Posts from Fred Wilson

In her decision last week on the Epic vs Apple case, Judge Yvonne Gonzalez Rogers wrote this:

I am not a lawyer, but I read that to say that apps that use crypto rails for payments cannot be blocked by Apple anymore.

If so, that is a decision of enormous consequences for the crypto sector and yet another opening for it.

That is so fucking awesome.

At USV, we have a fairly narrow thesis that sets out what we want to invest in, but all of us work across all of our thesis areas. We see ourselves as generalists not specialists.

In an environment when everything is moving so fast, that can be challenging, as I wrote about on Tuesday.

But there are also great benefits to working this way. As a team, we benefit from working together on everything versus having silos within our partnership and firm.

And as individuals, there is something quite helpful about moving back and forth between domains. It stimulates the mind in ways that going deep and staying deep on one thing cannot.

There are many ways to build a successful investment business. Specializing in a specific domain works well for many firms.

But I personally prefer being a generalist. Being able to meet founders in multiple different sectors back to back to back is really something special. It challenges and opens the mind in a way that really works for me.

I wrote in my 60th birthday post that my late career mantra is less hustle more conviction. It has been working for me and has kept me in the game.

But there are times, usually after an opening emerges, when a market moves so fast it is hard to stay on top of it all.

I don’t worry about missing out. That’s part of the venture capital business. Fear of missing out is a counterproductive emotion and I refuse to engage in it.

But I do worry about not understanding what is going on. When you stop understanding things, you are done. There is no way to be a great investor if you have no clue.

It is possible to surround yourself with others who can help you understand what is going on. I do that and I have terrific colleagues who keep me engaged in what’s happening. These colleagues are inside USV and also spread around many other firms too.

But at some level, you have to understand things yourself. Osmosis only works to a point. I find that you have to get your hands on the technology, use it, and feel it to understand it.

And that is the hard part when things go bananas as a market opens up. Less hustle works against you. And you have to find a way to engage in it all. That’s where I am right now.

I backed this project to fund a creator space and coffee shop in Williamsburg Brooklyn this morning.

As many companies make the decision to move to hybrid and remote workforces, we will need more of this kind of space to work in. I am excited to see entrepreneurs stepping in and filling that role. And I like to support them when they do.

Email readers can see the video here.

I am a fan of and a practioner of investing in risky assets. I believe you must take significant risk to earn significant returns.

But I also am a huge fan of diversification when holding a lot of risky assets. It has been easier for USV to get into new sectors, like crypto and climate for example, knowing that we also have large positions in other parts of the early stage tech sector.

When crypto went crazy in 2017 and then blew up, it was mostly a blip in our portfolio values. The same was true in the second quarter of this year when crypto had a big pullback.

This is not an argument against crypto only funds. USV has invested in a number of them and so have the Gotham Gal and I. But I would not be comfortable with a portfolio that was only crypto funds. I like to have a mix of assets, ideally uncorrelated, in our portfolio.

An asset class that I really like as a hedge against early stage tech sector risk is real estate. The Gotham Gal and I own a lot of income producing real estate and it feels very uncorrelated to early stage tech.

But there are many ways to get diversification. If you don’t want to think about your investments, something I cannot bring myself to do, then a stock index fund or a portfolio of stock index funds, and some fixed income funds can get you the diversification you need. But the level of risk taking in that strategy is a lot lower.

But regardless of how you get there, it is very important that you not have all of your eggs in one basket. That basket can drop and then you have a mess.

My partner Albert has been writing a book in public over the last decade called The World After Capital. There have been alpha and beta versions which he has put out there, gotten feedback on, and revised.

Yesterday he tweeted that he has now finished the book and will have it printed. That means I will read it again and you should too.

If you want to read it online, you can do that here.

This project on Kickstarter is cool. A UPS (uninterrupted power supply) for your entire home. I backed it this morning along with almost 2,400 other people who have backed it so far.

You can see the video and back it here.

Occasionally, I will write at USV.com and today is one of those days. I wrote about an investment in a DAO called Bright Moments that we made this week. DAOs are interesting and we plan to do a bunch of DAO investing going forward. You can read the post here.

I saw a statistic from one of our larger portfolio companies yesterday. They have had their offices around the world open for some time now with office usage optional. They are seeing office utilization rates of around “20-30%.” They are also seeing “flexibility” as the number one issue in recruiting new talent.

That was interesting to me because we are seeing a much higher office utilization at USV. We kept our offices open for much of the last 18 months and encouraged a return to the office once we were all vaccinated in early April. On most days, we see about half of our team coming into the office. I think that number was higher in the spring and will be higher in the fall. We also see friends in the VC business and startup world working at our office from time to time and that has been fantastic.

We have also seen that office utilization is much higher for our team members that live in NYC vs the suburbs, which is not surprising. This chart says it all:

We surveyed our portfolio companies last month on the topic of their work environment plans. We got 56 responses which is a tad under 50% of our active portfolio so this data could be off a bit. But it is interesting. Pre-pandemic, 75% of these respondents were fully “in office” with most of the rest using some sort of hybrid model. Very few were fully remote. Now the distribution looks like this:

That is a dramatic change from the pre-pandemic norm. I am sure that there will be some movement back to the office when we get to a new normal, whatever and whenever that is, but no matter what, tech companies have moved away from the “fully in-person” model and that will mean very different office utilization models.

We also asked our portfolio companies about “seat to employee” ratios and got these responses:

For those companies that will continue to have an office, it looks like the average seat to employee ratio nets out around 65%. And that is for the 75% of the respondents that plan to have some sort of office.

At USV, we are taking a contrarian approach to the office. We plan to build a new office that can seat 100% of our employees and we want to be able to host board meetings and other events frequently. We are also looking at other ways to invite the broader “community” to work and be at USV regularly.

But that does not mean we will expect our employees to be at the office every day. We understand that those with long commutes and children or parents at home need more flexibility and we have seen that providing that flexibility builds loyalty and commitment. So we will continue to support that way of working.

Startups and high-growth companies seem to have embraced fully or partially remote models for the most part in an attempt to attract and retain talent and leverage the increased productivity that comes from eliminating long and painful commute times.

But that doesn’t mean an office isn’t a good thing from time to time. It may be that organizations that support startups and high-growth companies, like USV, can step into the mix and be part of that answer. That is an interesting idea to me and one that USV is looking at right now.