Video of the Week: Nick's OuiShare Fest Talk

My colleague Nick Grossman went to the OuiShare Fest this year and delivered a talk he called “Venture Capital vs Community Capital”

Here it is:

#blockchain#entrepreneurship#marketplaces#VC & Technology

Comments (Archived):

  1. William Mougayar

    That was a loaded talk and really well put together macro trends synopsis. As a complement to the video, Nick’s post on the same topic explains this even better, as I felt he rushed a bit through the end on stage.…I think the smart companies will benefit both from venture capital AND community capital, if the latter is well architected into the fabric of their services, either via open platforms (where the community contributes, eg OpenBazaar), or by embedding a self-perpetuating value (where the user contributes, eg La’Zooz) into the services.All and all, I think that Open Source models are going to get really interesting going forward, in part due to blockchain technology, and to other collaborative forces.

    1. awaldstein

      Real world example of self perpetuating value please.

      1. William Mougayar

        I’m looking for more examples, but this one is from La’Zooz. When you download the App and drive, you earn tokens (because you are giving data) which you can use to pay for rides too. You earn & spend within a self-perpetuating cycle of value.

        1. awaldstein

          I love the concept but I bet at this point it is concept more than anything else.

          1. William Mougayar

            Exactly. Concept and usage are two different things (and that applies to any other startup).I like that idea, but nothing happens without a critical mass of users on both supply and demand sides.

          2. @mikeriddell62

            Told you guys before, something big is happening over here in the UK. Two major proof of concept lined up for this summer – both tackle social and environmental problems.Get yourselves over, I’ll pick you up from the airport and tell you all about your lovely new platform.

          3. William Mougayar


          4. @mikeriddell62

            Get yourself over to northern England where we are running two proof of concept projects that drive social and environmental change through cross sector collaboration that can be measured and metered, just like a utility.The coin will account for the change that is produced, and will be used to buy things of value, where money isn’t available.

    2. JLM

      .Fifteen yards for using the faux word “architected”. Please stop.Sorry.Back to our regular programming.JLMwww.themusingsofthebigredca…

      1. William Mougayar

        Picky picky picky. “weaved into””designed”Or wait til the book version comes out 😉

    3. Kirsten Lambertsen

      I was trying to explain my understanding of blockchain to someone and ended up saying, “It’s a way to make something peer-to-peer instead of mediated, using a public key/private key type of authentication.” Is that mildly accurate?

      1. LE

        So my first question is “who were you explaining this to?”Because if I was the “someone” that wouldn’t make sense to me at all.Only simple way to explain it is by using an analogy to something that the majority of people will understand. [1][2][1] When I have to explain DNS the analogy that I often use is that of an office receptionist. “Purchasing is in room 105”.[2] To explain what a web hosting server is I will often say “it’s just like a regular computer that has your website files on it… and almost any computer can function as a web server.”.Computer people (and attorneys) are really good at having difficult multi syllabic words and complex concepts wrapping around simple concepts which partly serves the purpose of keeping people out. The confusion created is a business model often.

        1. Kirsten Lambertsen

          Yeah, with “non-techies,” I like to avoid saying “Bitcoin” because it just opens a can of worms, frankly. Nick’s timestamp part is helpful in an additive way.When trying to describe B-chain to non-techies, we all need to put on our elevator pitch hats a little bit, and sell the sizzle not the steak. What does it *enable*? As a “civilian,” I don’t really care how it works. Show me the baby, don’t tell me about the labor pains. [Insert your own hackneyed phrase here!] So while peer-to-peer and secure keys are a long way from the sizzle, I was hoping I was getting closer by talking about what it makes possible.I’m intrigued with B-chain much more than B-coin, so I tend to want to think about B-chain without B-coin necessarily coming along for the ride. Am I crazy to think that there must be endless cool opportunities to utilize B-chain that have nothing to do with currency? I often wonder why B-coin makes its way into the conversation every single time.

      2. Nick Grossman

        Best explanation of the blockchain I’ve heard recently is from @muneeb who described it as “time”. In other words, the blockchain is a global, peer-verified, timestamp engine, that can take any piece of data and officially time-stamp it.For example, we make a transaction of bitcoin — what’s getting stored is a timestamp in the bitcoin ‘ledger’. I buy your house and we mark it as a contract in the blockchain, that’s marked as data stored in time, etc. You give me a ride in your car and I give you 5 stars, that’s marked in time on the blockchain.Never before have we had a single, global, verifiable and immutable timeline. That anyone can add to and no one can change retroactively (hopefully — this is a core question w bitcoin).I am going to write this up as a blog post soon. meantime,

        1. Kirsten Lambertsen

          Super helpful! Thank you 🙂

      3. William Mougayar

        It’s accurate. But then, answering “so what” is where it gets more challenging to explain.

  2. awaldstein

    Two thoughts jump from this:-Is connectedness in some ways the new concept of community from a crowd based perspective?-I agree that big changes will take bold new approaches. But the most powerful companies on the planet from Apple to Google to Facebook are of course all closed.

    1. William Mougayar

      I would add to your last point that brand value & loyalty is not to be under-estimated when discussing usage switching.

      1. awaldstein

        So true William.Brand may be the answer to my question to you below. Nothing is more tangible and economic yet so difficult and honestly so ineffable to create.

        1. Richard

          But has tech really done anything to change the brand game?

          1. awaldstein

            Don’t really know what that means Rich.But it is certainly true that both the difficulty in creating and breakaway brand and its value are both exacerbated today.

      2. @mikeriddell62


    2. @mikeriddell62

      And over-priced.And over-valued.

    3. Nick Grossman

      on #2, sometimes it’s takes being big to be bold (e.g, apple and USB-C) and sometimes it takes being small/outsider to be bold (satoshi)

      1. awaldstein

        Is there really a way to win–or get funded–if you are small and outside without being bold?

  3. Twain Twain

    THIS is key: heart of network. Intangible factor not yet included coherently in code or network frameworks.Heart as arbiter of value, control and trust.Hardest tech problem to solve of our times.So… borrowing this graphic from Nick of USV, thanks!

  4. JLM

    .Inside baseball, pros and coaches care about a left handed batter’s speed from home to first base.Today, they measure that speed without taking a swing.Nobody has ever beaten Mickey Mantle — whose time was taken with a swing (which changes your momentum dramatically). Ever. I, personally, find that fact incredible.The game has gone on and been appreciated by millions of people who do not know this fact and don’t need to know this.In many ways, the evolution of business — not just high tech, but all business — has this same element of “inside baseball.” It fixates on things that, in the end, are small and irrelevant elements in how the game is really played. How the final score will be counted and who will actually win.And, may have no impact on outcomes. As interesting as I may find the MM left handed speed issue, it never changed the outcome of a game. Or maybe it did?Makes for great intellectual wrestling matches amongst the initiated and illuminati but are really not what is driving the embrace of tech or what the public (customers) will pay for.It falls under that large umbrella — Your generation did NOT invent sex. (Or business.)The tension that is cited as an issue is the result of success. It fits into the continuum that:There are some people who are good at starting fires–the fire starters (entrepreneurs, founders, maybe even some VCs).There are some people who are good at tending/stoking fires–the professional managers hired by the successful founders.There are some people who will piss on your fire–the critics, the naysayers, the people who don’t really understand how the fire got started and may not like fire in the first place.In many ways, this is a validation of the success of the underlying startups.As I have said more than once, I am not a fan of the Uber henchpersons. There is a scrappy little startup called Gett which seems to be able to deliver a similar service without violating any laws of man, God or nature. They are a perfect example of Nick G’s paen to a “thin network.”A lot of this is perfectly normal.How the Hell is Mickey Mantle the fastest guy in the world from a left handed hitting position to first base for all this time? And he had to swing.Pro tip: Tell Nick — smart guy — to get his damn shirt pressed next time. Sorry, that was uncalled for and mean. Also, an hour with a speaking coach would not be the worst thing he ever did.JLMwww.themusingsofthebigredca…

    1. LE

      Never heard of gett but the hook seems to be “$10 Rides” when in fact the ride is not costing $10, right?It’s nice bait and reminds me a bit of those books that say “Learn Java in 24 hours” when they actually mean “24 1 hour lessons” (not the same thing). “Getts” you to pickup the book and take a look of course. Also very Clinton “depends on what the meaning of “learn” is..

    2. LE

      Pro tip: Tell Nick — smart guy — to get his damn shirt pressed next time. Sorry, that was uncalled for and mean. Also, an hour with a speaking coach would not be the worst thing he ever did.What???I thought Nick did a great job (and that is coming from me keep in mind).Noting that you also told William “Fifteen yards for using the faux word “architected”.”You must have attended a parochial school when growing up, right? Some kind of nun rapping you on the hands that is causing a bit of PTSD?In all seriousness I’d really like to know why you think he needs a speaking coach. (Now Albert Wenger on the other hand I would agree as I am not a fan of the heavy accent but perhaps that is because I was raised with accents like that and it’s my PTSD).As far as dress, I want to restyle Fred and get him out of the sports jackets…

      1. JLM

        .It was a droning lecture in which he kept looking at the slides distracting me.Look at the damn audience.He had a great set of points which he put into a blender and made into a tasteless bit of drivel.A good speaker uses the slides to punctuate his talk. To add spice.He never engaged with the audience. Not one rhetorical question, not one point of engagement.I did go to Catholic schools and suffered extreme cruelty at the hands of the Sisters of Charity — who are hitters. Some orders are not. The Sisters of Charity could whip ISIS into shape with their yardsticks.In fact, that may be exactly the elusive strategy the White House and the Pentagon have been working on for the last year. It could be true.Unfortunately, every stroke was well deserved, and, on balance, I probably needed a few more.If I have PTSD, which is a very real possibility, it was not the nuns.JLMwww.themusingsofthebigredca…

        1. LE

          He never engaged with the audience. Not one rhetorical question, not one point of engagement.Ok point taken. I thought the audience members were stone and would be stone and noted that they didn’t laugh at the joke at the start there was no noise. So I ignored them basically.Along the lines of your point, when I spoke at my daughters Bat Mitzvah a few years ago I started the speech by complimenting my ex wife and her new husband for the great job that they did with “the affair” and I also made a comment and called out someone who was attending (that I hadn’t been friends with since elementary school (was my ex wife’s friend)) that was in the audience. The idea and intent was to get them on board so they would nod their head and laugh at my jokes and provide social proof to others in the audience. Who mainly were her friends. That loosened those friends up as well. More than (insert some Texas saying here like “more than a goose over a Texas cactus”)And it “the manipulation” worked like a charm. I got a rousing and standing ovation at the end. My ex wife was laughing at almost everything that I said because I had greased her up at the start and sucked up to her. And because I am funny and had put in the effort to think of a strategy for this particular audience.That said Nick’s audience was french right? And a bit (admit it) dull and lifeless. As Steve Martin said “those french have a different word for everything”.My guess is that what works in US does not work the same in Rome and said coach needs to be geo specific and take into account cultural differences.

          1. JLM

            .”…more than a Mason jar of moonshine in a convent.””So what does a guy from New York know that a bunch of French high tech persons (Frogs) would find interesting? Let me tell you.”It’s called a narrative hook.JLMwww.themusingsofthebigredca…

          2. LE

            Isn’t a narrative hook though only as effective as the person delivering said hook? As an example take Elizabeth Warren “church lady” vs. George C. Scott’s portrayal of Patton in the eponymous movie.

        2. Tom Labus

          The Nuns, unfortunately, are not available since most went into pro wrestling.

        3. Pierre

          I guess it’s a matter of taste, I find Nick really quite an engaging speaker.

        4. Marissa_NYx

          My aunt was a nun, a Franciscan nun, she & her sisters were active in Africa. Clearly they were not tough enough. But the locals remember them with affection.

          1. JLM

            .I have the greatest respect for nuns, brothers and priests.I was formed by the Sisters of Charity, cut to measure by the Christian Brothers and inspired by those Irish priests.All of them were hitters and I deserved every stroke. But when your father is overseas and a kid needs a guiding hand, they delivered.They were all great educators.I am looking forward to seeing all of them in Heaven and will likely need their intercession to have a legitimate shot.JLMwww.themusingsofthebigredca…

          2. James Ferguson @kWIQly

            No comment required…

      2. Nick Grossman

        ha, thanks Larry! 🙂

      3. fredwilson

        Ouch! 😉

    3. Richard

      Have a speaking couch reccomedation?

      1. JLM

        .Ethan Allen?JLMwww.themusingsofthebigredca…

    4. Richard

      What about Ichiro Suzuki?

  5. LE

    “big and scary creates a rebellion”Reason is essentially probability and large numbers. The more people that are involved the more of a chance that one of those people will start an uprising.The more people that are involved in any group increases the chance that one of those members will stir the pot and others (lemmings) will follow. Lemmings are more likely to do nothing, or to follow, than to put in the effort to oppose typically. And if they are neutral that makes the people asking for change seem all that more powerful.A good example of this is Gawker voting for a union. [1] When I read the gawker blog (where only writers were allowed to comment … they were discussing the upcoming union vote) I was struck by how happy most of them seemed to be and the great things that they said about Gawker. Yet they were voting for a union. The party line among those in favor (even those who were happy, and many said “best place I ever worked”) was “we want to make sure things don’t change”. Not sure that is a typical labor relations scenario!!But the simple fact is that the idea to do a union came from 1 or a few people and the rest just followed their lead “sure why not”. Consequently anytime you have a large number of people involved in something there is the chance that a few outliers will create a problem or start a rebellion.In a small group probability wise this is almost certainly less likely.The closed systems have a way to quell the uprising since they are the ones in control (the dictator) and have tools and techniques at hand to squash any problems. The open systems have what appears to be a fairer process to keep everyone happy and to address discontent. Generally.In the end though anytime you have a large group of people there will almost certainly be trouble and rebellion especially if the dictator doesn’t use their power and oppressiveness crush the decent. [2][3] (This isn’t a history observation this is a business observation..)[1] http://www.capitalnewyork.c…[2] I once had the opportunity to deal with an attorney for a franchise company. I was struck by what an asshole he was and how he dealt. I jumped to the conclusion that that was a specific tactic that he used with franchisees (I wasn’t a franchisee obviously) that was necessary to keep them in line. No give an inch on his behalf. I’ve also seen this behavior on the part of building managers and anyone who has a certain amount of defacto power over others and needs to keep up barriers to any change.[3] Similar concept is keeping people on a short leash and setting boundaries and lines in the sand which others can’t cross. The musical group Eagles had many members but it was clear who was in control (watch the excellent documentary on Netflix..).

    1. Nick Grossman

      yep, great way of putting it

  6. @mikeriddell62

    There is a very exciting project taking place in the UK call Hullcoin. It’s like Bitcoin for good. It sounds like it’s exactly the kind of platform you want to invest in.There is significant interest from Blockchain developers who are very very interested in helping develop the proof-of-concept project that tackle the social problems of Public Health // Criminal Justice // Employment & Skills.Coin will be earned into existence in exchange for resources that are supplied by people, brands and organisations that help solve these problems.Social and environmental change driven by cross sector collaboration is the only way forward. The outcomes must be shared by all.Please get in touch if you need a way in.

  7. Kirsten Lambertsen

    I thought this was going to be about crowd funding ;-)Stimulating presentation!

  8. LE

    Nick mentioned [1] that Bezos said “your margin is my opportunity”.I’ve always felt that this ties into “pigs get fat, hogs get slaughtered” in the following way.Margin makes people pay attention to what you are doing far more than you would expect. Business decisions are emotional they don’t follow a rational pattern. Margin creates emotion and lures competition. Then the race to the bottom begins.Many with a new idea might consider following the model of their pricing being as low as possible at the start and then increasing prices over time (if they can of course) rather than pricing high in the beginning and lowering over time (when they will then need to anyway because of competition).The reason is simple and ties into what Bezos said “your margin is my opportunity”.Every morning someone wakes up and sees what others are doing to make money. They do a napkin calculation in their head. They calculate margin without even needing to do a spreadsheet. If they see margin they think (and it doesn’t matter if they are right or not) “there is money to be made in that business” and “I can do it for 10% less and still make money”. And then they come in and compete with you. And some of them will actually succeed and will be your competitors.There are always exceptions to this of course. If the obscene profits that you make allow you to build to the point where others starting can’t compete with you (because it’s a land grab) then it pays to do that. (Take airbnb or perhaps uber as an example). Or if there is some other barrier to entry that keeps them out and so on.[1] Excellent talk by the way really enjoyed it and Nick is a great and smooth communicator..but remember “no jokes for the French…”

    1. sigmaalgebra

      For retail, Bezos has more and brighterlights on his tree than nearly anyone elsein retail.He has one heck of a good business model,software architecture, Web site, andserver farm, and these are terrificbusiness advantages and also fairly highbarriers to entry.So, for his Web site, he just lets thirdparty sellers use that — they stand to beon a long walk on a short pier. For hisserver farm, once built as he needed itfor his Web site, etc., he just letsothers use that farm and became a leadingcloud provider.He’s done well managing enormous growth.He saw the opportunity and got in earlywhere he could pick the low fruit of thesmall book stores and record shops.To do really well selling a wide varietyof goods via just a Web site, the customersneed a lot of pre-sales info, many clear,high resolution pictures, reviews, etc.,and Bezos has provided those. Thecustomer reviews commonly have a lot ofjust terrific product information.His simple ‘recommendation’ system of”people who bought this also bought …”seriously impressed Eric Schmidt in hisEdinburgh Festival Keynote at…Now with Kindle, online music and videos,local warehouses, same day delivery, andhis new little stick for groceryshopping with a WiFi smart phone, he isgoing after much more.He has a shot a moving a lot of goods fromthe original producer to the finalconsumer often never touched or evenlooked by a human.Bezos is pulling a lot of the costs out ofconsumer and SOHO shopping.Tough to see what his ceiling might be.Wal-Mart is asleep at the switch.

      1. LE

        For retail, Bezos has more and brighter lights on his tree than nearly anyone else in retail.Financial not retail. Bezos strength is in being able to sell Wall Street in allowing him to spend money like a drunken sailor. There are many who would shine just as bright if they could do the same. An accomplishment but not the same as you are referring to.

        1. PhilipSugar

          No to your staples point. I had to buy a lock for a new door on the house. Should have gone to Home Depot or Lowes but just bought from Amazon.

          1. LE

            I put everything I can through Amazon as well.But what I am saying is that Bezos secret sauce is the fact that he can raise money and keep Wall Street happy which he needed to do in order to keep that strategy viable. Similar in a way to the reason for McDonalds dominance was real estate being key, not just burgers or the “speedy system” as they called it (I think). [1]Well known to continue to loose money all based on the hope that one day it will be the only one left standing.(Btw, what was my “staples point?”.)[1]

          2. PhilipSugar

            You don’t go there and instead of buying an extra $100 worth of stuff you just buy what you need online. If I went to HomeDepot I would buy an extra $100 worth of stuff. I like HomeDepot because my local one treats me really well.

        2. sigmaalgebra

          I’m no expert, e.g., have never seenan Amazon annual report and have nographs over time of their top line,bottom line, capitalizedexpenditures, rental agreements,loans, etc.What I’ve heard via the newsies isthat Wall Street wants Bezos to raiseprices and increase his bottom line.Instead Bezos wants to invest ininfrastructure, keep prices low,attract customers, and, for now,increase his top line, quickly (i.e.,grab market share).Or Wall Street wants a cash cow, andBezos wants a really big herd ofcows, sheep, goats, etc.Or, Wall Street wanted Bezos to sellbooks and records for top dollar, butnow Bezos is selling books, records,…, the kitchen sink, everything inthe kitchen, including the groceries,on the way to same day delivery,maybe someday with drones, thebathroom, the rest of the house,garage, SOHO, swimming pool, skichalet, boat house, etc.Who on Wall Street would have advisedBezos to become a leading cloudprovider?Or, there is a fundamentalcontradiction: On the one hand, (A)finance, including Wall Street, SandHill Road, etc., want the really big,biggest returns. So they wantsomething really rare. But (B) foranything so rare, getting a lot ofconsensus before hand isfundamentally in strong conflict –with a lot of consensus, the successwouldn’t be so rare.E.g., drive down to Bentonville andtry to talk them into covering amajor fraction of the town with aserver farm, etc.This (A)-(B) conflict is not new andgoes back to that crown jewel of MBAwisdom, Mother Goose and the story ofThe Little Red Hen where (A’)everyone thought she was a totalloser until (B’) she had hot fragrantloaves fresh from the oven at whichtime everyone thought that she was abig winner.Moral: If want to do something sogood it’s really rare, don’t expect alot of consensus before hand.Or, just where finance should be mostinterested, in the “so good it’sreally rare”, they have the mosttrouble. This is not necessary. Todraw from the movie Moneyball,Wall Street thinking is Medieval.What Wall Street needs is some goodmethodology. It exists, but WallStreet wants essentially nothing todo with it.While this (A)-(B) conflict can befrustrating, infuriating, etc., theflip side can be anopportunity.

    2. PhilipSugar

      I have always said low margin is a “moat”. If you look and think about competing with Amazon, you think wow I have to lose a ton of money.I think there will end up being many competitors to Uber and AirBnB.They have the problem of the “visiting a city for the first time” issue.What I mean by this is that the first time you visit a new city you end up paying a ton of extra money for stuff because you don’t know what to do where to go, etc. There is a ton of room for middlemen.The tenth time its really different you go direct. Same for business, whether you are a driver or renting a room. So yes, right now they can get their margin. Five years from now?? Lets see.

      1. LE

        Exactly. The first boat that I bought I bought it new. I didn’t want to learn about the pitfalls of buying used boats. The 2nd boat though I knew enough about the “lay of the sea (land)” and bought it used.Likewise you can cut corners if you ever renovate a 2nd or 3rd home because you’ve done it once already. I have bought enough rental properties (commercial) that I don’t even need to hire an inspector I already know the downside risks and can check for them.Also note how all of this is different from corporate purchasing and “never getting fired for buying IBM”. In a corporate job you always have someone looking over your shoulder and you can’t take any chances. But for your personal life, other than your wife perhaps, you are free to take chances and make riskier decisions.So yes judgement builds over time. Last night I had to pay for parking in cc philly. Didn’t bother me that the price was $26 just wanted the sure safe bet. If I did it every week I would find something cheaper. (It was actually $16 the night rate when I paid but I didn’t know that before paying).

        1. PhilipSugar

          That is a perfect example. When I go to Philly I just park. (I seem to get lucky on the street a bunch) but I don’t think about it I just park.But when I used to go a bunch??? I knew the best and cheapest garages.

  9. Richard

    I listened to this 2x. The first time It sounded like a great summation of AVC recent posts. The second time I critiqued it. A few thoughts:I agree that the collaborative network did more to accelerate innovation than almost anything and that this is the engine that will continue to propel things forward.As to “your margins are my opportunity”, I don’t think this applies to any of the companies you spoke about, it really hasn’t been a major factor for many startups operating at a profit, has it? , but it does apply to some, e.g., Zenefits.As to the sharing economy? Most so called sharing economy companies don’t share much at all except less friction in matching supply and demand. What’s interesting is which platforms survive at scale without (VC) subsidies ?

    1. BillMcNeely

      logistics companies don’t make the 20% margins currently made by Lyft and Uber. So some this is about margin

  10. God Hand

    Like kickstarter?

  11. Tom Labus

    Good job @nickgrossman:disqus