Posts from June 2015

If you, like me, were busy at work this week and were not able to pay attention to WWDC, then this podcast with Benedict Evans is well worth the 25mins it takes to listen.

Now I feel like I know what was announced and what to make of it.

Thanks Benedict.

I’ve been watching my friend Kirk and his colleagues Bart and Marc building a mobile app called Pegg for the past year. I’ve had almost every build on my iPhone during that time so I’ve been watching them up close and it’s been a pleasure to see them refine, simplify, and ultimately ship a really fun and engaging product.

Pegg is “your mobile mini mood board.”

Here’s my current Pegg board

 

Here is Kirk’s current Pegg board:

 

 

My favorite feature is the ability to quickly drop into a chat with anyone on their pegg board. Here’s the current chat on my pegg board:

If you have an iPhone and want to try out Pegg, you can download it here.

And there’s also a discussion of Pegg on Product Hunt today.

I recall having my first conversation with Kirk about Pegg at breakfast a year or more ago. He was inspired by the pegg board in his dad’s workshop. He thought that would make a nice metaphor for a board you could update daily with the little things in your life that represent how you feel and what you are doing. His initial concept was a website but he quickly turned his attention to mobile. Along the way Kirk and Bart learned how to design and build a mobile product and added Marc to the team.

The thing that I’ve been the most impressed by is how Kirk has stayed true to his initial vision through all the ups and downs, back and forths, and redesigns they’ve been through. It is so easy to get lost in that process. The product they shipped last week is pretty much the thing he described to me at breakfast when he first mentioned the idea to me. That’s hard to do and so congrats on that Kirk.

Yesterday was a bright sunny day on the east end of long island. So the Gotham Gal wanted a hat to shield the sun from her face and pulled out this gem from one of our closets.

For those that don’t know, that’s a Kozmo.com logo on the hat. Kozmo shut down in early 2001 and has been gone for over fourteen years. But I still see bike messengers riding around NYC with their messenger bags. It turns out the schwag is often more durable than the company. In this case, that has absolutely been true.

My prior venture capital firm provided much of the early capital to Kozmo and we wrote off something like $25mm or $30mm when it went up in flames.

On the way back from lunch, the Gotham Gal turned to me and said “Kozmo was way ahead of its time.” I woke up thinking about that this morning. It’s true.

Kozmo pioneered the idea of same hour delivery in 1998, fifteen years before its time. Kozmo pioneered the idea of raising and spending hundreds of millions of dollars a year long before it became fashionable, even normal to do so. Kozmo nailed the practice of scaling while your unit economics are upside down. They took that practice into almost twenty markets before the capital markets turned on them and there wasn’t money available to incinerate anymore.

I hope it all turns out differently this time. There are many reasons to hope and expect that it will. But for now, I see a lot of similarities out there in the delivery space to what Kozmo was doing, long before it was common.

I have a lot to be thankful for from Kozmo. I’ve got hats and messenger bags. But more than that, I’ve got scars. I wear them every day.

Ryan asked me what I thought about the news that the FCC is going to expand the Lifeline program, which provides a $9.25/month subsidy for phone (wired and wireless) to the poor, to include broadband.

In the short term it makes a ton of sense to me to say “you can use your $9.25/month subsidy to get broadband in addition to cell service” but I’m wondering if there isn’t more systemic and sustainable way to deal with the fact that 30% of US citizens still don’t have broadband at home.

The Lifeline program costs $1.7bn and is paid for by telecom service providers. It currently services 12mm households in the US.

There are roughly 330mm residents of the US, so approximately 100mm of them do not have broadband at home.

The Lifeline program alone is not going to solve this problem.

Part of the problem is that broadband is not available in certain rural locations. We have a home in Utah where there is no cable service and the best Internet we can get is 1.5 megabit DSL. And that connection is flaky at best. The minimum speed to qualify for “broadband” designation is currently 25 megabit and it is super hard to get that out of copper. This is not a new problem. There was a similar problem getting phone service out to rural locations in the last century.

Part of the problem is that broadband is too expensive for people living off very low incomes or no income. Time Warner Cable provides 15down/1up for $35/month. And that isn’t even technically “broadband”.

And some of those 100mm that don’t have broadband at home don’t want it. They either don’t have Internet, they have dial-up, or they use their phones when they want the Internet.

But if we look forward twenty or thirty years, the percentage of people who are going to want to live without broadband at home will likely decline to near zero. So coming up with some way to address this issue is an important policy issue and one that I’ve thought a lot about.

It seems to me that wireless is the way forward. It avoids the cost of running cable to every home and it also recognizes that people need broadband wherever they are.

I believe it is time for the US to rethink our wireless strategy. Currently we auction off spectrum to the highest bidder, raising tens of billions for the US Treasury, and then tax the winners a small portion of their revenue to provide a small benefit ($9.25/month) that doesn’t even come close to getting us to universal access. If you think of the annual cost of Lifeline ($1.7bn per year) over a decade, that is in the ballpark of what a wireless carrier will pay for a big band of licensed spectrum.

What if, instead of auctioning off spectrum to the highest bidder, we took some of our best spectrum and made it available to everyone to innovate on, like the Wifi spectrum is? And what if we provided tax subsidies to entrepreneurs who want to build out rural broadband companies using that unlicensed spectrum? And what if we provided free real estate for cell towers on our public housing projects, our school buildings, and our libraries in return for providing open and public networks in and around those tower locations?

We need to change the basis of competition in the wireless broadband industry if we want to get to universal access. We can’t keep maintaining a small oligopoly in wireless in this country and think that somehow we are magically going to get to universal access. We must create policy frameworks that allow thousands of new wireless telecommunications companies to get started in the coming years and we need to create economic incentives for these new entrants to build out networks where it is less attractive to do so. That will have the additional result of causing the incumbents to decide to compete in these less attractive areas as well. We’ve seen that with Google Fiber and some muni fibers efforts already.

I don’t buy into the conservative argument that we cannot afford to provide benefits to those who can’t afford them. I don’t buy into the liberal argument that we must tax and spend our way into solving these problems. I buy into the capitalist argument that if we create the right economic structures and incentives, entrepreneurs can and will solve these problems in a sustainable way. And I think that is the answer with universal broadband.

Several weeks ago I gave a talk at the commencement of NYU Poly, NYU’s School of Engineering. I’ve been on the board of NYU and NYU Poly and this is the first time I’ve given a talk at commencement. It was fun.

The talk is short, about five or six minutes, and the video cuts me off at times, but you can see most of it and hear all of it.

I’ve started using a cool mobile app called WifiMap.

It does something quite simple but also quite useful.

When you have the app on your phone and you are using a public wifi (open or password protected), you simply open WifiMap and it gives you the opportunity to “pin” that wifi on a map and supply the password, if there is one.

Then, when you are out and about, maybe in a foreign city, maybe in a new neighborhood in the town or city where you live, you can open WifiMap and find the nearest wifi that you can get onto and do work or play.

That’s it. It’s simple. But quite useful.

I’ve encouraged folks to use the MBA Mondays content in whatever ways they want. It is all creative commons licensed and available to be used freely as long as there is proper attribution. This past week Jason Li emailed me about his illustrated version of MBA Mondays. I took a look and was very pleased to see a curated version of the work with fun illustrations on the table of contents and every post. He also included the best of the comments!

This is an example of why creative commons is such a powerful model. He didn’t have to ask my permission to do this. He added value to my work and created a new and possibly better version of it. His work is also creative commons so anyone can take what he did and add to that.

This is how knowledge should work in the digital age. It should be fluid and iterative. The text book is the old model, GitHub is the new model. So thanks Jason for doing exactly what I had hoped would happen with MBA Mondays.

Last year I went up to Buffalo and talked to their startup community and got a tour of the emerging startup community there. I was impressed by what I saw. Like many cities around the country, Buffalo is betting on tech and tech startups to give their economy a boost.

Part of this bet is the $5mm startup challenge called 43North. I wrote about this last year and it is happening again.

43North is the world’s largest business idea competition. Once again they are awarding $5 million in cash, in the form of a $1 million grand prize, six $500,000 prizes and four $250,000 prizes. Winners also receive space in the 43North incubator, mentorship and access to START-UP NY, which allows companies to operate free of New York State taxes for 10 years.

The competition is open to applicants ages 18 and over from anywhere around the world, in any industry, with a few exceptions, like bricks-and-mortar retail and hospitality. It is free to apply and the first round application is a high-level business summary that takes 20-30 minutes to complete. Applications are due at www.43north.org by June 24.

Last year’s winners hailed from places like Taiwan, Miami, Brooklyn, Toronto and Atlanta and had businesses ranging from biotech to a virtual fitting room. All 11 winners are located in Buffalo and most of them in an incubator facility located in the heart of the Buffalo Niagara Medical Campus in free space with services, classes, training, support and mentors.

This is all part of NY State Governor Andrew Cuomo’s Buffalo Billion, a huge investment in Buffalo, which once was the 8th largest city in the US. The decline of the manufacturing and related transportation businesses in the midwest in the 20th century changed all of that. But we are in a new era, one defined by technology, and Buffalo wants a part of that. If you want to be part of that resurgence and get some much needed capital for your business too, check out 43North.

I was on the phone last night with Stephen DeWitt, the CEO of our portfolio company Work Market. He was talking about a specific community of people and I asked him how many of them were likely to be freelancers. He said “well the statistics say that 3 to 4 out of every ten people these days are freelancers.”

I thought that sounded high but after reading Mary Meeker’s Internet Trends Report, in which she says that “34 percent of the work force in the United States, 53 million people, now consider themselves independent contractors, short-term hires or other kinds of freelancers”, I think Stephen has it exactly right.

Look around you on the subway, the baseball park, the movie theater, 3 to 4 out of every ten people are freelancers. That’s a big number. And its growing pretty rapidly. Younger people are more inclined to be freelancers. Older people turn to freelancing for flexibility or economic necessity. And employers are more inclined to hire freelancers as technology makes the management and compliance requirements around freelancers easier to handle.

The biggest section of Mary’s report, some twenty or thirty slides if I recall, was on freelancers and the “on demand” economy. Technology, the Internet, mobile devices, and the communications and financial systems that have been built across all of these technologies is making freelance work easier and easier to issue and easier and easier to do.

When I got home last night for dinner, my son and his friend were checking out jobs on care.com. When I was their age, finding work was a manual process. Now you just pull out your phone, scan your feed, and get some work.

It’s a new era we are living in and the nature of work is changing and changing fast. There are tons of opportunities in and around this trend and we are invested in some of them. It’s one of the big megatrends of this century.