Posts from Fred Wilson

The Range Anxiety Weekend

Electrified cars were greater than 10% of the US market in 2021 and EVs were about 5%. EV sales are growing at nearly 100% YOY and could reach 25% of the US market in a few years. This is good news for the effort to reduce our dependence on fossil fuels. But there are still challenges for the EV market.

Range anxiety and charge times are among the top reasons that consumers avoid EVs.

The Gotham Gal and I have owned EVs for eight years now and have struggled with a few of these issues. But we continue to buy EVs and prefer them to gas-powered cars.

This past weekend, we took a five-hour road trip with our brother and sister-in-law. We each drove our own cars, both EVs. We drove our eight-year-old original Tesla Model S. They drove a Volvo XC40. We ran into a number of challenges that led us to call this road trip our “range anxiety weekend.”

The first issue that arose is that our destination was slightly beyond the range of both of our cars. We needed about 250-260 miles to get to our destination and we both had about 240 miles of range. So we selected a stop for lunch that had EV charging stations.

Fortunately, when we arrived for lunch, both charging stations were free. They were the only charging stations that we could find in this small town. If either had been taken, we would not have been able to charge during lunch and would have had to go on a charging station hunt after lunch.

We had a leisurely two-hour lunch and when we got back to our cars, we had each gotten another forty miles. That was enough to get to our destination so off we went. We did get to our destination with some spare battery but both of us were below twenty miles when we arrived.

The hotel we stayed out told us they had EV charging stations, but it turns out what they had were two Tesla charging stations and we could not find an adapter to charge the Volvo XC40 on the Tesla charger. So the Gotham Gal and I charged our Tesla both nights at the hotel but our brother and sister-in-law were not able to do that.

The next morning we went on an EV charging station hunt and found an Electrify America fast-charging station which took the Volvo XC 40 from empty to full in about two hours. We left that car charging for most of the day and toured the area in our Tesla.

We charged our Tesla again overnight at our hotel and we both had full batteries for the drive back. We picked another lunch destination halfway home that had charging stations and started the trip back.

While the lunch destination on the way home did have both Tesla and non-Telsa chargers, the charging rate was so slow on them that we were not able to get enough additional mileage over lunch to make it home. So the Gotham Gal and I headed to a Telsa Supercharging Station and in about ten minutes got another fifty miles and then made our way home.

Our brother and sister-in-law had to find a fast charger in town and did but it was not easy. And it took a fair bit longer for them to get the extra fifty miles they needed to get home. But get home they did and the range anxiety weekend ended without any major issues.

But here is what we learned from this trip about the availability of charging stations on the road in California:

  • When hotels and restaurants say they have EV chargers, they mostly mean Tesla proprietary charging stations that you need an adapter to use if you are driving something other than a Tesla.
  • When you are on the road, you need fast charging stations. The slow variety, which is mostly what is out there, only work for an overnight charge. So they are OK for a hotel but not for anything else.
  • Tesla has done an incredible job with their supercharging stations. Range anxiety is a signficantly reduced issue if you drive a Tesla.
  • While Electrify America is doing a nice job of buildling out fast charging stations for non Telsa EVs, their charging stations are signficantly slower than Tesla’s superchargers and they are not nearly as prevalent.

Given that range anxiety and charge times are among the top reasons that consumers don’t purchase EVs, it would make sense for the automobile industry to come together and standardize charging outlets and invest heavily in fast (super fast) charging stations. Telsa can likely get away with its own charging network and charging outlets, but everyone else cannot. I don’t understand why this is not a bigger priority for the industry. It needs to be.

#Blogging On The Road#climate crisis

1K Project For Ukraine

My friend Alex Iskold ran the 1K project during the pandemic to help families that were struggling with lost jobs/income, etc. I blogged about it here and AVC readers were generous with their support.

Alex came to the US from Ukraine many years ago, but he has many friends and family members there. So naturally, he has relaunched the 1K project focused on the suffering that is happening in Ukraine.

https://twitter.com/1kprojectorg/status/1498129537095372804?s=20&t=WeAWZMrKoskW7jn1dC_fBg

I supported a family and hopefully, some of you can join me in doing that. And those of you who don’t have the resources to support a family might be able to chip something in. Every little bit helps.

#crowdfunding#Current Affairs

Funding Friday: Codrone

I love using robotics to teach kids to code. A K12 teacher told me many years ago, “when the robot doesn’t do what you told it to do, you know your code is wrong and you need to fix it.” Robotics brings code to life for kids and that’s a great thing.

So when I saw this Kickstarter project, Codrone, I backed it immediately. So did 120 other people and so this project is going to come to life. If you want to back it too, you can do so here.

#crowdfunding#hacking education

A Return To Fundamentals

I wrote a fair bit last year about the disconnect between how companies were being valued and the fundamentals of those businesses. It seemed to me that many companies, from the founders, to the leadership teams, and the rank and file employees got more focused on raising capital and valuations than the basics of a business (people, product, customers, revenues, profits, etc).

That is starting to shift. I can feel it. With the public markets bringing high flyers back to reality, you can now buy the best companies out there at multiples of earnings and profits that make some sense in a historical context. And we are seeing reports that many mutual funds and hedge funds are leaving the private markets because the values in the public markets are so compelling. All of this is healthy.

Vitalik Buterin, the founder of the Ethereum project, said this at ETH Denver this past week.

The winters are the time when a lot of those applications fall away and you can see which projects are actually long-term sustainable, like both in their models and in their teams and their people

Vitalik was talking about a “crypto winter” but the basic point is more broadly applicable.

Business models need to be sustainable. Teams need to stick together and ship things. The fundamentals need to be in place for a business to succeed. All the money in the world at eye-popping valuations won’t do that for you.

I have no idea if we are in for another crypto winter. I have no idea if the stock market will continue to go down. I have no idea if the slump in the public markets will seep into the private markets. All of those questions are above my pay grade.

What I do know is that the businesses that focus on the fundamentals will succeed in any market, up or down. And I do feel that there is more of that going on in 2022 than we saw in 2020 and 2021 and that’s a very good thing.

#entrepreneurship#management#VC & Technology

A Blistering Pace

I wrote about pacing a few years ago. I am a fan of a steady pace, not too fast, not too slow. Sometimes the opportunity set forces you to go faster. As I wrote then:

I don’t think a VC firm should manage to a pacing number. It should manage to the opportunity set that it sees.

In the last two years, the VC business has been operating at a blistering pace, the fastest I’ve witnessed in my 35 years in the business (including the 99/00 era). Whether that is because of the opportunity set or the changing dynamics of fundraising (in-person to zoom, endless capital) we will only know in time.

But it is exhausting. Every day I heard some form of this from an entrepreneur, “we got a pre-emptive term sheet and will be making a decision in the next 24 hours.”

Making sound investment decisions in a week is doable. We have done it. We have done it long before the last two years. We have done it a lot more in the last two years. It helps to have a thesis, to know what you are looking for.

But even so, the VC business has turned into a sprint. And you can’t sprint forever.

My friend Howard tweeted out this blog post yesterday and suggested that every VC read it. So I did.

The author, Abraham Thomas, wrote this:

Across every aspect of venture, timelines keep compressing.

Abraham suggests in that post that this hyperactive market has become riskier even though the numbers don’t show it.

I learned a long time ago not to try to time markets. I don’t know if the VC business is near a top or near a bottom. It doesn’t matter to me. I believe you have to just keep investing, slowly and steadily, in the best opportunities that come your way and the rest will take care of itself.

But we all need to pace ourselves. This is not the public markets. Venture investments take many years to unfold. It is a buy and hold business. It is a invest and help business. It is seeding not harvesting. If you start a marathon with a sprint, you are gonna be puking by mile ten. And that’s my concern right now.

#VC & Technology

NFPs

Early in my career, I was taught that any team member was replaceable and that as long as you had sufficient time to find a suitable replacement, you would be fine. I have operated on that basis since then, imparted that wisdom to the founders and teams that I work with, and have always advocated for that approach to management.

But I have learned that on any team there are always a few members who are extremely difficult to replace. While most team members are “fungible”, there are always a few “non-fungible people” and retaining these NFPs can be incredibly important to the long-term success of the business.

The first, and most important, NFP is the founder. The person who originally conceived of the opportunity, recruited the first few team members, scoped (and often built) the first product, brings immense value to the business, mostly around long-term vision, setting the culture and values, and knowing when something is “off.” Retaining the founder’s interest in and involvement with the business is critical. There are times when the founder is bringing more difficulty to the business than value and they should depart. But those situations are to be avoided if possible because of how important a founder is to the business.

NFPs are usually individual contributors, not managers. The management function is much easier to replace than a uniquely skilled individual. A common mistake that I and others have made is to promote an NFP into management when they are much happier not managing people. A classic role for an NFP is the CTO of the business. In this role, the person sets the overall technology direction of the business, makes the hardest technical decisions, builds technology themselves, but does not manage the engineering function. In many companies, the CTO has no direct reports.

You can find NFPs in any part of the company. They are not limited to technical functions. You can have an NFP in customer service, finance, legal, marketing, really anywhere. The key is to identify them and recognize them, reward them, compensate them, and retain them.

More and more companies are moving to compensation models where critical individual contributors can make as much, or more, than their manager or any manager. This has long been common in sales where commission models create such opportunities and where there are often NFPs, but I am seeing more and more companies recognize that simply compensating people on the basis of their management level is incorrect and leads to their best people moving into management, underperforming in that role, and departing.

NFPs are pretty rare. Most people are easily replaceable given sufficient time to do a proper search. But there are always a few people who are not replaceable. Identifying them and retaining them should be a key goal of the management of the business.

#management

Get Paid In Crypto

Coinbase launched the first in a series of payroll offerings:

If your employer offers direct deposit, you can deposit some or all of your paycheck in your Coinbase account and immediately convert it into USDC, BTC, ETH or any other asset that is available to you in your Coinbase account.

This is just a first step in a broader set of payroll products for employers and DAOs.

I’ve always been a fan of “averaging into crypto” instead of trying to time the market. I wrote about this back in 2014 when I was buying 1.5 Bitcoin every week. That was back when you could buy a bitcoin for several hundred dollars.

But regardless of how much you can buy, the idea is to just have a regular buy program going on.

Putting some of your paycheck into crypto is a good way to do that and Coinbase now offers that to all of its users.

#crypto

On Covid

Two years ago this weekend, the Gotham Gal and I were in Park City at the annual Sundance Film Festival with another couple we have been great friends with for thirty years. On Monday morning we came down to breakfast and our friends announced they were flying back to NYC a few days early. Our friend Phil has been trading the financial markets for as long as we’ve known him and he knew, about a month before most of us, that something big was going to happen and he wanted to get prepared for it. That’s when it first hit me that we were in for something big. The financial markets tend to see things a bit ahead of us.

If you look at the financial markets now, as I wrote two weeks ago, what we see is the unwinding of the Covid trade. Companies like Zoom and Peloton have seen their stocks come way down. Fiscal and monetary policies around the world that kept people fed and housed for the last two years are being unwound. And the financial markets are reacting as one would expect. Stocks are down. All risk assets are down a lot. This is the “tell” that Covid, as we have known it, is coming to an end in many parts of the world.

There are three primary reasons why Covid, as we have known it, is coming to an end in the wealthier parts of the world. First, we have less severe variants now. Second, most people in the developed world who want to be vaccinated have been vaccinated, many multiple times. And third, we have antivirals that can protect those who get very sick.

One of the first wake-up calls I got early in the pandemic was a blog post I read called “The Hammer And The Dance” that was written by Tomas Pueyo on March 19th, 2020. In that post, he described the series of lockdowns and other drastic measures that we would all go through over the last two years in order to attempt to protect vulnerable populations and the medical system from a virus that would otherwise wreak havoc on the world. He was prescient and accurate. About a week ago Tomas wrote a Twitter thread explaining that we are now in the midst of the end of the pandemic. You can read it here. This tweet particularly rang true to me:

We all have been through a crazy, trying, stressful, and dangerous two years. Many of us have what Tomas calls PCSD, including our governments. And we all need to “unlearn many of the behaviors we’ve learned in the last two years”, particularly our governments.

But I am not one to criticize our governments too much. Almost 6mm people have died because of Covid around the world in the last two years. The death toll in the US is approaching 1mm people. If our governments had not done “The Hammer and the Dance”, those numbers would be massively higher. The death toll from the Spanish Flu pandemic of 1918-1920 was between 20mm and 50mm around the world. We can all find faults with the way our governments handled Covid, but I think it was largely a job well done.

In the US, the Trump administration prioritized vaccines with Operation Warp Speed which was a massive success. The Biden administration prioritized getting those vaccines distributed broadly and prioritized the most vulnerable populations. In NYS and NYC, vaccine mandates helped to get over 95% of NYers vaccinated and almost 75% “fully vaccinated“.

And yet, most Americans find fault with our government’s response. Trump lost his re-election bid at least in part because of Covid. And Biden is facing massive unpopularity, also at least in part because of Covid. We have people who oppose vaccination and masks. We have people who believe that everyone should be required to be vaccinated and masked. Nobody can agree on anything and everyone is angry.

It is time to stop obsessing about Covid. It is time to stop politicizing Covid. It is time to stop tweeting about Covid. It is time to stop reading about Covid. It is time to start healing and it is time to start moving on.

We can live with Covid and most of us will. The current death rate of Covid in the US is about what a bad flu season would be. We have vaccines if you want them. We will have anti-virals if you need them. We should take a lesson from many Asian countries and mask up if we are feeling sick from now on. And you can wear masks if you are uncomfortable on the plane or the subway. We’ve normalized mask-wearing in the US now and that is a good thing.

We’ve got other pressing matters to deal with. We have a warming planet that desperately needs our attention. We have economic challenges that need our attention. We have gun violence in our cities. We have other health care challenges to tackle. Covid was terrible, we are scarred from it, but we cannot let it divide us and we cannot let it drive us crazy. There are more important things facing us and let’s go deal with them now.

#Current Affairs

New Leadership At Tech:NYC

Six years ago this month Julie Samuels got together with a group of technology leaders in NYC and we decided to form an industry group for the growing tech sector in NYC. I agreed to co-chair the organization and have been in the chair role since then. We called it Tech:NYC and I first wrote about it here at AVC in March of 2016.

Last year, after more than five years at the helm, Julie decided it was time to pass the baton to a new leader and she and I and a group of board members spent the fall talking to lots of people and we found a fantastic new leader named Jason Clark. Jason starts as the Executive Director of Tech:NYC next week.

Jason takes over an organization of 800+ member companies, from the largest names in tech to the three-person startup you have yet to hear of. Tech:NYC has succeeded in getting tech “at the table” in Albany and City Hall and helping to make the tech sector more civic-minded and more integrated into the city and state. Julie and her team have done a tremendous job of taking an idea and making it a reality and I am incredibly grateful for her leadership.

The tech sector finds itself at an interesting moment in NYC. It is quickly becoming the largest employer in NYC and is bringing much-needed innovation to the city, state, and world. We have new leaders in Eric Adams and Kathy Hochul who are eager to work closely with the tech sector to do new things and move the region forward. But with great success comes great responsibility and the tech sector needs to employ a broader and more diverse group of NYers, it needs to be more civic-minded, it needs to be more philanthropic, and it needs to think beyond Manhattan out to the five boroughs and on to New York State and the NY Metropolitan region.

And Jason is the perfect leader to take Tech:NYC in those directions. Jason is a born and bred NYer, from southern Queens, a product of the NYC public schools, a lawyer who has started a law firm and worked in the Attorney General’s office in Harlem, and a former candidate for public office for the City Council seat in his home neighborhood in southeast Queens. Jason has the relationships, the lived experiences, and the mindset to lead NYC’s tech sector in the directions it must go as it becomes the leading industry and employer in the city and state.

I welcome Jason to Tech:NYC and look forward to working closely with him and the city and state leaders to step up to the opportunity that is in front of us. It is an exciting time.

Also, Jason is already on the hunt for a strong policy director with lots of tech experience. If you would like to fill that role or know someone great, please visit this job spec with instructions on how to get into the process.

#NYC#policy#Politics