Posts from November 2013

Android and iOS Demographics In The US

On friday, as I ate a bowl of soup for lunch, I pulled out two phones, an iPhone and my Android. I opened up the app stores and went to the leaderboards. And I looked at the top free apps on both phones. They were radically different. That got me thinking about the different user bases on these two operating systems here in the US.

So as I finished my soup, I opened up a google spreadsheet and entered the top forty apps in both stores. I then shared with Brian who likes to look at stuff like this, and then I posted a link to it on usv.com so that others could see what we were up to. I am hoping that we can start using our website to publicly share the things we are thinking about and working on inside USV more often. The benefit of doing that is Kevin Marshall built a script to pull this kind of data out of App Annie and into a .csv file. Thanks Kevin. I will use that next time I want to do this kind of work.

I took a little liberty with the categories. If an app is useless without friends on it, I called it social (not photo, not video, not communication). If an app is used for shopping, I called it shopping (not lifestyle). I collapsed a number of categories into a category I called utility. The spreadsheet is here in case you want to look at it.

Here is some interesting data that comes from this work (remember that this is US only):

1) There are only 14 apps that overlap on both top forty lists. They are (in their order of popularity on Android):

facebook, pandora, instagram, candy crush, bitstrips, snapchat, skype, kik, twitter, pet rescue, whats app, deer hunter, despicable me, vine

You will notice that these are primarily the top social apps where friends drive adoption, not app store distribution. All of the social apps in the top 40 on iOS are top 40 on Android.

There are 26 apps that are top 40 on iOS and not on Android. And the same with Android. If you are not a social app, being top 40 on iOS does not mean you will be top 40 on Android and visa versa.

2) There are 15 games in the top forty on iOS with an average position of 19 and there are 12 games in the top forty on Android with an average position of 22. Five of the top 10 on iOS are games. Only one of the top 10 on Android is a game. This could be a function of the popularity algorithm that Apple uses, but it sure feels like iOS users are more into games than Android users.

3) Nine of the top 40 apps on Android are utilities vs three of the top 40 on iOS. This really jumped out at me when I was looking at lunch. 

4) The two top 40 shopping apps on Android are eBay and Amazon. The three top 40 shopping apps on iOS are Groupon, Black Friday, and Target Cartwheel. No overlap there at all.

What I take from this work is that if the popularity algorithms on iOS and Android are similar (I don't know), then the user bases for these two operating systems in the US are fairly different. That may be true even if the algorithms work differently. 

The picture that emerges for me is Android users are a "barbell" with young pre-teens and teens using cheap phones that won't cost a lot to replace when they are lost or destroyed and old folks like me who want a large screen and care more about utility than having fun. iOS owns the college kids, the post college kids, and the folks who getting married and starting familes. My bet is Android is sub 18 and post 40 and iOS is the 18 to 40 crowd.

I assume that there have been demographic surveys on this. I just haven't seen them. If there is data out there on this, I'd like to see it. Please leave a link in the comments. I think this has a lot to do with how developers should think about what platforms to launch on and what platforms to support in the near term. It also has impact on your distribution strategy. If you have a social app, you can build a large user base on iOS and then turn that into a large user base on Android fairly easily, as we saw with Instagram last year.

#mobile

Video Of The Week: William's Interview of My Partner Albert

Albert stopped by the OneEleven accelerator in Toronto after the most recent Wattpad board meeting and sat down for a talk with William Mougayar.

Topics they discussed include how Albert got into Tech, working with entrepreneurs, the USV investment thesis, Tumblr, Foursquare, education, homeschooling, healthcare, Canada, crowdfunding's impact on venture capital, the new USV.com, machine learning, surveillance, privacy and security.
The video is about an hour and half, including intro and Q&A.

#VC & Technology

Feature Friday: Posting Music

Every morning I post a song to the Internet. I have been doing this for at least six years. For as long as I've been on Tumblr.

You all know how obsessed I am about posting every day. It's probably a mortality thing for me. Wake up, be glad to be alive, post something on the Internet. Like a dog marking his spot.

Posting music is a bit different than posting text. Because you can listen to it. It comes alive. It makes you smile, dance, tap, and at times, cry. I cried a fair bit last week as Lou Reed songs filled up my feed for a couple days. We sat shiva with his music.

Friday is particularly special because a group of us have played a game called cover friday for something like five years now. The group is loose. Anyone can join by simply posting a cover song on friday morning. But participating requires committment. Because you have to post a cover song to your Tumblr every friday morning. This is what my Tumblr looked like this morning.

Cover friday

Posting music used to mean finding a mp3 and uploading it. I never do that anymore. I post three ways. I find songs on soundcloud and embed them, I find music posts on Tumblr and reblog them, and I find mp3s on the web and post the links. Search and reblog is all it takes. I think pretty much every song in the world is somewhere online. At least that's been my experience for a long time now.

You can also do this with YouTube. Pretty much every song is on YouTube as well. But I don't like the video. I find it distracting. I just want the music. So I don't post YouTube music and don't watch much of it either.

Posting and streaming music has changed music discovery for me. I like to post so others can discover. And I like to follow people who post music so I can discover from them. I've made a bunch of great friends this way. Some of whom I've never met in person. But they light up my feed with music. Which is one of the best things a friend can do for a friend.

Here's my cover song for today:

#Music#Web/Tech

What Makes For The Most Productive Management-VC Partnership?

My friend Matt Blumberg
and I are co-teaching a class at Princeton in a few weeks. The subject
of the class is the VC/entrepreneur relationship. As part of doing this
class, Matt and I are doing two posts each in a point/counterpoint
model. Today is the second of these two co-posts about getting along post investment. Matt's post on today's topic is here and should be read directly before or after this post.

—————————————————-

I honestly can't think of a more important topic for VCs. It's pretty important for entrepreneurs as well. But entrepreneurs can build companies without VCs. It's not possible to be a great VC without being really good at working with entrepreneurs.

Having good personal chemistry helps a lot. Both VC and entrepreneur should consider that carefully before getting into business together. That was the subject of last thursday's post.

Once you've signed the documents and started working together, my number one suggestion is frequent face to face communication. If you can't do face to face, then I suggest hangouts or skype. And do it regularly. Make it a routine. I have breakfast every two weeks with quite a few of the entrepreneurs I work with. For those who get up late, we do afternoon meetings or hangouts.

Email is great for information sharing. But for building a relationship, I can't think of a good substitute for frequent face to face communication. So make the effort. Take the time. Get together often. Break bread if you can.

My second suggestion is figuring out how to be frank and honest with each other without making the other person defensive. I like to say "do you think your tech co-founder is up for the job of leading a ten person engineering team" instead of "I don't think your tech co-founder is up for the job of leading a ten person engineering team". You communicate the same thing with both lines but one leads to a conversation and the other puts the entrepreneur in a position where they are inclined to defend their co-founder. And then they box themselves in. Which is really bad for both parties.

However you figure out how to communicate, it is important to be honest early and often. If you feel that something is a problem, put it on the table. Don't push for a decision right away. But put the issue on the table, talk it through, let it sit there for a while. Most entrepreneurs will make the right call if given the time to make the decision themselves.

Which leads me to my third suggestion. Do not ever act like the entreprenur works for you. Because they don't. If anything, the VC works for the entrepreneur. So the relationship must be as peers who respect each other and are working together to get to the right anwers. This is a partnership not a boss/subordinate relationship.

My final suggestion is to help the companies as much as you can. When you help an entrepreneur you get karma points. Get lots of them. Because you will need them at times of crisis and conflict. So if an entrpreneur asks you to help recruit an engineer, help close a deal, fly to Seattle and back on a sunday (my partner Albert did that a week or two ago), come give a pep talk to the team, make an important intro, or even use an iPhone so you can try out their new product, you have to say yes. You have to work every day to help entrepreneurs succeeed. That is your job.

It is very easy as a VC to get frustrated with the people that start and lead the companies you invest in. I am constantly frustrated with the companies I work with. That frustration comes from caring a lot. Not just financially. It is an emotional thing. There comes a time when you've made a lot of money as a VC and your track record is secure. I am there. But I am still as frustrated as ever. I want these companies to live up to the dreams and vision that the founder described to us when we invested. And most of them won't. That reality is incredibly frustrating.

So they key is to keep the frustration to yourself. Be positive. Be honest. Be critical but always constructively. Help the companies as much as you can. And learn to take a deep breath, bite your tongue, and wait a few seconds before you speak. It took me forty some years to learn how to do that. It comes in handy. It has made me a better VC.

A company is a bit like a family. You can't have a happy family if the parents are fighting all the time. Same with a startup. The entrepreneur and the VCs have to get along. When they do, it leads to a better company. And that's what is in the best interests of everyone.

#Uncategorized

Bill de Blasio, the next Mayor of NYC

I would like to congratulate Bill de Blasio on his landslide victory in the NYC mayoral race. He will become our next mayor on Jan 1st 2014.

His vision of making NYC a city of opportunity for everyone is laudable and I hope he can deliver on it. But it is easier said than done. The problems facing our economy, our city, and our citizens are deep rooted and not prone to easy solutions. I don't believe old school liberalism will provide the answers. If we want to address the income equality issues, the job stagnation problems, and the crime and poverty that still blights parts of NYC, we must look for new ideas and they must start with education, empowerment, and entrepreneurship.

As the readers of this blog know, I am investing as much as I can in these three Es here in NYC. And in my work, I meet so many other like minded people who are investing their time and energy in similar ways. I hope Bill de Blasio embraces this kind of work because creating opportunities for our people, particularly our children, is the most powerful form of social change that I know.

The tech sector can be a powerful ally for our new mayor. And my sense is that he knows it. I was asked yesterday by a journalist for my take on what de Blasio's tech policies should be. Here is what I wrote her.

I think that Bloomberg's tech policies have been really good, particularly in the latter part of his time in City Hall. de Blasio would be well served to continue them and in many cases double down on them.

Two areas where more could be done are procurement of software where the city needs to adopt a more open process including open sourcing of code as much as possible and a more aggressive posture on broadband which may have to include looking at alternatives to the duopoly we have in NYC right now.

The tech community is largely apolitical. But that does not mean it is unavailable to help our city and our incoming administration. I hope that Bill de Blasio finds time for the tech community and listens and learns from us. I think many good things could come of that.

#NYC#Politics

Crowdfunding Computer Science in the NYC Public Schools

Yesterday evening I got a three minute speaking slot at the NY Tech Meetup and announced the effort we are making to bring computer science to the NYC public school system. If you didn't read about it last week here at AVC, you can click on that link to get a brief description of what we are up to.

I also announced the crowfunding part of the campaign. We recognize that most of the $5mm we are raising to help bring CS programs to NYC public schools will come from a few large donors (most of all me and the Gotham Gal), but we want to make sure that everyone in the NYC tech community and more broadly in NYC can be a part of this.

So if you would like to be part of this fund, you can contribute online here. There's a minimum contribution of $10 and we will take any and all amounts over that.

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If you want to give $5,000 or more, we would like to have you at our in person event on Nov 18th from 6-8pm at USV's offices. If you want to come to that, please RSVP here.

I know I ask a lot of the AVC community when it comes to causes like this one, DonorsChoose, and other similar things. I do these things to give back, particularly to education which is the key to progress and personal betterment. It is something I really believe in and I hope you all do to.

#hacking education#NYC

Hackpad

I love Hackpad. And it's strange because most of what Hackpad does, Google Docs does. And I really like Google Docs. I use Google Docs dozens of times a day.

But there is something about Hackpad that I like better than Google Docs for massively open online realtime document creation. Let's not turn that into an acronym please.

Yesterday, we created this document on Hackpad. And I embedded it on AVC. You could sit there and watch people from all around the world entering stuff into it, taking stuff out, commenting, adding things, etc. You could see when the folks in asia woke up and started entering in asian companies.

Wikipedia showed the power of the crowd to come together and co-create (peer produce) information. I truly believe the result is better, even if it can be a bit messy at the edges.

The document we created yesterday is also messy. I am trying to decide if I should clean it up. There is a bunch of stuff in that document that I would like to remove, that I don't think belongs there. I might do that in a day or two and then lock it down for now. Or I may not. Haven't decided yet. As my friend Peter said to me over email this morning, it is a great "crib sheet". If you have thoughts or suggestions on that decision, please leave them in the comments for me.

But regardless of how that decision goes down, I would like to thank the Hackpad team for creating an amazing product. We put it through the paces yesterday and it came through like a champ.

#Web/Tech

The Billion Dollar Valuation Club

Aileen Lee has a really good post up on TechCrunch, in which she analyzes the number of companies that have been started since 2003 that have gone on to be worth $1bn or more.

This is a very useful exercise in the VC business since it is these big wins that produce the vast majority of returns in the business. I am not sure it is that is worthwhile exercise for entrepreneurs since you can bypass the VC business entirely, keep all or most of your company, and sell it for $20mm and have a big personal and financial success. That's another way of saying that focusing on the huge wins is something VCs do, will keep doing, and need to do, but it can be a collossal waste of time and energy for everyone else. Unless, of course, you raise money from VCs. In which case, you are getting into the game and will be impacted by it.

So, with that disclaimer, let me say a few things about Aileen's analysis and then suggest an exercise we can all participate in.

The number of tech companies started each year that go on to be worth a billion or more has been a debateable figure for as long as I have been in the business. It is an important figure for VCs and the investors in VC funds.  I have heard people say it is one or less. I have heard others say it is ten or more. I think it is at least ten, particularly if you think about this globally. Aileen calculates it as roughly four per year (39 to be exact) in the ten years since 2003.

I think it is bigger than four/year in this past ten year period. But we won't really know for another ten years. That is because the billion plus companies started in 2008, 2009, 2010, 2011, and 2012 won't all show up right away. It takes at least five years and possibly longer for some companies to develop into large and valuable companies.

It is also true that some of the companies on Aileen's list won't be worth a billion or more in a year or two. As David Hornik points out in the comments to Aileen's post, using private company valuations to do this excercise means you will count companies with inflated valuations that they won't be able to live up to.

But I think it is OK to use private company valuations as long as you come back and revisit the list from time to time, add new names, and subtract the ones that did not live up to the hype.

Finally, Aileen's list is US and Silicon Valley centric. It misses at least three of our portoflio companies and probably a bunch of others. And it has no companies outside of the US.

So I created a hackpad that we can all use to list, track, and revisit this question. It is here and I have embedded it to the end of this post. It is a public hackpad and anyone can edit it, add additional companies, add comments, etc. 


#VC & Technology

Video Of The Week:

Zach Sims, founder and CEO of our portfolio company Codecademy, was on Colbert this week. There were some good lines. I liked  "drop out, turn on, and log in" at 3:40.

[I am getting autoplay complaints. Autoplay is off in the code. So I have removed this embed and you can find the video here]

#funny#hacking education

Feature Friday: Mobile Disqus

Sometime this past week Disqus flipped the switch and AVC has been using the beta version of Disqus' mobile embed. I have been using this embed on my Android for a month or so and at first it was hard to get used to clicking into a new tab to comment or read, upvote, and reply to comments, but I came to like that approach a lot better. The mobile embed in its own tab performs a lot better than the embed in the same tab as the main post.

But that's my take. I am interested in what all of you think. If you haven't seen it in action, pull out your iPhone or Android and load this post and go into the comments. You should see a couple comments and a blue button that leads you to a new tab with the new mobile embed in it.

Right now, this is only for phones. I do not believe it works on tablets. There is a question about what the right model for tablets is.

Twenty-two percent of the visits to AVC in the past month were on phones. Another 7.5% were on tablets. So thirty percent of visits are not coming from desktop/laptop web and that's a population that has not been served well by Disqus. They are working hard to fix that and the beta of the mobile disqus embed is their first real attempt to do that. I am curious what you all think.

#Weblogs