Putting 2012 To Bed

I'm typing this on my phone as our plane is starting to descend into the NY metro area. We will land at JFK within the hour.

I've wanted to write a year end post for days. I actually wrote one and stored it as a draft. But it comes across as a whiny complaint about the shitty year that 2012 was. And it was in many ways a shitty year for me. But the reason I couldn't publish that post is it didn't capture the greater picture that 2012 represents for me.

I moved every year as a kid. Throw away the old. Start with the new. That is etched indelibly in my psyche.

My venture investing career has three phases all roughly 6-8 years long. The first, at Euclid, was software to internet. The second, at Flatiron was internet to bubble. And the third, at USV, has been web 2 to mobile. I have always used a new firm to denote a new investment phase for me. Throw away the old. Start with the new.

And I feel that 2012 is the next demarcation year for me but this time I have to do it in an existing firm with an existing portfolio. That is new for me and I don't have a model for how to do it.

It was reported a few weeks ago that I had not made a single new investment in 2012. That is true. In fact, I have not made a single new investment since the summer of 2011. Fortunately my partners have picked up the slack and we have made a dozen or so terrific new investments at USV during that period.

I have been working on a new investment and I hope it will close in early 2013. So it is likely my 18 month dry spell will end soon. And I am going to treat that dry spell like a new start. I don't want to invest in the same stuff today that I invested in five years ago. I want to do new things, learn new lessons, and share them with you.

The funny thing about 2012 is that our firm made more money in 2012 than ever, with some huge carry producing events. And yet I think of it as a wasted year professionally. I don't like harvesting, I like planting the seeds, and helping them grow into fully flowered plants. That's where I get joy from my job.

So as I put 2012 to bed and think about 2013, I am happy to see this past year enter the history books. I didn't get much joy from it. And I am looking forward to doing new stuff in 2013, learning new things, and working with new people.

Happy new year everyone.

#VC & Technology

Comments (Archived):

  1. Noah Lackstein

    Happy new year. Hopefully 2013 will bring the challenge and excitement that you’re looking for.

  2. Bruce Warila

    “I moved every year as a kid.” Honey, start packing we’re moving the kids again. I just figured out Fred Wilson’s secret. May your 2013 be enriching in other ways. Peace.

    1. fredwilson

      :)Happy new year Bruce

  3. rrstevens1

    Happy New Year to you too. I look forward to another year of reading your posts. I always learn something from you and the AVC community when I visit your site.

  4. RacerRick

    It’s nice to know that other people had a shitty 2012.I hope that 2013 is awesome for you (and for me!)

    1. jason wright

      it was indeed shitty. my annus horribilis. 13, it’s the magic number. not that it really matters. seasons are the significant rhythm of life

      1. Donna Brewington White

        Welcome back. 😉

        1. jason wright

          thx. absence makes the heart grow fonder.i haven’t had a dream with a camera yet.

  5. michaelamar

    If there were no companies that caught your eye for 18 months than its good you didn’t invest…keep laying the right seeds. Happy New year!

  6. Laurent Courtines

    To quote my favorite New York radio station WFAN “.. first time caller, long time listener” Fred, and gang, glad to hear you had the guts to put out into the ether that you had a tough year. I did too! Makes me feel good to know that I’m not alone. Thanks Fred. He’s to 2013 being better!Question: When you find that a through process or system you held in mind has shifted, or changed…. what is your process for changing the mind set? Is it about going back and re-evaluating all your assumptions and making new ones? Or just sticking to ones guns and keeping pressing forward? As they say on the FAN “I’ll hang up and just listen”

    1. fredwilson

      That’s the hard part of what I am working through. In the past I just got a clean slate and started working on it. I don’t have that luxury this time.

      1. FAKE GRIMLOCK

        CANCEL EVERYTHING FROM OLD LIFE.REQUIRE EVERYTHING REAPPLY FOR SPACE IN NEW LIFE.IT BEST WAY TO REFACTOR.

        1. fredwilson

          We promise the entrepreneurs we back that we will be there for them until its time to close the doors, sell, or something else. We mean it.

          1. FAKE GRIMLOCK

            THEN THOSE GET AUTOMATIC PASS.SOMETHING MAKE LAST YEAR SUCK.REFACTOR UNTIL IT GONE.

          2. fredwilson

            Living in my home would help. Two floods in one year was a killer

          3. FAKE GRIMLOCK

            MOVE TO LESS DISASTERY LOCATION?

          4. fredwilson

            Harden our building

          5. FAKE GRIMLOCK

            HAVE TO HARDEN ALL BUILDINGS, OR YOU VERY LONELY NEXT DISASTER.

          6. William Mougayar

            I wished more VCs were like that 🙂

    2. ShanaC

      Something I’ve realized this past: you are rarely alone

  7. Adam Wexler

    Always admire your aspiration to move the needle forward. Despite the investment drought, I imagine you still made a profound impact on a number of services in the USV portfolio that many of us can’t live without. Thanks for all you do, Fred. Here’s to a *better* 2013! -Adam

  8. daryn

    Happy New Year, Fred.As you know, I’m in a harvest period right now as well, and while I’m learning a bunch, don’t have many complaints, and am being well-fed, this part especially rings true:”And yet I think of it as a wasted year professionally. I don’t like harvesting, I like planting the seeds, and helping them grow into fully flowered plants. That’s where I get joy from my job.”

    1. fredwilson

      I think that will ring true to most people here at AVC

  9. brian trautschold

    similar year for me in terms of consistently being less than pleased with personal outcomes… however, that tends to mean better outcomes are available in the future.hopefully hard work will deliver the desired results for both of us. It has been a great year getting to know this community better and I appreciate the effort/ thought/ energy you and so many of the regulars here contribute.

  10. AlexBangash

    Amazing Fred…Congrats on your most successful year! Any guess on what the evolution be — engaged communities to machine learning?…Will you change your thesis as you change your focus ” large networks of engaged users?” I think not. I think your thesis statement is one of the clearest of any fund manager.It is not ironic that some of the best positioned funds tend to have the most crisp thesis.USV: Large networks of engaged usersHeavybit: Cloud infrastructure business for developer facing communitiesMetamorhpic: Transactional processing media businesses

    1. David Roman

      I think whether or not there is a change in thesis is dependent on the frequency of which USV wishes to invest.There is only 24 hours in a day and there is only so much time a consumer can allocate to using these services that we build– therefore as the winners are settling (which is what we are starting to see) we will begin to see less and less large networks of engaged users, which means less investment opportunities for USV, should they strictly abide to their thesis.My guess is they will likely have a similar thesis in place, but may not feel such a great sense of loyalty towards it and ultimately become more lenient on how they typically classify possible investments.

      1. AlexBangash

        Frequency of investments definitely have impact on the thesis. Good point.

      2. ShanaC

        less, you have to sleep 🙂

        1. David Roman

          wait, what? this comment seems relevant for a thread on another recent post– but for you to put that together would require you being extraordinarily on the ball. Damn, you’re good.

  11. Richard

    Seeds 🙂

  12. Tom Labus

    If you combine all three phases, your 18 months hiatus is not out of time whack. I also believe that being on the sideline is just as an important position as being in the market and most of time much harder to do.How did Rex keep his job?

    1. falicon

      Because he’s a ‘yes man’ coach…he’ll do and say whatever the owner wants…which makes it pretty hard to get fired for (but also pretty hard to actually get results with if the owner doesn’t ask for all the right things)…I think he’ll *officially* lose the players in the next year or two and that will finally be the end for him…just my 2 cents.

    2. fredwilson

      No clue. He has underperformed for two years now

    3. ShanaC

      who is rex?

      1. JimHirshfield

        NY Jets

        1. ShanaC

          no wonder I am clueless

    4. David Petersen

      He has done about as well as you can do in the NFL with no talent at QB.

  13. Mike Lair

    Um, Fred – Can someone tell you that your kinda a sad cat?Drop of GG and the kids and come out to BigSky to ride a board and find joy in that first, then the j.o.b. next.

    1. fredwilson

      I have a bunch of mountain time on the calendar this winter. But there aren’t much greater pleasures in life than skiing or boarding fresh tracks with my kids

      1. LE

        “much greater pleasures in life than skiing”I find that doing deals (and strategy) is something that I never tire of. I want to do it every day, all the time. Anything else (boating skiing, traveling) is something that you can do for short periods but if you had to do it every day you would lose interest (well I would lose interest) after maybe a week or so.)

        1. JLM

          .On the lift at 8:00, corduroy all the way down. Effortless balance and almost self-generated turns.So smooth, no friction or stress.Can only ski like that for 2-3 hours and then the deals..

          1. Parkite

            Need to get off the groomers and into the bumps and trees.

          2. JLM

            .My hot love affaire with off piste ended a rotator cuff operation and wrist ago. Aw, but the memories.Now I am only a groomer rider and the closer to perfection the better.I like to slide and glide with my skis never leaving terra firma.Spring skier in long sleeve tee shirts preferred.But I still drink Courvoisier in my coffee, eh?.

          3. Parkite

            Funny. As the father of 2 young ones, I think off piste is actually safer to ski than the groomers. Too many 60 year old males bombing down the groomers:)

          4. fredwilson

            i only ski bumps and trees. groomers bore me to tears. i would rather be at the bar than on a groomer.

          5. Parkite

            Word. Need more snow. Resorts, particularly DV, have done a great job making it but we need more natural.

      2. JLM

        .Just got back from the ‘Boat for Christmas. 6’ of snow in 14 days.This is going to be a great year for snow.There is nothing special or righteous about a 12 month period.Shed the skin, reinvent yourself and be patient. Let it come to you. It will..

        1. fredwilson

          Yup. I am most certainly not forcing it. Been there done that don’t want to do it again

        2. LE

          “There is nothing special or righteous about a 12 month period.”Time periods are special because they are defined by society as having meaning and it’s difficult to escape them. The same way it is defined by society that I can touch a woman on the arm but not on her chest (without repercussions if we are not in a relationship). It’s totally arbitrary (and I’ve heard the arguments about arousal etc. and would be glad to further debate that because it’s bunk).

          1. JLM

            .No white after Labor Day?I can flaunt social convention easily..

  14. David Roman

    From what you’ve just described, I’d draw am assumption that 2012 will ultimately prove to be an invaluable year for you.The joy of learning and relying on it as a source of happiness is that it is an unlimited resource– we can not and should not ever stop learning. And sometimes, we’re able to optimize our ability to learn when we take time to observe in silence and allocate the necessary attention to properly grasp onto new profound insights so that they are understood in depth before executing.This is what I have been doing for the past 3 years. Now i’m ALMOST closed on my first ever venture round and am more ready than ever before to begin executing and look so forward to 2013.It appears as if you’re ready to execute again as well and the significance of your results for 2013 will ultimately be indirectly influenced by the decisions you’ve made in 2012 which will prove to be a blessing in disguise.Happy New Year, Fred. Wishing you continued success!

  15. muratcannoyan

    It’s interesting that you don’t believe you have planted any seeds. Maybe if you don’t think it terms of direct investments/relationships and more about the pubic life you lead. I bet your leadership and generosity has helped many through 2012 and beyond. Consider seeds planted Mr. Wilson.Happy New Year!!

    1. Jim Peterson

      +1

  16. falicon

    A year wiser, a year more with your wife and kids, and a year more filled with friendships, laughs, and good music…I suspect you’ve actually had a pretty great year…On the professional level…it’s been a ‘hold at best’ year for more than not (I did my own annual review and realized I only put out 3 actual projects myself in 2012 — *way* down from my average annual output). I don’t think we should feel too down about that as sometimes staying level is *still* way better than sinking…Oh and thanks to Sandy, you’ve had a chance to at least temp. move again in 2012…so the trend continues (I’m 38 and have lived in at least 35 different places in my life — so I feel where you come from here)

    1. fredwilson

      I think I have lived in about 30 homes (not including second homes) in my life. But I am a few years older than youSince Sandy hit, we have lived out of suitcases and are on our way to our seventh hotel in the span of two monthsI am a nomad

      1. Dave Pinsen

        Why keep switching hotels while in NYC?

        1. fredwilson

          We haven’t found one we like. I don’t think we will. We want to be home.

          1. Balu Chandrasekaran

            This is incredible. Can’t you find an apartment for a long term rental?

          2. fredwilson

            We would have to commit to a fixed term and we hope to be back in soon

          3. kidmercury

            airbnb

          4. LE

            Why in the world if you have money would you want to stay in someone else’s place where you have to clean up for yourself? At least part of the reason for making money is that you can decrease the pain and increase the comfort of your life by spending that money.I remember back when I was young staying in some bed and breakfasts in New England. They were nice places (in general) run by former corporate people who wanted to escape the rat race in NYC (stories in Inc. Magazine at the time to that effect). It was a unique experience. One day upon arriving at some place for a stay I pulled my car onto the lawn because it appeared to be configured to accept a vehicle and there was no other parking. The owner came out and yelled at me. After that it was fuck this shit.

          5. kidmercury

            airbnb and its clones are not necessarily cost savings options. lots of times you can get a luxury pad for a prolonged stay. i have some friends that have used it for that.

          6. fredwilson

            Tried that. And one fine stay. Didn’t work for a family of five

      2. JLM

        .As an Army brat myself, I have always been ready to move considering a 2-week stay enough to justify moving.In the last quarter, I spent a couple of months in Charleston/Folly Beach, a couple of weeks in the NC mountains and a couple of weeks in the ‘Boat.In all locations, I had great beds. That is the key for me. The bed..

        1. fredwilson

          The Gotham Gal agrees with youI can sleep anywhere on anything

      3. Guest

        Happy New Year Fred. I am a nomad too. I don’t like it, but I can’t blame my nomadic lifestyle on a natural disaster (Unless I consider myself a natural disaster). I love how you and GG have made NYC your home and how deeply involved in the community you guys are. It inspires me. Here is to hoping 2013 is more personally fruitful.

  17. riemannzeta

    Happy new year to you too. Posts like this are what keep me coming back to this blog. It’s not what you do, Fred. It’s who you are.

    1. fredwilson

      Thanks

      1. riemannzeta

        All that is gold does not glitter,Not all those who wander are lost;The old that is strong does not wither,Deep roots are not reached by the frost.

        1. FAKE GRIMLOCK

          SO, LESSON IS NO INVEST IN STARTUP YOU FIND IN CAVE PITCHED BY GUY WITH STRANGE SPEECH DEFECT?AND ONERING.IO SEEM SO PROMISING…

          1. Donna Brewington White

            It burns us.

          2. FAKE GRIMLOCK

            YOU CLOSET NERD.

          3. Luke Chamberlin

            A social network for ring-bearers? You might have a difficult time scaling.

          4. greaterFool

            I think most entrepreneurs feel like ring bearers

      2. RapidCloudSolutions.info

        Join me in 2013 Fred in viewing a business as * a business* instead of a software project. Long live well started and well grown businesses!

  18. LE

    It was reported a few weeks ago that I had not made a single new investment in 2012. That is true. In fact, I have not made a single new investment since the summer of 2011. Fortunately my partners have picked up the slackI read that (when it was initially reported) and the first thing that came to my mind after reading that was that you were spread to thin and distracted. (AFSE, those classes you give, other meetings, this blog – and things I am forgetting).Obviously there are benefits to spreading yourself thin (benefits which may take years to payoff and current exposure for yourself and USV) but I can see how it would have an impact on making deals. You only have so much time, right?Your partners of course (total assumption here) are not as distracted as you are. I’m sure though they appreciate what you do and how it benefits them.

    1. fredwilson

      In top law firms, there is a rain maker lawyer (whose name is on the door) and who brings in the clients and then there are a bunch of top flight lawyers who actually do the workMy role at USV (on the new deal side) has looked a lot like that for the past eighteen months. And we have won some great deals using that model It works well for USV but not for me personally

      1. LE

        “It works well for USV but not for me personally”By “personally” do you mean financially – there is a difference in how much you make if you don’t do the deal? Or do you mean because of other non-financial benefits of bringing in the deal?If financially any deal can be renegotiated obviously.

        1. fredwilson

          I mean emotionally. It works fine financially.

      2. JLM

        .You are a Gray Haired Eminence though you will have to work on the hair color a bit.http://themusingsofthebigre…JLM

      3. FAKE GRIMLOCK

        CHANGE THE GAME.

  19. Richard

    If possible, can you expand on this?”And I feel that 2012 is the next demarcation year for me but this time I have to do it in an existing firm with an existing portfolio. That is new for me and I don’t have a model for how to do it”Is it your individual so called demarcation (scope) of 2013+ investments that is unclear or is it executing it within USV (seed vs series A etc.) ?

    1. fredwilson

      Old stuff vs new stuffSee Arrington today on Tech crunchHe says it well

      1. FAKE GRIMLOCK

        THAT REQUIRE READ TECHCRUNCH. AND ARRINGTON.NO ONE DESERVE THAT.

        1. Richard

          I hear that they give good diet advice.

      2. William Mougayar

        Arrington is right. We need world-changing types of ideas & imagining new things that were not possible before. “I want something completely new and different to happen, and lots of it. Stuff that makes us change the way we think about a market, or the world. Something that inspires a new generation of crazy startups doing crazy things.”

  20. Dave Pinsen

    Sounds like a pretty good year to me: you and your family are healthy enough to travel halfway around the world and back, your firm made more money than ever before, and you didn’t make one bad investment.

    1. fredwilson

      Or one good one

      1. Donna Brewington White

        Ach! You didn’t take the out. 🙂

      2. LE

        Don’t want to sound to philosophical but this is what life is about. If not for the struggle, and these down times the up wouldn’t be as good (see how easy that is to say – effortless).If you have a good year (as I did) then you are worried about doing as well next year because you can only go down and now you have to repeat.If you have a bad year you have the pressure to improve and do better.In the first four months of this year I made my whole year. Next deal didn’t come until Dec. I remember thinking (in month 4) oh shit I wish this had been spread out over the entire year. And my wife saying (on date night) don’t you have any “stories” to tell me? Now I have next year to work on. Phelps you know got depressed after winning the gold medal (see 60 minutes video). (Dylan had it right all along).

      3. ShanaC

        don’t overthink it. You’ve written a lot of posts on perspective. It sounds like you are looking for some new ones to think about

      4. Dave Pinsen

        Yesterday, Bloomberg TV interviewed a retail investor who turned $20k into $20mm over 3 or 4 years: http://www.bloomberg.com/vi…The first thing the guy said was, “sometimes it’s not what you invest in, it’s what you don’t invest in”. The guy said he only made 1 or 2 big investments per year.

        1. fredwilson

          my kind of guy

  21. kirklove

    Hater 😉

    1. fredwilson

      I started off the post I ended up not using with the hater thing

      1. kirklove

        Just a joke. I like that you are critical of yourself, hungry, and want to be the man ( and not just hype and hyperbole). I also like to knock you down a few pegs. Happy New Year and welcome back, Jack.

  22. kidmercury

    i think the big shift is finally here. finally we can get on with the revolution that the internet is destined to bring us rather than stupid bubbles and video games. here are the opportunities i’m focused on:1. vertical digital media businesses, leveraging crowdsourcing and game play.2. “peak everything” but mainly gold and uranium. the uranium sector is so undervalued it is ridiculous. i’m also starting to get curious about phosphate and helium. if i had more time and money i’d probably explore their value networks more.3. japan! it’s collapsing. the yen has been collapsing big time over the past 2 months and i made a little money off it but not nearly as much as i should have, i foolishly mismanaged it. fortunes are going to be made shorting the yen and the japanese government bond market over the next 3 years.4. biotech. if i had the time/money for it i’d invest here. there are going to be some huge gains related to cancer drugs.5. agriculture. supply/demand imbalance in that more food is being consumed than produced. another opportunity i’d focus on if i had more time/money.6. european and japanese stocks. i think the shift is on from government bonds into stocks in these economies.

    1. AlexBangash

      Good macro economic perspectives. Biotech is extremely hard to make money in, though.

      1. kidmercury

        yeah i think there has been a lot of stuff in the pipeline for 10+ years and there are some opportunities where you can jump in just as it gets on fun part of the S curve. but all that stuff takes too much research for me, unfortunately. some cancer drug stocks have had pretty good gains over the past couple years though, hundred percenters. CLSN is one that comes to mind…..there are going to be more like that in my opinion in the years to come.

        1. AlexBangash

          yes…perhaps in public market…but in private (VC early stages) it is an unmitigated disaster. 🙂

          1. kidmercury

            oh yeah i can imagine.

        2. sdefor01

          I’d leave the pure biotech opportunities to the muti-nationals however I think there are opportunities in creating tech that enables and automates the development and production processes.

        3. Richard

          Biotech VC suffers from Valley of Death. Payment models have broken down.

          1. ShanaC

            “i see no evil”

        4. Abdallah Al-Hakim

          Bruce Booth from Atlas ventures has one of the best blogs (in my opinion) about biotech and investment. It is worth reading and following if you are interested in this topic. Here is the link http://lifescivc.com/

          1. kidmercury

            i just subscribed to his blog. thanks for the tip!

    2. Donna Brewington White

      I’ve learned to listen to you. But I cannot figure out how you know all that you know.Edit: “listen” as in “pay attention”

      1. kidmercury

        well maybe i’m wrong (tragically it has happened before) but most of my work is in internet marketing in the financial services sector…..so i get to spend a lot of time focusing on that stuff

    3. JLM

      .Japan is quite scary as they have had ZERO interest rates for going on 25 years and they still cannot get their economy to grow in a meaningful manner.I am spooked by the recent Fiscal Cliff nonsense — focusing on peanuts while the economy and jobs are not just stagnating, they are imploding.I truly wonder who is in charge. Not a political swipe as I am just as disappointed in the Republicans as the Democrats.Nobody seems to understand the basics of business and the economy and financial incentives.Staging tax increase pep rallies is a new low. this will NOT jump start the economy.We need to develop a respectable business press which simply reports on business and not other news or politics..

      1. kidmercury

        japan is very depressing and i worry the US and the rest of the world is following in their footsteps. japan has the highest suicide rate in the world (in spite of not having any guns), a population declining in absolute terms, sales of adult diapers outpacing sales of baby diapers…..the only hope i see for the US is the culture of entrepreneurship and rebellion, which is stronger here than pretty much anywhere else…..although i see signs of it deteriorating, which i find worrisome.

        1. JLM

          .Not to go all Freud on you but I think the psychological aspect of takers v makers, massive psychic self-destructive unemployment and the prospect of having two wars finish in a totally unsatisfactory manner may set off the same social malaise that flowed through America at the end of the Viet Nam war.Both Iraq and A’stan are in the process of regressing back to the day we intervened.We are totally out of control financially and we have no real mojo at work to reverse the trend.I am very concerned..

          1. kidmercury

            i agree. for me unemployment is the big one. people are not going to feel good about themselves if they are not earning enough or finding a sense of productivity. it’s the kind of feeling of being trapped and in despair that leads to deep depression and even suicide — in addition to an inability to afford a family and keep the species going. already in 2012 the US had its lowest birth rate in a long time.

          2. JLM

            .I agree more with you than you do with yourself..

          3. Pete Griffiths

            Totally agree. It is socially devastating.

          4. Wavelengths

            Think of Detroit as a city that has cultivated a culture of punching the clock, doing hard work, going the extra mile, and taking the lunchbox so as to be ready when the company needed you.The jobs are all but gone. I met people in a Tea Party protest line who were still going back, off the clock and through the back door, to take care of things that no new, paid, employee would know to look for. These are people with profound integrity and work ethic who are trashed in the current economy.Optimism is the opposite of depression, and depression is more than just an economic term. You are absolutely right. I would rather see some of those “virtual dollars” spent to encourage optimism that might spark creative and entrepreneurial solutions, rather than see people stuck in the tar-baby trap of total depression.

          5. Pete Griffiths

            I agree. This is reminiscent of the decline of other hegemonic powers. I have been through this before (I am from the UK originally). But the US faces even bigger difficulties because of the nature of the political system. The checks and balances are great in principle but may decisive action impossible even when it is blindingly obvious that it is desperately needed. Imho we have structural problems in our political system.

          6. Donna Brewington White

            How bad do you think it has to get before we wise up?

          7. JLM

            .We are already there. Today we witnessed a freakin’ “pep rally” for higher taxes on the wealthy which will not even generate sufficient revenue to pay for the rounding error on the collective postage machine.A pep rally for taxes. Led by our President who has not yet realized he won and the campaign is over.Meanwhile, we have terminal Stage IV cancer on the health of the economy and job creation.Understand that if we get growth to 5% and control spending all these problems disappear in 4 years.If you want Clinton era tax rates, is it unreasonable to not at least explore Clinton spending levels?The solutions are actually quite obvious. As an example, does anyone not think that the solution to SS is not going to include:1. Raise the eligibility ages. People are just living too damn long and well. Nobody needs to retire at 62 any more.2. Means test everything. They are already taxing it. Strip my SS benefits and stop pretending I am going to get anything.3. Give young folks the option to opt out completely from SS but still have to pay 2%. Let them have IRA style retirement accounts. Perfect marriage, contributions to current retirees, no future burden.4. Ultimately convert the entire program from defined benefit to defined contribution. Make it a series of IRA-like accounts.5. Get the actual money out of the hands of government and politicians, they simply cannot be trusted. They are financial crack heads.6. Adopt the Chile or Swiss model principles.The first guy who advances this solution will be very quickly retired from office. Tiny little dried up dead cojones? Never re-elected..

          8. Tereza

            Much to like in that comment (waving “Yoohoo JLM!! Happy New Year!!)One thing I propose adding to your list: some meaningful, breakthrough solutions around childcare and elder care. It locks up productivity and innovation gains, tying up significant time and brainpower. And I’m not talking the actual caregiving time but all the RAM absorbed by planning it, changing plans, administering it. Things have not changed one iota in childcare in the last 25 years. As evidenced by my new Au Pair manual which was referencing the ‘leading publication’ from :::::wait for it::::: 1985. WTF? And our school days are too short and there aren’t enough of them.I don’t foresee solutions coming out of government nor Big Business nor Amazing Tech Solution. Could we get a brilliant, gender-diverse group of rocket dedicated to solving this problem — please! I promise the solution will be a gift that keeps on giving, to all.

          9. Richard

            I dont see the math on how 5% growth for 4 years fills the hole?

          10. JLM

            .Growth AND control spending.Single matchbook analysis —Base year, $3.5T spending, $16.5T GDP <<< 20% of GDPYear 4, $3.3T spending, $20.1T GDP <<< 16.4% of GDP$3.3T taxed @ 30% = $1T per annum plus $0.5T new taxes = $0 deficitUS Fed target should be 15% of GDP.

          11. Richard

            Well it looks like you backed off of 4% growth get us out of this mess in 4 years. The problem is with further analysis you’ll have to keep backing up. Even if we get 4% growth for 4 years, do you think interest rates wil stay at their current level? Even of we get 4% growth, the interest on the debt will, since we are at parity on our debt to gdp ratio, increase faster than any increase in tax collections.Even of we get 4% growth, do you do you think inflation wont exist and that Medicare and Social  security spending will not rise? Even if we get 4% growth the growth rate of people collecting social security will consume the taxes collected.Even if we get 4% growth, do you think this will be from an increase in productivity and not  an increase in population and government services.

          12. mcbeese

            @JLM – careful… I agree with your main points but when you write “A pep rally for taxes. Led by our President who has not yet realized he won and the campaign is over”, I suggest that you consider that this is balanced by a Republican party that has not yet accepted that they lost the election and the people chose Obama. It’s all dysfunctional.

          13. JLM

            .You’re reaching. The pep rally is real, not imagined.You are speculating and projecting as it relates to the Republicans.In fact, today the Republicans handed the President everything he wanted — increased taxes and no spending cuts — indicating that they both know and acknowledge that the Pres won the election.This batch of Republicans — the House — maintained their majority and could well have resisted but, in fact, complied achieving high marks for bipartisan reality based legislation.And real service to the Nation, no?.

          14. mcbeese

            Not disagreeing with the pep rally, just saying that both parties are acting like we didn’t just finish an election.This batch of House Republicans recognized that they were in an untenable position and would be solely – and accurately – blamed if the country went over the cliff. Obama would have been able to tell the nation that the Republican party voted to increase everyone’s taxes by allowing us to go over the cliff. The decrease in your paycheck starting in January is a result of the Republican votes. That’s just not sellable in the 2014 mid-terms.The good news is that they got together and worked a deal. It’s a baby step, but it’s a start. I’ll take it.

          15. Wavelengths

            Some years ago, Colorado Governor Dick Lamm was villified for the words he used that suggested that people had a “duty to die.” The statement was driven way out of context, but I think the intention was true.At some point in our current societal structure, we can spend huge amounts of money to keep people alive in a comatose, non-communicative state. What quality of life are they enjoying? At the expense of everyone else?I am in the middle of this situation right now. My beloved mother has reached a point where she cannot move herself, and she has a hard time remembering the first and second part of a sentence. When I tell her “I love you,” she always answers “I love you, too.” Meanwhile my father is paying out more than his monthly income for most of his life to keep her in assisted living where she is safe and comfortable.My parents have already agreed to a DNR (Do Not Resuscitate) order for either of them. I don’t want to see an exit strategy planned for either of them, but I don’t want to see them forced through government intervention to live/breath/have-a-pulse beyond a time when they are aware and participating in this life.The governments and insurance companies participate in a collaboration to keep people alive to be able to collect more insurance money and to move more money around. No one can sue the government for keeping your mom alive, right?We have a mess of a system, and it is more of a mess than people realize until they bump into these sorts of issues.

          16. Wavelengths

            Agree. In Pilgrim’s Progress the Slough of Despond was a significant milemarker.The laws of physics also operate on an emotional/psychic level. We need momentum.

        2. matthughes

          Ugh.That is depressing.I really want to visit Japan soon. I’m hoping to catch a baseball game and ski on the same trip if possible.They have terrific baseball and their skiing looks awesome.

          1. mcbeese

            Their skiing is not good if you are a good skier. 1/10th as good as Whistler in BC.

        3. Donna Brewington White

          “the only hope i see for the US is the culture of entrepreneurship and rebellion”One of the many reasons I am a passionate believer in entrepreneurship, but one of the strongest. It is integral to economic health, long-term. Part of my excitement about crowdfunding is that this helps to make entrepreneurship more prevalent within the culture (as well as forms more community around startups).

        4. Luke Chamberlin

          Japan is an interesting case study for the first “post growth” nation. Modern economies have always been predicated on population growth and consumption growth.One time in Japan a man told me that they were racing to invent robot technology so that they wouldn’t have to let foreigners into their country to take care of their elderly the way we do in the US. He was serious.The US and many European nations would have similar demographics as Japan were it not for immigration. Look at birth rates vs. immigration rates in places like Germany or Italy.The earth will hit “peak population” sometime and then we’ll all have to figure out how to live. This will be a shift as big or bigger than the industrial revolution.

          1. kidmercury

            the demographics stuff is what i find perhaps most depressing of all, but where there is great sadness there is great opportunity for innovation — thus my fondness for searching for the saddest possible stuff i can find and dwelling on it as much as i can. i believe the demographics problem gets solved with stem cell technology that makes reproduction possible at any age, allows people to basically live forever, and all sorts of stuff so radical that it really calls into question what it means to be human, why we are here, and all that other philosophical stuff. i think that is about 30 years away from being pretty widely available. kinda a long time, but not too late in my opinion.i also would like to continue emphasizing debt and the role debt plays in all this crap. japan is the most indebted nation in the world, it makes greece and even the US look like a joke. solve debt and things will be functional again.

          2. Luke Chamberlin

            Have you read Altered Carbon by Richard Morgan.

          3. kidmercury

            no i havent but i just looked at the wikipedia entry and it looks interesting and prophetic. i have a lot of trouble reading fiction though. fortunately it looks like it might get turned into a movie so i will definitely watch that.

          4. Luke Chamberlin

            There’s more truth in good science fiction than most non-fiction.

          5. Wavelengths

            When you read a book you get into the author’s original intention. It’s a bit like reading a textbook, if you accept the analogy, but you have a better chance of actually understanding what the author meant before it got watered down by Hollywood metrics.I read a lot of sci -fi over many years. Some authors were predicting physical/engineering innovation, some were working on projections of societal changes. The great sci-fi was wonderful brain-training in how to receive new information.I love movies. But when I want the original concept, with all the meat, I go back to the author and the book. Movies are not a valid shortcut.

          6. Wavelengths

            Very forward thinking.

        5. Richard

          Yep, demographics are the headwind. When you go into debt just prior to an aging demographic, you can’t borrow your way out of it. Japan has been trying for 25 years.

        6. Wavelengths

          Entrepreneurship and rebellion are signs of creativity. Some of us can’t help ourselves. The Japanese have a high rate of personal savings, but that’s what you do when you don’t understand what else you might do.I believe we are at a major worldwide crossroads, and creativity, genius, and gumption are what can help us leap through the “wormhole” into a better world.The conservatives are preaching against anything that might create the change that could let us move into a different society. The old society has failed on so many levels.

      2. FAKE GRIMLOCK

        ANY SYSTEM WHERE METRIC FOR DECISION UNRELATED TO METRIC FOR SUCCESS DOOMED TO FAILURE.METRIC FOR GET ELECTED HAVE NOTHING TO DO WITH WHETHER COUNTRY SUCCEED OR NOT.RESULTS PREDICTABLE.

        1. David Petersen

          Down with congress. Bring on the direct democracy. I want to vote on every bill from my iPhone.

          1. JLM

            .We are a representative republic on the rocks with a chaser of democracy.Sad truth is that the takers want to take and they will elect anyone who maximizes that possibility.The makers do not want to pay more in taxes regardless of how much they make. Some merit to that argument given that the top 10% are paying such a disproportionately greater % of all taxes.The big variable is the quality of leadership.We currently have the most ill prepared and incompetent leadership — both parties, mind you — in a century.We will look back and realize we have engaged in two of the stupidest and most ill conceived and executed wars in the history of the world. And I was a professional soldier.Bad twist of fate..

          2. mcbeese

            @JLM – I agree with just about everything you just eloquently stated. My only disagreement would be that I think the top 10% should pay the same minimum tax rate (%) as everyone else even though that translates to a large absolute amount of tax paid because it can be argued that these individuals benefited more from the national infrastructure than the average person did. We can debate that more later.I think the country is on a bad trajectory and I’m worried. Despite what we spend, our education rank has fallen way down the international scale to something like 25th globally. Despite our world-leading healthcare technology, our healthcare delivery rank is an unacceptable 37th. We have no serious military threats yet we spend more than an order of magnitude more than the rest of the world on our military… even though China is bankrolling it. Our gun deaths are two orders of magnitude greater than any other major economy, including China. Two orders of magnitude! We’re turning into the new Brazil just as Brazil is turning into the new America.Our elected representatives were elected by us. WE are the problem. I’m not optimistic.

          3. pointsnfigures

            the fiscal cliff negotiations just proved why we should have zero deductions, and a flat tax rate. Everyone gets the same rights in the US, and everyone gets one vote. We all ought to pay the same tax.

          4. Wavelengths

            So, let’s assume that you and I met at the coffee shop, and we had some chemistry. You ask me out to dinner. I don’t want to feel like you are “buying ” me, so I want to pay my way, but as a woman, the statistic says I make “77 cents” for every dollar you make as an average man. Should we order similar meals and I pay 3/4 of each dollar on the bill?Notice that I’m not playing the old paradigm of expecting you, the guy, to pay the whole bill. But if we split it down the middle, it probably isn’t fair. Why? Well, maybe I’m the paralegal at the firm several floors down and you are a partner in a P&E company and you make three times what I make. I also pay for childcare, and if I’m late picking up my kids while having coffee with you, I have to pay an immediate $10 or $20 surcharge on top of my usual $300 or more per week, per child.What is the same tax rate? Based on what? Do I work harder than you? Do I have more obligations than you? Did you have an easier start in life, and your job was handed to you, with benefits, because your dads were members at the same country club?Think more deeply. I pose theoretical cases. What is fair?

          5. JLM

            .I share your concerns but probably on a Medium size while you are at the XXL size concern.The issue of taxes is just plain class warfare under a banner of “fairness”. Capital is mobile and this will turn out to be a very, very bad thing.Before I complete that thought, it is important to note that much of the “income” at the top level is not earnings at all but a return on capital which has already been taxed at least once.In England, they raised the highest marginal tax rate to 50% and in one year 16,000 returns with an AGI of 1MM pounds became 6,000 returns with an AGI of 1MM pounds.People think that raising tax rates results in a static number of returns and income — it does not. It drives this highly mobile capital to other jurisdictions.As to education, the world is not going to be lead by the “average” but rather the top 5%. It is our top 5% v the world’s top 5% and our top 5% is still at the top of the pack.All I can do this morning.Happy New Year!.

          6. mcbeese

            @JLM – Happy New Year to you too!Capital gains (not capital) is new ‘earnings’ but IMHO should be taxed well below wages when it is invested in growth-oriented categories because that’s what we mean when we use the term ‘job creators’. Investments in stocks and government bonds should come with a zero or minimal capital gains tax. These investments create jobs and support our national infrastructure. Gains from investments in mineral assets like gold should be taxed at the same rate as wages… these investments do nothing for our economy (let me know your thoughts on this).Capital is indeed mobile, especially in today’s world, but that doesn’t mean that the capital of the wealthy (the most mobile capital) should get a free pass. There is a reason why people live in this country and maintain their American Citizenship. I don’t know the answers, but I think we need to continue the dialog and come up with a simpler tax strategy. I’m a fan of a universal *competitive* tax rate and a 2-page tax form for individuals. Maybe we keep the income tax rate low by shifting more towards a consumption-oriented tax strategy than an income-oriented tax strategy? A freemium-like tax strategy? That would be disruptive.Your thinking on education is where we’re far apart. The world is going to be lead by the strongest economy. Our middle-class consumer market is the engine of our economy. If our ‘standard education’ leaves our middle class globally uncompetitive and largely unemployable outside of the service industry, our standard of living is in for a big shock. Our ‘top 5%’ will move offshore just as quickly as our capital.

          7. Wavelengths

            You clearly state my deep concerns about democracy — the stupid and illiterate, and downright malicious far outweigh those who want to see progress, yet each individual has a vote. I have no answer, I only pose the situation.

          8. markslater

            happy new year JLM. paged being turned.

          9. JLM

            .And to you, my friend Mark. Keep it coming in in the New Year as I love learning from you.Jeff.

          10. Wavelengths

            When I think of the general concept of checks and balances, I think of a system that tries to level the playing field so that “old money” and “new creativity” have a chance to mate and produce a child that will enrich other generations.Any dogma makes me think of jihads. The worst society-wide crimes have been committed in the name of some dogma/religion.If the current leadership had full rein to encourage honest creativity, in cooperation with the watchdog, but compassionate, conservatives … maybe we’d have a chance.Right now in the oilfield, there is no housing, and producing wells are flaring because the pipelines haven’t been installed yet to ship product.Entrepreneurs find solutions to problems where there is profit between the problem and the solution.Here’s a big one.

          11. mcbeese

            @David – you and I (or at least most people) are not qualified to vote on every bill. That would not work. People are generally lazy and wouldn’t do the homework – and are too easily swayed by propaganda from the likes of Limbaugh and Beck (and their Democrat counterparts, if there are any).I’m not suggesting our elected representatives are competent – because I think most aren’t – but they are leaps and bounds ahead of a lot of the people who voted for them.

          12. David Petersen

            A direct democracy obvious has problems, but it brings a few advantages.1: It’s easier to judge laws and bills than human beings. I can read a law, then vote for it. A politician — who knows what they will really do once elected2: A direct democracy helps the problem of corruption in politics. You can’t bribe the people as a whole. All of the hundreds of millions spent lobbying politicians, not to mention most of (but not all) the spending on political races will go away.3: Peace. I don’t think 51% of the people will ever vote to send their children off to war.

          13. ShanaC

            tell that to the athenians

          14. David Petersen

            If your comment about the Athenians is related to my peace comment: Athenians didn’t let women vote. Actually, they only let trained soldiers vote.But in general, comparing the behaviors of US voters to people who took part in a democracy 2700 years ago (in which only a couple thousand people at a time voted) seems unlikely to hold up.

          15. mcbeese

            @David – Don’t apply your own context to the idea that you are promoting. The majority of Americans have a very basic (declining) level of education and don’t have the time or ability to review proposals for new laws and bills. Nut jobs like Limbaugh and Beck prey on these people and would destroy any benefits of your ‘direct democracy’.If you talk to ranchers, shopkeepers, barbers, etc… you will find many very wise people, but they will not be schooled in the ways of Washington. They are far better equipped to judge a representative’s character than they are to analyze a new bill – if they can even get access to it.

          16. David Petersen

            I’m not promoting it; I think it would likely be a complete disaster. I was just commenting that it would bring a few advantages.

          17. Wavelengths

            The way that laws and bills are presented, with the clever marketing spins, no one knows what the words say. I fear that much of our country, including some very intelligent people, is illiterate. And the clever marketeers write so that no one will really know what the words mean anyway.Smile pretty, have fancy fuzzy ads promoting a “new America: and let your puppeteers keep manipulating you so that you leave a legacy that looks like you were a great president.I don’t know how long it has been since we have had a real statesman — male or female. I quietly hope for change.

          18. deancollins

            lol ever tried even reading a bill once the lobbyists have finished with it…..hard to decipher heads or tails…let alone for the general public from an iphone.

        2. Peter

          What metric do you claim is the metric for getting elected?

          1. FAKE GRIMLOCK

            MOST PRETEND TO SUPPORT WHATEVER FANTASY YOUR CONSTITUENCY BELIEVE IN.

          2. Wavelengths

            Lie, but lie convincingly with a big smile that shows how innocuous you are. Have plenty of people who either are true believers, or who know what you are up to and who see how it will benefit them. If anyone finds dirt on you, dish it back to them and get the election over quickly.

      3. Richard

        Yep, if you want to see what debt can do to a country …look to japan. If you want to know what direction commodity prices are going..look to china.

      4. Mark Essel

        I see some disturbing trend in long term zero interest government loans. What’s your take on US interest rates and where they should be? As a home owner I enjoy a pretty small rate (I didn’t refinance with the current 15year ~3%, but probably should), but it seems weird when a nation acts like a bank but doesn’t charge interest to other banks.

      5. deancollins

        Sure but their recent election will fire up the inflation percentages regardless of the outcome for the Japanese economy and the LDP.- http://www.facebook.com/Liv

      6. Wavelengths

        Japan has a societal influence toward savings. Great idea until it stops the flow of money. Stagnant. I read somewhere that the great Japanese manufacturers still had more of their company value in real estate in Tokyo (etc.) than in the value of their companies. This is not a paradigm that expresses forward movement for everyone. It is a situation where those who were lucky enough to have owned certain square blocks or miles many, many years ago now have some freedom to perfect the creativity that probably came from the US.This is all overlooked when fuzzy-headed journalists try to make comparisons.

    4. ShanaC

      The helium thing is interesting. You’re already seeing costs in the ballon industry (dush, stupid of us for doing that). I’m just not sure helium markets will be realized for hat they are until we stop with the balloons

      1. kidmercury

        helium is used in a bunch of medical technology stuff too, and there are no easy substitutes. if i had the time i’d look to see which industries are going to have the most opportunities and dislocations because of helium scarcity.

        1. JLM

          .We still have a pre-WWI Federal helium reserve in Louisiana..

          1. Luke Chamberlin

            Funny voices for everyone!

        2. ShanaC

          correct. But most people think about helium in terms of balloons.

        3. Wavelengths

          I may have some info for you if you could tell me what to look for. I’m in West Texas, and I know that helium is a product of some of the wells in the area.

          1. kidmercury

            well if i were to start investing in it i would look for industries that are highly sensitive to helium costs, and look for technologies that were not dependent on helium that could serve as a substitute. i would also look at the whole value chain to see what technologies could increase helium production or more efficiently allocate its usage.

    5. William Mougayar

      Good list. What is your involvement with these?

      1. kidmercury

        i run an online community, which i still believe in (in spite of struggling for 4.75 years now) and i invest personally in gold, uranium, and currencies. everything else i have no involvement in, but would if i had a lot of time/money.

        1. Luke Chamberlin

          “I invest in uranium”I hope this is on your business card.

          1. kidmercury

            lol it should be!

        2. William Mougayar

          Wow. I had no idea. Thanks.

    6. FAKE GRIMLOCK

      NO FORGET PEAK EMPLOYMENT.ME, GRIMLOCK, BELIEVE THAT ALREADY HAPPENED.

      1. fredwilson

        In the US or globally?

        1. FAKE GRIMLOCK

          US EARLY ADOPTER OF PEAK EMPLOYMENT.IT TAKE LONGER IN PLACES WITH LONG BACKLOG OF UNDEREMPLOYMENT.CHINA NEXT ONE CRUSHED BY AUTOMATION.

          1. Pete Griffiths

            ‘Peak employment’ is a great point. You could well be right on this. And if you are we face some truly deep questions about social organization. Do we want to be a two class society (which is the way we are going now) or are we going to try to increase leisure and share work and a decent life around? The latter has been explored for several decades by various social scientists but will be ideologically extremely challenging for the US.

          2. FAKE GRIMLOCK

            ME, GRIMLOCK, SUGGEST MORE PEOPLE GO BACK TO GROW OWN FOOD.IT ONLY JOB WHERE STARVE OR NOT HAVE NOTHING TO DO WITH MARKET.

          3. ShanaC

            not true, you need to be able to afford planting and harvesting enough to make sure you actually eat enough

          4. Wavelengths

            I wanted to grow food in front of my apartment. Not allowed. I could grow flowers, but if I grew food it would take more water and “everyone would want to do it!” said the landlord.

          5. Dave W Baldwin

            @fredwilson:disqus This is where Fake is on the money. @myscrawl:disqus, I don’t know which world you refer to (“which is the way we are going now”) but it is Haves and Have Nots. There are problems where everyone wants to feel self pity and that stokes the flames of Envy leading to the big cheer for taxing the wealthy. Then we have the problem of math since no one knows what a trillion is. If I had time, I’d produce a farce math lesson for Middle Schoolers using either the $1 or $10 bill to represent the defecit and how much this tax on wealthy will offset that. Back to Fake’s point, the Chinese are pushing to be part of the class of those who purchase (they want American made 😉 ) as there are those in the US who fight to find way to do better. But as @JLM:disqus notes, the leader is playing envy and is not very inspiring to achieve goals… and this connects with the bigger problem per his back/forth with @kidmercury:disqus- we have lowered the bar. There are things we can do this decade that will be hampered as we waste money on so many things that don’t push the bar and will be antiquated before they blossom… but the best we can do is then stoke the envy machine once more.

          6. Wavelengths

            As I look at the general group, I see the “Haves” as those who maybe inherited from a creative and entrepreneurial ancestor and all they have was made off of the capital, and lost from investments that might have been written in alien math.The “Have nots” are tired of working by the hour, or by the crop row, or by cleaning the hotel room, and there is no reasonable strategy to get them to become part of the “Haves.”Middle management seems to “mediate” between the two ends, but middle management tends to crush the “have-nots” by trying to squeeze a little more, while the “haves” don’t understand that middle management is devaluing their asset by reducing the work put into upkeep, all in the name of increasing profitsThe worker bees, and mid-management have no general idea of how money is made. Or they don’t care and are all about squeezing all they can out of the upper and lower levels.

      2. kidmercury

        i don’t believe in peak employment. employment is a function of debt and savings, fix those two and you fix employment. maybe we are at “peak ability to ignore debt” though, which would effect the employment issue in some way.

        1. FAKE GRIMLOCK

          WHEN COST OF STAY ALIVE HIGHER THAN VALUE OF THINGS LEFT IN ECONOMY FOR PEOPLE TO DO, THERE GOING TO BE PROBLEMS.

          1. kidmercury

            if the costs are high, then there are plenty of jobs available to push costs down. if costs are low, no jobs are needed. if costs are high because so much money goes to service debt, then you have a debt problem.if the debt problem was solved there’d be little need for people to work so much. people worked less in the 1950s and 1960s when the debt burden was lower. technology + no debt = less need to work, more financial freedom.debt is the only problem.

          2. FAKE GRIMLOCK

            COST OF STAY ALIVE (MEDICINE) INCREASING, ABILITY TO BE EMPLOYED DECREASING (ONLY ADVANCED SKILLS MATTER).BOTH CONSTRAINED BY AVAILABLE TALENT (NO EXTRA DOCTORS/NON-SKILLED CAN’T BECOME SKILLED). THAT NOT FIXABLE FASTER THAN GENERATION.OR MAYBE EVER.

          3. kidmercury

            why is the cost of all that stuff increasing? the real reason is taxes, debt, and inflation — but debt is the root cause (even taxes and inflation are derivatives of debt).

          4. FAKE GRIMLOCK

            NO.DEBT HAVE NOTHING TO DO WITH SIMPLE EQUATION OF GROWTH OF SYSTEMS REQUIRE MORE TALENT THAN AVAILABLE.DEBT NOT CHANGE THAT FUNDAMENTAL.

          5. kidmercury

            too hard to explain over text and no one is going to believe it anyway. but let’s pretend your assessment of hte problem is correct. what is the solution?any real solution to whatever the problem is begins with debt cancellation. want more talent? lower the cost of talent creation. how do you do that? how do you lower the cost of everything so that less talent is needed in the first place?debt is the only problem. debt cancellation is the only solution. people can ignore it all they want, they didn’t see this allegedly unforeseeable crisis because they ignored the debt problem and they won’t see the solution until they recognize the debt problem. painfully simple, but there it is.

          6. FAKE GRIMLOCK

            SUPPLY NOT ONLY CONSTRAINED BY COST.ALSO BY GENETICS, CULTURE.DEBT NOT AFFECT THOSE.

          7. kidmercury

            sure it does. how do you impact genetics/culture, assuming those are problems?

          8. FAKE GRIMLOCK

            NOT EASY, WITHOUT UNACCEPTABLE SOCIAL CONTROLS.

          9. kidmercury

            actually it’s quite easy, you just cancel the debt and that impacts culture and genetics, assuming those actually need to be impacted. really though if you cancel debt that sends prices falling dramatically and sends savings and consumption up significantly. voila, problem solved.

          10. FAKE GRIMLOCK

            DEBT NOT STOPPING PEOPLE WITH RIGHT GENETICS AND CULTURE FOR CREATE HIGH-ABILITY CHILDREN FROM HAVING MORE.CANCEL DEBT OF PEOPLE WITH RIGHT GENETICS BUT WRONG CULTURE MAYBE HAVE SMALL IMPACT BY AFFORD MORE KIDS, BUT NOT CHANGE CULTURE THAT PREVENT THOSE KIDS FROM REACH POTENTIAL.

          11. ShanaC

            what is right genetics?

          12. Wavelengths

            I’m sorry. Don’t you have a large trust fund? That comes with the “right genetics.”I’m having a hard time with this discussion. It seems to me that some people are already so deeply included into certain social strata that this discussion will never reach them.

          13. ShanaC

            no trust fund, sorryShana L. [email protected] <https: twitter.com=”” shanacarp=””>LinkedIn <http: http://www.linkedin.com=“” in=”” shanacarp=””>I never look back darling, it distracts from the now – Edna “E” Mode, The Incredibles

          14. Cam MacRae

            It’s not the only problem, but I agree agree about the debt jubilee.

          15. Wavelengths

            Properly used, debt allows the purchase of future performance and profit against today’s resources. With the loan against next fall’s crop, we can pay to plant, fertilize, harvest, and realize a profit that will pay off the debt and realize a profit. Simple. Very simple economics.This is debt used properly and in the most simplistic way.You can change the words and look at someone opening a store that serves a need that then generates profits to pay the employees and debts with the recovered profits. Simple.Making debt a new “four-letter word” just confuses the already confused general population, and scares them away from a legitimate financial tool, if understood properly.

          16. kidmercury

            i don’t dispute what you are saying, the problem though is that debt does not come from savings. debt is supposed to come from savings. i.e. i save money and loan it to someone else. right now banks create money when they make loans; the process of debt creation is inherently the same as the process of money creation, and so we have a world in which more debt fuels more inflation, and there is never enough money in the system to pay back the outstanding debt + interest. this situation invariably leads to a debt crisis, as well as rampant inflation, an overprivileged banking sector, and extreme income inequality.

          17. Pete Griffiths

            Probably the most disturbing increase in cost to stay alive is the cost of food. Rising costs of food is highly correlated with disruptive civil unrest.

          18. FAKE GRIMLOCK

            FOOD CURRENTLY AT RECORD LOW COSTS.HAVE LONG WAY TO GO BEFORE RETURN TO NORMAL, NOT RIOT LEVEL.

          19. karen_e

            My husband remembers well the 1980s bread riots in Morocco and always thinks of them when he notes the food prices these days.

          20. kidmercury

            yup. even the arab spring didn’t kick into high gear until food prices got out of control. history repeats……

          21. Wavelengths

            Also water and fertilizer. When productive land gets no rain …

    7. pointsnfigures

      You are wrong about Gold. Not with the amount of debt and fuel for inflation world central banks are creating. I am not a gold bug, but am wondering why I don’t have a vault with some bars in there.

      1. kidmercury

        there is a viewpoint, which i subscribe to, that the central banks are planning to remonetize gold amongst themselves and restructure the debt that way. for instance, the US treasury has 261.5 million ounces of gold on its balance sheet and 16 trillion USD in debt owed largely to other nations. at some point the powers that be are going to say, “let’s create a new currency X. currency X is used only for trade between nations, not at the individual level. currency X is based on a basket of currencies that includes gold. since the US and everyone else cannot repay their debt, we are going to reprice all that debt denominated in currency X.” when this new international monetary agreement kicks in, it will require lots of nations to turn their gold in. it will also send the price of gold much higher. the first step of this is the passage of what is known as the Basel III agreement, which kicks in today in some countries — thailand i believe is the first to adopt it. it basically says that if banks store gold, that will help them meet their capital adequacy ratios.anyway, that is the basic viewpoint. we’ll see if it comes to fruition.

        1. mcbeese

          Gold is a soft shiny rock. You can’t put it in your car and drive to work. You can’t eat it. The idea of basing our global economy on shiny rocks we dig from the ground makes me want to cry.Believing in Oil and Water makes a HUGE amount of sense.

          1. kidmercury

            you can’t eat US dollars. do you like them? if not let me know, i’ll be happy to take them from you…..

          2. mcbeese

            In fact, I can eat US dollars. As legal currency, it converts to food with a quick swipe of my card. I can also drink water and drive my car when I put gasoline in it. I heat my house with gas and I cool it with electricity. I cloth myself in natural and synthetic garments. All my commerce transactions are digital. I can’t remember the last time I used paper money in this country to pay for something… maybe once or twice in 2012.Gold is a soft shiny rock. It has no real value beyond bling for people with bad taste (gold is so last millennium) and electrical conductivity. In a world of online trading and accounting, gold has no place. In the olden days, gold was useful as a common currency for trading. Its scarcity made it something that couldn’t be artificially created. Hard to counterfeit gold. However, those days are behind us. Willingly enslaving a modern economy to shiny rocks that are distributed randomly across the planet makes NO sense whatsoever. We now assign digital values to assets that move between transactions and we record the account balances in digital ledgers.Shiny rocks are obsolete… unless you think there is enough demand for gold jewelry to support the value of all of the stored gold reserves. I think not.

          3. kidmercury

            you assume the days of gold as a store of value/medium of exchange/unit of account are over. this is where we disagree.

          4. mcbeese

            The days of gold as a store of value/medium of exchange/unit of account are clearly not over (yet) and that is what I’m whining about. Those days should be over. Our civilization should have outgrown shiny rocks by now.

          5. kidmercury

            we can outgrow a barbaric relic when we outgrow behaving like barbarians. till then, the barbaric relic remains essential, and will be valued accordingly.

    8. Abdallah Al-Hakim

      Interesting list kid. I would add the ‘Water’ as one of the next big (or perhaps already is) huge areas of growth in the future. From desalination to improved infrastructures to filtering technologies – there are excellent opportunities. One country that has developed exciting technologies in this area is Israel but also here in Canada we have some expertise when it comes to water technology.

      1. kidmercury

        oh yes! water is huge! i forgot about that and you’re right it totally needs to be on the list. i did spend some time looking into water technology because i think that is going to be one of the best investment opportunities out there. i have to stay focused but otherwise i would totally be exploring that to no end.

        1. Abdallah Al-Hakim

          I am a big fan of water investment. I did spend some time last year talking with the investors at XPV (http://www.xpvcapital.com/) which is fund completely dedicated to water funding. Also, Ryerson University in Toronto is doing some interesting public-private project for urban energy and water. Here is a link to that http://www.cue.ryerson.ca/c… (I know water is an area that they want to explore further).

          1. kidmercury

            i read the book aguanomics, which i highly recommend for anyone interested in water investing. i think there are two major areas of interest:1. water purification technology, including desalination2. water tracking technology — one of the problems is that is hard to price water in a lot of ways because its usage is hard to precisely track. municipalities are starting to realize this though and so there is a big opportunity i think in building technology to solve this problem.it is also a big subject in the energy world, which is how i got interested in water. energy development is very water-intensive and it is starting to become an issue. i think solar photovoltaics in a way will benefit because they use less water than most other energy sources.

          2. Abdallah Al-Hakim

            I completely agree with your two points. I would add3. Waste water to product4. Infrastructure renewalI will definitely be adding the book ‘aguanomics’ to my reading list. It is fascinating area and I have always been interested in it especially having grown up in Egypt where water scarcity is an obvious issue.

    9. Gordon Bowman

      What is your play on gold and uranium?

      1. kidmercury

        i’m long gold and gold mining stocks (mainly companies utilzing what is known as a prospect generator business model and companies with a market capitalization of less than $500 million). i spend a lot of time researching mining stocks. i’m also long uranium mining stocks. there are a lot fewer of those so it is much easier to analyze. on the shopping list is a company that buys uranium, holds it, and does nothing else — this is the closest i’ve found that one can come to speculating on pure uranium rather than an actual mining business.

        1. Gordon Bowman

          which are your favorite gold mining and uranium mining stocks?

          1. kidmercury

            favorite uranium: uranium energy corporation, cameco corporation, strathmore mineralsfavorite gold is a bit tougher. i’m confident in my overall portfolio although i don’t know which ones will get the returns i’m looking for. if i had to list three, i’d go with my royalty stocks: franco nevada, eurasian minerals, sandstorm gold. with that said my largest personal holding is tanzanian royalty exploration because i got it at a great price. i still believe in them very much although it is a higher risk play than the aforementioned royalty companies in my opinion.

    10. Wavelengths

      For your #3: First off, I am an ignoramus, but I have a gut sense. A country that on a total societal level values putting money in savings creates a stagnant economy. The Japanese, with their apparent ingrained attention to detail (to a fault?) can do many things well, but I don’t see the major “genius” leap from “ABC … therefore X” that comes from educated creativity. Masters at perfecting the concept. But not necessarily creators of the concept.As for #4: then what happens when people live longer, but the society isn’t already serving those who are here and healthy? I speak as a cancer survivor. I’m not sure, in my own life, what to do next to get back in the game. I was given the chance to beat cancer, but I don’t have a financial safety net to let me move forward. “Entrepreneurship or bust!”???I do believe that if we can convert “virtual money” into “real money” we have transformed society. I believe that there is a way to make games pay the players, and the players reap the rewards to be able to survive in the real world. I hope this new year will let us see ways to make that happen in very practical ways.

  23. takingpitches

    Throw away the old. Start with the new!That’s the spirit that makes this blog so energizing.“Each night, when I go to sleep, I die. And the next morning, when I wake up, I am reborn.”Happy New Year Fred and everyone at AVC!

  24. Balu Chandrasekaran

    Reflective posts like these are the reason I look forward to reading your blog every day. I ended 2012 with my first venture and my first failure, and am starting 2013 with a new venture and am very excited for it. Maybe it’ll even present itself to you as an investment opportunity at some point.Welcome back to NYC, Fred. Onward and upwards.

    1. Donna Brewington White

      “Reflective posts like these are the reason I look forward to reading your blog every day.”Me too. I was hoping for something like this but was willing to give “jet lag grace.”Congratulations on your new venture!

      1. Balu Chandrasekaran

        Thanks Donna! Happy New year to you in advance!

  25. Donna Brewington White

    Fred, I love how you just put it out there. I otherwise probably would have never admitted it publicly, but I had what even I as a blatant optimist would call a very hard year. Yet, if I made lists of what I have to regret this year and what I have to be grateful for, the latter is much, much longer.I also realize that the less-positive list represents many of the reasons that keep me motivated to reinvent — in almost every area of life. Reinvent. I have accepted that this will probably be my new years resolution for the rest of my life.It I didn’t accomplish or succeed as much as I wanted to, it wasn’t for lack of trying. And in that trying I know from experience that there were seeds planted this year that are probably germinating and I don’t even know it’s happening. I would bet on this being true for you. Maybe you are now planting seeds that have a longer germination period.Plus, you put so much out there, my guess is that you have contributed more than you can imagine to other people’s success that you will never personally benefit from or even know about. I will be on that list. That may be part of what this season of life looks like for you. Maybe this is a different season.I know that you are not the type who likes to rest on his laurels. But, dude, you’ve got laurels. As my 15 year old would say, chillax.

    1. fredwilson

      Sadly I am not a 15 year old!

      1. Donna Brewington White

        Hopefully you know I am not making light of your dissatisfaction.Here’s to an early win in 2013.

        1. FAKE GRIMLOCK

          EVEN GRIMLOCK HAVE YEARS THAT LESS AWESOME THAN USUAL.THAT WHEN LOOK ONLY AHEAD, STICK TO PLAN, CONTINUE ITERATING, RIDE OUT TURBULENCE UNTIL FLYING CONDITIONS RETURN TO AWESOME.

          1. Wavelengths

            Are you really a pterydactyl? Otherwise how would you know about flying conditions, unless you confer with JLM?

      2. ShanaC

        sadly? why would you want to be 15 again?

    2. Wavelengths

      Karma. It comes around, they say. This has been a very tough year for me, but with many positives that aren’t cash in the bank.Chop wood, carry water. Somehow every day the water has been in the well, and the wood has heated the house and food — metaphorically this year, although on a very practical level in some years past.This community activates my creativity, and in the loving spirit of community, inspires me to connect and to be grateful that I may be able to give back in my comments. Some of you have experienced what was for me a “near miss,” some are looking at the brass ring and wondering if it’s real and whether you should grab it. (GRAB IT!!!)To everything there is a season … I sense that all of us here are experiencing our seasons, and those of us with perhaps a few more years can see when someone is facing a time of letting the fields lie fallow so they can recover to provide a better crop.I am grateful that we all can meet here, and grateful also for the environment that encourages us to be more forthcoming and real in our interactions.May the empty slate of the New Year start filling up with awesome goals and rapid results!

      1. Donna Brewington White

        Good words. Thank you.

      2. Donna Brewington White

        And a Happy New Year to you!

  26. josephams

    Happy New Year. Enjoyed the perspective. Any chance healthcare IT investing is going to be part of your 2013 “new stuff”?

    1. fredwilson

      I hope so but I don’t want to invest in what we have been seeing so far in that sector

      1. pointsnfigures

        saw one that might be cool.

  27. Elia Freedman

    Happy new year, Fred. Personally, I think your daily posts are planting seeds, at least for me. You have been one of the more influential voices in my business life this past year, and this community has meant a lot to me. Maybe there haven’t been a lot of investments of money to go around, but your investment of time on this blog has meant a ton.

    1. fredwilson

      Thank you. It has helped me a lot too

    2. Donna Brewington White

      Yes, Elia! Well said.

    3. Nick Grossman

      I second that emotion. I give AVC.com a lot of the credit for helping me figure out who I am and what my career is.

    4. Kirsten Lambertsen

      +1

    5. Richard

      Grammys…, Webbys…, maybe we need the Freddys?

  28. ShanaC

    I feel like I am not surprised by this post. everyone goes through this. I’ve been going through this. And yes, I find that it usually marks a change. Much like you, I wish I could mark it.

  29. Carl Rahn Griffith

    Ditto.

  30. pointsnfigures

    Fred, I had a horrible 2012 for a lot of reasons. Would love to commiserate with you sometime about it. I posted similar thoughts at my blog today (Jan 1). God Bless you and your family and let’s hope 2013 is better. Maybe the Mayans were actually right and we are in some alternative universe now!

    1. kidmercury

      i really believe that by 2016-2020, we’ll be able to look back at the end of 2012 and see it as a major turning point.

      1. Richard

        That’s what a fortune teller would say.

        1. kidmercury

          i briefly considered working as a fortune teller (astrologer to be more precise, but there are large similarities). seriously! 🙂 i think there is little difference between an early stage investor, entrepreneur, and a fortune teller. if there is one difference, i would say the fortune teller is the one least likely to be dishonest. 🙂

    2. FAKE GRIMLOCK

      EVERY DAY IS WHOLE NEW WORLD.IF YOU LET IT BE.

  31. awaldstein

    Fred…Happy New Year! I trust you have a bottle of bubbly put aside. Shops are closing…

    1. fredwilson

      We are going to one of the restaurants we are investors in to celebrate. I am certain they will have some good options to choose from. What are you drinking tonight?

      1. JimHirshfield

        1995 Clos during Pain de Sucre

      2. awaldstein

        Started with this Reb of Georgia white. Interesting but not delicious.Moved on to the Tarlant Champagne, friends of friends of mine from France. Lovely. Luscious. Satisfying. Wonderful.Not sure where I’m going next.Do enjoy.My 2012 was mixed as well. I’m embracing a new year with some momentum and a lot of energy and open mindedness.

      3. awaldstein

        Happy New Year…(See that Disqus ate my comment from last nite. And this morning not accepting photos. Oy!)I’ll rebuild…re: wine.We started with a Reb of Georgian white. Interesting but not satisfying.Followed by a Tarlant bubbly. I know the producer. It’s everything that a natural bubbly from Champagne can be. Luscious. Exciting. So fine and fulfilling.My 2012 was really mixed Fred. Good stuff, disappointments all blended up. I’m will put my back to the weight and bend this year to my will if I can!

  32. JLM

    .Happy New Year, all.Alive at dawn!.

    1. Cam MacRae

      I was barely alive at dawn!Happy New Year!

  33. sdefor01

    FWIW, this blog and the great discussions and comments, have brought me tremendous personal value in the past year. Fred and all: Thanks and I truly appreciate this community.

  34. FAKE GRIMLOCK

    2012 YEAR THAT STARTUP WORLD GET BROKEN.2013 YEAR IT START GETTING FIXED.

    1. fredwilson

      I would agree with that sentiment although I might suggest it started breaking a few years ago

      1. FAKE GRIMLOCK

        2012 TIPPING POINT.

  35. FAKE GRIMLOCK

    WHEN YOU, @fredwilson:disqus GOING TO DO LIKE http://a16z.com DID?YOU HELP SHAPE NEW MODEL OF VC, OR WAIT TILL ESTABLISHED, CATCH UP THEN?

    1. fredwilson

      Never. I deeply dislike their model.

      1. FAKE GRIMLOCK

        WHY?

        1. fredwilson

          They are building a hierarchy in a world when networks are the emerging dominant model. I like what first round has done a lot better and we have done a lot in that area too.

          1. FAKE GRIMLOCK

            ME NOT PAY ATTENTION TO THAT PART YET.INTERESTING TO GRIMLOCK IS INFRASTRUCTURE THEM BUILDING.ME THINK LINE BETWEEN INCUBATOR AND VC ABOUT TO MOVE, LEAVE BOTH VERY DIFFERENT THING FROM NOW.

          2. fredwilson

            I would prefer to see the infrastructure built in our portfolio companies where it can be leveraged to provide lasting and sustainable value. Investment businesses are not operating companies. Entrepreneurs who are operators at heart but become VCs don’t understand that.

          3. FAKE GRIMLOCK

            ME EXPECT MIDDLE GROUND. NEW THING THAT NOT VC, BUT IS INFRASTRUCTURE FOR STARTUP THAT FUNDED THROUGH EQUITY OR OTHER NON-TRADITIONAL MEANS.

          4. fredwilson

            Frankenstein?

          5. FAKE GRIMLOCK

            EVERYTHING FRANKENSTEIN UNTIL IT NOT.

          6. Robert Holtz

            OMG — That’s GOT to be your next t-shirt. ^^

          7. LE

            “BUT IS INFRASTRUCTURE FOR STARTUP THAT FUNDED THROUGH EQUITY”Sounds like it would be very slow moving. Same reason in a corporation the guy who controls the supply closet and has the key is so valuable. One of the great things about being an entrepreneur is being able to execute quickly and be in control w/o having to rely on layers of abstraction (if I can call it that) to carry things out. Or get approvals or consensus.

          8. FAKE GRIMLOCK

            MAIN SLOWDOWN FOR STARTUPS?100 TIME + 100 BRAIN POWER + 10 EQUITY = 50 RAISE FUNDS30 RAISE FUNDS + 30 TIME + 30 BRAIN POWER = ESSENTIAL BUSINESS SERVICES.MUCH MORE EFFICIENT PROCESS:1 TIME + 1 BRAIN POWER + 5 EQUITY = ESSENTIAL BUSINESS SERVICES.WHEN DONE AS SASS, IT WORK.

          9. fredwilson

            that is happening already. twilio, stripe, github, etc

          10. FAKE GRIMLOCK

            TECH INFRASTRUCTURE EASY.INTERESTING PART WHEN SOMEONE BUILD THINGS NOT OBVIOUS TO ENGINEERS.WHEN SALES, HR, MARKETING, LEGAL, MORE ONE CLICK AWAY, THEN THINGS HAPPEN.

          11. fredwilson

            you are so right dino man

          12. FAKE GRIMLOCK

            ONCE IN WHILE TINY BRAIN WORK RIGHT.

          13. LE

            “Investment businesses are not operating companies.”Great point.Never forget years ago when I read a book about Henry Kravitz KKR and they had bought a hotel chain or something. The CEO of the hotel chain asks for Henry’s opinion of a sign for the chain.Henry has him fired.

          14. fredwilson

            exactlysay what you will about Henry. he is a great investor.

          15. Donna Brewington White

            Change is messy. VC may look a lot different in 10 years or at least more varied models. I don’t really know, but I find it fascinating to watch.

          16. LE

            “ME THINK LINE BETWEEN INCUBATOR AND VC ABOUT TO MOVE”One has to take care not to spread themselves to thin. Something that the peanut gallery never takes into account (not a jab at you by the way).If you take YC’s reason for cutting funding to it’s startups on it’s face value:”Indeed, Graham added, Y Combinator partner Jessica Livingston said she spent the majority of her time during the incubator’s previous program (it runs two sessions per year) dealing with disputes among the founders of so-called doomed teams.”I’m not saying that I even buy that as the reason why they cut the funding but I do think it’s true that she spends plenty of time on BS issues.

          17. FAKE GRIMLOCK

            AMOUNT OF TIME SPENT ON BS IS FUNCTION OF PERCENTAGE OF BS ALLOWED INTO EACH CLASS.

      2. JimHirshfield

        There’s a blog post in that statement. Out with it.

        1. fredwilson

          I replied with my answer to grimster

    2. William Mougayar

      USV has their own style & way, don’t they? And it can’t be copied because it’s intrinsic to the partners, their portfolio & their thesis.

    3. LE

      “YOU HELP SHAPE NEW MODEL OF VC”You make it sound like it’s easy. Like shopping for a car or a dishwasher. Why would you think that any “new” model is trivial to accomplish?

      1. FAKE GRIMLOCK

        NOTHING WORTH DOING EASY.

  36. William Mougayar

    Fred- Your standards are very high, and you’re always thinking about the next thing. You’re not a follower.I can’t wait to see what kind new plants will germinate in 2013 out of your mixing the seeds in 2012.Happy New Year! It’s been great knowing you and Joanne.

    1. fredwilson

      Good advice. I need to do some of that myself

  37. JimHirshfield

    You can’t plant if you don’t harvest.happy 2013…keep the creative juices flowing here. And don’t throw out too much of the old. We love you just the way you are. 🙂

    1. Donna Brewington White

      Amazing how agricultural cycles have relevance to life and business. We could all stand to spend some time down on the farm.

      1. Wavelengths

        Notice how agricultural cycles have nothing to do with the bi-weekly or monthly paycheck. I am intrigued by this dichotomy. The paycheck worker is disconnected from the sense of planting and harvest. Not good.

  38. David Petersen

    This is the most depressing thread I’ve ever read.Happy new year! I hope you all feel better in 2013.I’ll tell you what was great about 2012: Just being alive for another year. Plus the unbelievable Tesla Model S, Game of Thrones, Homeland, the Redskins season, the housing crash in Arizona finally came to an end, the iPhone 5, I finally managed to spend a summer not living in Arizona, and I found out that the US is on the way to energy independence. And lastly, my girlfriend putting up with my work habits for 95% of a year.I’m going to go hang out with my dog. He is busy chasing wild turkeys, deer, and whatever else he can find around my parent’s property in the Sierra Nevadas.

    1. fredwilson

      The redskins made football fun for me this season

      1. David Petersen

        At least you have this years Knicks. Eastern conference finals, here they come!

        1. fredwilson

          i sure hope so. the east is wide open. the heat don’t look as strong this year.

    2. kidmercury

      the energy independence stuff is all based on false equations assuming all forms of energy are equivalent and substitutable. if only. the subsidies tesla got to make a luxury toy are absurd on so many different levels. lets subsidize electric cars while extreme poverty rates rise.but 21 jump street did come out this year. one of the greatest movies ever made in my opinion. perhaps the best movie since dodgeball.

      1. David Petersen

        The subsidies don’t seem right, but they pale in comparison to our military budget and entitlements. Regardless, I have no say in the matter and thinking about the way our government works just makes me feel helpless anyway.It’s an awesome car and I appreciate it for that alone.As for energy independence, the situation still looks better to me than it ever has before.

    3. Wavelengths

      My doctor strongly recommended that I get a dog. With his written recommendation, I found I could get the dog of my choice, no breed restrictions, no weight restrictions, and no restrictions on training. Oh, and no pet deposit, since he is my therapy dog. His job is to make me laugh out loud at least twice a day (I say), and he meets or exceeds his job requirements.Post-cancer, and looking for income-producing work that allows for my bad days, and lets me give my service dog all the lovin’ he deserves.Remember that those of us here already understand the concept of working smart, not just “hard.” Out of our crowd intelligence, I hope we can first of all help our own community to be more productive, because it seems that regardless of cash-in-bank we are in the 5% of potential producers.Heartfelt best wishes to all as we step into a new slate, new year.

  39. Kathy Bass

    Thank you for your blog and for being you, Fred! This blog really hit a nerve for me…I have been an online startup business exploring and testing the best way to create and monetize a knowledge based business for the last 3 years, and am almost there. While sharing my lessons and journey, I have sadly had to watch my brother work “in” (instead of “on”) his offline auto parts business. He still does his inventory on index cards and has so much valuable knowledge and experience, but won’t take the time to automate or produce an online presence because he believes that he doesn’t have any extra time.It makes me sick to continue seeing him work harder and longer, while missing a huge market opportunity as well as compromising quality family time.From my extensive knowledge and experience, he is sitting on a goldmine…. He can’t or won’t do it, but if could automate his systems, photograph and place his inventory online, and capture his vast knowledge on video, etc. the growth potential is unlimited. I would love to hear what you and anyone else thinks about the challenge and investor potential of transforming an old-school business that has a 20-year proven track record with continual, but limited growth.Happy New Year to you and yours! Thank you in advance for any help onthis quandary.

    1. Donna Brewington White

      I wonder if it is a matter of him observing someone else who has done something similar. I know a guy in the Midwest who has turned a home air conditioning products sales and distribution co. into an e-commerce business. His business is now moving toward becoming a tech company. If your brother is in that part of the country — and even if he’s not, I’d be glad to help make an introduction. This guy might inspire him. dwhite AT bwasearch.

    2. JLM

      .The conversion of existing old school (profitable) businesses to new economy modern marketing driven businesses is THE greatest opportunity out there right now.The business has already survived the cradle rash part of the startup test of fire and can support itself.You are so right, that you should force your brother to just try an experiment.Maybe someone could just buy his business for a pocketful of beans, steal his birthright and shoplift his value?Make it happen, KB..

      1. LE

        “that you should force your brother”The only time I’ve seen a woman force a man to follow the path of entrepreneurship (and I’ve seen this many times) is when they are married.So much so that I have a phrase for it. I call it “she pushed him”. It’s in the same family as “she has his [you know what] in a vice”. Women is all like “go out there and bring home the animal you loser”.Why does it work with wives and not third parties.? Simple. One reason is sex which they can withold if they are not pleased. Another is that they can spend years brainwashing and jawboning the husband into submission. It’s a key difference. Sorry to end a serious thought with a joke but marrying her brother might be a step in the right direction.

        1. ShanaC

          quoteth the bf on this comment “it is about someone else believing in you”

      2. LE

        “shoplift his value?”In a small biz like that the value is the knowledge in his head. I think once that’s gone there is not much there.

      3. Wavelengths

        And structure the new business to throw him a percentage whether he likes it or not.! :-)Kicking and screaming, you can take both of you into profitability and benefit a lot of other folks.

    3. Anne Libby

      There are plenty of “case study” examples your brother could find and apply, and I’d disagree with @JLM:disqus. It’s tough and painful to try to make someone follow a path we want them to take. (No matter how much we love them, and how much we want to save them from what we see as pain…)

    4. LE

      “he believes that he doesn’t have any extra time.”He has the time he just doesn’t have the energy or motivation and most importantly he is probably filled with doubts about the process and it’s uncertainty. Also when you are running that type of operation you have so much day to day distraction that it’s hard even for the most capable people to focus on something new (unless there is clear evidence or feedback of the results). You start out your morning dealing with day to day shit, get interrupted and so even if you have time at 3pm you don’t feel like doing anything.(You can see Fred’s dilemma as well. He feels he needs a fresh start and clean slate to be able to focus on a different path. That makes much sense.)Some of the things that are preventing him from doing what you think is right can be “sold” to him and addressed. Others (like motivation) can’t. By sold I mean you find out what his hot buttons are and find ways to sell or address them.If you really believe in this you should simply set up some tests, even at your expense, to test out the idea in a small way. That will give him the spark perhaps that will spur him forward toward doing it for real.

  40. cutemonster

    Happy New Year Fred. Always appreciate your insights.

  41. Blcarey

    Fred, I’ve always thought it best to do what you love…it seems to me that you’ve had to figure that out a few different times along the way. So have I. Have an extraordinary 2013.

  42. matthughes

    For whatever its worth Fred, AVC was awesome in 2012.

    1. fredwilson

      Thanks

  43. Emil Sotirov

    May I say – Happy New Year! – to all Fred people! I comment rarely but read religiously.

    1. ShanaC

      welcome back, and you’re a regular in my book.

      1. Emil Sotirov

        Thank you Shana!

  44. Pete Griffiths

    Happily the industry continues to reinvent itself so I am sure you will find a new theme to occupy you for the next 6=7 years.Happy NY and thanks for this community.

  45. hypermark

    Fred, it’s metaphorically appropriate that you write this with thoughts of Japan in the distance as you’ve been open kimono with this blog, which is a blessing for the rest of us. Happy new year.

    1. JLM

      .Nice lyrical turn of a phrase, wordsmith. Well played..

      1. hypermark

        Super kinds words, my friend. Health and happiness to you in the year ahead.

        1. JLM

          .To us all, my friend. We shall need it..

    2. Wavelengths

      Courage is demonstrated when you show you have nothing to hide.And when your audience isn’t there to eviscerate you, (as is consistently here) you have a chance to get gifts of info that would never show up otherwise.In your role as VC you have the gift of alchemy. I hope your have several chances to use it this year.

  46. Obi Offorjindu

    For me the ashes of a bad 2012 are fertilising the seeds of a potentially great 2013.My absolute rookie attempt to create my own “cool” startup failed (My career has been in banking and I had no idea what I was doing). Having quit my job I burned through my savings rapidly and made lots of newbie errors along the way.However in the midst of my abject failure I discovered the following:- a real passion for tech and the startup culture – I’m pretty sure this is what I was meant to do.- I love learning to code (again), and I get extreme excitement from working on one of my own ideas rather than trying to recruit a “tech cofounder” for peanuts- I discovered this blog – the source of many planted seeds. Thanks Fred.So Happy New Year to you all! I will see in the New Year on a flight back to London. I wonder how that will be!

    1. Donna Brewington White

      “However in the midst of my abject failure I discovered…”Spoken like a true winner. That’s powerful.Have a great flight and I hope a terrific year is waiting for you on the other end of it.

      1. Obi Offorjindu

        Thanks Donna. I always appreciate your comments and learn a lot!

    2. ShanaC

      🙂 You sound like you learned a lot this year

      1. Obi Offorjindu

        Thanks Shana. Sure was a tough one but the learning has been priceless. Particularly discovering the AVC community!

    3. Wavelengths

      Don’t the great vineyards grow in the ashes of the volcanoes? Napa? Chile? Italy?Phoenix rising.Happy New Year to all!

  47. davidhclark

    Why didn’t you invest in 2012?

    1. davidhclark

      Maybe you were specifically looking for disruptive companies to fit your thesis in healthcare or finance or energy and didn’t find anything? Knowing your thesis, I can see how that would be difficult. On that note, I’m happy to see you’re looking for businesses in payments and commerce. I’m building an awesome biz in this space (using the Dwolla API).

    2. fredwilson

      i didn’t see anything i wanted to invest in.

  48. chris dixon

    I think you might be underestimating your positive influence on the startup community. I am starting a new job next month and would be happy to be 1/10th the investor you are.

    1. Dave McClure

      ditto

      1. James Ferguson @kWIQly

        @davemcclure:disqus @fredwilson:disqus @cdixon:disqus – But each of you only sees two others – wheras I see a trifecta win in any order – Happy NY all of you and thanks for the inspiration.

    2. fredwilson

      you are already one of the top investors i know Chris

      1. Steve Palmer

        What constitutes a top investor in your opinion Fred? I think all startup founders would agree with me when I say @cdixon:disqus @davemcclure:disqus and yourself are top investors.I say this because of the positive influence Chris mentioned. Your (collective) blogs, interviews and speeches and more translate into daily lessons; I think of it as going to startup school.It’s because of the knowledge and resources you share with all of us that I can say you are all part of the elite crew of investors.Full Disclosure: No investors mentioned here invested in us. In fact none of them even know me. Point is, we don’t need to be a portfolio company to extract value – everyday.:)

        1. fredwilson

          Chris is a top investor because he has exquisite deal taste combined with an ability and a wilingness to truly help an entrepreneur succeed

    3. JamesHRH

      Chris – congrats on the new, – and I would assume – ridiculously exciting gig. What a great group to be working with on a daily basis.While you and Fred are not public market types, some pearls from that arena apply everywhere, IMO. The one that comes to mind:’You can not fight the tape.”I think Fred’s dry spell says more about the environment than it does his mindset, productivity or strategy. Its the end of an era and there is not much out there to get excited about.Something, someone or some idea needs to light the lamp for others to follow. Let’s hope its you, me or someone we know well & soon!

    4. Aviah Laor

      But he is already the investor he is. IPOs, money, inspiring, even cultural change done. It’s a great problem to have, but it is still a problem.

    5. Mark Essel

      Chris, you know how to pick up a friend when their feeling down :).Yo Fred, you still need to meet up with myself and the founders I work for at Fast Society. It’s an exciting product but we have some pretty incredible challenges ahead.

      1. fredwilson

        shoot me an email mark

  49. Kasi Viswanathan Agilandam

    Happy New Year AVCers. Enjoyed reading the convo here and bumping into few of you. May God be with you all in 2013 in making your wish come true.And to the bartender … be good to yourself…and i sincerely pray to god that you plant more seeds in 2013 which makes you happy.One who keeps thyself happy can only make others [email protected]:disqus thanx again for the comment 3-4 days back…helped me reconfirm myself about staying niche.

  50. Jan Schultink

    You have the enviable luxury that you can define professional success beyond “done that, been there” things such as doing deals that journalists can write about, or making another big financial return. I am sure you will continue to find things that create change in the world beyond that. Happy New Year from Tel Aviv!

  51. Elie Seidman

    For builders, not building is its own kind of pain. I’ve had two of those years over the past 14 and they were extraordinarily dissatisfying – painful really.

  52. Korf

    My favorite avc post of the year – the subtext. Thanks for sharing,

  53. Michael Shaler

    Fred and I were both Army brats, and we both have as a strong suit the Phoenix from the flames act, again and again. I admire the candor and courage that Fred shows, so very often in public. I will take that to heart. Happy New Year!

  54. Dasher

    Happy New Year to all my AVC friends. Hope 2013 brings you much happiness and joy,

  55. Brad Lindenberg

    Your firm is a team and i bet your blog influenced the entrepreneurs to choose USV even if your partners pulled the trigger on the deals. Fred don’t forget about what you give too… This blog!! I also think its smart to wait, Patience is a virtue when you are investing and having the courage to sit on your hands until something compelling comes across the table is a discipline in itself – “you know it when you see it” and it’s better to wait and be sure than to just invest! Happy New Year!!!!

  56. Robert Holtz

    Fred, thanks for the honest post (as always). Your candor is always so appreciated.Here I thought I was the only one having a shitty year. ;P I worked three times harder in 2012 to make half as much money. But at the same time, I’ve been happy to be in-demand and circulating — happy to at least be stable. Honestly and truly I am so very grateful for that.That all being said, as an entrepreneur, I also naturally seek out new frontiers and have been thinking about something really big and bold/risky that I might actually put serious energy into in 2013 if I can get enough internal validation (i.e. a few other crazies to follow me^^).Fred, your note gave me a little extra kick in the right direction, I think. Tech is really so much more vast than we sometimes realize and there really is a lot of underserved territory still very much out on the horizon. Earl Nightingale used to use the analogy of “Acres of Diamonds” right under our feet waiting to be discovered.As for all my friends here on AVC (including the bartender), I hope each and every one here has a wonderful new year full of joy, good health, a sense of purpose, and good fortune. If 2012 sucked for you, share in the joy that 2012 is no more. 2013 is here at last, so in with the new!Happy New Year one and all.

  57. jason wright

    i can hear the snoring

  58. Kirsten Lambertsen

    I don’t know of anyone else who would have this many people trying to cheer them up after a statement like that.It sounds to me like you are heading into a creative phase.Advice is annoying, but it seems like you could use a little Tao about now 🙂

  59. Dave

    You have a remarkably positive impact on the startup community, which is huge value in and of itself. As an investor, the great investors are often defined by not investing when there is nothing they feel committed do. Bad or mediocre money managers rush to “deploy capital”. Great investors (which you and your partners unquestionably are) find the right opportunities and teams at the right time, whether that is three in a year or none for two years. My guess is a great time for you with new investments is right around the corner.

  60. markslater

    i’ll say thanks to you Fred for a great year on this blog – and it was also a pleasure to meet you finally in person.change is afoot – go be the agent again.And my best wishes to all the folks who live in the comments – to those i amused, rowed with, occasionally offended – my best to you all for a great year.

  61. Kirsten Lambertsen

    Happy New Year to everyone here 🙂 I feel very fortunate to have arrived at AVC in 2012.

  62. Matt A. Myers

    I wrote this elsewhere, though figured it’s fitting to share here as well –This year should be a great one – how great, I’m excited to find out. I’m more ready than ever to deal with whatever new challenges come my way.These coming moments are the moments I have been working for and towards for nearly three years now, and it’s all really starting to come together – is shifting in a big way.I have many people to be thankful for, for their support, their kind and motivational words, and I wish them all the best as I always will.I know some relationships will deepen immensely this new year, and there will be many new ones formed, cared for and fostered to reach whatever maximum capacity they can hold – and I look forward to each and everyone I meet through serendipity or other on this adventure I’ve chosen to take.I’m really excited to see who comes along with me on this journey, a mission and goals that I think everyone can be proud to be apart of – and that I hope is something everyone will aspire towards.Of course I’ll try my best as I always do, though I’m confident now, based on the past, that the future is bright.A happy new year to everyone! It will be great!Namaste

    1. Wavelengths

      The future’s so bright I gotta wear shades!

      1. Matt A. Myers

        I replied to your email about a week ago – hope you got it! 🙂

  63. Darren Herman

    Fred, while your investment activity might have been light (or non-existent), as Chris Dixon pointed out, your influence on the whole community has been bright. I would say that in 2012, you “came out” and became the face of the NYC venture world. While you typically have shy’d away from this, it was your year to shine. You emerged on panels, keynotes, videos – and were taken seriously each time. You contributed alot in 2012 to our collective ecosystem and we all value it. Keep doing what you are doing!

  64. Jason Hirschhorn

    Health, family, friends, hamburgers, movies, music. Then investments…I lost my sight for 3 months and my mom got cancer. But actually those things made me sit up and realize how good I’ve had and got it.

    1. fredwilson

      how did you lose your sight and how did you get it back?hearing that makes me realize 2012 was just fine for me. wow.and i totally agree about hamburgers, movies, and music. gonna do all of those things today

      1. Jason Hirschhorn

        didn’t pay attention to my health. diabetes ravaged my eye nerve. had severe double vision for over 3 months. lost around 50 lbs. long way still to go. but it thankfully subsided.

        1. fredwilson

          Phew!

    2. Wavelengths

      While we’re thinking we’re doing the top priority, the real priorities of health and home are ready to jump up and whack us upside the head, eh?I thought I could out-tough anything until the cancer diagnosis showed up.Best to you. Nothing like losing your sight to appreciate it when it comes back. Hope your mom is improving as well.

  65. howardlindzon

    Great year Fred…I learned so much from this blog as usual. You had your share of aggravation. I think you are seeing the pains of diversification. It’s just not that fun. But’ it’s life. Here’s to risk ‘on’ again in 2013, but get undiversified…. http://howardlindzon.com/fo

    1. fredwilson

      I don’t think you can do early stage VC without an appropriate amount of diversification. What is appropriate is a great question. I like at least 20 investments per fund.

  66. Guest

    Fred – what has to happen for you to feel joyful at work? Have you thought about the structure of your happiness so that you can design more of it? Excited for 2013!!

  67. Mastin

    Fred – what has to happen for you to feel joyful at work? Have you thought about the structure of your happiness so that you can design more of it? It seems like you enjoy variety and some uncertainty + adding value to others and the world and when not making new investments, life can seem kind of boring and like you aren’t making a difference. But you can design that variety and contribution! Excited for 2013!! Here’s to a joyful year!! :o)

    1. fredwilson

      🙂

  68. Anne Libby

    One of my most extraordinary experiences of 2012 was in June. @jerrycolonna and Michael Carroll addressed a group of NYC tech industry people on mindfulness and meditation. (Not coincidentally, hosted at USV.)This event was unusual in that attendees felt safe discussing the pain and dissatisfaction they were experiencing at work. No matter how privileged we know ourselves to be, we can’t wish this away. It’s part of our humanity. When we’re in safe space, and can admit how we feel, and see that others share this…life can feel a bit better.Even though I, too, couldn’t be happier to see 2012 in my rearview mirror, I woke up grumpy this morning. (Up too late, having fun with two of my favorite children, among other parts of my own issues of the human condition.)Safe space online helps too! Many thanks, and new year’s blessings to everyone out here, and to everyone whose lives we touch.

    1. ShanaC

      Wish I had heard about this. This sounded like an excellent idea

      1. Anne Libby

        Next time something like this comes up, I’ll let you know.

  69. Dan Sweet

    Does this mean a broader focus beyond primarily consumer internet’s large networks of engaged users? I see more data and enterprise in your future. You seemed way happier and engaged than I’ve seen you in a while in the NY Enterprise Tech Talk video last month.

    1. fredwilson

      I am seeing new opportunities in data and enterprise. But always with a network focus

  70. andyidsinga

    just to echo so many of the other comments from the community : you’ve definitely been planting seeds – cheers to that and a new year!

  71. Ken Galpin

    Fred,First of all, thank you for the past year of insights and best wishes for the year ahead.In reference to your comments, is it possible that we are in the digestion part of the innovation cycle. So much new innovation is currently being digested that adoption and utilization are slowing. Once the digestion is achieved we will be ready for the next wave of innovation. What areas of innovation will we be ready for? That is obviously the question you are looking to answer. May I offer a suggestion along these lines?As we more fully adopt the current crop of innovations, what problems and challenges will arise and require new solutions? In other words, in order to see the innovation opportunities of tomorrow we need to view them in the context of the “future normal.”So what problems or needs arise when “efficient online marketplaces” exist for most sectors of the economy? Or individuals become co-dependent on automation. Or when education certification is more valued for keeping a person “current” than providing a good foundation in learning principles?I think then that the more we can envision the “future normal” the better we will be able to unnderstand where we need to be planting seeds today.

  72. Luke Chamberlin

    Hi Fred – I had a great 2012 and this blog and community played a huge part. Thank you for making this place.

  73. panterosa,

    fredwilson I wonder about your frustration to not seed something new as you balance with making a new type of thing within the existing framework – no building, just redesigning. The idea of planting seeds and seeing them grow has been a theme in the comments here. It sounds to me like you are having to reinvent the way you farm in general with a mind to the future. While your past crops bring great rewards even as you have planted few new seeds, it sounds like the process itself is under scrutiny, part change perspective on building, and part re-engineering the post build managing.It makes me think of a post you did on Nov 4 about the Capitalist’s Dilemma, and the 3 processes that the economy invests in – deep invest in new (“empowering”), versus the tinkering to update and make existing systems work better in “sustaining” and “efficiency” innovations. I enjoyed that post.I don’t see re-engineering the pipeline/market/process as all bad, because things are never the same once they’ve hit the market – they adjust to it. But then this is my design nature talking, as someone who is as happy redesigning and starting from scratch. I see differences in builder vs manager. My friend built MOUSE, then decided after a few years that she was builder, not a manager, because she was not as happy running something even after she had built it herself. She left to build other things. I conclude many builders like to “empower” new things, and like to make them sustainable and efficient to ensure they stay out of the managerial process.As a builder myself, I prefer this way. I was interested in your comments as to building vs managing and the 3 processes of innovation, especially in light of your post on not investing for a while.

  74. PhilipSugar

    Yes, it might be a tough year, but think how blessed you are….harvesting sometimes is not a bad thing.

  75. jkrums

    Happy New Year Fred. Wanted to thank you for taking the time and writing your posts. You’ve become a must read and a major influence for me. Here’s to a great 2013. Look forward to learning more from you and this community.

  76. Steve Zimmerman

    I second the sentiments from many of the previous posts. Reading your posts Fred have been very extremely interesting and informative to me and you have had a greater influence on me and taught me more than anyone else in the VC space. Thanks.

  77. bsoist

    A little bit of a downer for reading on my birthday 🙂 but thank you so much for sharing. I made a lot of positive change in my life in 2012 – and I’m glad – but it didn’t make my life any easier. As a matter of fact, I’ve led a very charmed life up until recently, but I’m willing to take the bad with the good. Bring on 2013!

    1. ShanaC

      Happy birthday! 🙂 ignore the downess of it all

    2. falicon

      BTW – Happy belated birthday! 🙂

      1. bsoist

        Thank you! As you might imagine, I’ve had my share of belated wishes. 🙂

    3. Wavelengths

      Deep breath. Change is an essential part of the universe, but not very comfortable for us little ant-like creatures down here.I enjoy the continuity of this community to help keep me centered, as my own life goes through flux.Best to you in your new year.

      1. bsoist

        Best to you as well.

  78. lettrs

    Fred, so many of your thoughtful posts read more like an Open Letter. http://www.prweb.com/releas… “Slow Social” will attract people and brands of engagement. Hope you get back in the game for 2013! Industry needs you.

  79. Semil Shah

    I’ve been thinking about this post a lot since I read it a few days ago, and I can’t help but read between the lines a bit, which is fascinating: What I read is that maybe you went after a few deals very hard and either couldn’t convince the founders to take investment; or went up against larger funds who are currently less sensitive about valuation and decided to hold your ground and not bid up for the sake of bidding up. I know a handful of Valley VCs also weren’t as active in 2012 — such as Boetha, Cohler, Hoffman — I am not sure any of them led Series A investments, though I’m sure there were some stealth ones. Finally, on your last paragraph, it would be interesting to know more about how you’ve seen founders change over the last 2-3 years. My gut reaction here is that more and more are trying to maximize valuations, and there are many options for competitive deals, and even though it looks good at the moment, very few realize the dangers in raising at valuations that are too high. Thanks for sharing this.

    1. Mark Essel

      Great understanding, there has been an early stage dealflation for a handful of coveted startups so this makes sense (as a hypothesis). But Fred’s a contrarian, he’s gotta see the opportunity that no one else understands.

      1. Semil Shah

        Totally.

    2. fredwilson

      i don’t think i lost any deals this year. i just didn’t want to win any.

      1. Semil Shah

        That makes sense. Didn’t mean to imply that in a negative way, of course. Thanks for sharing and writing back.

  80. i Multiscreen

    You’re an inspiration!

  81. aegrumet

    Beautifully self-aware and generous. Thank you. Here’s to learning new lessons and planting new seeds in 2013. The greatest triumphs will likely be ones we never saw coming, but had the calm and mindfulness to be open to. And while our past, our commitments and our values hold steady, we can continually forget our assumptions and reinvent our approach. Happy New Year!

  82. << Work at home, $45/h, link

    Men are not so weak as you think. They can always leave anybody or any place without a pang – if they find another person or another place they like better. If they feel pricks and scruples it is merely because they cannot make up their mind that the chan

  83. VigVamVoo

    Dude seems to know which way is up. Wow.www.DareAnon.tk

  84. Esayas Gebremedhin

    It sums up what you went through last year and gives me some new insights too. Happy new year Fred. Great to have you in the game.

  85. Steven Kane

    There’s a reason all or most great art is sad.Life sucks.But the alternative is much worse.;)

  86. Tereza

    Well played, @CharlieCrystle!

  87. fredwilson

    i sure hope so

  88. jacopogio

    Hmm, you seem to suffer from “bad jet lag temporary drepession” ! 😉 A few good nights and caloric meals will help, trust me! Best wishes, anyway.