Taking Inspiration From Failed Projects

It’s easy to dismiss ideas after the first attempt fails, but I don’t think we should do that. Instead we should learn from what worked and what didn’t.

I saw the news that the Mayweather fight was watched on Periscope by many people and thought “that was the same thing that used to happen on Justin.tv.” Justin.tv failed, or actually pivoted into a big success, but Justin.tv did not work as a business. I’m not saying Periscope or YouNow (our bet in that sector) will be successful but if they have learned from what worked at Justin.tv and what did not, they will have a better chance of success.

I’m reading Nathaniel Popper‘s excellent history of Bitcoin called Digital Gold (out May 19, available for pre-order) and he goes all the way back to the mid 90s to tell the story of the development of Bitcoin. In 1997, Adam Back invented Hashcash as an early attempt to create a digital currency. It failed as a digital currency in its own right, but later emerged as the proof of work algorithm in Bitcoin.

It’s easy to look at Bitcoin and say “that came out of nowhere”, but the truth is Bitcoin emerged from several decades of work in cryptography, peer to peer networks, and digital currencies. Satoshi had some breakthrough ideas in his white paper, but much of it was inspired by earlier work done by others.

That’s the way it always is. In tech, in literature, in the arts, and in most everything.

Why be civically engaged if you’re in tech?

Tomorrow, Ron Conway and I are going to kick off Disrupt NY 2015, with a fireside chat with Kim-Mai Cutler. We plan to discuss philanthropy and civic involvement. I’m looking forward to this talk. I think folks in the tech sector need to embrace philanthropy and civic involvement and I look forward to making the case for that.

I’ve been working in the VC business since the mid 80s. And for most of that time, I’ve felt that the tech sector was surprisingly uninterested and uninvolved in things outside of the tech sector. That’s a great strength of the tech sector, it’s is focused on innovation, making things, and building companies. And it does not get distracted by things outside of that realm.

But we know that the things we make and the companies we build have great impact on those outside of the tech sector. It can be for the good, like building cars that don’t use carbon fuels and showing the auto industry that it can be a good business to do that. It can be for the bad, like automating away jobs that once paid the way for a middle class lifestyle.

It feels to me that our economy and our society is now deeply entwined with technology and being significantly impacted by it. If that is true, I believe it is shortsighted to avoid getting engaged in the discussions and debates about what kind of world we need to work toward. I think one way or another the tech sector is going to get pulled into these debates. It will be one thing if that happens thoughtfully and positively and another if the tech sector is pulled into them kicking and screaming.

Regular readers of this blog know that my partners and I have been involved in these discussions since we started USV over a decade ago. We spend our time, energy, and capital in areas like policy debates, philanthropy, and civic engagement. There are others in the tech sector who do the same. Ron Conway comes to mind as someone who has spent a similar amount of time, energy, and capital on this stuff. And I am thrilled to share the stage with him tomorrow as we discuss these issues.

We go on stage at 9:05am eastern tomorrow. I’m hoping the talk will be livestreamed and you can watch it live. If it is, it will be somewhere like here.

Video Of The Week: SEP Spring Showcase

The SEP (Software Engineering Pilot) Spring Showcase is today from 10am to 2pm at BRIC in Brooklyn. I’m still in Paris so will miss it but I encourage anyone in NYC to attend. Here’s a video from last year’s showcase so you can see what goes on at the SEP showcase.

SEP Showcase from SEPNYC on Vimeo.

Conveniently today’s SEP Spring Showcase is just a short walk from CrossFit South Brooklyn, where “Get Fit or Be Hacking” is happening at today at 2pm. As I blogged about several weeks ago, “Get Fit or Be Hacking” is the coding+fitness competition my friend Rob Underwood organized to raise money for CSNYC. The event is open to the public if you’d like to cheer on the teams. There is also an after-party at Three’s Brewing at 5pm that you’re welcome to stop by — Sean Stern, one of the star CS teachers from the Academy for Software Engineering, will be at Three’s among other friends and advocates for computer science.

If you’d like to support CSNYC and programs like SEP, think about supporting one of the teams competing at Get Fit or Be Hacking by making a donation on the “Get Fit or Be Hacking” fundraising page on Crowdrise. And if you enjoy watching amazing kids do amazing things with code, check out today’s SEP Spring Showcase.

Having Empathy For Your Users

My partner Albert has a great post up today on the limitations of data and A/B testing in managing a product. He strongly advises that product teams do two things that many don’t do

1) do in-person product testing sessions to see users interacting with the product and develop an understanding of why users struggle with aspects of the product

2) use the company’s product (really all employees should do this)

I want to echo Albert’s point and suggestions. I feel like the companies we meet with and work with generally do a good job of instrumenting their products and collecting on data on what is working and what is not working. But they often don’t have good answers for why the behavior they are seeing is happening. It’s hard to fix something you know is broken unless you understand why it is broken.

Dronebase

A couple years ago, in early 2013, I started writing a lot about Drones. I have always thought that Drones represent the leading edge of a robotics age. There are a host of reasons for that but the main ones are that they are already being actively used in military and some commercial applications, they require less coordination with the “real world”, and they represent a 10x improvement in cost and speed over things they replace (helicopters and planes).

However, finding an investment in this sector that fits well into our investment thesis has been challenging. We’ve looked at quite a few Drone investments but until recently we have come up empty. However, last month that changed when we closed on a seed investment in Dronebase.

Dronebase is a marketplace for Drone services. This is not a consumer oriented marketplace. This is a business to business oriented marketplace. If you are in the construction industry and want to hire a Drone Service Provider to monitor or survey your job site, Dronebase is for you. If you are in the mining industry and want to hire a Drone Service Provider to measure inventory values in your stockpiles, Dronebase is for you. If you are in the real estate industry and want to hire  Drone Service Provider to create aerial imagery for your properties, Dronebase is for you.

Dronebase is standardizing pricing and quality around two basic offerings to start; aerial imagery & video and more data-driven mapping & surveying (including the relevant analysis).

Like all investments, who is doing this is as important as what they are doing. Dronebase was founded by Dan Burton, a former Marine Infantry Officer, who saw the power of Drones firsthand in his time in Iraq and Afghanistan. He came back to the states and worked in a number of interesting jobs, but never lost the fascination for and the interest in Drones. So he started Dronebase to facilitate the commercial adoption of Drones.

This is a seed investment for USV. Dronebase is operating, but only in the Los Angeles market right now. They have big expansion plans which this seed capital will help facilitate. They are looking for software engineers and sales and operations people in the Los Angeles area. If you are interested in working at Dronebase, check out their careers page and apply.

On Europe Time This Week

The Gotham Gal and I flew to Paris last night and we arrived this morning. I’ve got meetings here the next few days and then we plan to enjoy Paris with some friends late this week and weekend.

I watched The Social Network on the flight over for the first time. The depiction of VCs in the film and the way the cap table got reconstructed was horrifying to me. I know stuff like that happens but it is not the way we do business nor is it the way many people in the VC and startup sector do business. So it is unfortunate that a popular film about the startup sector revolves around that narrative. It makes for a great story, and possibly is true (I don’t really know) but it does not paint our sector in a particularly good light. Otherwise it was an entertaining film with great performances.

I plan to post at my regular early morning hour so those of you on the west coast might see new posts going up before your bedtime this week.

Using CrowdRise To Help People In Nepal

When a disaster strikes, caring people all over the world seek ways they can help. Usually that means giving funds to a global relief organization like the Red Cross. But in the age of crowdfunding, giving to relief efforts takes on an entirely new flavor. You can see that in action on our portfolio company CrowdRise’s service this morning.

nepal

Crowdfunding means you can target your giving with more granularity.

You can give to this family in the US raising money to help their relatives in Nepal, who are now living in a temporary tent and are in desperate need for help.

You can give to this campaign where CrowdRise employee Mallory is raising funds to go to Nepal and help.

You can give to this campaign that celebrates Google engineer Dan Fredinburg who was killed while climbing Mount Everest this weekend.

You can give to this campaign that benefits a local relief effort.

The Gotham Gal and I have given to all of these campaigns and I hope you will consider giving to something as well.

All of the Nepal relief efforts on CrowdRise can be seen here.

The Lesson Of Title II and Time Warner Cable: Markets Have Two Sides

On thursday of this past week, I attended a small gathering of academics and policy makers who follow the technology sector. During that gathering, the news came out that the Comcast acquisition of Time Warner Cable was falling apart due to regulatory opposition. The conversation turned to the reasons why this happened.

I surmised that the reason for both the failure of Comcast/Time Warner Cable and the success of the Title II debate several months ago is that regulators and policy makers now understand that markets have two sides and you can’t just look at the consumer facing side of a market.

Comcast was correct in its assertion that they have very little customer overlap with Time Warner Cable and therefore consumers were not being harmed by the consolidation of the two networks. But if you look on the other side of their networks, to the suppliers of applications (Amazon, Google, Facebook, etc) and content (Time Warner, News Corp, Netflix) you see that the consolidation was going to be very harmful. Netflix was going to have one company standing between it and possibly half of its customers in the US. Same with Facebook. And there is no way that was going to be good for them. They may not have come out publicly in opposition to the merger, but you can bet that they came out in opposition privately.

The same is true of Title II regulation of the last mile Internet access. This was not a consumer story either. Very few advocates of “net neutrality rules” believe that this is a consumer issue. Very few have advocated that Internet access prices should be regulated. The debate has always been about the supply side of the market. The side where applications and content live. And the decision to apply Title II regulation to last mile Internet access was essentially a recognition that both sides of a network matter and that it is bad for the economy, society, and innovation to have a network attain enough market power to control what happens on the supply side of a market.

I don’t know enough about communications policy and antitrust policy history to know whether the two sided market construct has played an important role in the past. I think it may well have been an important factor in breakup of AT&T’s monopoly on wired telephony. And I expect there have been other examples as well.

But the one two punch of Title II and Comcast/TWC is a reminder that both sides of a market matter and competition (or the lack thereof) will have an important impact on how these markets function. I am a fan of both decisions and believe that our regulators and policy makers are thinking about this stuff correctly.

Video Of The Week: Albert’s TEDx Talk

My partner Albert gave this TEDx talk earlier this year. Somehow I missed it until this morning when I was looking around YouTube for something to post. I’ve heard Albert articulate all of these ideas for years. He’s influenced my thinking on them greatly and I’ve gone from dismissive, to skeptical, to supportive of experimenting with them. I suspect you will move in that direction too after watching this short (17mins) talk: