Posts from August 2011

Our portfolio company Boxee released Boxee For iPad yesterday. I downloaded it on a couple of our iPads around the house today. It's a free app so you can put it on all of your iPads.

Here's Boxee running on our kitchen iPad

As you can see, the home screen has three rows. The first is for the videos that are in your Twitter and Facebook streams. The second is for the videos that are in your "watch later" queue (via the awesome Boxee bookmarklet). The third is for featured videos from the Boxee service.

Here's a short video demo of one of the videos on my home screen running on the kitchen iPad:

There are a number of nice apps for aggregating and streaming video on the iPad including Fanhattan and Shelby. But Boxee brings a few new innovations to the world of iPad video.

First, Boxee has a "my media" tab. If you look closely at the top picture on this post, you can see it just to the right of the Home tab on the upper left of the screen. This tab will provide iPad streaming of video files you have on your local network via the Boxee Media Manager, which you can download here and install on all the computers in your home that have video files on them. I know that I wrote yesterday that files are on their way out, and in fact I don't have any local video files of my own, but I am equally sure that there are many of you out there who have large libraries of video files on your network. If you are in that camp, this feature is killer.

The second feature is "experimental" and Boxee CEO Avner Ronen explains it in his post about Boxee For iPad on the Boxee blog:

We’ve also got something from the “wouldn’t it be cool if Boxee could..” department – one of our engineers has been playing around with AirPlay and we’ve included it as an experimental part of this release. When you click on the AirPlay button on your iPhone/iPad/iPod Touch you will now see your Boxee Box as one of the target devices. Give it a try and let us know what you think!

With AirPlay you can take any video you have on your iPad and play it on your TV via the Boxee Box. That's super cool and I hope this feature makes it out of Boxee Labs into the core Boxee offering at some point.

That's it for now. Give Boxee For iPad a try and let me know what you think.

I've spent a bunch of time talking to entrepreneurs who are building companies in and around the cloud storage space. It's not a space I like very much because I don't think we'll be using files in the cloud. Now Dropbox is a brilliant company and an amazing service and they are doing very well, but will we need a service like Dropbox when everything is in the cloud? I don't think so.

I was in DJ Woooo's Dance/Electro Turntable room last week. I heard a remix track that was super fun. I hit the button to send the track to Rdio. I went to Rdio and listened to it a few times. Then I went to SoundCloud, found the track and then reblogged it into Tumblr. Not once in that experience did I have to touch a file. If Turntable and Rdio had good links into SoundCloud (I'm sure they will in time), I would not even have had to do any searching. It would have been click this, click that, click this and I would have been done. That's how I think things are going to work when everything is in the cloud.

This is why I love Google Docs so much. I just create a document and email a link. Nobody downloads anything. There are no attachments in the email. Just a link. Just like the web, following links, getting shit done. I love it.

That's the future. I'm pretty sure of it. Mobile is a bit of a complicating factor because we are still stuck with downloadable software and unreliable and slow internet connections. But I think we'll fix all of that in good time.

So if you are working in the cloud storage space, I think you've got a bit of a conundrum. The reality of the market today is that people use files. You need to support that use case, enhance it, and make people's lives easier. But over time, that use case will go away. And what people will want is a service that doesn't have files as the atomic unit. And how do you elegantly morph from a file centric model to a document centric model? It won't be easy, I'm sure of that.

Today on MBA Mondays we are going to cover yet another topic in the Financing Options series, financing capital equipment like servers, routers, switches, computers, etc.

Equity capital is expensive. Every time you do a raise, you dilute. It makes sense to look for places where you can use other less expensive forms of capital to fund growth. As we talked about in the last post in this series, I'm not a fan of debt for an early stage startup because there is no obvious way that the debt is going to get paid back. But capital equipment provides an opportunity for debt financing because you can borrow against the equipment. There are two primary ways to do this, capital equipment loans and leases.

Capital equipment loans are loans made by banks and finance companies to provide a company the funds to aquire the capital equipment. The company owns the servers, computers, etc and puts them on its books. The company also has a loan obligation on its books to the bank or finance company. The loan is collateralized meaning that if the company defaults on the loan, the bank or finance company can come take the equipment. The equipment is the security for the loan. These loans are usually self amortizing term loans of around 3 years and carry interest rates of between 6% and 12% depending on the financial profile of the borrower.

Leases are a financing tool used by the manufacturers of equipment (and sometimes by banks and finance companies too). Let's use Dell in this scenario. You want to purchase a bunch of Dell servers to run your web application on. Dell can lease the servers to your company instead of selling them to you. Under a typical lease deal, you will pay the lessor (in this case Dell) a fixed monthly amount for a fixed term, typically three or four years. At the end of the term, your company will have the option to buy the servers for a nominal amount or give them back to the lessor. Some leases will be capitalized and end up on your books and look a lot like capital equipment loans. Other leases will not end up on your books and will look more like renting an office.

In both cases, you are getting capital you need to finance growth (in this case servers and related capital equipment to serve your growing user base) without diluting. And the primary reason for that is the equipment itself provides the security for the loan, not your company, which is likely not credit worthy.

I am a huge fan of this form of financing for startup companies. The risks and rewards are well aligned for both the lender and the borrower and it makes sense for both parties to do these transactions. Don't use your precious funds raised in dilutive equity rounds to buy servers and other capital equipment. Go see a bank, finance company, or manufacturer about a financing arrangement. It's the right way to finance these kinds of growth needs.

I posted yesterday about highlighting and sharing quotes from books. I figured I'd make it a Kindle weekend here at AVC and talk about one other reason I love reading on an iPad and how Amazon could make it even better for me.

When I read, particularly biographies and other non-fiction, I love to hop out of the book and onto the web to get more details. I've been doing this a ton while reading Life, Keith Richard's biography.

When Keith talks about growing up in Dartford, riding bikes around the Heath, I hop out of the Kindle app and into Maps and find the map of Dartford and check out satellite views of the Heath. It's like taking a quick trip there to get some context.

When Keith talks about Andrew Loog Oldham, their first manager, I hop over to Wikipedia and get the lowdown on the guy. It makes the story more interesting to me.

When Keith talks about how beautiful Anita Pallenberg was when he met her, I hop over to Google Images and see what he's talking about. It turns a story into a movie in my mind.

Reading on an iPad via the Kindle app makes all of this pretty easy. I do it all the time. But imagine if, when you highlight something on the Kindle, you get a few more options, like Maps, Wikipedia, Images. Clicking on one of them takes you right to where you want to go. It would be killer. I hope Amazon adds this feature. I'd use it all the time.

When I read a book, I tend to do a lot of highlighting. I like to share many of them publicly on the web. I'm currently reading Keith Richard's biography Life and you can see the public sharing in action right now on my tumblog.

For years, when I came across a highlight I want to share, I pulled out my laptop and manually typed the quote into Tumblr. I do that with hardbacks, paperbacks, and the Kindle app on my iPad. It's a pain in the butt, but the desire to share the quote is such that I've been doing it.

I was with my friend Steven Johnson yesterday and he told me about a trick that is a game changer for me and maybe you too. When you are reading on a Kindle (or a Kindle app), your highlights are sent to a private page at amazon.com. The address of my page (and yours too I imagine) is https://kindle.amazon.com/your_highlights. If you have a kindle and do a lot of highlighting, go visit that page and you'll see all of your highlights.

From there, via the tumblr bookmarklet, it's trivial to share the quote on Tumblr. And so I suspect I'll be doing quite a bit more sharing as a result of this discovery.

Amazon has a gold mine on its hands but they aren't doing much with it right now. First off, they should let me make that page public or at least let me make some of the highlights public and showcase them on a public page. They should let me domain map that page so it becomes part of my social media presence. And they should let me connect that page with Tumblr, Twitter, Facebook, and Google+.

I'm sure I'm not the only person who does a lot of highlighting and would like to share many of the highlights with the world at large. Curation is a huge part of social media and discovery and pulling quotes from books and sharing them is a big opportunity and one that Amazon should work to unlock for us.

Jim Zirin is an accomplished trial lawyer who, when he reached his law firm's mandatory retirement age, made a career shift and became a television talk show host. His show, The Digital Age, is about how technology is changing the world and it runs on NYC's very own cable channel WNYE, channel 25 in New York City.

Jim asked me to come out to Brooklyn last week, to Westinghouse High School, where New York City has a TV studio and talk to him about venture capital, Kickstarter, and Twitter. I did that earlier this week and here is our discussion. It's a 30 minute show and it will run on TV sometime this fall.

The New York Times asked me to give them an opinion piece on the Mayor's effort to bring a new science and technology University to NYC. They also asked a few others, like Caterina Fake, Eric Reis, Dave Tisch, and several more students of NYC and technology. The entire discussion is here.

But the best thing I've read on this topic was not in the NY Times. It was on a blog, of course. Written by NYC's very own Chris Dixon. He nailed it.

This is what I wrote:

———-

The entire world is now a rival to Silicon Valley. No country, state, region, nor city has a lock on innovation in technology anymore.

The Internet has made this so, and there's no going back. We will see Apples and Facebooks get built in China, India, Brazil, Eastern Europe, Western Europe, the Middle East, Africa, and plenty of other places.

New York City has benefited enormously in the past decade from this trend. In technology, it has become the second most active start-up market in the U.S. Sadly, this is not yet true for biotech and energy tech start-ups.

Until recently, "technology" was largely about "moving electrons on wires." Now, "technology" is about building all kinds of interesting applications on top of the Internet. An increasing number of engineers and entrepreneurs are applying their ideas and energy to creating compelling services on the Internet.

Given New York City's cultural diversity, it has always attracted creative people. Amid intense global competition for innovation, it is well positioned to draw more talent.

The Bloomberg administration is wise to get behind the emerging technology sector and support it. The effort to build a world-class science and engineering campus is smart. Of course, we already have a number of great universities in the city, and these institutions are not sitting still. They are producing talented scientists and engineers in greater numbers every day.

The Bloomberg administration should also consider investing in science and engineering education in our public schools — particularly high schools — and the existing universities. We should be supporting what's already working here in addition to building new institutions.

At the start of this year, we raised a fund we call The Opportunity Fund. I blogged about it when we announced it in early January. The idea behind The Opportunity Fund is twofold; to allow us to invest in our existing portfolio companies after they've moved beyond the early stage where we are focused, and to allow us to invest in a few companies that we have been following closely over the years but were unable to invest in at the early stage.

One such company in the latter category is Lending Club. We've been interested in peer to peer lending marketplaces for about five years now. We've studied the category closely but have never found the right entry point. We have watched Lending Club innovate by delivering better risk assesment and mitigation which has led to better returns for lenders and in turn has made Lending Club the leader in this important emerging market.

Last week we closed on an investment in Lending Club which was reported today in the Wall Street Journal. Our partner John Buttrick wrote a short blog post outlining why we made this investment today on the USV blog.

We love marketplaces at USV. They are a special category of large networks of engaged users that monetize extremely well and take advantage of the web natively and powerfully. We are thrilled to be invested in the peer to peer lending marketplace and we are particularly excited to be able to do that through Lending Club.

Over the weeekend my friend Jeff Jarvis and I had a twebate about this topic. You can see it in action on storify thanks to David Connell.

I'm all for real names if people want to use them. I use "fredwilson" on every web service I can and that is almost all of them. It's a vanity thing for me more than anything else. I want to get to the service early enough that I can grab that handle.

But not everyone wants to use a real name. There are all sorts of reasons for that. This post on the EFF blog, which kicked off the twebate between me and Jeff, lists a bunch of them.

This community is a perfect example of the value of anonymity. Kid Mercury, FAKE GRIMLOCK, Prokofy, JLM, etc, etc. They are some of the most engaged community members. We love them (at least I do), and I could care less who they are in real life. What I care about are their ideas, their voice, their participation, and their energy. If anonymity brings that out in some, then bring it on.

David Weinberger left a comment on Caterina Fake's blog that I love and reblogged on Tumblr last week:

In our culture, we’re suspicious of strangers. They’re a threat. They lurk in shadows. On the Web, however, strangers are the source of everything worthwhile. Strangers and their utterances are the stuff of the Web. They are what give the Web its matter, its shape, its value. Rather than hiding in our tents and declaring our world to exist of the other tents near us — preferably with a nice tall wall around us — the Web explicitly is a world only because of the presence of so many strangers.

The desire to clean up the web, civilize it, and sterlize it pisses me off. I hate it. The Zuckerbergs can run a sterile community on the web if they want. That's just fine. But to suggest that real names is the source of their success it to learn the wrong lessons from Facebook.

Facebook is successful because they bring structure (phototags are the best example) and order (the newsfeed) to the social web. The requirement to use real names is a weakness not a strength of the service.

But of course not everyone will agree with me on this. Jeff doesn't. We ended our twebate with an agreement to take this debate to the stage. I hope we can do that this fall somewhere in NYC. I'm hoping for some sketchy dicey neighborhood to be honest. This is an important debate as it impacts the way social services are designed and executed. So let's have it.