Posts from 2014

Yesterday was a great day. I taught Jessica how to solder. And I taught Josh how to drive a stick shift. I enjoyed doing both very much.

Jessica is preparing for an art exhibition and wanted to make some light boxes she saw on the Internet. We went to the hardware store in town and bought a soldering iron and some electrical solder. It has been at least 20 years since I had soldered anything, but it came back to me like riding a bike. I soldered the first electrical connection. Then she soldered the second. It was a success. I gave her the soldering iron and solder to keep as a present. I hope she solders a lot in the coming years.

Josh has been driving for several years and got his drivers license a few months ago. He’s been driving our car and his sister’s car a bit. But he could not drive our 10 year old Jeep that we keep at our beach house. So yesterday afternoon, I took him out and showed him how to use the clutch and manually shift. He got it on the first try although we did stall out a few times as we drove around our block. The next step will be driving into town with either me or the Gotham Gal. I really enjoy driving a stick and that Jeep is my favorite car to drive out east. I am excited that Josh can experience the joy of driving a stick shift.

One of the many joys of parenting is passing down the things you know how to do to your kids. We do that from the minute they come out of the womb and for many years after. Our kids are all adults now, but the passing it down thing keeps going on. And that’s a really good thing for us and them.

Our portfolio company Disqus held a breakfast last week to talk about the subject of engagement. We kicked it off with an interview between Christina Warren and me.

The lights on stage were right in my eyes and so it was tough to look anywhere but down which makes watching this a bit tough.

The interview is about 30mins long. The Q&A, which I think is the best part, starts at 30mins and goes for another 20mins.

A payment protocol was added to the core Bitcoin system recently. The details on the Bitcoin Payment Protocol are here.

From that link, the key attributes of this payment protocol are:

1. Human-readable, secure payment destinations– customers will be asked to authorize payment to “example.com” instead of an inscrutable, 34-character bitcoin address.
2. Secure proof of payment, which the customer can use in case of a dispute with the merchant.
3. Resistance from man-in-the-middle attacks that replace a merchant’s bitcoin address with an attacker’s address before a transaction is authorized with a hardware wallet.
4. Payment received messages, so the customer knows immediately that the merchant has received, and has processed (or is processing) their payment.
5. Refund addresses, automatically given to the merchant by the customer’s wallet software, so merchants do not have to contact customers before refunding overpayments or orders that cannot be fulfilled for some reason.

In my view, this is an important addition to Bitcoin and addresses a number of limitations on using Bitcoin for payments.

Our portfolio company Coinbase, which offers the leading Bitcoin merchant payment solution in the market, has implemented the Bitcoin Payment Protocol. Their blog post about this is here.

So if you are a merchant and you want to accept Bitcoin from your customers and you want the advanced functionality that the Bitcoin Payment Protocol offers, you should check out what Coinbase offers. You can do that here.

I received this note in my inbox yesterday:

As you have possibly heard, earlier today, Vermont Senator Patrick Leahy, the Senate Judiciary Committee chairman, announced that he is tabling patent reform legislation that was supposed to come up for a vote tomorrow. 

This is a sad (hopefully temporary) end for the litigation reform efforts that had passed the House by an incredible, bipartisan margin and that the President mentioned in his most recent State of the Union Address.

In the last few days, we were seeing good compromise language coming out of negotiations between Republicans and Democrats, specifically Senators Cornyn and Schumer, and were optimistic the bill would come to a vote quickly. But the committee chair can unilaterally stop legislation and Leahy has opted to do so. For what it’s worth, we’re hearing that we was pressured to do so by Senator Reid.

This means we likely won’t be seeing fee shifting and other important measures that would have helped protect startups from patent trolls this year.

This pisses me off. And I am not the only one who is upset about this. Rackspace has a great post up on their blog today.

Here is the deal. Information technology startups are probably spending hundreds of millions of dollars collectively on an annual basis fighting off patent trolls. This is a tax on innovation and, I would argue, borderline theft. It must come to an end.

Our portfolio company DuckDuckGo launched a new version yesterday. Gabe wrote a short post explaining what’s new.

DuckDuckGo is on a tear and tripled direct searches in the past year.

There are a number of reasons why more and more people turn to DuckDuckGo to do their searches. First and foremost, it’s DDG’s privacy promise:

We don’t collect or share personal information.

But it also the fact that DDG is getting better and better every day. Through DuckDuckHack, anyone can make DDG better. And it is a lot better these days.

I have used DDG as my default search engine on all of my desktop browsers since before we made our investment in the fall of 2011. I would love to do the same on my mobile browsers but cannot do that yet. I used to use the !g extension on DDG searches to route them to Google at least 33% of the time. I find that I am doing that less than 20% of the time now. It may not be possible to do search better than google, but if DDG can do private search almost as good as Google, I think that will turn into a very significant business in time. It already is looking like that’s the case.

Yesterday, on stage at an event hosted by our portfolio company Disqus, it was suggested that I was “trolling Apple” with the comments I made at TechCrunch Disrupt. I explained that I was not trolling anyone and that I attempted to honestly answer a question about the changes afoot in technology. I think there is a fundamental and important distinction between a device focused strategy and a cloud focused strategy.

Carlos Kirjner is an analyst at AB Bernstein who covers Internet companies. I was reading his analysis of Larry Page’s letter to shareholders this morning (the analysis is not a public document and I cannot link to it).

In Carlos’ analysis, he wrote this:

We believe … Larry Page’s discussion about the new mobile, multi-screen world …. is really about the importance of cloud services in that world. This is by no means a trivial statement and we believe goes against a more device centric model favoured, we believe, by Apple.

Many interpreted my comments as anti-Apple and pro-Google and I guess they were. But I was attempting to make a larger point. Which is that a device centric strategy is not a winning strategy in my mind. The big gains from technology in the coming years will come from things like machine learning and collective intelligence. Hardware and operating systems are important but to some extent a commodity at this stage of the game in mobile. Yes, we will see more sensors, better screens, better battery life, and more and more technology packed into these mobile devices. But I don’t think any one company has a lock on all of the device level innovation and I worry that one company, Google, is developing a very large and sustainable advantage in machine learning and collective intelligence that will be hard for anyone to compete with.

So when I look at which top technology company is best positioned for the next decade as I see it unfolding, well that’s an easy answer in my mind and that’s the answer I gave.

Our portfolio company Coinbase is offering $10 worth of Bitcoin for every college student who opens up a Coinbase account using an email address with a .edu domain on it.

In the blog post announcing this giveaway, Coinbase says:

We believe that getting more young scholars thinking about and transacting in bitcoin will help spur the growth of the ecosystem and contribute to the ever-increasing creative ways bitcoin is being used to make the world a better place.

The big state schools were dominating the early results. This chart was published almost a week ago now:

I know that a lot of college students read AVC. So if you are one of them, go to Coinbase, sign up with your college email address, and get $10 of free bitcoin.

I touched on the concept of App Constellations in my post on Friday about Swarm. I’ve been thinking about this concept for the past week and I think its an important development in the world of non-game native mobile applications.

If you made a list of all the non-game mobile apps that have more than 10mm MAUs, it would be a pretty short list. It probably would not look much different than the top 100 or 150 free apps in the iOS and Android app stores without all the games. In a leaderboard driven world, the big get bigger and everyone else goes home. We’ve discussed this phenomenon many times on AVC, most recently here.

Early last week my colleague Brian showed me the home screen of his iPhone.

He pointed out to me that he had three Dropbox apps on his home screen – Dropbox, Mailbox, and Loom. He said he could imagine a world in which his entire home screen was populated by apps from a few of the top companies.

So that got me thinking. Not only do we have a rich get richer dynamic in mobile apps, but we also are witnessing a maturing market consolidating. The big mobile app companies, Google, Facebook, Dropbox, Twitter, Yahoo!, and most recently, if you believe the rumors, Apple, are acquiring the leading mobile apps, further concentrating the list of companies that have apps on the leaderboards and apps on our home screens.

But if that was not enough, two additional trends are worth noting in these emerging app constellations. Many of these app constellations offer a single login across all of their apps and if you are logged into one of their apps on your phone, you are logged into all of their apps on your phone. This is particularly helpful when downloading a new app that is part of a larger constellation. It is also helpful for CRM and ad targeting.

And we are seeing increased use of deep linking app to app among the apps in the same constellation. It is increasingly possible to do deep linking app to app between apps that are not part of a single constellation. Facebook and Twitter are making it easier for third party developers to take advantage of deep links in their apps to do this. But when you control a constellation of apps, it is much easier to make deep linking from app to app a standard across all of your apps. This is a very big deal because it creates a web like experience on mobile and the fluidity of that experience is very engaging, further drawing users in.

These app constellations are possibly the only sustainable answer to solving the distribution conundrum in mobile – how do I get around the app store leaderboard traffic jam? If you own a leading constellation, you can use your apps and your relationship with the users of those apps to promote and distribute new apps that you either build or buy. This promotion is “in situ” right on the mobile phone where the consumer’s attention is increasingly placed. I see this as yet another “rich get richer” dynamic in the mobile ecosystem.

It is interesting to contrast all of this to what happened in the last downloadable software phase in tech – PCs and PC Software. In that world, Microsoft’s Windows OS became totally dominant and led to a dominant application monopoly (Outlook, Excel, Word, Powerpoint, etc). In native mobile, we have a duopoly with iOS and Android and what looks like at least six App Constellations (Google, Apple, Facebook, Twitter, Yahoo!, Dropbox). There may be some other important constellations emerging. I would love some suggestions of other ones in the comments (Foursquare?).

Here’s my home screen. Other than my total and complete capitulation to Google, my phone isn’t yet a collection of app constellations – other than the USV constellation 🙂

But I think it is likely headed there along with all of your phones.

A couple weeks ago, I sat down with Mike Arrington to kick off TechCrunch Disrupt NYC. Everyone reacted to my comments about Apple, which were simply a reaction to a question posted by Arrington. I’m not backing away from those comments, but I was a bit taken aback by the vitriol that came at me in the days after this talk.

We covered some interesting territory, including privacy, valuations, and the NYC tech scene. It’s about 20mins long but you will have to wade through the opening ceremonies (3-4 mins) to get to our talk.