Herky Jerky Investing

The WSJ says some venture funds hit pause on big deals. The Journal describes

a group of venture capitalists dialing back on certain deals after a breathless year of venture investing that had some comparing 2011 to the late 1990s dot-com bubble. Many venture capitalists said they now are increasingly passing on companies seeking frothy valuations, and some are trying to get off the beaten path to find cheaper deals.

I am not a fan of this start and stop style of investing. Nobody can time markets. You can't deliver great returns to your investors by being a momentum investor during some periods and a value investor in others.

I believe the only way to be a top performing investor in any asset class is to have a disciplined investment strategy and approach and apply it consistently and actively in all markets all the time.

I am proud that our firm has been investing at about the same rate of new investments per year for almost eight years now. It hasn't gone up much but it also has not gone down much. We will never be the most active venture capital firm. But we will never be inactive either. We are open for business as much today as any other day in the past eight years. If you are building a large network of engaged users that has the potential to disrupt a big market, please talk to us about what you are doing.

#VC & Technology

Comments (Archived):

  1. Elie Seidman

    Fun exercise to prove to yourself that it’s incredibly difficult – or basically impossible – to know what “moment” the market is in when you’re in that moment: read old magazines, newspapers and blog posts and focus on the articles that are not news (such and such happened today) but rather analysis. You’ll laugh out loud – a lot. 

    1. fredwilson

      i will do that. sounds like a useful exercise

  2. Rohan

    ‘Greatness is not primarily a matter of circumstance; Greatness is first and foremost a matter of conscious choice and discipline.’ | Jim Collins, Great by ChoiceThis came to mind as I read this. Have a nice day! 🙂

    1. fredwilson

      i’d add “applied consistently over a long period of time”

      1. JamesHRH

        Consistent, persistent & adaptive – the hallmarks of greatness.

    2. tyronerubin

      @rrohan189:disqus loving great by choice. Almost half way [email protected]:disqus been using rescuetime.com for a bit now and could be that tool for me in 2012 that adds real value to my life. Letting you know this because AVC.com accounts for a lot of my time on their charts of my time spent. Letting it run in the background could prove to be very useful and powerful work analytics. Letting it run in a work environment can also I am sure be very powerful. I wonder where that product will go in terms of mainstream usage. Do you use evernote?

      1. Rohan

        Thanks Tyrone! I’ve been using Rescuetime over the past couple of months as well. 🙂 Great tool..AVC time is miniscule at my end overall.. since I only pop in and out for a few mins. I guess it adds up if you leave the window open. 🙂 And I’ve tried Evernote. Doesn’t work for me. I use OneNote and Love it!

  3. Elie Seidman

    As far as I can tell, during every moment when it was being reported that “VCs are pulling back because the climate is bad right now” there were great companies being founded and built. The media – which is an important source of the “information” that the cycle chasers are reacting to – are not paid based on how right they end up being 5 years later – they’re paid based on ads and page views. 

    1. fredwilson

      yup. when i look at the companies we backed during the “financial crisis of 2008” i am so glad we just kept doing what we were doing

      1. bfeld

        Strong reinforcement of the vision – just by looking at your portfolio and what you did in that time period.

    2. jason wright

      Mass media is structured for ‘snapshot’ capture and distribution of information and income, with a motor drive attached. The product is a kaleidoscope of ephemera.

  4. Dudu Mimran

    “building a large network of engaged users that has the potential to disrupt a big market” – the most focused investment strategy I have seen in a while!Are you interested in already existing networks:)?

    1. fredwilson

      yes, absolutelymy partner Brad is responsible for those words. he says we have to have an investment strategy that can fit inside a single tweet. he’s right.

      1. awaldstein

        When you looked at something like FourSquare, what market where you disrupting? I can see it of course as disrupting local advertising but it’s on the line between that and a platform for a new behavior.

        1. fredwilson

          time out magazine, zagat, yellow pages, etc, etcbasically local media

          1. awaldstein

            Big time vision on their part. 

          2. William Mougayar

            They’re getting close to it, daily…

  5. RichardF

    It’s like growing any company really you have to build on the vision and not take a reactionary stance.

  6. Brad Lindenberg

    I noticed your investment in Shapeways on the USV portfolio page. I think 3D printing is going to be massive.I see this as the Etsy of the future. E.g. The battery cover of my remote control snaps, just buy a “3D file” for $1.50 on Shapeways and print it on my 3D printer.I think this a GENIUS investment. We are a while away from having 3D printers in every house, but probably not as far away as we think. I think this will be one of those investment areas that most people overlook today but in 5 years time it will be blindingly obvious.It also makes sense to get exposure at the marketplace level than to take punts on the hardware manufacturers of the 3D printers as this is probably more risky. Amazing foresight!

    1. fredwilson

      i agree with you. but shapeways has not yet captured people’s imaginations the way that etsy did (or even codeyear)any ideas why?

      1. Brad Lindenberg

        Because you can’t buy 3D printers at BestBuy. When they are $99 at BestBuy Shapeways will fly because everyone will get one. Look at what happened to books when the Kindle hit $99 – 1 million sold a week.You need the penetration of the devices before the marketplace can take off – same way as iPhones spawned the App & Geolocation revolution. Also why Wag.com is working now, and Pets.com did not work. Timing.I think you are very very early, but very very right. I would focus on building and maintaining critical mass so that you are #1 when the device penetration catches up.Also Etsy is not dependant on 3rd party devices (such as 3D printers).

        1. fredwilson

          thanks. this is helpful feedback on an investment i am very enthusiastic about.

          1. tyronerubin

            @bradlind:disqus having people passionate about 3D printers is all we need.Look at this massive hithttp://www.kickstarter.com/…people going nuts on a product that is not near mainstream.3D printing is something with such huge legs right now.

          2. Mark Essel

            Brad sold me with on demand tool creation. No more running out to Lowes or Home Depot to buy a replacement. Craftsmen can build perfect sized parts.

          3. Brad Lindenberg

            On further analysis of the site, which I probably should have done before commenting – it looks to me like Shapeways are actually printing all the products then shipping them themselves.I think this creates a scalability bottleneck. I would consider trying to harness all the “Makerbots” on peoples desks by enabling customers to download 3D CAD files so they cant print their own stuff. You can then offer the same item, printed and shipped for more money. This way you are selling virtual goods with 100% gross margins as well as physical goods on demand, and over time as the virtual goods business grows you can reduce the capital required for your own in-house printing machines in the hope that people use their own machines on their desks.The best analogy I can think of is buying a book versus buying a kindle book. Buying a book you need to wait for it to ship and its more expensive, buying a kindle book you can download and read in seconds. I would have two prices for every item, a “Download” price and “Printed & Shipped” price, where the download price is like the $9.99 Kindle Book and the “Printed & Shipped” price is like the $24.99 hard cover. People who have 3D printers on their desks want to use them because its novel and it is part of the fun of owning one. They dont want their “stuff” printed by someone else then shipped in the mail if they own a machine. Just my 2 cents worth – however at this early stage as people don’t have 3D printers so in order to build the Shapeways marketplace and brand being able to do the printing for consumers is probably necessary however I think the focus needs to go in the direction of virtual goods. I also think they could promote 3D printer hardware on their site so that visitors can buy 3D printers through partners to increase adoption.I assumed Shapeways was a marketplace for “3d files” but it seems its a bit more vertically integrated.

          4. LE

            “I assumed”The site isn’t clear on first glance as to what exactly the product or service being sold is. That’s something that needs to be corrected.

          5. Brad Dickason

            Somehow my in-line response is now out of line. Oops :xWrote a response to you here, Brad:http://www.avc.com/a_vc/201

      2. Rohan

        Because..1) A huge portion of the population haven’t even heard of 3D printing..2) And even, for folks like me who have heard of the concept, I don’t know enough to understand how it could be useful to me.. 2 thoughts…

        1. Greg Leman

          30 years ago the number of people that could write code was infinitesimal.  Now you can make a nice living selling something to a very small subset of coders.  Even in the beginning of those trends there is money to be made.  Anyone remember Borland? 

          1. Kevin Pillow

            No

          2. Luke Chamberlin

            I lived down the street from Borland!

          3. Rohan

            Nope. no idea..

          4. SubstrateUndertow

            Yes and CP/M and UCSD Pascal.Do I get some kind of old person award ? 🙂

          5. Greg Leman

            Probably the same one I did.  It’s called arthritis.

          6. Alex Murphy

            ah, pascal … memories.

          7. LE

            Sure and remember story about Kahn using software to improve a boat race he was involved in or something. Remember Ashton-Tate?

          8. Greg Leman

            Yes, but Fox was better.  ;}

          9. Alex Murphy

            Qpro.  🙂 

        2. Kevin Pillow

          I’ve never heard of 3D printing.I don’t print unless its for school.

          1. Carl J. Mistlebauer

            I like “I don’t have any credibility.”  Are reputations built on credibility or on agree-ability and or like-ability?

          2. Alex Murphy

            you have stuff.it would be cooler if you could look at your desk and say “siri, please print me a new iphone” since you broke the last one because the signal from AT&T flaked out.3d printing is going to be big.

        3. testtest

          i saw 3d printing 15 years ago. i was doing a science project for the school, in association with British Aerospace, and went to a trade show where they had early models of the printers.   

      3. Carl J. Mistlebauer

        Etsy opened up a way for people who were making “stuff” to sell their “stuff”, Shapeways is a totally different animal, as it allows people to create “stuff”.  Most people are not creative.  I run into this all the time with retailers and tee shirts.  Everyone claims that if they had an opportunity they would produce a line of art that……So, then you say, “okay, lets draw that out….” and you never hear from them again.  Even when you give them the ability to determine what designs they want on what color shirts; they always end up asking you what are the best combinations and or what is everyone else ordering.Or you can visit just about any town in the midwest and you will find shops that allow you to create your own ceramics and outside of grade schools and day cares they end up being a novelty gift outlet that is open on by appointment only basis.The percentage of people with “imaginations” and a “desire” to create is very limited and a very small market; that is how Martha Stewart makes all her money. 

        1. Carl J. Mistlebauer

          You need to tell Shapeways that they need to use Disqus on their blog….They might want to look at Threadless as a business model rather than Zazzle.

          1. awaldstein

            A number of people have pointed me towards Threadless lately,

          2. Carl J. Mistlebauer

            Threadless, Uneetee, and Designs By Humans are truly community ecommerce sites. They basically are communities of graphic designers who design and compete/collaborate and then buy their own “cooking” while Zazzle and Cafe Press are more like Kinko’s.Threadless is the most complete because they have branched out into other products, like wall graphics and gift products; in fact I think Shapeways needs to make a trip to Chicago and seek out a joint venture.

          3. ShanaC

            Part of the community driven cool shirt trend.  They’re extreremely popular on college campuses.  You have no idea how many people would show up wearing Threadless’s communist party shirt when we were reading Marx and Engels.

        2. panterosa,

          Most people are not creative.Sadly, you are right. I blame crappy art education for a lot of those people who would have been freer to explore. The rest who don’t create try to spend creatively. We have people who define themselves by what they buy.

        3. SubstrateUndertow

          Here is a great TEDtalk that elucidates your point.Sir Ken Robinson: Do schools kill creativity?Oh! and he is really dry funny!http://www.youtube.com/watc

          1. Dave W Baldwin

            Thanks.  Just tweeted the link!

          2. panterosa,

            I loved that talk. And his other ones.

      4. JimHirshfield

        It’s one step removed from most consumers, so the utility might be lost on them. It’s kind of like Twillio is not a consumer product, but the products that devs make with Twillio _are_ consumer products. So, how do you get Shapeways exposed to the army of workers that have a need to make stuff? (i.e. print in 3D)Is it artisans? machinists? model railroad enthusiasts? DIY tinkerers? Hobbyist toy makers? This old adage speaks directly to the challenge, IMHO: People don’t want a drill, they want a hole.Shapeways is the drill. What’s the hole? And who are these hole seekers?

      5. aweissman

        You can now print Minecraft models using Shapewayshttp://www.shapeways.com/bl…Which to me proves the point of this blog post. You couldnt have predicted that or timed it. You can only have a set of principles to apply over time.

      6. abhic

        I loathe to compare two startups, as dissimilar as these. But one cannot underestimate the work that Chris & Jared and others did before they even wrote the first line of code. They really dug into the artisan forums and got in deep with the handmade community forums. That 100k userbase (of the forum) gave ’em a ready & willing audience to ideate with, to build For. There were others who were pretending to compete with eBay on pricing when Etsy launched. But Etsy started on Day 1 with sellers & solved the chicken-n-egg marketplace problem.There’s a lot to learn from their approach, no debate.

      7. mike gilfillan

        This should help: http://www.youtube.com/watc… (Minecraft to Shapeways demo).My 12 yr old son was just sent this link by a “maker-type” cousin.  Minecraft is all the rage with young kids and they WILL ask their parents to print 3-D parts.  Maybe Shapeways could do a formal partnership/promotion through Minecraft.Also, partner with Solidworks (I bought edu lic for son; my GA Tech neighbor’s daughter just used it at GE with 3D printing).Also, IMHO, Shapeway’s home page looks too much like an Etsy.  This FAQ should be front & center: I do not know how to 3D model, can you help me?

        1. Dale Allyn

          “Also, IMHO, Shapeway’s home page looks too much like an Etsy.  This FAQ should be front & center: I do not know how to 3D model, can you help me?”Mike, I also see the Shapeways landing page in need of redesign. First and foremost (to me) the term “3D Printing” is not meaningful to the vast majority of people. It’s non-intuitive and that needs to be addressed. Second, the landing page feels a bit like one has arrived at a housewares/toys outlet. I’m not trying to be snarky or mean here, this stuff isn’t always easy. But I definitely agree that a landing page redesign (including the logo/site ID in the upper right) would benefit the effort (IMHO).

          1. ShanaC

            Agreed, it should say something like “Build your own stuff automatically” or something like that.  With a diagram of how this works.

          2. SubstrateUndertow

            Yes! That landing page is to cluttered.It needs to be clean, simple and speak directly!Where is what we can empower you to MAKE with your imagination!With an array of creative examples that more effectively capture the average persons imagination.And at the bottom of the page clean simple graphics that drill down on the HOW-WHAT-MECHANICS of it all.With a tag line something like -Let reality flow like water directly from your imagination.

      8. Aviah Laor

        Classic crossing the chasm. Too broad “the future of staff”. Very creative== Very frightening: Narrow it: “this holiday you create the gift” Very novel ==Very frightening: Linkage to an already familiar theme: slow food >> slow toys, not-virtual (unzinga) etcIn short, for now, limit the choices. My 2 cents. 

      9. Mitch Haile

        I have heard of Etsy but never heard of Shapeways. I build a lot of 3d models for remodeling projects, furniture I am building, and so forth. It looks like some people have had success printing to Shapeways from Sketchup. Now that I have heard of Shapeways, I am interested in this and other things I could have fabricated.I had heard of 3d printers and that kit that runs about $1000, but I have only a mild interest in buying the kit. This service, however, …. Just while writing this post I have had half a dozen ideas of things to try.Of course, I say all of this without knowing anything about the pricing. 🙂

        1. Duann

          Hey, send me an email with what you have in mind to duann (at) shapeways.comI have a background in furniture design, (have 3D printed furniture components) and would be happy to help out.

      10. Luke Chamberlin

        They are trying to get people to make their own stuff. Some people are interested in this, but not many.I love Etsy as a buyer but I would never be a seller. Shapeways is too intimidating for people who just want to buy.They should find designers & artists who are good at making things and help them sell those designs to customers.The next Kidrobot is out there somewhere and they need to find that person and help them become successful. That designer is not the customer, they are a business partner.

      11. markslater

        we have a 3D glazed ceramics printer in our office complex who is on shapeways. Its a very heavy weight process (ovens etc) – we took a tour a few weeks ago – dead cool but very very early in terms of consumer adoption. 

      12. panterosa,

        #1I met Peter at Shapeways last spring, along with my Italian production specialist friend who wants to integrate 3D printing into her community of momtrepreneurs building new businesses in Italy and Europe. She wanted to help the moms prototype and do limited production in a more cost effective way than factory samples, which my friend has spent last 25 years doing and they are so costly.The big rub was the Shapeways connection to their 3D translators, who bridge the software divide for non CAD types. We came away with 3D printing high of OMG imagine what you can do, which I have shared with other 3D people like myself. But getting a crafty person to get over the software hump seems intimidating. I’m a sculpture major and still have no idea how to do CAD, and I make objects.#2I am looking to prototype new pieces for my games. I want to go green. I want to use biodegradable corn polymers and eco friendly inks printed directly on them. My games are about nature, so I feel my customer will demand this level of green design from me and I am more than happy to deliver it. Now the question is how? Shapeways offers tons of plastics but no biodegradable materials. I met Ayah of Little Bits to talk about magnets and production, an issue for her, and she felt it would be  $$$$ R&D money to develop the first round of by games in corn polymer. Yet many families I know bemoan they just had holiday influx of cheap chinese made plastic toys which break, and are un-green, and they tear their hair out.To me this may be same trajectory as organic food curve, but my feeling is we should be smarter than this. Just saw Janine Benyus’ TED talk on Biomimicry which talks about them offering biomimetic design solutions. http://www.ted.com/talks/ja… on TED I saw this yesterday on smaller 3D printerhttp://www.ted.com/t… printing is very much on my mind. Fred, I actually did send you email about  Shapeways when you said you would post on them. Outlined green materials. I didn’t hear back.I agree 3D is wave of future, specially with medical applications. I want them to connect to bio/organic etc. What if we could weave with Spider silk? It’s stronger than Kevlar and there are more than 7 kinds of silk on some spiders alone, each with different properties….This is the marriage I want to see and the materials I want to design with. After all, I am teaching thru games how nature is a designer.

        1. panterosa,

          This post was all tabbed out with spaces and easy to read when I wrote it and disqus made it a big blob of text. Has done it to me before a few times. What did I do to make it turn into a run on paragraph???

          1. Kevin Pillow

            Click your heels three times and repeat “there’s no place like home”.P.S. Don’t forget the ruby on rails slippers.

          2. panterosa,

            Just annoying to have it reformat.But then I am a quark jockey, who cares about minutiae like tracking and letting.

      13. Dave W Baldwin

        You can push 3D as a cult or push mainstream.  To go mainstream you should have someone already hitting the buttons of talk shows and/or news.Also, it does come down to affordability, both machine and cost for material.  I would push somewhat regional to get the experience of 3D into the hands of the slightly younger.  You then get the attention of adults that way and create a market group that will use it without thinking about it.Per @tao69:disqus ‘s thoughts on people are not creative.  Yes, you’re right, so you do it without depending on a big population that would all of a sudden want to design something from scratch (engineering).  You have to have some samples that the kids can maybe tweak and do the tools… dad would love to print out wrenches. 

        1. SubstrateUndertow

          GREAT POINT!Some easy-tweak-software enabling kids to operates on an array of starter-samples which piggyback off kid-popular product memes.Rolled into a turnkey educational-hobby-toy online package you can SHARE WITH YOUR KID.Then share and/or sell your creations into that product meme marketplace.

          1. Dave W Baldwin

            Thanks.  Won’t the middle part of this decade be fun  ;D

        2. panterosa,

          There were some comments earlier about linotronics and yes I am a dinosaur (not robot kind writing code) of that graphics era. Actually I set type by hand with stats before desktop publishing at a very swishy firm.So here is my complaint. While I adore more people making things, creating and designing etc, I dread a lot of the work because there is so little training behind it. When desktop publishing came out then everyone was on it and the quality was very low. I’m not for keeping it elitist at all, 3D printing or other methods. I just want people to get some design help along with the new gadgetry so they can make better stuff.I do think it would be great in schools. And hopefully some design training will accompany it.

          1. Dave W Baldwin

            Totally agree. My reference to cult was based on the methodology of sitting back with a smaller user base and wait for it to happen. What we need to do is get most everyone on the same page regarding design/programming.  Some will excel in one, other in the other, but communication/collaboration will accelerate achievement.3D printing offers a way to push design where failure is not so scary.  Shame it won’t solve the current problem related to need of teaching programming/coding in High School.But… if enough of us dinosaurs get on top of things, maybe we can make a change   😉

          2. panterosa,

            Males are more 3D than females, though females tend to like to make/craft more than males. 3D females are a low percentage. But it would be great to combine these energies with 3D printers and coding curriculum.I was super 3D girl, arrived in sculpture dept at art school then lost stereoscopic vision that year. A very interesting journey in 2 and 3 dimension since then.So I commiserate with those who can’t CAD (or can’t code), because I have a weird blindspot in my plastic brain which needs a neuroscientist to decode. And yet I produce design at a high level with help of others. Go figure.Yes “failure” needs to be manageable. In my view that takes a young teacher and a dinosaur in the same room to keep student accessing many different perspectives on solving.

          3. Dave W Baldwin

            To the first part, it depends on which 3D we are talking about for the female is able to see multiple angles way better than male, hence you multi task.Taking away fear of failure as can happen giving the blank slate to a student who feels pressure to create design to fulfill need will eliminate a handicap that has far reaching consequences.When it gets down to it, if we can get from idea to design to proto fast, following the gut feeling allows better first result and/or more qualitative evaluation of proto because the one or two things than may be a little off are already in the mind before beginning of evaluation.And there are so many who wish they could see as you.

          4. Dave W Baldwin

            Since today is Friday, a more crazy way to look at it. So we can print 3D a wrench. We can 3D print a figure. Then that means we can 3D a moving figure. 3D many moving figures and make something happen on a table.If we take a look at this video, you can imagine producing smaller moving characters set to a storyboard and when you’re done and don’t like it, throw it away. Failure isn’t so devastating. Otherwise, something may spark.You may say, “Baldwin, you’re tripping…”, but so what? Isn’t that what is happening inside the brain, anyway?Have a good weekend http://www.youtube.com/watc

          5. panterosa,

            DaveFirst off did not reply to your comment before the one you just posted, so I reply here. I wrote William to report an engage.io issue. Waiting for that to be fixed.As to printing many moving figures to try it out, why not? That ain’t tripping. And yes tripping IS what the brain does, and yes that IS awesome, and no DON”T stop. You are speaking my language now 🙂 AFter all I was talking about using spider silk to weave in a 3D maker….you (and your tripping brain) have a great weekend toohttp://www.youtube.com/watc…

          6. Dave W Baldwin

            Beautiful… and we’ll talk about how anti matter fits on the cavas another time. Have to go to St. Louis tomorrow and get the stuff re this year’s FRC Robotic Competition.

      14. LE

        “but shapeways has not yet captured people’s imaginations”Many reasons but one is no instant gratification. Look at the tutorials page more work than a couch potato would want to take on, right?http://www.shapeways.com/tu…I did photography and had a darkroom but the masses didn’t. Stuff to buy things to learn takes time etc.  Isn’t going to appeal to everyone. (Taking pictures of course did appeal because  you point, shoot, and someone else develops and returns prints to you.)Pages like this:http://www.shapeways.com/ma…A person thinks “what do I use all this for, that’s confusing”.Homepage has a problem also. What I’m seeing now is “create a sake set” and  items that others are selling. So there is ambiguity right there. Are they selling me a machine that I can make things with or are they selling things that others make?  Or do they operate the machine? And obviously most people don’t know what a “3d printed product is” and that’s in small print anyway.”codeyear”All Codeyear people did was signup as you mentioned that was easy with no friction (not even a captcha).Shapeways is a service bureau similar to what the linotronic was to print shops in the 1980’s. But the difference is in that case there was existing demand and disruption toa) legacy typesetting houses b) increased speed and lower costs c) higher quality (than existing inhouse methods – laser printers)In short it solved a problem and displaced an existing service (and additionally created much more demand for printing until the Internet came along).That said it wasn’t long until the qualify of laser printing increased (to 1200dpi) as well as the cost of laser printers decreased and operating a service bureau wasn’t exactly a license to print money.

        1. SubstrateUndertow

          You’re right!It is going to take accessibilitysoftware – software – softwarefor the rest of usbut early word processing which required you to embed formatting tags directly into your text were too tedious for mass consumption not so long ago.I fondly remember the first Word Processor I worked on.A Micom – before philips bought it up.http://www.pcmuseum.ca/imag…I use to run around trying to keep these things running in the late 1970’s.

          1. LE

            Sure, daisywheel printers loved the way they sounded.Before getting the Linotronic and Mac setup the Linotronic had an interface where to draw a box you had to do “mark point return point”. Before that we used an Itek Quadritek to phototypeset. I also used “runoff” http://en.wikipedia.org/wik… in college (Wharton Computer Center) and had a dial up terminal at my house to write papers.When the Mac came out with the ability to wysiwyg, having used the other manual tools, the impact and benefit was obvious.

      15. David McMahon

        Fax technology existed for years (patented in 1843?) before widespread use in the 1980’s. The concept was way ahead of its time and also the need for someone else to have one before yours being useful didn’t help.3D printing probably has similar issues – printing just about *any* product instead of buying from a shop/online!?… how weird is that! Beam me up Scotty! Scottish bloke invented fax btw.First time commenter and lovin’ the show folks. Thanks.

      16. Alex Murphy

        Etsy = Platform where creators can sell stuff they makeShapeways = 1 part Manufacturer where creators can build stuff they design and 1 part retailer where people can buy stuff made by 3d printer that they customizeEtsy is a marketplace, shapeways is not.Etsy is where creators that use 3d printers can sell stuff.I think that etsy is focused on one thing: making the environment for buyers and sellers interested in the indy small batch creations super fluid and easy.  IMHO, I think shapeways has to find the message that resonates with a group of people that becomes super engaged.  Too many different messages on the home page.  They need to simply the message, or immediately work to segment the users. The thought that is coming to mind is something like a three panel home page that takes users to one of three sections:  Shop, download designs, create your own.  Think of each as a portal and then educate users around those core themes.  Just a thought.

      17. JamesHRH

        Lacks market preparation? (don’t know details).Seems 2 steps or more ahead of the herd. Printer ( the people you took printiing work to) then copiers then desktop printing.Not too many people take things to be fab’d by a machinist.And there is not adjacent product that preps consumers.And printing is not the right word ( although I would steer clear of extruding!).I think it is cool stuff too – but way ahead of its time?

      18. panterosa,

        Consumer version has some issues, many of which are listed below.Biomedical is huge opportunity with 1) organic materials, and 2) fit of things like hearing aids. I put link in my long garbled post to smallest 3D printer whose maker talked about that type of application.Would you be interested in the biomedical #D printing or just consumer and hobbyist?- posted via http://engag.io

    2. Mark Essel

      Combine that with open source blue prints, just pay for materials and energy. License it to companies at scale. That will be a HUGE market. Timing is of course the big unknown, is the market ready to print their own. I lean heavily towards more digital and less material solutions though.Consolidate control into a small number of devices and open up software development and module augmentation (read write hardware).

      1. Brad Lindenberg

        Spare parts, car parts, toys, last minute xmas gifts (just print something!), iPhone cases… An oven repair guy needs a new dial that has broken. He can print it in his van instead of ordering a part and having to wait for it to ship then arranging another visit to install it. Think about the reduction in inventory capital for white goods companies like Smeg or Asko where plastic parts can be printed on demand instead of being held in warehouses. I think you’re just early, which is good. 

        1. Mark Essel

          A lot of those companies are intermediaries, and their logistics edge will have to flow towards supply of raw printing materials.I would bet you’re right about it being a little early today, two years maybe five before it really changes industry.

        2. Carl J. Mistlebauer

          “Spare Parts” “Car Parts” “oven repair guy” are all examples of B2B and not B2C.The reality is 3D printing, as you envision it, is no different than the ability of having a complete workshop in ones garage, build your own furniture, or repair your own car, whatever…..The reality is that will people have the time, in a world that is hectic, to use 3D printing in a B2C fashion?  If my battery cover of my remote breaks I buy a new remote.Now, if the knobs on my oven had a sensor that would alert a repairman  that they will be breaking and he arrives with a 3D printer and produces a replacement BEFORE they break then yes, that is something to get excited about.But to envision a world where everyone has 3D printers in their homes and they produce all their own plastic replacement parts is a little far fetched due to the time factor.

          1. ShanaC

            That could happen.  Or we become our own repair people, as things become easy to repair.

          2. SubstrateUndertow

            Or maybe just big box retailers like Worst Buy print out that latest iPhone 422 S on demand in their print-fabracation shop out back.

          3. Carl J. Mistlebauer

            Worst Buy will be out of business within the next 2 years….

    3. ShanaC

      I love them, but they need to certify more of their materials as safe to eat.  That would make a difference on what I could buy.Also, 3d software has to become more photoshop like.  Right now it is very hard to use something like Blendr.

      1. panterosa,

        Totally agree.

    4. fredwilson

      brad – you started one hell of a discussion here. this is the kind of thing that happens in the AVC comments occasionally. and it is magic. thanks for doing that.

      1. Brad Lindenberg

        AVC=awesome^9999

  7. abhic

    I really love this focus of yours – “If you are building a large network of engaged users that has the potential to disrupt a big market.”. Its almost like USV is what it wants to help – A Startup. It takes incredible patience and discipline to stick to any sort of ‘motto’ when the world goes topsy turvy.

    1. fredwilson

      i think you need that even more when the world gets topsy turvyhere’s my t-shirt quote of the day”don’t get herky jerky when the world gets topsy turvy”

      1. abhic

        I couldn’t agree more. Its a bit different for an early-stage team who don’t have a ‘startup’ even. They are iterating through product features rapidly to find the User + Love quotient. All this, while trying to fight the zombies trying to eat their brains and turn them into yet another _______________ (including Gartner theme for this quarter here).At this time, the constant paranoia & self-doubt is only marginally drowned out by the calm from their singular belief.

      2. abhic

        Kinda forgot my punchline there – I believe that me & my co-founder are actually ‘investors’ who are investing our time in our product, based on a singular investment strategy.

      3. LIAD

        herky jerky, topsy turvy…someone’s been watching too much sesame street.

        1. Kevin Pillow

          thanks for laugh

      4. John Clyman

        I like that. Reminds me of something my flight instructor drilled into me: “There’s no emergency you can’t make worse by panicking”. Except you’ve got better rhyming and alliteration.

        1. Alex Murphy

          Errors in flight are more apparent than most errors that normal people make. When pilots make errors, it can end up in disaster. There is a common point in the comments and blog posts here that you should focus more on product than on other things. The parallel for flying a plane is that while you may want to increase your altitude, speed and momentum are more important than pointing the nose of the plane up. Read this transcript of the Air France plane crash from 2 years ago and the commentary to understand that sometimes, if you want the plane (metaphor for your business) to climb you must first go down and gain speed in order to have the momentum to climb. http://www.popularmechanics

  8. John Best

    Evaluating (and indeed assessing value) has to be a case by case affair. Investing is about risk management certainly, and if you’re able to build a successful, growing startup no matter what the wider economy is doing, then why would anyone not think investing was sound (all things being equal)? Indeed, there is the argument that building that successful startup in the downtime is a great opportunity for the uptime.As far as I can tell, there have been stories about the next “bubble” since the last bubble bursting in the 90s.

  9. Mark Essel

    I’d like to add that strategic investment intervals falls outside of herky jerky. Having capital ready to deploy and using key features to signal investment timing pattern matches to hedge funds, but should work with any market with sufficient liquidity. Private investing has historically fallen outside of this class.With the rise of big private investing (DST) we should see more investment firms utilize information beyond direct deal flow/personal review. John Henry was one badass but he couldn’t outpace the machine.

  10. tyronerubin

    shot on film while growing up then the talk of a digital takeover then it happeninghttp://mashable.com/2012/01…Heard Elon Musk saying that there are always two tiers that need to happen in major disruption and change.In electric vehicles they needed and need to make the cars both cheaper and better/faster for the change to happen. Just one of those and it wont happen. People struggle with change unless its worth it on two fronts; Money and Speed.One thing never does it for a major change.No one buying another cola if its just cheaper.Thats been my theme in thinking for a while. People changed to e-mail when it became bother cheaper/free and quicker/instant.So its always two things for change not one. Cheaper/Free AND Better/Faster/Easier etc.

  11. teegee

    “I believe the only way to be a top performing investor in any asset class is to have a disciplined investment strategy and approach and apply it consistently and actively in all markets all the time.”So true.I’d go so far as saying that having a disciplined investment strategy is the ONLY way to invest… 

  12. Mat Jackson

    Do you ever get involved pre-launch, Fred?I know most (all) VC would like traction to some degree, and the risk of pre-proven applications is so much greater…but then again, the deal can be so much better…We’re London based, would love to put London firmly on your radar for 2012.Mat http://live-mapp.com

    1. fredwilson

      rarely

      1. Mat Jackson

        That’s not never; I like it. Thanks!

  13. John Frankel

    Totally agree, though you have to admit that there have been some amazing companies formed recently due to the convergence of disruptive technologies and other empowering factors (social engagement by consumers and lower costs of building the first stage of companies).  If the bar has stayed in the same place over the past 8 years then more companies should be getting over it now, and if the pace of investment is steady then the bar was raised last year.

    1. William Mougayar

      Yes- “social engagement by consumers” is definitely a big trend. It’s leading to individual empowerment in a big way, and that a big shift with plenty of opportunities.  

  14. Kha

    These are positive news that everybody is stil investing. :-)I hope i can finish my startup as quickly as possible, but for people who work fulltime it is not that easy. I pray everyday that my employer lais me off, but he doesn’ t wonna do that. Wish me luck all of you please.

  15. Kevin Pillow

    Can start-ups really be viewed as an asset class? I get a vibe that more hedge fund style VC firms are popping up because this area of investment has great returns when a company does a deal.

    1. fredwilson

      Venture Capital is an asset class

      1. William Mougayar

        And it should be insulated as much as possible from the market jerkiness, although there is a relationship at some point in time. 

  16. William Mougayar

    I continue to admire your level-headedness (both at the individual and firm level). And ending on a positive note is a great signal for more good things to come. I agree that the right opportunities are still out there for the picking. Creativity is the only limitation we have. Money will find the best ideas. Venture Capital investing is not a stock market. The hell with jerky erratic investors that look at it only from a financial opportunity perspective. The breathless are the ones that have been sprinting and they have to stop. But the marathoners are the smart ones. They can go on for a lot longer.

    1. John Clyman

      There’s a lot to be said for the marathon-not-sprint mentality.And inspiring to contemplate that world-class marathoners maintain about 5-minute miles the whole distance!

  17. kidmercury

    Everybody is trying to time markets, it is only a matter of degree. Daytraders try to time it with extreme precision, investors have a wider horizon. IRR is a metric that shows this.Of course the real cause of this “herky jerky investing” is inflationary monetary policy. Volatility will only increase until that problem is solved.

    1. bfeld

      I disagree that everyone is trying to time markets. I couldn’t care less about what the market is doing at any moment in time. I invest very early and at consistent pace every year (like @fredwilson:disqus does) and exit whenever the entrepreneur wants to and there’s an exit opportunity that presents itself and is compelling.

      1. kidmercury

        let me give you an example. i know you are an investor in zynga. i don’t know when exactly you got in, say it was around 2007 or so. suppose someone said to you, do you want to invest in this company — but you cannot exit until 2035. would you do it?or conversely, suppose zynga’s founders came to you in 1990. they said brad we have this great company but it is going to take us 20 years to really get going. you still down, or you going to tell them to check back in 15 years?those are extreme examples, but they do show the relevance of time. countless investors and entrepreneurs are too early and get burned as a result. anyone who lived through bubble 1.0 can tell you sob stories about what happens when you hang around too long. even things like gold….if you bought in 1980 at 850, you had to sit around for 27 years just to get to break-even.

        1. bfeld

          I don’t think the examples are relevant since the constraints are completely artificial.When I invest, I have zero idea or expectation of when I can exit. I don’t view this as a driver of my investment decision in any way.

          1. Mark Essel

            That surprised me a little, as I expected VCs to have some reasonable expectation of liquidity within a decade

          2. bfeld

            Conventional wisdom around venture capital is that typical exit horizons are 5 – 7 years and funds are 10 years long. However, the real dynamics are different. For example, Fred and I are investors in a company called Return Path. The initial investment was made in 2000. The company is a dominant market leader and extremely successful – but we are 12 years later. They might go public in a year or two (there’s no rush) – by the time there’s actual liquidity for the investors it’ll be at least 15 years.Now, both of us invested in year 1 of a fund. Most funds make new investments for the first 3 to 5 years of their fund (the commitment period). So – if the RP investment happened in year 3 of a fund, then that’s 18 years from the beginning of the fund.It also works the other direction. We invested in a company called AdMeld when it was two guys and an idea in 2007. They were recently acquired by Google. We had no expectation when we invested that there’d be a huge exit in four years.I’ve learned that trying to predict the timing of the outcome doesn’t work. Rather, I focus on working with entrepreneurs who want to build something great.Some VCs get all excited about their IRRs. I personally have always been focused on cash on cash return. I believe that if the cash on cash returnis significant enough, the IRR will take care of itself.

          3. Tom Labus

            RE Exit.  Was that always your model to not look for an exit or has that come with success and financial security?

  18. andyswan

    OF COURSE markets can be timed….ask Buffet or any number of fund managers that have had success for decades. Timing markets is for people that want to ride along in liquid securities and can hop off whenever they like…and there is value in that.But that’s not what you do.  It’s not what WE do.  Entrepreneurs turn nothing into something.  You help.We CREATE wealth.  We BUILD value.  There is no “bad time” to do that.

    1. Carl J. Mistlebauer

      Yep, we create Wealth, not jobs!  

      1. Aaron Klein

        Tech has created most of the new jobs during the last decade.Of course we create jobs.Which create wealth.

        1. Carl J. Mistlebauer

          Define “most new jobs.”http://globalpublicsquare.b…I read an article just the other day that the top 10 tech firms employs 150,000 people, which represents a total that is exceedingly less than what our economy needs to create in a month.If job creation was wealth creation then we would tax companies on the number of employees they have not on profits.Productivity gains is the ability to produce more wealth with less labor.Our economy is a mess because of the confusion in our thinking.

          1. Dale Allyn

            This is a myopic view, Carl. A tech company employs a certain number employees, which are then described as you have done with the “10 firms = 150K people” stat. But job creation does not stop there, depending on the company. Facebook employs some X,000 employees, yet there are thousands of jobs created outside of their walls because of the platform. Even my brother-in-law, who works at a commercial door company in Oregon is busy suppling doors to FB’s new data centers there. It goes much further than that. Our project has (will have) employment opportunity in terms of infrastructure, support, etc. and that is going to take place in the U.S., Europe, Asia and South America, but our _content_ is also geared to create employment opportunity, education and new entrepreneurial opportunity. This is way beyond the numbers that we expect to employ in support of our project directly. I have tremendous respect for @fredwilson:disqus among a few other VCs, and if we were seeking traditional venture capital right now Fred would be on our shortest of short lists (together with @bfeld:disqus et al) however for now we’re seeking a different type of funding because of our long term humanitarian interests. Still, we may go the VC route and creating wealth will be a great outcome for our investors, our team (all of them) and our users.  Creating wealth is the first step in job creation and empowerment. Wealth buys houses and houses are built by people. Edit: typos as usual.

          2. Rob Hunter

            I think that there is something to be said for looking at numbers that don’t immediately agree with your hypothesis.  I don’t think that the statement that “tech startups create jobs” is false.  To ignore the fact that tech companies often (not always, maybe not even mostly) destroy jobs in the industries that they disrupt is to ignore an important feature of tech companies.  That feature isn’t necessarily bad (to put off the pain of disruption to maintain a near term status quo is likely a mistake).By the same token, testing the validity of the statement of “current tech startups enrich relatively few” is a noble goal.  Your point about tech companies needing buildings (and other infrastructure) is spot on, but so do other types of company; to compare the top 10 tech companies employment of 150k to other verticals is an interesting (if not all encompassing) metric to examine.

          3. SubstrateUndertow

            @RichardForster:disqus I Agree.In the long run IT tech companies facilitate organic social-networking and collaboration.That is the key platform on which we will ultimately build out all organic social solutions.It is the very ether of contemporary, distributed, productivity and wealth!First we crawlThen we standThen we walkThen we run

          4. Carl J. Mistlebauer

            Aaron,In the last decade we had a net increase of zero jobs, we also saw median household income drop.The reality is that tech is “changing the world” and we are creating wealth but the benefits in jobs and income is not dispersed across the whole economy.That’s a fact and I am not saying its right or wrong, its just a fact.The reality is we are transitioning from an industrial economic system to a post industrial economy and lots of people will be left behind. That’s the way transitions work.Besides tech you also have globalization to contend with and the losses derived from globalization are greater than the gains enjoyed from tech.Fred is a great guy, and nothing I say should be considered derogatory toward Fred or VC’s for that matter; as I say, “..it is what it is…”Your brother is providing FB with a couple hundred doors, and a town in Iowa has a million square foot vacant Maytag building that they will sell to FB for a dollar, and it has more doors than FB would ever need.Probably has more doors than your brother’s company could produce in a year…That Maytag building is like the ruins in Rome or the Castles in Germany…its a relic to a time that no longer exists and will never return.It doesn’t make any difference who is President or what our tax policies are, economic systems change and evolve, we will no longer create the jobs we used to create, nor is our economy capable of creating the number of jobs it used to create.That’s the new reality of a post industrial society. Thats why I focus on the internet, social media, and the concept of community from a commerce perspective, rather than continue to slog through central america looking for cheaper labor…that’s why I got off the 20th century old economy treadmill and am trying to find a way to develop a 21st century way to meet the demands of my niche.The world is changing and the concept of labor and job creation is changing; in fact the labor needs of a post industrial society are much less than an industrial society. Then when you realize that globalization means that wealth derived in this country creates jobs throughout the world you realize that our whole concept of economics, taxes, and government is so 20th century…if not 18th century, if you claim a desire to return to the principles of our founding fathers.Personally I want to find my solutions for today’s problems in the future not the past….and I am not going to claim that I create jobs because I KNOW that my priority is to create wealth.

          5. Kevin Pillow

             This is going to sound weird but I really love charts, do you think you can put some links up?I found a pretty good one from the bls.gov site.

          6. Carl J. Mistlebauer

            2008-2018 PROJECTED Wage growth?Hey, Kevin, who is doing the projecting? The Mayans projected that the world will end in 2012….Gee, healthcare, those projections had to be done prior to 2008 so they do not include Obamacare and whatever and however that little legislation changes the healthcare…..Not a real big fan of projections myself…sorry.

          7. FAKE GRIMLOCK

            FUTURE IS FILLED WITH GREAT TECHNOLOGY THAT MAKE LIFE BETTER.SIDE EFFECT IS FUTURE NOT NEED AS MANY PEOPLE.PROBLEM IS NO ONE VOLUNTEERING TO LEAVE.

          8. Carl J. Mistlebauer

            Tell me what my options are in regards to “volunteering to leave” and I will let you know…If you got an openings for “bum in Tahiti” I will volunteer.

          9. FAKE GRIMLOCK

            SOYLENT GREEN?

          10. Alex Murphy

            oh, there are lots of people that would sign up for that list. 🙂

          11. Dale Allyn

            @tao69:disqus Replying to myself here, in reference to your post below (hit the Disqus reply limit below):We seem to agree on some of the fundamental observations and inner-workings, but we differ (or seem to) on how startups, tech or otherwise, can create jobs. I agree that creating wealth is what happens, but even before that, money begins to change hands as the wheels of a startup begin to turn. Money changing hands creates jobs, although the jobs of tomorrow will differ from the jobs of yesterday, as you so rightly point out. This is getting long, but I’ll respond to a couple of things: 1) my brother-in-law’s door sales and installation may seem trivial, but there were concrete workers, electricians, etc., etc, who are very happy to have the work. The reference to the construction and management of the new energy efficient data centers was just a part of what I was referring to. There are many people who are making a living from tech (FB et al), for example by supporting large companies wanting to market via new social media, new software interacting via API’s, etc., etc. 2) FB using that Maytag plant would have been met with roars of complaints regarding energy efficiency and all things “green”. They’re a high-profile company that can’t skimp in this area and a retrofit would likely be cost prohibitive.We agree that things are changing and adaptation is needed. I’m also passionate about doing as much as I can to bring as many along to benefit from the change as possible. Cheers.Edit: changed “their” to “they’re”

          12. andyswan

            OK fine Wal-Mart employs 1,000,000 people and created the greatest amount of wealth of any company known to mankind.What is your point?Please clarify what our thinking SHOULD be.  How our economy should be MANAGED from the top down….  We should NOT want productivity gains?  We should still be paying a room full of typists to get our company letters out?

          13. Carl J. Mistlebauer

            My thinking? Its real simple, economic trends are economic trends; some people get hurt and some benefit. When you transitioned from an agrarian society to an industrial society some people won, some people lost. The same holds true as we transition from an industrial economy to a post industrial society.So, Walmart created 1,000,000 jobs? They also displaced quite a few jobs; there were winners and there were losers; there was wealth created and wealth lost.I say lets go all out for technology gains, I hope that technology gains so much that labor becomes redundant; eventually that is the goal of technology isn’t it?So, why does everyone in tech champion that they create jobs when the reality is they should be cheering that they make work obsolete?

          14. Mark Essel

            I’m trying to imagine a future where there’s enough surplus to house/feed/supply creative impulses for every living person.I’m down with @tao69:disqus’s future job destruction through better tech economy. Supreme efficiency.Beach houses will be overrun, how will wealth be distributed without labor :)?Lotto.

          15. andyswan

            Always more to do, to create….more to win.Utopian fantasies are destruction

          16. Mark Essel

            Tell that to the Hollywood and Disney :). There’s a market for everything. Now there is work, and there will always be potential work.

          17. JLM

            Capitalism is just as much about creative destruction and failure as it is about growth and wealth.Markets are about winners and losers.Life is not T-ball where everyone gets a hit, nobody is ever out, every team wins and then you go out for ice cream.The redistribution of wealth through capitalism is a bit bloodier than the redistribution of wealth by BHO.

          18. SubstrateUndertow

            Define wealth ?Wealth is not so much a thing as it is an interdependent organic array.Personal – Corporate – Social – GlobalTo be sustainable wealth requires well distributed participation in both the production and consumption of said wealth.Without that key characteristic it cannot maintain cyclic homeostasis and ultimately collapses under the weight of its own illegitimate networking instability.The concentration of wealth is not so much amoral as it is mathematically unsustainable.(Organic Process Literacy)That reality mandates us to focus on solving a simultaneous equation that integrates wealth-production with job-production.Wealth can only be locally accumulated in small operational flywheel doses. In the larger social aggregate, wealth must cycle, it is a use it or loose it affair.That is the exact global economic cul-de-sac in which we have presently trapped ourselves.

          19. Carl J. Mistlebauer

            Substrate….For all the talk about “changing the world” and all the great visions of the future that “techies” have, like using a 3d printer to create a plastic part and DIY your own repairs, the reality is they have a pretty 18th century view of wealth, government, and inter relationship of all things…I was thinking today about Star Trek and Star Wars, since it seems that techies in their youth seemed to be fascinated with these shows and their vision of the future.Was their money in these movies? Was their wealth? Poverty? As we attempt to create the future, envision the future, do we think about how we are changing the social when we create these social networks? As social media topples governments in the middle east and begins the process of changing the economic expectations in these countries, do we not contemplate how these same forces will change government and economies in our own country?A quote from The Fountainhead: “You must love the doing.” I can’t help but wonder if we are at a Hegelian “thesis” “anti thesis” synthesis” moment as a society to where we have to ask ourselves is it the wealth or the love of doing that motivates us?Personally, I hope all techies get busy and create a new world where jobs and work are not needed any more.Maybe we can get our resident robot to clone himself and then we all can sit back and live off of their super productivity.

        2. Kevin Pillow

          Can the jobs created by the tech sector really lead to a trend in hiring in other sectors?

          1. Alex Murphy

            Of course.think of the services around to support tech.go back in time to the late 1800s and the gold rush.lots of people came looking for the gold, they were the super rich. But the middle class was made of the people that sold “stuff” to the miners.Funny thing there is that this is how Stanford made his fortune that ended up becoming the petri dish where many a company has been birthed out of … not just tech, but many sectors at this point.

          2. Kevin Pillow

            You make a great point because for some reason your comment made me think about the section in the Steve Jobs Biography where in during the 1950’s,60’s and 70’s it discusses how companies like HP, Intel and others added over 20,000 jobs to the Palo Alto area during the tech boom in micro processing technology.So yes the tech sector can be a catalyst for overall job market trend but now is there a limit on how big of a ripple effect it will have.I think im going to buy a book on the complete history of Palo Alto area from 1930 forward because a lot of what new tech spots are doing now was already done by schools like stanford.

          3. Alex Murphy

            save yourself the $9.99.Go watch this. It is awesome.”Secret History of Silicon Valley” – Steve Blankhttp://www.youtube.com/watc…

          4. FAKE GRIMLOCK

            JOB OF TECHNOLOGY IS TAKE AWAY ALL JOBS EXCEPT BUILD NEW TECHNOLOGY.

          5. Kevin Pillow

            So its an infinity loop! or is it? Do you mean we create technology to replace jobs(like introducing factory assembly line robots) but that technology will not create new technology itself. Instead humans will be the ones to research, build and commercialize new technology to replace whats old and during the entire process jobs are naturally loss and gained.  That’s what I’m talking about!

          6. FAKE GRIMLOCK

            LABOR FORCE IS MOUNTAIN OF TALENT SINKING INTO SEA OF MINIMUM EMPLOYMENT.SAFEST SPOT IS PEAK, WHERE GREATEST TALENT IS.WORST IS BOTTOM, NO SKILLS OR TALENT. IT ALREADY UNDER.BUT EVENTUALLY ALL BUT PEAK UNDER.

          7. Alex Murphy

            Grim … did you have a bad new year? a bad Xmas?  Or something else?  You are in DC, right? Lets get coffee.The very first great technology was the rock.  It was used to break things, like wood, and to make fire etc.  Technology evolved, and came in the form of shelter, and spears, and knives, and things to protect humans (from hungry dinosaurs no doubt)Technology grew to create irrigation systems, plows, and large scale farms.Technology grew to create boats, and wheels, and other things used to travel. Technology grew to create things like the written word and communication.Technology grew to create things like music and other things to entertain us.Technology grew to create things like books, the printing press, and other things that created widespread knowledge.Technology grew to create more things of transportation, knowledge, communication, medicine, and entertainment.  Technology is the core of humanity’s evolution.  It is how we have grown.  It is how we will grow.  It is certainly not the job of technology to take away all jobs.  It is the job of technology to expose the jobs that humans should really do, that what we should really be focused on, that what is really important.  

        3. FAKE GRIMLOCK

          ALSO DESTROYED MOST JOBS.UNFORTUNATELY, FIRST NUMBER SMALLER THAN SECOND.

          1. Aaron Klein

            That’s what they said about the printing press too. Give it time.The future always looks different than the past, which is the scary part of creative destruction.

          2. FAKE GRIMLOCK

            TECHNOLOGY MAKE HUMANS DO MORE PER HUMAN UNTIL TECHNOLOGY NOT NEED HUMANS ANY MORE.THAT POINT CROSSED WHILE AGO.

          3. Alex Murphy

            ability to create tech to replace “manulation” is faster than evolution of people to create new things to do. people will catch up.

      2. andyswan

        Not mutually exclusive at all

      3. jason wright

        ‘we’ also concentrate wealth.

    2. andrewwatson

      mutual fund managers? heh. none of them beat the S+P 500 index…

      1. bfeld

        Yeah – let’s all throw darts at the wall.

        1. Kevin Pillow

          Mutual funds are a necessary though. Deep down we know that. 

    3. GlennKelman

      Good point about liquidity Andy, that’s spot on.

    4. ShanaC

      Venture investors are a bit different, you’re investing in rapid growth in something new-can you time rapid growth in something new by the category of newness it is in?

      1. CJ

        Sure you can, but I don’t think you’ll hit the same returns as those who never stop investing, you’ll also strike out a lot for a higher cost as you’re now backing more me-too companies instead of market originators.  If you’re not chasing the hot market, you’ll invest in more companies at a lower cost and, if you’re good, hit more homeruns for less money.  

    5. Partner Source

      Andyswan, I agree with your point but wouldn’t you say there is some economic conditions that can create an unfavorable time to invest? I’m talking in general terms, sure there are areas where it makes sense in different situations.Glenn Wright | VPPartner Source (US Ranked #2) Lead Generation | Appointment Settingwww.thepartnersourceDOTcom

    6. chhhris

      Not sure if you’re implying that Buffett makes his money by actively trading (timing) in and out of markets, but the vast majority of his wealth was created through ultra long-term value investments. Buffett is the preeminent value investor of our time and is a disciple of Benjamin Graham who is generally considered to be the father of value investing.

      1. andyswan

        I know what you’re saying and we probably agree…..but there have certainly been periods where Buffet said “I am not buying this market.” which is what Fred is rejecting.

      2. testtest

        an example of when he doesn’t do buy and hold is his timing with the silver market. he’s been watching it for years

      3. kidmercury

        any public market investor is timing. private market investors are timing too, but less so so it is easier for them to deny it (they still want to exit before they die — ergo they have an expectation of cashing out profitably within 100 years — and so they are timing). evaluating metrics like internal rate of return also show they are thinking about time. i buy some stocks with the intention of holding it for 2-10 years. a lot of that is value investing straight out of graham’s playbook, but that is also market timing. because i’m not trying to hold beyond its sell by date, and once the parabolic blow off occurs, i’m out. timing will only become more important as the global economy becomes more volatile. #fs

        1. testtest

          do you do it with tech stocks? it must be quite hard to calculate the intrinsic value; because of the percentage of intangible assets and goodwill. i presume, for a tech company,  Short Term/Long Term Investments (under Assets on the balance sheet) are also largely intangible and goodwill. 

          1. kidmercury

            no, i don’t invest in tech stocks, only mining stocks. i mainly look at financial ratios (i.e. current ratio, P/E, price to book, dividend yield) which should be applicable to any stock regardless of sector.

    7. Kevin Pillow

      I want to try a metaphor,   It’s like WE make a pizza and THEY pay us for a slice.

  19. Scott Barnett

    Meanwhile, Dan Lyons made an interesting commentary on your contemporary Marc Andreessen yesterday – http://bit.ly/zYk62W.

    1. fredwilson

      crap performance depends on your entry price. Zynga has performed very well for USV

      1. Scott Barnett

        yeah, I wasn’t necessarily referring to the poor performance of some IPO’s, although for regular investors, they certainly haven’t been high flyers.  What got my interest was the “we’re not in a bubble” to “things are much too expensive” within a ~6 month period.  

      2. tom

        That’s the whole point in pulling back on deals when valuation expectations get out of control!  When new startups think that pre revenue or just launched companies deserve Series A investments priced around $20 M, then it’s hard for an investor to find a return.  In that environment I pull back, because I have a duty to my LP’s.

      3. Mark Essel

        Is USV still holding Zynga? If so when do you sell?

        1. John Revay

          I would assume USV shares are “locked-up” for some period of time, I would guess they may have to hold on to all shares for at least 3 months and probably longer

  20. MartinEdic

    Market timing may work for traders in liquid investments. VCs are not traders and their investments are not liquid. They are taking on longer term risk for greater reward. To ‘trade’ in and out of deals means they are basing decisions on the panic of their limiteds rather than their faith in their ability to pick potential. In other words, they don’t trust their own value proposition.Market and trends swings always take place. These are not the reason to invest or divest out of a startup. These firms should be outed and startups should avoid them, plain and simple. You cannot survive with investors who might pull the rug out at any time for reasons beyond your control.

    1. fredwilson

      yup

    2. Marcus Oberholzer

      Is it possible to balance both market timing and adherence to sound business cases? USV and Andreessen both seem to have experienced some level of success as investors given a seemingly divergent approach, so would a balance of approaches magnify results further?Perhaps, use the sound business case filter first to identify the right investment, and then allow market condition to help shape the amount.

  21. Brad

    Sounds like your investments are like your blog, steady and creative.

    1. fredwilson

      i hadn’t made that connection. but that is how i like to go about things.

  22. Trish Burgess-Curran

    If the idea is good, the team is right and the vision is clear, the company / group / person will allways find a way forward.  Regardless of the markets and the economy, there are always opportunities and people willing to ‘help’ you along the way. For those that are fans of ‘Only Fools and Horses’ (I just recently became one – http://en.wikipedia.org/wik…  ‘He who dares, wins’.  And Fred might add ‘He who consistently dares over a long period of time, wins’ 🙂

  23. GlennKelman

    William T. Sherman once explained to southerners that their mistake was in failing to recognize that the south’s general defeat was in fact a personal defeat for each one of them.I think entrepreneurs sometimes take Sherman too far, assuming that specific forces are at work on their idea, rather than sometimes-silly general trends. When a VC passes on your deal, it may be because you’re not part of his investment thesis — which can be just a description of which way the cattle are stampeding — or because he is in between funds, or because he got spooked about the whole economy.But it still feels like it’s because a very smart person has concluded your idea stinks. And it’s really hard to take. After being passed on 100 times, and always coming out with a business that makes plenty of money for everyone, it’s hard even for me to take. I thought I could get beyond that, but I never do, and never will.

    1. LE

      “because a very smart person has concluded your idea stinks”Those “smart people” have either never run a business or they decided to go into investing using other people’s money because they could and as the saying goes “nice work if you can find it”. And doing that you don’t have to be right anywhere near the times you need to be right if you are doing your own thing with your own money (or assets) on the line and reputation.  So I would remove the word “smart” from the sentence because they acknowledge the mistakes they make.And obviously rejection of any type is always hard to take.Added: By the way I don’t want anything that I’ve said to in anyway indicate any contempt for what VC’s or angel investors do or to seem like I think what they do is easy or that they don’t work hard and don’t deserve what they earn. I’m just bothered by the label “smart person” applied as if it’s a quantitative measure of something that is absolute.

      1. fredwilson

        i agree with everything you just said LE

      2. Brad Lindenberg

        LE you are smart. What do you do?

    2. JamesHRH

      NO from a smart, experienced and engaged ( i.e. gives a shit at the time ) person is a lot different than a no from a smart person.VCs are mostly……..

    3. JLM

      It only takes one kiss to transform a frog into a Prince but you have to meet a lot of frogs to plant that one auspicious kiss.Sherman was one of the founders of LSU — look it up.  LSU that most Southern of all institutions locked in the 1800s located in Baton Rouge.LSU was formed by planters who wanted their second sons to have a career and these rascapallions tormented Sherman miserably.  Because they knew he was impotent to discipline them because their Daddies founded the damn school.Sherman took the final revenge upon the planter class by burning down their homes, killing their livestock and raping their women.  He was America’s first real war criminal.

    4. fredwilson

      yup. it’s a fundamental truth about entrepreneurship, startups, and the venture capital/entrepreneur relationship

  24. vruz

    It goes to show how lopsided the typical Wall Street echo chamber can be.Many just can’t fathom that some people just might be creating actual, long lasting value.

  25. Mike Kijewski

    I totally agree with your point here, Fred. But the article said that Andreessen is passing on big-name startups with crazy valuations in favor of smaller, more reasonably-valued companies (like Actifio.) If I were a VC, I’d rather invest in them at $200M than Groupon at $800B or whatever their valuation is right now.Being a consistent VC investor doesn’t mean you need to support crazy valuations.

    1. Alex Murphy

      You can’t blame them, here is the model for over priced deals:Groupon went public on Nov [email protected] a market cap of over $16.5 BToday, Groupon is at 11.4 B. Down 31.5%Loss of just over $5 B in market cap.Avg loss in market cap = $89 M per daywhat did you do today?

  26. jason wright

    Isn’t there an element of self-fulfilling prophesy syndrome here?

  27. Maxwell Wessel

    I have a more academic question… Shouldn’t the metric actually be changing?  If there is more NYC based tech activity, you’re probably seeing more deals.  Wouldn’t the n (of deals seen) influence the output of your investment function if you had a disciplined strategy?Granted, you’re resource constrained, but it still seems that inherent in doing the same number of deals per year in a “frothier” market, you’re actually raising the bar for what you expect from your entrepreneurs?  Or the assumption becomes that the incremental deal in the door (the one you wouldn’t have seen in 2004) does not actually yield the potential for investment.  Which seems unlikely… though I can see the calibur of the average entrepreneur going down as you add more to the mix, I don’t see them as potentially value-less.No?

    1. fredwilson

      i don’t think so. we can only do what we can do. it just means there should be more VC firms in NYC. and there are.

  28. Brandon Marker

    “I believe the only way to be a top performing investor in any asset class is to have a disciplined investment strategy and approach and apply it consistently and actively in all markets all the time.”You could have just posted that quote today in response to the title and your message would be perfectly conveyed. Well said, 10x over. 

  29. Chris Kong

    How about the money inflow/outflow in the market?  Does that affect on how your run your business and your investment strategy?

    1. fredwilson

      nope. we have to ignore the noise and focus on a few good investments every year.

      1. William Mougayar

        Knowing what is noise is what makes a good VC. It’s not that easy. 

  30. bfeld

    I had the same reaction to the WSJ article. Actually, I had a stronger reaction: “what a load of bullshit – why does the WSJ publish stuff like this and why do VCs say things like this?”The only thing I could come up with is that it’s actually a head fake from the people saying it with the goal of getting some of their fast followers – VCs who are investing with them, competing with them on “hot deals”, and driving prices up to “slow down and blink” so there’s less competition. Regardless, it’s not a game I’ve ever played, nor is it one I believe in. Like you, we are really proud of our consistent pace regardless of market. “10-ish investments a year, every year.”

    1. JordanCooper_NYC

      i thought head fake for a second too. at least that’s the only reason they would publish strategy change like that, but i wouldn’t underestimate vanity and the desire to be correct in a public forum (i.e. continue to be the market leader, they led late stage scaled asset movement over past 12 months, now want to stay thought leader and publish next move)….more broadly though, i’m not sure I would call AZ’s strategy start/stop or momentum investing…they are one of a few firms in the world i can think of who successfully invest across all asset classes from super early stage to public market/LBO…My question back to Fred would be, do you not think it’s possible to shift volume of dollars deployed into different stages of company based on where we are in a cycle?  that makes sense to me if you have a footprint that plays at early mid and late…this article triangulates around valuation which is obviously the wrong metric…that’s the head fake that Andreesen is throwing out…internally i bet they talk a lot about liquidity of IPO and M&A markets and where they deploy dollars relative to visibility on that front…  [email protected]:disqus 

      1. bfeld

        Like most things, let’s check back in a decade. That’s when we’ll really know what happened.

        1. JamesHRH

          How many chairs will have moved at valley VC firms, by 2022?

          1. bfeld

            Probably a lot.

      2. fredwilson

        how do you know where you are in a cycle until its too late?they are doing start/stop herky/jerky investingthey will regret it

    2. William Mougayar

      Right. The article lacked substantial evidence. KPCB seems to have dialed-up their investments, contrary to the article, with reportedly large raises for Klout, SoundCloud and Fixmo.

      1. bfeld

        “Lacked substantial evidence” understates it. A few anecdotes and quotes. A tight time window. I have a phrase I love “jesus grabbed the steering wheel” – mainly that people react to something illusory and go in a totally different direction. Articles like this are so devoid of critical thinking as to be irrelevant, yet they become passed around the entrepreneurial community like gospel. I’m glad there are blogs and comments to point at how weak they are.

        1. William Mougayar

          Good thing this article will go behind the WSJ paywall in 2-3 days and nobody will read it. I just added a comment there “This article paints a very incomplete and inaccurate picture. Anyone reading it ought to also read this excellent discussion on the same topic http://www.avc.com/a_vc/201…”- posted via http://engag.io

        2. LE

          “yet they become passed around the entrepreneurial community like gospel. I’m glad there are blogs and comments to point at how weak they are.”Get together a group of a few VC’s from different firms and give them the other “this is bullshit side” so they can write that story. A totally contrasting view is always of interest in selling more papers (I’m serious.)

    3. LE

      “what a load of bullshit – why does the WSJ publish stuff like this”The WSJ is a different paper than it was years ago their standards were different because they could afford to have high standards given the certain advertising revenue. The business obviously is a balance to sell enough papers to sell advertising and, no surprise, make money.  Why wouldn’t truth take a back seat to survival? (I’m going with what you term “bullshit” not that I agree or not.)”why do VCs say things like this?”To me it makes sense as a media strategy to reduce valuations of companies that they want to invest in. A manipulation.  It’s really just FUD (fear,  uncertainty, doubt) in practice. I mean if I was interested in buying your widget the best thing that could happen is an article talking about widget values dropping and people passing on deals. That would certainly make you think twice about passing up my offer, right?And you can be sure that (just as Fred has done) this idea will get echoed around creating a self fulfilling prophecy that will cause dropping valuations. And unless you are looking to raise money for a new fund I would think that would be good not bad. So it makes sense to me.

      1. fredwilson

        but i didn’t echo it. i argued against it.

        1. LE

          My wrong choice of wording. But you gave it legs and drew more attention to it by talking about it as others will also do after reading your blog.   That’s fine of course.Do you remember the David Pogue “hit wife with iphone” nasty divorce story? Pogue was advised to talk about it on his blog but he didn’t. The story essentially went away and was mentioned in very few places after the first few days or maybe a week. In that particular case the strategy worked (although it could have easily backfired). Pogues girlfriend is in PR and I know for a fact that they discussed the strategy for how to handle it.http://www.huffingtonpost.chttp://www.pcmag.com/articl

    4. John Petersen

      newspapers must publish stories, especially stories that are going to attract eyeballs. clearly this worked as per the reaction of the startup community.you’ll never see a paper that prints the headline, “sorry, there is nothing significant to write about today. come back tomorrow”

      1. William Mougayar

        But still…they have to be more factual and more investigative. This article proves the point that the WSJ ain’t what it used to be.- posted via http://engag.io

        1. John Petersen

          you’re not going to hear an argument from me there

    5. Alex Murphy

      With a consistent add to the pipeline at this pace, you will start to expect to see a “normal” flow of exits as well.  No exits for the first few years, then 1, then 2 or 3 etc until you have come into a normal distribution of quantity and value of exits.  you and Fred are following the dollar cost averaging of VC investing.On the them of exits, congrats on the admeld deal.

      1. bfeld

        Thanks on AdMeld.I’m not sure I’d call it “dollar cost averaging” since that’s a more company specific concept (although we each have approaches there as well, but they have some differences in our approaches). The phrase I hear a lot is “time diversity” which eliminates the noise of the cycles since you are trying to pick a local minimum for entry or local maximum for exit.But the notion is definitely congruent.

    6. FAKE GRIMLOCK

      90% OF EVERYTHING SUCK.THIS INCLUDE VCS.YOU, BRAD, LIKE FRED, IN OTHER 10%.

    7. fredwilson

      better title – “what a load of bullshit”i love it

  31. Peter Vereycken

    all good and well, still a lot of people have great idea’s and are looking for trustfull investors, like myself not the first time the wrong people ran away with projects and the brain behind all is left out had that experiance aswell.Attitude is a little thing that makes a big difference.

  32. Tim Davis

    Hey Fred,Are you guys interested in international startups or just USA focused ? 

    1. Dave Pinsen

      USV invests internationally if it’s not too long of a flight from New York. They’ve invested in European start-ups (for example, SoundCloud in Germany, Zemanta in Slovenia), but Fred has said he wouldn’t invest in China, for example, because it’s too far.

      1. jason wright

        Then Fred needs a Scramjet.

      2. fredwilson

        exactly. 

    2. fredwilson

      both, but we need to be able to get there in 6-8 hours. any farther is too far

      1. Tim Davis

        ah right thanks @fredwilson:disqus – guess Australia’s out the question then! 🙂 would you support startups moving to New York or this also too hard ?

        1. fredwilson

          A better thing would be more local VCs in Australia

          1. Tim Davis

            @fredwilson:disqus totally agree with you on that …. except that Australia has such a dismal number of VC’s that USA is really the only avenue for startups here.It’s the unfortunate reality – huge brain drain – so most local startups are simply looking to move to the USA anyway they can

          2. Brad Lindenberg

            Australia is a good place to do your product development because there isn’t a brain drain like NY or SV but if you want to shoot for the moon and hit up the US markets you need to set up shop there. Build MVP in Oz the raise and move.I wouldn’t take money from an Australian investor only because they are too far removed from the SV and NY networks.Atlassian, 99 Designs, Oz Forex all took money from Accel. My friend Anthony Goldbloom who started Kaggle in Bondi beach moved to San Fran and raised $11m from the likes of Yuri Milner, Ron Conway, Index Ventures and more. If you’re serious that’s the way to do it. The cost of building stuff is cheap so you need smart money not just any money and the smart money in tech I believe is in the US.

  33. ShanaC

    I find this article weird – I agree with you in general about “venture capital as an asset class can’t be timed very well, so stop trying” but I do wonder if theses for investing by should be looked at and changed every once in a while.  They’ll be a point where large networks of engaged users will be rising incumbents, and it won’t make sense to invest.So I wonder.  What will be the next thesis “individualized and custom software for everyone?” (the shapeways discussion below seems to be impacting my decision of pretend new theses) “merging biotech with software for the medicines of today?”When are you supposed to re-evaluate

    1. LE

      “if theses for investing by should be looked at and changed every once in a while””When are you supposed to re-evaluate”While I can’t get inside of Fred’s head strictly from reading the blog, I feel that Fred isn’t paranoid enough. It’s easy to feel comfortable when things are generally working with what the current approach is. It becomes a panic once it’s to late. Fred also seems to be ptsd from having so large of a firm in the last boom. But one of the advantages to that might be to have many irons in the fire of which some could end up being the next thesis. Maybe just as micro investments. Things that you keep your hand in and invest small amounts that other lesser associates manage.

      1. fredwilson

        shhh.. you are on to me LE. pstd ftw

    2. fredwilson

      great point shana. we have evolved our investment thesis. we jigger it every couple years. if we applied our “large network …. big markets” thesis to our 2004 fund, we would have only made 7-8 of the 21 investments.

      1. ShanaC

        Thank you – so exactly how does this re-evaluation happen?- posted via http://engag.io

    3. William Mougayar

      I like that “individualized and custom software for everyone” Shana. Did you hear it somewhere or made it up? It is definitely about empowerment of the end-user. And the effects of peer-to-peer empowerment are multiplied. It’s almost like the Network of Engaged Users gets turbo-charged because there are powerful tools in the hands of users. 

      1. ShanaC

        I made it up. I was reading all the shapeway posts, and that is what came to mind. Also, recently the idea of the stack as being hot swappable seems sort of interesting. Like what is the fundamental difference of different tech at certain points….And I honestly don’t know what would happen if we went with the idea of individualized software. You could have peer to peer empowerment. You could have software as a fashion statement, your software as your identity. Or you could have a mess.- posted via http://engag.io

        1. William Mougayar

          Very interesting….Software as a fashion. I like that too, Shana. Thanks. – posted via http://engag.io

  34. Peter Vereycken

    How about a Investment for less then $6M, and a net return that is 20 to 100 times bigger in less then 24 months??????”Because we’re actors we can pretend and fake it, but I’d rather the  investors where authentic.2

    1. fredwilson

      If you are building a large network of engaged users that has the potential to disrupt a big market, please talk to us about what you are doing.

  35. Steven Kane

    amen better, i think you have been pretty darned consistent, continuously since 1996 (interrupted only for a year or two when the tech meltdown created such disarray.)best, during that long run, you, and only a tiny tiny number of VC investors, stuck to your guns regarding vision/strategy — eg, that the consumer web was and is a great place to create new businesses and startups. how many VCs followed the herd and abandoned consumer internet from 2000-2006? (or 2007 or 2008?)how many wish they had not done so? (all of them?)i used to think this was a bad thing. but now i like the fact that most investors (and entrepreneurs?) run with the herd — in the end that is what makes the best opportunities for those who dont;)

    1. fredwilson

      you are too kindthe SV VCs who are quoted in that piece remind me of flatiron circa 99/00we just got caught up with ourselves. drank our kool aid. thought we knew it all.but we knew nothing

      1. William Mougayar

        That is true…I was part of that period too but not as drunk as most others. 

      2. Steven Kane

        well, having taken a few swigs of that era’s kool aid, i can attest, it was a tasty brew

  36. another cultural landslide

    Perseverance is a sign of will power.He who stays where he is endures. – Tao Te Ching, Chapter 33’Nuff said.

  37. reece

    what do you think about @bryce:twitter ‘s comment that:”most seem to miss the point that these expensive rounds were never investments at all- they were marketing spends”seems to make sense to mecc @bfeld:twitter @jordancooper:twitter 

    1. bfeld

      @bryce:disqus is right on the money. Or they are hedge fund like investments, not VC investments. Fundamentally it doesn’t matter what you call them, but how you interpret them in the context of “building real entrepreneurial value over time.”

      1. reece

        yeah… thought so. thanks

      2. fredwilson

        yeah but see my comment abovehttp://www.avc.com/a_vc/201…

    2. fredwilson

      i would never ever ever ever ever use our LP’s capital to market our firm.that is grossly irresponsible. borderline criminaland i would point out that AVC.com and USV.com cost us not a dime to producejust our time

      1. reece

        appreciate the disclaimer, but you know we all know that 🙂

  38. bfeld

    It was thin pickings in the world of VP Blog Posts today so you not only rose to the top but didn’t have much competition for the top spot. I put this up as the post of the day on AsktheVC along with my quick thoughts.http://www.askthevc.com/wp/

    1. fredwilson

      thanks for the reblog!

  39. Dale Allyn

    @robvhunter:disqus wrote in response to my reply to @tao69:disqus : “I think that there is something to be said for looking at numbers that don’t immediately agree with your hypothesis.  I don’t think that the statement that “tech startups create jobs” is false.  To ignore the fact that tech companies often (not always, maybe not even mostly) destroy jobs in the industries that they disrupt is to ignore an important feature of tech companies.  That feature isn’t necessarily bad (to put off the pain of disruption to maintain a near term status quo is likely a mistake).By the same token, testing the validity of the statement of “current tech startups enrich relatively few” is a noble goal.  Your point about tech companies needing buildings (and other infrastructure) is spot on, but so do other types of company; to compare the top 10 tech companies employment of 150k to other verticals is an interesting (if not all encompassing) metric to examine.” I think testing the validity of nearly any statement is good practice. IMO tech startups have an opportunity to create much growth in employment numbers, but not all opportunities will be counted among the first tier of the study. Economic opportunity is a fabric, not a line. We’re best served as a society to look forward, while learning from the past, because forward movement will occur whether we choose to participate and contribute or not. That being said, there is great opportunity outside of tech as well. We should work together to fuel all opportunity.

  40. jason wright

    Why pay attention to the WSJ at all?

    1. Dave Pinsen

      Replaced it with the FT a few years ago, when the WSJ started looking more like USA Today.

    2. fredwilson

      because others pay attention to it

      1. jason wright

        It’s a journal because it has the attention span of today. If others want to synchronize with that then they’re welcome to read on. I’ve always had a dislike of mass media and their methods and objectives. It’s the ‘new’ church, but now thankfully being disestablished.Chomsky is an MIT man.

        1. LE

          It’s important to know what influential sources are saying whether you agree with them or not. To have insight into what is going on that others are reading and believing. 

          1. jason wright

            I get the feeling that so much of the copy is PR disinformation put out by corporations and printed almost verbatim by willing journalists serving the needs of their clients. It does little for the reader. I would hope that that is what most are thinking as they read.I would hope that the circulation of the WSJ will go the way of Myspace in time. Facebook ought to follow the same evolutionary path. Zuckerberg  is like a rogue state that’s acquired thermonuclear weapons technology and somthing needs to stop him. Users need to wise up fast and see that he is a 21st century Murdoch in the making.

  41. Otto

    Shapeways…I had not heard of it until I read this post and comments, or 3D printing for that matter. But it immediately made sense to me.Upon first glance of their website, it looks like something that is good for designers who aren’t necessarily makers. Or for people who want to design or develop design skills, but never had much incentive to do so until now.On the consumer only side of it, I would say some prices could be seen as high but that is subjective. People also have to “want” a indie designed 3D printed sake set. Also, consumers generally have been trained to trust only brand name stores and items that are packaged, labeled with product info, material info, safety info, etc., and that it has allegedly passed all of the consumer regulatory hurdles.

  42. Donna Brewington White

    Delayed reaction, but I am SO GLAD that the arrows at the bottom of the post are now marked “older” and “newer” post. Thank you!I wonder how many other blogs have people simultaneously and actively commenting on posts from multiple days at any given time?  I guess you can’t contain “community” within neat 24 hour constructs — and added to that are the multiple time zones represented from across the globe.

    1. fredwilson

      some days i wish i could contain this community. but then i realize that’s impossible. and that i am blessed to be part of it.

      1. Donna Brewington White

        It’s the nature of the beast, Fred, based on the type of people you attract. You created this monster. Or at least you keep feeding it. Same thing.

  43. Karan

    Are the following two statements congruent?”If you are building a large network of engaged users that has the potential to disrupt a big market, please talk to us about what you are doing.”From the blog post – Moceked and Misunderstood — “When people ask me, “how do you know which companies and services are going to be the biggest successes?”, I usually tell them to look for the companies and services that are mocked and misunderstood. For some reason, that correlates highly with the biggest breakout successes.If you already have a large network of engaged users are you mocked and misunderstood?

    1. fredwilson

      twitter still isfoursquare still is

  44. Ryan

    “Building a large network of engaged users”… check.”Disrupt a big market”… check”Please talk to us”… would love to!This blog has played a critical role in helping me develop my vision and strategic plan to create a large network of engaged users.  I feel fortunate to have heard a lot of your side of the conversation on many key topics… (only, slightly two way with my recent comments on the social movement post last week.)  Here’s a few of the key posts that resonated strongly with me…  (1) modern community building, (2) health care, (3) social movements, and (4) nations and networks.  Better than talking about each of them individually, it would be both fun and stimulating to talk about how they all tie together.  To the conversation, I’d be able to bring an interesting perspective as I’ve been primarily focused with building the network off-line and engaging with many stakeholders beyond consumers, including: government, non-profits, health care providers and foundations.  I couldn’t be more excited for 2012 and bringing it all together on-line.

  45. Vijay Sundaram

    Fred:Hats off to you, its much easier said than done. Your investing style and your writing style have a lot in common :)Can you share a bit more about the dynamic behind how you invest at a stable rate while the volume of companies swings wildly through up and down cycles? Do you set a target number or a quality bar? I take it to be the latter, but if so do you find that the number of quality deals (good companies at good prices) out there stays fairly constant, or that there are always more quality deals out there than you want to take on even in a down cycle which allows you to meet a target without compromising quality?

    1. fredwilson

      i think it starts by knowing what you are capable of doing each day. we don’t take on new investments that we can’t apply ourselves to. and adding staff to a VC firm doesn’t work. you just get big and bloated.

  46. Seth Gold

    Entrepreneurs Will themselves so that timing does not matter.  Goldman Sachs times the market by manipulating it.  Its an unethical method, but it still works.

  47. Alex Murphy

    Keys here:1. Disrupt, a2. Big Market, by3. Building a large network, (translate = “Be your own bitch,” Fred Wilson at smash summit) of4. Engaged Users.Are these the four slides you want?

    1. fredwilson

      that would be great

  48. Morgan Warstler

    Efficient Market Hypothesis – from god’s lips to your ears.

  49. John Revay

    Herky Jerky – so much for dollar cost averaging.I assume LPs make periodic steady & ongoing investments in VC firms, so why would VCs not do the same with their outflows.

    1. jason wright

      LPs invest across asset classes – ‘heads I win, tails you lose’. They have the scale to do that.VCs invest in an asset class. Some have more than one fund and invest in more than one sector of the class. They have the scale to do that.Flow – LPs make investment in successful VC firms. VC firms make investments in promising startup teams and their ideas, and in later rounds of growing startups.   Capital is electrons in a system. The web is electrons in a system. Match the  frequency and synchronicity of the two to form a successful partnership.

  50. Glen D

    As an investor, you believe your valuation differs from the market’s valuation, or else there would be no expected upside to the investment.  Given that your valuation can differ from the market’s valuation, it is possible that the market valuation is so much higher than your valuation for most VC investments that you choose not to invest. I interpreted the article to mean that this is the reason these funds are not investing. If you value potential investments at less than the market price, it doesn’t make sense to invest. So then applying a disciplined investment strategy actively in all markets all the time wouldn’t make sense.  Unless you are saying that there are always at least some undervalued investments to be found, which I guess is probably true.

    1. fredwilson

      a company’s valuation changes as it grows

  51. Rob

    As someone who is ready to start a round of financing, I am looking to move to NYC. Sorry if this is a little off topic but it is relevant as I am looking for VC’s to fund a product and wanted to ask a question about stealth mode. I know the classic answer to this is speak loudly and out-execute but is there a not a grey area in this whole debate.I found the following article disturbing. http://blog.eladgil.com/201… . This section I have a problem with is where he mentions that groupon went to SV after getting some traction and showed off their financials. The VC in turn showed these financials to their portfolio companies and others and a competitor was created. Now I am not arguing against competition but to disclose financials from a supposed meeting in confidence seems unethical to me. Companies should be allowed to launch to the public and then have competitors come after them. Companies are hard enough to start without having VC’s give a head start to their under-achieving portfolio companies in need of a pivot.  I love your blog Fred and it would be great to get a discussion going around this concept.

    1. fredwilson

      there are good VCs and bad VCs. bad VCs do stuff like that. you have to avoid the bad VCs. blogs are a good place to get a sense of people before you talk to them.

  52. Kevin Pillow

    I just realized I want to learn Ruby on Rails, can you make that happen Code Academy?

    1. fredwilson

      soon

  53. Carl J. Mistlebauer

    Andy, At one time the internet was a “utopian fantasy” Utopian fantasies are what creates change and creates wealth….Utopian Fantasies are the wellspring from which we create our future….The future that you and I work hard to achieve and grow wealthy from.

  54. Carl J. Mistlebauer

    Mark, Imagine how CREATIVE and SOCIAL we all could be if we did not have to work for a living?Andy could go off and “more to do, to create….more to win.” in all his free time.and realize as Howard Roark in the Fountainhead that “You got to love the doing.”  🙂

  55. Robbie

    Timing is simple, but not easy.  I 10-month simple moving average applied to most asset classes will keep you out of bear markets.  Mebane Faber has done a lot of work in this area.

  56. davidhclark

    I’m green with raising money. I’ve never done it. But I know what I have so I’m going for the best. And as a first time cash money hustler, I’m very much drawn to VCs that show a strong sense of consistency and focus. Not only with the frequency of investment, but consistency in  the portfolio company by following up with another round. 

  57. howardlindzon

    Luckily you can blog this everyday and no one really applies it so you can keep #winning but yes you have to keep banging the discipline drum.there are no gurus, just great forecasting, consistency and risk management…but having a good eye and instinct does not hurt.

  58. howardlindzon

    That ad ..i mean ‘article’ seems paid for my marc andreesen 

    1. fredwilson

      he looks like an idiot in it. can’t imagine why someone would pay to look like an idiot.

  59. hesky

    Fred I think part of the point of slowing down is NOT necessarily to time the market but rather a reflection of the fact that valuations have gotten absolutely ridiculous. Similar to Warren Buffet slowing down ( which he very publicly did) in buying equities during frothy times in the public markets

    1. fredwilson

      you don’t have to slow down. you just have to have discipline. they are not the same thing.

  60. James Bruni

    Way to go Fred. 

  61. Marcus Oberholzer

    Is it feasible to use a combination of the two approaches (business case-based versus market timing-based)? UVS and Andreessen seem to have had some success using their seemingly divergent approaches, so combining them in a thoughtful way could magnify the result.What if you (and maybe many already do) use a sound business case filter to determine the right investment, then apply a market-timing factor to shape the best price, structure, and strategy for that investment?

  62. Brad Dickason

    Hey Brad thanks for kicking off this thread and for taking the time to critique our site/service (disclaimer: I just started as Director of Product at Shapeways). I think you’re absolutely right about the future of Shapeways. We need to be a marketplace where anyone can find cool products.We make alot of our models available for download but have not yet experimented with ‘buy a model’ yet. Right now, the ‘personal’ 3d printers are not super high quality and I’m not sure if the user would be happy or disappointed in printing something off the site on our makerbot. However, as I type this, I’m realizing that if they already BOUGHT a makerbot, they probably know what quality to expect :PAs someone without one of these devices (I’m assuming), would you buy something from Shapeways? If not, why not? Did you find any products on the site that piqued your curiosity?Right now, I think (and it seems the commenters here agree) that our homepage is not focused and also tries to explain the entire concept of 3d printing and shapeways all at once. Would love to hear more thoughts now that you’ve gone deep into the concept.Edit: Crap, I think somehow my threaded response was unthreaded 🙁

    1. Brad Lindenberg

      Hey Brad, no problem. I hope you guys got some good take aways from it.I’m glad you view the future as a virtual goods marketplace. I read a quote on twitter that said something like this “Today’s 3D printing like the automobile in 1905. Will change we produce, shop, work, etc…””Today’s 3D printing technology is just version 1. Wait till version 3″This is how I see 3D printing. It really is in its infancy but it is going to be revolutionary.  Kind of like where the internet was in 1994.I don’t think my opinion of whether I’d buy something from Shapeways is at any way meaningful to you. I am a sample of one. Your revenue should tell you if people want to buy from you. That is the ultimate test. I think 3D printing is going to revolutionise the way things are manufactured. I think in the future things will be made with the ability to print 3D parts or components in mind and that supply chains and product design will be adjusted to accomodate for it. Manufacturers will try and make items out of compounds that are compatible with compounds that can be printed. E.g. The mirror of my Mini is plastic. If that got scratched I could print a new mirror cover, however Mini would need to design their cars in such a way that this new printed mirror cover can clip on. Mini might not initially want people to be able to print parts because their margins will be reduced, however the consumer always wins and the market forces will drive manufacturing this way because brands will graviate that way for various reasons. It also free’s up a huge amount of capital and shortens product lead time to an instant. It is true game changing and I think if your team can build critical mass around your marketplace you will be well positioned. I think at a global scale, 3D printing could be disruptive to China’s manufacturing economy to some degree. It could also be highly disruptive to the logistics industries because it removes a need for shipping. There is a lot of disruption that 3D printing can cause. Actually I really like this. I would buy this, but it took me 12 minutes to find something I want.http://www.shapeways.com/mo… The take away here, at least in my case, is that its not the process of 3D printing that is untrusted in any way, its just a matter of having products that people believe they have a need for. I like photography and have a Canon 60D but always have to find a place to put the lens cap so for me this product makes sense. Hope this helps. 

      1. Brad Dickason

        Thanks, this is super helpful! I agree about the scope of 3D printing and the potential to disrupt, but I’m worried that focusing on spare parts today may be the wrong direction until the consumer demand grows. One of the worst parts of Amazon’s shopping experience is when you’re looking for products in overlapping categories. If I search ‘Rework’ and get a ‘Dremel reworking tool’ instead of the book, i’m going to be confused. In that same way, spare parts could spring up and clutter the browsing experience significantly. I’m wondering how we balance this going forward.To sum the above up, I think you hit the nail on the head – discoverability and context are extremely important. We can be ‘everything to everyone,’ but we have to find a way to figure out people’s intent very quickly and present them really cool stuff that they can fall in love with. Etsy does a really great job of this, and we can learn alot from them.One of the points you made about disrupting the outsourced manufacturing business from China makes a key assumption: that 3D Printing can be cheaper/faster/better than traditional manufacturing. Today this is true for customized/personalized goods (i.e. print 500 things that are different) but is not yet the case for single models that sell 500x. It’s cheaper at the end of the day for a product designer to move away from Shapeways or another similar service when they reach that scale, so that’s going to be one of our challenges going forward. We want to retain our bestsellers, not graduate them to another company 🙂

    2. Brad Lindenberg

      Brad, I thought I’d pick your brain. What is the best way for the public to get investment exposure to 3D printing? I see it as an opportunity to invest in the makers of machines, supply materials etc just like it was smart to invest in Cisco in the early 90’s when they were in the infancy of building infrastructure for the internet. 3D printing is at this infant stage still.I’ve identified four companies in the space:SSYSDDDPMTChttp://www.objet.com/ (Israeli based company that might IPO on Nasdaq soon)Who is leading the race, making the best product etc? 

      1. Brad Dickason

        As I just started with Shapeways recently, I’m not the foremost expert on the entire industry as a whole (yet!). Let me ask someone who’s more qualified to give some thoughts/opinions on this.

  63. Sanford Dickert

    Fred – I was speaking to one of the VCs associated with the firms mentioned in the story, and they were discussing the very issues they saw there (e.g., EuroZone crisis, slowdown of the economy, over-priced rounds) and they were warning that people needed to batten down the hatches.  And this was back in Oct/Nov timeframe.I, too, believe in a consistant strategy – but sometimes one does need to look at the macro environs and see if there should or should not be an adjustment…

  64. Donna Brewington White

    “I’d love to see a guest post(s) by founders on market timing.”That’s a great idea.

  65. John Clyman

    We spun SiteScout off from a security consulting business in 2006 after seeing McAfee buy SiteAdvisor for ~$60MM and thinking “we could do that”. Raised $2MM from angels but found getting market traction was much harder than we anticipated (in retrospect: duh). In 2008, with the financial world collapsing around us, our investors were ready to throw in the towel. A co-founder and I weren’t prepared to give up despite the business challenges and the macroeconomic gloom, and bought them out with our own cash. In 2010 we had an exit that I’m proud of (and finally let us exhale).Learned some big lessons from that. Don’t be the second mover. (If I remember correctly one of Fred’s criteria for investments is that they be a market creator, not a follower — smart). Build value for the long haul, not to flip. B2B sales cycles are really long and there are endless gatekeepers (duh++). Have the stamina to persist even when the sky is falling. And what you say, Charlie — that trying to read the tea leaves is a waste of time. Just work the plan, gather data and make empirically informed decisions, and keep on keepin’ on.

  66. SubstrateUndertow

    Are these thing making it into many schools?Having this kind of tool available seems like a real fire-starter for kid imaginations.

  67. Brad Dickason

    Charlie I’ve enjoyed your comments over the years and now there’s one that’s super relevant to me! (Just signed on as Director of Product at Shapeways)Makerbot has been successful (imho) in enabling people to dream “Maybe I could design something” or “I could copy anything with that.”Is it possible for Shapeways to leverage the marketing/fascination that Makerbot is building? Or does our message (which I agree needs to become clarified) become more muddled with the existence of Makerbot.The first question I get after “did you say Shake Weights?” when I tell people where I work is either “What’s 3D Printing?” or “Is Shapeways a part of Makerbot?” My gut tells me to make it less about 3d printing (The how) and more about the dream of being able to buy anything you can imagine (the why).

  68. SubstrateUndertow

    Charlie ! Charlie ! Stop with the realism.We’re trying to dream here !;-o)

  69. Carl J. Mistlebauer

    I don’t shop, I leave that to the family expert, my wife.If you can get my 3d printer to alert its self when something is malfunctioning and automatically create a replacement part and then leave a post it note for the cleaning lady to replace said part then great!I want a 3d printer….after tonight I also hope you find a way to get my microwave to read product SKU codes and then via the internet find out the correct cooking times for said product because I just ruined a perfectly good bag of popcorn……

  70. Dave W Baldwin

    Good luck Charlie. 

  71. ShanaC

    ok, randomly butting in:I have this friend who I think would be perfect for makerbot.  How do I get him to you.

  72. Brad Dickason

    Hey Shana, I actually work for Shapeways, not Makerbot, but I’d be happy to talk to your friend! E-mail me at [email protected]eways.com.