AVC

Our portfolio company Stash, which offers a super simple mobile investing app and has roughly 2.5mm users, did some analysis on male and female users to see if there was a material difference in risk tolerance between men and women on their service.

The conventional wisdom is that men are risk takers and women are more conservative.

Stash found that there really isn’t much difference between male and female users of their service when it comes to risk tolerance.

And they found that women are more tolerant of the highs and lows that come with being an investor.

Check out the data here.

Conventional wisdom is that deleting old emails regularly is the best way to avoid issues down the road.

My experience has been different.

I’ve been involved in a few legal matters over the years where email discovery has been done.

Going back and re-reading emails you sent years ago is a pretty enlightening experience.

What I have found is if you have the right intentions and act reasonably and responsibly, old emails often show that to everyone and can be valuable.

Being able to go back over old emails is also a great way to jog a foggy memory.

So while I understand the challenges with having a lot of written and discoverable emails “on file”, I would argue they they often can be quite valuable.

Growing up, I always enjoyed the up and down patterns of work and play.

Back to school in the fall, a solid winter break, back to school for winter and spring, and then a long summer break.

Just as you were getting burnt out on school, a break would come along.

By the end of the summer, you were ready to go back to school and there was an excitement about it.

That doesn’t exist so much in the adult work environment unless you live in parts of the world where a long summer break is part of the picture.

As The Gotham Gal and I have moved beyond our child-rearing years, and found a way to work from wherever we are, we are recreating that childhood rhythm for ourselves.

We are wrapping up our summer today and heading back to the fall season in NYC.

It’s a bit like that back to school feeling, with a new lunchbox, some new clothes, the possibility of some new friends, and an excitement about all of that.

Today is Labor Day in the US. It is a day to celebrate labor, the union movement, and the role of the worker in our economy and our society.

I have always struggled with the idea that labor and capital are intrinsically opposed to each other.

It is obvious that workers have been taken advantage of by employers since the dawn of an industrialized society and possibly/probably for much longer than that.

But does it have to be that way?

In the tech sector, we typically issue between 15% and 25% of the company’s stock to the employees and we keep granting this equity as the company grows and expands.

And it is also the case that the tech sector is largely a non-unionized industry.

There are large portions of a tech company’s workforce that are in short supply, most notably software engineers and other technical positions where demand outstrips supply and has for as long as I have been working in this sector.

So there are things about the tech sector that are different from other large industries and I’ve always felt that human capital (as we like to call the people in the tech sector) is more valued in tech companies than traditional industries.

But when a tech company stumbles and starts bleeding cash, one of the first things to go is headcount.

Capital demands that a company have a profitable outlook or it will not flow to a company.

So there are fundamental economic realities that put capital and labor in opposition to each other at times.

But both capital and labor want sustainable companies that grow and prosper.

So it can be the case that labor and capital work together and succeed together.

And that has largely been the case in my career in the tech sector and I enjoy that feeling of shared success.

The Economist has a cover story this week called Peak Valley.

The article suggests that Silicon Valley’s lead as a hub for innovation has peaked and other regions are rising. It ends with the concern that innovation more broadly has peaked.

I somewhat agree with “the rise of elsewhere” narrative and disagree that innovation has peaked.

Our experience at USV has been that we can and do find high impact startups to invest in outside of Silicon Valley but that we find just as many in Silicon Valley.

In our first four funds spanning the vintage years of 2004-2014, we have had twelve very high impact startup investments. Seven of them were from outside of Silicon Valley and five were from Silicon Valley. The seven outside of Silicon Valley came from NYC (four), Pittsburgh, London, and Austin. Each of the funds we raised and invested during that period have had at least one high impact investment in Silicon Valley and at least one outside of Silicon Valley.

But our data set is small. We made investments in a total of sixty to seventy startup companies in that period. And we don’t invest in Asia, South Asia, Africa, The Middle East, and Latin America so we don’t touch large swaths of the area outside of Silicon Valley. And we are based in NYC so we have a home-court advantage there.

My point is that it has always been possible to build a high impact startup outside of Silicon Valley and invest in it too. But if we were to stop looking for investments in Silicon Valley, our opportunity set would be significantly reduced.

What is true is that Silicon Valley has gotten extremely expensive to operate in. We see that across many dimensions. Valuations of startups in Silicon Valley are significantly higher than outside of Silicon Valley. Cash compensation for employees is significantly higher in Silicon Valley than outside of Silicon Valley. Equity compensation for employees is significantly higher in Silicon Valley than outside of Silicon Valley. And the cost of living for employees in Silicon Valley is much higher than outside of Silicon Valley.

All of that means that capital (both human capital and invested capital) needs to achieve a much higher return on input in Silicon Valley than outside of Silicon Valley, all things being equal. I am not sure all things are equal though and that is really the rub.

Silicon Valley has always had one important advantage over other regions when it comes to the tech sector. There is a much higher density of talent, capital, employment opportunity, and basic research in Silicon Valley versus other locations. When I say density, I mean physical density. If you walked a mile, how many tech companies would you pass along the way? That metric in Silicon Valley has always been higher than elsewhere and still is. So even though the return on capital (human and invested) has significant headwinds in today’s Silicon Valley, it is still a lot easier to deploy that capital there. And I think that will continue to be the case for a long time to come.

The Economist piece ends with the observation that some macro dynamics (large incumbents capturing the lion share of the economics in tech and bad governmental policy toward tech) are making innovation harder. While both observations are correct, I do not think we are seeing any downturn in global innovation. What is happening outside of the US, particularly in Asia, is amazing and there are many new sectors that are just emerging now that will drive innovation in new and exciting directions. Things always look darkest right before the dawn and I believe we are seeing the dawn of a number of important new sectors. And I think Silicon Valley is on to all of them and will make a play in all of them. But so will many other regions around the world.

It’s a long weekend with many of us off the grid.

So what do you do when you are off the grid?

Get a GoTenna to stay connected.

This promotional video explains the power of GoTenna when you and your friends are off the grid.

Disclosure: GoTenna is a USV portfolio company.

I don’t know when Gmail started doing these for me but it was around the time I switched over to the new UI. Most likely this is one of the features of that new UI.

When I have not responded to an email that Gmail thinks is important, or when someone has not responded to an email from me that Gmail thinks is important, it resurfaces that email near the top of my inbox.

It looks like this:

The first email is a reply I sent to an email and the recipient has not responded in seven days. Gmail is suggesting that I follow up.

The second is a back and forth with my brother and I failed to reply to his latest. I just did. Thanks Gmail.

While this is a relatively small feature in the overall Gmail offering, I have found it quite useful in the month or two that I have had it.

Thanks Google.

There is a framework I’ve/we’ve used over the years to think about where to invest and where not to invest that I call “atoms vs bits.”

I am not sure where I got it from but the concept is simple. Is the software being built and taken to market dealing with just bits or are atoms also involved?

The idea being that it is going to be easier to make something work if there are just bits involved. Atoms make things more complicated and more expensive.

In the 90s, when I first came across this framework, it led us/me to focus on areas like media and financial services where the product was end to end digital. And the first industries to be truly disrupted by the Internet were the ones, like media and financial services, that are end to end digital (or can be).

I’ve held on to this framework over the years and while we’ve veered from it from time to time, often unfortunately, it still holds up.

If you look at machine learning, possibly the most impactful technology right now (and I mean right now), you can see this at work.

Machine learning algorithms have massively transformed online advertising (just bits), online commerce (just bits on the UI), trading of financial assets (just bits), and our attention (just bits and neurons).

But in areas where atoms are involved, not so much. There appears to be a growing acknowledgement in the tech sector that the timeline to fully autonomous vehicles is going to be longer than some had thought. It is not that surprising. There are lots of atoms and lives involved.

I’ve been waiting patiently for the day that I don’t have to do the dishes after yet another amazing meal by The Gotham Gal. I will likely wait longer. Atoms are involved.

I am not saying that we should not work on these harder problems. We should. But we should also understand that the timelines will be longer and the road to adoption will be more challenging. That means these efforts will be more capital intensive and should ideally be investable at more attractive valuations. Sadly the latter has not been the case.

When you are investing other people’s money, you need to be mindful of where the timelines are shortest and the path easiest. And that has been bits for the totality of my investing career.

Our portfolio company Coinbase partnered with Qriously to study the adoption of blockchain and crypto on campuses around the world.

They published their findings on the Coinbase blog yesterday.

Here are some interesting findings:

Stanford, Cornell, and Penn lead the way in the number of crypto and blockchain courses offered to students.

Blockchain and crypto courses are taught by math, science, business, finance, and social sciences departments.

 

Almost 20% of surveyed students own crypto assets and 26% want to take a course on crypto.

You can read the entire report here.

I’ve been thinking about moving from a Mac to a Chromebook as my primary computing device.

I have not used desktop software for probably a decade now. The browser is how I do all of my desktop computing. Paying up for a full blown computer when all I need is a browser seems like a waste.

And there are some security things that appeal to me about a Chromebook. I like the ability to do two factor authentication on signing into the device, for example.

I am curious what advice those of you who use Chromebooks have for me.

I like to use a desktop style setup vs a laptop unless I am traveling. So the Acer Chromebase and Chromebox look interesting to me.

But I am hearing great things about the Pixelbook and am wondering if I should start there.

I am also curious how one uses a Password Manager on a Chromebook. That’s the one desktop app that I regularly use.

If you have any advice for me as I consider this move, I would appreciate hearing it.