There are a lot of awesome people in the startup community, but Paul is among the most awesome.
Posts from October 2013
Two weeks ago, in a fun friday that many derided as "no fun" we established that a minority of this community, but a sizeable one, thought that the US would default in its debt obligations as a result of an inability to find common ground in the latest budget fight.
I would like to redo that poll to see where the community has come in the past two weeks, most of which has been during the government shutdown (a misnomer if there ever was one as most of the government is still operating) and a political showdown in Washington. So here is the same question, slightly reworded:
My view is that we are not going to default on our obligations this year and I voted that way.
The emergence of the Ryan plan (and Paul Ryan) strikes me as exactly what we need to get ourselves out of this mess. I would like to see Obama engage in serious negotiations to further cut the deficit by attacking Medicare and Medigap spending and I would like to see the GOP agree to modest revenue increases to go along with those cuts.
We've made a lot of progress over the course of the Obama administration in reducing the god awful deficits that the Bush Administration and the Stimulus Plan left us with. Obama may have been brought to all of these budgetary moves kicking and screaming by his Republican opposition, but we have gotten them done. And it looks like we might get even more now.
The way this is going, we might have a balanced budget by the end of the Obama administration. Who would have thought that Obama's twin legacies would be a health care system where everyone is covered and a balanced budget. Truth is always stranger than fiction it seems.
Here are some stats for AVC over the past month:
For those who don't want to do the math, desktop is 69%, phone is 23%, and tablet is 8%.
I was surprised that desktop remains so strong. I think my usage of the web is 40% desktop, 40% phone, 20% tablet. But I guess I am out and about a lot more than many people who are office bound during the day.
These numbers are up slightly this year. I ran the same numbers for the 2013 year to date and desktop was ~75% so it is moving down steadily, but not dramatically.
For those who want to know iOS vs Android, mobile visits are about 75% iOS, 25% Android. Not surprising considering who reads this blog.
A few years ago, I was doing some sort of public speaking thing and in the Q&A, a young man asked me for advice for founders who aren't technical. I said, "If you aren't technical, I suggest you get technical" And I meant it. I learned to code when I was a teenager. It wasn't that hard. I think anyone who has the motivation to start a company can find the motivation to learn to code.
Fast forward a few years and I read this story today. Sam Fellig wanted to build a marketplace where folks could buy products that were succesfully funded on Kickstarter and other crowdfunding sites. His wife, who was tired of hearing all his crazy startup ideas, told him to just do it.
So he went to Codecademy (one of USV's portfolio companies) and started taking classes. Soon enough he knew enough to get started. It wasn't enough to finish though. He had to learn more (I bet from our portfolio company StackOverflow or my partner Albert's Tech Tuesdays), but he kept going. And he did it. He built Outgrow.me into one of Time Inc's Top 50 Sites of 2013.
So to all you people out there who are sitting on your big idea and just can't figure out how to get it built, I would suggest you build it yourself. It can be done. It is done. Every day. By someone who takes the initiative to just do it.
Dr. Mandel counts 262,000 well-paying jobs in tech and information, an 11 percent jump since the economy crashed in 2007. The $30 billion in annual wages generated by the tech sector is small compared to the $90 billion in wages paid to the still-dominant financial sector, but tech wages have grown since 2007 while finance wages decreased.
I would have thought the real estate sector was larger (it may be) and it is also a bit surprising to me that tech is bigger than media & entertainment.
One of NYC's great strengths is the diversity of its economy – finance, real estate, media & entertainment, retail, fashion, health care, education, and now tech. And the reason tech is growing so fast in NYC is that it is embedding itself in all of these other industries. It's not entirely clear to me whether Gilt is a tech company or a fashion/retail company, it is not clear to me whether ZocDoc is a tech company or a health care company, it is not clear to me whether Codecademy is a tech company or an education company.
And you know what? It doesn't really matter to anyone other than those whose job it is to count jobs in various sectors. What does matter is if you want to work in tech, build a new company using tech, and be part of a vibrant tech community, NYC is one of the best places in the world to do all of those things, and a lot more.
Stephanie Tilenius, who is an EIR at Kleiner Perkins, wrote an interesting post on curated marketplaces last week. She mentions our portfolio companies Lending Club, Etsy, and Kickstarter in her post.
Stephanie argues that the old rules of building marketplaces, that led to big businesses at eBay (where she worked) and Amazon, are giving way to a new set of rules. This line, in particular, got my attention:
Consumers now demand beautifully designed and curated experiences, especially in a mobile-only marketplace.
I agree with Stephanie that marketplaces need to be simple, beautiful, and easy to use on mobile in order to succeed in the world we live in now.
We have a lot of marketplaces in our portfolio. I think they may be the single largest category of investments that we make. They are the commerce instantiation of our large networks investment thesis. So we talk and think a lot about them.
There is a tension between curation and being open to all comers. Lending Club curates its market by limiting borrowers to those with sufficient credit rating. That provides benefit to the lenders on the platform and has led to relatively low default rates over the years. Kickstarter states that "We never curate projects" but they do have guidelines on what can be posted on Kickstarter and what cannot. Etsy doesn't "curate" either but they do have guidelines on what can be posted in an Etsy shop, and those guidelines were changed last week to make Etsy open to a wider range of sellers.
Marketplaces can work in a highly curated model or a wide open model. Stephanie's post suggests to me that marketplaces are moving to a more curated model in order to become more user friendly (in many ways, not just on mobile). I think entrepreneurs need to be careful not to curate too much because you lose the power of the peer network, open Internet model that has proven to be so potent and disruptive over the years.
I'm a crotchety old guy. I worry about all these new companies. I’m glad that they’re easier to start, but the problem is, they’re just as hard to finish as they have always been.
The thing in Mike's quote that really speaks to me is the difference between starting and finishing. Starting requires an idea/inspiration, a team, some technical skills, the ability to iterate on the MVP and find product market fit. That's hard for sure, but what happens after you find product market fit is even harder. That's called building the company and building the business. And that is where I have seen all founders struggle. The ones that have done it before a few times seem to manage through this struggle better. The ones who are doing it for the first time really need a lot of help from mentors, coaches, and their team to get to the finish line. And many don't. Mike handed his company over to more seasoned managers and many other founders end up doing that too. Sometimes the VCs/investors have a role in making that happen. Sometimes the founder makes that call on their own.
The skills that get you from idea, through initial product, past product market fit, and into a market leading company are very different from what it takes to manage a 200-500-1000 person global business that needs to exectute well across a range of dimensions and keep everyone aligned, motivated, and working well together.
The quick pivots, the exhausting product/engineering sprints, the rapid fire innovation, the missionary zeal, etc work so well in the early days but they get old quickly and they don't scale. At some point calm, rational, supportive, and highly communicative management skills are required. And learning those on the job is hard. As Mike points out in his post, it is a bit easier to learn those skills from watching someone else who is really good at doing that. And that is why Mike argues that founders should pay their dues working in someone else's company before starting their own.
I agree with Mike that learning from someone else is a better model for becoming a great CEO. But often a first time founder has the right idea at the right time and assembles the right team and ships the right product. And getting behind that kind of founder has produced the best returns over time for USV and for many VC firms. So the art is helping the first time founder learn how to turn themselves into a great leader manager or helping them decide that they should step aside and let someone else take over.
I have seen both done both many times. There isn't a right way or a wrong way. But there is a right way or a wrong way in a specific situation with a specific founder and company. It all depends on whether the founder wants to make that shift, is making that shift over a reasonable period of time, and that the company is making that shift with them.
It's postseason baseball time. So I will use a baseball analogy here. The starter rarely pitches a complete game. Most times the winning team will leverage both a great start and a great close from two different pitchers. And there are plenty of both in the hall of fame.
Update: As my friend John points out, there are only 5 closers in the hall of fame. Not sure what that means for this post, other than my analogy was a bad one and I should have done some homework before using it.
Bitcoin was in the news this week and once again the association wasn’t all that positive. As I have said publicly, privately, and on this blog numerous times, I think so much of the discussion of Bitcoin misses the big point, which is that at its core, Bitcoin is a technology, protocol, and platform for entrepreneurial innovation.
Bitcoin is simply a transactional commerce layer for the global Internet. And once you wrap your head around that, the opportunities for innovation on top of Bitcoin turns out to be enormous.
But how does it work? Well, its not simple to understand. I think this video does a good job of explaining it.
It's friday and I am going to talk about a feature I have highlighted here before. It's the #Discover tab in Twitter. This feature just gets better and better and recently they overhauled the design to eliminate the noise and bring simplicity and clarity. I like it very much.
You can see that tweets of stories/posts/etc now reveal a short bit of the story. And tweets of photos show the photo in the timeline.
The other great thing is you get relevant news and interesting tweets from your friends comingled, as the screeengrab above shows.
If you use Twitter a lot, as I do and as I suspect many of you do, it knows you very well and does a fantastic job of highlighting the most interesting stuff right now on Twitter for you.
If you use Twitter and don't use #Discover, you are missing out. Big time.
My friend Jordy was cleaning out some old desk drawers and came across this today
I met Jordy in 1991, the year Euclid invested in the business he and his partner Ronny started, Upgrade Corporation Of America. I wrote a blog post about the important lesson those guys taught me fairly early in my career.
There is no way Jordy could have had my business card prior to 1991, so that tells me I did not have an email address at that time. I recall Steve Case handing out AOL floppy disks at some tech conference I went to in 1991 or 1992, so I think I got AOL email around that time. I still keep my AOL email address for old times sake. I am fredwilson at AOL and because of that, I am fredwilson at most every online service you might find me on.
In any case, you can see from my business card that in 1991, business was done largely on the phone. Within five years, business had largely moved to email, at least my business had.
I rarely use the phone anymore. I will use Skype or Hangout for a group meeting. I will still call into conference call bridges from time to time. But the vast majority (I suspect well north of 90%) of my business dealings are done via email. Which makes them much more discoverable (as Albert points out in his post today).
I don’t miss doing business by phone. We got less done, learned less, and moved slower. I realize there are many who might long for that pace of business. But I don’t.