The Filecoin Testnet Is Live

Our portfolio company Protocol Labs is the creator of the IPFS protocol and the Filecoin protocol. The idea behind both of these open source projects is to decentralize the storage of information on the web.

The Filecoin project is very ambitious. The idea is to create a decentralized storage network by allowing anyone to mine Filecoin by hosting files on the Filecoin network.

Yesterday the Filecoin project announced that the Filecoin Testnet is live. This means that an “alpha” version of the Filecoin network is up and running and anyone can connect to it and use it.

Filecoin has been 2 1/2 years in development since the project was funded in the summer of 2017. The launch of the testnet signals that the research and design phase is over and the protocol is now making it way towards going live next year.

This is a story that is playing out all across crypto. Many high profile projects were funded in 2017 and 2018 and have been heads down designing and building their protocols and networks since then.

Getting these projects out of development and into the market is a big step for the crypto sector and I believe that will be a big theme for crypto in 2020.

Butter

I once asked a famous celebrity chef how he made his pasta taste so good.

He answered “Butter. Lots of it.”

When we land in Paris, jet lagged and cranky, we head right to our favorite street cafe and order strong coffee, baguettes and butter. And our systems are restored.

Butter is one of my life’s treasures. I love it.

Butter is also something we look for in the products and services we invest in at USV.

My partner Nick coined the term Butter, at least inside of USV, and he wrote about Butter on his blog recently, explaining what it is and why we look for it.

I particularly like this part of his post:

On the consumer side, Butter means end-user experiences that are frictionless and joyful.  For example, I recently went to China and was blown away by the QR Code experience — straight butter wherever you go, linking the real world to the online world.  Duolingo is Butter for Learning.  Nurx is Butter for Health.  Coinbase is Butter for Crypto.  Amazon Prime is Butter for e-Commerce.

https://www.nickgrossman.is/2019/the-butter-thesis/

Nick provides some good guidelines on how you can make your product or service buttery in his post.

We look for buttery products and services to invest in because customers look for buttery products and services to use. It is really that simple.

So when you design and build your product or service, make it buttery. That will lead to all sorts of good things.

CS Education Week

This week is CS Education Week. There are CS Education week events all around the world, mostly in schools where students will do an hour of coding.

In NYC, where I do most of my CS Education work, there are CS Education week events in many/most of the public school buildings this week.

As I could not be in NYC this week, I went onto Twitter this morning to see what is going on and saw this:

I love Hopscotch Coding. Young students deconstruct the game of Hopscotch into the various moves and then lay out the code next to the Hopscotch game to show how they played it. This teaches students so many important skills at a very young age and doesn’t even require a computer.

Spencer Dinwiddie, the point guard from the Brooklyn Nets, went to PS 196 in Williamsburg and did an Hour Of Code with the students.

Students at this school in Little Neck Queens did coding exercises in English, Math, and Science. One of the great things about CS is that it integrates so well into many different disciplines.

Celebrating CS Education Week in your school or your child’s school is a great thing to do and I encourage everyone to celebrate CS Education week by doing that this week.

Algolia

One of the things I am most focused on with the new AVC.com, which is coming soon, is a better search experience.

I have been impressed by how much we were able to improve the search on the new USV.com and the way we did that was by using a site search service called Algolia. So I am going to use Algolia here at AVC as well.

Algolia allows me to customize the search results to improve them. That means I can work on improving the search results here at AVC over time.

There are 8,470 posts here at AVC as of today. That’s a ton of content. And finding the post you remember reading and want to read again, or send to someone, has never been easy.

I hope and expect to fix that soon.

Getting Tech Into The Boroughs

A number of elected officials tweeted “I told you so” when the news came out at the end of last week that Amazon had taken space in Hudson Yards and will move 1500 jobs there soon.

While the question of what kind of public funded incentives should be used to incentivize the behavior of the wealthiest corporations in the world is a conversation that we must have, the truth is we all lost something when Amazon decided not to build their second headquarters in Long Island City and bring 25,000 good paying jobs to Queens.

Where companies locate does matter. Sure you can take a subway from Jamaica Queens to Hudson Yards and some people will.

But NYC’s large and rapidly growing tech sector remains largely white and asian and centered in lower and midtown Manhattan.

I dream of a day when communities like the South Bronx, Jamaica Queens, Brownsville Brooklyn, and St George in Staten Island can have tech companies as residents and tech jobs will be readily available to the residents of those communities.

A good start is NYC’s groundbreaking CS4All program in which computer science teachers and classes are being made available in every public school building in NYC. Another good start is CUNY’s emphasis on making high quality computer science majors available at many of its twenty five campuses around NYC.

We are well on our way to training the tech workforce of tomorrow which can and should be as black and brown and female in the future as it is white and asian and male today.

But we also must connect the tech sector to the vast part of NYC that exists outside of lower and midtown Manhattan.

And the best way to do that is to create incentives of some sort for large and small tech companies to spread out into the outer boroughs.

There is a fantastic building in the Brooklyn Navy Yard called Dock 72. I have suggested to many of the tech companies that I work with that they move there. Some have taken a subway over there to take a look. But many have told me “I’m happy here in Manhattan.”

Locating in Manhattan is easy. You can recruit employees from New Jersey, Westchester and Connecticut. Moving to the boroughs is a harder decision.

So we need to encourage that behavior. If not tax incentives, then let’s try something else.

But if we leave this to the market to sort out, we will see the next 250,000 jobs created by the tech sector located in places like Hudson Yards and not Industry City.

And that will be a loss of all of us.

Bigger Isn’t Necessarily Better

Crunchbase has a story up today explaining that Series A and Series B rounds make up between 25% and 35% of all $100mm+ “supergiant” rounds every year.

That’s interesting but what would be more interesting is to compare the cohort of companies raising Series A and Series B supergiant rounds to the rest of the companies in a given year that raised Series A and Series B rounds.

What would interest me are success rates between the two cohorts. One could measure how many of each cohort are alive five years later. Or one could compare the stock price appreciation over the five year period between the two cohorts.

I have found, and written here, that performance of VC backed companies is inversely correlated to how much money they raise.

There are all sorts of reasons for that, but mostly it is that money is a burden, and anchor, it weighs you down and slows you down.

So I’d like to see the data on these supergiant A and B rounds. I suspect it will be pretty poor.

AIVC

My friend Fraser took a large number of AVC blog posts over the years and trained an AI model on them.

The result is a blog written by a machine.

You can see it here.

One one hand, it is kind of amazing that you can train a machine to write like someone.

On the other hand, I don’t think I will be out of a job anytime soon.

Digital Money

I was listening to this podcast on the treadmill this morning. It is a conversation between Peter McCormack and Andreas Antonopoulos about Bitcoin, Privacy, Freedom, and a lot more.

At one point Andreas says that we have digital money already, but it is largely debits and credits on ledgers in banks and other financial services companies. He also says that cash is currently only about 8% of global money and that number has been going down steadily over the last fifty years as digital money has taken over.

His point, and it is a good one, is that cash is decentralized money. But money that is registered on a ledger maintained by a corporation that is highly regulated by the government is an entirely different thing.

After listening to the podcast, I bought some more Bitcoin this morning.