Posts from February 2017

The Future Of Labor

As I mentioned yesterday, I am moderating a panel this morning at NewCo Shift Forum on The Future Of Labor.

As I think about, there are three big megatrends impacting the future of labor/work.

The first has largely played itself out over the past thirty years and that is globalization and outsourcing. I believe we have seen most of the impact of that trend in the US as wages and the standard of living has risen dramatically around the world and has stagnated here in the US for the working class. We are not yet in balance with the rest of the developed/developing world, but we are getting close enough that it is a much harder decision now to move a job somewhere else.

The next two big megatrends are starting to happen and they will shape the next fifty years. They are the move to an on demand model for work and the automation of work.

And so, the two people that are joining me on stage this morning are people who can help us think about where all of this might be going.

Stephen DeWitt is the CEO of USV portfolio company Work Market. I wrote a bit about Work Market here a few months ago. Work Market’s software allows employers of all shapes and sizes to arrange the people they work with into labor clouds. These labor clouds include freelancers, contractors, and full time employees. When they need something done, they issue the work order to the labor cloud and someone picks up the work order and gets it done. If you think about many of the operational things companies do (provide customer service, install something, attend a marketing event, make a house call, etc), these labor clouds allow an employer to get the work done without thinking about the kind of relationship they have with the worker. This is the “on demand” model for work and I think we will see this model explode in the coming decades.

Maya Rockeymoore is the CEO of Global Policy Solutions, a think tank and advocacy organization that focuses on the needs of workers and their communities. She is an expert on the US Social Security System and has written extensively on it and other issues.

I talked to Maya last week in anticipation of this panel discussion and I wanted to get her take on what happens to all of the jobs we could lose to automation over the next few decades. She explained to that we may want to look at the safety net that we built with social security as a model. We will get into that in more detail this morning as that is an interesting idea to me.

I don’t think all the work opportunities will be gone in fifty years. But I do think the nature of work is changing quite dramatically in front of our very eyes. Some jobs will clearly be automated out of existence. We are already seeing that. And other jobs will go from being full time employment to on demand employment and that will require big adjustments from everyone, including policymakers.

I thought it was interesting in Henry Blodget’s talk at DLD, which I blogged this past weekend, that we have gained 30 hours a month in productivity over the past fifty years and that 28 hours of those gains have gone towards watching TV. We are going to gain even more hours in productivity over the next fifty years. And what we do with those hours will say a lot about who we are as people, what we value, and where we are headed as a society. It is very possible that jobs and work will matter less and other things will matter more, a concept my partner Albert has been considering in his book World After Capital.

We should be talking about these issues as a society instead of pretending that we are going to bring back all of the jobs lost to globalization and outsourcing over the past fifty years. Those jobs are more likely to be gone completely via automation than coming back to the US. So that’s what I plan to do with this panel today. It should be interesting.

Capitalism At A Crossroads

I am on a plane flying up to SF to attend a two day conference called NewCo Shift Forum.

The premise behind this conference, put together by my friend and tech conference impresario supreme John Battelle, is that capitalism is at a crossroads brought on by changing political winds across the globe, technological advancements, and a growing consolidation of power and wealth at the very top. The longer treatise on why this conversation needs to happen is here.

This is not your ordinary tech conference where we are all promoting how great tech is and how successful our companies are. I don’t know about you, but I am tired of those kinds of events. This is a conference that features more academics, policy people, authors, and analysts than founders and CEOs. There will be some of that too, but it’s a balanced discussion covering all sorts of important questions that will need to be answered as we move things forward.

I am participating in one panel (Tech Under Trump) and moderating another (The Future Of Labor). I am looking forward to both conversations.

I don’t know about the plans to record and/or stream the conference. I suspect it won’t be streamed but will be recorded. But I will find out and update this post or post a comment with that information.

Tucows

Reblogging from USV.com today:

Union Square Ventures has made a substantial investment in Tucows, a 23 year old company company that has been publicly traded for over 15 years. Since we have never before invested in a public company, that requires a bit of an explanation.

All of us at USV feel fortunate to have participated in the wave of innovation unleashed by the open Internet. That innovation is now threatened by consolidation at the application layer and the access layer. Watching football over the weekend and seeing every carrier advertise video and music services on national television that don’t count against your data cap punctuated, for me, the end of the era of permissionless innovation that gave rise to Twitter, Tumblr, Etsy, and Kickstarter. As Fred pointed out  when large companies can pay to play, start-ups ability to reach consumers has been seriously compromised.

We are investing in Tucows because we believe they have built a great business, but also because they have been a stalwart defender of the open Internet. We are excited to be working with them now because they are challenging the incumbent access providers and the conventional wisdom, by building modern fiber networks in local communities across the U.S.. They are doing this at a time when telephone and cable companies are exploiting their natural monopolies in these communities, underinvesting in their outdated networks, raising prices and using the excess profits to buy back their stock, and buy their way into global entertainment businesses, pleasing shareholders but doing nothing for the communities they serve.

Tucows is doing the exact opposite. They are using hard won profits from the competitive wholesale domain name business to invest in modern fiber networks in cities like Charlottesville VA, Holly Springs, NC, and Centennial, CO. They believe, as we do, that, a modern communications infrastructure is the most important investment any community can make to expedite the transition from a 20th century economy based on undifferentiated manufacturing to a 21st century economy based on highly specialized manufacturing and services.

While they are at it, Tucows is exploding the myth propagated by the cable and telephone companies that the only way to finance a fiber network is to return to the gatekeeper model of the cable industry where the network build is subsidized by fees extracted from content providers in exchange for access to consumers. Tucows is committed building open networks that offer unfiltered, unthrottled, and unfettered access to consumers.  Open networks preserve the defining feature of the open Internet, permissionless innovation. It is that feature that ensures applications layer services have the freedom to innovate. More importantly, without open access to the Internet, no community can protect the economic, political, or personal freedom of their citizens. And without those freedoms, communities will have little chance to successfully manage the transition to a modern 21st century economy. Individuals in these communities will need unfettered access to knowledge to retool their skills for the new opportunities. Gig workers will need to access multiple platforms to optimize the return on their labor. Specialized manufacturers will need to fit seamlessly into global supply chains. All of this will need to happen quickly if we are to minimize the economic dislocation these communities are already grappling with. None of this will happen, if access to the Internet is mediated by vertically integrated global conglomerates.

The cable and telephone companies would like us to believe the open Internet is threatened by over reaching government regulation. In fact, it is threatened by crony capitalism. Instead of investing in local communities, the incumbents deploy thousands of lobbyists to argue that communities should not be able to invest in their own future. We are thrilled to be working with Tucows, because instead of lobbying Washington, to prevent competition, they are actively investing in fiber networks, the critical 21st century community infrastructure, and while they are at it, proving that investing in community fiber networks is a great business.

The End Of The Level Playing Field

I am old enough to remember the gogo days of cable TV when entrepreneurs who wanted to launch a new cable channel would go, hat in hand and cap table in tow, to the big cable companies and beg to get distribution on their networks. 

When the Internet came along in the early 90s, we saw something completely different. Here was a level playing field where anyone could launch a business without permission from anyone. 

We had a great run over the last 25 years but I fear it’s coming to an end, brought on by the growing consolidation of market power in the big consumer facing tech companies like Google, Apple, Facebook, Amazon, etc, by the constricted distribution mechanisms on mobile devices, and by new leadership at the FCC that is going to tear down the notion that mobile carriers can’t play the same game cable companies played.

Here is a quote from the incoming FCC Chair:

“Today, the Wireless Telecommunications Bureau is closing its investigation into wireless carriers’ free-data offerings,” FCC Chairman Ajit Pai said in a statement. “These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace. Going forward, the Federal Communications Commission will not focus on denying Americans free data. Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings.”

It is certainly true that consumers, particularly low-income consumers, like getting free or subsidized data plans. There is no doubt about that. But when the subsidies are coming from the big tech companies, who can easily pay them, to buy competitive advantage over that nimble startup that is scaring them, well we know how that movie ends.

It is sad to see this era ending. It was a lot of fun and quite profitable too. I am hopeful that some new competitive vector, like the Internet, will come along and make all of this moot and we are spending a lot of our time looking for it. Because backing startups on a field tilted in the favor of the incumbents is not fun and not particularly profitable either.

Online Immigration and Travel Resources

I found this thread on Hacker News quite informative.

If you are seeking to travel to the US, particularly given all the uncertainty now, you might want to check these resources out:

Stack Exchange Expatriates

Stack Exchange Travel

Visa Journey

Candle For Love

The Arrived Mobile App

Anyone who works in the tech sector knows and cares about people here in the US on visas and other immigration related paperwork. It’s a anxiety filled time for these people and I feel for them. They need our help and our support and our empathy.

Generational Transition In VC Firms

Today, sometime around 5:30/6pm PT at the Upfront Summit, my partner Andy and I are going to talk about generational change in VC firms, in a talk moderated by Lindel Eakman, who has been our lead limited partner investor at USV since we started the firm in 2003.

The subject is timely with the news that the leadership of Sequoia, surely one of the greatest VC firms in the business, is transitioning a third time, from Jim Goetz to Roelof Botha and Alfred Lin.

I don’t want to steal our thunder for what is going to be a lively conversation with Lindel this afternoon, but I think this is a very important topic. When my partner Brad Burnham and I started USV in 2003, we told prospective investors, including Lindel, that we had no intention of building an institution. We said we just wanted to create a place we could do great work and when we were done, the firm would be done as well.

That was naive. Whether we like it or not, we did create an institution at USV and the key stakeholders in that institution are not the partners of USV, or the team at USV, or the limited partners at USV. The key stakeholders are the founders, leaders, and team members of the 80ish portfolio companies of USV. They have attached their companies to our brand and we owe it to them to sustain it and build it over time.

I didn’t understand that in 2003, but I do now. And so did Don Valentine in 1996 when he passed the baton to Mike and Doug. That is an act of courage and respect for what is special about a venture capital firm and I think it is something to emulate. Which we are doing at USV now and which Andy and I will talk more about later today.