Sick Day

I woke up sick this morning and could not fly to Toronto where I was planning to do a session at Collision with Matt Glotzbach, CEO of our portfolio company Quizlet.

I sent some emails to let people know I could not make it and went back to bed and slept for another few hours and I feel a bit better.

I do this to myself a few times a year when life gets hectic. The good news is that Memorial Day Weekend is upon us and that means some much needed R&R.

Speaking of Matt Glotzbach, here is a video that Matt and Quizlet’s founder Andrew Sutherland did three years ago to introduce Matt to the Quizlet community. It does a great job of showcasing Matt’s personality and strengths (and Andrew’s too).

Sofar

Andy wrote about our investment in Sofar yesterday on the USV blog.

That is our practice. We publish our investment rationale on our blog every time we make an investment. It creates a permanent record of why we made the investment. It is interesting to go back and read them five or ten years later, regardless of whether they worked out or not.

Sofar is a company we have been following for seven years. We have been intrigued by this global community that has been building around the themes of meeting others in the real world, a shared love of music, and intimate spaces (often personal homes).

The Sofar community is large and sprawling.

The scale of the Sofar community, to us, is an example of “unspoken” value that Sofar has created for over one million people in 430 cities across 65 countries including London, Paris, New York, Sydney, Bangalore, Buenos Aires, Cape Town, and Seoul. In fact, more people will attend a Sofar in 2019 than will attend Bonnaroo, Glastonbury, and Coachella combined (also, 13 Sofar artists are playing at Coachella this year).

https://www.usv.com/blog/sofar

I just took a look at Sofar to see what events are happening in NYC in the coming weeks:

You can see the Sofars in the coming weeks near you by going here.

Sofar reminds me of our investment in Meetup, which we made twelve years ago. As Scott Heiferman, the founder of Meetup likes to say “use the internet to get off the internet.”

Sofar adds the element of music, performance, and intimate spaces. Andy describes all of this as the “Sofar container”:

Each Sofar has a few known constraints that make the show feel familiar: it will be in a unique space where you wouldn’t expect to see live music, an MC with a loose script will encourage you to get to know your neighbors, three performers will each play three to four songs, the address will only be revealed a day before the show, and the show will end early, by around 10:30 pm. This is what we call “the Sofar container”. The natural outcomes of the container are less tangible; for example, you will hear great music, you will feel safe and comfortable, you might make a new friend or you can attend solo, you won’t be judged. By bringing people together and creating spaces where music matters, Sofar broadens access to well-being – a core part of our investment thesis.
The beauty of creating a simple container, with known constraints, is that what goes into the container is dynamic. You don’t know who the artists are, who you’ll be sitting next to or what the venue will be like, but we believe that the essence of Sofar lies in trusting the container.

https://www.usv.com/blog/sofar

At USV, we are drawn to bottom-up networks instead of top-down centralized services; Etsy not Amazon, SoundCloud not Spotify, Wattpad not Kindle, Crypto not Fiat, and now Sofar not LiveNation.

I am excited that we finally found our way into the inside of this company/movement/experience. It feels so USV to me.

Citibike

In a time when there are so many options for getting around the urban landscape (walking, subway, e-bikes, e-scooters, Yellow Cabs, Uber, Lyft, Juno etc), you would think that the six year old Citibike service in NYC would be “old hat.”

But it remains one of my favorite things about living in NYC. The addition of bike lanes all over lower Manhattan (where I live and work) has made biking a lot safer and pedestrians are increasingly aware of the bike paths and the bikers on them.

The kiosk system, vs the dockless system that many of the newer offrrings use, has some challenges around trying to dock in a full kiosk at the end of your ride, but it is much preferable for the tidy/neat nature of the bikes.

Citibikes are particularly great for the one to two mile journey that would take 20-30mins to walk but 5-10 mins to bike.

I did that this morning from this kiosk in the west village to the Union Square neighborhood.

It took me 7 minutes and I was early enough to my meeting that I had time to get a cup of coffee before the meeting.

I honestly don’t think there is a better way to get around NYC for short distances on a lovely spring day. It is one of the things that makes living in NYC so enjoyable.

Custody, Trading, Staking

In our talk at Consensus last week, we talked about security in crypto land.

There are a few highly trusted custody services in crypto, including the popular consumer and institutional custody services offered by our portfolio company Coinbase.

These companies have invested tens of millions, sometimes more, in building highly secure storage systems to keep their customer’s crypto assets secure.

There are also exchanges all over the world that people can use to trade crypto assets. While they may be great places to trade, they are often not great places to custody your assets.

And then there is “staking” which is a term I am using for all sorts of validation services that crypto holders are increasingly doing to secure networks that use proof of stake and other approaches to consensus. There are and will be more staking services that crypto holders can use to participate in these services and get paid for doing that.

Again, these staking services many not be great places to custody your assets.

What is emerging are different services that specialize in different parts of the crypto economy.

There will be best of breed offerings in each sector and there will be a few, like Coinbase, that will offer leading services across all of these sectors.

The nice thing about crypto is it is programmable money. It should be possible, and I think it will be possible, to use one service for custody, another for trading, and a third for staking.

But it has to start with custody. If you own crypto assets, you need to secure them. And that is often not at the place you trade them.

Cheeze Wizards

Our portfolio company Dapper Labs, the maker of the popular crypto-collectible game CryptoKitties, is back with their second game, called Cheeze Wizards, also built on the Ethereum blockchain.

Cheeze Wizards is in “pre-sale” mode right now. You can “summon” your wizard in anticipation of the game which will be played this summer.

I summoned a wizard this morning from the fire wizards region. I spent a bit more than half an ETH on it and I am ready to rumble.

Dapper built this game for crypto enthusiasts who will be drawn by the large prize pool (322.6 ETH right now and growing) and that is why some of the most powerful wizards (like mine) are quite expensive. That said, you can summon a “neutral” wizard for 0.07 ETH right now which is less than $20. The focus on a smaller number of higher value players fits with where Ethereum is right now in its scaling efforts.

The best way to play Cheeze Wizards is to add the Dapper wallet to your browser. You can do that here. Then send some ETH to it from your Coinbase account (or any other place you hold crypto). Then go to Cheeze Wizards, you will log in with your Dapper wallet, and you are ready to summon your wizard.

The folks at Dapper wrote a great blog post explaining why they made Cheeze Wizards, how it works, and what they hope will happen with it. That post also reveals a lot about where Dapper is heading with CryptoKitties, Cheeze Wizards, and all of the other games they have under development right now.

Video Of The Week: Consensus 2019

This past Wednesday, I appeared on stage at Consensus 2019 with Paul Vigna of the Wall Street Journal and Brian Armstrong, CEO of our portfolio company Coinbase.

The topic we were supposed to discuss was why crypto has been so full of bubbles and crashes. We did talk about that but we also talked about a lot more. The discussion is about a half hour.

Public Speaking

I don’t do as much public speaking as I used to. Fortunately my colleagues at USV have picked up the slack and we are still out there telling the world what we believe in and why. I think that is critical to building the brand of an investment business.

Because it is Blockchain Week in NYC, I have done a number of public speaking events this week and have two more today. I also did something up at Columbia University last week for a friend and do a fair number of public appearances for the K12 CS Education work I do.

All of that has had me on a stage a lot in the last week and reminded me that there is an art to public speaking. I have also witnessed a lot of people doing it poorly this past week.

I have three main rules that I try to live by:

1/ Be brief. It is possible to make a point in less than a minute. But many take five or ten minutes to do it. In a world where people take their phones out the minute they are bored, you simply can’t take a long time to make a point.

2/ Be bold. Stake out positions that will stimulate debate and get people talking. I am not suggesting that you should take a position you don’t believe in. But I do think it is important to go out on a limb from time to time.

3/ Have fun. Show your personality. Smile. Laugh. Enjoy it. The audience will pick up on that and it will make it more fun for everyone.

I have also taken to doing a lot of interviewing lately. When I get asked to make an appearance, I often ask if I can do the interview instead of being interviewed. I usually turn those into public conversations and that is a lot of fun and, I think, works for the audience too.

I am interviewing Olaf Carlson-Wee, the founder of the Polychain token fund, today at The Token Summit. I plan to have fun and will work to keep it snappy and provocative.

Crypto Spring?

On Monday, I wrote:

With the crypto winter seemingly coming to an end and spring on the horizon,

So why do I think winter is behind us and spring is on the horizon?

Well you can see in the chart of the entire crypto market that there has been a meaningful move off of the bottom in the last five months.

The entire crypto market hit the low point in mid December at roughly $100bn and has rallied over the winter and spring to almost $250bn. While there is no guarantee that we won’t go back and test those lows, I do think we hit rock bottom in December.

It is also worth noting that the daily trading volumes are now higher (almost double) than they were at the height of the crypto bubble in January 2018. Investors are back in the market and pushing it higher.

And this is not just about Bitcoin. Here is the total market minus Bitcoin:

It is a very similar chart with very similar volume activity.

The most exciting thing to me is what you don’t see in these charts and that is the fact that many projects have been quietly building out their systems over the last 18 months and we will start to see new public blockchains and protocols go live over the next 6-12 months that will show the power of new ideas and new technologies that are coming to market.

I love spring.

Exploring An Investment Thesis

I remember back in the 2005/2006/2007 time frame when blogging and social media was coming of age, I used this blog as a petri dish to explore ideas like influencer marketing, social advertising, and virality that have become critical parts of a growth marketer’s playbook a decade later.

That “hacking around in social media” taught me so much that I could not have learned reading or talking to people. Of course, I did those things too, but getting my hands dirty with the technology and ideas helped me understand them and see the power of them and invest in them before others did.

So it is always great to see when other investors are doing the same thing.

Dani, one of our awesome analysts at USV, has been exploring the area of “free learning.” She has been writing about it. And she has been hacking around in it too.

Yesterday she launched a free learning game you play via text message.

She built it on “twilio/node/express/firebase.” I know she also built a version on the Kin Testnet to see how cryptocurrency rewards could impact how students stick with a game like this.

I just played a couple rounds of Numberline on my phone and thankfully I got the first two correct. I am quitting while I am ahead. If there was some Kin involved though…….