Posts from January 2021

Longtime AVC regular Kevin Marshall launched a Kickstarter a week or so ago. He’s raising funds to support the launch of two playing card games he created called Fubnub and Bad, Bad, Turtle.

I’ve embedded the video below for web readers. Email readers can click this link and watch it.

While Bitcoin is the gold standard in crypto, Ethereum has been the innovator, bringing new ideas, particularly smart contracts, to the table. Smart contracts allow developers to easily build things on a blockchain and we have seen a proliferation of new things built on the Ethereum blockchain as a result.

But what if you could do all of that on Bitcoin?

Enter Stacks 2.0 which launches on its mainnet today. USV has been an investor and supporter of the Stacks team since they first got started about five years ago and are large holders of the Stacks token.

Stacks makes Bitcoin programmable, enabling decentralized apps and smart contracts that inherit all of Bitcoin’s powers.

Stacks 2.0 also includes the Clarity smart contract programming language which is a significant improvement on the Solidity language that is used for Ethereum smart contracts.

So if you are a crypto developer who likes to try new things, check out Stacks 2.0 on the mainnet. It goes live today.

Yesterday, I had a gap in the middle of the day. So the Gotham Gal and I took an hour-long walk with our dog Ollie. It cleared my head and when I got back to work, I was full of energy and clarity.

I’ve been working exclusively from home since the end of November 2019 when we left NYC to go to LA. It has been a stretch of incredible productivity for me.

I am not arguing against going back to the office. As I’ve said in many posts recently, I can’t wait to go back to the office. But I am sure that many of us have had the same experience that I have had working from home during the pandemic. It has its advantages.

And in that realization exists the possibility that we are on the cusp on a revolution in how many of us can find work life balance going forward.

My friend Tom wrote this post last week suggesting that a husband and wife can now work a total of 50 hours a week between them and have two full-time jobs and raise a family. This part sums up the idea pretty well:

Why do I think 25 hours/ week is the equivalent of a 50-hour week (counting commuting)?

Given a nine-to five schedule with an hour for lunch, the 40 hour work week was only 35 to begin with.

As an ex-CEO, I think that at least ten hours of each workweek go to socialization, surfing the internet, checking with the spouse or checking up on the children, chatting on smartphones etc. (Mary thinks only five).

Meetings and travel to meetings waste a huge amount of time and money. One reason that Zooming appears not to have reduced productivity is that many of the meetings weren’t productive to begin with.

Office space and often parking are expenses to the employer but they are not income to the worker. If office space and all its attendant costs can be drastically reduced, employers can afford to pay more dollars in salary for the same productivity.

Commuting expense including perhaps even the second car, daycare, clothing and dry-cleaning bills, and paid before and after school activities whose purpose is to supervise school age kids are all expenses which go away when parents can work from home. Even if the WFH employee has less gross taxable income, he or she will have more cash at the end of each month.

https://blog.tomevslin.com/2021/01/newnormal-the-50-hour-family-work-week.html

Even if Tom is off by a bit with his math, he makes a terrific point. Companies can ask for less of a family’s time, pay them more, and get the same amount of work done using the techniques we have perfected during the pandemic.

I realize that not all jobs lend themselves to this approach. But maybe more than you think. Take doctors. We used to have to go see doctors in their offices. Now with digital health services like those offered by our portfolio companies Brave and Nurx, the doctors are seeing the patients from their homes (or wherever they are).

Teaching is another occupation that presents a lot of opportunity to rethink time and location. Many teachers have been learning how to help their students master new things from their kitchen counters over the last year.

I want to say it again. I am not suggesting that we won’t be going to offices anymore. I am not saying doctors won’t have offices anymore. I am not saying teachers won’t be in classrooms anymore.

What I am saying is that we can and should be asking how much of our work time needs to be in person, face to face, and how much can be virtual. And I am certain that we will be asking that. In our year-end reviews at USV, we heard again and again from our team that they wanted to ask those questions. They should. Commuting and business travel are not the necessities they were last century.

And, naturally, this coming work-life balance revolution presents tremendous opportunities for new products, services, and companies. We have been seeing many of them crop up over the last year and have invested in a few of them.

From bad comes good. This pandemic and all of the things that have come with it has been awful. But I believe it will unleash all sorts of new behaviors and businesses that will be for the better. If you squint, you can see them coming.

Look at any successful person; Angela Merkel, LeBron James, Oprah Winfrey, Jeff Bezos, and you will see someone who has benefitted tremendously from one or more mentors in their life. Nobody gets somewhere on their own. Everyone has help.

I was reminded of this when I read this touching remembrance that my friend Brad Feld wrote about his mentor Len Fassler yesterday. I first met Brad a few years after Len bought Brad’s first company and a few years before Brad and Len went through hell with Interliant. You could see how much Brad was learning from Len, how much he loved Len, and how much Len loved him back. As mentor/mentee relationships go, this was one for the ages.

I had two mentors early in my career; Milton Pappas and Bliss McCrum. They hired me as an associate at their venture capital firm, Euclid Partners, when I was 25 years old and between years at Wharton where I was getting an MBA. I worked for them for ten years and learned pretty much everything I know about venture capital from them. Bliss passed away a few years ago. Milton is still with us thankfully.

Of course, I learned so much about business from them. But the thing about great mentors is that they don’t stop with business. When I told Milton that Joanne and I were getting married, he dropped what he was working on in that moment, called across the street to his high touch travel agent, and we walked over there and he got us going on a first-class honeymoon. That was such a strong move and we learned a lot about traveling in style from that trip.

Bliss taught me how to chart stocks (technical analysis). We had no use for charting in the VC business, but that didn’t matter to Bliss. He liked to do it and taught me to do it with him. I don’t use that skill, but whenever I see a technical stock chart, I think of Bliss.

The thing about mentors is you can’t really ask someone to mentor you. It kind of happens organically. Someone takes you under their wing. They see something in you and want to bring it out, develop it. That’s how the best mentor/mentee relationships happen. And they are so great.

I remember the feeling when Milton would ask me to join him for lunch at the University Club. We would walk over there, order lunch, and talk about VC, business, life, and more for a couple hours. I always found a way to say yes when Milton invited me to lunch.

So if you are early in your career, look for opportunities to connect with someone a few decades ahead of you to help you figure stuff out. It helps so much. I am so grateful for what Milton and Bliss taught me early in my career.

I heard the news last week that Twitter had permanently banned Trump and thought “oh my.”

Sure it is wonderful news that the lies, the hate, the awfulness that is the current President of the United States will no longer be available on Twitter (where I am still a shareholder) and no longer in the White House very soon.

But as a very wise person texted me Friday morning:

Do you think it is appropriate? Do you think it is problematic that they have this much power?

Yes, I think it is problematic that Twitter has this much power. Not only are they silencing Trump, they are taking away his tens of millions of followers, and they are prohibiting all of his followers from seeing his tweets.

We should be careful what we wish for. This is a slippery slope we are heading down.

It is long past time that we move away from centralized applications to protocols.

If Twitter was a protocol, Twitter the app could ban the President from using its application and could block his tweets from being available in its app. But Trump could use another Twitter protocol client and his followers could as well and all of that social graph would still be available to them.

That is the way the web works. That is the way email works. That is the way social media should work as well and it is high time we start moving there.

This should be a warning sign to everyone in DC; the Senators, the Representatives, the folks leaving the White House and the folks entering it. He who kills the king becomes the king.

It is time to force the big centralized apps to open up. It is time to force the mobile app stores to open up. The longer we wait the worse this will get.

Update: My partner Albert posted his thoughts on this topic last night and I agree with them. You can read them here.

As I alluded to in a post earlier this week, we have some new things going on at USV. Today my partner Albert talks about one of them on the USV blog.

Over the last few months, USV has raised a climate fund. Our thesis for this fund is:

The USV Climate Fund invests in companies and projects that provide mitigation for or adaptation to the climate crisis.

https://www.usv.com/writing/2021/01/usv-climate-fund/

We believe that the time is right to invest in companies seeking to mitigate the climate crisis by either reducing carbon emissions or drawing down carbon from the atmosphere. We also believe the time is right to invest in companies providing solutions for adapting to the climate crisis that is already underway and may not be able to be completely mitigated.

This is the third strategy we are executing at USV. Each one has a fund associated with it. We have our core early-stage fund that is investing in what we call Thesis 3.0. We now have our climate fund investing in our climate thesis articulated above. And we have our Opportunity Fund that invests in more mature companies across both theses. And we have one team of generalists that works together to invest all three of these funds.

I encourage all of you to go read Albert’s post which has a bit more information about what we plan to invest in around the climate thesis and how we intend to do it.

What the world witnessed yesterday was a temper tantrum by the President and his people who, two months after losing the election, still cannot accept the results and the loss.

These are sore losers. The kind that walk off the field quickly without looking you in the eye and shaking your hand and congratulating you. These are children who cannot control their tempers and want to wail and scream so everyone can hear how upset they are.

As sickening as yesterday’s tantrum and terror were, I am hopeful that the shame of seeing the halls of our democracy sullied will finally pull reasonable people away from this man and his followers.

A friend said to me that we finally hit rock bottom in the US yesterday. If that is true, and I think it may be, then we can start the recovery now. This country needs it badly.

Watching the election returns last night made me think about all of the math we are learning in the last year.

Now that our elections include different kinds of votes that have different demographics associated with them (mail-in votes, early votes, same-day votes), the absolute numbers move all around as the votes are being counted and reported.

The networks are doing a pretty good job of trying to explain all of this math to us while it is happening and it is a real teaching/learning moment.

The same is true of the Covid pandemic. We are living in the midst of a disease that can expand exponentially. And we can see how lockdowns and other things (vaccines?) can change the viral coefficient of the spread. That is another teaching/learning moment.

There is nothing like using real-world examples and experiences to explain things that are not easy to understand. If I was teaching math right now, I would be using these events to teach complicated math concepts to my students.

I am not a teacher but my dad was. I will end with a story about him that I got via email last week. His passing has generated a lot of this sort of thing and my family and I appreciate it very much.

I recall the first day of class in Vector Mechanics.  The bell rang to signal the beginning  of class and the section marcher called us to attention.  MAJ Wilson did not appear through the door on cue.  All heads looked toward  the door.  Suddenly an arrow (with a suction cup) shot through the door and hit the board at the other end of the room.  As it vibrated against the wall MAJ Wilson entered the room with bow in hand and announced,  “That gentlemen was a vector.” 

Apparently that toy arrow was from my brother and my toy chest. My dad took it work to use something real to explain something a bit hard to understand. And it worked.

So as we all go through our days explaining things to our kids and colleagues, it is good to remember to leverage real world examples we all know and understand. They really work.

The Secretary Of Treasury, in his last month in office, is giving us a textbook case of how not to regulate important technology innovation. The issue is “unhosted wallets” and how regulated exchanges and other “hosted wallets” interact with them.

Let’s start with why this is important. Our current financial systems are old, creaky, expensive, and do not serve enough people. According to a 2017 survey by the FDIC, 25 percent of U.S. households are unbanked or underbanked. That is close to 100mm people, mostly black and brown. This is a big deal. This is a piece of the structural inequity that exists in the US and around the world.

Technology can, will, and should change this. When a bank account can simply be a wallet on our phone or computer, it should be massively less expensive and much easier for anyone to have one. And when that wallet can connect to any other wallet or bank and send, receive, sell, buy, etc, as easily as a browser can connect to AVC.com, then you have the architecture for an open financial system that is several orders of magnitude less expensive and more available than what we currently have.

What I have just described is how blockchains and cryptocurrencies work today. You can download a cryptocurrency wallet onto your phone, you can send some Ethereum to it from your Coinbase account in the cloud (called a “hosted wallet” and/or “exchange”), and then you can send that Ethereum to anyone else using any other crypto wallet. All of this is built upon open protocols in the same way that the web was built on open protocols. It is completely and totally interoperable, like the web or email, unlike our current financial system.

The crypto sector is building a new financial system, that requires much fewer “middlemen” taking a piece of the transaction, that anyone can adopt and use by simply downloading some software onto their phone, and that is secured with state of the art technology.

But the Treasury Secretary and his advisors are concerned about bad actors using this new open global financial system to do bad things. That is a legitimate concern, but it turns out that only about 2% of transactions that go between regulated exchanges and hosted wallets and unhosted wallets are “illicit” according to Chainalysis.

So in late December, the Treasury Department issued a notice of proposed rulemaking seeking to make the rules around sending cryptocurrencies to unhosted wallets much more restrictive than cash.

The notice of proposed rulemaking is a long-standing approach to regulating new things. But this notice of rulemaking is not like any other. It was shortened to 15 days from the customary “at least 30 days and often much longer” and it was issued in late December making comments due yesterday. That means that comments were due over two holiday weeks in the midst of a global pandemic. And then the Treasury Department intends to wade through all of those comments and issue a rule before it leaves office in a couple of weeks.

That is madness and no way to regulate an issue at the very heart of a new open financial system that is poised to open access and massively reduce the cost of financial services for everyone.

One can only come to one conclusion about the Secretary’s intentions here and it is that this was done intentionally to stifle debate and discussion and jam bad regulation through on his way out of the door.

USV and many others in the tech sector, venture capital sector, and crypto sector have issued comment letters opposing this rulemaking. Our comment letter is here:

I hope the Secretary and his advisors come to their senses and realize that this is no way to regulate important new technology. This would be a terrible legacy to leave office with.