meetings and what is not. They should help you get through the meeting on time and cover everything that needs to be covered. They should make sure the most important topics get the most air time. And they should make sure that everyone who wants to say things get to say them without taking over the meeting and wasting everyone’s time.

The leader of the Board should chair the executive session at the end of the meeting that happens without you. They should solicit feedback from the entire board and then they should share that with you so that you can process it and get value out of it.

The leader of the Board should also help you manage the most challenging and difficult Board members. They should advise you on how and when to communicate with them and what to emphasize and what to ask of them.

Most importantly, the leader of the Board should become your partner in managing your investors, your Board, and your company. They should be someone who can put their interests aside and act with the best interests of the company and management at heart.

If and when you find this person, they will be incredibly important and valuable to you. I’ve seen many people play this role masterfully over the years and I play it from time to time myself. It’s a very time consuming but rewarding job.