Posts from November 2016

Proof Of Stake

There is a lot of cutting edge computer science being used in blockchain technology and, because there are multiple blockchains and protocols being proposed and tested, there are various experiments going on at the same time. This is all very good in my view. We will eventually figure out which technologies are best for which applications and standards will emerge. I think we are three to five years away from that level of market stability, and possibly farther away than that.

One of the most interesting questions to me is whether we can figure out how to implement a proof of stake consensus mechanism in a large decentralized trustless public blockchain (ie Bitcoin, Ethereum, etc). The current consensus mechanism of choice is called proof of work and the specific proof of work implementation that is being used by most public blockchains is mining. Mining has a number of issues, most notably the massive amount of electricity consumed by miners to run these mining data centers. Other concerns with mining are centralization (a few large miners control most of the Bitcoin mining infrastructure) and exposure to 51% attacks (if one miner controls 51% of the network, they control the entire network).

Proof of stake is an alternative to proof of work and there is a lot of work being done to see if it can be implemented in a large public blockchain. The leaders of the Ethereum project have publicly stated a willingness to try to implement proof of stake on Ethereum and they are working toward that goal.

In a proof of stake system, you use the very coins/tokens that are at the heart of these systems as the “proof” that you can validate a transaction. Instead of using your capital to buy computers and electricity to run them, you just use your capital to acquire the coins/tokens and they allow you to validate transactions. This is all very simplistic, of course, but that is the heart of the idea.

I read the Proof of Stake FAQ on the Ethereum Wiki this morning. It’s an interesting (and dense) discussion of the various issues that crop up in a proof of stake approach and the algorithms and techniques that are being put forward to resolve these issues. If you are interested in blockchain technology and want to understand how all of this stuff works under the hood, you might do the same and give it a read.

I am hopeful that we will see a large public project, like Ethereum, attempt to implement a proof of stake consensus algorithm in the next year or two. Mining works. It has validated blockchain technology and allowed it to be commercialized. But my gut tells me that mining is not the best consensus system out there and that we can do better. And so we should see if we can. That’s what forward progress is all about.

#blockchain

Audio Of The Week: Positively Gotham Gal

Back in 2005 and 2006, The Gotham Gal and I did a weekly podcast called Positively 10th Street. At the time we lived in a townhouse on 10th Street in Greenwich Village and we would record it in our kitchen with our kids participating from time to time. The hosting service we used, Libsyn, took down the podcast when I cancelled our account and I can’t find the mp3s anywhere on our network. So these podcasts may be gone which is a shame. There were some great ones (and plenty of bad ones). I do have a dream that I find all the mp3s in a folder on a hard drive somewhere. That would be great.

We were a decade too early for the podcast thing. But now podcasts are a thing. Many interesting people, like Malcolm Gladwell, are doing them. And yesterday saw another interesting person join the ranks. The Gotham Gal has taken her Woman Entrepreneur Monday series which ran in blog format from November 2010 to August 2016 to the airwaves with a weekly podcast series called Positively Gotham Gal, a nod to our way to early attempt at podcasting.

Here is the first episode of Positively Gotham Gal featuring Margit Detweiler, Founder & CEO at Gyrate Media & TueNight.com. It’s a really good conversation about the joys and challenges of being a woman entrepreneur in the latter half of your career.

#entrepreneurship

Feature Friday: A Solar Roof

I think the product that blew me away the most this year is the Tesla Solar Roof. The idea that a regular looking roof tile could generate the solar power you need for your home and car is just great. And though I haven’t seen them in person, they look great on the web.

tesla-solar-roofs

We own Tesla’s cars. We are in line to buy their Powerwalls. And I hope to build our next roof out of their roof tiles.

I love the entire vision. It’s great.

#hacking energy

Labor Clouds and Being Your Own Enterprise

My friend John Battelle published an interview with our portfolio company Work Market‘s CEO Stephen DeWitt yesterday.

There are a couple interesting ideas that are explained in that interview:

  • Labor clouds. It turns out that John’s new company NewCo is using Work Market to create and manage a labor cloud of writers and editors to create a new publication. Some of these writers and editors are full time employees, some are contractors, some are true freelancers. In the “labor cloud” model, you manage all of the labor you need to get something done in a single platform instead of three (or four, or five, or six).
  • My favorite line from the piece, and the one I tweeted out, is this “”By 2040, I’m pretty confident that every skilled worker will have their own signpost. You will be your own enterprise” I like the idea that people are going to have more agency over their work life, their careers, and the way they want to work. I think that leads us to a better place, for both employers and employees.

This vision for the enterprise is more than the “uberization of work” although many people will simply see it as that. It is a recognition that enterprises should not manage workers in silos based on how they pay them but instead they should manage their workers in a cloud which allows everyone to be paid and managed the way they want. That’s a transformative vision for the future of work.

#employment#enterprise

Going Public

The news broke yesterday that Snap (fka Snapchat) has confidentially filed to go public and is aiming for a March IPO. I am very happy to see this. Snap is a great company led by a creative and ambitious founder and they have a loyal and growing use base. I think Snap can be an excellent public company. There are the obvious questions about valuation, long term growth prospects, profitability, etc. Those will determine how good of a business and a stock it will be over the long run.

But the thing that makes me happy is their decision to open up their cap table to all investors, to become more transparent with their numbers, and to follow the path taken by so many great tech companies over the past five decades.

Going public used to be a rite of passage for high growth tech companies. It was what every founder wanted to eventually do with their company. That all changed after the tech/internet bubble burst in 2000 and for the last fifteen years it has been conventional wisdom to delay the IPO for as long as possible or even forgo it in lieu of a trade sale or something else.

I appreciate why some founders want to avoid being public. I spent the last day and a half being a public company director. There are parts of that job that suck. 

But having seen this movie (going public/being public) many times now, I think there is a lot less to fear than most entrepreneurs think. It’s good for the company to be held accountable, it’s good for the employees and investors to have liquidity, and it’s good to join the ranks of the best companies in the world.

I am very pleased to see Snap going for it.

#entrepreneurship

The Dronebase Pilot Program

Our portfolio company Dronebase launched a new service yesterday that everyone who owns a drone should check out. They call it the Pilot Program. Basically any drone pilot that owns a drone with the right capabilities can now fly missions for Dronebase.

For several years Dronebase has been connecting drone pilots with aerial imaging jobs in industry sectors like commercial real estate, residential real estate, construction, insurance, energy, and telecommunications. Dronebase’s sales force calls on companies in these sectors, gets assigned aerial imaging missions, and then assigns those missions to drone pilots in their pilot marketplace. This “go to market” model has resulted in Dronebase initiating more commercial drone flights per month than any other company in the market. Revenues will to grow 7x from 2015 to 2016 and they probably will do something like that again in 2017.

But the Dronebase founders have not been happy with their ability to generate work for as many pilots as they can. They know that there are many drone owners who would love to fly commercial missions if they could. So Dronebase launched the Pilot Program this week after beta testing it for the past few months. Here is how it works:

dronebase-pilot-program

Drone pilots can do “Pano Missions” on spec and “Client Missions” for a guaranteed payment.

Here’s how you do a Pano Mission:

pano-missions

And here is how you do a Client Mission:

client-missions

If you own a drone and want to pilot commercial missions, go to Dronebase and sign up. You can also download the Dronebase iOS app and browse and accept jobs on your iPhone. An Android app is under development and will be coming soon.

Happy flying!!!

#drones

The Little Search Engine That Could

Our portfolio company DuckDuckGo continues to impress me.

By offering one thing that other search engines don’t offer, a promise not to store your search history, DuckDuckGo has grown impressively, year after year, with no signs of that abating.

ddg

It may turn out that in an era of growing mistrust of companies and institutions, DuckDuckGo has a very attractive proposition for the market.

I’ve used DuckDuckGo as my default search engine for years now and though I will occasionally use Google for certain queries, DuckDuckGo gets it done for me the vast majority of the time.

If you want to change your default search engine to DuckDuckGo and see what it’s like to use a search engine that doesn’t track you, go to DuckDuckGo and click the “Install” button on the upper right.

ddg-install

#Web/Tech

Distraction and Mission

Many of the leaders of our portfolio companies struggled to get their teams focused last week. We heard from many of them asking questions like “If either of you have thoughts on leading a team through exogenous events, happy to take your guidance”

It may sound insensitive or crass to be asking how you get people focused on work when they are upset, dismayed, and devastated. I understand that people need time to come to terms with something that is so emotional for them and that employers have to be sensitive to that. I am all for that. Much of last week was spent  on that.

But I also believe that getting the team off of Facebook and Twitter and back into the code and shipping product is actually a healthy thing for everyone.

Many of USV’s portfolio companies are mission driven. That’s not our investment strategy per se, but it seems to be an output of our investment strategy. We have portfolio companies trying to democratize access to healthcare, education and financial services. We have portfolio companies trying to make it easier to be an artist, an entrepreneur, a freelancer, or an author. We have portfolio companies trying to make it safer to use the Internet without being spied on. I could go on and on.

And so, working in these companies and working to help these companies and the people they support succeed is important. And if you are upset with the world, then one of the most therapeutic things you can do is try to change the world to be a better place. If you work in a company that is mission driven and you connect with that mission, then I would encourage you to throw yourself at that work this coming week. I can assure you that it will help.

And if you don’t work in a company that is mission driven, or if you don’t connect with your company’s mission, then I would encourage you to quit and join a company that you are inspired to work for and then throw yourself at that work. Here is a list of those kinds of opportunities.

#management

Fun Friday: What Is Exciting These Days In Tech and Startup Land?

I figured I’d follow up a post taking a shot at the AVC community with one that should engage the AVC community, including me.

And what better to talk about than what excites us these days?

It is no secret to the regular readers that it is hard for me to get excited about the current state of tech and startup land. David said as much in his comment yesterday.

With the exception of blockchain stuff, which seems very early and not yet investable except for fools and the foolhardy (me), I am struggling to find things to get excited about in tech and startup land.

So, let’s all jump into the comments and talk about what excites us about tech and startups right now. Not yesterday, not last year, not five years ago, right now. And if its your startup you are excited about, that’s cool, but please don’t turn the comments into a pitch fest. That’s my life already 🙂

#entrepreneurship#VC & Technology