Posts from October 2018

I got an email from the CEO of one of our portfolio companies last week.

It asked a very basic question, but one that I don’t recall being asked before:

I need to know if any of your LPs include  ……….  entities/interests. 

The CEO asked his VCs because questions were coming up internally and he wanted to answer honestly and accurately.

I expect to get more emails like this in the coming weeks as the startup and venture community comes to grip with the flood of money from bad actors that has found its way into the startup/tech sector over the last decade.

“Bad actors” doesn’t simply mean money from rulers in the gulf who turn out to be cold blooded killers. It also means money from regions where dictators rule viciously and restrict freedom. It could also mean money from business interests which profit by poisoning us with opioid addiction or warm our planet with fossil fuels.

I don’t claim to have entirely clean hands in this regard. When we sold our Twitter stock before the IPO many years ago, it turned out the buyer was fronting for gulf interests. I found that out after the fact but that doesn’t absolve me of anything. I could have asked the questions before executing the sale.

That said, I believe the investors in the USV funds we have raised over the years are ones we can be proud of. They include large pension funds for public employees like teachers, firemen, police, and the like. They include the family offices of some of the great entrepreneurs of the 20th century. They include endowments of some of the best research and educational institutions in the US. And they include the founders and leaders of some of the best companies that USV has invested in over our 15 years. And we manage funds for a few charitable foundations too.

It is time for all of us in the startup and VC sector to do a deep dive on our investor base and ask the question that the CEO asked me. Who are our investors and can we be proud of them? And do we want to work for them?

Sadly, the answer for many will be no and it will not be easy to unwind those relationships.

Those who can be proud of their investor base stand to gain from this emerging situation as our portfolio companies can recruit and retain talent better and we can compete with others in the market for deals with one more arrow in our quiver.

Not all money is the same. The people that come with it and who are behind it matter. That has always been the case and remains the case and we are reminded of it from time to time. Like right now.

Fortune recently did a big profile on Brian Armstrong, founder and CEO of our portfolio company Coinbase and in concert with that, they made this video featuring Brian and Emilie Choi, who leads corp dev, M&A, and a few other strategic efforts at Coinbase.

It’s a short video, less than five mins, and does a nice job of explaining the company’s mission and strategy.

I backed this “new journalism” project today.

I like the idea that journalists are experimenting with new models and I like the idea of using crowdfunding to support that.

I heard about a cool program that helps NYC tech companies build more diverse teams. It is called Winternships.

The program is run by a group called WiTNY (Women in Tech and Entrepreneurship in NY) which is a three year-old collaboration between Cornell Tech and CUNY to drive more female students into tech majors or minors, and into the NYC tech ecosystem.

It works like this:

A Winternship is a paid, three-week internship experience during the January academic recess for freshman and sophomore women in tech. Participating companies design an ‘immersion’ experience in their business – students sit in on meetings, meet executives, go on site visits — and they work together on a challenge project that they pitch on the last day. WiTNY identifies students based on a match between your needs and their skills. Their team will even help you craft the Wintern experience if you want.

Here are some stats on the program:

Last January, 46 companies raised their hand and welcomed 177 CUNY women into their companies. Amazingly, 54% of these young women were able to parlay that experience into a paid summer tech internship somewhere in the city.

And here is the demographic of the CUNY student body:

CUNY is among the largest and most diverse universities in the country, with 250,000 undergrads and approximately 85% students of color.

If your team is trying to figure out how to diversify your internship and entry level hires, or just want to open your doors to transform the lives of young New Yorkers, considering hiring a Wintern team this January. And if you’re a small startup or a non-profit, WiTNY will even pay the student stipends for you.

Sounds great, right? If you want to host a Winternship at your company this January, you can get started here.

Motion Photos is a feature available on Google’s Pixel Phones. It captures a bit of video as you are taking a photo.

I’ve always wondered how to share those photos with the motion in them, which you can’t do when you send them as jpeg files.

It turns out you can export them from your phone as gif files. For some reason, the Google Photos app on the web, which does allow you to see the Motion Photos on the web, does not support the export to gif feature.

So this is how you do it:

To convert your motion photo into a video or GIF, follow these steps:

Step 1: Open the Google Photos app on your device.

Step 2: Open the motion photo that you want to share. Then tap the three-dot icon at the top-right corner. From the menu, select Export.

Step 3: You will get three options: Video, GIF, and Still photo. Choose the one that you like from the first two to initiate the conversion process.

Step 4: Once the motion photo conversion completes, you will get a notification regarding the same. You can find the converted media in the same folder. Tap on it to open it and hit the share button to share it.

I took this Motion Photo below at a really cool music/art exhibition at the 21_21 Design Sight museum in Tokyo last week. After doing all of those steps, I can share it with all of you here.

The last time we were in Japan, six years ago, using Google Maps was pretty frustrating. We didn’t understand the Japanese language and addresses made no sense to us. We got lost multiple times a day and often had to find a person on the street who spoke english to help us out.

It is a pretty stark difference this trip. Google Maps seems to understand much of what it did not the last time around. The directions are great and we have yet to get lost.

Last night, I directed a cab driver in Kyoto who did not speak english using Google Maps on my phone and pointing right or left or straight each time we got to an intersection. We got to dinner on time and everyone, including our cab driver, was relieved.

I think this is a great example of the power of machine learning and other technologies that software makers are using to make their apps smarter and smarter. And that leads to better user experiences and delivers more value.

Much of this happens behind the scenes and is never announced as a new feature. The software just works better. And we come to expect this of our software and we take it for granted.

But it is pretty magical when you have the opportunity, like we are having in Japan with Google Maps, to compare an app to its younger version and see how much it has improved. You can see the software getting smarter over time and that’s kind of amazing.

There is a debate going on about the impact of Facebook, Google, and Amazon’s growing dominance on the consumer internet on the supply of venture capital to entrepreneurs.

Facebook funded this report that was published back in July and concluded that “big tech” was not impacting the supply of venture capital to entrepreneurs.

Ian Hathaway, a researcher who studies venture capital formation, recently published this blog post that challenges that assertion with some data obtained from PitchBook.

I have skimmed the Facebook funded report and read the Hathaway blog post and come away believing, as Hathaway himself does, that we don’t really know because the analyses done to date are not conclusive.

But as a market participant, I can certainly say that we shy away from funding startups that are going up directly against the large tech incumbents.

But we also are attracted to startups that are competing against the big incumbents with a fundamentally different model, like DuckDuckGo in search, or ShopShops in commerce.

So, anecdotally, based on our activity and other venture capital activity that I have observed, I would say that the big tech incumbents have most definitely shaped where venture capital is going and where it is not going. 

That does not mean it has decreased the overall supply of venture capital. It most certainly has not. 

And, I would venture, that big tech is increasingly vulnerable to a number of attack vectors, many of them self-induced, which should be attracting entrepreneurs to more directly go after the core franchises of big tech.

Whether those courageous entrepreneurs will attract the capital they need to launch those attacks is an open question. But I have a fundamental belief in capital markets to do the right thing over the long term and I also have a fundamental belief that entrepreneurs, software engineers, and new innovations will undo these increasingly dominant franchises in ways that regulators will never be able to.

We checked into a hotel today and next to the desk in our room was a block of USB ports to charge our phones with and a Bluetooth button. I pushed the button and my phone paired with the room. Now I can play music on the sound system in the room with my phone. 

There is nothing special about that really. We all do the same thing with our cars and headphones regularly now. But when it works as seamlessly as it did for me today, that is nice.

The truth is that Bluetooth is everywhere these days. And the pairing thing, which used to be such a hassle, seems to get easier and easier every day.

As I’ve written before, the power of non-proprietary protocols like Bluetooth is pretty impressive to see in action. The more they get adopted, the more they get used, and the more they get used, the more they get adopted. It’s one big virtuous adoption cycle and the beneficiary is us.

Nadia Boujarwah is the co-founder and CEO of our portfolio company Dia & Co. 

She dropped by the Gotham Gal’s offices last week and they recorded a conversation about starting an apparel business in the competitive online commerce sector.

Here it is: