Posts from January 2016

The Gotham Gal and I are doing our annual winter in the west and we flew to the mountains of Utah with some of our family yesterday. We are in Utah, Los Angeles, and the bay area regularly for the next couple months. We return to NYC when it’s spring.

Look for this blog to post daily between 8am and 10am eastern time for the next couple months.

We found that being out west last winter allowed us to spend more time with our friends and colleagues and investments out west and we are hoping to do more of that this winter.

I’ve been writing about wifi in the subways since 2005. Ten+ years later we still don’t have ubiquitous connectivity in the NYC subway system.

On Friday, NYS Governor Andrew Cuomo and Tom Prendergast, Chairman of the MTA, announced plans to accelerate the rollout of TransitWireless to all 278 underground subway stations so that all of them have wifi by the end of 2016.

They also announced the addition of USB charging ports on subways cars with 200 getting them this year and another 400 getting them next year. And they also announced plans to replace the MetroCard system with a mobile payments system that uses smartphones and smartcards.

It is great that the MTA is finally getting serious about joining the 21st century. If you live in other parts of the world or the US, or if you are a New Yorker who travels a lot and uses public transportation (like me), you know that none of this is particularly cutting edge. Many transit systems around the world have had this technology for years.

I would like to applaud Governor Cuomo’s focus on infrastructure in the past year. The investments in LaGuardia, Penn/Moynihan Station, the new rail tunnel under the Hudson, the local regional rail systems, and now, the subways, are all critical investments that NYC has needed to make, but has not made, in this century.

But if we can go back to wifi in the subways for a minute, I am pretty disappointed that we are not being more aggressive with the wifi rollout. Why stop at the subway stations? Why not put wifi in all of the tunnels throughout the city. When you ride the subways, you spend more time in the tunnels than the stations. If we want our kids to be able to do their homework and their reading (and their coding) on the way home and the way to school, wiring the stations will not be enough. We need to wire up the entire system.

And the TransitWireless system is too hard to log into all of the time. It should be wide open wifi that all phones can connect to immediately without having to log in. I never use TransitWireless because it’s a pain in the rear to log into and by the time you log in, the train has arrived and you are on your way. Why do these companies who build out supposedly free wifi systems always make them so damn hard to access. If its free, make it wide open and easy to use.

Finally, while I’m on a rant, why don’t we have a single SSID, NYCWIFI, that all of these free and open systems use. So once I connect in one place, I will automatically connect in every place. Then local shops and restaurants could also use that SSID and we’d slowly but surely build a single massive open and free wifi network around NYC.

So, while I am pleased about the accelerated rollout of TransitWireless and the other big infrastructure investments that the Governor is pushing, I don’t think we are thinking nearly big enough yet. Internet connectivity is a requirement to do business, to learn, and to stay connected to friends and family. We need way more of it in NYC and we aren’t getting it fast enough.

This isn’t actually video, it’s audio, but it’s a good one and so I’m making it the video of the week. My partner Albert and Peter Kafka talked a few weeks ago on the Recode Decode Podcast. Peter is one of my favorite tech journalists. He’s been around for a long time, he knows his stuff, and he asks hard questions and is appropriately cynical. He’s the real deal.

The Nasdaq closed 2015 at 5,007. It has fallen 6.4% this week and is now at 4,689.

Here’s the long term history of the Nasdaq:

5,000 is a number with some meaning with this index. It touched that number briefly in the Internet bubble, then built its way all the way back over the past fifteen years.

My question is this:

will the Nasdaq end 2016

— Fred Wilson (@fredwilson) January 8, 2016

Let me know what you think in this twitter poll and, as always, in the comments.

Co-founder stress and strain is one of the most under appreciated of all the startup challenges. If you don’t have a co-founder, well then you have other challenges, namely having to do it all on your own. But if you do have a co-founder or two or three, I would imagine that figuring out how to get along, stay aligned, communicate honestly and openly, and not drive each other crazy is a big challenge. I’ve seen it so many times. And co-founders don’t like to talk about it because they are afraid that their issues will freak out everyone else; their employees, their investors, etc. That’s why its among the least discussed and under appreciated of all of the startup challenges.

My friend and former partner Jerry Colonna and his colleagues are out to change that. In their CEO coaching work, they come across this co-founder stress issue very frequently. And so they have designed a four day Co-Founder Bootcamp to attack the issue head on. The next one is the first weekend in March.

A concern that I’ve heard from founders is “how are we going to afford $9k per person to do this?”  That’s a great question. My answer is the company should pay for it if it can. And if your investors aren’t in favor of you making this investment in the partnership that drives the business, then they don’t have their priorities straight. Getting the co-founders working right will go a long way to getting the company going right.

If you and your co-founder(s) are struggling, consider four days in the mountains in Colorado in early March with a team of people who can help you work out the kinks in the relationship. It can be a game changer for your company.

Flurry, a former USV portfolio company now owned by Yahoo!, put out a mobile report yesterday and there’s some interesting data in there. Flurry has its analytics on over 2bn devices around the world so they see a lot of activity.

The most interesting stat I saw in the report is this chart about device distribution in 2015:

It’s very much a normal distribution centered around the 5.5″-6″ mobile phone (phablet). There are still some people out there using smaller mobile phones and small tablets, but much of the world is converging around a single large phone. That makes sense. Four of the five members of my direct family have made that move and it’s a matter of time for the lone holdout, my oldest daughter.

Here’s a forecast by Flurry of how that trend will continue:

This trend is driving other trends like the rise of consumption activities on the phone:

There’s not a lot new in this data to be honest, but it confirms a lot of what everyone believes is happening. We are converging on a single device format in mobile and that’s driving some important changes in usage. We are in the phablet era.

My partner Andy tweeted this yesterday and I replied:

@aweissman @diymanik @elidourado i wonder how much of that is delivery model, business model, and content quality?

— Fred Wilson (@fredwilson) January 4, 2016

Andy was referring to this tweet:

Netflix now produces 3 of the top 5 rated video series according to Rotten Tomatoes https://t.co/RvVTS16oOF And Amazon produces the other 2.

— Eli Dourado (@elidourado) January 4, 2016

I was looking for some thoughts on whether these Netflix and Amazon shows are really the best content on TV right now or whether it is the packaging that has caused them to top the rankings.

Peter Kafka rightly points out that those rankings are suspect since they don’t include Game Of Thrones and other HBO shows:

@aweissman @fredwilson @diymanik @elidourado start w/gut: Do you really a top 5 or 10 list that doesn’t have GoT on it reflects audience?

— Peter Kafka (@pkafka) January 4, 2016

But even if the list is suspect, I stick with the question. Do Amazon and Netflix greenlight better shows than their competitors or do they package them up better?

This response from Andy captures the answer that I believe to be true, the packaging matters a lot to the consumer and also impacts the creators and how they make the shows.

@fredwilson @diymanik @elidourado all-at-once release model maybe https://t.co/Sr8PCpE4yy pic.twitter.com/frYPeHt2Sd

— Andy Weissman (@aweissman) January 4, 2016

I also like this reply:

@fredwilson @aweissman @diymanik @elidourado Season long (vs episode long) story format + Binge watching + Co-viewing + NFLX Curation/Rec

— Mike Puangmalai (@NonGAAP) January 4, 2016

I’m not sure what “co-viewing” means but I get the rest and agree with it.

The high level point to me is that the packaging matters a lot. Over the top services, a direct relationship with the content producer, all at once release (promoting binge watching), and great content is the winning formula. Content quality alone is not enough.

One of my favorite business moves over the past twenty years was the one Netflix pulled off. They started out as a subscription DVD rental business and evolved into the leader in subscription streaming video. I’ve never seen anything written about whether that was intentional all along or whether they figured it out as the business evolved. It doesn’t really matter, it was a great move in either case.

This move, the “analog to digital”, ought to be more common but I can’t think of many sectors in which it has played out that way.

But we are certainly witnessing another one in the ridesharing sector. If anyone really thinks that ridesharing is a way to get more drivers work, the news this morning that GM has invested $500mm in Lyft and will be strategic partners on “developing a network of self-driving cars that riders can call up on-demand” should put that to rest.

In this case it isn’t DVDs that will go away and replaced by bits. It is the drivers.

How this all plays out is anyone’s guess. But using an analog asset to build a large customer base that can then be leveraged in a native digital model is a great business move and I am surprised it has not been done in more markets over the past couple decades.

Brian Armstrong, founder and CEO of our portfolio company Coinbase, published two back to back posts yesterday on the dual topics of Bitcoin governance and the scaling Bitcoin debate.

Article 1: How are we going to solve bitcoin scaling? Miner Voting: https://t.co/XMkcGf64Nf

— Brian Armstrong (@brian_armstrong) January 3, 2016

and

Article 2: How the block size will affect bitcoin’s decentralization https://t.co/oKaGmprPa8

— Brian Armstrong (@brian_armstrong) January 3, 2016

I’d encourage everyone interested in Bitcoin to read these posts as they address two of the most important issues facing Bitcoin today; how Bitcoin is governed and how Bitcoin’s transaction processing power should be scaled from its current levels to Visa/PayPal levels over the next 5-10 years.

There are many reasons why Bitcoin is so interesting but for me the core reason is the decentralized nature of the technology and how it is designed to operate and evolve. Bitcoin is political in the sense that it has a belief system and that is that no one person or entity should control it.

What we are seeing right now is a test of that belief system and how Bitcoin answers this test will say a lot about its future. I happen to agree with Brian’s views on both topics and I am glad that Brian and Coinbase is stepping up and taking a vocal position on both.