NYC Is Savills’ Top Tech City

Savills World Research, a global property agent, has been ranking the world’s top tech cities based on a bunch of criteria for years. In this year’s rankings, NYC tops SF to become the number one tech city in the world.

This is just one survey and I am certainly not going to assert that NYC has surpassed the bay area in terms of the best place to start a tech company.

But the bay area is absolutely struggling with some challenges. Labor and real estate costs have skyrocketed in the last decade. And from what we are seeing it is easier to convince someone to leave the bay area and move to LA or NYC than it has been in the past. The bay area is not an easy place to live and work anymore.

Truth be told, NYC has some of those same issues, but it has the benefit of five boroughs, a mass transit system that even with all of its problems moves 5.5mm riders a day, and a vibrant business community that is diverse and talented.

Another truth is that any of those thirty cities would be a fine place to start a company. Tech has gone global and so has tech talent. And investors are eager to fund innovative tech companies in many places around the globe.

USV has portfolio companies in about a dozen of those top thirty cities and, while we limit our investments to North America and Western Europe, we certainly hope to increase that number in the coming years.

But regardless of all of that, I am proud of what NYC has been able to accomplish over the last twenty-five years. In the mid 90s, I doubt NYC would have been a top ten city on this list. And now it is number one. Well done Gotham.

SoundCloud Premier Distribution

Our portfolio company SoundCloud launched an important new feature today. Distribution.

There are plenty of services a musician can use to get their music onto the major streaming music services. There has been CDBaby, TuneCore, DistroKid, and many more. So why do musicians need another option?

Because if you grow up on SoundCloud, starting in your bedroom or parent’s basement, and you have all your music there, it is nice to be able to send some of it, or all of it, to Apple Music, Amazon Music, YouTube Music, Spotify, Tencent, and many more.

This service is free if you have a SoundCloud Pro or Pro Unlimited account.

Here’s the value proposition (from SoundCloud’s blog post):

With the first and only distribution tool built directly into a streaming platform, you can think of your SoundCloud account as mission control for your music: the only place where you can share tracks instantly, connect with your fans, manage your content, and get paid for your plays – everywhere. Simply choose from your uploaded tracks and albums and distribute to all major music services while keeping 100% of your rights and payouts (we take nothing) and getting streamlined payments directly from SoundCloud.

I am excited to see this launch as it is a key piece of SoundCloud’s position in the market, as the place creators go to start sharing their music, and stay to manage it as they grow their fan bases and careers.

The Weekly Email

One of my favorite moves that I have seen founders do in the early stages of their company (think pre-seed, seed, and possibly into the Srs A stages), is the weekly email.

This can take a number of forms; a weekly email to the team, a weekly email to the investors, a weekly email to everyone, even a weekly email to yourself! It matters a bit who the audience is for the weekly email because it determines what the founder can put into the email.

But I am not sure it matters that much who the audience is. What matters more is a weekly cadence of what is on the founders mind, what happened in the last week, and what the objectives are for the coming week.

Early stage startups are hyper-changing environments. The founder needs to keep everyone aligned and on-board as he or she weaves and bobs around product market fit, the positioning of the company, the composition of the team, and a lot more. The weekly email does a good job of accomplishing that.

But more than anything, writing the weekly email is a tool for the founder to collect themselves, get grounded for the week ahead, and articulate what they and the company are doing and why.

I like Sunday evening for the timing of the weekly email best. It sets up the week to come. But any time over the weekend, or even monday morning, works fine.

If you are starting something new and want a routine that can help you get into a rhythm and stay there, consider the weekly email. It’s a great one.

A Small Change To The Comments

David Steinberg, founder and CEO of Zeta Global, the owner of Disqus, saw my blog post last week expressing a desire to make this blog easier to manage. He reached out, asking how Zeta/Disqus could help.

I explained my frustration with the comments here at AVC and he asked the Disqus team to see if they could help.

And less than a week later, we have the first result of that assistance. AVC is running an experimental feature that Disqus is working on called “collapsed comments”.

One of the things that I find challenging with the comments is when a group of people decide to have a conversation with each other and it results in dozens of replies, one after another.

I don’t want to stop them from doing that, but I also don’t want that conversation to take up a ton of space on the page.

It is also the case that it is often in those rapid reply discussions where the flames come out.

So we are going to collapse the replies on multiple reply conversations here at AVC and it has been live since late yesterday.

It looks like this:

Behind that “Show More Replies” link are sixteen more comments, taking up four pages of screen real estate.

I am not saying that those conversations aren’t valuable. They are and people can still dive into them.

But they are not longer going to be the primary thing people see when they wade into the comments here at AVC.

I think that is a good thing and a small step to making it a bit easier to manage the comments here.

The Convergence Of The Phone And Laptop

The Gotham Gal wanted to get a new laptop. Her late 2015 Macbook has started to fade on her.

So yesterday we made a visit to the local Apple Store and checked out the options. We looked at the Macbooks, the Macbook Airs, and we also looked at the iPad Pros. We debated the choice and she ended up deciding to go for the iPad Pro. We work with a few people who have iPad Pros and love them. And she noticed how much I am using and enjoying my Pixel Slate.

One of the most interesting things about these hybrid tablet/laptop devices is that they run operating systems that are designed for the tablet or phone. They are touch devices like our phones vs mouse devices like our laptops.

A good example of this is how I do email on my Pixel Slate. I could run Gmail in the browser on my Pixel Slate. But I have found it much more pleasing to do email in the Gmail Android App on my Pixel Slate. I swipe emails away like I do on my phone. But I also have the keyboard when I want to write a long response. It is literally the best of both worlds.

I am writing this post on my Pixel Slate (in the WordPress web app in Chrome). When I want to go back up to the start of the post and re-read/edit it, I just swipe up. No messing around with the touchpad, up button, or down button. It is so much more natural, although it took me a while to get used to it.

I am helping the Gotham Gal set up her iPad Pro this morning and we are downloading all of the mobile apps she likes to use on her iPhone. I think that is how she will want to use her new “laptop”.

So if this is the future we are heading into, where the user interfaces and applications our computing devices and our phones use start to converge, it suggests that there is a bit of an opening for new applications that are designed from the ground up to work in this way.

Audio Of The Week: Reimagining The Well Woman

One of the areas we have been investing a lot in at USV is women’s healthcare (Clue, Modern Fertility, Nurx).

Another interesting company in women’s healthcare, that USV is not an investor in (at least not yet), is Tia, which calls itself “The Women’s Health Clinic.”

In this discussion with the Gotham Gal, the founder of Tia, Carolyn Witte, talks about her inspiration to start Tia and how she has evolved the business over the last couple years.

Funding Friday: Young Women Teaching Coding To Others

First of all, I’d like to say that I have a number of connections to this project that I am highlighting today. The young women who are behind this project are the same ones I mentioned at the tail end of the talk I posted last saturday. I have been inspired by these young women and their teacher since I met them at the Annual CS Fair a few years ago. And in this project, they are “modeling our curriculum and teaching practices on NYC’s Computer Science initiative (CS4ALL)”, which is a project that I helped start and am leading the fundraising effort for. So this project is very close to home and heart for me.

OK, on to the project. This summer six young women will travel to Mendoza Argentina to teach coding curriculum to teachers and students in an effort to get computer science classes into the schools in Mendoza.

Here is a video that explains the project:

This morning I helped launch their GoFundMe campaign with a $5000 donation. Their goal is to raise $15,600 to fund their summer trip to Mendoza. Hopefully some members of the AVC community will join me in backing this project on GoFundMe and help them make this trip a reality.

The Amazon Backlash

NY State Senator Michael Gianaris is leading the efforts to stop Amazon from opening up a large presence in the borough of Queens in NYC.

I get that this makes for good politics at some level. Standing up for the taxpayer and expressing outrage at a massive tax giveaway to the one of the wealthiest companies in the world, run by one of the wealthiest people in the world, makes for great stump speeches.

But there is one problem with all of that. The voters and taxpayers in Queens, particularly the minority voters and taxpayers, approve of Amazon’s move to Queens by very large margins.

The very people that Gianaris and others like Ocasio-Cortez represent and are “standing up for” want Amazon in Queens by large margins.

What the voters and citizens of Queens seem to understand is that this is a once in a decade type opportunity to change the face of a borough and a city.

As historian Kenneth Jackson explained in this excellent NY Times Op-Ed piece yesterday, history shows that the economic fortunes of cities change quickly with once dominant industries moving on and new ones arriving. This is a fantastic opportunity for NYC to cement its role as a leading tech sector and one that should not be missed. There is no guarantee that the NYC of tomorrow will be as vital as the NYC of today. We have to work to make it so and this effort to recruit Amazon to NYC is exactly the kind of work which will make it so.

My friend Kathy Wylde also penned an important argument in favor of Amazon in yesterday’s Daily News. Kathy explains that Queens has been planning for this sort of thing in Long Island City for over a decade and many of the issues that the rabble rousers are raising have been considered, planned for, and are already being worked on.

In my view, politicians like Gianaris and Ocasio-Cortez are being irresponsible and reckless in their opposition to Amazon while playing politics with something that is without question good for NYC, good for Queens, and good for their voters. Their voters know it and so should they.

The Seed Slump

I have written a bit about this topic in recent years, at the end of 2017, and again when the 2018 numbers started showing up.

What has happened over the last five years in venture capital is the seed boom stalled out, the late stage market exploded, and the traditional venture capital business (Series A and Series B) largely remained the same except round sizes, valuations, and fund sizes have all gone up.

Mark Suster posted a great analysis last night of why the seed stage market has stalled out. It comes down to the fact that the traditional venture capital market has not changed much so creating more supply has not resulted in materially more demand.

This chart tells the story well:

As Mark explains, the seed market remains alive and well, but it has grown so large that it can’t continue to grow unless the traditional venture capital market grows too and that has not happened, at least not anywhere near the rate that the seed stage market has grown.

In a companion post, Mark lays out the new architecture of the startup capital markets:

In the first five years of this decade, we saw the seed portion of the market explode. In the last five years of this decade we saw the growth portion of the market explode. But over those last ten years, the middle part, the traditional venture capital market, has not changed much.

That’s an interesting observation in and of itself and something that makes me wonder if that is the next shoe to fall.