Posts from 2020

I’m not much for the shopping mania that happens on Black Friday and Cyber Monday, but I do like the idea of taking a day at this time of year to give back. Today is that day.

This year is a particularly hard year for so many and so giving back, if you can, is even more important. The Giving Tuesday website suggests things like offering help to your neighbors, supporting a virtual classroom, reaching out to the elderly, and many more ideas that don’t require a financial donation.

If you do want to make a financial gift, there are many places to go online, including our portfolio company GoFundMe.

For those of us who have even more to give, I strongly encourage creating a family foundation and making giving back something you institutionalize in your life. Many of us in tech, startups, and venture capital find ourselves with large stock positions with very low cost basis. One of the very best things one can do with highly appreciated stock is to donate it to a family foundation and use those funds to support causes that matter to you and your family. We were encouraged to do that over twenty years ago and we did it and it has been a source of great joy and discovery and learning for us.

So no matter what level of giving you are able to do today, I encourage you to do something. It will help others and it will also do some good for you too. We are in a very difficult moment and giving back is a great way to lighten your load just a little bit.

We learned last week that the US Treasury wants to regulate crypto wallets like bank accounts. On the surface, one can understand that temptation. If people store, send, receive, and sell crypto assets in crypto wallets, then surely they should be regulated like bank accounts.

Except that is only one use case for a crypto wallet. It happens to be the primary use of crypto wallets right now but it is not likely to be the primary use of crypto wallets in a decade.

Regulators need to think of crypto wallets like web browsers. They are software applications that open up access to the decentralized internet and over time they will reduce our reliance on applications like Facebook, Google, Amazon, etc. But only if they are allowed to exist without crushing regulation, like we treated the web broswer when it came out in the mid 90s.

Brian Armstrong, the founder and CEO of Coinbase, pointed this out in a series of tweets last week and these two are particularly good examples of ways that crypto wallets are used that are not like bank accounts:

These are just early use cases for crypto wallets that don’t resemble bank accounts. There will be many many more soon if we don’t strangle crypto wallets with suffocating regulation.

Crypto will eventually lead to a decentralized internet but the first industry it is decentralizing is finance. It reminds me of the web browser that started in media. The issue with decentralizing finance first is that regulators are tempted to regulate crypto like it is just finance and that could not be more wrong. And it will take everything the industry has to push back on this temptation.

I learned yesterday of the passing of Arnold Waldstein. Arnold was as regular a reader of this blog as there ever was or ever will be. His warmth is what I will remember most. He cared about people.

Arnold was a born and bred NYer who went to Silicon Valley and built a career in marketing. He was an early employee at a number of well-known tech companies. Sometime in the 2000s, he relocated back to NYC and found his way to this blog where he became a regular commenter on tech, NYC, and pretty much everything else.

I met Arnold a few times and found him to be a lovely human being, everything he was online and more.

Online relationships, like the one I (and many AVC readers) had with Arnold, are very real relationships. Though I did not know Arnold well in person, I knew him well. And I will miss him a lot.

I’ve been biking several times a week in NYC this fall and every mask I’ve worn has caused me problems with fogging my glasses and making it harder to breath. I’ve tried a bunch of different masks and nothing works great.

So when I saw this project to make something better for working out on Kickstarter, I backed it right away.

As years go, 2020 is not one that generates a lot of gratitude in my mind. Global pandemic, racial struggles, millions without jobs, local merchants closing up, a surreal election here in the US, and that is just what comes to mind in the time it takes me to write this.

And yet, I am hopeful and thankful as I sit here thinking about this Thanksgiving that is upon us. I see the light at the end of the tunnel with the pandemic some time next year, I see new leadership in the US that is long on empathy and short on drama, I see proof that science continues to be up to the challenge of solving huge problems for humanity, and I see a resilience in the human spirit on the streets of NYC.

We are going to need everything we can get from science and the human spirit because we are facing enormous challenges that will not end with the pandemic. Racial inequity, climate change, ongoing job losses (and gains) being driven by technological change, massive budget deficits in local governments. The list goes on and on.

I am an optimist in a business that requires it. I think we can and will rise to meet these challenges and I am thankful that I can play a small role in doing that.

I have New York State’s exposure alerting app on my phone and check it every day. It gives me great statistics about what is going on in my location. You can download it here for iOS and Android.

It will also notify me if anyone who is using the app and has been with me gets Covid. I have not gotten any alerts in the month or two since I have had it on my phone. That’s great news and I have been healthy and that is good too.

But there is an issue with the uptake of this app in NYS. The last numbers I have heard suggest that less than 10% of NYS residents have installed this app on their phones. That compares with closer to 20% and rising in some other states.

Part of the reason other states are doing better getting their residents to install an exposure alerting app is they are promoting both their own app (like the NYS app) and also the “native” exposure alerting that became available in iOS 13.7 and soon will be available in Android.

This “native” exposure alerting is called Exposure Notification Express and this Lifehacker piece explains how to turn it on in iOS.

I like having the full NYS app on my phone. But for those who would rather just flip a switch on their mobile phone, Express is the better option.

Because all of these apps and native operating system features run on top of Apple and Google’s Exposure Notification system (GAEN), all of these systems are interoperable with each other and you will be alerted if someone using any one of these services who you have been in contact with becomes infected.

Fighting this pandemic is hard. But we can make it a bit easier by doing a bunch of simple things, like wearing a mask, social distancing, getting tested regularly, and using an exposure alerting app or service.

I saw this tweet in my feed yesterday and read the New Yorker piece when I woke up this morning:

Here’s what I think. There is more truth to that article than anyone in the venture capital industry wants to admit.

The idea that capital alone can create a strong company is a flawed idea that the VC industry pursued with a lot of passion for most of the last decade. The flameout of WeWork and the tarnished stories around other “fundraising as a strategy” startups will hopefully put an end to that approach of building companies, but I won’t hold my breath until that happens.

It is true that we VCs enable the bad behaviors outlined in that piece and we must look a little more carefully at ourselves in the mirror in the morning and, as the Gotham Gal likes to tell me, “get over ourselves.” I won’t hold my breath until that happens either.

All of that said, the vast majority of VC-backed companies are not WeWork. The vast majority of VC-backed companies are innovative, led by good people, and are creating value the old fashioned way, by supplying their customers with high quality products and services. We should not let a few bad apples spoil the whole bunch.

Cautionary tales like WeWork and the others outlined by Charles Duhigg are healthy. But they are not the entire story, thankfully.

There are many ways to invest successfully. Public stocks, bonds, private equity, real estate, venture capital, etc. And within each category, there are so many different investment opportunities.

In public stocks, there are something like 5,000 listed stocks in the US. In venture capital, there were something like 30,000 companies that raised venture capital in 2019.

How do you make sense out of all of that opportunity?

I’ve always been a fan of knowing what you are looking for and ignoring everything else. We call that thesis based investing at USV, but it is actually more than that.

We can say that we are looking to back trusted brands that increase access to capital, wellness, and knowledge, and we do. But we do more than that. In each of those sectors, we go deeper and identify specific areas within them that we want to target. We call those “deep dives.” We identify areas we want to focus on and areas we don’t want to focus on.

All of this is a relentless effort to figure out what we are looking for and then go out and find it. It is not a static thing. It is a dynamic thing. A pandemic comes along and rocks our world. Time to revisit the thesis and the deep dives. When the pandemic ends, and it will, we will factor that into our thinking too.

In a world with so much opportunity, it pays to ignore the vast majority of it and focus on a tiny bit of it. That may seem counterintuitive, but I am certain that it is the right thing to do.

I was on a zoom board meeting in early July and one of the board members started whipping out cards instead of interrupting. I captured the moment because I thought it was awesome.

Since then, I have wanted my own set of zoom meeting cards, but never took the initiative to make them.

So when I saw this Kickstarter project, I backed it immediately and went for the reward (which I rarely do) of the complete set of cards.

Email readers should click on this link and watch the video. I think you will want to get some cards too.