Posts from July 2023

I’ve written about this topic a bunch over the years. It is something I’ve been interested in for quite a while.

Our homes are filled with big hunks of plastic hanging on the wall that are off most of the time. They look like this:

Now that’s a lovely scene. Some nice plants. A cool wood cabinet. A nice lamp. A few books. And a piece of black plastic.

Here’s what our family room looks like when we are not watching the TV:

That’s a Sony TV with nothing special in it. I have done some work to make the art run on it, but that work is getting easier and easier. I’ve been playing around with this stuff for almost a decade and I feel like we are about to get to a place where everyone can do this.

Here’s what is involved.

1/ It is now simple to collect digital art that you can show on your TV. Here is the NFT that is showing on that photo. I minted it five days ago for about $90. It is part of a series of NFTs, but mine is unique. There is not another one that looks exactly like this one. There are hundreds of places you can mint NFTs these days and new NFT mints are offered every day, possibly every hour.

2/ It is relatively easy to write software to show NFTs on a TV. My partner Nick did that for the TVs at USV last year. We run that software on an inexpensive device called a Yodeck. I am currently using software written by the Bright Moments DAO for their NFT events and that runs on a Mac Mini.

3/ I expect a number of companies and projects will write consumer-grade software to do this over the next few years and I also expect the big consumer electronics companies to start shipping smart TVs with this kind of software in them.

Here is how I see this market working.

1/ You buy a smart TV with an NFT app in it.

2/ You connect it to the address that holds your NFTs. For me that is fredwilson.eth. You can see my collection here.

3/ You create playlists like you create playlists on your favorite music app.

4/ You tell the TV to play those playlists when the TV is off.

All of the pieces are in place for this to happen. We just need the software to be written and the consumer electronics companies to adopt it. That feels inevitable to me.

The New York Times had a piece yesterday suggesting that tech will no longer be a growth engine for NYC and the surrounding metro area as it has been for the last twenty years. I am not going to link to the piece because it is behind a paywall but if you want to read it, you can google “Tech Firms Once Powered New York’s Economy. Now They’re Scaling Back.” I talked to one of the reporters who worked on the piece and told him that their angle was incorrect. But when a publication has their mind made up on the angle, there isn’t much you can do to convince them otherwise.

If you take a real estate angle, which is how the New York Times approached the story, it is true that technology companies, large and small, are cutting back on their space needs. But that is more a reflection of the era of remote/hybrid workforces than anything else.

Here is what I told the reporter working on the story:

1/ Office leases to tech companies are down. The tech sector has embraced remote and hybrid workforces and their office space needs reflect that.

2/ Rank and file tech workers in NYC are roughly flat as many workers have left the NYC metro area but just as many have come here from other locations.

3/ Top talent in tech has massively increased in NYC since the pandemic as people with in-demand skills can now work anywhere and don’t have to be in the Bay Area anymore. There are significantly more USV portfolio company leaders in NYC today than there were before the pandemic.

I saw a headline the other day that said that more than half of the top 50 AI companies are in the Bay Area and another 10% are in NYC and nowhere else has a significant number of them. So in many ways, not much has changed with respect to the centers of gravity of the technology sectors.

Technology is the growth sector of this century and new sectors like AI, renewable energy, web3, etc will power the economies of many regions around the world. NYC will be a significant beneficiary of this, as it has been for the last twenty years.

The idea that the tech sector will not be a growth engine for NYC anymore is laughable. But that won’t stop people from suggesting otherwise.

The venture capital sector has been in a sustained downturn for almost eighteen months. How does this downturn end? Well, it may have already ended, but let’s see about that. We will know for sure in a few quarters.

The NASDAQ peaked at roughly 16,000 in November 2021. By June 2022, it was down 33%. It stayed down for all of 2022 and ended the year at roughly 10,500.

But this year the NASDAQ is up almost 40%.

What is driving this? If I had to pick one thing, I would say inflation and interest rates. Yeah, those are two things but they are tied together in times like this. As I laid out in the prior versions of How This Ends (here and here), I believe post-pandemic inflation forced the Fed to raise rates aggressively, blowing a huge hole in the asset bubble that built up during the pandemic.

Last week we got some great news. Inflation is way down in the US. That means rates may have peaked and will stabilize or possibly come down. I don’t know if the Fed makes any more moves or not. But I am not sure that really matters. What matters most to markets is expectations and I think inflation and interest rate expectations have settled down.

Private capital markets, like venture capital, lag public markets by a few quarters. That is because it takes time for private market investors to react to the public markets. The NASDAQ peaked in Nov 2021, but VC markets did not really start slowing down until the second quarter of 2022.

Now that the NASDAQ has posted a couple of strong quarters, I would expect venture capital to respond. But it won’t happen overnight. We are in the summer doldrums. It takes time for VCs to raise new funds. And deals take months to come together.

So my guess is we are mostly through this downturn. We will know for sure in a couple of quarters.

I spent a good part of my childhood at West Point, the US Military Academy. I got an email yesterday with photos of the flooding at West Point.

My dad and brother used to work in that grey stone building called Mahan Hall.

And the same storms that did this to West Point did worse to many parts of New England, particularly Vermont.

USV’s climate thesis is to invest in companies and projects that provide mitigation for or adaptation to the climate crisis. Adaptation means accepting that we’ve made the climate worse and adapting to it.

Flooding is a great example of that. As the earth warms, storms are capable of carrying a lot more water and dumping it quickly. West Point took ten inches of rain in a few hours.

USV has made investments in two companies working on flood adaptation; Floodmapp and an unannounced investment in a company helping communities become flood resilient. Flooding will be more common and we are going to need better tools to mitigate and manage it.

Along those lines, NYC’s Partnership Fund recently announced a new accelerator program focused on water. Their partner on this accelerator is the NYC Department of Environmental Protection (DEP) which manages NYC’s water and wastewater treatment operations.

This accelerator is called the Environmental Tech Lab and they are looking for early and growth-stage companies that have products that could be used by the NYC Department of Environmental Protection.

If you are building such a company and want to apply, you can do that here.

Flood and water management will be critical in adapting to the climate crisis and, unfortunately, is going to be a big business.

Like tens of millions of others, I downloaded Threads onto my phone yesterday and signed up.

The thing that Twitter has been missing since it killed off its ecosystem over a decade ago is competition. And as we all know, lack of competition is a very bad thing. In governments and in products.

Competition keeps you honest. Competition makes you hustle. Competition forces you to innovate. Competition makes you better.

So I am thrilled to see some real competition emerge for Twitter.

I am also excited to see a scaled social media platform embrace an open protocol. In the case of Threads, that protocol is Activity Pub.

As far as I can tell, Threads does not yet support ActivityPub but has committed to doing so.

I have not enjoyed using any social media apps built on the ActivityPub protocol, most notably Mastodon, but I am not sure if that is the fault of the protocol or Mastodon’s implementation. Hopefully, we will see a better implementation with Threads.

But more importantly, protocols that are widely used bring lots of developers to them and those developers bring lots of different ideas and products.

So to me, Threads is about two really important things:

1/ Competition for Twitter. Long overdue and badly needed.

2/ The emergence of a widely supported social media protocol. Which should produce a vibrant and interoperable social media ecosystem.

I’ve got some questions in my mind about how all of this will work.

What will identity look like in this “vibrant and interoperable social media ecosystem?” It can’t be and hopefully won’t be my Instagram handle. Ideally, it would look something like ENS where each and every one of us will own and control our own identity/handle, like we can own and control a domain name.

Will there be one protocol for all of social media (short form text, long form text, audio, video, etc)? Will Instagram support ActivityPub too, for example?

What role will web3 play in all of this or will web3 social emerge on a different dimension entirely?

The ability to even ask those questions and ponder the answers is a gift to me and to the world. And so, therefore, is Threads.