Posts from marketplaces

Headgum and Gumball

Podcasts have emerged as a major new category in media/entertainment/news/education etc. We have seen huge deals for big podcast hosts like Bill Simmons and Joe Rogan, both of whom did transactions with Spotify for nine-figure amounts. But as Spotify (and surely others to follow) lock-up top podcast content to strengthen their subscription offerings, we stand to lose something awesome about podcasts which is the ability to listen to them for free on any platform we choose.

But the counter weight to this trend is the growing size of the “live reads” ad market. This is when a podcast host reads out an advertisement on the show. This has been a staple of talk radio for many years. I remember Howard Stern doing live reads for LoJack back when Howard was on CBS Radio. Live reads are powerful and a form of influencer marketing. If you love Howard and he waxes eloquently about LoJack, you love LoJack. Or so it seems.

The live reads ad market for podcasts was in excess of $700mm in 2019 and seems headed to a multi billion dollar ad market in the coming years. So there is certainly a lot of money out there for podcast hosts who want to stay free and independent, or are emerging and building an audience.

And that is where Gumball comes in. Gumball is a marketplace where advertisers post live read ads and podcasters pick them up and read them on their shows. Ad-buying opportunities within podcasts have historically been manual and limited, not unlike the process of purchasing web ads pre-2000. As podcasts continue to gain market share, Gumball’s self-serve ad marketplace has the opportunity to be as transformative to the podcast industry as Google Adwords was for web ads. 

Gumball is a subsidiary of the Headgum podcast network. Headgum is a network of owned and operated comedy podcasts as well as third party podcasts that join the Headgum network for distribution and monetization (via Gumball).

USV has been looking for an opportunity to invest in podcasting that fits with our thesis and we found it with Headgum and Gumball. We like the way that Headgum’s owned and operated content, its Headgum network content, and its monetization platform Gumball all fit together and enhance each other. We made an investment in Headgum recently and blogged about it on the USV blog this morning.

#marketplaces#VC & Technology

Masks4All

A couple of weeks ago, I saw this tweet by my partner Albert:

I clicked on the underlying tweet thread and learned that some countries have adopted an approach where everyone wears face masks when they are out and about. That way, if you are infected and don’t know it, you won’t spread the virus to others. It requires everyone, or most everyone, to adopt this approach, which is why they call it Masks4All.

So I went to Etsy (Disclosure: I am the Chairman of Etsy and own a large amount of stock) and bought some face masks for my wife and me from a number of Etsy sellers. These are not medical masks. They are fabric masks, some with filters, some without filters. And we have been wearing masks when we leave our home ever since.

In the following days, every time we would go out to the market or for a walk, we would notice more and more people wearing masks. We are in Los Angeles right now and I would guess that at least half of everyone out and about in LA right now are wearing masks in public. It could be even more than that.

Last week, federal and state and city government officials started recommending wearing masks in public and we started to see even more people wearing masks.

Around the same time, Etsy started to see a lot of people coming there to find and purchase fabric masks. So they put out a message to all of their sellers (they have over 2.7mm sellers) asking them to make fabric masks if they can sew and work with fabric. And they massively increased the number of sellers making masks and the amount of mask inventory on Etsy.

If you go to Etsy and search for face mask (or mask or fabric mask or something along those lines), you will see this:

You can drill down and find the right kind of mask for you, your kids, your parents, or whomever you want to buy one for.

I like this story for a lot of reasons. For one, it shows that tens of thousands of individuals can come together and quickly ramp supply of something that everyone wants to buy right now. We don’t have to be reliant on a single large supplier. Second, by using fabric masks, we leave the medical mask supply for the healthcare workers which is critical right now.

And maybe most importantly, masks can become personal. Mine is different than yours. Maybe I have a bunch of them for various moods, days, times of day, etc. Like t-shirts or hats.

If we are going to be wearing masks in public for a while, we might as well treat them like any other item of clothing we wear, make sure they are comfortable, fit well, and look good too.

And Etsy is a great place to shop for things like that.

#Current Affairs#marketplaces

Haven

Our portfolio company Open Bazaar released a new mobile app called Haven today.

The idea behind Haven is:

Finally, people anywhere in the world can connect directly to each other using their mobile devices and trade privately with no credit cards, no banks, and no tech companies tracking their activities, or charging listing and transaction fees. 

Here’s what the front page looks like:

And here is what an item listing looks like:

Note that you can pay for this coffee maker in Bitcoin and Litecoin.

Haven is built on the Open Bazaar protocol:

Haven creates a mobile window into the groundbreaking OpenBazaar network powered by cryptocurrencies like Bitcoin, Bitcoin Cash, Litecoin and Zcash (Ethereum coming soon). Over 250,000 nodes have been created by people using this peer-to-peer network since the release of version 2.0 and tens of thousands of listings have been put up for sale from crypto tokens to original paintings by popular artists to business services. OB1 expects Haven to rapidly bring even more users onto the network who are eager to shop, chat and send cryptocurrencies privately from their mobile phones.

If you want to check out Haven, you can do that here.

#crypto#marketplaces

Otis

One of USV’s newest portfolio companies, Otis, had a coming out party yesterday.

The idea behind Otis is that cultural assets like fine art, rare books and comic books, jewelry and watches, sneakers and skateboards, etc are appreciated by everyone but are only collectible/affordable by wealthy people.

Otis intends to change that by securitizing these cultural assets and selling them off in shares for as little as $25 per share. These fractionalized cultural assets will be shown publicly while they are owned collectively.

You can see how this all works by downloading the Otis mobile apps here.

I did that yesterday and I have already set myself up to try to buy a share of Kehinde Wiley’s Saint Jerome Hearing The Trumpet Of Last Judgement on August 13th.

I’ve also opted to be notified when these assets “drop” so I can purchase a share of them too.

I am not a sneakerhead but for those of you who are this might be of interest to you:

This is just the start of what will hopefully be a highly liquid secondary market for the trading and collecting of shares of cultural assets. The market is starting out highly curated by Otis but that may change over time as things develop.

USV’s focus right now is on backing trusted brands that can open up access to captial, knowledge, and well-being and Otis fits in all three of those categories. We are very excited to be involved in this ambitious effort.

#art#crowdfunding#marketplaces#Uncategorized

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.

#art#marketplaces#Music

Carbon-Offset Shipping On Etsy

I don’t write a lot about Etsy here at AVC. It is a public company and I am the Chairman so I have to be careful.

But today Etsy is announcing something that makes me so proud. I have to tell you about it. Etsy is the first major online shopping destination to offset 100% of carbon emissions from shipping.

Here is Etsy CEO Josh Silverman’s blog post on this news.

Etsy has been committed to clean energy for a long time. They will power 100% of their operations with renewable energy by next year. But the company understood that they could not stop there and needed to think about the carbon footprint of their network of sellers shipping products to buyers. And so they have taken the next step of offsetting all of the carbon emissions related to shipping on Etsy. This initiative comes at no additional cost to Etsy buyers or sellers.

To celebrate the launch of carbon offset shipping on Etsy, they are going to do something tomorrow to make a splash.

To jumpstart our efforts and celebrate this milestone, tomorrow (February 28), we will also offset shipping emissions for the entire US ecommerce sector for the day. In the US alone, every day approximately 55,000 metric tons of CO2e are emitted into the atmosphere by delivering packages from online orders. Offsetting this impact for one day is the equivalent of protecting 100 square miles of US forests for one year.

https://blog.etsy.com/news/2019/on-etsy-every-purchase-makes-a-positive-impact/

I am a believer in doing well by doing good. There is a lot of that across our portfolio at USV and across our personal investments in tech and real estate. One of the good things we need to do for our world right now is reduce our carbon footprint. And we need to do that urgently. So I am thrilled and proud of Etsy’s leadership and work here. Well done Etsy.

#climate crisis#marketplaces

And Now A Word From Our Sponsor

I’m running an advertisement here today.

I’ve been Chairman of two public companies in my career and the leaders of those two companies sat down and talked yesterday.

I enjoyed watching that very much and hope you do too.

In this nine-minute video, Jim Cramer talks to Josh Silverman, CEO of Etsy, about what makes Etsy “special” and how being special allows them to compete and win against Amazon.

Etsy CEO on Amazon Handmade: It doesn’t really threaten our business from CNBC.

Disclosure: I am the Chairman of Etsy, have been on Etsy’s board for 12 years, and my wife and I own a lot of Etsy stock.

#marketplaces#stocks

ShopShops

It’s been a busy week on the USV news front. On Tuesday we rolled out our new thesis and yesterday we announced our latest investment, ShopShops.

I was talking to a young woman this week who we are interviewing for our two-year analyst program. I asked her why she was interested in working at USV.

She told me she liked that we posted our investment memos on our blog so that everyone knows why we made the investment, how it fits with our thesis, and why we are excited about it.

That is something we have been doing since the early days and is core to how we approach investing at USV.

You can go back and look at what we were thinking when we invested in Twitter, Twilio, Cloudflare, Coinbase, and pretty much any USV investment.

We don’t write investment memos for the files at USV, something I used to do at earlier VC firms I worked at. We just write them to the world. It puts our thinking out there and it stays there in perpetuity.

So yesterday Rebecca did that for our newest investment, ShopShops.

I like to think of ShopShops as what QVC would be in a global decentralized world where everything is live streamed on our phones.

This graphic from their website explains how it works:

Basically, hosts go into stores and livestream shopping experiences to viewers all over the world who can buy from stores they aren’t able to shop in.

This is a screenshot of ShopShops founder Liyia Wu doing a shopping event for viewers in China.

Time will tell if our investment in ShopShops lives up to everything we are expecting from it.

But I am excited by this idea, this founder, and this investment and I am thrilled we made it and told the world why.

#entrepreneurship#livestreaming#marketplaces

ADP Acquires WorkMarket

ADP announced this morning that they have acquired our portfolio company WorkMarket.

This is a bittersweet moment for me.

WorkMarket has been a big part of my personal portfolio for almost eight years.

USV and Spark seeded WorkMarket in June 2010, backing two serial entrepreneurs Jeff Leventhal and Jeff Wald.

The idea was to create a cloud based SAAS application to allow enterprises to manage their contingent workforces which were growing in size and complexity. It seemed like a timely opportunity at the time and it was. Eight years later the SAAS contingent workforce management market is in the hundreds of millions of dollars annually and WorkMarket is the creator and leader of it.

But like all startups, the WorkMarket story has a number of twists and turns. The market was a bit slower to develop than we had initially hoped and it wasn’t until the last few years that big companies started to include contingent workforce management in their SAAS budgets.

We also lost one of the two founders, Jeff Leventhal, when he stepped aside at the end of 2014 and was replaced as CEO by Stephen DeWitt who was recruited to the opportunity by Jordan Levy, who has been everything you could ask for in a co-investor.

The last few years at WorkMarket have been amazing. The senior team that Stephen and Jeff Wald built is among the best that I have had the opportunity to work with. And the contingent workforce market really exploded in 2016 and 2017.

But like all exploding markets, the expanding opportunity brought a lot of new entrants and buyers interested in getting into it. And one of those big companies, ADP, made us an offer we could not refuse, both in terms of the financial opportunity and the fit with their business. ADP has been helping enterprises, large and small, with human capital management solutions for decades and has the customer base, market knowledge, and capital to lean into this opportunity in a way that a venture backed startup never could.

So WorkMarket is now part of ADP and I am pleased with that outcome. Jeff Wald will take over leading WorkMarket for its next phase and he is well suited and deserving of that role. He has been the one constant for the eight years that I have worked on WorkMarket. Everyone else who was there at the start has come and gone. But Jeff and I saw it through from start to finish and I appreciate that very much.

I also want to acknowledge Stephen and the senior team of Grady Leno, Jim Chou, Marcy Shinder, and Tom Benton. As I said, this is an amazing team and it has been a pleasure to watch them build the product, market, and customer base. They are all superstars in my book.

This is the way of the VC business. You get inspired by an idea and a couple founders. You spend a lot of time helping them build something. You give a piece of yourself to the business. And one day, you are done. That day, for me and WorkMarket, is today and I have enjoyed the ride very much.

#employment#enterprise#marketplaces#VC & Technology