Posts from October 2018

I wrote about something called TxTenna back in May. It is a way to move Bitcoin from one wallet to another without needing to be connected to the Internet.

Well TxTenna is now live and if you want to see it in action you can try it out by following the instructions here.

And here is a blog post by Richard Myers, the engineer at GoTenna (a USV portfolio company) who managed the TxTenna project in which he explains how it works and why they built it.

And for good measure, here are a few more links:

Play Store link: https://play.google.com/store/apps/details?id=com.samourai.txtenna … 

Github link: https://github.com/MuleTools/txTenna …

Certainly this is not a mainstream use case, but it does showcase the resiliency of decentralized systems and that is pretty neat.

Google had its big event yesterday and announced two new Pixel phones, the Pixel 3 and the Pixel 3XL. I’ve been using Google phones for quite a while now, first the Nexus phones and now the Pixel phones. I love my Pixel phone but I will be upgrading shortly, probably to the larger form factor 3XL.

But even more exciting to me is the Pixel Slate. I’ve been using a Pixelbook at the USV office for the last month and I like it quite a bit but it badly needs a biometric login to the device. The Slate apparently comes with a fingerprint unlock. 

So I will probably swap out my Pixelbook for the Pixel Slate and see how that goes.

I will let you know once I’ve got the new devices and have been using them for a bit.

There has been a movement growing in K12 public education around the US over the last decade to get computer science into the K12 curriculum and into all schools and in front of all students. The name this movement has taken on is CSforAll and this week in Detroit Michigan, educators from all around the country are meeting to move the CSforAll effort forward. This meeting is called the CSforAll Summit.

Today is the big day and there will be a livestream of the main stage from 8:45am ET to 7pm ET. This blog post explains most of what will go on today.

I am particularly excited that Luis von Ahn, founder of our portfolio company Duolingo, will speak at the Summit about human computation, invention and entrepreneurship, and why all students need to learn computing. He goes on at 1:30pm ET.

When educators sign up to participate in the CSforAll Summit, they are asked to make a commitment to expand CS education in their schools and this year those commitments have increased as follows:

– 47mm CS learning opportunities for K-12 Students (nearly a 400 percent increase from 12mm in 2017)
– 246,000 CS educator opportunities (compared to 77,416 in 2017)

These are big numbers, both in absolute numbers and in the rate of growth. It speaks to how seriously the public education sector is taking computer science and related tech skills and the understanding that they are becoming required skills for work and adult life. I am very pleased so see this happening.

A friend of mine told me last weekend that he thinks the two biggest issues in NYC right now are the rise of homelessness and the proliferation of vacant retail spaces. One is about not having a space to live and the other is about a glut of vacant space. Interesting dichotomy.

I was walking home from the gym this morning and passed this sign on a vibrant shopping street in our neighborhood.

It got me thinking about what this glut of vacant real estate is all about. Is it the result of so much commerce moving online that retailers can’t make a profit selling out of a store anymore? Is it the result of rents being too high and when landlords bring them down, we will see the spaces fill up again? Is it a combination of both? And can technology help address this problem?

We are seeing an avalanche of startups that are taking the fractional ownership idea popularized by Airbnb and WeWork and applying it to new and different areas. For example, popup stores instead of long term leases. 

We are also seeing retailers using technology to attract shoppers into their stores and supplement the the inventory they have on hand.

I do believe that in person shopping has a place in the online era, but I also believe that too many retailers are stuck in an old model that is not working anymore. The Gotham Gal, who started her career in retail, has been blogging about this topic for over a decade and saw this change coming long before the stores started going vacant.

My guess is that we are in the early innings of a long and painful restructuring of retail, ground floor real estate, and the shopping experience more broadly. And I think we will be seeing more signs like the one I photographed this morning in the coming years.

But that doesn’t mean there isn’t opportunity in the midst of this painful process. In fact, it means there is a lot. And those entrepreneurs that seek to help the shopper, the retailer, and the landlord will have the greatest opportunity to reshape this sector and build large and lasting businesses.

When someone asks you how much of a company you own, the answer could be two very different numbers. You might own 10,000 shares and there might be 1mm shares issued and outstanding. That would suggest you own 1% of the company. And that would be correct, as of right now.

What is often not calculated in these sorts of numbers is future dilution, particularly dilution that is visible if you look closely. The most common form of future dilution that is visible are outstanding options and warrants to issue stock that have not been exercised.

Let’s say this fictional company that has 1mm shares outstanding also has a 20% unissued option pool (so 200,000 options in it), and lenders have warrants to purchase 50,000 shares.

That would be another 250,000 shares that are not issued, but will be at some point, making the “fully diluted shares outstanding” equal to 1.25mm, and your 10,000 shares now represent 0.8% of the company. That is your “fully diluted ownership.”

Nowhere is this issue more important than the crypto token sector. There are many crypto tokens trading in the market that have a relatively small amount of their total supply outstanding and the market value numbers on many of the sites that track this market are a bit misleading.

For this reason, I like the concept of “year 2050 market cap” that the site OnChainFx reports.

Take Numeraire, a token issued by our portfolio company Numerai, and a token that USV owns some of (that is a disclosure if anyone is confused).

Coinmarketcap reports Numeraire’s market cap at roughly $7mm suggesting that you could purchase 1% of Numeraire for $70k.

But by 2050, there will be a lot more Numeraire out there and as OnChainFX reports, the 2050 Market Cap is more like $110mm. It would take more like $1mm to purchase 1% of Numeraire’s total supply.

This concept of a market cap that includes future dilution is called a “Fully Diluted Market Value” and it is something investors need to be focused on when thinking about value, upside, and dilution.

My partner Rebecca Kaden was on the Twenty Minute VC podcast last week.

Once you get past the 3:20 mins of audio ad readouts (I advise to fast forward through them), she talks about areas in e-commerce that are possibly outside of the Amazon kill zone, the opportunities to build new trusted brands in healthcare, education, and financial services, and why small early-stage venture capital firms are the best firms to work at.

I was typing emails on my new Pixelbook yesterday and as I started a new word, Gmail would finish the word and often suggest an entire phrase to come after the word. All I had to do is hit tab to accept the suggestion.

I’ve had a version of that on the Gmail app on my phone for a while. It looks like this:

But the type assistance functionality on my Pixelbook was much more useful. First it was in line and it suggested entire phrases, not just words.

I’m of two minds on this feature:

1/ It is super useful and once I get used to it, I should be able to construct messages much more rapidly.

2/ I am not sure I want Google reverting my communication style (and yours too) to the mean.

I suppose if Google was using just its understanding of my writing style and nobody else’s in its algorithms, then it is helping me be me. And I like that a lot more.

But if it helping me be you, well I’m not as excited about that.

2003 was a fertile year for both of us as I started blogging in late September and Joanne picked it up on her birthday a few weeks later.

I’m not the only one in this family who blogs every day. It’s incredibly hard to do that. Trust me, I know.

And she has more range.

From her post today:

These past 15 years have been my thoughts on investing, tech companies, the state of the union, recipes, raising kids, restaurants, theater, design, books, travel, art, women entrepreneurs, trends and pretty much everything that rattles around my head.

I don’t think that is a comprehensive list. She covers a lot more range than that. And she edits herself a lot less than me too.

I am most jealous that her blog birthday is her real birthday.

So happy birthday to the Gotham Gal.

I listened to this IBM podcast with Matt Glotzbach, CEO of our portfolio company Quizlet, this morning.

Matt explains that edtech, a long-standing term for the market for software and technology sold to the education market, is fundamentally different from the newer and exciting market for consumer learning.

We agree with Matt and our approach to investing in education, a core part of our thesis 3.0, is about delivering learning tools directly to the student and bypassing the traditional education system.

That does not mean that consumer learning is in opposition to the traditional education system, though.

We see students and teachers adopting tools like Quizlet, Duolingo, Codecademy and many others to improve learning outcomes in the classroom and at home.

But consumer learning starts with the learner and is focused on serving them as the customer, not institutions, districts, schools or other “enterprises.”

I think a learner-centric model will produce better learning outcomes than an enterprise-centric model and I also think these consumer learning companies will be better businesses too.